To quote Dan Bordeaux in a letter to the Washington Times:
The ultimate tragedy in Haiti isn’t the earthquake; it’s that country’s lack of economic freedom. The earthquake simply but catastrophically revealed the inhuman consequences of this fact.
Since the disaster many people have been urging world governments to “drop the debt” that Haiti owes. Indeed many governments already have.
The real tragedy is that if half the effort we’re devoting to the rescue and salvation operations were applied to preventative measures, many more lives could have been saved.
Haiti has, for a long time, been enslaved by debt. As was noted by many before the quake, “Debt costs lives,” and few places in the world was this more evident than Haiti.
At it’s peak Haiti owed $1.8 billion, almost all of which was borrowed and squandered by past dictators. In the first half of this decade they spent more money each year repaying the debt than they did on healthcare, education or agriculture.
Last May an article from The Times – “Haiti: the land where children eat mud” – has one particularly disturbing insight into the effects of crippling debt and poverty on a society:
“Parents in Carrefour Feuilles are happy when their son joins a gang,” one Haitian woman, who runs an anti-violence project, tells me. “They are also happy when their daughters become child prostitutes. It means the family can afford to eat.”
And yet some will argue that Haiti needed better government, stricter planning rules or more access to information so that it could have prevented the huge loss of life in January, but as anti-dismal points out:
You may argue that stricter building codes are a major reason why the 1989 Bay Area quake killed far fewer people than did this week’s Haiti quake. But stricter building codes increase the cost of building and if you are poor and cannot afford expensive buildings you build cheap, less safe, ones. So you can have all the building codes you like, but people have to be wealthy enough to be able to afford to obey them, for them to work. Also buildings will get safer, even without building codes, as people get wealthier. The more wealth you have the more you have to protect and thus the more you are willing and able to spend on protecting it.
That Haiti gave almost $1oom to rich countries last year instead of investing it in infrastructure is a tragedy, but worse again still is that many other developing countries around the world are being forced to pay off such odious debts. This will ultimately leave them in the same state as Haiti was when the earthquake hit – when each day is a battle to survive there is no room for the luxury of planning for tomorrow.
This rule doesn’t just apply to natural disasters like the Haitian earthquake. Increased GDP per capita (throught free-er markets and more capitalism) can lift developing nations from all sorts of poverty-related problems, including famine, war, slavery and crime (albeit indirectly.)
In fact, emotions and humanity aside, there could be a very strong business case for dropping the international debt. The cost of dropping the debt to Haiti entirely was roughly equivalent to the amount that has been donated since January 12th, not to mention the amount that will be spent in years to come.
(There are some obvious flaws in the numbers here, dropping the debt doesn’t automaticall lead to a developed nation with top quality infrastructure, but it’s certainly a start. The other obvious issue is that the people donating are not those who were owed the debt.)
But in the long run, even if world leaders take a cold-hearted approach to the issue, dropping the third world debt (paying it on their behalf) could be their most cost effective strategy.
When talking to global leaders Bono, Geldof and compmany could try appeal to the strings of their purses, rather than hearts.
