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Haiti stuck in a "vicious circle," says IMF economist
Amid the current global turmoil, one country that's definitely no stranger to crises is Haiti. Haitians will surely feel the pinch of rising prices of things like food and fuel, International Monetary Fund economist Nicole Laframboise says during a Global Stage conversation with GZERO Media in partnership with Microsoft.
With more than 60% of the population under the poverty line and food inflation up 40%, it's going to be "extremely difficult for the poor," she told Shari Friedman, Eurasia Group's Managing Director for Climate and Sustainability.
Haiti didn't suffer as much from the economic shock of the pandemic as other countries because it doesn't trade much nor have a big tourism sector.
But recently the much wider concern has been what Laframboise describes as "homegrown" political instability — which undermines the ability of the government and of the IMF to provide advice on macroeconomic policy.
"It's hard. It's hard for them, and it's hard ... for us." So, what do countries like Haiti do when they can't borrow money to pay for food when it gets more expensive?
They often have no choice but to print money, which makes inflation rise even more.
"It's kind of like a vicious circle," says Laframboise, "but we are working with the authorities to help them break out of this circle."
This interview was part of a series of Global Stage interviews with international thought leaders at the World Bank and IMF spring meetings. Watch the Global Stage livestream with several of these thought leaders here.
What We’re Watching: SCOTUS immigration ruling, Barbecue runs Haiti quake relief, Eritreans back in Tigray
SCOTUS brings back "Remain in Mexico" policy: The US Supreme Court has ordered the Biden administration to reinstate a Trump-era immigration rule that requires asylum-seekers who attempt to cross the US southern border to wait in Mexico until their applications get processed. This is bad news for Joe Biden for two reasons. First, he cancelled that policy because it failed to accomplish its stated goal of reducing processing backlogs, while leaving thousands of migrants stranded in Mexico in legal limbo. Second, Biden knows he can't actually implement the policy anew if Mexico doesn't agree to accept migrants whom the US wants to send back. More broadly, the ruling throws yet another wrench into an already testy US-Mexico relationship — with tens of thousands of vulnerable human beings caught in the middle. Biden, who's tied up with the Afghanistan fiasco these days, wants to avoid a tussle with the Mexicans amid record numbers of migrants arriving at the US border so far this year. The Mexicans, for their part, will probably want something in exchange (maybe COVID vaccines) to be helpful.
Haitian gangs run quake relief: Need assistance after the recent earthquake that has killed over 2,400 in Haiti? Call Jimmy "Barbecue" Cherizier, head of the notorious G9, a "federation" of nine criminal gangs that a year ago stopped fighting each other to declare war on Haiti's corrupt political class. In the wake of President Jovenel Moïse's July 7 assassination, Barbecue — an ex-cop known to burn his enemies alive — is arguably the most powerful person in the country. The government knows this, and so has secured a truce with the G9 to allow safe passage for aid. Indeed, Barbecue calling the shots on post-quake humanitarian relief illustrates the collapse of the Haitian state: If the government needs permission from criminal gangs to deliver assistance to victims of a natural disaster, it may also need their cooperation to eventually hold elections to replace Moïse — perhaps with a politician who's friendly to the G9.
Eritreans back in Tigray? For nine months the Ethiopian government has been warring — at various levels of intensity — with militant nationalists from the Tigray region who want more autonomy from the central government. Early on in the conflict, neighboring Eritrea sent in troops to help the Ethiopian army. In June, a shaky ceasefire was agreed to after Tigray forces gained the upper hand, and the Eritreans began to go home. But now US Secretary of State Tony Blinken says they're back. What's more, Ethiopian PM Abiy Ahmed reportedly made an unannounced stop in Asmara last week, for undisclosed reasons. These are ominous signals for a simmering conflict that is far from resolved. The US has slapped sanctions on Eritrean leaders who it says are responsible for war crimes in Tigray, but as we wrote recently, there may not be much the US can really do to avert a deepening catastrophe in Africa's second most populous country.A view shows houses destroyed following a 7.2 magnitude earthquake in Les Cayes, Haiti August 14, 2021.
What We’re Watching: Haiti trembles, Canada's snap election, Malaysia’s political mess
Haiti quake aftermath: If you thought things couldn't possibly get worse for Haiti, they just did. The chronically unstable country, still reeling from the July 7 assassination of President Jovenel Moïse, was literally shaken on Saturday by a magnitude 7.2 earthquake that has killed upwards of 1,400 people and destroyed at least 14,000 homes. What's more, Haitians are now also bracing for a tropical depression that will likely cause floods and landslides in quake-hit areas. Many foreign governments and aid groups have already sent some aid, though many are fearful of a repeat of the situation 11 years ago, when another powerful earthquake devastated the capital, but the assistance was poorly coordinated and failed to reach Haitians that needed it most, and a subsequent cholera outbreak was blamed on UN peacekeepers. When the humanitarian aid does trickle in, the gangs that control large swaths of Haiti say they'll let it through. It's a devastating blow to a country where around two-thirds of people live in poverty.
Trudeau's election gamble: Canada's center-left Prime Minister Justin Trudeau has called a snap election for September 20 — more than two years before the next legislative vote was scheduled — in a bid to win the parliamentary majority. Back in 2019, Trudeau's party won the most parliamentary seats, but failed to win an outright majority. (Less than a year ago, Trudeau survived a no-confidence vote in parliament at a time his approval ratings had plunged over a series of ethics scandals.) For now, Trudeau has two things going for him. First, Canadians mostly approve of how he's handled the pandemic, including the economic stimulus, and Canada now leads the G20 in COVID vaccinations per capita. Second, his conservative rival Erin O'Toole is at odds with climate skeptics within O'Toole's own party and was recently panned for an attack ad on the PM. Most polls suggest Trudeau's Liberal Party will win a majority, but he could fall short if young voters turn to the progressive New Democratic Party. While Trudeau says he needs a new mandate to manage the next phase of the pandemic, critics argue it's a selfish and costly exercise when many Canadians are still suffering the COVID-fueled economic crisis.
Malaysia's never-ending political crisis: Malaysian Prime Minister Muhyiddin Yassin and his entire cabinet stepped down on Monday, putting an end to 17 months of fierce infighting among members of his coalition government. Muhyiddin will stay on as caretaker PM until the king picks a successor with enough support in parliament. The problem is that the two parties with the most seats don't have enough votes on their own, and as bitter rivals will block each other's candidate. The impasse can only be solved by calling an early election, an unpopular play amid a severe COVID outbreak, or to appoint a bipartisan national commission similar to the one that governed Malaysia during a period of racial unrest in 1969-1971. Former PM Mahathir Mohamed — who's no spring chicken at age 96, and caused much of the current mess after abruptly resigning in March 2020 — has offered himself to lead such a national unity government until the country recovers from the pandemic.