Without Venezuela’s oil, Haiti left in the dark


Sat, May 18, 2019 - Page 7

When her daughter was four years old, Jennifer Jean started a small catering business in Bourdon, a lower middle-class district of the Haitian capital.

Starting with the occasional wedding or corporate meeting, she grew the business into a venture that earned her as much as US$1,000 a month, enough to pay bills and send her now-teenage daughter and her seven-year-old son to a good private school.

Then the blackouts started, making it impossible to do basic activities.

Without refrigeration, she now has to buy ice on the street to keep her prepared food cool.

“Back in the day you were able to take your car out any time of night, 1am or 2am,” said Jean, who is thinking of migrating to the US. “Now all the streets are dark. You just don’t know what you are going to run into.”

Through the Venezuelan aid program known as Petrocaribe, Haiti once received about 60,000 barrels of oil a day under favorable terms that beat anything on the open market.

More than half the costs of the oil, which came at a heavily discounted price, were repayable over 25 years at a 1 percent interest rate, allowing the government to supposedly use the windfall for economic development.

In exchange, Haiti reliably backed Venezuela against the US in regional forums, such as the Organization of American States.

However, as Venezuelan President Nicolas Maduro’s government has struggled with plunging petroleum production and a cratering economy, Venezuela has stopped sending billions in subsidized oil to countries throughout Central America and the Caribbean, including Haiti, where the end of cheap oil has meant a sharp reduction in power.

Meanwhile, Haiti’s Bureau of Monetization of Development Aid Programs quickly ran into its own difficulties.

After starting to buy oil on the global market, the bureau this year said that it had run out of operating funds and stopped regularly delivering fuel needed by power station operators to keep the lights on.

Now, much of Haiti’s population enjoys electricity for just three hours a day.

Nighttime activity has ground to a halt as armed robbers hold up street merchants or break into people’s homes in darkness. Gas stations have gone empty for days, making it nearly impossible for many Haitians to get to work, run errands or take their kids to school. Hospitals are forced to rely on backup generators.

“We can’t find gas for our vehicles. Our clients can’t come to us. Sales are down in every sector,” said businessman Reginald Boulos, whose investment group runs major supermarkets and car dealerships. ]

The fuel crisis is helping push Haiti’s economy dangerously close to recession. GDP growth last year was 1.5 percent — less than half what the government expected.

Economists say this year is likely to be the same. Annual inflation has also reached an estimated 17 percent, while a gallon of gasoline sells on the black market for between US$6 and US$12.

Fuel distributors are reimbursed by the state to the tune of about US$0.27 for every subsidized gallon of gasoline sold to customers. That helps keep the price at about US$2.50 a gallon. However, the cash-strapped Haitian state has gone months without paying subsidies and at one point owed some US$71 million, leaving Haitian businesspeople to call for the end of the complicated state-oil purchase structure.

The path out is murky at best. When Haitian President Jovenel Moise tried to eliminate fuel subsidies on July 6 last year and raise prices of various petroleum products by 38 to 51 percent, protesters took to streets across the country calling for him to step down.

The decision was quickly reversed and the IMF has since offered the hemisphere’s poorest nation a US$96 million low-interest loan.

Protesters are also enraged by corruption. A Haitian senate investigation found that more than US$2 billion in profits from the Petrocaribe program had been wasted or stolen, leading to a months-long citizen campaign calling for more probes and prosecutions.

“The shortages are creating panic. The economy is being damaged. The best approach is liberalizing the market and regulating it, to avoid these problems,” said Maarten Boute, CEO of Digicel, Haiti’s largest mobile phone network provider.

Several other countries in the region have weathered the end of Petrocaribe far better.

Jamaica is seeing record economic performance, while Cuba is suffering from food and fuel shortages, although not as grave as Haiti’s.

Moise’s administration has asked the bureau, the finance ministry and private energy companies to suggest ways to further open up the petroleum market, but bureau director Fils Aime Ignace St Fleur said the agency would not give up its role overseeing the importation and wholesale pricing of petroleum in Haiti.

“The state reserves the right to intervene directly in the market,” he said.

In Bourdon, Jean said her situation was becoming dire.

Jean said she could not find gas, the price of a taxi has doubled and her children often strain their eyes to study in dim light.

“Without electricity, we’re in a very difficult situation,” she said.