By Caribbean News Now contributor
PORT-AU-PRINCE, Haiti – For over four months, people in Haiti have been protesting to demand that President Jovenel Moïse must resign amid allegations he embezzled hundreds of thousands of dollars of government funds designated for severely needed social programs.
According to a damaging report on government corruption, given to the Haitian Senate by official auditors on May 31, has initiated recent protests, with thousands marching through the capital, Port-au-Prince, and other cities throughout June. On June 20, a committee from the Organization of American States (OAS) flew to Haiti in hopes of lowering the political temperature.
PetroCaribe, a government program, is at the centre of the 600-page report and demonstrators’ wrath.
Under PetroCaribe, a vital oil alliance contracted with nearby Venezuela in 2006, Haiti, the most impoverished nation in the Americas, saved valuable dollars by borrowing fuel from its oil-rich neighbour and delaying payment for up to 25 years. Governments were deemed to use additional funds to strengthen the economy and finance social programs.
Alternatively, at least $2 billion (equivalent to almost a quarter of Haiti’s entire economy for 2017) went unaccounted for and Haitians saw few of the assured perks, according to demonstrators and local reporters. Haitian taxpayers still owe Venezuela billions of dollars for the borrowed oil.
The debacle has become a rallying cry for anti-corruption protesters, numerous of whom refer to themselves as PetroChallengers. Here is what to know about PetroCaribe and how it assisted in sparking Haiti’s demonstrations.
Hugo Chávez, Venezuela’s former president, created PetroCaribe in 2005. Venezuela has the world’s biggest proven oil reserves. The Latin American country was producing around 2.5 million barrels of oil per day, in the mid-2000s, long before its current economic collapse. Chávez desired to transform those reserves into more important regional control and gain partners against the US in the Organization of American States.
The PetroCaribe program was effectively a means for the Latin American country to provide other countries development loans, but it loaned oil rather than cash. Venezuela’s state oil business sold oil to Haiti and 17 other Caribbean countries and permitted them to delay payment on 40 percent of what they purchased for up to 25 years, imposing an economical rate of interest for the debt. Recipient governments then sold that oil and utilised the profits to finance social programs. With global oil costs at record levels in the initial years of the program, the oil sales made a lot of money.
The program languished after Venezuela’s economy started to fall apart in 2014, as a dip in the oil cost exposed the consequences of years of mismanagement and corruption.
Venezuela’s oil production has fallen to 830,000 barrels per day, and it ceased meeting its PetroCaribe pledges to Haiti in 2018. Haiti is “one of the most vulnerable members” of the PetroCaribe deal, according to experts at the Economist Intelligence Unit and it’s now undergoing fuel deficits as a consequence of the program’s deterioration.
In Haiti, the PetroCaribe cash was precious. Especially following the 2010 earthquake that obliterated more than 200,000 people and pointed to a continuing cholera outbreak, the government was deemed to utilise it to finance healthcare and infrastructure projects. It claimed to have funded approximately 400 such projects using nearly $4 billion allocated by PetroCaribe oil between 2008 and 2016.
But a lack of visible results sparked doubt. And in November 2017, a five-member commission in the Haitian Senate reviewed the program and described evidence of widespread dishonesty in the management of the funds under three successive governments during that period. The amount of capital in the government treasury was distorted, exchange rates were changed, and over half of the contracts awarded to businesses to sustain the projects didn’t go through the normal government bid process, according to the report.
Because the money wasn’t from a conventional international aid package, analysts say there was little oversight of how governments used the profits and few restrictions on what they could do with it, giving an abundant chance for corruption.
The disappeared money became a heated political embarrassment. But the corruption did not initiate protest until after summer 2018 when inflation skyrocketed, and government plans to increase fuel taxes prompted hostile demonstrations.
PetroCaribe is partly a cypher for Haiti’s deep-rooted and extensive corruption predicament.
Haiti is listed 161 of 180 countries on watchdog group Transparency International’s annual Corruption Perceptions index and questions have also been asked about the disappearance of approximately $13 billion in international funding given to the country after its 2010 earthquake. The World Bank asserts corruption is a primary cause of Haiti’s unbelievable levels of poverty.
Moïse was elected in February 2017, after the period the PetroCaribe inquiries scrutinised. But the report released May 31, the second phase of a three-part investigation, claims that he assisted in embezzling money from a large PetroCaribe project before he came to office when he was head of the company Agritrans.
Agritrans was given approximately $700,000 to fix some roads, even though its entire businesses were producing bananas.
On June 12, Moïse refuted any wrongdoing and reemphasised that he would not resign, notwithstanding the ongoing demonstrations.