Dominican Republic and Haiti: Country Studies

Dominican Republic and Haiti: Country Studies
reducing inflation, corruption, and smuggling. When he was
overthrown by dissatisfied elements of the military only seven
months later, on September 30, 1991, he left his homeland first
for Venezuela, then for the United States. Almost immediately
upon his departure, Haiti's foreign assets were frozen and an
international trade embargo was imposed on all items, with the
exception of basic food and medical supplies.
The impact of the trade embargo on the country's economy
was very severe. More than 100,000 jobs were lost. Starvation
spread through most rural areas and into provincial towns. The
flight of approximately 300,000 people from Port-au-Prince to
the countryside worsened poverty and health conditions.
Thousands of boat people managed to flee the country. Smuggling
and evasion of sanctions continued to increase to an
alarming degree.
From October 1991 to October 1994, Haiti was ruled by a
succession of military-backed regimes of which Raoul Cedras
was the principal figure (see Military Coup Overthrows Aristide,
October 1991-October 1994, ch. 6). They perpetuated
repression and terror, tolerated human rights violations, and
sanctioned widespread assassinations in open defiance of the
international community's condemnation. The international
embargo and suspension of most external aid caused inflation
to rise from 15 percent to 50 percent. A dramatic drop in
exports and investment also took a toll on the country's industrial
productivity and further damaged its already weak infrastructure.
Economic Policies
At the time of the military coup in 1991, Haiti's per capita
GDP had fallen steadily by 2 percent a year since 1980. The
country's economic stagnation was caused by permissive policies
that tolerated massive corruption and inefficiency in the
public sector, and by social polarization, mismanagement, and
total neglect of human resources. From 1991 to 1994, real GDP
fell 30 percent and per capita GDP dropped from US$320 to
US$260.
Aristide's return to power on October 15, 1994, after a complex
process that included threats of military intervention by
the United States and a coalition of multinational forces, raised
the hope of economic revival. With the situation gradually stabilizing,
a conference of international donors held in Paris in
August 1994 produced approximately US$2 billion—including
370