HAITIAN GOVERNMENT TASK FORCE TO STUDY ADOPTION OF US DOLLAR

HAITIAN GOVERNMENT TASK FORCE TO STUDY ADOPTION OF US DOLLAR
PORT-AU-PRINCE, HAITI –  A few months ago, Omega published an article written by this writer arguing why Haiti should consider adopting the U.S. dollar as its only official currency dumping the gourde.  Since that first article, the writer has received feedback from Haitians and non-Haitians alike. Haitians from the Diaspora (US, Canada, France, Brazil, Germany, and Belgium to name a few) and from Port-au-Prince, Haiti.  Recently, an official from the Haitian government contacted the writer to inform him that the government is convening a task force to study the social, political and economic implications of adopting the US dollar as Haiti’s only official currency.
If the Haitian government is serious about studying the possibility of adopting the US dollar, a task force is a good way to start. But the task force must have a deadline to conclude its study. This is not rocket science. Many countries have already adopted the US dollar and have conducted similar studies. Omega has contacted them, and they are willing to assist Haiti. Ecuador, El Salvador, Panama, and Zimbabwe would love to help Haiti. But knowing how things work in Haiti, the task force should have no more than twelve months to conclude its report, and then a referendum should be organized to allow the people of Haiti to vote on the adoption of the US dollar.
Besides members of the government, this writer has heard from several people from Haiti’s merchant class, commonly known as “the Haitian bourgeois.” As expected, many of them confided to the writer, privately that this is the “worst idea ever,” and that Haiti is a “sovereign country” that must retain its “sovereign status”; and adopting another country’s currency is NOT what nationalists do. This is a very spurious argument, and as this issue gains momentum, I expect them to make this argument more vociferously.
Their argument is baseless and plays on people’s emotion.  It is also a self-serving argument because the merchant class benefits greatly from the status quo. A change in the currency would uproot them and change the social, political and economic dynamics of the country. First, it will open the country to more investors at all levels of the Haitian economy; (2) investors would no longer have to speculate, and will gain confidence in the strength of the US dollar; (3) monetary policy will be set by the US Federal Reserve; (4) Haiti will spend less money paying its foreign creditors; (5) no more exorbitant currency exchange fees; and (6) it will be easier now for the government to maintain its reserve in US dollars.
Currently, Haiti imports nearly 90% of the food it consumes. So much so, the US State Department has reported food security as an existential threat to Haiti.  Haiti uses US dollars to pay for the food purchases. For example, each year, Haiti purchases from the United States, nearly 2 billion dollars’ worth of rice. But each year the price of rice goes up, not because the buyers are paying a high price to the US agribusinesses, it is because of the exchange rate, the gourde versus the US Dollar. By the time the rice gets to the masses in the street, and the exchange rate is factored in, the cost increases by nearly forty percent. Who benefits? The big merchants.
Most people in Haiti who toil in factories, including government employees, get paid in gourde but spend their money in dollars. The gourde has no real value because Haiti produces nothing to perk against the value of the gourdes, so in effect, the gourde is an obstacle used by sophisticated businessmen to continue the exploitation of those who do not understand how currency work. A few nights ago, I received an email from someone in Haiti who asked me “Why the dollar and not the Euro?”
For several decades since world war II, the US dollar has been the de facto global currency. Central banks all over the world, including Haiti’s central bank, agreed to link exchange rates to the US currency instead of gold leading them to hold dollars in reserve instead of the metal. Since that time, no other currency has come close to dethroning the dollar. In 1999 the Euro was born, but the financial crises of 2010 affecting Greece and other European countries gave pause to world investors and dimmed the Euro’s chance, as investors acquired more assets in US dollars. Regardless of what others may say, the US dollar’s role in the global economy will continue to strengthen.
Currently, the US dollar is used in 9 out of 10  transactions in the 5.1 trillion dollars a day foreign market exchange. Almost every commodity such as rice, oil, sugar, flour, corn and others are priced in US dollars. Haiti will do itself a great service by switching from the gourde to the US dollar as the only official currency. The Haitian government must not drag its feet. The task force must be given no more than 12 months to study the implications. But, the fastest way to get this done, is to run a referendum allowing the people of Haiti to decide. I am sure the masses would have to be paid in US dollars

 

By: Emmanuel Roy
Editor
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