Haitian Foreign Aid – Case Study In Unintended Consequences

Posted by Jason | Posted in Miscellaneous | Posted on 04-03-2010

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While I can understand the initial aid flooding into Haiti, this article in the Wall Street Journal highlights another reason why foreign aid is a bad idea. In order for liberals to feel good about themselves, they take their fellow citizens money at gun point and hand it over to foreign citizens, which allows them to bypass their local business. So the people they want to help are actually hurt.

Business for Ilia Alsene, one of Haiti’s ubiquitous “marchands”—or merchants—who sell food and beverages at curbside stalls here, is a lot worse since the country’s devastating earthquake. But Ms. Alsene doesn’t blame the quake so much as the international relief effort that followed.

“I have fewer customers now because they are handing out free food down the street,” says the 52-year-old, pointing to the nearby Champs de Mars plaza where aid organizations regularly hand out food to tens of thousands of people camped there in tents.

But only a tiny fraction of that money is being spent in Haiti, buying goods from local businesses. Worse, the aid is having the unintended consequence of making life harder for many businesses here, because of competition from free goods brought in by relief agencies. The damage to Haitian companies is making it harder for them to get back on their feet and create the jobs the country needs for a lasting recovery.

Alex Zamor’s drinking-water factory is operating again at near full capacity after suffering damage from the earthquake. But he still hasn’t rehired 200 employees at the factory because sales are so weak. He blames free water handed out by the relief effort.

“Of course we welcome the relief, but nobody wants to buy water if there’s free water on the streets,” he says. Mr. Zamor says international relief agencies should be sourcing more of their products for the relief effort from Haiti itself. “We should be helping Haitian companies instead of companies in Florida,” he says.

Tom Adamson, a transplanted Canadian, runs one of only two mattress companies in Haiti. Three of his 10 retail stores around the country were destroyed, and his factory suffered minor damage. But he says the biggest effect from the quake has been increased competition.

In the weeks after the temblor, a mattress company in the Dominican Republic sent 10,000 foam mattresses for the relief effort, getting import duties at the border waived. He and U.S. officials say nearly all relief supplies don’t get charged import taxes. Meanwhile, Mr. Adamson’s mattress company has a container of chemicals used to make foam mattresses stuck for months in Haitian customs, where is still being asked to pay import taxes.

“Things like this make it very hard for me to compete,” he says

via Global Aid Is No Relief for Small Haitian Businesses – WSJ.com.

Why buy products from the local business who employs your neighbors, when you can get the products free from foreign aid. Why grown your own wheat when the US drops in all it’s subsidized corn, which drives the price of your goods through the floor? Oh, and don’t think for a second this corn and other goods are donated out of the goodness of the grower’s heart. King Corn gets paid for the corn with tax money stolen from the tax payers. I’m sure they love foreign aid. It’s just another opportunity for corporate welfare, and it makes it harder for the people that are supposedly trying to be helped get back on their feet.

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