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 Fellow Hoosier and serious thinker Thomas Barnett puts words to a nagging misgiving thats been gnawing at the back of my brain since Haiti was leveled by an earthquake 12 days ago. Can a state that was in such poor shape before the quake really make a comeback? Is Haiti destined to become a perpetual national security problem that sends a chronic exodus of Haitian’s to our borders?  Functional capitalism does not seem to have ever taken serious hold in Haiti and Barnett suggests there is a real question whether it can:

“when you want to talk revitalization, the prime conduit is never Western NGOs and PVOs or official development aid, it’s the ex-pats and their money. I mean, the Bahamas are close by, have no natural resources, and yet make $30k per capita a year (Johnson piece). They get no serious aid that I can see. Meanwhile, last year the U.S. sent $290m in aid to Haiti (says Johnson). Overall, aid accounts for 30-40% of total government revenue–always a bad sign (about 15% is the good limit, otherwise you’re into the aid “curse” of an unresponsive government).  Meanwhile, according to the CIA Factbook, “Remittances are the primary source of foreign exchange, equaling nearly a quarter of GDP and more than twice the earnings from exports.” GDP is about $11B, measured in Purchasing Power Parity. So yeah, bring on the ex-pats. They have to be able to buy the world a more stable and sustainable Haiti than our aid has.

By some lights, Haiti was beginning to gain some traction in its governance, a small improvement under its technocrat President René Préval. The quake has wiped all of that progress out completely. If the country’s recovery remains solely or largely the province of the NGO crowd, I see little hope for Haiti to rise from the quake’s dust as a functional country and state.  We may be about to witness up close and personal here in our hemisphere the failure of aid that occurs in Africa, so often highlighted by Zambian economist Dambisa Moyo.

Oddly enough, some of those decrying Obama’s pledge of $100 million to Haiti relief are pushing exactly this idea, that we should leave it to the NGOs and charity to render assistance to the Haitian people. The reinstatement of a functional capitalist economy in this island nation is whats needed. I’m shocked to see conservatives calling for the active creation of a welfare state a mere 1.5 hour flight off our shores. If thats the future for Haiti, then the bright side of that $100 million (assuming its going to the Haitian government) pledged by Barry is that its a down payment to the Preval administration to manage the ongoing national security problem Haiti as a failed state will be, namely, keeping Haitians off the boats and on their own dry land, not ours.

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