The Americas

Haitian unrest as fuel subsidies are cut 7-21-18

Source - Economist, Nov 10, 2018: "A gamble gone wrong"     

Haiti is a mess. Still recovering after a 2010 earthquake that killed 200,000 people, the President of Haiti is Jovenel Moise, head of the "Shaved Head" Party, who came to power with big promises of massive infrastructure projects and uninterrupted electricity. These promises cost money and Haiti has an incredibly narrow tax base - just 70,000 income tax returns were filed last year in a country of 11 million people. The $300 million a year Haiti was receiving in aid from Venezuela has also stopped due to the ongoing economic crisis there. Aid donations from abroad usually go to NGO's, not the Haitian government because of corruption concerns. All this means Haiti can only spend about 5% of its already low GDP on health, education and social safety net programs (compared to 15% for nearly-as-poor Honduras).  

Moise sought to free up money by ending the fuel subsidies (about $350 million a year) his government pays out to keep gasoline cheap. As only the wealthiest Haitians can afford a car, these subsidies benefit the wealthy. 85% of the fuel subsidies benefit the wealthiest ten percent of Haitians. Yet, when they were cut (raising gas prices by about 40%) - riots erupted. And they were hard to stop. Haiti abolished its army in 1995 and UN peacekeepers left Haiti for good in October of 2017. The inability of the Haitian police to stop the fuel riots raises serious doubts about its ability to handle any future unrest.