When people think of Haiti, they often think of poverty. We work hard to always paint a positive picture of life here. Haiti is an amazing, beautiful country and we love working here. But the truth is that things overall aren’t going well for our beloved country and unfortunately our friends and neighbors are becoming poorer every day.
In 2010 when we first moved to Haiti 1 US Dollar (USD) was worth 39 Haitian Gourdes (GDS). The exchange rate remained fairly stable for years, maybe changing a point over the course of a year. Over the past year and a half however, the value of the GDS seems to change almost constantly. For instance last week 1 USD was 79.5 GDS one day and 80.5 GDS the next. Millions of people lost 1.2% of their buying power over night. This week, the Gourde is at 84 and is continuing to rise.
This affects big businesses all the way down to the little substance farmer in rural Chiron. Haiti is dependent on importing food and many other supplies from the US, Dominican Republic, and many other countries. Some reports say Haiti imports up to 90% of its food. These importers buy their goods in USD, but have to sell them in GDS. With the GDS devaluing the way it is, the importer or businesses on the top, looses so much of its profit margins that it eventually has to raise it’s prices. This means that the ladies selling these same goods at market also have to raise their prices. Unfortunately most consumers aren’t willing and able to pay these increased expenses, and so big business are beginning to shut down. As these importers shut down, less food and other supplies is available at market.
For us it means that our main supplier of chicken feed has stopped importing. The business can no longer sell feed with enough margin to continue operations.
Businesses typically pay employees in local currencies. When the GDS depreciates 15% and employees only receive a 2% annual raise, it means that at the end of the year they have 13% LESS buying power. To leverage against this crazy inflation, New Roots has switched our payroll over to USD. This way our employees will receive the same pay regardless of what the GDS does. We truly believe that this is in the best interest of our employees.
I fear that the situation Haiti is in is bad, and unfortunately is only getting worse. Last month we had fuel shortages for several weeks. This week, the entire country is once again out of fuel. It has come out that the branch of government who is in charge of purchasing fuel has maxed out their credit lines. The government needs to purchase fuel with USD, but the customers pay with GDS. As the GDS have depreciated so much lately, this means that gas is “cheaper” for those purchasing with USD, but that the government is left subsidizing a larger and larger portion. Without an economic shift, we aren’t sure how this problem will be resolved. People are so fed up that there are now country wide riots happening. Last year the government tried to increase the price of fuel by 40% which led to some of the most intense rioting in the streets that have happened in years. The government eventually decided to redact the raise in fuel price.
I fear that if this rapid devaluation of the GDS continues, there will be widespread market collapse in Haiti and the import market is going to be in big trouble. Now more than ever Haiti needs to become self sufficient. More and more food needs to be grown LOCALLY. A great focus needs to be on sustainable job creation. Although our work is only a tiny drop in the bucket compared to what needs to happen, we are proud to be tackling these two problems head on. New Roots is working towards changing systematic issues that our plaguing this beautiful country.
Yesterday the President of Haiti announced an Economic State of Emergency. The details of what this will do have been slow to unfold but it looks like they will be subsidizing some food, and removing customs advantages for some sectors.
Will you please join us in praying for Haiti in this difficult time. That the Government can find ways to purchase fuel regularly. That the GDS will stabilize. And that that there will be a great focus on growing food locally and job creation. And most importantly, pray for the Haitian people, that they will find ways to survive this latest hurdle thrown their way and that they can get through it peacefully.
Thank you for allowing us to be here empowering some of the greatest people we know. It’s making a difference in the lives of vulnerable families in our village.
To help us continue to reach anymore families and help through this difficult season, donations can be made at Here