Early Modern Times – Haiti’s debt spiral

Early Modern Times - Haiti's debt spiral

Dear readers,

The New York Times recently published findings from its Haiti ‘ransom’ project, about the Caribbean island’s indemnity to France from the early 19th to the mid 20th centuries, and which crippled the country’s economy. Haiti is currently the poorest nation in the Americas, but the French government has refused to acknowledge its historic role in Haiti’s impoverishment. Why did this newly independent country pay reparations to its former colonial masters, putting Haiti into a long debt spiral?

As noted in the Oct. 23, 2021 issue of Early Modern Times, slaves in the colony of Saint Domingue revolted against French planters in 1791, led by Toussaint l’Ouverture. By 1793, after an unsuccessful French attempt at invasion (pictured above), Haiti as it was now called was a Black-governed French protectorate. Although Napoleon sought to suppress the Haitian revolution in 1802, an Act of Independence was signed in 1804 by President Alexandre Pétion. Pétion, however, was embroiled in bitter conflict with his rival Henry Christophe. While Pétion had control of the south and sought cordial relations with France, Christophe governed over the north and was more hostile to their former overlords. The relationship between Pétion and Christophe was not one of love but Haiti.

Haiti would only be united under the leadership of General Jean-Pierre Boyer in 1818. Boyer, as Liliana Obregón points out in a 2018 article, sought French recognition of an independent and sovereign Haiti, with disastrous consequences. French plantation and slave owners were demanding that the restored Bourbon monarchy seize the former colony. At the end of the Napoleonic wars, they pressured the French crown to extend the slave trade and assert its right of reconquest. These plantation owners thus swayed the monarchy to light a Bour-bonfire under this rebellious colony.

By 1820, Haiti was a united, independent republic. The French accordingly shifted their strategy: if they couldn’t reconquer Saint Domingue, they would turn Haiti into a ‘commercial colony’. In 1825, the French crown sent a fleet of gunboats to the harbour of Port-au-Prince. The French would allow the independence of Haiti only in exchange for reparations to plantations owners at the sum of 150 million francs. The Haitians felt French-fried.

The Haitian government was unable to pay the full sum, and had to borrow from French banks. Haiti thus had a double indemnity: gradual payments to the French government and to the banks at the same time. The government defaulted twice on its payments, and was forced to impose oppressive taxes on its own people to pay the French. The French banks grew extremely wealthy out of this deal, and these ‘ransom payments’ financed, among other things, the costly construction of the Eiffel Tower–while Haiti sank into Towering debt. Over time, Haiti’s government had to take out loans from other European and American banks, leading to a century of repayments which pauperised the Haitian economy in addition to financial mismanagement and corruption at home. Haiti was dying a slow debt, caught in a debt trap with a century-long debt-march under a looming debt-penalty.

Till next time,

Simon Kow

Early Modern dance of debt Studies Program

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