Brunt of Embargo Hits Haiti As US Joins Sanctions Today

Some Haitians see turmoil; others, democracy restored

THE United States embargo on Haiti that begins today may hit this impoverished country hard economically, but its ultimate effect will be positive, predicts the Rev. Yvon Massacre, a friend and supporter of ousted President Jean-Bertrand Aristide."It will be good for Haiti," says the Roman Catholic priest. But just how the Organization of American States (OAS) trade embargo will help Haiti is not yet clear. And its first impact may be severe, judging by the long lines for basics, such as fuel, and the stunned reaction of Haitian businessmen after last week's announcement that the US would join the sanctions. Those sanctions - the first under a new OAS mechanism permitting it to confront the overthrow of democratic governments in the region - are aimed at reinstating Mr. Aristide. Haiti's first freely elected leader was deposed in a Sept. 30 coup. "A lot of us did not believe this would happen," says Chamber of Commerce and Industry President Gerard Bailly. He acknowledges that the private sector has had, in the words of one Western diplomat, "a rude awakening." The US and the other OAS members could come to regret "provoking a social and economic catastrophe... in one of the hemisphere's most vulnerable countries," Mr. Bailly warns. The outlook is particularly grim for Port-au-Prince factories that assemble garments, sporting goods, and electronic parts for export to the US. These companies yield 40 percent of Haiti's meager $650 million annual hard-currency earnings. About 65 percent of Haiti's imports come from the US, and 85 percent of exports are US bound. "The assembly sector will disappear on Dec. 5," says Albert Herry, the French manager of a garment factory. That is the cutoff date set by the US for reexporting goods assembled from raw materials already in Haiti. After that day "all our clients will take their orders elsewhere, and they won't suddenly switch back to Haiti when the embargo is lifted," he predicts. "I no longer understand the Americans," says a factory owner, pointing out that the assembly sector was the only business group to call publicly for Aristide's reinstatement, albeit with strings attached.

Domino theory If the 35,000 assembly jobs disappear, the ripple effect on jitney-bus drivers, street food vendors, and others who supply services to the plant workers will be immediate, economists say. The large number of family dependents, in a country with more than 50 percent unemployment, means several hundred thousand people will quickly lose their means of survival, they say. "People will starve. They will break into homes and loot stores for food and money," Mr. Herry says. "There will be something like civil war." Many analysts say almost all economic activity in this impoverished nation of 7 million people could swiftly be paralyzed by the other main arm of the embargo, a complete ban on shipments of petroleum products. Haiti has had no deliveries since its traditional source, Venezuela, cut off supplies after the Sept. 30 coup. Local distributors say gas stations will run out within days. Strapped for dollars by a freeze on Haiti's foreign assets, the military-backed interim government last week enlisted the financial aid of sympathetic businessmen in a frantic bid to buy on the spot market a $6 million shipment of gasoline and oil. But by leaning on suppliers, the US government appears to have blocked that attempt to circumvent the embargo. And last Thursday the State Department revealed plans to freeze the US-based assets of up to 40 wealthy Haitians. Many of those targeted are believed to be beneficiaries of privilege and corruption under the former Duvalier family dictatorship and are thought to have funded the recent coup. "This is such a tough embargo it could end up being short-lived because it will persuade everybody, including the military, to make concessions," says a senior banker who requested anonymity. Others, however, worry that the divided and undisciplined Army is still far from being willing to welcome Aristide back. These observers say a hard-line faction, backed by the enlisted men, could stage yet another uprising if it believes Aristide's return might come out of a new round of talks with the OAS mission expected to arrive here Wednesday. The Army's response so far to the US embargo has been to get even tougher. It carried out night car searches last weekend and issued a list of Aristide supporters accused of terrorism. "But that could be just an initial nervous reaction," the banker says. "It does not mean they won't see the inevitability of negotiations in the long run."

Parliament negotiates The OAS mission's main negotiating partner is to be the Haitian parliament, where signs indicate that the mainly right-wing legislators, who endorsed Aristide's ouster by naming a provisional president, are losing ground to centrists, who kept a low profile in the coup's early days because they feared Army reprisals. While moderates share criticisms leveled against Aristide by more adamant foes - that he usurped parliament and encouraged mob violence against opponents - they now discreetly promote formulas for his return. In exile, Aristide continues to make concessions. Last week he firmed up his willingness to replace his prime minister by offering to let the speakers of parliament's two houses submit a list of candidates. It was Aristide's refusal to let parliament remove his prime minister that set off a constitutional crisis in August and paved the way for the coup.

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