Haiti Embargo Hits Middle Class; Elite Exploits Black Market

WHEN the grinder at Famepak's came to a halt Friday afternoon, it signified more than the end of the work day. Haiti's only meat processing plant is now closed, another business squeezed dry by the United Nations embargo.

Four months ago, Famepak's owner George Frances shut down his slaughterhouse in the southern town of Aux Cayes, laying off 56 employees. In Port-au-Prince he has now reduced his payroll from 240 employees to 10, just enough to run a small supermarket on the factory grounds. Mr. Frances has lost more than $2 million since President Jean-Bertrand Aristide's 1991 ouster, which threw the country into political turmoil.

``I resisted as long as I could,'' Frances explains, pointing to a room filled with machines that cannot be repaired due to lack of spare parts. ``But I can't continue to operate at a deficit. I'm spending thousands of dollars buying black-market diesel just to operate my generators.''

The story is similar across the country. Since the UN tightened sanctions to include a complete commercial embargo in May, dozens of factories have closed. More than 20,000 people have lost their jobs. Assets of key people involved in the 1991 coup d'etat have been frozen. As of July 30, there are no more flights in or out of the country.

Workers feel the squeeze

For the last three years, Frances has sent Delva Germaine on biweekly buying trips to the Dominican Republic. Mr. Germaine made a good living by Haitian standards, nearly $700 a month, which supported his wife, two children, mother, sister, and her eight children.

When the border with the Dominican Republic was tightened several months ago to help reinforce sanctions, Germaine had trouble bringing goods into Haiti. Frances had to shut down that part of his operation. Germaine lost his job.

``I am devastated,'' Germaine says. ``I've used up my savings and sold or pawned everything I could. Now I'm reduced to asking friends or Frances for help, which is humiliating. If I saw the end in sight, I might be able to muster the courage to go on, but we're down to a day-to-day survival.''

The upper-middle class is even beginning to feel the impact of the embargo aimed at removing key Haitian Army officers.

But according to many analysts, the 1 percent of the population who receive 49 percent of the country's income are still insulated.

``We are not idiots,'' said one businessman close to the military. ``We were told months in advance they were going to freeze our assets. If people didn't see the writing on the wall, well, they deserve to lose what they have.''

Loopholes for the wealthy

Many of the elite, having the advantage of liquid cash, have made millions on the black market. Goods and gasoline still flow across the Dominican border for them to resell. The US dollar seems to be gaining strength on a daily basis. Meanwhile the value of the gourde, Haiti's currency, has dropped 20 percent in the last week.

``These guys [the elite] create a deficit of a certain product and then release it at an inflated price,'' said the owner of a wholesale warehouse, which recently switched from selling paints and cement to food items because he could not sell building supplies.

Though cement has tripled in price, there is no demand. Nothing is being built. ``Flour, which today is difficult to find, has gone from $14 to $25 for a 100-pound sack in just four months,'' he says.

No one here disputes that the embargo is having an impact, they just question at what cost. ``The embargo is working, but not enough to force the top guys to step down,'' said Fr. Antoine Adrien, a close friend of ousted President Aristide.

``They don't hurt the ones they should, the ones who have the power. And the ones who have the power, the ability to influence [Lt. Gen. Raoul] Cedras, don't seem to have the desire.''

Some argue that invasion is becoming the only solution. If there isn't some change in the military's position, the United States may have to become even more involved, they say. As one analyst put it: United Nations approval of a multilateral intervention ``may give them the final push they need to just go in and get the job done.''