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Article Artículo

Haiti

Latin America and the Caribbean

World

Did Trump Take a Page Out of Haiti’s Presidential Playbook?

Last week US President Donald Trump fired FBI Director James Comey. The president immediately came under heavy criticism, accused of obstructing justice, as the FBI is currently investigating the Trump campaign’s ties to Russia. Two weeks earlier, in Haiti, President Jovenel Moïse fired the director of the country’s financial crimes unit (UCREF). During last year’s elections in Haiti, UCREF produced an investigative report on Moïse, raising questions of possible money laundering. No charges have been brought, but the investigation appeared to be ongoing. 

While Trump’s moves have spurred increasing calls for impeachment ? or at the very least an independent investigation ? in Haiti, the move occurred with scant international attention. Local human rights groups, however, have sounded the alarm. Unlike in the US, where the president actually has the power to fire the head of the FBI, it appears as though the Haitian president had no such legal authority to fire the head of the UCREF.

The UCREF has been the recipient of millions of dollars in international support for years, much of which was from the United States. UCREF, however, has failed to produce many measurable successes. In 2016, the State Department reported:

The country’s financial intelligence unit (FIU), the UCREF, has continued to build its internal capabilities and to do effective casework. The UCREF has fifteen open cases but has not forwarded any cases to the judiciary in 2015. Continued issues in the judicial sector mean the UCREF’s progress is not yet reflected in conviction rates.

In recent years, Haiti has come under pressure from the Caribbean Financial Action Task Force (CFATF) to make improvements to its safeguards against money laundering. If improvements are not made, CFATF has threatened to recommend member states impose restrictions on banking transactions with Haiti. Moïse took office in February 2017 already under a cloud of suspicion for his own alleged involvement in money laundering, and the hollowing out of UCREF’s independence will likely only exacerbate this, with potentially serious economic consequences.

In early May, the Haitian Parliament approved a new law on UCREF. Previously, UCREF’s director general was selected in a process directed by five representatives from independent bodies. The new law reportedly gives the president the ability to approve three of the five representatives, granting the executive de facto control over the entity. 

But Moïse didn’t even wait for the new law’s approval to act. On April 19, he replaced UCREF Director Sonel Jean-François, just one year into a three-year term. A replacement, reportedly picked by Moïse, was supposed to be installed last week, but that process has been postponed indefinitely.

Maxime Rony of the Platform of Haitian Human Rights Organizations told the media that Moïse’s barely four-month presidency was based on a “governance of revenge,” noting that, in addition to the new law on UCREF, one of the first acts of the new Parliament ? controlled by Moïse’s allies ? was to pass a harsh defamation law. Haiti’s largest newspaper, Le Nouvelliste, wrote that since the UCREF report was released last year, its director had been “in the sights” of Moïse and his political allies.

Pierre Esperance of the National Human Rights Defense Network pointed out that the law governing the UCREF outlines a clear process for selecting a new director general, and that Moïse’s decision was “contrary to the law,” and “an extremely serious matter.” 

Jake Johnston / May 17, 2017

Article Artículo

Economic Growth

United States

Workers

No Evidence of Accelerating Wage Growth

In March, the Federal Reserve Board voted to raise interest rates for the second time this year, indicating their concern that rising wages would result in inflation if they did not take action. However, an analysis of average hourly wage trends for six sectors of employment since 2010 finds little evidence that wages are rising dangerously fast, or even accelerating at all.

CEPR and Sarah Rawlins / May 16, 2017

Article Artículo

The Trade Deniers

Trade denialism seems to be a fast-growing sector of the economy these days. Robert Samuelson, the Washington Post columnist, is one of the leading practitioners. In today's column, he has a new study by Gary Clyde Hufbauer and Zhiyao “Lucy” Lu from the Peterson Institute for International Economics, which tells us both that the job loss from imports was not a really big deal and also that we have gained hugely from trade.

The gist of the job loss exercise is to take the period from 2001 to 2016, measure the growth in imports, and then calculate the job loss over this fifteen year period. As Samuelson tells us:

"...the Peterson study estimates that from 2001 to 2016, imports displaced 312,500 jobs per year . Even this overstates the impact, because it ignores exports. In the same years, they boosted jobs by 156,250 annually, offsetting half the job loss."

He then tells us this is no big deal in an economy with 160 million workers that adds 200,000 jobs a month.

Some folks may beg to differ. First, the growth in exports doesn't really offset the gross job loss due to increased imports. The exports are generally in different industries and almost certainly in different factories. In other words, the jobs lost due to imports is the figure we should focus on in terms of the people who are seeing their lives disrupted.

It is also worth noting that the trade-related job loss was heavily concentrated over a narrow period of time, the explosion in the trade deficit from 2001 to 2007. While this took place during the George W. Bush presidency, the main cause was the run-up in the value of the dollar from the Clinton years, so we can make the blame bipartisan.

Anyhow, using the study's methodology, we get that the economy lost an average of 620,000 jobs a year due to imports in these six years, with almost 400,000 of the yearly job loss occurring in manufacturing. This means that almost 15 percent of the people employed in manufacturing may have seen their jobs disappear due to imports in this six-year time period. That doesn't seem like a minor issue.

CEPR / May 15, 2017