HAITI: STRUGGLING TOWARD CIVILIAN RULE

Document Type: 
Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP04T00907R000100220001-8
Release Decision: 
RIPPUB
Original Classification: 
S
Document Page Count: 
29
Document Creation Date: 
December 22, 2016
Document Release Date: 
March 28, 2012
Sequence Number: 
1
Case Number: 
Publication Date: 
June 1, 1987
Content Type: 
REPORT
File: 
AttachmentSize
PDF icon CIA-RDP04T00907R000100220001-8.pdf1.48 MB
Body: 
Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Directorate of Intelligence Haiti: Struggling Toward Civilian Rule Secret ALA 87-10029 June 1987 Copy 18 9 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Directorate of Intelligence Civilian Rule Haiti: Struggling Toward An Intelligence Assessment This paper was prepared by -]Office of African and Latin American Analysis, with contributions from Office of Leadership Analysis; and Office of Global Issues. It was coordinated with the Directorate of Operations. Division, ALA Comments and queries are welcome and may be directed to the Chief, Middle America-Caribbean Secret ALA 87-10029 June 1987 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 - Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Haiti: Strug H Toward Civilian Rule Key Judgments Looking ahead at the next few years, Haiti faces a difficult struggle to Information available achieve stable civilian rule. Although Haiti's ruling council is likely to as Qf 10 June 1987 adhere to its scheduled transfer of power to an elected civilian president in was used in this report. February 1988, it might delay the transition if public unrest recurs. The greatest danger to political stability is likely to come after the transition. A strong civilian leader has yet to emerge, and we doubt a new government would encounter the euphoria that greeted the downfall of the Duvalier regime and the installation of the council in February 1986. Without a national consensus on the country's future political direction, the new government could be toppled by even a short bout of unrest. Should Haiti's experiment fail, Haitian or other Caribbean leaders could call for greater US involvement-and possibly direct military intervention-to restore order and stability. The council has made some progress toward democracy, but US Embassy officials indicate that most Haitians perceive it as unresponsive to popular demands. Much of the current political calm probably reflects the popular assumption that the council will soon relinquish power. At the same time, in our view, the potential for serious civilian unrest persists largely because of frustrated economic expectations. We believe public demonstrations will increase as electioneering gains momentum in the next few months None of the leading candidates for president is likely to win a clear mandate in the election slated for November 1987. The political center, however, could present a formidable force if leading moderates put aside their differences and backed one candidate to head a united front. Although personal rivalries have precluded significant collaboration, lead- ing moderates may realize the need for unity as the election nears. Alternatively, socialist-leaning nationalists could be surprisingly strong contenders if they formed a populist coalition, especially if the moderates fail to unify quickly. Such a coalition, however, probably would call for sweeping reforms that would deepen the hostility between the people and the elite. Although we view the prospects for a successful transition as better than even, the process might be delayed if the military-dominated council believed that widespread unrest was threatening public order, that the leading contenders or an elected successor were inadequate to the task of Secret ALA 87-10029 June 1987 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 governing Haiti, or that the military's institutional interests would be threatened. We also judge it possible-although highly unlikely-that these same factors could induce the council to cancel democratization altogether. Regardless of who holds power, Haiti's authoritarian traditions and unrealistic popular expectations for economic progress will greatly compli- cate the government's ability to manage conflicting demands of key interest groups. Key figures in business, the military, and the government will resist dilution of their wealth and power. On the basis of US Embassy reporting, we believe the Catholic Church will continue to back popular demands for reforms that put it at loggerheads with conservative interests. We expect that, in this environment, the new government will have difficulty encouraging disparate groups to cooperate in the national interest without using intimidation and repression. Even a president favoring democracy may have to quell dissidence, on the left and right, in order to consolidate power. As a result, we see a return to civilian authoritarianism as a distinct danger. Alternatively, should the government fail to consoli- date power quickly and collapse as a result of popular unrest, a succession of unstable civilian administrations is possible. Such turmoil would strong- ly encourage the military to seize power again. We believe that if a civilian is installed as president the Haitian Govern- ment will seek substantial economic and military assistance from the United States. Haiti's new leaders almost certainly would be aware that past successful transitions from authoritarian to democratic governments elsewhere in Latin America suggest that even a modest US commitment helps reinforce the legitimacy of the new government and improves its chances of success. A stalled or aborted transition could quickly magnify Washington's problems. At a minimum, we would expect a heightening of anti-US sentiment. The ensuing political polarization could trigger violence that the Haitian Government might well be unable to control. If the security situation deteriorated markedly, we believe that Haitian refugees would flock to the United States and that the lives and property of US citizens in Haiti would be endangered. Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 We judge that the return of authoritarian rule-military or civilian- would present radical states with an opportunity to exploit Haiti's instabil- ity and increase their influence in the region. Cuba, and to a lesser extent the USSR and several foreign Communist parties, probably view Haiti as a long-term target of opportunity and probably would continue to provide various types of training and modest funding to Haitian Communists. Libya most likely would continue paramilitary training of small Haitian radical groups, encouraging them to initiate terrorist activity. In view of Haiti's fragile security situation, even small groups backed by foreign radicals could pose serious threats to stability. Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 -- Contents Key Judgments Introduction The Current Political Landscape The Military Business Elites and the Duvalierist Right 3 Socialist Nationalists and the Radical Left 5 Radical Foreign Influences Unrealistic Popular Expectations 7 Looking Ahead: Transition Scenarios Maintaining the Democratic Timetable 10 Dangers Beyond the Transition Implications for the United States A. Major Political Players and Presidential Contenders B. Haiti: Daunting Economic Challenges Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 3 Uoln niwn _ Repilblic ... Jamaica Haiti Puerto Rico (U.S.) r35,-I Jean-Rebel 1~~ r Male t c Saint-Nicolbss~ Bai,de=Hens Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 - Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Civilian Rule Haiti: Struggling Toward Haiti's military-dominated ruling council is generally adhering to the transition schedule it set for itself in 1986. The council held a referendum in March 1987 on the new liberal Constitution, which was approved overwhelmingly. Local elections are scheduled for August, and the presidential election is set for No- vember. The transition to civilian rule is slated to take place on 7 February 1988, the second anniversary of the ouster of former President Jean-Claude Duvalier. President Henri Namphy is determined to stick to this timetable and turn power over to a civilian president on schedule. Despite these promising signs, widespread popular dissatisfaction with the council's overall performance and its potential response to unrest remain serious threats to the handing over of power on schedule to a civilian administration. Popular discontent with Hai- ti's dismal economic conditions and the lingering political influence of Duvalierists have provoked spo- radic antigovernment protests and violence since the collapse of the Duvalier regime. According to US Embassy officials, the current political calm rests on the populace's assumption that the unpopular council will be gone by early next year; meanwhile, a random incident could still spark widespread mob violence. Namphy's predilection to use increasing force against potential demonstrators may signal a reversion to authoritarian tactics. The system is also under pressure from much more fundamental sources. We believe Haiti's largely illit- erate population and the country's history of dictator- ships and political fragmentation seriously limit the government's ability to construct a viable democracy that can withstand the continuing maneuvering of extremist elements on both the left and the right. This assessment examines the makeup of the domestic political landscape and the ability of radical foreign actors to affect the process. It analyzes the hurdles facing the development of democratic structures and the pressures that a civilian government is likely to confront. The paper also assesses possible political 25X1 outcomes over the next few years, considers the potential for greater Cuban and other outside inter- ference, and discusses the implications for US inter- ests, including the possibility that a deteriorating security situation could invite a more direct US role. The Current Political Landscape Haiti's political spectrum is dominated by the various interest groups and power centers that vied for influ- ence during the Duvalier era and by the newer ones that have emerged in the more open political climate allowed since the collapse of the old regime. Haiti's 25X1 political scene currently is dominated by political 25X1 moderates-all of whom opposed Duvalier in Haiti or from exile-who have staked out popular, reformist 25X1 positions while remaining largely acceptable to such crucial interest groups as the military and the busi- ness community. The supporters of the old regime- the so-called Duvalierists-with their political experi- ence and strong motive of self-preservation, also con- tinue to wield considerable, if low-profile, influence. Socialist-leaning nationalists have been unable to unite in an electorally workable political movement so 25X1 far, but we believe that their widely popular calls for 25X1 sweeping social reforms could, nonetheless, propel Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 them to the political forefront in the months ahead. In our view, the Catholic Church, as well as the far left and its foreign backers, are secondary-but still im- portant-players largely because of their demonstrat- ed ability to foment unrest and their weak support or outright rejection of the council's transition plan. Moderate Contenders The US Embassy in Port-au-Prince indicate that none of the half dozen or so leading moderates in a field of some 200 presidential contenders has yet to emerge as a strong front- runner.' Even the most prominent moderates lack sophisticated political organizations or nationwide support. Moreover, according to the US Embassy, the keen ambition of leading moderates to become presi- dent predisposes them to act as competitors rather than as allies. They appear unwilling or unable to take a firm first step toward forming a coalition movement, which we believe is their best vehicle to elect a centrist The Ruling Council's Mixed Record The Namphy government has turned in an uneven performance in several key areas since coming to power: Building Democracy. In addition to generally adher- ing to the transition timetable it set for itself in June 1986, the council-according-to-the US Embassy, has sought to encourage grassroots democracy in rural areas through local administrative units called casecs. The Embassy indicates that such initiatives as the Constituent Assembly elections in October 1986 have lacked preparation and failed to engender much popular enthusiasm; only 9 percent of Haiti's eligible voters, for example, participated in these elections. By contrast, the Embassy reports that the constitutional referendum in March 1987, which at- tracted roughly 44 percent of eligible voters, was better prepared and conducted fairly and openly. president To preserve their credibility with the voters, the moderates, in our view, perceive a need to distance themselves from the ruling council most leading moderates want to work according to the ruling council's electoral ground rules but have criticized the government's handling of the transition process. Fearing that elec- tions could be delayed or corrupted, leading moder- ates in December 1986 called for the creation of an independent electoral commission to oversee the building of a political infrastructure and monitor elections, according to US Embassy reports. Namphy subsequently met with several moderate leaders and reportedly reacted favorably to their proposal for the electoral commission. Although the government an- nounced the. establishment of a nine-member indepen- dent commission in May indicate that the politicians are increasingly skeptical of the ruling council's democratic intentions because Namnhv has failed to resume his dialogue with them. De-Duvalierization. One of Namphy's first acts as President was to disband the roughly 11,000-man Duvalierist militia, known as the Ton Ton Macoutes, which virtually eliminated the government's domestic intelligence capabilities. A few of the most brutal militia leaders have been charged with or convicted of crimes. US Embassy and press reporting indicates that other prominent Macoutes fled Haiti after Duva- lier's fall, and the government has been unable or unwilling to pursue their extraditions vigorously. Although some prominent Duvalierists were purged from the government bureaucracy, Embassy reporting suggests many remain entrenched in their jobs.F__ books. Human Rights. According to Embassy reporting, the government has allowed complete freedom of speech and a free press. Until recently, the council had eliminated intimidation and arbitrary arrest as gov- ernment policy, even though isolated incidents of brutality beyond the council's control had occurred. In February, however, the council proclaimed it had the right to undertake `preventive detentions, " osten- sibly to prevent disturbances on the anniversary of Duvalier's overthrow, but the decree remains on the 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 - Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Haiti's new Constitution is designed to prevent the emergence of another dictatorship and ensure human rights, while limiting the political activity of Duva- lierists, according to the US Embassy. The docu- ment-drafted by the Constituent Assembly and ap- proved by 99 percent of Haiti's voters-decentralizes governmental structures, curtails the president's pow- ers, and limits his tenure of office to two nonsucces- sivefive year terms. Under the new system, the president will govern in conjunction with a prime minister chosen, under tight restrictions, by the presi- dent. In addition, the president and prime minister share power with a bicameral legislature consisting of 27 senators and no fewer than 70 deputies. According to the Embassy, the Constitution does not clarify the flow of power between the president and prime minis- ter. The Embassy reports that some observers fear that the Constitution is well intentioned but too vague, and contains provisions that will make it impossible for any administration to govern the coun- try effectively. We believe the Constitution could be politically divi- sive as its implications become clearer and the re- forms it mandates are implemented. Provisions bar- ring Duvalierists from holding public office for 10 years if they have not been cleared of charges of corruption or human rights violations could, in our view, give the ruling council veto power over many presidential candidates, since most leading contend- ers have had at least some ties to the Duvaliers. In addition, the Constitution calls for the creation of an independent electoral commission and the separation of Army and police functions, both of which are unlikely to be popular with military leaders.F__1 25X1 Should difficulties arise as the Constitution is imple- mented, such as in the separation of powers, the legislature is empowered to amend the document in order to rectify the problems. The procedure for amending the Constitution,. however, is complex and drawn out. Moreover, the Constitution cannot be amended until 1993, after the first democratically elected president leaves office. Still, we believe the ultimate success or failure of Haitian democracy 25X1 depends less on the Constitution and more on the willingness and ability of the new political leaders to make it work. The Military Because the military is Haiti's strongest national institution, it is the most important political player, and one with a long history of involvement in political affairs. Moreover, the military members of the ruling council and other senior officers interpret the new Constitution as mandating that the Army will remain free of tight civilian control, Despite the pivotal role of the armed forces, we believe divisions in the officer corps, discontent in the ranks, and civilian distrust of the ruling council may impede the military's ability to influence political events. For example the council intends to press the military to vote as a bloc for an as yet unspecified presidential candidate, but we judge that such a move would fail. US Embassy officials say some senior Army officers tacitly support Duvalierists. Others in the military support moderate candidates or leftist groups, many in the military would refuse to support the council's choice for president simply because they are opposed to the leadership's telling them how to vote. Moreover, we believe such a blatant attempt by the military leadership to impose its choice for president could provoke strong popular opposition because many Haitians resent the continued promi- nent political role of the military since Duvalier's overthrow, according to the Embassy. Business Elites and the Duvatierist. Right Business elites account for only 1 percent of the population, according to the Embassy, but they have significant financial leverage to influence political 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 In the post-Duvalier era the military has been called on to provide internal stability. Even so, the deterio- rating capabilities of key units could seriously under- mine the military's effectiveness in maintaining order. that the Leopards Battalion-an elite counterinsurgencyforce-is at less than one-third of its authorized strength of 598 and is essentially nonfunctional because the General Staff has not authorized the unit to replenish its ranks. that the govern- ment totally depends on the Presidential Guard, the Dessalines Battalion, and the Port-au-Prince Po- lice-with a combined strength of approximately 3,000-to control civil disturbances in a capital city with over I million residents. The government also reportedly depends on regional units with an approxi- mate total strength of 2,500 troops to maintain order in the provinces, where an additional 5 million Hai- tians live. Official Haitian figures put the armed forces'strength at 9,998. owev- er, estimates the actual strength at approximately 7,700. We believe the figure may be even lower because of attrition and corrupt commanders padding their payrolls Factionalism and discontent within the military also threaten to reduce the government's ability to control the security situation. oppose military reform and jealously cling to perquisites enjoyed under the old regime. in January Namphy was sufficiently concerned about the loyalty of the officer corps that he promoted several trusted allies to shore up his support. A sweeping shuffle of senior officers in March, accord- ing to the Embassy, was engineered by Brig. Gen. Williams Regala, the other military member of the ruling council, to consolidate his position. Despite these moves, several senior officers believe that military morale and effective- ness are at the lowest point in years and that open dissent in the ranks may occur. events. Those of mulatto and Arab descent-who coexisted uneasily with the old regime-probably line up politically with moderate candidates. The Embassy indicates that some wealthy businessmen already are attempting to identify and back the likely presidential winner in an effort to preserve their economic inter- ests. Embassy reporting suggests the business community pays lipservice to reducing official corruption and improving human rights but privately views only limited social and political change as in its best interests. We believe the role of the Duvalierists is also impor- tant to the prospects for the transition because many supporters of the old regime remain wealthy and influential members of Haitian society. US Embassy and press reports indicate the ruling council has weeded out some Duvalierists from the government and brought several former militia leaders to trial for crimes committed during the Duvalier era. Despite these pressures and the public outcry that forced them to announce the dissolution of their fledgling political party last November, there are signs that the Duva- lierists are secretly rebuilding their political network to safeguard their perquisites and launch their own drive for power Adrien Raymond, who headed the ostensibly disband- ed party, reportedly is instructing supporters to main- tain a low political profile until the election draws interests, the DuvalieristsJ personal jealousies. Still, they clearly have more money and po iti- cal experience at their disposal than other groups on the horizon. The Church Internal divisions have prevented the hierarchy of the Roman Catholic Church in Haiti from playing a potentially central role in assisting the transition. Once outwardly united in the forefront of opposition 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X11 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 to Duvalier, the church-the only institution besides the Army with a national organization-has become increasingly divided between moderate clerics tacitly supporting the ruling council and militant leftist priests opposing it, Reporting from Embassy leads us to conclude that the radicals, at least temporarily, have the initiative. US officials say leftist clerics continue fomenting unrest in parishes throughout the country, even though they have lost some political momentum recently. For example, the most outspoken radical priest, Jean-Bertrand Aris- tide, is popular among youth, coordinates activities with radical groups, and openly agitates-with some success-for protests to topple the government. By contrast, church moderates have been politically reti- cent since Duvalier's overthrow. The Embassy says, however, that the Haitian bishops' pastoral letter issued in February was conciliatory toward the ruling council and may represent an attempt by the hierar- chy's moderates to undercut leftist clergy and regain control of the church's political message. Neverthe- less, even moderate clerics have been unwilling to tie their reputations to the council or its initiatives be- cause, the Embassy says, they doubt the government's commitment to democracy and social justice. Socialist Nationalists and the Radical Left Socialist elements have begun organizing politically in keeping with the government's ground rules but are far from coalescing into a unified political movement with a coherent strategy or ideology, according to the Embassy. Many socialists belong to an umbrella group called the Committee of the Congress of Demo- cratic Movements or CONACOM, but the Embassy reports that this group does not function as a single political entity. Numerous other socialist parties have operated intermittently alongside more radical groups under the banner of the Liaison for Democratic Forces, but this group is factionalized and increasing- ly ineffective politically. Despite the organizational shortcomings of the socialists, they share some com- mon beliefs. Embassy officials, for example, describe socialist elements as generally suspicious of the Unit- ed States, the business community, and the military, while advocating redistribution of wealth and eco- nomic self-sufficiency for Haiti The radical leftists continue to plan strategies aimed at manipulating or derailing the transition to democ- racy. the 25X1 have been secretly fomenting-antigovernment protests through other groups, strengthening links to radical Catholic priests, and developing a capability for armed struggle should they decide to pursue that course. The Communists reportedly also plan to run a candidate for president in the coming election. the Communists 25X1 Unified Party of Haitian Communists-which may have as many as 3,000 members-has had some success expanding its influence beyond Port-au- Prince, partly by keeping a low profile during bouts of 25X1 25X1 unrest in order to project a responsible image.~ 25X1 the leadership of the Democrat- 25X1 is Unity Confederation-a group popularly known as KID that has ties to Cuba and rejects the legitimacy of the ruling council-believes that violence is the best means to pursue revolutionary goals in Haiti, and is seeking weapons. We lack credible evidence that the left has the capability to carry out effective, 25X1 coordinated acts of subversion that could topple the government any time soon, although the Embassy reports that some radical groups may be partly re- sponsible for a recent surge in violent robberies. Leftist groups have had considerable success attract- ing protestors to antigovernment demonstrations over the past year, but have been unable to sustain the momentum of protests beyond several days. More- over, the Embassy reports that a conference in Janu- ary of Haitian radical groups showed that the left remains fragmented and reluctant to cooperate. foreign leftist actors are attempting to expand their influence in the region by supporting Haitian radical Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 - Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 groups and encouraging them to develop a capability for clandestine subversion in the posttransition period. emergence of scores of presidential candidates and parties. In addition, we believe widespread illiteracy among voters and the government's inexperience with electoral procedures could facilitate the manipulation and corruption of elections by antidemocratic ele- ments on the left and the right. Moreover, academic studies have underscored the fact that most Haitians traditionally have viewed governments in Port-au- Prince as predatory regimes that secured power by satisfying the interests of the elites while cowing the general populace into submission. Haitian history provides no precedents of a government successfully balancing the interests of the elites and the poor For example, the USSR, Cuba, and the French Communist Party are funneling considerable sums of money to Haitian Communists. Libya, which probably sees Haiti as a good opportuni- ty to gain a foothold in the Caribbean, also has become active. Libyans are backing a small group of radical former exiles and encouraging them to undertake acts of and well-trained subversives could cause serious prob- lems for the Namphy government, Qadhafi is backing groups that to date have demonstrated little popular appeal. In our view, the council faces several immediate and stiff challenges beyond its control in creating a viable democracy. At a minimum, the volatile political and social climate will greatly complicate the tasks of managing a smooth transition to democratic rule and building the national consensus needed to ensure the survival of a fledgling democracy. Undemocratic Traditions Haiti's long history of strongman rule provides little basis for the emergence of a workable party system. In our judgment, the country's highly individualistic political tradition is demonstrated most clearly by the without resorting to intimidation or terror. Unrealistic Popular Expectations We believe that broad dissatisfaction with the pace of social and economic progress will be a major hurdle for the council-and any new government-to over- come in the near term.' The lack of visible social and economic improvements, in our view, is a principal 25X1 reason that seemingly insignificant issues can quickly ignite widespread unrest. According to Embassy re- porting, impoverished Haitians-the vast majority of 25X1 the population-have high expectations but doubt 25X1 that the democratic institutions the ruling council is building will significantly improve their lot. In addi- tion, we judge that frustration with the lack of significant economic progress may well prompt fur- ther outbreaks of labor unrest, which would discour- age foreign investment in the coming months 25X1 25X1 Whether the transition to civilian rule occurs on schedule in February 1988 depends, in our opinion, on three key factors: ? The level and endurance of violent protests. ? The strength of Namphy's commitment to relin- quish power. ' For details on Haiti's recent economic performance and the factors determining the country's economic prospects over the next Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 After reviewing 25 transitions from authoritarian to democratic rule in the Western Hemisphere over the last three decades, a study done on contract for the Central Intelligence Agency identified 10 factors that tend to characterize successful transfers of power.a In Haiti's case, only one factor appears to apply fully, although several others may be partially present during the transition process, as the following table indicates. These findings reinforce our analysis that Haiti faces unusually strong obstacles in building a viable democracy. Al- though Haiti is doing some things right, according to the study, chances appear slim that favorable postturnover conditions-such as strong presidential leadership and relatively light pressures against the government-will occur to help compensate for remaining weaknesses in the early stages of the transition pro- cess. Characteristics of Key: ^Does not apply 0 Not likely to occur Successful Transitions 10 Partially applies O Likely to apply partially ^ Fully applies ? Probably will apply fully Pretransition Short prior authori- ^ The Duvalier family ruled for 29 years before it was ousted in 1986. tarian rule Strong domestic pres- 13 The widespread protests that forced Duvalier's departure have not translated into sure for democratic equal pressure for the overhaul of the political system. Public sentiment remains transition more focused against the ruling council than for the adoption of democracy, weakening the potential for a lasting transition. Transition Multistage transition ^ The study found that transitions that last more than a year and include process constitutional conventions and two- or three-stage elections-thus allowing more time for public acclimatization to the democratic process-have a greater chance of success than those that effect a turnover in one step. Namphy's extended timetable follows this pattern. He might further strengthen the transition process, however, by adding another stage, such as a runoff election among the top presidential contenders in the fall. Consensus to respect ^ Haiti's most conspicuous shortcoming, according to the study, is the absence of an new government agreement among major political actors to support and abide by the process of se- lecting the new government. Research showed that formal or informal consensual pacts were operative in the majority of cases where turnovers lasted at least five years. Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Inclusion of major parties in elections Honest balloting Posttransition Leadership experience and authority Absence of longstand- ing military antago- nism toward new ruling party Relatively low pres- sure against new gov- ernment at six-month point US signalling through increased aid Q Constitutional provisions proscribe candidates with ties to the Duvalier adminis- trations and the political parties law requires parties to collect 5,000 signatures to register. At least a dozen parties among the scores now active are likely to meet the requirement, however. presidential elections is likely to be relatively free from fraud. On the basis of Haiti's track record during the Constituent Assembly election and the constitutional referendum, we believe that voting in the legislative and Q None of Haiti's potential civilian rulers has had significant governing experience, a situation that weakens transition prospects, according to research findings. Moreover, the new president and prime minister will have to depend on fragile co- alitions of self-interested political groups for their governing authority as the democratic experiment gets under way. No candidate so far exhibits the charismatic leadership style that might override a lack of other political qualifications. Q Although there is no new ruling party yet, opinion of all current contenders and of politicians in general. On the other hand, the restriction of political activity in Haiti over the years has prevented the development of the deep-seated enmity between the military and certain political groups that the study found to have handicapped other, fledgling civilian governments. Q The ruling council is allowing political activity to flourish during the transition but has failed to initiate solid programs that might ease some of the difficulties the new government will encounter. We expect social, political, and economic tensions in the postturnover period to reach the same high levels that have characterized many failed transitions elsewhere in the region. Q Even a modest nod from Washington would benefit the new regime, according to the study. Positive aid signals characterized 10 of the 14 transitions that lasted at least five years, while most of the failed transitions steered reduced disbursements. a For the purposes of the study, a successful transfer was defined as one that resulted in at least five years of democratic rule. 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 ? The perceived ability and willingness of a civilian president-elect to implement policies within parame- ters acceptable to the military. Considering these factors, we believe that events in Haiti could unfold in three different ways. Under the most likely scenario, the ruling council would adhere to the transition schedule. A second possibility is a delay by Namphy in the transition, perhaps for several months, if outbreaks of violence occur during the election campaign, if the council perceives the leading candidates or president-elect as too inept to govern, or if the military believes that its institutional interests are threatened. A third scenario, although much less likely in our view, is a harsh government crackdown on dissent and the imposition of authori- tarian rule by the military. Maintaining the Democratic Timetable Largely on the basis of the ruling council's record of adherence to the electoral timetable and the people's clear expectation of political change, we believe the council has a better-than-even chance of meeting the schedule for the transition to civilian rule. Our as- sumption, however, depends heavily on the council's ability to avoid provoking widespread popular unrest or cracking down harshly on the sporadic outbursts that probably are inevitable as electioneering gains momentum. Moreover, the new Constitution declares that the council's mandate must end on 7 February 1988. US officials indicate that most Haitians want the council to leave office on schedule, and we believe the council is well aware of this sentiment. The most viable successor government, in our view, would be a coalition of centrist parties with similar ideologies, because key elements of Haitian society probably would support a moderate and no single party is likely to receive a clear mandate. The political center probably would present a formidable force in the presidential election if the leading moderates put aside their differences by backing one candidate to lead a united front. The strongest coalition would have the support of moderates in the church, the military, and the business community and would draw wide support from various social classes throughout the country. We would also expect at least some Duvalierists to quietly support a centrist coalition, if only in an attempt to safeguard their interests. Some leading moderates recognize that none of them is likely to garner enough support nationwide for a clear victory in November if they continue to act independently, according to US officials. Such con- tenders as Leslie Manigat, Marc Bazin, Louis Dejoie, Hubert DeRonceray, and Gregoire Eugene, among others, are aware of the similarity of their political and economic views and of the costs of splitting the centrist vote. ever- al of these moderates explored various coalition op- tions earlier this year, but so far they appear to be unable to reach an accommodation. We believe that direction from Namphy may be needed in order for the moderates to put together and sustain a coalition. Socialist-leaning nationalists, in our view, could also form a surprise coalition and garner widespread popu- lar support, especially if elements in the center and moderate right fail to unite on a timely basis. Al- though we doubt that such a ticket would appeal to the business community and senior military officers, a socialist platform of "de-Duvalierization" and social reform, particularly a national literacy drive and better health care, would be likely to attract some support within the church and could become a power- ful populist movement. A Delayed Transition Despite Namphy's reassertions that the Army has no political ambitions, we believe the military might insist on delaying the transition if public order were threatened by widespread unrest. Radical groups re- jecting the legitimacy of the council and its initiatives have vowed publicly to disrupt the process with protests. Should an already unstable security situation threaten to become unmanageable close to the presi- dential election, military leaders, in our view, would become convinced that they had a responsibility to retain power temporarily until a peaceful transfer of power could be assured. We believe there is a lesser, but still possible, chance that the military might refuse to yield power on schedule if it perceived the leading candidates or 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 president-elect as too inept to govern Haiti. Namphy continues to disdain politicians, and that he and Brig. Gen. Williams Regala, the council's other military mem- ber, are unimpressed by the leading candidates on the horizon. In our view, the three-month period between the November election and the scheduled transfer of power could prove to be an unusually difficult phase of the transition because the president-elect is likely to come under intense criticism from defeated oppo- nents, thus eroding confidence in the new government even before it takes office. The military, in our view, would also be prepared to delay the transition to protect its institutional inter- ests. Given the Army's experience during the Duvalier era, when the regime regarded it with suspicion and executed or exiled many senior officers, we doubt that Namphy and other military leaders would allow anyone whom they perceive to be a serious threat to the military to assume power, no matter how demo- cratically elected. he military leadership wants prior guarantees on its future role and benefits from serious presidential contenders in exchange for military support. We believe any civilian administration would have to secure the active support and confidence of Army leaders before assuming power. an elected president, for exam- ple, would have to reassure the Army that he would not seek retribution against officers for any impropri- eties they may have committed while serving the Against this backdrop, some elements may try to coax 25X1 Namphy to stay in power beyond his mandate. Al- 25X1 though Embassy reporting indicates 25X1 Namphy lacks strong political ambitions, we believe there is an outside chance that Duvalierists and other conservatives-inside and outside the government- might press him to remain President indefinitely in order to preserve continuity and stability and that he may view it as his duty to do so. senior military officers have plans to intervene and extend the ruling council's mandate to 1990 in the event of civil disorder or if 25X1 there is no clear-cut winner in the presidential election in November 1987. Considering the erosion in popular support for the military since Duvalier's ouster and the widely differing political views in the Army itself, we believe such a move would provoke civilian unrest and mutinies in the ArmyF___1 25X1 Even if Namphy remains committed in principle to an eventual transition to democracy, Regala and other key military officers are more 25X1 cynical about the need for democratic institutions and close ties to the Duvalier regime regard the course set by the ruling council as too tolerant. 25X1 25X1 25X1 25X1 25X1 2bAl 25X1 25X1 25X1 Duvalier regime. 25X1 25X1 LOA-1 While certainly the least likely scenario, nevertheless sug- gests to us that the same factors that may induce Namphy to delay the transition could spur him to cancel democratization altogether. Namphy told US officials in January that a recurrence of widespread disorders would prevent a successful transition to civilian rule. Namphy subsequently told Cabinet officers that one of his main goals is to maintain order and stability. He reportedly also vowed that the Army would react harshly to unrest-a response we believe could raise the level of violence and derail the transition The greatest danger to democratic rule in Haiti, in our view, probably will come after the scheduled transition. We believe the task of creating a stable political environment and effective democratic institu- tions ultimately depends on the ability of the govern- ment to satisfy some of the popular expectations for 25X1 economic progress and a purging of Duvalierists, Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 while avoiding economic sabotage and political back- lash by rightist elements perceiving a threat from sweeping reforms. We believe that, even if various centrist or socialist parties were to form a workable coalition and win the election in November, the cohesion of the-new government would be fragile. Even the leading moderate front-runners are unsure how to manage political affairs, uch inexperience and timidity cou- pled with a historical tendency toward political frag- mentation would almost certainly, in our view, make holding a coalition government together a difficult task. The new Constitution is designed to prevent the recurrence of a dictatorship, but we believe its restric- tions on the power of the civilian presidency will also compound the new government's difficulty in consoli- dating its rule. According to the Embassy, the Consti- tution mandates a division of power among the presi- dent, prime minister, and legislature. Considering the already limited popularity of leading presidential con- tenders, we believe this formula could lead to paralyz- ing factionalism in the new government as newly elected officials maneuver to consolidate power at the expense of the President Aside from internal weaknesses, we judge that the maneuverings of extremists-on the right and the left-would pose a serious danger to the viability of any moderate or socialist coalition. In our view, the popularity and credibility of any centrist movement would suffer if the support it attracted from even a few Duvalierist elements became public knowledge. Indeed, the public outcry expected from open support by Duvalierists could well unglue such a coalition altogether. Moreover, we believe a socialist coalition would be vulnerable to manipulation by the Commu- nist Party or other Marxist elements. In this environment, a return to civilian strongman rule is a distinct danger. The Embassy reports that several leading moderate contenders appear to favor the tradition of a strong executive. Even a government initially committed to democracy might, in our view, employ tough measures against political adversaries in an attempt to survive and could gradually cross the threshold into dictatorship, perhaps with the mili- tary's blessing. If, on the other hand, the civilian leadership failed to consolidate its rule quickly by co-opting key power centers in the Army, the church, and the business community, we believe the new government could be overthrown by even a short period of unrest. The fall of the new government, in turn, might lead to a succession of weak civilian governments. In a more likely scenario, however, we believe a deteriorating security situation would be a strong incentive for the military leadership to again "assume its responsibili- ties" and seize power. Implications for the United States We believe a politically stable and democratic Haiti would be viewed by Haitian and other Caribbean leaders as compelling evidence of the US commitment to democracy and development in the region. The transition's success would provide a concrete example that Washington, by backing up stated good inten- tions with actions tangibly benefiting a Caribbean nation, did more than simply facilitate a dictator's departure. We expect leading presidential contenders and possi- bly other Haitians to seek electoral assistance from Washington in order to guarantee the legitimacy of the election results. Namphy and Regala oppose the nine-member elector- al commission recently established by the Constituent Assembly to oversee elections because it is not con- trolled by the government. Should the council attempt to frustrate the independent body's work, we would expect some Haitians to ask the United States to pressure the council to accept outside monitoring of election balloting in order to minimize potential fraud. On the basis of the country's inexperience in conducting credible elections, we judge that Haitian officials would request extensive outside guidance in civic education and in the mechanics of carrying out elections. A minority, however, would be certain to charge that any direct assistance is an attempt by the United States to manipulate political developments. 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 - Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 We believe that, if a civilian president is installed, the Haitian Government will almost certainly seek imme- diate and substantial US, economic and military aid to ensure political stability. We believe most of the leading moderates who might win the presidency in a fair vote to be strongly pro-US, and they would expect the quick infusion of US assistance. A leftist coalition, in our view, would pursue a policy of nonalignment but still expect a large inflow of US assistance. Successful transitions from authoritarian to demo- cratic governments elsewhere in Latin America sug- gest that even a modest US commitment in these areas helps reinforce the legitimacy of the new gov- ernment and improves its chances of success. A stalled or aborted transition, in our view, could be more problematic for the United States. At a mini- mum, we would expect a heightening of anti-US sentiment, potentially threatening to US nationals and property. Moreover, we.believe ensuing political polarization could trigger violent clashes between leftist and rightist factions that the Haitian Govern- ment might well be unable to control. Such a deterio- rating security situation could create a flood of refu- gees to the United States and raise the chances that Haitian or other Caribbean leaders would seek a wider US role-possibly direct military interven- tion-to restore order and political stability.F___1 25X1 The reemergence of authoritarian rule in Haiti could be expected to present Washington with a serious dilemma in its relations with Port-au-Prince. We believe Haitians and other Latin Americans would increasingly question the US commitment to democ- racy in the region if Washington failed to make a meaningful gesture of disapproval of a dictatorial Haitian regime. International human rights groups probably would lobby hard for withholding US aid. At the same time, however, pro-US moderates in 25X1 Haiti would see a major reduction in aid not only as a serious blow to their political clout, but also as a move that could strengthen leftist arguments that real change in Haiti can occur only through revolutionary tactics 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Appendix A Major Political Players and Presidential Contenders Lt. Gen. Henri Namphy, President A political novice and reluctant head of state ... recently more active, visible, and confident ... widely regarded as an honest soldier ... governs with aid of small circle of advisers ... moving toward more results-oriented governing, more formal leadership style ... committed to seeing Haiti through the transition period ... has denied having personal political ambitions, but unfavorably impressed with potential successors, new Constitution ... 55.F___1 25X1 Brig. Gen. Williams Regala Controversial ... also Minister of Interior and Defense, Assistant Chief of Staff of armed forces ... probably most important decisionmaker in government ... re- cently engineered military reshuffle to gain greater control over military ... ambitions, raises public concerns about his political agenda ... 50. The Right Clovis Desinor Old-guard Duvalierist, former heir apparent to Francois Duvalier ... frequently mentioned as presidential contender ... may be political favorite of some senior military officers, but has no political party or campaign platform ... 71 25X6 25xb 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Secret Adrien Raymond Career diplomat, Duvalierist politician ... led political party of regrouped Duva- lierists until hostile popular reaction forced group to unilaterally disband last November ... reportedly planning to reactivate Duvalierist network 25X1 if opportunity arises ... 58. 2,25X1 Marc Bazin, Movement for the Installation of Democracy (MIDH) Paris-educated lawyer, highly regarded international banker ... former World Bank employee ... served briefly as Finance Minister under Jean-Claude Duvalier ... respected by Haitian businessmen, popular with moderate church elements ... greatest liability is local perception he is "Washington's candidate" ... 55. Sylvio Claude, Haitian Christian Democratic Party (PDCN) Protestant minister prominent in opposition to Duvalier regime ... repeatedly arrested, imprisoned, beaten for political activity ... ideology nebulous, sometimes contradictory ... believes God has chosen him to lead Haiti .. ambitious ... 53. 25X6 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Secret Hubert DeRonceray, Movement for National Development (MDN) Internationally respected, Canadian-trained sociologist, educator ... former Duva- lierist Cabinet officer, later persecuted for criticizing regime . 25X1 .55 25X11 tion, solid anti-Duvalier credentials owe much to current popularity ... 59. 125X1 Louis Dejoie, National Agricultural and Industrial Party (PAIN) Wealthy, Puerto Rico-based mulatto industrialist ... son of Louis Dejoie, Sr., presidential candidate defeated by Francois Duvalier in 1957... name reco ni- Thomas Desulme, National Labor Party (PNT) Former Duvalierist senator, prosperous plastics manufacturer during exile in Jamaica ... campaign theme is increased employment, but lacks coherent policies ... exaggerates private-sector support ... electorate may resent past political connections ... about 74 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Secret Gregoire Eugene, Haitian Social Christian Party (PSCH) Constitutional lawyer, strong academic background ... good public speaker= negotiations with Duva- lier regime in 1985 for legal recognition of PSCH tarnished his image, damaged his credibility ... 63 Leslie Manigat, National Democratic Group of Haiti (RDNP) Internationally known, highly regarded educator ... has played moderate, con- structive role in Haiti's political process since returning from exile in Venezuela ... has international Christian Democratic and socialist links ... former Duvalier- ist official, who broke with regime in early 1960s over human rights abuses ... presidential campaign may be handicapped by past Duvalierist connection ... about 57. Rene Theodore, United Party of Haitian Communists (PUCH) General Secretary of pro-Soviet party since 1978 ... exiled for 22 years in the USSR, France, and Cuba ... strongly supports new Constitution ... increasingly popular and active, especially in northern Haiti, 47. 25X6 25X6 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Appendix B Haiti: Daunting Economic Challenges President Namphy inherited overwhelming economic problems from the ousted Duvalier regime that wors- ened further in the immediate aftermath of the dictator's departure. US Embassy and International Monetary Fund (IMF) reports indicate that by early 1986 the Duvalier government had depleted foreign reserves to less than three weeks' import coverage and had run up sizable arrears on debt obligations to meet day-to-day expenses. Unchecked public spending, partly on make-work jobs and handouts to attempt to quell anti-Duvalier protests, had increased the rate of inflation to 20 percent and undermined the country's already weak international creditworthiness. More- over, business activity slackened in response to the initial protests during late 1986 and early 1987 and subsequent labor unrest among Haitians expecting immediate economic improvements upon Duvalier's departure. Foreign donors-skeptical of the new go- vernment's ability to restart the economy-initially restricted their contributions to emergency aid for food and repair of riot damage, leaving Namphy to cope with critical foreign exchange shortages.F_~ While the measures taken were appropriate for en- couraging longer term recovery, in the short term the economic downturn was merely slowed. Real GDP declined by 1.5 percent in 1986, according to the IMF, as a result of reduced government spending, faltering business confidence, labor difficulties, and a drop in tourism. Curtailed operations by many foreign investors caused a 25-percent drop in employment in the key light assembly sector-roughly 15,000 jobs, according to US Embassy reporting. The govern- ment's program, however, slowed the rate of inflation to almost zero by the end of last year. The decline in imports, resulting from the sluggish economy, and the ruling council's clampdown on graft and corruption helped to boost the country's foreign reserves from $6 million to roughly $36 million by yearend 1986, according to IMF reporting. The drop in imports offset declines in sales by the light assem- bly industry-which contributes almost 60 percent of total export earnings-and a falloff in agricultural exports other than coffee. The hike in foreign grants 25X1 in response to government economic reforms also To attract additional foreign aid, Namphy in April 1986 authorized newly appointed Finance Minister Delatour to take the measures needed to stabilize the economy. The US Embassy reports that Delatour in 1986 slashed public spending by one-third. Delatour pared expenditures on existing programs, closed the country's two largest money-losing state enterprises- the Darbonne Sugar Mill and the Edible Oil Fac- tory-and streamlined many remaining public firms. He also pushed through tighter monetary measures, mainly increasing reserve requirements for commer- cial banks and raising the ceilings on interest rates. In addition, he abolished nearly all import quotas and lowered tariffs and export taxes in an effort to increase the competitiveness of local firms and boost foreign exchange earnings. increased reserves. Near-Term Prospects Increased aid flows, in our opinion, will provide some economic breathing space during the electoral period. Approval in December 1986 of a $21 million, three- year IMF Structural Adjustment Facility has served as a linchpin for as much as $200 million in pledges of foreign aid-mainly from the United States and France-for disbursement in 1987. We believe rising imports of food and key inputs such as petroleum, other raw materials, and intermediate goods for agri- culture and manufacturing will push real economic growth to 2 or 3 percent this year. We believe, however, that the recent drop in world coffee prices Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Public-Sector Budget Deficit, as a Share of GDP Percent 1981 82 83 84 85 86a Secret 20 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Secret and lingering investor uncertainty abroad will keep the economy from reaching the 4- to 5-percent rate anticipated by IMF and Haitian officials. The ability of the next administration to sustain economic growth will depend largely on continued adherence to the IMF program and the responsiveness of foreign donors. In recent years, foreign aid has accounted for about 30 percent of public-sector reve- nues, 65 percent of public investment, and 40 percent of imports. According to US Embassy reports, recent economic reforms are due solely to Delatour-highly unpopular with many Haitians-and could quickly unravel as their full impact hits domestically. The closure in April of two more publicly owned sugar mills already has deepened public criticism of Dela- tour. Even if the economy performs better than we anticipate, expected layoffs of public employees prob- ably would prevent a substantial reduction in the current 50-percent rate of unemployment and under- employment over the next few years. In this environ- ment, there is a risk, in our view, that a new president-trying to bolster his popularity-could see firing Delatour as a way to further consolidate his position. Such a move, however, probably would again set economic policy adrift and increase the reluctance of already cautious donors to provide aid. We judge that the government's success in reviving the economy also hinges on its ability to reassure cautious foreign investors. The international business community will pay special attention to the govern- ment's responsiveness to continued labor demands for higher wages. Foreign investors repeatedly have told Namphy that any wage hikes would make Haitian labor-the country's most abundant natural re- source-uncompetitive with such neighboring coun- tries as Jamaica and the Dominican Republic.F_ Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 - Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8 Secret Secret Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP04T00907R000100220001-8