"Haiti’s Economic Dilemma" by Victor Bulmer-Thomas, Ph.D.

Bulmer-Thomas is Professor Emeritus and Senior Distinguished Fellow in the Institute for the Study of the Americas at London University. He has written numerous books, such as The Economic History of the Caribbean since the Napoleonic Wars (2012).

By 1890 Haiti had achieved some success in the management of its economy with a stable currency, a balanced budget and modest growth. The main export was coffee, which went principally to France although much of it was re-exported to Germany. The coffee was highly prized because of its flavor and sold at a small premium to many other coffees.

The Haitian economy, however, had become too dependent on coffee. This one commodity accounted for 70 to 80 percent of export earnings, which in turn paid for imports. At the same time taxes on imports and coffee exports accounted for 99 percent of public revenue.

Thus, Haiti was very vulnerable to a fall in the world price of coffee. This started to fall sharply in the 1980s as a result of massive over-production by Brazil—by far the world’s largest exporter. The fall in price was not compensated by an increase in volume exported and Haitian exports collapsed. This precipitated a fall in imports and a steep decline in public revenue. The Haitian government then struggled to service its debts and the path was set for United States military intervention in 1915.