The Pitfalls of "Cash for Work"

By Haiti Grassroots Watch. Published in HAITI LIBERTE, November 3 - 9, 2010 Vol. 4, No. 16

Since the Jan. 12 earthquake, multilateral agencies and humanitarian organizations have deployed across Haiti with "cash-for-work" programs, employing tens of thousands.

Taken together, these agencies and "non-governmental organizations" or NGOs - the term is a misnomer, since many are direct subcontractors of the US and other governments - are likely Haiti's largest employer.

Around the world, most media have heaped nothing but praise on the programs. Le Monde of Jan. 22 happily relayed that former US President Bill Clinton called the program "really important," adding that the US has "a lot of experience in this area from the Near East and Afghanistan." It also quoted UN Secretary General Ban Ki-moon as saying: "It is really important to give people something positive to do." PBS was thrilled to report on Jul. 9 that now, "[o]n every sidewalk and corner of Port-au-Prince there are entrepreneurs." And in a Feb. 2 headline, the Christian Science Monitor proclaimed that "US ramps up 'cash for work' to create jobs, help recovery."

Do cash-for-work programs help "the recovery"? Is it a good thing that the sidewalks are jammed with people selling mostly imported goods and cast-off clothing and shoes from overseas? And what lurks behind the comments of Clinton and Ban?

WHAT IS CASH-FOR-WORK?

"Cash-for-work" (CFW) is a term used by humanitarian agencies to mean short-term jobs meant for unskilled labor. A main objective is to get money circulating in order to "relaunch" an economy. Workers are paid minimum wage or less. The term appears to come from a related program, "Food for Work"
(FFW), which humanitarian agencies have been using in Haiti and around the world for decades.

In Haiti, CFW programs are specifically targeting earthquake victims who live in the 1,300 camps for displaced people or in the countryside with friends or family.

A CFW job is typically eight hours a day, five or six days a week, two or four weeks in length, with a daily salary of 200 gourdes (Haiti's minimum wage, about US$5.00). Typical jobs include: street-sweeping, cleaning drainage canals, rubble removal by hand, building latrines in camps, clearing or repairing rural dirt roads using picks and shovels, and digging contour canals on hillsides.

Some CFW jobs are actually CFW and FFW, because rather than receiving 200 gourdes, the worker gets 120 gourdes (US$4.00) and a food ration - typically wheat, beans and vegetable oil. In some parts of the country, workers get food only, like near Maniche in the south, where workers get a sack of wheat, a sack of beans, and five gallons of oil after four weeks of work.

Unfortunately for the Haitian government, for economists and for the public at large, no one person or agency actually knows how many people are working in the multitude of CFW and FFW programs in Haiti at the moment.

Haiti Grassroots Watch (HGW) spoke with CFW workers and supervisors, with representatives of various humanitarian agencies, and also scanned dozens of documents and websites. While many people were able to report that their program had 1,500 jobs or 2,500 jobs on any one day, nobody has totaled up the jobs, mapped their locations, or tallied up what the workers are doing.
(The lack of coordination in this sector is similar to what HGW found earlier this fall, related to resettling the 1.3 million homeless.)

For example: Concern Worldwide reports 400 workers, American Refugee Committee 105, Catholic Relief Services 6,000, Mercy Corps employs about 600 near Hinche, the World Food Program (WFP) said it will have employed a total of 140,000 people by the end of 2010, but the length of employment varies. The United Nations Development Program claims it will have employed almost
400,000 people by the end of 2010 (although the WFP claims paternity for some of those jobs), for a total cost of about US$80 million.

ORIGINS AND OBJECTIVES

The term "cash-for-work" is a relatively recent addition to the humanitarian lexicon, but the concept has been around for a long time.

In fact, British economist John Maynard Keynes (1883-1946) might be considered the father of "cash-for-work." Oxford University Press summarized Keynesian thought on state intervention this way: "Stated simply, Keynes blamed the [1929 Wall Street] crisis on insufficient demand, caused by 'orthodox' economic thinking about the virtues of the free market. Keynes argued for a much more intrusive and creative role for the state, which should adjust demand within the economy in order to ensure (relative) stability across economic cycles which otherwise would be a series of 'booms' and 'busts'.... One of Keynes's key insights was the tendency for increased demand to have a 'multiplying' effect, so that government intervention (say) in job-creation would promote new opportunities for work in industries which depended upon consumer spending."

During the Great Depression in the US, the Franklin D. Roosevelt administration put Keynes' theory to work. The "New Deal" Civilian Conservation Corps and the Work Projects Administration (WPA) employed millions at a time.

But as Truthdig's Robert Scheer wrote in his new book, The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street, capitalism is haunted by more than depressions and recessions. "The great and terrible irony of capitalism is that if left unfettered, it inexorably engineers its own demise, through either revolution or economic collapse. Government regulation of the market economy arose during the New Deal out of a desire to save capitalism rather than destroy it."

FDR's "New Deal" offers a perfect example. With thousands of jobless men and women marching on Washington, and with labor organizations and socialist or communist parties gaining strength, the jobs programs were as much about preventing revolution as they were about jump-starting the economy.

CFW PREDECESSORS IN HAITI

Those goals have also been behind the various jobs programs in Haiti across the years.

François "Papa Doc" Duvalier had a program of "woy-woy" or temporary "make-work" jobs which were administered through his Public Works ministry. Duvalier used woy-woy jobs - and terror - to prevent any kind of uprising.

But long before Duvalier's woy-woy jobs, the US began what has turned out to be a series of radical interventions into the Haitian economy as it tried to prevent revolution and migration to the US, as well as install capitalist structures and practices that would benefit the US economy.

The first big interventions took place during the first US occupation (1915-1934). By its end, over a dozen agro-industries - rubber, sugar, sisal, and pineapple plantations - had taken over hundreds of thousands of acres of land, many of it formerly farmed by peasants.

These newly landless peasants provided cheap labor - at 10 to 30 US cents a day - for the new plantations and agro-industries. The US State Department justified the "adjustment" of the economy with now-familiar promises, saying it would "give the population work and assure economic development," according to historian Suzy Castor.

Also during this period, the US government encouraged projects it said would "modernize" the agricultural sector, but, according to Castor, "the occupation did not solve or even improve the Haitian agricultural crisis."

After the occupation, the US government's Ex-Im Bank backed mostly US investors who set up businesses that had a "New Deal"-like promise of employing thousands and stimulating consumption.

The programs and projects had many negative results. The Central Plateau's Péligre dam, for example, displaced and impoverished thousands of peasant families. While spurring inflation and corruption, it made profits for foreign companies (including US military subcontractor KBR, then called Brown & Root), and added US$33 million to the Haitian government's debt, according to economist Gérard-Pierre Charles.

Missing from the list of results were the promised improvements to the economy via increased supply and demand.

Washington's next big intervention came during the Duvalier regimes. The US pumped in millions, at first to support the dictatorship as a bulwark against communism, and then for agricultural "development" projects aimed at stanching the flow of US-bound "boat people" refugees.

But the flow did not stop. So, in 1982, "the USAID and multi-lateral development agencies, including the World Bank, the International Monetary Fund, and the Inter-American Development Bank, formulated a new strategy," which was "unprecedented in both its scope and its size," according to Josh DeWind and David H. Kinley III of the important 1988 study AIDING MIGRATION - The Impact of International Development Assistance on Haiti.

The strategy included attempting to "increase Haiti's integration into the international economy and particularly into US markets" with projects mostly run by "private and voluntary organizations (PVOs). in order to bypass generally ineffective host-country government agencies." PVOs are the predecessors to NGOs - the "Republic of NGOs" was born.

In 1988, DeWind and Kinley noted that "the new strategy seems to have maintained and even exacerbated the economic and political problems that have caused Haitian emigration" but USAID, the World Bank and the PVO/NGO subcontractors have continued along the same path traced in 1982.

More recently, USAID programs have included massive job programs for the now millions of destitute peasants and former peasants. But numerous studies, like Feeding Dependency, Starving Democracy: USAID Policies in Haiti and Democracy Undermined, Economic Justice Denied, both produced in 1997, show that the programs have done little good.

Feeding Dependency looked at USAID-formulated FFW jobs programs that are not dissimilar with today's CFW programs, except that workers were often paid with US food, not cash. The report concluded that USAID programs "further[ed] US economic interests, not Haitian development."

The report analyzed a program of "labor-intensive, jobs-creation programs" established in 1993, when Washington realized that the return of then exiled-President Jean-Bertrand Aristide to Haiti was inevitable. USAID created the $18 million program in order to "increase the income of many poor Haitian families" and "create a sense of confidence and hope." Focusing on rehabilitation and improvement of agricultural land, the program was bumped up to a total of $38 million, running for 34 months, and reportedly employed 50,000 workers a day at its peak.

But was the objective really to "create a sense of confidence and hope"? Or was it also to insure that the supporters of Aristide and of the progressive democratic and popular movement, with its left-leaning demands, would not find terrain to mobilize once Constitutional order was restored in 1994?

Feeding Dependency discovered that the USAID jobs programs "actively strengthened anti-democratic forces and weakened grassroots, democratic organizations," noting that: "The negative implications that this carries for sustainable, community-based development cannot be overemphasized. By conducting the program under the coup regime, the US was providing the illegal government with political support."

The report also said the programs pulled peasants away from food production, created new, "unsustainable" habits of consumption, hindered "the volunteerism and community spirit necessary for development," and "generate[d] dependency."

Finally, the study noted that much of the infrastructure work was ephemeral - canals quickly filled in and hand-built roads reverted to rocky paths during the subsequent rainy season.

IS CASH-FOR-WORK WORKING?

HGW journalists - in Port-au-Prince and at five community radio stations across the country - interviewed CFW staff, economists and aid workers, and studied documents from NGOs and agencies implementing CFW and FFW programs.

HGW found that most workers were happy to have a CFW job. Journalists also found examples of corruption and mismanagement:

- A work crew was managed by a motorcycle taxi-driver who was the cousin of the "peasant leader," and it had at least one under-age worker. (Perey)

- In at least two places, workers reported having to pay a "finder's fee" -
500 gourdes and 1,500 gourdes, respectively - in exchange for getting a job.
(Perey and Carrefour-Feuilles)

- Work crews frequently had fewer workers than they were supposed to, were often seen not working and frequently knocked off work early. (Port-au-Prince and other places)

- An incumbent candidate from the ruling Inite political party controlled the hiring of CFW workers for many crews. (Léogane)

But HGW's other findings - related to the effects of CFW - are more disquieting than these examples of corruption. Here are some effects that were perhaps not planned for.

1 - UNDERMINING THE CONCEPT OF "WORK"

CFW programs are infamously under- and even un-productive. One foreign CFW coordinator called them "Cash for Standing Around and Doing Nothing."

This phenomenon is not unique to Haiti. In the US, even though many WPA programs produced lasting structures and employed hundreds of writers and artists, the WPA also had nicknames like "We Piddle Around" and "Whistle, Piss and Argue gang" because its road crews were not always productive.

Haitian economists and even some CFW implementers are worried about the long-term effects of CFW programs. "I worry that we're creating maybe a bad work ethic because I think that you see a lot of cash for work teams all over the city and the country and if you watch, those work teams aren't necessarily working," said Deb Ingersoll, CFW Coordinator for American Refugee Committee. http://www.arcrelief.org"I worry that we're providing. a visual association of working with not necessarily working hard."

Haitian economist Camille Chalmers agreed. "They know that they are earning money doing something that is not really work," he told HGW. "They are very aware of this. You see it clearly when you see people working on the rubble piles. They pick up one block or rock at a time. it creates a kind of deformation in peoples' heads about what work should be."

2 - UNDERMINING GOVERNMENT LEGITIMACY AND ALLOWING FOREIGN NGOS AND AGENCIES TO TAKE THE GOVERNMENT'S PLACE

In its six-month report on relief efforts last July , the UN's Inter-Agency Standing Committee already noted that CFW programs, whose workers often wear tee-shirts sporting NGO logos, might be undermining "government legitimacy." In interviews in the capital and the countryside, HGW found a growing disregard for the government (although, to be fair, this disregard predates Jan. 12) along with a growing expectation that people's basic needs and services can and should be met by foreign NGOs rather than the government.

"Our future lies with NGOs! We can't count on the government. If it were for the government, we would be dead already. Nobody from the state has ever come here," said Romel François, a CFW manager at the Terrain Acra camp in the capital, home to 5,000 families. "We basically don't have a government in this country."

"Whatever program that comes our way, we'll do it," said Wilson Pierre, head of the Perey Peasant Association, currently running a 600-job program for Mercy Corps. "If its work, and we get paid, we'll do it. I think these jobs should be permanent."

These attitudes are "very concerning," Chalmers noted. "This system of 'humanitarian economy' or 'emergency economy'. is locking the country into a 'humanitarian approach' and a dependency on aid. There is a growing disconnect between what people think they can do as citizens because more and more roles are being played by NGOs and international actors in all domains... It also legitimizes the presence of international actors in all the domains."

And that might be a sought-after result, according to Chalmers. "Look at the Collier report," he noted.

Chalmers was referring to Haiti: From Natural Catastrophe to Economic Security, written for the UN by British economist Paul Collier in 2009, and which lays out an economic plan the Haitian government and UN agencies appear to have used as the blueprint for post-earthquake Haiti. Collier recommends that NGOs and the private sector provide basic health and education services since "scaling up public provision is not a viable solution: the problems of the public sector are deep-seated and it is not realistic to expect that they can be addressed quickly."

A more recent paper by the RAND Corporation, a frequent US State Department contractee, makes the same recommendation.

As for the sought-after objectives, what did HGW find?

1 - OBJECTIVE - RELAUNCH ECONOMY

One stated objective of CFW programs is to get people working for cash, which is then spent on necessities, and thus contributes to "relaunching" the economy.

WHOSE ECONOMY?

While HGW cannot determine what role CFW programs have played in getting the economy moving, one thing is certain: sidewalks and streets in the capital are crammed with vendors hawking mostly imported goods. While USAID appears to define this kind of economic activity - selling cast-off shoes and imported underwear - as "success"[see USAID's recent brochure "ACME and USAID/Haiti Celebrate 10 Years of Success in Microfinance"], not everyone sees it the same way.

"The main impact of CFW is on the circulation of money," Haitian economist Gerald Chéry told HGW. "Whenever there is a big crisis in an economy. they always look for temporary measures to create work so people can have revenues."

However, Chéry noted, whereas giving people revenues creates demand, the question needs to be posed: Demand for what?

"We need the money to circulate in Haiti, not leave Haiti to go to another country," Chéry said. "The money needs to stay in Haiti so that it will create work. You don't want to pay someone and the person then buys, but another country, not Haiti, benefits."

And yet in Haiti today, that is exactly what is happening.

Studies by Oxfam and others indicate that CFW beneficiaries spend about one-half the CFW salaries on food and/or on goods to resell in the street, with the rest spent mostly on rent, school fees, paying off debts and other expenses.

If half of all CFW money is spent on food and goods, the ones getting the boost in this recession-battered world economy are outside of Haitian borders.

Haiti buys more than half of its food overseas, so a great deal of CFW cash is going to Haiti's trading partners, the largest of whom is the US. In
2008, Haiti bought almost US$1 billion in goods from its northern neighbor - US$325 million went for food.

IS THE SALARY SUFFICIENT?

Nobody interviewed - by HGW or by the NGOs who have conducted studies - thinks that the 200 gourdes a day is sufficient.

"It helps out, but not that much," said 19-year-old Lorde Jordany, a worker near Maniche in Haiti's south. "It's just a minimum."

In that Catholic Relief Services-run program, after one month workers get a sack of wheat, a sack of beans and vegetable oil. Jordany said he'll sell it all and should get about 3,200 gourdes, or about US$81, in return, meaning that he will have earned about 160 gourdes a day, less than the official daily minimum wage of 200 gourdes.

Economists, human rights advocates and even implementing NGOs agree that 200 gourdes is not sufficient. "We're finding that people are not really making enough to really meet all of their needs," noted Ingersoll.

A 2008 study conducted by the Washington-based Worker Rights Consortium, which took into account caloric needs, rent, schooling, energy, food and other costs of living, determined a living wage for one adult with two minor dependents to be 15,244.48 gourdes per month, or about 548.30 gourdes (about US$13.88) a day.

WHAT HAPPENS IN THE COUNTRYSIDE?

One of the problems with earlier FFW programs in Haiti was that agricultural production suffered because peasants left their plots in order work on a crew.

In 2010, HGW discovered the same phenomena, although admittedly in some regions October is a slow period. Nevertheless, few peasants would admit that their presence on the work crew would hurt their agricultural production. Many claimed that they would work the fields after an eight-hour work day in the Caribbean sun, or "really intensely" on Saturdays instead.

But one agronomist, Philippe Céloi, who was supervising the six-month Catholic Relief Services FFW program near Maniche, admitted that most of his
468 workers were peasants. The workers - who spend a month on a crew - are building contours on hillsides and doing other watershed management-related tasks.

"After six months there will be benefits - not only the workers have gotten a salary but also the community benefits," Céloi said.

Asked about farmers' fields however, Céloi admitted there was a down-side to the program. "Yes there are disadvantages also," he said. "For example, these people are not doing the planting they ought to be doing. Right now it's bean season. And they aren't planting potatoes or manioc or sorghum, so when this program ends, there is going to be a problem because people won't be able to find real food to eat. Then, these people will be in a difficult situation."

2 - OBJECTIVE - EMPLOY CAMP RESIDENTS AND DISPLACED PEOPLE IN THE COUNTRYSIDE

In the capital, the program camp residents appear to be the main beneficiaries of CFW programs.

In the countryside, however, HGW was unable to find one single displaced person or host family member working a CFW or FFW job. According to community radio journalists in Maniche, Fondwa and Papaye, very few displaced people remain in their rural communities.

Therefore, many of those working outside of the capital are peasants, youth and older people who got the jobs via their church, a local grassroots group, or through their connections to a candidate or another local "leader," who personally handed out work cards. In some places, local officials complained that the program gave them problems by causing "jealousy" in the communities.

3 - OBJECTIVE - POLITICAL STABILITY Only one CFW document that HGW obtained spells out this political objective - "stability" - in black-and-white, and claims success.

The USAID Office of Transition Initiatives (OTI), which through Jun. 30 had spent over $20 million on CFW programs, via two subcontractors - Chemonics and Development Alternatives Incorporated - had as its primary goals to "support the Government of Haiti, promote stability, and decrease chances of unrest."

In the same document, responding to criticism from the auditor that USAID-funded CFW programs were not removing as much rubble as they could, Robert Jenkins, Acting Director of USAID-Haiti as well as the AID/OTI, wrote this: "OTI's strategic objective in Haiti was and is to support stabilization in a changing and volatile environment. The initial means
(tactics) to this end were numbers of workers and rubble removal. The underlying assumptions in this regard were: (1) Workers (particularly young males) were less likely to resort to violence if employed; (2) Infusions of ready cash in the poorest neighborhoods would likely have a salutary effect;
(3) Rubble removal, again in the poorest neighborhoods, was highly symbolic because if offered hope of return to some form of normalcy."

Jenkins also noted that the programs were "clearly branded as a Government of Haiti initiative." This means that, objectively, in an election year, they supporting the incumbent party and its candidate, Jude Célestin.

Not surprisingly, there have been clashes over CFW in some neighborhoods, including clashes between apparently pro-Célestin CFW workers and supporters of other candidates who said they have been barred from jobs. "Cash for work is cash for vote!" one group of demonstrators shouted in late October.

CASH FOR WORK IS WORKING.

So in the long run. do the CFW programs in Haiti "prevent revolution" and "save capitalism"?

Certainly there have not been the kinds of major demonstrations like the ones post-earthquake Mexico witnessed in 1985. Within two weeks of that catastrophe, thousands were marching in the streets to make their demands for decent housing heard.

Perhaps the "stabilization" effect is one reason the Haitian government is asking agencies and NGOs to continue and even augment their programs?

A draft "Operating Manual" of the Haitian government's "Job Creation Program to Improve Food Security" (PCEASA), released in March 2010, doesn't mention that outcome. Instead, it claims the CFW jobs will "relaunch the economy," "improve food security," "clean up the environment" and "relaunch food production."

However, as HGW's investigation, the 1997 study and other work has showed, in the long run CFW programs don't contribute to any of those objectives... but history shows they're not a total waste of money either.

HAITI GRASSROOTS WATCH is a collaboration of Haitian grassroots media organizations with networks of community radio broadcasters from around the country. HGW aims to "watchdog" aid and reconstruction from the point of view of Haiti's majority, while providing historical and political context. Email: ayitikaleje@gmail.com Site: www.ayitikaleje.org

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