Caribbean & Central America - December 2022

In mid-November fuel began flowing again through the Varreux oil terminal southeast of Haiti’s capital Port-au-Prince, after a two-month interruption when the facility was blockaded by ‘G9’ alliance of gangs which is led by former police officer Jimmy ‘Barbecue’ Chérizier. 

The story of fuel supplies and the Varreux terminal is a microcosm of Haiti's spiralling humanitarian and political crisis. The 11.7m population of the poorest country in the Americas faces an acute energy crisis. Only about 30% of the population has access to electricity, often intermittently and at scarcely affordable rates. In rural areas the proportion falls to 10%. Despite good renewable energy potential (wind and solar) and because of a lack of investment in green energy, the country remains almost completely dependent on fossil fuels for electricity generation, with petrol and kerosene also being used for transport, domestic lighting, and cooking. Because of the power cuts, businesses, grocery stores, and hospitals often use their own generators. Around 70% of Haiti's fuel imports come in through Varreux, owned by the West Indies Energy Co, (WINECO). In normal times the fuel is held in storage tanks and distributed around the country by a fleet of tanker trucks.          

Amid a collapse in law-and-order, G9, one of about 100 gangs operating in the country, had seized access roads and shut down the terminal late last year, reputedly extorting US$100,000 to reopen it. Last October the terminal was blockaded once again, this time in response to a decision by Prime Minister Ariel Henry to withdraw fuel subsidies (which implied price hikes of 89%-128%). WINECO is owned by the Mevs family, one of the country’s wealthiest. The country’s six richest families are known as the ‘Bambam’ - an acronym formed by their surnames - and are often accused of conspiring with politicians and gang leaders to defend their economic interests.

Why G9, which had been demanding the resignation of the prime minister, ended its siege of Varreux was not immediately clear. But Tom Adamson, a Port-au-Prince based Canadian businessman, commented before the end of the siege that “in the past there have been rumours that the government gave gangs money to quieten them down. So perhaps, under the table, they are asking for money, but I don't know."

What is clear is that the closure of the terminal for two months has had a catastrophic economic affect. The United Nations (UN) estimates that over 96,000 Haitians have been forced to leave their homes to escape infighting between the gangs. Kidnappings have increased. Petrol stations shut down while water delivery companies and waste collection stopped. Schools and hospitals reduced their activities. The Caracol Industrial Park, a manufacturing hub in the north of the country which employs 15,000 staff, mainly in textile production, was forced to close. There were longer power cuts and a loss of mobile phone coverage. It is estimated that the annual inflation rate has surged to over 35% with some local economists warning that the country may face a more damaging slide into outright hyperinflation.

Food supplies fell sharply, with the World Food Programme reporting in October that 4.7m people (over one third of the total population) are experiencing “acute hunger”. Partly attributed to the lack of clean drinking water, there has been a new outbreak of cholera in Port-au-Prince and beyond, with the Pan American Health Organisation (PAHO) saying on 16 November that 175 people have died, 7,600 have been hospitalised, and at least half a million are at risk of contracting the disease. Overall economic activity, which in recent years has been stagnant, is widely expected to have turned sharply negative in the second half of 2022.

• UN response

Some form of UN-sanctioned intervention - to establish ‘humanitarian corridors’ to guarantee food and medicine supplies, remains under discussion. There is also talk of increasing financial aid with the Inter-American Development Bank (IDB) announcing a US$60m grant to improve food security, health, and economic resilience. Given the chequered history of previous foreign interventions in Haiti, it looks as if the crisis is likely to drag on some time yet without resolution.