The Promise, Politics and Profit of Primary Education for All. From Haiti Briefing 73 (February 2013)
On May 26, 2011, just 12 days after his investiture as President, Michel Martelly made his first major policy pronouncement: the launch of the National Fund for Education (FNE). Its aim was simple: get 1.5 million of the Haitian children not regularly in school into the classroom by the end of his five-year mandate. As a basic UN Millennium Development Goal, the ambition was widely applauded by Haitians and foreign donors alike.
The $360 million in funding needed for this ambitious project was to come from levies on incoming telephone calls and money transfers, thus tapping into the relative wealth of the several- million strong Haitian Diaspora. As an added bonus, no new taxes would have to be raised or old taxes actually collected at home in a country where non-payment of tax by those rich enough to owe, is not just the norm but is viewed as a basic right.
The fanfare that greeted the Fund’s launch subsumed many of the vital questions being asked at the time about the legitimacy of the electoral process that had brought Martelly to power, his past as supporter of brutal military rule and very serious doubts about his nationality and thus whether he was actually eligible to be President.
Also ignored were voices pointing out that unilaterally instituting such a tax without Parliament’s consent was unconstitutional, or that the tax would disproportionally affect the poorest, with the $1.50 levy on a remittance of $20 dollars to a family struggling to feed itself being the same as that on a transfer of hundreds of thousands of dollars for a business or property purchase.
Equally unclear was who would be the main beneficiaries: would the Fund be paying the private school fees of better-off Haitians, thus using the remittances of the poorest to subsidise the education of the relatively well-off? And in a country where up to three-quarters of primary school pupils are in private schools, would the Fund simply be subsidising the expansion of private schools rather than reinforcing the woefully inadequate and underfunded state sector?
Although the Central Bank – BUH – was to be in charge of collecting the money on transfers, no one knew who would be contracted to manage the levies on international calls, or, indeed under what terms. Despite this, the new President was adamant that the Fund would be managed in an independent and transparent manner, citing the IMF and auditors Price Waterhouse Cooper as guarantors.
As it turned out, Martelly appeared to have a ready-made candidate for this in the form of his former business partner and the director of his election campaign, Laurent Salvador Lamothe. As head of his own company Global Voice, Lamothe had extensive experience of how profitable such levy systems could be in various African countries. Profitable for him as well as his client states, that is. Renowned as a tough negotiator, Lamothe’s company had reportedly been getting up to 50% of the value of all levies collected in such schemes.
Almost nothing was heard of the Fund until September 2011, when the President’s Education minister-designate, Gaston Merisier, stated that the FNE had amassed $28 million. However, it soon emerged that only $2 million of this, the share from money transfers, was with the BUH. The remaining $26 million was credited to an account in the name of CONATEL, the national telecoms regulator, and as such closed to even the most elemental external scrutiny.
The lack of any basic accountability or transparency meant that serious discrepancies in consequent figures as to the value of the Fund cited by Diaspora news organisations, members of the Haitian Senate, civil society organisations, and even the head of Digicel, Haiti’s largest telecoms operator, tax payer and employer, could not be reconciled.
In January 2012, mounting concern forced Martelly to address the issue of the FNE, declaring: “Not one cent of the money has been touched… the people around me are not thieves… the money is so secure I can’t tell you anything about it.” To ensure nothing was revealed “about it,” government lawyers began threatening the news outlets asking questions.
Meanwhile, Digicel’s concern rapidly evaporated, perhaps their energies were focused on their imminent takeover of their only sizeable rival in Haiti, Voilà – a transaction that attracted minimal regulatory interference from CONATEL, despite it granting them an effective cellphone monopoly.
Sadly, one thing does confirm Martelly’s assertion that none of the Fund has actually been disbursed: there has been no discernable boost to the Haitian education system. While a number of pupils who had not previously attended school are now getting ‘free education’ (albeit far fewer than the government claims, as its figures include pupils already in free education), both public and private schools have been overwhelmed by an intake of unfunded students for whom they are unable to provide the basics, not least teachers.
Nothing has changed in the year since Martelly’s only comment on the Fund. The start of the 2012-2013 school year was again delayed by a full month due to lack of funding. Teachers continue to demonstrate in pursuit of months of unpaid wages. The original lack of a legal framework in setting up the FNE means its proceeds cannot be handed to the Ministry of Education. That state of affairs has now become institutionalised, the failure to hold elections for a number of Senate seats means it remains inquorate and thus constitutionally unable to ratify any retroactive legal framework.
But what of the actual value of the Fund? While in Florida in December 2012, where he had somewhat bizarrely decided to make his ‘State of the Nation’ (Haiti, not the United States) address, Martelly told the Miami Herald that the FNE was worth $16 million. That was dramatically at odds with the estimated revenue at its launch, which after 16 months would have been $136 million, not to mention a statement by CONATEL on 31 December, which put the Fund’s value at $81 million.
Is the discrepancy explained by the level of Global Voice’s percentage take for collecting the levies? If so, either of the figures above would mean, that percentage is well above the generous 50% Global Voice has pocketed elsewhere in the world. Someone who would know has, since the inception of the Fund, been promoted to Prime Minister of Haiti, namely Laurent Lamothe.
Worse still, perhaps, is the fund being used for other purposes, governmental or non-governmental? Presidential slush funds are hardly unknown in Haiti, in fact historically they have been the norm. It was just this sort of transparency vacuum that allowed the national Treasury to become the personal purse of the Duvaliers. And as Haitians are now asking: if this level of opacity and poor governance surrounds such a flagship as the FNE, what else is going on in even less scrutinised parts of this administration?
The Promise, Politics and Profit of Primary Education for All
The Promise, Politics and Profit of Primary Education for All. From Haiti Briefing 73 (February 2013)
On May 26, 2011, just 12 days after his investiture as President, Michel Martelly made his first major policy pronouncement: the launch of the National Fund for Education (FNE). Its aim was simple: get 1.5 million of the Haitian children not regularly in school into the classroom by the end of his five-year mandate. As a basic UN Millennium Development Goal, the ambition was widely applauded by Haitians and foreign donors alike.
The $360 million in funding needed for this ambitious project was to come from levies on incoming telephone calls and money transfers, thus tapping into the relative wealth of the several- million strong Haitian Diaspora. As an added bonus, no new taxes would have to be raised or old taxes actually collected at home in a country where non-payment of tax by those rich enough to owe, is not just the norm but is viewed as a basic right.
The fanfare that greeted the Fund’s launch subsumed many of the vital questions being asked at the time about the legitimacy of the electoral process that had brought Martelly to power, his past as supporter of brutal military rule and very serious doubts about his nationality and thus whether he was actually eligible to be President.
Also ignored were voices pointing out that unilaterally instituting such a tax without Parliament’s consent was unconstitutional, or that the tax would disproportionally affect the poorest, with the $1.50 levy on a remittance of $20 dollars to a family struggling to feed itself being the same as that on a transfer of hundreds of thousands of dollars for a business or property purchase.
Equally unclear was who would be the main beneficiaries: would the Fund be paying the private school fees of better-off Haitians, thus using the remittances of the poorest to subsidise the education of the relatively well-off? And in a country where up to three-quarters of primary school pupils are in private schools, would the Fund simply be subsidising the expansion of private schools rather than reinforcing the woefully inadequate and underfunded state sector?
Although the Central Bank – BUH – was to be in charge of collecting the money on transfers, no one knew who would be contracted to manage the levies on international calls, or, indeed under what terms. Despite this, the new President was adamant that the Fund would be managed in an independent and transparent manner, citing the IMF and auditors Price Waterhouse Cooper as guarantors.
As it turned out, Martelly appeared to have a ready-made candidate for this in the form of his former business partner and the director of his election campaign, Laurent Salvador Lamothe. As head of his own company Global Voice, Lamothe had extensive experience of how profitable such levy systems could be in various African countries. Profitable for him as well as his client states, that is. Renowned as a tough negotiator, Lamothe’s company had reportedly been getting up to 50% of the value of all levies collected in such schemes.
Almost nothing was heard of the Fund until September 2011, when the President’s Education minister-designate, Gaston Merisier, stated that the FNE had amassed $28 million. However, it soon emerged that only $2 million of this, the share from money transfers, was with the BUH. The remaining $26 million was credited to an account in the name of CONATEL, the national telecoms regulator, and as such closed to even the most elemental external scrutiny.
The lack of any basic accountability or transparency meant that serious discrepancies in consequent figures as to the value of the Fund cited by Diaspora news organisations, members of the Haitian Senate, civil society organisations, and even the head of Digicel, Haiti’s largest telecoms operator, tax payer and employer, could not be reconciled.
In January 2012, mounting concern forced Martelly to address the issue of the FNE, declaring: “Not one cent of the money has been touched… the people around me are not thieves… the money is so secure I can’t tell you anything about it.” To ensure nothing was revealed “about it,” government lawyers began threatening the news outlets asking questions.
Meanwhile, Digicel’s concern rapidly evaporated, perhaps their energies were focused on their imminent takeover of their only sizeable rival in Haiti, Voilà – a transaction that attracted minimal regulatory interference from CONATEL, despite it granting them an effective cellphone monopoly.
Sadly, one thing does confirm Martelly’s assertion that none of the Fund has actually been disbursed: there has been no discernable boost to the Haitian education system. While a number of pupils who had not previously attended school are now getting ‘free education’ (albeit far fewer than the government claims, as its figures include pupils already in free education), both public and private schools have been overwhelmed by an intake of unfunded students for whom they are unable to provide the basics, not least teachers.
Nothing has changed in the year since Martelly’s only comment on the Fund. The start of the 2012-2013 school year was again delayed by a full month due to lack of funding. Teachers continue to demonstrate in pursuit of months of unpaid wages. The original lack of a legal framework in setting up the FNE means its proceeds cannot be handed to the Ministry of Education. That state of affairs has now become institutionalised, the failure to hold elections for a number of Senate seats means it remains inquorate and thus constitutionally unable to ratify any retroactive legal framework.
But what of the actual value of the Fund? While in Florida in December 2012, where he had somewhat bizarrely decided to make his ‘State of the Nation’ (Haiti, not the United States) address, Martelly told the Miami Herald that the FNE was worth $16 million. That was dramatically at odds with the estimated revenue at its launch, which after 16 months would have been $136 million, not to mention a statement by CONATEL on 31 December, which put the Fund’s value at $81 million.
Is the discrepancy explained by the level of Global Voice’s percentage take for collecting the levies? If so, either of the figures above would mean, that percentage is well above the generous 50% Global Voice has pocketed elsewhere in the world. Someone who would know has, since the inception of the Fund, been promoted to Prime Minister of Haiti, namely Laurent Lamothe.
Worse still, perhaps, is the fund being used for other purposes, governmental or non-governmental? Presidential slush funds are hardly unknown in Haiti, in fact historically they have been the norm. It was just this sort of transparency vacuum that allowed the national Treasury to become the personal purse of the Duvaliers. And as Haitians are now asking: if this level of opacity and poor governance surrounds such a flagship as the FNE, what else is going on in even less scrutinised parts of this administration?