A controversial measure provoked strong protests that continue despite the fact that the measure was already revoked

Since July 6, protests against the increase in fuels started in Haiti. Although the president, Jovenel Moïse, in a televised message retracted, the protests continue. So far, 3 deaths have been recorded; however, for the national police it is not possible to say if these are a consequence of the protests. There have been looting of shops and burning of vehicles. The outlook for the rise is reminiscent of the protests in Mexico during the month of January, when the price of fuel in that country also increased.

Leer en español: Primer Ministro de Haití: “El gobierno condena firmemente los actos de violencia y vandalismo"

According to Reuters, the ministries of Commerce and Economy announced to the public that increases in fuel prices would take effect as of midnight. However, the protests exploded as soon as the measure was announced. The price adjustments included a 40% increase for gasoline, 47% for diesel and 51% for kerosene (used by the population as a substitute for electricity, which has no coverage throughout the country). As explained by AP, these adjustments came from an agreement with the International Monetary Fund, in order to increase government collection.

"The government strongly condemns the acts of violence and vandalism perpetrated after the announcement of the adjustment of prices of oil products," said Prime Minister Jack Guy Lafontant. The statements were made during a press conference on Saturday, July 7 in the morning. Already for Saturday night, in a televised message, the country's president, Jovenel Moise, announced that the increase was canceled. However, protests still continue. Unions of transporters called for a general strike on July 9 and 10, according to AFP.

The director of the national police, Michel-Ange Gedeon, pleaded urgently for calm during Monday's press conference. The director mentioned that there have been 3 deaths, but that it is difficult to determine if they were consequences of the protests, since the bodies were found in a suburb of Port-au-Prince, the capital of the country. "We understand your right to protest. But we do not understand violence", said Gedeon, giving a report on two police stations burned and vehicles burned.

The increase in gasoline also infuriates oil countries

The protests that take place in Haiti recall the situation experienced in January 2017, when there was a considerable increase in fuels in Mexico. Before reaching the presidency, according to the government plan, Enrique Peña Nieto showed the energy reform that he intended to carry out. He proposed to "modify the structure on the subject of hydrocarbons to make its sale more competitive and reduce prices to the home user."

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Although the proposal was intended to be carried out by 2018, on October 26, 2016, the Mexican Congress approved the Federal Income Law for the fiscal year 2017, published in the Official Gazette of the Federation on 15th November 2016. This law contains the new Special Taxes on Production and Services (IEPS) with which the government taxes gasoline and diesel at high rates.

For December 2016, the increase in the price of fuels that would take effect on January 1, 2017 was announced. The increase was 20%, and from February 18, 2017, the price would be released. The protests did not wait and dozens of businesses were looted. According to the Attorney General's Office (PGR), approximately 200 people were arrested throughout the country.

For Peña Nieto, during his presidential address on the subject, it was understandable "anger and annoyance (…) but if not, the effects would be more malicious with more serious consequences for daily living." Luis Miguel Labardini, energy sector analyst from Marcos & Asociados consultant, argues that what happened in Mexico is due to general misinformation. "From the beginning it was said that the plan was to liberalize the price of gasoline, and that means that the price would start to fluctuate as the price of crude oil does."

With the entry IGNORE INTO force of the reform proposed by Peña Nieto, new companies have been able to reach Mexico to take away the monopoly of PEMEX. The protests lasted throughout the month of January, but the measure was not revoked.

Compared to the case of Haiti, the analyst Alejandro Schtulmann, president of the consulting firm Emerging Markets Political Risk Analysis, mentions that "the increase of fuel affects the pocket directly on a daily basis, the increase affects the level of income, in Haiti, the fuel that it was going to be taxed also involved the consumption for the daily activities, since they do not have enough electrical coverage, the blow to the final consumer was going to be resounding. In Mexico, although there are not very high salaries, the situation is better economically speaking. "For Schtulmann, it is necessary to remember that Haiti is not an oil producing country, for which it is necessary to assume that the price of fuel is already high due to the import.

LatinAmerican Post | Carlos Eduardo Gómez Avella
Translated from “Primer Ministro de Haití: “El gobierno condena firmemente los actos de violencia y vandalismo"