Jeff (0:00)

Hey, everybody, I have some great news for you. Remember the missing puzzle piece that we've been talking about? We were going to take this whole season, season three, to build up and help you understand all of the existing puzzle pieces, the known puzzle pieces, so that we could then get to the missing puzzle piece so that you could truly appreciate that. But the world is moving too fast. I want to catch up with that with you. I want to talk with you about what is happening in the world and the Trump effect in the. The Marco Rubio Secretary, Secretary Rubio effect on Haiti. I want to get to that. But to do that, we have to get through all these puzzle pieces and the missing piece. So we're going to do all of that right here today in one episode on the Stimpak podcast. Let's go. Okay, so those of you who are just listening to audio only can probably tell that the sound is a little bit different. Well, that's because we're outside. Those of you who are watching on YouTube can see that we're in a different environment than we're normally in. My music room at the house and I wanted to change it up and I like the walk and talk, and hopefully you will, too. We'll see how it works. You guys are on this journey with me. Let me know how you like the. The new digs, so to speak. Anyway, so let's, let's get cracking. We'll start with. In order to get to the missing piece, we have to cover the existing pieces. Unfortunately, I'm going to change nomenclature on you for a little bit so that we can get a little more technical. The nomenclature that we use at Stimpak to refer to the puzzle pieces is work streams. So the metaphor being, I come from the tech. Tech world where you build out these huge technologies and there's, you know, millions of lines of code and hardware that needs to be integrated and, and people and services. They're huge projects. And so you break them up into work streams, similar to developing a nation, which obviously is going to be a astronomically large project. We break them up into work streams. We define those as good governance, rule of law, econ, economy, social issues. So I think human rights, women's rights, children's issues, health, all those kinds of things, and then the fifth being the environment. So let's start with what everyone typically, I would, I would say over indexes on when I go to D.C. and I go to these meetings and I'm meeting with people at the State Department and various think tanks and NGOs the vast majority of the conversation for years has been around good governance. And we talked about that in the last episode, about how massively impactful good governance and foreign relations is to a developing nation. Of course it is. It's huge. But the people who think that that is the solution, when you ask them, hey, you know what needs to happen in Haiti, and they'll jump right to elections. We, we absolutely have to establish a firm democracy with a powerful leader. And once we do that, that leader will take us to the promised land. I'm exaggerating for effect, but it, it, it feels like that level of simplicity. And of course nothing is, is that simple. But of course good governance is essential and, and we should hope for a powerful leader to come out of Haiti. Are there powerful leaders in Haiti? Absolutely. Unfortunately, most of them in this era are strong men. Meaning to survive in Haiti, in a, a lawless country, you have had to develop survival skills that have protected you. And in your party or your region of the country to this point, you've survived to expect a, you know, a George Washington or a Lincoln or even a Nelson Mandela level leader to rise to the top in the next election is, is something we should all hopefully hope for and strive for, but not plan for. So yes, good governance is important, but let's dial down our expectations and let's just get to what we call level one. So level one of five levels in the work stream of good governance, we're currently at a zero. We have zero elected officials in Haiti. So let's get to level one, which is some elected officials of some quality. Right? That's something. Okay. The other reason why I worry about over indexing on good governance as being the priority for Haiti is something we should focus all of our attention on is even if you do get the next George Washington or Nelson Mandela in Haiti to lead us to the promised land, he's not going to. Not because he doesn't want to, not because he's not an incredible world class generational leader, but because Haiti has an inability to collect taxes. Now you perhaps an American who's tired of being overtaxed might think, well, great, you know, low taxes are awesome. Okay, that's true. And I am what I call a bleeding heart capitalist. Right? I love low taxes, I love small government. But there is such thing as too small of a government, right? The, the most basic of societal services must be provided in aggregate. Meaning we get together as a society and agree we need some cops, maybe a, a national defense. Maybe we want to educate our people at Some very basics. Right. Some courts, maybe some prisons. Right. We need stuff. And you must collect taxes to provide those services for your people. Why is this a problem in Haiti? Well, in the Dominican Republic, right across the island, where they have about the same population, they collect 10 times the tax revenue the Haitius. And that may sound like the Dominicans are charging too much taxes. Their taxes per capita are somewhere around 1200, 1300 bucks U.S. the equivalent of that in Haiti. It's about $128 per capita. There's just not nearly enough tax dollars for even the greatest leader or leaders to properly provide for a civil society. In Haiti, you're gonna have lawlessness when you cannot provide basic services for your people. And so can an elected set of officials. President, prime minister, a full parliament, that senate, and all the assemblymen, the deputies. Can we. Can we put all those guys in place, or at least a handful of them, elected officials from throughout the country, put them in place and put them to work and have them create progress in Haiti? Absolutely, and we should all count on that and be working very hard to get that. But let's not expect that set of leaders to. To take us all the way to the promised land with $128 per capita in collected taxes. So that's good governance. That's the good governance work stream. We're currently at a zero. We need to work to a level five will do it slowly but surely. What you'll notice is all of these work streams are interdependent. So, for example, we can't get to a level 5 in good governance without progressing in rule of law and economics and social issues, etc. Okay, let's. Let's talk about rule of law for a minute. The one that kind of ties these two together is corruption, and probably do an entire episode on corruption. But suffice it to say for this moment that there is a level of corruption that will always exist in Haiti. It exists in the US, exists in all developing nations. Every nation has a corruption score. There's different types of corruption. The. The lowest level of corruption is called speed. Money and access money. Right? That's over tipping or inappropriate tipping or. Or taking money in order to. To get access to someone or give access to someone, maybe to get in front of a mayor or somebody who. Who grants contracts or think of it as inappropriate campaign contributions, that kind of thing. That kind of corruption is going to exist in every society to some degree or other for a very long time. But the worst levels of corruption, you know, grand larceny in Haiti, I would say they're a level zero, because many of the people who do have power are committing actual crimes for money. So you got to stop that stuff. And again, we'll address that more thoroughly in the future. But understand that that corruption work stream is kind of in both sides. Rule of law and good governance. Let's talk about rule of law. What do we mean by that? So in order to have a succeeding society, you need to have the very basics of removal of law. So think you need a citizenship paper, some sort of a. A birth certificate or id, and then titling. So the ability to own things, to own land, property, and then of course, to be able to protect it. So you need police for that. Right. You need to be able to buy a piece of land and in order to feel confident that you can invest in that piece of land, whether it be to plant stuff or build a building or manufacturing facility. I had a colleague of mine who took a multimillion dollar loan from the bank, built a manufacturing facility in Guadabuque and had the gangs just take it from him. And he still owes the bank for that. Right. Low rule of law or absence of rule of law is a huge disincentive for entrepreneurship of all kinds. And then of course, a robust court system and prisons, etc. It's all rule of law. Okay, we're currently at a level zero, and we need to get to level one. Stimpact. We define level one as the four major corridors, north, south, east, west, out of Port au Prince, need to be reopened for trade and then occupied by the Haitian National Police. So those police stations currently are all burned out and occupied by gangs. And so you need to reestablish those. That's level one security. And you can see back again to, to the inter, interplay between the work streams that on the good governance side, if you had those corridors open, then you could conduct a free and fair election in those little areas that were free and occupied by the police. So that allows you to maybe get to level one in good governance. Great. And by the way, that allows the economic side, which I would consider at a level one right now, but it would allow the economy to progress to perhaps level two. Right. You can see how they're all interrelated. Okay, so let's talk more about the economic side. So I wrote an article a couple years ago about the priorities in Haiti, and I mentioned all these, these work streams. And at the end of the article, I made the argument that our priority ought to be economic development over security. Or rule of law. And I made that argument because I believed the tenacity of the Haitian entrepreneur was sufficient to overcome any lawlessness because they were displaying that ability. And I think I mentioned a buddy of mine who had a food plant that had crow's nests or, or sniper towers around his manufacturing facility to protect it. And they would hire armed men to accompany their trucks to deliver the food. And you know, they just were making do. But I was wrong. I might have been right at that moment, but I eventually became wrong. As the gangs gained more and more power and it just became impossible. These guys kept losing trucks and then the gangs would ransom the truck back to them and just became untenable. And so one entrepreneur after another began to contract their activities and get sick of losing money and move on. And those numbers were reflected in the economy, their gdp. GDP began to drop the last few years. So you can see how dependent the economy is on safety and security. So we'll deal with the Haitian economy and what it means to help them develop their economy at length in future episodes. But just understand, at this point, we've got a long way to go. However, I am highly confident that if we do the missing piece, that we'll see massive gains in the economy. Haitian entrepreneurs are ready to explode in a great way. They could just have a tiny bit of safety and security to do their business, especially if they had a little help from the outside. We'll talk about that later. One of the key mechanisms for improvement in Haiti is collecting taxes. And of course a maturing economy is required to increase your tax collections. Why is the Dominican Republic collecting 10 times as much taxes? Well, they have a 5x economy. They're doing somewhere around probably the high 90s or low hundred billion dollar a year economy. Very strong compared to Hades, probably in the high teens, probably like 18 billion a year economy in 2024. I haven't seen those numbers yet, but they're probably somewhere around. So 5x the economy, 10x the tax collection. So why is that? Why, why isn't it 5x right? Why doesn't that number slide how you might expect it to? Well, that's because the smaller you go in economic strength, meaning the less mature your economy, the harder it is to collect taxes. So imagine you've got a $10 million a year business. The government knows who you are and they come knock on your doors and they audit you and, and you pay taxes and you need to have good relationships with your municipality when you're a decent sized business. If you're a Tiny subsistence farmer who grows onions and then brings your onions to the side of the street, you know, a half a mile away from your tiny plot of land in the hills. You're not paying taxes. Nobody's collecting taxes from you. You made a buck. Right. And so an immature economy pays very little taxes. Right? So as the economy matures and progresses and grows, it'll be easier and easier to collect a legitimate amount of taxes that that GDP to tax collection ratio will increase significantly. Okay, so we've talked about good governance, rule of law, the economy, and then, of course, social issues and the environment are in there also. Those are your five work streams. Those are your pieces to the puzzle. So now you're ready for the missing piece of the puzzle. So over the last, let's say 30, 35 years, the international community has begun to recognize, hey, we've wronged Haiti, and it's in our best interest to help stabilize this nation. Let's go try to help. And that's. That's a wonderful sentiment. What happens as this food and medicine and health workers flow into the country? It drives up the population. It allows the population to sustain a vastly higher number of people. And so you get this population spike. Unfortunately, the economy has not been able to keep up. And so the disparity between the power of the economy in Haiti and its population has only grown. And that creates scarcity, scarcity of resources, scarcity of food. Food. There's plenty of space in Haiti. There's a lot of congestion in Port au Prince, but there's plenty of room outside of Port au Prince. So when I say there's overpopulation in Haiti, I'm not saying they're running out of space. I'm saying they can't support themselves. So you might be saying, Jeff, you're the humanitarian guy. You've been, you run an ngo. You bring free food down to Haiti. What on earth are you talking about? Good, good pushback. First off, emergencies are different. And you have to be incredibly disciplined about what you define as emergency. For example, there's a difference between hungry and starving. And if you encounter a situation where, let's say it's a hurricane or a famine or for whatever reason, there's a short term dearth of food or water, you can get away with that and not be violating these principles that I'm talking about and driving up the population inorganically. That's one of the excuses that I used to jump in and be Santa Claus and bring food and water for free. But the vast majority of these dollars that have flowed into to Haiti over the last 25, 30 years have been what I call lazy dollars and tell you what I mean by that. And this here's your missing piece right here. This is it. I hope you're ready. Every dollar that flows into Haiti for humanitarian aid purposes needs to be accompanied by equal or greater, hopefully double that effort in self reliance initiatives, meaning economic development of some kind that allows not only the individual that you're serving, but, or the group that you're serving, but the entire nation and its economy to grow in an organic way. That's it. That, that is the missing piece. The problem is that the humanitarian aid has been coming in faster than the economy can grow. That's created scarcity, that's created the survival of the fittest where these gangs can't rule with impunity. Whoever's got the biggest guns makes the rules and gets the food and gets the land. That is the problem. And so the solution missing piece is any humanitarian aid that comes in needs to be accompanied by equal or greater, hopefully 2x that effort in self reliance initiative. That's it. You got it. That's the missing piece. I'll often talk to people who are new to, to all these concepts and they'll say, Jeff, okay, so that's, that's the missing piece. Why is it the missing piece? Why, why doesn't the international community, the NGO community, the diplomatic corps, how come they don't already understand this missing piece? Like why is this novel? Like why is this wow. And I believe it's because really smart, well intentioned, well trained, experienced people are trained in their silo, in their narrow discipline, and are, are rarely tasked with broad scope strategic diagnoses of this dynamic. And of course it changes, right? It hasn't always been this missing piece. Hasn't always been the missing piece, right? There were years in, in the 80s where you could have stopped the bleeding, just fixed good governance and then stop flooding the country with humanitarian aid and this dynamic would never have occurred. Right? There would have been other issues, of course, and, and the other work strings would have needed to progress, to consider Haiti a developed nation. But this is the missing piece here and now most people work on one of the work streams. There's very few people who ever even understand all the work streams. And that's what we've tried to focus on at Stimpact is a holistic approach to really diagnosing properly not just what are the problems, because there's lots of problems. That's what all the work streams are Right. We, we touched on not only good governance, but corruption and rule of law and the economy and human rights issues. All of those are problems and they all need to be worked on, but they're known problems with really talented people who can work on them. But if we don't fix this missing piece issue, this lazy giving issue, we're going to be right back here time and time again. You're going to somehow beat back the gangs, you're going to somehow get elections done, and you're somehow going to get humanitarian aid flowing again. And we're going to be right back here driving up that population with an economy that short of striking oil is never going to go faster than that artificially inflated population. So that's it. That's the missing piece. I hope you found that enlightening and interesting. So you might now be saying, okay, Jeff, what now? Like, what do, what do we do with this information? That's where it gets exciting. So now with President Trump in office and Secretary Rubio doing some pretty exciting things, I've had people reach out to me and say, dude, Jeff, you're the humanitarian aid guy and Secretary Rubio just killed usaid. Aren't you freaking out? Aren't you upset? Say no. Oh, let me tell you why. And that's what we'll talk about in the next episode. Stimpak podcast. Thank you guys for, for joining me. Hope you'll join us next time. We'll talk about a lot of cool things or of course going to talk about the Trump effect. We're going to talk about the ethics and obligations and philosophy of obligation and what is our obligation as individuals to Haiti? What is our obligation as a church or a nation? Right. Whatever that that group is. Right. So group ethics versus individual ethics and how that applies. And then we'll also talk about the technical aspects of. Okay, let's say we want to help. How, how do we help? Right. What are the, the technical approaches to doing economic development? What is that self reliance thing you talk about? Right. How do you actually achieve that? What are the levers we can pull? And I hope you're excited to, to learn a little bit more. Hope you enjoyed this new kind of format. Hope you didn't get dizzy walking around this lake thing. But it's been good to be with you. You guys are awesome. Thank, thanks for joining me. Talk to you later.