Several protests took place across Haiti between 18 and 26 November, demanding the resignation of President Jovenel Moïse and investigations into the alleged misuse of Petrocaribe funds.

• There have been violent confrontations with demonstrators, who threw sticks and stones, and the police used tear gas and water cannons; shootings have also been reported. At least 11 people have died, and many have been injured.
• Legislative elections are scheduled for October 2019, but these are likely to be delayed, increasing the risk of having a non-functional parliament.
• The likelihood of President Jovenel Moïse stepping down over the coming year is increasing; this is the second wave of disruptive protests he has faced, this time against a more organized opposition and civil society organizations. Should he step down, a transitional government is likely to be put in place, generating a power vacuum and policy paralysis.

On 23 November 2018, thousands of demonstrators staged nationwide protests in Haiti to demand the resignation of President Jovenel Moïse. This followed weeks of anti-government and anti-corruption protests over the alleged misuse of funds from the Venezuela-led scheme, Petrocaribe, during the tenure of Presidents René Préval and Michel Martelly (2008-16). This new wave of protests started on 18 November, and involved confrontations between demonstrators and the police, with demonstrators throwing sticks, stones and Molotov cocktails, erecting barricades using burning tyres, as well as attempting to loot stores and burning parked vehicles. The police used tear gas, water cannons, and rubber bullets to disperse the crowds and several shootings have also been reported. At least 11 people have died, and many have been injured.

In addition, on 24 November there were shootings in Malpasse, at the border with the Dominican Republic, between civilians and the police, that ended with six Haitians dead including four police officers, and arson attacks that targeted customs and police facilities. These events came at the same time of a related a three-day general strike which paralyzed all services, including schools, public offices, commerce, and transport.

Protests were initially organised via social media with the hashtag #petrocaribechallenge, in response to a November 2017 Senate report that revealed that infrastructure works to be financed by Petrocaribe funds were never completed or poorly executed, and that the judiciary had not undertaken any action. The opposition has now gathered under the Democratic and Popular Movement (DPM), formed by 20 political parties, and joined the call for restitution of the funds and for Moïse to step down. This has been led by Moïse Jean-Charles (Platfom Pitit Desalin), and Maryse Narcisse (Fanmi Lavalas). Although President Moïse has not been directly involved in the allegations, the opposition accuses him of inaction in the investigations, and of being "biased" in favor of his predecessor and mentor, Michel Martelly.

Government has failed to allay concerns or promote dialogue

The government is in in a rapidly weakening position, given the growing organization of the opposition, and also the deteriorating economy. The economic downturn is marked by a sharp depreciation of the currency (gourde) and a significant increase in unemployment, which is affecting people's purchasing power considerably in a country where 80% of the population lives below the poverty line. The government has failed to allay concerns or promote solutions and has limited prospect of doing so in coming weeks. The judiciary is also unlikely to make significant progress on the Petrocaribe investigations: with high impunity rates in Haiti, prosecution of former government officials is unlikely. Haiti's poor fiscal position prevents the government from responding to people's economic demands, such as implementing or expanding social programs capable of appeasing the economically motivated protesters and separating them from the political opposition, or allocating more funds to basic services, such as healthcare and education.

In 10 days Moïse made only two public statements: he ruled-out resigning, and notably, did not refer to Haiti's problems directly or propose any prospective solutions. He did call for dialogue, but has not undertaken any initiative to facilitate this, according to IHS Markit sources in Haiti.

This is the second round of violent and widespread protests that Moïse is facing since he took office in February 2017. In July 2018, violent protests against announced cuts to fuel subsidies ended in the resignation of the then-Prime Minister and his whole cabinet.

Outlook and implications

The likelihood of President Moïse stepping down over the coming year has increased significantly. He has already been considerably weakened by the July protests, having been forced to change the prime minister and the whole cabinet, without successfully diffusing anti-government protests. Although Moïse received backing from the UN Core Group (consisting of the Special Representative of the United Nations Secretary-General, the ambassadors of Brazil, Canada, France, Germany, Spain, the European Union, the United States, and the Special Representative of the Organization of American States), the fact that the political opposition and wide sectors of the civil society are coming together to demand his ousting, international is unlikely to be enough to save his government.

Political instability risk will increase over the coming year, with legislative elections - planned for October 2019 - likely to be considerably delayed if demonstrators continue to question Moïse's legitimacy, and refuse or are banned to participate. The last legislative elections were overdue for more than a year and parliament was dissolved between January 2015 and January 2016 as its seats were not filled. This increases the risk of having again a non-functional parliament.

Should the government receive foreign support to fund initiatives capable of reducing unemployment and shoring up the currency, or if there are meaningful advances in the Petrocaribe investigations, this would indicate improving prospect of Moïse gradually diffusing protests and therefore, reducing government instability risk. Should business associations - which have so far supported Moïse - support the opposition, this would indicate rapidly rising government instability risk, leaving Moïse highly isolated. Should he resign, a transitional government is likely to be put in place, generating a power vacuum and policy paralysis.

Posted 30 November 2018 by Carla Selman, Principal Research Analyst, Country Risk, S&P Global Market Intelligence