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Wednesday, September 17, 2008

When Governments Fail

If the largest insurance company in the world, AIG, fails what could possibly happen next?

The United States government could fail, defaulting on debts, for one thing.

Sound absurd to you? Well, many smart people would have laughed in your face twelve months ago if you told them AIG or Lehman Brothers or Merrill Lynch could fail. All but one of those events has happened just this week. Fannie Mae and Freddie Mac failed last week.

It is important to consider worst case scenarios. In my work as a disaster project manager, in Haiti, India and even SE Washington, DC, I was required to do exactly that on a regular basis. Projects did fail, for reasons I could not control. I got plenty of experience at managing projects during worst case scenarios.

Mariani, Haiti 00007

Haiti: A Worst Case Scenario

A common reason for project failure in Haiti was that the national government completely failed. That is not unusual in Haiti or Africa.


When national governments fail some things are certain. The national currency becomes almost worthless. Stores raise prices daily and sometimes even hourly. This is happening right now in Zimbabwe. It is called "runaway inflation."

Another thing that happens when governments fail is that banks fail. In other words, you go to the bank to make a withdrawal and the doors are locked. If the heavily-armed guard does decide to let you in, you can only withdraw a very small amount of your money. Right now the Federal Deposit Insurance Corporation or FDIC has admitted there are 117 banks on it's list of troubled institutions. After bailing out several banks already this year the FDIC does not have enough money in the kitty to cover too many more bank failures, and especially not big banks like Wachovia or Washington Mutual.

Downtown Charlotte 42493

When governments fail wealthy people hire small armies of security guards to protect their homes and businesses. You see, some businesses, like food stores and taxis are still able to stay in business since people still need those things. All other people lose their jobs, including most government workers, except the army. After a few days people start to get hungry and they gather in mobs to loot the food stores and warehouses. The taxi drivers drive quickly past you unless you wave money at them.

When governments fail the military takes over control of the country. It is important that people realize this now. If the U.S. government defaults on debts and banks fail, the U.S. Army may be required to establish martial law to restore order.

I am not kidding, this happened three times in Haiti and once in India.

Most foreign people leave countries that fail. They go home to places that are not so dangerous and chaotic. As a U.S. citizen I was ordered to leave Haiti by my embassy but I chose to stay. I did not want the people that were served by my projects to starve to death. The U.S. embassy staff did not like the fact that I remained in Haiti.

When all the foreign project managers leave their projects the local people often loot the project's store rooms. It takes a few days for people to realize they can do this. So during emergencies I decided to immediately go and visit as many other projects as possible. I went to the Catholic Charity project site, the Norwegian government-sponsored site, Peace Corps, CARE, and many other sites. All told, I went and inspected about 15 different project sites and assured the people that everything would be OK in a few days. I inspected the stores, made sure food distribution continued, and sometimes gave the managers or teachers one or two dollars during my visits.

Mountain Village of Ossanite 00002

The sites that I kept visiting were never looted but all the others were.

When the foreign workers finally returned, weeks later, they were surprised that the sites had not been looted. When they asked, they were told that Mr. Williams had taken care of the projects while they were gone. They all asked the same question, "Who is Mr. Williams?"

After each emergency I never even got around to those projects to explain what I had done. I was too busy keeping my own clinic, feeding program, orphanage, soybean-planting work, and schools operating. In that way I became somewhat of a mysterious hero that never really cared he was a hero. I was too damn busy to care about myself.

Ossanite, Haiti 00002

The people who stay calm during disasters are the same people everybody looks to for confidence, ideas, and support. Oddly enough, that is happening with me right now during this financial disaster in the U.S..

The Haitian military did not like me staying in Haiti. My presence made it difficult for them to shoot people without getting caught. They somehow had the notion that I would file a report to the U.S. government and the U.S. Marines would then arrive.

I could hardly make a phone call to donors in Port au Prince much less call the U.S. government in Washington. Besides, who would I call anyway? The president? I did not even work for any government agency. I was an independent relief worker associated only with a businessman's association in India. My funding came mostly from wealthy local Haitian people that lived up on the mountain tops.

The military men sometimes came to my project sites to arrest me. I was usually not there when showed up so they would go away after an hour or two. People would tell me the military were going to come for me so I knew when to not be at a particular location.

When they came for me at night, and I was at a project, I would crawl into the water cistern and wait in the shallow water until they went away. This only happened a few times. Once a soldier even lifted the lid to the cistern but it was night and he could not see me inside.

Mountain Village of Ossanite 00003

The reason the local people warned me and did not rob me was that I ran the schools their children went to, and sometimes fed them, and my clinic provided low cost or free health services. Total strangers step up to defend foreign aid workers, it is amazing to see that happen, especially when you are aid worker under attack!

One day I was walking back to the project when shooting started. I heard and saw the shots hitting the buildings next to me. Just then a group of local women came by with baskets of fruit on their heads, shaking their rear ends and singing loudly. I put my briefcase on my head, started swinging my skinny little butt, and singing out of key as I walked behind them. The revolutionaries and the soldiers stopping shooting at each other and started laughing out loud at the crazy, foreign aid worker, me.

Once I had gotten past they started shooting at each other again.

Links:

Washington Post article #1

Washington Post article #2

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