Financing the War with the Printing Press

A budget can finance a necessary war and, through the way it pays for it, weaken the very people it claims to defend. The amended budget of 2 June puts the bulk of the effort into security. That was necessary. But it pays for it by running the printing press and by creating new taxes on consumption and on wages, and therefore on a population already at the end of its tether. At the same time, the diaspora money that still allowed families to eat is under threat from abroad. It is this sword hanging over families, more than the figures in the decree, that we need to look at.

Before it is a table of figures, a budget answers a simple question: who will pay, and for what. On the what, the amended budget of 2 June is clear: security. On the who, it speaks under its breath. Yet it is that answer which decides the fate of millions of people.

For the country on which this budget falls is not a country at rest. More than half of its inhabitants, nearly 5.7 million people, suffer from acute hunger, according to the latest Integrated Food Security Phase Classification (IPC) analysis. The economy is shrinking for the seventh year in a row. Inflation came close to 32 percent at the end of 2025. More than a million people have fled their homes. This is a body with no reserves left. So the real question is not whether the text is coherent. It is what it takes, and from whom, when this body is already at the end of its strength. And the answer is harsh: it takes above all where it hurts most.

Who pays for security?

The direction, first of all, is clear. The fifteen billion gourdes added to investment go almost entirely to the instruments of force: the National Police’s allocation rises from 7.7 to 19 billion, the Armed Forces get two billion more, the Security Support Fund is replenished, and funding for political parties falls to zero. In day-to-day spending, equipment and supplies come before assistance to households. After years of waiting, this is a clear and defensible choice. That is not where the problem lies. It lies in the bill, and in the name of whoever pays it.

Table 1. The main balances of the 2025–2026 amended budget

Sources: Table of Government Financial Operations (TOFE), Le Moniteur, Special No. 29, 5 June 2026, pp. 7–8. Percentage changes may not be exactly reproducible from the rounded amounts shown.

The deficit widens from 20.6 to 30.5 billion. To close it, the decree draws on a resource the original budget had not provided for: an advance of 16.5 billion from the Bank of the Republic of Haiti (BRH), the central bank. Put plainly, the state is financing its war by running the printing press. Yet the economy runs on the dollar, and inflation was still around 20 percent in early 2026. Under these conditions, printing money amounts to levying a tax that no one voted for, and that the poorest pay first: rising prices.

That tax appears in no article, and yet it is the heaviest in the decree. It hits those whose income does not keep pace with inflation: wage earners, people of modest means, families with no dollar savings. Public-sector wages, for their part, rise by only 1.3 percent, far less than prices. In other words, through the currency, the state is impoverishing the very people it wants to arm. Nor is this advance merely a bridge over the months that remain. In part, it covers deficits already run up since the start of the fiscal year, in October 2025. The real risk comes afterward: if the full-year budget, in September, again turns to the central bank, the temporary gash will become a lasting wound.

Table 2. The structure of deficit financing

Sources: TOFE, section H (Financing), Le Moniteur, p. 7. BRH financing is zero in the initial budget and appears in full in the amended budget.

To this silent levy, the decree adds a visible one, aimed at the same taxpayer. It raises the withholding tax on supplementary pay from ten to fifteen percent: bonuses, year-end payments, pay in lieu of untaken leave, overtime. Nor is this an advance that can be recovered later; it is a final levy. Put that way, five more points does not sound like much. Measured against what was already being withheld, it is no small matter: the levy rises by half. Yet these supplements are no luxury. They are the extra hours worked to make it to the end of the month, the year-end bonus, the leave sold back because taking it is not an option. They are the part of the wage that serves, precisely, to hold out against rising prices. And it is this part that the state cuts into further, just when it is most needed.

The comparison with Article 2 is more troubling still. The same decree exempts the base wage in the export sector from tax. That is no neutral gesture: put plainly, it is a subsidy to that sector, since the state forgoes revenue to lower labor costs and support assembly jobs. And at the same time, it raises by half the levy on everyone else’s supplementary pay. On one side, it supports one kind of earned income. On the other, it weighs more heavily on the kind that puts food on the table. Why this choice?

That leaves the third channel: the new taxes on consumption, which, as we shall see, also fall on those with the least. Three instruments, then, and only one thing in common: they all take from the same pocket. This is less a lack of means than a lack of imagination. Other avenues existed, and there was nothing extraordinary about them. In 2002, facing a comparable emergency, Colombia financed its security without printing money: through a special tax, levied on wealth and upheld by its Constitutional Court. A fair tax takes time and political work. Printing takes neither. Taxing, withholding, printing: these are the three easiest solutions, and all three fall on the population. Between effort and the easy way out, the decree chose the easy way. And it is the population that pays.

Protection, but on what terms?

Several of the decree’s new taxes and customs duties are meant to protect local production and, in time, to replace what the country imports. The idea is a good one. No country has an interest in depending indefinitely on what it buys abroad. The problem, then, is not the principle. It lies in two conditions without which a protective tax protects nothing. First, a local producer must actually be able to supply the market. Second, that producer must be given time to grow before the price increase falls on the consumer. In Haiti today, both conditions are missing: insecurity cuts producers off from their fields and their customers, and the decree protects right away what will only be able to respond later. The table below classifies the measures. The examples that follow show what lies behind each rate.

Table 3. The decree’s tax measures, by type and incidence

Key: in green, the measures that lighten the burden; in red, those that add to it, including the Article 3 withholding tax, whose rate is raised to fifteen percent. Sources: Decree, Articles 2 to 6, 13, 23, 24, and 36, Le Moniteur, pp. 2–6. The decree sets the rates but does not break down the expected yield of each measure; the incidence analysis remains qualitative.

Take tomatoes. The decree taxes tomato paste, ketchup, and sauces at fifteen percent, products the country buys almost entirely from the Dominican Republic next door. Yet a local factory exists: SHAISA, founded in 1976 in Croix-des-Bouquets, which produced under the Famosa and Tina brands. Its management was itself publicly calling for this tariff increase as early as 2018. On that point, the decree proves it right. But the factory is located in the Cul-de-Sac plain, precisely where tomatoes grow, and that plain is now a battlefield. In the spring of 2026, the fighting for control of it left many dead and drove thousands of residents onto the roads. The routes to the North and to the Artibonite are held by the same armed group. A tax can shield an industry from imports. It can do nothing for an industry that war has cut off from its fields and its markets.

The same goes for sausages, taxed at forty percent. Here again, a local meat processor exists: Carisa, opened in 2018 in the airport industrial park, which makes hot dogs, sausages, salami, and mortadella from poultry and local spices. Here is an industry worth protecting. But it is young, and still small in a market dominated by imports. It is located in the part of the capital that insecurity is choking, where bringing in supplies and making deliveries is already a feat. One example serves as a reminder: HMP, an older meat processor, went bankrupt, not for lack of customers, but because insecurity ended up strangling its business. Replacing imports, then, will not happen overnight. The price increase, by contrast, is immediate. It hits a staple of the ordinary household basket, sold mostly by small street traders. And these traders already pay a toll to the armed groups to bring their goods in. The state’s tax comes on top of that toll and squeezes an already thin margin further, while the country waits for local production to recover, a recovery that depends first and foremost on the return of security.

The customs duties do not stop at sausages. They cover a whole basket of hygiene products: toilet paper and tissues at thirty percent; cosmetics, shampoos, and deodorants at ten; soap and sanitary pads at five, as well as diapers. Some of these products are, however, made in Haiti. Soap, first of all: it is made locally, even in social-economy workshops. Sanitary pads too: a social enterprise, ANACAONA, produces washable, reusable ones in Port-au-Prince. The problem, then, is not that there is nothing to protect. It is that this production remains small, and that it does not replace the disposable pads and diapers that families buy, almost all of them imported. The tax, on the other hand, takes effect immediately: it makes basic necessities more expensive, first and foremost for women and families. This production will take over only if it scales up, in safety and over time.

One last measure, of a different kind, points in the same direction. Article 7 requires the entire propane gas chain, from micro-centers to retailers, to get into compliance within fifteen days: a business license and an operating permit. Otherwise, the importer pays a fine of 500,000 gourdes, the distributor or retailer 100,000, and the establishment can be shut down. Bringing order to a dangerous sector, largely informal and beyond the reach of the tax authorities, is in itself a good thing. But the measure lands all at once on a chain that is overwhelmingly informal. And since the price of propane is not set by the state, unlike that of gasoline or diesel, the cost of compliance is passed straight on to the retail price. Once again, a defensible measure, but one whose timing makes households pay, this time through their cooking gas.

The list could go on: alcohol, where protection does next to nothing for a clairin that is still made by artisanal methods; salted fish or solar equipment, where the relief, by contrast, hits the mark. But tomatoes and sausages tell the essential story. And this is not a reproach; it is a question of method. Protecting an industry that exists is not a mistake. Everything depends on timing, and on what is put in place alongside the tax. For a customs duty to end up replacing imports, two things are needed: safe territory, where businesses can obtain supplies, produce, and sell; and a strategy to help them grow until they get there. Without these, and applied immediately, the tax drives prices up now, for the sake of local production that will follow only later, if it follows at all. The order of the steps matters as much as the steps themselves: secure first, support next, protect last. The Ministry of Commerce has indeed launched, with public funds, a few programs that point in the right direction: support for young graduates in technical trades, Zouti pou Demen (“tools for tomorrow” in Creole), and support for women entrepreneurs. But they do not yet add up to a real strategy for these industries, and they rest on a bet: that the economic situation will improve.

Does retaking territory bring it back to life?

Retaking a neighborhood and securing it is one thing. Truly holding it is another. And the two are often confused. Securing means driving the weapons out, posting guards, preventing the group from coming back: that is a matter of force. Holding means bringing the state back where it had withdrawn, through water, electricity, schools, the clinic, support for farmers, a public office with someone behind the counter. The two are not equivalent, and that is the whole difficulty: an area can be secured without the state ever coming back.

Security, moreover, does not do this work. It only makes it possible. For markets do not reopen by decree. The informal sector has never been organized by the state: as soon as fear recedes, people live, trade, and rebuild their networks on their own. What falls to the state, and what no one else will do in its place, is a civilian presence, public services, support and supervision. And it is that work which decides everything.

And that work decides whether families eat or not. For hunger here is nothing abstract: it comes from insecurity. Where armed groups control the ground, the farmers who still work their land must negotiate access to their fields and give up part of their harvest. Small businesses close. Jobs disappear. That is what is starving the country. The tomatoes stuck in the Cul-de-Sac plain, the sausage stall that can no longer get supplies, are not details: they are the first signs of this stranglehold, which the hunger figures reveal on a large scale.

On this, the budget is right on target: it tackles security, which is the root of this hunger. The question remains: with what means will the ground be held once it has been retaken? And here the budget shows a weakness. The money that is truly new and truly Haitian, the central bank’s advance, finances the reconquest. But what makes it possible to hold territory, bringing back schools, justice, agricultural extension, depends on other money: agriculture keeps nearly 14 billion, financed largely by foreign aid, whose amount and timing the state does not set. The money for reconquest is therefore Haitian; the money for reconstruction is foreign, and uncertain. Mexico shows the danger. Since 2006, its army has been fighting criminal groups. Twenty years later, it is still patrolling the same territories: force regained ground, but the civilian state did not follow to hold it. A reconquest that is not consolidated is a reconquest that will have to be done all over again.

Table 4. Public investment by entity

Sources: Breakdown of appropriations by entity (Le Moniteur, pp. 9–12) and Public Investment Program (pp. 71–97). Police (code 1212, p. 40) and Armed Forces (code 1217, p. 45) checked against the official copy. Education and State University as orders of magnitude; Justice excluding National Police. Percentage changes may not be exactly reproducible from the rounded amounts shown.

The same imbalance appears within security itself. The Ministry of Justice’s budget reaches 55 billion, but the increase goes to the Police. What comes after the arrest, the judges, the courts, the prisons, stays at the same level. Yet strengthening the capacity to arrest without strengthening the capacity to try and to imprison, in prisons that are already overcrowded, only clogs the machine. A police force that arrests without the means to try or imprison does not push violence back: it recycles it.

The civilian foundation, meanwhile, is quietly crumbling. Education, the state’s largest civilian budget item, keeps the same amount as before. With inflation, that amounts to a cut. Yet it has precisely the tool that security lacks: earmarked revenue, the National Education Fund. What bears fruit over time is left to stagnate, while what shows results right away is financed by the printing press.

And the thread is fraying from outside

All of this is playing out inside the country. But Haitian household consumption was still holding up thanks to a thread from abroad: diaspora money. Nearly four billion dollars a year, almost a fifth of national output, most of which pays for everyday expenses, starting with food. Yet on 25 June, the Supreme Court of the United States allowed the US government to end the Temporary Protected Status (TPS) of 330,000 to 350,000 Haitians, and it ruled out review by the courts. The measure would not apply immediately, and its impact on remittances cannot yet be quantified. But the threat comes at the worst possible moment. The budget is already eating into household incomes; and now the support from abroad, the support that cushioned the blow, could disappear as well, for reasons over which Haiti has no control. That would be the sword’s other edge.

What the autopsy shows

Put end to end, these pieces form a single picture. Over families hangs a sword: hunger, which already affects more than one Haitian in two. It hangs by two threads, and both threads hold up the same thing: what families can eat. The first, inside the country, is purchasing power, what wages can still buy. The budget is wearing it thin: the printing press feeds inflation, the withholding tax cuts into wages, the new taxes drive up the cost of the basket. The second, outside, is diaspora money, which pays for the other half of the basket and which a foreign decision threatens to cut. None of these moves stems from malice; they stem from reflex, from the path of least resistance. But the effect does not depend on the intention. A budget that pulls on the thread it should be strengthening, just as the other one threatens to give way, is not merely financing a reconquest: it is bringing the sword closer.

Retake, hold, bring back to life

None of this was inevitable, and none of it is yet. The real test is the September budget, which this time will cover a full year. The easy way would be to renew this decree as it stands: the printing press for financing, and security as almost the only priority. That would be a serious mistake. Financing a full-year budget by printing money would feed inflation, just when the value of the gourde and the credibility of the transition matter most. The September budget can do otherwise, and provide for what is needed to truly hold the ground retaken: a dedicated, measured tax in place of the printing press; a national budget line to bring the state back into retaken areas; resources for the courts and prisons, not just for the police; protection for the incomes of the poorest against rising prices; and clear accounts of how every gourde is used. Governing by decree is sometimes necessary. Doing so without being held to account never is.

A budget says more about a state’s true priorities than any speech. This one sets out one priority: retaking ground. That was necessary. But retaking and securing are not enough. Ground must be held, and holding, as we have seen, means bringing the state back. The success of this effort will not be measured by the billions spent today. It will be measured later, by simple signs: water coming back, a state office reopening, a harvest reaching a town, a family returning home, a market reviving where there used to be a barricade. The decree of 2 June does not produce that. At best, it opens the way. The September budget will tell which path the country chooses: the easy way, already taken, or reconstruction. Two threads still hold families above hunger. The first comes from abroad: it is diaspora money, and Haiti can do nothing about it; the decision came down in Washington, and it threatens that thread. The second is domestic: it is household purchasing power, and that one the state still holds. That is where the real choice lies, and it is entirely Haitian. Retaking the territory was necessary. But retaken land where people can no longer live is no victory. The only victory that counts will be to have kept the country alive.

Sources and references

Primary source. Decree establishing the Amended Budget for fiscal year 2025–2026, Le Moniteur, 181st year, Special No. 29, Port-au-Prince, 5 June 2026. Aggregates and financing: TOFE and balance table, pp. 7–8; appropriations and withdrawals of appropriations, pp. 9–12 and 31–57; Police (code 1212) and Armed Forces (code 1217) checked against the official copy, pp. 40 and 45; tax measures, Articles 2 to 6, 13, 23, 24, and 36, pp. 2–6, including the Article 4 customs duties covering, among other items, sausages (tariff heading 1601, 40 percent), paper and various hygiene and personal-care items (up to 30 percent), and sanitary pads and diapers (5 percent); compliance requirement for the propane gas chain and related penalties, Article 7 et seq., pp. 5–6; Security Support Fund, pp. 65–66.

Economic conditions and population. Inflation: 31.9 percent year on year in September 2025 and 20.6 percent in March 2026 (IHSI; BRH). Real GDP down 2.7 percent in 2025, a seventh consecutive year of contraction; nearly half the population below the $3-a-day line; more than one million people displaced (World Bank; IOM, 2025–2026). Acute food insecurity: about 5.7 million people, more than half the population, in IPC Phase 3 or above, including nearly two million in Phase 4, September 2025–February 2026, with deterioration projected for the March–June 2026 lean season (IPC; WFP).

Value chains and insecurity. Local tomato processing: SHAISA (founded in 1976, Croix-des-Bouquets), Famosa and Tina brands, the only factory in the country in this segment on record up to 2018; an increase in the duty on imported paste called for by its management as early as 2018 (Le Nouvelliste, 2017–2018). Local processed-meat production: Carisa (Carisa Food, founded in 2018, airport industrial park, Carrefour Fleuriot, Port-au-Prince), hot dogs, sausages, salami, and mortadella made from poultry meat and local spices, presented as a national alternative to imported brands (carisafood.com). Bankruptcy filing of an older meat processor, HMP, attributed to the deterioration of the security environment rather than to a lack of demand (industry sources, 2025–2026). Tomato products mostly imported from the Dominican Republic; mass-market processed meats still largely imported. Croix-des-Bouquets and the Cul-de-Sac plain in the grip of 400 Mawozo and the Viv Ansanm coalition, control of the roads to the North, clashes in May 2026; Port-au-Prince metropolitan area largely under the control of armed groups (ACLED; InSight Crime; International Crisis Group, 2025–2026). Ministry of Commerce and Industry programs for micro-enterprises: Zouti pou Demen, helping young graduates of technical schools into work through equipment grants and mentoring (registration opened in December 2025), and the Support Project for Women’s Entrepreneurship, PAEF (mci.gouv.ht, 2025–2026).

Remittances and TPS. Diaspora remittances of around $4 billion, about 20 percent of GDP (IHSI; BRH; World Bank). US Supreme Court decision of 25 June 2026 (Mullin v. Doe and Trump v. Miot, 6–3) allowing the administration to end TPS for Haitian nationals and barring judicial review; affected population estimated at about 350,000 beneficiaries (DHS; Congressional Research Service); effective date deferred and assessed case by case. Sources: SCOTUSblog, CNN, The Washington Post, 25–26 June 2026.

Colombia. Legislative Decree 1838 of 11 August 2002, Constitutional Court ruling C-876 of 2002, Ley 863 of 2003 (SUIN-Juriscol; SIPRI; World Bank).

Mexico. Militarization of the fight against criminal groups since 2006 and creation of the National Guard in 2019, without a parallel rebuilding of the civilian state apparatus (National Guard created by constitutional reform, Diario Oficial de la Federación, 2019).