April 18, 2009

(Another) New Day for Haïti?

A donor conference on Haïti organized by the Inter-American Development Bank (IDB) was held in Washington, D.C. on April 14, 2009 (see "Donors pledge support for Haiti's economic recovery plan"). According to the IDB, "Donors pledged to provide $324 million in additional aid to Haïti over the next two years, of which $41 million is for budget support in 2009. This fresh assistance complements the financing previously committed by international community partners, who are currently supporting projects totaling $3 billion in Haïti."

One of Haïti's greatest challenges is the lack of a comprehensive development plan that encompasses essential components such as education, health care, private sector, capacity building in the public sector, public infrastructure development and maintenance, and protection and restoration of natural resources. Haïti is an example of how a economic recession can send an already impoverished nation into a deep long-term depression and perhaps this new aid package will provide the necessary support to prevent Haïti from becoming a completely failed nation. The challenges are large since 80 percent of the people residing in the Maryland-sized nation live on less the $2.

Perhaps Haïti is embarking on an opportunity to change its downward spiral into a positive trajectory. The IDB said, "The recovery program, donors agreed, could generate as many as 150,000 jobs over the next two years. Delegates welcomed the Haïtian government's plans to capitalize the opportunities opened by the HOPE II Act, a U.S. trade legislation that grants Haïtian exports preferential access to U.S. markets. They also encouraged authorities to work closely with the private sector to improve Haïti's business climate."

Although the IDB's press statement notes that "besides Haïti's traditional partners from the international community, the conference attracted representatives from civil society organizations that either run programs in Haïti or have been strong advocates for the Haïtian people." I am unsure if the private sector was represented at the donor conference, but these conferences shall serve as a reminder that the private sector must take an collaborative role alongside governments, nonprofit organizations, and local citizens to acheive sustainable long-term results in socio-economic development. Donor conferences should also address foreign direct investment facilitation.

However, I am pleased to learn that during United Nations Secretary-General Ban Ki-moon's recent visit to Haïti, "He asked all 'friends of Haiti' to work with the government and the private sector to create jobs and spur economic growth by taking full advantage of openings to international markets" (see "Haiti: Ban challenges donors, investors to create 100,000 jobs").

In addition, according to The Washington Post article, "Impoverished Haiti Slips Further as Remittances Dry Up," United States Secretary of State Hilary Clinton's visit to Haïti on April 16, 2009 included a visit to a garment factory. Secretary Clinton "strolled through a huge factory in Port-au-Prince where rows of young men and women ran jeans and khaki slacks through sewing machines. Clinton noted that the nearly 500 workers earned two to three times the $2-a-day minimum wage."

Lastly, debt relief will provide Haïti with another tool to change course. The IDB notes, "The heads of the International Monetary Fund and the World Bank appraised the conference on Haïti's progress towards reaching the completion point of the Enhanced Initiative for Heavily Indebted Poor Countries, which will enable Haïti to benefit from debt relief. The process may be finished by the end of June, after which the IDB, the IMF and the World Bank stand to provide Haïti with $1 billion in immediate debt relief. IMF Managing Director Dominique Strauss-Kahn said debt cancellation could free up to $40 million a year for poverty-reducing and pro-growth spending in Haïti."

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