Haiti Works to Rebuild Its Economy Two Years After Earthquake and Cholera Outbreak

Sources:
CFI: Investment in Haiti
FT: Haiti Struggles to Rebuild
The Guardian: Haiti Earthquake: Where has the Aid Money Gone?
The Guardian: Haiti Embarks on Economic Recovery Plan with Help from Private Sector
NYT: Haiti: Cholera Epidemic’s First Victim Identified as River Bather Who Forsook Clean Water
PBS Newshour: Two Years After Quake, Most Haitians Still Living in Disaster Zone

Two years ago, an earthquake in Haiti caused the deaths of 316,000 Haitians. An additional 1.5 million people were left homeless, and over 300,000 buildings were destroyed or badly damaged. Currently, 500,000 Haitians still live in settlement camps that were originally intended as temporary housing. A cholera epidemic also broke out two years ago, sickening 500,000 Haitians and resulting in the deaths of 7,000 more. Under the direction of the newly appointed prime minister, Garry Conille, the Haitian government has announced that foreign aid alone may not be sufficient to develop the country into a modern, industrial state. Therefore, it aims to attract private and public sector investments to help stimulate the economy through job creation, combating cholera, permanently housing displaced people, and improving the country’s infrastructure.

Experts agree that reconstruction efforts thus far have been too slow. International aid has proven insufficient to cover the costs of rebuilding. Although $4.5 billion were pledged by world leaders for the first two years of reconstruction in March 2010, only 53% of this amount has been delivered. Only 77% of the United States’ pledge of $180 million to aid Haiti during the cholera crisis has been delivered. Experts attribute dwindling donor support to concern over the stability of Haiti’s government in the last two years, especially since a disputed election in 2010 left the then newly elected Haitian president, Michel Martelly, without an effective government for several months. Experts suggest that donors seemed unwilling to contribute to recovery efforts because they feared that an ineffective government could lead to inefficient distribution of resources and aid.

By contrast, Haiti’s current government’s efforts to attract foreign investors seem successful. The government held a forum in December, inviting 1,000 potential investors to invest in Haiti, and Marriott Hotels and Digicel (a mobile phone network provider active in the Caribbean) have already agreed to collaborate in building a $45 million hotel in Port-au-Prince, which will hopefully create 175 jobs and provide a boost to the tourism industry. The government is promising initiatives to investors such as a fifteen-year tax holiday and other generous subsidies, such as a zero tax rate for up to fifteen years with a partial tax exemption that gradually decreases over an additional five years and an exemption on most import taxes.

The Haitian government is also working with the Inter-American Development Bank and USAID to develop Haiti’s manufacturing industry. For example, last November, construction began on the Caracol Industrial Park (CIP) which will house much of this industry. Sae-A, a South Korean textile company that supplies US retailers like Walmart, is looking to benefit from Haiti’s guaranteed duty-free access to US clothing markets by investing $78 million in the CIP, and plans to hire about 20,000 workers. The government anticipates that the CIP will provide many opportunities for local entrepreneurs and include a residential development with 5,000 homes.

The government is also looking to public and private investment to help improve the country’s sanitation infrastructure. It plans to implement a $700,000 health and sanitation program to help contain the spread of cholera that will include a latrine and potable water system in the south-western Grand’Anse region that will benefit about 80,000 families. In the Cite Soleil district of Port-au-Prince, it is working with USAID and the Caribbean trade group Caricom to improve access to medical supplies, toilet facilities, and hand-washing stations. Although experts have expressed optimism about the government’s projects and the international community’s support, they emphasize that the government needs to prioritize the needs of Haitians and not foreign investors to ensure the maximum development benefit for the country.