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Haiti Overview

Four years after the magnitude 7.0 earthquake struck Haiti on January 12, 2010, significantly deepening existing challenges and creating massive reconstruction needs in a country that was already the poorest in the Western Hemisphere, Haiti continues to rebuild and strengthen both its infrastructure and institutions.

In spite of the enormity of the task, much has been done by Haitians and the Haitian Government, in partnership with CSOs, the private sector, and the international community.

  • Of the 1.5 million internally displaced people, over 1.3 million have left the camps and relocated. Reconstruction programs are repairing and building safe housing and upgrading neighborhoods.
  • Most of the 11 million cubic meters of debris has been removed, making Port-au-Prince's roads more navigable.
  • Government has launched multiple initiatives to help the most vulnerable. 

Nevertheless, much remains to be done to reduce poverty and improve the lives of Haitians.

POLITICAL SITUATION

The political situation has been relatively stable with the Government, led by Prime Minister Laurent Lamothe, trying to accelerate government-led efforts for reconstruction, and address longstanding service delivery gaps. The government has adopted a pro-active private sector development agenda, highlighted by a “Haiti is open for business” campaign aimed at promoting foreign investment and links with the diaspora. The government is also taking action to combat extreme poverty in Haiti by launching social safety initiatives for the poorest.

Senatorial and Municipal elections (already delayed from 2011) have yet again been postponed. A compromise solution is being sought to bring forth elections in CY 2014.

ECONOMY 

Haiti remains the poorest country in the Americas and one of the poorest in the world (with a GNI per capita of US$ 760 in 2012), with significant needs in basic services. Over half of its population of 10 million lives on less than US$1 per day, and approximately 80% live on less than US$2 per day. It is also one of the most unequal countries, with a Gini coefficient of 0.59 as of 2001 (poverty statistics are currently being updated through a new household survey).

The Haitian economy has been recovering since the earthquake. Growth has been modest, but macroeconomic stability has been maintained and inflation controlled, despite an unfavorable international environment and the repeated hurricanes and tropical storms such as Isaac and Sandy, droughts, and agricultural pests.

Economic growth is estimated to have reached 4.3 percent in fiscal year 2013, up from the 2.8 percent observed in 2012. This has been mainly attributed to a pick-up in agricultural production, as well as the construction and industrial sectors particularly the textile and garment industries. Inflation for fiscal year 2013 is estimated to have reached 4.5 percent.  This improvement is partly explained by lower price pressure of imported food products as well as greater supply of domestically produced food.   

The World Bank strategy balances reconstruction needs with long-term economic development. Reconstruction work focuses on housing and electricity.  In housing, the neighborhood reconstruction approach is being used, which includes infrastructure improvements in neighborhoods along with housing repair and reconstruction and rental subsidies, to facilitate return of displaced persons from camps into neighborhoods. In the electricity sector, support is centered on increasing access and quality of service, improving management of the public electricity utility, and reducing Government transfers over time.

Beyond reconstruction, the World Bank Group supports government efforts to reduce its vulnerability to natural disasters, reconstruct critical infrastructure, build human capital, promote decentralized and inclusive growth, and strengthen governance.

Investment operations in disaster risk management to improve nation-wide disaster response capacity and enhance the resiliency of critical transport infrastructure are complemented by strategic use of trust fund resources (Global Facility for Disaster Reduction and Recovery), which has led to building codes for public building as well as a multi-hazard assessment following the earthquake. To support the building of human capital, the Bank finances tuition waivers and school feeding for children in primary schools, as well as improvements in the quality of education.  It also finances health services for mothers and children under 5, referrals and waivers for health services to vulnerable people in remote areas, and cholera prevention education and treatment.

To help revitalize the economy in a way that incorporates inclusive growth and decentralization, the Bank finances improved agriculture public services to increase yields and rural incomes, small scale, local infrastructure using a community-driven approach, and is investing in regional growth poles and working closely with the IFC to improve the business environment and create jobs.

Through budget support, the Bank has helped the government close its fiscal deficit and continues to support its effort to reform public financial management, increasing the transparency and efficiency of public spending.

Improving governance and building government capacity is a cross-cutting theme of the World Bank program. All of the projects focus on strengthening the role of State institutions, including building capacity to set effective public policies and deliver services to the people. The Bank program also contributes to this objective by providing all of its financing to the State.

In response to the earthquake of 2010, the World Bank’s fund to support the poorest countries, the International Development Association, made an exceptional allocation of US$500 million to Haiti, which is many times more than the normal allocation.  Of this amount, US$405 million is already at Government’s disposal in the form of ongoing projects.  The remaining US$95M is expected to be approved by the Board in the first half of 2014. 

Disbursements 

The Haiti portfolio consists of 15 projects for a total commitment of $685.7 million, of which $245.1 million have been disbursed. Since the earthquake, the Bank has disbursed an average $8.3 million per month and the disbursement ratio at 9.3 percent is higher than the regional average of 6.5 percent.

Support for the private sector

The investment climate in Haiti is hampered by a number of challenges including business environment, land availability and ownership rights, access to basic infrastructure, logistic and financial services, and access to skills.

IFC’s strategy in Haiti is twofold:

  • Creating immediate jobs, access to basic infrastructure, and income opportunities by making catalytic investments despite remaining challenges;
  • Supporting the development of a sustainable and inclusive economy, through advisory programs that help address challenges and foster a more conducive environment for investors and for micro, small, and medium enterprises.

Since the January 2010 earthquake, IFC has committed six new investment transactions and significantly scaled up its advisory operations. To date, 

IFC’s portfolio amounts to $78 million, including $26 million mobilized from other partners. IFC’s combined investment and advisory projects in Haiti have helped create 5,000 new jobs and safeguard 5,000 existing jobs.

IFC Advisory Services in Haiti has supported the business training of nearly 3,000 entrepreneurs and managers (of which 45% were women), through partner SOFIHDES.

MiCRO, an IFC Advisory Services project, will help to insure 70,000 micro-entrepreneurs against natural disasters.

Haiti Reconstruction Fund (HRF)

The HRF has emerged as the largest source of flexible finance for the reconstruction. 

At the request of the Government of Haiti, the World Bank established the Haiti Reconstruction Fund (HRF) in March 2010, in partnership with the Inter-American Development Bank and the United Nations. The World Bank serves as the Fund’s trustee, as well as, secretariat and supervises some of the activities financed by the HRF. Contributions to the HRF total $396 million, of which $381 million has been received. Since the Fund began operation in June 2010, $288 million has been allocated to 19 projects. 

In the immediate aftermath of the earthquake:

  • World Bank financing housed and equipped the Ministry of Economy and Finance and Tax Office (500 staff), allowing salaries to be paid, revenues to be collected and economic governance efforts to continue.
  • Set up the first environmentally and socially sound debris management site in Haiti, with capacity sufficient to treat bulk of debris from Port au Prince.
  • Conducted building assessments of Port au Prince (400,000 buildings); developed and disseminated building guidelines for reconstruction housing and public buildings.

Since the earthquake:

  • The Bank has also financed school fees for 200,000 children in primary school this year  who will be funded for the full 6 years of elementary school , and provided school meals for more than 80,000 every day and compensation grants for 2,824 schools in earthquake affected areas. Reached over 3 million people through targeted cholera and health/sanitation, education and prevention training; supported more than 200 cholera treatment units and oral rehydration posts with personnel and/or supplies; provided water treatment products and/or soap to nearly 600,000; and trained over 6,000 health and hygiene agents and medical personnel.
  • Repaired the road from Port au Prince to Jacmel, enabling half a million people to remain connected to the capital.
  • Completed twelve water supply systems, benefitting 60,000 people in rural communities.
  • Provided 25,000 short-term cash-for-work jobs, including debris sorting and canal clearing in Port au Prince, which was critical to avoid flooding of one of the largest camps (Champ de Mars camp) during the hurricane season.
  • And, is supporting the return of 50,000 people to safer housing through rental subsidies this year and improving neighborhood infrastructure in PaP with street lighting, improved drainage, and paved roads. IFC projects support close to 10,000 jobs, of which 4,000 for women. 5,000 new jobs were created or preserved by IFC investment and advisory activities since January 2010. 
  • IFC funded E-Power has increased the installed electric production capacity in the Port au Prince metropolitan area by 35 percent. 
  • IFC Advisory Services in Haiti has supported the business training of nearly 3,000 entrepreneurs and managers (of which 45% were women), through partner SOFIHDES.

LENDING

Haiti: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

Around The Bank Group

Find out what the Bank Group's branches are doing in Haiti