Overview

Five years after the magnitude 7.0 earthquake struck Haiti on January 12, 2010, Haiti has moved from recovery to longer term development as it continues to improve infrastructure and strengthen institutions, work toward increasing access to education, health and other services, and stimulate investment.

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, more than 1.4 million have left the camps and relocated. Reconstruction programs are repairing and building safer housing and upgrading neighborhood infrastructure.
  • Haitians children have benefitted from better access to primary education, where participation rates of school-age children rose from 78 to 90 percent. However, the quality of education and learning remains a challenge. Only one third of all children aged 14 are in the appropriate grade for their age.
  • Haiti has made progress in controlling the cholera epidemic since the 2010 outbreak with reported case numbers decreasing from a monthly average of more than 35,000 in  2011, to about 2,200 cases per month in 2014. However, cholera continues to be a threat and water borne diseases are among the leading causes of infant mortality in the country. 
  • The government has also taken action to reduce extreme poverty in Haiti by launching several social safety initiatives for the poorest. However, sustainability, targeting, and coverage remain significant challenges. Only 8 percent of the Haitian population received noncontributory social assistance benefits in 2012, such as scholarships, food aid, and other transfers.

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

POLITICAL SITUATION

In recent years, the political situation had been relatively stable. Having been elected in 2011, a year after the earthquake of 2010, President Michel Martelly has less than one year left on his term. However political tension due to delays in holding Parliamentary and Municipal elections led to the resignation of former Prime Minister Lamothe in December 2014, who had led the Government for over two and a half years.  Since January 2015, most Parliamentarians terms have expired and, without the possibility of quorum, parliament is no longer functioning. As a result, President Martelly is left to rule the country by decree with an interim Government.

However, with the publication of the electoral calendar for presidential, parliamentary, municipal elections, starting in August 2015 and ending at the beginning of 2016, the crisis appears to be receding. According to the UN Secretary-General's latest report on the UN Stabilization Mission in Haiti, the country has made some “measurable gains towards the holding of long-overdue elections by the end of 2015, despite the lingering 'uncertainty' caused by the absence of a functioning Parliament.” Key political parties have registered to participate in the process.

ECONOMY

The Haitian economy has been recovering since the earthquake. Growth has been modest, but macroeconomic stability has been maintained and inflation generally controlled. This was achieved, despite an unfavorable international economic environment, droughts and pests drastically reducing agricultural production, and repeated hurricanes and tropical storms, including Hurricanes Isaac and Sandy.

Economic growth is estimated at 2.7 percent in fiscal year 2014, down from the 4.3 percent observed in 2013. This substantial slowdown in 2014 was mainly due to delays in budget approval and adverse weather conditions that affected agricultural production.

A major challenge for Haiti will be to manage the substantial decrease in donor financing. Having declined for the last three years, the trend is expected to continue in the future. This will likely constrain Haiti’s capital investments, which had increased for the last three years with limited impact on growth. With limited resources, efficient and effective use domestic and external resources will remain critical. 

Haiti remains the poorest country in the Americas and one of the poorest in the world (with a GDP per capita of US$ 846 in 2014) with significant needs in basic services. According to the latest household survey (ECVMAS 2012), more than 6 million out of 10.4 million (59%) Haitians live under the national poverty line of $ 2.44 per day and over 2.5 million (24%) live under the national extreme poverty line of 1.24 dollar per day It is also one of the most unequal countries, with a Gini coefficient of 0.61 as of 2012.

The World Bank strategy balances reconstruction needs with long-term economic development. Reconstruction work focuses on housing and electricity. Beyond reconstruction, the World Bank Group supports government efforts to reduce its vulnerability to natural hazards, reconstruct critical infrastructure, build human capital, promote decentralized and inclusive growth, and strengthen governance.

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.

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, support to the government to improve the quality of education and public management of the largely private education sector. It also finances health services for mothers and children under 5, referrals and waivers for health services to vulnerable people in remote areas, cholera prevention education and treatment, as well as, improving access to water and sanitation.

To help revitalize the economy in a way that promotes inclusive growth and decentralization, the World Bank finances improved agricultural public services, including “smart” subsidies to increase yields and rural incomes, small scale, local infrastructure using a community-driven approach, and regional development in the North, Artibonite, and Centre regions, improvement of the touristic circuit of Cap Haitien and the Citadel National Historic Park and works with IFC to improve the business environment, increase access to finance for SMEs, and support livelihoods.

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

Improving governance by building state institutions and increasing 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 and evidence-based public policies and deliver services to the people. The World 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 in the form of grants, which is the largest ever allocation to Haiti by the World Bank. The entire amount has already been made available to the Government through ongoing projects.

Disbursements

The World Bank’s portfolio in Haiti comprises 16 projects, with a net committed amount of $798.2M, the largest ever in Haiti by the Bank. The program finances government project in areas such as disaster risk management, housing, electricity, transport infrastructure, water and sanitation, agriculture, education, health, regional development, private sector growth, and public financial management. The Bank is the third largest donor to Haiti, behind the US Government and IADB.

As of March 2015, of $322.45 million has been disbursed from the Bank portfolio. In FY14, disbursements totaled US$120 million, and total disbursements of US$80 million are expected in FY15. In addition, the World Bank provides a large portfolio of advisory and analytical work, across sectors, comprising a dozen activities, receiving US$3.73 in funding for execution. 

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. IDA resources finances tourism in the North, transport connectivity and market infrastructure in the Centre and Artibonite regions, the development of regional value chains in each of the 10 departments, and technical assistance on financial inclusion. In addition to IDA, the World Bank Group engages in Haiti’s private sector through an active IFC portfolio. IFC’s strategy in Haiti is twofold: 1) creating immediate jobs, access to basic infrastructure, and income opportunities by making catalytic investments despite remaining challenges; 2) 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 seven new investment transactions and significantly scaled up its advisory operations. To date, IFC’s committed portfolio in Haiti amounts In Haiti, IFC has a committed portfolio of US$113 million, including US$24 million mobilized from other partners. IFC has supported most of Haiti’s flagship private sector projects before and after the earthquake; its combined investment and advisory projects in Haiti have helped create 5,000 new jobs and safeguard 5,000 existing jobs.

IFC’s 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, insures 60,000 micro-entrepreneurs against natural disasters. 

Immediate post-earthquake results:

  • Conducted building assessments of Port au Prince (450,000 buildings); developed and disseminated building guidelines for reconstruction housing and public buildings;
  • Provided 25,000 short-term cash-for-work jobs, including debris sorting and canal clearing in Port au Prince, which was critical to prevent flooding of one of the largest camps (Champ de Mars camp) during the hurricane season;
  • 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 sufficient capacity to treat the bulk of debris from Port au Prince, where the earthquake was centered.


Other results since the earthquake:

  • Over the last four years the World Bank has financed about 290,000 school fee waivers for primary students in non-public schools, about 237,000 daily meals reaching about 81,000 students per year, and grants for 2,824 schools, allowing them to re-open after the 2010 earthquake.
  • Financed rental subsidies for more than 50,000 people to move from camps to safer housing;
  • Upgraded neighborhood infrastructure in areas badly damaged by the earthquake, including improved roads and drainage, better street lighting, and reinforced ravines for 300,000 people
  • Rebuilt or repaired housing for more than 12,000 people;
  • Provided for cholera treatment and prevention education for over 3 million people and water treatment products and/or soap to nearly 600,000 people
  • Supported more than 200 cholera treatment units and oral rehydration posts with personnel and/or supplies; and trained over 6,000 health and hygiene agents and medical personnel;
  • Improved access to clean water for 60,000 people in Southern
  • Repaired the road from Port au Prince to Jacmel, enabling half a million people in Southern Haiti to remain connected to the capital;

International Finance Cooperation:

  • Codevi, a garment manufacturing company, is one of the largest private sector employers in Haiti. It employs about 7,000 workers and is expected to add 2,000 over the next three years. About 30,000 people in the northern town of Ouanaminthe, where Codevi is located, derive their livelihoods from indirect jobs associated with the company’s operations;
  • E-Power has increased the installed electric production capacity in the Port au Prince metropolitan area by 35 percent; the company generates power for 1.59 million customers.
  • Teleco, the national phone company was losing $1 million a month and barely serving 20,000 customers. NATCOM, a public-private partnership supported by IFC, now serves about 1.7 million subscribers and is expected to generate about $200 million in tax revenues for the government in five years.
  • Nearly 3,000 entrepreneurs and managers received business training through a partner SOFIHDES;
  • Approximately 60,000 low income micro-entrepreneurs are insured against natural disasters through an IFC/Micro/Fonkoze partnership. This helps protect their livelihoods against weather-related risks and natural disasters.

Haiti Reconstruction Fund (HRF)

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, the United Nations and 19 contributing donors countries. The HRF has emerged as the largest source of flexible finance for reconstruction. The World Bank serves as the Fund’s trustee and secretariat, as well as supervises some of the activities financed by the HRF. Contributions to the HRF total $396 million, of which $386 million has been received as of June 2014. Since the Fund began operations in June 2010, $342,3 million has been allocated to 25 projects addressing post-quake issues in debris management, relocation and housing of displaced people, rehabilitation of public infrastructure and spaces, and disaster risks management, as well as, long and medium term development issues, such as education, energy and private sector development.

The HRF-financed activities supported the Government in achieving results including:

  • Removing over 900,000 cubic meters of debris in urban neighborhoods;
  • Supporting the repair and rebuilding of near 2,600 houses;
  • Facilitating the closing more than 50 camps and providing housing solutions for over 24,000 displaced households.
  • Creating nearly 4,500 jobs as part of road rehabilitation and home reconstruction
  • Establishing 12 Community Resource Centers to facilitate planning, coordination and information sharing on local development and reconstruction
  • Distributing more than 14,000 school supply kits, 24,000 school uniforms and 76,000 textbooks throughout the country
  • Training more than 900 teachers

LENDING

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

*Amounts include IBRD and IDA commitments