WB: US$ 100 Million in Grant Money for Recovery and Reconstruction of Haiti in Wake of Earthquake

January 13, 2010

WASHINGTON DC, January 13, 2010 - In swift response to the worst catastrophe in Haiti’s history, the World Bank has mobilized considerable technical and financial resources to help the impoverished nation deal with the aftermath of Tuesday’s earthquake.

The Bank announced an additional assistance package of US$100 million in grant money to help in the recovery and reconstruction efforts of the Caribbean nation whose capital was devastated by the 7.0-magnitude earthquake. It also said that a team of experts will be sent to Haiti to work with the Government and its international partners to assess damage and losses and plan for recovery and reconstruction.

"This is a shocking event. It is crucial that the international community supports the Haitian people at this critical time," said World Bank President Robert Zoellick. "The Bank is mobilizing significant financial assistance and will send a team to help assess damage and reconstruction needs."

Buildings and infrastructure have suffered major damage, and thousands of people are feared dead. Haitian President René Préval issued an urgent appeal for his hard-hit nation saying that "the damage I have seen here can be compared to the damage you would see if the country was bombed for 15 days." "It is like in a war," he told Reuters.

In addition to housing and schools, the earthquake toppled or seriously damaged many of the major buildings of Port-au-Prince, including the National Palace, the Parliament, the Cathedral, the Ministries of Economy and Finance and Public Works, the Tax Office, and the United Nations Stabilization Mission headquarters. The United Nations building collapsed in the quake killing at least 47 staff members, including the mission chief, while trapping several people inside. The World Bank’s own office in the Port-au-Prince suburb of Petion-Ville was seriously damaged, although its entire staff has been accounted for. The International Red Cross said three million people, nearly a third of Haiti's population, will need food, water and shelter for months to come.

“Our hearts and prayers go out to those affected by the earthquake,” said Yvonne Tsikata, World Bank Director for the Caribbean.

Tsikata explained that the World Bank’s assistance of US$100 million in grant money will be channeled through both new initiatives and existing project structures to support the recovery and rebuilding efforts. She also said that the Bank will provide seed money to set up a multi-donor Haiti Reconstruction Fund to act as a magnet for recovery and reconstruction funding from the international community.

The Bank official added that a concerted international effort and strong financial support will be required to rebuild Haiti. “Even though it’s too early to assess the full extent of the blow to Haiti’s economy, it looks like it’s going to be quite costly,” she said. Preliminary World Bank estimates suggest that the cost of the disaster could be at least 15 percent of Haiti’s Gross Domestic Product.

Going forward, the Bank will aim to advance rebuilding initiatives, while also keeping longer-term development goals, such as vulnerability reduction and capacity-building, in sight. It will also be an opportunity to focus on “building better in Haiti while strengthening codes and the institutions that supervise constructions,” Tsikata said. “In sum, we’ll be looking at projects that are quick, effective and responsive to the government’s needs.”

With a GNI per capita of a US$560, Haiti is the poorest nation in the western hemisphere. More than half the population lives on less than one dollar a day and 78 percent on less than two. There is a high infant mortality rate (60 for every 1000 births) and the prevalence of HIV among those between15-49 is 2.2 percent, according to World Bank estimates.

The new US$100 million funding is subject to approval by the World Bank's Board of Directors.

There are now 14 main World Bank projects active in Haiti in areas including disaster risk management, infrastructure, community-driven development, education and economic governance. All current World Bank assistance to Haiti is in grant form.

Since January 2005, the International Development Association (IDA), the World Bank arm that provides interest-free credits and grants to the world’s poorest countries, has provided a total of US$308 million for Haiti. In addition, trust funds administered by the World Bank have given more than US$55 million since 2003. These totals do not include the US$100 million just announced.