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HAITI: Donors Pledge 324 Million Dollars to Rebuild After Storms

Jim Lobe*

WASHINGTON, Apr 15 2009 (IPS) - International donors have pledged 324 million dollars over the next two years in additional aid to help Haiti recover from food riots and damage to roads and other key infrastructure caused by four hurricanes that ravaged Latin America's poorest nation last summer.

The commitments were made during an all-day, all-star meeting that featured former U.S. President Bill Clinton, his wife and current secretary of state, Hillary Clinton, U.N. Secretary-General Ban Ki-moon, and the heads of the World Bank and International Monetary Fund (IMF), among others, at the headquarters of the Inter-American Development Bank (IDB) here Tuesday.

The new commitments, including 41 million dollars to reduce the government’s anticipated deficit this year, came amid growing concern that Haiti's economy faces daunting challenges not only in recovering from the hurricanes that effectively erased 15 percent of its gross domestic product (GDP) last year, but also in coping with the global financial crisis which, among other effects, has reduced remittances to Haiti from the U.S.

For the first time in several decades, the economy's growth in 2007 – 3.4 percent – exceeded the increase in its population. But the hurricanes, which hit the country's third-largest city, Gonaives, particularly hard, more than reversed the advances of the previous year. Losses were estimated at some one billion dollars, while more than 800 people were killed by the flooding and tens of thousands were displaced from their homes.

"Haiti's economy was beginning to show the first signs of a turnaround," noted World Bank President Robert Zoellick, who visited Haiti shortly after the storms, "but the results haven't yet reached critical mass or visibility. Now, set back once again by global recession, there is a real danger that we fail to seize the moment of Haiti's promise," he noted, adding, "long-term 'Haiti fatigue' may prove more devastating to the country's future than natural disasters."

Just last month, the Brussels-based International Crisis Group (ICG) warned that serious instability could ensue if donors failed to sharply increase their assistance in the wake of last April’s food riots, which resulted in the ouster of the then-Prime Minister Jacques-Edouard Alexis, and the following summer’s hurricanes.

"The socio-economic situation is worse than at the time of the April 2008 riots and the fall of the Alexis government," said Bernice Robertson, the group’s senior Haiti expert, when the report was released in early March.

"We are treading on very fragile ground," declared Haiti's new prime minister, Michele Duvivier-Louis, during the opening session of Tuesday's meeting. "If no action is taken now the consequences will be catastrophic."

Haiti's urban areas, she noted, were filled "with unemployed young men and women whose future looks absolutely grim."

"This small nation of nine million is on a brink," agreed Hillary Clinton, who plans to meet with President Rene Preval during a visit Haiti Thursday on her way to the Summit of the Americas in Trinidad. "It is on a brink of either moving forward with the help of the collective community or falling further back."

Clinton said Washington will provide 287 million dollars in non-emergency to Haiti this year, most of which will be devoted to infrastructure, agricultural development, debt relief, and security, which, despite the natural disasters, has improved sharply over the last several years due largely to the efforts of the Brazilian-led U.N. 9,000-strong peacekeeping force, MINUSTAH.

In addition to aid, Washington has provided Haiti with duty- and quota-free treatment to Haitian garment exports guaranteed over 10 years under its Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE II) Act of 2006.

Development economist Paul Collier, who has acted as Ban's special adviser on Haiti, has praised HOPE II as "best trade deal on earth" and one that could, given needed investments in energy and infrastructure, create tens of thousands of jobs in a country where unemployment is estimated at 70 percent and some one million young people are expected to enter the job market over the next five years.

In addition, Haiti is on track to meet the conditions for gaining one billion dollars in debt relief from the IDB, the IMF, and the World Bank as early as the end of June. IMF Managing Director Dominique Strauss-Kahn said debt cancellation would free up to 48 million dollars a year for projects to reduce poverty and promote economic growth.

"Haiti is at a turning moment," said Ban, who traveled to the Caribbean nation with former President Clinton and Haitian-American rapper Wyclef Jean last month. "It may count among the world’s poorer nations. Yet the plain and simple fact is that its prospects, today, are better than almost any other emerging economy."

Clinton, whose intervention in Haiti in 1994 resulted in the restoration of civilian rule and whose foundation supports a number of projects there, echoed that view in the conference keynote address. "Haiti’s got a chance, the best chance in my lifetime," he said. "Haiti has good leaders. Haiti has a good plan, only you can give them the capacity to do it," he told the donors.

The Haitian government is hoping that President Barack Obama will yield to appeals by Preval and Duvivier-Louis to grant "temporary protected status" (TPS) to tens of thousands of undocumented Haitians – as it has done for Central Americans after natural disasters. TPS, which was repeatedly denied to Haitians by the administration of President George W. Bush, would permit them to work here and send money back home. The issue is reportedly under review by Homeland Security Secretary Janet Napolitano.

The U.S. is Haiti's biggest bilateral donor, although Canada, France, and Japan – all of which sent senior officials to Wednesday's conference – have also provided hundreds of millions of dollars in aid in recent years.

Canada's Minister of International Co-operation, Beverley Oda, announced Tuesday that Ottawa was on track to meet its commitment of 555 million dollars in aid to Haiti over five years, making it the largest per capita bilateral donor.

The Haitian government has worked closely with donors in developing a two-year recovery plan designed, among other things, to create 150,000 jobs. Zoellick called for improved co-ordination among the donors, particularly reducing the administrative and accounting burden on Haiti’s weak government bureaucracy, channeling more aid through the national budget, and aligning funding with priority projects.

*Jim Lobe's blog on U.S. foreign policy can be read at http://www.ips.org/blog/jimlobe/.