The reconstruction of Haiti a year after its massive earthquake is entering a critical stage as the immense international aid effort moves from the planning to implementing stage.
At $5.3 billion, international aid pledged to Haiti in the wake of the 7.1-magnitude earthquake in January 2010, is slightly less than half the country’s GDP of $11.2 billion. The earthquake killed some 300,000 people, left more than 1 million homeless and physically destroyed state institutions, with most government infrastructure, including the presidential and legislative seats, left in ruins.
The disaster has been complicated over the past few months by a cholera outbreak that added thousands more to the death toll, and a highly contentious political climate involving allegations of fraud in the presidential elections and the return of former dictator Jean-Claude “Baby Doc” Duvalier, after nearly 25 years in exile. The situation grew more thorny still with the return this month of Jean-Bertrand Aristide, a priest-turned-president who was deposed in a 2004 coup after several rocky years in office.
The physical destruction and political turmoil have contributed to the slow pace of reconstruction, but there are high expectations that the recovery will shift into a higher gear in the coming months.
Robert Perito, who heads the Haiti Program for the United States Institute of Peace (USIP), tells Emerging Markets that, while little has happened in the area of reconstruction, “there is a process in place. Institutions have been created that have great potential.”
José Agustin Aguerre, who runs the Haiti programme for the IDB, agrees that progress over the first year was slow, but says the speed of the reconstruction was on par with other disasters of similar magnitude, such as the earthquake and tsunami that struck Aceh, Indonesia in 2004.
“The earthquake affected the capital, destroying government institutions and killing many civil servants. It was back to zero, which adds a huge burden to what could be done immediately. If institutions were weak in many sectors before the earthquake, they were non-existent after it,” says Aguerre.
Aguerre says the key word for 2011 is “execute, execute, execute! We need to make sure we start delivering on goods in terms of services, infrastructure. The investment that has been planned and the bids that have been put out must take shape.”
There are many obstacles that might complicate transforming plans into action, including the lack of physical infrastructure. The recovery plans of multilateral donors, such as the IDB, which has pledged $2.3 billion in grants to Haiti through 2020, in addition to forgiving nearly $500 million in debt, are betting on private investment flowing to Haiti to create jobs and get the economy growing.
The country’s road, energy, telecom and water/sanitation infrastructure are still in ruins, and even if infrastructure building plans move from the drawing board shortly, they will still not be operational for years to come. Mark Weisbrot, of the Center for Economic and Policy Research, says that it “is impossible to build an economy without roads, housing, water or sanitation”.
THE PRICE OF AID
There is little evidence of private enterprise, local or foreign, moving in to take advantage of different opportunities, such as the US Help Act, which allows Haitian products to enter the US tariff free. Watchdog groups are also suspicious of work programmes that pay $5 a day, the minimum wage, for short-term jobs.
The purpose is to stimulate the economy. Proponents claim the programmes are better than work-for-food programmes, but opponents say they are stalling economic development by making work instead of creating jobs.
The housing issue is particularly daunting because of another problem: the lack of property titles. This has halted a $30-million housing initiative by the IDB approved last April after it was discovered that the land was not publicly held, but disputed by private owners. One of the bank’s approved projects for 2011 is the Land Tenure Security Programme, which aims to increase the number of rural households with secure land tenure rights.
Around 1 million Haitians still live in makeshift tent cities 14 months after the earthquake, and watchdog groups, such as Haiti Grassroot Watch, claim that around 200,000 families – or more than half the displaced people – will not benefit from housing plans because their destroyed homes were rented properties.
A double-edged sword is the thousands of non-governmental organizations (NGOs) operating in Haiti. There are anywhere from 7,500 to 10,000 NGOs working in the country in every conceivable sector, many focused on small-scale infrastructure projects.
Perito calls Haiti “the republic of NGOs” and says, “while individual organizations may have beneficial effects, taken as a whole they create more confusion than anything else.” He says projects are not coordinated, and while well intentioned, they could create further chaos for the development of large-scale education, water and sanitation projects.
Aguerre says NGOs “from the very best to the very worst” have populated Haiti, but that the good outweighed the bad.
Looming over the recovery is the country’s fractious political context. As Emerging Markets went to press, counting was still under way following Haiti’s delayed presidential run-off on March 20. Preliminary results are expected on March 31, with final results not set to be confirmed until April 16.
Voters had a choice between Michel Martelly, an academic and former pop star, and former first lady Mirlande Manigat.
While the race is expected to be close, the presence of Duvalier and Aristide, two of Haiti’s most controversial figures, has complicated the situation. Aristide – whose political party, Lavalas Family, was barred from the election – could sway the outcome with an endorsement of either candidate.
Albert Ramdin, assistant secretary-general of the Organization of American States, who is monitoring the elections, has warned about interference. “Nothing should be done to create instability or to intensify Haiti’s existing problems. And that is the responsibility of all – not just the candidates, but former politicians.”
Perito reckons political uncertainty could put things on hold while different forces jockey for position. “People are waiting to see what Aristide does and if any problems will be caused by Baby Doc. There are many things at play,” he says.