Frontier market Haiti aims to reduce its dependency on foreign aid and boost reforms to modernize its economy, which has been devastated by a series of natural disasters in recent years, its finance minister said yesterday.
“We have a very great ambition”, the Haitian finance and economy minister Marie Carmelle Jean Marie told Emerging Markets in an interview. “We want to turn Haiti in an emerging market by 2030 – and this cannot be just a slogan!”
She said her priorities were to restore public finances and attract investment, including from foreign companies from Venezuela, neighbouring Dominican Republic and the US. “A lot of efforts are needed to achieve this,” she said.
“We need to reform public finances; we will need a lot of investment. We have to convince investors that we can manage our own domestic resources with efficacy and transparency.”
Public private partnerships (PPP) will be a key to boost the fledging economy with a focus on sectors that have been weakened by a succession of flooding, earthquakes and devastating storms, such as agriculture and the food sector.
Haiti currently imports 70% of its food consumption and needs to put the primary sector back on its feet. In the past, the Caribbean country has experimented with import substitution policies, all-out nationalization of electricity and telecommunications, followed by a wave of privatizations in the 1990s but has achieved little progress.
The PPP strategy, which has recently started in the energy sector, aims to have “less state, but a better state” participation than in the past, says Jean Marie. The government has already set up a special PPP unit to try to put the Haitian administration in order. Public transport and tourism are other targets.
In the meantime, Haiti is still facing severe challenges. Its international reserves have nearly halved in less than three years to $1.2 billion; the growing current account deficit was around 4% of GDP in the 2011/2012 fiscal year (ending in September), according to the Haitian central bank. The severe deterioration was mainly caused by a drastic 32% decline in official donations, little more than three years after the devastating earthquake in Haiti. At the beginning of the year, the government of Canada froze its official aid to the country, which is one of the poorest in the world, due to lack of accountability. In the meantime though, remittances from Haitians from abroad increased by a mere 8%, which was not enough to fill the gap.
But Jean Marie said she wanted to turn her back on foreign aid dependency. “We need to replace it by foreign investment,” she said. “We cannot leave the people as if they were beggars. We must make rapid progress on the PPP agenda and create jobs.”
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