Haiti’s economy appears to be stabilizing after years of stagnation and decline.
Haitian President René Préval says that his country no longer deserves its "failed state" stigma, and he is right. Haiti’s recent progress is real and profound, but it is jeopardized by continued institutional dysfunction, including the government’s inexperience in working with Parliament. There is an urgent need to create jobs, attract investment, overhaul and expand access to basic social services, and achieve tangible signs of economic recovery. Now that the United Nations has extended its peacekeeping mandate until October 2008, the international community must seek ways to expand the Haitian state’s capacity to absorb development aid and improve the welfare of the population. The alternative could be dangerous backsliding.
EMERGING FROM CHAOS
Haiti is beginning to emerge from the chaos that engulfed it in recent years. This is a moment of relative stability that presents a window of opportunity for Haiti to move towards a more sustainable path of economic growth, political development, and poverty reduction. But this is also a period of fragility and continued vulnerability, and further advancement is by no means assured.
In February 2006, Haiti held its first elections in five years, which brought to power former President René Préval and restored elected rule for the first time since the ouster of Haitian President Jean-Bertrand Aristide two years earlier. Over the past eighteen months, the Haitian government, working with the United Nations and other international partners – including a core group of Latin American countries, the United States and Canada – has achieved modest but discernible progress in improving security and establishing, at least minimally, a democratic governing structure. But institutions, both public and private, are woefully weak, and there has not been significant economic advancement. Unemployment remains dangerously high and a majority of the population lives in extreme poverty. Still, Haiti should be viewed today with guarded optimism. There is a real possibility for the country to build towards a better future. (...)
During his first year in office, President Préval, in his quiet and self-effacing way, has proven to be an effective leader. He has appointed competent ministers to critical posts, and reached across party lines to bridge Haiti’s historic political polarization. Préval has forged alliances with moderate elements within Haiti’s civil society, political parties, and business sectors, while holding onto support from the Haitian poor, and maintaining the backing of the international community. To date, Préval’s instincts have generally been democratic and inclusive, and he has made tough choices, including the decision to confront the criminal gangs in Port-au-Prince. The government is still weak, however, and has limited capacity to set internal priorities and implement decisions and policies. The government has little evident experience in working with Parliament, and the Parliament itself remains poorly organized and under-resourced. It has not adequately contributed to the governing process. (...)
Haiti’s economy appears to be stabilizing after years of stagnation and decline. Haiti achieved a GDP growth rate of more than 2 percent last year, even though per capita growth remained negative. This year the country’s growth rate will be more than 4 percent – barely above the rate of population increase but a move in the right direction. The uptick has been driven by an increase in foreign aid and remittances, and new U.S. trade preferences passed last year may help to sustain it. Haiti’s manufacturing sector is showing glimmers of revival. Haitian economic officials have established a favourable macroeconomic climate, cutting the inflation from above 40 percent to below 10 percent and stabilizing Haiti’s currency. Despite these gains, Haiti’s economy remains virtually stagnant on most fronts and plagued by widespread joblessness. Even with sustained domestic leadership, it will take many years of foreign assistance before Haiti can make its own economic way. (...)
REPUTATION LAGS PROGRESS
Haiti’s substantive problems are compounded by the fact that its reputation lags behind the real progress that has been made, and discourages investment, tourism, and support for new initiatives. International rating agencies should thoroughly review and revise their data on Haiti to ensure their judgments reflect the current reality and are not grounded in information that is now outdated. (...)
Rampant unemployment is one of the 9. top challenges facing the country today. Having increased security, the government and international community must now demonstrate tangible evidence that lives are improving by focusing on jobs, investment, and infrastructure. While some job creation programs have been implemented, clearly more effort is required to generate employment that will help Haitians to take care of their basic needs and provide the basis for greater social stability. Many of Haiti’s important challenges, including sanitation, waste removal, and the development of basic infrastructure, can be achieved using Haiti’s vast unskilled and semi-skilled labor pool. Innovative approaches to job creation must be a top priority.
This column is based on excerpts of the report Haiti: Real Progress, Real Fragility from the Canadian Foundation for the Americas (FOCAL) and the Inter-American Dialogue.