Its hard to find a silver lining in the earthquake
that killed over 230,000 people in Haiti in January. But if
there is one, it may be that it turned the worlds focus
once again to the plight of a desperate country.
This earthquake has raised the consciousness of the
western hemisphere ... and this time there needs to be a
willingness [by the international community and the government]
to make a serious effort, says Ciro de Falco, the former
Inter-American Development Bank executive vice-president
appointed to head a special task force in Haiti.
For this to bear fruit, all parties involved must cooperate
fully in putting the country back together in
particular, by agreeing on objectives and how they will be
This kind of cooperation is relatively new, given the
striking weakness of the state until very recently, according
to Robert Maguire, a Haiti expert at the United States
Institute of Peace. He says that over the past few years the
country had shown significant improvements. The arrival of the
René Préval administration in 2006 gave Haiti a
new international legitimacy reflected in initiatives by
major development institutions to grant Haiti debt
Until this government was established, Maguire says,
donors tended to bypass supporting the state and chose to
work principally with non-state actors, be they
non-governmental, non-profit organizations or private sector.
And this left the state extremely weak.
After so many years and billions of dollars of foreign
assistance, some thought Haiti should have been better prepared
to handle such a disaster. As Johanna Mendelson of the Center
for Strategic and International Studies notes, for all the
money that has been pumped into the economy, you
dont see anything for it.
Francis Ghesquiere, the World Banks lead disaster risk
management specialist, believes the investment was woefully
inadequate to limit Haitis vulnerability. Using $5
billion as a ballpark figure for aid to the country in recent
years, he notes pointedly: What do you mean by a lot of
money? $5 billion, for a country of 9 million people? $5
billion is the equivalent of the improvements at Washington
Dulles airport over the last three years.
Comparisons with Chile and its recent earthquake are
inevitable. While Haitis earthquake killed over 200,000
and pushed the poorest country in the Americas back to square
one, a similarly powerful quake a month later in Chile
one of the most developed Latin countries caused fewer
than 1,000 fatalities.
Haiti and Chile are, within the context of Latin America,
economic and social mirror images. Ghesquiere points out that
while poor countries suffer much higher fatalities, Chile, as a
middle income country, is likely to suffer much more extensive
The contrast in seismic construction standards is one
example of Haitis underachievement. Mark Schneider,
senior vice-president and special adviser on Latin America at
the International Crisis Group, points out that Haiti did
not require the kind of modern construction standards that
Chile had implemented. My recent trips to Haiti over the past
two years have involved discussions more focused on hurricanes
Haiti was so desperately challenged, even before the
earthquake, that it had to prioritize spending. The government
can hardly be blamed for emphasizing hurricane prevention, a
yearly affair, or the daily affair of hunger, over a 500-year
event like this earthquake. You cant insist that
someone who is making five dollars a day builds a shelter that
is resistant to a level-seven earthquake, says de Falco.
Even if the government had the laws in place, they
didnt have the money to enforce the laws.
Still, some good could come out of this in terms of future
infrastructure. De Falco hopes that one of the outcomes will be
stricter building codes that the government is going to
have to implement.
GOVERNMENT UNDER PRESSURE
Underlying this predicament is extreme institutional
weakness. Pre-earthquake, you had a very thin layer of
governmental leaders who were able to act in an effective and
competent way, says Schneider.
Haitis lack of institutional capacity has deep roots.
Over the past 50 years the capability of the Haitian
state to play a positive role in the lives of its citizens has
been eroded continually, says Maguire. The
government of Haiti had little or no capacity to respond to a
disaster of that magnitude, he says, noting that in the
past 30 years, Haitian authorities have depended almost
completely on external intervention to help it in the wake of
He adds: Haiti has suffered from its own bad
governance and from the tendency of its leaders to be more
involved in protecting their own interests and advancing
them than in working towards the well-being of the
state. But it is shared with international actors who have
imposed upon Haiti development strategies that have not
benefitted the people.
Mendelson goes even further in a critique. International
actors, she says, set up a system where people made their
living not from productive activities so much as from a cut of
the foreign aid, a cut of the charitable donations, and that
mentality never produced anything; it was not
sustainable, and contributed to Haitis tremendous
There is a chance to amend much of this, but it will not be
easy. Ghesquiere puts it this way: The challenge is not
rebuilding the physical infrastructure; its helping the
Haitians recreate the state. For this to happen,
the state has to be at the core of the reconstruction
programme, especially in terms of involving the line
You cannot do a reconstruction programme, and once
its done just hand over the keys to the authorities and
say, heres the country, its rebuilt, now go and run
it, he says.
In practical terms, an initial challenge is how the
government can organize itself to take full advantage of the
money coming in. We are trying to persuade them to look
at the experience of other countries, says de Falco,
pointing to the Aceh tsunami recovery programme, generally
reckoned as being successful.
In that model, the donors established a single agency to
implement the recovery programme. But some see this
super-agency as, in effect, setting up a parallel government.
To avoid that, donors institutional initiatives must be
matched by the efforts and attitudes on the part of the
government. If you are going to have success you have to
have the two sides on the same page and wanting to
cooperate, says de Falco.
The difficulty lies in restructuring the government at
the same time that you are carrying out a national
reconstruction effort, says Schneider.
With ministries wiped out, records lost and officials
dispersed, there needs to be a rethinking of how to
structure the Haitian government response; there needs to be a
decision-making core that works with the international
community, he says.
The consensus is that the Haitian government will take the
lead in rebuilding, partly out of necessity. My
experience shows that when you try to do things from the
outside, from an IFI [international financial institution] or
from a foreign government, you can only go so far, says
de Falco, who adds that early indications suggest adequate
But Schneider believes the situation demands a more
fundamental reorganization. Im urging we think
beyond relief and the nature of reconstruction, and deal with
underlying structural problems that made Haiti
The disaster should be seen as an opportunity, among other
things, to decentralize access to services of
municipalities and departments and to avoid a
concentration of capacity in Port-au-Prince, he adds.
Decentralization is a novel yet major theme in the
international community. Mendelson underscores its importance
and points out that it would be a mistake to treat the Haitian
government as a monolith. A large part of any success
will hinge on the ability to exploit the leadership base at the
local, decentralized level. That is where the most can be done,
as the contributions are tailor-made to the local
FINANCING THE REBUILD
Financing reconstruction remains the biggest challenge; a
country drowning in debt is in no position to rebuild
Although a considerable portion of Haitis external debt
was forgiven in 2009, $1.1 billion remained at the time of the
earthquake. In the quakes aftermath, multilateral lenders
were quick to pass a new wave of debt forgiveness.
Though helpful, this is just a starting point, says Corinne
Deléchat, Haiti mission chief in the IMFs Western
Hemisphere Dept. Debt relief will be considered as one of
the ways to deliver that assistance to Haiti, but clearly what
debt relief can achieve is little in comparison to the
needs, she says.
Shortly after the earthquake, the World Bank approved $100
million in emergency grant funding to support post-earthquake
recovery and reconstruction. The IMF similarly provided $114
Funds from the IMF will be mainly used to build
foreign exchange reserves, finance critical imports for
reconstruction and ensure there is enough cash in circulation
in the economy, says Deléchat.
The consensus view is that the cost of the damage exceeds
the equivalent of one year of Haitis GDP. But it will
take time to arrive at a true figure. An initial IDB
econometric study extrapolated the monetary damage of the
earthquake as between $8 billion and $14 billion.
The real figures will come when the PDNA is
ready, says de Falco, referring to the Post Disaster
Needs Assessment and Recovery Framework (PDNA/RF), a
government-led report detailing the physical, human and
economic impacts of a disaster and related early and long-term
recovery needs and priorities. With that estimate available,
the role of the international community will be better
The World Bank says the financing mechanism will likely
follow the model used after the Asian tsunami of 2004, with the
establishment of a multi-donor trust fund (MDTF) as the pooling
The MDTF could play a critical role in rebuilding as well as
in filling balance-of-payments and fiscal gaps, according to
Nancy Lee, deputy assistant secretary for the western
hemisphere at the US Treasury. The IDB also endorses the idea
of such a trust fund.
Haitis fiscal gap is likely to be significant.
The government could collect about half of its budgeted
revenue in fiscal year 2010. Revenues based on direct taxes are
likely to experience the largest shortfalls, says
Whatever the final needs, the donors conference is unlikely
to raise the funds immediately. I am hoping that in the
lead-up to that conference it will be made clear that the
reconstruction of a new Haiti is not a one-year exercise, a
single donor conference exercise, but a 10-year effort
says de Falco. March 31 will probably be one of many
efforts to try to get donors to help Haiti get back on its
Besides the donors efforts, there is widespread
understanding that the private sector, both within Haiti and in
terms of FDI (foreign direct investment), will have to play an
Haiti, however, has not had historically high levels of FDI.
This could change, given the concerted effort to bring in such
flows. One hope is that Asian direct investors will use the
free trade agreement that Haiti enjoys with the US, to gain
access to the US under the agreement.
But even before the earthquake, poor infrastructure was a major
impediment to foreign investment.
The IMF, among others, is looking at ways to allow the
private sector to fully play its role in rebuilding the economy
and providing jobs, in the context of the broader
reconstruction and economic recovery, says a spokesperson
for the fund. That is a tall order.
Besides raising the necessary funds, there are also
challenges relating to donor coordination and cooperation.
The last thing that Haiti needs now is competition for
headlines among donors, says Maguire. Ghesquiere adds,
The principal donors perceive this as an opportunity to
really give a new start to Haiti.
A healthy interrelationship among the international players,
says Maguire, will be helped by having the Haitians take the
lead particularly in identifying problems and
priorities. The international community needs to respond and
not to dictate, he adds.
This time around, theres been no bickering yet.
While there will always be some tension among agencies,
there is the willingness, at least at the highest levels, not
to have that kind of conflict, says de Falco. There
is enough to do in Haiti for everybody.
One major concern, ahead of the donor conference on March
31, is how long lasting support will prove. Luis Alberto
Moreno, president of the IDB, says: I want to see that
this outpouring of support doesnt last until this news
cycle is over, but we can have something sustainable for a
larger period of time.
De Falco thinks this time may be different. He says that an
event so close to home has shaken substantially the
consciousness of the western hemisphere. He adds:
Attention will not fade quickly.