From rubble to recovery

From rubble to recovery

Published: February 13, 2010

Foreign Direct Investment

(Read the original article here)

A huge recovery challenge lies ahead for Haiti after its devastating earthquake, but could the rebuilding programmes bring about an essential economic restructuring? Michael Deibert reports from Port-au-Prince.

The incremental economic progress that Haiti, an impoverished Caribbean nation of 9 million people, had been experiencing over the past several years was brought to a cataclysmic halt late on the afternoon of January 12, when a 7.0 earthquake centred just south of the capital city sent the pillars of state and industry crashing to the ground in a heap of dust.

In a matter of seconds, Haiti’s Palais National, Palais de Justice, Parliament and many government ministries were either totally or partially destroyed. The top command of the UN mission, whose troops had been supporting the government of president René Préval since his 2006 election, lost their lives, along with an estimated 200,000 Haitians. Factories collapsed onto their owners and workers alike, and entire neighbourhoods tumbled down the brooding mountains that surround the capital city’s bay.

Further devastation

Haiti, already desperately poor but having experienced its first sustained period of political calm and stirrings of foreign investment interest in many decades, seemed as if it would be reduced to an even graver level than it had been before: mortally wounded, traumatised, ungovernable. In addition to the buildings destroyed, Haiti had also lost some of those best placed to aid its tenuous economic recovery, among them one of the country’s most respected economists, Philippe Rouzier, as well as Jean Frantz Richard and Murray Lustin Junior, the director-general and director of operations, respectively, at the Direction Générale des Impôts, the country’s main tax office in the capital.

According to the International Organisation for Migration, as of early February at least 460,000 people were still living in 315 spontaneous settlements throughout Port-au-Prince, while the World Food Programme said that more than 1.6 million people had received ­supplies since the start of the earthquake response.

Economic focus

But Haiti’s industrious population knows a little something about struggle and perseverance, even in the face of such a devastating tragedy. Within days of the earthquake, the country’s market women, taxi drivers and other labourers had returned to the streets, resuming commerce among the hundreds of thousands camped out between the shells of ruined buildings. Capital residents began to flow back into Haiti’s countryside, seeking family solace among the loss.

From a terrible misfortune, some hoped that Haiti might still have set in motion the seeds for a new beginning. Despite the ousting of a popular prime minister last autumn, Haiti’s modest economic engine, buoyed by an extended period of relative political tranquillity and an improved security situation, continued chugging along under a new prime minister, Jean-Max Bellerive, seemingly bearing out a December 2008 UN report asserting that it was striking “how modest are the impediments to competitiveness relative to the huge opportunities offered by the fundamentals” in the country.

Last year, billionaire George Soros’s Economic Development Fund announced plans to create a $45m industrial park in Cité Soleil, one of the capital’s poorest neighbourhoods, while two new hotels were set to open along the country’s lush south coast.

At the same time, the OTF Group, a competitiveness consulting firm credited with breathing new life into Rwanda’s tourism, coffee and agro-industry sectors following the country’s 1994 genocide, praised the business opportunities in Haiti. Focusing on several key “growth clusters” to drive economic development, it hoped to help create 500,000 jobs in Haiti within three years.

Following the earthquake, though reassessed, the group said its conclusions did not necessarily need to be shelved, just pushed back for six months to a year.

“The outmigration from [Port-au-Prince] is a huge opportunity to reverse the migration trends of the past two decades,” says OTF director Robert Henning. “If reconstruction can create opportunities and jobs outside of the capital, this will achieve an important goal of redistributing the influence and economic weight of Haiti.”

Trade possibilities

Though the country’s interior has been severely deforested over the past few decades, local groups, such as the Mouvman Peyizan Nasyonal Kongrè Papay, have worked for years on reforestation and irrigation projects and some areas, such as the Artibonite Valley, remain relatively fertile. With Port-au-Prince’s harbour severely damaged and the likelihood of recurrent large-scale earthquakes extremely high, according to the US Geological Survey, international attention has for the first time begun to look seriously at developing Haiti’s long-neglected interior with manufacturing and agricultural initiatives.

A long border with neighbouring Dominican Republic, which lends itself to the possibility of free-trade zones, and possible ports that might conceivably be expanded around the country – including Miragoâne (in the country’s west), Saint-Marc (in the middle region) and Cap-Haïtien (in the north) – would seem to support this possibility for future investment.

Following a decision last year by the World Bank, the International Monetary Fund and the Inter-American Development Bank to cancel $1.2bn of Haiti’s debt – with the latter institution approving an additional $120m in grants for investments in key sectors such as infrastructure, basic services and disaster prevention, the G-7 countries told Haiti after a post-earthquake meeting in Canada in February that the country’s debts to the body did not need to be repaid.

New beginning

None of this in any way minimises the grievous shock – physical, psychological and economic – that Haiti’s people and its government have suffered because of those terrible moments in January. But, day by day, it appears to be picking itself up, dusting itself off and trying to decide where it will head from here.

“The extent of this disaster is also due to the fact that this country has not been managed, or rather has been ill-managed, for the past 50 years,” says Michèle Pierre-Louis, a civil society leader and former prime minister of Haiti. “Maybe after mourning our dead and saving the lives of the survivors, we should start thinking about ways to put together our energies, our solidarity, our creativity to rebuild our capital under some kind of strong leadership… [which] could eventually lead to rebuilding the entire country. Now is the time.”