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'La tè tranble nan peyi d'Ayiti'

Evans Jadotte

On Tuesday January 12 2010, a 7.0 Richter scale earthquake, off the coast of Haiti destroyed its capital Port-au-Prince. It also razed the cities of Léogane, Petit-Goâve, Grand-Goâve, Jacmel, and Les Cayes. It came as a terrible unexpected shock to one of the poorest countries in the world, that is still staggering from three hurricanes and a tropical storm that wrecked almost 70 per cent of its agriculture in 2008. The fatalities so far, according to Haitian officials, amount to more than 200,000 people. No material toll has been made public yet but according to Haiti's head of government, Prime Minister Jean Max Bellerive, around 60 per cent of the country's GDP has been reduced to rubble.

The challenge of reconstructing Haiti today and into the future is how to manage, if not reduce, its vulnerability to natural hazards – and the vulnerability of its people to poverty in the case of natural hazards – and how to strengthen the resilience to adverse shocks.

Background

Haiti's vulnerability to natural hazards is well known. The most recent earthquake was the third to have destroyed Port-au-Prince since 1750. Like many small island states (see further reading), it is frequently affected by hurricanes. As documented in the UNU-WIDER study 'Vulnerability in Developing Countries', Haiti was the Caribbean country worst affected by natural hazards between 1990 and 2006, when it suffered 28 natural disasters.

Moreover, in Haiti the vulnerability to natural hazards translates into a vulnerability to poverty, i.e. the probability of falling into poverty or to remain in that state.  Thus although poverty is high – 75 per cent of its population is estimated to live on less than $2 USD per day – if one considers vulnerability to poverty the number is higher and approximately 84 per cent  of the population is poor.

Haiti's vulnerabilities cannot be addressed without taking into consideration that the country's GDP is unequally distributed. According to the Gini-index, Haiti's score of 0.65 (in 2001) makes it the most unequal country in the Latin American and Caribbean (LAC) region (Haiti Living Conditions Survey 2001). High inequality has fostered distributional conflicts in this Caribbean nation from peasant massacres (e.g. the Jean-Rabel 1987 massacre) to various coup-d´états.

As far as the Human Development Index (HDI) is concerned, Haiti is ranked at 149 out of 182 countries. Between 1950 and 2008 GDP growth averaged 1.25 per cent per annum, which was the worst performance among LAC countries. In terms of per capita income, as Table 1 shows, the situation is even more inauspicious with per capita income only about ten per cent of that of the average for the LAC region.  Table 1 further compares Haiti's socio-economic status (before the earthquake) with that of the LAC region.

Table 1. Selected socioeconomic statistics for Haiti and the LAC region

All of these socio-economic indicators will be adversely impacted by the January 12 earthquake. Greater child malnutrition, deterioration in literacy and schooling, and poorer health prospects in the light of reduced access to energy, water and sanitation will worsen poverty and underdevelopment. A danger now is that in their efforts to cope with the crisis, many households will have no choice but to engage in adverse coping, such as reducing health care, children dropping out of school, and assuming greater risks in order to survive. The approaching rainy season will affect more than a million people, who will be left without adequate shelter. Infrastructure may be rebuilt in a number of years; however the cost in terms of human capital may have much more lasting effects. Reconstruction and recovery in Haiti should thus be human-focused, with priority given to enabling people to meet their basic needs. Two groups in particular can play a role here in assisting the country's struggling households: the international community and the Haitian diaspora. However, their efforts need to be underpinned by a concerted effort by all Haitians to strengthen and extend the country's institutional framework – to move the country away from being a fragile state.

Considerations for recovery

The role of the International Community

The international community has responded quickly. However efficiency in the way aid is reaching the poor and vulnerable is still a concern one month after the cataclysmic event. Hopefully the broad willingness to support Haiti will not vanish soon after the television cameras are gone, as it has happened in the past. Although a considerable amount of money has been poured into Haiti for development purposes over the past decades, results and impact on the poor have been unsatisfactory. The international community will have to find a much better way to manage and monitor aid, a great share of which is allocated to a plethora of non-governmental organizations (NGOs), which are generally not held accountable for the moneys received and the service they are supposed to deliver.

Haiti has one of the highest densities (if not the highest) of NGOs in the world and their expertise can be efficiently used to assist the poor and vulnerable. However, if real incentives to deliver are not put in place and the actions of the NGOs on the terrain are not coordinated, the probability of failure becomes high; and I think that Haiti is a good case in point. The presence of this plethora of NGOs is explained by the weakness of the Haitian state and the inability of past governments to deliver to the Haitian people. The creation of strong social institutions can be a good way to solve this problem and the international community can play a pivotal role in that respect.

The role of the Haitian diaspora

In relation to its economy, Haiti is the highest receiver of remittances in the LAC region.  International migrant workers' remittances amounted to about $1.8 billion USD in 2008, representing more than 20 per cent of the country's GDP (Inter-American Development Bank-IDB). This flow of non labor income is a source of livelihood for many Haitian households. Most important, as can be seen from Figure 1, remittance flows to Haiti are not as volatile as official development assistance (ODA). And in contrast to foreign direct investment (FDI) remittances flow has increased steeply in recent years.

Figure 1. Haiti international remittances inflows, ODA, and FDI: years 1971-2005.

In terms of the state of the global economy the earthquake could not have come at a worst time for Haiti. As a result of the global economic crisis, the amount of remittances Haitians abroad send to their relatives and friends in Haiti has declined steeply. Officially recorded remittances amounted to $69 million USD in January 2010, down from the $104 million the month before. Remittances have been providing a lifeline to Haitian households and are even more crucial after the January 12, 2010 event. Despite this 34 per cent dip in remittance flow, the Haitian diaspora seems to be responding swiftly in mobilizing funds for their relatives. An example is how Fonkoze - Haiti's Alternative Bank for the Organized Poor (which is the Haitian branch of the Grameen Bank of Bangladesh) – swiftly converted into cash funds deposited by US-based Haitians to supply the needy in Haiti, while commercial banks in the country remained closed.

Remittances have traditionally financed consumption, education, health care, and some entrepreneurial activities in Haiti. These funds could however even be better leveraged for development. For instance it is estimated that one out of every five Haitians has lost her/his job because of the earthquake. This adds to the already vexing unemployment situation that prevailed, where two out of every three Haitians had no formal job. In that context, policy makers could help promote small business development by providing tax breaks and by matching funds coming from the diaspora earmarked for community projects and business start-ups. Such schemes are already in place and functioning quite well in different countries in the LAC region. A good example is the Tres por Uno instituted in Mexico since 1999 (Dos por Uno since 1992). Herein the government Mexico matches every dollar sent by migrant workers for development projects in a community with three dollars from different levels of government. Such initiatives may be important at least over the short and medium term for reconstruction, as the absence of a strong state means that private entrepreneurial activity will play an important role to reduce household vulnerability in Haiti.

The need for institutional strengthening

A proper discussion of the reasons for Haiti's underdevelopment, as reflected in table 1, falls outside the scope of this article. However, as reconstruction after the earthquake affords Haitians the opportunity to promote a kind of reconstruction which will leave them less exposed to similar future external shocks, mention needs to be made of the role of the country's history and its institutional failures.

While vulnerability to natural hazards does clearly contribute to Haiti's misfortunes, natural hazards do not need to become natural disasters. They often do so when households and communities lack the ability to cope with or to reduce risks, in other words when they lack resilience. In turn, resilience is largely the outcome of a country's institutional set up. Here institutional set up refer to the broad institutions (or 'rules of the game') which support effective government and markets, such as efficient governance, property rights, rule of law, freedom, etc. Often a country's current institutions have been shaped by its history. In this regard,  Haiti historic events, such as the country's colonial experience, have been unhelpful. For instance in the early 19th century Haiti had to pay an indemnity to France to have its independence recognized. This payment has triggered a cycle of crippling debt dependence, with disastrous effects on the country´s capability to invest in infrastructure, both physical and social.

Even if history is not destiny, Haiti had difficulty escaping from the shackles of colonialism due to its inability to establish subsequently a robust democracy and other institutions economically productive activities. The country has frequently experienced bloody coup-d´états supported by a narrow elite, as well as stagnating foreign direct investment. This narrow elite is one of the many problems Haiti is confronted with. For the immediate future the most complex challenges that remain are how to align the interest of Haiti's elites with what is good for the country, and to improve the business conditions so as to attract greater foreign investment and entrepreneurial activity. As Keefer et al (2010- see further reading) recently established, earthquake mortality is significantly higher in countries with weaker democracies – it is in particular young democracies, autocracies with less institutionalization, and with corrupt regimes where the mortality impact of earthquakes tend to be higher. Stronger, more responsive institutions, a more diversified economic base, and higher living standards will result in a more resilient Haiti.

Concluding remarks

For Haiti, development would first and foremost require that its households become less vulnerable to poverty, and more resilient to external shocks, in particular hurricanes and earthquakes. It also has to be asked whether the country can, perhaps over the longer term, reduce its vulnerability to such natural hazards?

In the accompanying WIDER Angle article, Density and Disasters: Economics of Urban Hazard Risk by Somik V. Lall and Uwe Deichmann, they point to the fact that more people could be affected in the future by natural hazards such as hurricanes and earthquakes because the population of people in cities exposed to such hazards is expected to increase significantly over the next few decades.

Haiti's recent experience has illustrated the vulnerability that such urban concentrations of people in affected areas face. Much of the country's economy is centred on Port–au- Prince, and until the January earthquake this has attracted growing numbers of migrants – both temporary, seasonal, and permanent migrants. Both the material and the human tolls from the earthquake point to the necessity of decentralization in the reconstruction efforts.

The fact is that most people die in earthquakes due to building collapse. According to Kenny (2009) engineering solutions exist that can almost completely eliminate the risk of such deaths. Although these are often expensive, and in a poor country such as Haiti cannot be the only way to reduce the mortality impact of earthquakes, the reconstruction of Port-au-Prince needs to consider a role for building regulations. Moreover, in line with Somik V. Lall and Uwe Deichmann's emphasis on good urban management, this will not be achieved as long as Haiti remains a fragile state. The development of institutions in Haiti should be such as to ensure transparency of, and adherence to such regulations. And furthermore, good urban management would need to contribute to the appropriate investments in general (public) mitigation infrastructure and to general rural and regional development throughout the country.

About the author

 

Evans Jadotte is a lecturer in Economics at the 'Universidad Nacional de Educación a Distancia' and collaborates with the 'Universitat Autònoma de Barcelona', in Spain. He was a visiting PhD intern at UNU-WIDER in 2008. His work has focused mainly on poverty, vulnerability, inequality, migration and remittances issues in Haiti.

Further and related reading

Keefer, P., Neumayer, E. and Plümper, T. (2010). 'Earthquake Propensity and the Politics of Mortality Prevention', Policy Research Working Paper 5182, The World Bank.

Kenny, C. (2009). 'Why Do People Die in Earthquakes? The Costs, Benefits and Institutions of Disaster Risk Reduction in Developing Countries', Policy Research Working Paper no 4823,
The World Bank.

Mark McGillivray, Wim Naudé and Amelia Santos-Paulino, 2008. 'Small Island States Development Challenges: Introduction', Journal of International Development, 20 (4): 481-85.

Wim Naudé, Amelia Santos-Paulino and Mark McGillivray, 2009. 'Measuring Vulnerability: An Overview and Introduction',  Oxford Development Studies,  37 (3): 183-91.

Wim Naudé, Amelia Santos-Paulino, and Mark McGillivray, 2008. 'Vulnerability in Developing Countries', UNU Research Brief, United Nations University.

Wim Naudé, Amelia Santos-Paulino, and Mark McGillivray, 2008. 'Fragile States', UNU Research Brief, United Nations University.

WIDER Angle newsletter, February 2010

ISSN 1238-9544

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