Paul Collier on Haiti

Haiti: From Natural Catastrophe to Economic Security

A Report for the Secretary-General of the United Nations

Paul Collier,Department of Economics,Oxford UniversityJanuary 2009

Haiti: From Natural Catastrophe to Economic SecurityContents

1. Introduction2. The Fundamentals Favour Economic Development3. Haiti is not Hopeless4. A Realistic Strategy for the Rapid Attainment of Economic Security4.1 Simple and Immediate Objectives: Underpinning Security with Jobs, Basic Services,Food Security and Environmental Sustainability.4.2 Policies for Jobs4.2.1 Reconstruction4.2.2 Export Zones4.3 Policies for Basic Services4.4 Policies for Food Security4.5 Policies for Environmental Sustainability5. Next Steps

1.

Introduction

Haiti has a long history of socio-economic fragility. Following a period of crisis, in 2004 theUnited Nations intervened, creating MINUSTAH which successfully established crediblesecurity and progressively extended it throughout the country. On this base of securitydemocratic politics was re-launched, including peaceful elections which produced alegitimate and accountable government. In 2007 these security and political developmentswere complemented by the enactment of HOPEII, which gave Haiti uniquely favourablepreferential access to the US market. Thus, as of 2007 the combination of security,democracy, and economic opportunity were in place. With these foundations the next stageshould have been the launching of economic development.Instead, during 2008 the society was hit by a series of major external shocks. First the suddenincrease in world food prices triggered riots and led to the fall of the government. Given thefractured nature of Haitian society, democratic politics is inevitably fraught and so it took five months to get a new government in place. No sooner was government restored than thecountry was hit by the fourth of a series of hurricanes, causing flooding and severedestruction of infrastructure and livelihoods. Further shocks are on the horizon for 2009. Theglobal recession is likely sharply to reduce the remittances which are by far Haiti’s largestsource of foreign exchange and this will particularly hit the livelihoods of the poor. Multipleelections are due and these are likely to distract policy makers.These shocks have two serious consequences. One is that they have created a humanitarianemergency which, if it is not dealt with, has the potential to reignite social disturbance. Theother is that they have set back the launch of economic development. The immediaterequirements for rehabilitation of social and economic damage are set out in the

Rapport d’Evaluation des Besoins Post-Desastre

(PDNA). The present Report takes these needs asgiven and presupposes that appropriate action will be taken. It builds on and complements thePDNA in elaborating a strategy that can take the society beyond recovery to economicsecurity. In conjunction, the food crisis and the hurricanes turned 2008 into a lost year andthis loss of time is important. Both MINUSTAH and HOPEII are time-bound. Unlesseconomic development is started very soon it will become much more difficult: the remaininghorizon for both MINUSTAH and HOPEII will be too short for investor confidence. Moresubtly, the setbacks of 2008 have reinforced an unhelpful sense that Haiti is trapped in a cycleof failure.Manifestly, it will be harder to launch economic development in 2009 than it would havebeen in 2007. Both the legacy of the 2008 crises and the global recession make 2009unpropitious. However, it is both feasible and imperative.The feasibility of economic development in Haiti is the core subject of this Report. Indeed,despite the prevailing despondency, the opportunities for Haiti are far more favourable thanthose of the ‘fragile states’ with which it is habitually grouped. Due to the country’s location,the governments of Haiti, the USA and Canada have a common interest in pursuing apractical and focused agenda that delivers rapid improvements in socio-economic conditions