Development Progress |  Challenges Ahead |  World Bank Assistance to Haiti |  Contacts

DEVELOPMENT PROGRESS

In 2008, Haiti has been hit by a series of shocks: soaring world prices for food and fuel, followed by four tropical storms or hurricanes since August 18.  The rising cost of living has caused great hardship and triggered a social and political crisis, as violent protests erupted and the Senate voted out Prime Minister Jacques-Edouard Alexis and his Government. The storms have killed several hundred people and created a humanitarian emergency, with around 850,000 (a tenth of the population) needing assistance. Floods have seriously damaged infrastructure and crops, contributing to shortages, fuelling further inflation, and possibly bringing about economic contraction.

 

Haiti requires strong support from its international partners for relief, recovery, and rebuilding – and to safeguard the considerable progress made since 2004, when the country was swept by a wave of political conflict. Haiti has improved economic and social stability, democratically elected a president and parliament and launched wide-ranging reforms, particularly in the area of economic governance (notably in budget formulation, execution and reporting).

 

Security has improved since December 2006, when the UN peacekeeping force (MINUSTAH) and the Haitian National Police (HNP) launched direct operations against criminal gangs. The 9,000-strong, Brazilian-led MINUSTAH has been deployed since 2004. Kidnapping rates have fallen sharply. But crime and violence, centered on gangs based in Cité Soleil and other Port-au-Prince slums, continue to undermine Haiti’s development.

Haiti has posted three successive years of economic growth since 2004, when the economy contracted by 3.5 percent, and is still set to post modest growth for the country’s 2008 fiscal year (which ends Sept. 30, 2008). However, growth estimates for FY09 and beyond are being revised downwards to reflect the impact of the recent storms.

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CHALLENGES AHEAD

 

Despite recent improvements in some areas, Haiti continues to be the poorest country in the Western Hemisphere. Some social indicators are among the weakest in the world:

 

• GNI per capita is US$560 (2007, Atlas methodology)
• Haiti ranks 146th out of 177 countries on the United Nations Development Programme Human Development Index (2007/2008)
• 54 percent of Haitians live on less than US$1 a day and 78 percent on less than US$2 a day
• Literacy (people 13 years of age and older) is 43 percent.
• Life expectancy at birth is 60 years
• The infant mortality rate is 60 for every 1,000 live births
• The prevalence of HIV among the population (aged 15-49) is 2.2 percent.
• Less than 2 percent of forest cover remains

 

Haiti’s government in November 2007 completed a comprehensive strategy paper that sets out the main development challenges facing Haiti and the Government’s strategic priorities for addressing them. The National Strategy for Growth and Poverty Reduction Paper (Document de Stratégie Nationale pour la Croissance et la Réduction de la Pauvreté), was developed through a broad consultative process under the leadership of the Ministry of Planning and External Cooperation.

 

The strategy outlines the following three strategic pillars for action:

 

(i) enhancing human development, with a focus on improving delivery of basic services;

 

(ii) strengthening democratic governance, particularly by improving security and the justice system; and

 

(iii) promoting four specific vectors (i.e. drivers) of growth.  The vectors of growth identified by the strategy are agriculture and rural development, tourism, infrastructure, and science and technology. The strategy also emphasizes the importance of a stable macroeconomic framework and sound management of public resources, which depend on good governance and transparency.

 

Authorities and donors remain committed to the implementation of this strategy, though some adjustments will be necessary to reflect the impact of the food crisis and the recent storms. These have raised the need for additional efforts to reduce vulnerability to natural disasters and other shocks, and to do more to improve food security.

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WORLD BANK ASSISTANCE TO HAITI

Haiti became a member of the World Bank in 1953. While the first loan, in 1956, was from the International Bank for Reconstruction and Development (IBRD), other financing has been channeled primarily through the International Development Association (IDA), the arm of the World Bank that provides interest-free loans and grants to low-income countries. IDA was created in 1960. All World Bank assistance to Haiti has been in grant form since July 2005.

 

The Bank’s recent strategy and planned activities in Haiti are outlined in the Interim Strategy Note (ISN) for 2007-2008. The twin aims of this strategy have been to help the government deliver rapid results, through jobs and basic services, and to foster the development of credible institutions over the longer term.

 

Since 2005, the World Bank has approved approximately US$230 million in IDA assistance for Haiti.

 

There are currently 13 main World Bank projects active in Haiti. New projects in 2008 include:

 

• A US$10 million emergency grant to help the government respond to the food price crisis and help implement its poverty reduction strategy. The grant is part of the Fast-Track Facility for Food Crisis launched by the World Bank, which supports global efforts to overcome the global food crisis with a new US$1.2 billion rapid financing facility, including US$200 million in grants targeted at the vulnerable in the world’s poorest countries.

 

• A US$16 million grant to provide basic infrastructure and social services for disadvantaged urban communities through a participatory process in which community-based organizations propose, select, implement, and maintain subprojects.

 

• A US$7.4 million grant to support recovery from Tropical Storm Noel, which hit the country in October 2007. The grant is designed to help the country support the provision of basic services and creating jobs, rehabilitating areas devastated by floods, and working with communities to support local development. 

 

• A US$6 million grant to support the training of new teachers for grades 1-6, which will increase children’s access to quality primary education.

A US$1.6 million grant to control the spread of avian flu in animals, prevent and limit the virus’ spread among humans, help affected populations cope in the event of a pandemic, and minimize the virus’ social and economic impact.

 

For more information on Bank projects in Haiti, click here.

 

The World Bank has been participating in efforts to reduce Haiti’s debt. In November 2006, Haiti qualified for debt relief under the Enhanced Highly Indebted Poor Countries (HIPC) initiative by reaching decision point. Haiti would also qualify for debt relief under the Multilateral Debt Relief Initiative upon reaching the Enhanced HIPC completion point.

 

In addition, the Bank provides support to Haiti through smaller trust fund grants, a range of analytical and advisory activities, and support for communications and consultation activities. The Bank has also played a central role in aid coordination, including the development of the Interim Cooperation Framework (the strategy that guided international assistance to Haiti for 2004-2006), as well as hosting the July 2004 donor conference and a March 2007 donor meeting.

 

The International Finance Corporation (IFC), the private-sector financing arm of the World Bank Group, is expanding its activities in Haiti, identifying further actions to help establish a sound business enabling environment, while also investing in projects that support the development of a sustainable private sector. Recent IFC investments are in cellular telecoms (Digicel - US$30 million), textiles (Grupo M - US$20 million), microfinance (MicroCredit National - US$400,000), and a trade line to Capital Bank (US$300,000).

 

IFC is also exploring: (i) advisory support on regulatory simplification and investment climate, policy and promotion; (ii) support for the textile sector in light of the HOPE Act, which extended tax-free U.S. market access to some Haitian exports; (iii) support for the central bank, to establish a credit bureau; and (iv) support for microfinance, Small and Medium Enterprises (SMEs), banking, business planning skills, electricity, and tourism.

 

The World Bank and IFC are currently developing a new Country Assistance Strategy for Haiti, to align assistance behind Haiti’s own strategy for growth and poverty reduction.

Updated November 2008

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CONTACTS

Mathurin Gbetibouo, Country Representative in Port-au-Prince
Tel. 509-2256-0844
E-mail: mgbetibouo@worldbank.org

Alejandro Cedeno, Senior Communications Officer for the Caribbean in Washington, DC.
E-mail: acedeno@worldbank.org

For more information on World Bank assistance to Haiti, including lending breakdown and project reports, see: