[Documents menu] Documents menu

Emergency Economic Recovery Program

From the United Nations International Report,
Vol. I, no. A1 (3 April 1995)

In mid-October 1994, under the leadership of the Inter-American Development Bank, 12 organizations started a Joint Assessment Mission to evaluate how to tackle Haiti's economic and social problems. Members of this mission included the Inter-American Development Bank (IDB), World Bank (IBRD/IDA), United Nations Development Program (UNDP), Food and Agriculture Organization (FAO), United Nations HABITAT, United Nations Economic, Social and Cultural Organization (UNESCO), United Nations Family Planning Association (UNFPA), United Nations Fund for Children (UNICEF), United Nations Industrial Development Organization (UNIDO), World Food Program (WFP), European Union (EU), U.S. Agency for International Development (USAID), Organization of American States (OAS), Pan American Health Organization (PAHO), World Health Organization (WHO), and Canadian International Development Agency (CIDA).

Jointly they drafted the Emergency Economic Recovery Program (EERP), a blue print for the economic reconstruction of Haiti. Detailes are supposed to be adjusted according to the progress of the program.

Following the Executive Summary of the Report of the joint mission, dated January 3, 1995:

Macroeconomic Conditions

A. Statement of the Problem

In the aftermath of the coup d'etat in September 1991, Haiti has experienced a dramatic deterioration of is economic and social conditions. The country's economic performance and social indicators have worsened dramatically, accentuating the downward trend of the 1980s. Haiti is now characterized by debilitated institutions, strong macroeconomic imbalances, dilapidated infrastructure, depleted productive assets, and pervasive poverty. In the period from 1980 to 1991, the population suffered a continues decline in the standard of living, with real gross national product per capita falling by about 2 percent each year. Between 1992 and 1993, Haiti's real per capita income declined at a multiple of this rate. It is currently estimated to haven fallen well below $250, making Haiti by far the poorest country in the Western Hemisphere.

Preliminary estimates indicate that real gross domestic product (GDP) declined by around 20 percent in 1992 and 1993, and by an additional 10 percent in 1994, bringing the cumulative decline in economic activity since the military coup to some 30 percent. Inflation, which had averaged close to 25 percent a year in 1992 and 1993, is estimated to have more than doubled to 52 percent by year-end 1994.

The political developments of the last two years also had adverse effects on public finances: Treasury accounts indicate that tax revenue has been cut in half and the overall government deficit has increased from 0.5 percent of GDP in 1991 to 4.7 percent of GDP in 1994.

In the face of a growing fiscal deficit, Central Bank net credit to the public sector rose by an average of 65 percent a year between 1992 and 1994. Total exports fell by over 40 percent in 1994 to $47 million, which is about one-third their 1991 level. Total imports declined by 20 percent in 1994, and by about 66 percent if food and supplies to NGOs imported under humanitarian programs are excluded.

B. Recovery Strategies

To ensure the sustainability of the economic recovery process to be supported by the EERP, the government will need to rapidly establish a second economic policy framework that addresses macroeconomic imbalances and builds private sector confidence in Haiti. The necessary economic policy reforms in the context of the EERP relate to public finances, money and inflation, civil service reform, privatization, and international trade.

Many of the policy reforms described below, which will be necessary to achieve these objectives, have already been endorsed in the Government of Haiti's Strategy of Social and Economic Reconstruction, presented to the Informal Donors Meeting in Paris in August 1994 and reiterated in the government's economic policy letter on A Framework for a Sustainable Economic Recovery of November 1994, addressed to the World Bank and the IDB. It is expected that these policy reforms will be reflected in a Standby Agreement with the International Monetary Fund, which the Haitian government intends to negotiate beginning in December 1994.

The Agricultural Sector

A. Statement of the Problem

The already weak productive base of the Haitian rural economy has suffered an increased rate of decapitalization during the crisis of the past three years. Small-scale farm households, which make up the vast majority of the 70 percent of the Haitian population living in rural areas, were obliged to further deplete their scarce soil, agroforestry and livestock resources. Levels of indebtedness have grown rapidly. Meanwhile, the basic public and private physical infrastructure remains partially or totally inoperative. MARNDR requires a substantial restructuring if it is to efficiently fulfill its normative and supervisory functions nationwide.

B. Strategies and Costs

The strategy of the Haitian government and the bilateral and multilateral institutions aims to reverse the process of rural decapitalization in the short term while initiating policy and institutional reforms to support development of the sector in the medium and long term through technical assistance ($1.7 million). Priority investments required during the 12 and 18 month time frame concentrate on improving physical infrastructure ($10 million), increasing the availability of key inputs and credit ($12.5 million), and reforestation and soil conversation activities ($7 million). Most of the public works projects require labor-intensive technologies that will immediately boost employment in rural areas. The thrust of the much-needed institutional modernization program has been articulated by the government in the recent plan entitled Deconcentration Administrative au MARNDR.

The Industrial Sector

A. Statement of the Problem

Industrial production both for export and local consumption has continued to seriously deteriorate. Out of 252 firms existing in 1990 in the assembly sector, only 44 are still operating today. Of 46,000 workers in 1990, over 40,000 are today without a job.

The handicraft sector is also seriously affected, and nearly 60,000 artisans have ceased activity. The absence of an enabling environment and lack of dialogue between the government and the private sector represent serious obstacles to industrial recovery.

B. Strategies and Costs

Within the framework of the EERP, the following priority areas should be considered: policy measures supportive of industrial development, financial support and marketing assistance to the handicraft sector, development of small-scale industry, human-resource development, rural development, industrial maintenance, and the establishment of the agro-related metal-working industry.

Based on the belief that industrial development should be based on local resources availability, the program assigns high priority on the agro-based and the mineral-based industries. Both cover a wide range of products and technologies, some geared to local basic requirements (food and shelter) and others having significant export potential (handicrafts). These efforts should lend themselves to decentralized manufacturing and rural development.

While some activities for the emergency phase will be completed during that period, others will require a sustained effort over a longer period of time. Among the latter are assistance to the Ministry of Commerce and Industry to enable it to more actively support small-scale industry promotion, strengthening the role of the Bureau of Mines in supporting the minerals industry, and formulation of a coherent program for industrial maintenance.

Successful implementation of this program will require dynamic and long-term cooperation between the government and the private sector. The total budget for this portion of the program is $5.0 million.

The Private Sector

A. Statement of the Problem

The private sector, including industry and commerce, small business and microenterprise, has suffered greatly as a result of the political crisis, the macroeconomic situation, and the trade embargo. While the major portion of the EERP effort must be directed toward implementing basic institutional structures that support democracy, addressing humanitarian and social needs, and rebuilding infrastructure, it is also urgent to direct assistance to the most pressing needs, and rebuilding infrastructure, it is also urgent to direct assistance to the most pressing needs of the private sector to achieve sustainable growth. The Haitian private sector is diverse and its participants display unique qualities of resourcefulness and drive. It includes import and export industries, agricultural producers and manufactures, professionals and tradespeople, and firms that operate in and out of the formal sector.

B. Strategies and Costs

Private sector development programs proposed in this report take into account the diversity of Haiti's private sector and provide approaches to stimulate private activity on concert with the new democratic order. A priority of the program is to provide assistance in establishing a transparent enabling environment in order to create a level playing field for all domestic enterprises (including new entrants), stimulate trade and investment based on market forces, and realize the full productivity and competitiveness of the sector.

The program also directs attention to the export sector to generate immediate employment and foreign exchange, and provides assistance to microenterprise and a newly emerging class of small entrepreneurs who will help drive Haiti's future economic growth. The program recommends setting priorities for infrastructure rehabilitation in critical areas on which private sector depends, and proceeding rapidly with state enterprise privatization. An assessment of the current credit needs of the Haitian private sector is proposed in order to lead greater credit availability over time. The program calls for a major effort to upgrade Haiti's productive work force through on-the-job training in the short term and planning for nationwide vocational training in the medium term. And lastly, it is recommended that procurement related to the EERP program itself maximize opportunities for the Haitian private sector. The technical assistance provided in the EERP is designed to help create conditions for private enterprise and position the private sector to attract investment and realize growth in the medium term. The financing requirement is $11.3 million.

The Financial Sector

A. Statement of the Problem

Financial institutions have continued with daily operations throughout the period since the 1991 coup. However, the prevailing economic and market conditions, distorted pricing structure, and increased concentration of bank portfolios in larger, low-risk clients have exacerbated structural weaknesses in the financial sector.

Regulation in the financial industry has been extremely weak due to management and operational deficiencies of the Central Bank and the Department of Bank and Financial Institutions, as well as to the lack of prudential norms. Banks are undercapitalized. Portfolios are concentrated in a few large borrowers, and the liquidity of the banks is constrained by an average 49 percent legal reserve requirement and an unknown amount of funds, held in escrow for foreign firms, that are due to the Haitian government. Declining demand for credit from secure borrowers and a growing supply of savings deposits, fueled by the increase in the money supply, have resulted in extremely negative real rates of return for loans and deposits. The non-regulated, specialized institutions that provide credit to the micro and small enterprise sector have continued to function but have been decapitalized.

Capital mobilized by the banks in the form of saving deposits is short term, and constrained in general by negative deposit rates and a high legal reserve requirement. There is no securities market nor available equity financing. The negative interest rate ceiling eventually limits the development of more innovative and costly lending instruments. However, investment is currently constrained more by risk factors exogenous to the financial sector. Insecure property rights and an arbitrary performance of the judicial system, particularly in the execution of guarantees, raise the transaction costs of financial intermediation in general and constitute a significant barrier to entrepreneurs who cannot meet extremely risk-adverse guarantee requirements. In broader scope, the lack of adequate infrastructure, communications and public services creates an unpredictable level of risk in the business environment, especially for the emerging entrepreneur. Performance of the Fonds de Developpement Industriel (FDI), the rediscount and guarantee facility, has not been positive. However, a strengthened and more flexible FDI could play a significant role in the emergency period given that banks will likely face both liquidity and risk problems that inhibit investment.

B. Strategies and Costs

Specific measures should be taken during the emergency period to guarantee the integrity of the financial sector and to encourage financial institutions and the private sector to play a leading role in financing the reactivation of economic activity. The operational and supervisory capacity of the Central Bank must be strengthened. The reserve requirement should be lowered and interest rates liberalized. FDI should be adapted and recapitalized to address four priorities: a) adapting mechanisms to promote investment; b) capitalizing FDI to provide a level of liquidity that complements existing capital in the financial sector; c) developing guarantee mechanisms to facilitate prudent bank investment in strategic sectors; and d) strengthening FDI in order to play a more aggressive role in risk assessment. Specialized finance institutions should also be strengthened institutionally and recapitalized in relation to their operational capacity.

Financing requirement: $15 million for capitalization of FDI; $3.5 million in technical assistance to FDI and the Central Bank.

Infrastructure, Sanitation and Transport

I. Water Supply, Sanitation and Waste
A. Statement of the Problem

Water supply is deficient and encounters heavy losses; less than 40 percent of the water needs of the capital are being met. Sanitation conditions have reached a deplorable state as a result of suspended drainage and collector works that wee being financed externally prior to the coup. Gathering and disposal of solid waste is very erratic, particularly in Port-au- Prince and Cap-Haitien. Compounding these problems are weak sector institutions and the lack of self- financing. Physical facilities in secondary cities have also deteriorated but are in a less critical condition.

B. Strategies and Costs

The emergency works for water supply, sanitation, and waste (estimated to cost $16.1 million) would help rehabilitate existing water plants, improve the quality of the water, increase the access to water for low- income groups, and reduce losses. With regard to sanitation and solid waste, emergency cleaning and disposal will provide for permanent systems to sustain improvements. Emergency works in Port-au-Prince would consist of rehabilitating physical facilities to achieve a 50 percent increase in the supply of water, restoring 20 standpipes and building 100 new ones, increasing water metering, building latrines in low- income areas, opening outlets of main sewers and cleaning of 150km of drains along main roads, removing heavy waste accumulations on streets and vacant land, developing the waste dumps of Truittier, and acquiring a weigh station and spreading equipment. In secondary towns and rural areas, emergency programs would reactivate suspended water programs, sewerage works and waste disposal.

II. Municipal Infrastructure

a) Statement of the Problem

Since the political crisis, the financial constraints of municipalities have worsened. This condition is reflected in further deterioration of the already inadequate urban infrastructure, particularly in the most densely populated municipalities. In Port- au-Prince, there is a heavy accumulation of solid waste, insufficient drainage and contaminated flooding, lack of basic urban hygiene, and numerous potholes in the roads. Despite the shortage of spare parts, lubricants and at times fuel, excess traffic density continues to overwhelm much of the urban roadway system. Secondary towns also have decaying infrastructure systems, although the situation is less critical.

b) Strategies and Costs

The aim of the emergency infrastructure works for municipalities (totalling $10.5 million) is to bring about immediate and visible improvement in these systems. It would consist of repair and maintenance of major urban arteries carrying heavy traffic, rehabilitation of road intersections, improvement of markets (two in Port-au-Prince and one each in Petionville, Jacmel, Les Cayes and Cap-Haitien), refurbishing of the central abattoir at Port-au-Prince, general cleaning (including prevention of land erosion), improvement of cemeteries, and relocation of street hawkers to appropriate areas. Technical assistance would be provided to help strengthen institutional capacity at the local government level.

III Transport

Inter-city Roads
a) Statement of the Problem

Haitian roads (4,545 km in total) are in poor condition. Eighty percent of the paved roads and 96 percent of the remaining primary roads require repair or rehabilitation, thereby increasing vehicle operating costs. Rural areas lack access due to insufficient penetration roads and the degradation of bridges. The Ministry of Public Works, Transport and Communications (MTPTC) is overextended by too many demands for its services and has insufficient financial resources.

b) Strategies and Costs

The inter-city roads emergency works (costing $17.8 million) would concentrate on rehabilitating the existing road network and restoring normal maintenance levels. It would support a) the rehabilitation of badly damaged areas in primary roads (Route Nationale 1, 2 and 3. Route de l'Amitie and the road between Belladeres and Baptiste) and several unpaved roads (about 1,000 km combined) on which transit is now possible only with four-wheel-drive vehicles; b) elimination of regressive embankment erosion and landslides; and c)reconstruction and protection of several bridges. Technical assistance would be included to help strengthen MTPTC.

Domestic engineering expertise could be called upon, as several local engineering firms were previously associated with large infrastructure projects. Professional support would also be obtained from the public sector, particularly MTPTC, since many of its engineers and technicians are underutilized. The suspension of external financial assistance and budgetary constraints have curtailed civil works by domestic private contractors, causing decapitalization in several firms. To implement the inter-city and ports components, therefore, domestic contractors might need to be supplemented by foreign firms.


a) Statement of the Problem

The situation of the country's port is equally problematic. APN's equipment is antiquated and unsuitable for container traffic, dockworker teams are inordinately large and expensive, and night work is rare. The lack of buoys and other navigational aids makes costal shipping hazardous. As a result, Port-au- Prince has become the most expensive port in the Caribbean, which has had a detrimental effect on both export and import activity.

b) Strategies and Costs

The program for ports (totalling $8.5 million) is designed to correct deficiencies in APN facilities. It would finance procurement of maritime signaling, cleaning, traffic and container handling, parts and equipment, and dock repairs at Port-au-Prince and the ports of Niragoane, Jacmel, Cap-Haitien, Petit Goave, Port de Paix, Jeremie and Saint Marc. Technical assistance would be provided to review APN functioning and evaluate possible privatization. As inventory of its equipment and facilities will be carried out, as well as revisions to its tariff policy and security measures.


Haiti's six telephones per 1,000 inhabitants ranks below poor countries in Africa (eight telephones per 1,000). Telephones are a luxury, confined mainly to the capital city (80 percent of the telephones). Given the need for new technologies and efficient operation of the telecommunications system, and the scarcity of funds, the privatization of TELECO may be warranted. Economic recovery through export-led growth will depend heavily on reliable telecommunications.

The Energy Sector

A. Statement of the Problem

The energy sector, similar to other sectors in Haiti, has been adversely affected by the political and economic situation of the past few years. Since 1986, no significant new equipment has been added to the facilities of Electricite d'Haiti (EdH), while plant upkeep has deteriorated steadily. During the trade embargo and the suspension of external financial assistance, the situation has worsened. In addition to insufficient fuel, there was a shortage of spare parts and lubricants. At present only 30 megawatts (MW) thermal capacity is available in PAP, out of a nominal capacity of approximately 70 MW. Because of abundant water supplies in the reservoir, the Peligre Dam is producing up to 54 MW and EdH has been able to meet the present load requirement (somewhat less than 90 MW) with minimal disruptions. However during the low water season (January-May 1995), the Peligre plant produces only 10 to 15 MW and, if emergency measures are not taken, extensive load shedding will be necessary. In the provinces service is also very deficient, with more than half the nominal capacity unavailable. These problems can be solved with an aggressive program of rehabilitation to increase effective capacity in existing thermal plants by 40 MW to reach 70 MW.

Additionally, EdH has experienced a growing number of institutional problems in direction and management, including limited long-term planning, inadequate operation and maintenance practices, poor commercial and financial arrangements, lengthy administrative procedures, shortages of management information, and weak institutional organization. EdH has little autonomy in its day-to-day operation and management, which is critically affected its overall performance. Total electricity losses have risen from 29 percent in 1985 to 44 percent at present (an all-time high) and the company has had net operating losses of approximately $10 million in each of the last years.

B. Strategies and Costs

In order to address these problems, an emergency program of $46.5 million is proposed. The program includes a) a management performance contract for 24 months with a foreign utility to run EdH's operations and prepare the enterprise for potential privatization; b) rehabilitation of existing generators and spare parts; c) procurement of an emergency 20 MW gas turbine; and d) rehabilitation of the transmission and distribution network. The establishment of a team to carry out the emergency program is recommended.

It is also necessary to immediately start a plan for the future of the sub-sector. This would include a review of the possibility for private sector participation in the medium and long term.

The Social Sector

Social conditions have seriously deteriorated in the past three years. Even before the recent crisis, the largest part of the Haitian population had little access to public education, health, and potable water, and malnutrition was widespread. At the same time, the population seeking these services continues to grow by around 2 percent per year, with an increase from 6.9 million residents to 8 million forecast during the next six years.

I. Education

a) Statement of the Problem

Haiti has the lowest enrollment rates and the lowest level of literacy in the Western Hemisphere; less than 50 percent of the population can read and write. In contrast with most countries, the education system is predominantly private (90 percent of primary and secondary enrollment), reflecting the low government priority given to education.

The quality of instruction is deficient in most private and public schools because of unqualified teachers, low salaries, uncoordinated development of curriculum and instructional materials, lack of textbooks, and poor facilities. The problem is intensified by deficient sector management resulting from the lack of clearly defines educational priorities, policies and standards and the weak institutional capacity of the Ministry of Education, and by the low level of public investment in the education sector. In addition, resources are used inefficiently, as evidenced by high repetition and dropout rates. Only one-third of the children entering primary school complete the cycle. Girls are particularly at risk in the sector, with female rates of educational participation the lowest in the Western Hemisphere.

A direct effect of the crisis has been a significant fall in primary school enrollment, due to declining incomes, political repression, and related population migration. Today, the education sector is near collapse. It is highly unlikely that much sustainable economic progress can be achieved without improving the quality of education and access to it. There is a need to define more clearly the structure and respective roles of the public and private networks, as well as the management, supervisory and financing functions of the central and provincial authorities.

B) Strategies and Costs

To reconstruct the educational infrastructure and establish acceptable conditions in schools, the following transitional activities are foreseen, at a cost of $29.6 million: a) preparation of a national educational plan; b) strengthening of sector management; c) retraining of primary school teachers; d) distribution of educational materials; e) rehabilitation and reequipping of schools; f) implementation of school feeding programs; g) establishment of scholarship, literacy and civic education programs; and h) development of programs for disadvantaged children.

In designing and implementing a new education development strategy, the government needs to find a balance between the emergency programs ad longer-term investments to increase access, improve quality, strengthen management, and ensure the financial sustainability of education.

II. Health, Nutrition, Population and Water

a) Statement of the Problem

Since 1991, Haiti's health situation has deteriorated sharply from what was already the poorest in the region. Epidemics of measles, meningitis, rabies and anthrax, along with deteriorating nutritional conditions, reflect the total breakdown of public services, widespread poverty, and environmental degradation. Malnutrition is a major cause of illness and death, and impairs educational achievement and productivity. Water and sanitary conditions have deteriorated to a level never before experienced. The mortality rate for children under five exceeds 15 percent, while maternal mortality, estimated at 4.5 per 1,000 live births, is among the highest in the world.

Population growth is very high, with a total fertility rate of more than six children per woman, and a contraceptive prevalence rate at less than 10 percent. The population doubled between 1950 and 1980 and it is estimated to increase from 6.9 million inhabitants to more than 8 million by the year 2000. There is a significant rural-urban migration and urban population growth is four times that in rural areas. Insufficient attention to the interrelationship of population and development during the past decades has already brought Haiti to the brink of its carrying capacity and heavily mortgaged its future sustainable human development. Without effective measures, population growth will reach alarming proportions, reducing further the quality of life for Haitians. The future demand for quality social services will place a severe strain on the human, financial and institutional resources of Haiti's public and private sectors. In addition, the growth of the labor force will present a particular challenge to economic policy management. Toward this end, support for a national census is recommended.

Health care expenditures are poorly allocated; public resources are maldistributed, and over 98 percent are consumed by salaries. Primary heath care coverage is low (less than 60 percent) and services are poorly organized. Falling family incomes have reduced access to even the most basic health care.

A successful transition from humanitarian assistance to the establishment of sustainable functioning and accessible health services will be critical for the medium-term recovery of Haiti's living standards and for future economic growth prospects. The immediate priority is to reduce avoidable mortality, particularly among infants, children and women.

b) Strategies and Costs

The health sector strategy relies on a) strengthening the central ministry to fulfill its normative functions and to guarantee service and quality access; b) decentralizing services to improve quality, accessibility and efficiency; c) ensuring access to an affordable minimum package of integrated basic health services; and d) supporting community participation and coordinating public sector, NGO and donor activities to optimize resource utilization.

To reconstruct Haiti's health infrastructure, and to improve service quality and coverage, the following transitional activities are proposed, at a total cost of $57.3 million: a) define health priorities, norms, and procedures for supervision, monitoring, and evaluation; b) strengthen management capacities; c) develop administrative mechanisms for decentralized management; d) develop management information systems; e) retrain health personnel; f) rehabilitate and reequip health facilities; g) provide essential drugs and medical supplies; h) undertake water and environmental sanitation activities; and i) establish health supply storage and distribution systems at the provincial and local levels.

The nutrition strategy, in addition to the above- mentioned health, water and sanitation activities, will require education and communication programs to improve child care and feeding practices and actions to improve household income and food security.

The Environment

A. Statement of the Problem

Haiti's worsening and overwhelming environmental problems are a classic case of interaction between environmental degradation, extreme poverty, demographic pressure, and cultural, socio-economic, physical, and ecological factors.

All indicators point to an accelerating rate of soil erosion; each year the equivalent of 6,000 hectares of land is lost to erosion and its soil transported to sea and deposited along the way. Consequently, across the country, food production is declining. River regimes are becoming more extreme, aggravating negative impacts on agricultural, energy and transportation infrastructure. Sediment deposition is shortening the usable life of drainage systems and port facilities, and destroying near-shore marine ecosystems.

Inadequate land use practices diminish the productive capacity of 6,000 to 15,000 hectares of usable land every year, increasing the already high population densities in rural areas (800 people per hectare of arable land). With a shrinking natural resource base, diminishing productivity, increased demographic pressures and unrealized political expectations, migration pressures are mounting.

Forest cover has been severely impaired in over 97 percent of Haiti, leaving less than 60,000 hectares of forests on mountain ranges in the southern part of Haiti. Of 30 major watersheds in the country, 25 can be considered devoid of substantial forest cover. At the present rate of deforestation, only the pine forest area in the southeastern part of the country will remain forested by the year 2008.

B. Strategies and Costs

The EERP proposes an environmental program with two components. First, soil conservation and agro- forestry activities would be initiated in critical areas and near large cities. These activities would reduce erosion, retain water, and enhance farmers' productivity using well tested, effective technologies and NGO/PVO participation. A subset of these activities includes environmental rehabilitation of public beaches and tourist sites, as well as of poor neighborhoods and small towns. The second component is institutional strengthening of the Ministry of Environment. The Ministry would be responsible for environmental regulation and would become the focal point for introducing environmental considerations across all sectors of the economy and in development activities, involving public participation through the establishment of a National Advisory Council on the Environment, and providing a political framework for the sustainable development of Haiti.

The new Haitian government has made a commitment to decentralize the decision-making process related to environmental and natural resources matters to lower levels of government and local entities. The strategic nature of the institutional strengthening component capitalizes on the political will being shown by the government on this matter. Such an approach is a critical element in a sustainable environmental rehabilitation and restoration strategy. In the past, the failure to delegate authority and responsibilities to lower level government and local entities has been a major constraint to effective environmental rehabilitation work.

Investments in reforestation, soil conservation and agro-forestry are included as part of the Agriculture Sector and amount to $7 million. Urban rehabilitation and protected areas work will involve $1.5 million and institutional strengthening totaling $1.7 million.

Technical Assistance Requirements

A. Overview

Official development assistance to Haiti up to 1991 amounted to some $150 million per year. This included balance of payment support, investment projects, technical cooperation projects and food aid. Of this, 75 to 80 percent was in the form of grants and 20 to 25 percent were loans. Some 30 to 40 percent of total aid was classified under the broad heading of technical cooperation, of which 75 percent was project- related and 25 percent was free standing technical assistance.

Development assistance to Haiti has had three basic shortcomings: a) lack of national leadership and control (ownership); b) little measurable impact on basic economic and human development indicators; and c) no sustainability.

B. Major Issues

In order to avoid Haiti's past experience with externally financed programs, the following issues need to be addressed:

  1. National ownership. Government must assume leadership of the strategic development efforts that the international community will support in Haiti. This will require strengthening aid coordination mechanisms, and improved skills, project identification, formulation and execution capacity.
  2. Impact. National programs with clearly defined targets must be formulated to provide a framework for external aid and appropriate mechanisms for joint monitoring and impact evaluation in which government and external agencies involved can participate.
  3. Sustainability. Development efforts have had little continuity following the withdrawal of international support. Insufficient attention has been paid to the economic, social, environmental and cultural sustainability of development efforts. Ensuring the technical, financial and managerial capacity of Haitian counterpart agencies to continue development initiatives is critically important. Involvement by counterpart agencies in selection of development projects (public central, public decentralized, private sector, or NGO) needs to be addressed in the project formulation stage. Strengthening and decentralizing decision-making to municipal bodies should be carried out. Democratizing the process of external cooperation is also urgent.

C. Medium-term Issues

Haiti has lived in a state of political, economic and social emergency for many years. The state of emergency still exists today. An effort must be made to ensure that programs designed for the emergency period can then evolve to serve medium-term development needs.

Two elements are necessary: first, a commitment by donor agencies to long-term development objectives and to the continuity of aid flows; and second, designing strategies at the outset of projects for moving from emergency to medium-term goals. These should include attention to capacity-building and to the sustainability of projects.

D. Technical Cooperation

The government will require tools to identify, formulate, execute and evaluate the programs and projects of the EERP. Technical cooperation in the EERP will be mainly project-related, but advisory services for government decision-makers will also be required.

Apart from the technical cooperation projects that will meet sectoral requirements, the following areas will require cooperation: external assistance coordination, programming, implementation and evaluation mechanisms; governance issues; macroeconomic management; policy formulation at central and sectoral levels; state reform, including civil service reform; and decentralization.

Technical assistance projects in these areas should be implemented as soon as necessary funding becomes available from interested agencies.

Implementation Mechanisms

The Government of Haiti should consider various alternative operational mechanisms that would more promptly deliver basic services, and provide relief to the population in a short period of time. In order to achieve this goal, various alternatives to executing projects should be considered, such as the creation of an Emergency Implementation Unit (EIU). This unit should have the necessary staffing and technical expertise to carry out emergency works. Its dimensions would reflect the amount of resources to be channeled through this mechanism. The EIU should function as an autonomous body. A Steering Committee would be named that would be chaired by the Prime Minister with the participation of other cabinet members. A national director should be designated by government.

The EIU should have flexible operational mechanisms and sound project selection criteria to facilitate the EERP implementation within the current context of Haiti. Necessary auditing and financial controls should be established. Works envisaged under the EERP should be carried out by contractors, NGOs, and national and international agencies in accordance with agreements reached by the government with donors. It is anticipated that the national agencies would select projects and provide technical supervision of the implementation.

The EERP is coordinated by the Inter-American Development Bank,
Mr. Richard K. Archi,
Mail Stop E0607,
1300 New York Avenue, N.W.,
Washington, D.C. 20577,

Tel: 202/623-1988

IDB-External Affairs: Daniel Drosdoff, 202/623-2407