Can US Provide Coherent Strategy Combining Aid and Support for Business Growth in Haiti?

haitiThe commemoration of the January 12th 2010 earthquake in Haiti has seen numerous articles from various international and US newspapers showcasing actors involved in the Haiti post-earthquake drama as genuinely surprised at the lack of progress, accountability, and alleged waste of US$ 7.5 billion in assistance to Haiti.

From the beginning, Haiti and its Diaspora from all cross-sectors of the economic stratum have decried the ineffective strategies adopted by the international community, namely the US. Many predicted more of the same intangible solutions which were reached with minimal Haitian input, and which continuously bypass the very people whose lives are to be impacted.

Add to the mix, the panic engendered by Julian Fantino’s, a former Ontario, Canada Police Commissioner made Harper Government minister of International Cooperation, threat to freeze some US$ 1 billion in Canadian aid[1] to Haiti. Julian Fantino’s statements may have had ulterior motives beyond mere insensitivity and political incorrectness. Fantino was simply frank in articulating the Canadian International Development Agency (CIDA) shift towards openly tying its political interests and assistance directly to Canadian corporate interests. Subsequently, Fantino announced that CIDA needs to work more closely with, facilitate, and perhaps even co-invest with Canadian mining companies and energy extraction companies. And per usual, Haiti is the experiment and target because of Canada’s mining interests in Haiti.

Policies directly linked to match a country’s financial interests are not new. It is how donor countries operate, including the US Agency for International Development (USAID).  Fantino’s statements reiterated simple facts: foreign government assistance is tied to corporate and political interests. The Canadian Agency for International Development will likely be folded into the Department of Foreign Affairs and International Trade.

Many decried Fantino as insensitive and as a result he subsequently released a statement to quell the uproar caused by his undiplomatic remarks, but he did not back down “While the results of specific projects have largely met expectations, progress towards a self-sustaining Haitian society has been limited. Our government has a responsibility to maximize the value of Canadian taxpayer dollars”. In short, governments do not give money away to the world to reduce poverty. Further, an unstated fact: foreign assistance requires a return on investments.

After the Fantino statement, the US State department was quick to assure that the US stands by Haiti. But let’s pause for a moment to review the past 25 to 30 years. Though, there is no international perfect structural model for managing international assistance, the Scandinavians are applauded for their efficiency in the developing world. They run their aid programs out of their foreign-affairs departments. Britain also has a stand-alone agency that is equally admired.

Besides, the supposed independence of USAID is illusionary at most, especially when it comes to Haiti. USAID seems to apply laws, such the Bumpers Act amendment which clearly exempts Haiti, but is too narrowly interpreted and therefore severely limits US aid impact. This neither benefits the US taxpayers or the people of Haiti. In addition, the agency has become captive to NGOs through which it funnels nearly all Haiti funding assistance. The result is a staggering 4 million people in Haiti are food insecure, and an additional 1 million suffer from poor economic access to food according to the United Nation World Food Programme. These numbers represent a total of 5 million Haitians or half of the population is food insecure in a country with less than 10 million people and an over 70% unemployment rate.  Results clearly demonstrate that policies adopted by the US and other international actors over the past 30 years are not working. The proof is in the pudding and leaves the US and the international community with some serious soul searching to do.

Regine Barjon bill clinton

Regine Barjon with President BIll Clinton

The US is Haiti’s largest donor which leaves Haiti subject to US aid policies. Therefore, the US bears the responsibility to implement policies which must have the greatest impact on the most people, while taking into consideration local capacity and ability, with an eye towards growth and development. This began when President Clinton, who along with the president of Haiti, has lead the campaign that Haiti is open for business. Secretary Hillary Clinton has championed Haiti and introduced the concept of engineering the changes needed within USAID policy towards encouraging greater investments in Haiti with the Caracol project, currently lined up with more than $125 million in potential investments for the industrial park and some allied projects.

But changing the world perception of Haiti is only a start. USAID must reassess the whole of its economic involvement in Haiti to effect change. A clear goal must be defined not just by President Clinton, but policies must be enacted with a stated framework of operation adopted by Secretary Kerry and USAID’s administrator Rajiv Shah to reduce Haiti’s reliance on international aid.

There would have been little bemoaning today regarding the loss or the unaccountability of the US$ 7.5 billion aid package, had a fraction of these funds been invested in Private Sector Development to encourage local entrepreneurship, capacity building in both existing businesses and the development of new businesses to build capacity and to strengthen the government of Haiti.

The goal for the international community, led by USAID in this sphere, is to clearly establish the foundation towards building a collective tax base to support food security, public education, consistent energy generation and municipal solid waste collection services to better ensure healthcare and clean water, etc….

As taxpayers, Americans must decide that the return on their tax dollars investments equates with viable contribution to Haitian economic recovery and sustainability, which will then result in effective reduction of Haiti’s reliance on foreign aid. With no shortage of PhDs working in the halls of the US government, the international institutions do know how best to reduce poverty in Haiti:  viable policies which must be expanded and expedited to implement and finance private sector programs and projects which meet Haiti’s needs, capacities and assets to create jobs, ensure food security and to contribute to sustainable economic growth.

As Haiti’s donors take stock, so to must the government of Haiti work with its international partners to impose pragmatic policies that effect favorable change which will impact the lives of Haitians. Past policies must be revised in favor of new policies aimed at remediating economic ills to better establish a tax base which will allow the government of Haiti to meet its obligations to its people as is done by the US and every other country in the world. This is the only means towards ensuring a positive return on US Investment dollars. Can the US government implement a coherent strategy for both aid and supporting business growth in Haiti? Yes.

Haiti Earthquake Foreign Assistance Fund Summary

Official bilateral and multilateral donors pledged $13bn and, according to the UN Office of the Special Envoy for Haiti, almost 50% of these pledges ($6bn) have been disbursed. Private donations were estimated at $3 billion.

To date, US$7.5 billion in aid has been disbursed, with little or no accountability according to  the Canadian based Center for Global Development (CGD). The CGD asserts that the short answer is that the vast majority of funds disbursed have been paid to international NGOs and private contractors. The CGD estimates, 10 private contractors have received over $437 million. Over 75 percent of all funds disbursed by the United States Agency for International Development (USAID) went to firms inside the D.C.-Maryland-Virginia beltway, leading some to call this process a “gold rush.” While many of these private contractors and NGOs do great work, there is shockingly little information on how they use the funds. These entities have limited accountability and undergo few evaluations of services delivered, lives saved, or mistakes made.

US$ 579 million went to the GOH, representing less than 1% of total aid funding allocated to rebuild near-obsolete and destroyed public institutions. This aid package was not seen, nor grasped by the international community as an opportune means to strengthen the GOH and to build capacity.

US$ 36 million went to national NGOs, also less than 1% of aid funding. It should be noted that most International NGOs operating in Haiti tend to not hire Haitian nationals.

Contracts to Haitian firms were also less than one percent of total contracts awarded by USAID. The money that has been spent was done so largely without consultation of locals. Only a handful of all the Haitians we interviewed have ever been contacted by members of the foreign assistance community to discuss local needs.

regine barjonUS foreign assistance to Haiti is tied to commercial trade which obviously benefits the US, but has resulted in Haiti’s ever growing trade deficit. This large deficit is due to trade difference between imports and exports. For 2011-2012, Haiti imported is estimated at US$ 4.3 billion[2] primarily from the US, while its exports represented only US$ 825 million[3]. A direct impact of the trade imbalance is the need for Haiti to import over 60% of basic food staples, such as 300,000 tons of rice[4] annually, which represents an estimated market value of US$ 225 million per year[5] and benefits in large part a handful of Arkansas farmers. Haiti is the US fifth largest rice importer.

Regine Barjon

Monday, 25 March 2013

[1]  Canada is Haiti’s 2nd largest donor after the US, having contributed $1 billion since 2006; and Haiti is Canada’s 2nd largest international funding recipient.

[2] Calculated with a rate exchange of 40 gourdes (National Haitian currency) per US Dollar, – or 172 billion Gourdes; 33 billion gourdess equivalent to  US$ 825 million.

[3] Numbers for fiscal year 2010. Source: USDA Agricultural Report: Grain and Feed/Haiti. Authors:  Carlos G. Suarez & Nicolas Rubio : Rice Production and Trade update : www.…/Rice%20Production%20and%20Trade%2


[5] Based on the estimated import value of US$ 750 per ton of rice. Please note that as a commodity, the price of rice fluctuates.


  1. Georgianne Nienaber says

    This is one of the best explanations of what has gone wrong with foreign aid that I have seen.

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