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

DEVELOPMENT PROGRESS

Click here for a map of Haiti (120K JPG)

Haiti has made solid progress since the crisis of early 2004, when President Jean-Bertrand Aristide resigned and departed amid a wave of political conflict. The country 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 dramatically since 2004, and particularly 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 around gangs based in Cité Soleil and other Port-au-Prince slums, continue to undermine Haiti’s development.

Economic growth has resumed, but remains slow. Annual GDP growth increased to 3.2 percent in the year through September 30 (Haiti’s fiscal year), 2007,  the third successive year of growth since 2004, when the economy contracted by 3.5 percent  The IMF estimates that growth could rise to 4.0 percent or more in the in coming years, assuming stronger budget execution, continued improvement in security conditions, increased private investment, and growth benefits from improved US market access (especially textiles) under the Haitian Hemispheric Opportunities through Partnership (HOPE) Act.  . But even at this rate it will take many years for Haiti to catch up the ground lost in previous years, amid political instability and poor governance.  Haiti’s economy has contracted, in per capita terms, in three of the last four decades.  Real per-capita GDP fell by an average of 1 percent per year from 1961 to 2000, resulting in an overall decline of 45 percent over the period.

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

• GNI per capita is US$480 (2006, World Bank Atlas methodology)
• Haiti ranks 146 out of 177 countries on the United Nations Development Programme Human Development Index (2007)
• 54 percent of Haitians live on less than a dollar a day and 78 percent on less than $2
• Life expectancy is 53 years
• The infant mortality rate is 76 out of 1,000
• Nearly half the population is illiterate
• Less than 2 percent of forest cover remains.

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CHALLENGES AHEAD

Haiti’s government in November 2007 completed a comprehensive strategy paper that sets out ithe 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, DSNCRP), was developed through a broad consultative process under the leadership of the Ministry of Planning and External Cooperation.

The DSNCRP outlines three strategic pillars for action. These are:

(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 DSNCRP also emphasizes the importance of a stable macroeconomic framework and sound management of public resources, which depend on good governance and transparency.

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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), all other financing has been channeled 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 current strategy and planned activities in Haiti are outlined in the Interim Strategy Note (ISN) for FY2007-2008. The twin aims of this strategy are to help the government deliver rapid results, through jobs and basic services, and to foster the development of credible institutions over the longer term.  For the current fiscal year (July 2007 through June 2008) IDA is preparing a $15 million project to support urban community driven development and a $6 million project to strengthen teacher training. In January 2008, the Bank approved $7.4 million to support recovery from Tropical Storm Noel, which hit the country in October 2007.
 
Since January 2005, IDA has approved 11 projects for $206 million for Haiti. This comprises: two development policy operations and two technical assistance grants in support of economic governance reform; six investment projects; and a catastrophe risk insurance grant. Recent projects approved by the Bank’s Board include a  Rural Water and Sanitation project, the  Second Economic Governance Reform Operation, a  Catastrophe Risk Insurance project, and an  Education for All project.
 
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 ICF, 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$15 million in each of FY2006 and FY2007), textiles (Grupo M - US$20 million in FY2004, microfinance (MicroCredit National - US$0.4 million in FY2004), and a trade line to Capital Bank (US$0.3 million in FY2007). 
 
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.

With the expansion of its activities in Haiti, IFC has recently established a local presence. Its new staff will be co-located at the World Bank Country Office.

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, the DSNCRP.

Updated March 2008

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CONTACTS

Mathurin Gbetibouo, Country Representative in Port-au-Prince
Tel. 509-256-0844
E-mail: mgbetibouo@worldbank.org

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

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