Tuesday, January 19, 2010

Guest Post: A Marshall Plan for Haiti?


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via Undiplomatic by Guest on 1/19/10

The following guest post was written by Jacob Francois, an entrepreneur with over eighteen years experience in the financial services industry, and owner of Lakay Financial International, Inc.  in addition to reaching out to the Haitian and Haitian-American communities via appearances on radio and television, Mr. François has served 7 years as a board member and two years as president of the Haitian-American Community Association (HACA) located in Chicago. He is also founder of Project 2000 International, a non-profit organization dedicated to providing assistance to Haitian children. The organization is responsible for securing donations in-kind, as well as monetary donations to purchase whatever is necessary to facilitate the education (school supplies, uniforms, shoes, etc.) of these youngsters whose families would otherwise be unable to provide these necessities for them. For more information about these organizations, please follow the above links.

Haiti has been struck by a terrible catastrophe far beyond its economic capacity. Immediate humanitarian assistance is essential, but Haiti will need more that just relief if it is to rebuild and prosper. For this reason, we at the Haitian Priorities Project propose a "Marshall Plan" for Haiti:

  • $5 billion to help the Haitian people rebuild their livelihood
  • $2 billion earmarked for the private sector
  • $1 billion for a 1500-megawatt electrical plant
  • $1.5 billion to rebuild various government compounds in the 10 departments
  • $1 billion for a communication system capable of providing at least 1 million land lines
  • $3 billion to rebuild 5,000 km of roads, connectors, sewers and provide garbage collection
  • $1 billion for 10 national airports in 10 departments
  • $1 billion for the agricultural sector
  • $2 billion for the school sector
  • $2.5 billion for economic development programs
  • $700 million for heavy machinery

In all, $20.7 billion per year for three years could put Haiti back on the path to becoming a modern nation. If we put this amount is the context of the United States GDP for 2009, the amount is less than 1/100th of 1 percent of the United States GDP.

The Marshall Plan from its inception, was known as the European Recovery Program, (ERP). The first phase of the program started in 1948 and ran through 1952. The United States implemented the ERP as a tool for rebuilding and creating a stronger economic foundation for countries in Western Europe.

Given the destruction of its infrastructure, Haiti would benefit from a similar plan, which could be dubbed the Haiti Recovery Plan (HRP), and without which Haiti may never be a viable nation.

Haiti is the most impoverished country in the Western Hemisphere with 80 percent of the population living under the poverty line and 54 percent in abject poverty. Two-thirds of all Haitians depend on the agricultural sector, mainly small-scale subsistence farming, and remain vulnerable to damage from frequent natural disasters, exacerbated by the country's widespread deforestation.

The economy has shown some signs of recovery in recent years, registering positive growth since 2005 after the ravages of hurricane Jeanne in 2004.  Several hurricanes damaged the entire system in 2008 as well as the transportation infrastructure and agricultural sector. Haiti has enough natural resources to build a viable nation, although capital investment is lacking and some natural resources possessed by Haiti are deemed strategic reserves to the United States. Haiti has bauxite, copper, calcium carbonate, gold, marble, hydropower and oil.

US economic engagement under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act, passed in December 2006, has boosted apparel exports and investment by providing tariff-free access to the US. HOPE II, passed in October 2008, has further improved the export environment for the apparel sector by extending most favored nation preferences to 2018; the apparel sector accounts for two-thirds of Haitian exports and about 8 percent of GDP. Remittances are the primary source of foreign exchange, equaling more than 15 percent of GDP and about twice the earnings from exports.

Haiti suffers from high inflation, a lack of investment, limited infrastructure, and a severe trade deficit. In 2005, Haiti paid its arrears to the World Bank, paving the way for reengagement with the Bank. Haiti has received debt forgiveness for about $525 million of its debt through the Highly-Indebted Poor Country (HIPC) initiative by mid-2009. The government relies on formal international economic assistance for fiscal sustainability.

The United States and France have a moral obligation to correct the wrongs against Haiti dating back to 1824, four years after the Monroe Doctrine was initiated. In 1824, France sent 65 ships to Haitian ports threatening to take the country back to slavery if an agreement was not signed to start paying 100 million francs to France on a yearly basis. At the time, Haiti had to shut down all government services including all the schools. This action had a profound impact on Haiti's development and on all subsequent government efforts to build viable institutions.

Without substantial new investment, Haiti will never come out of its terrible position. A government operating with less than $2 billion a year, of which 60% is from bilateral aid, will never be able to respond to the needs of a population of 10 million people.

The United States has in particular been helpful. At this juncture, however, if substantial investment is not made in Haiti, the epidemic of boat people to Florida will continue for a long time.

Our plea is to appeal to the humane compassion we know to exist in the Unites States, France, Canada, Venezuela, and all other countries to make their investments in the framework that was stated above in a length of time not to exceed three years. Otherwise, the spiral of misery will continue in Haiti for another two hundred years.

Photo:  UNDP Flickr Photostream using a CC 2.0 license

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