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Please Click here to give
your impression on the performance of current and past
Haitian Governments on the economy
Since the demise of the Duvalier dictatorship in
1986, international economists have urged
Haiti to reform and modernize its economy. Under
President
René Préval, the country's economic agenda has included
trade and tariff liberalization, measures to control
government expenditure and increase tax revenues, civil
service downsizing, financial sector reform, and the
modernization of state-owned enterprises through their sale
to private investors, the provision of private sector
management contracts, or joint public-private investment.
Structural adjustment agreements with the
International Monetary Fund,
World Bank,
Inter-American Development Bank, and other international
financial institutions are aimed at creating necessary
conditions for private sector growth, have proved only
partly successful.
In the aftermath of the
1994 restoration of constitutional governance, Haitian
officials have indicated their commitment to economic reform
through the implementation of sound fiscal and monetary
policies and the enactment of legislation mandating the
modernization of state-owned enterprises. A council to guide
the modernization program (CMEP) was established and a
timetable was drawn up to modernize nine key parastatals.
Although the state-owned flour mill and cement plants have
been transferred to private owners, progress on the other
seven parastatals has stalled. The modernization of Haiti's
state-enterprises remains a controversial political issue in
Haiti.
External aid is essential to the future
economic development of Haiti, the least-developed
country in the
Western Hemisphere and one of the poorest in the world.
Comparative social and economic indicators show Haiti
falling behind other low-income developing countries
(particularly in the hemisphere) since the 1980s. Haiti's
economic stagnation is the result of earlier inappropriate
economic policies, political instability, a shortage of good
arable land, environmental deterioration, continued use of
traditional technologies, under-capitalization and lack of
public investment in human resources, migration of large
portions of the skilled population, and a weak national
savings rate.
Haiti continues to suffer the consequences of the 1991
coup and the irresponsible economic and financial policies
of the de facto authorities greatly accelerated Haiti's
economic decline. Following the coup, the
United States adopted mandatory sanctions, and the OAS
instituted voluntary sanctions aimed at restoring
constitutional
government. International sanctions culminated in the
May 1994
United Nations embargo of all goods entering Haiti
except humanitarian supplies, such as
food and
medicine. The assembly sector, heavily dependent on U.S.
markets for its products, employed nearly 80,000 workers in
the mid-1980s. During the embargo, employment fell from
33,000 workers in 1991 to 400 in October 1994. Private
domestic and foreign investment has been slow to return to
Haiti. Since the return of constitutional rule, assembly
sector employment has gradually recovered with over 20,000
now employed, but further growth has been stalled by
investor concerns over safety and supply reliability.
Please Click here to give
your impression on the performance of current and past
Haitian Governments on the economy
If the political situation stabilizes, high crime levels
reduce, and new investment increases, tourism could take its
place next to export-oriented manufacturing (the assembly
sector) as a potential source of foreign exchange.
Remittances from abroad now constitute a significant source
of financial support for many Haitian households.
Haiti's real
GDP growth turned negative in FY 2001 after six years of
growth. Real GDP fell by 1.1% in FY 2001 and 0.9% in FY
2002. Macroeconomic stability was adversely affected by
political uncertainty, the collapse of informal
banking cooperatives, high
budget deficits, low investment, and reduced
international capital flows, including suspension of IFI
lending as Haiti fell into arrears with the Inter-American
Development Bank (IDB) and World Bank.
Haiti’s economy stabilized in 2003. Although FY 2003
began with the rapid decline of the gourde due to rumors
that
U.S. dollar deposit accounts would be nationalized and
the withdrawal of fuel subsidies, the government
successfully stabilized the gourde as it took the
politically difficult decisions to float fuel prices freely
according to world market prices and to raise interest
rates. Government agreement with the
International Monetary Fund (IMF) on a staff monitored
program (SMP), followed by its payment of its $32 million
arrears to the IDB in July, paved the way for renewed IDB
lending. The IDB disbursed $35 million of a $50 million
policy-based loan in July and began disbursing four
previously approved project loans totaling $146 million. The
IDB, IMF, and
World Bank also discussed new lending with the
government. Much of this would be contingent on government
adherence to fiscal and monetary targets and policy reforms,
such as those begun under the SMP, and Haiti’s payment of
its World Bank arrears ($30 million at 9/30/03).
The IMF estimates real GDP was flat in FY 2003 and
projects 1% real GDP growth for FY 2004. However,
GDP per capita-- $425 in FY
2002-- will continue to decline as population growth is
estimated at 1.3% p.a. While implementation of governance
reforms and peaceful resolution of the political stalemate
are key to long-term growth, external support remains
critical in avoiding economic collapse. The major element is
foreign remittances, reported as $931 million in 2002,
primarily from the U.S. Foreign assistance, meanwhile, was
$130 million in FY 2002. Overall foreign assistance levels
have declined since FY 1995, the year elected government was
restored to power under a UN
mandate, when over $600 million in aid was provided by the
international community.
Workers in Haiti are guaranteed the right of association.
Unionization is protected by the labor code. A legal minimum
wage of 36 gourds a day (about U.S. $1.80) applies to most
workers in the formal sector.
Please Click here to give
your impression on the performance of current and past
Haitian Governments on the economy
U.S. Economic and Development Assistance
Political insecurity and the failure of Haiti's governments
to invest in developing the country's natural and human
resources attribute significantly to the country's current
state of underdevelopment. U.S. efforts to strengthen
democracy and to rebuild Haiti's economy aim to rectify this
condition. The U.S. has been Haiti's largest donor since
1973. Between FY 95 and FY 99, the U.S. has contributed
roughly $884 million in assistance to Haiti. These funds
have been used to support programs that have addressed a
variety of problems. Among the initiatives funds have
supported are:
Food assistance programs that include a school lunch
program that feeds around 500,000 children daily.
Agricultural development programs that have endeavored
to revitalize Haiti's coffee sector and to help thousands
of Haitian farmers adopt sustainable agricultural
practices and protect the environment.
Teacher training programs that have included 6,000
educators at the primary and secondary level.
Population programs that have expanded modern family
planning practices in many rural areas.
Health care programs that have supported child
immunization and have helped provide primary care to
nearly half of the Haitian population.
In addition to financial support, the U.S. provides human
resources. U.S. Peace Corps volunteers returned to Haiti in
1995, largely focusing their efforts on income generation
programs in Haiti's rural areas. Many private U.S. citizens
travel regularly to Haiti or reside there for extended
periods to work in humanitarian projects.
Haiti has been plagued for decades by extremely high
unemployment and underemployment. The precipitous decline in
urban assembly sector jobs, from a high of 80,000 in 1986 to
fewer than 17,000 in 1994, exacerbated the scarcity of jobs.
To revitalize the economy, U.S. assistance has attempted to
create opportunities for stable sustainable employment for
the growing population, particularly those who comprise the
country's vast informal economy. A post-intervention
transitional program of short-term job creation principally
in small towns and rural areas provided employment to as
many as 50,000 workers per day throughout the country. More
recently, programs that help to increase commercial bank
lending to small- and medium-scale entrepreneurs, especially
in the agricultural sector, have helped to create jobs and
foster economic growth.
Additional U.S. efforts in economic revitalization
include the establishment of the U.S.-Haiti Business
Development Council, an Overseas Private Investment
Corporation commercial loan program, and inclusion of Haiti
within the Caribbean Basin Initiative. These efforts all
provide greater market opportunities for American and
Haitian businesses. Current Congressional prohibitions on
providing assistance to or through the Haitian Government
has accelerated the move to private voluntary agencies as
contractors to oversee use of U.S. aid funds.
GDP: purchasing power parity - $9.2 billion (1999
est.)
GDP - real growth rate: 2.4% (1999 est.)
GDP - per capita: purchasing power parity - $1,340
(1999 est.)
GDP - composition by sector:
agriculture: 32%
industry: 20%
services: 48% (1998 est.)
Population below poverty line: 80% (1998 est.)
Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices): 9% (1999 est.)
Labor force: 3.6 million (1995)
note: shortage of skilled labor, unskilled labor
abundant (1998)
Labor force - by occupation: agriculture 66%,
services 25%, industry 9%
Unemployment rate: 70%; widespread
underemployment; more than two-thirds of the labor force do
not have formal jobs (1999)
Budget:
revenues: $323 million
expenditures: $363 million, including capital
expenditures of $NA (FY97/98 est.)
Industries: sugar refining, flour milling,
textiles, cement, tourism, light assembly industries based
on imported parts
Industrial production growth rate: 0.6% (1997
est.)
Electricity - production: 728 GWh (1998)
Electricity - production by source:
fossil fuel: 55.63%
hydro: 41.62%
nuclear: 0%
other: 2.75% (1998)
Electricity - consumption: 677 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products:
coffee,
mangoes,
sugar cane,
rice,
maize,
sorghum;
wood
Exports: $322 million (f.o.b., 1999)
Exports - commodities: manufactures, coffee, oils,
mangoes
Exports - partners:
US 86%,
EU 11% (1998)
Imports: $762 million (c.i.f., 1999)
Imports - commodities: food, machinery and
transport equipment, fuels
Imports - partners: US 60%, EU 12% (1998)
Debt - external: $1 billion (1997 est.)
Economic aid - recipient:
$730.6 million (1995)
Currency: 1 gourde (G) = 100 centimes
Exchange rates: gourdes (G) per US$1 - 18.262
(January 2000), 17.965 (1999), 16.505 (1998), 17.311 (1997),
15.093 (1996), 16.160 (1995)
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