In the six months since the devastating January 12 earthquake, the Inter-American Development Bank has mobilized an unprecedented amount of resources to help Haiti in its efforts to recover from the worst natural disaster ever to strike a country.
The world’s attention is still focused on Haiti’s humanitarian plight, epitomized by the teeming tent camps in Port-au-Prince and other areas hit by the quake. At the end of March the international community pledged billions of dollars for the Haitian reconstruction plan, but the impact of long-term aid is not easily discerned in the short-term.
If previous disasters in other regions of the world serve as precedent, Haiti will gradually recover. The government, which lost thousands of employees and nearly all its buildings, will regains its capacity to operate and reconstruction will gather pace. Taking IDB disbursements as a rough indicator, there are some encouraging trends.
In the months immediately after the earthquake, IDB-financed projects came to a virtual standstill. Since April, however, operations have resumed and disbursements have increased sharply. So far this year they have reached $48 million, and could rise to $150 million for the full 2010 – a record year for Haiti.
During the first few months, the IDB used money from existing operations to support relief efforts, such as the distribution of food and medical supplies. A water and sanitation project backed by the Spanish government yielded resources to distribute large rubber tanks known as bladders to supply water in tent camps. Another project helped buy solar energy panels for hospitals.
The IDB also helped Haitian government agencies get back on their feet, providing access to office space and supplies, telecommunications equipment and temporary staff. The IDB financed repairs to Haiti’s core inter-bank network, an indispensable step for reestablishing the financial payments system.
Getting children back in school was a top priority for the Haitian government. Using resources from another grant, the IDB financed the construction of nearly 600 classrooms on the grounds of schools wrecked by the earthquake. These light but sturdy structures have allowed tens of thousands of students to return to school under safer conditions.
As part of their negotiations to increase the IDB’s capital, in March the Bank’s Board of Governors agreed to provide Haiti $200 million a year in grants over the next decade. In light of Haiti’s unique circumstances, the Governors also agreed to cancel the country’s outstanding debt.
Recognizing that the Haitian government would need more help than ever before, the IDB assigned more staff to work on Haiti. Between the country office in Port-au-Prince and a new team in Washington, the IDB now has 50 people dedicated exclusively to Haiti.
The increased staffing levels will be needed to handle a growing volume of operations. The new annual allocation of resources is four times the total of grants made in 2007. To help speed up project execution, the IDB also streamlined its procurement procedures for operations in Haiti.
IDB resources promote economic, social and institutional development. In Haiti, these long-term investments support the expansion of the national transportation infrastructure, agricultural production, water and sanitation, electrification, natural disaster prevention and education. All IDB-financed projects include components to strengthen the Haitian government.
Since the earthquake the IDB has approved $90 million in new operations, including $50 million in budget support for the Haitian government to cover priority expenditures such as paying salaries and making transfers to schools and hospitals. New grants totaling $110 million are due to be submitted for approval in July, September and October.
New projects are concentrated in a handful of sectors identified as priorities in Haiti’s national development plan. Over the next few years the IDB expects to invest more than $150 million in upgrading primary and secondary roads, seeking to improve transportation between Haiti’s cities and regions. These projects will not only reduce transport operating costs and travel time but will also emphasize road maintenance, which has long been a key problem.
In a partnership with Spain, the IDB is the leading contributor in the water and sanitation sector in Haiti. The IDB plans to invest $65 million over the next few years to improve services in Port-au-Prince, in secondary cities and in rural communities, as well as to strengthen Haiti’s new water regulating agency, DINEPA.
Rural development is another priority for Haiti, as half its population depends on agriculture for a living. Over the next few years The IDB will invest $200 million in this sector, building on past projects involving irrigation, watershed management and crop pest and disease control, as well as modernizing Haiti’s land titling and registration system, one of the key obstacles to rural productivity.
One of the biggest commitments over the next few years will be education. Presently, nearly half a million school age children are not attending classes because their families cannot afford tuition fees. The Haitian government intends to reform the education system to expand access to free, quality education. The IDB will support this effort with $250 million in grants, leveraging them with contributions from other donors.
The IDB has long played a significant role in each of these sectors, accumulating expertise and building trust with Haitian authorities. These sectors are also crucial for another Haitian priority: decentralization. Haiti’s government has identified three areas beyond Port-au-Prince where it wants to promote regional development. The IDB will be especially active in two of them, the Northern Pole, centered around the city of Cap Haitien, and the Artibonite Pole, which includes Haiti’s principal agricultural area.
While housing has traditionally not been a focus of IDB work in Haiti, since January the Bank and its Multilateral Investment Fund (MIF) have approved grants for three separate projects to provide shelter to people left homeless by the earthquake. Two projects are underway: the Latin American NGO Un Techo Para Mi País is building wooden temporary houses in the southwestern city of Grand Goave., and Habitat for Humanity, a U.S. non-profit, is rebuilding and repairing core houses in the city of Cabaret, north of the capital. A third project, backed by a $30 million grant, will provide transitional housing for some 5,000 families in Les Orangers, in the northern outskirts of Port-au-Prince. The homes will be built on land provided by the Haitian government, with sufficient space for public areas, schools, health units, latrines and public showers.
The IDB is also promoting private sector development in Haiti, where around 70 percent of the labor force works in the informal economy. On one hand, the Bank and its affiliates are working to unlock credit for Haitian microenterprises and small and medium-size businesses. The MIF recently established a program to relieve microfinance institutions from earthquake-impaired loans. This will prevent microcredit from drying up at a time when hundreds of thousands of microentrepreneurs most need it.
In addition, the IDB is assisting the Haitian government in its efforts to attract more private sector investment in sectors with strong potential for job creation, such as garment manufacturing, agribusiness and tourism. The IDB will back the development of industrial parks and is encouraging international textile firms to establish operations in Haiti.
In all cases the IDB coordinates its activities with the Haitian authorities and other donors. As a major contributor to Haiti, the IDB is represented on the board of the Interim Haitian Reconstruction Commission, chaired by President Bill Clinton and Prime Minister Jean Max Bellerive.
- Peter Bate