1

Poverty in Haiti:

Challenges and Opportunities

o Ankita Bhato Doaa Althalathinio Dong Joo Kimo Sam Nickell

Source: Global Images

(Source: Operation World: http://www.operationworld.org/haiti)

Background of Haiti

The major problems of Haiti include – High population, food insecurity, natural disasters, low wages, high youth unemployment, and political instability.

Population :10.57 million Distribution:

• Port-au-Prince - 22% • Rural areas- 52%• Other urban areas – 26%

2014- GDP: 8.713 Billion USD (Current US$)o GDP/Capita: 824.2 USD (Current US$)

Historical Context Revolution and independence – 1805o Led to the destruction of the plantation economy o Loss of capital, labor, and knowledge.

Emergence of new elite Continued extraction of resources from Haitian citizens.o Predatory state.

Land reform and inheritance laws- 1809 Farm size per citizen significantly reduced. This has led to over-farming and soil

degradation.

Duvalier Dynasty: 1956-1986o Francois Duvalier and Jean-Claude Duvaliero Continuation of predatory state. Consolidated military and government sectors

under the rule of the president.o By some estimates, family pocketed $1.6 billion of government funds.

Poverty in Haiti

The first official national poverty line for Haiti was developed between October 2013 and February 2014.

It defined values of HTG 81.7 ($2.41 PPP of 2005) for poverty line and HTG 41.6 ($1.23 PPP of 2005) for extreme poverty line.

Haiti remains the poorest country in the Americas and one of the poorest in the world.

o Almost 70% of the population is either poor or vulnerable to falling into poverty.

o One million people live slightly above the poverty line and could be pushed below the line by a shock.

6

Source: World Bank

Poverty in Haiti

In 2012, around 6.3 million (58.5%) Haitians living in poverty, and 2.5 million (23.8%) living in extreme poverty.

Poverty is mainly rural, at 74.9%, vs. 50.3% in urban areas

Extreme Poverty

Declined between 2000 and 2012:

o Total from 31% to 24% o Urban areas from 21% to 12% o Rural areas, remained the same at 38%

The poorest groups of rural people in Haiti are:

o Female-headed households.o Landless farmers.o Fishers who don’t own boats.

Source: World Bank

8

Geographic Distribution of the Poor

Source: UNDP

Multidimensional Poverty Index

49.4% of population are multidimensional poor (25.2% urban, 65.9% rural).

22.6% of the population are vulnerable to multiple deprivations.

Source: OPHI

10

Geographic Distribution of Multidimensional Poor

Source: OPHI

Education

Service provision is highly privatized: 85% of schools and hospitals are private.

Though progress has been made in area of education, more than 23% of children do not attend primary education and; 75% do not attend secondary school.

Reasons for low education rate:

o High education fees: costs amount to 10% of total household budget.o Accessibility: Long distance to schools, bad roads (especially North

and South West of the country).o Quality of education remains a challenge, 85% of the teachers are not

qualified to teach at primary school level.

Health

By 2011, 5,899 had died of cholera outbreak, and 216,000 were infected.

One-third of Haitian women and children are anemic

Fewer than 1 woman in 10 in the lowest quintile benefits from assisted delivery, versus 7 in 10 among the better off.

- In 2012, 7 in 10 women aged 15-49 years do not seek medical support for lack of money, while 43% for lack of transport.- Household health expenditures are relatively limited (less than 3% of total household budgets).

Food Insecurity & Hunger2013 2.6 million Haitians were

continuously affected by food insecurity Early end of rainy season and El Niño

worsens it.

100,000 children under 5 suffer from Malnutrition. 20,000 of them suffer from severe

malnutrition leading to death.

Mud Cookies: to keep from starving.

Source: Global Images

14

Unemployment Unemployment affects 40% of the urban workforce, and almost

50% of the female workforce.

Youth unemployment – 60%, triggering economic and social concerns leading to high levels of discouragement

Low wage rate: 60% earn below minimum wage - Women earn 32% less than men

Causes of Poverty

Source: UNOCHA

Income Inequality Trap

Gini coefficient static at 0.61 since 2001, The richest 20% hold over 60% of the total income in the country.

80% of rural households engage in farming. The returns to agriculture are low and unreliable in Haiti due to environment degradation and farming technique. Lack access to markets to sell goods. Trade liberalization

Poor households have more children (labor) due to lack of pension, social security and savings.

Many poor households lack access to savings institutions.

Poverty and vulnerability due to risky environment and natural disasters. Lack income to deal with welfare cost, coping cost, and

catastrophic cost to deal with shocks.

Environmental Trap and Impact

Environmental Trap and Impact

Change in climate over the past four decadeso Annual mean temperature riseo Rainfall variability (extreme droughts and flood)o Sea level rise (influx of salt water restricts agriculture)o Increase in tropical storms and hurricaneso Threaten over 500,000 Haitians every year

In 2008 climatic disasters caused losses worth USD 200 million to agricultural sector and resulted in food insecurity to 3 million people.

In January 2010, an earthquake killed 220,000 and destroyed more than 130,000 houses. Estimated costs of damage and losses was $7.8 billion.

Deforestation and Floods (Vicious Cycle)o Most deforested country (forest cover 1.5%) causing soil degradation, erosion, flooding, desertification, and water scarcity.o Flood cause fertile soil wash away, intensify next flood, destroy crops and farmlando Climate change exacerbates all of the above

Poor disaster risk-management planso Lack of management system of governmento Few accessible and adequate shelters

Haiti’s current forestry policies does not incorporate strategies for climate change

Reforestation often fails due to soil erosion and poor people cannot wait for the trees to grow

Renewable energy technologies as alternative to charcoal has not been fully developed

Lack of Capacity to Adapt

Weak Political Institutions History of predatory state:

o Winner take all/ zero-sum game. Corruption Perception Index

o 2005 CPI- 1.8 o 2014 CPI- 19 o Has translated into a deficiency in rule of law, inhibiting economic

growth and poverty reduction. Limited capacity to provide basic goods- health services, education,

infrastructure.o Social spending only 5 percent of GPD. o Heavily dominated by non-state sector. Implementation is sporadic,

and quality is low. Aid volatility:

Bad Governance Trap

Political Instability, weak political institutions and corruption Poor governance exacerbate negative demographic and socioeconomic

outcomesWidespread poverty and inequalityRapid urbanization and high youth unemploymentUnable to manage the negative social outcomes of crime and violence,

especially in urban areas.

Inability to provide public goods- security, infrastructure, basic services. Underinvestment in human capital and poor expenditureLack of investment social services, education,

Aid Controlled by the Haitian

Reconstruction Fund (HRF)o Multi-donor fund.o IFADo CARE

Haitian government heads HRF committee, but funds are ensnared in a complex bureaucracy of donor agencies.o NGOs, UN, World Bank

Consequences:o Heavily dependent aid stateo Capacity building of the

Haitian state to assume development responsibilities takes a back seat to aid accountability and the auditing process.

o International development goals take precedence over plans of the Haitian state.

23

$13 billion in Earthquake Aid but that doesn't mean all that money is spent on the ground.

After two years of the quake, only 40% of $5.6 billion pledged by foreign governments had actually been released.

U.S. government has allocated $4 billion; $3 billion has already been spent, and the rest is dedicated to longer-term projects.

Much of the money went on travels, salaries, accommodation, security and transport for the NGO workers themselves.

The spending structure: vast majority of money being funneled through foreign contractors instead of Haitian government or local organizations. This has built-in inefficiencies, compounded by a lack of accountability and transparency.

Only 2.3% of reconstruction aid went to Haitian firms. Haitians have simply been excluded from the rebuilding of their own country.

Where did the money go?

Social Serviceso Improve access to primary education.o Greater access to safe water and sanitation.

Income: Economic reform througho Modernization and revitalizing agriculture.o Animal husbandry

Environment: By integrating the different actors working in Haiti Haiti Regeneration Initiative (HRI), 2010-2040 How it will work:

o Support and work with the Government of Haitio Identify, develop, implement wide range of sustainable

development solutions.Governance: Instill a sense of political will and hold politicians accountable.

o Push through participatory and realistic strategic policies o Update antiquated or deteriorating infrastructure.

Conclusion

References Carrillo, S. (2007). Assessing Governance and Strengthening Capacity in Haiti. World Bank Institute.

Echevin, D. (2011). Vulnerability and livelihoods before and after the Haiti earthquake. Washington, D.C.: The World Bank,

pp.1-4.

Haiti: The Challenges of Poverty Reduction. (1998). Document of World Bank, 1, pp.2-30.

International Monetary Fund (2014), Haiti: Poverty Reduction Strategy Paper, IMF Country Report No. 14/154.

International Monetary Fund, (2008). Haiti: Poverty Reduction Strategy Paper. IMF Staff Country Reports, 08(115), pp.8-13.

Jensen, D. and Lonergan, S. (2012). Assessing and restoring natural resources in post-conflict peacebuilding. Milton Park,

Abingdon, Oxon: Earthscan, pp.241-264.

Kraay, A. and McKenzie, D. (2014). Do poverty traps exist?. [Washington, D.C.]: World Bank, pp.2-5.

Lundahl, M. (2011). Poverty in Haiti: Essays on Underdevelopment and Post Disaster Prospects. Palgrave Macmillan.

Margesson, R. and Taft-Morales, M. (2010), Haiti Earthquake: Crisis and Response, Congressional Research Service, 7-5700.

O'Connor, D., Brisson-Boivin, K., & Ilcan, S. (2014). Governing failure: development, aid and audit in Haiti. Conflict, Security &

Development, 14(3), 309-330.

OPHI (2015), Global Multidimensional Poverty Index (MPI) At a Glance, Country Briefing, University of Oxford.

Singh, B. and Cohen, M. (2014). Climate Change Resilience: The case of Haiti. Oxfam Research Reports, pp.10-27.

References

UNDP (2014), Report Millennium Development Goals 2013: Haiti a New Look, Executive Summery.

UNOCHA (2013), HAITI Humanitarian Action Plan 2014.

Verner, D., & Egset, W. (2007). Social Resilience and State Fragility in Haiti. Washington, DC: The World Bank.

Verner, D., & Heinemann, A. (2006). Enbreve: Vol. 94. Social Resilience and State Fragility in Haiti: Breaking the Conflict-

Poverty Trap. Washington, DC: The World Bank.

WFP (2013), Haiti 2010-2013: Working Toward Sustainable solutions,

Williams, V. (2011). A Case Study of the Desertification of Haiti. JSD, 4(3).

World Bank (2014), Investing in People to Fight Poverty in Haiti: Reflections for evidence-based policy making.

Zanotti, L. (2010). Cacophonies of Aid, Failed State Building and NGOs in Haiti: setting the stage for disaster, envisioning the

future. Third World Quarterly, 31(4), 755-771.