“Reconstructing to Rebalance Haiti after the Earthquake”

TESTIMONY

“Reconstructing to Rebalance Haiti after the Earthquake”

Robert Maguire, Ph.D.
Trinity Washington University And The United States Institute of Peace (USIP)

Testimony presented before the Subcommittee on International Development, Foreign Assistance, Economic Affairs and International Environmental Protection of the US Senate Committee on Foreign Relations
 

February 4, 2010

EXCERPTS

(document below)

1. Welcoming Dislocated Persons: A de facto Decentralization

Since the quake, some 250,000 Port-au-Prince residents have fled the city, returning to towns and villages from which they had migrated or where they have family. An estimated 55,000 have shown up in Hinche in Haiti’s Central Plateau; the population of Petite Riviere de l’Artibonite has swelled from 37,000 to 62,000; St. Marc’s 60,000, has swollen to 100,000. The flight of Haitians away from a city that now represents death, destruction and loss might become a silver lining in today’s very dark cloud. If that is to be the case, however, we – both the government of Haiti and its international partners – must catch up with and get ahead of this movement. Already underdeveloped rural infrastructures and the resources of already impoverished rural families are being stretched. The provision of basic services to these displaced populations is an urgent priority. If conditions in the countryside are not improved, the displaced will ultimately return to Port-au-Prince, to replicate the dangerous dynamics of earlier decades.

To catch up and get ahead of this reverse migration, we should support an idea proffered by the Government of Haiti in Montreal last week: the reinforcement of 200 decentralized communities. As soon as possible, “Welcome Centers” might be stood up in towns and villages. They can be temporary, to be made permanent later. They can serve as decentralized ‘growth poles’ that offer multiple services, including relief in the short term, with health and education facilities attached. Let us not forget that Haiti has lost many of its schools and among those fleeing the devastated city are tens of thousands of students. Twenty five percent of Haitian rural districts do not have schools. And schools that exist outside Port-au-Prince are usually seriously deficient. The reverse migration we are seeing today offers a golden opportunity to rebalance the education and health system of Haiti.

The centers can coordinate investment and employment opportunities, as well as state services including robust agronomic assistance to farmers. Haiti’s planting season is almost here and now more than ever the country needs a bountiful harvest. Displaced people working as paid labor can reinforce Haiti’s farmers.

Infrastructure needs to be rebuilt – or built for the first time - including schools, health clinics, community centers, roads, bridges and drainage canals. Hillsides need rehabilitation, particularly with vegetative cover and perhaps even stone terraces. Providing work for not just the displaced, but to those they are joining in towns and villages throughout Haiti, will go a long way toward rebalancing Haitian economy and society, and toward repairing a social fabric ripped to shreds by decades of neglect and subsequent migration. This is an opportunity that must be seized.

2. Support the Creation of a National Civic Service Corps

Since 2007, various Haitian government officials and others have been working quietly on the prospect of creating a Haitian National Civic Service Corps. Citizen civic service is mandated in Article 52-3 of the Haitian constitution and, even before the quake, the idea of a civic service corps to mobilize unemployed and disaffected youth seemed attractive. Now is the time for this idea to take off. As I have recently written, a 700,000-strong national civic service corps will rapidly harness untapped labor in both rural and urban settings, especially among Haiti’s large youthful population, to rebuild Haiti’s public infrastructure required for economic growth and environmental rehabilitation and protection; increase productivity, particularly of farm products; restore dignity and pride through meaningful work; and give Haitian men and women a stake in their country’s future. It will also form the basis of a natural disaster response mechanism.

If this all sounds familiar, it should: the idea of a Haitian National Civic Service Corps parallels the same thinking that went into the creation of such New Deal programs as the Works Progress Administration (WPA) and the Civilian Conservation Corps (CCC).

We have seen what these programs did to help the United States and its people stand up during a difficult time.

In the aftermath of the storms that devastated Haiti in 2008, Haitian President Prèval asked not for charity, but for a helping hand to allow Haitians to rebuild their country. Today he is making a similar point. Here is more symmetry between the Haiti and the U.S. As Harry Hopkins, the legendary administrator of the Works Progress Administration, pointed out: “most people would rather work than take handouts. A paycheck from work didn’t feel like charity, with the shame that it conferred. It was better if the work actually built something. Then workers could retain their old skills or develop new ones, and add improvements to the public infrastructure like roads and parks and playgrounds.” Let’s help Haiti restore its balance by supporting a national civic service corps that can accomplish the same for Haiti and its people as our New Deal programs did in the United States decades ago.

To reiterate, as was the case with our New Deal, Haiti’s civic service corps must be a ‘cash-for-work’ initiative. Cash-for-work will inject serious liquidity into the Haitian economy and stimulate recovery from the bottom-up. Already there are various entities employing Haitians in a variety of cash-for-work programs. This Monday, for example, the UNDP announced that it has enrolled 32,000 in a cash-for-work rubble removing program; a number expected to double by tomorrow. Coordination of existing efforts within an envisaged national program will be essential to maximizing how Haiti can be built back better – by its own people, with everyone wearing the same uniform.

A special commission, similar to those established by President Prèval in 2007 to engage Haitians from diverse sectors to study and make recommendations on key issues confronting his government, might be established to oversee this coordination. (Other special commissions could be mounted to tackle other topics or needs and as a means of expanding the Haitian government’s human resource circle.) Such a commission could be enlarged to include representatives of key donors. A central figure like Harry Hopkins will have to lead the endeavor. Perhaps such a figure could emerge from Haiti’s vaunted private sector. In any case, let’s avoid a repetition of the cacophony of feel good, flag-draped projects.

3. Strengthen Haitian state institutions through accompaniment, cooperation and partnership

At the Senate Foreign Affairs Committee hearing on Haiti held last week, witnesses spoke of the need to rebuild the Haitian state from the bottom up, and of working with Haitian officials – not pushing them aside. I agree with these points whole-heartedly. This is not the time to impose governance on Haiti – that is a 19th century idea unfit for the 21st century. This is an opportunity to help strengthen Haiti’s public institutions, not to replace them.

As pointed out above, the capacity of the Haitian state, never strong to begin with, has deteriorated progressively over the past 50 years. In recent years that was due in part to international policies that circumvented state institutions in favor of private ones – both within Haiti and from beyond, and left the resource-strapped government virtually absent in the lives of its citizens. In the aftermath of the quake, we see starkly the results of the decimation of the Haiti state. The already weak state has been further set back by the death of civil servants and the loss of state facilities and physical resources. In this context, the government of President Rene Prèval and Prime Minister Jean Max Bellerive has taken much criticism for its response – or lack thereof – in the past few weeks.

It is easy to kick someone in the teeth when he or she is already on the mat. Rather than swinging our foot, however, we should offer our hand. This is the time of the Haitian government’s greatest need. Achieving cooperation and partnership, as pointed out by Canadian Prime Minister Harper at the recently-held Montreal Conference, is the biggest concern. Over the past four years, the Prèval government has won praise internationally – and among most in Haiti – over its improved management of the affairs of the state. Political conflict, though still extant, has diminished considerably. Haiti’s terribly polarized society is a little less polarized today. Moderation and greater inclusion – not demagoguery and a winner-takes-all attitude – have worked their way into the ethos of the Haitian political culture. Partnership to strengthen the Haitian state was on the horizon following the ‘new paradigm for partnership’ agreed to at the April 2009 Donors Conference.

Let’s stay that course. Generations of bad governance and a zero sum political culture are not turned around overnight.

Quietly, but steadily in the post-quake period, the Haitian government has been picking itself up by its bootstraps beyond the photo-ops and glare of the cameras to reassemble, and then to reassert, itself. Still, given the magnitude of this catastrophe, the government is overmatched. Any government would be. This is not the time to cast aspersions. It is the time to work in partnership and to accompany Haitian leaders through their time of loss and sorrow, into a more balanced and better future.

4. Get Money into the Hands of Poor People

In 1999, Peruvian economist Hernando de Soto estimated that there was $5.2 billion in ‘dead capital’ in Haiti, shared among 82 percent of the population. Of this sum, $3.2 billion was located in rural Haiti. This amount dwarfed by four times the total assets of Haiti’s 123 largest formal enterprises. This capital, principally in the hands of poor people in the form of property, land, and goods, is considered ‘dead’ because it cannot be used to leverage further capital for investment and growth. To free it up, clear titling would be required along with a reduction of red tape and corruption, and a brand newattitude toward Haiti’s most vibrant form of capitalism – its’ informal economy – and the poor entrepreneurs who make it work.

Doubtless, you have seen post-quake stories of how Haiti’s grassroots entrepreneurs began rebounding within days.

A key to Haiti’s recovery – and, yes, to its rebalancing – is to get capital into the hands of grassroots entrepreneurs – be they still in Port-au-Prince or elsewhere in the country. Formalizing dead capital – which will be a long, tedious and conflictive path, but one that perhaps can be facilitated now through such steps as the issuance of provisional land and property titles that subsequently are fully formalized – is but one way of getting liquid assets into poor people’s hands. Others, more expeditious, include:

• More small loans (microcredit) to entrepreneurs, particularly those who produce something, including farmers. Farmers with capital will not just produce more food, but will increase employment. Government studies indicate that a 10% increase in man-hours on farms will create 40,000 new jobs. One strong candidate to improve microcredit throughout Haiti is an organization called FONKOZE. With more than 33 branches country-wide, it serves some 175,000 members, mostly among those who make – or made prior to their engagement with microcredit - $2.00 a day or less. FONKOZE also facilitates the efficient and lower cost decentralizing of the flow of funds sent to Haiti from family abroad.
  
• Haiti must now benefit from a conditional cash transfer (CCT) program. Brilliantly popular in such places as Mexico and Brazil, CCT programs serve as a means of transferring cash to the poorest of the poor, conditioned upon the children of poor families attending quality schools and fully operational clinics. Mexico’s program is largely rural; Brazil’s more urban-oriented. In both cases, they have succeeded in assisting millions of poor families improve living standards while sending their children to schools and clinics. As such, CCTs have invested in future human resources. Such a program in Haiti could accomplish these goals, but only if Haiti’s educational and health systems are extended into rural areas (helping to rebalance) and upgraded in existing locations (helping to rebuild). Importantly, CCT programs provide the government with the challenge/opportunity of being a positive presence in the lives of citizens. In Haiti, this is essential as a means of enabling the government to move from being largely absent to being positively present in the lives of citizens, and to demonstrate therefore that there are tangible fruits of democratic governance.

5. Seek-out and Support Institutions, Businesses, and Leaders who work toward Greater Inclusion, Less Inequality, and Enact Socially-Responsible Strategies for Investing in Haiti.

One cannot discuss the future of Haiti without considering the prospect of external investment to create factory jobs, particularly in view of the HOPE II legislation and its potential benefits. Beyond any doubt, factory jobs should be a part of Haiti’s future. Already, some of the assembly plants in Port-au-Prince are back in operation, to the satisfaction of both owners and workers. In this regard, support should be given to the “Renewing Hope for Haitian Trade and Investment Act for 2010” introduced by Senators Wyden and Nelson. But, as this legislation is considered, three important points must be kept in mind if this job creation strategy is to be a plus in helping Haiti to rebalance, ‘build back better’ and avoid mistakes of the past.

First, the fiasco of the 1980’s ‘Taiwanization’ period must not be repeated. Universal free education and rural investment are important, and though they will not precede assembly investment, they must robustly parallel it and eventually get ahead of it. Investment in Haiti should not ignore decentralized agri-business possibilities and the economic growth and development it can bring through jobs and the infusion of cash into the Haitian economy.

Second, assembly plants cannot be concentrated largely in Port-au-Prince. If nothing else, the shattered infrastructure of the city should serve as an incentive for decentralization. Haiti has at least a dozen coastal cities that either already have a functioning, albeit usually rudimentary, infrastructure or where a port and support infrastructure can be built – perhaps at a lower costs than Port-au-Prince. Decentralization to coastal cities and towns offers Haiti and investors an opportunity to undo the damage begun fifty years ago by Papa Doc’s insidious centralization in Port-au-Prince and to rebalance the prospects for economic growth and infrastructure development (including electricity) to all of Haiti.

Third, investors, owners and managers must be mindful of the fact that Haitian workers are more than plentiful cheap labor. As Secretary of State Clinton said at the April Donors’ Conference, “‘talent is universal; opportunity is not.” A key to Haiti’s renaissance is to improve the opportunity environment for all of its people. Haiti’s Diaspora offers bountiful evidence of what can be achieved when opportunities are twinned with talent.

Jeffry Sachs has equated factory jobs in Bangladesh with the first rung on a ladder toward greater opportunity and development. In Haiti, however, the ladder for most factory workers, in view of their survival wages juxtaposed with a constantly increasing cost of living and the absence of any public social safety net, has a single rung. Haiti’s opportunity environment will be improved considerably:

• If investors, owners, and mangers recognize that Haiti’s workers have legitimate aspirations to improve their lives, and their honest days’ work should be means for that, and;
  
• If investors, owners and managers follow that recognition with actions that demonstrate socially responsible investing and public-private partnerships that improve workers status and conditions, and;
  
• If the Haitian state has the strength and resources to become and remain a positive presence in workers lives by providing services to them and their children, particularly in education, health, and safety from gangs and other criminal elements whose activities are often financed by narcotics trafficking.

“Reconstructing to Rebalance Haiti after the Earthquake”