Is aid doing Haiti more harm than good?



There is a flicker of hope over the horizon for people like Eddy, with Haitian authorities preparing a partial credit guarantee fund, which they hope will bring down interest rates to affordable levels on $140 million in loans to allow small businesses and entrepreneurs to get back on their feet.

But the engine of foreign investment, on which Bellerive is depending, is still sputtering.

There have been some significant projects announced, the biggest a $100 million investment in the state telecoms company by Vietnamese military-run company Viettel.

A South Korean textile manufacturer, Sae-A Trading Company, announced it would form part of a project to develop an industrial park and garment making operation in Haiti, aimed at creating 10,000 jobs. Other garment manufacturers are also sniffing around, seeking out low wages as costs rise elsewhere, and after the U.S. Congress this year expanded duty-free access to the U.S. clothing market.

On the outskirts of the capital, building continued on a brand new $56.7 million electricity generation plant despite the earthquake, and the Haitian-South Korean joint venture plant is due to come on line in January.

But planned investments in hotels and tourism, with five chains interested before the earthquake, were swept away, said Jocelerme Privert, an economic adviser to the president.

Mulet says foreign investment is seriously held back by the absence of the rule of law, something he blames on the political and business elite who benefit from the status quo and lack political will to change.

All the reconstruction effort, all the investments, all that is being done on humanitarian assistance to the people… everything will be in vain unless the Haitians themselves lead in creating the rule of law in Haiti

The Caribbean nation, which lies just east of Cuba on half of the historic island of Hispaniola, has a reputation for corruption, tropical intrigue and explosive social and political violence, famously encapsulated in Graham Greene\’s novel \”The Comedians\”.

Dictators like Francois \”Papa Doc\” Duvalier and his son Jean-Claude \”Baby Doc\” teamed up with powerful local and foreign businessmen to keep the bulk of the mostly rural population crushed under grinding poverty.

\”The repugnant elite\”

Like the hospital owner, Savain, Richard Coles is a light-skinned member of the business elite, and he freely admits his peers have played an undistinguished role in their country\’s checkered past.

\”We never respect the rule of law, we easily conspire to overthrow the government but never to rebuild the country, we use our access to the national palace to further our business interests but we never go to the national palace to say \’do something for the people in Cite Soleil,\’\” he said, referring to the capital\’s infamous slum.

\”We spend our good money in the U.S. and not in Haiti,\” he added. \”The country gave us everything and we gave nothing in return.\”

And yet, Coles argued, the international community needs to stop seeing business leaders as a \”repugnant elite\” and collaborate with them to rebuild the economy.

Coles runs MultiTex, a branch of the sprawling family business that employs 3,000 people and turns out two million T-shirts a week for export to the United States and Canada.

What is lacking, whether in the chaotic NGO effort and in the private sector, is government leadership, he said in his office, sewing machines humming under strip lights on the factory floor below.

\”Everyone wants to do good, but the sum of so much goodwill is so pitiful,\” he said.

Coles wants a master plan from the government, some \”predictability\”, a sense of where the country is going, what sectors of the economy to invest it and some help in accessing the capital to invest.

\”Unless there is a master plan for Haiti, the Haitian private sector will keep on surviving, but will never be an actor for development,\” he said.

\”Once we have a plan, energies will be channeled to rebuild the country. With no plan, the energy will be wasted.\”

Since coming to power in 2006, Preval\’s government had gained a decent reputation abroad for promoting reforms and business. But it was crippled by by the quake, losing ministry buildings and scores of trained civil servants.

Even so, many quake victims grumble the government has been slow to attend to their needs, and even Mulet talked of the need for a \”renewal in the political energy\” and new leadership after presidential elections in November.

Sitting in his hill-top villa overlooking Port-au-Prince, Prime Minister Bellerive seems almost paralyzed by the challenge he faces. Government plans do exist but he acknowledges there is not the clarity there could be — something he blames squarely on the international community.

Even though Haiti has been following IMF programs for years Bellerive said a poverty reduction plan drawn up in 2006, and \”applauded by the whole world\”, was simply not financed.

\”We are not going to waste months preparing a plan without knowing who is going to finance it,\” he said.

Almost all the money that has flowed into Haiti since the earthquake has bypassed the government completely, much of it flowing through NGOs who do not even coordinate with the government, he said. Even the $11 billion that has been pledged over the next decade is uncertain to arrive and largely out of his control, he said.

\”I don\’t know how much and when it will come,\” he said. \”How are you going to plan for that?\”

So we come full circle, all the actors in Haiti almost overwhelmed by the scale of the problems. \”Everyone is blaming each other, but everyone is responsible,\” said Coles.

Perhaps when November\’s elections are out of the way, if there is macroeconomic stability and some more forceful leadership, business leaders say, there is still hope to get Haiti\’s reconstruction back on track and its private sector back on its feet.

But in October, with the vast bulk of the rubble still uncollected and the vast majority of survivors still living under canvas, there is little to give substance to those hopes.

The money that has come so far seems to washed over Haiti without leaving much behind, except more dependence on aid.

\”And when the money runs out, we are … \” Savain said grimly in his empty hospital, drawing his hand across his neck in a chopping motion.