Give Haiti trade and reform, not aid
By
Senior Writer
Jody Clarke Jan 22, 2010
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Even before last week's devastating
earthquake, Haiti
was in an awful state. The poorest country in the Americas, it has few paved roads,
while 80% of its people live on less than $2 a day. So the country "is
unusually ill-equipped to cope" with disaster, says The Economist. But
what can be done now?
"Haiti needs a new version of the
Marshall Plan," writes Andres Oppenheimer in the Miami Herald. The $550m
already earmarked by the United Nations may be less than 10% of the amount needed
to fund the cost of its reconstruction, never mind long-term economic
development. Economist Jeffrey Sachs in The New York Times agrees. He says that
between $10bn and $15bn should be spent on a five-year development programme.
The trouble is, more aid will only "lead
to more poverty, more corruption and less institutional capacity", says
Bret Stevens in The Wall Street Journal. "It's a potential bonanza for the
misery professionals of aid agencies and NGOs" who rely on poverty to keep
their own jobs. Indeed, a 2005 report from the World Bank states that "Haiti
has dysfunctional budgetary, financial or procurement systems, making financial
and aid management impossible".
Far better, argues Stevens, to empower
Haitians to make their own decisions, once the immediate tasks of rescue are
over. For example, the country has some of the most burdensome business
regulations in the world. It also received ten times as much in aid in 2007 as
it did in foreign investment. Overturning these problems would be a more
effective means of dragging it out of poverty. And that means strengthening the
government.
That will require US help. More than 70% of
Haitian exports go to the US,
putting the Obama administration in a unique position to alleviate suffering by
easing export tariffs. Some progress has been made – in 2006, overriding
protests from US textile
manufacturers, the US
granted tariff exemptions to Haitian-made clothing. As a result, by 2009, more
than two-dozen Haitian firms employed 24,000 people making T-shirts, men's
suits and more, writes Alec MacGillis in The Washington Post. Another useful
step would be to allow Haiti
to put up tariffs on US
rice. Until the 1980s, the county grew enough to feed itself. But, under
pressure to ease trade restrictions, by 2007, 75% of rice eaten in Haiti came from America,
according to Robert Maguire of Trinity
Washington University.
"National disasters,
as awful as they are, make you want to seize those moments, and use that awful,
awful opportunity to strengthen the ability of national and local authorities
to act for the benefit of their citizens," says Jordan Ryan, an assistant
administrator of the UN Development Programme in The Washington Post. Assisting
Haiti
is not just about humanitarian aid, agrees The Economist. "Haiti
was already a source of illegal migrants and a crossroads for drugs. Unless the
rudiments of government and a modern economy can be swiftly set up, both
problems will only get worse. That means the massive aid effort must focus on
more robust housing, hospitals and schools." Some hope for the future
might then be snatched from the jaws of this disaster.
Published in
Economics
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Jody Clarke
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