Academic journal article Journal of Haitian Studies

Haiti: Where Has All the Money Gone?

Academic journal article Journal of Haitian Studies

Haiti: Where Has All the Money Gone?

Article excerpt

Introduction: Foreign Assistance to Haiti

Haiti has long had a volatile relationship with the United Slates and other foreign countries. For the past century or more, reforms have been imposed largely by outsiders, leaving the country with little ownership of the development of economic and political systems. Haitians were left with a "prickly nationalism," distrust of foreigners, and an economy largely dependent on foreign assistance.1

By 1970, foreign assistance constituted 70 percent of the Haitian national treasury revenues; aid levels rose to $35.5 million in 1975.2 Largescale corruption meant that this aid never reached the Haitian people and the economic situation remained largely unchanged.3 As the poorest country in the Western hemisphere, Haiti's GDP per capita declined at an average rate of 2 percent annually. One study in 1984 estimated that less than 25 percent of the population lived above the absolute poverty line. Haiti also suffered from a high rate of population growth, a high degree of income inequality, deforestation over 97 percent of the country, and significant soil erosion.4

The volatility of official foreign aid to the Haitian government during the latter half of the twentieth century decimated an already weak public sector. To date, the Haitian government has few resources and little revenue. In 2002, the government budget (for a country of almost ten million) was roughly equivalent to that of the town of Cambridge, Massachusetts (population 100,000)/ In 2008, the net foreign assistance to Haiti was $92.30 per capita. Yet only 3 percent of bilateral aid went to budget support for the Haitian government.1' Funding for budget support has also been also extremely volatile, even during years when foreign assistance to Haiti remained relatively stable. In F Y (fiscal year) 2010 it increased from $93.6 million to $225 million. As of June 2011, it was only $48.8 million for FY 2011/ This unpredictability further complicates the ability of the Haitian government to create long-term plans for recovery and economic progress.

In this paper, we look at the flow of money to Haiti in the aftermath of the earthquake that struck Haiti on January 12, 2010. Some S3 billion was spent by the government of the United States; another S3 billion was spent by foreign governments, and an estimated S3 billion was donated by private citizens. We find that nongovernmental organizations (NGOs) and private contractors were the intermediate recipients of most US government funds. The government of Haiti received just 1 percent of humanitarian aid and somewhere between 15 and 21 percent of longer-term relief aid. As a result, NGOs and private contractors in Haiti built an extensive infrastructure for the provision of social services. Yet these entities appear to have limited accountability; despite the use of public funds, there are few evaluations of the services delivered, the lives saved, or the mistakes made. Most importantly, Haitians are disillusioned with the overall lack of progress, and with the lack of transparency and accountability.

HISTORICAL CONTEXT: US RELATIONS WITH HAITI

Haiti's instability is fueled by a long tradition of failed political and economic development, in addition to the volatile relationship with the United States and other countries. French colonialism and the US occupation (1915-1934) left the country with a struggling economy and little local control over industry or trade. The United States ended its official occupation without a process to transition the government, and few efforts were made to build local institutions or prepare Haitians for leadership. The United States kept control of Haiti's national finances until 1947.8 Even the Haitian army was created by an act of the US Congress, although it never faced a non-Haitian enemy and was disbanded in 1995.'' Haitians were left with little control over their economy and their natural resources.10

The economic situation has been exacerbated by intense political instability; Haitian history is characterized by short presidencies and periodic foreign interventions. …

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