Ayiti: Nan direksyon yon nouvo naratif - Dyagnostik sistematik peyi a

Public Disclosure Authorized Public Disclosure Authorized Haiti Toward a New Narrative Systematic Country Diagnostic Public Disclosure Authorized Public Disclosure Authorized Raju Jan Singh Mary Barton-Dock Haiti Toward a New Narrative Raju Jan Singh Mary Barton-Dock © 2015 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 18 17 16 15 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Contents Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii About the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Map. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Country Profile: What Makes Haiti Haiti?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Trends and Profile in Poverty and Shared Prosperity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Trends and Drivers of Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Sustainability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1. Country Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Opportunities and a Vision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 A Broken Social Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Vested Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Political Instability and Violence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Natural Disasters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Limited Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 2. Trends and Profile in Poverty and Shared Prosperity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Drivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 3. Trends and Drivers of Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Drivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 4. Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Social Tensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Macroeconomy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Recent Progress in Poverty Reduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 5. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Prioritization Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Quantitative Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Qualitative Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 iii Five Priority Areas for Policy Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Data Gaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Appendix A: Price Comparison Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Appendix B: Bottlenecks and Correlates of Firm Productivity . . . . . . . . . . . . . . . . . . . . . . . 95 Appendix C: Most Significant Data Gaps in Haiti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Boxes 1.1 Common Features of PIM in Donor-Dependent Countries. . . . . . . . . . . . . . . . . . . . . . . . 13 1.2 Product Market Concentration Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 2.1 Gender Inequalities in Haiti. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 3.1 Petrocaribe and Haiti. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 4.1 Drivers of Conflict in Haiti—An Empirical Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 4.2 Electricité d’Haïti (EDH). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 5.1 Benchmarking the Drivers of Shared Prosperity: An Application to Haiti. . . . . . . . . . . 73 5.2 Conflict and Welfare Spending in Haiti: What Could We Learn from Cross-Country Evidence?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 5.3 Bank-Sponsored Competition of Academic Papers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Figures 1.1 Inclusiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 1.2 Competition Intensity and Extent of Market Dominance, 2014–15. . . . . . . . . . . . . . . . . 17 1.3 Business Risks Related to Weak Competition Policies (by Components). . . . . . . . . . . . . 18 1.4 Concentration Levels Based on HHI in the 18 Most Important Haitian Product Markets, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 1.5 Vulnerability Index, 2013 (Average Score of Susceptibility, Coping and Adaptive Capacity). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 1.6 Migrants International Comparison, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 1.7 Migrants by Destination Country, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 1.8 Remittances, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 1.9 Foreign Flows, 1998–2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 1.10 Effects of Aid and Transfers on the Trade Balance, 1980–2013. . . . . . . . . . . . . . . . . . . . . 25 1.11 Imports of Goods and Services—LAC Region, 2011–13. . . . . . . . . . . . . . . . . . . . . . . . . . 26 1.12 Merchandise Imports, Aid and Remittances, 2005–14. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 1.13 Statistical Capacity Indicator, 2014 (0=Lowest, 100=Highest). . . . . . . . . . . . . . . . . . . . . . 27 2.1 Trends in Poverty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 iv Contents 2.2 Food Insecurity, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 2.3 Change in Composition of Labor Market, Workforce Ages 15+, 2007–12. . . . . . . . . . . . 36 2.4 Composition of the Labor Market, Workforce Ages 15+, 2012. . . . . . . . . . . . . . . . . . . . . 36 2.5 Breakdown of Haiti’s Population by Labor Status (2012). . . . . . . . . . . . . . . . . . . . . . . . . . 37 2.6 Born Elsewhere, 2011 (Total Population, Area of Living). . . . . . . . . . . . . . . . . . . . . . . . . . 38 2.7 Schooling of Adults Living Outside Department of Birth (15+), 2012. . . . . . . . . . . . . . . 38 2.8 Contribution to Extreme Poverty Reduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3.1 GDP, 1970–2013 (1970 = 100) (Constant 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3.2 GDP per Capita, 1970–2013 (1970 = 100) (Constant 2005). . . . . . . . . . . . . . . . . . . . . . . . 44 3.3 Annual GDP Growth vs. Occurrence of Natural Disasters, 1971–2013. . . . . . . . . . . . . . 46 3.4 Annual GDP Growth vs. People Affected by Natural Disasters, 1971–2013. . . . . . . . . . 46 3.5 Annual GDP Growth vs. Changes in Government, 1971–2013. . . . . . . . . . . . . . . . . . . . . 47 3.6 Economic Structure, 1970–2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 3.7 Decomposition of Value Added Growth by Sector, 1971–2013. . . . . . . . . . . . . . . . . . . . . 49 3.8 Urban Population, 1971–2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 3.9 Obstacles to Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 3.10 Change in Governance Indicators, 2004–13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 3.11 Credit by Sector, as of Q2 of 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 3.12 Logistic Performance Index, 2014 (1=Lowest, 5=Highest). . . . . . . . . . . . . . . . . . . . . . . . . 54 3.13 Port Tariffs Estimated Cost per TEU, 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 3.14 Electric Power Consumption, 2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 3.15 Informal Employment, 2012–22 (Working Age Population 15+). . . . . . . . . . . . . . . . . . . 56 4.1 Population Living in Flood Prone Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 4.2 Population Exposed to Hurricane Damage—High and Medium Intensity. . . . . . . . . . . 62 4.3 Political Violence, 2003–06. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 4.4 Criminal Activity, 2010–14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 4.5 Macroeconomic Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 4.6 Effective Exchange Rate, 2006–14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 4.7 Central Government Fiscal Balance, 2004–14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 4.8 Current Account Balance, 2004–14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 4.9 International Aid, 2008–25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 4.10 Government Deposits, 2009–14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 4.11 Petrocaribe Financing, 2008–17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 4.12 Project Activities Financed by Petrocaribe, 2008–13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 4.13 Histogram of Annual Per Capita Consumption, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 5.1 Prioritization Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 5.2 Extreme Poverty Simulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 5.3 Economic Magnitude of Estimated Parameters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 5.4 Life Expectancy at Birth, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 5.5 Cabinet Changes, 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 5.6 Income Effects of Closing the Gap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Contents v Maps 2.1 Extreme Poverty Rates by Department, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 4.1 Violence and Criminal Activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Tables 1.1 Import Quotas for 19 Major Families, 1984–85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.2 Frequency and Impact of Natural Disasters, 1971–2014. . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2.1 Access to Basic Services—Coverage Rates (2001–12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 2.2 Basic Sociodemographic and Socioeconomic Characteristics of Poor, Extreme Poor and Nonpoor Households, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 3.1 Contributions to Growth (α = 40%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3.2 Haiti’s Governments, 1971–2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 vi Contents Acknowledgments We would like to thank the members of the Haiti Country Team from all Global Practices, CCSAs, IFC, and MIGA, as well as all the partners and stakeholders in Haiti who have contributed to the preparation of this document in a strong collaborative pro cess. We are very grateful for the generosity exhibited in providing us with substantive inputs, knowledge and advice, particularly given the time limitations. The table below identifies the full list of team members who have contributed their time, effort and ex pertise, and their affiliations. The team was led by Raju Jan Singh (Program Leader, LCC8C). The work was carried out jointly with the IFC (Sylvain Kakou) and MIGA (Petal Hacket) under the overall guidance of Mary Barton-Dock (Special Envoy for Haiti, LCC8C) and Jun Zhang (Senior Regional Manager for the Caribbean, IFC). We wish to thank for their helpful sugges tions and insights the Systematic Country Diagnostic (SCD) peer reviewers, Nancy Benjamin, Senior Country Economist (GMFDR), Oscar Calvo-Gonzalez, Program Leader (LCC2C), and Philip Keefer, Principal Advisor (IDB), as well as Rolf Parta for moderating our two-day Country Team retreat, and Augusto de la Torre (LCR Chief Economist) and Daniel Lederman (LCR Deputy Chief Economist) for their advice throughout the stages of the SCD process. The SCD not only draws on existing liter ature from within and outside the Bank, but benefitted from the results of the recent household survey (ECVMAS 2012), as well as access to the MINUSTAH data on crime events across Haiti. In this regard, we wish to express our gratitude to the ONPES, IHSI, and MINUSTAH for making this possible. This report also draws heavily on the recent ly-completed Poverty Assessment and the ongoing Public Expenditure Review. In addition, a number of background papers have been written by the Country Team on specific themes. In this respect, the Team is appreciative to Prof. James Robinson (Harvard University) and Prof. Suresh Naidu (Columbia University) for discussions on the role of Haitian business elites in Haiti’s de velopment, and particularly to Lauren Young (Columbia University) for presenting pre liminary results of their research at the World Bank. We wish also to thank Prof. Cristina Bodea and Masaaki Higashijima (both from Michigan State University) for their work on public spending and conflict. The analytical work was validated by wide consultations. In this regard, we wish to thank Bernard Craan, Executive Director of the Private Sector Economic Forum for orga nizing a meeting with the members of his as sociation; Delphine Colbeau, UNDP, who coordinated a workshop on violence with the heads of all UN agencies present in Port-au Prince; Gilles Damais, IDB, for inviting us to present our work at one of its Wednesdays of Reflection with members of the academia, civil society, private sector, and Haitian ad ministration; Kesner Pharel to provide us with the opportunity to share our ideas on his TV show; and Mariam Yazdani from Vivario for interesting discussions on gang dynamics. We are also very grateful to Hans-Muller Thomas, Kore Fanmi National vii Coordinator, Germanite Phanord, Kore Fanmi Regional Coordinator, and Jean Raynold Saint Hilaire, Chief Social Worker for organizing our field trip to the com munes of Boucan Carré and Thomassique, Central Plateau Department, as well as to the National Association of Haitian Professionals for having invited us at Harvard University for their Third Annual Conference with the Haitian diaspora. Finally, we wish to thank Ricardo Augustin (Dean, School of Economics— Notre Dame University of Haiti), Raulin Cadet (Dean, School of Economics Dean— Quisqueya University), Fritz Deshommes (Deputy Dean of the State University of Haiti), Amos Durosier (Dean, Advanced Commercial and Economic Studies Institute), and Lionel Metellus (Dean, Quisqueya American University Institute) for setting up our competition of academic papers (“The Twin Goals Awards”), as well as all the members of our Selection Committee from Haiti: Henri Bazin (President, Haiti Conciliation and Arbitration Chamber), Charles Cadet (Ministry of Economy and Finance, Haiti), Kathleen Dorsainvil (American University), Fritz Jean (President, North East Chamber of Commerce, Haiti), Eddy Labossière (President, Association of Haitian Economists) and Guy Pierre (Autonomous University of Mexico), and from the World Bank: Dorsati Madani (Senior Economist, GMFDR), Gael Raballand (Senior Public Sector Specialist, GGODR), and Erik von Uexkull (Country Economist, GMFDR). A special thanks should be given to all our participants from Haiti, Canada and the United States, but particularly to our laureates: Jose Minerve Cayo (State University of Haiti), Jean Ribert Francois (State University of Haiti), Carl-Henri Prophète (Centre d’Études Diplomatiques et Internationales, CEDI), Alendy Saint-Fort (FDSE), Jean Carrington Saintima (IHECE), and Guimard Syvrain (CTPEA). viii Acknowledgments Haiti SCD team Global practice/cross-cutting area Team members Agriculture Pierre Olivier Colleye, Katie Freeman, Christophe Grosjean, Eli Weiss Communication Christelle Chapoy, Berdine Edmond Education Melissa Adelman, Juan Baron, Axelle Latortue Energy and extractives Susana Moreira, Remi Pelon, Frederic Verdol Environment Nyaneba Nkrumah Finance and markets Juan Buchenau, Caroline Cerruti Governance Alexandre Berg, Mamadou Deme, Onur Erdem, Sheila Grandio, Fabienne Mroczka Haiti CMU Mary Barton-Dock, Pierre Bonneau, Gabrielle Dujour, Nellie Sew Kwan Kan, Michelle Keane, David Lighton, Deo Ndikumana, Raju Singh, Kanae Watanabe, Paula White Health, nutrition and population Eleonora Cavagnero, Sunil Rajkumar IFC Ary Naim, Sylvain Kakou, Lina Sun Kee, Jean Francois Pean, Frank Sader, Jun Zhang Macroeconomics and fiscal management Kassia Antoine, Calvin Djiofack, Evans Jadotte, Julie Lohi, Sandra Milord, Konstantin Wacker MIGA Petal Hacket Poverty Facundo Cuevas, Federica Marzo, Aude-Sophie Rodella, Thiago Scot Social protection Lucy Bassett, Carine Clert, Maki Noda Social, urban, rural and resilience Ali Alwahti, Paul Blanchard, Sylvie Debomy, Sergio Dell’Anna, Joan Fomi, Van Anh Vu Hong, Oscar Ishizawa, Peter Lafere, Michel Matera, Bernhard Metz, Claudia Soto Orozco, Rafael Van der Borght, Gaetano Vivo, Javier Sanchez Reaza, Alys Willman Trade and competitiveness Babatunde Abidoye, Massimiliano Cali, Emiliano Duch, Tanja Goodwin, Maria Kim, Martha Licetti, Siobhan Murray, Georgiana Pop, Lucia Jimena Villaran, Joaquin Zentner Transport and ICT Malaika Becoulet Water and sanitation Jean-Martin Brault Acknowledgments ix About the Authors Raju Jan Singh is the program leader for Haiti, leading and overseeing the World Bank’s work on economic policy, private sector de velopment, and education and social pro tection, and was previously sector leader and lead economist on Central African states, stationed several years in Yaoundé, Cameroon. Prior to joining the World Bank, Raju was working as a senior economist and mission chief at the International Monetary Fund, where he held positions in the Fiscal Affairs, Asian and Pacific, and African De partments, working on a wide range of countries and leading missions to China, Cyprus, and Tonga. He has been an advisor in the Swiss Executive Director Office, and worked at the Swiss Finance Administration in Bern, as well as at Lombard Odier & Cie (private banking) in Geneva. He has also been a consultant for the Swiss Agency for Development and Cooperation, working with the central banks of Rwanda and Tan zania, and has taught at the Graduate Institute of International Studies in Geneva. He has published on a wide set of issues, including fiscal decentralization and public finance, banking, trade, and remittances. Raju holds a master’s degree and a doctorate in eco nomics from the Graduate Institute of Inter national Studies in Geneva. Mary Barton-Dock is the special envoy and director for Haiti. Prior to taking this posi tion, she was the director of climate change and environment for the World Bank. She has also served as the country director for Cameroon, Chad, the Central African Republic, Equatorial Guinea, Gabon, and São Tomé and Principe. Prior to becoming a country director, she was the manager of the World Bank’s Agriculture, Environment, and Social Development programs in West Africa. In addition, she has been the World Bank’s resident representative in Chad, and the team leader from programs in Southern Africa. Prior to joining the Africa region, she also worked in South East Asia, and she started her career with the World Bank working on Bolivia. Mary holds a master’s degree in public policy from Harvard. x Abbreviations ACD Armed Conflict Dataset ACLED Armed Conflict Location & Event Data ASCUYDA Automated System for Customs Data BMPAD Bureau de Monétisation du Programme d’Aide au Développement (Bureau of Monetization of Development Aid Programs) CCRIF Caribbean Catastrophe Risk Insurance Facility CPIA Country Policy and Institutional Assessment CSCCA Cour Supérieure des Comptes et du Contentieux Administratif (Supreme Court of Accounts and Contentious Administrative Proceedings) DHS Demographic Health Survey DINEPA Direction de l’Eau Potable et de l’Assainissement (Water and Sanitation Authority) DR Dominican Republic ECVMAS Enquête des Conditions de Vie des Ménages (Household survey) EDE PÈP Social Assistance Program “Help the People” EDH Electricité d’Haiti (Public Electricity Company) EM-DAT Emergency Events Database FDI foreign direct investment FSAP Financial Sector Assessment Program GCI Global Competitiveness Index GDP gross domestic product HELP Haiti Economic Lift Program HHI Herfindahl-Hirschman Index HIPC highly indebted poor country HNP Haiti National Police HS Harmonized Coding System HTG Haitian gourde IFC International Finance Corporation IHSI Institut Haïtien de Statistique et d’Informatique (Haiti’s Statistical Institute) IICA Inter-American Institute for Cooperation on Agriculture IMF International Monetary Fund IPPs independent power producers LAC Latin America and Caribbean LIC low income countries LPI Logistics Performance Index LSCI Liner Shipping Connectivity Index MDG Millennium Development Goals MDRI Multilateral Debt Relief Initiative xi MEF Ministry of Economy and Finance MENFP Ministère de l’Education Nationale (Ministry of Education) MINUSTAH United Nations Stabilization Mission in Haiti MSMEs micro, small, and medium enterprises MSPP Ministère de la Santé Publique and de la Population (Ministry of Public Health and Population) NEER nominal effective exchange rate NGOs non-governmental organizations ODA official development assistance OECD Organization for Economic Cooperation and Development ONPES Observation Nationale de la Pauvreté et l’Exclusion Sociale PARDH Plan d’Action pour le Relèvement et le Développement d’Haiti (Action Plan for the Recovery and Development of Haiti) PDNAs Post-Disaster Needs Assessments PIM public investment management PIP Public Investment Program PIU Project Implementation Units POVCALNET Online Poverty Analysis Tool—World Bank PPP public-private partnership PSDH Plan Stratégique de Développement d’Haiti (Strategic Plan for Development of Haiti) REER real effective exchange rate PRSP Poverty Reduction Strategy Paper SAM Social Accounting Matrix SCD Systematic Country Diagnostic SCI Statistical Capacity Indicator TEU twenty foot equivalent units TFP total factor productivity UN United Nations WDI World Development Indicators WEF World Economic Forum WHO World Health Organization xii Abbreviations This map was produced by the Map DesiThe boundaries, colors, denominations ashown on this map do not imply, on the Group, any judgment on the legal statusendorsement or acceptance of such bou To To Monte Monte Christi Christi Fort-Liberte Fort-Liberte Ferrier Ferrier NORD - EST NORD - EST DOR Hinche Hinche Lago Enriquil Chaine de la Selle Ovi Thiotte Thiotte W°27 OCEAN Cap-Haitien NORD NORD Trou- Trou- du-Nord du-Nord Grande Rivière Grande Rivière du Nord du Nord Saint Raphaël Saint Raphaël Saint Michel Saint Michel de l'Attalaye de l'Attalaye Maïssade Maïssade P l a t e a u P l a t e a u uayampuo CENTRE CENTRE Lac de Péligre Mirebalais Mirebalais Croix des Croix des Bouquets Bouquets Marigot Étang Saumâtre OUEST OUEST Chaine de la Selle (2680 m ) (2680 m ) Belle Anse Belle Anse SUD - EST SUD - EST W°27 Limbé Limbé Ennery Ennery uayampuo G G ARTIBONITE ARTIBONITE Jacmel Artibonite Artibonite PORT-AU-PRINCE ATLANTIC W°37 Île de la Tortue Palmiste Port-de-Paix Les Trois Les Trois NORD - OUEST NORD - OUEST Gros-Morne Gros-Morne Gonaives Gonaives C e n t r a l C e n t r a l Golfe de la Gonâve Verrettes Verrettes Anse-à-Galets La Cayenne la Gonâve Léogâne Léogâne Petit Goâve Petit Goâve Jacmel Côtes-de-fer Côtes-de-fer Sea W°37 Pa ssa g e Baie de Môle St.-Nicolas W indwa rd Henne Île de Île de la Gonâve Pointe-à-Raquette Île à Vache Cayemite Grande Miragoâne Miragoâne NIPPES Vieux Bourg Vieux Bourg SUD SUD d'Aquin d'Aquin Les Cayes Caribbean 20°N 74°W Jeremie Roseaux GRANDE ANSE M a s s i f d e l a H o t t e M a s s i f d e l a H o t t e Camp-Perrin Les Anglais Camp-Perrin Port-Salut 74°W Map HAITI SELECTED CITIES AND TOWNS DEPARTMENT CAPITALS NATIONAL CAPITAL RIVERS MAIN ROADS RAILROADS DEPARTMENT BOUNDARIES INTERNATIONAL BOUNDARIES HAITI GRANDE ANSE Anse d'Hainault Les Anglais 18°N 40 Kilometers 30 20 10 0 30 Miles 20 10 0 xiii Executive Summary Haiti has a vision to become an emerg ing economy by 2030. Haiti’s geography, resources, and history provide it with oppor tunities. The country has comparative advan tages, including its proximity and access to major markets; a young labor force and a dynamic diaspora; and substantial geo graphic, historical, and cultural assets. Areas of economic opportunity for Haiti include agribusiness, light manufacturing and tour ism. Building on these opportunities, the Government of Haiti issued in May 2012 a Strategic Development Plan (PSDH), aiming at building a new modern, diversified, resil ient, competitive and inclusive economy, re spectful of its environment and in which people’s basic needs are met. This objective would require ambitious double digit growth rates, a significant break from the past, based on an expansion of agriculture, construction, manufacturing, and tourism. Overall, Haiti’s growth performance in the last four decades has been disappointing, however, and poverty remains endemic. A history of vested interests, political instabil ity, and natural disasters has prevented the country from realizing its aspirations, trap ping the country in a low equilibrium and keeping it as one of the poorest and least equal countries in the world. GDP per capita fell by 0.7 percent per year on average be tween 1971 and 2013. As a result, in 2012 59 percent of Haitians remained poor and 24 percent suffered from extreme poverty, indicating that almost 6.3 million Haitians could not meet their basic needs and 2.5 mil lion could not even cover their food needs. This Systematic Country Diagnostic (SCD) seeks to identify the most important constraints to and opportunities for inclusive and sustainable growth in Haiti. To identify the key constraints to Haiti’s growth and shared prosperity, an extensive review of the literature (from both within and outside the World Bank) was first carried out. Economic and sector work on Haiti produced in 1980s and the early 1990s had already identified most of the country’s challenges and demon strated that better functioning institutions, stronger human capital, and improvements in infrastructure were all needed for Haiti’s economic growth and shared prosperity. Rather than listing these again, this report attempts to provide some prioritization and identify the most binding constraints, both quantitatively and through a series of consultations with stakeholders and the country team. Country Profile: What Makes Haiti Haiti? A social contract is missing between the State and its citizens. While overall income growth is a necessary condition for increas ing shared prosperity, it is not sufficient. Growth that is inclusive of the poor requires additional mechanisms such as a pro-poor fiscal regime, as well as targeted social pro grams and expenditures, not only to redis tribute resources towards the poor but also more importantly to ensure that the less well-off are an integral part of the process Executive Summary 1 and that opportunities improve for all. Previous reports have noted, however, that Haiti has never had a tradition of providing services to the population or creating an en vironment conducive to sustainable growth. Haiti’s tax system generates limited resources for the government and tends to be regres sive. Furthermore, public spending in health, education, and social protection remains limited, constraining the government’s abil ity to provide services and offer equal oppor tunities to its citizens. In the absence of government, basic services such as health and education are mainly provided by non government actors, placing a substantial fi nancial burden on households and delivering achievements closely linked with household income. The reliance on non-government actors has also weakened public investment management. Haiti’s public investment man agement exhibits a number of distinctive fea tures and practices common to countries that are aid-dependent, including weak appraisal capacity and reliance on donors to design good projects, hampering the effective use of public resources. Sectoral strategies to guide the prioritization of projects are lacking. This leads to a Public Investment Program composed of projects that are neither fully assessed nor prioritized. Furthermore, there is no effective ex-ante control on disbursements based on the phys ical progress of projects against plans. While progress is being made in fiscal reporting by rolling out the use of a single treasury ac count, domestically-funded capital expendi tures are not yet properly accounted for, tracked and reported, creating an environ ment conducive to a lack of transparency and accountability. The structure of the private sector shows signs of high degrees of concentration, hampering the entry of new actors and re sulting in high prices for consumers. From the beginning of the twentieth century, au tocratic leaders in Haiti have traded politi cal support from the elite for economic advantages to this elite. Though publicly available information on privately held businesses is limited, many of the same families who dominated the Haitian econ omy during the era of Duvalier in the 1970s and the 1980s seem to remain in control of large segments of the economy today, re sulting in high concentration in a number of key industries, distorted competition, and non-transparent business practices in many instances. Several of the most impor tant food products in the Haitian consump tion basket are sold in concentrated markets, and a preliminary analysis indi cates that the prices of these products are on average about 30–60 percent higher in Haiti than in other countries from the re gion. This translates into limited opport unities for a substantial expansion of the formal private sector across most sectors. Few of Haiti’s established private firms have modern capital and governance structures with professional management, limiting their access to long-term financing. Political violence has occurred regularly throughout Haiti’s history, leading to insta bility. At Independence in 1804, Haiti was at the forefront of history, being the first na tion to abolish slavery. Since then, however, with some exceptions such as the 30-year period of autocratic rule under Francois Duvalier (Papa Doc) and his son Jean Claude Duvalier (Baby Doc) (1957–86), Haiti has known a succession of short-lived 2 Executive Summary governments. Lacking sufficiently long peri ods of stability, the country has struggled to develop the institutional mechanisms and policy fundamentals essential to eco nomic development and the rule of law. Disenfranchised and without effective chan nels to voice needs and demands, citizens have taken to the streets in protest, some times violently. While violent airing of griev ances in Haiti’s early history generally took place in the rural areas, contemporary unrest tends to break out in the cities, reflecting the country’s demographic evolution and urban ization over the years. Against this backdrop, the post-earthquake period has been com paratively stable. Furthermore, the Haitian population is one of the most exposed in the world to natural disasters—hurricanes, floods and earthquakes. Between 1971 and 2013, Haiti’s economy has been subjected to natural di sasters almost every year with adverse effects on growth. The country has a higher number of disasters per km2 than the average of the Caribbean countries. In 2008, tropical storms and hurricanes caused losses esti mated at 15 percent of GDP. The earthquake on January 12, 2010 killed 220,000 people, displaced 1.5 million people, and destroyed the equivalent of 120 percent of GDP. In this unfavorable environment, migra tion has become a key avenue for Haitians seeking a better life. Substantial internal mi gration is taking place, particularly from rural to urban areas, as people seek better economic opportunities and better services. In addition, for both political and economic reasons, large numbers of Haitians have emi grated throughout the twentieth century building an important diaspora. A vast ma jority of Haitians who continue to emigrate now seem to do so because they cannot find work opportunities in Haiti. This large dias pora is a significant source of remittances: remittances received by Haiti are the highest among Latin America and Caribbean (LAC) countries in terms of GDP and the fourth highest in the world in terms of export earnings. Trends and Profile in Poverty and Shared Prosperity While remaining high, poverty has de clined in Haiti. Recent findings indicate that extreme poverty has declined in Haiti from 31 percent of the population in 2000 to 24 percent in 2012. Progress was mainly con centrated in urban areas, however. This trend is confirmed by both monetary and non monetary poverty indicators, with the big gest non-monetary progress recorded in education. All school-age children go to school in about 90 percent of the households compared to about 80 percent in 2001. Immunization rates are also up. Recent evidence suggests that this decline in extreme poverty was driven by labor income, private transfers, and aid. Non agricultural labor income increased by about 3½ percent on average per year, especially among men, with expansions in construc tion, telecommunication and transport, all concentrated in urban areas. Formal employ ment remains small (13 percent of the labor force) with agriculture and urban informal sectors still providing most of the employ ment with about 40 percent and 47 percent of the labor market, respectively. Workers’ transfers from abroad have represented more Executive Summary 3 than a fifth of Haiti’s GDP in recent years, and the percentage of households receiving private transfers (domestic transfers or re mittances from abroad) in Haiti increased from 42 percent to 69 percent between 2000 and 2012. Furthermore, the 2010 earthquake resulted in unprecedented aid flows in the form of money, goods and services. These external flows have also contributed in re ducing poverty over the period, especially in the metropolitan area which attracted most of the assistance (in large part because Port-au-Prince was hit hardest by the earthquake). Trends and Drivers of Growth Overall, Haiti’s growth performance in the last four decades has been disappointing. From 1971 to 2013, GDP growth averaged 1.2 percent a year, much lower than the aver age of the LAC region (3.5 percent) and the average of economies at the same level of de velopment (3.3 percent). The few periods of positive growth were short-lived, often fol lowed by a contraction in economic activity. Furthermore, in light of the country’s impor tant demographic growth, the level of GDP per capita even fell by 0.7 percent per year on average between 1971 and 2013. Whereas low income countries (LICs) have on average seen their GDP per capita taking off since the mid-1990s, Haiti was left behind. Political instability and natural disasters have taken a toll on growth. Despite invest ment and increases in the labor force, Haiti’s growth performance has remained weak, re flecting the natural disasters and political in stability the country has experienced. The departure of Jean-Claude Duvalier initiated a period of intense political instability in Haiti. Between 1986 and 2014 the country had 18 changes of president and important changes in regime. Such political instability has often been accompanied by violence and a continuous weakening of state institutions, the rule of law, and the investment climate, undermining investor confidence. Uncertainty as to whether investors can ob tain returns from their investments rep resents one of the main constraints to growth in Haiti. Political instability has also resulted in a trade embargo in the first half of the 1990s that crippled private sector activities. Haiti’s business environment is hampered by institutional weaknesses. Although gover nance indicators have improved, Haiti still ranks lowest in the region in control of corruption or government effectiveness. Efficient mechanisms for international arbitration and mediation are lacking. Guarantees for the protection of investors’ private property rights are insufficient. Legal and regulatory frameworks are fragmented and dysfunctional. In particular, a real prop erty cadaster and land registry system is needed. Furthermore, access to finance is challenging for both, households and me dium- and small-sized enterprises. Haiti’s infrastructure also falls short. Island economies are extremely dependent on the quality, frequency and cost of the means of transport that link them to markets which represent both outlets for their prod ucts and supply sources for the needed im ported goods. The efficiency and effectiveness of transport, whether by road, by sea, or by air, therefore strongly affects their competi tiveness. The quality of transport and logistics services in Haiti is low, however, with large parts of the territory still poorly connected. Recent evidence indicates, for instance, that 4 Executive Summary only 40 percent of people living in rural areas have access to all-weather roads. Haiti is also less integrated into the global shipping line network than many developing countries, and the costs of loading and unloading a standard container at Port-au-Prince are by far the highest of the Caribbean ports. In particular, the provision of electricity is problematic. The supply of electricity cov ers only a small proportion of the country, with rural areas being particularly neglected. Only 35 percent of Haitians have access to electricity (11 percent in rural areas). The provision of electricity in Haiti is also unsta ble and there are frequent power cuts and surges, which can result in serious damage to industrial equipment. Business owners cite the lack of reliable electricity supply as the most binding constraint to private sector de velopment. Despite this poor service, the cost of electricity is among the highest in the region. Furthermore, per capita consump tion of electricity in Haiti is substantially lower than in other Caribbean countries, for example, it is only two percent of the level observed in the Dominican Republic. Surveys also point to the lack of qualified labor. One major constraint faced by enter prises in Haiti is the difficulty to find techni cians that are well qualified, particularly in new technologies and trained managers for middle management. This forces the country to position itself as a low cost producer for goods and services requiring limited skills. The level of education among the adult pop ulation remains low: 45.7 percent of the adult population (60.5 percent of house holds’ heads) have never attended school or have not completed primary education. Not mastering basic skills such as literacy and numeracy when starting work represents a major impediment for their insertion in the labor market and, more importantly, for their ability to absorb post-school training either on or off the job, and to adapt to changing job requirements. The constraints discussed above seem to be particularly present in the agriculture and the non-agriculture informal sector, where most Haitians are likely to continue working for the foreseeable future. The for mal manufacturing and service sectors have the potential to be an important source of employment, but because they hire such a small share of the labor force, even with very high growth rates, they will not be able to absorb more than a fraction of the new en trants. The agriculture sector in Haiti has been declining for many years, the result of neglected rural infrastructure, weak research and extension, poorly defined land tenure, limited access to credit, and under-investment in human capital. With regard to the infor mal non-agriculture sector, empirical evi dence suggests that a little investment in years of education or remedial training for skills acquisition among people who have been out of the school system for a long time, as well as improved access to inputs, such as electricity and water, are associated with substantial increases in income. Sustainability Urbanization is increasing Haiti’s vul nerability to natural disasters. As a safety valve, migration probably contains poverty and provides relief to many families through private transfers. However, moving to urban areas is putting pressure on the environment, and leading to the settlement of large popu lations in vulnerable places. Urban areas have experienced an explosive expansion in the past two decades with a near total Executive Summary 5 absence of urban planning and growth regu lation. This unplanned urban growth has created vulnerabilities for both the physi cal environment and those who live in it. Furthermore, settlers tend to occupy areas that are not only prone to risk from disasters, but are also sometimes nature’s protection from risks such as coastal ecosystems. Slow degradation of the environment in such areas in turn increases the country’s vulnera bility as a whole to natural disasters. Rapid urbanization could also be feeding greater violence. Youth violence is often ex pressed as a reaction to perceived social and economic exclusion—grievances that can easily be