Haiti: Social Resilience and State Fragility in Haiti - A Country Social Analysis

April 27, 2006 Document of the World Bank Report No. 36069-HT Haiti Social Resilience and State Fragility in Haiti Caribbean Country Management Unit ESSD Sector Management Unit Latin America and the Caribbean Region A Country Social Analysis Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized ABBREVIATIONS AND ACRONYMS ASEC AIDS ANAMAH APENA CASEC CASER C A M E P C C H C F C I D C I M O C T DHS E B C M E C D E C V H EDH EMA EU FAd’H FAES FAFO GDP GIPNH GNI HIV/AIDS HLCS H N P HRW HTG I A C H R I C F I C G I C L A C IDB IFS IG I H S I I L A C IMF IMR L A C L C R LICUS M A S T Assemblte de l a Section Communale Syndrome Immuno-deficitaire acquis Association des juges haitiens Administration Nationale De Prison L e Conseil administratif de l a section communale Conseil d’administration de l a section rurale Centrale Autonome Mttropolitaine d’Eau Potable Cadre de Cooptration Interimaire L e Conseil Interdtpartemental Compagnie d’Intervention et du Maintien d’ Ordre AutoritBs locales Enquetes dtmographiques et de santt Enqu6te budget-consommation des me’nages Developpement de la petite enfance Enquete sur les Conditions de Vie en Haiti Electricite d’Haiti Ecole de l a Magistrature Union Europtenne Anciennes forces armies d’Hditi Fonds d’ Assistance Economique et Sociale Institut pour les sciences sociales appliqutes Produit national brut Groupe d’htervention de l a Police Nationale d’Haiti Virus Humain D’Immunodtficit (HIV) et syndrome acquis d’immunode’ficit (SIDA). Enqu6te sur le mode de vie en Haiti Police Nationale Haytienne Surveillance de Droits de l’homme L a Commission Inter-Amtricaine sur des droits de l’homme Cadre D e Cooptration D’Inttrim Groupe des crises internationals D’Instituto canadiense de laminas en Construcci6n de L a de Para. d’acero Banque Interamtricain de De’veloppement Institut pour des e’tudes fiscales Inspecteur Ge’ntral Institut Haytien de Statistique et d’hformatique Consortium Aide Ltgale Internationale Fonds Monttaire International Taux de Mortalite infatilt Pays 6 faible Revenu etdifficulte’s Ministbre des affaires sociales et d’emploi Assembly o f the Section Communale Acquired Immunodeficiency Syndrome Association o f Haitian Judges National Penitentiary Administration Administrative Council o f the Section Communal Board o f Directors o f the Rural Section Metropolitan Autonomous Drinking Water Station Interim Cooperation Framework Interdepartmental Council Company for Intervention and the Maintenance o f Order Local authorities Demographic and Health Surveys Household Budget-Consumption Survey Early Childhood Development Inquire into the Living conditions in Haiti Electricity o f Haiti School o f the Judiciary European Union Former Armed Forces o f Haiti Economic and Social Assistance Funds Institute for Applied Social Sciences Gross domestic product Intervention Group o f the National Police o f Haiti Gross national income Human Immunodeficiency Virus (HIV) and Acquired Immunodeficiency Syndrome (AIDS). Haiti Living Conditions Survey Haitian National Police Human Rights Watch Haitian gourde (currency unit) Inter-American Commission on Human Rights Interim Cooperation Framework International Crisis Group Instituto canadiense de laminas en acero para l a construcci6n Inter-American Development Bank Institute for Fiscal Studies Inspector General Haitian Institute o f Statistics and Data Processing International Legal Consortium Assistance International Monetary Fund Infant mortality rate Latin America and the Caribbean Latin American and Caribbean Region L o w Income Countries Under Stress Ministry o f Social Affairs and Employment MICIVIH M I N U S T A H N C H R NGO NSPs OAS OPS PAHO P C H I PPP P R E M PRSP PO P 1 P2 RI RNDDH RSF R D N P UN U N D P UNICEF UNMIH U N P O L U S D U S A I D VAT V S N N N S WBI WDI WFP L a Mission Civile Internationale de l a L’OEA et l a mission internationale des Nations Unies Mission de stabilisation des Nations Unies en Ha‘iti Coalition nationale pour les droites humains en Haiti Organisation nonne gouvernementale (ONG) N o n Secteur D’Etat Dans L a Disposition D e Service Organisation des ttats amtricains Organisations Populaires Organisation Pan-Amtricaine de l a Sand Paritt du pouvoir d’achat Papier D e Stxattgie De Rtduction de Pauvrett Rtfugits Internationaux L e Rtseau National D e l a Dtfense de Droits de l’homme Reporters sans Frontieres Rassemblement des Democrates Nationaux Progressistes Les Nations Unies Programme des Nations Unies pour le dtveloppement L e Fonds des Nations Unies pour l’enfance Mission des Nations Unies en Hayti Force de police de 1’ONU Dollars des Etats-Unis Agence des Etats-Unis pour l e dtveloppement international Taxe B l a valeur ajoutte (TVA) Volontaires de l a SCcuritt Nationale Institut de l a Banque Mondiale Indicateurs pour le Dtveloppement Programme mondial d’ l’alimentation The OASAJN International Civilian Mission United Nations Stabilization Mission in Haiti National Coalition for Haitian Rights Nongovernmental organization Non-state service providers Organization of American States Popular Organizations Pan American Health Organization The Distribution o f Per Capita Household Income Purchasing Power Parity Poverty Reduction and Economic Management Poverty Reduction Strategy Paper Headcount Poverty Ratio Poverty Gap Index Squared Poverty Gap Index Refugees International The National Human Rights Defense Network Reporters without Borders United Nations United Nations Development Programme The United Nations Children’s Fund United Nations mission to Haiti UN Police force United States dollars United States Agency for International Development Value Added Tax National Security Volunteers World Bank Institute World Development Indicators World Food Program Social Resilience and State Fragility in Haiti Table of Contents FOREWORD ........................................................................................................................... iv EXECUTIVE SUMMARY ........................................................................................................ i 1 . INTRODUCTION .............................................................................................................. 1 ANALYTICAL FRAMEWORK ........................................................................................................ 3 2 . SOCIOECONOMIC OUTCOMES AND R I S K S ....................................................................... 6 DEMOGRAPHIC TRENDS ............................................................................................................. 6 Population, Population Growth and Density, Age Structure, and Urbanization ................... 7 Household Size and Fertility ................................................................................................. 8 HAITIAN POVERTY AND WEQUALITY ......................................................................................... 9 Household Income and Income Generation .......................................................................... 9 Poverty ................................................................................................................................ 13 Poverty Correlates: Does Rural Poverty Differ from Urban Poverty? ............................... 17 Simulation of the Effect of Economic Growth on Poverty in Haiti .................................... 19 MIGRA~ON .............................................................................................................................. 19 Human Capital .................................................................................................................... 23 Access to Basic Infrastructure Services .............................................................................. 25 HISTORICAL BACKGROUND: ORIGINS OF THE RURAL-URBAN DIVIDE ....................................... 1 THE HAITIAN PEOPLE: DEMOGRAPHICS, POVERTY, AND ENDOWMENT AND DISTRBU~ON OF ASSETS AND RESOURCES .............................................. 23 Employment ........................................................................................................................ 27 Unemployment .................................................................................................................... 30 SOCIAL COHESION AND VIOLENCE ........................................................................................... 31 C O N F L I C T RISK ........................................................................................................................ 36 GOVERNANCE AND INSTITUTIONS ....................................................................... 37 HAITI’S FRAGILE STATE ........................................................................................................... 39 A Legacy of Public Sector Corruption ................................................................................ 40 An Unfinished Decentralization .......................................................................................... 41 The Role o f the Non-State Sector in the Provision o f Basic Services ................................ 44 Basic Services: Access, Quality, and Equity ...................................................................... 46 The Problem of State Regulation and Coordination ........................................................... 48 Institutional Capacity and Accountability ........................................................................... 50 Police Reform ...................................................................................................................... 52 J U S T I C E AND RULE OF LAW ...................................................................................................... 53 CONCLUSION: DEMOGRAPHIC AND SOCIOECONOMIC IMPLICATIONS FOR VIOLENCE AND 3 . INFRASTRUCTURE AND BASIC SERVICES .................................................................................. 43 SECUrZrrY ................................................................................................................................. 49 The Haitian National Police ................................................................................................ 49 Judicial Independence and Accountability .......................................................................... 53 Access to Justice ................................................................................................................. 54 T h e Criminal Justice System ............................................................................................... 55 Lessons Learned 1994-2004 ............................................................................................... 56 CONCLUSION: RESTORING THE CAPACITY OF STATE INSTITUTIONS ......................................... 58 POLITICAL FORCES AND ACTORS ......................................................................... 60 A HISTORY OF POLITICAL VIOLENCE ....................................................................................... 60 A DIFFICULT DEMOCRATIC TRANSITION. 1990-2004 ............................................................... 62 POLITICAL MOBILIZATION AND ENTREPRENEURS OF VIOLENCE .............................................. 6 3 4 . CHECKS AND BALANCES IN H A I T I ’ S POLITICAL PROCESS ........................................................ 65 CONCLUSION: STRONG NATIONAL LEADERSHIP I S CRUCIAL TO BREAKING THE CONFLICT- POVERTY TRAP ........................................................................................................................ 66 5 . CONCLUSION: BREAKING OUT OF THE CONFLICT-POVERTYTRAP ........ 67 REFERENCES ............................................................................................................................. 73 APPENDIX A: COUNTRY AT A GLANCE ............................................................................ 81 APPENDIX B: DEMOGRAPHY ............................................................................................... 83 APPENDIX C: DATA AND METHODOLOGY ...................................................................... 85 APPENDIX D: INCIDENCE OF EDUCATION LEVEL AND POVERTY CORRELATES ........................................................................................................................................................ 89 APPENDIX E: POVERTY PROFILE ....................................................................................... 91 APPENDIX F: ACCESS TO BASIC SERVICES IN HAITI .................................................. 97 APPENDIX G: COHESION AND VIOLENCE IN HAITI ................................................... 100 FOREWORD Dorte Verner and Willy Egset (task team leaders and the main authors of this report) led the report team. The work was based on the findings of various missions that visited Haiti during 2005, and on additional research undertaken during 2004. The task team includes Stephanie Kuttner, Michael Justesen, Gillette Hall, Dan Erikson (consultant, Inter-American Dialogue), Katherine Bain, Emma Grant, and Franka Braun. The report does not reflect developments since February 17,2006. This report i s the result of collaboration among several Bank units. Funding for the study was contributed b y the Haiti Country Management Unit, the Social Development Department, the Conflict Prevention and Reconstruction Unit, the LICUSBragile State Unit, and the PREM Civil Society Group in Latin America. The funding i s gratefully acknowledged. Background papers, notes, and direct input to the report were prepared b y Gillette Hall (social protection), Dan Erikson (political situation), W i l l y Egset and Mark Mattner (urban violence), Michael Justesen and Dorte Verner (youth), Stephanie Kuttner (governance), Dorte Verner (poverty, growth, and labor markets), Katherine Bain, Emma Grant, and Franka Braun (non-state service provision), and Nathalie Lamaute, Gilles Damai, and Willy Egset (rural governance and local institutions). Andrew Crawley edited the report and Vivian Callaghan provided administrative support. The report was produced under the supervision of Caroline Anstey, Director, and McDonald Benjamin, Sector Manager. The members of the team would like to thank other Bank staff and individuals from outside the Bank for support, guidance, and comments. Special thanks are due to Joelle Dehasse, Senior Country Officer, for her support throughout the process. Several other people helped the team, including Christian Lotz, Per Wam, Antonella Bassani, Estanislao Gacitua-Mario, Garry Charlier, Pierre Werbrouk, Mark Mattner, John Redwood, Mark Schneider (International Crisis Group), Jocelyn McCalla (National Coalition for Haitian Rights), Jim Dobbins (RAND Corporation), and John Horton (Inter-American Development Bank). In Haiti, Nathalie Brisson Lamaute, Gilles Damais, and Dominique Mathon supervised data collection and analysis for some of the background papers under very challenging and sometimes dangerous conditions. The views expressed in this report are exclusively those of the authors. Social Resilience and State Fragility in Haiti EXECUTIVE S U M M A R Y 1. Haiti i s a resilient society whose rural communities in particular have developed coping mechanisms in response to a long history of underdevelopment and political instability. The country’s religious, cultural, and artistic life i s highly diverse and vibrant. L i k e other fragile states, however, Haiti i s also beset b y widespread poverty and inequality, economic decline and unemployment, poor governance, and violence. This Country Social Analysis’ examines Haiti’s conflict-poverty trap from the perspective of the triangle of factors that have been identified as i t s main components: (a) demographic and socioeconomic factors at the individual and household levels; (b) the state’s institutional capacity to provide public goods and manage social risks; and (c) the agendas and strategies of political actors. The report’s three main sections explore the nature of these components, and a closing section considers the linkages among them. The Haitian People: Demographic and Socioeconomic Outcomes and Risks 2. This section addresses the main demographic and socioeconomic factors that contribute to Haiti’s conflict-poverty trap. The population growth rate i s highest in the cities, and in the metropolitan area in particular. Port-au-Prince now scores highly on known demographic risk factors for violent conflict, including a very young population profile, high population turnover because of high in- and out-migration, and poverty. New migrants continue to be attracted to the area b y higher levels of infrastructure and services, greater access to formal and skilled jobs, and lower poverty levels than all other parts of the country. Demographic Trends 3. Haiti’s rapidly growing population i s increasing competition for scarce resources in a poor country where such resources are limited. At Haiti’s current population growth rate o f 2.2 percent a year, the number of inhabitants, now about 8 million, could reach about 12.3 million b y 2030. The country’s rapid rate of population growth, combined with poor economic performance, i s lowering per capita GDP, which has fallen b y about 50 percent to $332 in the last two decades. Of all sectors, agriculture has been the hardest hit. 4. In the last two decades there has been a very raid rate of urbanization in Haiti, especially in the metropolitan area. Some 40 percent of Haitians lived in urban areas in 2003, up from 25 percent in 1982. Moreover, Haiti i s s t i l l far from achieving a demographic transition, since children and youth s t i l l account for roughly 50 percent of the population. Extremely poor households have about twice as many children as do the nonpoor. Most Haitians lack pensions, social security and savings, and thus children are often the only security for old age. The Country Social Analysis (CSA) i s a new analytical instrument launched b y the World Bank to provide a country-level understanding o f the social, economic, and institutional context o f development. The CSA analyzes two principal dimensions o f development: (i) social diversity, assets, and livelihoods; and (ii) power, governance and institutions. The specific foci and relative emphasis o f these components are determined by the country context and Bank portfolio. 1 Poverty and Inequality 5. In 2001, 49 percent of all Haitian households lived in extreme poverty, with wide differences among localities and regions. On the basis o f a US$1 a day extreme poverty line, 20, 56, and 58 percent o f households in metropolitan, urban, and rural areas, respectively, were extremely poor. Most o f the approximately 3.9 million who are extremely poor live in rural areas. Poverty i s especially extensive in the Northeast and Northwest regions. Income inequality partly explains why Haiti’s poverty indicators are worse than those in countries that have similar per capita incomes. Income distribution i s extremely unequal in Haiti: in 2001, the Gini coefficient for the country as a whole was 0.66, which i s among the highest in the world. 6. Social indicators such as literacy, life expectancy, infant mortality, and child malnutrition also reveal that poverty i s widespread. About 4 in every 10 people cannot read and write; some 20 percent o f children suffer from malnutrition; nearly half the population has no healthcare; and more than four-fifths do not have access to clean drinking water. The good news i s that poverty measured b y these non-income poverty indicators has declined in the last three decades. Nonetheless, the gap between the rich and poor, and among regions, remains wide. 7. Residence in rural areas does not in itself affect the probability of being poor, and those engaged in agriculture are not more likely to experience poverty than those engaged in services and industry. The likelihood o f falling below the poverty line in rural areas depends on educational attainment, s k i l l s and so on. Female-headed households in rural areas are more likely to be poor than male-headed households. Poverty, moreover, i s more prevalent among those with l o w levels o f education. Social capital protects against poverty in rural areas but not to a statistically significant degree in urban areas. In rural, urban and metropolitan areas, migration and education are the factors that most reduce the likelihood of falling into poverty. Migration and the Endowment and Distribution o f Assets and Resources 8. Livelihoods in Haiti are determined by three key factors: assets, which can be sold to smooth out consumption when the household i s adversely affected b y a natural disaster or economic slump; access to labor markets, infrastructure, and services that can improve the opportunities for income generation; and migration. Poor households have very little or no access to many o f these livelihood-improving factors. 9. For a large proportion o f Haitians, migration i s a coping mechanism in the face o f poverty and a lack of opportunities. Many move to the capital, which absorbs more than 75,000 migrants every year despite grim living conditions in the slum areas. Most migrants in Haiti are self- selected economic migrants. On average, migrants have more education than those who stay behind. Moreover, migrants have a higher probability of finding jobs than non-migrants, and are more likely to find work in the higher-paid nonfarm sector. 10. International migration has affected the Haitian economy and the welfare o f Haitian households for decades. Haiti i s the world’s most remittance-dependent country as measured b y remittances’ share of household income and of GDP. Remittances from the diaspora constitute the most important private risk management and social protection system for Haitian households. Some 30 percent of all households and 44 percent o f metropolitan households receive remittances from expatriates. These transfers total about US$SOO million annually and account for about 30 percent of household income. Although remittances are an important source o f income for many 1 1 families, emigration also gives rise to lack of qualified workers or a brain drain. For youth, the lack of parental role models (particularly fathers) caused b y emigration leaves an even bigger gap. 11. Access to assets such as education and infrastructural services i s highly unequal and strongly correlated with poverty in Haiti. The rural poor in particular lack access to potable water, electricity, and roads. Although overall educational attainment has increased in recent decades, there i s substantial variation in attainment and school attendance across regions; children and youth in the poorest regions lag behind their peers in richer regions. Moreover, the children of poor households have less education than their nonpoor peers. Access to safe water and electricity i s another significant challenge. Only 7.9 percent of the rural population has access to safe water, compared to 28 percent o f those in the metropolitan area. Electricity supply i s the public service most marked by unequal access between rural and metropolitan areas: most (91 percent) of the urban population have access to electricity, but the figure falls to 10 percent among the rural population. Moreover, only about 8 percent o f Haitians have access to a paved road, and just 3 percent have a telephone. Finally, the extremely poor have much more restricted access to services than do the nonpoor. 12. Labor i s poor people’s most abundant asset and it accounts for most o f their total income. Nonetheless, the poor are constrained in their labor use in several ways: lack o f jobs, low wages, and wage discrimination, especially for women. Many Haitian workers are poor despite working full time, and thus it i s important that the quality of jobs, as well as their quantity, i s raised. The challenge o f job-creation, therefore, i s to increase worker productivity and increase opportunities in the labor market for competitive wages, so as to lift workers and their households out of poverty. 13. Employment analyses suggest that the three key determinants o f access to higher-paid employment in Haiti are education, gender, and migration status. Unemployment and underemployment are serious problems, particularly in urban areas. The unemployment rate i s highest in urban areas: 49 and 37 percent in metropolitan and other urban areas, respectively, compared to 36 percent in rural areas. 14. In total, each year more than 100,000 job-seekers enter a metropolitan labor market where there are very few opportunities and a high rate of unemployment. The capital’s labor market has fewer total wage jobs than the number o f new entrants every two years, and fewer skilled jobs than one year of new entrants. Migration and remittances have spurred expansion in areas such as home-building and banking, which has created jobs for construction and business workers. But most new entrants to the labor market j o i n the estimated one million Haitians in the informal sector who are engaged in a multitude of occupations, from self-employed traders and artisans to casual laborers. Very few formal sector jobs are available. 15. Haitian youth face a number of challenges, such as unemployment and HIV/AIDs. Youth who leave school are likely to end up being inactive or unemployed. The youth unemployment rate i s 47 percent, the highest in Latin America and the Caribbean (LAC) and nearly three times that of the older cohort (the 35-44 age group). The unemployment rate i s highest among women across the country and among youth in Port-au-Prince. In many households, youth face the challenges arising from the absence of the father or both parents, drug abuse, early childbearing, and domestic violence. Haiti also has the highest prevalence of HIV/AIDS in the LAC region, and health services are weak or inaccessible for much o f the population. ... 1 1 1 Social Cohesion and Violence 16. Rural Haiti remains relatively peaceful and has a tradition o f strong social cohesion. Especially in fragile states, the ability of communities and households to work and live together i s essential to maintaining people’s livelihoods, security, and welfare. Social capital indicators that measure levels o f trust and reciprocity suggest that robust cohesion on the community level has been crucial in preventing Haiti’s institutional-political crisis from deteriorating into broad social collapse or civil war. There are, however, sharp urban-rural differences: people in rural areas feel far safer in their daily lives than do urban residents. 17. In conjunction with state fragility, political tensions and widespread poverty, rapid urbanization can compound an explosive social situation. Data show that metropolitan residents live in fear of crime and violence, despite higher material living conditions than in rural areas. Respondents in urban slum areas have pointed to multiple causes of violence but concur on the importance of unemployment as a fundamental driver. 18. A direct indicator o f trust and social cohesion i s whether people feel safe or afraid in various social situations. As many as 58 percent of residents in the metropolitan area feel unsafe “often or most of the time” in their own home, compared to 15 percent in rural areas. While a significant minority in rural areas also expresses fear o f visiting markets and other towns, the data show that fear i s not a major and daily concern for three-quarters of the rural population. 19. Violence i s undermining development in Haiti. Domestic violence against women and children i s the most prevalent form of violence: 35 percent of women over the age o f 15 have been victims o f physical violence. As regards homicide rates, Haiti i s estimated to have 34 homicides per 100,000 citizens, which i s somewhat higher than the regional average o f 22.9 per 100,000. 20. Unconsolidated democratic institutions and “entrepreneurs o f violence” have undermined political leadership. Within a year of the country’s 1990 elections, democracy was brutally repressed b y the army and i t s supporters, using armed paramilitary groups that have been a feature o f Haitian politics since Duvalier’s tonton macoutes. After President Aristide’s return in 1994, democratic consolidation was undermined b y deep conflicts among erstwhile democratic allies. The result was a political stalemate that lasted until his departure in 2004 and that stalled progress in poverty reduction, economic growth and state building. Moreover, the stalemate transformed important parts of the democratic movement-elements within the urban popular organizations-into violent government enforcers and criminal gangs that struggled for control of territory and state favors, particularly in urban slums and “popular areas”. 21. The pool of potential recruits for crime and violence thus continues to grow, while the opportunity costs of participating in illegal activities or political violence are low. As the population shifts from rural to urban areas, the robust social cohesion that has characterized rural areas becomes less effective in mitigating social dislocation. This places a heavy burden on state institutions to provide basic services that alleviate demographic and socioeconomic pressures, and to mitigate the negative outcomes o f crime and conflict. But the state’s institutional capacity to provide basic services, and to establish security and the r u l e o f law, will require significant strengthening if Haiti i s to break out o f i t s conflict-poverty trap. i v Governance and Institutions 22. Institutions matter for social and economic development, and are crucial for state building. Institutions have the potential to mitigate the risk factors o f violence and conflict that emanate from the socioeconomic and demographic context. The Haitian state, however, has only a limited capacity to establish law and order, or to create conditions for economic growth and poverty reduction. Progress in breaking out o f the conflict-poverty trap demands attention to the restoration o f core state functions in these areas. 23. T o understand the Haitian state’s capacity to be a driver of development, i t s financial constraints must f i r s t be noted. Haiti’s GDP i s extremely low and has been in decline since 1980. In 2005, central government revenues were only 9 percent of GDP, compared to an average o f 18 percent among other low-income countries. Only 1.8 percent of revenues derive from taxes on income, profits, or capital. Central government expenditures have fluctuated sharply-between 9 and 16 percent o f GDP in recent years-largely as a result o f volatility in external assistance. That volatility stems from difficult partnerships with donors who have periodically withdrawn or redirected development assistance in response to political crises and insecurity. Thus a weak domestic revenue base, unstable external flows, and poor expenditure targeting have left spending on education, health, and infrastructure in Haiti below the average of low-income countries. 24. The state’s territorial outreach i s limited. The 1987 constitution provides for an elaborate regional and local governance structure. This has never been implemented, however, except at the lowest levels (section communal, commune), where many local councils have been active despite a lack of financial and material resources. Infrastructure and Basic Sewices 25. In response to the extremely limited public sector provision o f infrastructures and basic services throughout the country, the non-state sector has expanded rapidly to attend to unmet needs, especially for health and education services. This may account for the observed improvement in some social indicators. Yet critical gaps in coverage persist in terms o f access for the poorest and the overall quality o f services for the majority. 26. The role of the Haitian state in primary education i s uniquely l o w from a global perspective. O f the world’s 20 poorest countries, Haiti i s the only one in which more than 50 percent of children are enrolled in non-state schools. A snapshot o f the education sector reveals an elite category o f private schools (usually religious and urban-based) that have established themselves at the top o f the pile, but are affordable to only a small segment o f the population. These are followed b y a large group of public schools that occupy the middle o f the range, and then b y the vast majority o f private schools at the bottom. Public schools exist mainly in urban areas and 92 percent o f all schools are non-state, the vast majority o f which do not receive public subsidies. Among all primary and secondary school students, 82 percent attend private, fee-paying schools. 27. State health service provision i s similarly limited. Only about 30 percent of health facilities in Haiti are public, and most of them are in urban areas. Nongovernmental organizations (NGOs) provide an estimated 70 percent o f health services in rural areas and focus in particular on primary health care, including reproductive health, drug counseling, infant care, and HIV/AIDS screening. There are a number of hospitals run b y private foundations but the state retains the main responsibility for secondary and tertiary care, as well as for overall oversight and referral. V 28. Recent surveys examining the role of non-state service providers in rural areas and poor neighborhoods in Port-au-Prince have found a strong presence of community organizations in areas such as sanitation, drinking water, healthcare, education, and even electricity provision. Public utilities are the main providers of water and electricity but that circumstance does not ensure equal access. The diverse and unregulated nature of basic service-provision can be exploited b y political interests that use access as a means o f bestowing patronage, garnering support, and gaining leverage. Access to services i s patchy, unstable, and unequal, reflecting political considerations in initial provision, poor maintenance capacity, a low level of coordination, and the violence and crime that affect service supply and demand. Given the state’s limited resources and capacity to provide services directly, development efforts should focus on improving the policy guidelines, coordination mechanisms, and regulatory frameworks for public-private partnerships. Security and the Rule o f Law 29. Security and the rule o f law are not only crucial to ensuring justice and safety; they are also essential in creating an enabling environment for investments, economic growth, and development. However, private systems o f violence linked to political and criminal activities have become decentralized and widespread; Haiti now has more private security personnel than police officers. The institutions responsible for establishing security and the rule o f law-the police, judiciary and prisons-have largely collapsed, and to some degree they have become a source o f insecurity themselves. Political interference and corruption have undermined previous reform efforts and brought about the rapid withdrawal o f international assistance, with further destabilizing effects. 30. Haiti has one o f the world’s weakest police forces. There are 63 police officers per 100,000 people, less than a quarter of the regional average o f 283 per 100,000 and only a third of the average for sub-Saharan African countries. Moreover, a significant number o f members o f the Haitian National Police (HNP) are alleged to be involved in criminal and violent activities, including direct involvement in the past year’s wave of kidnappings, according to human rights organizations and police officials themselves. The United Nations Stabilization Mission in Haiti (MINUSTAH) i s mandated to support national authorities in the reform o f the HNP, but it has not had executive authority over the national police force for the purposes o f overseeing and monitoring the latter’s activities. There are increasing calls within Haiti and among the international community for MINUSTAH’S mandate to be strengthened in this regard. 31. Haiti’s judiciary i s similarly weakened b y corruption and frequent political interference, which have undermined the institution’s independence and constrained the success o f previous reform efforts. The justice system suffers from the obsolescence o f many laws, the absence o f basic guarantees, poorly trained and paid judicial officers, and the advanced state o f deterioration o f i t s physical infrastructure. As a result, access to law and justice i s difficult and random. Moreover, there i s only limited integration of the police, judiciary, and prisons into a functioning criminal justice system or chaine pknale. Communication breakdowns between the investigative “judicial police”, the prosecutor’s office, court clerks and the prison administration result in long delays in the administration o f justice and a pretrial detention rate o f almost 80 percent. 32. The state’s ability to provide basic public goods has thus been undermined b y a history o f neglect, political capture and corruption, and compounded b y difficult donor partnerships As regards the state’s administrative capacity, the territorial reach of state institutions i s minimal vi outside major urban centers, decentralization has not been implemented, and the state has been unable to provide basic services or infrastructures to large portions of the population. A diverse and vibrant non-state sector has filled some of the gaps in health and education, but these efforts have been largely uncoordinated and unregulated. The result has been a substantial variation in the quality o f the services provided and significant gaps in services for certain regions and vulnerable groups. The institutions responsible for providing the essential public goods of security and the rule o f law (namely, the police and judiciary) are largely ineffective and suffer repeated problems of political interference and corruption. Above all, core state institutions remain weak, and the impacts of past technical assistance programs have been largely lost. Before beginning large-scale capacity building programs, government and donors must establish firm oversight and mutual accountability mechanisms to obviate the recurrence o f practices that weaken institutions and perpetuate the conflict-poverty trap. Political Actors and Strategies 33. Twenty years have passed since the 1986 ouster of Jean-Claude “Baby Doc” Duvalier created a window o f opportunity to establish a more stable and democratic form o f governance. But Haiti’s highly polarized politics has complicated efforts to address the country’s complex and deeply rooted development challenges. 34. The 1987 constitution provides for a clear separation o f executive, judicial and legislative powers, as well as decentralized governance structures. In practice, however, politics in Haiti lacks a predictable system of rules. Political stability w i l l remain illusive without the establishment of an equilibrium among the competing forces within society-including class forces that historically have pitted a small political and economic elite against the vastly larger urban and rural poor. Haitian politics swings between two key dangers: capture b y privileged elites who harness government to protect their dominant position in society; and populism that neglects the country’s long-term institutional and economic development while paying lip service to the poor. The 2006 elections do not themselves ensure national reconciliation, but Haiti’s return to elected rule does create opportunities for the consolidation o f democratic institutions and processes. 35. Strong national leadership i s crucial to achieving a turnaround in Haiti. Entrepreneurs o f violence have taken advantage of political instability and weak state institutions to manipulate popular grievances for political and criminal ends. Breaking free o f Haiti’s poverty-conflict trap w i l l require capable national political leadership that i s committed to the consolidation o f democratic institutions and processes. In a context o f very difficult socioeconomic conditions, high social risks, defunct state institutions, extremely limited budget resources, and political polarization, Haiti’s leaders face enormous challenges. The 2006 electoral process, however, has created new opportunities for reform, reconciliation and partnerships. Conclusion: Breaking the Conflict-Poverty Trap 36. Haiti’s social resilience and social capital, i t s vibrant cultural life and improvements in social indicators are keystones to draw upon in breaking the conflict-poverty trap. Haiti’s deep and widespread poverty results from a long history o f failure to establish even basic enabling conditions for broad-based social and economic development. The state has struggled to provide basic services to the population and has been dominated b y a small elite that has made limited investments in infrastructure and basic services. Development, poverty reduction and conflict vii prevention will not be possible without a focus on strengthening the state’s capacity to provide basic public goods, including security and the r u l e of law. I t s financial and managerial resources must be used with an exceptionally strong sense of priority. In the past, however, efforts to restore state functions have been undermined b y political interference and corruption, which in turn prompted the withdrawal and redirection of donor support. 37. A reduction in violence and an improvement in security conditions are of paramount importance in fostering sustainable development in Haiti. Very poor urban neighborhoods are explosive points of conflict in the country’s development crisis, combining demographic, socioeconomic, institutional, and political risk factors. Violence and insecurity in the Port-au- Prince slums in particular have undermined the political process, fuelled conflict, and negatively affected development and reconstruction efforts. Joint multisectoral interventions in key urban areas (including CitC Soleil) that combine security and poverty reduction objectives w i l l be essential for creating the conditions necessary for broad-based national development strategies. 38. The most important factor for breaking out o f Haiti’s poverty-conflict trap cannot be provided b y donors but only by Haitians themselves: good leadership. Donors can support good leadership by establishing incentives that reward good governance and penalize the opposite. Because of the centrality o f corruption in undermining good leadership, transparency in public finances should be a foundation for the Bank and other donors’ assistance to a new Haitian government. 39. Haiti’s development crisis i s so multifaceted, and the country’s needs are so many, that prioritizing reconstruction efforts and development assistance has proven difficult. This report argues that the focus should be on the restoration of core state functions-the provision of the public goods of security and the rule of law, infrastructure and basic services. Among the triangle of risk factors in the poverty-conflict trap, institutional capacity building i s a key entry point for breaking the cycle; improving demographic and socioeconomic outcomes and supporting political dialogue remain longer-term objectives. Institutional reform itself, however, requires a long-term engagement. National planning and international assistance should build on the existing International Cooperation Framework b y prioritizing resources and monitoring progress, such that both donors and government can be held accountable for results. ... V l l l 1. INTRODUCTION 1.1 Haiti holds a unique place in modern world history as the f i r s t independent black republic, established in 1804 following the only successful slave revolution against colonial rule. Undoubtedly, this historic accomplishment has helped build national pride and solidarity across economic and social distinctions in Haiti, and i s reflected in the country’s vibrant cultural life. But as a stark reminder o f the republic’s troubled history, the bicentennial o f independence was overshadowed by violence and political instability that resulted in the fall of President’s Aristide’s government in February 2004. The sources of both Haiti’s strong social resilience and the recurrent political instability can be located in the country’s difficult independence process, which i s discussed briefly below as a backdrop to this report’s more contemporary focus. Today, the report argues, poverty, institutional weakness, and urban violence continue to sustain Haiti’s conflict-poverty trap in ever shifting ways. Yet Haitians continue to cope b y means o f informal social mechanisms and migration abroad. This report analyzes these challenges and opportunities in Haiti’s development trajectory and proposes strategic development priorities to reinforce strengths and mitigate weaknesses. The analytical approach i s described in more detail below, following a brief historical introduction.2 HISTORICAL BACKGROUND: ORIGINS OF THE RURAL-URBAN DIVIDE 1.2 The Republic o f Haiti emerged from a colonial order that established economic and social conditions for i t s post-independence development. Haiti i s more known for i t s early colonial-era dominance in sugar production, but the rapid growth o f coffee production in the second part o f the eighteenth century transformed Haitian society in several ways (Trouillot 1990). The expansion o f coffee production to meet soaring international demand attracted a new class of French migrants with more humble backgrounds than the traditional French sugar aristocracy. Together with freed people o f mixed ancestry, they established small coffee estates in the country’s mountainous interior, thereby providing a basis for peasant production outside the sugar plantations o f the coastal plains. This development reinforced another practice, whereby slaves were given garden plots for small-scale farming on land that was unfit for larger- scale production and that was more amply available in the interior. Coffee production made the interior a significant economic locus and helped turn an increasing number o f producers against French colonial rule. France’s trade monopoly cut off producers from valuable markets in other European countries and the United States. Haitian nationalism was also growing, forging a sense of identity that-with the independence process-came to be seen as essentially black, even among the lighter skinned economic elite.3 1.3 Despite this growing nationalism, Haiti’s political and economic leaders and most of the population were set on different courses. The revolutionary wars destroyed much o f Haiti’s physical and human capital. Plantations were ruined; a third o f the slave population was killed, and many escaped to the mountains or enrolled in revolutionary armies; almost the entire white administrative class disappeared; and foreign trade practically came to a standstill. Slavery was abolished but the wars had a disastrous impact on the country’s economy from a fiscal perspective. Hence Haiti’s new leaders, from L’ Ouverture during the wars and continuing under The historical background section i s based largely on Trouillot (1990) and Lundahl(l979). The grand blancs, petits blancs, and the affranchislgen de coleur. 1 Dessalines fro,m 1804, were determined to re-establish large-scale export-oriented plantations to restore the country’s economic strength. Former plantation land owned b y whites was confiscated b y the state, which led efforts to restore the plantations. But the availability o f land in the interior, and the former slaves’ aversion to plantation work, made it impossible to secure the necessary voluntary labor. Hence the introduction o f the fermage system, whereby every person who was not in the army or in urban trade was attached to a plantation under strict supervision and control. This re-establishment of export production through coercion met with some initial success, but for a number of economic and political reasons4the restoration policy proved futile and land was gradually redistributed into peasant plots. B y the end of the nineteenth century, Haitian agriculture was characterized almost entirely b y smallholding peasant production geared to subsistence and local market^.^ The country’s financial situation remained weak throughout the century as a resu