Following the devastating earthquake in January, CGD experts offered fresh ideas on how the U.S. and the international community could help Haiti rebuild, particularly through non-aid channels. Several recent developments in the U.S. legislative branch reflect or build upon these ideas:
Kim Elliott, senior fellow and chair of the CGD Global Trade Preference Reform Working Group, proposed improving Haitian export opportunities to the U.S., urging legislators to relax complicated eligibility rules and extend preferential access to all Haitian exports. (CGD president Nancy Birdsall and research fellow David Roodman pushed these ideas in separate congressional testimonies—more below.)
Last week, the House of Representatives and the Senate passed the Haiti Economic Lift Program (HELP) Act of 2010 (H.R. 5160) to expand access for some Haitian apparel products and to extend two U.S. trade preference programs governing Haitian imports. If signed into law as expected, the legislation will stimulate some investment and growth in Haiti’s apparel industry, but as Elliott explains, the benefits of the bill will not apply to the majority of Haitian exports, mainly t-shirts and sweatshirts.
Elliott argues that the U.S. could further improve economic opportunity in Haiti by extending trade preferences to all exports and relax or remove overly restrictive program rules, a recommendation she says should apply to all least developed countries.
Haiti Fellows Program
In testimony before the House Financial Services Subcommittee on International Monetary Policy and Trade, Birdsall urged members of Congress to enact better trade and migration policies—in addition to increasing flexibility in our assistance efforts—to help Haiti rebuild after the earthquake. (CGD director of policy outreach Sarah Jane Staats provides additional details here.)
When asked by Chairman Meeks (D-NY) about what could be done to restore Haiti’s government capacity, Birdsall encouraged the committee and outside funders to consider a program modeled after the Scott Family Liberia Fellows that would support young people—particularly those among the Haiti diaspora—to return to Haiti to work as special assistants to key government ministers. We understand that forthcoming legislation will likely develop a similar model for Haiti to help relieve and bolster the country’s over-stretched and under-staffed government institutions.
The same House Financial Services Subcommittee asked Roodman to testify on the potential role and impact of microfinance in development. Roodman cautioned members that microfinance is not a panacea, and echoed Birdsall’s calls for greater flexibility for USAID and other agencies to analyze and adapt to the strengths and weaknesses of the Haitian economy. He also said the U.S. and other donors should support Haiti’s own private sector and innovative approaches to cash delivery, including via mobile phone networks.
Roodman offers his take on the hearing, concluding, “There was agreement that financial services and entrepreneurial activity are essential to helping Haiti recover and prosper, and a recognition that any successes will be hard-won.”
Last month, President Obama signed the Debt Relief for Earthquake Recovery in Haiti Act of 2010. The law calls on U.S. representatives at international financial institutions and multilateral development banks to use the “voice, vote, and influence” of the U.S. to cancel immediately and completely the $709 million in debts that Haiti owes to the organizations. Roodman provides more insight on Congress’ efforts to cancel Haiti’s debt in his blog on “Truthiness and Justiness at the Haiti Debt Hearing.”
It’s encouraging to see Congress exploring these fresh ideas for Haiti that encompass not just aid, but trade, governance, and private sector innovation. Even better that some of the ideas can be traced back to CGD work!
I hope that this and future progress in Haiti can open the door to broader foreign assistance reform, as Birdsall and Staats suggest here.