Helping Haiti - Vijaya Ramachandran and Michael Clemens

January 06, 2014

As the fourth anniversary of the massive, January 12, 2010, earthquake in Haiti approached, I invited CGD senior fellows Vijaya Ramachandran and Michael Clemens, experts respectively on disaster relief and labor mobility, to join me on the Wonkcast to discuss the role of outsiders in trying to assist Haiti’s recovery. The record is not reassuring on either count. But it does offer valuable lessons for future efforts in Haiti and for attempts elsewhere to help poor countries struck by disasters.

Vijaya’s research on Haiti found that in the aftermath of the quake there was an outpouring of international support, with some $6 billion in public and private contributions from the United States alone. Vijaya explains that such a large sum, if distributed directly to citizens, would have doubled the income of the average Haitian for a year. But reconstruction has been painfully slow and there has been little sign of improved living conditions. What happened to all that money?

“Nobody knows,” Vijaya says. “There is so little tracking of what happened to these funds. We know from the available data that money was disbursed to organizations in the US and elsewhere--nongovernmental organizations, for-profit organizations, some public organizations, including various agencies that were implementing programs in Haiti--but after that the trail goes cold.”

Much of the relief and reconstruction money initially passed through USAID, the leading US development agency. USAID reports on disbursements to its primary contractors but these firms and NGOs typically then subcontract to others. And while the primary contractors are required to collect data on their subcontractors’ activities, they are not required to disclose it. Usually they don’t--and neither does USAID.

“The information is likely somewhere in USAID’s system, but it’s not being aggregated or released in any understandable way to the public,” Vijaya says.

This way of doing business is increasingly at odds with a global push for greater transparency, including in foreign assistance. The International Aid Transparency Initiative (IATI) has created an online toolset that makes it easy for aid donors, NGOs and for-profit contractors to disclose their activities on a common platform in a consistent digital format.

Vijaya explains: “IATI basically creates a very simple accounting format where different organizations can report what they’re doing. And this format is standardized, so we can compare what one organization, say Save the Children, is doing in comparison to Oxfam ¼ and these organizations themselves can see what the other players are doing.” Subcontractors can use the system just as easily--and likely would if USAID encouraged them to do so, Vijaya adds.

“There’s no reason why this data cannot be uploaded quickly and easily,” she says.

The issue is not going away. Vijaya and I recall how after Typhoon Haiyan devastated the central Philippines last November a blog post that she wrote with Owen Barder urging the United States and other donors to be transparent about their assistance received thousands of Facebook likes from Filipinos in the Philippines and overseas. The Philippine government launched its own Foreign Aid Transparency Hub (FAiTH) and is looking to the United States and other donors to support this effort by disclosing more detailed data on their own activities in the Philippines.

Of course, aid can only do so much. Michael Clemens argues that the benefits of increased labor mobility potentially dwarf aid, in Haiti, the Philippines, and elsewhere.

After a short break I turn to Michael to discuss the potential for increased labor mobility to raise incomes and reinforce recovery in Haiti. It’s an issue on which he has been actively involved, as one of the world’s top researchers on such questions and as a policy entrepreneur, pushing for Haitians to receive the same opportunities that many other poor developing countries have to send temporary workers to the United States.

Increased labor mobility for Haiti “could help enormously,” Michael says. “Something like 10 percent of Haitians live outside Haiti, and about a quarter of the economy in Haiti is sustained by people sending money home, so really a huge feature of the economic landscape.”

The United States did slightly modify migration rules for Haitians after the quake: those already in the country were temporarily protected from deportation. But Michael discovered that Haiti was not included on the list of countries eligible for temporary work permits known as H-2 visas, which allow people to work in seasonal agriculture and service industries, such as tourism. Under Michael’s leadership, CGD pushed for Haiti to be included.

“We recommended to the Department of Homeland Security that they undo that ban and allow Haitians to access these visas,” Michael explains. They did that, but since then, nobody has taken the next step of building a program that would allow Haiti to really use this program for mutual benefit.”

The next step Michael refers to would be the creation of a guest-worker program, similar to successful programs in New Zealand and Canada, that help to ensure mutual benefits through activities such as pre-departure training, collaboration and information sharing, and selection of workers. In the absence of a broader national program, Michael suggests a US-Haitian partnership that could effectively and cheaply help Haiti recover and grow its economy.

Such a partnership, he says, should include Haiti’s labor ministry; an international organization to provide technical assistance, showing Haiti how other countries manage such programs; and private sector recruiters to recruit, train, and monitor the workers.Michael estimates that such a program, which could unleash hundreds of millions of dollars in remittances from Haitians working in the United States, could be set up and run for less than a million dollars.  That's about one sixtieth of one percent of the US$6.4 billion in donor money that has been spent on Haiti since the earthquake.

We end the discussion concluding that there are two “stroke of the pen” changes that could make a world of difference to Haiti, even four years after the quake. 1) USAID Administrator Raj Shah should announce that primary contractors are strongly encouraged to begin using IATI to disclose data on subcontractor activities and 2) a philanthropist involved in trying to help Haiti should step forward to sponsor the creation of US-Haitian labor mobility partnership. (Those who worry that such programs might reduce employment opportunities for Americans should check this out.)

My thanks to Kristina Wilson for a draft of this blog post, and for recording and editing the Wonkcast. 


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.