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David Roodman's Microfinance Open Book Blog


I testified yesterday before the U.S. House of Representatives Committee on Financial Services, Subcommittee on International Monetary Policy and Trade. The subject of the hearing was "Promoting Small and Micro Enterprise in Haiti." The hearing's web page lists all the witnesses and includes our written testimony and full video.

Some people were afraid of what I would say:


Saunders: Diz, I'm afraid. Terrible things are happening. I've got to stop him.

Diz [grimly]: They're listening to him. Anything might happen now.

It was an honor to appear with the other witnesses. Mathias Pierre appears to be just about the only poor Haitian to cross the DMZ between the informal subsistence economy and the elite formal business sector reportedly controlled by a half-dozen families. He runs a successful computer consulting company. Olivier Barrau runs an insurance company that appears to be doing great things in microinsurance. The depth of John Sanbrailo's experience doing aid in the Americas was evident in his written testimony. Simon Winter told hopeful stories about TechnoServe's work cultivating small businesses in poor countries.

I felt perplexed when I was invited to testify since I know little about Haiti. So I talked at length with a clutch of experts and tried to synthesize what I learned in the first half of my written testimony. (Thank you Stuart Rutherford, Nhu-An Tran, Luyen Tran, Alice Liu, Greta Greathouse, and Claire Alexandre.) In the end, it seemed that the subcommittee wanted my take on microfinance generally, so that is what I gave at the hearing:


Chairman Meeks ran the hearing with extreme efficiency until all of us had made our remarks. Then he adjourned it so Members could go to the Capitol building to vote on various measures. Some 45 minutes later, Representative Maxine Waters returned to reconvene the hearing and run the question & answer period. To my surprise, she started by quoting me. Her question/comment was long and I did not fully understand it (what does credit have to do with USAID procurement?). I chose to answer part of it, and also struggled to find my footing at first:


I suspect I didn't tell her anything she didn't already know. For she replied by saying, essentially, that's all very nice, but what precisely should Congress do? Perhaps the answer is here. At any rate, John Sanbrailo, who spoke right after me, disagreed, arguing that the problem is not rigid rules but lack of enough (top-notch) people at USAID. Sarah Jane Staats explained to me that there is a longstanding debate over just this point among people discussing how to reform American aid. I suspect that the root of the problem is our divided government, which was founded on a deep suspicion of executive power, and well before "micromanagement" had been coined. Whether because of formal rules or a sense that Congress is watching closely and suspiciously, USAID often errs on the conservative side. Its safer to contract with American companies even when Haitian ones can do the job for less.

I did not emerge form this hearing with an itch to blog the way I have about past hearings of this subcommittee (this and this). This one brought together diverse but compatible perspectives. 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.

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