Twelve months after the devastating earthquake, some of the fresh ideas CGD policy experts proposed to help Haiti through non-aid channels have gained traction, while others remain relevant, but have yet to be tried. The anniversary is a time to revisit progress and shine a light on untapped opportunities to assist Haitians in their reconstruction efforts through U.S. policies on trade, debt, migration, and more:
President Obama signed the bipartisan Haiti Economic Lift Program (HELP) Act (S. 3275 and H.R. 5160) on May 24, 2010. The law improves Haitian export opportunities to the United States by expanding access for certain Haitian textile and clothing products and by extending U.S. trade preference programs for Haiti through September 2020.
While the HELP Act will stimulate investment and jobs in Haiti’s apparel and textile industries—a South Korean clothing manufacturer announced this week that they will invest $78 million to open a textile factory in Haiti, projected to create 20,000 jobs over the next seven year—senior fellow Kim Elliott explained that the benefits of the law do not apply to many Haitian exports, such as t-shirts and sweatshirts. The United States could further fuel economic growth in Haiti by extending duty-free and quota-free market access to all exports and by relaxing or removing restrictive program rules. As Nicholas Kirstof summarizes in a recent column, “Those nations that have managed to lift themselves out of poverty have done so mostly with trade, not aid.”
While potentially momentous for Haitian workers, extending additional trade preferences to Haiti would likely have minimal impact on U.S. producers, as Haitian exports account for a tiny percentage of total U.S. imports. The 112th Congress appears keen to push an active trade agenda—we hope that it will include expanded preferences for Haiti.
In April 2010, President Obama signed the Debt Relief for Earthquake Recovery in Haiti Act (S. 2961 and H.R. 4573), calling for the immediate and complete cancelation of Haiti’s $709 million in debts to international financial institutions and multilateral development banks. In May, the World Bank cancelled Haiti’s remaining debt to the institution’s International Development Association (IDA), roughly $36 million. The following month, the IMF approved cancellation of Haiti's $268 million debts and agreed to a three-year arrangement with the country, which included a $60 million loan.
In a series of substantive blog posts, senior fellow David Roodman examined the calls to cancel Haiti’s debt, considered Congress’ efforts, and cautioned against overestimating the potential of outright debt relief. His reflections highlight the need for preventive strategies to manage risk in poor countries and for comprehensive disaster responses—plans that consider migration, trade, and other policy options.
Beyond the policy debate, the Haiti debt episode created a new, formal IMF facility to cancel debt of countries experiencing extreme disasters. The criteria, however, are so stringent that currently, only Haiti qualifies. But, as David pointed out during a debt relief event at CGD last September, once such structures are created, the parameters often soften over time. He notes that this could be the thin end of a wedge that institutionalizes and automates debt relief.
For CGD senior fellow Michael Clemens, the disaster in Haiti exposed a gaping hole in U.S. migration policy that often and unfairly excludes those in greatest need. Michael points out that simply having the chance to leave Haiti has lifted more Haitians out of extreme poverty than all of the billions of dollars in aid, all of the foreign investment, and all of the trade preferences that Haiti has received from the United States during the past thirty years. (For more on the impact of mobility, particularly for Haitians, see Michael’s CGD working paper, Washington Post, and Foreign Policy articles.)
The United States had no prearranged, systematic way to handle even a small number of potential migrants after the earthquake. As the comprehensive immigration reform debate rages on, Michael is searching for other ways to provide refuge for victims of natural disasters, through legislative and/or administrative channels. Stay tuned!
Prior to the earthquake, Senator Dick Durbin (D-IL) and Representative Kendrick Meek (D-FL) introduced related versions of the Haiti Reforestation Act (S. 1183 and H.R. 4206, respectively). Neither bill, however, reached the floor for a vote. If reintroduced and enacted, the Haiti Reforestation Act would authorize assistance to Haiti to reduce deforestation, to increase reforestation, and to improve management of natural resources.
Monitoring will be a key component of such an agreement. Senior fellow David Wheeler has written extensively about the importance of forest conservation (see his work here and here) and with his team, created an online tool to detect forest loss. Forest Monitoring for Action (FORMA) can help U.S. policymakers and other authorities know when and where forest destruction is occurring—making it easier for wealthy and developing countries to work together on climate agreements.
A Haiti Fellows Program?
By some estimates, 40 percent of Haitian government workers either perished in the earthquake or have since left the country. Yet many young, educated Haitians currently residing in the United States are eager to serve their country. In testimony last year before the House Financial Services Subcommittee on International Monetary Policy and Trade, Nancy Birdsall encouraged members of Congress 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. The idea was well received by committee staff and, despite the leadership change, we are hopeful that future legislation will develop a similar model for Haiti.
In a recent blog, my colleague Charles Kenny speculates that “some of the frustration with the response might reflect expectations that are perhaps unrealistically high rather than an excessively lackluster response.”
I add my praise and gratitude for the countless people and organizations that have worked tirelessly to overcome this devastating event—and renew the call for innovative, policy-driven responses to promote and sustain development in Haiti.