The Caribbean Community (CARICOM) has serious concerns about the continuing deterioration of the security situation and the social circumstances in the Republic of Haiti

The continued breakdown of law and order in Haiti and its miserable impact on the Haitian people

The Haitian unrest is having a negative impact on the already weak economy of Haiti - leading to even more mass demonstrations.  Especially the worsening social conditions and the limited availability of food require urgent and immediate attention from the international community

The Caribbean Community (CARICOM) is gravely concerned by the continuing deterioration of the security situation and the social circumstances in the Republic of Haiti.

The continued breakdown in law and order, and its distressing effect on the people of Haiti, is intensifying.  The fraught situation is exacerbated by the inability of the Haitian security forces to address the ongoing violence.

The unrest is having a negative impact on the already weak economy leading to even more mass demonstrations.  Especially the worsening social conditions and the limited availability of food require urgent and immediate attention from the international community.

This persistently distressing situation is untenable, and CARICOM calls for all stakeholders to engage meaningfully with the aim to find a way forward and to put country first and address the situation urgently.

CARICOM, following discussions in the past weeks, remains available to assist and work with international partners to mobilize financial and technical resources to facilitate a process towards normalization and ultimately the holding of free, fair and credible general elections.

Georgetown, Guyana

19 September 2022

Source

Money, money, money: Remittances and microbanking in Haiti

by Jennifer Nerby, COHA Research Associate



Haiti, along with the greater Caribbean, has experienced a substantial decline in remittances following the 2008 global economic crisis. Fortunately, remittance flows to Haiti increased significantly in the aftermath of January 2010’s earthquake. That year, Haiti received USD 1 billion in relief funds, with a significant portion coming from the Haitian diaspora.[1] While these contributions helped many individual Haitian families to recover from the devastation, it is demonstrably clear that remittances do not pose a long-term solution for the country’s economic woes. In spite of relatively high remittance rates, Haiti suffers from pervasive unemployment. Many small island specialists seem to feel that only growth in small businesses and microlending operations can stimulate an independent and self-sufficient Haitian economy.


The Quake


On January 12, 2010, a 7.0 magnitude earthquake struck ten miles west of the Haitian capital, Port-au-Prince, leaving over three million people in need of emergency assistance.[2] The earthquake displaced at least 1.3 million people, and as of January 1, 2011, an estimated 810,000 remained in the 1,150 refugee camps still in operation.[3],[4] That same month, Nigel Fisher, the United Nations Humanitarian Coordinator for Haiti, commented, “In retrospect I think we can say that by and large the initial response to the earthquake was a success.”[5] Remittances were a critical component of the total relief efforts; more than one million members of the Haitian diaspora increased the amount of money they send to relatives in Haiti after the calamity, resulting in a USD 360 million surge in remittances during 2010. World Bank economist and remittance expert Dilip Ratha explains that, “Financial help in the form of remittances from family members is always the first to arrive in times of distress.”[6] Though remittances provided much needed support to the earthquake’s survivors, it is unclear if these funds will permanently reduce poverty and bring about necessary infrastructural change.


The Remittance Debate


Like many Caribbean nations, Haiti depends on remittances as a fundamental component of its national GDP ratings. According to the World Bank, migrants hailing from Latin American and Caribbean nations (LAC) sent a total of USD 48.3 billion to their home nations in 2005, and remittances represented 70 percent of all foreign direct investment to the region in 2004.[7] In Central American and Caribbean nations, remittances typically account for 10 to 20 percent of each nation’s GDP.[8] Haiti, however, is a special case; it dramatically surpasses the average ratio, with remittances accounting for 52.7 percent of the nation’s GDP in 2004.[9]


Remittances do not necessarily solve pressing economic, political, or social issues in the Caribbean. In a 2007 paper entitled “Close to Home: The Development Impact of Remittances in Latin America,” World Bank senior economists Humberto López and Pablo Fajnzylber examine the positive and negative effects of remittances. Although the authors acknowledge that remittances often stimulate growth and investment, improve access to health care and education, and increase macroeconomic stability and individual savings, they question the effectiveness of remittances in decreasing poverty and instability in recipient nations.[10] These contributions are subject to the financial standing of individual immigrants in developed countries and often prove inconsistent, as evidenced by the stagnation of remittance flows following the inception of the global financial crisis of 2008.


The Crash


The global economic crisis of 2008 caused an abrupt decline in remittances worldwide, doing grave damage to many Caribbean economies. Looking forward, a variety of sources anticipate substantial increases in remittances to the Caribbean during 2011 and 2012 as developed economies recover from the 2008 crisis. Nine of fifteen Caribbean countries were expected to grow in 2010, but Haiti, along with five other nations, was predicted to contract significantly.[11] This regression is largely related to a 12 percent decline in remittance rates during 2009, as Haiti was found to lack the domestic industries required to recover without international aid. The Outlook for Remittance Flows report anticipated that a two percent growth in remittances to Latin America and the Caribbean should be expected in 2010, and the World Bank reported that a “healthy recovery” was underway from the slump of 2009.[12] Furthermore, the Outlook anticipated 7.6 percent growth for 2011 and 10 percent growth in 2012, totaling USD 69 billion in remittances allocated to the Caribbean. Haiti is scheduled to be one of the top three recipients of such funds.[13]


While high remittance rates have at times accounted for legitimate economic benefits, local business development in Haiti has been dwindling as a result of the nation’s dependency on international donations. Much of Haiti’s reliance on remittances can be attributed to the nation’s high rates of unemployment, which reached an astronomical 40.6 percent in 2010. The CIA World Factbook noted that two-thirds of the population did not hold a formal job and ascribed the lack of foreign investment in industry to Haiti’s “limited infrastructure and a lack of security.”[14] As a result, remittances have been found to create a vicious cycle of dependency on international donations coming from abroad. The escalating presence of microbanks as a major financial tool has led to the growth of small businesses and local industries, conceivably replacing remittances as the backbone of the Haitian economy.


Microlending


Unlike remittances, microlending initiatives retain the potential to tackle Haiti’s weak infrastructure and unemployment. Fonkoze, one of Haiti’s most prominent for-profit microbanks, has forgiven more than ten thousand loans after the earthquake and continues to play a crucial role in the recovery process. The bank also expanded the “Ti Kredi,” or “Little Credit,” loan program to offer small loans of USD 25 to poor families who did not qualify for the bank’s larger USD 125 loans. “Ti Kredi” includes shorter repayment periods as well as health care and educational services.[15] Fonkoze’s programs present borrowers with the economic opportunity to open small businesses, along with the critical skills to manage them successfully.


Thus far, microbanks have been one of the most effective relief agencies in Haiti and have been found to have the potential to enact enduring and progressive change in the region. Greta Greathouse of the United States Agency for International Development (USAID) believes that Haitian microbanks “need to get stronger on a permanent basis so they can offset the operational risks that come with Haiti because of the earthquake and the inherent risks that are unfortunately a way of life for the country and its people.”[16] A debilitating lack of infrastructure prevents many microbanks from becoming self-supporting and for-profit, as international contributions are often needed to cover losses from missing and delayed loan payments. Strengthening the Haitian banking industry will require improved regulation and a gradual shift toward for-profit banking.


Most microbanks in Haiti remain non-profit and consequently require international assistance to recompense for unpaid loans. Non-profit banking, while more sustainable and autonomous than remittances, lacks the financial transparency of for-profit institutions.[17] Fonkoze is one of the few for-profit institutions in Haiti and had to operate at a loss for nearly three years before it was able to turn a profit. The microbank eventually stabilized thanks to USD 15 million in foreign donations.[18] Though the bank initially depended on international contributions, Fonkoze is now en route to self-sufficiency and provides many Haitian borrowers with the opportunity to open and operate independent businesses.


Conclusion


The microlending climate in Haiti is far from ideal. Fonkoze nearly closed in 2008 due to losses from a destructive hurricane season, and more than 50 percent of borrowers with the major microcredit group Finca Haiti missed payments after the 2010 earthquake.[19] The impoverished Caribbean nation is no stranger to natural disasters, and its dependence on foreign aid automatically entails a delay in relief efforts. The development of sound local emergency relief programs will enable Haiti to respond quickly and efficiently to crises without having to wait for foreign assistance. As more Haitians turn to microbanks for loans, the need to secure and regulate the banking industry grows ever more pressing. While some regulation efforts have been undertaken, it is still necessary to guarantee that Haitian microbanks are able to survive natural disasters and economic downturns like that of 2008.


Both remittances and microbanks have been vital to Haiti’s recovery since January 2010. Remittances offer a temporary solution to a greater economic problem. With improved regulation and security, microbanks can revolutionize the Haitian infrastructure and employ millions of jobless citizens. As in Fonkoze’s case, initial international investment will be necessary to financially secure Haitian microbanks, but the eventual autonomy of these institutions could be a remarkable game-changer for the Haitian economy.




The references for this article can be found here.





The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, visit www.coha.org or email coha@coha.org

August 25, 2011



caribbeannewsnow

Bahamas Blog International

Respect or the lack thereof, the missing ingredient to propel the Haitian recovery

By Jean H Charles


I have been reflecting and pondering on why Haiti is not developing harmoniously while it has an optimum population -- 10 million people -- resilient, industrious, willing to work for almost nothing (a base revenue or a salary of $500 per month for each working Haitian would create a brand new middle class and provide an extraordinary boom to the Haitian economy!) I have found respect or the lack thereof is the missing ingredient that could propel the Haitian recovery.

This lack of respect is almost universal. The Haitian government, the international community, the NOGs implanted in the country and by ricochet the Haitian people toward each other are all culprits in this chain of disrespect that infect the seedling of a relationship that would produce a tree filled with welfare, generosity and good hospitality for all.

As the Haitian people and the rest of the world were commemorating last week the January 12 earthquake that devastated the capital and the surrounding cities, it is proper to recall how the Haitian government under the baton of the man who is now proposed to become the next chief of state of the country has collected the bodies and proceeded with their inhumation.

Pay attention to this wrenching story as recalled by my parish priest of St Louis King of France in Port au Prince. Armed with a leadership style that is not obvious in Haiti, the priest went to scout out the place where thousands of victims of the earthquake were placed in order to bring the whole congregation to a pilgrimage to pay respect to the dead ones.

His description brought tears in the eyes of the parishioners. He could not find the place except the frame of a small hill where the goats and the pigs were roaming freely. An eyewitness told him that 60 large trucks were in line to dump the bodies to a former site -- Ti tayen -- where the dictatorial regime of the Duvaliers used to kill its opponents.

There was a small riot by the surrounding populace at the infamous site, forcing the macabre convoy to be diverted further to St Christopher, where they unceremoniously dumped the bodies. Dirt was put on the dead by tractors, making a small hill. The site has been abandoned since, with no memory and memorial, visited only by the goats and the pigs.

In life as in death, the Haitian government treats its people in oblivion. The living do not fare better. The capital city is filled with garbage not collected for weeks or months sometimes. The public market is in condition so filthy that it should shock the conscience of any civilized person.

Cape Haitian the second city of the Republic, a museum style treasure that should be cherished not only by the citizens of Haiti but by the rest of the world as a world heritage site because each house is a museum relic of the colonial era. It reflects the decomposition of the profound disrespect of the Haitian government towards its own people.

Sewers have not been cleaned for decades. For a population of half a million people there is no public water distribution. The lack of leadership in service delivery is only equal to the limitless resilience of the Haitian people in accepting and living with the squalor imposed upon them by their own government.

The rest of the country is completely abandoned with no dedicated funding going directly to any of the cities or the rural villages. The First Lady in a recent interview to the Associated Press was offended at the national and international press for treating her husband president as derelict in leadership style. Using the lowest denominator on the evaluation scale, one cannot find a better characterization. As a scholar educated abroad, I know the First Lady know better!

The international community, in spite of the outpouring of generosity following the earthquake, has treated Haiti and the Haitian people with contempt. The Organization of American States (OAS), the main actor in framing the political transition, has not made any excuses, pardon or retribution to Haiti for contributing to the destruction of its economy through the enforced embargo against the country in October 1992 for reasons that had nothing to do with reason, logic, and good politics.

The president (Jean Bertrand Aristide), who was expelled from the country, was so divisive in tearing apart the very fabric of society that it has not being able to be woven again. Imposing an OAS-led embargo for his return was the high point of insanity, nay, stupidity!

Accurate reports by international organizations have found one thousand children dead of malnutrition every month during the two years embargo. The destruction of the environment was accelerated and maintained since the embargo. The Haitian economy has taken since a deep decline it has never recovered from.

The disrespect of the OAS/CARICOM organizations towards Haiti is so deep that you will not find one single Haitian professional in the policy making decision of either organization, in spite of the fact the population of Haiti and the immigration issues confronting the region and its relations in the context of public private international law necessitates a Haitian voice and insight in the policy deliberations.

The OAS resident in Haiti, Mr Ricardo Seitenfus, a scholar on Haiti in his own right, in a departing shot, has expressed with a phenomenal clarity the true picture of Haiti vis a vis the international community. “The international reconstruction commission to this day is searching for its real functions. (As such) 11 billion collected for Haiti never got to the country. Haiti needs a peace mission not a war mission. MINUSTHA has been an albatross out of place devoid of a true mission thrown into Haiti as a cottage industry for its own needs not to bring relief to the people; in the case of Haiti we need not a security council but a council for social and economic development. If people imagine that Haiti future can be made through MINUSTHA or through the NGOS we are deceiving the public opinion and we are deceiving the Haitian people.”

For these accurate comments Mr Seitenfus was fired by the OAS Secretary General at a critical time when his judgment is necessary to facilitate the smooth transition of the Haitian democratic process.

In the next weeks the lack of respect of the OAS/CARICOM team will be more evident. A scheme concocted last June between the Haitian government represented by one of its ministers, at the headquarters of the OAS in Washington DC, with Mr Colin Granderson and Mr Albert Ramdin to facilitate the Preval regime to maintain its power through a flawed and corrupt election will be either confirmed or tossed out of the basket by the vigilance of the Haitian people and/or the leadership of some friends of Haiti, including the Obama government.

The NGOs have descended en masse into Haiti after the earthquake. The emergency support was unprecedented, yet the haphazard mode of reconstruction is offensive to the nation. A giant ghetto -- Corail -- is being planned and executed with the funds donated by the people of the world while the rest of the country needs decent housing, convenient school and hospitals and incubation for business promotion. Massive amounts of money are channeled to truck water distribution when the purification could be done easily at the source.

Their intrusion into the country would be beneficial if they would agree amongst themselves to coordinate their work and pay a decent salary to their workers – a minimum of $500 per month to the unskilled. The NGOS represent also a safe harbor for the thousands of Americans, Europeans, Canadians and South Asians who cannot find a job at home. One of them told me the truth: “But for Haiti, I would still be unemployed with a 14% rate of unemployment in Florida.”

Finally but not least, the lack of respect of the Haitian people amongst themselves is contagious. The public officials in their tainted cars with all the privileges showered upon them by the government exhibit an arrogance that echoes the master-servant relationship. Haiti, the land where democracy and human rights took birth in the western hemisphere, is today a de facto apartheid state. The vicious circle of disrespect by and amongst the ordinary citizen is pervasive. It can be seen in the public transportation, in the delivery of the health system, in schools and the organization of the public markets.

The rebuilding of the country must start with the most elementary ingredient: respect for each citizen and respect for each other. The spirit of the hundreds of thousands who lost their lives in the January 12, earthquake demand no less! One year after the earthquake, faced with a complete disorganization of the international institutions, as well as the low level of the trickling down of the recovery resource, it has become clearer for each Haitian that salvation can only come from within, starting with respect for and to each other.

Note:
January 12 of each and every year should be dedicated as a Day of International Solidarity with the people and the Republic of Haiti to honor the 300,000 dead from the earthquake, spirit the 1.5 million internal refugees out of the fetid camps into self dependence and last but not least usher into economic self sustenance eight million (out of ten million) Haitian people who live now in abject and extreme poverty!

January 17, 2011

caribbeannewsnow

Bahamas Blog International

Remittances to the Caribbean on the rise again — World Bank

WASHINGTON, USA (CMC) — After what was considered to be a "rough 2009", the World Bank says remittances are on the rise again in the Caribbean.

A briefing paper by the Washington-based financial institution said remittances "began to bottom out during the last quarter of 2009" and, as a result, "money transfers now appear to be on the rise" in Jamaica, Haiti and other places.

The briefing paper said remittances to Latin America and the Caribbean didn't fall as sharply as private capital flows to the region, as investors pulled out of emerging markets.

The bank said remittances to Latin American and Caribbean nations sank 12 per cent as the US and global economies "hit the skids" last year.

Overall, World Bank researchers said remittances to the region are expected to increase this year by an estimated 5.7 per cent and would also grow in 2011.

The World Bank said remittances to Haiti are expected to increase this year as relatives abroad seek to assist those at home.

It said the post-earthquake decision by the United States to grant temporary protected status to 200,000 Haitians living in the country illegally could also increase remittances by as much as US $360 million this year.

The bank said the Haitian Diaspora sent an estimated US $1.32 billion in remittances to their homeland last year. In 2008, remittances accounted for a fifth of the Haitian economy.

September 14, 2010

jamaicaobserver

Bahamas Blog International

Haitian president-elect Rene Preval offers hope for economic progress in Haiti

Haiti’s Ambassador to The Bahamas - Louis Harold Joseph believes that with economic improvement, fewer Haitians would be inclined to make the desperate voyage to The Bahamas and other countries in search of better opportunities

Envoy Hopes For Economic Progress In Haiti

By Candia Dames

Nassau, The Bahamas

5 May 2006

Hope for economic progress in Haiti is building as Haitian president-elect Rene Preval prepares to be sworn in on May 14.

Mr. Preval, who has vowed to restore security and create jobs to help pull Haiti’s poor out of their state of despair, won the election earlier this year.

Haiti’s Ambassador to The Bahamas - Louis Harold Joseph believes that with economic improvement, fewer Haitians would be inclined to make the desperate voyage to The Bahamas and other countries in search of better opportunities.

"Certainly, a stabilized country will have an impact on the economy," Mr. Joseph said in an interview with the Bahama Journal on Thursday.

"First of all, that will allow the government of Haiti to concentrate on more important matters in the country, particularly alleviating the situation of the poor people in the country and put everything in place for the economy to work properly."

He noted though that many Haitians living in The Bahamas have been contributing to the economic development of the country for decades and believes that there is a way this can continue to happen legally.

It’s why Mr. Joseph supports the establishment of a labour accord between The Bahamas and Haiti - whereby The Bahamas would get labourers from Haiti when needed.

"Since we’re going to have a new government, I cannot get into details because I don’t yet know what will be the position of the new government, but I think this is one possibility," the ambassador said.

The labour accord is also something that government officials like former Labour Minister Vincent Peet, and Foreign Affairs Minister Fred Mitchell both believe can work.

Bahamas High Commissioner to CARICOM, A. Leonard Archer also believes that a labour accord would be mutually beneficial for The Bahamas and Haiti.

On Thursday, Mr. Joseph said the kind of stability Haiti is beginning to experience with presidential and legislative elections now history, would also help foster greater investments in the country by outsiders, including Haitians who live in other countries.

"A stabilized country certainly could attract more investments.  People will be more willing to go to Haiti and work with the business sector," he said.

"We are on the right path toward democracy and at this particular time Haiti deserves the support of the international community as well as that of all our neighbours and particularly our sister nations in CARICOM."

Minister Mitchell also said recently that CARICOM expects that Haiti will take its seat again around the table after Mr. Preval is inaugurated.

Mr. Joseph said he thinks the promises between The Bahamas and Haiti are great.

He also noted that over the last 15 years or so there was no economic growth in Haiti, but the population has been increasing.

Mr. Joseph said that The Bahamas has traditionally supported Haiti, and Haiti expects that that support will continue.

"We need that support at this particular phase because the political situation in Haiti is always fragile, particularly at this time, and we continue to need the support of [The Bahamas]," the ambassador said.