Caribbean Development Bank. Country Strategy Paper 2013-16 Haiti. Staff Report

The Haitian economy is still recovering from the January 2010 earthquake albeit at a slower pace than anticipated. Prudent macroeconomic policies have helped keep inflation in the single digits and improved the external position. However, less than anticipated capital spending coupled with a series of disasters, including a cholera outbreak and tropical storms, has slowed down the reconstruction and economic recovery.

Prior to the earthquake, about 78 per cent (%) of the population (estimated at 9.9 million in 2009) was poor, that is, living below the international threshold of $2 a day. This situation was made worse by the earthquake with the level of unemployment rising to an estimated 41% in 2010, compared with an estimated 35% prior to the event. Overall, social and economic conditions are dire. Compounding and contributing to the poverty situation is limited access to education at all levels, with 40% of primary-school-age children not enrolled in school and few children transitioning to the secondary level. This results mostly from high school fees which most poor parents are unable to pay; and the absence of school facilities especially in rural areas. As a consequence, 87% of household heads with no formal educational background are among the poor.

Haiti’s population is largely rural-based with pre-earthquake estimates indicating that approximately 60% of persons live in rural communities. In general, rural communities are characterised by high levels of poverty, limited infrastructure and poor access to services resulting from decades of under-investment and environmental degradation. Overall, only 5% of residents in rural areas have access to electricity, less than 55% have access to improved drinking water sources and less than 10% to improved sanitation facilities. In addition, the rural road network is limited, with roads generally unpaved, making navigation difficult particularly during the rainy season. Agriculture is the dominant economic activity in rural areas providing employment for an estimated two-thirds of residents. However, over the past two decades the sector’s output has been on the decline due to a combination of factors including underinvestment in rural infrastructure and services; poor natural resource management; limited access by farmers to modern technology, credit, production and marketing support; and weak and poorly-governed rural institutions.

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