Haiti has a vision to become an emerging economy by 2030. Haiti’s geography, resources, and history provide it with opportunities. The country has comparative advantages, including its proximity and access to major markets; a young labor force and a dynamic diaspora; and substantial geographic, historical, and cultural assets. Areas of economic opportunity for Haiti include agribusiness, light manufacturing and tourism. Building on these opportunities, the Government of Haiti issued in May 2012 a Strategic Development Plan (PSDH), aiming at building a new modern, diversified, resilient, competitive and inclusive economy, respectful of its environment and in which people’s basic needs are met. This objective would require ambitious double digit growth rates, a significant break from the past, based on an expansion of agriculture, construction, manufacturing, and tourism.
Overall, Haiti’s growth performance in the last four decades has been disappointing, however, and poverty remains endemic. A history of vested interests, political instability, and natural disasters has prevented the country from realizing its aspirations, trapping the country in a low equilibrium and keeping it as one of the poorest and least equal countries in the world. GDP per capita fell by 0.7 percent per year on average between 1971 and 2013. As a result, in 2012 59 percent of Haitians remained poor and 24 percent suffered from extreme poverty, indicating that almost 6.3 million Haitians could not meet their basic needs and 2.5 million could not even cover their food needs.
This Systematic Country Diagnostic seeks to identify the most important constraints to and opportunities for inclusive and sustainable growth in Haiti. To identify the key constraints to Haiti’s growth and shared prosperity, an extensive review of the literature (from both within and outside the World Bank) was first carried out. Economic and sector work on Haiti produced in 1980s and the early 1990s had already identified most of the country’s challenges and demonstrated that better functioning institutions, stronger human capital, and improvements in infrastructure were all needed for Haiti’s economic growth and shared prosperity. Rather than listing these again, this report attempts to provide some prioritization and identify the most binding constraints, both quantitatively and through a series of consultations with stakeholders and the country team.
Country Profile: What Makes Haiti Haiti?
A social contract is missing between the State and its citizens. While overall income growth is a necessary condition for increasing shared prosperity, it is not sufficient. Growth that is inclusive of the poor requires additional mechanisms such as a pro-poor fiscal regime, as well as targeted social programs and expenditures, not only to redistribute resources towards the poor but also more importantly to ensure that the less well-off are an integral part of the process and that opportunities improve for all. Previous reports have noted, however, that Haiti has never had a tradition of providing services to the population or creating an environment conducive to sustainable growth. Haiti’s tax system generates limited resources for the government and tends to be regressive. Furthermore, public spending in health, education, and social protection remains limited, constraining the government’s ability to provide services and offer equal opportunities to its citizens. In the absence of government, basic services such as health and education are mainly provided by non-government actors, placing a substantial financial burden on households and delivering achievements closely linked with household income.