Rebuilding Haiti's economy

UN says recovery efforts must focus on kick-starting shattered economy.

    The UN has said the aid focus should now be on efforts to rebuild Haiti and its economy [EPA]

    As the emergency relief effort continues to gather pace in Haiti, attention has begun to focus also on the long term needs of rebuilding the country's shattered economy.

    Haiti's ambassador to the UN has estimated that the quake will cost the Caribbean nation up to 25 per cent of its GDP, adding that it may take a quarter of a century before it has recovered to pre-quake levels.

    special report
    Special Report: Haiti earthquake
    An urgent step in that recovery process, experts say, is simply to restore the flow of cash that is the lifeblood of economic activity.

    Without that simple step, many of the tens of thousands who lost their jobs as a result of the quake have little hope of finding work, and so being able to feed themselves and their families.

    As a result restoring the country's banking system has been a key priority.

    The first banks are expected to re-open to the public over the weekend, Haitian officials have said, although given the country's chronic poverty problems before the quake it will be just one step in the recovery drive.

    "It is really important to give people something positive to do and a lot of people [in Haiti] want to be a part of rebuilding their country"

    Bill Clinton, former US president

    It will though ease access to the remittances sent home by overseas Haitians – a vital source of funds that even before the quake accounted for up to a fifth of Haiti's GDP.

    As part of efforts to jumpstart the economy, the UN announced on Thursday that it was beginning to shift its priorities from emergency response to longer-term recovery work.

    Ban Ki-moon, the UN secretary-general, said international aid efforts must start to focus on measures to revive the economy, get cash flowing and get Haitians working again.

    Among the measures being implemented, he said, was a cash-for-work programme, enlisting a paid workforce of Haitians to begin rebuilding their country.

    Ban said the scheme aims to employ Haitians in recovery efforts such as clearing earthquake rubble, street repairs and bringing essential infrastructure such as electricity, back online.

    Time 'of the essence'

    UN officials have said they hope to enrol some 220,000 Haitians for the programme, which will pay people $5 a day for their work.

    Getting money flowing again is vital to reviving Haiti's economy [Reuters]
    Bill Clinton, the former US president and the UN's special envoy to Haiti, will oversee the programme which Ban said would indirectly benefit up to one million Haitians.

    "It is really important to give people something positive to do and a lot of people there [in Haiti] want to be a part of rebuilding their country," Clinton told reporters.

    His comments were echoed by Helen Clark, the head of the United Nations Development Programme, which has already announced plans to employ more than 1,000 people in cash-for-work programmes.

    "Time is of the essence in getting early recovery after a major disaster," Clark said, adding that the initial funding will help "prepare for the longer-term rebuilding".

    Meanwhile the UN's Food and Agriculture Organisation (FAO) has called for urgent support for Haiti's farming industry to expedite economic recovery.

    Vital food storage and irrigation facilities were destroyed or damaged in the quake and the agency said that urgently repairing those would be vital to Haiti's ability to support its own recovery.

    Planting season

    Jacques Diouf, the FAO director-general, said it was "crucial" work fast to save Haiti's upcoming planting season, which begins in March.

    Haiti officials said banks will reopen at the weekend to maintain cash flow [EPA]
    "It is urgent that we do this in light of the thousands of people fleeing the devastated capital for the rural areas and food prices rising," Diouf said in a statement.

    In a further step to ease pressure on the Haitian economy, the World Bank on Thursday said it had agreed a five-year waiver on Haiti's interest-free $38m debt, and is working to cancel the full amount.

    The International Monetary Fund (IMF) has also said its proposed $100m loan for Haiti would be interest-free until late 2011 to help the country rebuild.

    IMF officials say they have been working with donors to get cash circulating again so people can buy food and civil servants get paid.

    On Wednesday the IMF chief, Dominique Strauss-Kahn, called for an ambitious international recovery plan saying Haiti needed something more than "a piecemeal approach".

    He said Haiti needed "something which is much bigger to deal with the reconstruction of the country", citing the US Marshall Plan that rebuilt Europe after World War II.

    SOURCE: Agencies


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