The April 2009 Haiti Donors Conference in Review
Delegates from 28 countries and multilateral organizations participated in the 2009 Haiti Donors Conference. Given the global economic downturn , now is a tough time to hold such an event. Donors pledged to provide $324 million in additional aid to Haiti over the next two years, of which $41 million is for budget support in 2009. Not as much as hoped for, but if the Haitian government can spend it well, this may open doors for increased support from donors later on.
The Inter American Development Bank (IDB) provides a basic summary of the event on its website. The summary notes that the the fresh assistance complements the financing previously committed by international community partners in Haiti, of about $3 billion dollars. It is important to note though that the conference resulted in pledges not actual contributions. I wish that pledges always turned into contributions, but sometimes they do not.
The event was co-chaired by Haitian Prime Minister Michèle Duvivier Pierre-Louis and IDB President Luis Alberto Moreno, President Moreno underscored the need for donors to improve aid coordination to help Haiti safeguard the progress it had made in political, economic and social stability before the past year’s external shocks which included food insecurity, a succession of major tropical storms and extensive flooding, that caused over a billion dollars in damage. The political gridlock over the selection of a new Prime Minister was another complicating factor.
According to the IDB, governments and institutions ensured that their support was aligned with the priorities of the Haitian two-year plan, which seeks to rekindle economic growth, rebuild infrastructure damaged by last year’s storms, expand access to basic public services and reduce the country’s vulnerability to natural disasters.
The recovery program could generate as many as 150,000 jobs over the next two years. Delegates welcomed the Haitian government’s plans to capitalize the opportunities opened by the HOPE II Act, a U.S. trade legislation that grants Haitian exports preferential access to U.S. markets. They also encouraged authorities to work closely with the private sector to improve Haiti’s business climate.
The International Monetary Fund and the World Bank updated the participants on Haiti's progress towards reaching the completion point of the Enhanced Initiative for Heavily Indebted Poor Countries, which will enable Haiti to benefit from debt relief. The process may be finished by the end of June, after which the IDB, the IMF and the World Bank stand to provide Haiti with $1 billion in immediate debt relief. MF Managing Director Dominique Strauss-Kahn notedf debt cancellation could free up to $40 million a year for poverty-reducing and pro-growth spending in Haiti.
Jacqueline Charles of the Miami Herald wrote a piece on the donors conference, noting how uncharacteristic it was that the U.S. government provided some degree of budget support ($20 million) toward Haiti's budget gap. It showed both confidence and a willingness to take a risk on Haiti. In all, donors provided $41 million for direct budget support.
Debt forgiveness is key given that the country pays about $4 million a month in loan repayments. Much of that debt was acquired under dictatorships not democracies. Lifting the debt burden will go a long will to helping Haiti over the long haul. Jubilee USA applauded the decision of the USA to pay off a portion of Haiti's debt, allowing Haiti the flexibility to invest in environmental preservation, health, infrastructure, etc.
Over the past year, much of what little financial flexbility the government had was wiped out by disaster response and trying to address food insecurity in the wake of the riots. However, many donors are hesitant to provide donor support to a government with a long history of corruption, even if there are signs of some progress. For example, the Canadian government feels Haiti is not ready for direct budget support until processes can be put into place to promote accountability and transparency.
On the other hand, Bernice Robertson, senior analyst for Haiti at the Brussels-based International Crisis Group, said the Haitian government had made a genuine effort to gain donor confidence by coming up with real priorities, and direct funding is a way for the government to have control over meeting them. He went on to state that governments often do not have the capacity to follow up what each organization is doing to ensure that it is compatible with their priorities.
OAS Secretary General Insulza stated that trust and mutual accountability must become the norm for cooperation between Haiti and donors. He endorsed direct budget support as a mechanism to increase transparency and efficiency in a new cooperation framework. For its part, Haitian government officials reiterated its commitment to regularly present detailed and timely information about its budget process and program execution. Donors underscored the importance of Parliament's role in moving forward with an ambitious reform agenda.
If you would like more information about this event, visit the IDB conference website. Here you can find the remarks of all speakers, information on the Haitain economy and infrastructure, in text or in video format. You can also download the documents referenced in the conference.
When it comes to development, it is not a one day conference that matters most but long-term engagement. Though pledges fell short of what had been hoped, the Haitian government does have a chance now to prove to donors that it has both the will and the capacity to better meet the needs of its people. We welcome your thoughts as always.