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U.S. Department of State

Diplomacy in Action

Haiti (12/07/10)


December 7, 2010

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For the most current version of this Note, see Background Notes A-Z.

PROFILE

Geography
Area: 27,750 sq. km. (10,714 sq. mi.); about the size of Maryland. Ile de la Gonave, Ile de la Tortue, and Ile a Vaches comprise Haiti's principal offshore territories.
Cities: Capital--Port-au-Prince (est. pop. 2.35 million prior to the January 2010 earthquake). Other cities--Cap Haitien (est. pop. 250,000).
Terrain: Rugged mountains with small coastal plains and river valleys, and a large east-central elevated plateau.
Climate: Warm, semiarid, high humidity in many coastal areas.

People
Nationality: Noun and adjective--Haitian(s).
Population (April 2010 est.): 9,900,000.
Annual population growth rate: (2009 est.) 1.66%.
Ethnic groups: African descent 95%, African and European descent 5%.
Religions (2003 data): Roman Catholic 55%, Protestant 28%, voudou (voodoo) practices pervasive.
Languages: French (official), Creole (official).
Education: Years compulsory--6. Adult literacy (2003 census)--56%.
Health: Child mortality--1 out of 8 children die before they reach the age of five. Life expectancy--62 years (women), 59 years (men).

Government
Type: Republic.
Independence: January 1, 1804.
Constitution: March 1987.
Branches: Executive--President. Legislative--Senate (30 seats), Chamber of Deputies (99 seats). Judicial--Court of Cassation.
Administrative subdivisions: Ten departments.
Political parties and coalitions: INITE Coalition (formerly Lespwa), Alternativ Coalition (Struggling People's Organization--OPL), Alyans and Fusion of Social Democrats (FUSION), Fanmi Lavalas (FL), Ansamn Nou Fo, PLAPH Coalition (Assembly of Progressive National Democrats (RNDP) and several other parties), National Christian Party for Haiti's Reconstruction (UNION), RESPE, and several others.
Suffrage: Universal at 18.

Economy
GDP (2009 est.): 6.56 billion.
Real GDP growth rate (2009 est.): 2.0%.
Per capita GDP (2009 est.): $733.
GDP by sector (2009): Agriculture--24%; industry--8%; services--43%; other--25%.
Inflation (2009 est.): -4.7%.
Natural resources: Bauxite, copper, calcium carbonate, gold, marble.
Agriculture (24% of GDP): Products--coffee, mangoes, sugarcane, rice, corn, cacao, sorghum, pulses, other fruits and vegetables.
Industry (8% of GDP): Types--apparel, handicrafts, electronics assembly, food processing, beverages, tobacco products, furniture, printing, chemicals, steel.
Services (43% of GDP): Commerce, hotels and restaurants, government, tourism.
Trade (2009 est.): Total exports f.o.b.--$551 million: apparel, mangoes, leather and raw hides, seafood, electrical. Major market--U.S. Total imports f.o.b.--$2.04 billion: grains, soybean oil, motor vehicles, machinery, meat, vegetables, plastics, petroleum.

Note: The figures reflect estimates, as national statistics may not be reliable.

PEOPLE
Although Haiti averages about 350 people per square kilometer, its population is concentrated most heavily in urban areas, coastal plains, and valleys. About 95% of Haitians are of African descent. The rest of the population is mostly of mixed Caucasian-African ancestry. A few are of European or Levantine heritage. Sixty percent of the population lives in rural areas.

French is one of two official languages, but it is spoken fluently by only about 10% of the people. All Haitians speak Creole, the country's other official language. English and Spanish are increasingly used as second languages among the young and in the business sector.

The dominant religion is Roman Catholicism. Increasing numbers of Haitians have converted to Protestantism through the work of missionaries active throughout the country. Much of the population also practices voudou (voodoo), recognized by the government as a religion in April 2003. Haitians tend to see no conflict in these African-rooted beliefs coexisting with Christian faith.

Although public education is free, the cost is still quite high for Haitian families who must pay for uniforms, textbooks, supplies, and other inputs. Due to weak state provision of education services, private and parochial schools account for approximately 90% of primary schools, and only 65% of primary school-aged children are actually enrolled. At the secondary level, the figure drops to around 20%. Less than 35% of those who enter will complete primary school. Though Haitians place a high value on education, few can afford to send their children to secondary school and primary school enrollment is dropping due to economic factors. Remittances sent by Haitians living abroad are important in paying educational costs. After the January 12, 2010 earthquake most schools in the greater Port-au-Prince area were not operating, though some schools re-opened on April 5. As of July 1, 2010, 75% of students in earthquake-affected areas had returned to school.

Large-scale emigration, principally to the U.S.--but also to Canada, the Dominican Republic, The Bahamas and other Caribbean neighbors, and France--has created what Haitians refer to as the Eleventh Department or the Diaspora. About one of every eight Haitians lives abroad. Although the expatriate Haitian community has a strong interest in Haiti’s future and a positive financial impact on the Haitian economy, the Haitian Diaspora is constrained by Article 15 of Haiti’s 1987 Constitution, which prohibits dual citizenship. Consequently, Haitian Americans lack political rights in their homeland, including voting rights; property rights are restricted for foreign nationals.

HISTORY
The Spaniards used the island of Hispaniola (of which Haiti is the western part and the Dominican Republic the eastern) as a launching point from which to explore the rest of the Western Hemisphere. French buccaneers later used the western third of the island as a point from which to harass English and Spanish ships. In 1697, Spain ceded the western third of Hispaniola to France. As piracy was gradually suppressed, some French adventurers became planters, making Saint Domingue, as the French portion of the island was known, the "pearl of the Antilles"--one of the richest colonies in the 18th century French empire.

During this period, African slaves were brought to work on sugarcane and coffee plantations. In 1791, the slave population revolted--led by Toussaint L'Ouverture, Jean Jacques Dessalines, and Henri Christophe--and gained control of the northern part of the French colony, waging a war of attrition against the French.

By January 1804, local forces defeated an army sent by Napoleon Bonaparte, established independence from France, and renamed the area Haiti. The impending defeat of the French in Haiti is widely credited with contributing to Napoleon's decision to sell the Louisiana territory to the United States in 1803. Haiti is the world's oldest black republic and the second-oldest republic in the Western Hemisphere, after the United States. Although Haiti actively assisted the independence movements of many Latin American countries, the independent nation of former slaves was excluded from the hemisphere's first regional meeting of independent nations, in Panama in 1826, and did not receive U.S. diplomatic recognition until 1862.

Two separate regimes--north and south--emerged after independence but were unified in 1820. Two years later, Haiti occupied Santo Domingo, the eastern, Spanish-speaking part of Hispaniola. In 1844, however, Santo Domingo broke away from Haiti and became the Dominican Republic. With 22 changes of government from 1843 to 1915, Haiti experienced numerous periods of intense political and economic disorder, prompting the United States military intervention of 1915. Following a 19-year occupation, U.S. military forces were withdrawn in 1934, and Haiti regained sovereign rule.

The late 1950s saw the start of the violent and repressive dictatorship of Francois "Papa Doc" Duvalier. Elected president in 1957, he declared himself president-for-life in 1964 and ruled until his death in 1971 with the help of his paramilitary force, the Tontons Macoutes. Francois Duvalier was succeeded by his son, Jean-Claude "Baby Doc" Duvalier, who also declared himself president-for-life. The Duvaliers’ rule was characterized by repressive state controls, including the lack of basic democratic rights. Faced with economic collapse and a popular uprising, Jean-Claude Duvalier fled to France on February 7, 1986. The period immediately after his departure was marked by mob vengeance against members of the Tontons Macoutes. From 1986 to 1990, Haiti was ruled by a series of provisional governments. In March 1987, a constitution was ratified that provides for an elected, bicameral parliament; an elected president who serves as head of state; and a prime minister, cabinet, ministers, and supreme court appointed by the president with parliament's consent. The Haitian Constitution also provides for political decentralization through the election of mayors and administrative bodies responsible for local government.

In December 1990, Jean-Bertrand Aristide won 67% of the vote in a presidential election that international observers deemed largely free and fair. Aristide took office on February 7, 1991, but was overthrown that September in a violent coup led by army elements and supported by many of the country's economic elite. The coup contributed to a large-scale exodus of Haitians by boat. From October 1991 to September 1994 a de facto military regime governed Haiti. Several thousand Haitians may have been killed during the de facto military rule. Various Organization of American States (OAS) and United Nations initiatives to end the political crisis through the peaceful restoration of the constitutionally elected government failed. On July 31, 1994, the UN Security Council (UNSC) adopted Resolution 940, which authorized member states to use all necessary means to facilitate the departure of Haiti's military leadership and to restore Haiti's constitutionally elected government to power.

The United States took the lead in forming a multinational force (MNF) to carry out the UN's mandate by means of a military intervention. In mid-September, with U.S. troops prepared to enter Haiti by force, Gen. Raoul Cedras and other top leaders agreed to accept the intervention of the MNF. On September 19, 1994, the first contingents of what became a 21,000-member international force touched down in Haiti to oversee the end of military rule and the restoration of the constitutional government. President Aristide and other elected officials in exile returned on October 15.

Nationwide local and parliamentary elections in June 1995 returned a pro-Aristide, multi-party coalition called the Lavalas Political Organization (OPL) to power at all levels. In accordance with the constitutional bar on succeeding himself, President Aristide agreed to step aside and support a presidential election in December 1995. Rene Preval, a prominent Aristide political ally, took 88% of the vote, and was sworn in to a 5-year term on February 7, 1996, during what was Haiti's first-ever transition between two democratically elected presidents.

In late 1996, former President Aristide broke from the OPL and created a new political party, the Lavalas Family (FL). The OPL, holding the majority of the Parliament, renamed itself the Struggling People's Organization. Initial results of elections in April 1997 for the renewal of one-third of the Senate and creation of commune-level assemblies and town delegations showed victories for FL candidates in most races. However, the elections, which drew only about 5% of registered voters, were plagued with allegations of fraud and not certified by most international observers as free and fair.

Preval’s first term was marked by political wrangling. The opposition blocked his initiatives, and he failed to organize timely legislative elections. Following parliamentary elections that the opposition deemed deeply flawed on August 28, 2000, Haiti's main bilateral donors re-channeled their assistance away from the government and announced they would not support or send observers to the November elections. Most opposition parties regrouped in an alliance that became the Democratic Convergence. Elections for President and nine Senators took place on November 26, 2000. All major opposition parties boycotted these elections, in which voter participation was estimated at 5%. Jean-Bertrand Aristide emerged as the easy victor of these controversial elections, and the candidates of his FL party swept all contested Senate seats. On February 7, 2001, Jean-Bertrand Aristide was inaugurated as President.

The political stalemate continued, and violence ensued. On July 28, 2001, unknown gunmen attacked police facilities in Port-au-Prince and the provinces. A subsequent government crackdown on opposition party members and former soldiers further increased tensions between Lavalas and Convergence. On December 17, 2001, unidentified gunmen attacked the National Palace in Port-au-Prince. Following the assault, pro-government groups attacked the offices and homes of several opposition leaders. One opposition member was killed. Negotiations between FL and Democratic Convergence were suspended indefinitely.

Despite the creation of an OAS Special Mission designed to strengthen Haiti's democratic institutions in security, justice, human rights, and governance, security continued to deteriorate. Events spiraled downward throughout 2003, as President Aristide and the opposition failed to agree on a political resolution. Following a meeting with Aristide at the Summit of the Americas in January 2004, Caribbean Community leaders proposed a plan to resolve the political crisis, which President Aristide said he accepted. A high-level international delegation went to Haiti February 21 to obtain agreement on a specific implementation timetable. President Aristide agreed, but the opposition "Democratic Platform" group of political parties and civil society expressed reservations. Meanwhile, violence in Gonaives culminated February 5 in the "Artibonite Resistance Front" seizing control of the city. Other armed groups opposed to the Aristide government quickly emerged and succeeded in seizing control of many towns, mostly with little resistance from government authorities. By February 28, 2004, a rebel group led by a former police chief, Guy Philippe, advanced to within 25 miles of the capital. On February 29, 2004 Aristide submitted his resignation as President of Haiti and flew on a chartered plane to Africa.

2004-2010 - Interim Government Gives Way to a New Democracy
Following the constitutional line of succession, Supreme Court Chief Justice Boniface Alexandre assumed the presidency and Gerard Latortue was appointed prime minister of the Interim Government of Haiti (IGOH) with the mandate of organizing elections to choose a new government. The interim government managed to organize three rounds of elections with the help of the OAS and UN. The first round of elections for President and Parliament took place peacefully on February 7, 2006, with a turnout estimated at over 60% of registered voters. The elections were considered generally free, fair, transparent, and democratic by national and international observers.

Rene Preval, former President (1996-2001) and former ally to Aristide, won the presidential election with 51.15%. Partial results first showed he fell short of an absolute majority, which triggered demonstrations against alleged fraud. The later decision of the Electoral Council not to count blank ballots gave the victory to Preval. The Parliament, composed of a 30-seat Senate and a 99-member Chamber of Deputies, was elected in two rounds held on February 7 and April 21, 2006. Lespwa was the main political force in both chambers but fell short of the majority. Fusion, UNION, Alyans, OPL, and Fanmi Lavalas had many representatives in both chambers. Preval chose his long-time political associate and former Prime Minister Jacques-Edouard Alexis to serve again as his Prime Minister. Municipal elections were held December 3, 2006 and April 29, 2007. Some of these local government positions had not been filled in over a decade.

A series of crises in 2008 threatened Haiti’s democratic consolidation. Nationwide civil disturbances broke out in April 2008, sparked by sharp increases in food and fuel prices. The April riots caused widespread disruption and suffering, toppled the government of Prime Minister Alexis, and forced postponement of a donor conference. In August and September, four tropical storms and hurricanes killed 800, affected nearly one million, exacerbated food shortages and pushed yet more Haitians into poverty. In early September 2008, Prime Minister Michele Pierre-Louis’s government took office and acted decisively within its means to provide relief and reconstruction. Pierre-Louis initially received cooperation from Parliament in crafting a relief package, but soon after Parliament summoned both her and her ministers to explain perceived delays in delivering relief assistance and to criticize her 2008-2009 budget. On October 20, 2009, Michele Pierre-Louis was dismissed by the Senate only 1 year after taking office. Prime Minister Jean-Max Bellerive, former Minister of Planning and External Cooperation, took office in November 2009.

Despite the devastating hurricanes and food riots in 2008, the Preval administration made substantial gains in the overall physical security throughout Haiti. The international community took notice of Haiti’s relative stability, and in January 2009, UN Secretary General Ban Ki-moon commissioned British economist Paul Collier to draft an economic development strategy for Haiti. In February, shortly after taking office, Secretary of State Hillary Clinton identified Haiti as a policy priority. By March, Collier’s report, “Haiti: From Natural Catastrophe to Economic Security” was adapted by the Government of Haiti as a template for its own economic growth strategy, presented at the Haiti Donor’s Conference hosted by the Inter-American Development Bank in April. The strategy called on donors to assist the Haitian Government by investing in the country’s roads, export zones, agriculture, electricity, schools, hospitals, and ports. In May 2009, the Secretary General named former President William J. Clinton as UN Special Envoy for Haiti and charged him with coordinating donors and attracting private investment to Haiti.

By most accounts, Haiti prior to the January 2010 earthquake enjoyed relative internal stability. Haiti had a fully functioning legislature, and although it had risked instability by ousting Prime Minister Michele Pierre-Louis, it demonstrated a marked readiness to act by promptly approving new Prime Minister Jean-Max Bellerive. The January 12 earthquake produced enormous devastation that threatens political and socio-economic stability and poses huge recovery and reconstruction challenges. On April 15, the Haitian Parliament ratified a law extending by 18 months the state of emergency that President Preval declared after the earthquake. The law also created the Interim Commission for the Reconstruction of Haiti (IHRC). The IHRC will allow for Haitian-led planning with a role for international partners to provide input.

The disaster prompted postponement of legislative elections and cast uncertainty over whether presidential elections could be held at the end of 2010 as planned. On May 10, the mandates of one-third of the Senators and all of the 99 Deputies in the Haitian Parliament expired, leaving 19 Senators in office. In the interim, President Preval has the authority to rule by decree. Just before the mandates expired, Parliament passed a bill allowing President Preval to remain in office until May 2011, 3 months beyond the February date when he originally intended to step down. Presidential and parliamentary elections were held on November 28, 2010.

January 12, 2010 Earthquake
On January 12, 2010, a 7.3-magnitude earthquake struck Haiti, with its epicenter near Port-au-Prince. The quake caused severe damage in Port-au-Prince, Leogane, Jacmel, and surrounding communities. Search and rescue teams were on the ground in Port-au-Prince immediately following the earthquake and worked 24 hours a day using listening devices, cameras, and trained dogs to detect any sign of human life. Rescue efforts eventually transitioned into recovery efforts on January 27, 15 days after the earthquake. The government estimated 230,000 deaths, about one million displaced people within the Port-au-Prince metropolitan area, and 598,000 people who migrated from the affected areas to other locations in Haiti. Most of those people are thought to have returned to Port-au-Prince, as the communities of origin lacked the capacity to sustain the increase in population.

Following the earthquake, the U.S. military and representatives from the U.S. Department of Health and Human Services' Disaster Mortuary Operational Response Team (DMORT) worked side by side to recover, identify, and repatriate any American citizen that was recovered. All U.S. citizens believed to be in the Hotel Montana, which had collapsed in the earthquake, were repatriated back to the United States, and families of victims recovered from other locations were given the choice of repatriation or local disposition. The U.S. Embassy and the Bureau of Consular Affairs' Office of American Citizens Services and Crisis Management were in regular and direct contact with the families of all of the missing.

The earthquake was the worst in Haiti in the last 200 years, and generated an estimated $11.5 billion in damages and reconstruction costs. Assisting Haiti in recovery and rebuilding is a massive undertaking and requires a well-coordinated, well-funded, Government of Haiti-led effort by the Haitian people, the United States, the United Nations, other nations, international organizations, the Haitian Diaspora, and non-governmental organizations (NGOs). The outpouring of international support has been tremendous, as has the resolve of the Haitian people. The U.S. Government continues to work with the Haitian Government, NGOs, the UN, and partner nations to provide humanitarian assistance in Haiti. U.S. Government humanitarian relief efforts in Haiti total over $1 billion. The United States and other donor countries, international organizations, and other partners have pledged resources, coordinated support of Haiti’s long-term recovery, and committed to a sustained, long-term effort to support Haiti. At the "International Donors’ Conference Toward a New Future for Haiti," co-hosted by the United States and the United Nations on March 31, 2010 in New York, UN member states and international organizations pledged $9.9 billion toward long-term reconstruction. The United States pledged $1.15 billion toward reconstruction efforts in the areas of energy, health, agriculture, governance, and security. The Government of Haiti presented its action plan outlining its vision for the future, which donors unanimously endorsed.

International Presence 1995-2004
After the transition of the 21,000-strong MNF into a peacekeeping force on March 31, 1995, the presence of international military forces that helped restore constitutional government to power was gradually ended. Initially, the U.S.-led UN peacekeeping force numbered 6,000 troops, but that number was scaled back progressively over the next 4 years as a series of UN technical missions succeeded the peacekeeping force. By January 2000, all U.S. troops stationed in Haiti had departed. In March 2000, the UN peacekeeping mission transitioned into a peace-building mission, the International Civilian Support Mission in Haiti (MICAH). MICAH consisted of some 80 non-uniformed UN technical advisers providing advice and material assistance in policing, justice, and human rights to the Haitian Government. MICAH's mandate ended on February 7, 2001, coinciding with the end of the Preval administration. The OAS Special Mission has some 25 international police advisors who arrived in summer 2003; in addition to observing and reporting on Haitian police performance, they provide limited technical assistance.

International Presence 2004-Present
At the request of the interim government and the UN, the U.S.-led Multilateral Interim Force, made up of troops from the U.S., Canada, France, and Chile, arrived in Port-au-Prince to ensure stability until the arrival of a UN peacekeeping force.

In April 2004, the United Nations Security Council adopted Resolution 1542, which created the UN Stability Mission in Haiti (MINUSTAH). Since that time, the Security Council consistently and unanimously approved the renewal of MINUSTAH's mandate. On October 13, 2009, the UNSC voted unanimously to extend MINUSTAH's mandate for 12 months through October 15, 2010 with an authorized force of 6,940 troops and 2,241 civilian police. In response to the earthquake on January 12, 2010, the Security Council adopted on January 19 Resolution 1908 increasing the force levels of MINUSTAH by 2,000 troops and 1,500 civilian police to support the immediate recovery, reconstruction, and stability efforts in the country.

U.S. Southern Command established Joint Task Force Haiti to support the relief effort following the earthquake. At the height of the task force's initial response, the U.S. contributed more than 20,000 U.S. troops, 20 ships, and 130 aircraft. U.S. military forces were focused on mitigating the negative weather effects on displacement camps in Port-au-Prince, supporting efforts to relocate displacement camps to transitional resettlement sites, and positioning the task force for a seamless transition. By March 15, all Canadian troops had left Haiti. Joint Task Force Haiti completed its mission on June 1. A small military liaison office of eight people remained in Port-au-Prince to coordinate further humanitarian missions with the lead U.S. federal agency, the U.S. Agency for International Development (USAID), and the Government of Haiti during the already-scheduled theater security cooperation exercise called New Horizons. The exercise brought in about 500 soldiers, mainly from the Louisiana National Guard along with soldiers from the Arizona, Montana, Nevada, Puerto Rican, and Virgin Island National Guards, to conduct engineering activities and medical readiness training exercises in the vicinity of Gonaives, north of Port-au-Prince.

Principal MINUSTAH Officials
Special Representative of the Secretary General--Edmond Mulet (Guatemala)
Force Commander--Major-General Luiz Guilherme Paul Cruz (Brazil)
Police Commissioner-- Geraldo Chaumont (Argentina)
Resident Representative for UNDP--Nigel Fisher (Canada)

Principal Government Officials
President--Rene Preval (since May 14, 2006)
Prime Minister--Jean-Max Bellerive
Minister of Foreign Affairs--Marie-Michele Rey
Minister of Economy and Finances--Ronald Baudin
Ambassador to the U.S.--Louis Harold Joseph
Ambassador to the OAS--Duly Brutus
Ambassador to the UN--Leo Merores

The Embassy of Haiti is located at 2311 Massachusetts Ave., NW, Washington, DC 20008 (tel. 202-332-4090).

ECONOMY
Over the past 5 years, the Haitian economy has grown slowly. Economic growth averaged 2.3% per year in 2005-2009, up from minus 0.7% in 2000-2004. Despite this recent improvement, Haiti remains the least-developed country in the Western Hemisphere and one of the poorest in the world. Comparative social and economic indicators show Haiti falling behind other low-income developing countries (particularly in the hemisphere) since the 1980s. Haiti now ranks 146th of 177 countries in the UN's Human Development Index. Haiti's relative economic stagnation is the result of earlier inappropriate economic policies, political instability, a shortage of good arable land, environmental deterioration, continued reliance on traditional technologies, under-capitalization and lack of public investment in human resources, migration of large portions of the skilled population, a weak national savings rate, and the lack of a functioning judicial system.

The 1991 coup and the irresponsible economic and financial policies of the de facto regime resulted in a sharp economic decline from 1991-94. Following the coup, the United States adopted mandatory sanctions, and the OAS instituted voluntary sanctions aimed at restoring constitutional government. International sanctions culminated in the May 1994 UN embargo of all goods entering Haiti except humanitarian supplies, such as food and medicine. The assembly sector, heavily dependent on U.S. markets, employed over 100,000 workers in the mid-1980s. During the embargo, employment fell below 17,000. Private domestic and foreign investment has returned to Haiti slowly. Since the embargo's end following the return of President Aristide from exile on October 15, 1994, assembly sector employment has gradually recovered to about 28,000. The Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act, enacted by the U.S. Congress in December 2006 and extended in May 2008 for 10 years, provided trade preferences for textile/apparel products that could boost production in the sector. It expanded duty-free treatment to products that are wholly assembled or knit-to-shape in Haiti regardless of the origin of the inputs. In May 2010, Congress passed the Haitian Economic Lift Program (HELP) Act, extending the Caribbean Basin Trade Partnership Act and the HOPE Act through September 30, 2020. The Help Act also expands the duty-free treatment of imported apparel made in Haiti or the Dominican Republic irrespective of the source of the inputs, and increases the quota for tariff preference levels for knit and woven apparel from 70 million to 200 million square meter equivalents. However, growth has been stalled by investor concerns over security, lack of access to credit, and legal and physical infrastructure constraints.

The country’s current economic agenda remains essentially the same as in President Preval’s first term (1996-2001), consisting of trade/tariff liberalization, measures to control government expenditure and increase tax revenues, civil service downsizing, financial sector reform, some privatization of state-owned companies (including the telecommunications company, the sale of which was finalized in April 2010), the provision of private sector management contracts, and public-private investment. Workers in Haiti are guaranteed the right of association. Unionization is protected by the labor code. In October 2009, the legal minimum wage was raised from 70 gourdes a day (about $1.75) to 200 gourdes (about $5) for most workers and to 125 gourdes (about $3.15) for textile workers.

Following almost 5 years of recession ending in 2004, the Haitian economy grew by 1.8% in 2005, 2.3% in 2006, and 3.4% in 2007. Growth slowed to 0.8% in 2008, following the food and oil crisis and the devastating 2008 hurricane season, but reached 2.9% in 2009. However, significant improvement in living standards would require an estimated doubling of the growth rate. Inflation rose to 20% in 2008 due to the food and oil crisis, but fell to less than 1% for calendar year 2009. The Preval administration has largely sound fiscal policies, but the low revenue collection rate (roughly 9.5% of GDP) remains insufficient to provide social services and invest in physical and human capital. External assistance (more than $1.5 billion from 2007 to 2009) as well as Diaspora remittances (estimated at approximately $1.2 billion per year) remain critical to keeping the economy afloat. In November 2006, Haiti was approved for an International Monetary Fund (IMF) Poverty Reduction and Growth Facility (PRGF). In June 2009, Haiti received U.S. $1.2 billion in multilateral debt relief under the Heavily Indebted Poor Countries (HIPC) and the Multilateral Debt Relief Initiatives.

According to a Post-Disaster Needs Assessment (PDNA) undertaken by the World Bank, UN, European Commission (EC), and Inter-American Development Bank (IDB), the total value of damage and losses caused by the January 12, 2010 earthquake is estimated at U.S. $7.863 billion, which is the equivalent of more than 120% of Haiti’s 2009 GDP. Most damage and losses were experienced by the private sector ($5.5 billion, or 70%), while the public sector impact was $2.4 billion (or 30% of the total). The value of destroyed physical assets--including housing units, schools, hospitals, buildings, roads and bridges, ports, and airports--was estimated at $4.302 billion (55% of the total effects of the disaster). Economic losses (loss of production, reduction in turnover, loss of employment and salaries, increased costs of production, etc.) reached $3.561 billion (the equivalent of 45% of the total). Housing is the sector most affected by the earthquake, with damages estimated at about $2.3 billion. The other sectors, in decreasing order of magnitude in terms of the impact sustained, are trade (damage and losses of $639 million, or 8% of the total), transport and government buildings ($595 million each), and education and health (with an average of 6% of the total).

Foreign Assistance
Haiti is one of the original members of the United Nations and several of its specialized and related agencies, as well as a member of the Organization of American States (OAS). It maintains diplomatic relations with several dozen countries.

Major bilateral donors include the United States, Canada, the EU, Spain, France, Brazil, Norway, Japan, and Venezuela. Cuba provides highly visible, low-cost medical and technical experts. Multilateral aid is provided by the Inter-American Development Bank (IDB), International Monetary Fund (IMF), World Bank, and the UN and its agencies. Most bilateral assistance is currently channeled through non-governmental organizations.

At the March 31, 2010 post-earthquake donor conference in New York, over 50 countries and organizations pledged more than $9.9 billion in support to Haiti. The short-term assistance totaled $5.3 billion for the next 18 months, with the remainder for Haiti’s long-term reconstruction needs over the next decade. The United States committed $1.15 billion over 2010-2011, not including $1 billion already spent as of May 2010.

Haiti received approximately $1.2 billion in multilateral debt relief from the IDB and World Bank and 100% debt cancellation from bilateral donors in the Paris Club following completion of the Heavily Indebted Poor Countries (HIPC) process in June 2009. Following the earthquake, multilateral organizations agreed to provide additional debt relief. In March 2010, the IDB Board of Governors agreed on a plan to forgive all of Haiti’s outstanding debt with the IDB--approximately $479 million. The IDB also agreed to provide $200 million annually to a grant facility for Haiti from 2010-2020 (for a total of $2.2 billion over 10 years). The World Bank will likewise forgive remaining debt, and announced that $479 million will be made available to support Haiti’s recovery and development through June 2011, including $250 million in new funding. The current debt outstanding to the IMF is U.S. $271 million, including $114 million disbursed immediately after the earthquake. No payments are due to the IMF by Haiti before 2012, and the debt has a zero interest rate.

U.S.-HAITI RELATIONS
U.S. policy toward Haiti is designed to foster economic growth, enhance government capacity, and strengthen democracy; help alleviate poverty, illiteracy, and malnutrition; promote respect for human rights; counter illegal migration and drug trafficking; and assist in the reconstruction of the country after the January 2010 earthquake. The U.S. also supports and facilitates bilateral trade and investment along with legal migration and travel. U.S. policy goals are met through direct bilateral action and by working with the international community. The Haitian Diaspora is a potentially powerful ally in the effort to strengthen U.S. policy initiatives in Haiti.

The United States has taken a leading role in organizing international involvement with Haiti. The United States works closely with the Organization of American States (OAS), particularly through the Secretary General's "Friends of Haiti" group (originally a UN group that included the U.S., Canada, France, Venezuela, Chile, and Argentina which was enlarged in 2001 to add Germany, Spain, Norway, Mexico, Guatemala, Belize, and The Bahamas), the Caribbean Community (CARICOM), and individual countries to achieve policy goals. The U.S. is a member of the board of the Interim Haitian Reconstruction Commission, established in May 2010 by the Government of Haiti. This commission is co-chaired by Prime Minister Bellerive and former President William J. Clinton. Both Haitian and international stakeholders sit on the board of directors.

Maintaining good relations with and fostering democracy in Haiti are important for many reasons, not least of which is the country's geographical proximity to the continental United States. In addition to the many Haitians who receive visas to immigrate into the U.S. (averaging over 13,000 annually in FY 1999-2003), there is a flow of illegal migrants. Over 100,000 undocumented Haitian migrants were intercepted at sea by the U.S. Coast Guard in the past 2 decades, particularly during the 1991-94 period of illegal military rule when more than 67,000 migrants were interdicted. Since the return of the legitimate government in 1994, the interdiction of illegal migrants by U.S. Coast Guard vessels has decreased dramatically, averaging fewer than 1,500 annually. Neighboring Caribbean countries, particularly The Bahamas, continue to interdict Haitian migrants as well. The prospect remains, however, for the renewal of higher flows of illegal migrants, particularly under conditions of political unrest or further economic downturn. Following the January 12, 2010 earthquake, the U.S. Coast Guard has not seen a rise in illegal migration by sea. On January 15, 2010, the U.S. granted temporary protected status (TPS) for 18 months to Haitians living illegally in the U.S. During that period, they are allowed to live and work in the U.S. upon submission and approval of a TPS application. On July 12, 2010, the TPS registration period was extended an additional 6 months through January 18, 2011.

U.S. Economic and Development Assistance
Political insecurity and the failure of Haiti's government to invest in developing the country's natural and human resources has contributed significantly to the country's current state of underdevelopment. U.S. efforts to strengthen democracy and help build the foundation for economic growth aim to rectify this condition. The U.S. has been Haiti's largest donor since 1973. Between FY 1995 and FY 2003, the U.S. contributed more than $850 million in assistance to Haiti. Since 2004, the U.S. has provided over $1.5 billion for improving governance, security, the rule of law, economic recovery, and critical human needs. President Barack Obama's budget request (prior to the 2010 earthquake) for FY 2011 was $359 million, and the President's post-quake supplemental budget request was $2.8 billion.

Haiti has been plagued for decades by extremely high unemployment and underemployment. The precipitous decline in urban assembly sector jobs, from a high of over 100,000 in 1986 to fewer than 20,000 in 2006, exacerbated the scarcity of jobs. To revitalize the economy, U.S. assistance attempts to create opportunities for stable sustainable employment for the growing population, particularly in rural areas. Programs that help to increase commercial bank lending to micro-enterprises, especially in the agricultural sector, have helped to create a significant number of jobs. More recently, since the January 2010 earthquake, the United States has sponsored numerous cash-for-work programs to employ Haitians in post-earthquake clean-up and rubble removal. The Government of Haiti estimated that 90,000 jobs were lost as a result of the quake, but information on the location and sector are not available. However, in the apparel assembly sector, which is monitored more closely, quake impact was minimal.

Combating Drug Trafficking
Haiti is a transshipment point for South American narcotics, primarily cocaine, being moved into the United States by trafficking networks who take advantage of weak law enforcement and judicial institutions. The U.S. Government, through the International Narcotics and Law Enforcement Affairs section and other agencies at Embassy Port-au-Prince, counters this threat with a focus on developing the capacity of the Haitian National Police--including the counternarcotics division and units dealing with money laundering and financial crimes--through training support and operational assistance. The U.S. also provides material assistance and training to the Haitian Coast Guard for interdiction of drugs and illegal migrants. In recent years, the Haitian Government has agreed to the expulsion of several traffickers under indictment in the United States to stand trial in U.S. courts.

U.S. Business Opportunities
The U.S. remains Haiti's largest trading partner. Port-au-Prince is less than 2 hours by air from Miami, with several daily direct flights. Daily flights also connect Port-au-Prince with New York and Fort Lauderdale. Both Port-au-Prince and Cap-Haitien on the north coast have deepwater port facilities, although the Port-au-Prince seaport sustained significant damage in the January 2010 earthquake. The port of Cap-Haitien also needs dredging to bring it to the 11 meters required to dock cruise ships and large cargo vessels. Many Haitian entrepreneurs conduct business in English, and U.S. currency circulates freely in Haiti. A number of U.S. firms, including commercial banks, telecommunications, airlines, oil and agribusiness companies, and U.S.-owned assembly plants are present in Haiti.

Over the past year, Haiti has emerged as a country that holds real economic potential in areas as diverse as tourism, light manufacturing, biodiesel, and agriculture. Strategic investments in these sectors will ensure that Haitians can better help themselves once the humanitarian relief has moved on. In particular, private business sector investment is crucial to ensure long-term development beyond the reconstruction phase. Following a visit of 200 international investors to Haiti in October 2009, coordination has taken place between private businesses and companies that provide logistics and markets. As a result, international chains like Best Western and Choice Hotels started building new hotels in Haiti.

Opportunities for U.S. businesses include the development and trade of raw and processed agricultural products; medical supplies and equipment; rebuilding and modernizing Haiti's infrastructure (particularly relevant in the wake of the January 2010 earthquake); developing tourism and allied sectors--including arts and crafts; and improving capacity in waste disposal, transportation, energy, telecommunications, and export assembly operations. Haiti's primary assembly sector inputs include textiles, electronics components, and packaging materials. Other U.S. export prospects include electronic machinery, including power-generation, sound and television equipment, plastics and paper, construction materials, plumbing fixtures, hardware, and lumber. Benefits for both Haitian and American importers and exporters are available under the Caribbean Basin Trade Partnership Act (CBTPA)--which provides for duty-free export of many Haitian products assembled from U.S. components or materials--the successor program to the Caribbean Basin Initiative, and the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act provides additional duty-free preferences for qualifying apparel/textiles products and automotive wire harnesses. The HOPE Act of 2006 extended duty-free treatment on imports of knit and woven apparel assembled in Haiti regardless of the source of the inputs. However, HOPE was less successful than anticipated, in part because the majority of the trade benefits it extended lasted only 5 years. HOPE II, passed in 2008, extended Haiti’s trade preferences for 10 years and liberalized the rules of origin. While HOPE II is estimated to have created at least 7,000 jobs, Haitian stakeholders called for new legislation following the earthquake to induce more international companies to operate in Haiti. The Haitian Economic Lift Program (HELP) Act signed into law in May 2010 expands the duty-free treatment of imported apparel made in Haiti or the Dominican Republic to 2020 without regard to the source of the fabric. These new improvements aim to attract major international brands and apparel manufacturers, particularly from South Korea and Brazil.

U.S. export opportunities also exist for four-wheel-drive vehicles, consumer electronics, rice, wheat, flour, animal and vegetable fats, meat, chicken, vegetables, and processed foodstuffs. The Government of Haiti seeks to reactivate and develop agricultural industries where Haiti enjoys comparative advantages, among which are mangoes, coffee, cocoa, essential oils, spices, sisal, and other fruits and vegetables. The government encourages the inflow of new capital and technological innovations. Additional information on business opportunities in Haiti can be found in the Country Commercial Guide for Haiti.

Establishing a Business
Individuals wishing to practice a trade in Haiti must obtain an immigrant visa from a Haitian Consulate and, in most cases, a government work permit. Transient and resident traders must also have a professional ID card.

The Government of Haiti created the Center of Investment Facilitation (CFI) in August 2006. The aim of the organization is to facilitate and promote local investment by reducing administrative delays, streamlining the creation of enterprises, and facilitating the provision of inducements. For more information please go to http://www.cfihaiti.net.

Property restrictions still exist for foreign nationals. Foreigners’ property rights are limited to 1.29 hectares in urban areas and 6.45 hectares in rural areas. No foreigner may own more than one residence in the same district, or own property or buildings near the border. To own real estate, authorization from the Ministry of Justice is necessary.

Hurdles for businesses in Haiti include poor infrastructure, a high-cost port, an irregular supply of electricity, and customs delays.

In November 2002, the Haitian Parliament passed an investment law prohibiting fiscal and legal discrimination against foreign investors. The 2002 law explicitly recognizes the crucial role of foreign direct investment in spurring economic growth and aims to facilitate, liberalize, and stimulate private investment in Haiti. Foreign investment protection is also provided by the Haitian Constitution of 1987, which permits expropriation of private property for public use or land reform with payment in advance. American firms enjoy free transfer of interest, dividends, profits, and other revenues stemming from their investments, and are guaranteed just compensation paid in advance of expropriation, as well as compensation in case of damages or losses caused by war, revolution, or insurrection. The U.S. and Haiti have a bilateral agreement on investment guarantees that permits the U.S. Overseas Private Investment Corporation to offer programs in Haiti. The two governments also signed a bilateral investment treaty in December 1983, but it was not ratified.

Additional information on establishing a business in Haiti can be found at www.export.gov under market research, Country Commercial Guides.

Principal U.S. Officials
Ambassador--Kenneth Merten
Deputy Chief of Mission--David Lindwall
Public Affairs Officer--Jerome Oetgen
USAID Director--Carleene Dei

The U.S. Embassy in Haiti's contact information can be found on its website at haiti.usembassy.gov.

Additional Contact Information
The U.S. Commercial Service does not have a separate office in Haiti. Interested parties may contact the U.S. Commercial Service in Santo Domingo:

U.S. Commercial Service
American Embassy
Ave. Pedro Henriquez Urena No. 133
Santo Domingo, Dominican Republic
Tel: (809) 227-2121
Fax: (809) 920-0267
www.buyusa.gov/caribbean/en

Alternatively, they may contact the Port-au-Prince Embassy economic section at papecon@state.gov. For more Embassy contacts, visit the Embassy’s website at http://haiti.usembassy.gov/. (Note: As of mid-2010, Haiti's land line telephone system was not operating because of damage caused by the earthquake. Therefore, e-mail communication with the Embassy and other organizations located in Haiti is recommended.)

Overseas Private Investment Corporation (OPIC)
1615 M Street, NW
Washington, DC 20527
Tel: (202) 457-7200
Fax: (202) 331-4234

U.S. Department of Commerce
14th and Constitution Ave., NW
Washington, DC 20230
Haiti Desk: Tel: (202) 482-1810

Caribbean/Latin American Action
1818 N Street, NW, Suite 310
Washington, DC 20036
Tel: (202) 466-7464
Fax: (202) 822-0075

Association des Industries d'Haiti (ADIH)
Bldg. Le Triangle Delmas 31, #139
Port-au-Prince
Tel: (509) 2246-4509/4510 or 2211
www.adih.ht
e-mail: info@adih.ht

Centre Pour la Libre Entreprise et la Democratie (CLED)
37, Avenue Marie-Jeanne
No. 8 B.P. 1316
Port-au-Prince
Tel: (509) 2244-0901 or (509) 2245-6039
Fax: (509) 2222-8252

Chambre de Commerce et d'Industrie d'Haiti
P.O. Box 982
Port-au-Prince
Tel: (509) 2222-0281 or (509) 2222-2475

Haitian-American Chamber of Commerce and Industry (AMCHAM)
Rue Oge, A-5
Petionville
Republic of Haiti
Tel: (509) 2511-3024, fax not available



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