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Haiti

Executive Summary

Haiti occupies the western third of the island of Hispaniola located in the Caribbean Basin. The Haitian economy, a private sector-led and free market system, is mainly driven by its traditional agricultural sector, construction, commerce, and the manufacturing industry. The Government of Haiti (GOH) initiated numerous measures to maintain macroeconomic stability and to establish a legal framework for long-term private sector led and market based economic growth. The ultimate objective is to transform Haiti into an emerging economy by 2030. The GOH also focused on reinforcing public financial management, strengthening the establishment of the Treasury Single Account, and improving the business environment for private sector development. The government is seeking to spur job creation and encourage economic development through foreign trade and investment. The Haitian Central Bank (BRH) continues to follow a contractionary monetary policy on containing inflation and tightening legal reserve requirements. Its main challenge, however, is to maintain monetary stability while public authorities urge it to uphold anti-inflationary measures in response to a chronic budget deficit, the economic implications of Hurricane Matthew, and increasing global commodity prices.

Foreign direct investment (FDI) inflow increased slightly to USD 104 million in 2016, making Haiti one of the smallest recipients of FDI in the region. Despite Haiti’s favorable policies toward FDI, Haiti’s rates of FDI inflow are indicative of a slow-growing economy and an unstable political environment. The GOH designated tourism, agriculture, construction, energy, and manufacturing as key investment sectors, and supports sector-focused investment promotion, public spending, and special economic zones. The GOH established the Center for Facilitation of Investment (CFI) to improve Haiti’s investment climate, and to assist investors interested in doing business in Haiti. The CFI introduced a series of measures, including pre-registered services, to expedite the processes involved in starting a business. To simplify the process even further, CFI also eliminated the step requiring the executive branch to review the incorporation draft before final publication. As a result of these measures, CFI reported an increase in foreign companies that expressed interest in exploring business opportunities in Haiti in 2016. According to CFI, most businesses that explored investment in Haiti in 2016 were interested in the garment sector and in business process outsourcing (BPO).

In 2016, Haiti’s economy grew by 1.4 percent, a deceleration compared to Fiscal Year (FY) 2015 when the economy grew at a rate of 1.8 percent. The 2016 growth rate is attributed to a volatile exchange rate, the continued reduction of external financial assistance, political instability, and severe drought conditions in FY 2015 that destabilized agricultural production. Annualized consumer price inflation moderated to 14.3 percent at the end of December 2016 because of weak domestic production, a chronic budget deficit, food price pressures and the depreciation of Haitian Gourde against the USD. As of March 2017, Haiti’s net international reserves stood at USD 845 million compared to USD 844 million in February 2017. The World Bank (WB) predicts that gross domestic product (GDP) will be between two and three percent in 2017, despite previous predictions, immediately following the hurricane, of a 0.6 percent contraction. Improving the investment outlook for Haiti in 2017 requires the GOH to enact reforms that improve Haiti’s business and political environment.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2016 159 of 175 http://www.transparency.org/
research/cpi/overview
World Bank’s Doing Business Report “Ease of Doing Business” 2017 180 of 190 doingbusiness.org/rankings
Global Innovation Index 2016 N/A https://www.globalinnovationindex.org/
analysis-indicator
U.S. FDI in partner country ($M USD, stock positions) 2015 N/A http://www.bea.gov/
international/factsheet/
World Bank GNI per capita 2016 $810 http://data.worldbank.org/
indicator/NY.GNP.PCAP.CD
Investment Climate Statements
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