Friday, January 22, 2010

Reflections on Past and Future

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Haiti is not some far away place to me. Both my parents are from Haiti and I have
family members that still live there. I try to go to Haiti every 2 to 3 years and last visited in 2007 to volunteer with a local organization called Concerned Haitian Americans of Illinois (CHAI). I have seen a mix of improving and deteriorating conditions in the country over the past 10 years, but this recent crisis is a wake up call.

Much of the devastation in Haiti was largely unavoidable. Even if the buildings had been constructed better, it is unlikely any well made structures could survive a 7.0 earthquake[1]. Nonetheless, lax building code enforcement and poor construction quality has exacerbated the problem. For example, in 2008 there was a school collapse in Port-au-Prince that had nothing to do with the earthquake. However, some of the lack of communications and access to roads to help disaster victims can be attributed to a very poor and deteriorating infrastructure. The rush to make sure that those in need get emergency medical attention, clean water, and food, should compel us to think about making sustainable improvements to not only prevent future crises but also to create new economic opportunities that improves the quality of life for Haitians.

Immediately after the disaster there will be an opportunity to rebuild – to begin anew—creating the infrastructure designed to sustain a modern country. In recent months, there have been initiatives to reduce the time it takes to incorporate a business. According to the World Bank, it requires 13 procedures, takes 195 days, and costs 227.93% GNI per capita to start a business in Haiti – this is almost unheard of. Across the border in the Dominican Republic, it requires only 8 procedures, takes 19 days, and costs 17.3% GNI per capita to start a business. Along each of the World Bank’s indices of access to business credit and protection of investors, Haiti is in the bottom of the rankings[2]. Haiti is one of the most difficult countries in the world to do business with—this needs to change if there’s ever to be any hope for catalyzing the development that can begin to transform the country and improve peoples’ lives.

In addition, the average Haitian, no different than most, needs to be gainfully employed in order to provide for his or her family and businesses need either debt or savings to get off the ground. But with the unemployment rate hovering around 50% for the last two decades, gainful employment will require greater foreign direct investment and a growing economy. A long-term solution requires investment in both the country’s physical infrastructure (e.g., roads, ports, and telecommunications) and its social infrastructure (e.g., improved school system, reform of a standing army or national police force, and protection of property rights). Without this investment and the ability to provide access to credit, Haiti will continue to be mired in poverty.

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