The International Aid Debacle: How to Get a Return on the Investment in Haiti

The International Aid Debacle:
How to Get a Return on the Investment in Haiti
By Stanley Lucas*
August 10, 2006

The international community has invested more than $15 billion in foreign aid in Haiti since the late 1970s. The Clinton Administration alone spent $3 billion in Haiti in 1994. Looking at the current state of the country, there is nothing to show for it.

Haiti is the sixth poorest country in the world. The infrastructure is falling apart with limited electricity, a phone system that barely works and roads in shambles. The World Bank and other international institutions have spent several billion dollars supporting education and various projects, however, illiteracy stands at about 54 percent; agricultural production is a quarter of what it was in 1960; per capita income is only $370/year; the level of unemployment is 75 percent; there are only three hours of electricity per day; and 80 percent of the water supply is contaminated. Haiti is an ecological disaster.

Haiti's leaders have squandered the opportunities provided by international aid to address the country's dire situation. Current and past Haitian governments have effectively shunned the rule of law and have been deeply involved in corruption, drug trafficking, money laundering, and political assassinations. International funds have often ended up in the personal banks accounts of government leaders and their national and international supporters. Meanwhile, the vast majority of Haitian people continue living in abject poverty. No one has ever been held accountable.

With the support of the international community, Peruvian officials went after former President Alberto Fujimori and recovered more than $40 million in siphoned international aid. In sharp contrast, Haitian deposed leaders have never been prosecuted by the international community. The stolen funds have never been seized and put to their original and intended use.

One of the main reasons Haitian leaders continue to evade accountability is an unrealistic and unseeing bureaucracy that is firmly ensconced in the international institutions, many officers in their same positions for decades. It seems they continually turn a blind eye to the Haitian government's refusal to play by the same rules that other countries are held to in order to receive and maintain international funding. They do not, in effect, hold them to the same standards as other countries. The Haitian government has yet to submit sufficient or correctly formatted requests for funding. They have yet to met the criteria for receiving and accounting for funds, but they always receive their funds.

Despite these facts, the bureaucracies of the international institutions offer reports outlining all the benefits Haiti has received as a result of aid packages, but the reports do not always reflect the reality. Perhaps they should ask why, despite their efforts, there is no progress in alleviating the systemic poverty in Haiti and no movement on economic development.

The World Bank's 2002 assistance evaluation report on Haiti paints a grim social and economic outlook and outlines specific recommendations on how to address the mistakes of the past and improve accountability in Haiti. While the recommendations are in place, they are not enforced. The same situation exists with regard to the Inter-American Development Bank and the United States Agency for International Development (USAID). Without the ability to conduct an honest and candid assessment of the impact – or lack thereof – of international funds for Haiti, instability in Haiti will continue. This is for certain.

Recommendations

Don't get me wrong. Aid must go to Haiti. There is a hardly a country that is more in need.

But we need to put in place an appropriate framework to make the system really work. The international community should have a zero tolerance policy for undemocratic behavior including the violation of the constitution, human rights violations, rigged elections, corruption, and drug trafficking. The following actions would go a long way to ensuring that that aid is effectively used:

§ Enforce International Standards: First, the World Bank, IADB, the European Union and USAID have standards in place that Haiti should meet in order to receive funding. They must be enforced. If not, Haiti will remain mired in poverty and instability. With the enforcement of the international standards, there are safeguards against the money being misappropriated, squandered or diverted to personal bank accounts. These programs are in place to help change the system and provide opportunities for Haiti's poor. We must ensure that they actually start to reap the benefits.

§ Require a Preval Administration Policy Agenda : After three months in office, it is time for Haitian government officials to present the donors with a strategic economic, social and political action plan. Their current plan is disorganized and is not comprehensive. Rather it is a sort of list of $7 billion in projects without systematic justification behind how they fit into Haiti's overall goals. This plan should include projects in the areas of education, infrastructure, agriculture, security, economic development, and environmental protection. Equally important, this plan should take into account international funding requirements.

§ Strengthen Domestic Management Capability and Accountability: The Haitian government needs to put in place a human infrastructure that is capable of project and fund management and remove those who are incompetent. They should recruit capable professionals from the Diaspora and within Haiti into government. There are too many unqualified people in the government and it is severely limiting progress. As a capable management team comes in, they must also be subject to strengthened rules to ensure proper oversight and accountability so that the cycle of corrosion that has weakened human infrastructure in government in the past, corrupting many who entered government with good skills and a clean conscience, cannot be repeated.

§ Coordinate Donor Programs: In 2006, there are more than 3,000 non-governmental organizations operating in Haiti – often at cross-purposes. Nobody within the international community or within the Haitian government has a comprehensive overview of what they are doing. In order to maximize efficiency, international donors should put into place a multilateral coordination body and develop a database of existing programs. Existing programs should then be reviewed for redundancy and to identify additional areas of need. Haiti needs targeted grants for specific and measurable goals, not a $750 million lotto prize. This will not only reduce waste, but will also make it more difficult to divert funds.

§ Support Institutions, Not Individuals: The international community should support the rule of law, checks and balances, free and fair elections good governance and functioning ministries. Current efforts in Haiti should focus on clear goals, not charisma, not acquaintances, lobbying or contractors' political influence.

§ Develop an Independent and Non-Partisan Judiciary and Police Force : The international community should support a non-partisan reform of Haiti's justice system. The Executive Branch is interfering and politicizing the judicial system. This must stop. The training school of judges must reopen with international support. The Haitian National Police should clean out its ranks of known kidnappers, drug traffickers and political agents involved in human rights violations. The international community should provide technical assistance to strengthen the police force and help put into place mechanisms that will ensure that it is independent and non-partisan.

§ Require Efficiency in the State Sector: International donors provide approximately 50 percent of Haiti's budget. International donors have an investment in the country and should expect to see a return. The continued provision of funds should be linked to Haiti's performance in generating its own revenue from its revenue generating sectors, such as telecommunications, ports, and the tax authority.

§ Support Haiti's Private Sector: Haiti has an eager Chamber of Commerce with 10 chapters throughout the country. They desperately lack information on how to function as a Chamber as well as the ability to carry out the various trade and economic promotion activities normally run by Chambers. In addition, there is a need for micro-credit programs and women's development projects, including women entrepreneurs – a particular opportunity for the IADB. Haiti also needs jobs. One way to encourage job creation would be for the U.S. Congress to pass the HOPE legislation that would lower tariffs in certain sectors and promote greater U.S.-Haiti trade.

§ Push for Timely Elections: There is some concern that there is an effort to delay the remaining district Legislative and nationwide Municipal and Local elections. The international community has a $120 million investment in these elections. If they are not carried out in a timely and free and fair election process, this government will have undermined all the current and previous efforts to build viable democratic process and institutions.

§ Support for Democratic Institutions: Political parties, civil society, parliament and the Ombudsman's office are all still in need of training programs on how to function and organize. Local human rights groups and NGOs have good intentions but no resources. And the average Haitian citizen is still largely unaware of his/her rights as a citizen. This is a long-term struggle – one that international institutions have certainly been investing in – but one that needs continued attention.

§ Stop the Thugs: Gang members, thugs and drug dealers are still linked to state affairs. In fact, on Preval's trip to Washington in May, the White House barred access to two members of the Preval delegation who were known criminals. The Haitian government must put a vetting process in place to keep criminals out of its ranks – and have the courage to clear out criminals and others unworthy of the public trust who are already in government. The international community should require the development of such a process as a condition for further aid. The U.S. Department of State could help by developing and sharing a list of those known or strongly suspected of not meeting transparent criteria.

§ Peacekeepers Should Disarm All Armed Groups : Aristide loyalists (chimeres, gangs and drug traffickers) control 80 percent of the weapons and the police. The rebels also have some weapons in their possession. Both groups need to be disarmed. This is an important step toward restoring security, rule of law and the authority of the police.

§ Prosecute Corruption: The international community should revoke visas and freeze bank accounts and other personal assets of past and current Haitian government officials involved in corruption, drug trafficking, money laundering, and human rights violations. There must be accountability. The international community, specifically the U.S., must continue to investigate what happened to prior aid to Haiti.

§ U.S. Policy Discipline: When USAID decided to decentralize all programmatic decisions giving field officers authority instead of Washington, the U.S. government gave up a significant amount of control over policy implementation. Decision-making should, of course, take into account field officer input and should be a shared responsibility. However, in order to ensure policy discipline in the field, USAID should follow the policies set forth by the NSC and State Department.

§ Don't Go Native: Personal relationships are important, but should not obstruct a more business-like approach. There is an increasing trend for representatives of international aid organizations to become personally involved in the political process. Some are personally investing in the business sector. They are not Haitian. This is not their mission. In fact, it is destructive. Their mission is to assist. They have an enormous contribution to make and expertise to bring to bear. All of that, however, is negated when they choose sides or have a stake in the status quo. USAID's policy is to "put the client first." This makes good sense.

It is time to interject some common business sense into this process. International donors have to stop the double standard of exempting Haiti from common international practice and requirements. They should be expecting to see a return on their investment, but instead, they are merely accepting mediocrity and thus limiting opportunity. The Haitian people are hard working, positive and good people. They deserve the opportunities to contribute to society and move beyond subsistence living.

* Stanley Lucas worked on Afghanistan, the Middle East, Africa and Latin America. Lucas is currently the Director for Latin America and the Caribbean for the Washington Democracy Project.