Prepared by the Private Sector Economic Forum
DRAFT Version FOR DISCUSSION PURPOSES ONLY
March 13, 2010
Introductory Memo
[To be prepared by the Forum and to potentially include:
1. Summary of vision
2. Summary of principles
3. Commitments from the private sector
1 page in length]
Table of Contents
[To be added]
1. Introduction
The devastation wrought in Haiti by the January 12, 2010 earthquake is monumental. Estimates indicate that over 200,000 people have lost their lives, and hundreds of thousands more are injured and homeless. Three million people have been directly affected, and the country's infrastructure, institutions and economy are crippled. The prospects for long-term recovery and development have been set back drastically. Yet, the opportunity has now arisen to help the nation build back better.
We – members of the Private Sector Economic Forum – are committed to partnering with the Haitian government and to committing our own resources for the development of the country. Our vision for the country extends to the creation of a New Social Compact for all Haitians where business, the public sector, civil society and the international community are acting in concert, with mutual trust and accountability, in the best interest of all Haitians.
2. Vision 2020
The earthquake has set us on the beginning of a new path. The opportunity exists for all Haitians to benefit from transformative change – creating private-sector led, robust economic growth, high-quality social services, and a well-functioning, high-performing government. This change must be driven with a respect for the dignity of every Haitian.
For a long-term, prosperous Haiti, any vision rests on a functioning economy, able to provide jobs and create wealth for all Haitians:
· A robust economy with an agricultural base, but with many diversified opportunities across tourism, light manufacturing and eventually a business process outsourcing industry;
· A commitment to a 'green' economy, ensuring all future actions repair and restore Haiti's ecosystem;
· A partnership between a private sector, competing on a level playing field, and a fully-functioning modern government; and,
· An economy so vibrant, so as to attract Diaspora investment and return.
By 2020, we commit to making Haiti a diversified and robust economy open to all, and renowned for its environmental sustainability and modern government.
Recognizing that this journey will be long and challenging, the following sections detail the priority actions in the short (18 months), medium (3 years) and longer term (5 years) to achieve the vision of a new Haiti. In summary, they include:
· Short-term: Provide basic services and spur business activity
· Medium-term: Create decentralized and competitive growth poles
· Long-term: Expand economic opportunity to build a robust middle class
2.1. Short-term: Provide basic services and spur business activity
In the coming 18 months, Haiti's first priority must be recovery, providing basic services of health, nutrition, education and shelter to all Haitians and sustaining the Haitian economy in the face of immediate challenges.
Haiti in the short-term must be one of well-coordinated donor and humanitarian efforts, where basic services are provided quickly and a sense of normalcy is returned as soon as possible, meaning children are back in school, food and healthcare are being provided, and reconstruction is well underway. This reconstruction should be inclusive of Haitians, employing as many local workers as possible, and using local supply chains. Finally, an environment has to be created where Haitian businesses can survive this loss of assets and customers, through provision of stopgap loans to cover ongoing debt obligations and well policed national borders to stop an influx of smuggling.
By the end of the 18 month recovery period,
· 500,000 Haitians will have been employed in the reconstruction efforts
· 30% of humanitarian aid products will have been made in Haiti
· 75% of Haitian children are back in school
· Fund created to provide short-term stopgap loans to Haitian SMEs, with 2 million dollars already disbursed
2.2. Medium-term: Create decentralized and competitive growth poles
As the nation begins to rebuild and reconstruct, the fundamentals for a new, decentralized economy need to be laid down, both to provide more economic opportunity for Haitians, and to ease the overcrowding of Port-au-Prince that contributed to the magnitude of the disaster.
The Presidential Commission on Competitiveness has identified high priority sectors based on their ability to create jobs and value for the Haitian economy. The private sector should commit to investing in these sectors and to assuming some degree of risk, and the government should create industrial zones to facilitate the functioning of the sectors and offer corresponding incentives. The growth poles should be centered around the following, in addition to a restored Port-au-Prince:
1. In the North, between Cap Haitien and Ouanaminthe, to support tourism, textiles and agriculture
2. In the South to support textiles and agriculture
3. On the St Marc peninsula just North of Port-au-Prince to link the Artibonite valley
By the end of the 2-3 year reconstruction period,
· 1 million Haitians will be employed in tourism, textiles and agriculture
· Three new industrial zones will have been created, with basic services provided across the zones
2.3. Long-term: Expand economic opportunity to build a robust middle class
The earthquake has given Haiti the chance to build a better society for all – a new Haiti. Haiti in the long-term succeeds only with a robust middle class functioning as part of a transformed society, where a culture of entrepreneurship co-exists with a modern, well-functioning government.
In five years,
· The Haitian government will have passed necessary legal reforms to rank in the top 75 in the World Bank Doing Business rankings
· Business and entrepreneurship classes will be included in the curricula of secondary and tertiary schools
· SMEs in the formal sector will make up 70% of the economy and national tax base
· 500 million of FDI will have been attracted, and 2 million total jobs created
3. Principles
Difficult tradeoffs will doubtless need to be made in the reconstruction of Haiti, but how we approach the coming period will determine whether or not we can truly transform our country's social, political and economic fabric for the better. The earthquake and dealing with its immediate aftermath has created a new and previously unparalleled solidarity in Haiti across all of us as individuals, and across the government, private sector and international community. If we fail to adhere to a set of basic principles during the immediate reconstruction period, we will all have squandered a once in a lifetime opportunity to set the country on a new path of social and economic growth.
Five priority principles must guide all actions and decisions during reconstruction:
· Leadership and mutual accountability: We need strong leadership and partnership from both the private and public sector for the country to move forward. All parties have a role to play in accountability for development.
· Decentralization and equal growth: Social and economic growth must include all regions of Haiti in order to reduce the extreme poverty in rural Haiti, and allow for effective reconstruction of Port-au-Prince. Political decentralization should accompany economic decentralization.
· Commitment to Modernization: Efforts to rebuild the Haitian state should propel us into the 21st century and ensure that modern communications, information technology and management systems are put in place across all government ministries.
· Haitian-led: Recovery and reconstruction programs should involve Haitian people and firms as often as possible, and focus on building their skills. Foreign aid should be particularly attentive not to displace local businesses.
· Independence from international aid: Haiti aims to rebuild in a manner such that the new Haiti is less reliant on the donor community for financing and support. Every plan put forward by the international aid community should have an exit strategy or sustainability component.
We must all hold ourselves accountable for adhering to these principles.
4. Pillars of Vision 2020
Achieving this social growth requires a multitude of investments, both in terms of financial and human capital. Haiti has no shortage of resources for development, yet the stark realities caused by the earthquake force both the private and public sectors to prioritize their efforts, and work in extremely close coordination in order to ensure a return on those investments. Five areas in particular deserve significant attention: (i) Job Creation and Economic Opportunity; (ii) Housing and Economic Security; (iii) Food and Environmental Security; (iv) Health and Education; and (v) Governance and Institutional Capacity.
4.1. Pillar I: Jobs and shared economic opportunity
In the short-term, the construction of housing and infrastructure will create hundreds of thousands of jobs for Haitians, but Haiti's long-term economic prosperity must rely on building a skills-based economy in globally competitive sectors.
Given the need to create jobs immediately, aid efforts must ensure that they are strengthening and not displacing the Haitian workforce and Haitian businesses. We have been overwhelmed by the generosity and compassion that individuals, corporations and governments outside of Haiti have demonstrated in the aftermath of the earthquake. We now critically need them to be our partners in rebuilding the private sector in Haiti – both by ensuring that aid efforts include Haitian manufacturers in their supply chains and by supporting efforts such as Plus One for Haiti to source imports from Haiti.
More broadly, we support the work of the Presidential Commission on Competitiveness, which has identified the following portfolio of priority clusters: (i) fruits and vegetables, (ii) animal husbandry, (iii) tourism, (iv) housing and urban development and (v) garments. Significant expansion across the sectors of agriculture, tourism, construction and garments will allow for the creation of millions of jobs and ensure shared economic prosperity in Haiti. In turn, a stronger and formalized private sector will contribute to strengthening government's capacity and ability to deliver public services.
[Align with GTC report]
| Outcome | 18 months | 3 years | 5 years |
| Jobs | 500,000 primarily in construction and agriculture | 1 million in tourism, textiles, and agriculture | 2 million in tourism, textiles and agriculture |
| Population migration and settlement | Xx migrated to new economic development zones | Xx settled in permanent housing | Xx settled in permanent housing |
| Informal sector | 85% of economy | xx… | xx… |
| Number of tourists | xx… | xx… | xx… |
| Land ownership | xx… | xx… | xx… |
| | | | |
4.1.1. Drive near-term employment for Haitians in construction: Major construction projects are needed in the near term, both to rebuild Port-au-Prince and to develop new zones for economic development across the country. The construction of housing and infrastructure must balance multiple needs: creating employment opportunities for Haitians, responding to the urgency of the situation, and building for quality as well as ensuring provision for maintenance. International construction companies will bring the needed expertise but should be required to both employ Haitians as well as consider that imperative in the selection of construction methods.
To this end, the GOH and the foreign aid community should pursue the following initiatives:
1. Mandate that a majority (75% at a minimum) of individuals employed by construction companies be Haitian, or members of the Haitian Diaspora;
2. Require use of Haitian supply chains by construction companies, to the extent those supply chains exist or can be developed rapidly;
3. Devise and implement an automatic linkage between financial resources made available for construction and those made available for maintenance;
4. Prioritize modern construction techniques for major roads and infrastructure but mandate labor-intensive techniques for feeder roads, in order to create the maximum jobs in the short term as well as longer term (maintenance), without holding back reconstruction.
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4.1.2 Create new zones of economic development around priority clusters: The development of priority clusters for Haiti must take place through a decentralized economy, driven by three new economic development zones outside Port-au-Prince, in the following order of development:
1. In the North, between Cap Haitien and Ouanaminthe, to support tourism, textiles and agriculture, requiring the following investments:
a. International airport in Cap Haitien;
b. A road between Labadi and the UNESCO world heritage sites within the National History Park (Citadel, Sans Souci and Ramiers), with feeder roads into agricultural areas;
c. A container port in either Cap Haitien or Fort Liberte; and,
d. An industrial park focused on textiles.
2. In the South to support textiles and agriculture, requiring the following investments:
a. A trans-shipment port in Baie du Mer;
b. Feeder roads into cocoa and coffee producing regions;
c. An industrial park focused on textiles; and
d. Development of a top-notch agriculture program at the University of Notre Dame's agricultural engineering facilities in Redon.
3. On the St Marc peninsula just North of Port-au-Prince to link the Artibonite valley; the breadbasket of Haiti, requiring the following investments:
a. xxx
b. xxx
In order to make these growth poles successful, we see several required initiatives:
1. Create Local Development Boards around each of the new zones of economic development to develop detailed plans and oversee the rapid execution of the projects. These boards must include representation from government, private investors, local businesses and donors and have a direct linkage to the senior-most level at the reconstruction agency. We suggest that just one multi-lateral and/or bi-lateral donor should take the lead on each zone to reduce complexity in coordination across multiple donors.
2. Invest public funds in industrial parks in both the Northern and Southern economic development zones, with private contractors managing the development of the industrial parks. Given the risk and timing associated with garment tenants, public funding is necessary to catalyze investment in the new economic development zones. However, these industrial parks should be privatized either on a specific time (co-incident with HOPE legislation) or on revenue and profitability triggers.
3. Create flexible labor laws, including immediately legalizing the 3x8 work shift to allow increased competitiveness in the textiles industry and job creation.
4. Integrate plans for provision of housing and basic services around these new zones and place increased security at strategic locations, particularly to support the proposed expanded work shift.
5. Create managed contracts for the critical infrastructure associated with these economic zones as noted below in 4.1.3.
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4.1.3 Create managed contracts for critical infrastructure: Efficient management of infrastructure and public services is critical to allow the effective development of the private sector in Haiti and to ensure that the maximum number of jobs can be created. Currently the management of customs, airports, ports and energy does not lend to a positive enabling environment for businesses in Haiti.
Customs is only collecting approximately 20% of import duties across the Haiti – Dominican Republic border, reducing the competitiveness of local production and the fiscal base of the government. In addition, energy is expensive and unreliable, ports are expensive and do not adequately provide access and the international airport in Port-au-Prince is badly damaged. The management of these areas needs to be overhauled. To do so we propose that the GOH pursue public-private partnerships with managed contracts for each critical infrastructure asset. All contracts should be competitively and transparently bid and open to international and local companies.
More specifically, we outline the following guidelines for the managed contracts:
1. Customs:
· Outsource the administration and enforcement of customs to a company whose compensation is aligned with specific performance targets for duty collection.
2. Energy:
· Change the energy law to allow Independent Power Producers (IPPs) to operate in the country and supply power to the industrial parks, with transitional arrangements to supply power outside of the industrial parks while internal demand is building up.
3. Ports:
· Eliminate restriction on receiving containers outside of the Port-au-Prince port
· Establish a private managed contract for the Port-au-Prince public port
· Ensure access to water berth
4. Airports:
· Conduct a quick, limited competition to immediately get the international Port-au-Prince Airport fully operational.
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4.1.4 Build and formalize micro, small and medium enterprises (MSMEs): Micro, small and medium enterprises drive economic growth and job creation and can be a significant source of innovation. We cannot talk about the private sector without including these enterprises which today contribute an estimated 95% of jobs in Haiti. These enterprises – both formal and informal – were especially exposed to the devastation wreaked by the earthquake. We must support them in overcoming the losses incurred and position them to be significant contributors to the Haitian economy and to contribute to the country's fiscal base.
More specifically, we outline the following initiatives:
1. Keep loan capital flowing to existing SMEs:
· Create partial guarantee funds covering both future credit to SMEs across Haiti as well as the refinancing of existing credits issued in Port-au-Prince to incent increased activity by banks;
· Establish mechanisms for recapitalization of banks such as the issuing of subordinated debt by banks and creation of a fund or financial entity tasked with purchasing portfolios of insolvent loans; in the case of the latter solution, the banks themselves should still be tasked with the recovery of loans and be compensated on a commission basis;
· Expand the types of guarantees accepted by banks to include purchasing guarantees.
2. Increase loan capital available to micro-entrepreneurs, using similar initiatives as above as well as the following:
· Putting in place an insurance mechanism to protect MFIs from risks linked to natural disasters or other external shocks, which have often wiped out MFI's activities in Haiti and significantly reduced operations in areas of the country that are more prone to natural disaster;
· Distributing one-time humanitarian aid through MFIs to micro-entrepreneurs that were active in Port-au-Prince such that they can meet immediate needs and be positioned to re-build operations, possibly funded and supported by a fundraising effort targeting the Diaspora.
3. Support new entrepreneurs with seed capital and management assistance:
· Launch investment funds capable of providing both management assistance and risk capital, through quasi-equity instruments, to meet the needs of small and medium-sized enterprises, particularly those without a lending collateral base;
· Create incubators (possibly through the IFC) to provide seed grants and support to new entrepreneurs;
· Establish Centers for Entrepreneurship targeting Haitian entrepreneurs across prioritized growth sectors, and tasked with providing training courses in basic business skills, modular trainings on specific sectors.
4. Support the formalization of the economy by putting in place requirements and incentives for formalization of MSMEs:
· Simplify formalization requirements and processes for SMEs, reducing the burden and cost of compliance;
· Provide funding to the Regional Chambers of Commerce to assist SMEs in becoming formal, including incorporation, registration, accounting and governance;
· Make formalization a requirement for any MSMEs receiving funding through reconstruction effort, including through NGOs.
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4.1.5 Establish clear and undisputed land ownership: The lack of clarity in land ownership in Haiti has long been a barrier to private sector investment in Haiti and currently discourages banks from making mortgages available. While multiple plans have been developed to address land ownership issues in Haiti, the political will has been lacking to execute on these plans. The reconstruction effort creates an unparalleled opportunity to once and for all provide clarity on land ownership and adjudication procedures, and to implement the decisions of the courts under the aegis of MINUSTAH.
More specifically, we propose that the GOH in partnership with the proposed Reconstruction Development Agency:
1. Establish registration and land cadastre;
2. For dispute-free government land, immediately award land titles and concessions for use in the reconstruction effort;
3. For disputed land, establish a dedicated court to adjudicate claims, with a focus on special fast-track procedures for new economic development zones, as well as clear deadlines and minimum fees to discourage frivolous claims.
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4.2. Pillar II: Food and environmental security
Agriculture plays a critical role in the Haitian economy with an estimated 60%-80% of the population involved in agriculture. There is a strong need for the development of the agricultural sector, both from a food security as well as income generation stand-point.
On the agri-business side, Haiti has significant potential to expand the role of agriculture as an income generator. Micro-climates, combined with proximity to the US means there is potential for targeted production of high value products such as fresh produce. A processing base already exists that can be built upon. And just as importantly, agriculture offers the opportunity for shared growth and wealth creation across Haiti.
To make the agriculture sector sustainable in the long run, environmental concerns have to be a core tenet of agriculture going ahead. Massive deforestation has led to extensive soil erosion and the vulnerability of Haiti's water towers. The push for commercial agriculture typically comes with the use of chemicals (particularly for pest control) which must be carefully managed for environmental impact; a focus on organic production which allows a premium on price would safe-guard against this. Just as important to repairing and restoring Haiti's ecosystem is the larger question of impact of energy use. Haiti must transition from charcoal and fossil-fuel based products to renewable energy options.
| Outcome | 18 months | 3 years | 5 years |
| Agricultural imports as % of production | | | |
| Agricultural exports | | | |
| Smallholder farmer income | | | |
| Malnutrition rates | | | |
| % forest land | | | |
| Etc. | | | |
4.2.1. Increase Food Security: Today, Haiti is a food insecure country, with food imports constituting 57% of what Haitian consume, 9% of children under the age of five suffering from acute malnutrition and 24% from chronic malnutrition. In the immediate aftermath of the earthquake, a vast majority of Haitians were rendered vulnerable. When combined with the high density, a focus on export-led agribusiness, as well as population growth rate, Haiti's ability to produce all the food needed for its population will continue to be strained. As such, a focus on a mid-to-long term solution is critical. These solutions require a three pronged approach which increases the amount available for consumption, addresses malnutrition through targeted fortification of foods and provides targeted support to vulnerable populations.
To effectively address the food security issue, we must:
1. Increase amount of food produced in Haiti by
· Supporting farmers with appropriate technology and extension services to be more productive;
· Streamlining the supply chain to reduce wastage.
2. Tackle malnutrition through:
· Targeted fortification of foods (especially flours and oils);
· Increased consumption of fruits and vegetables, which can be achieved when linked with the agri-business strategy where produce that does not meet export-market standards is circulated in the local market for consumption;
· Revamping the dairy and poultry industries to increase consumption of milk and eggs, which are important sources of proteins.
3. Provide targeted support to vulnerable populations by:
· Creating preferential tie-in with key countries or producers to ensure food supply complements local production;
· Creating a clear insurance mechanism against surge in the prices of staple crops which can bring additional strain to an already vulnerable situation.
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4.2.2. Boost export-led agribusiness: Agri-business currently contributes only XX% of GDP versus YYY% in the 1970s. The following private sector-led initiatives can significantly enhance export-led agri-business:
1. Build on the existing core of fruit exports by first fixing the post-harvest supply chain where over 40% of produce is lost;
2. Develop targeted out-grower schemes to involve small-scale farmers. Depending on the exact product, segregation could include farmer production of organic output for higher-end markets that leverages developed export supply chain;
3. Support the development of strong farmer cooperatives which provide a key, underlying infrastructure for providing inputs and credit, as well as aggregating supply of extension services and ultimately farm output. This typically results not only in higher, targeted production, but also increased margin capture by the farmers themselves
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4.2.3. Reforestation and soil protection: Extreme deforestation exposes Haiti and its agriculture sector to significant risk given the resulting soil erosion and pressure on water-towers. We propose the following initiatives to address this critical issue:
1. Mandate the density of X trees/acre across the country. Rather than a tax on land to push productive utilization, this would have a more immediate beneficial role for the country
2. Tap carbon credit markets for carbon sequestration through reforestation. This would be attractive for large-scale forests developed, particularly when coupled with timber supply, as well as has the potential for additional income for small scale farmers;
3. Adopt basic techniques against soil erosion, including:
· Radical terracing for hill-side agriculture;
· Planting of cover crops;
· Development of gabions in key valleys.
4. Adopt alternative sources of energy and eliminate use of charcoal and firewood by:
· Regulate against commercial use of charcoal and introduce subsidy for alternative sources of energy such as Liquefied Petroleum Gas (LPG);
· Create incentives for use of solar lanterns and solar power for lighting;
· Expand electricity at affordable prices.
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4.3. Pillar III: Health and education
4.3.1. Health
With the lowest healthcare spend in the Western hemisphere and high rates of disease, Haiti's health system was already stretched and ineffective prior to the earthquake. Yet rebuilding the country is dependent on not only providing immediate health services to earthquake victims, but creating a strong national healthcare system that can ensure a healthy population is available to contribute to economic activity and society at large
| Outcome | 18 months | 3 years | 5 years |
| Incidence of communicable diseases | Rates of highly communicable diseases have returned to pre-earthquake levels | Rates of highly communicable diseases have reduced to x% | Rates of highly communicable diseases have reduced to x% |
| Health spend per capita | $xx, ranking y in Western hemisphere | $xx, ranking y in Western hemisphere | $xx, ranking y in Western hemisphere |
| Life expectancy | Xx years, ranking y in Western hemisphere | Xx years, ranking y in Western hemisphere | Xx years, ranking y in Western hemisphere |
| Infant mortality rates | Xx/1000, ranking y in Western hemisphere | Xx/1000, ranking y in Western hemisphere | Xx/1000, ranking y in Western hemisphere |
| Doctors/nurses per capita | Xx/1000, ranking y in Western hemisphere | Xx/1000, ranking y in Western hemisphere | Xx/1000, ranking y in Western hemisphere |
4.3.1.1. Enhance provision of immediate services to high-need populations: The earthquake has left hundreds of thousands of people in dire need of healthcare services, and poor living conditions make communicable disease outbreak a constant threat. Haitian authorities must prioritize immediate healthcare delivery, through the following specific initiatives:
1. Create an Independent Service Authority (ISA) on a pilot basis for incremental service provision
2. Establish food and health distribution centers in concert with donors, possibly linked to the reopening of schools, and publicize the locations to the Haitian people
3. Oversee the creation of an International Medical Volunteer Corps of doctors and nurses to coordinate current relief efforts and train local doctors and nurses
4. Prioritize maternal/newborn health through focus on emergency obstetrics training and support
5. Launch public health campaign focused on awareness building and information dissemination for preventing post-disaster pandemics (e.g. tuberculosis) and emphasizing sanitation
6. Establish emergency communicable disease surveillance system (Early Warning Alert and Response Network)
7. Create and implement design to prevent outbreaks of communicable diseases (e.g. support lab capability to conduct epidemiological surveillance)
8. Develop information system to collect data, employing mobile devices and mobile telecom technology
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4.3.1.2. Move from one-off relief efforts to stronger healthcare systems: As the crisis subsides and the multitude of relief efforts fades, the existence of a cohesive healthcare system is critical for Haitians to receive adequate care in the medium and long terms. The GOH needs to begin planning for this transition by:
1. Create an incentive program to retain local Haitian talent (doctors, nurses, ministers, health experts) and attract the Diaspora
2. Pilot and test Pay-4-Performance health models based on purchasing agreements with public providers and NGOs responsible for achieving minimum coverage rates with quality
3. Create a strong governance system by consolidating government oversight over health budgets to empower the Ministry, with provisional coordination support from WHO, pairing with centralized purchasing services from private sector/NGO players
4. Invest in rebuilding hospital and clinic infrastructure, integrating clean water models in hospital construction, emphasizing storm-resistant construction and exploring alternative energy sources for electricity.
5. Invest in new infrastructure in the new industrial zones and rural regions, integrating clean water models in hospital construction, emphasizing storm-resistant construction and exploring alternative energy sources for electricity.
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4.3.2. Education
Only half of school-aged children were enrolled in classes before the earthquake. Fees are often beyond the poor. Now, with an estimated 3,000 schools damaged and a mass loss and exodus of teachers, access to education is likely to be even more challenging. The provision of education in Haiti, primarily provided by the private sector and largely unregulated, has significant variability in quality. Approximately 70% of students fail national tests, and those that do pass are not necessarily prepared to be productive participants in the economy. Haiti requires a massive overhaul of the education system to increase access and affordability, improve quality and provide a pathway to productive employment.
| Outcome | 18 months | 3 years | 5 years |
| Access | xx… | xx… | xx… |
| Quality | xx… | xx… | xx… |
| | | | |
4.3.2.1 Provide immediate and longer-term access for all students: There is a lack of facilities and infrastructure to get students back in school. Facilities need to be reconstructed or developed, and quickly. Fees are still prohibitive to enable broader student access, particularly girls. More specifically, we propose the following initiatives:
1. Provide government or donated private sector land for schools to high-performing institutions, particularly in the new regional economic zones;
2. Immediately deliver pre-fabricated school buildings;
3. Offer a voucher program to all eligible children, with a particular focus on supporting gender equality and driving a performance-oriented selection process by providing information on school-student performance.
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4.3.2.2 Improve the quality and oversight of the education system: Haiti's education system requires improving teacher and institutional quality and adding appropriate incentives and accountability. More specifically, we propose the following initiatives:
1. Provide international support to improve the teacher training and certification programs, including the following in Port-Au-Prince and regional clusters…, and provide fellowships and outreach to bring back teachers from abroad;
2. Revisit curriculum and national tests to ensure alignment with country and economic needs; involve private sector in curriculum review committee;
3. Under the Reconstruction Development Agency, establish an Independent Service Authority (ISA) to set performance standards, evaluate institutions, license institutions and direct funding; enforce closure as appropriate and reward high-performing institutions to support scale and replication;
4. Provide performance-based funding to institutions for their student results on the national test.
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4.3.2.3 Prepare students for economic opportunity: The Haitian economic vision outlines globally competitive industries in agriculture, textiles, tourism and eventually business process outsourcing. To meet the needs of those industries will require significant skills. More specifically, we outline the following initiative:
1. Create vocational institutes as critical parts of each economic growth pole. Funding and design of the institutes should be as focused as any other element.
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4.4. Pillar IV: Housing and economic security
The challenge in providing housing for Haitians is two-fold: how to address the vast immediate needs for shelter and services, while integrating immediate aid into massive construction works of longer-term sustainable permanent housing in well-planned urban areas. Moreover, as new housing structures will be one of the greatest asset reserves for most Haitians, constructing clear plans to translate housing into economic security is needed for Haitians to fully benefit from the reconstruction efforts.
| Outcome | 18 months | 3 years | 5 years |
| Housing provision and financing | X% of Haitians provided temporary housing; y% of salvageable structures rebuilt | X% of Haitians provided permanent housing; y% with mortgages | X% of Haitians provided permanent housing; y% with mortgages |
| Land rights | X% of land parcels have clear titles and deeds | X% of land parcels have clear titles and deeds | X% of land parcels have clear titles and deeds |
| Infrastructure provision | X% of temporary camp residents have access to basic infrastructure | x% of new housing development residents have access to basic infrastructure | x% of new housing development residents have access to basic infrastructure |
| Employment | Xx jobs created in construction | Xx jobs created in construction | Xx jobs created in construction |
| Regionalization | X% of new housing created outside PaP | X% of new housing created outside PaP | X% of new housing created outside PaP |
| Environmental sustainability | X% of new housing created with green building features | X% of new housing created with green building features | X% of new housing created with green building features |
4.4.1. Immediate housing provision to meet humanitarian need: Housing is obviously one of the most critical needs for Haitians in the months following the earthquake. In addition to the previously discussed immediate job creation benefits in the construction industry that wide-scale housing provision will bring, housing and shelter must be delivered in a manner that ensures housing solutions are replicable and compatible with the longer-term economic decentralization plans. In the short-term, immediate housing provision should be a top priority of the government, requiring coordination of donors and the international and Haitian private sector. In the short term, the GOH should:
1. Make dispute-free government land immediately available for temporary housing;
2. Ensure that temporary housing camps do not become slums with abject living conditions. Areas of housing congregation should be equipped with basic infrastructure (water, electricity, waste removal) and social services (meal delivery, healthcare distribution, childcare facilities, counseling services);
3. Employ as many Haitians as possible in the temporary camps, construction of housing, and provision of services;
4. Coordinate all donor and NGO activities to ensure some areas of Port-au-Prince are not underserved;
5. Call for Haitians outside Port-au-Prince to display solidarity and provide shelter for urban Haitians in a spirit of temporary cooperation (and the beginning of decentralization).
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4.4.2. Changing the map of Haiti with permanent housing: In order for decentralization to become reality, Haitians will need not just job opportunities, but viable housing options – these should be planned together. As the industrial zones in the north and south are planned, housing provision should be the shared responsibility of the Haitian public and private sectors. In order to speed construction, and ensure quality standards, the GOH should:
1. Establish clear land rights and adjudication system (as outlined in section 4.1.5);
2. Establish building codes that correlate to the seismic conditions of the country;
3. Ensure that when giving land titles, construction permits or mortgages, the builder of record is clear and traceable; this builder should be held accountable for the quality of construction with clear penalties for violating construction codes;
4. Require that permanent housing be constructed in the new industrial zones in the north and south, and outside of Port-au-Prince, and reduce taxes for companies willing to build housing for their workers;
5. Offer incentives such as preferential financing terms and tax duty exemptions to international companies willing to build permanent housing in an environmentally sustainable way (solar powered, etc.), financed by donors, particularly OPIC and the EXIM bank;
6. Offer incentives such as preferential financing terms and tax duty exemptions to international construction companies affiliated with the Haitian Diaspora (either owned by, or with a substantial Diaspora employee base), financed by donors particularly OPIC and the EXIM bank.
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4.4.3. Providing economic security for bottom of the pyramid: Housing programs will need to be segmented into broad categories of those who can afford some payment for housing, and those who are currently indigent and must be cared for by the state. Realizing that sufficient housing has always been a challenge for the poorest of the poor in Haiti, prioritization among segments and their various financing needs will be a challenge. The GOH should:
1. Secure donor commitments to finance the construction of permanent shelters for those who cannot afford it; for the poorest of the poor, there is little option but 100% subsidy from government and/or donors;
2. Create a voucher system, where the government (with donor financing) supplies monthly vouchers that can be used only for rent (or a portion of rent) to the poorest segment of the population, in an effort to create a functioning housing market rather than state-run housing complexes.
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4.4.4. Providing economic security for the middle classes: Housing assets will be the largest vehicle for financial security for the majority of Haitians. Developing financing mechanisms for the largest swath of the population possible to access housing will be the greatest challenge, and should be the government's priority. The GOH should:
1. Provide a heavy subsidy financed by donors and GOH bank guarantees for mortgages for the lower/middle classes and civil servants who can take on a partial mortgage;
2. Develop, in consultation with the commission of engineering and financing experts, a menu of housing choices and associated mortgage plans for the middle classes to choose from;
3. Distribute ownership titles and regulations for the sales of permanent housing, in order to create a functioning real estate market.
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4.5. Pillar 5: Governance and Institutional Capacity
Over the last few years, Haiti has made considerable progress and a solid commitment to democracy and elections. Political stability and security, supported by MINUSTAH, is at risk of eroding after the earthquake. Successful and effective reconstruction will require the legitimacy and support of the people. More broadly, it will require a well-functioning civil society and set of institutions. Already with limited capacity before the earthquake, the government has lost an estimated 10% of civil servants, as well as a significant amount of the physical government buildings. The fiscal base needed to administer the government has likely disappeared as well.
There is a unique opportunity to fundamentally reform the relationships and dialogue that underpin our society. We believe that it is critical that a New Social Compact emerge that broadly involves government, civil society, and the private sector – from the large businesses to the informal traders – across Port-au-Prince and throughout the country. At its core, the New Social Compact will support free and fair elections, free enterprise and a commitment to individual political and economic freedom. Only then will we be able to have the mutual trust, respect and dignity to create a society with government accountable to the people and a private sector serving the people.
| Outcome | 18 months | 3 years | 5 years |
| Elections | xxx… | xxx… | xxx… |
| Fiscal Revenue Base | xxx… | xxx… | xxx… |
| … | | | |
4.5.1 Commit to elections and political stability: While the earthquake has delayed parliament elections, we support the Presidential and Parliamentary elections proceeding in due course, with MINUSTAH security, by XX.
4.5.2 Create a climate of accountability and transparency: A New Social Compact must have a commitment to accountability and transparency from government, civil society and the private sector. We propose the following initiatives:
1. Government improve its accountability through increased funding for parliamentary staff to conduct technical research on issues; frequent, public hearings and testimonies to provide open dialogue with the public; and, funding of independent think tanks and institutions to submit reports and briefs to parliament.
2. Business leadership commits to a public code of ethics and compliance and takes specific actions to improve corporate governance and oversight.
4.5.3 Expand the fiscal revenue base: The significant tasks ahead cannot be completed without a fiscal revenue base that can support the administrative and programmatic needs of the country. Likewise, in order to move toward aid independence, Haiti will need to create a sustainable fiscal revenue base. This will a review and revision of the tax code. We outline the following initiatives:
1. Immediately setup revenue collection administration with the capacity to administer, collect and enforce appropriate tax and duties.
2. Government and private sector commit to compliance and transparency.
3. Revise the tax code with a focus on simplifying and creating a flat tax. Where feasible provide estimated taxes for SMEs in order to begin to encourage a culture of compliance and commitment to the state.
4. Reduce the gap between imports across the Dominican Republic border and duties collected, currently at only 20%, through outsourcing the customs operation.
4.5.4 Build a modern government and increase administrative capacity: Building a modern government requires both fundamental legal reform and increased administrative capacity to serve a new Haiti. We outline the following initiatives:
1. Conduct a constitutional reform with public-private participation to update the national legal framework by xx. Immediately make the following changes: dual citizenship, etc…
2. Increase government administrative capacity to support the reconstruction. In the near-term, supplement government capacity with international experts. In the longer-term, provide a civil service…
3. Decentralize government functions, such as the Central Bank, to match the new regionalization of Haiti. Increase the capacity and stature of the local delegates.
4.5.5 Create sustained public-private dialogue: The New Social Compact will depend on mutual trust and respect. Sustained dialogue will be a critical part of building that trust. Dialogue can be informal but is best done when the parties have specific tasks at hand. We outline the following initiatives:
1. Active Role in Reconstruction
2. Transition to Economic Development Board and Regional Development Boards
4.5.6 Govern the Reconstruction responsibly and effectively: We support the creation of the Interim Haiti Recovery Commission and the Haitian Development Agency under the following principles:
· Haitian ownership and leadership
· Broad representation, including the private sector
· Regionalization, not just nationalization
· Sustainability of efforts beyond the donor response
· Focused donor efforts not broad efforts
· Capital and risk sharing between public and private sectors
With these principles, we outline the following considerations:
· Private sector representation
· Mandate
o Land adjudication
o Managed contracts for national and international bidders
o Health and education oversight
o Local procurement, joint venture and employment requirements
· Regional level
· Transition to economic development board at national and regional levels
5. Roadmap
5.1. Sequencing
5.2. Financing needs
5.3. Integrated regional projects
