Before I joined the Global Development and Environment Institute in 1999, I was the executive director at Grassroots International, a Boston-based aid organization. With a focus on structural change and empowerment, Grassroots started an emergency program in Haiti after the first ouster of President Jean Bertrand Aristide in 1991. Later, we watched up close as the large US-funded aid effort, after Aristide’s return in 1994, undermined Haitian government priorities, undercut food production, and weakened civil society institutions. The aid empowered foreign aid agencies and multinationals rather than Haiti’s people. We documented the aid disaster with a report: “Feeding Dependency, Starving Democracy.”
Will history repeat itself in Haiti now? The outpouring of private aid, much of it from the pockets of people in the US, has been encouraging. But what should donors and agencies support if they want to avoid repeating history? Aid goes not to projects or services but first to service providers, to agencies themselves. And aid is power. Those who get more aid end up stronger than those who don’t. When the crisis is over, who do we want to be stronger as an institution, and therefore better able to address or avert such crises in the future?
Here are a few guidelines I came up with:
1. Support agencies that build local capacities and institutions– Some aid agencies, including most of the largest and best-known in the US, are “operational”, that is, they set up offices in-country and provide services themselves, often hiring large numbers of local residents to work for them. Operational agencies often weaken local institutions, drawing qualified staff out of relatively weak local organizations. Wherever possible, support agencies that work primarily through local partner institutions.
2. Support privately funded initiatives, not government contractors – The US government is the largest aid provider in the US and it contracts much of that work out to US-based aid agencies. More than half the budgets of many of the largest US-based aid agencies come from the US government. So what? Well, first, private money is relatively less important to such efforts, which tend to be multimillion-dollar activities. Second, those agencies naturally tend to be accountable mainly to the US government, not to its private donors nor, more important, to the local communities they serve. Third, official US aid programs are among the most political in the world, often hewing to State Department objectives and guidelines first and humanitarian guidelines and needs second (or third or fourth).
3. Buy local and support regional economic development – Procurement is everything, a massive stimulus program. The question is, whose economy is it going to stimulate? USAID brags that 75% of all its aid comes back to the US – paying US consultants, buying US products, etc. As Ecuador’s President Rafael Correa said when he visited Haiti: “There is a lot of imperialism among the donors. They donate first, but most of it goes back to them.” Government and private aid should stimulate the Haitian economy.
4. Agriculture matters – Sure, Haiti needs food aid right now. It also needs agricultural investment and protection for its farmers from the low prices caused by food aid and unregulated imports. In the 1990s, food aid poured in, trade liberalization opened the borders to subsidized US rice, and Haiti’s rice production fell dramatically.
5. Small is beautiful – The aid industry is dominated by the largest agencies, which compete for and win government contracts. The last things Haiti needs are aid agencies with more resources and power in-country than the government.
6. Rebuild government institutions – Private aid often comes with an anti-government bias. Haiti’s government has, quite literally, been reduced to rubble. Aid should prioritize efforts to build strong, responsive government institutions. Early reports showed precious little funding going to the Haitian government. Aid should also respond to Haitian government priorities, such as agricultural development. In the 1990s, less than 5% of US aid went to agriculture even though it was the government’s highest priority. In the meantime, creditors should cancel Haiti’s $891 billion debt, not just restructure it.
Disasters often generate strong movements for social change, and the recovery effort itself is important not only economically but politically. This time, let’s not feed dependency and starve democracy.
Note: The Center for Economic and Policy Research has launched a new blog: Haiti: Relief and Reconstruction Watch.
Very insightful comments. I want to add that aid can have adverse macroeconomic effects, especially when countries have liberalised foreign trade (or are encouraged to do so by the donors) by pushing up real exchange rates to levels that generate or add to current account deficits, and make tradeable activities less viable. This is only too obvious in countries like Cambodia, where the effective dollarisation has also destroyed any possibility of independent monetary policy. So donors who really want to improve the economic situation of the country need to factor in this adverse effect and try to ensure that the nature of the aid is such as to minimise it.
Tim Wise’s blog provides good pointers for improving aid. Besides canceling all Haitian debt, and ensuring future aid reaches local beneficiaries and strengthens the Haitian government, aid must be provided only as strings-free grants, and it must especially target women, the pillars of Haitian communities and households, who must play a key role in planning and implementing Haiti’s recovery. These are among the recommendations I make in, “To Help Haiti, Upend Aid Habits, and Focus on its Women” published on the Center for Economic and Policy Research’s Haiti blog at http://www.cepr.net/index.php/blogs/relief-and-reconstruction-watch/to-help-haiti-upend-aid-habits-and-focus-on-its-women/
Thanks for your important message. We’d like to encourage your readers to sign on right now to a petition to President Obama urging him to make sure the United Nations leads the rebuilding effort in Haiti – NOT the IMF or the World Bank. http://actionaidusa.org/do/petitions/recruitment/rebuildhaiti
ActionAid has been partnering with poor people’s organizations in Haiti since 1996. We believe that only through true partnership with the poorest populations will we be able to solve world hunger and poverty. Those organizations must have a seat at the table when decisions are made about reconstruction spending and priorities.
As Haiti starts to rebuild, its people need a lot of things: new homes, jobs, investment in agriculture, infrastructure, and a real voice in the rebuilding process. Key decisions made in the next few weeks will determine what kind of reconstruction comes to Haiti. The World Bank and the IMF have both consistently championed development and reconstruction policies that deprive poor people of their homes and livelihoods while simultaneously driving their governments deeper into debt.
We saw just how damaging their approach to reconstruction could be in Sri Lanka. After the Tsunami hit in December 2004, funds that originally came from the World Bank forced thousands of poor people off their coastal lands, put women and children in harm’s way, and left them even more vulnerable to future disasters by destroying natural barriers to floods.
The international community must work especially hard to guarantee that the interests of ordinary Haitians are first and foremost in the reconstruction debate and challenge the age-old prejudices that leave millions of poor people without a voice in the democratic process, and without the means to lift themselves out of poverty.
It would be a good idea indeed to avoid the IMF, and the World Bank if possible. But whether this will materialize is quite another matter.
It is my opinion the biggest and most chronic problem in Haiti has been its ability to use the aid money to adequately help its people. For example: Haiti has an electrical grid that has been operable just a few hours per day. What does that mean? It means a large amount of aid money goes to the purchase of diesel fuel for small electrical generators instead of supporting a large more efficient, less costly electrical grid. With increasing diesel costs, Haiti continues to be thrust into poverty.
The second largest problem, in my opinion, has been a birth rate unsupported by its economy.
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Aid should be not only food or medicine but the structures or the opportunity to overcome the current situations. They should provide the materials for constructing house or factories. so people can work can get paid and overcome their misery.