Haiti Sets Out on Path to Recovery with Broad International Support

Haiti’s arduous reconstruction and recovery process jolted forward today following fresh commitments to help the Caribbean nation rebuild in the wake of its devastating January 12 earthquake.

The World Bank Board of Directors gave today the go-ahead to US$65 million in grants as the first installment of the Bank’s emergency assistance of US$100 million pledged right after the earthquake struck. The announcement came on the heels of the Santo Domingo technical donor conference that closed with strong backing for a preliminary road map for the reconstruction of Haiti.

World Bank officials explained that the funds approved will support the reconstruction of key aspects of Haitian infrastructure and state functions obliterated by the earthquake, including roads, bridges and administration buildings. It will also help restore essential economic and financial functions of the government of Haiti.

Haiti Country Director Yvonne Tsikata stated that these funds complement the Bank’s ongoing support, including existing projects soon to be restructured to better suit the country’s immediate reconstruction needs. “These steps are vital to help Haiti get back on its feet and support its overall rehabilitation,” said Tsikata.

She also shed light on the main outcomes of the Santo Domingo conference, where representatives from 24 donor countries, civil society and private and government sectors discussed Haiti’s priorities taking into account a multi-agency Post-Disaster Needs Assessment (PDNA) preliminary report that was presented at the meeting. In a final declaration they also backed the creation of a Multi-Donor Trust Fund to be managed by the Haitian government and the international community, with the World Bank acting as a fiscal agent. The donors will meet again at a full-fledged ministerial conference in New York on March 31.

The report estimates a total of US$7.8 billion in losses and damages caused by the earthquake -or 120% of Haiti’s annual GDP-and reviews the country’s future needs. The paper also raises Haiti’ s budget gap for the remainder of the fiscal year, which stands at roughly US$350 million after a projected revenue shortfall of 40%—50%, the report states.

Tsikata emphasized that the document “is still work in progress and we still have to go back to the government for their inputs and make sure there’s no double counting”.

The PDNA report goes beyond assessing damages and addressing the government’s short and long term needs, as it is a strategic document to rebuild Haiti for the future, says World Bank disaster management expert and PDNA mission member Doekle Geert Wielinga.

“It’s essentially the cornerstone for recoveryand reconstruction, and will provide a sort of visionary document that looks at what are the strategic pillars that Haiti will use for reconstruction and development in three, five and 10 year scenarios,” said Wielinga, who participated in the multi-agency mission including the European Union, the United Nations and the Inter American Development Bank.

With the 2010 hurricane season around the corner, providing temporary housing and land for people are priority recommendations in the report, according to the expert. Other areas that require immediate attention include job creation, rehabilitating public services and decentralizing the country’s economic activity, 60% of which takes place in Port-au-Prince right now.

The report also presents an opportunity “to do things differently in Haiti,” Wielinga said.

“Our experience from the tsunami in Aceh and from the work that we’ve done so far in Haiti shows us that involving the communities, with strong leadership from the government, have proven to be more cost-efficient and efficient in the long-term.”

The World Bank’s Haiti earthquake response includes:

• A US$100 million grant announced on January 13, 2010, in order to help the Government of Haiti in the early recovery and reconstruction phase. The International Finance Corporation (IFC), the private sector arm of the World Bank Group, recently announced a US$35 million in emergency investments in Haiti to generate jobs.
• A restructuring of the World Bank portfolio in Haiti. Within the portfolio, there are 14 active World Bank projects in Haiti focusing on areas including disaster risk management, infrastructure, community-driven development, education, and economic governance. All current World Bank assistance to Haiti is in grant form.
• Participating as one of the key contributors to the Post-Disaster Needs Assessment (PDNA) led by the Government of Haiti. The PDNA will include physical damages, economic losses and human recovery needs, and its results are expected before the March 31st donor meeting in New York.

All current Bank assistance to Haiti through the International Development Association (IDA) and trust funds is in grant form. Since 2005 the Bank has approved approximately US$308 million of IDA resources for Haiti and more than US$55 million from trust funds. These amounts do not include the US$100 million in grants as part of the Bank’s emergency response after the earthquake.

Attainment of the Heavily Indebted Poor Countries Initiative Completion Point in June 2009 and the Multilateral Debt Relief Initiative have led to the cancellation of US$1.2 billion of Haiti's debt. Haiti’s remaining debt amounts to about US$1 billion, of which only US$38.8 million (less than four percent) is due to the World Bank. Bank Management is currently exploring a proposal for the complete forgiveness of Haiti's debt for its Board's consideration.