A Possible Future for Haiti

The Economist

June 2017

SWIVEL, clank, scoop, dump. On the outskirts of Desdunes, a town in Haiti’s fertile Artibonite valley, three enormous excavators sink claws into the banks of the muddy Duclos canal. Arching across it, their slender hydraulic arms uproot small trees and drag them through the clay-coloured water as they gouge out mud from the canal bed. They deposit the glistening sludge, mixed with tall grasses, on their side of the channel, forming a neat ridge. Bored-looking policemen lounge in the shade of palm trees, ostensibly to deter thieves from stealing the machines’ batteries. Blue-grey herons stand to attention; cows and horses graze. Ahead of the excavators, the canal is a mere incision through the fens. Behind lies the result of their work: the canal looks wide enough to accommodate a battleship. Naked boys dive in, seeking respite from the Caribbean sun.

The Artibonite is Haiti’s rice basket, capable of producing enough grain for the whole country. The rice grows in standing water, which requires irrigation and drainage. By 2015, marshes had colonised so much of the canal that its waters had stopped flowing. The fields surrounding Desdunes have since lain fallow, costing farmers four harvests. “Whenever people see these excavators, they start dancing,” says Samson Demosthene, the crew’s pot-bellied foreman. “Nothing makes them happier.” When the work is done, the valley will come back to life.

The dredging fulfils a promise by Jovenel Moïse, Haiti’s president since February, who has vowed to make rural areas more productive. That he is actually trying to keep this promise is startling in a country notorious for bad government. Haiti’s long-run economic record is atrocious. In countries that were as poor as Haiti in 1981, GDP per person rose by half on average by 2012; in Haiti it dropped by 40%. After an earthquake in 2010 that killed more than 200,000 people and cost 120% of GDP, foreign governments and NGOs donated $10bn, about 150% of GDP. But donor fatigue has set in and aid has dwindled to the flow rate of the unexcavated Duclos canal. Even the hurricane that devastated Haiti’s south-western peninsula in October brought only a drizzle of money.

Haiti has not emerged from the shadow of the earthquake: amputees are disconcertingly common on the streets of Port-au-Prince, the squalid, chaotic capital; 50,000 people remain in tent cities. Mr Moïse governs from the rump of the presidential palace, whose stately central dome collapsed and has not yet been rebuilt. Nonetheless, he is the first president since 2010 who can move beyond a single-minded focus on reconstruction to devise a new long-term development strategy for the poorest country in the Americas. “I have to deliver results so that people understand that politics is relevant to their lives,” he says.

Mr Moïse ran in a protracted election beginning in 2015 as the candidate of the Shaved-Head Party, so named because both he and the previous president, Michel Martelly, sport gleaming pates. Mr Martelly’s pre-presidential career was as a compas singer known as Sweet Micky. His political heir has an earthier moniker, Banana Man; he is a planter from Haiti’s remote north-western peninsula. After leading in the first round of a presidential election, Mr Moïse waited over a year to take office because the electoral commission ruled the ballot invalid owing to accusations of fraud. In the re-run last November, in which just a fifth of the electorate participated, he was elected with 56% of the vote, buoyed by support from the hinterlands.

So far, he has focused on what he knows best: the needs of the countryside. “We have to feed the people first,” he says. “That’s why agriculture is my priority.” But growing more rice and bananas will not lift Haiti out of poverty. Mr Moïse is casting about for new ideas in a country where few policies have worked as intended. One source of fresh thinking bore fruit just after he took office. The Copenhagen Consensus Centre (CCC), an NGO, completed a study of potential policies in Haiti. With C$2.5m ($1.9m) from the Canadian government, the CCC commissioned dozens of experts to score and rank a wide range of proposed initiatives by their return on investment. After a year of research, the CCC presented its findings to Mr Moïse in Port-au-Prince last month.

It has detractors. Its founder, Bjorn Lomborg, irks climate-change activists by arguing that some efforts to reduce carbon emissions are a waste of money (though he favours a carbon tax). Some critics accuse him of using shoddy statistics, a charge he vigorously disputes. He is not responsible for the calculations that landed on Mr Moïse’s desk, which are the work of independent economists. The CCC’s call for “prioritisation”—concentrating on policies that offer the biggest bang for the buck—should be well-suited to poor places like Haiti. It promises to guide governments with cold-hearted maths, no matter how unsettling the results might be. For example, among Haiti’s woes is a cholera epidemic that was brought by UN peacekeepers in 2010 and has killed more than 10,000 people. It might seem wise to vaccinate the entire country. But Dale Whittington of the University of North Carolina at Chapel Hill found that delivering the full two doses of the vaccine to every Haitian would be both prohibitively expensive and of limited value, since the disease has trouble spreading once a minimum share of the population is resistant. He found that the highest return—a social “benefit-to-cost ratio” (BCR) of 5.9 to one—came from delivering a single dose to schoolchildren, whom the government can easily reach, and counting on the resulting “herd immunity” effects to reduce the spread of cholera.

In practice, such calculations are sensitive to researchers’ choices and the quality of their evidence. Studies that incorporate estimates of positive knock-on effects or ignore negative ones yield higher BCRs than those that do not. The CCC’s models tend to give generous scores to health projects, whose benefits are measured in “disability-adjusted life-years”, and disappointing ones to the agricultural initiatives dear to Mr Moïse, whose benefits were simply assessed on the cash value of a crop.

However, raising the productivity of subsistence farming, as in the Artibonite valley, will also improve nutrition, an effect that some of the CCC’s studies do not measure. And investments in health and education, particularly for children, may provide less value to a country than their BCRs would indicate if the beneficiaries emigrate as adults because they cannot find jobs. A full accounting of such interactions could significantly change the rankings. Similarly, distinguishing causation from correlation in social policy is an inexact science. All but one of the 85 evaluations in the CCC’s report were either not based on randomised controlled trials (RCTs), the only way to prove that a policy under consideration will work, or sought to translate RCTs from other countries to the unique environment of Haiti.

Imperfect information is better than no information, the CCC argues. “What’s important is not whether the BCR is [precisely] 2.3 or 0.9,” says Brad Wong, its chief economist; the differences between the top and bottom of the rankings are big enough to judge which policies are worthwhile. The policies the CCC endorsed most heartily do enjoy widespread support—and Mr Moïse is listening.

The highest BCR comes from fortifying wheat flour with iron and folic acid, which would prevent 150 infant deaths and 250,000 cases of anaemia a year for a trivial overall cost of $5m (see chart). This practice is standard even in poor countries. Jamie Marks, who runs Les Moulins d’Haïti, a big flour producer, says his firm could add the micronutrients within months of the government specifying a formula. Mr Moïse said he found the value of wheat fortification the most surprising of the CCC’s findings, and promised to require it within half a year. That alone could justify the cost of the CCC’s research.

Another priority is training first responders. Haiti is prone to natural disasters: it has suffered four times as many as the neighbouring Dominican Republic relative to its area. Deforestation makes the country vulnerable to floods, and unregulated house-building in vulnerable areas makes them devastating. It would cost just over $1m to provide first-aid instruction to volunteers across the country, which the CCC estimates would save 700 lives a year. Ensuring that they have access to vehicles and equipment would be more expensive, but valuable. Brazil, Venezuela and Cuba have donated nearly 100 ambulances to Haiti, but the government has not maintained them or equipped them with oxygen tanks and defibrillators. “They’re like ghost ambulances,” says Jean-Pierre Guiteau, the head of the Haitian Red Cross.

Easy wins like first-aid instruction are small-scale. Another recommendation would be transformative and far harder to achieve: reforming Electricité d’Haïti (EdH), the creaking national power company. Expensive and unreliable electricity is one of the biggest obstacles to development. Consumption per person is a paltry 2% of the level in the Dominican Republic; the price is almost double. EdH only manages to charge for 30% of the power it generates. The rest is either stolen or lost to technical faults. Blackouts can last up to 15 hours. To keep the lights on intermittently, the government spends 10% of its budget to buy power for EdH generated at exorbitant prices by local firms.

Mr Moïse acknowledges that “there will not be any development without energy reform.” He wants to replace EdH’s costly contracts to buy electricity with public-private partnerships, which would be a step in the right direction. But implementing reform would require confronting EdH’s powerful suppliers. Mr Martelly tried and failed. Such obstacles highlight the limits of the CCC’s approach: no matter how good an investment may look, making it work requires competent government. The CCC did not calculate a payoff from developing better governance; its costs and benefits are hard to estimate. But its absence is modern Haiti’s original sin.

In a report published in 2015, the World Bank asked, “What makes Haiti Haiti?” Its first answer was succinct: “a social contract is missing between the state and its citizens.” Since the dictator Jean-Claude Duvalier was overthrown in 1986, Haiti has had 18 changes of leadership, of which few were peaceful, democratic and undisputed. A small business elite has supported fragile governments in exchange for low taxes and oligopolistic control of key industries, keeping the economy uncompetitive and obliging the government to finance itself through regressive taxes on imports. Perennially short both of cash and professional civil servants, the state has failed to provide infrastructure, the rule of law and services such as health and education. The earthquake made the weak state even weaker, killing many civil servants and destroying their records. Most Haitians who have escaped poverty have done so by emigrating. Many of those who stay resort to crime. Violent protests are common, sometimes toppling presidents and starting the vicious cycle anew.

Mr Moïse agrees that a weak state is the main explanation for Haiti’s 200-year-old poverty trap. To correct that, he says, Haiti needs political stability first of all. He wants to leave the country’s “democratic apprenticeship” behind by enacting constitutional reforms to hold more elections at the same time. Currently, presidents, senators and lower-house deputies are elected on different cycles. Perhaps more contentiously, Mr Moïse would replace the cumbersome semi-presidential system, which includes a prime minister, with a purely presidential one. He has plans to reform the civil service; he would replace ageing bureaucrats with energetic younger ones and set up a new training school. He is trying to improve the business climate, for example with legislation to cut the number of days needed to start a company from 97 to 30 and to allow employers to extend the work day by using shift labourers.

Some enterprises, unwilling to wait for a functional state, are taking matters into their own hands. Donald Trump’s withdrawal from the proposed Trans-Pacific Partnership trade agreement provides a business opportunity: Haiti’s textiles will continue to enjoy privileged access to the United States. Investors from places like Taiwan are moving in. At Lafito, an industrial development 20km (12 miles) up the glimmering turquoise coast from Port-au-Prince, a consortium led by GB Group, a local conglomerate, is building a $1bn state-within-a-state, with a 25MW power plant, a data centre for speedy internet access, a reservoir and desalination plant, and a container port. Eventually it will include housing and a teaching hospital.

So far, one of Mr Marks’s flour mills and a cement plant are the only operations. But Georges Sassine, who runs Lafito, says producers of apparel and motorcycles have more demand for factory space than he can accommodate. “The whole idea is to have Haiti itself not create problems,” he says, gesturing towards squatters’ homes on hillsides nearby.

In the Artibonite valley there is a bit more faith. The dredging of the Duclos canal has shown that the state can contribute to prosperity after all. Now farmers need ploughs and trowels, good seeds, access to credit and crop-storage facilities, say the leaders of a local farmers’ association. Banana Man still has much to do.

This article appeared in the The Americas section of the print edition under the headline "A time to sow"