Everyone has seen the tragic images of destruction coming from Haiti. The death toll is estimated at 100,000 but the true figure will remain unknowable. According to the International Red Cross, approximately a third of the population will need food, water and shelter for months to come. As the relief operations begin to provide essential life support, other problems will emerge. Public health is a major concern, as diseases can spread very fast in a city without a public sewage system and where only 50 percent of the children have been vaccinated against common diseases like diphtheria and measles.
The world is responding with solidarity. Many countries, including the United States, are already present either directly or through the UN Mission in Haiti (MINUSTAH). Multilateral agencies have also pledged additional resources, with the World Bank offering US$100 million. In addition, Private donors have also used several channels to contribute to multiple relief funds and organizations. Haitians and their government surely need all the aid they can get.
But very soon the cameras will be gone and Haiti’s problems will remain, beginning with lack governance and state capacity. Haiti simply does not have a government capable of providing basic public services such as order and security. Its administration is incapable of coordinating the reconstruction. Building a state goes beyond the reconstruction of the National Palace, government offices, schools, hospitals, and jails. It is about governance and the capacity to design and implement public policies, which are as weak as they get in the developing world. Haiti urgently needs a state and this is a good opportunity to get one. This disaster can be transformative if the Haitian population, with the help of the international community, agrees to that objective.
A recent survey of the literature on the economic effects of natural disasters by Eduardo Cavallo, from the Inter-American Development Bank, and Ilan Noy, from the University of Hawaii, highlights that the long-term economic effects of natural disasters do not depend exclusively on the magnitude and initial destruction of the disaster. However, everything else equal, natural disasters in countries with better institutions have a smaller negative impact on economic growth. In some cases, reconstruction efforts and the stimulus associated with them can actually give a boost to GDP, offsetting the initial negative effect. This is especially the case if the affected areas are not essential for production and economic activity.
This suggests that Haiti’s reconstruction has to favor income generation and institution-building. The communications breakdown and the already weak public infrastructure that existed before the earthquake are major constraints. Moreover, the country has a long history of violence, poverty and a lack of governance. Even before the disaster, Haiti needed international assistance to sustain its fiscal budget. Just imagine how much larger that need is now.
To build the state, Haiti needs more than the UN Peacekeeping mission. The reconstruction efforts will require significant coordination. An authority has to make all the agencies operating in Haiti accountable. The number of actors from international governments and civil society is simply too large. Haitians should agree on a temporary administration with real powers transferred to third parties. The U.N. is in a good position to offer that, building on the model used in Kosovo in the 1990s. Canada and Brazil are two countries who played a leading role in that effort.
It is very important to get the economy moving again. Damage to the airport terminal and the main seaport will slow the speed of the recovery, making reconstruction of key infrastructure a top priority as soon as the humanitarian situation stabilizes. Without physical infrastructure and communications, it is virtually impossible to reactivate economic activity, particularly when exports play an important role.
Haitians also depend critically on remittances from workers in the U.S. and Europe. Therefore, there will be pressures for new migration waves out of Haiti. Rather than announcing that those that who attempt to flee the country will be returned, international governments should agree on a number of temporary visas that would be offered as part of the relief operation. Granting Temporary Protective Status (TPS) to Haitians by the United States is a move in the right direction and it will hopefully be followed by other countries. This would have a direct impact on incomes in Haiti and will help manage the crisis by reducing tensions and pressures at this critical moment.