|Since the demise of the Duvalier dictatorship in 1986, international
economists have urged Haiti to reform and modernize its economy. Under
President Preval (1995-2000), the country's economic agenda included
trade/tariff liberalization, measures to control government expenditure
and increase tax revenues, civil service downsizing, financial sector
reform, and the modernization of two out of nine state-owned enterprises
through their sale to private investors, the provision of private sector
management contracts, or joint public-private investment. Structural
adjustment agreements with the International Monetary Fund, World Bank,
Inter-American Development Bank, and other international financial
institutions intended to create necessary conditions for private sector
growth, proved only partly successful.
In 1999, Haiti's economy began to falter after about 4 years of positive, though modest growth. Real GDP growth fell in 2001 by 1.2%. The Privatization program stalled. Macroeconomic stability was adversely affected by political uncertainty, low investment, a significant increase in the budget deficit, and reduced international capital flows. The lack of an agreement with the IMF has prevented the resumption of crucial international assistance. This recent weakening of the economy has serious implication for future economic development as well as efforts to improve the general standard of living.
External aid is essential to the future economic development of Haiti, the least-developed country in the Western Hemisphere and one of the poorest in the world. Comparative social and economic indicators show Haiti falling behind other low-income developing countries (particularly in the hemisphere) since the 1980s. Haiti's economic stagnation is the result of earlier inappropriate economic policies, political instability, a shortage of good arable land, environmental deterioration, continued use of traditional technologies, under-capitalization and lack of public investment in human resources, migration of large portions of the skilled population, a weak national savings rate, and the lack of a functioning judicial system.
Haiti continues to suffer the consequences of the 1991 coup and the irresponsible economic and financial policies of the de facto authorities which greatly accelerated Haiti's economic decline. Following the coup, the United States adopted mandatory sanctions, and the OAS instituted voluntary sanctions aimed at restoring constitutional government. International sanctions culminated in the May 1994 UN embargo of all goods entering Haiti except humanitarian supplies, such as food and medicine. The assembly sector, heavily dependent on U.S. markets for its products, employed nearly 80,000 workers in the mid-1980s. During the embargo, employment fell below 17,000. Private domestic and foreign investment has been slow to return to Haiti. Since the return of constitutional rule, assembly sector employment has gradually recovered with about 25,000 now employed, but further growth has been stalled by investor concerns over safety and political instability.
If the political situation stabilizes, high-crime levels reduce, and new investment increases, tourism could take its place next to export-oriented manufacturing (the assembly sector) as a potential source of foreign exchange. Remittances from abroad now constitute a significant source of financial support for many Haitian households.
Workers in Haiti are guaranteed the right of association. Unionization is protected by the labor code. A legal minimum wage of 36 gourds a day (about U.S. $1.80) applies to most workers in the formal sector.
GDP: purchasing power parity -
$12.7 billion (2000 est.)
SOURCES: The World Factbook, U.S. Department of State
Mother Earth Travel > Country Index > Haiti > Map Economy History