Difficulties In Rebuilding Haiti's Economy

Haiti barely had a functioning economy even before last month's deadly earthquake. Almost entirely dependent on a small textile industry and remittances from Haitian exiles, it was also captive to the often-clashing interests of multinational development banks and aid agencies.

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ROBERT SIEGEL, host:

The most urgent questions in Haiti since the earthquake have been questions of life and death. But now, three weeks later, the images of Port-au-Prince, largely destroyed, have us asking more mundane but still very important questions about the country's economy. Is there any commerce in Haiti? Is anyone there going to work?

Well, Adam Davidson of NPR's Planet Money is in Haiti and he joins us now.

And, Adam, for starters, where exactly are you?

ADAM DAVIDSON: I'm right outside of the airport. I'm standing in front of a lotto shop called Pliejean Lotto(ph). You see these all over Port-au-Prince; these are just private sector guys selling lotto tickets basically. They get the numbers sometimes from the New York Lottery, sometimes from the Dominican Lottery, and they pay you some winnings if you get the numbers right.

SIEGEL: Well, beyond lottery tickets, do you see other signs of economic life around you?

DAVIDSON: I have to say, at least the parts of Port-au-Prince that weren't destroyed, it's quite a bit of economic activity. I just came from a textile factory where 350 people were hard at work sewing T-shirts for Hanes. There's a mango processing plant that we visited this morning. We were at a few supermarkets. There's restaurants opening.

You know, Port-au-Prince is a bit like a bowl, and generally the higher up in the mountains you are, the calmer things are. And as you climb the hills, you really see a very vibrant economic activity.

SIEGEL: Now, this is a country that was receiving huge amounts of international aid even before the earthquake. Was the country's economy functioning before the quake?

DAVIDSON: It's a very strange economy, I have to say. I mean the bulk of the economy, I mean estimates range to 50 to 60 percent, is remittances from Haitian relatives living in Miami, New York, Montr´┐Żal. These lotto stores that I mentioned, they are a surprisingly large soft part of the Haitian economy. They are a big, big activity. The bulk of the country makes their living on subsistence agriculture and very low levels of development.

But there is a small but quite prosperous business elite that own factories, own tourism hotels, own shipping concerns. And that business elite surprisingly sees this as potentially an opportunity, that the earthquake may bring some really needed reforms to the Haitian economy.

SIEGEL: Adam, I wonder if you could explain an observation that I've read elsewhere, which is that before the earthquake, even as bad as things were in Haiti, in Haitian terms compared to the past, things were looking up.

DAVIDSON: I mean, I don't think it's wrong to say that December 2009 and the first week and a half of 2010 was the best period of time in modern Haitian economic history. It was sort of this incredible coming together of a whole bunch of elements that finally hit.

First of all, there was a peaceful transition of power in 2006. Then the U.N. security forces were able to clean up the streets and prevent the rampant kidnapping and looting and rioting and violence that had plagued the country. In 2007-2008, the World Bank, the IMF, the USAID, many other foreign agencies started saying, okay, there's something going on here. We don't have to just talk about feeding starving Haitians and arresting horrible Haitian gang lords. We can actually begin to talk about developing the economy.

That put into process a whole series of trade preferences and global private sector development plans. And there was real, actual stuff happening on the ground. Korean companies were coming in and investing and building textile plants. I know of at least one U.S. company that built a textile plant. There was dramatic improvement in the agricultural export market.

And, you know, it was still obviously an unbelievably poor country but Haitians keep telling me - at least the Haitian businessmen - that January 11, January 12 was a time of such hope, really beginning to see that maybe for the first time in decades Haiti could be a self-sustaining economy sometime soon.

SIEGEL: Thank you, Adam.

DAVIDSON: Thank you, Robert.

SIEGEL: That's Adam Davidson of NPR's Planet Money, who will be following Haiti's economy over the coming months.

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