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Impoverished Haiti Slips Further as Remittances Dry Up

By Mary Beth Sheridan
Washington Post Staff Writer
Friday, April 17, 2009

PORT-AU-PRINCE, Haiti, April 16 -- The U.S. economic crisis touched down recently in the dusty town where Marie Rosita Simon ekes out a living selling sandals. Her brother, a New Jersey cabdriver, slashed his monthly $400 transfer to her by half because his business was off.

For Simon, that amounted to a 40 percent plunge in income for her family of five. Coming after a horrendous year in which food prices soared and hurricanes washed away her plantain and bean crops, the 43-year-old street vendor decided something had to go: dinner. And sometimes she can't provide breakfast for her children.

"They're hungry," she confessed.

Secretary of State Hillary Rodham Clinton flew to Haiti on Thursday, en route to a summit with hemispheric leaders concerned that the global economic crisis could push Latin America and the Caribbean into another "lost decade." Haiti, a Maryland-size nation in which 80 percent of the population lives on less than $2 a day, offers perhaps the most worrisome example of how the recession could worsen poverty in the region's vulnerable countries.

Clinton told reporters Thursday that because of Haiti's dire economic situation, the Obama administration is considering granting temporary legal status to Haitians who have come to the United States illegally, so they could still keep sending money home. And she promised to continue helping Haiti rebuild its shattered economy, after the United States and other countries and organizations at a conference in Washington this week made pledges of $324 million in aid, far less than the $900 million sought by the Haitian government.

"Haiti deserves our help," Clinton said at a news conference in Port-au-Prince, the capital.

Shrinking remittances are one of the main ways the crisis could harm Latin America and the Caribbean. The cash sent home from immigrant nannies, hotel workers and gardeners from Los Angeles to Bethesda has ballooned to a $69 billion-a-year lifeline in the region in the past decade. It is particularly important for small countries such as Haiti, which received about $1.65 billion last year -- more than a quarter of the country's annual income.

These transfers have dropped 13 percent in the region in the first few months of the year, according to Luis Alberto Moreno, president of the Inter-American Development Bank.

In Haiti, the reduction in remittances can have dramatic long-term consequences. Most schools are private, and students are often kept home when parents can't pay the tuition, returning months or years later.

Jimmy Pierre-Sant, a 25-year-old in Cabaret, a plantain-growing town about 30 miles north of Port-au-Prince, is one of the indirect victims of the U.S. recession. Several months ago, his aunt in Winter Haven, Fla., was laid off from her factory job. Short of cash, she and other relatives have cut their bimonthly payments to Pierre-Sant's family from about $200 to $50. That meant he had to quit school yet again.

"I felt very bad about it. I'm the only one in my family who got to 11th grade. I was ahead of everybody. I loved school," Pierre-Sant, in a Bugle Boy T-shirt and plaid shorts, said as he sat on the concrete patio of his grandmother's shack, where he sells soft drinks from a cooler.

Simon, the sandal seller, who also lives in Cabaret, has managed to keep her two children and the niece she is raising in school. But at times there is only enough money for one meal a day.

"Sometimes I let them suffer in order to pay the school tuition. I never had to do that in the past," she said.

Clinton said the Obama administration was "looking carefully" at whether to suspend deportation of Haitians in the United States illegally and allow them to work temporarily. The Haitian government has requested that its immigrants abroad be awarded such a status, but the Bush administration had declined.

"We are going to be considering how best to help the people who are here continue to have those resources" sent by relatives in the United States, Clinton said at the news conference. She warned, however, that any such program would apply only to Haitians who had moved to the United States before Obama took office. "We don't want to encourage other Haitians to make the dangerous journey across the water," she said.

The crisis has shattered a period of economic improvement in Latin America and the Caribbean, which benefited from international growth and booming trade in recent years. Even Haiti had started to inch forward, after years of political turbulence and violence involving street gangs.

But then global food prices soared last year, setting off riots across Haiti that toppled the government. While prices have eased, they have not returned to their old levels. Rice is still about 30 percent more expensive than in August 2007; cooking oil costs 50 percent more.

And residents are still trying to recover from four hurricanes that pounded Haiti last year, killing 800 people and causing $1 billion in damage.

In a sign of how strained family budgets are, many Haitians can't even afford to spend 12 cents to buy a mud cookie, a snack consumed by the poorest.

"There's no money," said Mona Pierre, as she mixed clay, water and shortening to make the cookies in a market near the impoverished Cite Soleil slum in Port-au-Prince.

Anne Hastings, director of Fonkoze, the biggest micro-credit institution serving the poor in Haiti, said she is turning away new borrowers for the first time since she began running the agency 13 years ago, since her bank credit tightened in the international financial crisis.

The combination of high food prices, the hurricane damage and the economic crisis could create a combustible situation in a country that is still so fragile that a 9,000-member U.N. peacekeeping force keeps order, said Hastings, a former management consultant in Washington.

"Everyone thinks we're going to explode any day now," she said.

A series of high-profile figures, including former president Bill Clinton, U.N. Secretary General Ban Ki-moon and rap artist Wyclef Jean, have been trying to focus global attention on Haiti to ensure it is not ignored by nations focused on their own economic problems.

Haiti's best chance to emerge from crisis, they say, could be a special trade preference granted by the U.S. Congress that will allow this impoverished nation to export garments duty-free to the United States for nine years.

On Thursday, Clinton strolled through a huge factory in Port-au-Prince where rows of young men and women ran jeans and khaki slacks through sewing machines. Clinton noted that the nearly 500 workers earned two to three times the $2-a-day minimum wage.

"This is a direct result of actions taken by the U.S. Congress," she said. The trade preference program had created 11,000 jobs in Haiti so far, she said.

Clinton announced more than $50 million in additional funding for Haiti at the international conference Tuesday, including money for new roads to help get products to market.

The Haitian capital is full of reminders of what could happen if Haiti's economy continues to contract. In Petionville, a relatively upscale neighborhood, businesses still have spider-webbed windows that were attacked during food riots last year.

Mathias Pierre, 42, who grew up in a poor neighborhood but now runs a $2.5 million-a-year computer business, was stunned when protesters shattered the windows of his firm in Petionville.

"It created the fears we have today, that anything can happen," he said. "The level of poverty is too high."

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