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After the earthquake, how to rebuild Haiti from scratch

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By Jeffrey D. Sachs
Sunday, January 17, 2010

President Obama has declared that the United States will not forsake Haiti in its moment of agony. Honoring this commitment would be a first for Washington.

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To prevent a deepening spiral of death, the United States will have to do things differently than in the past. American relief and development institutions do not function properly, and to believe otherwise would be to condemn Haiti's poor and dying to our own mythology.

In Haiti, we are facing not only a horrific natural disaster but the tectonics of nature, poverty and politics. Even before last week's earthquake, roughly half of the nation's 10 million inhabitants lived in destitution, in squalid housing built of adobe or masonry without reinforcements, perched precariously on hillsides. The country is still trying to recover from the hurricanes of 2008 as well as longtime social and political traumas. The government's inability to cope has been obvious, but those of us who have been around Haiti for many years also know about the lofty international promises that follow each disaster -- and how ineffectual the response has been each time.

In the past two decades, U.S. interventions have done much more harm than good to the Haitian economy. In the early 1990s, Washington thought it did Haiti a favor by imposing a crushing trade embargo to bring about democratization -- specifically, the reinstatement of democratically elected President Jean-Bertrand Aristide. The embargo destroyed Haiti's fragile manufacturing industries.

Then, true to America's political swings, ideologues in the Bush administration spent years trying to oust Aristide, first by foisting a de facto and illegal aid freeze on international development agencies, and then by brazenly toppling Aristide and carrying him to the Central African Republic. Congress took a pass on reviewing these sordid events, pausing only to declare its love for the Haitian people.

Now it's time to save Haitian lives by the millions, or watch a generation perish. A serious response will require a new approach. President Obama should recognize that the U.S. government alone lacks the means, attention span and true regard for Haiti that is needed to see this through past the most urgent phase. After the coming weeks, during which U.S. emergency airlift assistance is essential, the effort should be quickly internationalized, in an effective manner that acknowledges U.S. political realities and leverages the help that Washington will give.

Typically, a tragedy such as this is followed by international pledges of billions of dollars, but then only a slow trickle of help. The government of Haiti, overwhelmed far before this earthquake, is in no position to pester 20 or more complicated donor agencies to follow up on designing projects and disbursing funds. The recovery operation needs money in the bank -- in a single, transparent, multidonor recovery fund for Haiti and the world to see. Haiti does not need a pledging session; it needs a bank account to fund its survival and reconstruction. The Inter-American Development Bank would be an excellent venue; it is well-run and highly regarded, already serves as Haiti's largest development financier and could bring in donor partners from around the globe.

How would a Haiti Recovery Fund be organized? It should receive emergency outlays from the United States and other donors; organize a board that includes members appointed by Haitian President René Préval, the U.N. secretary general and donors; and empower a management team to formulate and execute plans agreed to by the Haitian government.

Very soon, the first phase of recovery operations in Haiti will end. Tragically, tens or hundreds of thousands will have died under the rubble, with relief and equipment arriving too late. Now the race is on to save Haiti itself. Its capital, a city without reserves of food, water, power, shelter, hospitals, medicine and other vital supplies, faces the real possibilities of hunger, epidemics and civil unrest. And the rest of the country is like a body without a head. The port is shut, the government is overwhelmed, many U.N. peacekeepers have transferred to Port-au-Prince, and the normal operations of government, skimpy as they once were, have broken down entirely.

The recovery fund would focus first on restoring basic services needed for survival. For months to come, medical supplies from abroad should be stockpiled and then distributed in the capital and beyond. Makeshift surgical units and clinical facilities will be essential. Power plants on offshore barges will be needed for electricity until new plants can be constructed. The salaries of public workers -- especially teachers, police officers, nurses, reconstruction workers and engineers -- must be assured, despite an utter collapse of revenues. Haiti's currency will need to be backed by international reserves so that the demand for public spending does not create harrowing inflation. The Haiti Recovery Fund, together with a quick-disbursing grant from the International Monetary Fund, should provide the needed reserves and budget financing.

Emergency relief should quickly and seamlessly transform into reconstruction and development. Indeed, if we stop at humanitarian relief alone, Haiti will be back in crisis soon enough, after the next disaster. The first step in this transition is food security: Haiti's farmers will need seed and fertilizer within weeks if they are to grow food for a destitute country. The displaced urban population will need income support or food transfers to subsist. The World Food Program's effective food-for-work projects can help feed workers recruited to rebuild roads and buildings.

After the extreme emergency period over the next few weeks, growing more food in Haiti will be far cheaper, more reliable and more sustainable than living on imported food aid. Supplying the farm inputs to Haiti will require more grants -- as impoverished farmers have no capacity to buy seeds, fertilizer and small-scale equipment -- as well as official aid to help deliver such materials to Haiti's remote villages.

New shelters must not be makeshift units that would be destroyed by Haiti's frequent floods, landslides and hurricanes. The country will need a revived and expanded construction industry to produce the brick, reinforced concrete and other vital materials. Private companies, domestic and international, should be contracted to set up operations. China is capable of quickly dismantling a factory, putting it in containers on ships and reconstructing it within weeks in a foreign location. Such efforts are needed immediately. (The asphalt for Liberia's roads comes from a Chinese factory assembled this way in the capital, Monrovia.) The list of needs goes on; it was very long and urgent even before last week's calamity.

The Haiti Recovery Fund should be constituted for five years -- a suitable period to respond to such a challenge. Electoral politics in Haiti should be suspended for at least one year as well. This is no time for national elections; the people's survival is the first purpose of politics.

How much money would the Haiti Recovery Fund need? And where should it come from? Here is a rough estimate: Before the earthquake but after the hurricanes, I had calculated an urgent (and unmet) development financing need of $1.4 billion per year for Haiti, up from about $300 million currently. Basic urgent reconstruction costs will add perhaps another $5 billion to $10 billion over the next few years. One can imagine annual disbursements of $2 billion to $3 billion annually over the next five years.

Obama should seek an immediate appropriation of at least $1 billion this year and next for a Haiti Recovery Fund, and ask other countries and international agencies to fill in the rest, not with promises but with cash. The obvious way for Washington to cover this new funding is by introducing special taxes on Wall Street bonuses, utterly unjustified payments that will be announced in the next days.

Haiti will suffer a quick death of hunger and disease unless we act, and the United States will suffer a slow and painful moral death unless we respond to the extreme distress of our neighbors, whom we have neglected for so long and, at times, even put in harm's way.

Jeffrey D. Sachs is the director of the Earth Institute at Columbia University and the author of "Common Wealth: Economics for a Crowded Planet."


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