Luckily for Lionel Hillaire, dust is everywhere in this decrepit city of crumbling streets and sidewalks. He is among the legions of shoe shiners who count on the grime to eke out a living.

"It is a dirty and tough job, but there are few other choices for me. I am doing what I have to so I can eat once or twice a day," said Hillaire, 20, who charges the equivalent of 10 cents for a shine. "Although Haitians are poor, we are proud, and people will spend some of the little money they have to look the best they can."

Like Hillaire, multitudes of Haitians are improvising ways to survive as part of an ever growing informal economy that today accounts for the largest number of jobs in the Western Hemisphere's poorest nation. An estimated 70 percent of Haiti's work force is technically unemployed, meaning that the vast majority do not have official jobs in the private or public sectors.

"Life was a lot easier for us a year ago when my wife was breast-feeding our child and we did not have to worry about buying milk for him," lamented Andre de Pierre, 32, who said he earns about $2 a day selling drinks on the streets of Petit-Goave, a small town 40 miles south of the capital. "All the promises made to us about a better life one day have been lies."

During the years of military rule, Haiti's economy shriveled about 40 percent, mainly as a result of an embargo imposed by the United States, while the country's infrastructure deteriorated. By the time U.S. forces returned President Jean-Bertrand Aristide to power in 1994, inflation exceeded 50 percent. The figure has since been brought down to about 12 percent, but per-capita income stands at only $250 a year.

"The informal economy is a survival system. It is a distribution of some wealth, but it is not a creation of wealth," said Leslie Voltaire, an urban planning adviser to President Rene Preval. "Without it, we would see a lot more desperation and a lot more boat people," trying to emigrate by sea.

Those working in the amorphous and chaotic informal economy say returns are minimal because most Haitians do not have much disposable income. But the meager earnings, they note, help them afford basic necessities and retain a sense of dignity.

"It may not be much, but I have made something of my life because I have a business and I am not a gang member or a thief," said Jean-Claude Paul, 25, who earns several dollars a day on the streets of Port-au-Prince selling perfume and cologne.

The prevalence of informal employment is most visible in urban areas, particularly here in the capital, where sidewalks are jammed with rows of vendors hawking a panoply of new and used wares, as well as food, in what has transformed Port-au-Prince into a virtual outdoor bazaar.

The selection of goods is dizzying: baby beds, mattresses, coffins, dishes, blenders, washtubs, clothes, beard clippers, toothbrushes, curlers, condoms, locks, cassette tapes and more. On one recent afternoon, a woman was trying to sell surge protectors and TV antennas while her husband stood nearby with a bundle of new leather belts draped over his arm.

Vendors generally buy their products from wholesalers--particularly importers, since most merchandise is foreign-made--or on the black market. Haitians living in the United States and elsewhere also send goods to their relatives for sale here.

The Aristide Foundation for Democracy, an outreach organization headed by the former president, runs a $400,000 fund from which its 15,000 members can obtain business loans. The fund is designed as an alternative to borrowing money from street lenders, who charge up to 200 percent interest.

Several foreign banks, including one in Panama, also have extended credit to informal-sector workers, while Haiti's leading private financial institution, Unibank--in collaboration with the World Bank's International Finance Corp.--is preparing to launch a micro-loan program.

The informal economy has been made more difficult by the influx of large numbers of people from the countryside who are searching for more opportunities. In Port-au-Prince, a city of 2.5 million people, officials estimate that the population is growing by about 120,000 people a year.

Overall, Haiti's formal economy expanded about 3 percent last year. But that was largely offset by 2 percent growth in the population. Economists said that for Haiti's situation to improve, the overall economy will have to increase 5 percent to 6 percent annually, which is higher than the outlook for the next few years.

In many ways, the narcotics trade also has become part of the informal economy. Haiti is a major transshipment point for drugs bound for the United States from South America. Those desperate for jobs and money haul drugs by land to the neighboring Dominican Republic, where the contraband is then spirited into the United States.

One of the biggest obstacles to creating jobs in the formal, measured economy has been a shortage of investment by either foreign or Haitian business owners. The hesitancy reflects concerns about crime, political instability and Haiti's justice system, which remains corrupt and inefficient despite some improvements.

Haiti's economy has been helped by the estimated $600 million a year that Haitians outside the country send to relatives. Additionally, some sectors of the formal economy, such as manufacturing in assembly plants, have been growing, adding 40,000 jobs in the past five years.

CAPTION: Janine Gele sells mangoes on the street in Port-au-Prince to piece together a living. Street vendors make up a significant portion of Haiti's unofficial "second" economy.