The World Economic Forum Annual Meeting 2010 took place only days following the tragic earthquake that struck Haiti on 12 January. During a special session in Davos, the Forum pledged to work in partnership with its stakeholders to assist in Haiti’s recovery by focusing specifically on economic development. The following report, produced in partnership with the World Bank, the International Finance Corporation (IFC), and the Inter-American Development Bank (IDB), presents the strategy for sustainable growth in Haiti and identifies opportunities for involvement by different international...
Despite the challenges, Haiti is poised for sustained growth. That is the message for the international business community that has emerged only a year after the devastating earthquake in Port-au-Prince, based on dialogue and actions by the Haitian private sector, the international community, humanitarian agencies, and innovative investors who have already established a foundation of partnerships.
Haiti can achieve GDP growth of 6-8% for the next decade, given the right public policies, positive engagement of the national and international private sector, and sustained support from the international community. According to IMF forecasts, when combined with the Dominican Republic, the island of Hispaniola would then represent one of the largest and fastest growing economies in the Caribbean.
Risks and rewards
Investing in Haiti may present some risks, but it also promises significant rewards. The country is equipped with the basic conditions to proceed on a path of shared growth and development, and now it needs the involvement of the international private sector to help overcome the obstacles and generate a vibrant, resilient national economy.
Last year, the earthquake that struck Port-au-Prince incapacitated much of the nation’s infrastructure and left one million people homeless. Since then, several sectors in the country have demonstrated the potential to direct local and international resources in support of a long-term vision for growth. This vision depends on creating a prospering, diversified economy that can withstand shocks and create sources of employment for the nation’s youth.
Humanitarian agencies and the international community have been involved in Haiti for decades. While these stakeholders have helped fill critical needs, the Haitian economy has continued to falter, and its potential has been underdeveloped. Despite continuing challenges and many gloomy forecasts about the nation’s predicament, the country is equipped with the fundamentals necessary to succeed. Factors that point towards this potential include ease of exporting to consumers in the world’s largest market and abundance of affordable labour. But it cannot reach this goal alone.
Gaps represent investment opportunities
Many of the gaps that remain in Haiti – from housing to energy – are also investment opportunities for corporations with specialized expertise. Investing in Haiti is certainly not without risks but, as a number of multinationals have demonstrated in recent months, there is the potential for a win-win opportunity – for local and international businesses and for the citizens of Haiti.
There is a range of options for private sector engagement in Haiti and the different strategies and models that are available. While some companies invest in order to generate long-term profits, other interventions are structured as “strategic philanthropy.” This approach blends traditional corporate philanthropy with a focus on improving social entrepreneurship and building local resilience. These mutually beneficial partnerships leverage the knowledge and resources of the private sector to improve lives in Haitian communities.
Once the present political instability is resolved and a new government is clarified, the national leadership will have the opportunity to chart a path for Haiti – in partnership with local and international stakeholders – to place the country on a faster growth trajectory than would have otherwise been possible. The World Economic Forum is focusing on the constructive role that business can play in helping Haiti realize this accelerated economic trajectory and in improving livelihoods throughout the country.
Constructive economic engagement is essential
By issuing this call to action at the 2011 Annual Meeting in Davos, Switzerland, and by deepening ongoing commitments in the months and years ahead, the international private sector can show the transformative effect of constructive economic engagement. The first step is to forge the partnerships that can bring about this change.