Haiti: Recovery Bill Estimated at 11.5 Billion Dollars

In its draft “Preliminary Damage and Needs Assessment” (PDNA), which was prepared with the help of some of its bilateral and multilateral donors, the government projected total damages and losses caused by the quake at close to eight billion dollars.

That sum represented the equivalent of roughly 120 percent of Haiti’s 2009 gross domestic product (GDP), making the quake’s cost relative to a country’s economy the world’s greatest since the current methodology used for assessing costs of natural disasters was adopted by international authorities 35 years ago, according to the Assessment. Even before the quake, Haiti was the poorest country in the Americas.

It estimated that more than 220,000 people died as a result of the quake and that more than 300,000 others suffered injuries.

Some 1.3 million people are living in temporary shelters in and around the capital, Port-au-Prince, while more than half a million others have fled the area, “resulting in the exacerbation of already existing problems in access to food and basic services,” according to the Assessment.

It said the most immediate problem with which the government and aid agencies have to contend is to prepare for the rainy season that threatens to make the tent cities that have sprung up since the quake uninhabitable. The rainy season normally begins in April.

The draft assessment, to which some 250 Haitian and international experts have contributed, will help guide discussions at a donors conference co-chaired by UN Secretary-General Ban Ki-moon and U.S. Secretary of State Hillary Clinton at UN headquarters in New York City Mar. 31.

The United States, which so far has spent nearly 800 million dollars in emergency relief and recovery efforts, is expected to pledge more than one billion dollars more in new aid over the next three years at the UN conference, according to knowledgeable sources who said the final figure had not yet been decided and could go significantly higher.

At a brief press conference after meeting with Haitian President Rene Preval in Port-au-Prince Tuesday, Ban noted that the Haitian government will need international assistance “simply to cover its payroll…for the foreseeable future.”

“Shelter, coupled with sanitation and continued humanitarian assistance and reconstruction, those are major priorities,” he said, adding that UN and other aid donors have thus far provided only 60 percent of the 1.3 million people displaced by the quake with tents, tarpaulins and plastic sheeting.

“We will continue to expedite this process before the rainy season and the hurricane season arrive,” he said.

Other immediate challenges include the removal of an estimated 40 million cubic metres of debris and the provision of tens of thousands of jobs. Nearly 10 percent of Haiti’s total workforce lost their jobs as a result of the quake, according to the Assessment.

The Assessment called the damage to the country’s infrastructure “massive”. Some 105,000 homes were completely destroyed, while twice that number suffered structural damage. Indeed, housing was the hardest-hit sector. But more than 1,300 educational institutions and more than 50 hospitals and health centres have also been rendered useless, it said.

Of the total value of 7.86 billion dollars in total estimated damages and losses, the destruction of physical assets – everything from houses to roads and ports – accounted for 4.3 billion dollars, or 55 percent, the report concluded. The balance consists of losses – in production, jobs, salaries, rents, and other sources of income.

Of the 11.5 billion dollars needed for recovery over the next three years, according to the Assessment, nearly two billion dollars would be devoted to infrastructure, including housing, transport, energy and telecommunication; 5.4 billion dollars to health, education, nutrition, water, and sanitation; 1.7 billion dollars to environmental challenges, including pollution and disaster risk management.

Some 800 million dollars would be devoted to improving governance and public services, and to improving governance, while another one billion dollars would be targeted on specific productive enterprises, especially agriculture and fisheries, as well as assembly industries and tourism, according to the draft, which noted that these estimates had not yet “been cleared, nor prioritised or ratified” by the government.

The assessment also called for the country to adopt a longer-term development strategy focused on building more economic opportunities in the countryside, as opposed to the capital, which has long dominated Haiti’s economic, as well as political, life.

“(Sixty-five percent) of economic activity in Haiti is located in the Port-au-Prince area, while the economic opportunities in other departments are not harnessed,” it said. “The flight of half a million people from the capital “offers an opportunity to develop other growth poles in the country.”

The government, it added, should encourage the displaced to settle around these poles, develop infrastructure and services there, and thus “accelerate the process of deconcentration and decentralisation.”

The document was welcomed by some observers here as an important first step in planning the recovery process, although they expressed some doubt that donors will be willing to pledge the full sum at the U.N. conference.

“I think the PDNA really lays out some very sensible priorities and is an important first step in attaching a price tag to some of those objectives,” said Dan Erickson, a Caribbean specialist at the Inter-American Dialogue (IAD), a hemispheric think tank here.

“But there remain a lot of questions about how to channel resources to Haiti in an effective manner,” he added, expressing some scepticism that the country will be able to absorb the equivalent of nearly four billion dollars a year in foreign assistance.

“There’s widespread recognition that it’s important to build the capacity of the Haitian state to manage resources and execute projects, and the development effort won’t be successful if it’s channelled principally through foreign contractors and NGOs,” he added.

“But everyone also recognises that the Haitian govt has a limited capacity, so there needs to be an effort that builds this up over time,” Erikson told IPS.

Vicki Gass, a Haiti specialist at the Washington Office on Latin America (WOLA), said she hoped to see more details about the plan’s implementation, particularly regarding the development of new centres of economic activity and the role of civil society in improving governance and transparency.

“It does talk about support for civil society to promote dialogue on public policy,” she said. “That’s important, but what does it mean? Will civil society be given a role in guaranteeing that aid is going to the intended goals?” she asked.