26 June 2010
We have all seen the appeals for Haiti, five months ago, and we have all been impressed by the generosity of individual people giving whatever they could spare. The national action in The Netherlands generated more than 60 mln Euros, and with a government match of 41 mln, that brings the contribution of a small European country to well over 100 mln Euros, say 125-130 mln US$. Other countries have similar tales, and then you have the institutional donors, the European Union, the Worldbank, USAID, and many individual governments that have pledged to contribute to the rehabilitation of Haiti. All of these people came together end March, and the collective total promised was 9.9 billion US$.
Let’s put this into perspective. Haiti’s GDP was 7 bln US$ (2008, latest figure available). With a little under 10 mln or so inhabitants, that is 716 US$/person. So the average Haitian earns 716 US$ per year. The aid pledged is 130% of the country’s GDP. Let’s say 1000 US$ per person. I wonder what individual Haitians would say if we offered them the choice of 1000 dollars each, ie more than an average annual salary each, or 3000 NGOs helping them rebuilding their country.
Of course it doesn’t work that way, we all know that. Collectively, aid money goes further and achieves more than if spread thinly – that is true, by the way. Aid money has to be well spent, responsibly, transparently – and we also want Haitian government leadership, it should not be the foreigners deciding. So the international community created what has become known as an MDTF, a multi-donor trust fund, which pools international funding for the reconstruction. And they have also created a committee that oversees this fund, with both international and Haitian representatives (initially 9 internationals and 8 Haitians, but after a public outcry the score is now 9-9). This committee, created for 18 months, is to decide what the fund can spend its money on. Nobody knows what will happen after 18 months. At the same time, a steering committee has been created, for the same fund, with different members (you qualify if you have contributed at least 30 mln US$ – actually contributed, not just promised -, and guess what, Brazil is the only member so far). Why two committees who do almost the same? On one, Venezuela is represented, and hey, it would be unacceptable to the US to have Venezuela have a say over spending of US money. Hadn’t we just agreed that collectivity was the best way forward? And that this needed to be Haitian led? Right.
In any case, the MDTF, recently renamed the Haitian Reconstruction Fund, is only going to receive a fraction of the 9.9 bln, perhaps 5-10% of it. And it is not yet clear what share is going to be spend on long term rehabilitation projects, and what on direct budget support, to allow the government to operate, pay civil servants, essentially. Anybody can apply to the fund for money, for projects doing infrastructure, social services, clean-up, job creation, as long as it is aligned with the overall Haitian Reconstruction Plan, as long as you do so through a ‘partner’, either the Worldbank, the Inter American Development Bank, or UNDP. The fund is set up to ensure rapid disbursement – there is a five day turn-around promised once a project has been submitted for funding -, but since you can only apply through one of those partners, all organisations not known, shall we say, for their ability to approve anything rapidly, it may still take a while before you see your money. This is probably why the mandate of the fund is until December 2017. Most of the money is anyhow still going to be managed outside the fund, by NGOs, by individual government donor, who have no intention giving up their control over the money they have raised or promised. For good reasons, I would think.
Sometimes I think we should abandon the politics, just offer each Haitian a 1000 US$ and go home.
next: the road