Why We Need a “Marshall Plan” for Haiti

IMF Blog, January 22, 2010

Source details

The earthquake is described as "the worst in the region in more than 200 years."
Some 80 percent of its nine million people live below the poverty line.
According to the International Red Cross, three million people, nearly a third of Haiti's population, will need emergency food, water, and shelter for months to come.
Much of Port-au-Prince has been flattened; victims are still being dug out of the rubble.

The IMF and other international agencies "aim to make $100 million available to Haiti in the next few days as a bridge" from humanitarian relief to reconstruction.
The Fund has the capacity to provide "urgently needed cash resources very quickly."
For now, and for at least the next couple of years, Haiti has no payments to make on its existing debts to the Fund.
The emergency loan provided is "interest-free, with no repayments due for five years."
The Fund is assisting authorities to get cash to circulate in the economy so people can buy food and civil servants can be paid; banks will reopen shortly but the payments system is not fully operational yet.

The author proposes a "type of Marshall Plan—an international effort to support the Haitian authorities in rebuilding the country and back its democracy."
A first donors’ conference is scheduled to take place in Montreal next week, "in preparation for a larger conference in the spring that will mobilize financing for Haiti."
The Fund will participate by "providing money and expertise" in a reconstruction plan coordinated across the international community.
The goal is to plan now for the future even as immediate rescue efforts continue.

Restart private activity, including rebuilding businesses and encouraging guarantees for the banking sector so that lending can get under way again.
Support the creation of jobs in rural areas, where large sectors of the population have moved because of the quake.
Coordinate international donors to mobilize all available resources and deliver them as quickly as possible.
Reassess Haiti’s debt situation "in light of the catastrophic damage to its economy" and prepare the international community to provide comprehensive debt relief at the appropriate stage.
Emphasize that the focus on Haiti "must not result in the diversion of aid at the expense of other poor countries."

The catastrophe presents an opportunity to "think on as massive a scale as then U.S. Secretary of State George C. Marshall did after World War II."
The international community acting in concert is framed as essential to meet challenges beyond individual governments.
The overarching objective: help the people of Haiti escape a cycle of poverty and deprivation fueled by recurring natural disasters.

Source: Dominique Strauss-Kahn, "Why We Need a “Marshall Plan” for Haiti", January 22, 2010, IMF blog post.