Port-au-Prince's Aid Economy
How foreign aid to Haiti can pressure the local economy, compound inflation problems, and maybe do more harm than good in the end
Facebook
Twitter
Tumblr
Blogger
StumbleUpon
Digg
Delicious
Reddit
Google(Page 2 of 2)
"After the earthquake, the price of housing practically doubled," says Medjine Jasmin, an assistant at real estate agency Groupe Immobilier D’Haïti in Pétion-Ville. Many of the company’s clients are organizations from abroad. Because the majority of relief assistance contracts received by NGOs and foreign contractors lasted only six to 18 months, Jasmin says that many foreign organizations packed up and headed home or at least drew back operations once contracts terminated. A lot of them left the country, and a gap in the economy.
"NGOs pay very well," says Jasmin. "There were many ways to make money. Now, it’s more difficult."
The aid economy clearly is a boon for property owners and locals fortunate enough to be employed by foreign organizations. But it puts upward pressure on real estate prices, and even for locals who get jobs, it may not be a long-term path to the working-class, particularly for low-skilled workers like drivers and security guards.
It may be impossible to tell just how much the aid economy affects the local economy until aid flows diminish over the next five to 10 years, but the aid economy in Haiti may be less temporary than the international community lets on, or than in war zones like Afghanistan. Here, like the 520,000 Haitians still living in ostensibly temporary tent camps around Port-au-Prince, it’s not apparent that the international NGOs, branches of foreign governments, and aid contractors will ever leave.
Tate Watkins is a freelance writer based in Port-au-Prince and a one-time Reason intern.
Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time.
-
Deja vu?
-
In Haitian creole that'd be something like "davu". Like the way "l'autre bord de l'eau" becomes "lot bo dlo".
-
This problem is the reason why I support Ron Paul idea to stop foreign aid. As a Haitian born, I know first hand that all that good intention has done nothing but wreak Haiti. Foreign aid in the form of food just destroy the livelihood of farmers. I will go as far as saying that most foreign aid are evil. Most of it is just stimulus for American farmers at the expense of these countries agricultural sector.
-
The problem with foreign aid dollars is that proponents conflate all types of foreign aid, and in doing so can cherry pick examples that appear to protect it. These types are:
1. Foreign investment
2. Medical/Scientific research
3. "Stimulus" spendingThe last category, including such treasures as the War on Drugs and food and medicine give-aways, is easily the largest, and smacks of Keynesianism at its finest (worst?). No one seems to realize that such spending will not guarantee an increase in supply, but will guarantee an (artificial) increase in demand, leading to inflationary bubbles.
The second one, though usually lumped into the category of "foreign aid", is actually a form of domestic spending for politicians to return the "favors" of the pharma-industry.
The first one is the only legitimate form of foreign aid, but unfortunately it's not nearly as widespread as it should be.
-
United States Virgin Islands Republican caucuses, 2012
Candidate Votes Percentage Unbound Delegates Delegates
Ron Paul 112[3] 29.2% 1 1
Mitt Romney 101 26.3% 6 7
Rick Santorum 23 6.0% 0 0
Newt Gingrich 18 4.7% 0 0
Uncommitted 130 33.9% 2 1
Unprojected delegates:[4] 0 0
Total: 384 100% 9 9 -
And how does this relate to the topic being discussed?
-
What would be the effects if Haiti adopted a gold standard? Would they be more prosperous, less prosperous?
Can anyone help me understand?
-
A gold standard can be effective only when a society and its government are honest.
Even the most vociferous Haitian Nationalist will tell you - in private - that the American is preferred over a Haitian to administer some program or business.
Meanwhile, Haiti's gold has been in Fort Knox since the American Occupation of the early 1910's. And it is best it stays there.
-
A gold standard forces government to be honest (why do you think they don't want it ?). People always say how Greece is suffering because it can't control its own currency, I see it from the opposite angle, Greece is now forced to cut its government fat which I see as a good thing, the alternative is to inflate away the debt and keep its over bloated government and hope that somehow the problem will go away.
-
Foreign aid to Haiti is a waste.
-
Foreign aid is more than a waste, it's having the same effect that welfare did on the black family, creating a class of people content with dependency. Why would I work a lousy job for pitiful money when I can sit at home for the same money? Of course, there's no advancement when you're dependent.
-
Having children is effectively advancement if benefits increase with family size.
-
The aid that Haiti gets stinks like colonialism, the country can never get out of its hole as long as foreign nations utterly control every aspect of the nation.
-
One of the most poorly argued articles on the effects of foreign aid on Haiti -- which, I agree, are deleterious -- I've read. You're talking about an event that destroyed an estimated 250,000 residences. Of course there will be a spike in rents. It's supply and demand. Do you really think the landlords of Pétion-Ville apartments in which NGO workers are currently living would otherwise rent them for $187/month?
You fail to mention the antiquated land tenure system that left many without proper documentation to their home. Or population density, etc.
What's more, you don't discuss that major disasters always have an inflationary effect on their economies (see Hurricane Katrina, which doesn't come close to the earthquake effect on GDP).
A lot of faults can be found in the aid system, but you really owe it to your readers to be more careful and exhaustive with your reporting. -
Did you read carefully the third sentence of the piece?
I didn't feel this piece was the place to delve into the intractable issue of Haiti's antiquated land tenure system.
You're right that the issue of population density in PAP probably merited a mention.
-
You mean the sentence starting, "Demand for housing spiked after ..."
Yes, I read it. It's also incorrect.
Demand didn't spike. If anything, it declined, sadly, due to the number of deaths. Or at least it was constant.
Supply decreased, which caused the housing prices to rise.
An economist could have told you that and clarified some of your other ideas ... if you'd bothered to call one. -
You're right, it was badly worded on my part, but the end result I reported holds: prices have increased drastically as there's a huge number of people looking for housing relative to the stock.
One takeaway from the reporting for this piece was how difficult it is to suss out just how much the presence of foreign orgs affects the local economy, given that the earthquake caused such massive damage and shocked the entire country and economy. I thought that that nuance came through in the piece. ("It may be impossible to tell just how much the aid economy affects the local economy . . .")
-
the negative effects of foreign aid on Africa have been well documented. It is not only that the alot of it is stolen and ends up in foreign bank accounts, the aid that actually reaches say, a farmer, is likely to ruin his occupation, as this article points out.
the NYT had a piece on how foreigners are helping african women. felt strongly that it is not the business of westerners to change people’s sexual politics. In the west, women’s education followed men’s and a huge accumulation of wealth from free enterprise. In poor countries, already hundreds of thousands of men with degrees in law or political science who can’t find work. And there are millions of men who can’t get educated. Better to fund a woman’s or children’s healthcare center than to favor women over men and to create all kinds of resentments. Let people handle their own social affairs.
-
I noticed that the property owners of the dwellings lived in by Madames Louis and Simon live outside of the country. Could absentee landlordism contribute to the problems? God bless.
-
But they can gambol in Haiti! That means it's paradise! Right?
-
Nice post.
-
Crime rates and insurgence are among the many problems of rebuilding Haiti. The crime wave after the earthquake surged and the job market shut down completely. With no jobs, no incomes, no stability, people have a greater tendency to commit crimes in order to survive. Haiti is a very dependent state and NGOs have helped to create this matter, however without the NGOs Haiti may be just as bad, if not worse.
