March 03, 2010
The Wall Street Journal reports on the effects of aid on local markets and small businesses in Haiti:
After the Jan. 12 quake, which killed as many as 300,000 people, the world launched a massive relief effort to bring food, water, medicine and other supplies to needy Haitians. The U.S. alone has spent more than $665 million, official figures show.
But only a tiny fraction of that money is being spent in Haiti, buying goods from local businesses. Worse, the aid is having the unintended consequence of making life harder for many businesses here, because of competition from free goods brought in by relief agencies. The damage to Haitian companies is making it harder for them to get back on their feet and create the jobs the country needs for a lasting recovery.
The article cites Peace Dividend Trust, noting that “as little as 5% of the budgets of humanitarian agencies is spent locally.”
Although US and UN officials say they are aware of the need to buy local, the WSJ describes one of the problems:
But one hurdle is AID’s strict regulations, which call for dealing with companies that have a proven track record and transparency. That makes it more difficult to deal with smaller Haitian firms, many of which don’t have outside auditors, for instance.
The article also notes the effect of rice imports on the price for local rice, but US officials believe it will only be temporary, with the World Food Program beginning to buy local soon.
Peace Dividend Trust works as a “matchmaker” trying to get local businesses involved with relief organizations. They are working on a program entitled “Haiti First.” The benefits of buying local are immense, described by Peace Dividend Trust:
Billions of dollars will soon be spent on Haiti, but aid levels will drop off. Adopting a “Haiti First” policy now will ensure that the benefits from local purchasing – increased domestic incomes, tax revenue generation and job creation – are felt sooner and for a longer term.
For the full plan, and more info on Peace Dividend Trust’s efforts in Haiti, click here.
