WASHINGTON – Coinciding with the first anniversary of the devastating earthquake in Haiti, the U.S Department of the Treasury reviewed the progress made and continued challenges ahead in promoting financial stability and fostering long-term economic growth in the country – a critical aspect of Haiti’s recovery.
“Just one year ago, Haiti suffered a catastrophic event – hundreds of thousands of lives were lost while millions more were changed forever,” said Treasury Under Secretary for International Affairs Lael Brainard. “In the face of what some might say were insurmountable challenges, there has been progress. As January 12 approaches, much hard work remains ahead. We are more committed than ever to working across the U.S. government, with our friends in Haiti and the rest of the international community to recover and rebuild.”
Under Secretary Brainard visited Haiti in July to assess first-hand the assistance efforts of the MDBs and discuss Treasury’s deployment of a technical assistance team to the country with senior officials of the Haitian government.
Treasury worked closely with the U.S. Congress and the international community to achieve full relief of Haiti’s debt at the International Monetary Fund, the Inter-American Development Bank (IDB), the World Bank and the International Fund for Agricultural Development, in one of the fastest complete debt reductions in history. This innovative approach to debt relief allowed the IDB to fully cancel Haiti’s debt and, in combination with the IDB’s ninth General Capital Increase, provide $2.5 billion in grants to Haiti through 2020. The funds will support projects in critical sectors such as education, transportation, agriculture, water and sanitation, energy and private sector development.
In cooperation with other U.S. agencies and with support from Congress, Treasury also contributed $120 million to the Haiti Reconstruction Fund (HRF), a multi-donor fund administered by the World Bank, which is being used to fund priority areas defined by the Government of Haiti including housing reconstruction, rubble removal and education. A portion of the U.S. contribution will also support a $35 million partial credit guarantee fund that will allow banks and credit unions to restructure loans and provide additional financing to viable small and medium-size businesses affected by the earthquake.
“After the earthquake, amid a devastating humanitarian tragedy, there was an immediate and alarming shrinkage of credit – making it nearly impossible for any banks to lend and anyone to borrow,” said Under Secretary Brainard. “Credit is an absolutely essential part of a sustainable economic recovery so we have worked closely with the IDB, the World Bank, and the Government of Haiti on a fund that enables small business owners to gain some breathing room and get back on their feet.”
In the immediate aftermath of the earthquake, Treasury acted quickly to deploy senior representatives on the ground and will send a permanent financial attaché to work on a variety of issues, ranging from preserving land title records that serve as the legal underpinning for commercial transactions to re-establishing the inter-bank payments system, which serves as the backbone for domestic financial flows between banks.
In addition, Treasury’s Office of Technical Assistance plans to establish a long-term presence of a team of experts to assist the relevant ministries in strengthening public finances, financial accountability, debt management and reinforcing the insurance sector. This cooperation will strengthen the capacity of the Haitian government to better manage its revenues and dedicate resources to priority areas for reconstruction, while improving the financial sector’s ability to provide credit to the private sector in support of long-term economic development.