Institute Notes: A Dialogue on Overcoming Hunger and Poverty

Building Haiti Back Better

In a packed hearing yesterday of the Senate Foreign Relations Committee, Chairman Kerry reminded us that prior to the earthquake, Haiti had actually begun to show some signs of progress, with violent crime declining and increased access to the U.S. market. Indeed, this week a CNN report, examined the garment industry, which before the quake employed 130,000 people, with workers earning $4 a day (more than half of Haiti’s minimum wage) and new investments fueling a potential resurgence of the sector.  Much of this gets lost in the flood of stories about how the earthquake has destabilized a “basket case” of a country. But I digress.

U.N. Deputy Special Envoy for Haiti, Dr. Paul Farmer, turned our attention to a new set of health concerns, such as outbreaks of cholera and water-borne diseases in the newly formed tent cities. He also urged a focus on quickly establishing safe schools, hospitals, and storm-resistant housing.  Wreckage must be cleared, students need to be back in school, and life -- as wretched as it appears in the present -- must continue. Dr. Rony Francois detailed the massive infrastructure challenges. Among them is assessing the structural integrity of the remaining buildings. We know that many people, even with homes intact, are loathe to return to them. He also called for a long-term plan to decentralize Port-au-Prince and reinvest in agriculture, food security, jobs, roads, and the like. James Dobbins of Rand Corporation pointed out that as post-conflict environments go, Haiti is “no Somalia, Iraq, or Afghanistan.” So we don’t need American troops in Haiti for the long haul, but we do need to focus on creating jobs, alleviating poverty, and enhancing Haiti’s capacity to govern. We should also pay Haitians to build back their own country as my colleague discussed earlier this week.

In light of the billions anticipated for recovery and reconstruction, all commentary led back to what Farmer described as the failed “aid machinery” and how to do it better than it has been done in the past. The AP reported this week that of the $379 million the U.S. spent on earthquake relief in Haiti, less then a penny of each dollar is going to the Haitian government in cash. See the full article for a breakdown on how this money has been spent. To date, $2 billion in relief has streamed into Haiti, almost all into the hands of NGOs. With more NGOs per capita than any other country in the hemisphere, this is no surprise. 

Some creative measures were put on the table, such as coordinating Haitian-American volunteers into small groups linked with their former hometowns and institutions in Haiti; creating a multilateral recovery fund and new ground rules for NGO involvement in Haiti; and my favorite, appointing a U.S. Haiti “czar” comparable to the role Ambassador Richard Holbrook now plays in Afghanistan. This could raise the profile of the recovery effort and help improve coordination among U.S. agencies. But there were no easy prescriptions for engaging the Haitian government, other than the acknowledgment that yes, there is corruption and weak capacity, but a “better” Haiti is one in which strengthening governance, civil institutions, and the economy is central. 

Reconstructing Haiti (part two)

Conjectures about how long it will take to rebuild Haiti are imprecise at best, except for the one thing they have in common. It’s going to be a long while before the country is put back together.

The Active Learning Network for Accountability and Performance in Humanitarian Action (ALNAP) says it will take three to five years, basing this on 30 years of historical evidence following other earthquakes in developing countries. My colleague in a post yesterday quoted officials who estimate as long as ten years. Keep in mind there are many factors that could lengthen or shorten the time it takes to rebuild Haiti.

But this doesn’t mean development in Haiti should be put on pause for years. Relief, recovery, and development should be going on concurrently.

Here’s a way to combine all three. Weak infrastructure caused the devastating effects in Port-au-Prince. Earthquakes of 7.0 have occurred in the developed world without causing collapsed buildings and mass fatalities. Poor infrastructure is symptomatic of underdevelopment writ large.

Haitians, not international NGOs or the U.S. military, should be paid to rebuild the country. Unemployment was a big problem before the earthquake and now it’s an even bigger one. Again, the numbers are imprecise, but USAID puts unemployment between 70-80 percent in the formal sector before the quake. We know Haitians need jobs, and rebuilding the country’s infrastructure can create lots of them. Here in the United States, much of last year’s federal stimulus was invested in infrastructure improvement. Investments in infrastructure create jobs right away and they can lay a solid foundation for future economic growth.

Here’s where the international community needs to help. The U.N. has launched a cash-for-work program that will “enable the population to take part in the reconstruction of Haiti by employing Haitians in recovery efforts, such as cleaning the streets and clearing earthquake rubble. It allows people to receive $5 a day for their work and hopes to ultimately enroll some 220,000 Haitians, indirectly benefiting one million people,” according to U.N. officials.

Five dollars a day may not sound like much, but it’s actually double what most Haitians have been living on. At the end of last week, the U.N. had garnered $5 million in aid. This won’t get us very far, but let’s hope it’s just the start. Most of the world’s attention right now is focused on getting food to people and getting the homeless into makeshift shelters. That’s understandable, but the country’s economy, such as it is, has to be put back together too.

The effort to rebuild Haiti should be driven by its own government and civil society organizations. A lot of people have a knee-jerk reaction against trusting the Haitian government with leadership on anything. I understand that. Transparency International ranks Haiti 168 out of 180 countries on its Corruption Perceptions Index -- obviously not a stellar showing, but the country scores higher than two notably large beneficiaries of U.S. aid and attention these days: Iraq and Afghanistan.

“In fact, Haiti in recent years has been much better managed under President René Préval and has shown signs of being on the mend,” writes Nicholas Kristof in The New York Times.

I’m not going to get into it about the corruption in Haiti. All I’m saying is development doesn’t stand a chance in Haiti, as elsewhere, unless it is country-led.

One of the best things we can do to help Haiti is to pay Haitians to rebuild the infrastructure necessary for their society to function effectively.

Haiti: Toward Reconstruction

Efforts in Haiti now turn to the wrenching task of clearing wreckage (with untold numbers still trapped in rubble) and housing hundreds of thousands before the rain and hurricane seasons start. Still reeling, Haiti must quickly turn to reconstruction and recovery, while balancing ongoing relief for the 2 million people affected.

On Monday, Haiti’s top leaders gathered with international donors in Montreal to assert their central role in the reconstruction agenda. Foreign ministers from 14 countries largely agreed that we are looking at a decade, at minimum, of concerted investment in Haiti. The outcomes of the meeting outlined the obvious: Haiti will need deep and broad long-term assistance. A more involved donors conference will convene down the road where actual dollars will be pledged following an independent needs assessment.

While the beleaguered Haitian government presented an initial $3 billion plan to salvage Port-au-Prince (housing the homeless and rebuilding infrastructure), others have begun to press for unprecedented levels of aid and coordination.

On Project Syndicate this week, Jeffrey Sachs recommends focusing on five key sectors for long-term reconstruction and development: smallholder, or peasant, agriculture; reconstruction; port services and light manufacturing; local small-scale trade; and public services, including health care and education. He also pushes for an overarching framework and an unprecedented display of international cooperation led by the Inter-American Development Bank because of its track record in Haiti. His price tag for this effort: $10-$20 billion over 10 years.

To naysayers of aid to Haiti, Sachs says:

“Other countries have risen from the rubble of natural disaster and war, and Haiti can do the same over the next five to ten years. For the next decade, however, and especially for the next five years, there will be no escape from the need to rely on international financing, and mainly grant assistance, to finance the rebuilding effort. The world has spent heavily in Haiti before, but very ineffectively. This time, it must be done right.”

So world leaders must now grapple with how to structure aid efforts in Haiti, with its history of corruption and weak institutions. In a statement following the meeting, Secretary of State Hillary Clinton said,

"It's important that we see ourselves as partners with Haiti, not patrons… We bear a responsibility to our taxpayers to assure that the money that our government commits will be well spent transparently and with results on the ground for the Haitian people.”

Let’s see if the interest, concern, and good will emerging from this tragedy can be channeled into a coherent, transparent, and collaborative development agenda that prioritizes broad-based economic growth, debt relief, and poverty reduction. This is our opportunity.

2010 Hunger Report: A Just and Sustainable Recovery

Bread for the World Institute’s latest annual hunger report, its 20^th edition of this esteemed report, appears today. A Just and Sustainable Recovery analyzes what needs to happen to reduce hunger and poverty as the U.S. and global economy recover from the worst economic crisis since the Great Depression.  

A jobless recovery will not suffice and does not have to be what we get if policymakers grasp the opportunity to rebuild the economy in ways that put people at the forefront of policies to stimulate and sustain growth. 

The report highlights policies that can ensure a sustainable future in spite of the ups and downs that are inevitable in business cycles. It calls for new investments in the nation's energy infrastructure, as to create lots of jobs; rebuilding the manufacturing sector, also to create jobs but more importantly to get America producing things people want to buy, besides risky financial products; reducing inequalities in areas like housing, health care and education policy; helping low-income families to save and build assets for the future, just as the government does for middle and upper income families; and revitalizing neglected communities throughout the country, places so far on the margins they are effectively excluded from participating in the rest of the national economy, except for low-paying work in the service sector. This report has a big agenda, but we're at an opportune moment for making a fresh start and thinking big about the future.

The report also makes the case for U.S. leadership in reducing hunger and poverty around the world and in addressing climate change. Without addressing the triple threats of hunger, poverty, and climate change, the report argues, the coming decades augur far greater instability around the world. 

The release of the report coincides with a launch event at the National Press Club, including speakers David Beckmann, president of Bread for the World and Bread for the World Institute, Robert Greenstein, president of the Center on Budget and Policy Priorities, Gawain Kripke, director of research and policy at Oxfam America, and Reverend Lennox Yearwood, president of the Hip Hop Caucus. The report’s website, including everything in the print edition plus many other features, will be adding video from the National Press Club event within a few days.

Here on Institute Notes we’ll be blogging regularly about the report, as issues discussed in the report, from hunger to climate change to health care reform and jobs and inequality, continue to be in the news everyday.  So check in and participate in the discussion with us if you like. 

Surprising Success at the G20

The conclusion of the G20 seems, at first blush, to provide a great deal of positive news for developing countries. The official Communique begins with the recognition that

prosperity is indivisible; that growth, to be sustained, has to be shared; and that our global plan for recovery must have at its heart the needs and jobs of hard-working families, not just in developed countries but in emerging markets and the poorest countries of the world too; and must reflect the interests, not just of today’s population, but of future generations too.

To achieve financial stability and promote a return to trade and economic growth, G20 leaders had to act boldly, and it appears they have.

Economics 101

For those of us who struggle to understand the complexities of economics, I found David Korten’s recent article “After the Meltdown: economic redesign for the 21st Century" very informative.  He compared economic thinking of Jeffery Sachs, James Gustave Speth, and Kevin Pillips.  Whether you agree with anything Korten says, he gives a lot of food for thought.

The G 20 Comes to Town

The G 20 came and went here in Washington this past weekend without much apparent impact: There were some street closings, a few protests, some press briefings. The Washington Post had a front page story and a lead editorial on November 17, but  -- given the parlous state of the global economy -- all in all it was remarkable for its lack of attention and public follow-up. Those who had modest expectations going in were not surprised or disappointed.

Some – President Sarkozy of France, for example -- apparently came into the meeting with an expansive agenda – almost a rethinking global capitalist system. More modest objectives included modified governance for the Bretton Woods Institutions (the World Bank and IMF), improved supervision and controls on financial flows, re-commitment to trade liberalization and open markets and fiscal stimulus measures to address the gathering global recession.

One of the principal reasons, of course, for the low expectations was the lame duck status of the President Bush.  It’s asking a lot of world leaders to commit to actions that may not survive the change in administrations. The president’s generally low credibility as an “internationalist” and his basic ideological commitment to market-based solutions served to further undercut the possibility of major reform commitments at this time.

Progress in Africa

There are a couple of stories this week that serve as a reminder that progress can be made under challenging circumstances--Time and CNN report that many African countries are experiencing strong economic growth and steady improvements in governance. Good news is indeed a rare commodity these days but I'll take it! The financial crisis is taking up much of the oxygen and understandably so. But as my colleagues Eric Munoz and Charles Uphaus have noted in recent blog posts that developing countries are especially at risk in this crisis, both in terms of access to the financial resources needed for development and because of the impact of slower growth in rich countries on exports from developing countries. An unintended consequence of this financial crisis, coming on the heels of a surge in food and fuel prices, may be a growing setback in the progress against poverty that we have seen in recent years. It is absolutely clear that if the global community doesn't step in, the gains we have made will be lost.

Curtains for the Washington Consensus?

Two stories in the October 1 Washington Post expand on the recent Institute Notes, with special focus on Latin America. One discusses the effect on remittances of the U.S. economic downturn; the other describes how the financial system collapse is playing out in regional politics. 

According to the first story, when adjusted for inflation and exchange rates, the volume of remittances – projected at $67.5 billion for this year -- will actually decline for the first time since records have been kept. A slowdown is important, because remittances constitute a significant portion of national income for some Latin American countries -- 18 percent for El Salvador, 12 percent for Guatemala – and provide a means for poor families to expand their economic horizons.

The second story features the speech by Brazilian President Luiz Luna de Silva to the U.N. General Assembly, in which he pointedly criticized the “boundless greed” of U.S. bankers and fingered the U.S. financial sector for any consequent global impact: “This crisis belongs to the American bankers, the European bankers . . . It’s not fair for Latin American, African and Asian countries to pay for the irresponsibility of the American financial system.”

A quick news round up

There are a few articles that I think are worth calling attention to:

There are signs that farmers in India, China, Australia and other parts of the world are beginning to respond to higher food prices by planting more food crops. This will certainly ease pressures on the record high prices that we have seen in the last 18 month--but particularly in the last six months. This is good news for consumers. The story suggests that rice and grain prices have not come down as much as wheat and soybean. A WSJ article and reports from the World Bank and USDA suggest that while prices have and will continue to decline in coming months as a result of a supply response, it is unlikely that they will go down to pre 2004 levels, when they were quite low. Grain prices in particular will remain high because of the ethanol mandates and subsidies in the US that are diverting corn and land away from food and feed production. For people living in extreme poverty and hunger, an easing of food prices may be of some comfort but they are still very vulnerable to even the slightest fluctuations and will continue to face enormous challenges feeding their families. They need the skills, tools and physical strength to lift themselves out of poverty once and for all and that is where development assistance, trading opportunities, and good governance come in.

This morning's New York Times has a piece by Roger Cohen about Ghana--the kind of story you don't see much in our media about Africa or anywhere in the developing world quite frankly. But many developing countries are making progress, leap frogging technologies, facing up to challenges and there is an energy and intensity about the changes that is quite enticing. Of course there are a great many challenges, far too many people (862 million) go to bed hungry but as Cohen acknowledges, very few of these type of stories make the papers.