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Economic Growth and Trade

The Challenge

Economic security is predicated on people having secure livelihoods. Even before the 2010 earthquake, Haiti faced significant challenges to economic security. Its economy is primarily driven by informal micro-, small-, and medium-sized enterprises (MSMEs), which generate up to 80 percent of new jobs. However, informal MSMEs, which are often in need of business development services and training, have difficulties accessing financing from formal institutions. This limits their ability to grow. The wide-scale damage caused by the earthquake further exacerbated the situation, disrupting businesses and destroying stores and other infrastructure. Estimates indicate that 40 percent of the Haitian population is unemployed.

USG Strategy

The U.S. Government is helping the Haitian government in its goal of creating jobs, with a corresponding increase in household incomes, savings, and other assets, resulting in increased economic security. To achieve this goal, the U.S. Government is:
  • Helping the Government of Haiti to increase domestic investment and attract foreign direct investment;
  • Supporting value chains related to foreign direct investment and U.S. Government investments in priority sectors such as energy, agriculture, garments, and housing; 
  • Working with local financial institutions to increase lending in the economy;
  • Developing public private partnerships to access private sector expertise and leverage their investments; 
  • Planning a program to provide business development services and training to MSMEs in priority sectors;
  • Supporting the Government of Haiti’s efforts to increase tax and customs revenue generation to improve services and reduce the need for foreign aid. 
 
Since 2008, U.S. trade preferences for Haiti have contributed to the creation of at least 10,000 apparel sector jobs.

Accomplishments

The U.S. Agency for International Development (USAID) is leading the U.S. Government strategy by creating jobs in targeted sectors and increasing access to capital from formal sources to stimulate growth and job opportunities. So far, USAID has:    
  • Provided support valued at $20 million to 57 microfinance institutions to increase lending to underserved populations and MSMEs in several sectors.
  • Contributed to more than 42,000  agricultural loans for farmers to improve crop production and allow agricultural cooperatives to access markets directly; crops include mango, cocoa, plantain, corn, rice, and beans.
  • Supported an innovative business plan competition—USAID’s Leveraging Effective Application of Direct Investments (LEAD) project—that provides matching grants of up to $200,000 to promising entrepreneurial SMEs investing their own scarce capital to expand their businesses. So far, over a dozen grants have been awarded under the program. 
  • Finalized four new Development Credit Authority (DCA) guarantees that will stimulate up to $30 million in loans by local commercial banks, microfinance institutions, and credit unions. The guarantees cover a nine-year period and will contribute to rebuilding Haiti’s private sector through increased local lending to MSMEs and out-of-reach populations.
 
USAID has also partnered with the Overseas Private Investment Corporation (OPIC) to bring $20 million of long-term financing and technical assistance to Haiti for housing finance. OPIC intends to double its current portfolio of $76 million. Additionally, the U.S. Department of Treasury is providing technical assistance to the Ministry of Finance to improve budgeting, tax collection, and debt management in the public sector.
 

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Last updated: February 10, 2014

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