Beyond the Bubble - 04/29/10

In sharp contrast to the donor apathy that has plagued the relief effort in the Democratic Republic of Congo, the Haitian government is in the unfamiliar territory of having too much aid at its disposal to repair its nation following the earthquake in January.

Total donations for Haiti relief have now exceeded the anticipated rebuilding costs, according to some estimates. The Haitian government’s most ambitious estimates place the rebuilding effort at $14 billion. Highly effective fundraising efforts, however, have raised $14.9 billion in pledges combined from private individuals, national governments and multilateral bodies (including the United Nations and World Bank).

This outpouring of aid, while fantastic in its display of international altruism, have led to unexpected consequences for the rebuilding effort. CBS news reported on the state of the Haitian economy: “When you continue having a lot of food distributions, you lower the price of food so that people can’t trade, and it disrupts markets.” When food is readily available for free, farmers are unable to sell their products, stunting the local economy.

Government officials also fear that an abundance of ‘free’ resources will increase the prevalence of criminal activity and corruption. Reports citing Haitian gangs intercepting aid and re-selling products on the black market have been rampant. Even more concerning is the assertion that this criminal activity is continuing to the knowledge of high-ranking officials.

Such practices, if allowed to continue, could fundamentally undermine the credibility of the law enforcement sector in the struggling nation. This in turn could decrease the perceived legitimacy of the government and erode the effectiveness of the government in implementing rehabilitation initiatives.

This credibility is of the utmost importance at a time when the Haitian government has pitted itself against the advice of many in the international development community. Last week, the government asked that international donations in the form of free health care and large-scale food aid be ceased. This initiative is intended to decrease the reliance of the nations citizens on foreign aid. They hope that this will force individuals to buy from local farmers and in turn stimulate the economy.

They also desire a more controlled allocation of resources, hoping for a decrease in the corruption surrounding the foreign funds.

Though well intentioned, this policy has led to another series of problems.

Food distribution camp authorities report that though rebuilding efforts are proceeding well, many Haitian citizens remain homeless and jobless. These individuals have no income with which to purchase food for themselves and their families.

In Haiti, a fascinating study of aid distribution politics rages. Though the actors within the rebuilding effort are the same, the dynamics of the narrative are starkly different. Rather than attempting to try and spread limited resources around to all of those in need, government officials are pitted with the equally difficult tasks of trying to get citizens to buy local products and decreasing the corruption surrounding aid packages. Though surprising, it seems readily apparent that that excess aid too can be highly damaging in the rebuilding effort of developing nation.