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Mobilizing the diaspora for reconstruction of Haiti - via diaspora bonds
With Sanket In addition to the temporary protected status and facilitation of remittances - see my earlier post, when government offices and banks resume functioning, Haiti could usefully tap its large diaspora's wealth for the reconstruction of community infrastructure and social projects. This could be done via the issuance of "diaspora bonds". By diaspora bond, I mean not only bonding between the diaspora and the homeland, but more specifically a financial instrument for attracting investment from the diaspora. In the past diaspora bonds have been used by Israel and India to raise over $35 billion of development financing (see my article with Suhas Ketkar). Several countries - for example, Ethiopia, Nepal, the Philippines, Rwanda, and Sri Lanka - are considering (or have issued) diaspora bonds recently to bridge financing gaps. Besides patriotism, diaspora members are usually more interested than foreign investors in investing in the home country. Not only Haitians abroad, but also foreign individuals interested in helping Haiti, even charitable institutions, are likely to be interested in these bonds. Offering a reasonable interest rate - a 5% tax-free dollar interest rate, for example - could attract a large number of Haitian investors who are getting close to zero interest rate on their deposits. If 200,000 Haitians in the US, Canada and France were to invest $1,000 each in diaspora bonds, that would add up to $200 million. If these bonds were opened to friends of Haiti, including private charitable organizations, much larger sums can be raised. If the bond rating were enhanced to investment grade rating via guarantees from the multilateral and bilateral donors, then such bonds would even attract institutional investors. By the way, if you are wondering whether Haitian immigrants are too poor to invest, consider this fact from the Current Population Survey of the US: nearly one-third of Haitian immigrants in the US belong to households that earned more than $60,000 in 2009. In comparison, less than 15% of the immigrants from Mexico, Dominican Republic and El Salvador in the US had that level of household income. A quarter of Haitian immigrants, especially women, are reportedly in the relatively higher paying health care and education sectors; only a small number of them are in the construction sector. Credit enhancement would be necessary for Haitian diaspora bonds. My preliminary calculation suggests that a $100 million grant from official (or private) donors to guarantee such bonds (say, for 10 years, on an annual rolling basis) could actually generate $600 million of additional funding for Haiti! Such a guarantee structure could reduce interest rates on these bonds from over 15% to below 5% at the going rates. Also marketing diaspora bonds in the US would require a temporary exemption from SEC regulations; perhaps a tough sell, but well worth it under these extraordinary circumstances.
22 January 2010
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Haiti: A lesson in perseverance after the earthquake
On-the-ground report: Eustache Ouayoro, World Bank Country Manager for Haiti As I write this my hands still hesitate from remembering last week’s earthquake which cut short the lives and dreams of thousands of Haitians, but have also taught us a lesson in resilience, perseverance and hope. That fateful Tuesday, January 12th, started off as a bright, promising day for most of us, but ended up being possibly the worst day ever for Haiti, myself, and all of us working for its courageous people. Our office was bursting with excitement because we were expecting the visit of the Finance Minister, Ronald Boudain, to discuss accelerating the pace of disbursement of our projects so we could make a difference more quickly in the lives of so many Haitians. The Bank's country office in Haiti was fully energized for this work. I was mentally reviewing my conversation with the Minister while giving the final touches to a new issue of our newsletter when all hell broke loose. Out of nowhere the building started shaking furiously, as if the whole office was riding a concrete and steel wave. Nevertheless, it took me what seemed a long while to realize it was an earthquake. It was unimaginable. An earthquake in Haiti! As I was trying to maintain my balance in the middle of a mess of flying desks, glass shards and deafening sounds, I was saying to myself “this is disaster.” People who have lived through earthquakes before often say that an earthquake feels like an eternity, even though it lasts only a few seconds. This one felt longer than an eternity. All sorts of thoughts were going through my mind as the earth shook for an excruciating 35 seconds, the recorded duration of the 7.0 magnitude earthquake. Pondering to myself, I thought: why is this happening at a time when things are looking up in Haiti? The economy has been improving, communities across Haiti are making progress in key areas, and for the first time in many years, Haiti’s future is looking brighter. I thought about my family, my staff, about dying before accomplishing so many things. When the shaking stopped, we came outside and that’s when everything started to sink in. The first sight when you come out of our office is the proud six-story Hotel Montana. When we came outside it was just a pile of debris engulfed in a thick cloud of dust with badly injured people lying around. This is bad, I thought, as I saw good Samaritans running to the site with no equipment but their courage to try to save lives. Suddenly I felt depressed. Why — I wondered — is this country that has been so badly beaten been hit again? I was glad to be alive — and that my staff was alive — but at the same time I could not understand why I was one of the lucky survivors after realizing that so many people seemed to have died. But as I watched the impromptu rescue efforts around the Montana Hotel it became clear to me that the Haitian people are resilient and strong, that they are not afraid and their imagination is just another tool in their survival kit that gives them the ability to do things for themselves and their communities. In a flash, I understood that, now more than ever, we should be ready to continue to help the Haitian people. I’m ready to go back to my duties. We are ready to start the long –probably decades-long- reconstruction process, with new and innovative ideas to support Haiti's resilient people. We will continue involving Haitian communities in projects — which have yielded great results — and listen to them to figure out what needs to be done. This is where we can make a difference. Even though this has been a life-changing event for most of us, I’m ready to be part of the challenge of rebuilding Haiti.
22 January 2010
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Update on Haiti's education system after the earthquake
We recently received an update from Bob Prouty, head of the Education for All: Fast Track Initiative Secretariat, with regards to the education situation in Haiti after the earthquake. From his email: According to the early assessments we have received, 95% of school buildings in the immediate Port-au-Prince area have been destroyed. Education teams on the ground from organizations like UNICEF, Plan International and CIDA are working together to get a better sense of this and will coordinate the assessment of Ministry capacity. The Ministry has created an emergency response group with which the Local Education Group will work. The situation on the ground at present remains desperate, and most education staff are still dealing with immediate urgencies, such as food and water. A number of heads of the DDE (decentralized Ministry of Education offices) were in Port-au-Prince at the time of the earthquake for a meeting and lost their lives in the earthquake. We do not yet have a full accounting of Ministry staff or of teaching staff, but it is clear that the education sector was particularly hard hit and that recovery will require extraordinary coordinated efforts by all partners working with the Haitians for many years to come. We'll be posting more updates about the situation in Haiti as they come in. For more information, see the Education for All — Fast Track Initiative website. Bob Prouty is head of the Education for All: Fast Track Initiative (EFA-FTI) Secretariat located in the World Bank in Washington DC. The EFA-FTI is a partnership of donors, developing countries and civil society groups whose purpose is to accelerate progress toward the 2015 Millennium Development Goal by which all children worldwide will be able to complete a primary school program of good quality. Photo: Children in the town of Petit-Goâve, Haiti, some 60 km from capital Port-au-Prince, run towards a UN helicopter. 20/Jan/2010. Petit-Go‚ve, Haiti. UN Photo/Logan Abassi.
22 January 2010
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World Bank Haiti Country Director addresses reconstruction in The Huffington Post
Yesterday on The Huffington Post, World Bank Haiti Country Director Yvonne Tsikata shared some of the work being done by the Bank in Haiti and a few thoughts on the Bank's larger, long-term commitment to the country: Going forward, we would like to put special emphasis on the capacity generated by community-driven development projects, where people at the local level decide their priorities. We have supported a number of such initiatives going on in Haiti at the moment that have proven to be particularly successful on the basis of community involvement. This will be critical in the reconstruction. Just to give an example, by May 2009 our community-driven initiative had completed 549 projects, primarily for agricultural support and other infrastructure -- including grain mills, water pumps, and local roads -- as well as income-generating activities. It provided technical support to 4,032 community-based organizations in rural areas, benefiting around 763,000 people in poor rural areas (or 57 percent of the population of the rural communities covered by the program). Check out the full piece on The Huffington Post for more information on the Bank's work in Haiti and to engage in the discussion happening there. Yvonne Tsikata is the World Bank Country Director for the Caribbean covering Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago, in the Latin America and the Caribbean Region.
22 January 2010
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Double tragedy
I visited Haiti just before Christmas with Nik Win Myint from the WDR team. I talked to community groups in some of the slums that have been most ravaged by drugs and gang-related violence—Cite de Soleil, Martissant, Bel-air. Visiting a poultry farm in Haiti. Photos © Henriot Nader The people I met had great hope for the future—after decades of a debilitating cycle of poverty, violence and state inaction, they finally felt that things were improving. The young men in the pictures here had just started their own farm for chicken eggs, funded through small grants from the government. "Security is better. The police are better. We are still worried about the future, but this is the first time the state has done something for us. People in this community just need the chance to work, to get training" they said. Who knows how many of the people I talked to are still alive. Tens of thousands have died in the earthquake, and those who survive have lost family members, their houses, their possessions, their jobs. This would have been a tragedy at any time—it is more so at a period when the country seemed to be regaining hope and some confidence in the future. Nik Win Myint (left) and I in a community bakery. International aid is pouring into the country—and the immediate needs are humanitarian, to care for the hurt and desperation amongst survivors. Yet watching the faces on my TV screen and thinking about those I spoke to just a few weeks ago, I'm also struck by how important it is that this aid gives Haitians the chance to regain the hope and dignity which they were claiming before the earthquake struck. This will mean the international community sticking around for long enough after the initial crisis not only to feed and treat victims and help rebuild destroyed infrastructure, but also to get Haiti's fragile economy and institutions back on their feet. Not just giving people clothes and temporary shelter, but making sure they have an income at the end of it to start to rebuild their own lives. Not just rebuilding hospitals, schools and police stations, but making sure that the government has the means to run them. Not just rebuilding houses, but making sure that the poor do not have to live in the most vulnerable locations to natural disasters because they have no other access to land or property. Haiti needed more aid even before the earthquake—with gaps in funding for job creation, for agriculture and to support continued change for the better in the police and the justice system. Hedi Annabi, the UN SRSG who died in the earthquake, was struggling to persuade donors around the world to provide this funding. It would double the tragedy if this support is not now provided—for this is what is needed not only to paper over the current damage but to make Haitians less vulnerable to a similar disaster in future. As the BBC did this week, it is good to ask "What will happen in one year, or five years? Will this be the opportunity to remake Haiti or will it be a lost opportunity?" Streetsigns prepared by a youth group to improve their neighborhood.
22 January 2010
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Filling Another Need for Haiti - Information
As the Bank and others prepare their response plans for Haiti, it is worthwhile taking a moment to stress the importance of media and communication in the aftermath of the disaster, as well as in the more long-term post-crisis reconstruction period. In both post-conflict and natural disaster situations, donors focus on filling people’s basic needs: shelter, sustenance, medical care. But there is another basic need that people have in emergencies: information. People need to find out if their loved ones are safe, and if so, how they can communicate with them. They need to find out where they can access basic services. They need to find out if it is safe to go back to their homes, and if not, where they can stay. And in the longer term, they need to reconnect with others in society, to come together to rebuild a nation. Unfortunately, in many post-conflict and disaster situations, the media and communication sector is one of the last to be addressed in systematic fashion. Typically, communication interventions are inserted awkwardly into the reconstruction process, with purely tactical and/or expedient choices taking precedence over strategic decision-making. While this is to be expected in the immediate aftermath of a crisis, it tends to persist even well into the sustained period of reconstruction and recovery. As assessment teams begin to roll out and long-term plans are laid, donors have a chance to think strategically about the role of media and communications in Haiti’s recovery and longer-term development. This means not merely setting up emergency public information units, but thinking about the long-term impact of media such as emergency radio stations; how these stations and other crisis media can or should form a bridge to a future revitalized media sector; and how a revitalized media sector can support good governance and development for Haiti in the years to come. This may seem like a lot to digest, especially now while people are still dealing with the terrible reality of death and destruction. But donors are already considering long-term development issues as they prepare assessment and short-term stabilization teams. This is an area that should not be overlooked. For more information, see last year's CommGAP paper "Towards a New Model: Media and Communication in Post-Conflict and Fragile States" Photo Credit: United Nations Development Programme (on Flickr)
21 January 2010
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Disaster expert Francis Ghesquiere speaks on Haiti reconstruction
World Bank natural disaster expert Francis Ghesquiere will be leading the Bank contingent of a multilateral team — including staff from the UN and the InterAmerican Development Bank — that will go to Haiti in the next few weeks to conduct damage and reconstruction assessments in every major sector, including health, education, water, sanitation, electricity, and roads. Below, you'll find a short video interview with Francis Ghesquiere where he speaks about how assessments are done after natural disasters like the Haiti earthquake: "As we go about the reconstruction of Haiti, we will have to make sure the infrastructure that is rebuilt is resistant to earthquakes, but also to hurricanes and other hazards." More information about the assessment team can be found on the feature story: Bank Team Prepares for Damage Assessment, Recovery Plan. Francis Ghesquiere is the regional coordinator for disaster risk management for the Latin America and Caribbean Region at the World Bank. His team supports client countries in identifying and reducing their exposure to adverse natural events.
21 January 2010
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From Sumatra to Haiti, the importance of increasing government capacity in responding to disaster
In Indonesia, a national disaster management agency was set up in 2008 to serve as a guardian of disaster risk management. The agency's important role was clear in the aftermath of a West Sumatra earthquake in 2009. The unprecedented earthquake in Haiti and the massive destruction it caused reminds me of the significant destruction that resulted after the Aceh tsunami five years ago. The Haiti earthquake hit the country’s capital, Port-au-Prince, which is the center of government and economic activities. The combination of enormous damage on facilities and infrastructure, the collapse of the national government function, and the lack of preparedness and experience make it inevitable that the people of Haiti will rely on the international community for guidance and coordination. This situation is different from what happened in Aceh after the 2004 tsunami. At that time, although the devastation was also severe and affected a large part of Aceh, it did not affect the country’s capital city. The Government of Indonesia, which is located in Jakarta, remained fully functional and was able to coordinate the emergency response, disaster assessment, and reconstruction effort that followed. The government was also able to set up reconstruction agency in only a matter of months after the disaster. Looking back to those years, it seems that the Indonesia Government has since built a lot of capacity and gained more confidence in handling disasters and conducting post-disaster assessments. After the tsunami, the government’s effort to conduct a damage and loss assessment was largely supported by international partners. The tsunami assessment was a marking point for the government in utilising an established methodology and more systematic approach to assess damage and losses, as developed by the UN’s Economic Commission for Latin America and the Caribbean (ECLAC). When another major disaster happened in Jogyakarta in 2006 (pdf), the Government proved to be more proficient in conducting the assessment and still continues to develop the country’s capacity in disaster management, a skill which is very much needed in a country such as Indonesia that is prone to disasters. Disaster management laws were issued in 2007 and a national disaster management agency (BNPB) was set up in 2008 as a guardian of disaster risk management in Indonesia. BNPB’s role in responding to disasters was strongly demonstrated in the West Sumatra earthquake in 2009. As the appointed national agency for disaster management, it provided the overall coordination and worked very closely with provincial and local governments. The capacity of the BNPB to lead the assessment and their knowledge on the assessment method was evident. Clear guidance was provided to the team on the field situation, response plans, and on the expectations of government. Smaller group meetings based on different sectors were set up to have focused discussions on data and situation analysis. The local governments also made a huge contribution by providing and compiling data in a short time period from the various areas across the affected province. Strong knowledge, commitment, enthusiasm, and hard work are obviously exposed in the process. Being involved in the previous disaster has made me realize how well the capacity of the government has evolved during the last five years. It is evident that the Government of Indonesia has learned important lessons from past disasters in how to better respond when disasters strike, and it is continuously evolving – perhaps not yet to a maximal point, but has already reached higher ground. It also seems that the fruit of extensive efforts are now ripening. As I praise the Indonesian government, and as I remember how costly and destructive a disaster can be, I think it might be helpful to remind them that work still needs to be completed on mitigating future disasters – particularly as the country is located in the hot spot zone for earthquake. As the growing consensus says, “Disasters perhaps cannot be prevented, but the disaster’s damage and losses can be.” Photo courtesy John Orford under a Creative Commons license.
20 January 2010
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Helping Haiti through migration and remittances
A laudable measure that will benefit Haitians, more than any other aid and assistance, is the decision by the United States to grant them temporary protected status (TPS) for 18 months. This will allow about 200,000 Haitians currently residing in the US without proper documents to live and work here legally, without a fear of deportation. It would also allow them to send money home quickly and efficiently through formal remittance channels. Haiti receives between $1.5-1.8 billion in remittances each year (some estimates are even larger, over a half of its national income). If the TPS resulted in a 20 percent increase in the average remittance per migrant, we would expect an additional $360 million remittance flows to Haiti in 2010! What is more, if the TPS were to be extended once beyond the currently stipulated 18 months – the extension is almost certain to happen, judging by the history of extensions of the TPS for El Salvador, Honduras, Nicaragua, Somalia and Sudan – additional fund flows to Haiti would exceed a billion dollar over three years. That would be a billion dollar of financial help coupled with goodwill and advice, tailored to the needs of the recipient. Financial help in the form of remittances from family members abroad is always the first to arrive in times of distress. Remittances to Haiti this year will surge, as they have done whenever and wherever there has been a crisis or natural disaster (see paper). In the immediate term, there is a need to ensure that remittance flows to Haiti are not disrupted. In the medium-term, there is a need to leverage these flows for local and national development (without directly interfering with these flows). The challenge would be to tame a temptation on the part of the government and the donor community to treat remittances as a substitute for aid or public spending on rebuilding efforts, especially in communities where migrants’ relatives reside. According to official statistics about a million Haitians are living overseas, about a half of them in the US. Newspapers often report that a million Haitians live in the neighboring Dominican Republic. There is now a fear of mass migration from Haiti to the US and to Dominican Republic, and both countries are now tightening borders to prevent an influx of Haitians. This is not surprising, but this is paradoxical, like the proverbial giving-with-one-hand-and-taking-it-away-with-the-other. I should think the short-term surge in migration would subside rather quickly when Haiti begins to recover and rebuild itself.
19 January 2010
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Haiti earthquake: Out of great disasters comes great opportunity
A collapsed building in Port-au-Prince. Photo by IFRC/Eric Quintero under a Creative Commons license. The scale and magnitude of the earthquake in Haiti has shocked, saddened and horrified us all. But there is a silver lining to this great tragedy. Looking back in history, great natural disasters are often a catalyst for huge, positive change. The great fire of London in 1666 led to a massive rebuilding effort, better building regulations and, in the end, a safer, cleaner city that maintained the medieval street plan that is still visible, to some extent, today. The Wall Street Journal has an interesting discussion of how the impact of the 1755 earthquake in Lisbon led to the creation of a new metropolis with earthquake-proof buildings, wide thoroughfares and a sewer system. The massive reconstruction financing required after the great fire of Copenhagen of 1795 led to the creation, in 1797, of Kreditkassen for Husejere i Kjøbenhavn (The Credit Association of Copenhagen homeowners), the precursor of modern mortgage markets. The 2004 tsunami that hit Indonesia and the province of Aceh is a similar, recent catastrophe from which we can draw valuable lessons and some challenges in the long haul ahead in the massive reconstruction effort that will be needed to rebuild Port-au-Prince. The tsunami claimed about 167,000 lives and destroyed schools, houses, churches, roads and livelihoods. The Multi-Donor Fund (MDF) managed by the World Bank with contributions and guidance from 15 other international donor partners is considered by many a model for success. The greatest success of the MDF was the strong partnership with the communities, placing them front and center in the entire reconstruction effort. The biggest challenge today, however, has been the successful transition and hand-off of to the local authorities as well as a transition from a “pure” reconstruction effort to a longer-term sustainable and viable development strategy. So what are the lessons for the authorities in Haiti? By a somewhat tragic coincidence, the World Bank has just completed its Handbook for Housing Reconstruction after Disasters based on an in-depth assessment of the reconstruction effort after major disasters over the past two decades. While avoiding being prescriptive (each major disaster is unique) the Handbook has ten major principles that should be at the core of the reconstruction effort. These include putting in place early a reconstruction policy that is inclusive, equity-based, and focused on the vulnerable; having reconstruction policy and plans that are financially realistic but ambitious with respect to disaster risk reduction; and understanding that people affected by a disaster are not victims; they are the first responders during an emergency and the most critical partners in reconstruction.
17 January 2010
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Earthquake in Haiti: How to Help
Originally posted on the Youthink! blog: It is the worst catastrophe in Haiti's history: on January 12, a devastating earthquake scale struck near the capital, Port-au-Prince, killing thousands of people. The International Red Cross has said that 3 million people--nearly a third of Haiti's population--will need food, water and shelter for months to come. The earthquake, which measured 7.0 on the Richter scale, destroyed or seriously damaged houses, schools, and many of the city's major buildings including the National Palace, the Parliament, the Cathedral, the Ministries of Economy and Finance and Public Works, the Tax Office, the United Nations Stabilization Mission headquarters, and the World Bank’s office. The international community is rallying efforts to help the country deal with the aftermath of the earthquake. Here are a few places where you can learn more about the ongoing efforts, and how you can help: American Red Cross World Food Programme Mercy Corps UNICEF International Rescue Committee Doctors Without Borders (If you would like to respond to this post, please leave your comments on the original post on Youthink!)
15 January 2010
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