In a recent opinion article in the Washington Post , Columbia University professor Jeffrey Sachs proposed creating a multi-billion dollar “Haiti Recovery Fund,” using contributions from the international community, to support the reconstruction of Haiti.
Professor Sachs is correct that addressing the post-earthquake devastation in Haiti will be a multi-billion-dollar project, and that it needs a very sophisticated level of coordination. Nevertheless, the reconstruction effort should be driven by a combination of international funding to subsidize basic needs, and market based solutions that address the daunting Haitian challenges ahead and reflect a high level of participation and commitment from the private sector. In the long run, private sector investment will indispensable in reaching and sustaining the levels of development that have eluded Haiti and that its people deserve.
Reading Sachs’ piece, I thought about an old professor of mine, Lauchlin Currie, a Canadian-born economist who worked in Colombia’s National Planning Department in the 1970s. He was one of the architects of the Pastrana administration’s “Four Strategies” plan, which included a very successful emphasis on using the housing sector to stimulate the economy and lead economic development.
From the bleak photos out of Port-au-Prince over the past week, it’s clear that once international relief organizations have a chance to address immediate needs of medical care, clean water and food, construction will be priority number one. Over a million Haitians are now homeless, and government agencies, schools, hospitals and other centers of civic life were destroyed. As Lauchlin Currie’s strategy showed, focusing on the construction and housing sector can be highly effective in creating jobs, revitalizing financial services such as mortgage providers, establishing domestic and international supply chains and, of course, improving quality of life as people move into safe new homes.
In recent years we’ve seen remarkable progress in a formerly failed state, Rwanda, which can be credited in large part to development of its private sector and an understanding that a nation’s long term well-being depends on dignity and self-reliance – factors that, in the words of Michael Fairbanks, a leading strategic thinker on international development, can’t be bought with “checkbook development.” The World Bank’s annual “Doing Business” report singled out Rwanda as one of the world’s fastest-reforming nations. It would be a giant step forward if Haiti were to follow Rwanda’s example and take this disaster as an opportunity to create a private sector that pulls the country out of 200 years of solitude.
Last October, former U.S. president Bill Clinton led a mission of international investors to Haiti in an effort to interest them in business development there. Haiti will need all the help they can provide (and then some), but hopefully, in the years ahead, we will find that private sector solutions for poverty – along with necessary coordination with the public sector – will make Haiti stronger than ever before.
