Haiti's economic and social development continues to be hindered by political instability, increasing violence and unprecedented levels of insecurity, which exacerbate fragility. Haiti remains the poorest country in the Latin America and the Caribbean (LAC) region and among the poorest countries in the world. In 2021, Haiti had a GNI per capita of US$1,420, the lowest in the LAC region, which averaged US$15,092. On the UN's Human Development Index, Haiti ranked 163 out of 191 countries in 2020.
Amid the lingering political and institutional crisis, high vulnerability to natural hazards, coupled with violent gangs vying to gain control over business districts, the economy contracted for three consecutive years by 1.7% in 2019, 3.3% in 2020, and 1.8% in 2021.
In such a context, past gains in poverty reduction have been undone. While more recent data to measure poverty are unavailable, the lack of improvement in critical dimensions needed to reduce poverty negatively affected household incomes across the country. For example, by December 2021, 65 percent of households experienced a deterioration in their incomes compared to the years before the pandemic, indicating that an already high poverty rate has most likely risen. In line with these results, estimations done by the Bank's team show that in 2021, poverty likely increased to 87.6 percent ($6.85/day), 58.7 ($3.65/day) and 30.32 percent when using the extreme poverty line ($2.15/day). Haiti is also among the countries with the greatest inequality in the region. This is largely due to two thirds of the poor living in rural areas and the adverse conditions for agricultural production, creating a welfare gap between urban and rural areas.
Haiti remains one the most vulnerable countries world-wide to natural hazards, mainly hurricanes, floods, and earthquakes. More than 96 percent of the population is exposed to these types of shocks. On August 14, 2021, an earthquake measuring magnitude 7.2 on the Richter scale, struck the southern region of Haiti, an area where approximately 1.6 million people live. The earthquake's epicenter was recorded approximately 12 km north-east of Saint-Louis-du-Sud, about 125 km west of the capital Port-au-Prince.
The direct human toll of the earthquake resulted in 2,246 deaths, 12,763 injured and 329 missing in the three departments of the Southern Peninsula. In terms of infrastructure, 54,000 houses were destroyed while 83,770 other buildings were damaged, including schools, health facilities and public buildings. At the government's request, the World Bank worked with development partners to produce a post-disaster needs assessment (PDNA) to estimate the extent of the damage and to chart a path to recovery. The results of the assessment of the effects of the August 14, 2021, earthquake indicate a total of more than US$1.6 billion in damage and losses, or 11% of GDP. The same region was impacted in 2016 by Hurricane Matthew, which caused losses and damages estimated at 13 percent of the 2015 GDP, and the 2010 earthquake that killed approximately 250,000 people and decimated 67 percent of the country's GDP. Climate change is expected to increase the frequency, intensity, and impacts of extreme weather events, and Haiti, while making some progress, still lacks adequate preparedness and resilience-building mechanisms.
On the human development front, after three years with no laboratory-confirmed cases, Haiti is experiencing a new outbreak of cholera, with a several confirmed cases in some populated areas of the capital cities. Improvements in human capital have therefore stalled and, in some cases, deteriorated since. Infant and maternal mortality remain at high levels, and coverage of prevention measures are stagnating or declining, especially for the poorest households.
According to the Human Capital Index, a child born today in Haiti will grow up to be only 45 percent as productive as they could be if he or she had enjoyed full access to quality education and healthcare. Over one-fifth of children are at risk of cognitive and physical limitations, and only 78 percent of 15-year-olds will survive to age 60.
This project will train, provide technical advice and seed capital to 80 families in Cap-Haitien, reducing poverty (85% of population) and unemployment levels (15.7%) in Haiti, preventing immigration mostly to Dominican Republic, USA, Canada, etc. Around 85% of the businesses in Haiti are informal and have no access to credit, most of them survival type of micro businesses.