Foreign assistance played a critical role in the economy. As the poorest country in the Western Hemisphere, Haiti was the recipient of economic assistance from numerous multilateral and bilateral development agencies and more than 300 nongovernmental foreign organizations. Some analysts went so far as to call the development community in Haiti a shadow government because overseas funding contributed as much as 70 percent of spending on economic and social development and 40 percent of the national budget. This situation was largely a legacy of the Duvalier governments, which conserved spending on development projects by soliciting generous foreign-aid commitments. Nevertheless, per capita foreign economic assistance to Haiti continued to be well below the level of assistance in most other Caribbean and Central American nations, as a consequence of the government's weak commitment, minimal counterpart funding, ineffectual public institutions, and history of corruption.

The United States was the most important source of bilateral economic assistance, and it was the only country that maintained a resident aid mission. United States economic assistance to Haiti began in 1944, only three years after the last economic advisers of the occupation departed. This assistance ended when United States president John F. Kennedy terminated all but humanitarian aid to the François Duvalier government in 1963. Consequently, Haiti did not participate in the Alliance for Progress (the Latin American development program initiated under the Kennedy administration and continued under the administration of Lyndon B. Johnson). United State assistance resumed in 1973 under Jean-Claude Duvalier, and it continued until January 1986, a month before the end of the Duvalier era. The United States restored aid in unprecedented amounts three weeks after Duvalier's exile, but the administration of President Ronald Reagan again severed nonhumanitarian aid flows after the electoral violence of November 1987. Development assistance was resumed in the late 1980s, but it continued to be tied to progress toward fair elections.

AID's major goals in Haiti were to improve rural conditions through soil conversion, agro-forestry, and watershed management to augment the country's human resources through increased nutrition, family planning, and educational opportunities and to foster economic policy reform aimed at private-sector development and export promotion. AID also pursued narcotics interdiction, migration control, and political reform. In 1982 AID began to channel an increasing percentage of its assistance through nongovernmental organizations rather than through Haitianministries. The United States had legislated this policy shift through the 1981 Foreign Assistance Act. Canada, West Germany and other foreign donors also decided to circumvent government agencies in favor of nongovernmental organizations. This approach proved so much more efficient and effective that, by the late 1980s, AID distributed all of its humanitarian aid through a network of nongovernmental institutions.

The Inter-American Foundation an 1000 nd the Peace Corps also supported the United States development effort in Haiti. The Peace Corps entered the country in 1983, after more than a decade of negotiations. Political instability in 1988 and 1989, however, led to the dismissal of the Corps' volunteers. Other foreign donors included Belgium, Canada, France, Israel, Italy, Japan, the Netherlands, Switzerland, West Germany, and Taiwan.

Multilateral development agencies underwrote most major infrastructural projects, and they financed most payment shortfalls during the 1970s and the 1980s. The IMF was the most influential multilateral agency in the country. Since the early 1950s, Haiti had signed more than twenty standby agreements--more than any other member country--with the IMF. The IMF in 1988 made Haiti a test case for its Enhanced Structural Adjustment Facility, a special financing arrangement reserved for only the poorest countries. The World Bank, the supplier of one-quarter of multilateral aid in the late 1980s, lent extensively for highways, electricity, education, institution building, and policy reform. Beginning in the early 1960s, the IDB approved more than US$300 million for improved irrigation, rural water systems, public health, and road construction. Other multilaterals included several other United Nations (UN) agencies, the European Economic Community, the Organization of American States, and the Organization of Petroleum Exporting Countries.

A 1985 survey of nongovernmental organizations in Haiti revealed that one-third of these organizations had arrived in the country before 1960. Many had come in response to Hurricane Hazel in 1954. Nongovernmental organizations reportedly donated as much as US$65 million in annual assistance, food aid, other goods, and project financing.

Some Haitian officials complained about the lack of coordination among nongovernmental organizations. Partially in response to this criticism, AID in 1981 financed the creation of an umbrella nongovernmental organization, the Haitian Association of Voluntary Agencies (HAVA), to share ideas, technology, and lessons learned. By 1989 HAVA included over 100 members.

The case for supporting Haiti's economic development was indisputable. Haiti had the potential for development. The government and the urban elite had failed, however, to tap the strengths of the nation's hard-working people, except in an exploitive fashion. Development problems in Haiti were, in many ways, political rather than economic. Politics exacerbated the country's economic and ecological problems, but the resourcefulness of the people and the prospect of political change provided some hope. The many small successes of the hundreds of nongovernmental organizations that worked with rural residents to improve their status was proof that better economic management and determined efforts could make a difference.

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Compared with research on Haiti's history, politics, and security, the volume of literature on the nation's economy is modest. Nonetheless, the small group of scholars that concentrate on Haiti are dedicated and well-informed. Many of the most important studies on the economy in recent years have been funded by AID in Port-au-Prince, notably Agriculture Sector Assessment: Haiti, by Marguerite Blemur, et al. "Land Tenure Issues in Rural Haiti," by Peter Bloch, et al. and Haiti: Country Environmental Profile, by Marko Ehrlich, et al. Other major works on agriculture include Mats Lundahl's The Haitian Economy: Man, Land, and Markets, which previously appeared in French. "Foreign Assembly in Haiti," by Joseph Grunwald, et al., and Le Système Bancaire Haïtien: Fonctionnement et Perspectives, by Charles A. Beaulieu, are the definitive works on their respective topics. More general publications that merit recognition are Brian Weinstein and Aaron Segal's Haiti: Political Failures, Cultural Successes and Simon Fass's Political Economy in Haiti. Haiti's Future, edited by Richard M. Morse, reveals the views of twelve 603Haitian n leaders on the post-Duvalier era. The Bank of the Republic of Haiti publishes the most current available statistics through its annual reports and monthly bulletins. The Ministry of Economy and Finance's Haitian Institute for Statistics and Information (République d'Haïti, Ministére del l'Economic et Des Finances) provides the most comprehensive data by means of Recueil des Statistiques de Base and other publications. The World Bank, the IMF, AID, and the IDB compile the best data on Haiti outside the island. (For further information and complete citations, see Bibliography.)

Data as of December 1989