Haiti 

Haiti country policy

Policy established 20 October 1993

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Country class: 7

Haiti country facts

Atradius DSB  Economic Research
Country Report last updated :  6 February 2008
Country :  HAITI 

Political Situation
Structurally Unstable

Head of state
President René Préval.

Form of government
Coalition headed by the Lespwa-party.

Internal Economic Situation
Despite Some Recovery, Very Weak

General situation
Political instability, periods of suspended aid/sanctions (1991-1994; 2001-2004) and natural disasters have delivered Haiti the least developed economy of the western hemisphere. Since 2005 modest recovery as political instability lessened and foreign aid was resumed. The economy is originally based on agriculture but output (coffee, sugar) declined over the years, leaving (informal) services as the mainstay of income and employment. Strong decline of inflation to < 8% p.a. mid-2007. Very large corruption: 177th  out of 179 of the TI index. Rudimentary banking sector with low level of intermediation and weak regulation/supervision. Highly dollarized economy. Tourism is hindered by poor infrastructure. 
 
External Economic Situation
Very Weak

Main sources of foreign exchange
Foreign financial support, workers’ transfers (20% GDP), garments, mangos.

Main foreign markets
United States (80%), Dominican Rep. (8%), EU (4%).

Main expenses of foreign exchange
Food (30%), industrial products (27%), fuel (22%).
 
Balance of payments  
Duty free exports of clothes to the USA encourage local exports. Wide trade deficits are financed by workers’ remittances ($1.38 bn in 2006) and external grants. Negligible FDI-inflow.