January 17, 2014
Writing in Boston Review yesterday, CEPR Research Associate Jake Johnston looks back at the international community’s efforts to provide housing to those displaced by the earthquake, finding that:
By September 2013, nearly four years after the earthquake, only 7,500 new homes had been built and 27,000 repaired—an incredibly small achievement when set against the billions of dollars and grand plans put together by the international community in the wake of the catastrophe.
The number of displaced persons is down to 200,000 from its 1.5 million peak, according to the U.N. But only 25 percent of that decrease has anything to do with official programs to provide housing. Many were given a paltry subsidy and evicted from their camps. The highest profile and most visible camps were closed down, but those tucked in alleys, out of the view of the convoys of aid workers’ vehicles, remain forgotten. Fifty-five thousand Haitians who moved to areas known as Canaan, Jerusalem, and Onaville were recently removed from the “official” list of Internally Displaced Persons camps. Though those who were pushed out of the camps simply returned to their old homes, the international community claims progress….In fact, if another quake happened today, they’d be more likely to die than they were living under tents in clearings.
But how this came to be wasn’t simply “the problems of reconstruction in a poor country,” but rather what happens when political priorities are put before the needs of those on the ground. The Interim Haiti Reconstruction Commission, led by Bill Clinton, was formed to coordinate all the various aid projects and ensure they were aligned with the Haitian government’s goals, but instead, Johnston writes:
The commission’s formation was handled not by the Haitian government, but by the staff of the Clintons, mainly Cheryl Mills and Laura Graham, as well as a team of U.S.-based private consultants. The commission’s bylaws were drafted by a team from Hogan Lovells, a global law firm headquartered in Washington, D.C. A team from McKinsey and Company, a New York based consultancy firm, handled the “mission, mandate, structure and operations” of the commission. Eric Braverman, part of the McKinsey team, later went on to become the CEO of the Clinton Foundation.
According to Jean-Marie Bourjolly, a Haitian member of the commission, the body’s “original sin” lay in concentrating the decision-making power in the Executive Committee of the Board, made up of Bill Clinton and then–Haitian Prime Minister Jean-Max Bellerive.
Six months after its formation, Bourjolly wrote to Clinton and Bellerive, warning that by “vesting all powers and authority of the Board in the Executive Committee, it is clear that what is expected of us [the rest of the Board] is to act as a rubber-stamping body.” Another commission staffer told Johnston that many projects were approved by the commission simply because “they were submitted by USAID and State” and “that as long as USAID is submitting it and USAID is paying for it,” it should be approved.
The commission never lived up to its billing, silently closing its doors when its 18-month mandate ended in October 2011. Further, Johnston writes:
little remained of the grand plans to build thousands of new homes. Instead, those left homeless would be given a small, one-time rental subsidy of about $500. These subsidies, funded by a number of different aid agencies, were meant to give private companies the incentive to invest in building houses. As efforts to rebuild whole neighborhoods faltered, the rental subsidies turned Haitians into consumers, and the housing problem was handed over to the private sector.
Gabriel Verret, the former Executive Director of the commission, told Johnston:
“Now, we have a return to the status quo, the same situation that was there before the earthquake, with no coordination and each project done haphazardly.”
One of these projects, which was initially approved by the Clinton commission, was USAID’s permanent shelter program, which aimed to put a roof over the head of as many of those displaced as possible, as quickly as possible. Its original goal was to build 15,000 houses, with the majority of them built near Port-au-Prince, where the earthquake damage was the greatest. Johnston continues:
This June, the U.S. Government Accountability Office (GAO) issued a report revealing that only 900 of those 15,000 homes had been built. The overall goal has been reduced to 2,600. At the same time, costs increased from $53 million to over $90 million. The GAO found that the program suffered from a fatal flaw: original estimates had drastically low-balled how much the houses would cost. The calculation of 15,000 planned houses was based on an estimate of each costing around $8,000. With the cost of preparing the land, the total cost per house was over $33,000.
Johnston speaks with members of USAID’s Shelter Team, assembled after the earthquake. The plan was to invest the majority of resources in the most damaged areas and to utilize local construction teams and local materials to keep costs down. But, as Johnston reports, this isn’t what ended up happening:
The contracts ended up going not to small local companies but to large international ones. Thor Construction, based in Minnesota, received $18 million, and CEMEX, a Mexican company, got over $7 million. Another $35 million went to two Haitian-American firms based in Maryland for environmental assessments, construction management, site preparation, and other associated projects.
Outsourcing the construction drove the price up, since international companies had to fly in, rent hotels and cars, and spend USAID allowances for food and cost-of-living expenses. To incentivize working in Haiti, the U.S. government also gave contractors and employees “danger pay” and “hardship pay,” increasing their salaries by over 50 percent. With all these costs included in contracts, it’s not hard to see how prices ballooned. Bill Vastine, a long-time contractor and member of the Shelter Team, said, “if the American people saw the true cost of this, they’d say ‘you’ve got to be out of your mind.'”
But perhaps the biggest change was that instead of investing the majority of their resources into damaged communities, 75 percent of the houses would now be in the Northern Department, on the other side of the country where the Caracol Industrial Park had just been built. The industrial park, built with hundreds of millions of dollars from the international community, had become the face of Haiti’s reconstruction and the State Department was committed to putting its resources there, rather than back in Port-au-Prince. To date, just 750 houses have been built near the park, and “as the four-year mark comes and goes, the first families are just now starting to move in. Meanwhile, back in Haiti’s capital, at least 200,000 quake victims face another year living under tattered tarps.”
You can read the full article here.