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Testimony of Adolfo A. Franco
Assistant Administrator, Bureau for Latin America and the Caribbean
United States Agency for International Development
Before Committee on Foreign Affairs
U.S. House of Representatives
Subcommittee on the Western Hemisphere
Tuesday, March 13, 2007
"Haiti's Development Needs"

Mr. Chairman, Members of the Committee, it is both an honor and a privilege to have the opportunity to appear before the Subcommittee on the Western Hemisphere of the House Foreign Affairs Committee.

Haiti is the poorest country in the Western Hemisphere. Its per capita annual income is less than $520 and 80% of the population lives in poverty. Unemployment and underemployment remain major problems; more than two thirds of the Haitian labor force do not have formal jobs. Out of every ten children who enter primary school, only three will complete 6th grade. One out of every two adults is illiterate. A Haitian boy born today will on average die by the age of 51.

Yet despite this bleak picture there is a reason for hope. This is a particularly important juncture in Haiti's history. A rare combination of factors - new leadership, a resumption of constitutional governance, and international support - has the potential to generate a turnaround in Haiti's economic fortunes and improve the well-being of the Haitian people.

Last year Haiti held presidential, parliamentary and local elections - all of them judged free and fair by international observers. President Préval has a broad popular mandate. He has spoken positively about the importance of business growth, including foreign direct investment, as a way to pull the country out of poverty. President Préval has welcomed Haiti's business community as a partner in development, and the business community has expressed its support. The government's willingness to undertake reforms has caught the attention of the international donor community. For example, the International Monetary Fund has approved a Poverty Reduction and Growth Facility and the Inter-American Development Bank has a proposal to cancel over $400 million of Haiti's debt before its Board. On the security side, both Haiti's leadership and the UN mission in Haiti have in recent months been more effective in taking action against the gangs and other criminal elements in Haiti. These events provide a window of opportunity to reverse the cycle of violence and instability. In collaboration with the international community, we are committed to help the Haitian people during this critical time.

U.S. Assistance Past and Future Action

The United States continues to be Haiti's largest bilateral donor. From 2004 to 2006, the United States provided over $600 million in assistance to Haiti. U.S. assistance, primarily humanitarian in nature, has played an important role over the past two years and helped lay the groundwork for a peaceful transfer of power to a democratically elected government. At the July 2006 Donor conference, the U.S. pledged $210 million of the $750 million pledged by all donors for the July 2006- September, 2007 period.

USAID funding provided over 600,000 short-term jobs for underserved segments of the population, and rebuilt areas devastated by Tropical Storm Jeanne in September 2004. Ongoing food program provide livelihood support for some of the poorest segments of the population. Currently 335,000 people receive supplemental food. The U.S. Government sponsored program ensures access to basic health care to approximately 47% of the population in Haiti. USAID supports civil society organizations and fund over 120,000 loans to micro entrepreneurs. Working with the Haitian Government and other donors, USAID helped improve economic governance, and was able to initiate reforms in the justice sector, including in the critical area of pre-trial detention. The United States contributed $34 million for presidential, municipal, and local 2006 elections, as well as support for political parties, media, and voter education.

Priorities for Stability and Growth

The United States works with the Haitian government and the donors to help build a stable and well-governed state that is first, responsive to the needs of its people, and second, lays the foundation for long-term economic progress. As we look ahead, we see dual priorities -- for stability and for growth. Continued instability threatens growth objectives, and growth is necessary for permanent stability to take root. In addition, donors need to consider both short and long-term needs.

The Préval administration has stressed the importance of visible, quick impact projects, especially in the poorest slums that are both underserved and that are the source of destabilizing crime and violence. An important element of the equation is short-term job creation and public works that address community needs - a critical step in enhancing Haiti's prospects for a stable future.

From the longer-term perspective, we are committed to strengthening the capacity of Haiti's government institutions. We believe that enhancing the effectiveness of Haiti's executive, legislative and local government branches is essential to good governance. We hope to reinforce government leadership in improving the conditions that most directly affect daily life in Haiti, such as social services and access to justice, and in creating a climate where investors will be willing to take risks and bring jobs to Haiti.

Short-Term Employment and Community Infrastructure

We give high priority to the immediate need to reach marginalized and troubled urban slum communities, providing jobs and tangible improvements in the quality of life. Our programs will aim to reach unemployed youth with opportunities that demonstrate that there are clear alternatives to violence.

Over the past two and a half years, USAID has supported programs that work with community groups in violence prone neighborhoods to identify and quickly fund small, high impact projects that engage the community and build citizen confidence and trust. USAID helped to reduce political tensions in several crisis spots through community projects in Port-au-Prince, Gonaives, Saint-Marc, Petit Goâve, Cap Haïtien, and Les Cayes, with 860 small grants valued at $18.2 million. Also during this period, USAID funded a Clean Streets program that employed youth to collect more than 300,000 cubic meters of solid waste in the Port-au-Prince area. The U.S. Government announced on February 1 an additional $20 million for a program in Cité Soleil, one of Haiti's most dangerous neighborhoods and a persistent source of instability. This initiative aims to improve access to police and justice, strengthen local governance, provide vocational training, and create jobs through infrastructure and public works projects.

The United States Government has expanded these activities through a program that offers short-term employment while at the same time builds the foundation for longer term community improvements through extensive public works. This new conflict mitigation jobs program emphasizes short-term employment by implementing community-identified, labor-intensive, infrastructure rehabilitation activities in these same cities. These improvements will include both productive infrastructure, such as roads and drainage, and social infrastructure such as clinics and schools. This program will also work with local and national government entities so that they can better serve these communities. In addition, we plan to expand a program of job-relevant training and to work to link youth from slum areas with durable employment opportunities.

Democracy Building

Haiti has passed a turning point. The Government of Haiti can now consolidate its restored institutions of democracy. USAID assistance will facilitate lasting improvements in key sectors of the government that will both enhance government legitimacy and create conditions for growth.

The United States Government is already working with key ministries to help the Haitian Government fight corruption, assume more fiscal responsibility, and reach out to its citizens. Since December 2004, the United States Government has funded and continues to fund advisors to provide technical and managerial assistance to several cabinet Ministries. Approximately 3.4 million textbooks were subsidized to reduce back-to-school expenses for Haitian families and to allow the poorest families access to affordable school materials. USAID's program is helping increase transparency and internal controls through an Integrated Financial Management System that connects a network of 41 major government and public service sites, in order to promote internal controls and transparency in government spending. Support in the area of economic governance helped the Ministry of Finance establish transparent budgets and a framework for continued sound macroeconomic performance. We plan to continue these types of programs to enhance democracy within the executive branch.

A priority for U.S. assistance is to help Haiti build a justice system that is effective, independent and impartial. Within the past two years, USAID has helped Haiti increase access to justice by improving court management and operations. USAID supported training for over 800 judges, prosecutors, court clerks and other judicial personnel. The Agency supported the development of 82 standard rules of practice for Justices of the Peace and introduced them throughout the country through direct assistance to some courts and leveraging assistance of other donors in addition USAID helped the judicial police adopt standard procedures for criminal investigations. The Agency has also begun work to reduce pre-trial detention by providing legal assistance to more than 300 pre-trail detainees by a Port-au-Prince court.

USAID will continue to help Haiti strengthen the capacity of courts, legal defense and prosecution and continue efforts to reduce length of time spent in pre-trial detention and percent of prison population detained awaiting trial. Our program will help increase oversight of the justice function to detect and sanction corruption and poor performance, modernize procedures, improve and standardize justice service delivery at all levels; rehabilitate deteriorated courts and facilities; and expand legal education and defense for the indigent.

USAID plans to help Haiti's new legislators to reach out to citizens and function effectively. Agency assistance will include workshops in such topics as the roles and functions of Members of Parliament and their staff, rules and procedures, constituent outreach and relations, and accountability and transparency. Following recently held municipal and local elections, our program will strengthen the capacity of local government institutions to deliver services with citizen input through a program of technical assistance and training. Representative local governments will ensure responsiveness to citizens at the local level.

Human Rights

USAID will continue to provide assistance to victims of organized violence through training of human rights organizations, advocacy campaigns, and the documentation of abuses. The Agency will build upon partnerships with multilateral, international, and civil society organizations and local communities to combat trafficking in persons, including children in domestic servitude. Support for this effort will continue with a program that focuses on services to children trafficked into domestic service in Haiti and into the Dominican Republic, as well trafficking prevention measures and steps leading to the arrest and prosecution of traffickers.

Economic Growth

The United States remains Haiti's largest trade partner, with bilateral trade totaling over $1.3 billion in 2006. The Haitian Hemispheric Opportunity through the Partnership Encouragement Act of 2006 (HOPE Act) provides new trade benefits to Haiti to help support export-led growth. If the President certifies that Haiti is eligible to receive benefits under HOPE, USAID will be supporting its implementation through technical assistance to help the Government of Haiti comply with the provisions of the Act.

Our assistance is helping to improve market linkages for small-scale farmers, with crops such as mangos, cacao and coffee, yams and peppers, and for small-scale producers in non-agricultural sectors (such as handicrafts). For example, with USAID assistance, mango growers identified a new market for organic mangos and shipped 6,000 lbs to U.S. buyers. Coffee farmers shipped eight containers of Haitian Bleu and Fair Trade coffee to the U.S., Europe and Japan. Farmers have planted more than 42,000 grafted citrus and mango trees. Eighteen micro-finance institutions and 20 credit unions have been strengthened and their combined loan portfolio now exceeds 120,000 clients. Many of our agricultural programs have the additional benefit of introducing better natural resource management techniques which help prevent further degradation of the country's hillsides.

U.S. assistance supports the Haitian Government's efforts to create an environment for trade and investment-driven employment generation. Through our support for Haiti's new Investment Facilitation Center, we are poised to help Haiti recast the regulations that affect business operations and help Haitians to promote trade and investment.

This year we intend to initiate new environmental activities as part of a strategy to reduce the ongoing degradation of Haiti's natural resource base, expand livelihood options, and reduce population vulnerability. We have just completed an assessment of Environmental Vulnerability in Haiti and are reviewing the findings and recommendations as the basis for this new strategy. We are looking at such areas as better management of critical watersheds and sustainable natural resource management. We are also exploring new ways to further improve rural livelihoods, including production and marketing of high value crops using a market-driven approach. The activity would involve strong collaboration with the Ministries of Environment and Agriculture, other donors, and, very importantly, the private sector.

Health and Welfare of the Haitian People

In the health sector, we are addressing the most pressing health concerns: malnutrition, child health, reproductive health and HIV/AIDS. Through a USAID-funded network of NGO and Government health service facilities in ten departments, roughly 47% of Haitians have access to basic health care through 100 NGO health clinics and 27 of 30 Haitian Government health clinics funded by the U.S. government. Providers offer a package of services including immunization, nutrition, maternal and reproductive health care, ante-natal care, and TB detection. Every year U.S. funding is used to immunize approximately 50,000 children under the age of one. Last year, USAID helps the Ministry of Health expand to underserved areas by reactivating essential health services at 27 public sector sites-reaching another 1.5 million Haitians. A new focus of the program promotes a more pro-active role in health services management for the Ministry of Health at the departmental level. We plan to continue these activities, with expansion to underserved areas.

The United States Government assists the Ministry of Health and civil society NGOs to support persons affected by HIV/AIDS. Through the President Emergency Plan for AIDS Relief (PEPFAR), the U.S. Government has provided support for the counseling and testing of over 193,600 people, care and support for 77,200 people, and treatment for nearly 8,000.

U.S. supported programs are improving education at 450 primary schools, and 150,000 children and youth have benefited from this work. Our programs offer children in the poorest neighborhoods help with tuition payments, provision of books, and other school fees. In addition, we provide a non-formal education program for out-of-school youth emphasizing literacy, basic education, and vocational training in addition to a special emphasis emphasize on educational opportunities for young children in the urban slums.

Conclusions

Over the next year, we will give priority to expanding development and humanitarian programs in the poorest and most violence-prone neighborhoods of Port-au-Prince and other towns. USAID will also implement projects in key sectors - such as agriculture and natural resources, health and education. We will work to help strengthen the executive, legislative, and judicial branches of government which will enable an environment for private sector expansion. By doing so, the United States will support the Préval administration in its efforts to establish an environment for long-term stability and economic recovery.

The United States is using its wide-ranging assistance resources to help Haiti move beyond its history of endemic poverty and political instability. The Administration does not underestimate the challenges involved in achieving stability and a permanent economic turnaround. It will take time and patience and sustained U.S. Government assistance. Yet in Haiti today there is a climate of hope, and sustained progress is within our grasp.

Mr. Chairman, this concludes my statement. I welcome any questions that you and other Members of the Subcommittee may have for me. Thank you.