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Foreign Economic Relations

The World Economic Forum ranked Haiti last in its 2003 Global Competitiveness Report. Thus, Haiti's role in the global economy often has been confined to receiving foreign aid. The trade balance is negative, with imports in the order of US$ 1 000 million, while exports amount to only US$ 300 million. On the whole, however, the balance-of-payments deficit is not that great, thanks to transfers from émigrés and resources from external aid. In 1969, over 1.5 million Haitians lived outside the country, mainly in the Dominican Republic and the United States. Remittances from emigrants, particularly those living in North America, currently estimated at around US$ 800 million per year,6 which amounts to a little under US$ 100 per capita, represent an indispensable contribution to the survival of many families, as well as to the country's balance of payments.

The United States has been the leading donor to development in Haiti and plays a vital role in Haiti's economy. Haiti does maintain active membership in a variety of multinational economic organizations, including the International Coffee Organization, Latin American Economic System, and Caribbean Community and Common Market. Haiti also is a signatory to the Cotonou Convention?an economic community seeking to foster trade among African, Caribbean, and Pacific countries.

Haitian imports totaled nearly US$1.1 billion in 2004. Total imports from the United States are nearly 10 times the value of imports from any other country. In 2002 Haiti imported US$641 million worth of commodities from the United States. Other significant sources of imports include the Dominican Republic, Colombia, Trinidad and Tobago, and Japan. Haiti's primary import items are food, fuels (including oil), machinery, and manufactured goods. In 2004 Haiti's exports totaled an estimated US$338.1 million, with about US$270 million of that revenue coming from exports to the United States. Other major export partners include the Dominican Republic and Canada. Assembled manufactures, coffee, edible oils, cocoa, and mangoes compose the majority of Haiti's exports.

Haiti annually has a large trade deficit. In 2004 the country had a negative trade balance of nearly US$662 million. In 2003 Haiti's balance of payments was negative US$4.6 million. Annually, Haiti's large trade deficit is partially offset by transfers received, including international aid.

Haiti's total external debt surpasses US$1 billion. In 2004 it reached an estimated US$1.2 billion, an amount equal to one-third of its gross national product. Following the promising democratic election of Aristide in December 1990, many international creditors responded by canceling significant amounts of Haiti's debt, bringing the total down to US$777 million in 1991. However, fresh disbursements of aid throughout Aristide's presidency swelled the amount of debt to more than US$1 billion by 1999.

There has been very little foreign investment in Haiti over the past 20 years. Development aid and loans have been the only consistent source of outside capital. In order to encourage foreign investment, the government approved a 15-year "tax holiday" for all foreign businesses that invest in Haiti.

Between 1999 and 2004, no new foreign aid disbursements were made to Haiti because political instability made it unlikely that aid would be distributed properly. According to a World Bank report published in 2004, Haiti requires more than US$1.3 billion in aid for 2005 and 2006. In July 2004, a donors' conference awarded Haiti more than US$1 billion in pledged aid for 2005 and 2006. The United States pledged US$230 million in aid through fiscal year 2006.

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Page last modified: 02-08-2011 16:44:41 ZULU