Violence also kills Haiti’s economy

The wave of violence who currently lives Haiti is having enormous consequences on the economy of the country and, in light of this, experts warn that the challenges in this regard are increasing, despite the fact that 2024 had begun showing signs of a timid improvement compared to the previous year.

According to the Haitian Institute of Statistics and Informatics (IHSI, for its acronym in French), international reserves showed some improvement, although on a low base; customs collections had increased by almost fifty%, The exchange rate showed relative stability and the year-on-year evolution of inflation was at 20.9% last January, compared to almost fifty% in the same month of 2023.

But the escalation of violence has overturned those figures and, in the opinion of the vast majority of experts, who already raised pessimistic forecasts for the local economy (fifth year of negative growth, inflation and increase in exchange rates and the cost of life), economic challenges increase.

Haiti is the poorest country in the Americas and has many difficulties in attracting investment and generating trust. This is the context in which the national crisis has been worsening for some time: the price of the dollar has tripled in the last ten years, the economy uses the US currency as a reference with consequences such as cycles of deflation and inflation that feed on each other, and there is very low purchasing power of the population.

Furthermore, the economic structure is based on cheap labor, and remittances from the Haitian diaspora constitute the first source of income for the Gross Domestic Product (GDP), with the export of textile products in second position.

Haiti has also faced challenges such as paying for the call “debt of independence”or the compensation to the French which, according to the newspaper ‘The New York Times’ today would be between US$ 21,000 and US$ 115,000 million, if the investment potential of these resources is taken into account, or the American occupation in 1915 with the loss of public and private assets.

The weight of violence and migration on the economy

A climate of peace, political stability and security is necessary for a country’s economy to move forward, but in Haiti the opposite is true, a situation that has worsened even more since the escalation of violence began at the end of February.

Today insecurity is unprecedented: more than 80% Port-au-Prince is dominated by armed gangs, including ports and airports, and more than 600,000 weapons circulate in the country.

In addition to violence, another factor that, according to experts, influences the economy, especially inflation, is the migratory flow and internal displacement: in just fifteen days of March some 53,000 people left the metropolitan area of ​​Port-au-Prince, according to data from the International Organization for Migration.

All of this impacts the economy of a country with historically very little industrialization and agricultural production far below its potential, few local products and the existence of groups that earn from imports and resale and that have dominated and monopolized ports and customs. for a long time, together with a currently very small service sector.

Activity paralyzed

For almost all of March, activity in the capital was practically paralyzed. In times of high insecurity like the current one, few groups are saved and, for example, large importing companies were looted, which also affects exporters, mainly Dominicans.

During this time, Haiti has not been able to import through its main ports and airports due to violence by gangs, who also control several entry routes to the capital.

Furthermore, Haiti has not been self-sufficient in food, which is influenced by the fact that the department of Artibonite, where the agricultural sector is largely concentrated, is completely blocked.

Regarding industry, the country’s main industrial park, Sonapi, remains closed due to insecurity in its surroundings.

The only sectors that seem to have grown significantly are those related to illicit activities, such as the gangs themselves, the kidnapping business, extortion and intermediation (of merchants and transport, with the imposition of a kind of tolls) or the illegal importation of weapons.

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