Haiti Economic Structure

Haiti is the poorest nation in the Western Hemisphere and is largely dependant on international aid for its fiscal sustenance. The country’s economy is plagued by high levels of trade deficit and massive external debt. Inadequate infrastructure, low investment and shortage of skilled labor have hindered the growth of the country’s industries. Low labor costs and duty free exports to the US have, however, led to the development of Haiti’s apparel industry, which contributes nearly one-tenth of the country’s current GDP.[br]

Haiti is the poorest nation in the Western Hemisphere and is largely dependant on international aid for its fiscal sustenance. The country’s economy is plagued by high levels of trade deficit and massive external debt. Inadequate infrastructure, low investment and shortage of skilled labor have hindered the growth of the country’s industries. Low labor costs and duty free exports to the US have, however, led to the development of Haiti’s apparel industry, which contributes nearly one-tenth of the country’s current GDP.[br]

Haiti Economic Structure: Trends in GDP Growth

Widespread deforestation and frequent natural disasters in the form of earthquakes and tropical storms have restricted Haiti’s economic growth in recent years. The country’s GDP growth (in real terms) has declined from 3.4% in 2007 to 1.3% in 2008 and -0.5% in 2009. The vast destruction of Haiti’s infrastructure, following the tropical storms in 2008 and a massive 7.0 magnitude earthquake that occurred in January 2010, have put the country again at the mercy of international aid. Haiti’s economy is expected to shrink significantly in 2010.

 

The US, Canada and the European Union have been the largest donors to Haiti. Venezuela and Cuba have also made several contributions to Haiti’s economy in recent years and China is the latest to pledge aid to Haiti’s earthquake devastated economy.

Haiti Economic Structure: Contributors

Although two-thirds of Haiti’s population is dependant on agriculture and lives on small scale subsistence farming, the country imports large quantities of rice and other food items. Agriculture contributes only around 28% of the country’s GDP. Cocoa, mangoes and coffee are some of the agricultural products exported by Haiti.

 

Haiti’s industry sector is largely underdeveloped due to inadequate infrastructure and irrational policies followed by the authorities. The segment comprises of sugar refining, flour milling, textiles, cement and light assembly units, and employs 9% of the country’s population while contributing around 20% of its GDP. Haiti’s industrial growth rate has declined by 2%, according to the 2009 estimates.[br]

 

The country’s services segment, which comprises of tourism, national and local government run organizations, contributes nearly one-third of Haiti’s GDP while employing only a small proportion of the country’s population. Remittances from Haitians working abroad are a primary source of foreign exchange and contribute nearly a quarter of the country’s GDP.