Haiti Economy Profile 2012

Haiti is the poorest country in the Western Hemisphere with 80% of the population liHaiti's economy suffered a severe setback when a 7.1 magnitude earthquake damaged its capital city, Port-au-Prince, in January 2010. Already the poorest country in the Western Hemisphere with 80% of the population living under the poverty line and 54% in abject poverty, the damage to Port-au-Prince caused the country's GDP to contract an estimated 8% in 2010. Two-thirds of all Haitians depend on the agricultural sector, mainly small-scale subsistence farming, and remain vulnerable to damage from frequent natural disasters, exacerbated by the country's widespread deforestation.

US economic engagement under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act, passed in December 2006, has boosted apparel exports and investment by providing tariff-free access to the US. Congress voted in 2010 to extend the legislation until 2020 under the Haitian Economic Lift Act (HELP); the apparel sector accounts for three-quarters of Haitian exports and nearly one-tenth of GDP.

Remittances are the primary source of foreign exchange, equaling nearly a quarter of GDP and more than twice the earnings from exports. Haiti suffers from a lack of investment because of insecurity and limited infrastructure, and a severe trade deficit. In 2005, Haiti paid its arrears to the World Bank, paving the way for reengagement with the Bank. Haiti received debt forgiveness for over $1 billion of its debt through the Highly-Indebted Poor Country (HIPC) initiative in 2009. The remainder of its outstanding external debt was cancelled by donor countries in early 2010 but has since climbed back to about $500 million. The government relies on formal international economic assistance for fiscal sustainability.