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Big Cities Fare Better Than Rural Areas, Says First Poverty Analysis Post-Earthquake

The World Bank
December 11, 2014

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PORT-AU-PRINCE, December 11, 2014 - A new report released today by the National Observatory on Poverty and Social Exclusion (ONPES) and the World Bank suggests the need for more inclusive growth and policies to increase access to basic services, livelihood opportunities and social protection for the poor in Haiti as the best way forward for accelerating poverty reduction in the country.

The report Haiti: Investing in people to fight poverty highlights that extreme poverty declined from 31 to 24 percent at the national level and from 20 to 5 percent in the Port-au-Prince area between 2000 and 2012. The biggest gains in access to basic services have been in education, where school participation rates have risen from 78 to 90 percent.

"It is clear that the Metropolitan area received more attention in recent years, but we also note that more and more actions are directed to the provinces. If these actions are sustained and integrated into a comprehensive policy to foster development of rural areas, we will undoubtedly have a lower poverty rate, "said Shirley Augustine Coordinator ONPES.

However, poverty remains high and access and quality of basic services remains a major concern, particularly in rural areas. More than 6 million Haitians - almost 60 percent of the population - live on two dollars a day and the richest 20 percent of households hold 64 percent of total income in the country.

The authors find that the key drivers behind the decline in poverty since 2000 have been the increase of better paid jobs in construction, transport and telecommunication, particularly in the Port-au-Prince area, as well as large flows of remittances and international aid.

From 2001 to 2012, wages in the formal sector were four times higher than in the agriculture sector, and the share of households receiving remittances rose from 42 to 69 percent.

“In spite of progress, opportunities for Haitian families to improve their economic and social status remain limited compared to the rest of Latin America and the Caribbean. Far from the capital, most families have very limited access to basic services and often cannot afford to cover their medical bills or send their children to school,” said Mary Barton-Dock, World Bank Special Envoy in Haiti. “Nearly five years after the devastating earthquake, this analysis highlights priority actions to help tackle poverty and promote inclusive growth in the country”.

The report suggests three priority directions to sustain progress in closing the poverty gap and broaden opportunities for all Haitians across the country:

Boost incomes and economic opportunities: Incomes have stagnated in rural areas where 80 percent of the poor are concentrated. Boosting agriculture productivity through diversification and improved access to markets, skills and inputs such as fertilizers, pesticides, and seeds would be an effective way to multiply economic opportunities. In urban areas, workers with better education obtain substantially better jobs and incomes. The analysis suggests the need to improve working conditions in the informal sector through better business environment and jobs training.

Improve access and quality of health and education services: Despite sizeable progress, child and maternal health indicators remain low compared to the region and about 200,000 children aged 6 to 14 are currently out of school. High cost of access to services is still an obstacle. On average, families spend 10 percent of their budget on education and 3 percent on health care. The report suggests that increasing access to cost-effective primary health care, while focusing on improving the quality of service delivery in health and education, would have a significant impact on poverty.

Protect the poor and vulnerable from shocks: The government recently announced a new social protection strategy to consolidate and improve the targeting and coverage of existing social safety nets. Continued efforts are needed to meet the needs of the most vulnerable. Haiti’s hard-earned development gains are often jeopardized by adverse natural events. A better understanding of and response to disaster risks is needed, notably through the integration of disaster management in investments and public policies.

This joint ONPES WB poverty diagnostic is based on the 2012 household survey conducted by the Haitian Statistic and IT Institute (IHSI) to help identify priorities for public investments and improve service delivery to the poor. It will also inform the upcoming World Bank Group country strategy for 2015-2021.