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Where has all the Haiti aid money gone? U.S. to keep closer track

Source: Thomson Reuters Foundation - Wed, 30 Jul 2014 08:25 GMT
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In a file photo from Feb. 13, 2010, Haitians sit in a street next to a logo of USAID (U.S. Agency International Development) in downtown Port-au-Prince. REUTERS/Ivan Alvarado
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BOGOTA (Thomson Reuters Foundation) – U.S. Congress has passed a bill that will make it easier to track the billions of dollars of American aid money spent in Haiti, a think tank said.

After a massive 7.0-magnitude earthquake hit Haiti in January 2010, killing more than 200,000 people, the U.S., the largest foreign aid donor in Haiti, allocated a total of $1.3 billion for humanitarian relief efforts and $2.3 billion for recovery, reconstruction, and development.

The Assessing Progress in Haiti Act – passed by Congress earlier this month and now awaiting President Obama’s sign-off – aims to improve oversight, transparency and U.S. accountability on how money is spent on the ground, says the Washington-based Center for Economic and Policy Research (CEPR).

“People often ask where did the money go in Haiti? It’s been difficult to fully answer this question. The bill is the first step to know how money is being spent. It provides a measuring stick and a basis to hold the U.S. government accountable on what it does in Haiti,” Jake Johnston, a CEPR expert on U.S aid to Haiti, told Thomson Reuters Foundation by telephone.

Most are the funds are largely overseen by the U.S. Agency for International Development (USAID) and include money to tackle the cholera epidemic that has killed more than 8,550 people, the construction of a power plant, new housing settlements, and a new port in northern Haiti, which is two years behind schedule, according to a report last year by the U.S. Government Accountability Office.

A key reason it is difficult to track how USAID funds are spent on the ground is because the agency relies heavily on contractors, who often hire subcontractors in Haiti, as is the case elsewhere in the world, Johnston said.

The Haiti Act requires the State Department to report to U.S. lawmakers every six months on post-earthquake recovery and development efforts, including details on direct contracts awarded by USAID and other government agencies, and more significantly on subcontracts as well.

“Often the black box appears at the subcontract level. Reporting subcontracts by programme, such as health, will give more clarity on what money is being spent on,” Johnston said.

LOCAL PROCUREMENT

The legislation calls on the U.S. government to do more to involve Haitians in rebuilding and development, including hiring more Haitians, using local contractors and companies, and publishing more information in Haitian Creole.

“It lays out the groundwork for consultations with the Haitian government and civil societies and gets those voices who have felt outside to be inside the reconstruction process,” Johnston said.

In the past five years, USAID has been pushing to increase the use of local contractors and organisations in countries where it operates as part of a series of reforms, known as USAID Forward.

Yet there is a long way to go to ensure that USAID uses Haitian rather than U.S.-based companies or organisations - an issue the Haiti Act seeks to address.

“Of the $1.4 billion awarded by USAID in contract and grants since the earthquake, less than 1 percent has gone to Haitian companies,” Johnston said.

While USAID data shows that local procurement by the agency increased worldwide from 14.3 percent in 2012 to 17.9 percent in 2013, in Haiti it decreased, according to Johnston.

Recent data on the USAID Forward website reveal that just over $4 million, or 2 percent of all USAID spending, went to Haitian companies or organisations in 2013, down from $11.3 million in 2012.

(Editing by Alisa Tang: alisa.tang@thomsonreuters.com)

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