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The CGD Podcast
Helping Haiti - Vijaya Ramachandran and Michael Clemens
00:30:23
As the fourth anniversary of the massive, January 12, 2010, earthquake in Haiti approached, I invited CGD senior fellows Vijaya Ramachandran and Michael Clemens, experts respectively on disaster relief and labor mobility, to join me on...
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- [00:17]
A
Welcome to the Global Prosperity wonkast. I'm Lawrence MacDonald. With me in our new studio today is Michael Clemens, senior fellow here at the center for Global Development, and Vajaya Ramachandran, who's also a senior fellow. Michael studies, among other things, the role of migration in development. And VIJ studies, among other things, foreign assistance, especially in humanitarian relief. Welcome, both of you, to the show.
- [00:40]
B
Thank you.
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C
Thank you, Lawrence.
- [00:42]
A
Our topic today is a sad one. We're looking ahead to the fourth anniversary of the horrific earthquake in Haiti, which killed more than 150,000 people. Some estimates say as many as 300,000. I think it's a reflection of the weakness of the Haitian state that the true number may never be known. And in the wake of that, there was a huge outpouring of assistance, both public assistance and private assistance. VIJ looked at what happened to that money and where it went, and there was also a lot of thought about what might be done in addition. And one of the ideas that was focused on, especially here at cgd, was migration. And Michael, you led that process of looking to find ways to enable Haitians to come to the United States to work as guest workers and send remittances home. So it's going to be a little different today. I'm going to start with you, vij, talking about the aid flows and where they went. And then in the second half of the show, we're going to invite Michael in and talk about migration. VIJ after the earthquake, there was this I was actually surprised at the degree of public outpouring of support. I think there's a sense, maybe it has to do with racism in the United States, that Haiti is not everybody's favorite country. But many people contributed. There were a lot of voluntary contributions. My wife and I, I'm sure you and Michael, people gave money and the US Government responded generously. So how much money was committed in.
- [02:17]
C
The end in public contributions? It seems like the US has pledged somewhere of the order of 2 to 3 billion dollars in relief and reconstruction efforts in Haiti, and other governments have pledged somewhere of the order of $3 billion as well. So at least from the US side, we're looking at numbers somewhere in the range of 5 billion or 5 to 6 billion dollars, combining relief and reconstruction aid.
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A
That's a lot of money for a country that has 10 million people. That comes out to what in terms of if you just took all the money and divided it up and gave it to to the Haitian people, what would that have done to their income?
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C
It would be about $600 per Haitian. So that's well above the earning power of most Haitians in any given year.
- [03:05]
A
So it would have doubled their incomes for the year?
- [03:06]
C
That's correct.
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A
And is anything remotely like that in terms of benefits received as all this aid? What happened to the money?
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C
Nobody knows.
- [03:14]
A
Nobody knows. You can't tell me that. $6 billion, nobody knows.
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C
The information is impossible to find, I think in part because there is so little tracking of what happened to these funds. We know from the available data that money was dispersed to organizations in the US and elsewhere, non governmental organizations for profit organizations, some public organizations, including various agencies that were implementing programs in Haiti. But after that, the trail goes cold. We don't know how many Haitians were served, what types of services were delivered, how effective these programs were, what the cost was per Haitian in terms of food delivered or water or health care delivered. So after four years, we don't know what has happened to this money.
- [04:01]
A
This is really bad news. If I'm a taxpayer or somebody who's in a position to give to support a relief effort and I hear that nobody knows what happens to the money, I'm going to feel a little less willing to give next time. Certainly for the government money, there must be some record what happens if USAID makes a $10 million contract with somebody who's providing earthquake relief? They then know what happens to that money.
- [04:29]
C
Presumably USAID knows what happens to the money, but what the law says right now is that the subcontractors that USAID uses are required to report their data to the prime contractor. USAID itself is not legally responsible for then reporting those data to the public. So as a result, the information is somewhere in USAID systems, but it's not being aggregated or released in any understandable way to the public. So we just don't know what these private contractors and other organizations are doing with the money they receive from usaid.
- [05:08]
A
You spent more than a year trying to untangle all of this, assisted by at least one very gifted research assistant contacting everybody you could, and in, I guess it was around the middle of 2012, published your paper, where has all the money gone? Telling people that the trail has gone cold. Has anything changed since then in terms of the public disclosure of how these monies were spent?
- [05:31]
C
So a little bit has changed. We have seen some data release from usaid, but again, it's this first line data. So we see, you know, what contracts have been awarded to which organizations. I have a little bit more information on that front. So I know for example that 95% of the money disbursed in fiscal year 2013 went to organizations that were in the U.S. i know what the 10 top contracts were in terms of disbursements in 2013. Kimonics, which is a private for profit provider of development assistance, received seven of the top 10 contracts. This data has been released by AID as part of USAID Forward through USASpending.gov, other channels. But we don't know what then happens. What has Kymanics done with the funds? Who has this money gone to? How have services been delivered? This information continues to not be provided to us by USAID or by any of the subcontractors. There is very little sort of public release of data that would actually be useful in terms of understanding how people in Haiti have been helped.
- [06:45]
A
You have been in Haiti. You went after conducting this research. When were you there?
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C
I was in Haiti in the middle of 2012, just as I was working on the paper. I wanted to see what was happening on the ground. So I.
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A
This would have been about three years after the quake, or two and a half, I guess, correct? About two and a half years after the quake.
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C
Correct.
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A
And did you see evidence of a lot of aid supported activity? New roads, new clinics, new schools, new apartment buildings?
- [07:17]
C
You know, unfortunately, because the money was routed mainly through non governmental organizations, you do not observe much investment in infrastructure. What happened in Haiti after the quake was that many organizations came in and delivered services like health care and the provision of clean water and things like that, but in a very mobile manner. So we didn't see investment in roads, in more permanent structures, in the kinds of things that would supply services to Haitians after these organizations leave. And you know, it's now been four years, many of the organizations have left.
- [07:53]
A
I remember you came back with some striking photographs of Haiti anti NGO graffiti that people were angry at these organizations that were purportedly helping them and angry at the UN as well, painting slogans on the walls criticizing them.
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C
That's correct. You know, I think Haitians were very disillusioned by the duplication of effort in many places, by the lack of coordination, by the fact that they were largely not consulted. Many Haitians had absolutely no access to the decision makers in the NGOs at USAID at the other the, the foreigners who were in Haiti. I think they felt very disenfranchised in the process of reconstruction. And I think the feeling persists to this day.
- [08:35]
A
This comes against a backdrop of real worldwide movement for aid. Transparency. We have the international AIDS transparency Initiative. Tell briefly, for those who aren't familiar with that, how that works and how that could offer a solution to the this problem.
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C
The International AID Transparency Initiative is a very nice idea where it basically creates a very simple accounting format where different organizations can report what they're doing. And this format is standardized so that we can compare what one organization, an organization like Save the Children is doing relative to Oxfam, relative to another ngo. And these organizations themselves can see what the other players are doing. And so it will reduce duplication, it increases efficiency, it certainly increases transparency and accountability.
- [09:27]
A
So many aid donors have committed to comply. We say IADI compliant. They commit to upload their information to iadi. Has USAID done so?
- [09:38]
C
USAID has announced that it will comply with IATI standards. And what it has started to do is report, you know, some of the. Some of the data on the primary contractors on its own website using its own format, with the idea that this will eventually transfer to the IATI format.
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A
Why not just put it in IATI? I mean, you know, it's like, oh, no, we're U.S. government. We can't stoop to upload our data to an international reporting effort.
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C
Yes. I find this process very cumbersome. It's not clear to me what the rationale for it is. And I think more troubling, when I look at the data for Haiti for 2013, half of the records that USAID has reported are missing a vendor number. A third of the data are missing data on the amount of the award. So even the data it's reporting now in its own format are quite incomplete. And I don't understand why we don't know who the vendor is. If they're receiving 10 or 20 or $50 million, we should know who the vendors are that this money is going to.
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A
Is IADI designed in such a way that the contractors could also upload their information if USAID were to issue a directive tomorrow that said we expect those with contracts above a million dollars with USAID to be IADI compliant and upload the data themselves. They could. The format is there.
- [11:04]
C
They could easily do so. The format is very simple. It's very standardized. There's even a template that you can use that's even easier to use that uploads. You can use it as an interface to upload to iati. All contractors can do so easily if USAID asks them or requires them to do so.
- [11:23]
A
We've got just one minute before the break, and then I do want to turn to Michael in the migration questions before we do that you and I had a busy round of communications and I'm tempted to say advocacy around a more recent disaster, the terrible typhoon Haiyan, called by the Filipinos, Yolanda, that devastated the central Philippines in November. And because the pressure for transparency has grown since the Haitian quake, I was hopeful that as the US responded in a typically generous fashion with promises of millions of dollars to help the Philippines recover, that we might see a greater commitment to transparency around the typhoon. So far, my sense is not so much. What's your sense?
- [12:12]
C
You know, I remain hopeful. I think the Philippine government is emphasizing transparency and has much greater capacity to enforce it than the Haitian government did. The Haitian government was devastated by the quake. Most government employees, many government employees died during the quake, so. So there's very little capacity on their side. The Philippine government has created this Transparency Hub, which is a good sign.
- [12:34]
A
I love the name. Yes, I can get the acronym, but it's the F A, I, T H Foreign Aid Transparency Hub. And having lived in the Philippines and recalling how there are people of deep faith, mostly Catholic, this resonates very strongly with Filipinos that the hub is called the Foreign Aid Transparency Hub.
- [12:58]
C
That's correct. And I think the Filipinos themselves have had a very active dialogue about aid transparency in the aftermath of Haiyan, including on our website when we posted a blog post suggesting that transparency be a focal point of the work after the typhoon, of the relief effort. My sense is that as the relief effort in the Philippines moves from. From relief to reconstruction, we will see more data release, at least from the Philippine government side. And I still remain hopeful that USAID will come round to the idea of releasing subcontractor data because that's where the work gets done. They have no excuse not to release these data. There are easy digital formats to report this stuff. It is not onerous from an administrative point of view. So I continue to be optimistic about this.
- [13:46]
A
Our founding board chair, Ed Scott, is, as you know, very fond of ideas that he likes to call stroke of a pen, things that could change overnight. If there was ever a stroke of a pen, it looks to me like, unless I'm mistaken, I don't think Rajshah needs congressional authorization. He doesn't need new legislation. He doesn't even need to require it. He just needs to say it's our hope and expectation that this will happen. And if I'm Chemonics or some other vendor and I've got my eye on next year's business, I'm going to turn around that day and say to my people, get your behind in gear and post this data. It's totally stroke of the pen. Raj Shah could do it tonight when he hears this podcast.
- [14:29]
C
That's correct, Lawrence. I think there's no reason why these data cannot be uploaded easily and quickly.
- [14:34]
A
Vij, I'm going to give you a little request. I hope you'll give us an update ahead of the anniversary on the 2013 data. Maybe a blog post around that.
- [14:43]
C
I will certainly do that. Lawrence.
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A
We're going to take a quick break. I've been speaking with Vijaya Ramachandran about where is the money? What happened to the $6 billion in funds that were provided to Haiti after the terrible earthquake four years ago? The answer is we don't really know. When I come back after the break, I'm going to speak with Michael Clemens, senior fellow here at the center for Global Development about a non aid channel for trying to help Haiti and countries like Haiti to become more prosperous. We'll be back in a bit. Welcome back to the Global Prosperity wonkcast. I'm Lawrence MacDonald. I've been discussing with VijRamachandran and Michael Clemens the fourth anniversary of the terrible earthquake in Haiti which killed somewhere between 150 and 300,000 people. We've just heard from Vij how the $6 billion in foreign assistance doesn't seem to have done much. And more shockingly that there are very few records of where the money went. Michael, you've been looking at an alternative channel, labor mobility. Tell me about the potential of labor mobility to help patients to recover and maybe unpack this term. Around here we talk about labor mobility. We're really talking about people going elsewhere, leaving their homes to seek jobs elsewhere on a temporary or permanent basis.
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B
Exactly.
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A
How would that help?
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B
It could help enormously. So Haiti is a country that has about a fourth of its economic activity supported by remittances sent by people who are overseas.
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A
Those would be the Haitian cab drivers that I meet in New York and.
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B
Boston and Montreal and Miami all over the world. Haitians are very successful outside of Haiti. There's nothing inherent to Haitians that produces poverty. Haiti is a poor place. Haitians are an industrious people and when they have the opportunity to do it, they are very productive. They send a lot of money home. And this is a gigantic phenomenon. Something like 10% of Haiti lives outside Haiti. And something, as I said, about a quarter of the economic activity that goes on anywhere in Haiti is sustained in part by people sending money home. So really a huge feature of the economic landscape.
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A
Well, presumably after the Earthquake had devastated Haiti's infrastructure and the city itself. Port au Prince was a total shambles. Were there avenues that people could then more easily leave Haiti and go elsewhere to work?
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B
It was exactly the opposite, unfortunately. The US as a major destination country's only response right after the earthquake on migration policy was to institute something called temporary protected status, which meant that if you had left Haiti and come to the United States without authorization before the earthquake, then unless you were a criminal, you couldn't be deported back. A year later, that was revised, but for the first year after the earthquake, that only applied to people who had left before the earthquake, meaning that if you left because of the earthquake, there was nothing facing you but a naval blockade. And that was strengthened. After the earthquake happened, there were announcements on radio trying to deter people from leaving.
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A
So there was no sort of refugee status. I guess refugee means political persecution or war, but if your country is destroyed by an earthquake, you can't seek refugee status. Is that the case?
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B
I was so naive at the time of the earthquake. I actually thought that refugee. The definition of refugee might increase. Include people fleeing natural disasters. It's an interesting facet of history that for something like 30 years of US history, our own unilateral definition of refugee did include people fleeing natural catastrophes that ended in 1980. Since then, we use the standardized international definition, which, as you just said, is you belong to a well defined social group that is facing a credible threat of violent persecution.
- [18:44]
A
You discovered in your research, a possible window that could enable Haitians to come here to work temporarily. There is this thing, as I've learned from you, called H2 visas that permit people to come here and work for a while. There are what, 50 some countries that have a record of sending Jamaica, which is not that different from Haiti, Caribbean island, majority black, has a long history of sending people here to work. Mostly, I gather, picking crops and in resorts, they send remittances, then they go home and somebody else comes. Haiti was excluded from that. Why was that?
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B
Yes. So right after the earthquake, we urged the donor community to take advantage of the power of labor mobility as some small portion of the relief and recovery effort. We outlined a bunch of stroke of the pen initiatives that would have allowed more labor mobility between the two countries. Really win win ideas. The H2 program provides work workers that American agriculture and service industries need to grow the economy. They give job opportunities for people that don't have good jobs like that. They send remittances home. A situation where really everybody benefits. There is a list of countries that has access to these opportunities. And as you said at the time of the earthquake, Haiti was specifically excluded. As the first step toward taking advantage of that opportunity, we recommended to the Department of Home Homeland Security that they undo that ban and allow Haitians to access these visas. They did that. But since then, nobody has taken the next step of building a program that would allow Haiti to really use this visa for mutual benefit.
- [20:16]
A
I remember when we got word that Haiti had been added to the eligibility list for H2 visas. And you and I worked together in telling that story and trying to explain to people why it mattered. And I was hugely excited because you had done some calculations about the potential benefit. It was on the order of equivalency over time to all of the foreign assistance post earthquake that we've been hearing about from vij. But unlike the post quake assistance, we wouldn't have had to worry about where that money went because it would have been earned by Haitians and sent home to their loved ones and gone directly into those families. Yes, it was a very exciting and hopeful time.
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B
Yes. So unfortunately, the US does not have a guest worker program. We have a guest worker visa which is that if a specific employer gets perfect permission, shows they haven't been able to find an American for a low skill seasonal job, and recruits you specifically from Mexico, Guatemala, Jamaica, you can bring in that person, nobody will stand in your way. The government does not, however, facilitate this movement in any way. It doesn't assist the country of origin in recruiting people, in training them, in monitoring them, in checking out employers to make sure they're legitimate, in making sure that the visas are not being used for human trafficking, etc. Etc. The US does not do this. Many other countries do so. Canada has a seasonal agricultural workers program that is a program, it's a bilateral agreement with other countries, including Guatemala. New Zealand is a world leader in this area. They have something called the Recognized Seasonal Employer Scheme, which is a set of bilateral agreements with four different low income Pacific island nations. They give assistance to the the countries of origin to manage the program. We do nothing of the kind.
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A
You know, I can imagine the rationale for this would be that we'll let the private sector respond, the US government will issue the visas and labor agencies will come in and fill this vacuum and will provide these services. And I guess in the case of Jamaica, that's kind of what's happened. Why couldn't that happen in Haiti?
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B
At the beginning it was government recruitment. The H2 program was created in 1943 specifically for Jamaica. It was the Only country that could use the program at the time, because in 1943, American men were off doing something else and we needed people to pick crops. Over time, some of the recruitment in Jamaica has shifted to the private sector. It's really a public private partnership. The Ministry of Labor of Jamaica governs the process, and they contract people to do the recruiting. They sit together at the same table to do. Do the worker selection and training, etc. Haiti is definitely a country where the government faces major challenges in just getting things done, getting basic operations done, particularly after the earthquake. And it's an area where they would need international cooperation. There is no human being in the entire US Government whose job that is. As I pointed out, that's different in other countries. New Zealand has people in its aid agency. Australia has people, people in its aid infrastructure whose job it is to help other countries use their seasonal agricultural workers program to benefit those workers and to benefit the countries. They explicitly consider this to be part of their aid package for those countries. The US does not do this.
- [23:29]
A
So in the absence of having a guest worker program, as you've explained, there are guest worker visas, but no guest worker program. Were any Haitians able to take advantage of these visas and what happened to them?
- [23:41]
B
That's not known. The government doesn't release statistics about that. You can see on the Department of Labor website how many employers requested workers. They don't tell you from what country. And the US Embassy in Port au Prince does not release these data. So it is not a transparent area.
- [24:02]
A
In the absence of a government program. I mean, if we were really the czars of the world, we would say, you know, based on your analysis, there ought to be a US Government guest worker program that would help. Help to select people and ensure their return. In the absence of that, are there things that other actors could do in this situation if you were to be issuing a recommendation for somebody who said, you know what? I've looked at Michael's work. I listened to the Wonk cast, and I think that temporary work visas really could help Haiti more than all this mysterious foreign aid. What could somebody of means, say, a foundation, do in a situation like that?
- [24:40]
B
It's a gigantic opportunity that nobody has seized. No donor. The bottom line is that going to another country and working there, even for a short time, is by far the most profitable investment that is available to most Haitians. For Haitians who participate in the US Seasonal agricultural work program, we're talking about people who in Haiti would make one or two thousand dollars a year, year in one Growing season, they can make about ten thousand US dollars just for part of the year. Meaning that as you mentioned before, even just a few workers moving and taking advantage of this opportunity, it means millions of dollars going directly into Haitians pockets, into their families pockets, not to contractors in D.C. but directly to Haitians spent on things that they need and what's needed to facilitate. This is a program to help the Haitian government do what other countries do.
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A
So a philanthropic funder would fund an NGO or a for profit labor contracting organization to provide the intermediary, recruit the people, find them, find them jobs, ensure that they go home. I mean that's the sort of the missing link in this, is that right?
- [25:54]
B
It needs to be a partnership between the portion of the Haitian Ministry of Labor that has jurisdiction over this, an international organization of some kind that could provide technical assistance showing Haiti how other countries manage exactly these kind of programs. And probably also private sector recruiters who know how to get labor, monitor them, trade them, train them. This is something that could be very easily done very cheaply, relatively to the benefits.
- [26:24]
A
But what are we talking about when you say cheaply?
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B
It's a $50 million job, no less than $1 million.
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A
Less than a million dollars.
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B
For less than a million dollars, a three year program of technical assistance for the Haitian Ministry of Labor to get a real program up and running would be easily achievable. The benefits, if you could just get a few hundred Haitians using this program would be in the millions, tens of millions of dollars per year on an ongoing basis. Just a spectacular rate of return.
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A
This is a huge leverage opportunity, huge. However, I'm going to write you a check for a million dollars right now.
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B
So you might think that donors to Haiti would be more interested in this opportunity. We have talked to lots of different actors who are, who have major investments in Haiti and the principal reaction that we get from them is. But you don't understand, we're trying to develop Haiti, we're trying to give people a reason to stay.
- [27:27]
A
But of course this would develop Haiti because these people are going to send money home to their loved ones who are going to buy cement and educate their children and obtain medical care and better nutrition and all of these things. You know, it's not as if the counterfactual foreign assistance has progressed, proven to be all that effective. So it would be money for Haiti earned by Haitians working hard instead of as charity.
- [27:49]
B
It would complement everything that every aid actor in Haiti is trying to do. We're not talking about all of Haiti going anywhere. We're talking about a few hundred, a few thousand people like Jamaica going, doing temporary work and earning lots of money, the huge majority of which would be spent in Haiti. We know that from observing other workers who use this vehicle from other countries. And when money is spent in Haiti, that gives income to the farms and to the factories that donors are trying to develop right now.
- [28:18]
A
So we have two stroke of the pen things that could make the world a much better place and especially make Haiti a much better place. The first we heard about from UVic is an order by Raj Shah that all USAID contractors involved in Haitian relief above a certain level, you pick it, half a million dollars must become IADI compliant or are strongly encouraged to comply with the international AID transparency initiative. Doesn't even need to be legally binding. Stroke of the pen, Michael. The other thing is a stroke of the pen, too. It's a stroke of a pen on a check. Has to be a check for somewhere between what, a million and $5 million to set up a kind of a labor brokerage that would partner with the labor ministry in Haiti, the government in the US to enable Haitians to come here, work hard, and send money home or less. Yes, well, it's been a terrible tragedy in Haiti. One of the nice things about working here is that we can come up with these ideas. It's even better when we can find people who will act upon them. And I'm hoping that this little broadcast, as amateur as it is, might reach the ears of somebody in position to make a difference. It's always a pleasure to have you on the show. Michael Clemens. Vijaya Ramachandran. Thank you for joining me.
- [29:30]
B
Thank you.
- [29:31]
C
Thank you.
- [29:32]
A
This has been the global prosperity wonkcast from the center for global Development. My guests today, Michael Clemens. We're speaking about labor mobility in the aftermath on the fourth anniversary of the Haitian quake. And Vijaya Ramachandran talking about where did all the money go? What happened to the $6 billion given to Haiti? And the answer is, for the most part, sadly, nobody knows. You can find the Wong cast online on itunes and on stitcher. Just search for wonkcast or CGD and sign up to hear a new interview every week. Until next time, I'm Lawrence MacDonald. Thank you for listening.