The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.
Topics include Openness to Investment, Legal and Regulatory Systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
These statements highlight persistent barriers to further U.S. investment. Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy.
Executive Summary
Haiti, one of the most urbanized nations in Latin America and the Caribbean region, occupies the western third of the island of Hispaniola. Haiti’s investment climate continues to present both important opportunities and major challenges for U.S. investors. With a market economy, ample arable land, and a young population, Haiti offers numerous opportunities for investors. Despite efforts by the Haitian government to achieve macroeconomic stability and sustainable private sector-led and market-based economic growth, Haiti’s investment climate is characterized by an unstable national currency (Haitian gourde, or HTG), persistent inflation, high unemployment, political uncertainty, and insecurity. The global outbreak of the coronavirus and resulting slowdown of economic activity, the August 2021 earthquake in the south of Haiti, the assassination of the Haitian president, and increasingly emboldened criminal actors further complicated the Haitian government’s capacity to achieve macroeconomic stability, create jobs, and encourage economic development through foreign trade and investment. In the absence of a functioning parliament and prior to President Moise’s assassination in July 2021, the Haitian government had taken additional steps to regulate commercial activity by presidential decree, with sudden regulatory changes the business community viewed as detrimental to a functioning market. As a free market system, the Haitian economy traditionally relies on its agricultural, construction, and commerce sectors, as well as the export-oriented apparel assembly industry. Although the business climate is challenging, Haiti’s legislation encourages foreign direct investment. The government has prioritized building and improving infrastructure, including boosting energy production, and has additionally designated agriculture, manufacturing, and tourism as key investment sectors. The Haitian investment code provides the same rights, privileges, and equal protection to local and foreign companies. Under Haitian law, Haiti’s business climate affords equal treatment to all investors, including women, minorities, and foreign nationals.
Haiti continues to face significant challenges and civil unrest. With no dates yet announced for national elections, it is anticipated that political uncertainty and a short-term economic policy focus will complicate the workings of an already opaque bureaucracy. Prime Minister Ariel Henry has publicly announced the imminent formation of a new Provisional Electoral Council to organize elections and a National Constituent Assembly to reform the constitution. While the country maintains a liberal trade and foreign exchange regime, and largely adheres to World Bank programs to fight poverty, continuing reports of corruption and financial mismanagement have raised challenges for investment.
The Government of Haiti (GoH) Post-COVID Economic Recovery Plan (PREPOC 2020-2023) includes the textile sector as one of the most important means for achieving economic transformation and diversification over the next three years. Since its launch in January 2021, the Investment Opportunity Generation Project has tried to support the industry through targeted business information as well as transactional support to increase business opportunities for investors and manufacturers. Despite the negative impact of the pandemic, most companies in the sector currently operates near full capacity.
According to the World Investment Report 2021 United Nations Conference on Trade and Development (UNCTAD), Foreign Direct Investment (FDI) flows to Haiti fell to $30 million in 2020 from $75 million the year prior – a 60 percent decrease and the lowest level since United Nations Economic Commission for Latin America and the Caribbean (ECLAC) began recording FDI inflows using a consistent methodology in 2010. Inflation remains above target because of weak domestic production, a deepening government budget deficit mostly financed by monetization from the Central Bank, food price pressures, and the depreciation of the Haitian gourde against the U.S. dollar. The Haitian Central Bank (BRH) assesses that inflation is also caused by deteriorating security conditions, with armed gangs blocking key transport thoroughfares and cutting off Haiti’s southern departments from markets in Port-au-Prince and the North. The rise in commodity prices on the international market also increases the country’s import bill and amplifies inflationary pressures. Haiti’s net international reserves were $520 million at the end of March 2022. Improving the investment outlook for Haiti requires political and economic stability underscored by the enactment of institutional and structural reforms that can improve Haiti’s business and political environment. The International Monetary Fund projects a 0.3 percent growth of the Gross Domestic Product (GDP) in 2022.
Monthly inflation was recorded at 0.6 percent and 2.1 percent, respectively in January and February 2022. Year-on-year, the inflation rate reached 25.2 percent in February 2022. The Central Bank assesses the implementation of a realistic budget and better coordination between fiscal and monetary policies through adherence to an economic and financial governance pact could limit the monetary effect in the fueling of inflationary pressures.
Haiti is ranked 170 out of 189 countries on the United Nations Development Program’s 2020 Human Development Index. The World Bank’s latest household survey in 2012 reported that over 6 million Haitians live on less than $2.41 per day, and more than 2.5 million fall below $1.12 per day.
The reports of damage from the 2021 earthquake indicate that nearly 54,000 houses were destroyed and 83,770 other buildings, including schools, health facilities, and public buildings, were damaged. The Post Disaster Needs Assessment (PDNA) report, made available on December 12, 2021, estimated the total recovery needs from the earthquake to be $1.98 billion, which is equivalent to 13.5 percent of Haiti’s 2020 GDP.
To access the ICS, visit the U.S. Department of Department of State’s Investment Climate Statement.