The Caribbean country of Haiti occupies the western third of the island of Hispaniola, sharing a land border with its eastern neighbor, the Dominican Republic.  Its capital is Port-au-Prince.  The country’s economy is heavily dependent on trade ties with its neighbors, particularly the Dominican Republic and the United States.  Although the business climate presents challenges, Haiti’s legislation encourages foreign direct investment, and the Haitian investment code provides the same rights, privileges, and protection to local and foreign companies.  The Government of Haiti provides two types of incentives for foreign investment: customs duty incentives and income tax incentives.  Import and export policies are non-discriminatory and are not based on nationality.    

Haiti continues to face significant challenges and civil unrest.  With the uncertain timing of national and local elections, it is anticipated that political instability and a more short-term economic policy focus will impede the effectiveness of an already opaque bureaucracy.  Former President Moise was assassinated on July 7, 2021 and parliamentary elections scheduled for September 2021 were postponed.  An interim Haitian government established following Moise’s assassination, among other things, responded to an August 2021 magnitude 7.2 earthquake that struck the southwestern part of the country, is investigating the assassination of the late President, expanding its COVID-19 vaccination efforts, working with the Haitian National Police to promote security and the rule of law, combating burgeoning gang violence, and coordinating with the international community to establish the conditions necessary for Haitians to vote as soon as conditions permit.  At the same time, the economy is expected to shrink slightly in 2022, while the government has limited ability to provide a fiscal stimulus to the economy.  Due to instability and crises, trained professionals and graduates in Haiti are leaving the country, decreasing the availability of high-skilled labor and human capital.  The brain drain affects all areas in Haiti. 

Prime Minister Ariel Henry’s priorities are prosecuting major crime, reinforcing the police capacity, supporting the creation of an open and inclusive transitional government, responding to food insecurity, inflation, and unemployment, and organizing the elections.  Prime Minister Henry and other interim government leaders have made public statements re-committing to the following priorities in 2022: 

• Reform the state apparatus and maintain political and social stability; 
• Transform Haiti into an investment destination; 
• Increase agricultural production and improve the environment; 
• Build energy, transportation, and port infrastructure; 

• Reinforce water and sanitation infrastructure; 
• Improve the infrastructure and quality of the education system, and 
• Promote stability through social projects. 

The United States is one of Haiti’s top trading partners.  In 2021, the United States imported $1.10 billion in goods from Haiti, an increase of 33.7 percent from $827 million in 2020.  Of the 2021 total imports from Haiti, the United States imported $994 million in apparel from the Haitian garment sector through the Haitian Hemispheric Opportunity through Partnership Encouragement and Haiti Economic Lift Program (HOPE/HELP) Acts and Caribbean Basin Trade Partnership Act (CBTPA) legislation, constituting more than 91 percent of total exports to the United States.  Haiti’s garment sector remains of interest to large-scale manufacturing operations.  Beyond the apparel assembly sector, the shipping and telecommunications sectors attract a significant number of foreign investors.

In 2022, Haiti continued to experience an economic downturn, with annual inflation of 26.7 percent and volatility in the country’s currency, the Haitian gourde (HTG), with 11.1 percent depreciation in 2021 against the dollar, a contrast with a superficial appreciation of nearly 28 percent during calendar year 2021.  Following recurring periods of road blockages due to protests in 2021 and the ongoing growth of gang activities, businesses in Haiti also continue to face challenges in 2022 due to energy supply issues, political instability and persistent gang violence that interrupt some commercial activity.

While there are business opportunities in the country, Haiti’s investment and trade climate is challenging.  Haiti ranks near the bottom globally in well-known indices tracking ease of doing business and corruption perceptions.  Impediments to investment include poor infrastructure, weak investor protections, uneven contract enforcement, high energy costs, and corruption.

Exports of U.S. goods to Haiti totaled $1.32 billion in 2021, and the United States remains Haiti’s priority partner in international trade.  Products that comprise the great majority of Haitian exports to the United States, in order of importance, are 1) apparel; 2) fruit and other agricultural products, and 3) essential oils such as vetiver.

U.S. companies may consider exporting to or establishing businesses in Haiti for the following reasons:

• The Haitian economy is one of the most open economies in the Caribbean.
• Haiti offers proximity to the United States and many Haitian businesspeople speak fluent English;
• U.S. goods comprise over 32 percent of Haiti’s total imports;
• Four international security-certified ports (Port-au-Prince, Cap Haitian, Lafito, and St. Marc) provide maritime access to Haiti;
• Two international airports (Port-au-Prince and Cap Haitian) usually offer multiple daily flights between Haiti and the United States. The airport in Cap Haitian facilitates commerce and provides quick access to the Caracol and CODEVI industrial parks located in free-trade zones in the northeastern region. 

According to the Central Bank of Haiti, Haiti’s total imports reached $3.7 billion during fiscal year (FY) 2020, while total exports were valued at $886 million.  Imports represent more than 70 percent of goods sold inside Haiti’s formal economy.

Following a contraction of 3.3 percent of GDP in 2020 in the context of political turmoil and social discontent, GDP contracted by an estimated 1.8% in 2021.  Progress in poverty reduction has been mitigated by a succession of crises including the COVID-19 pandemic, the assassination of President Jovenel Moïse and the August 2021 earthquake.  Haiti’s economy was particularly affected by setbacks in the agriculture sector, which suffered from loss of crops due to natural disasters, and the service sector, which has been affected by violence, gang activities, and political unrest.  The economy has been battered by multiple shocks since mid-2018 and was already facing significant challenges.  Past marginal gains in poverty reduction have been undone by the recent shocks, with current World Bank estimates pointing to a poverty rate of 52.3 percent in 2021, compared to 51 percent in 2020.  According to the World Bank, Haitian gross domestic product (GDP) is estimated at US$1,815 per capita.  About two-thirds of the poor live in rural areas.

Political instability and security concerns due to armed gangs vying for control over business districts decreased investment.  

It is estimated that in 2021 investments declined  21.8 percent. All three sectors of the Haitian economy declined, with agriculture registering the largest decrease at 4.1 percent, partly as a result of watershed degradation and low rainfall.  On the fiscal front, the government struggled to mobilize tax revenues.  The fiscal deficit is estimated at 2.5 percent of GDP in 2021, with direct subsidies to the energy sector accounting for 1.3 percent of GDP. The economic decline was combined with poor administrative capacity to collect revenue.  The fiscal deficit, however, was contained due to cuts in capital investment and social programs.  In 2021, the government installed a gourde policy which decreased the net international reserves by 35.8 percent at US$ 457.6 million in FY2021.  Gross reserves would finance an estimated  6.5 months of imports.  The current account balance (CAB) remains positive at 0.7 percent of GDP on large remittance inflows, higher exports, and the collapse in investment. Despite a recent political agreement to form a new interim government, the political situation remains volatile.  Energy subsidies continued to be a fiscal burden limiting the fiscal space for spending in growth-enhancing sectors. Increasingly, the budget deficit has been financed by the Central Bank, and annual inflation reached 26.7 percent as of June 2022.  Inflation is attributed to weak domestic production, a chronic budget deficit, and instability of the Haitian gourde against the U.S. dollar.  The government’s ability to collect taxes continues to be a challenge, with the most recently reported internal revenue collections reaching 12.6 percent of GDP in FY2018, according to the Central Bank.  

Haiti remains vulnerable to natural disaster, including hurricanes and earthquakes.  Despite the substantial seismic risk and a long history of damaging quakes, Haiti lacks high-quality seismic stations for network monitoring.  According to the Haitian Ministry of Environment, The Bureau of Mines and Energy’s (BME) annual bulletin a total of 1,647 earthquakes with magnitudes ranging from 1 to 7.2 on the Richter scale were recorded across the entire country in 2021, an increase of 230 percent compared to 2020.  The seismic activity was greatest in the departments of North-West, the South-East, and the West.  Further, Haiti experienced a devastating 7.2 magnitude earthquake in the southwest part of the country on August 14, 2021, that significantly damaged the departments of South, Nippes, and Grand’Anse resulting in 2,246 casualties, 12,763 wounded, and 329 missing.

The number of earthquakes recorded in 2021 by department:

- Nippes : 711

-Grand-Anse: 406

- South: 238

- North-West: 87

- South-East: 65

- West: 65

- Artibonite: 25

- North: 21

- North-East: 11

- Center: 5

- Grand’Anse: 4

Political & Economic Environment:  State Department’s website for background on the country’s political environment.