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A SPECIAL SECTION: Haiti, Since the January 12, 2010 Fierce Earthquake
The Mattapan/Greater Boston Technology Learning Center Charity Banquet

 Posted Thursday, July 22, 2010     

U.S. Senator Warns Aid to Haiti Is at Risk
The U.S. risks wasting the aid it is offering earthquake-torn Haiti, a Senate report to be released Thursday says.

The government has failed to make basic reforms such as ensuring transparent elections (Haiti: No Leadership-No Elections) and reducing barriers for private investment, according to the report "Without Reform, No Return on Investment in Haiti," by Sen. Richard Lugar (R., Ind.), who criticized Haitian President Rene Prval's leadership during the crisis. "

President Prval's actions do not suggest a departure from the self-destructive political behavior that has kept Haiti the poorest nation in the Western Hemisphere," the report said. "If reforms ... do not occur, American taxpayer investments in Haiti, beyond essential humanitarian aid, should be reassessed."

Mr. Prval's office didn't respond to a call to comment Wednesday.

The censure, from the ranking Republican on the Senate Foreign Relations Committee, marks the latest escalation between the Haitian government and its principal foreign benefactor.

The U.S. has promised to deliver more than $2.8 billion to Haiti, but in recent months concerns have grown among U.S. lawmakers that the money won't spur needed changes like direct foreign investment.

A main concern, according to the report, has to do with the difficulty of reconstructing Haiti's private sector.

Private enterprises suffered more than 70% of the Jan. 12 earthquake's total damage, yet the country remains one of the Caribbean's most difficult in which to begin a business due to government red tape, the report says. Haitian entrepreneurs are hobbled by lack of credit in the country, and the Haitian government has done little to change regulatory barriers, it says.

The report suggests the establishment of a fund administered by Haitian and American bankers, underwritten with a U.S. government grant, to provide loans for private businesses.

Mr. Prval hasn't been receptive to earlier suggestions from the Senate. After Sen. Lugar recommended an international team restructure Haiti's Provisional Electoral Council, which has been accused of being loyal to the president, Mr. Prval rejected the proposal, saying it would cause "anarchy."

The report warns that current efforts to rebuild Haiti could follow U.S. attempts to aid the country which it called unsuccessful. Since 1990, the U.S. has given roughly $4 billion in aid to Haiti, yet the effort has "not delivered many improvements," the report said.

"U.S. leaders have been making very clear to the Government of Haiti that it would be ill-advised to take the goodwill of the American people for granted," Sen. Lugar said in a written response to questions.

Write to Nicholas Casey at nicholas.casey@wsj.com

Copyright 2009 Dow Jones & Company, Inc. Reprinted from The Wall Street Journal of Thursday, July 22, 2010.
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