The Caribbean country of Haiti with Port-au-Prince as its capital, occupies the western third of the island of Hispaniola, sharing a land border with its eastern neighbor, the Dominican Republic. 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. Political uncertainty has increased as insecurity and gang violence increase, and democratic elections are delayed. The absence of a stable government that could create long-term economic policy complicates the workings of an already opaque bureaucracy. The global outbreak of the coronavirus, and multiple national lockdowns all but paralyzed economic activities. Furthermore, an August 2021 magnitude 7.2 earthquake that struck the southwestern part of the country, and the delayed resolution of the political crises following former president Jovenel Moise’s assassination on July 7, 2021, further complicated the transitional government’s capacity to achieve macroeconomic stability, create jobs, and encourage economic development. The transitional government is investigating the assassination of the late President, 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. The precarious security conditions preventing the normal flow of goods compounded within the existing socio-economic challenges have contributed to the contraction of the Haitian economy for 5 consecutive years; an annual decline expected to reach –0.4 percent by the end of fiscal year 22-23. 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 sectors of Haitian society.
As the leader of a transitional government established following the assassination of Jovenel Moise in July 2021, Prime Minister Ariel Henry’s priorities are prosecuting major crime, reinforcing the police capabilities, supporting the creation of an open and inclusive transitional government, responding to food insecurity, inflation, unemployment, and organizing elections. The United States is one of Haiti’s top trading partners. In 2022, the United States imported $1.09 billion in goods from Haiti, a decrease of 0.9 percent from 1.10 billion in 2021. In 2022 the United States imported $836 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. This constituted more than 77 percent of total Haitian 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 2023, Haiti continued to experience an economic downturn, with annual inflation of 46.4 percent and volatility in the country’s currency. After a superficial sharp appreciation of nearly 28 percent at the end of calendar year 2020, the Haitian gourde (HTG) depreciated nearly 140 percent against the dollar during the following two years. Beginning April 2023, the Haitian gourde gradually appreciated 13 percent against the dollar.
Businesses in Haiti continue to face major challenges in 2023 due to energy supply issues, political instability and persistent gang violence and road blockages that interrupt most commercial activity. While there are business opportunities in the country, Haiti’s investment and trade climate is challenging. 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 $1.43 billion in 2022, 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 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 $4.5 billion during fiscal year (FY) 2022, while total exports were valued at $1.17 billion. Imports represent more than 70 percent of goods sold inside Haiti’s formal economy.
Following a contraction of 1.7 percent of GDP in 2022 in the context of political turmoil and social discontent, GDP contracted by an estimated 0.4 percent in 2023. Progress in poverty reduction has been mitigated by a succession of crises including 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. The Russian invasion of Ukraine has additionally disrupted security equipment trade between Haiti and its partners, depriving the nation of necessary timely assistance in the fight against gangs. 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$1,748.3 per capita. About two-thirds of the poor live in rural areas.
Political instability and security concerns related to armed gangs vying for control over business districts in Port-au-Prince have decreased investment. It is estimated that in 2021 investments declined 21.8 percent. On the fiscal front, the government improved its ability to collect tax revenues while limiting the monetary financing of the budget by the Central Bank to only 1 percent of GDP as of the first semester of 2023 compared to 2.5 percent of GDP the previous year. The fiscal deficit is estimated at 1.9 percent of GDP in 2022 compared to 2.5 percent of GDP in 2021. That improvement is due to stronger controls and structural reforms which boosted Custom’s capacity to increase revenue collection. In 2022, the government installed a foreign exchange surrender requirement policy which increased the net international reserves from $114 million to $480 million as of the end of the first semester of 2023. Gross reserves would finance an estimated 6.5 months of imports. Despite many tentative political agreements to form a new interim government, the political situation remains volatile. Energy subsidies accounting for 62 percent of total subsidies continued to be a fiscal burden limiting the fiscal space for spending in growth-enhancing sectors. Meanwhile, the annual inflation reached 46.4 percent as of May 2023. Inflation is attributed to weak domestic production, gang-imposed blockades preventing the free circulation of goods, a chronic budget deficit, and instability of the Haitian gourde against the U.S. dollar. The government’s ability to collect taxes has improved but continues to be a challenge.
Haiti remains vulnerable to natural disasters, 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 1451 earthquakes with magnitudes ranging from 0.7 to 5.5 on the Richter scale were recorded across the entire country in 2022, a 12 percent decrease compared to 2021. Following a devastating 7.2 magnitude earthquake in the southwest part of the country on August 14, 2021, resulting in 2,246 casualties, the departments of Grand’Anse, Nippes and South recorded the greatest amount of seismic activity in 2022. The number of earthquakes recorded in 2022 by department:
-Grand-Anse: 633
- Nippes : 406
- South: 156
- West: 87
- North-West: 73
- South-East: 39
- North-East: 35
- North: 13
- Center: 5
- Artibonite: 4
Visit State Department’s website for background on Haiti’s political and economic environment.
https://www.state.gov/countries-areas/Haiti/
Political Environment
For background information on the political and economic environment of Haiti, please click on the following link: https://www.state.gov/countries-areas/haiti/.
Since January 1, 2023, Haiti has had no elected officials. This absence of elected leadership has weakened state institutions and created a political vacuum. Prime Minister Ariel Henry has led a transitional government since the July 2021 assassination of President Jovenel Moise. Despite mediation efforts by regional and international bodies, Henry and other political actors remain at an impasse, unable to agree on a path towards elections. Much of the capital, Port-au-Prince, is controlled by armed gangs, whose kidnappings for ransom and violent attacks on neighborhoods have displaced more than 200,000 people, according to the IOM. Despite its efforts to clean up the judiciary by certifying judges, the judicial system also struggles to function properly and faces significant obstacles. The jurisdiction of Port-au-Prince has not held jury-assisted trials since 2018, although non-jury-assisted trials resumed in July after five years.