Report No. 17242-HA Haiti The Challenges of Poverty Reduction (In Two Volum-les) Volume Il: Technical Papers Public Disclosure Authorized August1998 PovertyReduction and EconomicManagement Unit and CaribbeanCountry Management Unit Latin Americaand the CaribbeanRegion Public Disclosure Authorized Public Disclosure Authorized . Public Disclosure Authorized 1. CURRENCY EQUIVALENTS Currency Unit: Haitian Gourde (G) G 16.046 = US$1.00 (August 3,1998) 2. FISCAL YEAR January 1 - December 31 3. ACRONYMS AND ABBREVIATIONS CGP Communal Governance Program FONHEP Haitian Private Education Foundation GDP Gross Domestic Product GNP Gross National Product HIMO Labor Intensive NGO Non-Governmental Organization PCE Employment Generation Project PRECJ Program for Rehabilitation of Schools, Health Centers and Judicial Courts PRH/EU Rehabilitation Program for Haiti/European Union PURE Emergency Economic Recovery Program UNICEF United Nations Children's Fund USAID United States Agency for International Development Vice President Shahid Javed Burki Country Director Orsalia Kalantzopoulos Sector Director Guillermo Perry Task Manager Judy Baker Haiti Poverty Assessment Volume II: Technical Papers Contents 1. Rural Poverty in Haiti Thomas Wiens and Carlos Sobrado 2. Gender and Poverty in Haiti Maria Correia 3. Food Security Issues in Haiti Gerard Gagnon 4. MVicroenterpriseDevelopment and Job Creation in Haiti John Currelly 5. Health and Nutrition Sectors Miriam Schneidman and Ruth Levine 6. E,quity and Quality in Private Education Jamil Salmi 7. Review of the Impact and Effectiveness of Donor-Financed Poverty Alleviation Programs Garry Charlier 8. NGO Sector Study Alice Morton 9. Social Capital and Governance in Haiti: Traditions and Trends Tl Anderson White and Glenn R. Smucker 1 RURAL POVERTY IN HAITI THOMASWIENS ANDCARLOS E. SOBRADO 1. Despite the absence of recent and systematic data, it has been widely accepted that the population of Haiti is the poorest in the western hemisphere. Some two-thirds of this population (or 4.8 million out of 7.2 million) live in rural areas, and the few proxies available suggest that rural poverty is more severe than urban poverty. Beyond these basic facts, observations about the characteristics and causes of rural poverty in Haiti are impressionistic, and there is a need to establish a statistical foundation on which strategies for addressing rural poverty can be constructed. This paper addresses that need on the basis of the most recent and comprehensive set of household survey data available. 2. The data set is drawn from a USAID-sponsored survey of 4,026 households carried out in Haiti during 1994-96 for the purpose of investigating "factors that affect the viability of livelihood systems and, hence, promote or inhibit household food security." The household (HH) survey was carried out by three non-governmental organizations in distinct geographic zones: a CARE in the areas of Gonaives and the Northwest (August to November 1994); * CRS in the areas of the South and the Grand Anse (March to June 1995); and * ADRA in the areas of the West and the Central Plateau (February to April 1996). 3. Sampling was based on an initial classification of localities into agro-ecological zones (Table 1), following a "Rapid Food Security Assessment" of a small proportion of localities. The sampling design "took into account" both departmental and communal population in 1982 (the latest available data) and the classification of localities into agro- ecological zones, and was randomized with respect to selection of sample localities from a list of rural localities in each zone. Table 1. Classification of Agro-ecolo ical Zones of Rural Haiti AgroecologicalZones Altitude Rainfall Crops1 SamDleSize (m) (mm) HHs % Dry Coastal 0-400 Variable Sorg.,Manioc,PP 441 11.2 Dry Plains 0-400 < 1,000 Sorg.,Corn,Manioc,SP,PP 664 16.8 Dry Mountain < 800 < 800 Sorg.,Corn,Manioc,Yam,SP, 282 7.1 PP HumidCoastal 0-400 Variable Com, Beans,Yam, Sisal, PL 454 11.5 HumidPlains 0-400 > 1,000 Corn, Beans,Sugar C., PL 787 19.9 HumidMountain 400-800 800-1,000 Coffee,Beans, PL 742 18.9 Irngated Plains 0-400 Variable Corn,Beans,Rice,Sugar C., 360 9.1 1PL. Very HumidMountain > 800 > 1,000 Coffee,Vegetables, Produce 220 5.6 l Sorg.=Sorghum,PP=Pigeon peas, SP=Sweetpotato, PL=Plantain,Sugar C.=Sugarcane. 4. Approximately the same number of households (34-36) was sampled in each locality, despite differing populations of the latter. However, there is no indication that the sample is self-weighting with respect to any population characteristic. On the contrary, there was probably over-sampling with respect to the more sparsely-populated agro-ecological zones; but no estimates of the breakdown of the rural population across agro-ecological zones have been compiled. There is no basis for weighting the locality samples to obtain estimates statistically-representative of the entire rural population or that of each region. Consequently, the findings below relating to general composition and systematic variations and to factors correlated with livelihood should be taken more seriously than any estimated means of sample statistics, as representative of the general rural condition. 5. The surveys were conducted in the three regions at different times using instruments (questionnaires) which were not entirely consistent. Due to various reasons, the data as received contained many errors and inconsistencies, most of which could not be corrected for want of information. Rather than rejecting a significant part of the data set, only records missing the most significant data were eliminated, in the hope that errors were random and likely to be self-canceling in the aggregate. Thus some 3,954 out of 4,026 sample households were retained for calculation of income and consumption aggregates, but additional numbers of households were eliminated from other types of analysis. 6. To adjust for price inflation over the span of time for which recall data was collected, all data originally collected in value terms were converted to March 1996 prices based on the monthly Consumer Price Index from the Central Bank of Haiti (data on production in physical terms was converted to value using a 1996 set of local prices). The price-conversion multipliers were 1.53 for Gonaive and the Northwest areas, 1.34 for South and the Grand Anse areas, and 1.11 for West and the Central Plateau areas.' l As earningsor expenditureswere collectedas recollectionsof the previous12 months,the values citedin each surveywere assumed to reflectprice levels prevailing six monthsearlier than the mid-point monthof surveyadministration. 2 7. The three surveys collected recall data on the major sources of income, expenditures, and consumption, though not systematically (with respect to all possible components) or consistently among the three samples. Almost all information was collected in value terms, with incomplete information on quantities or prices. For any particular household, items not captured in the survey might represent significant portions of total budgets. However, the only systematic exclusions identified were (a) food, medical services, or medicines received gratis, and (b) inventory changes for crops, animals, land, equipment, or savings. Of these, only the exclusion of food aid is likely to significantly bias the average totals over multiple households. Net Income & Consumption 8. WELFARE RANKING. Total consumption2 of each household was estimated and divided by the number of adult male equivalents3 to obtain the chief indicator of household welfare employed below, a ranking of households by quintiles (where Ql represents the lowest 20 percent and Q5 the highest 20 percent of households in terms of expenditure per adult equivalent). 9. POVERTY LINE. To put these relative welfare rankings into a context permitting cross-country comparisons, a poverty line and a line of indigency were estimated. The latter is simply the local cost (at March 1996 prices) of reaching the FAO minimum nutritional standard of 2,240 calories daily per capita, with a diet which matches the food expenditure percentages of the average sample household. The poverty line adds to this amount expenditure on non-food commodities, such that the percentage of food expenditure in total expenditure matches the average for poor rural households (71.8 percent"). In terms of annual per capita income, the estimated indigency line was Gds. 2,384 and the poverty line Gds. 3,321 in March 1996 (around US$160 and US$220 respectively at an exchange rate of Gds. 15 = US$1). As these estimates depend primarily on price quotes and budgetary proportions of various foods, they are not very sensitive to sampling error or omissions, but would vary with systematic regional differences in food prices. 10. These poverty standards, commonly employed in other countries, indicate that two-thirds of the surveyed rural households fell below the indigency line, another 14 percent possessed consumption levels lying between indigency and poverty lines, and only 19 percent (essentially, the top quintile) exceeded the poverty line (Table 2). The status of CARE-surveyed rural households in the northwest, considered the worst off in the 2 Assembled from interview daata on agricultural production and uses, animal production and uses, and previous year's expenditures. Total consumption is defined as the sum of self-produced and consumed food, value of own animals consumed, and total cash expenditures. 3 Data origin: From files containing "demographic" responses for all three zones. From the same file other characteristics were obtained: religion, age, gender, household head's gender and education, general education, and marital status. Adult male equivalence weights each individual according to energy requirements, based on age and gender, relative to the requirements of a male 30-59 years of age. An average of the budgetary proportion spent on food for sample families for whom (a) total expenditure was in the vicinity of the indigency line and (b) food expenditure was in the vicinity of the indigency line. 3 country, was indeed found to be much below the survey average: 81 percent indigents, and onlynine percent abovethe poverty line.