Haitian Families and Loss of Remittances During the COVID-19 Pandemic

By Toni Cela, Senior Research Associate of the Migration for Development and Equality (MIDEQ) hub & Co-ordinator of the Interuniversity Institute for Research and Development (INURED), and Louis Herns Marcelin, Co-Director of the MIDEQ project; Professor at the University of Miami; & Chancellor of INURED

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Port-au-Prince, Haiti. Photo: Rafal Cichawa/Shutterstock

Migration has always featured prominently in Haiti’s history. At times forced, as in the case of sociopolitical repression and the aftermath of disasters, induced to fulfil labour and workforce needs in the Caribbean and in other periods voluntary as in the circulatory movement recorded in the Caribbean, South and North America. Over the past decades, migration in Haiti has evolved from a survival strategy for individual migrants and their families to now buttressing the local economy through the transfer of remittances. This reality was made evident during the 2010 earthquake rebuilding effort when the Haitian diaspora identified itself as Haiti’s “single largest donor” citing “the magnitude of its remittances to the Haitian Republic and how those contributions totalling [USD] $2 billion dollars annually allot[ed] for 30% of the GNP .”  In comparison, public revenues, excluding grants, represent 13% of GDP and are projected to fall to 10% in 2020.

Remittance transfers to Haiti have continued to grow over the past decade, the lion’s share of funds originating in countries throughout the Americas, particularly the United States, where the majority of Haitians have settled. Yet, the global economic crisis brought on by the COVID-19 pandemic poses a serious threat to the global remittance economy. For Haiti, reduction in remittances will further weaken an already feeble economy while negatively impacting the livelihood and health of families and communities.

Haiti’s History of Migration 

Even prior to Haiti’s official independence from France in 1804, the extinction of the indigenous population would facilitate the transatlantic slave trade. During the Haitian Revolution, many formerly enslaved and free individuals fled the island. However, it was in the mid-20th century that migration would become a prominent feature of Haitian society.

By 2015, 1.2 million Haitians were living outside of the country, at least half of whom had settled in the US. Between 2010 and 2019, approximately 500,000 Haitians had migrated to countries in Latin America. The vast majority of Haitian migration to Latin American countries has been to Brazil, followed by Chile where they represent the third largest migrant population.

Remittance Dependence in Haiti 

For many developing countries, migration helps the poor and vulnerable remain afloat through remittance transfers. Migrant transfers cover basic needs and medical expenses and, in the best of circumstances, support local investments in land, real estate and businesses. The LAC region disproportionately relies on these resources as it is “among the most income dependent regions on remittances.” In 2015, remittances to Haiti represented one-quarter of GDP rising to more than one-third (36.2%) of GDP in 2019. In a country where public spending on social programmes is limited – as a share of GDP, it is half the LAC average, remittances have helped the working poor and impoverished Haitian families purchase food, pay school fees, as well as cover other basic expenses. Yet, in the wake of the global pandemic these transfers have started to decline. Remittance data show an 18% decline when comparing March 2019 and March 2020 transfers. Further impacting the remittance economy is reduced service due to limited access to local currencies and the possible rise in transfer costs as service providers face new operational challenges.

The Vulnerability of Haitian Migrants and their Families in Haiti

With the majority of Haiti’s remittances coming from the US, Haiti feels the ripple effects of economic shocks suffered there. Prior to the pandemic, many migrants in the US lived on the margins. More than one-third (35%) earned less than USD $20,000 per year, one-fifth were uninsured, and that number rises to 32% for the undocumented. It is anticipated that as many as 595,000 migrants in the US will become unemployed as a result of the pandemic. Such vulnerability suggests that the migrant population in the US faces two risks: that of unemployment or increased exposure to infection with limited access to medical care or the financial means to seek it out.

As a triple minority (Black, immigrant and linguistic), Haitian migrants in the US are in many respects disproportionately affected by these risks. Further, they must contend with the demands of vulnerable family members in Haiti. Haiti has faced years of protracted political crises, the most recent crisis the result of delayed elections culminating in rule by Presidential decree between 2012 and 2016. In October 2016, Haiti suffered its most devastating disaster since the 2010 earthquake: Hurricane Matthew. In less than two decades, disasters – both natural and manmade – have exacerbated the country’s fragility affecting 5.5 million, with more than 235,000 lives lost to flooding, mudslides, hurricanes, the earthquake or the United Nations introduced cholera epidemicHurricane Matthew has compounded the severity and long-term prevalence of food insecurity in the country.

Socioeconomic and political conditions exacerbate vulnerability making the COVID-19 public health crisis a recipe for yet another disaster. In 2013, access to quality healthcare services for the urban population was 57% and an abysmal 8% in rural areas. That same year, only 60% of Haitians had access to improved water sources and half (30%) had access to improved sanitation facilities. A national survey of critical health facilities in Haiti has reported only 124 ICU beds in the country with a capacity to ventilate 62 patients within ICUs and six patients outside of them. And, HIV prevalence varies between 1.5% and 2.7%, depending on the region.

In 2019, 2.6 million Haitians were food insecure. Stunting affected 4% of children under the age of five and 10% of children under five were underweight. Further threatening the health and increasing the suffering of poor families was the forecasted rise in the cost of staple foods that has now come to fruition.

In this context, any decrease in remittances poses an immediate threat to the health and well-being of many families and will deliver a significant blow to Haiti’s beleaguered economy. As of May 29, 2020, there were 3,966 suspected cases, 1,443 confirmed cases of infection and 35 COVID-19 related deaths in Haiti. Arguably, these numbers are more reflective of Haiti’s limited testing capacity than actual infection and mortality rates.

Therefore, the Haitian government could take steps to protect its people from further suffering which include: a) placing a moratorium on the government tax on international wire transfers during the pandemic; b) absorbing the costs associated with COVID-19 related hospitalisations; and c) subsidising local staple foods as a counterbalance to the anticipated reduction of remittance transfers that will affect Haiti for several months to come. To make these recommendations a reality, there is a need for a coordinated international effort to support the country’s national budget shortfalls that would result from remittance tax exemptions and food subsidies. This effort should also seek to directly support the most vulnerable families through cash transfer programmes. These coordinated actions would greatly alleviate some of the burdens brought on by this pandemic that have exacerbated pre-existing vulnerabilities.

These programmes can also be partially leveraged by grants already obtained from multilateral and bilateral institutions such as the World Bank,  the International Monetary Fund and USAID, as well as donations of medical equipment from the World Health Organization, China, and the UNDP, among others. It is, therefore, imperative that the government intervene to facilitate the transfer process, incentivise it, and where possible, absorb the shocks to the economy that the reduction of remittances will most certainly cause during these very difficult times.

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