Which donors are going local in Haiti?

Not long after reconstruction efforts for the 2010 Haiti earthquake kicked into high gear, there were some signs that while Western implementers would take the lead in the interim, over time, foreign aid donors were eager to increasingly channel the billions in recovery money through Haitian organizations. The goal of this transition was to make the recovery effort more sustainable over the longer term. “While using more in-country partners may mean sacrificing some immediate development impact, the long-term impact and sustainability of development outcomes will be strengthened,” Elizabeth Hogan, the then-director of the U.S. Agency for International Development’s Haiti task team and now the agency’s acting assistant administrator for Latin America and Caribbean, explained to Devex in 2012. Five years into the reconstruction and $13.5 billion in assistance later, Devex analysis of contract awards and grants by four of Haiti’s largest donors finds that for the most part, local partners aren’t even close to assuming the levers of control over the recovery money — albeit with the exception of one major donor. It’s worth noting that the data we analyzed generally exclude government-to-government transfers. “Donors’ general reluctance to invest locally in Haiti often seems to be based more on fear and prejudice than an impartial, empirical assessment of risk,” asserted Gregory Adams, director of aid effectiveness at Oxfam America, who cited the case of Afghanistan as a positive example for aid localization in Haiti. According to one estimate, less than 0.6 percent of the relief money has been invested in Haitian organizations and businesses. U.S. Agency for International Development Despite being, by far, the most visible proponent of aid localization in the donor community, USAID awarded just 1 percent of its contract and grant funding to Haitian partners in 2013. On average, Haitian partners garnered 1.2 percent of USAID’s contract and grant funding each year between 2010 and 2013. As might be expected, the remainder was overwhelmingly awarded to American implementers. In keeping with USAID’s 30 percent local funding target for the end of fiscal 2015, USAID officials had pledged to gradually award more funding to Haitian partners in the aftermath of the Haitian earthquake. Five years into the reconstruction efforts, Adams told Devex he believes it’s time for the rubber to hit the road. “I think the United States has been too cautious in Haiti regarding local solutions,” said Adams. “There are plenty of stories from Haiti of underperforming U.S. investments, even when all the money was handled by U.S. officials or U.S.-based implementers. That alone would seem to say that the risk of using local systems in Haiti has been greatly exaggerated.” USAID officials and implementers, on the other hand, stress that much of the contract and grant funding awarded to American groups is eventually subawarded to Haitian organizations. USAID estimates it has subawarded funding to more than 400 Haitian nongovernmental organizations and firms. USAID is currently accepting concept papers for its annual program statement for local partners and U.S. private voluntary organizations in Haiti. World Bank Among the four donors assessed, the World Bank stands out for being the only one to consistently award nearly all its contract funding to Haitian partners. In 2013, the bank awarded 100 percent of its contract spending to Haitian partners — up from an already impressive 96 percent in 2010. This trend holds even if the number of contracts is considered. On average, Haitian partners won 112 contracts each year from 2010 to 2013, compared with just 1.5 for foreign partners. Over that period, the number of Haitian partners for the World Bank, including individual contractors, nearly doubled — from 75 in 2010 to 143 in 2013. The World Bank has a long history of channeling funding through national governments, including in Haiti, one reason why Oxfam’s Adams was only “mildly surprised” when he was shown our findings. In fact, if contracts executed by the Haitian government are included, then the bank’s local contract spending would likely be substantially higher than the $43 million figure we found for 2013. It’s worth noting that as in the case of USAID, the World Bank records at least some groups affiliated with international implementers, including World Vision and Save the Children, as suppliers originating from Haiti. EuropeAid Meanwhile, EuropeAid awarded 28 percent of its contract and grant funding to Haitian partners in 2013, up from 17 percent in 2010. On average, Haitian partners garnered 19 percent of EuropeAid’s contract and grant spending in Haiti each year between 2010 and 2013. Firms from EU member states have claimed the lion’s share of EuropeAid contract and grant spending in Haiti — a trend that holds even if both contract and grant spending are counted separately. Between 2010 and 2013, Haitian partners won an average 16 percent of EuropeAid’s annual contract funding in Haiti, and a slightly higher 25 percent average of its annual grant funding. In terms of the number of contracts and grants, however, EuropeAid procurements have been far more evenly divided between Haitian and EU-based partners. In 2013, Haitian partners won five grants while EU-based partners won seven. That same year, Haitian partners won five contracts while EU-based partners won eight. In a critical assessment of EU relief efforts in Haiti, the European Court of Auditors last year found that EuropeAid’s partners in Haiti have not been aware of local restraints and have also lacked knowledge of the language and local situation — findings that arguably bolster the case for EuropeAid to beef up its local procurement in Haiti. Inter-American Development Bank The largest multilateral donor to Haiti, the Inter-American Development Bank awarded a third of its contract spending to Haitian partners in 2013, down sharply from 85 percent in 2010. On average, Haitian partners claimed 49 percent of IDB’s annual contract spending in Haiti between 2010 and 2013. In terms of the number of contracts, however, Haitian partners — mostly individual consultants — have edged out their foreign competitors each year since 2010. In 2013, Haitian partners won 669 contracts while foreign ones won only 56. When only consulting services contracts are counted, Haitian partners also emerge ahead of their foreign counterparts in the three of the four years since 2010, both in terms of number and value. Haitian partners lag far behind, however, in the competition for goods and works contracts, which account for the vast majority of IDB’s business in Haiti. IDB is currently accepting bids for four of its projects in Haiti under international competitive bidding procedures, which are compulsory for bank contracts exceeding $5 million in the case of works and services and more than $350,000 for goods. Check out more practical business and development advice online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.