HomeReportsBureau of Economic and Business Affairs2019 Investment Climate Statements…Haiti

# 					2019 Investment Climate Statements: Haiti			

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													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Haiti, one of the most urbanized nations in Latin America and the Caribbean region, occupies the western third of the island of Hispaniola. Despite the government of Haiti’s efforts to achieve macroeconomic stability and sustainable private sector-led and market-based economic growth, investors have reported that Haiti still faces challenges, such as political instability, a depreciating national currency (Haitian gourde), persistent inflation, and high unemployment. As a free market system, the Haitian economy traditionally relies on its agricultural, construction, and commerce sectors, as well as the export-oriented apparel assembly industry. Although the business climate is challenging, Haiti’s legislation encourages foreign direct investment. The Haitian investment code provides the same rights, privileges, and equal protection to local and foreign companies. Under Haitian law, Haiti’s business climate affords equal treatment to all investors, including women, minorities and foreign nationals. Haiti faced significant economic challenges and civil unrest from 2018 into 2019, which hampered the government’s ability to create jobs, improve the business environment for private sector development, and encourage economic development through foreign trade and investment. The Haitian Central Bank continues to follow a contractionary monetary policy concentrated on containing inflation and tightening legal reserve requirements. The Central Bank’s main challenge, however, is to maintain monetary stability in the context of a growing budget deficit, the depreciation of its currency, and increasing global commodity prices.

Foreign direct investment (FDI) inflows reached USD 105 million in Fiscal Year 2018, returning to its prior levels after an unusually high USD 374 million in FY 2017. Despite favorable policies toward FDI, Haiti’s rates of FDI inflow reflect investors’ assessment of the country’s slow-growing economy and unstable political environment. The government of Haiti has designated tourism, agriculture, construction, energy, and manufacturing as key investment sectors, and supports sector-focused investment promotion, public spending, and special economic zones. In 2006, the Haitian government established the Center for Facilitation of Investments (CFI) to improve Haiti’s investment climate, and to assist investors interested in doing business in Haiti. The CFI’s “one-stop shop” project, in development since early 2018 with the goal of expediting the processes for starting a business, is not yet operational. 

In FY 2018, Haiti’s economy grew by 1.5 percent, a modest improvement from the 1.2 percent growth rate in FY 2017, when the economy was greatly affected by natural disasters as well as political instability. The value of goods imports grew to USD 4.5 billion in 2018, while Haiti’s goods exports were USD 1.1 billion. The sluggish GDP growth rate and increase in imports are due in part to a weakening exchange rate, the continued reduction of external financial assistance, and slow and destabilized agricultural production. Annualized consumer price inflation rose to 17.0 percent at the end of March 2019 and remains above target because of weak domestic production, a deepening government budget deficit, food price pressures, and the depreciation of the Haitian gourde against the USD. Haiti’s net international reserves stand at USD 766 million as of early April 2019. The World Bank predicts that gross domestic product will grow at a rate of 0.4 percent in 2019. Improving the investment outlook for Haiti requires political and economic stability underscored by the enactment of institutional and structural reforms.

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