This report provides a brief analysis of Haiti's development needs. It examines the current situation in Haiti, Haiti's development needs, and what is being done by the Haitian government, the United States, and foreign donors to meet those needs. It also addresses priority areas for Haitian development. Haiti and its multilateral and bilateral donors developed an international assistance strategy, known as the Interim Cooperation Framework (ICF), to address Haiti's short-term needs following the collapse of the government of President Jean-Bertrand Aristide in February 2004. The Cooperation Framework has been extended through 2007, and is the basis from which a long term Poverty Reduction Strategy is being developed. The second part of the report uses the Interim Cooperation Framework's outline to organize statistics related to the priority needs that have been established. These statistics illustrate the challenges posed by current conditions of poverty in Haiti for achieving Haiti's development goals. Haiti's poverty is massive and deep. Over half the population (54%) of 8.2 million people live in extreme poverty, living on less than $1 a day; 76% live on $2 or less a day. Poverty among the rural population is even more widespread: 69% of rural dwellers live on less than $1 a day, and 86% live on less than $2 a day. Hunger is also widespread: 81% of the national population and 87% of the rural population do not get the minimum daily ration of food defined by the World Health Organization. In order to reach its Millennium Development Goal of eradicating extreme poverty and hunger by 2015, Haiti's Gross Domestic Product (GDP) would have to grow 3.5% per year, a goal the International Monetary Fund (IMF) says Haiti is not considered likely to achieve. Economic growth for FY2006 is estimated to have been 2.5%. Over the past 40 years, Haiti's per capita real GDP has declined by 30%. Therefore, economic growth, even if it is greater than population growth, is not expected to be enough to reduce poverty. The likelihood that economic growth will contribute to reduction of poverty in Haiti is further reduced by its enormous income distribution gap. Haiti has the second largest income disparity in the world. Over 68% of the total national income accrues to the wealthiest 20% of the population, while less than 1.5% of Haiti's national income is accumulated by the poorest 20% of the population. When the level of inequality is as high as Haiti's, according to the World Bank, the capacity of economic growth to reduce poverty "approaches zero." President René Préval, who was inaugurated to a five-year term on May 14, 2006, recently completed his first year in office. He outlined his government's two main missions to be building institutions as provided for in the constitution—including the new municipal posts filled by elections on December 3, 2006—and creating conditions for private investment in order to create jobs. Préval has criticized the donor community for not dispersing funds quickly enough. Some international donors have complained that Préval's government keeps changing priorities - first children's needs, then road-building, then security issues. Crime and kidnapping levels have been high, leading Préval's government and the U.N. Mission in Haiti (MINUSTAH) to focus on improving security. Plagued by chronic political instability and frequent natural disasters, the Republic of Haiti remains the poorest country in the Western Hemisphere. The United Nations designates Haiti as one of the fifty "least developed countries" in the world. "Least Developed Countries" (LDCs) [are] a category of States that are deemed highly disadvantaged in their development process..., and facing more than other countries the risk of failing to come out of poverty. As such, the LDCs are considered to be in need of the highest degree of attention on the part of the international community....the UN gives a strong signal to the development partners of these countries, and points to the need for special international support measures and concessions in their favour. Haiti has many priorities for development that are deeply interconnected. To address the persistent poverty crisis in the country, the Haitian government and the international donor community, including the United States, are implementing and developing assistance strategies that address many development needs simultaneously. In the short-term, they are trying to implement projects that will boost public and investor confidence. At the same time, the government and donors are pursuing medium-term development plans that will improve living conditions for Haiti's vast poor population and construct government institutions capable of providing services and stability. The Haitian government is working with international donors to develop a long-term poverty reduction plan. Since 2000, in response to unresolved elections disputes and questions of transparency, U.S. and other foreign donors have directed assistance through non-governmental organizations. The interim government (2004-2006) focused on macroeconomic performance. The Préval Administration has continued efforts begun by that government, maintaining fiscal discipline and implementing structural economic reforms. Now that an elected government is in place, donors are looking at how to ensure transparency as they provide funds directly to the government again. In addition, since President Préval took office in May 2006, both the new government and international donors are shifting from a short-term program to carry Haiti through a transition period to a long-term program to help reduce poverty in Haiti. Haiti and its multilateral and bilateral donors developed an international strategy for assistance to address Haiti's short-term needs in between the collapse of the government of President Jean-Bertrand Aristide and the time a new government could be elected and installed. The World Bank, the Inter-American Development Bank, the United Nations, and the European Commission convened the International Donors Conference on Haiti in July 2004. Working in conjunction with Haiti's interim government, the conference adopted the Interim Cooperation Framework (ICF), which focused on development goals in four general areas: political governance, economic governance, economic recovery, and access to basic services. At the conference, international donors, including the United States, pledged $1.2 billion from 2004 to 2006 to help Haiti rebuild its infrastructure, strengthen institutions, and improve basic services. According to the IMF, about $960 million of these funds had been disbursed as of December 2006. In July 2006, international donors pledged $750 million to bridge Haiti's budget gap and fund economic, social, and democratic reconstruction projects through September 2007. The Interim Cooperation Framework establishes priority needs and projects that fall under four broad categories. For each of these four strategic axes, the Framework provides a strategy, priority objectives, and monitoring indicators. The "Strengthen Political Governance and National Dialogue" axis addresses security, police, and disarmament; the judicial system and human rights; and the electoral process. The "Strengthen Economic Governance and Institutional Development" category promotes improved and more transparent management of public finances; strengthening the capacities of public institutions; and decentralization in favor of regional, urban, and local preparation of development strategies. The "Promote Economic Recovery" objective aims to reverse Haiti's trend of economic regress by promoting macro-economic stability; providing reliable electricity; reviving the private sector; and providing jobs and access to micro-finance. Economic Recovery programs also aim to help farmers meet their needs; improve roads and transport; and rehabilitate and protect the environment. "Improve Access to Basic Services" is the fourth axis. Because basic services are so scarce in Haiti, the priorities in this category are many. They range from immediate goals such as providing emergency humanitarian aid to more long-term goals. Health-related long-term goals include increasing the availability of potable water and lavatories; extending minimal health services and improving access to them, improving the ability to address food security, and improving solid waste management. Programs also include improving the quality of and access to education at all levels; engaging disadvantaged youth; supporting Haitian artisans; and reinforcing the media as a means of promoting pluralism and democracy. Other priorities include improving slums and the government's ability to provide social safety nets and protection. Progress has been made toward these objectives since 2004, such as the organization of elections, jobs creation, and broader access to clean water and other services. The economic policies of the strategy focused on restoring macroeconomic stability and establishing good governance practices, and had success in areas such as the preparation of budgets before the commencement of a fiscal year, and improvements in fiscal transparency. But because the emphasis was not on economic growth, results were negligible, according to the Haitian government, and Haitians did not experience an improvement in living conditions. Building on drafts created by the interim government (2004-2006), the Préval Administration produced an Interim Poverty Reduction Strategy for the years 2007-2009. This plan calls for actions to be taken with a macroeconomic framework focusing on three goals: maintain macroeconomic stability; target actions to reduce poverty; and create conditions conducive to continuous and sustainable growth driven by private initiative. The strategy notes that programs already outlined need to continue, and that the absence of a sector in this strategy does not mean that sector is not important. Partially in response to criticism that too many priorities were set forth in earlier plans, the Haitian government says this plan focuses on those sectors that can be effectively financed in the first year, considering limitations of time, and human and financial resources. The Interim Poverty Reduction Strategy defines major priorities for 2007-2009 to be infrastructure, energy, education, health and security.