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- GDP (PPP):
- $12.9 billion
- 2.8% growth
- 1.3% 5-year compound annual growth
- $1,243 per capita
- Inflation (CPI):
- FDI Inflow:
Haiti’s economic freedom score is 48.9, making its economy the 156th freest in the 2014 Index. Its overall score has increased by 0.8 point since last year due to notable improvements in investment freedom and labor freedom. Haiti is ranked 24th out of 29 countries in the South and Central America/Caribbean region, and its overall score is far below the regional average.
Over the 20-year history of the Index, Haiti has advanced its economic freedom score by nearly 6 points. The overall score improvement has been relatively broad based, driven by improvements in six of the 10 economic freedoms including investment freedom, monetary freedom, and financial freedom.
Nonetheless, reforms to improve the business and investment climates have been largely undermined in practice because of pervasive corruption and the inefficient judicial framework. Governing institutions remain weak, and overall progress in post-earthquake reconstruction has been limited. The effectiveness of public spending has been reduced by ongoing political volatility that undermines the already fragile foundations of the rule of law.
President Michel Martelly was elected in 2011. Though Martelly won the runoff election with a strong majority, his party lacks majority support in the legislature. Prime Minister Laurent Lamothe took office in May 2012 after a four-month vacancy following his predecessor’s resignation. Despite the presence of a U.N. Stability Mission since 2004 and improvements in the training and equipping of the national police force, civil unrest remains a constant threat. Several thousand former members of the disbanded Forces Armées d’Haiti (FADH) have formed rogue paramilitary units. Haiti is poor, corrupt, and without dependable rule of law. Drug trafficking is a major destabilizing factor. Haiti suffered a massive earthquake with a magnitude of 7.0 in 2010, complicating efforts to restore public order and jump-start development.
Endemic corruption continues to limit Haiti’s political and economic development. Smuggling is a major problem. The judicial system is underfunded, inefficient, corrupt, and burdened by a large backlog of cases, outdated legal codes, and poor facilities. Most commercial disputes are settled out of court if at all. There is no comprehensive civil registry. Bona fide and undisputed property titles are virtually nonexistent.
The top individual income and corporate tax rates are 30 percent. Other taxes include a value-added tax (VAT) and a capital gains tax. The overall tax burden is 13.1 percent of gross domestic income. Government expenditures are around one-third of the domestic economy, but the government has relied heavily on foreign aid since the 2010 earthquake. Public debt is below 20 percent of GDP.
Haiti’s already poor regulatory efficiency is undercut by economic and political uncertainty. Launching a new business is costly and time-consuming. Completing licensing requirements takes over 1,000 days. A considerable portion of the workforce is underemployed or dependent on informal activity. The state-owned and-subsidized electrical utility consumes 12 percent of the national budget but serves only 25 percent of the population.
The average tariff rate for Haiti is 7.3 percent. Civil unrest has been a deterrent to foreign investment, and investment in some sectors of the economy is subject to government screening. The underdeveloped financial sector does not provide adequate support for the private sector. Most financial transactions are handled informally, and credit for new business ventures remains severely constrained.