In Port-au-Prince on July 27, the MIF sponsored a seminar on public-private partnerships (PPPs) with officials from the Haitian Ministry of Finance and other government agencies. Based on our discussions with the government and other stakeholders in Haiti, we at the MIF believe that the private sector can and should play a major role in fostering economic growth and reducing poverty in Haiti. In areas as diverse as tourism, coffee and mango farming, and venture capital, the Haitian public and private sectors are already collaborating with the MIF to stimulate job creation and business growth. PPPs offer powerful models through which the private sector can engage in economic development in Haiti.
Is Haiti ready and able to implement PPPs?
The answer, from what we heard at the seminar is yes. PPPs are complex and long-term transactions requiring not only private sector willingness to invest capital, but also government capacity to oversee contracts and ensure transparent and fair decision making. By making appropriate policy decisions and accurately assessing its institutional and supervisory capacity, Haiti can determine the right level of private sector engagement in rebuilding its infrastructure.
While institutional capacity will most likely continue to be limited in the short term, Haiti can strengthen supervisory capability in certain discrete areas that may attract private investment. Haiti already relies extensively on private operators in health and education, so it is conceivable to envision PPPs to improve performance in these and other sectors. Haiti also has a new water and sanitation sector policy that encourages private and community initiative in management and provision of services. If projects are appropriately designed to the level of institutional capacity, making use of good project selection methodology and private sector advisors, one can envision future PPPs in infrastructure and basic services
Does Haiti even need PPPs, given the amount of aid it receives?
Again, we believe the answer is yes. Aid flows inevitably decline over time, and donor projects take time to implement and are often faced with long delays. The private sector can implement projects more quickly and efficiently, as long as the right incentives are in place. Small scale projects can be carried out with local investors, and larger projects with international investors. Private sector participation adds capital, management and technical expertise in a situation where such knowledge is often lacking. Despite the difficult conditions in Haiti, it is possible to define workable PPP arrangements that will help to achieve service goals and attract local and foreign capital and expertise. Such arrangements can supplement aid flows and enhance project implementation, especially in terms of timely project completion.
This will not happen overnight. It will take time to build productive dialogue among stakeholders and to reach political consensus—not to mention for the country’s political leadership to not only establish the right enabling environment for PPPs, but also demonstrate a strong commitment to implement them properly. Implementing successful PPPs at the national or community level ultimately depends on the skills and capacities of the individuals charged with making them work. Governance of the process is key. The MIF has seen enough experience across countries to believe that PPP can work at various levels of institutional and economic development and solutions will vary accordingly.
What do you think are key elements to make PPPs work in such challenging environments?