HAITIAN CITIES: ACTIONS FOR TODAY WITH AN EYE ON TOMORROW OVERVIEW HAITIAN CITIES: ACTIONS FOR TODAY WITH AN EYE ON TOMORROW © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The bound- aries, colors, denominations, and other information shown on aTny map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissem- ination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522- 2625; e-mail: pubrights@worldbank.org. Cover photo: © Ingrid Nelson. Further permission required for reuse. Cover design: © Ingrid Nelson. Further permission required for reuse. ACKNOWLEDGEMENTS The Haiti Urbanization Review was prepared by a team led by Nancy Lozano-Gracia (Senior Economist GSU10–Task Team Leader), and consisting of Sarah E. Antos (IT Officer, Data and Information Management, ITSOP), Paolo Avner (Urban Economist, GSUGL), Andrea Colombo (Consultant, GSU10), Chandan Deuskar (Consultant), Marisa Garcia Lozano (Consultant, GSU10), Alexandra Panman (Consultant), Jonas Ingemann Parby (Senior Urban Specialist, GSU10), Joseph Denis (Consultant, GSU10), Claudia Soto (Disaster Risk Management Specialist, GSU10), and Benjamin P. Stewart (Geographer, GGSCE). Claudia P. Pacheco Florez (Program Assistant, GSU10) provided overall administrative assistance. The work in Chapter 3 constitutes a collaboration between the World Bank, Flowminder Foundation, the WorldPop Project, and Digicel Haiti. The Flowminder team included Guilherme Augusto Zagatti, Miguel Gonzalez Canudas, Chris Brooks, Maximilian Albert, Elisabeth zu Erbach-Schoenberg, Alessandro Sorichetta, Simon Dutka, Priya Burci, Andrew Tatem, Erik Wetter, and Linus Bengtsson. The team is grateful for peer review input from Roger Gorham (Transport Economist, GTI04), Augustin Maria (Senior Urban Development Specialist, GSU11), and Michel Matera (Senior Urban Specialist, GSU13). Additional contributions were provided by Roland A, Bradshaw (Senior Disaster Risk Manage- ment Specialist, GSU10), Lauren Nicole Dauphin (Consultant, GGSCE), Katie L. McWilliams (IT Officer, Data and Information Management, ITSOP), Emilie Perge (Economist, GPV04), and Franck Taillandier (Senior Urban Transport Specialist, GTI08). The team benefited from the technical guidance from Catalina Marulanda (Practice Manager GSU12) and Pierre Xavier Bonneau (Program Lead LCC8C). Valuable comments and guidance were provided by Judy Baker (Lead Urban Economist, GSU10), Trevor Monroe (Senior Operations Officer, GTKM1), and Raju Singh (Program Lead LCC8C. The report was prepared under the overall guidance of Ming Zhang (Practice Manager, GSU10). The team also recognizes the support of the Country Director for Haiti, Mary A. Barton-Dock. The overview was edited by Communications Development Incorporated, and editorial support for the entire report was provided by Jean-Dany Joachim. The book’s design is credited to Ingrid Nelson. The policy discussion in this report has benefited from discussions with high-level government officials and development partners including representatives from: Comite Interministeriel d’Ame- negament du Territoire (CIAT), Centre National de l’Information Géo-Spatiale (CNIGS), Institut Haïtien de Statistique et Informatique (IHSI), Ministère de l’Intérieur et des Collectivités Territori- i ales (MICT), Ministère de la Planification et de la Cooperation Externe (MPCE), and Ministère des Travaux Publics, Transports et Communications (MTPTC). Special thanks go to Michèle Oriol and Rose-May Guignard from CIAT for their overall guidance and contribution to this work. The work in this report has been made possible thanks to the financial contribution from three grants: support from the Global Facility for Disaster Reduction and Recovery (GFDRR) TF0A2693; a grant from the World Bank’s Jobs Umbrella Trust Fund, which is supported by the Department for International Development/UK AID, and the governments of Norway, Germany, and Austria, the Austrian Development Agency, and Swedish Development Agency SIDA, TF0A2893; and a grant from the Innovations in Big Data Analytics program, under the Global Data and Text Analytics Operations unit in the Global Themes Vice Presidency of the World Bank. ii ABBREVIATIONS ASEC Assemblée de la Section Communale (Communal Section Assembly) CAP Cap-Haïtien CASEC Conseil d’Administration de la Section Communale (Communal Council) CDD Community-Driven Development CFPB Contribution Foncière des Propriétés Bâties (Tax on built properties) CIAT Comité Interministeriel d’Aménagement du Territoire (Inter-Ministerial Committee for Territorial Development) CNIGS Centre National de l’Information Géo-Spatiale (National Center for Geospatial Information) DGI Direction Générale des Impôts (General Tax Office) DHS Demographic Health Surveys DINEPA Direction Nationale de l’Eau Potable et de l’Assainissement (National Drinking Water and Sanitation Directorate) DRM Disaster Risk Management EC European Commission ECLAC Economic Commission for Latin America and the Caribbean ECVH Enquête sur les conditions de vie en Haïti (Survey of living conditions in Haiti) ECVMAS Enquête sur les Conditions de Vie des Ménages Après Seisme (Survey of households’ living conditions in Haiti) EDH Electricité d’Haiti (Electricity of Haiti) FGDCT Le Fonds de gestion et de développement des collectivités territoriales (Local Government Development Fund) FY Fiscal Year GDP Gross Domestic Product GHSL Global Human Settlements Layer GUF Global Urban Footprints GVA Gross Value Added HTG Haitian Gourde (currency) iii IADB Inter-American Development Bank IHSI Institut Haïtien de Statistique et Informatique (Haitian Institute of Statistics and Information) IMF International Monetary Fund ILO International Labor Organization JRC Joint Research Centre LAC Latin America and the Caribbean MARNDR Ministère de l’Agriculture, des Ressources Naturelles et du Dévelopment Rurale (Ministry of Agriculture, of Natural Resources, and Rural Development) MDE Ministère de l’Environnement (Ministry of Environment) MEF Ministère de l’Economie et des Finances (Ministry of Economy and Finance) MSPP Ministère de la Santé Publique et de la Population (Ministry of Health) MICT Ministère de l’Intérieur et des Collectivités Territoriales (Ministry of Interior and Local Authorities) MPCE Ministère de la Planification et de la Cooperation Externe (Ministry of Planning and External Cooperation) MTPTC Ministère des Travaux Publics, Transports et Communications (Ministry of Public Works, Transport and Communications) ONACA Office National du Cadastre (National Agency for Cadastre and Land Registration) PaP Port-au-Prince PDNA Post-Disaster Needs Assessment PFM Public Financial Management PRAFIPUM Programme d’Amélioration des Finances Publiques Municipales (Program for the Improvement of Municipal Public Finance) UN WUP United Nations World Urbanization Prospects USAID United States Agency for International Development USD United States Dollars WDI World Development Indicators WHO World Health Organization iv OVERVIEW NORTHERN PART OF CAP-HAÏTIEN, NORD. PHOTOGRAPHED BY REMI KAUP, 2006 SOURCE: WIKIMEDIA, CREATIVE COMMONS LICENSE OVERVIEW Today, more than half of Haiti’s population calls cities and towns their home, in a major shift from the 1950s when around 90 percent of Haitians lived in the countryside. Urbanization is usually paired with economic growth, increased productivity, and higher living standards, but in Haiti it has taken a different course. Potential benefits have been overshadowed by immense challenges, all of which require immediate action. To better understand the factors that constrain the sustainable and inclusive development of Haitian cities, this Urbanization Review organizes the challenges along three dimensions of urban development: planning, connecting, and financing. Planning reviews the challenges in supporting resilient growth to create economically vibrant, environmentally sustainable, and livable cities. Connecting focuses on the obstacles of physically linking people to jobs and businesses to markets, while financing focuses on identifying the key capital, governance, and institutional constraints that are hurdles to successful planning and connecting. Along these lines, the analysis suggests three main challenges for Haitian cities: PLANNING: Resilient urban growth is hindered by wide gaps in basic services, increasing exposure to natural disasters, and ineffective land use planning. CONNECTING: Poor connectivity within Haitian cities hampers integrated labor markets and access to economic opportunities. FINANCING: The ability of local governments to plan, service, and connect cities and towns is heavily constrained by limited resources at the municipal level. To respond to these challenges, the Urbanization Review proposes three broad strategies (encap- sulated in the Summary Matrix, Table O.1): PLANNING: A shift toward resilient urban planning is needed to address current infrastructure deficits and prepare for future urban growth. This includes investing in basic service deficits, lever- aging information for decision making, and strengthening property rights. 1 CONNECTING: Better within-city connectivity and accessibility are achievable through improved motorized transport and enhanced coordination between land use and transport investments. This entails investing in and improving efficiency, increasing affordability, and strengthening coordination of land use and transport investments. FINANCING: Strengthening municipal finances is essential to close the urban infrastructure and services gap, and to accommodate the growing urban population. This requires consolidating, harmonizing, and enforcing existing frameworks; building capacity and expanding financial opportunities; and expanding and leveraging the local revenue base. “WE ARE LIKE A REED; WE BEND, BUT WE DON’T BREAK” Proverbs are integral components of Haitian culture and speech. Along with metaphors, imagery, and storytelling, they are a traditional form of communication used to pass down knowledge and wisdom from one generation to another. Though the findings and messages of the Urbanization Review are technical, they resonate with a well-known Haitian proverb that reflects Haitians’ day-to-day struggles and hopes for a brighter future. Nou se wozo; nou pliye nou pa kase—Haitian Creole for “We are like a reed; we bend, but we don’t break.” This proverb captures Haiti’s long history of resilience in the face of slavery, colonialism, political oppression, widespread destruc- tion from natural hazards, social exclusion, inequality, and poverty—all which have shaped the country’s urbanization, a process that determines its current challenges to development, but most importantly, the opportunities that lie ahead. Historically, fragility1 in Haiti has been driven by political violence and instability (World Bank 2015b).2 Such instability has weakened state institutions, the rule of law, and the investment climate, leading to violence and distrust in public authorities (Singh and Barton-Dock 2015). Despite some improvements in governance indicators, the country ranks the lowest in Latin America and the Caribbean (LAC) in control of corruption. While Haiti’s fragility can be traced to the Duvalier regime (1957-1986), subsequent political and institutional instability have exacerbated volatility in the country’s recent history. Between 1986 and 2014, Haiti witnessed eighteen changes of government and over twenty major cabinet changes. In the second half of the 20th century, factors such as faulty agricultural policies and overexploitation of land deteriorated the rural economy and fueled a massive migration into urban areas of peasants seeking security, opportunities, and access to services, particularly in Port-au- Prince, the capital. But the provision of basic services did not expand to meet the new population pressures and cities were unable to meet the demands of the incoming population. 1 The World Bank Group classifies Haiti as a “fragile” state due to its low Country Policy and Institutional Assessment ratings for economic, social, and public sector polities and institutions. Broadly, fragility is defined as the weakness of institutions and vulnerability to instability, conflict, and violence. 2 In less than thirty years (1986-2014) the country was led by a succession of eighteen short-lived governments and suffered repeated delays in elections, which led to Parliament’s dissolution in 2015. 2 The destructive impacts of the earthquake in 2010, coming on the heels of a devastating hurricane season in 2008, and followed by the even more devastating Hurricane Matthew in 2016, further depleted the resources to generate greater prosperity throughout the country, with most efforts geared toward recovery and reconstruction. Despite these obstacles, as the proverb says, Haitians “bend but don’t break.” While facing political instability and immense losses from disasters, the country has also taken important steps toward development. Key milestones on the social and economic fronts have been achieved, including a reduction in extreme poverty and expansion of education and health services. Today, 90 percent of children attend school, and infant mortality decreased by 9 percent between 2005 and 2012. The country’s major cities are now all connected to the main road network, tourism has increased, and access to finance—in particular micro credits—has expanded (World Bank 2015b). There is a renewed sense of optimism for the future. Haiti is now at a decisive point in its history, as the country shifts from a focus on reconstruction to long-term development and forward-thinking planning. As another proverb states, Wè jodi a, men sonje demen, or “Live today, but think about tomorrow.” This proverb is a manifestation of Haiti’s culture, one that stands strong and determined to act today, with tomorrow in mind. The Haiti Urban- ization Review aims to contribute solutions for living through the problems faced by cities today and provide recommendations to help build the “thinking” about solutions for a better tomorrow. URBANIZATION IN HAITI: UNSERVICED CITIES GROWING IN A FRAGILE AND RISKY ENVIRONMENT Around the world, urbanization has often had a positive effect on economic growth. The strong link between urban levels and income has been well-documented. Historical data between 1996 and 2015 for over 180 countries show incomes rising as the share of population living in urban areas increases. Densities found in cities promote productivity and offer opportunities to improve people’s livelihoods and quality of life, eventually helping lift many out of poverty. For firms and workers in cities, proximity makes skills matching and job searching more efficient. For govern- ments, basic public services and infrastructure can be provided at lower cost due to economies of scale. The relationship between urbanization and economic growth, however, is not always linear. High densities of people alone are not enough to create the agglomeration economies often attributed to cities. When densities are poorly managed, externalities such as congestion, pollution, and high crime rates can overshadow the benefits of urbanization. In Haiti, urbanization has not gone hand in hand with economic growth. Gross Domestic Product (GDP) per capita remained stagnant and in fact dropped from USD 757 in 19963 to USD 727 in 2013, even when urban rates increased from 33 to 58 percent. Unlike similar countries in LAC, Haiti has not benefited from urbanization. Widespread fragility and costly natural disasters may have under- mined the benefits of the urbanization process. A closer look at the country’s system of cities, the deficits in urban infrastructure and services, and the limitations in governance and urban financing at the local government level helps explain why Haiti has urbanized without economic growth. 3 At constant 2010 prices. 3 Since 2000, Haiti has urbanized rapidly, albeit later than many of its LAC peers. In 1950, roughly 10 percent of the country’s population lived in urban areas, but from this decade until the 1980s, the number of urban dwellers increased at four times the rate of the rural population. In the 1980s, the urban population increased at a faster rate than the total population, reaching 30 percent by the mid-1990s. According to national official statistics, 52 percent of the popula- tion in 2015 resided in urban areas. The United Nations (UN) World Urbanization Prospects put this figure at 57 percent for the same year, with an average annual urbanization rate of 5 percent between 2000 and 2015. In 15 years, Haiti’s urban population grew 3.6 percentage points faster than the average Caribbean country and doubled in size from just over 3 million people to nearly Figure O.1. PROPORTION OF POPULATION IN HIGH-DENSITY AND URBAN CLUSTERS (WORLDPOP VS. UN WUP URBANIZATION RATE) Source: Deuskar, Stewart, and Lozano-Gracia (2016) based on WorldPop (2015), European Commission thresholds for urban areas, and UN World Urbanization Prospects (2015). 4 6 million. Each year, as many as 133,000 Haitians are becoming city dwellers (World Bank 2015b). Ten years from now, the number of urban dwellers is expected to increase by almost another 2 million people, and could surge to around 11 million by 2050, for a 76 percent urban rate. Satellite imagery to update what is urban in Haiti suggests that the urban population may be higher than suggested by official statistics. Definitions of urban areas in Haiti are outdated and have used unclear criteria. To address this limitation, this report uses a different measure of “what is urban” based on gridded population estimates and population density thresholds. By producing an urban vs. non-urban classification at high resolution (100m x 100m cells) and identifying urban built-up areas, the analysis suggests that Haiti has an urban population of over 6 million people, or about 64 percent of the total population—a marked difference from the 52 percent reported by official figures based on projections from the latest census. This makes Haiti the fourth most urbanized country in LAC, just after Puerto Rico, Trinidad and Tobago, and Mexico, instead of ranking 20th based on the United Nations World Urbanization Prospects (UN WUP) data (Figure O.1). PLANNING: A SHIFT TOWARD RESILIENT URBAN PLANNING IS NEEDED TO ADDRESS CURRENT INFRASTRUCTURE DEFICITS AND PREPARE FOR FUTURE URBAN GROWTH Haitian cities are not supported by adequate urban infrastructure and basic services, under- mining productivity and livability. Rather than benefiting from high densities, cities in Haiti today are overcrowded places with wide gaps in infrastructure and services. Resilient urban growth is hindered by these gaps and by increased exposure to natural disasters, and by ineffec- tive land use planning. As many as 35 percent of urban residents do not have access to improved water, and the share of families with water connections inside their dwelling or with access to a public tap fell sharply between 2000 and 2012 (respectively, from 24 to 3 percent, and from 65 to 21 percent). Two-thirds of urban residents lack improved sanitation, and an estimated 8 percent of urban residents practice open defecation. Haiti has the lowest collection rate of solid waste services in LAC (12.4 percent), ranking far behind the next lowest country in the region, Paraguay (57 percent), and behind low-income African countries such as Senegal, Benin, Mali, and Ghana, with collection rates of 21, 23, 40, and 85 percent, respectively (Hoornweg and Bhada-Tata 2012). Cities are also growing in an uncoordinated and unregulated manner, heightening their exposure to natural disaster risks. Haiti is one of the world’s most exposed countries to multiple natural hazards. Over 93 percent of its surface and more than 96 percent of its population are at risk of two or more hazards (World Bank and ONPES 2014). Between 1976 and 2012, hydro-me- teorological events cost the economy nearly 2 percent of GDP a year (World Bank 2016). The 7.3 Richter-magnitude earthquake in 2010 inflicted massive economic losses, representing 120 percent of GDP (World Bank 2015a). Built-up areas are particularly vulnerable, as they are disproportionately concentrated in high seismic hazard zones (60 percent), and around half are considered at risk for flooding. How urban areas expand in the country, and how buildings and infrastructure are built, are vital when vast amounts of land are exposed to different types of natural hazards. 5 Further, weak land administration, information gaps, and inappropriate regulation hamper effective decision making and exacerbate planning challenges. Information on land is limited and out of date, affecting the overall quality of land administration in Haiti, which scores the lowest in LAC according to the 2017 Doing Business index. Out of 190 countries, Haiti ranks 180th on ease of registering property and 166th on obtaining a construction permit.4 Construc- tion permit fees represent 15 percent of the total cost of construction, far higher than the average 2.5 percent in LAC and 7.6 percent in Sub-Saharan Africa. 5 Costs and time constraints are associated with informal and unplanned development, and it is calculated that 60 percent of Haitian households do not have any formal document of property ownership (USAID 2010). The lack of a national land cadastre is a major obstacle to effective property rights, which are pivotal to carrying out large-scale urban housing or infrastructure investment programs. Efforts are underway to introduce such a cadastre, but the process is highly challenging due to the fragmentation of the land registry system. Governance challenges remain the overarching hurdle to long-term resilient urban growth. Since 2010, the government has focused on reconstruction activities. Recently, however, it is undertaking a broader effort, transitioning to comprehensive forward-looking urban planning. The government is promoting decentralization to increase local governments’ role in urban planning through the Strategic Development Plan of Haiti, which emphasizes territorial reform as a gateway to achieving the country’s development objectives. Strategic plans have been developed to guide decision making across different levels and sectors of government. However, their effective implementation to shape Haiti’s urban areas faces two major constraints: plans may exist in law, but are not implemented in practice; and, where plans are developed, there is a gap between expectations set out by the plans and the financial and technical capacity to implement them. Resilient urban planning is central to Haiti’s social and economic development. Forward- thinking planning must be embraced to steer urban growth in the direction of rising incomes and economies of agglomeration, and away from congestion and heightened exposure to risk. The shape and form that cities take can have real impacts on productivity and livability. Smart and targeted investments are needed to reap the benefits of urbanization and control the associ- ated economic, social, and environmental costs that it may bring. Planning for resilient devel- opment is about supporting coordinated action to help shape urban growth so that it supports a country’s (and its cities’) development objectives, while managing natural disaster risk to protect hard-won advances in living conditions. As the pressure of urban population growth intensifies, laying the foundations for cities to work through better planning will be required. The shift toward resilient urban planning requires actions in the following three areas to address current infrastructure deficits and prepare for urban growth. 4 Refer to the “Doing Business 2017 – Equal Opportunity for All” report to see how Haiti ranks in other indicators that shed light on the country’s business environment. 5 In less than thirty years (1986-2014) the country was led by a succession of eighteen short-lived governments and suffered repeated delays in elections, which led to Parliament’s dissolution in 2015. 6 Invest to address the basic service deficits Big gaps in urban services such as water, sanitation, and solid waste collection call for large investments immediately. In the short term, Haiti can invest in basic services by lever- aging community engagement and by improving service management and delivery through local government capacity building. Community engagement and participatory approaches are key to successfully upgrade access to services in areas where development has taken place in an unregulated manner, as they are linked to improved confidence in government and long-term sustainability of urban development. Haiti’s experience in community-driven devel- opment (CDD) projects attests to their potential, but their design could be improved to better address particular urban challenges such as high levels of violence, criminal activity, and social exclusion. In the near future, the government can consolidate basic service delivery by building on “what works”; in other words, improvements in basic services can be viewed as a ladder by which each modernization effort builds capacity and paves way for new and more advanced initiatives led by local governments. The national government can help build capacity and improve local service provision by providing the right incentives (such as grants, subsidies, or transfers to municipalities based on specific outcomes or performance in service delivery). Leverage information to facilitate coordinated decision making To manage unregulated growth and minimize the risk exposure of Haitian cities, households, firms, and local governments need to be provided with relevant land use planning and risk infor- mation. Specifically, resilient planning in cities can be achieved by disseminating risk analysis insights to support decision making, placing trunk infrastructure for basic services ahead of devel- opment, and integrating hazard risk knowledge into transparent urban infrastructure investment decision making. Information on risk in urban areas must be made publicly available to support non-structural measures for protecting people from risk, such as emergency planning and infor- mation-based campaigns to encourage flood risk mitigating behavior. Following the 2010 earth- quake, Haiti developed tools to strengthen disaster risk management information in planning, such as multi-hazard risk assessments, seismic zonation mapping, and location of exposed assets. Technological innovation can provide new opportunities to engage citizens and disseminate infor- mation on risks. In Tanzania, unmanned aerial vehicles—drones—were used to map floodplains in Dar es Salaam, the country’s largest city. The information was used to plan and predict how water would move in the event of a flood. This cost-effective approach could be considered in Haiti. It is a more expensive and complicated task to provide basic services to unplanned areas than it is to put in place trunk infrastructure ahead of development. Planning ahead will save financial resources. Although plans can be an effective tool in anticipating urban growth, local actors sometimes lack the funds or incentives to implement the decisions. In this case, simple, disseminated plans can be highly effective in guiding new development. Compliance with plans can be encouraged by making clear and credible information available to households and firms so that they can make better, informed decisions. Such is the case of Tunis, Tunisia where, rather than restricting urban expansion into unplanned areas, households were provided with clear infor- mation on future infrastructure expansion plans, which helped to secure rights of way for future 7 investment (World Bank 2014). To minimize risk exposure, important win-wins could be achieved by integrating flood risk management with broader development objectives, such as in the northern corridor. The north and northeast areas of Haiti experience population growth pressures, deficits of basic services and transportation, and significant flood risk. Inaction in these places will lead to increasing numbers of people at risk. Strengthen property rights and promote institutional reform for improved governance Resilient planning is a long-term effort that demands institutional reform and strengthening, but stepping stones can be put down today. The government can begin with specific actions, including strengthening property rights with dispute-resolution mechanisms and promoting municipal cooperation in Haiti’s largest cities. The establishment of a single and accurate record of land ownership is vital for resilient development, but there are many challenges to cadastral reform and the establishment of an effective land registration system. In Haiti, legal uncertainty over property rights stands out as one of the main hurdles, and any effort to establish formal land titles depends on the broader institutional structure for property rights. Initial efforts, however, can be made by strengthening alternative dispute-resolution mechanisms to help solve the backlog of unresolved property rights disputes, which may facilitate the creation of an official land registry. Also, building frameworks for municipal cooperation becomes increasingly important in light of Haiti’s continued progress toward political and fiscal decentralization. Effective service provision is a priority for institutional reform, yet coordination across municipal, and even departmental, boundaries is necessary to avoid duplication of activities or contradictions in policies. This can be achieved by developing coordination frameworks to promote cooperation. CONNECTING: BETTER WITHIN-CITY CONNECTIVITY AND ACCESSIBILITY ARE ACHIEVABLE THROUGH IMPROVED MOTORIZED TRANSPORT AND ENHANCED COORDINATION BETWEEN LAND USE AND TRANSPORT INVESTMENTS Today, poor connectivity within Haitian cities hampers integrated labor markets and access to economic opportunities. Accounting for within-country variation, accessibility to economic oppor- tunities in Haitian cities is poor. Public transport in urban areas is unaffordable to many, limiting their access to economic opportunities, especially among the poorest households.6 Tap-Taps are the most widely used form of public transportation in Port-au-Prince, covering 56 percent of the market.7 Although regulated by the Ministry of Social Affairs, Tap-Tap fares are unaffordable to many poor households. Based on current fare costs, if a Tap-Tap journey was repeated twice a day, five days a week, transport expenditures would represent anything between 25 and 73 percent of per capita expenditures in the lowest quintile. The proportion of households that spent nothing on transport in 2011–2012 was 57.1 percent, according to the Haitian Household Expenditure Survey (IHSI 2012), meaning that just under 60 percent of households used no motorized transport whatsoever. Haiti is 6 Most information on urban transport patterns in the metropolitan area of Port-au-Prince was extracted from a report “Urban Transport in Port-au-Prince” prepared by Kopp and Prud’homme (2011) for the Inter-American Development Bank. 7 Tap-Taps are converted pick-ups often imported from the United States and Canada, and can seat 10-14 people but often accommodate up to 20. These informal minibuses are the dominant collective transport service in urban areas. 8 COMMUTERS DURING DAYTIME FOR WORK-RELATED ACTIVITIES (LEFT) Figure O.2. AND DURING THE EVENING (RIGHT) Source: Authors’ elaboration using Digicel data. in the process of eliminating subsidies on fuel prices, which could worsen the affordability of public transport without compensatory measures. Though well-intended, because they are highly regres- sive, the removal of these subsidies may result in higher costs to Tap-Tap owners if they must absorb the fuel cost increases. Any increase in transport fares intended to offset extra costs would exacer- bate the unaffordability and further exclude the poor from accessing economic opportunities. This report is the first to use mobile phone call records to understand commuting patterns and the degree of spatial mismatch between jobs and homes in Haiti. A good understanding of how workers move in and around the largest cities, where the job centers are and how accessible they are for different segments of Haitian urban society, and what the most critical road segments are to ensure that job accessibility not be affected by a disaster, can provide valuable information for evidence- based decision making. Absent up-to-date censuses and travel surveys, accessibility to opportuni- ties in Haitian cities was measured using mobile phone data. Call data records8 were utilized to track locations of users throughout the day, and even at night. This information was plotted into maps, which showed where jobs were geographically concentrated in the two main urban centers of Port-au-Prince (Figure O.2) and Cap-Haïtien. The overall picture is one of concentration toward the city center during daytime, where most jobs are located, and inversely one of diffusion toward the outskirts during the evening. 8 Digicel, the main mobile phone subscription provider in Haiti (with close to 80 percent of the market), granted the team access to a sample of de-identified call records. This technique was used to overcome data scarcity in Haiti. 9 An analysis of commuting patterns shows that labor markets are fragmented in Haiti. Port-au- Prince and Cap-Haïtien suffer from low employment accessibility as measured by commuting patterns. Data show that only a small share of people in both cities travel to work and the distances traveled by these commuters are short. Only 42 and 40 percent of the population are considered commuters in Port-au-Prince and Cap-Haïtien, respectively, traveling beyond their home cluster (1km radius). These patterns are indicative of local job matching, meaning that access to a large array of economic opportunities is low. While short commutes are not negative in themselves, they may reflect the difficulty and unaffordability of traveling. Motorized travel is slow and lengthy in Port-au-Prince, mainly due to a combination of lack of road infrastructure, poor road maintenance, and suboptimal use of public street space. Based on travel logs of various vehicles, speeds in Port-au-Prince are as low as 10.9km/hour on average. Public transport travels at slower speeds, with Tap-Tap users reporting an average on-board travel time of 44 minutes for an average commute distance of 5.9km, suggesting average speeds for Tap-Taps of 8km/hour. Part of the problem is lack of road space, but Kopp and Prud’homme (2011) argue that congestion can mainly be attributed to the suboptimal use of street space and poor road maintenance. Encroachment of the public realm occurs when sidewalks are used by merchants for commercial purposes, forcing pedestrians to walk in the traffic lane. In addition to pedestrians’ use of roads, road space is also compromised by parked vehicles. Together, these factors lead to considerable loss of speed and heightened safety risks for pedestrians. Cities should become integrated labor markets that provide opportunities to residents, allowing them to choose jobs from larger pools and thus leading to increased welfare (Bertaud 2014). Integrated labor markets exist when it is possible for an individual to reach a large share of the employment opportunities within a city at a reasonable cost or within a reasonable period. Large and integrated labor markets support improved matching by increasing the number and diversity of employers and job seekers, which makes the best of their skills and aspirations. When access is good, firms also benefit from the proximity to product and labor markets that the density of cities allows. Conversely, when accessibility is limited the likelihood of finding a good match is smaller, because firms and households must select from a smaller pool of workers and employment options. Jobs outside high-density economic clusters tend be scarcer, more informal, and lower paying. Low accessibility levels also pressure families to locate closer to jobs, which can turn out to be a disadvantage given that land and housing are more expensive, in turn forcing these families to live in basic conditions and fueling the growth of central slums found, for example, in many African cities (Antos, Lozano-Gracia, and Lall 2016). Connectivity and accessibility are necessary—but not sufficient—conditions to achieve efficient urban labor markets. Creating jobs and achieving efficient labor markets demand a multidimensional solution to overcome many obstacles, ranging from the lack of a financial and banking system to create businesses, to low education levels, and a costly regulatory framework. Improving accessibility will not solve all these issues, but failing to address urban accessibility will impede progress in productivity and livability. To address connectivity challenges in Haitian cities, actions along the following three lines are essential. 10 Improve travel speeds and quality of service through more investments and enhanced efficiency in urban areas There are various avenues to increase speeds for motorized transport in urban areas, which could improve accessibility and help cities become better matchmakers. Investing heavily in roads and public transport is certainly a way to do this, although such an option would require large financial resources and is unlikely to be very effective before the chronic challenges on the current network are addressed. Therefore, a more immediate solution is to focus first on improving the operation and maintenance of the current network. These two options are not mutually exclusive, but the most effective sequencing would be to start by improving the current network. Less expensive alternatives, such as improved traffic management, road space allocation, and road maintenance can yield significant results. Improving road space requires freeing up road lanes for circulation rather than to accommodate street parking or pedestrians. At the same time, sidewalks must prioritize pedestrian mobility over street vendor activity9 and ensure comfort and safety of those commuting by foot. Road maintenance— repairing potholes and uneven road surfaces—can save vehicle maintenance costs and travel time. A first step would be to replenish Haiti’s existing road maintenance fund. In the longer term, collective transport lanes could be a promising approach to reduce travel times in urban areas. Increase the affordability of collective transport for inclusive matching of opportunities Reductions in operating costs could help lower transport fees and improve affordability, via several means. First is to increase speeds on the road network, through interventions on the network and by rationalized Tap-Tap routes to allow Tap-Tap drivers to complete more round trips in a given time. This option would increase the revenues and margins of Tap-Tap operators and could lead to lower fares, and is the most promising. Another approach would be making Tap-Tap vehicles – often operated for more than 25 years (Kopp and Prud’homme 2011) – more fuel efficient to lower the volume of fuel required. Public interventions to scrap old, fuel-inefficient, informal minibuses and subsidize the purchase of more efficient vehicles were adopted in Senegal and the Dominican Republic, and the lessons learned from these experiences could help in Haiti. The urban area of Dakar (Senegal), for example, created incentives for informal car rapide (minibus) operators to buy more fuel-efficient minibuses from 2003 to 2008, providing subsidized loans that covered around 75 percent of the purchase cost of the vehicle (Kumar and Diou 2010). In exchange, car rapide owners had to retire their old vehicle and formalize their activities. Using the lessons from Senegal, a suitable model for the Haitian context could be designed, such that it can be negotiated with local operators. An ongoing technical assistance of the World Bank is exploring different mechanisms to offset fuel-cost increases, and the results will inform whether scrapping old Tap-Tap vehicles is a viable option. In the longer term, carefully targeted transport subsidies could be directed toward the poorest households to ensure they obtain or retain access to opportunities. 9 Digicel, the main mobile phone subscription provider in Haiti (with close to 80 percent of the market), granted the team access to a sample of de-identified call records. This technique was used to overcome data scarcity in Haiti. 11 Strengthen coordination of land use and transport investments for improved access and increased resilience Interventions aimed at coordinating land use and transport reduce the disconnect between residential areas and employment opportunities and help build resilience in the wake of natural hazards. Two main ways of improving accessibility to opportunities in urban areas have been identified: increasing speeds and reducing distances. The first calls for investing in the connective network and making motorized transport more affordable, while the second entails reducing the fragmentation of the urban footprint by incentivizing density of people and opportunities and better integrating land use and transport. At present, population densities in Port-au-Prince and Cap-Haïtien are high, so there is limited room to reduce the distance between people and economic opportunities by increasing densities further. However, modifying the spatial layout to encourage land use clustering can increase accessibility within a given period. There is also considerable room to advance accessibility by planning for urban expansion while reducing exposure to natural hazards. Both cities show examples of urban development, either in safer but poorly connected areas or closer to economic opportunities but in riskier locations. It is important to avoid these trade-offs and carry out investments that prioritize both measures. A first step in building a strategy for increased resilience against natural disasters is under- standing which road sections are the most critical links in the network. Based on a criti- cality analysis, the most urgent road segments for intervention in Port-Au-Prince’s network are the Route Nationale 2 that connects downtown to Carrefour and beyond to the west, RN1 connecting the downtown and north areas of the capital, an isolated link between downtown and Pétionville, and a couple of links connecting Canaan to the rest of the network. FINANCING: STRENGTHENING MUNICIPAL FINANCES IS ESSENTIAL TO CLOSE THE URBAN INFRASTRUCTURE AND SERVICES GAP, AND TO ACCOMMODATE THE GROWING URBAN POPULATION Given its current rapid urbanization, Haiti faces big challenges in strengthening public finances. Today, the ability of local governments to plan, service, and connect cities and towns is heavily constrained by limited resources at the municipal level. Over the past two decades, the gap between the funding capacity of Haiti and the pace of urban growth has led to a constant deficit of urban infrastructure and services in cities and towns. The progressive decline of international aid further widens the funding gap. According to World Bank (2016), Haiti faces critical challenges, including adapting to financial reductions, raising more revenue internally, and making better use of existing funds. Despite improvements in the country’s fiscal revenue, from less than 10 percent of GDP in 2004 to 12.6 percent of GDP in 2014, Haiti remains the poorest performer in revenue mobilization in LAC (World Bank 2016). This greatly hinders the country’s ability to carry out much-needed devel- opment spending in infrastructure, health, education, and other key sectors. As cities expand in size and population, the challenge to finance sustainable and inclusive urban development grows. Municipal governments are unable to provide adequate infrastructure and services due to incom- plete decentralization and a weak legal framework for municipal finance. The Constitution of 1987 (including the 2012 amendment) and the Presidential decrees of 2006 establish the fiscal and 12 financial autonomy of communes, the decentralization of public services provision, and the institu- tionalization of municipal revenue. But while the decentralization framework is in place, effective devolution of key expenditure and revenue functions to municipal governments has not yet taken place. A fragmented municipal finance framework hampers the ability of local governments to raise revenue to finance service provision. Thus improving local government capacity for public financial management remains key to successful devolution of responsibilities to communes and to effective fiscal decentralization. Only 0.6 percent of GDP is currently spent at the communal level, and total municipal revenue makes up only 1.7 percent of total revenue. It is important to address the inconsis- tencies in devolution and decentralization so that function follows finance. Limited and unpredictable sources of municipal revenue undermine capacity for planning, budgeting, and delivery of much-needed services in urban areas. Local governments have four main sources of revenue: transfers from the central government; taxes collected on behalf of the communes by the General Tax Office (DGI); duties and royalties collected by the communes; and other external sources (such as development partners). However, local governments are dispro- portionately dependent on national transfers, mainly the Local Government Development Fund (FGDCT). Except for Port-au-Prince, Pétionville, and Delmas, it is the main source of income for communes, typically ranging between 80 and 95 percent. The transfer system, however, lacks trans- parency and is unreliable. Only half of the funds designated for the communes are transferred, and a significant share is transferred to inactive or nonexistent structures. Additionally, national transfers reduce the incentives for improving public financial management in local governments, as these are neither linked to improved performance in service delivery nor are they entirely needs- based. The financial capacity of local authorities is further curtailed by their limited tax collection capacity. Municipalities often only collect a fraction of their revenue potential. Own-source revenue is highly concentrated in major cities, with the five communes of the Port-au-Prince metropolitan area collecting 80 percent of all Haitian communes’ own resources. Better planning, connecting, and servicing cities and towns in Haiti require substantial inter- vention to review, revise, and scale their financing arrangements. Enhancing transparency in fiscal transfers, developing more dynamic sources of local revenue, and strengthening municipal finances are crucial steps in guiding urban growth away from crowding and toward healthy and productive densities. Present levels of resources fall extremely short of current demand for services. There is an urgent need to improve the volume, predictability, timeliness, and management of finances, and to identify additional mechanisms for generating own-source revenue. This requires a systematic effort to adjust and implement reforms aimed at improving national and local government management and the oversight of resources. Since May 2014, the government has developed a comprehensive public financial management reform strategy and action plan aimed at ensuring a financial system that promotes transparency, accountability, fiscal discipline, and efficiency in using and managing public resources by growing revenue from taxes and tariffs, thus increasing local government autonomy. However, limited progress has been made to date. The following paragraphs highlight the key actions needed to strengthen municipalities’ finances and their capacity to provide much-needed local services. 13 Consolidate, harmonize, and enforce the legal and regulatory framework for municipal financing Policy options should first focus on fixing the gaps in the institutional, regulatory, and financing framework for local governments. Haiti’s urban development is taking place in a context of incom- plete decentralization and an unclear legal framework for municipal financing. A regulatory framework that provides clarity of roles and resources is crucial for effective decentralization. Steps in this direction include reviewing the normative framework of municipalities, as stated in the decrees of 2006, and identifying actions for implementation; formalizing the taxation functions and responsibilities of municipal governments; and reviewing legislation and regulations, particularly those related to property tax and business tax. Together, these actions seek to clarify the respon- sibilities, systems, incentives, and accountability relationships for the financing and delivery of services, and the capacity of local governments to manage and allocate increased funding. Recent reform work has opened the door to opportunities to deepen decentralization efforts. A draft law on the financial autonomy of communes and communal sections is on the legislative agenda. Strengthen the system for municipal finance to build capacity and accountability, and expand financial opportunities A stronger municipal financial system is needed to increase the financial autonomy of local govern- ments. As mentioned, cities are heavily constrained by limited revenue sources and are highly reliant on transfers from the national government. The solution may differ between small and large cities. For smaller cities, efforts can be focused on enhancing the management, oversight, and transparency of the FGDCT, including fund mobilization, allocation, transfer, expenditures, and accounting, and using the fund as an opportunity to build local capacity for implementation. Larger cities, on the other hand, must prioritize building capacity for own-resource revenue collection, management, and spending. Expand and leverage the local revenue base Municipalities need more revenue autonomy through access to strong and broader sources of local revenue. The financing system in place is not working to the advantage of local governments: not only are revenue levels too low to meet the demand of public services and infrastructure, but the options to increase revenue are flawed and leave little room for accessing adequate financial resources. For municipalities to generate and collect own-source revenue, efforts must be geared toward strength- ening the planning and budgeting capacity of municipalities, including forecasting of revenue. To improve the financial management capacity of local governments, the Ministry of Economy and Finance (MEF) and the Ministry of Interior and Local Authorities (MICT) could develop a local government public financial management manual, which sets the basic standards and procedures in budgeting, accounting, reporting, procurement, and audit. This improvement could be achieved through capacity-building programs that focus on four main areas: strengthening the administrative capacity of the municipal financial units; strengthening the capacity of municipalities in project management for timely disbursements of FGDCT funds allocated to them; increasing municipality revenue mobilization capacity including enhancing technical competencies of staff; and providing municipalities with incentives to explore alternative financing mechanisms. 14 “LIVE TODAY, BUT THINK ABOUT TOMORROW” (WÈ JODI A, MEN SONJE DEMEN) The challenges discussed in this report need action today. But, as the proverb says, policymakers need to think about tomorrow. Not everything can happen today, so defining what must take place now and how that will open the way for much-needed changes is essential. Table O.1 summarizes policy recommendations and puts forward specific actions that can be taken in the short, medium, and long terms, distinguishing between high-, medium-, and low-pri- ority actions, as well as identifying the institutions leading the actions. Most actions require the engagement of more than one institution, thus underscoring the importance of collaborative efforts in achieving urban development that benefits all. 15 Table O. 1. SUMMARY MATRIX OF POLICY RECOMMENDATIONS: PLANNING, CONNECTING, AND FINANCING CITIES IN HAITI Key to Table PRIORITY LEVEL TIME HORIZON H High M Medium L Low S Short-term M Medium-term L Long-term (next 12 months) (next 1–3 years) (next 3-5 years) MOVING FROM RECONSTRUCTION TO RESILIENT URBAN PLANNING FOR A BRIGHT FUTURE A shift toward resilient urban planning is needed to address current infrastructure deficits and prepare for future urban growth TIME PRIORITY LEADING BROAD HORIZON LEVEL INSTITUTION(S)/ ISSUE RECOMMENDATION SPECIFIC ACTIONS (S, M, L) (H, M, L) CHAMPION(S)* High deficits in basic Invest in resilient Upgrade and extend access to services; leverage S H MTPTC urban services, and infrastructure to address past community-driven efforts, but at the same Communes current deficits in basic time build capacity now for the long term limited investment in urban services. infrastructure to meet Improve basic service management and S H MICT growing population delivery while building and consolidating local Communes government capacity through performance- needs based mechanisms. Disseminate risk-analysis insights to support M H MICT-DPC informed decision making and vital non- CNIGS structural measures to protect people and assets MTPTC from risk. Uncoordinated Leverage information Use information to align incentives: inform S M MPCE growth of cities with to facilitate coordinated citizens about future plans and risks so that Communes decision making among they can make better decisions. insufficient regard to households, firms, and natural disaster risk government. Integrate flood risk knowledge with M M MTPTC transparent urban infrastructure investment MARNDR decision making. Conduct vulnerability assessment of critical S H MTPTC public infrastructure. Weak land Strengthen property rights Strengthen property rights with dispute L M CIAT administration, and promote institutional resolution mechanisms. reform for improved opaque information governance. For Haiti’s largest cities, build frameworks for L M MICT on land ownership, municipal cooperation. MPCE and inappropriate land regulation SHAPING LABOR MARKETS: CONNECTIVITY, JOBS, AND RISKS Better within-city connectivity and accessibility are achievable through improved motorized transport and enhanced coordination between land use and transport investments TIME PRIORITY LEADING BROAD HORIZON LEVEL INSTITUTION(S)/ ISSUE RECOMMENDATION SPECIFIC ACTIONS (S, M, L) (H, M, L) CHAMPION(S)* Fragmented labor Increase speeds and Better manage road and sidewalk space for S H MTPTC markets caused by the improve quality of transport increased speeds, more pedestrian comfort, Communes through more investments and decreased road accidents. spatial mismatch and enhanced efficiency. between economic Guide urban expansion toward accessible and S H MPCE opportunities and safe locations, and secure rights of way for Communes future infrastructure investments. residential locations Invest in road maintenance for lower future S H MTPTC costs of repairs and increased speeds. Unaffordable and slow Leverage information Build Tap-Tap stops and dedicated public M M MTPTC public transport to facilitate coordinated transport lanes for increased speeds and Communes decision making among accessibility and lower costs for operators and system households, firms, and fares for users. government. Promote retirement of fuel-intensive Tap-Tap M M MEF vehicles to lower operators’ costs and travel fares and to reduce vulnerability to an increase in fuel prices. Limited coordination Strengthen coordination of Build resilience of the transport network S H MTPTC between land use and land use and transport in- by identifying the most critical links and DPC vestments for better access upgrading or investing in redundancy. transport planning and resilience. reduce accessibility In parallel, enforce building codes to minimize L M MTPTC and increase the impact of natural hazards such as Communes vulnerability of the earthquakes. network Develop registers and statistical systems L M IHSI for targeted demand-side public transport subsidies for the poorest and most vulnerable. * LEADING INSTITUTION is shown bolded. The institutions are abbreviated as follows (in alphabetical order): DPC Directorate for Civil Protection MARNDR Ministry of Agriculture, of Natural Resources, and Rural Development DGI General Tax Office MEF Ministry of Economy and Finance IHSI Haitian Institute of Statistics and Information MICT Ministry of Interior and Local Authorities CIAT Inter-Ministerial Committee for Territorial Development MTPTC Ministry of Public Works, Transport and Communications CNIGS National Center for Geo-spatial information MPCE Ministry of Planning and External Cooperation FINANCING HAITIAN CITIES Strengthening municipal finances is essential to close the urban infrastructure and services gap, and to accommodate the growing urban population TIME PRIORITY LEADING BROAD HORIZON LEVEL INSTITUTION(S)/ ISSUE RECOMMENDATION SPECIFIC ACTIONS (S, M, L) (H, M, L) CHAMPION(S)* Incomplete Consolidate, harmonize, Review the normative framework of the ter- S H MICT decentralization and and enforce the legal and ritorial collectivities as established in the five regulatory framework for decrees of 2006 and identify possible actions a fragile and municipal financing. for implementation. fragmented legal framework that Formalize the taxation competencies entrusted S H MICT to the municipalities as stipulated in Article MEF-DGI governs municipal 142 of the decentralization framework. finances Revisit municipal tax laws, particularly those M H MEF-DGI related to property tax and business tax. MICT Limited sources of Strengthen the system Strengthen tools available for linking invest- S M MICT municipal revenue for municipal finance ment planning, budgeting, and execution for Departments and expand financing local governments. Communes opportunities. Build local capacity for budget managing for M M MICT timely execution of budget and better service Departments provision. Communes Carry out property assessments in all S H MEF-DGI municipalities and update the property tax Communes registry accordingly to broaden the tax base. Lack of transparency Conduct a diagnostic of the inefficiencies in L M MEF and limited reliability the FGDCT and agree on an action plan. MICT of the transfer system Implement an action plan for enhancing L M MEF FGDCT (allocation, management, transfer, MICT and monitoring and evaluation) and initiate drafting of intergovernmental fiscal strategy. * LEADING INSTITUTION is shown bolded. The institutions are abbreviated as follows (in alphabetical order): DPC Directorate for Civil Protection MARNDR Ministry of Agriculture, of Natural Resources, and Rural Development DGI General Tax Office MEF Ministry of Economy and Finance IHSI Haitian Institute of Statistics and Information MICT Ministry of Interior and Local Authorities CIAT Inter-Ministerial Committee for Territorial Development MTPTC Ministry of Public Works, Transport and Communications CNIGS National Center for Geo-spatial information MPCE Ministry of Planning and External Cooperation REFERENCES Antos, S. E., N. Lozano-Gracia, and S. V. Lall. 2016. “The Morphology of African Cities.” Policy Research Working Paper 7911, World Bank, Washington, DC. Bertaud, A. 2014. “Cities as Labor Markets.” Working Paper #2, Marron Institute on Cities and the Urban Environment, New York University, New York. Deuskar, C., B. P. Stewart, and N. 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