geopolitical risk ratings firm

Haiti – No End to Dysfunction

MOST LIKELY REGIMES AND THEIR PROBABILITIES
18-Month: Divided Government 65% (45%)
Five-Year: Divided Government 45% (40%)
FORECASTS OF RISK TO INTERNATIONAL BUSINESS
 
Turmoil
Financial Transfer Direct Investment Export
Market
18-Month: High B- B- C+
Five-Year: High C+ (B-) C+ (B-) C+(B-)

( ) Indicates change in rating.                                    *  Indicates forecast of a new regime.

KEY ECONOMIC FORECASTS

Years
Real GDP Growth %
Inflation %
Current
Account ($bn)
2011-2015(AVG) 3.4 6.9 -0.51
2016(F) 2.6 10.9 -0.45
2017-2021(F) 3.1 6.3 -0.40

No End to Dysfunction
On October 25, Haiti held a first round of presidential voting concurrently with run-off elections to determine the winners for most of the seats in the enlarged 119-member Chamber of Deputies and two‑thirds of the seats in the 30-member Senate.  The hope was that the elections would clear the way for the restoration of a functioning legislature for the first time since January 2015, and produce a legitimate claimant to the presidency before the expiration of Michel Martelly’s mandate in early February 2016.
But six months later, there are still 27 vacancies in the lower house and six in the Senate, the executive branch is headed by a temporary president elected by the incomplete legislature, and there are serious doubts that the patched-together administration will be able to complete the election process before the expiration of its 120-day mandate in early June.  Adding to the uncertainty, it is not at all clear what happens if it does not.
Interim President Jocelerme Privert has become embroiled in a controversy over his decision to appoint a commission to verify the disputed results of the October voting, which Jude Célestin, who finished second in the first-round of presidential voting, has made a condition for his participation in the run-off election.  Célestin’s previous threat to boycott the elections triggered violent protests that forced the cancellation of two previous attempts to hold the vote.
Unfortunately, the leading candidate, Jovenel Moïse, who is running with Martelly’s support, suspects a plot to deny him the presidency, and has warned that he will order his supporters into the streets if Privert proceeds with the verification commission.  Making matters worse, international donors are pressing Privert to stick with the timetable outlined in the accord.
Facing the prospect of violent unrest either way, it is extremely doubtful that the results of elections held under such conditions would be accepted as legitimate.  Parliament will have the option of extending the provisional government’s tenure, with the agreement of all parties, or possibly even choosing someone else to take a crack at completing the task.  The US and other foreign benefactors might not be pleased, but Haiti’s lawmakers do not seem to be unhappy with the current arrangement.
Perhaps the most troubling aspect of that prospect is that it could very well be the best-case scenario for Haiti.  If nothing else, Privert can at least claim to have the support of a majority in the partial legislature.  It is doubtful in the extreme that anyone who assumes the office following what will inevitably be a disputed election will be able to achieve even that much.

Economic Forecasts for the Three Alternative Regimes

Divided Government Reformist Coalition Authoritarian
Growth
(%)
Inflation
(%)
CACC
($bn)
Growth
(%)
Inflation
(%)
CACC
($bn)
Growth
(%)
Inflation
(%)
CACC
($bn)
2016 2.6 10.9 -0.45 3.0 9.8 -0.40 1.2 12.1 -0.52
2017-2021 3.1 6.3 -0.40 4.5 4.7 -0.65 -1.0 14.5 -1.15

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