The Haitian curse: it may be slowly lifting.

• Author: Kleiman, Gary N.

The past decade of unrelenting political standoff in the hemisphere's poorest country sparked a crime and murder rampage at home and an exodus of boat people seeking better lives in neighboring islands and the United States. But a May commercial and diplomatic mission to Washington by a high-level Haitian delegation inspired praise of tentative economic and security shifts that Caribbean basin investors have begun to notice. A United Nations mission to assess the peacekeeping effort there just before the visit cited "encouraging factors" following successful presidential and provincial elections in 2006, including the group's ability to circulate freely through the capital Port-au-Prince's worst and most violent slum, Cite-Soleil. It suggested the overriding challenge was "finding employment and economic growth" to reinforce the positive direction.

At a White House meeting with Haiti's President Rend Preval, President Bush noted the changes. He said, "Inflation is down and exports are up" after passage of legislation extending duty-free status to Haitian garment assembly operations, and pledged continued assistance with anti-corruption and drug efforts, fighting natural disasters, and normalizing immigration rules. Commerce Department statistics show the United States is the destination for 75 percent of exports, and accounted for US$125 million in foreign direct investment last year and the bulk of US$1.6 billion in remittance money, equivalent almost to 40 percent of gross domestic product. Aid to rebuild infrastructure and provide income and health support to the 85 percent of the population earning under two dollars daily was US$150 million for the period.

Western donors overall committed US$750 million through the end of 2007 at a conference coordinated by the Inter-American Development Bank and World Bank, and agreed to debt relief as the country reached the initial decision point phase of the Heavily Indebted Poor Country (HIPC) program. A three-year US$100 million loan facility was signed with the International Monetary Fund last November, which commented that "macroeconomic stability was restored through fiscal discipline and improved governance," with progress in growth, inflation, currency, and foreign exchange reserve levels. The central bank's refusal to underwrite budget deficits while maintaining positive interest rates was a key pillar of recovery, it added.

This year the economy is on track with agricultural, textile, and...