Empowering Hope: How Haiti’s Remittances Can Transform Lives

Remittances play a vital role for poverty-struck communities, especially when it comes to countries like Haiti. The Caribbean nation depends on remittances sent from abroad, particularly from the United States where the Haitian diaspora is considered the 15^th largest foreign-born population.

Today, three-fifths of Haitians live on less than $2 a day. Following a long history of socioeconomic problems and decline, the devastating 2010 earthquake pushed the country to its limit. With no government system to fall back on and grave societal issues such as food insecurity, Haiti depends on the funds received from abroad. But these same remittances could help rebuild and restore Haiti to what it used to be.

Haiti’s and its Economy Today

Prior to the French colonial era, the island of Hispaniola was inhabited primarily by the Taínos. The population was organized into chiefdoms, with Marién and Jaragua occupying present-day Haiti.

Each chief was in charge of distributing work amongst their communities to ensure there would be enough food and resources to go around. For the most part, women were in charge of agricultural and domestic tasks, including artistic endeavors, while men would take care of planting, hunting, fishing, and carving. Even children played an active role, scaring away birds from the plantations.

Under subsequent French rule, Haiti, then known as Saint-Domingue, became one of the wealthiest and most profitable colonies in the world, though the indigenous and slave populations were not benefitting from this economic growth.

By 1804, Haiti became the first nation to have gained its independence through a slave revolt, the first freed colony in Latin American, and the first to abolish slavery. Unfortunately, it was this same great feat that cemented the nation’s economic decline.

There were several crucial factors at play: the destruction of capital and infrastructure, the lack of diplomatic and trade relations with other nations, the scarcity of foreign and domestic investment, the transitions towards subsistence farming to escape plantation agriculture, and reparation payments made to France.

The last factor was a particularly brutal and damming one. In order for the French Empire to formally recognize their independence, Haiti was forced to pay a sum of 150 million francs – or the equivalent of $21 billion in today’s money, which practically matches the country’s 2021 Gross Domestic Product (GDP). 

The Impact of the Haitian Diaspora

Fast-forward to today, Haiti is the poorest nation in the Western hemisphere, and its unlucky geographic location hasn’t helped.

As such, there has been a massive increase in migrants leaving the country over the years. Some 1.75 million Haitians had left the island by 2021, according to data from Knomad.

But there is hope for Haiti, and much faith can be applied to the ever-growing diaspora population. There’s an estimated 70% of skilled labor immigrants currently living outside the country, eager to get back home and build up their homeland.

Moreover, the Haitian diaspora, particularly in the US, has made big gains towards achieving better education, with some 13% of them obtaining a Bachelor’s degree- a far cry from the 4.53% in Haiti. This type of education can better prepare them to help in Haiti’s development.

All in all, the Haitian work ethic and belief in the equalizing force of education remains the diaspora community’s major asset.

Currently, the best contributions these overseas Haitians make to their economy is through remittances. The country relies heavily on them, and they make up to 24% of the country’s GDP. Some $3.8 billion worth of remittances were sent in 2023. For that reason, it’s also important to foster a climate of financial inclusion that will help Haitians take better advantage of the money they have and kick-start their future.

Fostering Financial Literacy and Inclusion

Being educated in financial literacy is crucial for financial inclusion, which continues to be a big challenge for Haiti going forward. Even those who own some type of bank account or mobile wallet still lack basic financial skills.

That education and skills deficit then impedes them from accessing the most basic of financial services, with a mere 32.6% of Haitians owning an account, according to data by World Bank.

In Haiti, only 1.27% of the GDP is spent on education, which is over 3 points lower than the global average, which sits at 4.4%. This lack of government funding directly impacts the population’s financial literacy levels and means that much of the education-related infrastructure, such as schools, aren’t prioritized to be repaired or rebuilt.

In fact, more than a thousand of the affected schools are yet to be rebuilt after another devastating earthquake in 2021.

Adding to this lack of schooling infrastructure, another aggravating factor is the poor literacy rate in the country, with just 61.7% of the population being able to read. If people can’t read, they’ll struggle to receive any type of education.

Another report concluded that the reason many people in Haiti don’t have a financial account is because they simply can’t afford one (34%) or that it’s too expensive (15%), so education isn’t the only factor at play.

Despite these relatively low figures, the number of Haitians with accounts is on the rise, to the point where they are now on a par with other low-income countries. Though it’s still not an overly positive fact, it bodes well for the country going forward.

Empowering Hope through Remittances

Though Haiti is taking huge strides to improve their future, the country’s situation is still a difficult one. However, if there’s one thing that history has taught us is that they have proven to overcome fierce obstacles.

And now, with the money received through remittances, Haitians have a whole host of options regarding where they can best put their money to use, according to their needs and what they want.

Once Haitians achieve greater financial inclusion – be it through the opening of bank accounts or the acquisition of different financial products such as credit or loans – the money can be put towards developing local infrastructure, towards education to raise the ceiling for Haiti’s youngest or towards healthcare, all in a bid to reduce dependence on foreign aid, which totalled some $13 billion between 2011 and 2021.

By consciously channelling their funds, they can invest strategically to secure their future, improve the overall economy of their country, massively increase their immediate living conditions and also develop sustainable economic growth overall.

This puts Haiti at a bit of a crossroads. While the remittances Haitians receive can and should be put towards improving everyday life and the future of the country as a whole, a broken system plays against them.

In the meantime, steps should be taken to continue improving financial literacy. With better access to banks, Haitians will be more empowered and will achieve greater economic stability, helping to build a better future and drag themselves out of the complicated situation they’re currently in.

Are you looking to send money back home to family or friends? Then make sure you visit any of our locations or download the Ria Money Transfer app to get started.