Financing Haiti's Recovery

While many of us struggle to stay afloat during these tumultuous economic times, donors large and small have come out in full force to support Haiti in the wake of a tragic earthquake that took the lives of 100,000 victims. From Fortune 500 companies to individuals, celebrities to sports teams, everyone is doing what they can to help ease the pain of this horrific disaster. Brad and Angelina gave $1 million to Doctors Without Borders. The New York Yankees donated $500,000. Eli Lilly and Co. pledged $125,000 now and $125,000 over the next year. Financial institutions and banks have also turned out. U.S. securities and investment banking firm Jefferies donated all of its net commissions and volunteered salaries for one day, in addition to a $1 million sum to the relief effort.

Technology has made raising money quicker and easier, allowing anyone with a cell phone or computer to become part of the relief efforts. The American Red Cross has raised over $8 million through texts that add $10 donations directly to phone bills. Amazon.com's homepage features a link to MercyCorps, a charity providing disaster relief, which raised $111,000 in its first six hours.

The outpouring of generosity may even exceed the private donations made after Hurricane Katrina, totaling $6.5 billion and the 2004 Asian tsunami for which $2 billion was given globally. Aid groups say cash is most useful because it flows directly to the efforts on the ground. Donated goods and food are a good alternative, but may not be usable if the region is inaccessible or can be delayed through customs.

Money given now is flowing to immediate needs such as food, water and medical supplies. As the search for survivors comes to an end, international efforts are beginning to focus on building a future for a country that was already the poorest in the Western Hemisphere before the disaster. Government donors including IMF and UN officials will meet in Montreal this week and the World Economic Forum in Davos, Switzerland will emphasize how to encourage international investment in a market that was excluded from much of the global investment boom of the past decade.

Only time will tell if a mixture of public and private development efforts will be able not only to rebuild Haiti's infrastructure, but also improve Haiti's education system, social programs and healthcare. Perhaps there could even be a silver lining to this terrible storm cloud if the outpouring of aid could be used to create new economic opportunity and poverty alleviation that the country lacked prior to the disaster.