Haiti scrambles to get its financial system up and running

MIAMI — Haiti
scrambled Tuesday to get its fragile banking system up and running, a
pivotal step in restoring life to the earthquake-battered nation.

Haiti’s central bank told its commercial banks, which have remained closed since the Jan. 12 earthquake, to reopen Thursday. “People in diaspora should not have any problems sending money to family,” said Charles Castel, head of the central bank.

Meanwhile, money transfer services, which play a
critical role in sending cash to Haitians from family members abroad,
began resuming operations amid damaged facilities, limited
communications, and a shortage of cash.

To help, some firms, such as Western Union
and Unitransfer, are temporarily offering fee-free money transfers to
the island nation, which is the poorest country in the Western
Hemisphere.

The crucial flow of cash into Haiti was abruptly cut off when last week’s devastating earthquake struck the capital at Port-au-Prince.

In the early days after the earthquake, other
priorities — search and rescue, health care, and food and water —
remain most important. However, as Haiti looks to stabilize, cash and a functioning banking and payments system will become increasingly crucial, banking experts say.

A World Bank official told The Miami Herald that experts inside and outside of the bank planned to hold a conference call Wednesday to evaluate the status of Haiti’s financial system and to discuss ways to inject life into the remittances and payments system in the wake of the disaster.

Amiceau Almira, who used to work at Western Union,
sat outside a damaged center in Petionville Tuesday, his pockets empty,
telling folks that the shop was still closed. He said the agency is
open in Saint-Marc, Gonaive and Cap Haitien, and expected to open more
locations in the capital on Thursday or Friday.

“Currently, we’re working with our agents and local offices in Haiti to help restore service. We are operating on a partial basis,” said Daniel Diaz, a Western Union spokesman. “Where we have open locations, they are operating. The only variable factor is the availability of currency.”

Haitians rely heavily on remittances from friends and family members overseas. The Inter-American Development Bank estimates remittances to Haiti reached more than $1.87 billion in 2008. That amounted to 16.2 percent of the gross domestic product. About 70 percent of the money came from the United States, which has large groups of Haitians in Miami, New York and Boston.

Such cash from abroad is expected to play an even greater role as Haiti looks to stabilize and rebuild. “It’s going to be critical to open up the spigot,” said John Rodriguez, president of the Florida International Bankers Association.

Hollywood, Fla.-based Unitransfer, a major money transfer firm in Haiti, said it resumed sending money from the United States to people in Haiti Tuesday, and isn’t charging fees.

“We are waiving all transfer fees. We know the
situation is difficult on this side as well, and we want to do whatever
is possible to help people to send money that is crucially needed in Haiti,” said Jean-Marc Piquion, a vice president at Unitransfer, a unit of Unibank, Haiti’s largest commercial bank.

Piquion said locations in the provinces should be operating normally, while outlets in Port-au-Prince are becoming operative “gradually.”

At a Unitransfer store in Miami’s Little Haiti Tuesday, Rose Baker sent $100
to a friend’s brother suffering from two broken legs. She said it is a
relief to be able to start providing direct financial help to loved
ones.

“I have to come back later to send some more money to my family. Right now, they’re stranded in Port-au-Prince with nothing to eat or drink,” Baker said.

Joubert Pascal was on his way to send $200
to his sons who are sleeping outside in a park after their home
suffered extensive damage. “They need the money to buy food or
whatever. They have nothing in their pockets,” he said.

In Haiti, the rupture in the cash pipeline is hitting hard.

“Yesterday I bought a case of juice for 80 Haitian
gourds, the currency. Before, it was 65,” said Estaneala Bonheur, who
was sitting in a lonely Port-au-Prince soda stand with no customers. “But nobody has money in their hands, so nobody is buying. Even cigarettes are too expensive.”

Marie Carmel Plasir, who has a spot at the tent city right in front of the crumbled National Palace in Port-au-Prince, said she has lots of relatives in Miami willing to send her money. She just hasn’t had any way to get to it.

“My family in Miami
takes care of me, and they want to continue taking care of me,” Plasir
said. “They are asking me how to send money but there’s no possibility.
Nothing is open. I have to depend on other families to share their food
with us.”

To get cash into Haitians’ hands, City National Bank, an African-American-owned bank in Newark, N.J., which isn’t related to City National Bank of Florida, is working with Fonkoze, a financial services firm that serves Haiti’s
poor, to provide free money transfer services to Haitians. The two
firms have an ongoing project aimed at reducing the cost of delivering
cash to Haitians from family and friends outside the country.

Louis Prezeau, president of City National Bank and a director of Fonkoze, said the reopening of Haiti’s banks this week should enable City National
and Fonkoze to go ahead with the fee-free money transfers, once cash is
available. “Fonkoze has very grass roots connections in Haiti. The idea is to make it simpler and easier and cheaper for Haitians to send funds to their families.”

Rodriguez, the president of FIBA, said the earthquake’s devastating blow comes just as Haiti
was beginning to make progress in exporting and trade finance.
“Factoring arrangements were being established so exports could be
financed,” he said. “We’re hoping it’s a temporary interruption and we
hope to get back on track.”

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