Haiti Earthquake Facts, Its Damage, and Effects on the Economy

The 2010 Earthquake Caused Lasting Damage

Haitian earthquake survivor Rosena Favecal recovers at the Red Cross medical observation tent inside General Hospital
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Kim Badawi / Getty Images

On January 12, 2010, a 7.0 magnitude earthquake-ravaged Haiti. An estimated 230,000 people were killed. Another 300,000 were injured. More than 600,000 people left Port-au-Prince to stay with families outside the capital. The quake displaced 1.5 million people. Makeshift camps sprung up to shelter them. In total, the quake-affected 20% of the nation's 10.4 million population. 

Seven years later, 55,000 people still lived in the camps, according to the United Nations Office for the Coordination of Humanitarian Affairs. The U.N. also reported that 2.5 million Haitians needed humanitarian aid. That would cost $370 million. In 2016, Hurricane Matthew set back rebuilding efforts. Food became scarce, and cholera started spreading again. Also, Haiti must absorb the 250,000 of its citizens returning from the Dominican Republic.

Damage From the Earthquake

In 2010, the Inter-American Development Bank estimated that the earthquake created between $7.8 billion and $8.5 billion in damage. It said that the damage could be as much $13.9 billion over time.

The earthquake shrank Haiti's gross domestic product by 5.1%. It crippled the main airport, most of the ports, and almost all the paved roads. That made it difficult for relief efforts to reach the victims. The quake damaged 294,383 homes and destroyed 106,000 of them. 

The quake hit Port-au-Prince, Haiti's capital. This impaired government efforts to restore order. It killed 25% of the civil servants living in the capital. About 60% of the city's government buildings and 80% of its schools were damaged or destroyed.

Even before the quake, Haiti was the poorest country in the Western Hemisphere. Eighty percent of the population lived below the poverty line. Fifty-four percent of the population lived in abject poverty. That is partly because two-fifths of all Haitians are subsistence farmers.

Haiti is also vulnerable to damage from natural disasters because of deforestation. Trees cover 30% of the country. Colonists cut down trees for sugar and rubber plantations. They harvested mahogany and other precious hardwoods.

Haitians who live abroad and send money back contribute one-fifth of the country’s gross domestic product. That's five times more than the total value of exports in 2012.

Effects on Haiti's Economy

The earthquake struck just as Haiti’s economy was starting to grow again. President Bush had signed the Haitian Hemispheric Opportunity Through Partnership Encouragement Act in 2006. This trade agreement boosted Haiti's apparel industry by allowing duty-free exports to the United States.

By 2008, Haiti's exports had reached $575 million, according to a World Bank report. The IADB reported that apparel made up more than 90% of Haiti's exports to America.

In 2010, the U.S. Congress extended the Caribbean Basin Trade Preference Agreement. It extended HOPE II until 2020 under the Haiti Economic Lift Program Act. Countries canceled any debt owed to them by Haiti. 

The Haiti earthquake inspired massive donations to help relief efforts. Most of these donations were made via credit cards. Normally, credit cards charge a 1% to 3% fee for their use. These fees, known as interchange, generate $45 billion a year in revenue for the companies. Capital One, Visa, MasterCard, American Express, and Discover waived fees for donations to relief efforts.

Credit card companies make around $250 million a year from charitable donations. These fees cover transaction costs and are charged for all credit card use. Only Capital One waived fees for all charitable donations made through their credit cards. 

By 2011, just when the CIA World Factbook reported that Haiti's economy was starting to recover, two hurricanes hit. By 2014, their GDP was $18.3 billion and grew just 2.3%. That's better than the $12 billion produced in 2008. 

Effect on U.S. Economy

The Haiti earthquake didn't impact the U.S. economy much. Haiti's economy is only one-tenth that of the United States. 

Cause of Earthquake

Haiti sits above two tectonic plates, the Caribbean Plate and the North American plate. These plates are rigid parts of the Earth's crust that slide separately on the planet’s molten core. They were sliding past each other. When the two jagged edges catch, they hold at first. The mounting pressure eventually forces them to grind past each other. That's what causes an earthquake.

The 7.0 quake that struck Haiti was the same strength as the Loma Prieta earthquake that struck San Francisco during the 1989 World Series. But Haiti's quake was 6.2 miles below the surface. It was also just 10 miles from the capital of Port-au-Prince. The quake's closeness made its impact much stronger. 

The Bottom Line

Almost a decade after the disastrous 2010 earthquake, Haiti has still not sufficiently recovered. Subsequent natural disasters, such as Hurricane Matthew in 2016, have drastically set back its recovery. In 2014, Haiti held the title of the most vulnerable country in the Latin American and Caribbean region, according to the United Nations University. Its economy still remains highly sensitive to natural hazards and climate change. 

Political instability as also largely contributed to the continued existence of its humanitarian crisis. In consequence, it has hindered Haiti’s social and economic development. In July 2018, a government announcement of the termination of subsidies led to protests and civil unrest.

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