Haiti Earthquake Facts, Its Damage, and Effects on the Economy
The 2010 Earthquake Caused Lasting Damage
On January 12, 2010, a 7.3 magnitude earthquake ravaged Haiti. More than 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 percent 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 $270 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.
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 percent. 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 percent of the civil servants living in the capital. About 60 percent of the city's government buildings and 80 percent 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's 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 percent 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.
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 1-3 percent 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, GDP was $18.3 billion and grew just 2.3 percent. 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. That's because 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.