The Haitian economy, never strong to begin with, was decimated under the military regime during the early 1990s due to widespread corruption, mismanagement, and the effects of the economic sanctions imposed by the international community. There has been no substantial improvement since the end of the dictatorship, and many experts agree that it will be several years until economic production reaches precoup levels. In the meantime, many Haitians are malnourished, unemployed, and without real hope of a better life in the foreseeable future. The president needs to create jobs, to increase agricultural production, and to restore hope to Haiti's impoverished masses. Aristide aims for widespread privatization of industry and economic measures designed to further reduce inflation. Sixty-five percent of Haiti's budget comes from foreign donors and is contingent upon the adoption of these measures.
Haitians have experienced continual chaos since Prime Minister Rosny Smarth resigned in 1997 to protest electoral fraud. Parliamentary elections, held in May 2000, saw major victories for Aristide's Lavalas party. Results fell under intense scrutiny, with critics including the United Nations (UN) claiming rampant fraud. In protest, many opposition leaders boycotted the 2000 presidential elections and foreign aid from the United States and European Union was frozen. Financial aid is crucial for Aristide to combat Haiti's many economic, social and political problems. Aristide's major challenge is to quell political instability in order to make significant economic and social progress.
Some of the contributing factors to popular discontent with Aristide's government in 2002–03 included: a cooperative pyramid scheme that affected a large section of the middle class, costing investors US$200 million; a fuel shortage that reduced electrical service to three hours per day, increased the price of fuel on the black market, and hindered transportation and food deliveries; widespread corruption; and an ill-equipped police force of less than 3,000 officers for the entire country. This in addition to the political tension gripping Haiti.