Haiti's new president embarks on cross-country mission

14 April 2018

Haiti's new president embarks on cross-country mission 

FDI Magazine

(Read the original article here)

Jovenel Moïse, the president of Haiti, tells Michael Deibert how he is looking to effectively govern the whole country, through policies such as improving healthcare in all regions and building roads to prevent the more rural areas becoming isolated.  

Jovenel Moïse became president of Haiti in February 2017, just after Hurricane Matthew hit the country’s southern peninsula. An agribusinessman from the north who is often referred to as 'Nèg Bannan' (the Banana Man) because of his previous life as a banana entrepreneur, Mr Moïse won more than half of the vote in a crowded field. Since entering office, he has repeatedly criss-crossed the country, initiating road-building programmes in the provinces and measures such as remobilising Haiti’s army (demobilised in 1995 but never officially disbanded). 

Q: Tell me a little bit about your background before you became president.  

A: The fact that I have lived both in a rural zone in the north – I was born in a small town, Trou-du-Nord – and in [the capital] Port-au-Prince helped me better understand the socioeconomic dimensions of the country. Haiti, like many countries in the world, has a kind of cleavage. You have urban zones, rural zones, people in the town and people in the country. As an agricultural entrepreneur, I was able to see the entire country and it helped me understand the challenges of governing here. My experience in the private sector – I was the president of the chamber of commerce in the north-west and the secretary general for the national chamber of commerce – helped me understand the economic problems of Haiti. 

Q: You’ve been president for more than a year. How do you gauge your performance thus far?   

A: I would say that during this first year I’ve developed a better understanding of the challenges of governing. We have taken a lot of decisions and done a lot of work all over the country. We’ve addressed healthcare, for example – now you have a dialysis centre in the north and one in the south, we’re putting another one here in the west where we only have one. And with infrastructure, we have teams working in every department [and region building roads].  We call our strategy 'the caravan of change'. I said that we were going to have a new army, a professional army, an army in service of development, with engineers and technicians to work on natural disasters, and now we’re building one. With this new approach, we want to move Haiti beyond being the republic of non-governmental organisations [NGOs]. We welcome NGOs but they cannot replace the state, which is what has been happening in Haiti. We are working to resolve that problem 

Q: Can you speak a little about the opportunities for foreign investment in Haiti.  

A: In energy, Haiti consumes [more energy than it produces], so people produce their own with generators, batteries in their houses and other means. So this is a great opportunity, with [energy sector regulator] Anarse, to democratise the energy sector. We are also prioritising renewable energy – wind, water, sun and biomass. In tourism we have opportunities for construction of hotels and cruise ports. There is enormous potential in tourism. And there is an opportunity in the assembly sector too, with the Hope and Help acts, which allow us to export [textiles and apparel] duty-free to the US. 

Q: What was the motivation behind declaring the gourde the only legal currency for business in Haiti?  

A: The same motivation that every country has. Our constitution, our law, is very clear on this – there is one legal currency: the gourde. [To have two currencies] provokes inflation for those, especially the poor, who have to continue paying in gourdes. We haven’t stopped people from having bank accounts in dollars, or transferring money in dollars. But transactions within the country will be in gourdes. 

Q: Historically, there has been a big difference between the people in the cities, especially Port-au-Prince, and the people in the countryside. What steps has your government taken to end this?  

A: I am against all forms of division, which is a big problem in this country. We want to make all the departments interconnected. We want the deconcentration of public services and the decentralisation of the structure of the state to the provinces.

Haiti: time to take a second look?

13 April 2018

Haiti: time to take a second look? 

FDI Magazine

(Read original article here)


Haiti's name has been synonymous with natural disaster and political turmoil in recent decades. However, as Michael Deibert discovers, foreign investors both large and small are impressed with what they have found in the country, and many sectors are ripe with potential.

In his offices just off Champs de Mars square, set beneath brooding mountains and just beyond a glittering Caribbean Sea in bustling, colourful Port-au-Prince, Haiti’s president, Jovenel Moïse, speaks of his vision for a national revival

“There are enormous opportunities here,” says Mr Moïse, a former agribusinessman who assumed the presidency in February 2017. “In energy, to construct a high-tension interconnected national network; in renewable energy, such as wind, water, sun and biomass. In tourism, we have opportunities for the construction of hotels and cruise ports. There is opportunity in the assembly sector, where we are allowed to export [textiles and apparel] duty-free to the US.”

Hidden stability

Despite the president’s enthusiasm, at first glance Haiti, a country of just under 11 million with a history of poverty and political instability, may seem a counterintuitive place for foreign investors to consider. However, the country actually boasts one of the lowest rates of violent crime in the Caribbean, two international airports (in the capital and in Cap-Haïtien on the northern coast) and, apart from a brief interim government, has been governed by elected presidents since 2006. The second independent republic in the Western Hemisphere after the US (having defeated the French in 1804), Haiti is making a renewed push for foreign investment.

In February, the IMF signed an agreement with Haiti’s government, with the latter agreeing to “carry out economic and structural reforms to promote economic growth and stability, and alleviate poverty…[ and a] fiscal policy will focus on mobilising revenues and rationalising current expenditure, to make room for critical public investment in infrastructure, health, education and social services”.

Earlier in 2018, the government set up the Autorité Nationale de Régulation du Secteur Énergétique to oversee the opening of the country’s system of production, distribution and sale of electrical energy previously overseen by the state-run Electricité d’Haiti. After years of maintaining an unspoken dual status with the US dollar, in March, Mr Moïse declared Haiti’s national currency, the gourde, as the sole legal currency for business in an effort to stem inflation.

Opportunity and poverty

State investment agency the Centre de Facilitation des Investissements (CFI) is located in the capital’s Turgeau neighbourhood. The building is an atmospheric house in the gingerbread style of architecture, whose inside walls are covered with Haitian art and posters posing the question ‘Haiti: why not?’.

CFI general director Tessa Jacques says: “We are looking at tourism, infrastructure, renewable energy, apparel manufacturing and agribusiness. With the rise of private sector entities being able to sell electricity directly to the consumer, we’re talking about micro-grids, with solar, wind and other types of renewable power. It’s certainly a business opportunity.”

But the country’s statistics are stark. According to the World Bank, Haiti’s GDP per capita hovers around the $846 mark, with more than 6 million people existing beneath the national poverty line of $2.41 per day. Earlier this year, the Banque de la République d’Haïti, the central bank, expressed concern about the country’s deficit, which is somewhere north of 3bn gourdes (more than $200m). Questions remain over how $2bn of money linked to the Venezuelan Petrocaribe fuel programme – overseen by Mr Moïse’s predecessors, Michel Martelly and the late René Préval – was spent.

Downward spiral

Some of the factors that have most adversely impacted Haiti’s economy have been external. In the early 1980s, a US-Canadian programme to stem the spread of African swine fever exterminated 1.2 million Creole pigs – a major contributor to Haiti’s peasant economy – and only haphazardly compensated owners.

In the early 1990s, a US-led economic embargo imposed on the country to force a military junta from power devastated the country's middle class, dealing such a blow that the country’s GDP only regained pre-1991 levels in 2008. The decision by Haiti to reduce its tariff on imported rice from 50% to 3% in the mid-1990s then destroyed the ability of Haiti’s farmers to compete with cheap imported rice flowing into the country.

“The decisions we made in the late 1980s in terms of commercial openness and liberalisation were not smart, not gradual and not selective,” says Etzer Emile, a Haitian economist and professor at the capital’s Université Quisqueya. “When I compare that with other countries in the region, they did it step by step and product by product. We didn’t, and that transformed Haiti from a productive economy to an import-dependent economy.”

Satisfied customers

However, these problems did not deter mobile phone giant Digicel, which launched a $130m investment in Haiti in 2006, the largest corporate investment ever made in the country by an international company.

“This is a land of opportunity with more than 10 million consumers that is still very largely untapped,” says Maarten Boute, chairman of Digicel Haïti. “The lack of large-scale reliable employment means that there is access to a massive talent pool; almost every Haitian is looking for a job. With the right training and management, it is a very dedicated and committed workforce.”

Nor did Haiti’s ills deter Dutch brewing giant Heineken, which purchased a 95% stake in the Brasserie Nationale d'Haïti (Brana) in 2011, and invested another $100m in 2014. Founded in 1975, in addition to Haiti’s signature beer, Prestige (often served so cold that ice coats the glass bottle), Brana also produces Guinness and various brands of bottled water and soft drinks.

“Haiti is one of the most populated countries in the Caribbean and as a market is expected to grow,” says Brana managing director Wietse Mutters. “We are looking for organic growth and long-term investment.”

In addition to its 1400 employees, Brana now boasts a training centre and it partners local schools to train students finishing their studies to bring them into the company upon graduation. It is also updating and modernising its facilities, located in a sprawling industrial park just across the street from country’s main airport.

“If you’re here for the long term, I would say it’s a good investment,” says Mr Mutters. “I would look at facts, not reputation and rumour. Talk to investors like us. I think there are huge opportunities here, not only for multinationals but also for start-ups. I think the government is very supportive of foreign investment and it sees the need for it.”

Haiti can be a place of jarring contrasts. A fractious, sometimes explosive political culture co-exists with warm, gentle people. Desperately poor slums are found sometimes only a stone’s throw from elegant restaurants and shiny new hotels. Off the radar for years to many but the most adventurous, Haiti is now vying to come back in from the cold.

Deux Mains: from small beginnings

Not all foreign investment in Haiti exists on a massive scale. Near the capital’s airport, the 25 full-time employees of the Deux Mains (“two hands” in French and a homophone of “tomorrow”) apparel company work in a series of containers situated around a bucolic courtyard.

Founded by Julie Colombino, a relief worker who first came to Haiti after the devastating January 2010 earthquake, the company initially registered as a non-profit before registering as a for-profits enterprise in 2014 (the non-profit arm continues as Rebuild Globally). The company uses repurposed car tyres and inner tubes in nearly all its products, sourcing those and almost all its other raw materials in Hispaniola, the island Haiti shares with the Dominican Republic.

Describing itself as an “ethical fashion company”, Deux Mains has attracted the attention of the likes of designer Kenneth Cole, who partnered with it to launch a limited edition sandal line, and the model Heide Lindgren, who began as a brand ambassador and now serves as an official adviser.

Partnering with USAID’s local enterprise and value chain enhancement programme, the company – which sees 40% of its sales in the US and 60% in Haiti – is expanding into a 440-square-metre factory and adding 15 employees in order to produce its signature sandals, handbags and other goods through a combination of artisanal and industrial techniques.

“There are several benefits that are available for a business in Haiti,” says Deux Mains vice-president Sarah Sandsted. “We have a hard-working, talented workforce here really eager for opportunity. Haiti is such a creatively inspiring place, and our products are more beautiful because we are in Haiti."

Good neighbours?

Good neighbours?

Published: June 08, 2010

Foreign Direct Investment

Haiti and the Dominican Republic have endured a fraught relationship over the past 200 years, but could the latter’s response to the former’s recent earthquake lead to a more mutually beneficial partnership in the future? Michael Deibert investigates.

(Read the original article here)

When an earthquake devastated a large section of Haiti in January, no country responded more empathically than the Dominican Republic, which shares the Caribbean island of Hispaniola with Haiti.

Despite what has been an often stormy and distrustful relationship between the two countries – due in large part to the many Haitian occupations of the Dominican Republic, as well as the long history of abuses committed against the almost 1 million Haitians living in the Dominican Republic – Dominicans almost immediately began fundraising drives and gathered supplies. These were then ferried across the border to Haiti by a combination of local relief organisations and ordinary citizens.

“I had been visiting Haiti for such a long time, and have such good friends over there, that I knew I had to do my best to help,” says Juan Pablo Fernandez, president of Químicos & Plásticos, a Dominican company that supplies raw materials to the industries of both nations. After the earthquake, Mr Fernandez and his employees joined other Dominican businesses in transporting privately donated relief supplies to Haiti’s stricken capital, Port-au-Prince.

The Dominican response to the earthquake just might have eased some of the mutual recrimination brought on by an oft-tragic shared history stretching back two centuries.

In 1822, then Haitian president Jean-Pierre Boyer invaded the eastern part of the Dominican Republic. Despite this, country succeeded in declaring its independence in 1844. Another Haitian leader, Faustin Soulouque, who would go on to declare himself emperor of Haiti, then invaded the Dominican Republic twice.

In 1937, following the expulsion of Haitian cane cutters by Cuban dictator Fulgencio Batista, even more Haitian labourers flooded the Dominican Republic, then led by dictator Rafael Trujillo, who would rule the country from 1930 until his murder in 1961. That October, under Mr Trujillo’s orders and for reasons that still remain unclear, Dominican soldiers and police massacred an estimated 20,000 Haitians.

Haitians continue to stream into the Dominican Republic looking for work today, even though they continue to face “severe discrimination”, according to the 2009 Human Rights Report issued by the US State Department’s Bureau of Democracy, Human Rights, and Labor. But though both countries have experienced authoritarian regimes and high levels of corruption, their economic and investment portfolios paint a markedly different picture, analysts say, especially over the past two decades.

Revealing data

Before the earthquake, according to the CIA’s World Factbook, the GDP real growth rate for the Dominican Republic was 1.8% during 2009, and the GDP per capita was $8300. In Haiti, these figures were 2% and $1300, respectively. While average life expectancy for the Dominican Republic is 73 years, the figure in Haiti is just 57 years. To add to Haiti’s woes, according to its government’s Preliminary Damage and Needs Assessment, the damage bill from January’s earthquake was in the region of $7.9bn.

While two-thirds of Dominican exports remain bound for the US, foreign remittances, mostly from the US, continue to account for nearly one-tenth of the country’s GDP, and there remains a robust tourism industry. Boasting the largest economy in the Caribbean, the Dominican Republic currently has approximately 50 free trade zone parks, producing everything from textiles to electronic devices and pharmaceuticals. The country’s financial sector has also largely stabilised since the collapse of its second-largest bank, Banco Intercontinental, in 2003, which had to be bailed out by the Dominican treasury at a cost of some $2.2bn.

“Business is increasing on a daily basis [in the Dominican Republic] and there is much optimism,” says Aryam Vázquez, an economist who covers country risk for Wells Fargo’s emerging markets unit in New York. “The banking sector is much better regulated than in the past, and we have seen concerted efforts by successive governments to stabilise the domestic demand market.”

Across the border

Before the earthquake, Haiti seemed to be regaining some of its financial footing following the chaotic presidency of Jean-Bertrand Aristide between 2001 and 2004 and the often erratic rule of the interim government that replaced him. Relations between Dominican president Leonel Fernández, in office since August 2004, and Haitian president René Préval, who has governed since May 2006, are said to be warm. During their mutual first term in office in the 1990s, Mr Fernández made the first official state visit by a Dominican leader to Haiti since the 1937 massacres.

Political instability in Haiti has led to environmental degradation and economic atrophy. While Haiti was ruled by a series of ravenous civilian and military dictatorships for much of the past 50 years, Joaquín Balaguer, a long-time Trujillo consigliere who led a series of authoritarian governments in the Dominican Republic over the past half-century, was taking steps to prevent the country from sliding into the environmental disaster that was befalling Haiti, including using the Dominican army to prevent extensive deforestation. Haiti, on the other hand, has lost 90% of its tree cover over the past 60 years (and about one-tenth between 1990 and 2000), with the resulting erosion destroying two-thirds of the country’s arable farmland.

Hope beyond the despair

Despite such statistics, there is hope that out of the tragedy of January’s earthquake there lies an opportunity to help Haiti advance beyond the modest improvements in economic stability and security of recent years.

Haiti’s garment industry, once a pillar of its economy, has benefitted in recent years from measures that provided certain Haitian textiles with duty-free status when entering the US. Last year, Haitian firm the WIN Group, along with the Soros Economic Development Fund, announced their intention to construct a $45m industrial park in Port-au-Prince’s Cité Soleil slum region, a project that has been put on hold in the aftermath of the earthquake.

The OTF Group, a competitiveness consulting firm, has continued to advocate for the creation of “growth clusters” around Haiti, a proposal that fits closely with the Haitian government’s desire for decentralisation, economic diversification and the “decongestion” of the Port-au-Prince metropolitan area, rather than rebuilding as before.

Such measures might well provide a possible future at home for the Haitians currently living in the Dominican Republic and spell a less fractious new era for two nations whose economic destinies, despite frequent tensions, remain inextricably linked.

Haiti - Back to life

Haiti - Back to life

Published: October 15, 2009

Foreign Direct Investment

(Read the original article here)

The violence, poverty and corruption that has blighted Haiti over the past few years has given way to an air of peace, efficiency and optimism. Michael Deibert reports.

Politically aligned gangs warring across the ramshackle capital of shanty towns and gingerbread houses are a thing of the past in Port-au-Prince, the capital city of Haiti, and visitors cannot help but be struck by the feeling of change in the air.

An airport previously staffed by political cronies, where passengers sweated in boiling halls, is now a model of air-conditioned efficiency. Streets once deserted after sunset now teem with life, with upper-class restaurants in the hillside Petionville district and the kerosene-lit roadside stands of the ti machann (vendors) downtown luring customers late into the evening, something unthinkable only a few years ago.

Peace has been brought to this Caribbean country of 9 million people through the work of president René Préval’s government, and the 9000-member United Nations Stabilization Mission in Haiti, known as MINUSTAH.

Haiti was previously ruled by the erratic priest-turned-president Jean-Bertrand Aristide from 2001 until his ousting in February 2004. This was followed by turmoil under an interim government that ruled until President Préval’s inauguration in May 2006.

From a police force of just 3500 at the start of Minustah’s mandate, Haiti now boasts 9200 police officers, a number projected to grow to 10,000 by the year’s end, and to 14,000 by the end of 2011. Recent mid-term parliamentary elections passed largely peacefully – no small feat in a country where ballots often threatened civil order.

In addition, the World Bank, the Inter­national Monetary Fund and the Inter-American Development Bank (IADB) collectively cancelled $1.2bn of Haiti’s debt in June, erasing almost two-thirds of the country’s outstanding debt in one stroke. The IADB went even further, approving an additional $120m in grants to help Haiti improve its infrastructure, basic services and disaster prevention plans.

“Haiti has a lot of potential,” says Michèle Pierre-Louis, the country’s prime minster and a respected civil society leader before she joined President Préval’s government. “But we have a very fragile civil society, and we’ve never thought of social mobility and prepared for a middle class.”

Positive outlook

Many observers and investors feel a guarded optimism about the country’s political and economic prospects.

“The investment climate in Haiti is far better now than it was during the [interim] period or the days of President Aristide, that can be said without any doubt,” says Lance Durban, a US businessman who first arrived in Haiti in 1979 and now runs Manutech, an electronics manufacturing company employing about 450 people. “You’re close to the US market, you have a lot of people who speak English and you have the lowest wages in the Americas.”

Last year, Haiti boasted modest-though-respectable GDP growth of 2.3%, and at the beginning of 2009, President Préval created the Groupe de Travail sur la Compétitivité, a body designed to increase Haiti’s competitiveness in attracting global businesses.

Beyond the manufacturing sector, new avenues in Haiti’s potential for investors are also opening up. The garment industry, once a lynchpin of Haiti’s economy, could help the country’s economic revival, if given the right incentives and support. In the US, the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II) built on a 2007 measure that provided certain Haitian textiles with duty-free status when entering the US. Mining is another area of interest (see In Focus, below).

Tourism targets

Also on Haiti’s business landscape is the OTF Group, a competitiveness consulting firm credited with breathing new life into Rwanda’s tourism, coffee and agro-industry sectors following the genocide in the country in 1994. OTF has found encouraging evidence that Haiti might be ripe for a similar renaissance.

“In terms of the business opportunities, I am amazed by what I think is possible,” says OTF director Rob Henning. “And our role is to facilitate a process by which the Haitians, both the public and private sector, take ownership over industries and try to create a prosperous Haiti where poverty is reduced through wealth creation and the creation of businesses.”

Though Haiti currently ranks 154 out of the 180 countries covered by the World Bank’s Doing Business Index, substantial improvement has been made in cutting down the red tape that once made investing in the country an inexplicable maze for foreign capital.

It generally now takes a maximum of 40 days to incorporate a company in Haiti, as opposed to the 202 days that it took as recently as 2003.

However, the challenges the country faces remain substantial. Weak infrastructure, environmental degradation and deforestation contributed to conditions which saw a trio of hurricanes kill at least 600 people in 2008. After Haiti’s Senate passed a measure in May raising the country’s minimum wage to a rate of about $4.90 a day, a 300% increase from its current level, President Préval balked at signing the measure, fearing that it would jeopardise Haiti’s already fragile employment sector.

In unison

Despite this, however, Haiti’s business class and its poor majority have learned some hard lessons about working together.

In the once-violent Port-au-Prince neighbourhood of Saint Martin, member’s of Haiti’s private sector and local community leaders have been meeting with the support of the Irish charity Concern Worldwide since 2007. A ‘peace and prosperity’ committee in the district boasts three members from Haiti’s private sector and 12 representatives from the community of Saint Martin. A recent general assembly to address community concerns attracted nearly 150 people.

“You can no longer put a business in a community where it is built against the community,” says Ralph Edmond, the president of Farmatrix, which has manufactured pharmaceutical products in the district since 1994, and who is active in the debate. “If we are to live in this country, then we have to live differently than our fathers did before.”


COUNTRY PROFILE

HAITI

Population: 9.03 million
Pop. growth rate: 1.84%
Area: 27,560 sq km
Real GDP growth: 1.3%
GDP per capita: $1300
Current account: -$611m
Largest sector (% of GDP): Agriculture 66%
Labour force: 3.64 million
Unemployment rate: na
Source: CIA World Factbook, 2009

IN FOCUS

MINING INDUSTRY TO STRIKE GOLD?

Eurasian Minerals, a Colorado-based mining company, in association with Newmont Mining Corporation, has initiated exploratory prospecting procedures at several sites in the north of Haiti, where there could be substantial gold and copper deposits.

In the neighbouring Dominican Republic, the Pueblo Viejo gold deposit has proven to be one of the largest in the Western Hemisphere, with proven and probable reserves of 570,000 kilograms of gold, 3.3 million kg of silver and 192 million kg of copper.

“Mining could represent a substantial investment in the country, its economy and its infrastructure,” says Eurasian Minerals CEO David Cole, noting the potential for “very large” gold deposits in Haiti that have never been properly explored.