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.
Showing posts with label OTF Group. Show all posts
Showing posts with label OTF Group. Show all posts
Thursday, June 10, 2010
Saturday, February 27, 2010
From rubble to recovery
From rubble to recovery
Published: February 13, 2010
Foreign Direct Investment
(Read the original article here)
A huge recovery challenge lies ahead for Haiti after its devastating earthquake, but could the rebuilding programmes bring about an essential economic restructuring? Michael Deibert reports from Port-au-Prince.
The incremental economic progress that Haiti, an impoverished Caribbean nation of 9 million people, had been experiencing over the past several years was brought to a cataclysmic halt late on the afternoon of January 12, when a 7.0 earthquake centred just south of the capital city sent the pillars of state and industry crashing to the ground in a heap of dust.
In a matter of seconds, Haiti’s Palais National, Palais de Justice, Parliament and many government ministries were either totally or partially destroyed. The top command of the UN mission, whose troops had been supporting the government of president René Préval since his 2006 election, lost their lives, along with an estimated 200,000 Haitians. Factories collapsed onto their owners and workers alike, and entire neighbourhoods tumbled down the brooding mountains that surround the capital city’s bay.
Further devastation
Haiti, already desperately poor but having experienced its first sustained period of political calm and stirrings of foreign investment interest in many decades, seemed as if it would be reduced to an even graver level than it had been before: mortally wounded, traumatised, ungovernable. In addition to the buildings destroyed, Haiti had also lost some of those best placed to aid its tenuous economic recovery, among them one of the country’s most respected economists, Philippe Rouzier, as well as Jean Frantz Richard and Murray Lustin Junior, the director-general and director of operations, respectively, at the Direction Générale des Impôts, the country’s main tax office in the capital.
According to the International Organisation for Migration, as of early February at least 460,000 people were still living in 315 spontaneous settlements throughout Port-au-Prince, while the World Food Programme said that more than 1.6 million people had received supplies since the start of the earthquake response.
Economic focus
But Haiti’s industrious population knows a little something about struggle and perseverance, even in the face of such a devastating tragedy. Within days of the earthquake, the country’s market women, taxi drivers and other labourers had returned to the streets, resuming commerce among the hundreds of thousands camped out between the shells of ruined buildings. Capital residents began to flow back into Haiti’s countryside, seeking family solace among the loss.
From a terrible misfortune, some hoped that Haiti might still have set in motion the seeds for a new beginning. Despite the ousting of a popular prime minister last autumn, Haiti’s modest economic engine, buoyed by an extended period of relative political tranquillity and an improved security situation, continued chugging along under a new prime minister, Jean-Max Bellerive, seemingly bearing out a December 2008 UN report asserting that it was striking “how modest are the impediments to competitiveness relative to the huge opportunities offered by the fundamentals” in the country.
Last year, billionaire George Soros’s Economic Development Fund announced plans to create a $45m industrial park in Cité Soleil, one of the capital’s poorest neighbourhoods, while two new hotels were set to open along the country’s lush south coast.
At the same time, the OTF Group, a competitiveness consulting firm credited with breathing new life into Rwanda’s tourism, coffee and agro-industry sectors following the country’s 1994 genocide, praised the business opportunities in Haiti. Focusing on several key “growth clusters” to drive economic development, it hoped to help create 500,000 jobs in Haiti within three years.
Following the earthquake, though reassessed, the group said its conclusions did not necessarily need to be shelved, just pushed back for six months to a year.
“The outmigration from [Port-au-Prince] is a huge opportunity to reverse the migration trends of the past two decades,” says OTF director Robert Henning. “If reconstruction can create opportunities and jobs outside of the capital, this will achieve an important goal of redistributing the influence and economic weight of Haiti.”
Trade possibilities
Though the country’s interior has been severely deforested over the past few decades, local groups, such as the Mouvman Peyizan Nasyonal Kongrè Papay, have worked for years on reforestation and irrigation projects and some areas, such as the Artibonite Valley, remain relatively fertile. With Port-au-Prince’s harbour severely damaged and the likelihood of recurrent large-scale earthquakes extremely high, according to the US Geological Survey, international attention has for the first time begun to look seriously at developing Haiti’s long-neglected interior with manufacturing and agricultural initiatives.
A long border with neighbouring Dominican Republic, which lends itself to the possibility of free-trade zones, and possible ports that might conceivably be expanded around the country – including Miragoâne (in the country’s west), Saint-Marc (in the middle region) and Cap-Haïtien (in the north) – would seem to support this possibility for future investment.
Following a decision last year by the World Bank, the International Monetary Fund and the Inter-American Development Bank to cancel $1.2bn of Haiti’s debt – with the latter institution approving an additional $120m in grants for investments in key sectors such as infrastructure, basic services and disaster prevention, the G-7 countries told Haiti after a post-earthquake meeting in Canada in February that the country’s debts to the body did not need to be repaid.
New beginning
None of this in any way minimises the grievous shock – physical, psychological and economic – that Haiti’s people and its government have suffered because of those terrible moments in January. But, day by day, it appears to be picking itself up, dusting itself off and trying to decide where it will head from here.
“The extent of this disaster is also due to the fact that this country has not been managed, or rather has been ill-managed, for the past 50 years,” says Michèle Pierre-Louis, a civil society leader and former prime minister of Haiti. “Maybe after mourning our dead and saving the lives of the survivors, we should start thinking about ways to put together our energies, our solidarity, our creativity to rebuild our capital under some kind of strong leadership… [which] could eventually lead to rebuilding the entire country. Now is the time.”
Published: February 13, 2010
Foreign Direct Investment
(Read the original article here)
A huge recovery challenge lies ahead for Haiti after its devastating earthquake, but could the rebuilding programmes bring about an essential economic restructuring? Michael Deibert reports from Port-au-Prince.
The incremental economic progress that Haiti, an impoverished Caribbean nation of 9 million people, had been experiencing over the past several years was brought to a cataclysmic halt late on the afternoon of January 12, when a 7.0 earthquake centred just south of the capital city sent the pillars of state and industry crashing to the ground in a heap of dust.
In a matter of seconds, Haiti’s Palais National, Palais de Justice, Parliament and many government ministries were either totally or partially destroyed. The top command of the UN mission, whose troops had been supporting the government of president René Préval since his 2006 election, lost their lives, along with an estimated 200,000 Haitians. Factories collapsed onto their owners and workers alike, and entire neighbourhoods tumbled down the brooding mountains that surround the capital city’s bay.
Further devastation
Haiti, already desperately poor but having experienced its first sustained period of political calm and stirrings of foreign investment interest in many decades, seemed as if it would be reduced to an even graver level than it had been before: mortally wounded, traumatised, ungovernable. In addition to the buildings destroyed, Haiti had also lost some of those best placed to aid its tenuous economic recovery, among them one of the country’s most respected economists, Philippe Rouzier, as well as Jean Frantz Richard and Murray Lustin Junior, the director-general and director of operations, respectively, at the Direction Générale des Impôts, the country’s main tax office in the capital.
According to the International Organisation for Migration, as of early February at least 460,000 people were still living in 315 spontaneous settlements throughout Port-au-Prince, while the World Food Programme said that more than 1.6 million people had received supplies since the start of the earthquake response.
Economic focus
But Haiti’s industrious population knows a little something about struggle and perseverance, even in the face of such a devastating tragedy. Within days of the earthquake, the country’s market women, taxi drivers and other labourers had returned to the streets, resuming commerce among the hundreds of thousands camped out between the shells of ruined buildings. Capital residents began to flow back into Haiti’s countryside, seeking family solace among the loss.
From a terrible misfortune, some hoped that Haiti might still have set in motion the seeds for a new beginning. Despite the ousting of a popular prime minister last autumn, Haiti’s modest economic engine, buoyed by an extended period of relative political tranquillity and an improved security situation, continued chugging along under a new prime minister, Jean-Max Bellerive, seemingly bearing out a December 2008 UN report asserting that it was striking “how modest are the impediments to competitiveness relative to the huge opportunities offered by the fundamentals” in the country.
Last year, billionaire George Soros’s Economic Development Fund announced plans to create a $45m industrial park in Cité Soleil, one of the capital’s poorest neighbourhoods, while two new hotels were set to open along the country’s lush south coast.
At the same time, the OTF Group, a competitiveness consulting firm credited with breathing new life into Rwanda’s tourism, coffee and agro-industry sectors following the country’s 1994 genocide, praised the business opportunities in Haiti. Focusing on several key “growth clusters” to drive economic development, it hoped to help create 500,000 jobs in Haiti within three years.
Following the earthquake, though reassessed, the group said its conclusions did not necessarily need to be shelved, just pushed back for six months to a year.
“The outmigration from [Port-au-Prince] is a huge opportunity to reverse the migration trends of the past two decades,” says OTF director Robert Henning. “If reconstruction can create opportunities and jobs outside of the capital, this will achieve an important goal of redistributing the influence and economic weight of Haiti.”
Trade possibilities
Though the country’s interior has been severely deforested over the past few decades, local groups, such as the Mouvman Peyizan Nasyonal Kongrè Papay, have worked for years on reforestation and irrigation projects and some areas, such as the Artibonite Valley, remain relatively fertile. With Port-au-Prince’s harbour severely damaged and the likelihood of recurrent large-scale earthquakes extremely high, according to the US Geological Survey, international attention has for the first time begun to look seriously at developing Haiti’s long-neglected interior with manufacturing and agricultural initiatives.
A long border with neighbouring Dominican Republic, which lends itself to the possibility of free-trade zones, and possible ports that might conceivably be expanded around the country – including Miragoâne (in the country’s west), Saint-Marc (in the middle region) and Cap-Haïtien (in the north) – would seem to support this possibility for future investment.
Following a decision last year by the World Bank, the International Monetary Fund and the Inter-American Development Bank to cancel $1.2bn of Haiti’s debt – with the latter institution approving an additional $120m in grants for investments in key sectors such as infrastructure, basic services and disaster prevention, the G-7 countries told Haiti after a post-earthquake meeting in Canada in February that the country’s debts to the body did not need to be repaid.
New beginning
None of this in any way minimises the grievous shock – physical, psychological and economic – that Haiti’s people and its government have suffered because of those terrible moments in January. But, day by day, it appears to be picking itself up, dusting itself off and trying to decide where it will head from here.
“The extent of this disaster is also due to the fact that this country has not been managed, or rather has been ill-managed, for the past 50 years,” says Michèle Pierre-Louis, a civil society leader and former prime minister of Haiti. “Maybe after mourning our dead and saving the lives of the survivors, we should start thinking about ways to put together our energies, our solidarity, our creativity to rebuild our capital under some kind of strong leadership… [which] could eventually lead to rebuilding the entire country. Now is the time.”
Monday, October 19, 2009
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.
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.
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