Haiti After the Crisis: A case for investment
Years of political instability have had a profoundly negative effect on the already modest Haitian economy. Since 1998, the country has experienced negative growth, increased inflation and a devaluation of the local currency, which has placed great stress on local enterprises, big, medium and small alike. The emigration of a large number of skilled professionals has reduced the pool of qualified entrepreneurs, managers and executives. Businesses across the board have cut or delayed their capital expenditure programs.
Despite the negative political and economic headlines, there is much good news. In the short term, the country will need significant investments in infrastructure, in particular electricity, road, and water systems. To quote a recent report on Haiti, “The infrastructure of democracy is roads, schools and electricity, markets, irrigation systems and potable water.” Local entrepreneurs and companies in these fields have the technical expertise, but they often need to team up with foreign partners or companies to execute large-scale projects. The Haitian-American diaspora represents a vast pool of competence and experience that can be tapped once the political and security situations are stabilized. The government is also expected to significantly improve port and airport infrastructures.
The revival of the assembly industry represents another promising short-term opportunity. Haiti used to be a leader in the Caribbean in textile and light electronic assembly. Political turmoil after 1986, and the 1993 U.N. embargo, decimated the industry. Many companies shifted production to Honduras, Mexico, or the Far East. Yet, Haiti remains competitive due to its proximity to the United States. If a revival is to occur in earnest—already there are signs that foreign companies are returning to Haiti—the industry must clean up its act when it comes to workers’ wages and working conditions. The adoption and application by factory owners of the Worldwide Responsible Apparel Production Principles is critical. These are standards that address labor practices, factory conditions and environment issues, as well as customs compliance. The passage of the Haiti Economic Recovery and Opportunity (HERO) Act by the U.S. Congress in 2003 also should provide a major boost to the apparel assembly sector.
Agribusiness shows substantial promise for the medium term. With a strong agricultural tradition and a respectable landmass, Haiti should be a leading agricultural exporter. That is not the case. Production of fruits and staples has decreased due in part to the import of subsidized products from the United States and other developed countries. Two new areas could be bountiful for entrepreneurs and agribusiness companies: organic products (vegetables and fruits) and food processing. The growth of the organic market in the United States and Europe plays into the strengths of the Haitian agricultural sector and could represent a significant export opportunity. With an internal market of eight million, Haiti could benefit from the processing and local sale of Haiti-grown staples, which could also be exported. The Artibonite Valley, nestled in the central section of the country, has the capacity to feed all of the Caribbean if properly exploited.
In the 1950s, Haiti was the top tourism destination in the Caribbean. Today, the industry is all but dead. One niche market has not been exploited: the two million-strong members of the Haitian diaspora that come back to Haiti regularly whatever the circumstances. Another niche market that can be developed is cultural- and eco-tourism. The number of historical sites and the rich history that Haiti has from two centuries of independence distinguishes it from the rest of the Caribbean, with the exception of Cuba. Add the country’s strong African culture and Haiti could attract another more knowledgeable, albeit smaller, class of visitors.
Investments in infrastructure are a necessary first step toward unlocking Haiti’s potential. Haitians are hopeful that the expression “economic and development policy” will become a regular part of the domestic political discourse. This will be a sign that politicians have finally understood that their interests are closely aligned with the financial well-being and the improvement in the standard of living of all Haitians, not just the small clique of loyalists with whom they customarily surround themselves.
When the focus of public and political life becomes the economic well-being of the citizenry, productive jobs, decent housing in a secure environment, with water and electricity, schools and roads, Haitians will all have won, rich and poor, big and small businesses, Haiti and its neighbors.
Patrice Backer is the managing director of PromoCapital Haiti S.A., a Haitian-American investment bank with offices in Pétionville, Haiti, and Aventura, Fla. He can be reached at email@example.com.