Promise of jobs spurs Haiti development debate

The emergence of a new industrial park in northern Haiti has reignited discussion about the best way for Haiti to develop.

06/10/2012 5:00 AM

06/10/2012 11:19 PM

It’s precisely the kind of development that just about everyone has been saying Haiti needs: foreign governments pooling dollars to build housing, create jobs and foster hope.

But a $300 million investment to help create tens of thousands of textile jobs in this rural northern village has reignited debate over whether banking on Haiti’s past as a garment-assembly capital will bring the kind of social and economic development needed to lift the country out of abject poverty. Some argue the funds are better invested in agricultural projects to feed the country and boost farmers.

The debate illustrates the challenges facing Haiti where natural disasters, political turmoil and weak institutions have left few options.

It also reflects the challenges of President Michel Martelly’s year-old administration, which has adopted the slogan, “Haiti is open for business” but has yet to address the fundamental issues needed to attract investors.

“Nations traditionally cannot thrive on a single industry,” said Mark D’Sa, senior advisor for Haiti at the U.S. State Department, and a former senior director for a major U.S. retailer. “It can be a starting point, but ultimately there needs to be a diverse set of services. We know from the experiences of countries around the world, as well as from our own in regions of the U.S., that the apparel industry can be a good economic catalyst.”

Georges Sassine, head of the Haitian government’s commission to take advantage of U.S. Congress-approved trade preferences benefiting Haiti’s struggling garment industry, agrees.

“We never said the assembly sector was the way to success,” he said. “We only said that by having approximately 100,000 people working, it will start to create new economic impulses and give time for other sectors to come into play.”

Still, critics point out that even at its height of 100,000 jobs in the 1980s, Haiti’s garment industry failed to be an economic catalyst.

Today, they not only question the revived development plan but whether the Caracol Industrial Park being built in northern Haiti can even be replicated elsewhere. They argue the international community would be better off pouring its aid dollars into modernizing Haiti’s agriculture sector, which has been hampered by everything from soil erosion to a lack of property titles and modern equipment to outdated laws.

Meanwhile, even those desperate for a livelihood question the opportunities for upward mobility in an industry that pays minimum wage.

“Haiti used to be self-sufficient in rice production; it used to be self-sufficient in most of the cereals, the food that it consumed,” said Alex Dupuy, a sociologist at Wesleyan University in Connecticut, who has written about the failures of the Haitian assembly industry.

“Very few of the dollars that are invested in Haiti in these assembly industries are going to remain in Haiti,” he said. “And since the assembly industry is the only game in town, and there is nothing else being planned around it to grow the economy, it’s not going to have any long-lasting effect on the growth of the economy.”

‘THE SAME WORDS’

Robert Fatton, a Haiti expert at the University of Virginia, said he isn’t sure if returning to Haiti’s past will provide a solution for the future.

“I don’t see a significance difference between this kind of development and the one we had in the ’70s,” he said. “They are using the same words that were used then: ‘We are going to create jobs; We are going to be the next Taiwan; We are going to export to the U.S.’ There were tax breaks and tariff breaks to export services. This is the same model. And I don’t see it giving fundamentally different results.”

At the center of the debate is the state-owned 600 acres where the park is being developed, and 357 Haitian farmers informally cultivated before it was donated by former President René Préval’s administration.

The farmers have since been compensated with either cash for their crops, relocation to another plot or enrollment in a training program to another kind of business, said Agustín Filippo, private sector development specialist for the Inter-American Development Bank.

Filippo and others note that surveys conducted as part of the IDB’s $3.5 million farmers’ compensation package showed that while the 123 acres farmers cultivated generated an estimated $50,000 in annual income, the same land in five years is expected to pay about $45 million in local workers’ salaries annually from Korean manufacturer Sae-A, the park’s largest employer.

For the IDB, which has partnered with the United States to develop the park, it’s not a question of emphasizing textiles over agriculture, spokesman Peter Bate said. The bank is spending more than $200 million in agriculture projects, including a recent grant of $15 million it provided to Haitian authorities to help modernize the sector, he said.

Cherly Mills, counselor and chief of staff for U.S. Secretary of State Hillary Clinton, said tapping agriculture is an important part of the U.S.’s strategy in Haiti. It is investing about $300 million in the sector, including in the very areas where the industrial park is located.

“In the end, it’s going to require the [Haitian] government to ensure that the park and other investments in the region that they are guiding, adequately produce the long-term economic development and benefit for the entire region,” she said.

EROSION’S ROLE

Mats Lundahl, a Sweden-based consultant and development-economics expert, said agriculture remains a hard sell in Haiti because of the erosion process caused by population pressure.

“The more people who enter the agricultural sector, the more severe the erosion,’’ he said. “You need to get people out of that sector so that it can be reformed: holdings that are large enough to sustain a family at a decent income level; tree crops instead of what you have now; and a [registry] to straighten out the land title issue. All this is very difficult, but sooner or later the issue must be faced.

“Textiles is admittedly a low-wage sector, but it is better to have a low-paid job than no job at all,” Lundahl added. “If you want state-led development you must have an honest, viable state, not one which is about to fail.”

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