Hillary Clinton-backed post-quake Haiti project ‘a work in progress’

An ariel view of the sewing factories at northern Haiti’s Caracol Industrial Park.
An ariel view of the sewing factories at northern Haiti’s Caracol Industrial Park. Courtesy of the Inter-American Development Bank

While visiting this one-time bean field in Haiti’s northeast region, former U.S. Secretary of State Hillary Clinton declared it was a new day.

“We had learned that supporting long-term prosperity in Haiti meant more than providing aid,” Clinton told a roomful of star-studded investors at a luncheon celebrating the opening of the United States’ largest post-quake investment in October 2012. “It required investments in infrastructure and the economy that would help the Haitian people achieve their own dreams.”

Nearly three years after the opening of the Caracol Industrial Park, some wonder if Clinton and others underestimated what it would take to create jobs and the environment for sustainable economic growth in a country riddled with disaster and political gridlock.

“Caracol is still on crutches,” said former Finance Minster Marie Carmelle Jean-Marie.

In the nearby town of Caracol, several say that the park hasn’t transformed their lives as promised. “The park doesn’t benefit the people of Caracol,” said Renel Marseil, 31. “The foreigners have taken over Caracol for themselves.”

Billed as a stepping stone to helping Haiti cut its dependence on foreign assistance in favor of trade, the complex today employs 6,200 Haitians, most of them garment workers sewing T-shirts, leggings and sweatshirts for Target and Walmart. The number is just 10 percent of the 60,000 promised. And while an informal State Department study shows that 1,000 mom-and-pop businesses have opened in nearby communities since the park’s arrival, the large multiplier effect proponents hoped Caracol would generate, hasn’t happened.

Supporters say it remains “a work in progress” that can still meet expectations. They point out that it has contributed $100 million in exports to Haiti’s limping economy while accounting for 60 percent of the apparel jobs created since the country’s devastating Jan. 12, 2010 earthquake. The park’s $12 million annual payroll from its five commercial tenants also is boosting the local economy.

“So far it has mostly met our projections,” said Thomas Adams, special coordinator in the U.S. State Department Haiti Office that oversees U.S. engagement in the country. “Job creation there has grown steadily.”

Last month, the U.S. Congress extended trade preferences for Haiti to 2025. The preferences allow Haitian-sewn apparel to enter the U.S. duty free and fabric can come from anywhere in the world. The extension wasn’t the 2030 date that the Association of Industries of Haiti pushed for, but it allows for further growth of the industry’s 36,000 jobs, and for Caracol to attract additional foreign investment.

Mark D’Sa, a U.S. State Department consultant who promotes the park, says dozens of potential investors have shown interest over the years but end up walking away for a host of reasons. Sometimes it’s due to lack of Haitian government followup; sometimes, the buildings can’t be constructed fast enough.

For some, the strict U.S. oversight that D’Sa, a former apparel executive with The Gap, enforces is also a deterrent as is the environmental monitoring by the Inter-American Development Bank, the park’s main donor. Haiti’s political crisis, and ongoing protests over electricity in the region, have also been deterrents.

Last May, the Haitian government was forced to deploy 26 specialized police officers to provide security at Caracol after flaming barricades erected by protesters along the main highway paralyzed operations inside the park because the 42 employee buses couldn’t transport workers.

Last month, two containers belonging to Sae-A Trading Co Ltd., the anchor tenant, were hijacked — and later recovered — by protesters and used as barricades during a violent protest that led to the killing of a Chilean U.N. peacekeeper. Like past demonstrations, this one was about residents from nearby Fort-Liberté and Ouanaminthe demanding 24-hour electricity from the industrial park’s 10-megawatt power grid. In addition to the tenants, the U.S. financed grid provides power to 8,800 others in the neighboring towns of Caracol, Trou-du-Nord, Terrier Rouge and Limonade .

“Some of these protests defy logic,” Adams said, adding that the violence and political crisis affects Haiti’s ability to sustain progress. “One, not too long ago, destroyed the only backhoe in Cap-Haïtien that can clear out the drainage ditches. A recent one up near Fort-Liberté damaged the switch that allows electricity to go to Ounaminthe. It’s going to take several months to get the new piece of equipment in to fix that.”

Georges Sassine, who had championed Caracol as part of his larger vision of reviving the country’s once-robust assembly industry, said Clinton didn’t underestimate the park’s potential. The problem is that “the other pieces didn’t come to fruition,” he said.

Caracol was supposed to be part of a larger revitalization of Haiti’s neglected “Northern Corridor,” which included three hospitals, a new port in nearby Fort-Liberté and thousands of new homes in existing communities. Homes were built but the plans for the port have been scratched in favor of renovating the existing Cap-Haïtien port.

For some, Caracol is symbolic of the endemic problems U.S. aid and development projects face in broken countries like Haiti. Jake Johnston, however, also views it as part of Hillary Clinton’s and husband, former President Bill Clinton’s, Haiti legacy.

“Both Hillary and Bill Clinton invested a tremendous amount of political capital and U.S. taxpayer dollars to showcase a success in Haiti to the global community, but the result is another lesson in the pitfalls of top-down development,” said Johnston, who has been tracking Haiti’s relief and reconstruction as a research associate with the Washington-based Center for Economic and Policy Research. “If this is what happened with the international community's flagship reconstruction project, imagine what is happening elsewhere, where less attention is being paid.”

The jobs produced by Caracol were supposed to be for Haiti’s unskilled, uneducated workforce. But a State Department analysis shows that half of the employees have either a high school or secondary education.

“There are a lot of good, qualified people up here who are eager to work but don’t have the opportunity,” said Pierre Yves Gardere, owner of the paint manufacturing company, Peintures Caraïbes, which employs two chemists from the area. “For me, it’s been very gratifying.”

Lon Garwood, advisor to Sae-A Chairman Woong-ki Kim., said that 80 percent of the company’s employees have never held a formal job.

Employers say most workers are being paid above the approximate $5-a-day minimum wage for the garment sector, which in itself is far short of the equivalent of $11.36 per workday that garment workers have demanded.

“The average Caracol worker earns two and a half times Haiti’s per capita income,” D’Sa said. “These are mostly people who before Caracol were earning between $0 and $2 a day and have now stepped up to $5 or $6 a day. In addition, they have free transportation, so that’s an additional benefit for 50 cents a day. They have two weeks paid vacation, which they never had before. They have a pension plan, health insurance and one month’s salary as a bonus at the end of every year.

“You want to bring the $10 and $15 a day job to Haiti, but without those skills and education level, the investors are hesitant to come and invest,” he added.

Still, observers say the fact that overqualified people are competing for minimum wage jobs not only underscores the lack of employment opportunities in rural Haiti but the government’s failure to attract other kinds of industries.

In his latest book, Haiti Trapped in the Outer Periphery, Haiti-born political scientist Robert Fatton said that for Haiti to once more adopt “the type of export assembly project that has guided Haiti’s economic programs for the past 40 years is to invite the same failures and contradictions that have contributed to generalized underdevelopment and poverty.”

Simply put, the road taken after the country’s catastrophic earthquake, Fatton said, “cannot generate any type of self-sustaining, let alone equitable development.”

Last month, Sae-A took delivery of its fourth 120,000 square feet sewing factory and construction is nearly completed on a new factory for Port-au-Prince based Coles Group, the park’s newest tenant. But of the $200 million the IDB disbursed for Caracol, $82 million is unspent. Attracting foreign investments requires construction to be a continuous process with funds moving much more quickly, observers say.

“If the IDB was serious about economic growth we would have seen more buildings,” said Yves Savain, the executive director of the CTMO-HOPE, the government agency overseeing working conditions and ensuring compliance with U.S. trade preferences.

IDB Spokeswoman Anna Escobedo Cabral said the pace of construction is a function of when funds become available and when demand from tenants materializes.

With its $2.3 billion in annual revenues more than Haiti’s budget, some have wondered if Sae-A’s presence is more of a social experiment than a profitable business venture. Since it arrival in the country, Sae-A has arranged provided free medical care for neighboring communities, and operates a free K-6 school, S&H Primary, nearby.

Most of the school’s 300 students are employed with Sae-A and are being educated in French, Creole and English.

“It has long been our company’s policy to invest in the communities where we work,” Garwood said. “In Haiti, our efforts have been on a larger scale to meet the needs of the community.”

Sae-A, he said, is eager to bring more factories online and as they do, “the number of workers in our employ will continue to rise,” he said. “Our expansion plan is on track.”