2006 Miami Conference

Reports

HAITI: HAITI’S SOCIAL AND ECONOMIC CHALLENGES
WEDNESDAY, DECEMBER 6, 2006
2:00 PM – 4:30 PM

Moderator: Guilaine Victor, Association des Industries d’Haiti (ADIH)

Discussants: Jean–Michel Caffin, Bureau Veritas; Maxime Charles, Scotiabank ; Guy Lamothe, Centre de Facilitation des Investissements ; Gregory Mevs, Terminal Varreux S.A. ; Edmond Mulet, UN Stabilization Mission for Haiti (MINUSTAH) ; Brian Nichols, US Department of State ; Philippe Saint-Cyr, Citadelle Capital LLC.

The Context
With a constitutionally elected President and a newly elected parliament, Haiti continues to face significant development challenges. Though new social appeasement programs and anti-violence policies are currently being implemented, the country stands poised to become reintegrated into CARICOM and benefit from the Economic Partnership Agreement with the European Union, direct local and foreign investments continue to be the key to the country’s success.

The Challenge

How is the new Government responding to the challenges that it is facing?
Who are the key players needed for success? And, what are the critical actions required in the short-term?
What is the development plan for the next five years vis-à-vis economic growth and investment?
How can the local and international business community contribute to the country’s economic development with Haiti capitalizing on its unique geographical position?
Is the country’s newly revised investment code and Free Zone code enough to attract the much needed investments, to create new jobs, and encourage reconstruction efforts?
To what extent can the local private sector and the donor community collaborate in true public/private partnership to improve on current economic conditions and truly make a change?
Can Haiti take advantage of the small window of opportunity and successfully change its future?

Points and Comments Brought up in the Session:

Haiti is still in crisis but small signs of improvement are evident in daily activities, providing clear signals of commitment from investors and businesses. However, the National Government presence is weak at this time, and the positive expectations of the election are yet to materialize, despite increasing macro-economic improvements. The economy is still moving very slowly. Tax
collection is still very poor, and job creation is low. 60% percent of the national budget is financed by the outside, and 75% of the then GDP is based in the informal sector.
Nonetheless, improvements overall have been noted—the GOH has implemented methodology that has brought greater financial transparency, a balanced budget, and a large international donor commitment to support Haitian development. The link between security and development is clear, and the international donor community has committed financially to the cause. A broader international context should be taken into consideration however—to include countries that have not traditionally participated in this broad initiative. Micro-credit is another aspect that may create jobs, and encourage short-term employment.
Haiti renewed its commitment to join the CARICOM, and is participating in the regional negotiating machinery. Haiti will be the largest market for the CARICOM.
Disbursements of committed funds to Haiti will be made easier in the near future and new pledges were made at the Madrid Donor Conference by Ireland and Turkey. 1$billion has been pledged at this time. Currently, a reform process related to the rule of law is being implemented, and the MINUSTAH has now a more defined role to play in the country, and is contributing to the efforts to build capacity in the nation. Technical assistance in security and capacity building to promote short and long term security are of high importance as they impact economic development.
Customs is currently collaborating with USAID, to improve its processes, and the Maritime Ports Security project is well under way, and will continue to be supported by USAID; other projects in distance learning, business development, formal and informal micro enterprise development are being implemented.
Resources can help fill gaps, help articulate appropriate policy.

Questions and Answers Brought up in the Session:

How is the MINUSTAH going to deal with the continued problems of daily security—security issues (kidnappings, thefts, murders) still affect the daily lives of the Haitian citizens. Tension and fear are still pressing on the Capital.
Can we identify new clusters for development? Suggestions were made to focus on the cultural heritage of the island: site of the first Spanish Port of the New World, for example should be a “world heritage” site. In addition, linking Haiti/Dominican Republic in a larger cultural tourism context may be a way to promote tourism. Other such clusters are potentially marketable. This will of course imply that we focus on agriculture, infrastructure and job creation, in addition to security.
What other areas are affected by security concerns?
What about education? Education is important and the IDB has currently a $25,000,000 project for Haiti. Other agencies such as USAID are also focusing on education.

Recommendations Made:

Reinforce law enforcement capacity at the national level, to restore security and the rule of law.
- Restore long- term security—and investments will return (as they did in some African countries).
- Rule of law, good governance and transparency in financial and political dealings are primordial.
- Encourage transparency and collaboration between national agencies.
Focus on local governance and on decentralization as a key process towards improving the political climate.
- Resources and technical support need to be focused outside the capital of Port-au-Prince, reinforcing local governance structure and engaging them in the overall governance process
- Support legislation abroad with great impact on Haiti, such as the HOPE bill which could bring trade advantages to Haiti. It is imperative that Haiti have positive trade relationships not only with the US but also with other partners in the region.
Create wealth promotion agencies, focusing in areas of potential for the island: tourism, apparel, and other productive sectors.
Modernize existing legislation on property and business ownership, to encourage foreign direct investment, bringing much needed capital. Improve the regulatory framework overall. Cut down on the bureaucratic red tape, making the process of conducting business more efficient.
Develop new business strategies to bridge existing gap, encourage foreign and national direct investment, and support key development objectives.
Identify competitive markets and then focus resources on their development.
Inform the general population of steps to be taken, changes in legislation, and gain their support for true economic development.