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The Road to Recovery in Haiti

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Haiti searches for an economic future in the midst of chaos

By Jane Bussey

Miami Herald
June 6, 2004


The fresh paint is gleaming on the walls in Georges Roumain's office near the capital's docks; his workplace is tidily appointed with shiny office furniture, a formidable safe and a new Compaq computer, plugged into a recently installed electricity outlet. But, like many things in Haiti today, this picture of modern efficiency is not reality. Outside Roumain's window are the crushed and burned hulks of dockside warehouses, pillaged and torched in riots after former President Jean-Bertrand Aristide resigned and left the country just more than three months ago.

Aristide departed under pressure from armed rebels and former soldiers who had taken over two major cities. The departure sparked more shootings and looting. Among the targets was Haiti Terminal, a private stevedoring company, where looters stole hundreds of used cars and ransacked containers. ''It was like Apocalypse Now,'' said Roumain, general manager of Haiti Terminal. ``Everything got burned down. All this is new. There was nothing left.''

The scene at Haiti Terminal could serve as a metaphor for the Caribbean country today, poised at a turning point between a pauperized and politically ravaged nation and a vision for the future of a modernized and more equitable country. But Haiti's track record in economic recovery is not good. This is at least the fourth time in two decades that the country has tried to reinvent itself after political upheavals.

Devastating Loss

Estimates for the recent damage range as high as $200 million, although there has been no formal assessment. The full tab for fixing Haiti would run into the billions of dollars in a country where the gross domestic product is less than $3 billion a year. To add to Haiti's pain, recent flooding near the border with the Dominican Republic killed more than 1,000 Haitians and left thousands homeless.

There is general agreement that Haiti's interim government, as well as its business sector, is facing huge challenges. ''We have to change the rules of the game,'' said Kesner Pharel, an independent economist who once worked in the Central Bank. There is also consensus that there may not be many more opportunities to reinvent Haiti. ''The government has no choice; they have to act, not use words,'' Pharel said. ``The Haitian private sector has to look itself in the mirror and ask if they have done their job, not only paying taxes but by creating social capital -- health and education. Otherwise, they will not be able to live in this country.''

Haiti is hobbled by its small economy, with more than half of Haitians eking out a living as subsistence farmers. In addition, the collapse of a group of unregulated credit unions in 2002 put added strain on the middle class and created ill will toward Aristide among many small investors.

Few Options

''Haiti doesn't have many choices,'' Pharel said, listing the possibilities as tourism, serving as an assembly industry platform, or growing niche crops like specialty coffee. For now it is the United States that sustains the economy; buying the bulk of exports, sending aid and serving as the source of remittances from Haitians who have left the country. ''We are living off the United States,'' Pharel said. Even the country's drug trade, which has become a significant but unmeasurable part of the economy, is tied to the United States as Haiti increasingly serves as a jumping off point for cocaine shipments to the north.

The interim government of technocrats has appealed to Washington, multilateral lenders such as the World Bank and other countries for aid as it prepares for a July meeting with donors in Canada. The government and the private sector also want the U.S. Congress to pass the Haitian Economic Recovery Opportunity Act, known as the Hero Act. This would allow Haiti's garment assembly plants to import cheap Asian fabric, instead of buying U.S. textiles, to compete with Asia in apparel manufacturing. The measure would create thousands of jobs, the government claims. Assembly plants employ some 30,000 Haitians today, about half the number of people working in the industry in the early 1980s.

Set against this bleak backdrop, around a dozen Haitian business leaders interviewed by The Herald say that beyond rebuilding the economy, they must craft a consensus between the millions of have-nots, political leaders and business owners to restructure the country's institutions and economy. Without a truce among the divided factions, they say, the country cannot get on its feet. ''Will consensus work?'' asked Michael Madsen, president and chief executive of Brasserie d'Haiti, which brews Prestige beer. ``It's not a choice; it's a must. Otherwise, we will not exist as a nation-state.''

Economic Standstill

The poorest country in the Western hemisphere -- with one of the most unequal distributions of income -- Haiti has seen its economy come to a standstill in the past three years. Public services, such as police, education, health care and electrical power, along with the physical infrastructure, are decimated.

With almost no electricity from the state-run power company (the government lacks funds to buy the fuel), private generators power factories, hotels, private offices and homes. In government agencies, employees work in the sweltering heat. There are more than a dozen traffic lights in downtown Haiti, but only one of them has actually worked sporadically in recent weeks. For the majority of Haitians living in rural communities, electricity is nonexistent.

Roads, sewers and water mains in the capital were built for a population of 400,000 people. More than 1.2 million people now strain the infrastructure. SUVs clog the streets; pollution hangs over downtown; rubbish piles in the gutters; slums ring the city and cling precariously to the hillsides. Still, more than three months after Aristide's departure, rebuilding is underway, along with a smattering of business initiatives going forth. Madsen's brewery began exporting Prestige beer to the United States for the first time last month, and the tourism industry has drawn up a wish list of how to beautify Haiti to entice tourists again. For now, the capital's hotels are filled with officials from multilateral lending institutions, relief groups and international organizations.

Absurd Situation

Near the port, factory owner Georges Barau Sassine recently sat in front of his computer at A.G. Textiles, where 600 workers stitch together warm-up pants for Sara Lee. ''See all these empty machines? That is a consequence of the events,'' said Sassine, who studied at the University of Miami. Sassine was writing a memo to his bank in Miami about the tough times. ``That is what my bank is asking me -- why did you lose money?'' But Sassine, whose plant runs off the power of a generator, savors the absurdity of the chaos. ''I haven't had power in three months,'' he said. ``Last week they came to be paid! Then they took away the meter.''

Sassine is luckier than his industrial zone neighbor, Charles-Henri Baker, president and general manager of P.B. Apparel. The sewing machines are silent in Baker's darkened plant. His U.S. contractors canceled their orders after Baker was arrested and jailed briefly by the Aristide government during a series of protests last fall. Now Baker is seeking new apparel contracts to start up work again. ''Haiti has been studied inside and out,'' Baker said. ``There are only a few ways to develop a country -- been there, done that. You don't need a crystal ball.''

Some business leaders are impatient and have started joking that Interim Prime Minister Gérard Latortue is living up to his name, tortoise in French, by moving at a turtle's pace. During a visit to Miami just after his first trip to Washington last month, Latortue shrugged off the criticism. ''I see terrible impatience from everybody, like I was a magician to change things overnight,'' Latortue said. Latortue's top priority is to organize credible elections next year. On the economic front, he warned that his government needs aid urgently, since the government's monthly revenue of $15 million falls short of the $20 million in total expenses.

Washington has pledged $100 million; the Inter-American Development Bank has $345 million in promised loans that will be disbursed for projects over time. Latortue said in addition to aid, he would encourage private investment and a return of Haitians who have left the country. One of his suggestions is to attract Haitians set for retirement in Canada and the United States, allowing their pension payments to flow to Haiti.

Clean Sweep

Authorities have also started to sweep away the vestiges of Aristide -- taking down his pictures around the capital -- although his party, Lavalas Family, remains a political force. Critics warn that the good is being thrown out with the bad. The publishing industry is up in arms over the new government's failure to renew grants to publishers that were implemented under Aristide, allowing the book industry to produce cheap textbooks for schools. Without the grants, publishers warn that textbook prices will jump 300 percent and they will be forced to cut back their press runs drastically to avoid being saddled with books that poor families cannot afford.

''I'm not going to say the government in place was a good government, doing good things,'' said Christopher Lewis, a Haitian-Canadian who helps run Edition Areytos in the capital. ``But education is important, and they did something for education.''

Basic Needs

Business leaders said the country needs security, electricity and new sanitation before any economic overhaul can gather momentum and attract foreign investment. ''This is a moment that rarely comes around in our history,'' said Andre Apaid, owner of AGC, a garment business in Port-au-Prince. ''The moment is ripe for people to understand that the ownership of wealth, capital and knowledge is a good thing,'' said Apaid. ``On the other side, elites need to engage themselves in recognizing that the conditions of the people are unacceptable.''

The country failed to set a new course after dictator Jean-Claude Duvalier fled to France in 1986. Another moment of consensus emerged around Aristide, first when he was elected in December 1990 and again when he returned with U.S. backing in 1994. Aristide served out his term and power was transferred to President Rene Preval in February 1996, but political and economic problems continued to dog Haiti. When Aristide was elected again for a term that began in February 2001 in questioned elections, international goodwill began to dissipate and much of the private sector withdrew its support. This time, Apaid is among those spearheading what is known as the Group of 184, an organization of business, students and labor trying to draw up a blueprint for the future.

A big problem is that in a country where about half the population lives on $1 per day, there is only a tiny middle class to drive consumption. Réginald Boulos, who runs a media group and a car dealership among other businesses, said poverty is not in the interest of business. Haiti imports 1,800 cars a month, while the Dominican Republic imports 75,000, Boulos said. ''In the best month, I sell 50 cars; I usually sell 20,'' he said. ``Do you call that business doing well? We are managing misery.'' Boulos, who once ran health clinics in the slum of Cité Soleil, argued that the most important change for Haiti would be to create a middle class, more like the neighboring Dominican Republic. ``The elite in this country need to get involved in politics.''

Across Haiti, people are waiting. In her small rice stall at the local market, Sabine Calitte, 25, said she hopes the country is turning its back on recent strife and problems. ''Now we suffer over water, power and security. I don't know what happened to Haiti,'' she said.

Tourism Trickles

The Haitian tourism sector has enthusiastically embraced the new government's call for broad participation, although hotel owners admit the country's problems obscure its attraction for tourists: the vibrant and distinct culture, from its vivid naif art to its Vodou traditions. High-end tourism started in Haiti more than half a century ago, attracting celebrities from British author Graham Greene to rock star Mick Jagger. But there are few tourists these days.

''I started building 50 rooms five years ago and then stopped three years ago,'' said Elisabeth Silvera Ducasse, managing director of the 87-room El Rancho, a hotel on the hillside above Port-au-Prince. Ducasse and hotel owner Dominique F. Carvonis, present and past presidents of the Haitian Tourism Association, recently participated in a two-day brainstorming session with the government to try to jump start the economy. ''For business to start again, you need security, money and stability,'' Ducasse said. But she is optimistic. ``You think, oh my God, things can change. We hope that things can change again. The will is there; the mentality is also there.''


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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.