Is there hope for Haiti? (Part 2)
S. Brian Samuel, Guest Columnist
Part 1 of this feature was published in last Sunday's In Focus section.
If Haiti has a limited capacity to absorb donor money, it has an even more limited ability to absorb business money. President Martelly likes to pronounce that Haiti is "open for business" - many would add behind his back: yes, but "closed for renovation"!
In the World Bank's 2012 Doing Business Report, Haiti ranks 174th out of 183. Haiti's legal regime is archaic, its system of land tenure Byzantine, and its capacity to regulate almost non-existent.
Worse yet, the political system does not lend itself to easy passage of laws - Martelly's administration hasn't passed a single piece of legislation in its two-plus years in office; halfway through its term. In a sense, Haiti is "too democratic"; with no strong party system and legislators forming and re-forming loose alliances, usually because they share a common enemy. Under Haiti's extreme term limits, no president can serve two consecutive terms; so although he has only 'just' been elected, for Martelly the clock is ticking - loud.
But all is not lost; business is being done in Haiti. Where angels fear to tread, you will always find … cell phones. Irish-owned Digicel is now Haiti's biggest company, after pumping more than US$350 million into the country. Following on their heels came, strangely enough, the Vietnamese Army Telecoms Company (Viettel), which in 2010 bought into the state-owned Teleco, bringing much-needed competition to the sector.
Heineken bought the Prestige brewery (a very decent brew); and the Marriott Corporation, in partnership with Digicel, is currently building a US$45-million 175-room business hotel in Port-au-Prince - all the more significant as it is located outside the usual comfort zone of Pétion-Ville.
NEEDS ELECTRICITY BOOST
Even more impressive are the new breed of independent power producers (IPPs), three of which have commenced private generation of electricity within the past decade. With only 12 per cent of the population having access to electricity supply (25 per cent if you count illegal collections), Haiti has one of the lowest rates of electrification in the world - if not the lowest - and urgently needs to increase its generating capacity.
Enter the private sector, Haitian and foreign, which invested in three separate thermal-fired power plants, selling bulk electricity to the state-owned Electricité d'Haïti (EdH) under long-term power purchase agreements (PPAs).
Most of the electricity that is distributed by EdH is never paid for, thanks to what is euphemistically termed 'non-technical losses'. In other words: thiefing; plain and simple. And, as people in the know will tell you: do not for one minute believe that electricity theft is only being done by the poor and the needy - poor people hardly use any electricity to begin with - most electricity is 'lost' in the suburbs above Port-au-Prince, running air conditioners.
Under Haiti's antiquated legal system, the electricity company has to jump through hoops, including magistrate's court and the police, to disconnect for non-payment. At the same time, EdH is its own worst enemy; one large user of electricity told me he has been trying to get a bill out of EdH for over a year now to pay it, without success. A similar situation applies in the water sector - but worse.
Depending on which way you look at it, the Caracol Industrial Park is either the most exciting industrial project in Haiti's history or its biggest white elephant. A brainchild of the Clinton Foundation and funded by the Foundation, USAID and the Inter-American Development Bank, this gleaming new US$300-million industrial park in northeast Haiti is modestly touted to employ 60,000 people - in the future. In the present it employs about 2,000 people, in three light manufacturing plants.
But these are early days yet. It will take many more for the effects of the US HOPE legislation granting incentives for the importation of garments from Haiti to make any substantial impact - companies do not relocate overnight. Hopes are high; but for the moment, Caracol's dedicated 10-megawatt electricity-generating plant is operating at a fraction of its capacity.
Haiti's government wants to develop the country's tourist industry, which some people see as a pipe dream, considering the overwhelming negative images that have been associated with Haiti since the earthquake. In the mind of the average tourist (i.e., rich/white), Haiti is not the first place one thinks of as a holiday destination. Au contraire.
But this does not mean that Haiti has no future in tourism; it just may not be the type of future that the government has in mind. Art is one of Haiti's most famous and enduring assets and could be used as a basis to develop the tourism industry. Culture vultures tend to be a bit tougher than your average tourist type, and are more likely to ignore the negative stereotypes that define Haiti in the media's eye.
Plus ça change: through it all, Haiti's art is still vibrant.
I was half-minded to begin this article with a word suggested by my brother Gerry, when I sent him pictures from Port-au-Prince:
Dystopia: A society characterised by dehumanisation, totalitarian governments, environmental disaster, or other characteristics associated with a cataclysmic decline in society. (Wikipedia)
But on reflection, such a description is too pessimistic. Yes, Haiti has had more than its fair share of all the above - but can it be as bad as that? No, it isn't. Haiti also has, at last, a sense of hope. For decades, Haiti has suffered at the hands of its dictatorial leaders - democracy is still a new phenomenon that is only now beginning to take root.
Haiti has had a tendency to take its politics too seriously - and as a consequence give its leaders too much power. Such was the fate of Haiti from the days of L'Ouverture and Dessalines, through decades of US occupation and Duvalier dictatorships; a political culture of domination has taken root, which Haitians are only now beginning to shake off.
The two main players in the 2011 presidential election (even though one didn't make it to the end) were the eventual winner, calypsonian Michel 'Sweet Micky' Martelly, and the Haitian-American hip hop star Wyclef Jean - if ever there was a sign that Haitians are moving away from taking elections too seriously, surely this was it.
Unlike in the past, when political loyalties and affiliations were matters of deadly seriousness, nowadays you get a sense that politicians cannot count on the automatic support of their hard-core supporters - they've got to earn their pay. Haitians have more important things on their minds than politics - like survival - and they want to see results literally on the ground, and quickly.
LONG, HARD ROAD
It is not the donor community that will uplift Haiti; it is the business community - local and foreign, big and small. The more money the West gives to Haiti, the more money Haiti will continually need. It is only by investing in Haiti that Haiti will be able to grow and stand on its own. This is beginning to happen, but it is a long, hard road; and Haiti will need help along the way.
Help is there in abundance, perhaps even too much help, but it is having a positive impact - however slowly. The World Bank is providing help that is focused on fixing the institutional problems, rather than the usual habit of just throwing money at Haiti (even though, like everyone else, the Bank Group has thrown an awful lot).
Haiti's legal and financial systems are archaic and a hindrance to business. One foreign businessman told me, "It took us over a year to open a bank account; I had to be walking around with mountains of cash!"
The billions being poured into Haiti will yield tangible results - in time. But it will take years just to rebuild reliable water, transport and electricity networks - the basic building blocks for any business. International companies will see the economic sense in relocating to the Caracol Industrial Estate - in time. In the 1980s a similar programme in Jamaica, the 807 Garment Programme as part of the Caribbean Basin Initiative (whatever happened to that one?), employed tens of thousands of people, mainly women. The modernisation of Haiti's legal and regulatory regimes will create an enabling environment for investors to set up new businesses or expand existing ones, without all the stifling red tape that currently applies.
All of these programmes will yield results - in time. The question is: Does Haiti have the time?
S. Brian Samuel worked for the International Finance Corporation, the private sector arm of the World Bank, from 1998 to 2007. He currently consults on project financing and public-private partnerships. Email feedback to email@example.com and firstname.lastname@example.org.
CAPTION: A woman carries her belongings as she is evicted from a camp that was set up for people displaced by the 2010 earthquake near the national stadium in Port-au-Prince, Haiti, Monday, April 22, 2013. An Amnesty International report says Haiti has violated international human rights obligations by failing to protect people who have been forced to leave the impromptu settlements that sprang up after the 2010 earthquake. People kicked out of settlements find themselves "further marginalised and driven deeper into poverty", it said. - AP