CGI 2011: Haiti Development Workshop

[updates and edits, especially in the 4th-6th grafs]

“The winner” in Haitian development created 12,000 jobs in the garment industry in the past eight years in Haiti.  Seems as if all of the participants today will be garment manufacturers, though WJC notes that companies such as Coca-Cola and Newmont Mining are also considering investment.

When I sent an email out indicating that I was thinking of attending, the best response I got to questions you would like to ask was “Is Haiti doomed forever to be the developed world’s sweat shop? Will it ever be allowed to have an agricultural economy of its own?”

Only 43% of the aid pledged after the earthquake nearly two years ago has been disbursed today. (Take that, “shovel-ready” complainers!) WJC: “Haiti will not have a sustainable economy unless there are new investments, new jobs, and new business.”  President Clinton describes the disaster as “best opportunity in my lifetime” for the country.” (I’m guessing this is in the same way as education privatization has worked in New Orleans since Katrina.)  Most of the donor monies have not gone through the local institutions, but President Martelly is determined to have local government integrated in the discussions. 

As an example of the problems before the earthquake, WJC notes that there was no market in lending—even mortgage lending—in the country before now.

WJC describes Donna Karan as “Haiti has taken over her life to the extent that I am now a back-bencher.”  I think this is a positive statement.  Also gets a pledge for development from the new group run by Mohammed Yunus (who I interviewed at the 2009 CGI) and one other group [update: Zafen appears to be the other Commitment].

WJC, leading up to the President of Haiti, mentions that W. described the President of the United States as the “decider in chief.” Clinton said that he rather agrees with that statement, noting of Martelly that “This man will make a decision.” He also declares that most of them have been good ones, something he did not say, at least now, about GWB.

The President of Haiti Michel Martelly rehashes some of these points in more detail and discusses the plans of his administration to make it easier to start a business in Haiti and complete a new Industrial Park, with two more apparel companies and a furniture manufacturer joining there by the end of the year. Working with USAID, IADB, and others to ensure that their business-friendly approach will be highlighted around the world. Revamping processes and reshaping policies to create trade agreements with other countries, such as Brazil, using the model of the 10-year agreement with the United States.

Upsides: free education for all pledged, as well as opening a state university and (separate) vocational school.  Will be subsidizing the education of 772,000 Haitian children and leverage their location near the largest market (U.S.) and the “booming markets of Latin America.”

WJC notes that even the long-antagonistic Dominican Republic has worked with Haiti to rebuild since the earthquake.

First speaker is Magalie Dresse, owner, Caribbean Craft, who notes that her business has expanded rapidly thanks in large part to Donna Karan’s commitment and some major effort from Ms. Dresse herself.

A representative from the Haiti Action Network—or perhaps Denis O’Brien of Digicell—follows, claiming that Haiti has been a democracy for only five years.  He’s still alive, and follows that by declaring that “there’s no country that has more creativity than Haiti.”

Luis Alberto Moreno, the president of the Inter-American Development Bank (IADB), follows, declaring that the five-month President”inspired us all.” (I’m hoping I misheard that and that he was really referencing WJC.)  He then goes on to talk about “Juan Valdez” and the Colombian coffee industry.  I cannot tell if the audience is too polite, too young (doesn’t look like the way to bet), or just too stunned.  But he goes on to make good points about possible developments that would not be dependent on the rag trade.

President Martelly speaks again; it’s easy to understand why people like him, and he clearly has a vision for agricultural development as well as economic development.  Not certain I would quit my job to work for him, but it would be worth thinking about.

The next speaker is Woong-Ki Kim, chairman of the Sae-A Trading Company—or, more accurately, Ron Garwood, who is working as his interpreter. Chairman Kim has several reasons for his Haitian investment, including shorter delivery times, “an abundant and motivated labor supply,” a preferential Trade Agreement with the U.S. that provides duty-free entry, and that the U.S. and the IADB are building up the North Industrial Park, including an eco-friendly , state-of-the-art waste-water treatment plant, a power plant, and housing, not to mention giving them land (150 hectares, if I heard correctly). Mr. Alberto Moreno notes that another Korean company—a Fiber-Optic firm—and an American furniture company are also seriously planning to move into that park to create jobs.

WJC, who I still maintain is rivaled by no one in his ability to process and retain data, asks about sugar production in Haiti, noting that it is very fragmented and strongly concentrated in rum manufacturers.  Mr. Alberto Moreno notes that the IADB has been speaking with the Brazilians about their recent efforts in using sugar cane as energy and leveraging that technology into power generation. Haiti pays the highest KwH power cost of anywhere.  “This is insane.” – WJC.  As most of this is effluvia to sugar generation, the marginal cost is almost solely derived from capital investment—virtually no labor cost, even if you provide better (“good”) income to workers.  Mr. Alberto Moreno confirms President Clinton’s vision for energy generation, noting the hydropower generation opportunities as well.

President Martelly notes that Haitian are working to produce sugar—in Santo Domingo.  Providing the opportunities at home would cause repatriation and improve human capital. (“They would rather stay home and do it—so we should try it.”)

Talk goes to tourism, with the best sight gag of the day: President Martelly says, “I could stand up and tell you”—stands up—“that Haiti is the most beautiful country in the world.”  He then goes on to note that voudoun is an attraction. (Maybe I would quit my job and work for his government after all.)

Mr.O’Brien notes that he toured Haiti this summer and that there are many opportunities for “boutique” hotels (20 rooms or fewer) and other boutiques in areas—“either way, left or right, as you come out of the airport”—that are growing in other areas but are underavailable to tourism.

(Having been to Punta Cana, I suspect that the areas outside of Port-au-Prince are more diverse, and therefore more interesting, than those in the DR.  But I could be wrong; if I am, please note so in comments,)

WJC notes that former colonies tend to have “a legacy rules-based government.” (This is standard cant among the technocratic center, with a large grain of truth and somewhat deliberate elision of the reason many of those rules were put in place initially.)

Ms. Dresse notes that Donna Karan’s declaration that the potential for Caribbean Craft is 20-30,000 more jobs “underestimates the potential.”

Mr. Alberto Moreno closes with an announcement of an investor conference on 29-30 November in Haiti. “Guarantee you will be pleasantly surprised.”  Had more than 300 investors from Latin America at a conference three months  before the earthquake.

The abiding feeling from this presentation—for me at least—is that the Latin American countries and Korea recognize and are moving toward an opportunity. Whether U.S. investors are so enthusiastic is still TBD.