How to fix Haiti’s economy
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In the aftermath of January’s devastating earthquake there’s a lot of talk about finally getting things right in Haiti, a sense that the opportunity to rebuild means the opportunity to fix what’s been wrong. That’s as true of the economy as anything else. Still many experts are wary of solutions that have been tried and failed in the past, as The World’s Jeb Sharp reports.
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MARCO WERMAN: A rainstorm soaked earthquake survivors in Haiti last night. It was a reminder that the rainy season is on the way and hundreds or survivors are still living in makeshift camps. Relief officials are hoping to build more permanent camps in time for the rains next month. Meanwhile, the work of rebuilding Port-au-Prince is starting. There’s a sense that it’s a chance to do things right and fix what’s wrong. That goes for the Haitian economy as for anything else. But many development experts are wary of solutions that have been tried in the past and failed. The World’s Jeb Sharp reports.
JEB SHARP: One thing the earthquake laid bare was just how awful conditions had become in the capital, Port-au-Prince. Robert Fatton on the University of Virginia says the city had become a symbol of Haiti’s distorted economy.
ROBERT FATTON: You go downtown Port-au-Prince, you can see a city that is completely chaotic. You have no urban planning, people are pouring in from the rural areas living in really very, very bad conditions, conditions of squalor, literally.
SHARP: And Haiti’s rural areas also show devastation Fatton says. The forests have been chopped down and farm land neglected and this in a place whose sugar plantations once made it one of the most lucrative colonies in the world. Many historical factors have played into Haiti’s ruin, but experts say development strategies devised in the 1970′s played a big role in the bloating of Port-au-Prince and the decline of Haitian farming. Fatton says what happened to rice is a good example.
FATTON: The IMF and the World Bank essentially compelled the Haitian government to reduce its tariff on rice. That meant, ultimately, that rice production in Haiti collapsed. Haiti used to be up to about 1980, almost self-sufficient in terms of rice production. But with the new tariff production fell and the import of American rice which, paradoxically, is subsidized by the U.S. government, increased dramatically.
SHARP: What happened to rice also happened to other staples including sugar. Farms collapsed and people flooded into the cities in search of work. They had reason to hope they would find jobs there; this was the era of the supposed Taiwanization of Haiti. Investors were building factories and creating low wage jobs making clothing and sporting goods. But these so-called export assembly industries were no panacea according to sociologist Alex Dupuy of Wesleyan University.
ALEX DUPUY: The assembly industries, even at their height, never really solved much of Haiti’s unemployment because it employed at most eight to nine percent of the urban labor force. But what it did is that it compelled people to leave rural areas to come to Port-au-Prince in search of jobs because they were paying slightly above what other sectors were paying, but still, the wages were the cheapest in the hemisphere and they still kept the workers under the poverty level.
SHARP: Most of the manufacturing jobs were lost anyway in the political unrest that followed the end of the Duvalier dictatorship in 1986. But in recent years there has been a big push to bring those jobs back. The U.S. Congress even passed trade preferences for the Haitian garment industry in order to boost jobs on the island. And now after the earthquake, prescriptions for Haiti’s recovery emphasize the need to keep creating manufacturing and other export jobs. But critics are wary of too much emphasis on low wage jobs in urban areas. Robert Fatton says don’t forget, most Haitians still live in the countryside.
FATTON: It’s not that you should reject the development of an export oriented enclave. But it shouldn’t be the priority. The priority should be, in fact, trying to re-establish the infrastructure in the rural areas so peasants have an incentive to produce for the local market.
SHARP: Fatton is not alone in hoping that Haiti will be able to feed itself again one day. Dan Erikson of the Inter-American Dialogue, a think tank in Washington, says Haiti’s identity has long been deeply tied to working the land.
DAN ERIKSON: And I think this is going to remain a very, very sensitive debate moving forward. So when you see resistance in Haiti to plans to work more along the lines of developing manufacturing and fabrication for export, part of the reason for that is that Haiti is not yet willing to give up the agricultural element that has been such a core aspect of Haitian society for so long.
SHARP: For his part, Erikson doesn’t think there has to be a conflict between restoring Haitian agriculture and developing Haitian manufacturing. He thinks Haiti needs investment on every possible front. But he is not optimistic about Haiti having a self-sustaining economy any time soon. These are tough times for any Caribbean economy he says, let alone the poorest, unhappiest one. For The World, I’m Jeb Sharp.
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