Three years after a devastating earthquake, Haiti still has a long way to go to get back on its feet economically. But the country is making progress. Much of the rubble has been cleared away. Confidence in the Haitian government is climbing, from an 11 percent approval rating in 2010 to 32 percent last year, according to a Gallup poll.
Now Prime Minister Laurent Lamothe, a former telecom executive, is traveling the world inviting businessmen to invest in Haiti. His message, which he will deliver to international donors at a meeting Wednesday, is that the country needs trade, more than aid, to sustain its future. He’s right. But it remains to be seen whether Haiti’s economic master plan — intended to bring more low-wage manufacturing jobs to the country — will work.
One of the crown jewels of the plan is the Caracol Industrial Park, a 600-acre manufacturing site equipped with electricity and access to transportion, built with funds from the US Agency for International Development, the Clinton Foundation, and the Inter-American Development Bank. This is where a large chunk of America’s post-earthquake aid went. USAID put in more than a third of the $300 million construction.
Sae-A Trading, a South Korean company that makes clothing for Walmart and the Gap, is already producing T-shirts there. So far, only 1,500 people are employed there. But US officials say Sae-A is on track to employ 20,000 Haitians. It’s part of a larger plan for the country to regain more than 70,000 apparel jobs that it lost due to political instability and embargoes. Haiti’s government also hopes electronics manufacturers will soon forgo China and open up in Haiti, which enjoys duty-free status and close proximity to American consumers.
The trouble is that Haitians have had bad experiences with previous industrial ventures. Metropolitan Industrial Park in Port-au-Prince created jobs, but also exacerbated problems in a nearby slum, Cite Soleil, where the factory workers lived. And a low-wage manufacturing economy can only sustain a country so much: Wages can be so low that the few who get them still struggle, and employers are always tempted to shift operations to poorer countries with lower wages.
Wages can be so low that the few who get them still struggle
Still, manufacturing can be part of Haiti’s economic solution, even if it can’t rescue the Haitian economy on its own. The vast majority of Haitians make their living on agriculture and fishing. Proper investments in these areas could result in real and important gains for farmers. US officials should make sure Haiti does not bet entirely on manufacturing and ignore other crucial sectors.
Finally, the US government, which invested so heavily in the Caracol park, must also make sure that the jobs there pay a decent wage and that the industrial activity there doesn’t damage the environment surrounding the park. A stable, economically growing Haiti is of vital interest to the United States, which shoulders much of the burden of Haitian refugees. But its focus must be on long-term gains, and sustainabilitiy.