Labour Day in Haiti

By Jean H Charles


In a country where 89% of the population endure unemployment or underemployment, more than 500,000 people, mostly young ones, turned out into the vast yard of Haiti’s Ministry of Agriculture to celebrate International Labour Day on May 1.

Indeed on Labour Day, the rest of the world (with the exception of the United States that celebrates its own on the first Monday of September) takes a day of rest to give homage to the punishment that God sanctioned man to: “You shall now eat your bread from the sweat of your labour.”

Early in the day, I took public transportation to go to the Ministry of Agriculture, located on the outskirts of the city of Port au Prince, to attend the fiesta of three days that features the art, the food, the agricultural experiments and the produce of Haiti.  I knew, there would be a massive traffic jam later when the whole city would take the only road leading to the event.  Indeed by midday, only a helicopter could get you into the Labour Fair.

President Michel Martelly, freshly minted from a week’s stay at a hospital in Miami, recuperating from pulmonary embolism, plunged himself into the affection of the crowd to urge the Haitian people to make the duty of work, a labour of love to remake Haiti the pearl of the islands when labour was total hell.

The president, as well as his Minister of Agriculture, Heber Doctor, and his Minister of Social Affairs and Labour, Francois Lafaille, that sponsored the event, took the artistic decorated podium (a master work of Sisalco, a Haitian company that produces designer bags, trays and other home products made of sisal) to urge the crowd and the nation to take advantage of the new vision of the government in terms of agriculture that focuses on four different features: guaranteed food security for all; guaranteed revenue for those who work hard and play by the rules; protection of the natural resources; and contribution for bringing foreign currencies into the country.

I was already into the path of that new locomotive when, last week I was invited to Cape Haitian (on the northern coast of Haiti) to a spectacular forum organized by the very articulate and ebullient Under Secretary of Agriculture for vegetal production, Mr Fresner Dorcin.  For the first time in Haitian politics, a ministry is pulling all the actors and founding agencies together to share their knowledge, their constraints and their vision on agriculture in a given catchment area: the northern and northeast part of Haiti. 

This caravan will go from county to county in duplicating the model developed in the north of Haiti.  Secretary Dorcin has pulled off a energetic team made of the best agronomists in the country, ready to kill the sacred cows and the old inertia that incubate the culture where each director of the ministry has his own little program that has nothing to do with a coordinated vision of the modern management of agriculture in a country where 90% of the population are involved in a way or the other in the business of agriculture.

The mood in Haiti is comparable to the mood in the rest of the world on Labour Day.  No more those massive demonstrations of workers united to celebrate the symbol and the achievements of communism and socialism (down with capitalism!) in the capitals of the former Soviet Union, its satellites and its wannabe satellites.  The crowd in Haiti was festive and in a spirit of jubilance, not a single incident of violence in a mass of half a million people, most of them still looking for work or a ready market for their creativities.

I was proud to be a native of Haiti amongst this gargantuan demonstration of creativity in decorative arts, happy as a lad going from booth to booth in sampling the different culinary specialties of each county of Haiti.

Upon stumbling on a giant fruit that I did not know before (I knew later its name was jacqier, a native of India), I was ready to buy the produce and play the Christopher Columbus game (transporting one seed from east to west of the world) when Mr Brunel Garcon, a friend from high school, who in the meantime became an official of the cabinet of the minister of agriculture, intervened to help me to get the gargantuan fruit free of charge. 

I profited from my proximity on the stage with the minister of agriculture to conduct a long and debating conversation on the policy of agriculture in Haiti.  Should the government incubate and facilitate the business of agriculture as countries such as Japan, the United States and the European Union or should this government stay out of the business of incubation and let the market and investors have free hand?

At the level of the political platform of Repons Peyizan, the party in power (freshly reconciled in a warm and intimate relationship with the government) is leading a movement to enrich each peasant family in the territory of the republic. 

The program is a cocktail of husbandry, organic agriculture and art-craft where the party, through its social organization, will incubate each family to engage into those activities that will generate a minimum of $15,000 dollars per year in the next five years from the paltry $400 dollars per year today.

The party is attaching itself to an anchor agency to actualize its goal and its mission. The program is starting in the region of Jacmel, in the southeastern part of Haiti, with the support of the technical mission of Taiwan at the beginning of this month.

The debate initiated with  the minister of agriculture is still open.  Will Haiti follow the model seen in the other Western countries where the number of agricultural workers take a dip on the lower side as the country becomes richer or should Haiti lead the way again in the world where it can demonstrate it can retain its agricultural workers in their fields and on their land, where they will lead a happy and pastoral life with niche markets for specialized and organic products?

Haiti is today at an exciting place. It has a new president, soon a new government, dynamic ready to shake the inertia of arrogance, incompetence and indifference of the last sixty years of governance in the country.  Its young population of almost 8 million people out of a nation of 10 million people is ready to engage into the world of work with the creativity which is proper to the Haitian people.

Haiti is indeed open for business!  Businessmen of the world unite!  See you in Haiti soon!


May 5, 2012


caribbeannewsnow

Money, money, money: Remittances and microbanking in Haiti

by Jennifer Nerby, COHA Research Associate



Haiti, along with the greater Caribbean, has experienced a substantial decline in remittances following the 2008 global economic crisis.  Fortunately, remittance flows to Haiti increased significantly in the aftermath of January 2010’s earthquake.  That year, Haiti received USD 1 billion in relief funds, with a significant portion coming from the Haitian diaspora.  [1] While these contributions helped many individual Haitian families to recover from the devastation, it is demonstrably clear that remittances do not pose a long-term solution for the country’s economic woes.  In spite of relatively high remittance rates, Haiti suffers from pervasive unemployment.  Many small island specialists seem to feel that only growth in small businesses and microlending operations can stimulate an independent and self-sufficient Haitian economy.


The Quake


On January 12, 2010, a 7.0 magnitude earthquake struck ten miles west of the Haitian capital, Port-au-Prince, leaving over three million people in need of emergency assistance.  [2] The earthquake displaced at least 1.3 million people, and as of January 1, 2011, an estimated 810,000 remained in the 1,150 refugee camps still in operation.  [3], [4]   That same month, Nigel Fisher, the United Nations Humanitarian Coordinator for Haiti, commented, “In retrospect I think we can say that by and large the initial response to the earthquake was a success.”[5]   Remittances were a critical component of the total relief efforts; more than one million members of the Haitian diaspora increased the amount of money they send to relatives in Haiti after the calamity, resulting in a USD 360 million surge in remittances during 2010.  World Bank economist and remittance expert Dilip Ratha explains that, “Financial help in the form of remittances from family members is always the first to arrive in times of distress.”[6]   Though remittances provided much needed support to the earthquake’s survivors, it is unclear if these funds will permanently reduce poverty and bring about necessary infrastructural change.


The Remittance Debate


Like many Caribbean nations, Haiti depends on remittances as a fundamental component of its national GDP ratings.  According to the World Bank, migrants hailing from Latin American and Caribbean nations (LAC) sent a total of USD 48.3 billion to their home nations in 2005, and remittances represented 70 percent of all foreign direct investment to the region in 2004.  [7]   In Central American and Caribbean nations, remittances typically account for 10 to 20 percent of each nation’s GDP.[8] Haiti, however, is a special case; it dramatically surpasses the average ratio, with remittances accounting for 52.7 percent of the nation’s GDP in 2004.[9]


Remittances do not necessarily solve pressing economic, political, or social issues in the Caribbean.  In a 2007 paper entitled “Close to Home: The Development Impact of Remittances in Latin America,” World Bank senior economists Humberto López and Pablo Fajnzylber examine the positive and negative effects of remittances.  Although the authors acknowledge that remittances often stimulate growth and investment, improve access to health care and education, and increase macroeconomic stability and individual savings, they question the effectiveness of remittances in decreasing poverty and instability in recipient nations.  [10]   These contributions are subject to the financial standing of individual immigrants in developed countries and often prove inconsistent, as evidenced by the stagnation of remittance flows following the inception of the global financial crisis of 2008.


The Crash


The global economic crisis of 2008 caused an abrupt decline in remittances worldwide, doing grave damage to many Caribbean economies.  Looking forward, a variety of sources anticipate substantial increases in remittances to the Caribbean during 2011 and 2012 as developed economies recover from the 2008 crisis.  Nine of fifteen Caribbean countries were expected to grow in 2010, but Haiti, along with five other nations, was predicted to contract significantly.  [11]   This regression is largely related to a 12 percent decline in remittance rates during 2009, as Haiti was found to lack the domestic industries required to recover without international aid.  The Outlook for Remittance Flows report anticipated that a two percent growth in remittances to Latin America and the Caribbean should be expected in 2010, and the World Bank reported that a “healthy recovery” was underway from the slump of 2009.[12] Furthermore, the Outlook anticipated 7.6 percent growth for 2011 and 10 percent growth in 2012, totaling USD 69 billion in remittances allocated to the Caribbean.  Haiti is scheduled to be one of the top three recipients of such funds.[13]


While high remittance rates have at times accounted for legitimate economic benefits, local business development in Haiti has been dwindling as a result of the nation’s dependency on international donations.  Much of Haiti’s reliance on remittances can be attributed to the nation’s high rates of unemployment, which reached an astronomical 40.6 percent in 2010.  The CIA World Factbook noted that two-thirds of the population did not hold a formal job and ascribed the lack of foreign investment in industry to Haiti’s “limited infrastructure and a lack of security.”[14]   As a result, remittances have been found to create a vicious cycle of dependency on international donations coming from abroad.  The escalating presence of microbanks as a major financial tool has led to the growth of small businesses and local industries, conceivably replacing remittances as the backbone of the Haitian economy.


Microlending


Unlike remittances, microlending initiatives retain the potential to tackle Haiti’s weak infrastructure and unemployment.  Fonkoze, one of Haiti’s most prominent for-profit microbanks, has forgiven more than ten thousand loans after the earthquake and continues to play a crucial role in the recovery process.  The bank also expanded the “Ti Kredi,” or “Little Credit,” loan program to offer small loans of USD 25 to poor families who did not qualify for the bank’s larger USD 125 loans. “Ti Kredi” includes shorter repayment periods as well as health care and educational services.[15] Fonkoze’s programs present borrowers with the economic opportunity to open small businesses, along with the critical skills to manage them successfully.


Thus far, microbanks have been one of the most effective relief agencies in Haiti and have been found to have the potential to enact enduring and progressive change in the region.  Greta Greathouse of the United States Agency for International Development (USAID) believes that Haitian microbanks “need to get stronger on a permanent basis so they can offset the operational risks that come with Haiti because of the earthquake and the inherent risks that are unfortunately a way of life for the country and its people.”[16] A debilitating lack of infrastructure prevents many microbanks from becoming self-supporting and for-profit, as international contributions are often needed to cover losses from missing and delayed loan payments.  Strengthening the Haitian banking industry will require improved regulation and a gradual shift toward for-profit banking.


Most microbanks in Haiti remain non-profit and consequently require international assistance to recompense for unpaid loans.  Non-profit banking, while more sustainable and autonomous than remittances, lacks the financial transparency of for-profit institutions.  [17]   Fonkoze is one of the few for-profit institutions in Haiti and had to operate at a loss for nearly three years before it was able to turn a profit.  The microbank eventually stabilized thanks to USD 15 million in foreign donations.  [18]   Though the bank initially depended on international contributions, Fonkoze is now en route to self-sufficiency and provides many Haitian borrowers with the opportunity to open and operate independent businesses.


Conclusion


The microlending climate in Haiti is far from ideal.  Fonkoze nearly closed in 2008 due to losses from a destructive hurricane season, and more than 50 percent of borrowers with the major microcredit group Finca Haiti missed payments after the 2010 earthquake.  [19]   The impoverished Caribbean nation is no stranger to natural disasters, and its dependence on foreign aid automatically entails a delay in relief efforts.  The development of sound local emergency relief programs will enable Haiti to respond quickly and efficiently to crises without having to wait for foreign assistance.  As more Haitians turn to microbanks for loans, the need to secure and regulate the banking industry grows ever more pressing.  While some regulation efforts have been undertaken, it is still necessary to guarantee that Haitian microbanks are able to survive natural disasters and economic downturns like that of 2008.


Both remittances and microbanks have been vital to Haiti’s recovery since January 2010.  Remittances offer a temporary solution to a greater economic problem.  With improved regulation and security, microbanks can revolutionize the Haitian infrastructure and employ millions of jobless citizens.  As in Fonkoze’s case, initial international investment will be necessary to financially secure Haitian microbanks, but the eventual autonomy of these institutions could be a remarkable game-changer for the Haitian economy.




The references for this article can be found here.





The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, visit www.coha.org or email coha@coha.org

August 25, 2011



caribbeannewsnow