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Haiti calls for private investment to help development

All agree the task to rebuild Haiti will be huge. 11 billion dollars has been pledged by donors since the devastating earthquake which levelled Port-au-Prince at the start of the year. But the current Prime Minister, Jean-Max Bellerive, has warned it will take much more than this aid to build a “better” Haiti. The promised aid money only equates to around 110 dollars per year for each of Haiti’s 10 million inhabitants. This kind of sum will be nowhere near sufficient to fund the needs of housing, infrastructure and services for Haiti’s population. Therefore the Haitian government is calling for more companies to invest in their country and bring an end to their reliance on international aid.

A few foreign companies are already active in Haiti. In a joint Haitian-South Korean venture, E-Power has just completed a new electricity generating plant in Port-au-Prince. Plans for the plant were already under-way before the earthquake struck and E-Power was determined to complete the project. The 30 Megawatt facility is vital, since other private firms will only invest in Haiti if they can be assured of effective and reliable electricity supplies.

The World Bank’s International Finance Corporation (IFC) is keen to develop specific economic zones within Haiti, where firms can group together and operate quickly under special regulatory and land title agreements. This would cut legislative and bureaucratic delays. A similar approach has been taken in other developing countries such as Bangladesh, El Salvador, Vietnam and China.

One industry which could benefit from such economic zones is Haiti’s garment sector, which is seen as a key focus for private investment. The clothing sector accounted for 75 per cent of Haiti’s export revenue before the earthquake and provided employment to more than 25,000 people. In May, the US Congress approved a bipartisan duty-free access for Haiti to the American clothing market under the Haiti Economic Lift Program (HELP). This gives Haiti the kind of competitive edge it needs and helped persuade the South Korean textile manufacturer Sae-A Trading to invest in the country. With assistance from Haiti’s government, the IFC and the US State Department, the company will set up a garment making operation just north of the capital or on the northern coast. This investment is expected to create 10,000 new jobs.

The IFC expects that if progress is seen to be smooth with these first investors, others will follow. Already, the IFC believes it is witnessing a new “consensus” between government officials and the private sector in Haiti, where in the past there were bitter disputes. As one IFC representative put it, the quake has “provided a kind of shock” which has lead to new “alignment [and] inclusiveness, and this gives me a lot of hope.

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