October 26, 2012
Reposted from VOXXI
It is not often I will wake up at 4:30 a.m. to fly two hours to see a factory. But that is what I did on Monday. And it was well worth the effort. The opening of the Caracoal Industrial Park outside the northeastern city of Cap Haitien marked the triumph of a long stalled vision to decentralize Haiti’s economy from the capital, Port au Prince, to the north.
Beyond this dream of economic decentralization, the opening of this South Korean owned factory, Sae-A Industries, symbolizes a massive public-private partnership with the United States government, the multilateral lending institution, the Inter-American Development Bank, the Korean private sector and the Haitian government. Along with private foundations, and the Clinton Global Initiative, this undertaking demonstrates that you really can “build back better.”
Haiti’s champions, Secretary of State Hillary Clinton and her husband, the former U.S. president, Bill Clinton, were at the “birth” of this new venture, each one hailing the opening of this industrial park as a triumph for the all. Both Clintons have a soft spot in their heart for Haiti having spent their honeymoon there 37 years ago. As an aside, they noted that in spite of numerous visits to Haiti over the years, and especially since the tragic earthquake that destroyed the large swaths of the country in 2010, this was the first time they had traveled back together!
Why was this factory inauguration so special? First, since anything of this scale in Haiti is special because it helps create jobs, and quickly. From the time of the ground breaking in November 2011 to the ceremony on Monday, the Sae-A textile factory with close to 1000 employees, primarily women, is more than a big deal. In a country where the unemployment rate is 40 percent, and more than two-thirds of the labor force do not have formal jobs this new factory complex marks a new opportunity. Factory jobs in a clean facility, with job training for workers, and the promise of more than 20,000 Haitian employees by 2016 is one of the most hopeful things that has happened to Haiti in a long time.
Haiti has been an economic basket case for so long that this upward trajectory in investment, symbolized by the opening of the largest industrial park in the Caribbean (600,000 square feet of space), really represents a change in the attitude among investors and Haitian government officials that the country is really open for business. With the United States having committed $224 million and the Inter-American Development Bank adding in $105 million more to the construction costs this represents one of the most significant development investments in the region. And this is beyond the close to $2 billion that was supplied for humanitarian assistance after the 2010 earthquake.
So what have we learned by this experiment to build back better?
- Speed matters – from the initial groundbreaking to the opening of the factory was less than two years.
- Keeping an eye on the prize – The U.S. government, and especially the Counselor to the Secretary, Cheryl Mills, drove a process that resulted in the engagement of the private sector, the Inter-American Development Bank, and others to complete the job on time.
- Attitude matters – President Martelly and his team helped to ensure that the private sector would play a major role in Haiti’s future. Not the old families who operated Haiti as a personal fiefdom, but new international business leaders who think private investment could bring Haiti back to a position as an off-shore destination for a U.S. market.
It would be foolish to speculate that one new industrial park can transform a national economy overnight. But the sense of optimism among Haiti’s political class and its entrepreneurs was palpable at the opening ceremonies as community leaders, national government officials and businessmen, large and small, gathered to show the world that it was “a new day in Haiti.”
There are still many obstacles that remain in Haiti’s future. For example, there are simple regulatory fixes that must be mandated from the President to help make doing business easier. These have yet to be implemented. Reforms to the constitution have moved forward, but the failure to resolve the membership of the new electoral commission impedes legitimacy in the government as the terms of a third of the senators will expire before new elections can be held. It is difficult to build a credible government if you cannot give people a voice. Finally, it is hard to ignore that Haiti’s capital, Port au Prince, is still hobbled by a stalled reconstruction effort. With more than 300,000 people homeless and living in squalid tent cities, it is even more compelling that the government and its donors, ensure that the gains of economic decentralization in the north can also address the ongoing problems of misery and poverty.
Yet for a couple of hours in Haiti’s north, these issues were cast aside as Haitians and international investors set aside these worries to create “a new day” for Haiti.
Photo Credit: VOXXI