Haiti is open for business.
This motto was the straightforward message from this year’s investment conference in Haiti, co-hosted by the Inter-American Development Bank, the William J. Clinton Foundation, and the Michel Martelly Administration on November 29-30 at the Karibe Hotel. With damages from the earthquake estimated at USD 7.9 billion and total reconstruction costs around USD 11.5 billion, conference participants convened at the Karibe Hotel to discuss business-oriented solutions to address the massive scale of infrastructure investment needed in Haiti, meet partners, clients, and suppliers in the country, discuss with public officials key regulatory aspects in the industries, and work towards closing business deals. Discussions were moderated during five panels on apparel, tourism, agribusiness, infrastructure, and sustainable employment and innovation.
Key note speakers included Luis Alberto Moreno (President of the IADB), Laurent Lamothe (Minister of Foreign Affairs of the Republic of Haiti), Michel Martelly (President of the Republic of Haiti), President William J. Clinton (Chairman of Haiti’s Presidential Advisory Council on Economic Growth and Investment, Co-President of the Interim Haiti Recovery Commission, and United Nations Special Envoy to Haiti), and Gary Conille (Prime Minister of the Republic of Haiti). Panelists included Mark D’Sa (US State Department Advisor to the Government of Haiti), Joey Adler (Founder of OnexOne Foundation), Georges Sassine (President de l’Association des Industries d’Haïti), Steve Lamar (Executive Vice President of American Apparel and Footwear Association), Dennis O’Brien (Chairman of Digicel), Sean Penn (Founder of J/P Haitian Relief Organization), Gerard Vaugues (Vice President of Capital Bank), Anne Hastings (CEO of Fonkonze), and Kofi Taha (Associate Director of D-Lab at Massachusetts Institute of Technology). (For a complete list and biographies of the speakers, please visit the official website.)
“The President announced Haiti is open for business. Why? Simply because this government is serious about nurturing and protecting your investment. We are without any doubt the most pro-business administration in the history of this country. Haiti needs massive investments now, and today is the official kickoff event for job creation in Haiti. The bottom line however is this: all Haitians need to benefit directly from investments in this country.
During the first five months of this administration, we have already begun promoting a new image of Haiti around the world, starting with a communications campaign to spread the word that Haiti is open for business. We have shifted from a traditional to a business diplomacy. Every embassy and consulate in Haiti has been instructed to promote this image of hope in its respective country. Government liaisons have been placed in foreign affairs positions to facilitate commerce and investments from these countries.
Haiti is a small country, but we have a lot of pride and dignity. We will not rest until investments start flowing into this country. As such, we have established a Presidential Investment Advisory Board comprised of 32 members, from around the world, who will promote a new business image of Haiti and will advise the President on the best investment opportunities. For example, the Marriott recently signed an agreement to come to Haiti. The Best Western is opening soon, and the Oasis shortly thereafter.
The Martelly Administration has recently launched an e-government platform to transform the status quo of doing business in Haiti. We will move from a 12-step process to a 2-step process that can be completed online. We will send Parliament a bill to pass la loi de la copropriété, such that foreigners can own land and open condominiums in Haiti.
Investment in infrastructure is heavily needed in Haiti. The government has a plan to build 20,000 homes, all anti-seismic and hurricane-proof. There is currently a 400,000 home deficit in Haiti, the earthquake having destroyed 56,000 houses. We are working to fix this.
Furthermore, we are launching a low-income mortgage credit system backed with USD 100 million to provide low-income families access to credit.
With the incredible opportunity for tourism, with our UNESCO world heritage sits, our waterfalls, our mountains, and 1700 kilometers of beaches waiting for your hotels, the time to invest in Haiti is now. Things may not be perfect, but remember: the greater the risk, the greater the reward. Haiti is open for business, cleared to invest.”
The Martelly Administration provided investors and entrepreneurs with and unprecedented hope to rebuild roads, water supply, sewers, ports, airports, electrical grids, telecommunication networks, homes, schools, hospitals, courthouses, and prisons via public-private partnerships aimed at addressing long-term economic development in Haiti.
Traditionally described “incapacities” of Haiti’s infrastructure and transport networks were rebranded as “investment opportunities” by the organizers of this pivotal event. Promises were made to attract foreign investment to develop existing resources in the Haitian economy, such as coffee, mangoes, honey, textiles, and tourism. Indeed, the energy in the air was infectious. But the BrandHaiti team attended the event to ask one question regarding rebuilding and investing in Haiti:
We received many answers from invitees ranging from one- or two- person microenterprises to executives from foreign investment firms. We approached traditional narratives of “job creation” with much skepticism. One CEO and investor who will remain anonymous discussed with us extensively his work in Haiti when we presented our rebranding campaign. “You’ll be happy to hear that we closed a deal through President Clinton during the conference to invest in a factory that will create nearly 3000 jobs in Haiti. Our company, like all others since 2000, avoided Haiti like the plague. But after the earthquake, we just couldn’t stand by; we knew we had to do something in Haiti.” Our heartstrings wrenched at this point, we continued to pry, always with a smile. What was he producing? Luxury furniture built in a Chinese factory located in a tax- and duty-free zone in Haiti. How many pieces of furniture will be sold in the country? Zero. Rather, they would be exclusively exported to high-end retail stores in the US and Switzerland. Who will run the factory? A team of high-salaried managers, all trained abroad in Canada or the US. How much will Haitians be paid? Minimum wage, without the possibility to unionize in order to negotiate wages, workdays, or factory conditions. As we realized quickly what he was conveying to us, we cut to the chase: “So how does the profit from this endeavor benefit Haitians?” He tells us the company will set aside USD 500,000 for the first two years to invest in health, education, and infrastructure in Haiti. He did not mention to which companies/organizations he was referring. While his company and high-salaried managers would be making millions annually over the next decade, this was his way of “giving back.”
BrandHaiti doesn’t buy it. $500,000 can go a long way in Haiti, and perhaps this company is giving more than others will. However, the gross disproportion of this profit being shared with the Haitians whose labor supplies the company with profit is disheartening. For BrandHaiti, not only should the product be ethical and socially responsible, but the process as well. Exploiting Haitians to give back to Haitians is a problematic investment strategy, one that BrandHaiti does not endorse. Unfortunately, this investor represented a certain conference norm, one commonly referred to elsewhere as disaster capitalism: exploiting the collective chaos and disorientation of a population who recently experienced a natural disaster in order to obtain preferential reconstruction and investment contracts to extract profit from the national economy. Unfortunately, Haiti historically has maintained a comparative advantage in being poor—i.e., offering cheap labor to its principal trading partner in close proximity, the United States. As such, cheap labor is typically the first resource targeted by the exploitative mechanism of disaster capitalism.
We were not discouraged. Fortunately, we quickly found Haitian entrepreneurs and investors who, like us, refused this historical business model of extracting cheap Haitian labor to reap enormous profits to be sent abroad. Many companies and entrepreneurs had already proven that keeping investment and profit within the Haitian economy was not only possible, but also profitable.
Ayiti Natives Co. presented their start-up soap and oil company to the BrandHaiti team. These soaps are produced using Haitian oils and natural ingredients, such that the eco-friendly production process produces no byproducts. As these soaps are made by hand, no pollution is emitted in the process. Lastly, the final products are wrapped in recycled T-shirts that were discarded by apparel factories. The company employs principally women of retirement age, whose fragile conditions disfavor their employment elsewhere. From start to finish, this company showed us on a micro-scale that socially-responsible business in Haiti is possible.
The Director of Rosidu S.A. Emmanuel Philippe Joseph presented us his artisanal collective that crafts décor from bone scraps purchased from local markets, coconut shells thrown away after consumption, recycled metals, and glass. Beautiful fashion products, jewelry, and accessories all handcrafted were displayed at the conference.
These small enterprises, though, were not the only sign of hope. We ran into old friends, like Alex Georges of Enersa and Mathias Pierre of Être Ayisyen, both successful entrepreneurs of large Haitian companies. Mark D’Sa greeted Marie-Gabby with a big hug after his presentation. Lon Garwood, the Senior Advisor to the Korean knitwear manufacturing supply company SAE-A (who will invest $78 million in the Caracol Industrial Park), provided a framework for public-private partnerships in investment. Together, they developed a list of obstacles of doing business in Haiti:
1) Power must be stable. Brown-and blackouts are not conducive to stable business. If power is fixed, businesses will come;
2) Haiti hosts many workers, but most are unskilled. If the public sector provides the resources to train them, companies will employ them;
3) Political instability and disasters render the large investment of building a factory insecure. If someone builds the factories, companies will rent them out.
Although this list is in now way exhaustive, it provides a blue print for investment opportunities within a public-private relationship. Elsewhere, Steve Lamar from the apparel industry provided constructive advice for an investment strategy:
“Haiti must work through its perception problem. We have to start working together to transform Haiti’s image. One of the biggest comparative advantages in Haiti is the fact that armies of individuals who come to Haiti fall in love with the place. They praise Haiti and show much enthusiasm to do business here. We must harness that energy.”
Yet another piece of investment advice came from the renowned actor and founder of J/P HRO, Sean Penn:
“The concentration and inevitability of NGOs working on the ground with a multitude of experience can assist businesses in investing in Haiti by providing this expertise. The best thing you can do for Haiti is not to send my organization money. Rather, come to Haiti and spend your money in the economy.”
J/P HRO has served as a model in relationship building. The NGO has facilitated relationships among the US military, local governments, international NGOs, UN peacekeeping troops, various UN agencies, and Haitians on the ground. Penn was asked if there would be room for partnerships with private investors and for-profit companies:
“When discussing future business ventures in Haiti, we are really talking about people who will be fifteen years older when they will be able to say that Haiti is developing. The circumstantial problem now is the fact that tens of thousands of these future leaders and investors—Haiti’s youth today—are currently living in tents, with little or no education. Thus, there is an incredible opportunity for integrated infrastructure investment. For example, when discussing investment in green technologies, you must invest in training and education of youth who will eventually take ownership over these technologies. You must build them homes and provide water. This is an example of a corporate social engagement that is coming, and in many ways, is already here.”
It was repeated over and over again that sectors such as health and water do not fit into private investments. If there is a future business model for pro-Haitian development, the public sector must provide these services such that workers in the private sector do not remain in daily insecurity. Not only is it ethical to provide these vital services to Haitians, but it is also good business.
BrandHaiti supports the corporate social engagement Sean Penn discussed. Given the multitude of dysfunctional nodes in Haiti’s infrastructure, only a systematic, global approach to development can allow the majority of Haitians to thrive with the opportunity that us foreigners assume to simply be “the way things are.” It is up to us, in partnership with Haitians who share ownership over the process from the beginning, to hope for a sovereign and developed Haiti according to the country’s own terms.
-Nick Stratton, President of BrandHaiti