Central investments: increasing Haiti’s economic activities – Norma Powell
Almost five years after a devastating earthquake, Haiti is beginning to regenerate and is firmly open for business. Norma Powell, director of the Haiti Government's Centre for Facilitation of Investments, divulges what the country is doing not only to attract investors, but also to expand its economy.
"Every day I see roads being built, sidewalks being laid and bridges being constructed," says Norma Powell, director of the Centre for Facilitation of Investments in Haiti, discussing what life looks like in the Caribbean country. Almost five years after it was struck by a devastating earthquake, the island is emerging as a place of major economic interest. GDP figures for this year indicate growth of 4%, foreign investment is on the rise and jobs are being created.
"Everyone is working towards the same goal here," Powell says. "Whether it's the private sector, social and civil society or the government, we all realise that we want the economy and country to grow and we want to provide much needed jobs and create wealth. We have a pro business government and it's producing very tangible results."
At the centre of this programme of change is the country's president, Michael Martelly, a man many have described as the most pro-business leader Haiti has had in decades. His commitment to growing the economy is summed up in an administrative slogan that couldn't be clearer: "Haiti is open for business."
"It is not simply a slogan," he told the Council of America earlier in the year. "My administration has worked assiduously to create the optimum conditions for wealth creation. We have many sectors of activity untouched, just waiting to be exploited. Come, come; Haiti hands you its arms. Whether the energy sector, tourism or infrastructure, the opportunities are there."
In the past, political instability and natural disasters have held Haiti back from achieving the sort of development it needs and wants, but Powell is confident things are finally changing.
"For the past two and a half years, we've seen a massive increase in investment," she says. "In agriculture, which is a sensitive sector if there is any political instability, there was $168 million of investment between 2013 and 2014. In tourism, another sensitive sector, we've had $206 million of investment over the past 12 months. Haiti is also a very safe place. The homicide rate is 8.1 per 100,000, which makes us the fourth-safest country in the western hemisphere, contrary to what the press says."
Much of this development owes its success to two major trade agreements: the Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II) and the Haiti Economic Lift Programme (HELP). Both agreements have allowed American consumers to source products from the Haitian market, which has increased total production and boosted job creation, particularly in the clothing and textiles sector, which accounts for 75% of the country's exports.
"These are trade laws that the US Government passed with the view of giving Haiti preferential access to the US," Powell says. "HOPE I gave us preferential duty-free access to 70 million SMEs. HOPE II extended duty-free treatment to 200M SMEs for knit and woven apparel as well as various other products.
The Help Act was a Haiti-hemispheric opportunity for partnership encouragement that was enacted by the US congress after the earthquake. What that does is add other products to the preferential access we have to the US market, such as luggage, head gear and sleepwear."
Partner in progress
Alongside a strong trade agreement with the North-American market, Haiti is in the process of finalising an application on economic partnership with the European Union. The application was first signed in December of 2009 but, at the opening of parliament in 2010, the earthquake struck.
"It was put off temporarily," Powell says. "Haiti has access to the EU markets, but with ratification of the EPA, we will also be joining the group of Cariforum countries that have signed the EPA."
Haiti has also been an active member of CARICOM since 2002, but is yet to fully integrate into the single market because of previous turbulence and agreements with countries and organisations elsewhere. Powell says this is going to change.
"We should be integrating quite soon," she says. "The issue we had previously was that, when we consolidated our tariffs at the World Trade Organization (WTO), we did so on very low terms. We're one of the most liberalised economies in the western hemisphere and the issue about entering into CARICOM is that we have to abide by common external tariffs for products that are produced in the CARICOM area. That means we have to increase our tariff lines at the WTO.
"Additionally, with the Bali Accord, and as an LDC, Haiti will have preferential access to exports to developed countries and 97.3% of tariff lines."
More on offer
It's not just textiles and clothes that Haiti has to offer. Take Surtab, a high-tech manufacturing company in Haiti that makes android tablets. Or look at Heineken, one of the biggest companies in Haiti, and which Powell describes as a "resounding success".
"We want to take away from the international perception that Haitians can only make t-shirts," Powell says. "It's not true. Just look at Surtab - the training for making these tablets is between four and six weeks, which is practically the same as making a t-shirt. I think there are many reasons to come to Haiti and many unexploited business opportunities that investors should be looking at.
At the moment we import around $2-billion worth of products every year to Haiti. We are looking very closely right now at exactly what we import and what we could offer to the investor to substitute this and create jobs here.
We also have a lot of Haitians studying abroad - approximately 20,000 every year go to the Dominican Republic to study. There are thousands more going to Europe, the US, Taiwan or Mexico. They come back as engineers, accountants and biologists and we want to be able to create sustainable jobs for them."
Tourism is another major plank of the country's new economic strategy. Minister of Tourism Stephanie Villedrouin laid out an incredibly ambitious master plan that she hopes will return the country to the popularity it enjoyed in the 70s and 80s.
"It's going to create a lot of value chains," Powell says of the plan. "We're going to need to feed the tourists; we are going to need an arts and crafts sector to produce the gifts for people to buy. It will attract a number of different investments - everything that tourists need to have a good time. The initial signs are good. In 2013, we saw an increase of 20.2% in our tourism, which was the highest in the region according to the Caribbean tourism organisation.
Last year 643,000 tourists came to the country through the cruise industry. Port-au-Price in the north is now a Royal Caribbean Cruise Line destinations port, which shows how much the area has developed. We also have five international hotel groups that have come into Haiti, including Best Weston Premier, Hilton and the Marriott, which is scheduled to open in doors in February 2015."
To achieve all of this, the country has put in place a series of policies designed to make setting up a business in Haiti as easy as possible. The Centre for Investment Facilitation has been restructured with a new research department available to answer any question an investor might have. The country is also a signatory of the International Centre for Settlement of Investment Disputes and the multilateral investment guarantee agency.
"We're helping them understand an environment that they may not know," Powell says. "Whatever they need as information we provide to them. All of these things we are doing show that the government is very serious about attracting foreign investors."
With this kind of ambition and a fully liberalised economy with access to around 600,000 million consumers around the world, the future looks very bright for Haiti.