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Haiti - Economy : «Rebuilding Haiti in the Martelly era»
"...the HOPE (1) [Haiti Hemispheric Opportunity through Partnership Encouragement] program is an unquestionable success. However, we are only just beginning to capitalize on its potential. Thanks to HOPE the sector is thriving near its maximum capacity given the current industrial capacity in Haiti. We could be producing more and creating more employment, but our largest constraint right now is a shortage of industrial factory space.
Every day I field phone calls from potential foreign investors who want to begin new apparel production runs in Haiti. Unfortunately, I have to tell them that the sector is at capacity, and there is simply no additional manufacturing space to offer right now. I admit, this is a good problem to have, but if this problem persists for too long then buyers will begin to move Haiti further down their list of potential sourcing locations.
This is why CTMO-HOPE has pursued a dual approach to revitalizing the apparel manufacturing sector: enhance trade benefits under HOPE and simultaneously expand Haiti’s capacity to utilize the benefits. In my capacity as Executive Director of CTMO (Tripatite Presidential Commission on Implementation)-HOPE, I have been intimately involved in the efforts to increase the capacity of Haiti’s manufacturing sector through an international strategy coordinated with the United States and major international institutions such as the Inter-American Development Bank (IDB) and the World Bank-IFC. The focus of our combined efforts is the construction of two major new industrial parks in Haiti, one in the north of the country, in the Cap-Hatien area, which will be driving development as part of an integrated strategy for the north, and a second industrial park outside of Port-au-Prince. Each park would be capable of more than doubling Haiti’s existing manufacturing capacity, and supporting 25-50,000 jobs.
The construction of an industrial park is an enormous undertaking. It begins with financial feasibility and environmental impact studies, and then requires construction financing coordination, tenant lease commitments, power and water development, worker housing and training, and port and transit infrastructure development.
The U.S. State Department, through the Haiti Special Coordinator, Ms. Cheryl Mills, has provided invaluable support working with all stakeholders to follow through on their commitments during the process. I also want to express my sincere appreciation to other U.S. Government agencies and the U.S. Congress for the enormous support provided to Haiti in recent years.
Northern Industrial Park
This past January the Government of Haiti, the Inter-American Development Bank, the largest Korean apparel company Sae-A, and the U.S. Government signed a memorandum of understanding to launch the construction of the first new industrial park in the north. We are optimistic the project will be completed and operational by the second quarter of 2012. We already have commitments from other major foreign apparel producers to also begin operating in the park upon its completion.
The IDB is financing the main structure of the park, including the factory shells, roads, and other logistics and facilities. The U.S. Government stake in the northern industrial park will include projects in energy infrastructure and housing, as well as port capacity expansion. In addition, as mentioned, we expect this industrial park development and the associated infrastructure to also catalyze developments in other sectors, such as tourism and agriculture.
Ganthier Industrial Park (Outside Port-au-Prince)
We are also working with the U.S. Government on a second industrial park development project, which would be located outside of Port-au-Prince. The International Finance Corporation, which is part of the World Bank, has agreed to fund feasibility and impact studies for the industrial park development in Ganthier.
The U.S. Government has made a commitment to provide the same types of infrastructure support for the Ganthier industrial park as is being provided for the northern park, such as power supplies and worker housing. In the meantime, we are working with the support of the IDB to expand the existing industrial park in the Port-au-Prince area, SONAPI, with the addition of five more factory shells that could be used to create probably a minimum of 2,500 additional, badly needed jobs.
Part of CTMO-HOPE’s mandate is to ensure that foreign apparel buyers are aware of the trade benefits available under the HOPE program. Over the past four years we have hosted several events, conference calls, and have been involved in other forums to present and promote the many advantages of doing business in Haiti.
The World Bank is supporting our efforts by funding CTMO-HOPE trade missions to foreign countries. My team and I have so far made several trips, including to Korea and Brazil, where we meet with both government and private sector officials to discuss potential synergies and opportunities to utilize the HOPE program. The trips have resulted in the commitments of long-term foreign direct investment in Haiti’s apparel sector that will occur upon completion of the industrial parks.
Haitian Apparel Center
The Government of Haiti has initiated efforts to establish an apparel manufacturing training center and has provided the main training building. The Haitian Apparel Center, or HAC as it is called, which is located in the SONAPI industrial park in Port-au-Prince, is training Haitians to be operators and managers in the growing apparel manufacturing sector. Through a grant from USAID, the HAC has graduated 2,000 trainees, and approximately 60 percent of those graduates have been hired by existing factories. It is my understanding that USAID will continue to support this program.
The success of the Port-au-Prince HAC demonstrates the need for a similar operation in the north of Haiti. The looming capacity of the new industrial parks will require thousands of additional trained Haitians workers.
Special Economic Zones
Haiti is also working with the IFC to develop a model for special economic development zones in the country that will facilitate private investment. The goal of the zones is to streamline the process of starting a business. Initially we envision five to six zones that would include industries such as tourism and light manufacturing.
The HOPE trade program was novel because it included, at the request of CTMO-HOPE, a mechanism to ensure that worker rights would be protected in the apparel manufacturing sector. As implemented under HOPE, the International Labor Organization operates a Better Works program in Haiti’s apparel sector, which monitors international worker rights standards in factories, helps remediates any issues, and publishes public reports on the compliance record of all factories in Haiti. Haiti is the first country in the Hemisphere to have a Better Works program -- because we are well aware that compliance is an important issue for major U.S. buyers, and we are committed to building a world class apparel sector, not simply on the basis of inexpensive labor, but also on the basis of high quality and world class social compliance.
The Better Works program is well accepted by Haitian factories and U.S. buyers concerned about social compliance and brand protection. Just this month Better Works held a buyers forum in Haiti that was well attended by the industry.
(1) The law HELP (Haiti Economic Lift Program) extends to 2020, the Law HOPE I and II passed in 2008]