PERSPECTIVES ON THE RECONSTRUCTION OF HAITI
DELIVERED BY
MOST HON. P.J. PATTERSON, ON, OCC, PC, QC
SPECIAL REPRESENTATIVE OF CARICOM ON HAITI
TUESDAY, NOVEMBER 22, 2011
TRINIDAD & TOBAGO
SALUTATIONS
I begin by conveying again the heartfelt condolences of the Region to the Government and People of Japan for the three-fold tragedy wrought by Earthquake and accompanying Tsunami on March 11, 2011.
We know that you cannot replace the lives lost, nor erase the psychological scars, but we continue to be amazed as we observe your efforts at reconstruction.
The magnitude of the economic infrastructural and institutional losses – public and private – suffered by Haiti on January 12, 2010, makes reconstruction one of the largest investment opportunities in the world.
In the case of Haiti, the investment requirement is not just for reconstruction. Perhaps even more is required for new construction and development, if the quality of life of the vast majority of the Haitian population is to be brought to acceptable international levels and made sustainable.
National Action Plan
The Action Plan for National Recovery and Development of Haiti which was presented by the Haitian Government and adopted by the international community at the Headquarters of the United Nations on April 30, 2010, embodied that concept. It divided the country into seven developmental zones and proposed integrated planning for each zone and for the country overall. It envisioned an integrated process for:
i) Territorial rebuilding which would include the planning and managing of the development centres, rebuilding of the affected areas and replacing or building the infrastructure required for overall growth and development, such as roads, energy and communication.
ii) Economic rebuilding aimed at building new key sectors and modernize existing sectors such as agriculture, construction, manufacturing and tourism.
iii) Social rebuilding with priority on education and health-care.
iv) Institutional rebuilding focused on making the State Institutions functional and with the capacity to effectively manage the reconstruction and development processes.
The investment cost for reconstruction of public sector facilities and infrastructure was estimated at US$11.5 billion and the private sector at roughly two times that level.
The international donor community pledged almost US$10 billion towards the public sector requirements. It was expected that US$5.5 billion would be contributed in the first eighteen months. Only a relatively small portion of the pledged resources has been committed. But the objective needs remain.
Despite the requirements of US$300 billion to fund your own recovery, Japan never lost interest in Haiti and honoured your pledge in full. The Caribbean Community thanks you sincerely.
This huge gap creates an even greater demand for private sector initiative and action. President Martelly recognizes the importance of creating the policy and legal environment which will stimulate such private sector action.
A Place to Conduct Business
To that end, he has announced a vision to Change the image of Haiti from a place to “conduct charity” to a place to “conduct business”. He has also created a High Level Presidential Advisory Council on Growth and Investment. The Council is chaired by former United States President, Bill Clinton and includes a number of former world political leaders and current business leaders. I have been invited to be a member.
Our task is to:
- Advise the President on policy and strategic initiatives to improve the country’s competitiveness, enhance the economic outlook and attract investments that will create sustainable jobs.
- Solicit investment sources to spur economic growth.
Investment opportunities in Haiti are limited more by the imagination than by objective attributes or need. Haiti has some unique features which are favourable to investment at this time. These include
- A relatively large and under-served population of 10 million. In addition, there is a large Haitian Diaspora, mainly in North America and Europe. It offers low labour rates.
- A need to rebuild a significantly devastated economy and also economic, physical and social infrastructure.
- Preferential access to key markets such as the United States under the Caribbean Basin Trade Partnership Act (CBI), the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act, and the Haitian Economic Lift Programme (HELP) Act of May 2010; and to the EU market under the Economic Partnership Agreement (EPA) and the “Everything But Arms” (EBA) Agreement.
- Duty-free and quota-free access to the markets of other developed countries and major developing countries for all products except for arms. The Government of Brazil is leading an initiative in MERCOSUR to have an Agreement under which Haiti can export whatever it produces to the MERCOSUR countries. The trigger for the Agreement is production in Haiti.
- Duty-free and quota-free access to the markets of the Member States of CARICOM for over 40 products which the Haitian Authorities identified as important. This list can expand with production and in any event Haiti is expected to become a full member of the CARICOM Single Market and Economy in the near future.
Areas for Investment
Taking into account the above attributes, some areas for private investment or public/private partnerships are:
- Economic and social infrastructure such as airports (the locations for several are identified in the National Action Plan): seaports for freight and cruise tourists; energy, in particular from renewable sources of fuel; major roadways;
- Agriculture, forestry and agro-industries. The Government has identified coffee and cocoa as strategic crops for reforestation and watershed protection. 25,000 hectares of land has been identified for coffee expansion over 10 years.
- Tree crops for bio-fuels such as lucaera, maringa and jatropha, and other energy crops such as sugar cane represent excellent opportunities.
- Produced in sufficient quantities, these operations also benefit from carbon credit trading.
- Light manufacturers and the Infrastructure for industrial production such as industrial parks. Textiles and garments, electronics and ICT systems and services have been identified as high priorities.
- The construction of large industrial park, the Northern Industrial Park near Cap Haitien is to begin before the end of this year. It is being financed by the Inter-American Development Bank (IDB) and USAID. Almost all the space is already taken. There is a clear need for similar facilities in other parts of the country.
- Energy, unavailability, unreliability and cost, is one of the major constraints to social and competitive economic development in Haiti. Fuel wood use contributes to forestry and soil degradation. Haiti has conditions for the production of alternative sources of energy, including solar, wind, biomass and wave and ocean thermal (OTEC). It is a fairly large and mountainous island so investments are needed not only in the production of the fuel sources, but in the generation and distribution of the energy.
- Tourism has been identified as a high priority for a country with excellent natural touristic resources and a rich and creative culture, but very limited development.
- Haiti currently has a cruise port on the North Coast which accommodates the largest cruise ship in operation and an exclusive port for one of the major cruise lines near Port-au-Prince. There are several other ideal locations for cruise ports. There is also a dearth of hotels for stopover visitors and a lack of amenities and attractions. At the same time, Haiti has access to the back-up and promotional and training services of the Caribbean Hotel and Travel Association (CHTA) and the Caribbean Tourism Organisation (CTO).
- These represent a sample of investment opportunities in some of the economic and physical infrastructural sectors of Haiti. There are other important areas which might be described as “soft” or “facilitative”. Critical but perhaps not as obvious until mentioned. These include:
- Facilities for investment and trade, financial, mortgage and credit generally.
- Haiti has four modern private commercial banks which are mainly dedicated to safe traditional services to the small established commercial and business interests located mainly in Port-au-Prince. It has one small private and one small public development bank. There is no mortgage bank or investment credit facility.
CARICOM Special Fund
CARICOM was requested by Haiti in July 2010 to develop a facility which could provide credit to CARICOM, including Haitian investors, willing to make investment in the priority sectors for development in Haiti.
“A CARICOM Fund For Facilitating Private Sector Investment in Haiti” has been designed, accepted and “launched” by CARICOM Heads of Government.
It is a US$1 billion fund to be supported by a mix of public and private sector loans and grants in amounts and on terms which would allow the CARICOM Fund to make loans, not grants, of up to US$20 million to CARICOM firms investing in Haiti in the priority sectors for development. It will make loans and effectively managed so that it can be both sustainable and meet commitments to investors in the Fund. It will become operational when the first $100 million has been mobilized.
The first Draft of the Fund document was submitted to the JAPAN/CARICOM Foreign Ministers in August 2010 and subsequently, to JVIC. The finalized Fund document took into account the questions raised after the first presentation and adequately responds to them.
I stress that there is great scope for investing in finance related activities in Haiti. There are opportunities in other business-related services.
Time to Go Hear, See and Feel
Haiti is a country which has been away from public view except in times of disasters or other negative events.
There is a new Government arising from the operations of the Democratic Process. A significant amount of Planning and investment opportunity identification has been taking place, but, the information has remained significantly in Haiti.
I suggest that it is a good time for Investors and other Business persons from other countries begin to go, to hear, see and feel. I say this from my experience as a Member of the IHRC and more recently, my perspective as a Member of the President’s Advisory Council to mobilize and facilitate investment in Haiti.
I thank you for the opportunity of sharing with you a perspective on the reconstruction of Haiti and invite Japan to partner with the Caribbean Community on this exciting venture which will mark Haiti’s second Renaissance.
