HAITI: HIDDEN COSTS OF THE INDUSTRIAL ZONE
by David L. Wilson, World War 4 Report
On Oct. 22 Haitian president Michel Martelly hosted the official opening of the Caracol Industrial Park, a 617-acre tax-exempt factory complex in Haiti's rural northeastern corner that promoters say will bring as many as 65,000 jobs to the country.
The Haitian president was joined by an array of foreign officials and celebrities. The United States, which invested $124 million in the project, was represented by Secretary of State Hillary Clinton, Labor Secretary Hilda Solis, and Senator Patrick Leahy (D-VT). Another guest, former US president Bill Clinton, now the United Nations special envoy for Haiti, was a major promoter of the Caracol facility.
Colombian diplomat Luis Alberto Moreno was present as well; he heads the Inter-American Development Bank, which has put up some $100 million for the complex. There were also representatives of Sae-A Trading, the Korean apparel firm that will be the lead tenant at the industrial park, in which the company has invested $78 million. Sae-A began production with a few hundred employees in May; it shipped 76,000 T-shirts to the US retailing giant Wal-Mart on Oct. 15.
Actors Sean Penn and Ben Stiller, fashion designer Donna Karan, and British billionaire Richard Branson attended too—apparently to attract media attention for the spectacle.
To judge from press accounts, the speakers stressed jobs for the Haitian people and had little to say about how companies like Sae-A and Wal-Mart may benefit from the complex’s duty-free status and a 15-year tax holiday. Secretary of State Clinton talked about the United States' help in "creating jobs and sustainable economic growth."
"Children will go to school, will be healthier, will have more of their own dreams fulfilled because their mothers had good jobs," she said in her remarks.
A few days earlier the Haitian online news service AlterPresse reported on a very different event near the industrial park, an event without celebrities or coverage by the foreign media. A few dozen farmers marched through the little town of Caracol on Oct. 13 to protest what they said was the industrial park's "takeover of the fertile lands which we've occupied for several generations." They charged that the decision to displace farmers and cover agricultural land with concrete and buildings had led to a scarcity of locally grown beans, making the town dependent on imported beans at a time of rising food prices on the international markets. The price of beans in Caracol has risen dramatically since August, they said, from 35 gourdes (83 cents) for a gode (a local unit of measure equal to about three-quarters of a pound) to 50 gourdes (almost $1.20).
"The country has never benefited from the promises that are made," the protesters said.
Paving Over the Fields
The displacement of local farmers to build the Caracol Industrial Park neatly exemplifies the "economic development" programs the United States and international institutions regularly promote in Haiti.
In the 1970s Haiti was an agricultural country that grew 81% of its own food. Agriculture was its strength, although there were problems: a chaotic and unequal distribution of land, over-farming in many areas, and environmental degradation, mostly through deforestation. Any rational development plan for Haiti would have included a major agrarian reform; subsidies and low-interest loans to small farmers; properly maintained roads so that producers could get their crops to market; environmental protection measures and a reforestation program; and healthcare and education for the rural population.
Instead, successive Haitian governments and their international advisers systematically neglected the agricultural sector, while US "free trade" enthusiasts pushed to reduce the tariffs that protected local agriculture from foreign competition. In 1994 then-US president Bill Clinton included "a drastic reduction of tariffs" as part of the neoliberal economic program Haitian president Jean-Bertrand Aristide had to sign in exchange for being returned to office three years after a bloody military coup. Rice farmers were the main victims of the agreement; rice tariffs were cut back to 3%, the lowest rate in the Caribbean, opening the way for US rice to flood the Haitian market and ruin many local producers.
Now Haiti imports 51% of its food, leaving the population vulnerable to sudden price increases on international markets. And the under-funding of the agricultural and environmental sectors continues. Haiti remains a largely agricultural country, but in the government’s budget for fiscal 2012-13, the Agriculture Ministry gets just 7.55 percent of the total—$234 million out of $3.12 billion, much less than the Public Works Ministry or the Planning Ministry. The Environment Ministry’s share of the budget is a minuscule $22 million, 0.70 percent.
Repackaging the Sweatshops
While ignoring the rural economy, Haitian governments focused on using duty and tax exemptions to attract investment in assembly plants—the factories to which US and Canadian firms now outsource the final stages of producing such commodities as clothes and electronics. In 1975 Jean-Claude ("Baby Doc") Duvalier—then the country's "president for life"—inaugurated a 122-acre industrial park near the Port-au-Prince airport. By the early 1980s some 80,000 Haitians were employed in the assembly plants, putting together electronics or stitching baseballs.
But there were never enough assembly jobs to employ the hundreds of thousands of people who were forced into the cities as conditions deteriorated in the countryside. And the plants started to close after Baby Doc's overthrow in 1986. The US media blamed the closings on "political instability" in Haiti, although competition from newly opened assembly plants in Central America, Mexico and China was probably at least as important a factor in the decline of Haiti's assembly sector.
The failure of the assembly plant policy didn’t stop its promoters from recommending more of the same. In 2002 President Aristide, then in his second term, signed a law creating a 15-year tax holiday and other benefits for foreign investors. In 2003 his administration initiated the construction of the CODEVI (Compagnie de Développement Industriel SA) free trade zone at Ouanaminthe in the northeast, across the border from the Dominican city of Dajabón. With 6,500 employees, CODEVI is a sort of prototype for the nearby Caracol Industrial Park. It too displaced farmers and paved over fertile fields, in this case to help the Dominican company Grupo M churn out T-shirts for foreign markets.
The US Congress did its part to encourage Haiti's assembly sector: in 2006 it passed the HOPE Act (Haitian Hemispheric Opportunity through Partnership Engagement Act), which lowered US tariffs for apparel assembled in Haiti; the measure was extended in 2008 with HOPE II. US financier George Soros, who had already helped finance CODEVI, also stepped in. The Soros Economic Development Fund announced in October 2009 that it was joining with Haiti's WIN Group, owned by the wealthy Mevs family, to build a $45 million industrial park near Port-au-Prince's Cité Soleil neighborhood.
The 2010 earthquake did little to change these plans. Shrugging off the deaths of hundreds of workers in the collapse of the Palm Apparel T-shirt factory in Carrefour, southwest of the capital, Bill Clinton and international economic advisers pushed for creating more such factories—now under the rubric of "building back better." The HOPE Act was rechristened the HELP (Haiti Economic Lift Program) Act, and the site of the new factory complex was moved to Caracol, far from the earthquake-ravaged capital.
In the 1980s Haitian leftists regularly charged that the United States had a sinister "American Plan" for Haiti, one in which economic policies would be used to drive the rural population into the cities so that they could provide cheap labor for assembly plants supplying the North American market. The US embassy dismissed this at the time as a leftist conspiracy theory. In retrospect, the "conspiracy theory" looks more and more like an accurate description of the last 35 years of Haitian history.
Fulfilling Their Own Dreams?
Will the jobs at the new Caracol complex do anything to break this pattern?
Yannick Etienne is a lead labor organizer for Batay Ouvriye (Workers' Struggle), a leftist organization with the distinction of having organized the only union with a contract in Haiti's assembly sector, the Ouanaminthe CODEVI Workers Union (SOKOWA). In an interview in the Port-au-Prince suburb of Pétionville the evening of Oct. 16, Etienne discussed the assembly workers' constant struggle—rarely mentioned in the foreign media—to keep their wages even at a subsistence level.
On Oct. 1 the minimum wage officially rose to 200 gourdes (about $4.75) a day for those assembly workers who are paid at a flat rate. For piece rate workers, the majority of the employees in the garment plants, there was a much larger increase; the wage law stipulates that "the price per unit of production…should be set in such a way as to allow the worker to receive at least three hundred (300) gourdes [about $7.12] for his or her day's work of (8) eight hours."
Etienne was asked whether wages really went up to 300 gourdes on Oct. 1.
She smiled. On the books the wages went up, she said, but the plant managers used subterfuges to get around the law: they raised the piece work quotas; they reduced the work crews; they did everything they could to make sure the workers wouldn't be able to meet the quota and receive their 300 gourdes.
This is flagrantly illegal, Etienne pointed out, since the law specifies that the workers should receive "at least" 300 gourdes a day. But as with so many laws in Haiti, there's no effective enforcement mechanism. The current minimum wage law, passed in 2009, calls for the formation of a tripartite Superior Council on Wages to deal with such issues, but Etienne noted that even after three years the government still hasn’t named all the members of the council.
Even if the workers were receiving the full 300 gourde salary now, it's hard to justify Hillary Clinton’s claim that these are "good jobs." A November 2011 study by Haiti Grassroots Watch (Ayiti Kale Je), a partnership of journalism students and several Haitian media organizations, found that assembly workers have to pay the equivalent of $3 each day just to cover their transportation to work and their meals at the plant. At the new minimum wage this would leave the workers just $4.12 a day to pay for food, housing, clothing, healthcare and education for their children.
The work in the plants is hard, Etienne pointed out, and many of the women—most of the garment workers are women—leave after a few years, returning to work as ti machann, street vendors.
Etienne was speaking on the second floor porch of a small hotel. It was after 8 PM, but even at that hour the noise from the street vendors sometimes made it difficult to hear her. Pétionville is generally described as a wealthy suburb, and many of its neighborhoods still live up to that reputation. But the hotel is in an area a few blocks below the town hall which—like many parts of the capital—has filled up with thousands of impoverished street vendors. During the day the sidewalks and even the streets are often impassable. Each available space is filled with baskets or scraps of cloth displaying candy bars, packets of chewing gum, rice, fruit, shoes, knapsacks, perfume, CDs, soft drinks, drinking water in little plastic bags. Some vendors make their living by refilling cell phone minutes or by exchanging US dollars for gourdes; young men with motorcycles clog the intersections offering a cheap cab service. There is the constant sound of people hawking their wares, of music from the CD sellers, of car horns as drivers try to maneuver their battered vehicles through the crowds.
Some of the items being sold are local produce or handcrafts, but most seem to come from the United States or the Dominican Republic. The vendors are impoverished people who have used their little money or credit to buy this cheap merchandise in the hope of reselling it for a few extra gourdes to other people just as impoverished as themselves. It's the neoliberal fantasy of an economy based on sales and services, without production.
These are the people who left the countryside in a desperate search for work, or their children or grandchildren. They are the products of the endless promises of "jobs and sustainable development."
David L. Wilson is co-author, with Jane Guskin, of The Politics of Immigration: Questions and Answers, Monthly Review Press, 2007. He also co-edits Weekly News Update on the Americas, a summary of news from Latin America and the Caribbean.
Photo of Oct. 8 workers' rally outside the Port-au-Prince industrial park, courtesy of Marty Goodman/Socialist Action.
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Reprinting permissible with attribution