Monday, April 06, 2009
Beyond the Begging Bowl...by Paul Collier
Beyond the begging bowl
Haiti need not be a failing state.
Haiti is on all the lists of "failing states". Yet the persistence of its troubles demonstrates not so much their intractability as the past incompetence of the international community in helping to tackle them. Haiti should not be a failing state: its fundamentals such as neighbourhood are remarkably favourable. Its problems are fixable if the international community moves beyond gestures to a co-ordinated use of a range of policies: security, trade, governance and aid.
Like most failing states, Haiti is structurally insecure and periodically torn apart by political violence. It has one of the fastest rates of population growth in the world and a chronic shortage of jobs. Unsurprisingly, with few jobs and agricultural incomes in decline, the aspiration of young Haitians has been emigration. The last year has compounded these problems: the world food crisis toppled the government; the country was hit by four hurricanes and because of the US recession, 30,000 illegal immigrants are about to be repatriated.
International policies have been unco-ordinated, yet fortuitously, the most difficult have already been put in place. Thanks to $5bn and 9,000 Brazilian troops who - under the auspices of the UN - have been keeping the peace, there is now effective security. Brazilians turned out to be just the right military for this task. Previous peacekeepers had baulked at entering Cité Soleil. When the Brazilians saw it, their reaction was: "That's a favela: it's only seven blocks!"
Haitian emigration has enabled a trade policy to develop. Firms in the bottom billion need privileged access to our markets and this is usually difficult to negotiate. The large Haitian diaspora in America has become an effective political lobby: in 2006 Congress passed the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE), which has given Haiti the best trade deal on earth, with duty-free, quota-free access and generous rules of origin guaranteed for a decade.
The security provided by peacekeeping and the market access provided by HOPE are a window of opportunity: potentially Haiti could now break into the US garments market. In Bangladesh the sector provides more than 2m jobs; in Haiti, a 100,000 jobs would be transformative.
The remaining policy planks are governance and aid. The governance agenda for exporting garments is not daunting - if the Bangladeshi government can do it, so can the Haitian. The governance of ports and customs needs improving, and the export zones need exemptions from legislation that prevents the private generation of electricity and multi-shift working. These changes would have political costs, but if they create jobs, the government is willing to make them.
But security, market access and governance are not enough: manufacturing needs infrastructure. Haiti's two existing garments clusters demonstrate that infrastructure will be decisive. The cluster in Haiti's capital, Port-au-Prince, is struggling whereas that in Ounaminthe, in the remote north-east, is thriving. The explanation is that although Ounaminthe is remote from the rest of Haiti, it is right on the border with the Dominican Republic. The garment manufacturers get their electricity by plugging into the Dominican Republic power grid, and export their products through its roads and ports. Infrastructure is needed for export zones in the major population centres.
Infrastructure is expensive and so it needs aid, especially now that international private finance has dried up. But to date, even when they chose infrastructure, donors neglected the obvious. Trapped into a mentality of projects, they ignored the issue of maintenance, so the same infrastructure has been built again and again. One road has been rebuilt three times in 25 years, the last time with a $170m loan, and now needs rebuilding again. More seriously, provision has not been linked to a larger strategy. For example, in Port-au-Prince there is a donor plan for electricity, yet because of the insistence on using new equipment, the cost of the power it would produce is triple that paid by the Chinese firms with which Haiti must compete. Nobody has worked out what infrastructure would be appropriate for the HOPE opportunity to succeed.
Security, market access, governance and aid: each is dependent upon a different actor yet all are needed for success. Unless the donors can credibly commit to a more strategic programme, it would be quixotic of the government to incur the political costs of policy reform. Thanks to the recent roadshow, led by Ban Ki-moon, Bill Clinton, Susan Rice and the rapper Wyclef Jean, Haiti now has the attention of the international community. In April there is a rare opportunity to address such interdependence: all the key actors will be convened by the Inter-American Development Bank. What is needed is not to pass round the begging bowl, but to set out a list of commitments which, in combination, will turn HOPE from a tacky acronym into an inspiring reality.
• Paul Collier is professor of economics at the Oxford University
Photograph by John Carroll