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Investing in Haiti

November 20, 2013 | 10:10 am | Print

By Ilio Durandis
CJ Contributor

THERE IS nothing more important to Haiti at this moment than new investments and modernization of the business sector.

However, talking about investing in Haiti is not the same thing as having direct investment in the country that can lead to permanent employment.

Haiti’s real unemployment rate cannot easily be measured because of many factors, among them too many adults without formal identification documents, and not enough statistical data to evaluate the total size of the labour force and its strength.

As a way to get the country moving forward, the current administration has set its goal on attracting investment, and the catch phrase “Haiti is open for business” has been adopted and promoted by some of Haiti’s biggest friends, including former US President, Bill Clinton.

Since the earthquake, the country has tried to emphasize investment over aid. It has been proving that decades of aid to Haiti have not played a significantly role in employment and thus has had a very small impact on the standard of living of Haitians. It’s made poverty into a kind of chronic social chronic disease.

BY a presidential decree back in January 2006, the Center for Facilitation of Investment (CFI) was established with the goal of simplifying the regulations and procedures to start a business, in order to increase economic activity in the country.

The CFI has never been as active as it is today; but measuring its real impact in term of facilitating new investment into the country remains a daunting task.

Recently, I had the opportunity to talk to Jean-Pierre Mongones, who is the chief of Cabinet for the director general of the CFI. Our conversation was about the business climate in Haiti, the type of advantages or services being offered by the CFI and what some of the main business sectors were that needed new investments and investors.

Like most in the current administration, Mongones was very upbeat about the current situation of the country, and agreed that Haiti was indeed open for business. He talked about the new hotels that have opened in Petion-Ville and the multi-million dollar Industrial Park in Caracol as signs that some investors are willing to give Haiti a look.

During our conversation, Mongones emphasized certain incentives, especially tax breaks that investors or companies would receive if they entered certain sectors, such as real estate, manufacturing, communication, tourism, agribusiness and so forth.

The law is set in such a way that certain businesses could get up to 15 years of income tax exemptions.

To me, what is not being addressed is the political climate, however. In the politics of today’s Haiti, it is almost impossible to get new laws enacted; such is the case with the recent electronic signature bill. The country, like much of the region, also has very high cost of energy and transportation, coupled with a lack of transparency in customs and the major ports as compared to other countries in the region.

Even though small positive steps are being made, doing business in Haiti seems a very risky proposition by any measure.

While the focus is on attracting foreign investment, many would-be Haitian investors inside and outside of Haiti are feeling left behind.The CFI is doing its best to make itself a first stop for new investors, but somehow its message has yet to reach a great part of the Haitian Diaspora, who would like to start new businesses in Haiti. Or it could be that the trust in a government agency is not yet there, given the traditional performances of past administrations and public institutions.

I talked to a few potential investors from the Diaspora, and they could not understand on what bases the CFI wanted to charge $2500 USD for what the agency called “One Click Business”.

This new service purportedly reduces the fees and time it would normally take to register and start a new business. One of those potential investors asked me why it was so expensive when they could register a business in less than a week in the United States and for far less than the CFI’s asking price.

Another issue for investors, especially members of the Haitian Diaspora who are investing in Haiti is the slow moving of materials once in customs. While I was in restaurant in Petion-Ville, I ran into Jeff Lozama, a Haitian entrepreneur who is in the construction and building-materials business,. He mentioned that business was good, but that improvement was needed in customs.

Mongones told me that people were starting to take advantage of this new offer and that his agency had to restock on those “off the shelves companies” a couple of times.

But another group of people who are yet to feel the presence of the CFI are the small investors within Haiti. By most accounts, the majority of business transactions are done via the informal economy, and this sector is made up of small merchants, vendors and resellers. Many of them are not registered with the state, and those that do often have a hard time coming up with the necessary cash or credit to stay in business.

Case in point: I met with a very young Haitian entrepreneur, Paul Harry Jeanty, the founder of “Le Grand Fermier Entreprise,”” who is looking for Haitian partners for his agribusiness. He mentioned to me that one of his biggest issues at present is to find dynamic people who are willing to network and partner with his enterprise, and I thought this could be a great avenue for the CFI to intervene.

The CFI is not an investment bank, but rather, as the name suggests, an agency that facilitates investments. The question is what kind of assistance can be offered for the local farmer who would like to expand his enterprise, or a young local entrepreneur looking to create a startup business. I was not impressed with the comments I heard in this area.

It seems that the CFI is more focused on big international investors that could come and inject lots of money in specific sectors of the economy. For these people, Haiti is open for business and all the perks that come with the slogan. But in reality, these investors remain very cautious, and are taking their time to assess Haiti’s political stability.

It is too early to judge the strategy to open the country up to foreign investors. However the CFI, as an agency that has as its priority facilitation of investment, should develop a stronger relationship with local entrepreneurs and members of the Diaspora, by making available business workshops throughout the country, supporting young business students and even establishing scholarships for those who are really bright and have great business ideas.

The CFI is still a young public agency — but it must learn from the mistakes of other public institutions and to not be afraid to be bold in its actions of serving Haitians and nurturing local talents that could one day be the investors that other countries might look to attract.

Ilio Durandis, a Caribbean Journal contributor, is the founder of Haiti 2015, a social movement for a just and prosperous Haiti. He is also a columnist with The Haitian Times.

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