18 March 2009: Press release - Haiti Support Group says focus on garment assembly is ill-advised and inappropriate.

United Nations Secretary-General, Ban Ki-moon, is urging the Haitian government to focus on garment assembly as the way to reduce poverty and spur economic development. During his recent visit to Haiti, and in his latest report on Haiti to the UN Security Council, he declared that Haiti must take advantage of US legislation giving garments assembled in Haiti duty-free and quota-free access to the US market.

According to Ban, the HOPE II legislation provides "a golden opportunity to bring in investors and create hundreds of thousands of jobs". He wants the Haitian authorities to "work together with donors to undertake a targeted programme to create export zones", and to submit it to a donors' conference on Haiti to be held in Washington DC in mid-April.

The British solidarity organisation, the Haiti Support Group (HSG), which has worked closely with progressive civil society organisations in Haiti since 1992, is dismayed that the United Nations is throwing its considerable weight behind a development strategy that has already been proposed, tried, and found to have failed in Haiti.

The HSG's Charles Arthur said,"We are appalled that - just at the moment when Haitian civil society is mobilising to press the government to prioritise national agricultural production and environmental rehabilitation - Ban Ki-moon is, in effect, torpedoing their initiative."

Arthur continued, "Over four decades, the international finance institutions have repeatedly tried to force Haiti to follow a development strategy based on low-paid, labour-intensive, assembly operations(1). Not only has this strategy failed to bring any significant or sustainable economic development but, by focusing on assembly operations, the international planners have encouraged the donors to ignore the potential of domestic agriculture and other types of local production. As a result, Haiti has become more dependent on foreign aid, more dependent on imports, and more vulnerable to natural disasters."

On this basis alone, the HSG is surprised that Ban Ki-moon - whose initiative is based on a report by Oxford University economics professor, Paul Collier(2) - is now favouring yet another promotion of the garment assembly for export to be carried out in free trade zones (FTZs). This export-led development strategy is all the more contentious as it is being proposed in the context of a global economic crisis that has seen international trade collapse. Just last week , the IMF's director, Dominique Strauss-Kahn, said, “Continuing deleveraging by world financial institutions, combined with the collapse in consumer and business confidence is depressing domestic demand across the world.” One wonders how Haiti's garment assembly exports are expected to prosper when China - the world's leading garment assembly producer - has been battered by a massive fall in demand for its goods.

Ban Ki-moon's suggestion that the Haitian government prioritises garment assembly FTZs at the forthcoming donors' conference is, says the HSG's Charles Arthur, "a slap in the face" for President Rene Preval and Prime Minister Michele Pierre-Louis who, following last year's food riots and hurricane disasters, have repeatedly stressed the importance of national production, in particular, agriculture.

Ban's proposal also disregards the position of Haiti's progressive civil society organisations which have repeatedly warned of the harm caused by a focus on assembly operations, and have voiced their demands for an alternative development strategy. These organisations claim that garment assembly does little to help Haiti's economic development because it is just that - assembly - with parts of clothes sent from abroad, sewn together in Haitian factories, and then re-exported.

For their part, the advocates of garment assembly stress that the important thing is the jobs that such a development strategy will create. However, while employment opportunities are desperately needed in Ha iti, as the Collier report point outs, the wages paid to the workers in the garment assembly factories are low - and this is precisely what is viewed as the advantage that Haiti has over other countries in the region. As Collier writes; "Due to its poverty and relatively unregulated labour market, Haiti has labour costs that are fully competitive with China, which is the global benchmark."

Even if garment assembly workers get paid US$4-5 a day(3), progressive civil society organisations question the knock-on effects on the wider Haitian economy. Typically garment assembly workers spend the lion's share of their wages on food and transport to and from work, and given Haiti's ever-increasing dependence on imported food and fuel, this means that even the workers' spending power will have a minimal effect on the country's economic development.


The HSG's Charles Arthur said, "The UN Secretary-General's focus on garment assembly as the motor for Haiti's economic recovery is ill-advised and must be reconsidered. It is yet another case of international planners foisting their inappropriate ideas on Haiti, while the opinions of the Haitian majority and their organisations are ignored."


Notes:
1) Even at its peak, in the early 1980s, this sector only employed around 60,000 people. By the mid-1980s the number had dropped significantly as foreign contractors moved their orders to other, cheaper, and more stable co untries.
2) "Haiti: From Natural Catastrophe to Economic Security: A Report for the Secretary-General of the Unite d Nations", Paul Collier, Department of Economics, Oxford University, January 2009.
3) At present the minimum daily wage in Haiti is 70 gourdes (less 8th an US$2), a rate set in 2003. A long-overdue move to increase the minimum daily wage is stalled in the Haitian parliament. The lower house of parliament, the Chamber of Deputies, recently passed a bill increasing the minimum daily wage to 200 gourdes (around US$4.80), but the upper house, the Senate, has yet to endorse the increase. Senators are apparently subject to intense pressure from Haiti's private sector to reduce the amount of the increase. This pressure is only likely to increase now that the UN chief has endorsed the Collier report and its recommendation that Haiti maximises the 'economic advantage' represented by its cheap labour.


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Sent by the Haiti Support Group - A British solidarity organisation supporting the Haitian people's struggle for participatory democracy, human rights and equitable development - www.haitisupport.gn.apc.org