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#658: Haiti's Dual Economy Lets Most Scrape By (fwd)


Haiti's Dual Economy Lets Most Scrape By ___Officially Jobless, 70% of
Workers Must Improvise By Serge F. Kovaleski  Washington Post Foreign
Service  Monday, October 4, 1999; Page A16 

PORT-AU-PRINCE, Haiti?Luckily for Lionel Hillaire, dust is everywhere in
this decrepit city of crumbling streets and sidewalks. He is among the
legions of shoe shiners who count on the grime to eke out a  living. "It
is a dirty and tough job, but there are few other choices for me. I am
 doing what I have to so I can eat once or twice a day," said Hillaire,
20,  who charges the equivalent of 10 cents for a shine. "Although
Haitians are   poor, we are proud, and people will spend some of the
little money they   have to look the best they can."  Like Hillaire,
multitudes of Haitians are improvising ways to survive as part        
of an ever growing informal economy that today accounts for the largest
number of jobs in the Western Hemisphere's poorest nation. An estimated
70 percent of Haiti's work force is technically unemployed, meaning that
the vast majority do not have official jobs in the private or public
sectors. "Life was a lot easier for us a year ago when my wife was
breast-feeding  our child and we did not have to worry about buying milk
for him," lamented Andre de Pierre, 32, who said he earns about $2 a day
selling  drinks on the streets of Petit-Goave, a small town 40 miles
south of the   capital. "All the promises made to us about a better life
one day have been lies."  During the years of military rule, Haiti's
economy shriveled about 40  percent, mainly as a result of an embargo
imposed by the United States, while the country's infrastructure
deteriorated. By the time U.S. forces  returned President Jean-Bertrand
Aristide to power in 1994, inflation  exceeded 50 percent. The figure
has since been brought down to about 12  percent, but per-capita income
stands at only $250 a year.  "The informal economy is a survival system.
It is a distribution of some  wealth, but it is not a creation of
wealth," said Leslie Voltaire, an urban   planning adviser to President
Rene Preval. "Without it, we would see a lot  more desperation and a lot
more boat people," trying to emigrate by sea.Those working in the
amorphous and chaotic informal economy say returns  are minimal because
most Haitians do not have much disposable income. But the meager
earnings, they note, help them afford basic necessities and  retain a
sense of dignity.  "It may not be much, but I have made something of my
life because I have  a business and I am not a gang member or a thief,"
said Jean-Claude Paul, 25, who earns several dollars a day on the
streets of Port-au-Prince selling  perfume and cologne. The prevalence
of informal employment is most visible in urban areas, particularly here
in the capital, where sidewalks are jammed with rows of  vendors hawking
a panoply of new and used wares, as well as food, in  what has
transformed Port-au-Prince into a virtual outdoor bazaar. The selection
of goods is dizzying: baby beds, mattresses, coffins, dishes,        
blenders, washtubs, clothes, beard clippers, toothbrushes, curlers,   
condoms, locks, cassette tapes and more. On one recent afternoon, a    
woman was trying to sell surge protectors and TV antennas while her     
husband stood nearby with a bundle of new leather belts draped over his 
arm.   Vendors generally buy their products from
wholesalers--particularly importers, since most merchandise is
foreign-made--or on the black  market. Haitians living in the United
States and elsewhere also send goods to their relatives for sale
here.    The Aristide Foundation for Democracy, an outreach organization
by the former president, runs a $400,000 fund from which its 15,000    
members can obtain business loans. The fund is designed as an
alternative  to borrowing money from street lenders, who charge up to
200 percent interest.  Several foreign banks, including one in Panama,
also have extended credit  to informal-sector workers, while Haiti's
leading private financial institution, Unibank--in collaboration with
the World Bank's International Finance Corp.--is preparing to launch a
micro-loan program.  The informal economy has been made more difficult
by the influx of large  numbers of people from the countryside who are
searching for more  opportunities. In Port-au-Prince, a city of 2.5
million people, officials  estimate that the population is growing by
about 120,000 people a year.  Overall, Haiti's formal economy expanded
about 3 percent last year. But  that was largely offset by 2 percent
growth in the population. Economists said that for Haiti's situation to
improve, the overall economy will have to increase 5 percent to 6
percent annually, which is higher than the outlook   for the next few
years. In many ways, the narcotics trade also has become part of the
informal  economy. Haiti is a major transshipment point for drugs bound
for the  United States from South America. Those desperate for jobs and
money  haul drugs by land to the neighboring Dominican Republic, where
the contraband is then spirited into the United States.  One of the
biggest obstacles to creating jobs in the formal, measured  economy has
been a shortage of investment by either foreign or Haitian   business
owners. The hesitancy reflects concerns about crime, political   
instability and Haiti's justice system, which remains corrupt and
inefficient  despite some improvements. Haiti's economy has been helped
by the estimated $600 million a year that  Haitians outside the country
send to relatives. Additionally, some sectors of  the formal economy,
such as manufacturing in assembly plants, have been growing, adding
40,000 jobs in the past five years.