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#4255: On making Ayiti economically fit: Poincy replies to Gill (fwd)

From: Jean Poincy <caineve@idt.net>

It is very true that the assembly industry as introduced in Ayiti can't
be considered as a step to economic development. I strongly believe that
it has caused more harms to the economy and the workers than helping.
The proponents of it and activists that are waging war against the
giants of the apparel industry argue that it brings jobs, but with
unfair wages. All they see is that some at least have a job by default
of any other. Again, it is a "myopic approach" toward improving living
conditions of poor Ayitians. 

Unconsciously, they prefer the immediate miserable temporary relief of
the few beneficiaries than the long shot sustainable relief of the
whole. The reason being is that the former is immediate and the latter
is too remote. That's human nature to discount the far away benefits.
However, the rational kinds always know they must sacrifice today's
benefits for the future harvest. I can understand the irrational ones.
For when hunger reigns there is no time for logical or strategic
thinking. The sufferers have little fate in the positive that's lie
ahead to settle for a mediocre situation such as the assembly industry
in Ayiti's case. 

The assembly industry has devastated the economic structure of the
country by provoking the desertion or abandonment of the rural area. The
arable land that was cultivated for food crops is converted to cash
crops for export. This kind of cultivation does not fuel the local
market and the local industry. As a result, the country comes to rely on
imported food to feed its population. The excessive in-migration left
the rural areas with very few farmers to conduct cash crop production.

The influx of farmers to Port-au-Prince lead to environment degradation
as the city is not suitable to absorb the new comers. The results are:

1: the slums that we all know of
2: the expansion of "kwabosal" to the steps of the national Catholic
Church "katedral" 
3: the transformation of the main roads of Pétion-ville, a used-to-be
wealthy neighborhood, a la "kwabosal". The same is for Delmas and other
used-to-be well-do neighborhood. Where in Port-au-Prince and its
surrounding there is not an open market?
4: the growth of shoe-shiner ranging from age 9 if not lower to very old
age, coming from "Kenskof". This is a lucrative business actually
considering the frequency at which one needs to clean his/her shoes due
to the dusty Port-au-Prince (the irony is: there are not too many dry
cleaners). Public shower places would be a lucrative business as well.
The people get dirty as often as their shoes.
5: the growth of "water seller" usually the mother of the shoe-shiners
roaming the street of the dusty dried Port-au-Prince.
6: the sidewalks are converted into market space during the day and
sleeping spots at night.

Why is that? Instinct propels one to migrate from one region to another
to better his/her life. We all do it. In the case of Ayiti everyone
thinks that s/he will have the chance or be the one to make it. (It is
the same reasoning when despite being aware of the danger of dying in
deep sea; they all take the boat heading to the US. Everyone thinks,
s/he will be the one to make it or be rescued by the US authorities and
granted asylum). It is economically rational to migrate to much better
off areas and Port-au-Prince does seem to be so in the eyes of the

The assembly industry was introduced in Ayiti as a promising industry to
boost economic development. The peasants were made to think so and were
very responsive to it. Two major flaws in the whole campaign:
1: the industry was not evenly distributed in Ayiti. If it were not
concentrated in Port-au-Prince, the flow of peasants into the capital
would be less intense. Some other regions hosting companies would absorb
portions of the floating labor force and Port-au-Prince would feel less
2: the industry was not tied to the local industries to create backward
and forward linkages. As Dr. Gill pointed out parts were coming from
aboard to be assembled in the country and be exported afterwards. Thus,
the Ayitian market never saw the true formation of the final product
value added. So much damage caused by the assembly industry but to be
repaired by sound economic development.

Contrary to what Dr. Gill thinks, I don't think it is a matter of
political opponents to get along. Although an important criterion, it is
meaningless if the privates don't take in hand themselves the economic
development of the country. It is a mistake to think of government as
the chief operator of economic development. Such kind of thinking is a
paternalistic one associated with the development of the communist
trend/era. Hence, the planning of the whole economic activities. Despite
its merits as a guiding hand, it does not prevail over the (seemingly
chaotic) entrepreneurial activities of the privates in the system. 

The government would have its initial role to play:
1: guaranteeing the security of each individual evolving in the system.
2&3: guaranteeing the smooth administration of national resources. 
3&2: guaranteeing a just allocation and use of such resources.
4: preventing the waste of the resources.
5: protecting the rights of future generations to these resources.
6: enacting laws governing all economic activities under the umbrella of
fair trade practices.
7: putting in place the BASIC infrastructure facilitating, first and
foremost, economic activities. This item is debatable since privates can
do it much better than the government, but under the latter's
8: promoting abroad the country and its economic activities.
9: guaranteeing that money in all its official forms are circulating
with assurance that they can discharge such and such obligations for any
duration considered.
10: enforcing its legal backup of the privates' economic initiatives.

In any way privates should wait and expect the government to do
something. They are the main engines of economic development. They are
in closer contact with the people and are able to assess better their
economic needs. They are the one to know what to produce for whom, in
what quantity and at what quality. The government is too remotely
situated to know better than the privates what the needs of each region
and family are. All that is to be expected from the government is the
listed items above. The micro management of the society that most of us
on the list expect from the government is quite a demand. The
government's effort to respond to such unreasonable expectation will
fall short.

It does not matter how much money the government will get, it can do
nothing with it but putting in place the basic infrastructure, which can
help productive activity. Anything else that is not productive in the
near future, such as investment in human capital, should be postponed at
a later date. If the privates are not supported in the framework
outlined above, their entrepreneurial incentives will die out and Ayiti
will never have economic development even if politicians make peace.

Ayiti has lived, lives and will live