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#4342: On economic development Poincy replies to Gill (Ref: Post # 4270) (fwd)

From: Jean Poincy <caineve@idt.net>

This is where most of the organization, planning and production
strategies would take place. We would not expect such an enterprise to
take roots in the next five years or so considering Ayiti's agricultural
state right now. Further, hope would be gleam only in light of the
international market where competition is stiff.  I concede that as a
baby in the field, Ayiti would not hold long. If revamping the primary
sector is a costly enterprise, it is for sure very lucrative. It boils
down to how efficient any concerned authority will make the system. As
long as actions remain constant within well thoughtful guidelines, the
cost and a long duration of it should not be a deterrent.  

However, at the primary stage, the focus would be entirely on the local
market.  Recall the initial suggestion which calls for some radical
trade policies to protect the nascent industry. I have no quarrel with
the fact that the textile industry would be a rocky terrain if Ayiti
goes international too early. Being aware of such would oblige the
authorities to be very careful about how they would devise economic
strategies favorable for Ayiti's economy. Knowing at what stage it needs
to reach a certain development level would be central. That's why Ayiti
needs qualified and perceptive technicians to conduct such affaires.

Economic Development is not a one-shot deal. It is a gradual process
which does not allow for burning bridges. The toughness of the
international textile industry is not a permanent barrier to entry to
any country. While keeping in mind the initial suggestion, this is how
Ayiti would need to proceed to pierce the international market: 

1: Before the economic ostracism, Ayiti would make sure it acquires
significant know-hows in the textile business. 

2: During the economic ostracism Ayiti would make sure to produce
quality products that its own people would feel good to use. Remember,
the production would be for them.

3: Once established loyalty for its products on the local market and
things begin to boom locally, Ayiti would comply to trade conditions to
reenter the economic associations and begin to increase its production
level to raise the surplus needed to exchange.

4: After the economic ostracism, the CARICOM, or one of its members
would be used as a litmus test for Ayitian products. Once establishing
loyalty among this new group of consumers, enough confidence will be
built to venture the international market.

5: Venturing the international market can be done two ways: go directly
to the international market and the use of the assembly industry.

The former can be very damaging if the products are not successful. The
latter seems to be more promising. However, Ayiti must agree to make
good use of its cheap labor. Ayitian companies, after affirming their
skills in the apparel business, can offer their subcontracting service
to the international giants. In return, if Ayitians can negotiate a
profitable deal, the assembly industry can be the springboard to promote
Ayitian products abroad. At this point, cheap labor would not matter
because the structure of the assembly industry would compensate for it
by creating the missing linkages for real economic development. 

The concessions that Ayitian authorities would need to receive from
those seeking for cheap labor are: 

1: parts to assemble are to be made in Ayiti. (Remember would already
master the skills).

2: the final products are not to be sold directly on the local market so
they won't compete with the national ones. (Since Ayitian purchasing
power would start to increase, the Ayitian market would become a
potential market for these giants and they would want to be able to sell
some of their products on the Ayitian local market.)

3: have these companies channel Ayitian products through the
international market. 

To get all these advantages, Ayiti must give more incentives to these
companies. They would range from keeping wages low for a while to
keeping labor movements in check. An easy and quiet way the government
could do that is by providing some social benefits, such as food
subvention, public health benefits and public housing.

With this frame of mind and provided that appropriate authorities have
beefed up their negotiation skills, there would be no reason to fear the
international market. While keeping these in perspective, strategies are
to be devised for absolute success. Effective economic organization is
the key, an aspect I take on a different post.

Ayiti has lived, lives and will live