#4414: Haiti's parallel economy in full bloom (fwd)

[Robert Corbett <bcorbett@netcom.com>]

From:nozier@tradewind.net

Monday, June 26 8:00 PM SGT Haiti's parallel economy in full bloom

PORT-AU-PRINCE, June 26 (AFP) - 

Vitale Guy has sat on her wooden stool for five hours, under an intense
tropical sun, waitingfor something on her stall to catch the eye of a
passer-by.With an unemployed husband and two children to feed, this
29-year-old Haitian women says she earns a few dollars each day selling
cosmetics from her stall -- the only regular income the family has.
Guy's situation is similar to that of thousands of Haitians who leave
the shanty towns circling the capital to hawk their wares on the
sidewalks and streets of downtown Port-au-Prince.After years of
political turmoil, Haiti's economy has collapsed, leaving the nation the
poorest in the western hemisphere."Seventy-five percent of the wealth
earned in Port-au-Prince comes from the informal economy, which has
blossomed for 15 years," said Bernard de Brouwer, one of the organizers
of an association which provides credit to the city's poorest residents.
In the informal economy, shopkeepers have no shop, they are not
officially even working, and their precarious livelihoods are often
jeopardized by rampant crime."It's an economy of survival, not of
growth," said Philippe W. Lahens, head of the French-Haitian Chamber of
Commerce and Industry.Port-au-Prince's streets are alive with cars and
trucks that are in good shape, and the bustle would seem to contrast
with the official estimate of unemployment at about 60 percent.
"That figure doesn't include the parallel market, which accounts for 90
percent of economic activity," Lahens said."There's a lot of money
circulating."According to Lahens, only about 500,000 bank accounts have
been opened by the Haitian population, which totals eight million -- an
indication of how much money never passes through official channels.
Like others, Vitale borrowed money from her family to launch her small
business. Cash is sometimes borrowed on a 24-hour street loan to buy
merchandise, while friends or relatives scout around for a stall.
But even the informal economy has its own rules: every evening, seven
days a week, the sellers put away their products -- some 80 percent of
which are imported -- in a box, which is stashed away until the morning
in nearby cheap storage spaces.The more entreprenerial borrow more money
and develop their business. But only a very few ever break through
the barrier to move from the informal to the formal economy. It's too
expensive (they have to pay taxes) and too complicated (red tape), they
explain.In order to turn around Haiti's economy, the country will have
to develop its basic infrastructure and attract investors. And most
importantly, private-sector business people say, it has to provide
political and institutional stability.After all, the small Caribbean
island nation has a lot going for it: 1,350 kilometers (840 miles) of
stunning coastline, a hard-working population, crafts that are exported
around the region, and a unique naive school of painting."Our problem is
that we do not produce anything, we don't export anything, apart from
coffee, mangoes and art,"explained Max Chauvet of the Free Enterprise
and Democracy Center."We have no energy resources, and little arable
land," and that little is being steadily eaten away by construction, he
added."But we could develop free-trade zones and tourism," he said -- as
long as there is a stable, corruption-free government capable of
protecting its people.