14198: Durban to Ives on Haitian Employment (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Lance Durban <lpdurban@yahoo.com>

In his response to my post earlier this month, Kim Ives offers
up the left wing view of exploitation of Haiti by the developed
world espoused by Paul Farmer (The Uses of Haiti, Common Courage
Press, 1994).  Unfortunately, he missed my question, which was:

   If we are to (1) oppose agricultural development (coffee,
   sugar, cocoa) which he claims enriches western importers
   at the expense of Haitian peasants, and (2) simultaneously
   discourage investment in the assembly sector, what are the
   vast masses of Haitians supposed to do for a living?

Let me add a few other ideas that Kim and others might want to
comment on...

                IS INDUSTRIALIZATION NEEDED?

Producing something of value is a requirement if a country is
going to escape being a perennial beggar, but job opportunities
for an uneducated population in an extremely competitive global
economy are very, very limited.  Should Haiti remain solely
agricultural and forego industrialization?  Some people DO argue
that, but most feel that a country is better off hedging its bet
through a balanced economy.

In the drive to industrialize, I would argue that a vibrant
assembly sector is a necessary first step on the manufacturing
ladder.  In Haiti, assembly jobs generally pay a bit more than
the minimum wage (36 gourdes or 95 U.S. cents).  That's not
much, but in a country with so few entry level positions,
assembly work can offer the masses a first job.  And from that,
the most ambitious can demonstrate a variety of skills that lead
to promotions if the business (and the country's economy) is
growing.  Ideally, from the simplest assembly operations, a
growing economy will sprout companies that proceed to the next
steps... purchasing their own raw materials locally, sourcing
materials globally, designing the products they build, and
seeking new markets for their products.  This is true even if
the foreign investor firm is only interested in the simplest of
assembly operations (eg. contract sewing).

                 EDUCATION AS A LIMITING FACTOR

The complexities of a business multiply exponentially as more
operations are undertaken, and more skilled employees are
needed.  Unfortunately, a country with a poorly educated
workforce will find it increasingly difficult to compete with
its more educated neighbors.   Comparing Haiti and the Dominican
Republic is instructive:  Haiti may offer a less expensive pool
of uneducated labor, but for technically skilled people, the
Dominican Republic is way ahead.  Skilled technicians and
mid-levels managers are easier to find (and their wage levels
are lower) in the DR than in Haiti, and this is a direct result
of a better education system.

                      FOOD AID DISTORTIONS

About the only agreement I have with Kim is on the matter of
food aid.   As a Chicago-school efficient markets person, I
would like to see Haiti wean itself of food aid, which badly
distorts local agricultural prices, helping drive rural Haitians
off their land while enriching those few who are charged with
distributing foreign food aid (including the big NGO's like CARE
and CRS).  Unfortunately, few countries (including Haiti) are
willing to shut down the free food spigot which Uncle Sam
offers.

In closing, the question of how to increase employment
opportunities in Haiti is probably the most important task
confronting any Haitian government.  I would welcome suggestions
any Corbetters might want to offer on this important topic.

Lance Durban







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