24222: Durban (discuss): Less commerce, more industry needed (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Lance Durban <lpdurban@yahoo.com>

I caught a snippet of a speech aired by Radio Metropole a couple
of days ago where Prime Minister Latortue complained  that many
basic necessities are sold at widely fluctuating prices
depending on where you are shopping.  Seems you can pay H$50 in
one place and H$70 or H$80 for the same thing somewhere else.
Coming on the heels of the appointment of a new Minister of
Commerce and Industry (Fritz Kenol), Mr. Latortue opined that a
government investigation of pricing should be undertaken.

Personally, I'm not so sure that the government can or should
get involved, other than to ensure a level playing field for all
the players.  In the final analysis, it is still up to the buyer
to seek out the best value for his money.  My feeling is that in
his new position, Mr. Kenol would do well to spend less time on
commerce and more time on industry.

Notice how almost everyone not working for the government in
Port-au-Prince is somehow involved in "commerce"... buying and
selling, all in the effort to make something on the mark-up
without actually producing anything.  (OK, economists will point
out that distribution does have a place in society, ie. Wal-Mart
is performing a valuable service for the U.S. economy).

In fact, if we consider only "commerce" and "industry", 95% of
the people employed are just going to do a job, whether that job
is selling oranges on a street corner (commerce) or gluing heels
on shoes in a factory (industry), whether it is bagging
groceries in a supermarket (commerce) or making brooms for sale
on the street (industry).  The other 5% are the educated folks
who CREATE those jobs, either by importing new products and
opening stores (commerce), or opening a factory to create
something to sell (industry).

In Haiti, most of that last 5% are concentrating on commerce
rather than industry.  So, most of the other 95% end up in
commerce as well.  Thousands upon thousands of people competing
to sell oranges (as well as countless imported products), while
relatively few are actually producing anything.  Redressing this
imbalance should be an urgent priority for the new Minister of
Commerce and Industry.

At this point is useful to distinguish between assembly and
manufacturing.  Both are "industry" and both require management
skills, yet in Haiti, industry is mostly limited to the much
maligned assembly sector (which in Haiti is primarily sewing).
Assembly operations are routinely condemned for offering only
low paying factory jobs while enriching foreign investors
(customers).  Manufacturing requires more skills:  design,
engineering, purchasing, marketing, and a better-educated
workforce.  It also draws strength from a more developed
economy, one that is able to provide locally available lower
cost raw material.

Moving from assembly to manufacturing should be a long-term
goal, but in the short term Haiti should be creating any kind of
industrial job that will provide employment.  Unemployment in
Haiti is scandalously high, yet any visible government response
is hard to find.

The irony is that in spite of a nicely recovering American
economy, U.S. manufacturers are in serious trouble with
thousands of American jobs leaving every week for countries with
lower labor costs.  The high growth of the PacRim countries of
Asia is a direct consequence of this global shift in
manufacturing.  But where is Haiti?  With wages entirely equal
to China and located a scant 750 miles from Miami, Haiti should
be a manufacturing powerhouse, sucking up more than its share of
these jobs.

The task of the new Minister of Commerce and Industry is (of
course) to upgrade infrastructure and systems in support of...
commerce and industry.  But, perhaps even more important, he
needs to figure a way to open the eyes of Haitian entrepreneurs
to the vast North American market for manufactured products.
For Haiti to grow its way out of poverty, we need to be seeing
far more products "Made in Haiti" on the shelves of Wal-Mart.

Lance Durban