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9126: Haiti's informal sector thrives in tough times (fwd)

From: Greg Chamberlain <GregChamberlain@compuserve.com>

     By Trenton Daniel

     PORT-AU-PRINCE, Sept 26 (Reuters) - Francillon Jean and his wife Sonia
organize funerals for a living.
     From their downtown office in the Haitian capital, the two refurbish
coffins, find graves, transport bodies and arrange for flowers and music at
wakes, usually putting together three to eight funerals a month.
     The Jeans inadvertently benefit from Haiti's low life expectancy rate
of 54 years, compared to the Latin American average of 60, according to the
World Bank.
     Lately, however, business has been affected by the recent economic
deterioration. "I'm touched by the economic problems, but I don't
necessarily feel it," said Francillon, 60, in his office, a narrow corridor
stuffed with coffins and hot as an oven.
     The Jeans, who pay no taxes and whose business is not registered with
the government, are two among millions of Haitians who contribute to and
help run Haiti's enormous informal economy, a marketplace that makes its
own rules and operates on innovation, resourcefulness and creativity, local
economists say.
     "Ninety percent of the economy is seen as informal. That goes from the
urban to rural areas," said Jean-Claude Paulvin, an economist for ECOSOF, a
financial consulting firm based in the Port-au-Prince suburb of
     "The informal sector is large and the whole country rests on the ...
people conducting transactions on an informal basis. Elsewhere, as in the
United States, the informal economy is thought of as illegal activities.
     "But in Haiti, the informal economy is a way of conducting
transactions, a way of life in Haiti. It's a substantial (part) of the
Haitian economy," Paulvin said.
     The variety of jobs in the impoverished Caribbean nation is a
testimony of the informal economy's significance -- ranging from dubious
hustlers who peddle information, to street-side vendors who sell hedge
clippers, leather belts and shoes, week-old newspapers, used sunglasses,
bicycle pumps, car accessories -- anything that potentially has value.
     "What pushed people into these activities? My main answer is that they
have to survive, they have no choice, they need something to do," Paulvin
said. "It's driven by necessity."
     Indeed, there is little choice for the almost 8 million people of
Haiti, whose shaky economy is sinking further.
     The value of the gourde has recently plunged to 25 to the U.S. dollar,
down from about 20 for most of last year. A political impasse over the May
2000 legislative election has stalled more than $500 million in sorely
needed foreign aid.
     Major opposition parties alleged the vote was rigged to secure a
victory for President Jean-Bertrand Aristide's Lavalas Family party.
Despite pressure from abroad and at home, the government refused to recount
the contested results and the aid money remains on hold.
     Haiti's trade deficit reached nearly $1 billion last year and its
budget deficit came to about $45 million in the first half of the current
fiscal year, said the London magazine The Economist.
     Local economists say the economy has been hurt by a decline of drugs
coming into Haiti, reducing profits that previously made their way into the
informal economy via money laundering.
     Although cocaine flow through Haiti decreased in 2000, Haiti remains a
significant trans-shipment point for drugs, primarily cocaine, moving
through the Caribbean from South America to the United States.
     Finance Minister Gustave Faubert recently announced that measures
would be taken with the new team at the Republic Bank of Haiti to slow the
gourde's depreciation.
     Still, the informal economy, along with remittances from abroad, helps
keep the country moving.
     While the world's oldest profession remains popular in Haiti,
particularly in the Carrefour and Petionville suburbs, where scantily clad
streetwalkers pose under street lights after dusk, other jobs exhibit more
creativity. In Haiti, no job is considered too odd.
     Jean Laguere, a 21-year-old high school student, has been going to
typists about once a month for the past two years, he said. He pays them to
type letters to overseas readers, telling them he is a struggling student
whose family doesn't have enough money to support him, and asking for help
in any way possible. He stops short of asking directly for money.
     Laguere, who pulls the names and addresses of his potential readers at
random from books at his local library, says he receives a response about
once a month.
     But Haiti's informal economy finds other ways aside from this
message-in-a-bottle approach of trying to find help, ones that pull in a
more reliable income.
     Joseph Leopold Rene, a 41-year-old typist, sets up shop five days a
week from 7 a.m. to 4 p.m. near the downtown National Palace, typing
letters for government officials, students like Laguere, secretaries and
anybody else who might need a document typed.
     Rene found his job by way of luck, though he had a little bit of
experience already under his belt.
     "When I was in the army, I was a clerk working at an office and I
picked this job, because I already knew how to type," said Rene, referring
to the time when he was a member of the army that Aristide disbanded after
a U.S.-led invasion restored him to power in 1994.
     "My responsibility rests on that," said Rene, a 41-year-old father of
five, tapping his hand on a typewriter that a friend in France sent him two
years ago.
     International monetary institutions generally put Haiti's unemployment
rate at around 80 percent, though local economists say the figure is much
lower. While Paulvin said the informal market made up 90 percent of the
country's economy, other local economists estimate the figure to be lower.
     Pierre-Marie Boisson, chief economist for local SogeBank and a former
World Bank employee, puts the informal economy at a little over 62 percent
and the formal economy at 13 percent. Another 7 percent are domestic
servants and 17 percent are truly unemployed, he said.
     "Sixty-two percent of the working-age population is self-employed --
that includes the guy driving the taxi, that includes the guy who's fixing
tires," Boisson said.
     "They are a kind of survivor. They would do whatever they can. Because
when they are working those micro-enterprises, it's not a choice of their
own. They don't find jobs in the formal employment. So they have to