Last month's food riots in Haiti were a vivid reminder that the country can easily slide backward toward more years of political turmoil, boat people, and upheaval. After two years of political calm, good government, and international support, Haiti has a chance to find its place as a stable, lower-income country with good prospects for development. But its political institutions, as the food crisis shows, are still barely functional and its people live with very recent memories of hunger and violence. Congress needs to act quickly to help Haiti stay on the right track.
Part of the response is a food aid package that can stop the rapid rise in rice and bread prices. Equally important is quick support for growth and job creation through rapid approval of the "HOPE II" (Haitian Hemispheric Opportunity through Partnership Encouragement) trade benefit program advocated this year by Reps. Charles Rangel (D-NY) and Kendrick Meek (D-FL) and Sens. Jeff Bingaman (D-NM) and Bill Nelson (D-FL). This would give Haiti 10 years of special tariff exemptions, enabling businesses to put thousands of people to work and thus giving the Haitian public confidence that the future will be better than the past. Given the rapid worsening of Haiti's economic distress during the present food crisis, Congress needs to act fast.
Press reports frequently term Haiti "the poorest country in the western hemisphere." The phrase is accurate, but scarcely adequate. Two statistics put the reality of Haitian life in perspective:
- Income: Haiti's per capita income is $450 per year. This is barely a tenth of the $4,045 figure for Latin America and the Caribbean, and well below the $746 average for sub-Saharan Africa.1 The rates for Haiti's comparable neighbors -- the Dominican Republic, Jamaica and Trinidad -- are respectively $7,150, $3,390, and $10,300.
- Unemployment: Very few Haitians have jobs. Statistics are shaky, but between 200,000 and 350,000 of Haiti's 8.6 million people have permanent paid work. With an unemployment rate of roughly 80 percent, most Haitian men and women do not earn salaries, but scrape by through small-scale peddling, temporary construction work, remittances from relatives abroad, and so on.
Despite the dismal economic data, though, the last two years have a reasonable claim to be Haiti's best in five decades. The 30 years of the Duvalier family dictatorship between 1957 and 1986 were followed by 20 years of chaos, sanctions, and coups d'etat. Together, they reduced the Haitian economy to bare subsistence -- industrial employment fell from between 80,000 and 100,000 in the early 1980s, to 15,000 by 2004 -- and left its government institutions barely functional.
But since 2005, much has changed. A U.N. peacekeeping force introduced in 2005, known as MINUSTAH, has restored calm to Port-au-Prince and sharply cut crime and violence. MINUSTAH officers have trained a nascent national police force of 9,000 officers, which should be at the full strength of 14,000 by 2012. President Rene Preval, a modest and realistic man, has used the space of relative political calm to restore a functioning democratic political system and worked with aid donors (principally the United States, Canada, and France) to rebuild the country's ministries and basic public services.
American trade policy has also provided some help. About 23,000 of Haiti's salaried workers -- roughly one in 10 -- make clothes for export in 23 factories around Port-au-Prince. These clothes receive special duty-free treatment through a provisional program created by Rep. Charles Rangel in 2006, known as "Haitian Hemispheric Opportunity through Employment," or HOPE. Each earns $5 or more a day, which is four times the country's per capita income and enough to pay for food, shelter, and clothing for 10 family members in rural districts or low-income Port-au-Prince neighborhoods.
A year after its passage, HOPE gets partial credit for the creation of about 3,000 additional garment jobs. But it was a compromise program even in 2006, and has not been wholly successful. Its complex and restrictive rules make it hard for Haitian businesses to use. Still more important, it is a short-term program which will expire in only two more years. After that, the major tariff benefits expire and Haiti's treatment will be less favorable than that of its neighbor the Dominican Republic.
With only two years of tariff benefits, managers have reopened once-closed plants. But they are not confident enough in future orders to train new workers, which takes months and is fairly expensive. Most Haitian garment factories are therefore using only two-third or half their capacity. Potential foreign investors in Haiti, meanwhile, are reluctant to commit the money to add new facilities. This means HOPE has created less investment and fewer jobs than it could.
It is in this fragile situation, then, that Haiti is trying to navigate the food crisis. Over the past year, food prices have risen by 57 percent worldwide. In a country in which 78 percent of the public lives on less than a dollar a day, a near-doubling of the cost of food is very difficult to manage. Without an effective internal security service, instability once begun can feed upon itself with little to slow it down. The riots of April are an early warning of the risk of sliding back into the cycle of instability, upheaval despair, and boat pilgrimages so familiar ever since the 1980s.
In these circumstances, it is urgent that Congress act soon to bolster long-term confidence and employment, as well as provide emergency aid. Reps. Meek and Rangel, together with Sens. Bingaman and Nelson are championing a more ambitious and longer-lasting program called HOPE II. This would change the existing program by extending the benefit from two years to 10, and by easing Haiti's ability to use international fabrics in the clothes its workers sew, thus allowing cheaper and more flexible production, especially in knitted clothes.
A small and cost-free step, HOPE II would give businesses confidence in their future as employers and producers in Haiti, and provide work for thousands of Haitians in the capital. This would mean not only direct benefits to these workers, but food security for tens of thousands of Haitians and grounds for broader public optimism during a moment of crisis.
Apparently the main obstacle to quick action on the proposal is the opposition of several Republican senators, mystifyingly alarmed over the prospect of Haitian competition. Sens. Elizabeth Dole (R-NC), Lindsey Graham (R-SC), along with Saxby Chambliss (R-GA), attempted to block HOPE I in 2006 on protectionist grounds.2 They were wrong then and remain wrong today. Haitian clothes amount to about 0.6 percent of U.S. clothing imports. If HOPE II promotes some growth in Haitian imports, it will be the result of some minor shifts in sourcing decisions by retailers, and will not change overall imports or employment trends in the United States. Such opposition was stingy and mean-spirited in 2006, and is even worse in today's moment of crisis.
HOPE II is obviously not a solution for all of Haiti's problems. That will require a long period of rebuilding political institutions, development of a professional local police and security service, environmental remediation in rural districts suffering from deforestation, and more. But HOPE II is a chance, at a moment where two years of progress hang in the balance, for Haiti to overcome a crisis, restore political calm, and continue toward a future in the next decade of development into a stable, democratic, lower-middle income nation.
It is not often that Americans have a chance to help a neighbor achieve a goal like this -- and almost never do we have the chance to do so at no cost. Congress should act now to give Haiti hope.
1. The alternative "purchasing-power parities" measure of GDP places Haiti slightly closer to Africa, at a per capita income level of $1840 to Africa's $2,004 and Latin America's $8,140.
2. "Rangel Presses Farm Conferees to Add Haiti Preferences," Congress Daily, April 29, 2008
