Hi, I’m Zara Fatima
Social Politician.

How Haiti can be More Open for Business: Building a More Attractive Business Climate

Around the world, the biggest responsibility in government officials and policymakers’ jobs is to spur economic growth, create jobs, and increase the economic and social welfare of the society in which they govern or exist overall. A country’s ability to attract and keep foreign direct investment has a tremendous impact on jobs, economic growth, and welfare of the citizens. However, this is not something that Haiti has historically been able to hang its hat on. According to the World Bank, in 2017, Haiti was the 181^st country out of 190 when it comes to the ease of doing business. Forbes’ annual The Best Countries for Business ranking which ranks which countries are most inviting for capital investment ranked Haiti 3^rd from the bottom out of 153 countries. It is time to change that.

The Forbes ranking is compiled using data on the following: property rights, innovation, taxes, technology, corruption, freedom(personal, trade, and monetary), red tape, investor protection, and stock market performance. Understanding what kind of data and information actually goes into these indexes and rankings helps us begin to think about how we ca create change piece by piece at a more granular level. How do you attract business and encourage foreign direct investment in a developing country like Haiti that has a poor development record and is fighting a seemingly uphill battle? Think about it; Haiti does not even have a stock market to begin with.

There are many different steps that can be taken to foster an environment that attracts investment, retains business, and enables valued domestic businesses to thrive, and it is important to understand that it takes a combination of individual and collective initiative to improve some of the aforementioned parts of what we define as “a place where it is good to do business”.

Where better than to start than with education? A young, educated workforce something that firms look for and is a crucial piece of the decision-making process that firms go through when deciding where and how to direct investment in the private sector, which makes it important for a country to have. Not only does a more educated workforce create more competition for jobs (where as the best of the best rise to the top), but the baseline pedigree for what gets you in the door in the private sector in Haiti challenges and incentivizes the next wave of workers to rise above that to be competitive. Just as the high-school education as a proxy for entry level jobs used to be prevalent in the U.S., a college education is now assuming that role, leading to more and more people going on to specialized programs,graduate school, etc. to stay competitive; this makes the labor force more educated and it ultimately benefits the economy as a whole.

A young, educated workforce not only makes companies more productive, but young workers are more connected to what the world needs,especially when it comes to innovation and tech. Building on this idea, I think that investing in infrastructure ahead of the demand will be crucial to attracting timely investment and businesses into Haiti. When competing with developed countries in high-skill or low-skill sectors, you have to realize that companies looking to invest have an agenda, and you have to be ready when they come knocking. They have a product or service, and their goal is to get the ball rolling to fill a need and get it to market. The response time would take too long unless you have educated, entrepreneurial, and business-minded people of credibility making the call on where to allocate resources that will lead to Haiti being prepared.

There is also a space for country-wide education and NGO cooperation to occur in terms of talking about what the demands of tomorrow and the future of the labor force will look like, because there are people from other countries in NGOs that have grown up in a business-friendly business climate and/or are keen to what the labor market might look like in the coming years.

Another way that Haiti can attract more foreign direct investment and be more open for business is to work towards political stability. Not only is instability a deterrent for mission teams, tourists, and other visitors that would come to Haiti, who at the very least benefit the economy by coming in and spending their money, but it causes lower productivity levels in-country and discourages things like entrepreneurship, extension of capital, human capital accumulation, etc. because of the heightened risk that instability brings.

Building on the point that stability is crucial to economic growth and increased social welfare, it is also important for people of credibility and high pedigree to be in positions of power and leadership, so that businesses trust who they’re doing business with and so that they will be confident moving forward that they will be have the support structure and assistance needed to succeed and navigate doing business in a new country.

Countries should strive to not just poor free money into Haiti to put a band-aid over the problems, but to facilitate a marketing campaign or engage in direct investment that will cause people to come down and spend their money and create more jobs. The Haitian people want to work, and they want to be able to do business. It’s up to the country to decide if it wants to turn the corner once and for all in order to make it up to the rest of the world to invest rather than give.

Click here to read my book ‘ From Aid to Trade’ for more analysis of how Haiti and other developing countries can get out of poverty. 

References

Economic Opportunities and Health Care in Haiti

Health Care in Haiti

The health care industry in Haiti presents a great opportunity for job creation and economic
development. The health care industry can engage different professionals or trade and crafts
within the country. From the architect who draws the hospital building plans to the structural
engineers that develop them. In the above process, the electricians, plumbers, the material
and transporters will be fully engaged to bring about the hospital buildings. Not forgetting to
mention the pharmaceutical industries that produce drugs and also those who will build
medical equipment and laboratory machines.

Economic Opportunities

Economic opportunities abound within the Haiti health care industry, because not only is
health care necessary but it is not an option. Health care has to be embraced and developed
and can also be used as a wonderful medium for job and wealth creation. Of course, the
healthier our people, the wealthier our society.
Health care is an essential aspect of every nation. The necessity of a functional health care
sector cannot be overlooked. Each step of the way in setting up a hospital provides numerous
opportunities for business to start, grow and flourish. This makes it a reason why Haiti health
care industry is not just a choice, but mandatory for economic growth as stated above.
The health care sector operates in a chain like entity. Just look at it from this point: from the
hospital buildings, though it is not just about buildings, installations and every process
needed to bring about a health care facility.

It is worthy to note that health care needs a lot of
resources and workforce for this chain like system to function effectively. The synergy
required from different vital players is not what that can be toiled with. Of course, bringing
together these resources will create an opportunity for job creation for Haitians. This may
stem from individuals to business, then from business to health care and then the virtuous
circle goes on. This appears simple, but they are a lot of wealth to be created for everyone.
This process embraces government and private participation, a kind of public-private
partnership.

Haitian Healthcare Industry

The Haitian healthcare industry can as well attract foreign direct investment from
multinational corporations that are interested in investing in the medical sector to private
equity ventures. Being a developing nation, the Haitian health care sector can create
employment for its citizens as the industry sees expansion and growth. When such investors
bring in their monies, it will go through the banks, that means our financial institutions will
have more capital in their hands, they will also import equipment and machines which they
will have to pay customs duties, that again is money for our government. All these processes
will require both skilled and unskilled labor to ensure success.

Quality health care services are expensive, so we need to create jobs for our people so they
can afford excellent health care services for themselves. We need to generate disposable
income for our common citizen. Our greatest obstacles of creating disposable income for the
people are political instability, corruption, and foreign aid. These three hindrances have
plagued Haiti for too long. The global solution to excellent health care services remains the
creation of job opportunities for people, so they can work and raise income for themselves.

Quality Health Care Service

Then use these revenues to pay either private companies or the government (in the form of
taxes) to access proper health care services. Now quality health care services depend on the
functionality of the different sectors of the country. Health care services are linked to jobs
and necessary infrastructures such as good roads, electricity, transportation system, banking,
supplies and importation, pharmaceutical/drugs manufacturing, building developing, etc. It is
all linked to each other to have a capable health care system. How would you build a hospital
in a rural area if they is no electricity there? The medical equipment will not function
without power supply. Of course, the basis of lack of those structures starts with the lack of
employment and job opportunities, lack of economic opportunities, lack of investment, and
lack of decency. To show that we are patriots of Haiti, that we love our country and people,
we will provide the necessary systems and incentives for economic activities start, for the
people to work and live with dignity so that they can afford themselves their health care
systems.

The health care industry is interrelated to all other industries

The health care industry is interrelated to all other industries, the health care sector cannot
function in isolation, health care cannot be separated from economic development. Any
attempt to do that will result to an ineffective and failed health care system. Also, health care
cannot be removed from political decisions, good, and sound legislative decisions. Any
attempt to isolate health care by itself as a standalone entity will further compromise its
ability to solve the health care crisis and would be suicidal. The health care industry can be
compared to the human anatomy, where several small systems working together and
interlinked to each other for the human to survive. The health care system also needs other
systems for it to function effectively.

Finally, what is the solution? Firstly we need good leadership. A leadership that sees the
health care needs of the society as paramount and places the welfare of the society above
itself. Not only do we need leadership, but we also need collaboration from the private sector,
the NGO communities, and the government. Everyone needs to come together to bring about
decency, workable and effective health care systems to our citizens. Until then, we won’t
achieve much.

Killing Entrepreneurship in Haiti

Haiti as a nation has been troubled with natural disasters all of its History but has been exacerbated by earthquake and hurricanes in the past few years which has led to an accelerated rate in the loss of lives and properties.  The impact of these unfortunate events has been daunting on the economics of the nation as a whole because of the immense loss that has been encountered. Economists have proven that entrepreneurship is the way out of the poverty problem; although a market economy, Haiti has, nonetheless, plunged into chronic economic decline despite the effort put in trying to restore it back to how it was before. Foreign aid has increased and so did poverty. This sharpe contrast has led me to a deeper study suggesting that perhaps foreign aid has an adverse effect on entrepreneurship of Haiti as well as other third world countries.

The harsh reality of the Haitian economy

Economic Watch publishing shows a low economic growth of Haiti with over 80% of their population living below the poverty line, which means that Haiti is faced with an economic dilemma as a third world country. Statistics put out by World Bank has served as a harsh awakening to us Haitians on the economic toll these disasters have had on them, the statistics includes a 1% economic growth rate and a 1.2% GDP growth rate in 2017, down from 1.5 % the year before, a full display of how the economy of Haiti has fared from 2013 to date is available on Global Finance.  Haitians are forced to ponder on factors that may be causing the poor economic performance as well as means to pull their economy out of that deep economic depression.

On this quest, two of the suggested strategies by World Bank to tackling the problem are to generate economic opportunities outside the nation’s capital as well as to strengthen human capital, these go in line with the opinion of economist since entrepreneurship is indeed a way to apply these strategies. However entrepreneurship in Haiti faces another problem which is foreign aid, a deeper look into how entrepreneurship has been challenged by foreign aid.

Entrepreneurship and Foreign aid in Haiti

A 2016 study by Vanessa Gowreesunkar and Hugues Seraphin highlights that in Haiti 47% of the labour market are in the private informal sector with 39% involved in agriculture, these numbers go to show how largely dependent the Haitians are on entrepreneurship and this is inevitable a high driver of the economy.

Since entrepreneurship is an intrinsic part of the Haitian community, it is expected that the economic growth of the country as a whole should be better than it is today considering that entrepreneurship is seen as one of the major players in achieving a thriving economy. Focus on these contrasting facts about entrepreneurship and national economic growth as existing in Haiti and other third world countries has been brought up in several statements.

Haiti as a nation has received high figures in form of foreign aid, these aids are not limited to money but extend to labour, services and goods in a bid to help the nation but the economy of the nation remained crippled.  In one of my lectures titled ‘from Aid to trade’ I provided a deeper insight on how this has been happening.

My research, published in my book ‘ From Aid to Trade’  shows that only about 1.6% of funds donated from foreign aid after the 2010 hit reached Haitian businesses. The discrepancies of foreign aid to economic growth has been an issue manifested in third world countries and has brought about suggestions on how to get out of the dilemma and focus more on entrepreneurship like with Dominican republic. It is important to point out that foreign aid is meant as a temporary solution to economic problems of a country with a view that the country will eventually find a way out of their challenges and become more independent and self- sustainable.

How foreign aid kills entrepreneurship

1. Impossible competition: Haiti already exists as an economy highly dependent on informal economic sector, which means there are social entrepreneurs that cater to the needs of the population by providing goods and services to them and at the same time employing a good number of that population. These goods and services naturally come at a price which consumers have to pay, while foreign intends to make some of these things more available to the general population by providing it free of charge they are creating a competition in the market for these entrepreneurs. This competition however is not a healthy competition because entrepreneurs struggle to sell their products to a market that already gets similar products free from foreign aids “who can compete with free?”, it is practically impossible. The entrepreneurs who employ a good number of the population as labour force are then thrown out of business by this crushing and impossible competitive environment created from the foreign aid which creates a ripple effect on their suppliers also running out of business as well as their retailers. In the end, higher number of dependants are created and more foreign aid is brought in to continue to make the poverty problem even worst.
2. It does not actually increase income: to boost the economy of a nation, there has to be an increase in income which increases the spending power as well as the GDP per capital of that nation. Foreign aid is not generating income of the nation and since it does not generate sustainable employment to the population, it therefore does not boost the income of the people resulting in a dependent community and does limited economic activities to boost the spending power and the GDP growth of the community.
3. They make struggling and helpful entrepreneurs appear to be a rip-off: when foreign aid provides aids without helping the local economy, they parallel them at an impossible price to compete with and they create a perception that entrepreneurs are ripping off the population. To fix this they have to buy from those entrepreneurs and make the people learn that it is a reasonable fro them to pay a price to fulfill their needs.
4. It is one of the three killers of a nation’s economy: Foreign aid as the third killer of a nation’s economy and this is because foreign aids often operate without the cooperation of local labour, this is in no way to discredit the intention of help from foreign aid but when the local labour of the people are replaced rather than demanded, establishments run out of business and jobs are lost and new businesses do not come up. Short term missions need to be replaced by long term coaching, investors and experts to help the local economy grow and create sustainable employment opportunities in the long term.

In conclusion, foreign aid although, with good intention hinders the growth of entrepreneurship and job creation in Haiti and throughtout the developing world; therefore create a bigger problem of economic growth. In order to fix this, foreign aid has to collaborate with local entrepreneurs rather than replace them; that means to function as foreign partnership rather than hanging out aid and to support the entrepreneurial space by purchaising local products and establish long term partnerships so that they are helping local entrepreneurs rather than destroying their businesses.

References are found in My book From Aid to Trade. Click here to read the book.