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The Haitian Economic & Academic Liberty (HEAL) Initiative

Contact Info: 
jhelberg@gwu.edu

In Haiti, “January 12th 2010” hardly needs any further specification. The earthquake that devastated the country’s largest cities, including the capital, killed over 250,000 thousands people and left over 1.5 million people homeless (UN News Centre).[i] As people sought to recompose their livelihoods and their communities, homeless families regrouped and rapidly formed what has become known as “tent cities” (Beaubien 2010).[ii] Lacking adequate access to electricity, clean water, shelter, sanitation and food, international humanitarian agencies moved boldly to meet the urgent needs of a overcrowded sporadic communities made significantly more vulnerable to disease outbreaks and natural disasters. By October 2010, development agencies began reporting rising cases of Cholera for the first time in over 100 years (Trevelyan 2010).[iii] As of April 2011, the World Health Organization reported that Cholera had claimed some 4,787 lives and had infected over 274,418 people (PAHO 2011).[iv]  As the international community scrambled to slow the spread of infectious diseases, development agencies have notably achieved several successes in enhancing peoples’ overall wellbeing by improving the level of coordination between different relief and recovery programs providing drinkable water, primary and secondary education, temporary shelter, and the like. However, international reconstruction agencies now face a new challenge – ensuring the sustainability of those improvements.

 

The purpose of this paper is to articulate a triangular private-public-academic partnership model designed to build the capacity of Haitian communities and sustain progressive improvements in peoples’ general wellbeing over time. Demonstrating a firm commitment to comprehensive long-term solutions for the country’s development challenges, the Roosevelt Institute, the State University of Haiti, the Embassy of France to the United States, and the City of Jacmel, have worked together on crafting an experimental pilot program aimed at testing the effectiveness of using a triangular partnership framework between the public, private and academic sectors to help address in a sustainable way the many challenges Jacmel-families face.

 

The study will begin by an introductory discussion on why it would be preferable for development programs to favor improving peoples’ overall wellbeing as their ultimate objective rather than focusing on income as the end-goal. Following sections of this study will outline an in-depth analysis of the experimental “Self-Sustainable Micro-Community” (SSMC) program, constructed based on the triangular sector partnership model, planned to be implemented in the city of Jacmel. The primary objective of this analysis is to demonstrate that the SSMC Program represents an effective tool to help enable the City of Jacmel to incrementally become capable of sustaining improvements in peoples’ wellbeing, as short-term relief-aid programs eventually draw to a close. The reasoning conveyed throughout this study, at the basis of this Program, is that in the particular case of Haiti, creating jobs while rolling-back to the country’s informal economy is central for public institutions to realistically build the capacity to sustain such improvements in wellbeing. 

 

Therefore, while the expected outcomes of this pilot-program are primarily educational and economic, those outcomes are only meant to serve as tools for the broader goal of helping expand the “capabilities” of Jacmel’s people by building the capacity of local public institutions to sustain “wellbeing” improvements recently attained by other humanitarian programs in different spheres of development.

 

 

Wellbeing: A Multidimensional Approach To Poverty

 

Precipitated by the end of the Cold War and the perceived vindication of economic liberalization, the Washington Consensus of the early 1990s asserted the primacy of income in the analysis of poverty and development programs. As a consequence, income has often been regarded as an end-objective of development. In the late 1980s and early 1990s, Amartya Sen shed new light on the view that income is in fact a mere tool facilitating a person’s ability to improve his or her “functionings.”

Revisiting ancient works, Sen aligns his reasoning with Aristotle’s interpretation of happiness in which wealth is referred to as “merely useful and for the sake of something else”. Sen explains: “Economic growth cannot be sensibly treated as an end in itself. Development has to be concerned with enhancing the lives we lead and the freedoms we enjoy” (Sen 1999).[v] In this view Sen draws attention to the notion of “functioning” as being what a person “may value doing or being.” Commodities, Sen explains, are therefore a simple means to expand an individual’s “capability” – referring to the “freedom that a person has in terms of the choice of functionings given his personal functionings (conversion of characteristics into functionings) and his command over commodities,” Sen notes (Sen 1985).[vi] Denouncing the rise of “growth without development” in panoply of developing countries where governments have adopted aggressive growth policies, Sen redirects the utility and purpose of income towards its conversion process and its ability to affect the different dimensions of a person’s wellbeing. For Sen, human wellbeing means “being well,” in the basic sense of being healthy, well nourished, or highly literate and more broadly, having freedom of choice in what one can become and can do (Sen 1985).[vii]

 

Drawing from this definition of wellbeing a definition for multidimensional poverty, Foster described: “the differences between households’ levels of education, health and wealth reflect a broader pattern of variations between different types of deprivations, concurrently experienced at varying levels of intensities by individuals, households or groups of people.” The combined works of Sen and Foster highlight the need for development policies as well as development programs to aim enhancing peoples’ wellbeing, requiring the multidimensional alteration of poverty patterns. Confining development goals to income would therefore be a misinterpretation of how people experience poverty.

 

In his study conducted with the Oxford Poverty and Human Development Initiative (OPHI), Foster outlines three broad areas at the basis of multidimensional poverty: health, education and standard of living (Alkire, and Santos 2010).[viii] Education encompasses the number of years of schooling an individual has successfully completed along with the rate of child enrollment. Health encompasses child mortality and nutrition. Slightly broader, standard of living includes an individual’s access to electricity, sanitation, drinking water, the absence or presence of floor in one’s home, the type of cooking-fuel employed that household, and the assets owned by that household. A key lesson from these studies is that the different dimensions at the root of human development are very much interconnected.

 

The implications of these findings for development programs in Haiti is that the outcome of development programs in one dimension, for instance health, will ultimately affect the outcome of development programs in other dimensions, for instance standard of living. It is on this premise that the SSMC program targets specific desired outcomes related to academic training and employment, while coordinating its activities with other development programs of the region to ensure addressing poverty comprehensively and achieve higher results in every dimension.

 

“Interlinkages” Between Dimensions of Development in Haiti

In Haiti, the interconnectedness between the different dimensions of development is most notably exemplified through the issue of cooking fuel. The country’s overreliance on charcoal and fuelwood has recently been estimated to account for 75% of the country’s energy consumption (Klugman 2010).[ix] Likewise, over 50% of the wood harvested is used as a cooking fuel, mainly for firewood in rural areas and charcoal in urban areas. With 98% of its territory deforested, the challenges confronting Haiti epitomize the interconnectedness between the different dimensions of development – with effects ranging from human security to food security and public health (Roc 2008).[x]

 

With regards to seasonal environmental patterns, trees play a key role in moderating the concentration of water in the soil, reducing the effects of both droughts and floods. This plays a particularly important role in the context of Haiti’s subtropical climate and hurricane-prone geographic location. Given that the roots of trees maintain the soil, Haiti’s absence of forestry has triggered massive environmental disasters over recent years, as the soil grows increasingly eroded – causing massive landslides during torrential rain seasons. "If you remove the trees, you have no buffer. So the water"—and soil—"tends to very quickly move downhill," explained Mark Ashton, a professor at the Yale School of Forestry and Environmental Studies, in article for the National Geographic (Than).[xi] The scale and scope of deforestation in Haiti combined with the country’s steep eroded mountainous slopes raises serious concerns about the potential frequent reoccurrence of landslides and floods like the ones that virtually drowned the village of Mapou beneath 25-feet of muddy waters in 2004, killing over 2,000 people (Weiner).[xii] Although largely self-evident, the economic costs entailed by incidents of this order are significant in the destruction of property and infrastructure, the loss of human lives and the depression of short and long-term economic activities (Webersik , Esteban , and Shibayama 2009).[xiii]  As described in the Human Development Report of 1994: “Human security is not a concern with weapons – it is a concern with human life and dignity” (Kaul 1994).[xiv] Given the substantial “loss of life” caused by deforestation in over time, one could subsequently argue that the absence of trees has made rural communities in Haiti less secure.

In food security and public health, forest-cover is central in slightly different ways. The roots and the leaves of trees provide incredibly rich nutrients, rejuvenating the fertility of the soil over time and making small farms a reliable and sustainable source of food supply.  Adversely, not only does the absence of forestry deprive the soil from essential nutrients, it exposes the top of the land to erosive factors like wind and water. In Haiti, as in many other developing countries, this has resulted in the widespread decrease of long-term fertility – and thus productive capacity – of the soil. This reduced productive capacity translates directly in an issue of food security as millions of rural inhabitants struggle to build a reliable stream of food supply. Moreover, the economic losses of incidents associated with extreme levels of deforestation – such as the 2004 mudslide in Mapou – can easily be noted by the fact that the land on which farmers base their subsistence livelihood is devastated, the crops on which they seasonally rely on are lost, and the labor they employ to cultivate the land is gone.

Finally, biomass-based cooking fuels offer substantial effects in the realms of public health. With respect to deforestation, the trees’ moderating effect on the soil’s water concentration and therefore in reducing the severity of droughts and floods is as beneficial for food security – in preserving the crops – as it is for public health. Indeed, droughts and particularly floods are extremely conducive to the spread of vector-borne diseases like Malaria, Dengue Fever (mosquito-borne diseases), leptospirosis (rodent carried disease), Cholera and Diarrhea (water-borne). The absence of trees also translates into an absence of natural habitat for mosquito-predators – like bats – entailing substantial increases of mosquito populations over time, thereby increasing the risks of outbreaks in vector-born diseases (Epstein).[xv] The tragic recent spread of Cholera in Haiti sheds new light on the importance of these issues and the need to address the incentives in people’s daily lives that lead them to deforest their land. As discussed earlier, the largest contributor to deforestation in Haiti is by far people’s usage of wood and charcoal as primary cooking-fuels (Smucker 2007).[xvi]

More directly, the exposure of women and children to highly toxic pollutants emitted by the combustion of solid cooking fuels such as wood – emitting carbon monoxide, particles, and carcinogens – represents a major health threat in millions of households in Haiti and the developing world. Indoor air pollution is estimated to account for 1.5 million deaths annually and shortening the average life expectancy in Haiti by approximately 6.6 years. “This issue is inextricably linked to poverty, as it is primarily the poor who rely on solid fuels and inefficient stoves, and many are trapped in this situation” (Rehfuess 2006).[xvii] The relationship between a person’s health and productivity has substantial effects on employment and wages and therefore requires close attention when weighing the effectiveness of strategies unidimensionally focused on income (Strauss, and Thomas 1998).[xviii] “These interlinkages,” Sen explained, “are particularly important to seize in considering development policies” (Sen 1999)[xix] A balance therefore should therefore be maintained between the multitude of different approaches to poverty.

 

Up until now, international relief efforts have largely been centered on non-income dimensions of poverty: health, shelter, water, food, and primary and secondary schooling. For instance, food rations were provided to some 4.3 million people, emergency shelter was provided to 1.5 million people, basic health services was provided to approximately 90% of the displaced population in Port-Au-Prince, over one million children benefited from provision of basic learning materials, temporary learning spaces, and school tents, and over 8,400 new teachers were trained (Office of the Haiti Special Coordinator 2011).[xx] These are all remarkable achievements, particularly considering the difficult environment in which they were carried out. Nonetheless, if programs building Haiti’s formal economy are not implemented relatively soon, the small country risks seeing its reconstruction funding slowly dilapidated into short-term “hand-out” programs without the necessary – and costly – investments in place to accelerate the creation of new employment opportunities. A failure to identify and place key revenue-generating investments throughout Haiti’s economy would therefore jeopardize the sustainability of these improvements in peoples’ wellbeing as Haitians would remain overly dependant on charity donations and foreign aid funding for most of their basic services. Indeed, before the earthquake foreign aid – which for the most part represents unproductive economic activities – accounted for over 80% of Haiti’s Gross Domestic Product (GDP) (Artwood 2010).[xxi] This simply underscores the need to make the country’s economy more productive, more inclusive and less informal.

 

The Self-Sustainable Micro-Community Pilot Program

and the

Triangular Sector Partnership

 

Since the International Donors’ Conference convened at the United Nations on March 31st 2010, Haiti was pledged about $11 billion (USD) over a 10-year period in aid for its reconstruction. While this amount seems large, it averages to about merely $100 per person per year. Using these funds efficiently is therefore essential for Haiti to “build back better,” as called upon Dr. Paul Farmer (Farmer 2010).[xxii]

Following paragraphs highlight the importance for international reconstruction agencies to place revenue-generating investments while current humanitarian relief programs in food, water, and health are still in place. This section of the study will begin by a brief outline of the SSMC Program planned for the city of Jacmel, followed by an overview of how the Triangular Sector Partnership Model (TSPM) applies in reality, and an examination of the Programs’ effects on education and employment.

 

SSMC Overview

TSP can best be described as a coordinated package of investments in (i) a new doctoral school within the State University of Haiti, (ii) an E-Learning Center with intensive vocational training programs in key industries designated as priority sectors by the local authorities of Jacmel, (iii) an integrated supply chain for the production of mango juice, (iv) 15 commercial-space units, (v) 1 new hotel, and (6) 150 new permanent housing accommodations. This reflects the twofold capacity-building objective of the Program in developing local academic expertise and expanding economic activities of the formal economy. 

 

The first and second components of the investment package represent the educational-side of the Program. The third, fourth and fifth are primarily employment-oriented programs, although each has a variety of positive effects on peoples’ overall wellbeing. As suggested by the distinction between the first and second components, the educational programs of SSMC are themselves divided between technical vocational training programs provided through the E-Learning Center, and advanced high-skilled research programs provided through the new doctoral school.

 

For the purpose of discussing the effects of enhancing the level coordination in the labor market, following paragraphs will mainly focus on analyzing first three components of the Program.

 

Education: The State University of Haiti Doctoral School

The inclusion of a new doctoral school within the State University of Haiti in the first phase of this program has easily caused many to stress the need for primary and secondary education along with additional institutional capacity-building programs. However, such criticism neglects the simple fact that international humanitarian agencies have already provided basic learning materials and temporary school tents to the scale of over 1 million children (Office of the Haiti Special Coordinator 2011).[xxiii] No organization or policymaker disagrees with the fact that what is now needed is the reconstruction of adequate infrastructure to build a permanent socio-economic landscape for cities and communities across Haiti (Bellerive 2010).[xxiv]

 

This process, however, will require – as it already has – a vast number of experts in civil engineering, urban planning, and the like. While every development programs in Haiti focuses on either primary, secondary, or general university-level education, Haiti lacks a single credible doctoral program. As a consequence, international, national and local reconstruction agents have no central entity where they can turn to request research on a given project in order to enhance their decision-making capability. Not only does this strip Haiti from critical brain-power it now has an unprecedented opportunity to develop, it creates enormous inefficiencies as companies, NGOs, and public agencies each send their own experts from overseas conduct the necessary studies, proliferating duplications of activities. The “cacophony of feel-good flag-draped projects that last only as long as the money does,” as explained by the president of the World Bank, Robert Zoellick, “have proven a vastly inadequate substitute for a coherent development strategy” (Zoellick 2009).[xxv] 

 

The establishment of a new doctoral school within the State University of Haiti – Haiti’s largest and only public university – would therefore represent a significant achievement in terms of Haiti’s expertise independence. Besides the fact that it would be Haiti’s first sophisticated doctoral program, it would provide the local authorities of Jacmel, along with national reconstruction agencies, with a centralized research institution capable of conducting sophisticated studies and assessments critical to the coherence of Haiti’s reconstruction process.

 

From a capacity-building viewpoint, the doctoral school would create new sources of revenue for the State University through private advanced research services. This gain in skill-power gives the State University of Haiti (SUH) a stock of talent and expertise to ensure the perpetual training of new professors teaching regular undergraduate courses.  Likewise, the gain in revenue would allow SHU to self-fund the recovery of existing academic programs in the short-term and create new ones in the future.

 

Supported by assistance from the French and American governments and their respective academic communities, the doctoral school will in the short-term be specialized in oceanography, agricultural sciences, efficient energy-systems, and tourism – four areas designated as priority sectors for the economic development of the Southeast Department.

 

Education: Intensive Online Vocational Training Programs

The second phase provides the establishment of a new “E-Learning Center” or “Distance-Learning Center” with 100 computers online intensive vocational training programs accessible to individuals from all backgrounds and in specific areas with potential for job-creation. It is important to note that a distance-learning center of 100 computers has the capacity to train 1,890 students on an annual basis, providing 75 minute lectures to 630 students, 6-days days a week per 84-day period. The primary objective of these practical vocational programs is to encourage a rapid increase in the productivity of the local labor force in industries where labor-demand is the highest – currently in the process of being determined.

 

By connecting government public policy with academic expertise and private sector activities, TSPM is innovative in the way it increases the level of efficiency in the labor market as workers receive a type of training that directly meets the needs of private companies at all levels of the supply-chain. In effect, TSPM allows improving the coordination between both, the supply and demand sides of the labor market (Autiero 2008).[xxvi] This measure is particularly effective in a setting like Haiti, considering that nearly 70% of the workforce was believed to be unemployed a few short months before the earthquake (Flintoff 2009).[xxvii] Moreover, the effectiveness of coordinating the supply and demand sides of the labor market is all the more confirmed by a study released by FAFO in 2009, revealing that the unemployment rate for participants of vocational training programs was exactly half of those graduating from high school with the general “Rheto” diploma – both respectively at 27% and 54%. While general high-school education programs should in no event be replaced or substituted, these figures simply show that intensive vocational training programs are an effective tool to fight the unemployment the staggering unemployment problem, particularly for the nearly 40% of individuals above the age of 20 years with no or incomplete primary education (Lunde 2009).[xxviii]

 

The doctoral school and the intensive vocational training programs both reflect TSP’s emphasis on practical modalities of academic programs as both represent critical segments of the supply-chain production process. Indeed, while the doctoral school provides high-end expertise necessary for a planning and management, the intensive vocational training programs support the base of the production process. The combination of these two will help reduce the cost of private companies to invest in the Jacmel area (OECD 2002).[xxix] Having examined the impacts of SSMC’s academic programs, following paragraphs will bring further emphasis to the economic effects of the project.

 

 

Economic Effects of Fruit-Juice Supply-Chain: Increased Output in Rural Area

 

Establishing a new supply chain in the periphery of Jacmel for the production of fruit juice will be significant tool to support and sustain the economic revitalization of the city’s surrounding rural areas. As shown in Figure 1.1, an estimated 35% to 55% of all fruits grown by farmers in Haiti are estimated to rot beneath the heat of the sun within days after the two-week harvesting period. The primary factor causing this waste of nearly half of fruit harvests is overwhelmingly the absence of any nearby facility where farmers can store and conserve their fruit (Capecchi 2005).[xxx]

 

 

 

 

 

 

 

Figure 1.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Lovo, Stefania. "Liquidity constraints and farm household technical efficiency. Evidence from South Africa.University of Sussex. UK. (03 Jun 2010): Print.

 

Not only has this amplified already dire conditions of food-insecurity throughout rural areas, but it has also contributed to maintaining rural farmers in a mode of subsistence livelihood, unable to save or accumulate revenue from 35% to 55% of their output. Allowing them to immediately store and sell their crops to a fruit-juice processing plant will subsequently make them more efficient and thus increase their production possibilities frontier.

 

The inclusion of a “fruit-juice factory,” administered as a cooperative, is highly reflective of the triangular partnership model, considering that a close collaboration between the public, private and academic sectors was necessary to conceive such an operation successfully. Furthermore, being coordinated with other reconstruction programs of the region, the construction of this new supply chain would be particularly effective as numerous international reconstruction agencies, including the Clinton Bush Fund, the United States Agency for International Development (USAID), and The Coca Cola Company, have already disbursed sizable resources to help rural mango-farmers of the Jacmel area become more productive. Supporting those efforts with a local fruit-juice supply chain would help build on top on these efforts to eliminate chronic causes of waste and seasonally low levels of output.

 

 

 

 

Figure 1.2, illustrated below, displays the different components of the supply chain included in the SSMC Program.

Figure 1.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Masini, G. "Supply Chain Planning Optimization in the Fruit Industry." Universidad Nacional del Comahue Buenos Aires. (2003): Print.

 

As represented on the above schematic outline, the supply chain includes a refrigeration chamber to preserve ripe fruits over extended periods of time. Farmers will have the choice of either selling their produce directly onto fruit-markets or having them processed into juice to be sold later on juice-markets.

 

Lastly, giving rural farmers incentives to cultivate indigenous fruit-crops, such as mangos or bananas, would simultaneously translate in the commercialization of reforestation along the hillsides and rural communities surrounding Jacmel.  As fruit become scalable and exportable commodities, local farmers will have a growing incentive to increase the quantity of fruit they produce to generate higher levels of income, by planting more trees on their property.

 

While it is difficult to anticipate at this stage the individual increases in the incomes of urban workers employed to work in the plants of the supply chain, we can estimate relatively easily the overall earnings from the export-sales of fruit and fruit juice. This estimate – represented below – is based on the average quantity of mangos currently produced in the region and the current market price paid by consumers (Djems 2006).[xxxi]

 

 

 

 

Figure 1.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: The Coca-Cola Company . Haiti Hope Project Fact Sheet. Atlanta, GA: , 31 Mar 2010. Print.

 

Firgure1.3 reflects the anticipated pattern in the production of mangos with the introduction of a fruit-juice supply chain in the periphery of Jacmel. Like many other types of fruit, mangos are harvested on a biannual basis. The figure above therefore covers a period of 30 months. The values for the first harvest are based on an average of 50 mangos per mango-tree with about 10,000 mango-trees surrounding the Jacmel area. Averaging values outlined in a report by the Coca-Cola Company’s “Haiti Hope Project,” the unitary price paid by consumers for one 450ml bottle of mango-juice is $2.69. In fruit-markets, the average price paid by consumers for one mango “francisque” is $3.59. It is important to note that the mango-juice industry is far profitable because 450ml bottles of concentrated juice can be produced with about half of one mango (The Coca-Cola Company 2010).[xxxii]

 

As represented on the graph by the distribution between the shades of light and dark-green, the first harvest is expected to be primarily directed at exports towards fruit-markets. As the processing plant for the production of juice becomes operational, the second harvest is expected to be characterized by a sharp decline in exports towards fruit-markets (dark green) and a substantial increase in exports towards juice markets (light green).  Given that juice-markets are more profitable than fruit-markets, the shift from one to the other during the second Harvest resulted in an overall increase in earnings for Jacmel’s “fruit industry” (USAID 2010).[xxxiii] Although this trend carries through the third harvest, the proportion of mangos sold to fruit-markets is expected to stabilize throughout the fourth and fifth harvest as farmers plant and add new trees to the current existing supply-stock in an effort to earn higher revenues by increasing their production. The expected total earnings from fruit-juice supply-chain amounts to $1,615,000 (USD) in the Harvest 1, $1,794,000 (USD) in Harvest 2, $2 098 400 (USD) in Harvest 3, $2,152,000 in Harvest 4, and $2,220,375 (USD) in Harvest 5. While the specific numbers of this estimate will likely differ from those achieved throughout the realization of the program as unaccounted variables may take effect, the overall trend will likely remain the same because of the time-lag between the construction processes of the different facilities in the supply chain. 

 

By contrast, the expected annual revenue of the Hotel is far simpler to estimate. Taking into account the fact that Jacmel currently has only two functional hotel-accommodations, each of which are priced at $100 (USD) per night per room, the hotel planned to be built within the SSMC Program is anticipated to generate a total of $2 190 000 (USD) annually simply from room-fees. This figure does not include additional revenues from the hotel restaurant.

 

The simple combination of the hotel and the fruit-juice supply-chain are subsequently expected to contribute an influx of $5,599,000 (USD) in revenue to the city of Jacmel during the first year of operation. This revenue will be splintered amongst the incomes of new jobs encompassing the operations of the processing plants, the servicing of the hotel, the transportation of fruit-crops from rural farms to the urban supply chain, and the like. Applying a generic 30% tax on the overall total earnings allows us to estimate the new revenue, of $1,679,700 (USD), gained by public institutions through the SSMC Program. One should to take into account that these figures are somewhat undervalued as they exclude thousands of direct and indirect jobs created throughout the construction process of the project. These figures also omit the value-added by the replication of Jacmel’s ancestral architectural-style throughout the design of every component of the project.  By stimulating the rise of a “micro-middle class” in Jacmel, the economic activities of the SSMC Program help trigger a virtuous circle where improvements peoples’ standards of living become as much an outcome is they are an input to growth (Birdsall 2010).[xxxiv]

 

Self-Sustaining & Inclusive Economic Growth

 

For the same reason that higher levels of revenue could enable public institutions to sustain improvements in peoples’ wellbeing, encouraging the burgeoning of a “micro middle-class” in Jacmel could equally play a critical role in extending improvements in the wellbeing of non-beneficiaries of the Program. Birdsall among others have highlighted that countries where the majority of people benefit from economic growth are likely to be more economically and politically stable and sustainable (Birdsall 2007).[xxxv] In Haiti the issue of income inequality or “polarization” has deteriorated to alarming proportions since the late 1970s. In 2007, 68% of the country’s total national income went to the wealthiest 20%, while 78% of all Haitians survived on $2 (USD) a day or less (Maguire 2010).[xxxvi] In “The End of Poverty,” Jeffrey Sachs has equated factory jobs in Bangladesh with the first rung on a ladder toward greater opportunity and development (Sachs 2005).[xxxvii] In the context of Jacmel, the SSMC Program will provide thousands of new opportunities, and enable families to earn a permanent income sufficient enough for them to accumulate capital and enhance their economic security from potential future periods of temporary unemployment.

 

In the context of Haiti, economic security is particularly instrumental in building sustainable improvements in households’ wellbeing for the simple reason that it makes them less vulnerable to patronage or clientist political pressures – both of which have haunted Haitian communities for decades. Additionally, greater economic security has equally proven to embolden peoples’ readiness to act politically to demand the economic policies that protect private property and encourage private investment. Mirroring Birdsall’s definition of “middle class growth,” the SSMC Program aims at increasing the size and economic power of a small middle class in Jacmel, by targeting investments driving “underlying growth” and generating new wealth and productivity gains in private activities. This type of economic growth, Birsdall argues, is not only self-sustaining but also transformative (Birdsall 2010).[xxxviii]

 

Making the Urban Area of Jacmel more Sustainable for the Realities of Current Demographic and Economic Trends

 

When discussing the issue of economic sustainability in Haiti it is difficult to overlook the longstanding imbalances between rural and urban areas. As we have seen in previous parts of this study, one of the primary advantages of the SSMC Program is that it stimulates the economic revitalization of rural farming communities, reducing the economic necessity for people to migrate towards the urban area of Jacmel. Simultaneously, the SSMC Program will make the urban area of Jacmel more sustainable by decentralizing the city’s center through a new “urban quarter” built on the city’s periphery, allowing to account for the realities of current demographic and economic patterns.

 

The Latin American and Caribbean regions account for the most urbanized developing regions in the world. At the beginning of the twenty-first century, three out of every four inhabitants were living in settlements of more than 2,000 inhabitants and more than half of the population was living in settlements with more than 5,000 inhabitants. Recent projections indicate that in the year 2030, more than 600 million of the 725 million inhabitants of the region will be living in urban areas (Rojas 2010).[xxxix]

Haiti has not been exception to this trend. In the late 1970s, Haiti’s rural to urban demographic ratio was 80% to 20%. Today it has been estimated at 55% to 45% (Maguire 2010).[xl] Over the past three decades, Haiti’s urban population has increased from 1.2 million people in 1982 to over 3.2 million in 2002 with Port-Au-Prince accounting for over two-thirds of the growth. Still shortly before the earthquake, the country’s urban population was growing more than twice as fast as the national average – with annual averages of, respectively, 5% and 2.2% (Verner 2006).[xli]

 

To date, approximately 80% of gross domestic product (GDP) growth in the Caribbean is generated in urban areas, with a distinctly positive correlation between urbanization and per capita income (Dobbs, et al. 2011).[xlii] These trends observed in most regions of the world have in great part resulted from market forces that generate economies of agglomeration, favoring specialization and raising the productivity of urban enterprises and workers over time. With population growth rates in many developing countries nearly doubling that of GDP, countless cities have experienced the formation of vast informal settlements – commonly referred to as shantytowns or slums. Shantytowns are frequently characterized by a double paradigm: (i) a growing concentration of income among entrepreneurs and workers linked to the modern and formal segments of the urban economy, and (ii) a simultaneous expansion of the informal economy with temporary informal jobs linked to services and the production of simple-to-make goods that are not tradable in international markets (Rojas 2010). [xliii]

 

Haiti’s urban centers suffer from this double paradigm very intensely. The emergence of large slums in Haiti can therefore be explained by the massive migration of rural inhabitants to cities where economic growth was overwhelmingly incapable of absorbing and accommodating large volumes of new settlers – a phenomenon described as “premature urbanization.”[xliv]

 

Addressing the challenge of informal urbanization at its root, SSMC will create strong economic and educational incentives for homeless families and individuals to willingly relocate at the city’s periphery, draining the demographic pressure from many of Jacmel’s urban informal settlements – commonly known as “tent-cities.” Relocating homeless families from overcrowded and sporadic “tent cities” will equally allow reducing their exposure and vulnerability to disease outbreaks and natural hazards – particularly hurricanes and earthquakes. On a “wellbeing” standpoint, the SSMC Program promotes the creation of new employment opportunities in the formal economy. This further improves the overall wellbeing of families given that informal-economy jobs do not enjoy the measure of protection afforded by the formal sector in terms of job security and decent working conditions (Becker 2004).[xlv]

The establishment of a new “urban quarter” on the city’s periphery has numerous other important benefits. First and most importantly, it is a more realistic approach than other programs aiming to create an entirely new community onto itself. The reason for which expanding and upgrading the current urban area of Jacmel is more realistic stems at a basic level from peoples’ personal preferences. As in most other regions of the world, Haiti’s youth are notably adverse to the idea of returning or relocating to marginal rural areas. At the heart of the social-media revolution, Haiti’s youth, as in most other countries, wants to be as connected in cyberspace as in reality – a “want” that people have only truly satisfied in an urban area (Dobbs, et al. 2011).[xlvi] Jacmel’s demographic decentralization towards its periphery is in turn made possible by the decentralization of services included within the SSMC Program. At the national level, this will help slow the migration-rush towards Port-Au-Prince driven over recent decades by the lack of services and employment opportunities outside the capital. On the eve of the earthquake, Port-Au-Prince accounted for over 65% of the country’s total (formal) economic activity and 85% of its fiscal revenue (Maguire 2011).[xlvii] On a more technical level, replicating an urban landscape facilitates the implementation of public transportation and efficient energy systems, thus indirectly helping address many of the wellbeing challenges – like those related to cooking-fuel – discussed in the first part of the study (Kamal-Chaoui, Robert 2009). [xlviii]

 

Urban settings facilitate attracting Foreign Direct Investments (FDIs) over time by offering key benefits for the development of companies. Indeed, cities provide cost-advantages to producers and consumers through “agglomeration economies.” Indeed, firms often prefer to be located where they can learn from other firms doing similar work. Learning occurs through both formal relationships, such as joint ventures, and informal ones, such as from tips learned through personal relationships and contact with other people. These agglomeration economies are also referred to as “spillovers” and constitute part of the benefits of what Alfred Marshall described as “industrial districts” (Marshall 1920).[xlix] In this respect, the SSMC Program provides a certain degree of “active collective efficiency,” as described by Hubert Schmitz, by integrating academic training programs of all levels of the production process with economic activities (Schmitz 1999).[l] 

 

The effectiveness of this approach was indirectly noted by Dorothy McCormick, as she concluded that “groundwork clusters prepare the way; industrializing clusters begin the process of specializing, differentiation, and technological development; and complex industrial clusters produce competitively for wider markets.”[li] Finally, establishing an urban strategy for the decentralization of Jacmel will facilitate attracting FDIs as studies have shown that productivity rises with city size.[lii] Embracing an urban landscape is therefore more effective to enhance Jacmel’s long-term desirability as an investment destination.

 

When weighing the cost of forgone investment in Jacmel – and Haiti as a whole – it is important to place the question in its regional context. The table below allows comparing Haiti’s performance relative to that of its neighbors.

 

Figure 1.4

 

Haiti

Dominican Republic

Caribbean

FDI Inward Flows (in millions of dollars)

38

2 158

44 157

Inward FDI Flows (as % of Gross Fixed Capital Formation)

4.00

31.5

166.8

FDI: Inward Stocks (in millions of dollars)

446

13 303

319 980

FDI: Inward Stocks (as % of GDP)

6.3

28.5

187.5

Inward FDI Performance Ranking

126

37

N/A

Population (in millions of people)

9.719

9.956

36.314

Source: World Bank; Dated 2009.

 

In Figure 1.4, we can observe striking differences in the distribution of Foreign Direct Investments (FDIs) between the neighboring countries of the “Isla Hisponola. While the Dominican Republic counted $13.303 billion (USD) in inward stocks of FDIs in 2009, Haiti held only $446 million (USD) the same year. Analogously, in July 2010 the Oxford and Human Development Initiative (OPHI) estimated roughly 10% of the Dominican Republic’s population as being multidmensionally poor. By contrast, OPHI counted over 50% of Haiti’s population as living in multidimensional poverty.[liii]

 

While several factors help explain the gap between the levels of multidimensional poverty observed in Haiti and the Dominican Republic, the Dominican Republic’s distinct outperformance in attracting FDIs has undeniably contributed substantial investments – worth over 28% over the country’s total GDP – in infrastructure, jobs, and subsequently income. For instance, in 2005, tourism alone accounted for over 35% of the country’s exports. Increasing more than tenfold from $173 million (USD) in 1980 to over $2 billion (USD) by 2000, the tourism industry has become the single biggest revenue earner of the country’s economy (UNCTD 2007).[liv] Accommodating foreign investments has enabled the Dominican Republic’s governmental institutions to earn over $1.4 billion (USD) in additional tax-revenue in 2010, accounting for 31% of the country’s total tax-receipts (Mañón 2010).[lv] As a study by the United Nations shows, foreign investments in tourism have greatly contributed to the introduction of new technologies and skills in the Dominican Republic’s economy, encompassing advanced management, environmental and energy systems. Not only have these entailed notable improvements in the productivity and sustainability of the economy but it has also lead to a broad variety of beneficial spillovers, including the diffusion of knowledge and skills through staff movement to local firms. In 2007, tourism supported 18.4% of total employment in the Dominican Republic (UNCTD 2007).[lvi] These figures represent compelling evidence of the central role that foreign direct investments played in stimulating job-creation and increasing the government’s tax-receipts. By investing in technical expertise, a hotel, a fruit-juice supply-chain, 15 commercial-space units, and 150 new homes, the City of Jacmel has the potential to jump-start the expansion of private sector activities, while developing a local industry (fruit-juice) with a high potential for growth.

 

 

Conclusion

 

In closing, international reconstruction agencies currently have an unprecedented opportunity to build Haiti’s capacity to sustain progressive improvements in peoples’ wellbeing. Given the incredible weakness of Haitian public institutions, efforts to build the long-term sustainability of basic “public services” – currently overwhelming provided by NGOs – should therefore aggressively aim at creating new revenue streams for the public sector. This paper has articulated an experimental Self-Sustainable Micro-Community Program planned to be implemented in the City of Jacmel characterized by a triangular partnership between the public, private and academic sectors. This Program is constructed like investment package aimed at creating new permanent employment opportunities relatively quickly. Stimulating job-creation is subsequently placed as a short-term objective to rollback the country’s dominant informal economy in order to advance the Project’s broader long-term goal, strengthening public institutions through growing revenues from tax-receipts.

 

In order to increase the likelihood of success in achieving these short and long-term objectives, the SSMC program is implemented in partnership between agencies from the three key sectors previously mentioned. The effectiveness of adopting this approach stems from the fact it allows to better coordinate both, the supply and demand sides of the labor market. In effect, this translates to ensuring that the type of technical training provided to the local workforce will give way to employment opportunities. Working with the private and public sectors is therefore necessary to determine the types of skills required for the implementation of priority reconstruction projects, while working with the academic is necessary to ensure the inclusion of the local workforce throughout the reconstruction process – as opposed to shipping prebuilt material from abroad. Embracing Jacmel’s urban and Creole landscape will equally help make the City more sustainable and more livable for its growing youth population. Supporting efforts by the United Nations Educational, Scientific, and Cultural Organization to restore Jacmel’s architectural beauty will help accelerate ongoing efforts aimed at registering the City as a “World Heritage Site.” Such efforts will only further facilitate the city’s ability to attract FDIs – increasing the positive effects of the SSMC Program from the construction of an integrated supply-chain for the production of fruit-juice along with a new hotel – the two components discussed most extensively throughout this paper.

 

The way in which the SSMC Program embraces Jacmel’s urban landscape should be regarded as a “happy compromise” between the three key types of agencies involved in the reconsutrction process. While expanding the City’s urban setting on its current periphery, the Project improves the living conditions of urban inhabitants by providing new housing accommodations, employment opportunities and technical training programs. Similarly, by including the fruit-juice supply chain, the Project equally allows revitalizing the economy of surrounding rural areas as farmers become able to store and sell what they produce without substantial seasonal waste.

 

Although the SSMC Program is fairly well rounded in the different sectors and industries it encompasses, it can ultimately only truly be successful if simultaneous efforts by international reconstructions agencies succeed at ridding Haitian public institutions from chronic problems of corruption . Even though corruption has been most prevalent in Port-Au-Prince, it will eventually be up to Jacmel’s institutions to adopt effective development policies and allocate the appropriate level of resources for basic services. Therefore, while the SSMC Program will likely result in notable successes in creating new employment opportunities and subsequent public revenue streams, it cannot be regarded as sufficient onto itself to achieve self-sustainable improvements in peoples’ overall wellbeing as it will ultimately depend on the commitment of its beneficiaries.

 



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[ii] Beaubien, Jason. "Amid Slow Recovery, Haiti's Tent Cities Remain." News Publication Radio (NPR) (22 Sept 2010): Web. 19 Apr 2011. <http://www.npr.org/templates/story/story.php?storyId=130047763>.

[iii] Trevelyan, Laura. "Cholera In Haiti 'Stabalising'." British Broadcasting Corporation (BBC) (25 Oct 2010): n. pag. Web. 19 Apr 2011. <http://www.bbc.co.uk/news/world-latin-america-11617094>.

[iv] "Atlas of Cholera Outbreak." Pan American Health Organization (PAHO). World Health Organization, 04 Apr 2011. Web. 19 Apr 2011. <http://new.paho.org/hq/images/Atlas_IHR/CholeraHispaniola/atlas.html >.

[v] “Aristotle: Nicomachean Ethics” – Aristotle. Translated by W.D. Ross. Book I, Chapter 5: Happiness. / Amartya Sen, Development as Freedom

Sen, Amartya. Development as Freedom. New York, NY: Knof, 1999. 14. Print.

[vi] Sen, Amartya. Commodities And Capabilities. Amsterdam: Elsevier, 1985. pp 25-26. Print.

[vii] Sen, Amartya. Commodities And Capabilities. Amsterdam: Elsevier, 1985. pp 10-11. Print.

[viii] Alkire, Sabina, and Emma Santos. "Multidimensional Poverty Index." Oxford Poverty & Human Development Intiative. (Jul 2010): p.2. Print.

[ix] Klugman, Jeni. United Nations. Real Wealth of Nations: Pathways to Human Development. New York, NY: Palgrave Mcmillan, 2010. Print.

[x] Roc, Nancy. "Haiti-Environment: from the « Pearl of the Antilles » to Desolation." Fundación para las Relaciones Internacionales y el Diálogo Exterior. (Sept 2008): Print.

 

[xi] Than, Ker. " Haiti Earthquake, Deforestation Heighten Landslide Risk." National Geographic (14 Jan 2010): n. pag. Web. 19 Apr 2011. <http://news.nationalgeographic.com/news/2010/01/100114-haiti-earthquake-landslides/>.

[xii] Weiner, Tim. "Floods Bring More Suffering to a Battered Haitian Town." New York Times (29 May 2004): n. pag. Web. 19 Apr 2011. <http://www.nytimes.com/2004/05/29/world/floods-bring-more-suffering-to-a-battered-haitian-town.html>.

[xiii] Webersik , FirstChristian, Miguel Esteban , and Tomoya Shibayama. "Climate Change and Human Security: Measuring the Economic Loss Due to Future Increase in Tropical Cyclones." American Political Science Association. (2009): Print.

 

[xiv] Kaul, Inge. United Nations. Human Development Report. New York: Oxford University Press, 1994. Print.

[xv] Epstein, Paul. "Climate Change Futures: Health, Ecological and Economic Dimensions." Harvard Medical School, Center for Health and the Global Environment . (2006): Print.

[xvi] Smucker, Glenn. United States. Environmental Vulnerability in Haiti. Washington, DC: Chemonics International Inc., Apr 2007. Print.

[xvii] Rehfuess, Eva. Fuel For Life: Household Energy & Health. Paris, France: WHO Press, 2006. Print.

[xviii] Strauss, John, and Duncan Thomas. "Health, Nutrition and Economic Development." Journal of Economic Literature. XXXVI. (Jun 1998): pp.766-817. Print.

[xix] Sen, Amartya. Development as Freedom. New York, NY: Knof, 1999. p. 40. Print.

[xx] United States. Office of the Haiti Special Coordinator: Haiti One Year Later. Washington, DC: Haiti Special Coordinator: Releases, 20 Jan 2011. Web. 19 Apr 2011. <http://www.state.gov/s/hsc/rls/154255.htm>.

[xxi] Artwood, Brian. American Public MediaIntervew. 13 Jan 2010. United States Agency for Interantional Development (USAID). Print. 19 Apr 2011. <http://marketplace.publicradio.org/display/web/2010/01/13/pm-haiti-q/>.

[xxii] Farmer, Paul. Brown University, 08 Oct 2010. Interview. 04 Oct 2010. Film. 19 Apr 2011. <http://www.youtube.com/watch?v=9Mtzv-2UlC4>.

[xxiii] United States. Office of the Haiti Special Coordinator: Haiti One Year Later. Washington, DC: Haiti Special Coordinator: Releases, 20 Jan 2011. Web. 19 Apr 2011. <http://www.state.gov/s/hsc/rls/154255.htm>.

[xxiv] Bellerive, Jean Max. Government of Haiti. Post Disaster Needs Assessment (PDNA). Port-Au-Prince: Mar 2010. Print.

[xxv] Robert Zoellick, “Securing Development” (remarks at the United States Institute of Peace conference titled “Passing the Baton”, Washington, DC January 2009).

[xxvi] Autiero, Giuseppina. "Labor Market Coordination Systems and Unemployment Performance in Some OECD Countries." Journal of Socio-Economics. 37.5 (2008): Print.

[xxvii] Flintoff, Corey. "In Haiti, A Low-Wage Job Is Better Than None." National Public Radio (NPR) (14 Jun 2009): Web. 20 Apr 2011. <http://www.npr.org/templates/story/story.php?storyId=104403034>.

[xxviii] Lunde, Henriette. "Haiti Youth Survey 2009." Norwegian Confederation of Trade Unions (FAFO). (2009): Print.

[xxix] Organisation for Economic Co-operation and Development (OECD). Foreign Direct Investment For Development. Paris, France: OECD Publications Service, 2002. Print.

[xxx] Capecchi, Christina. "Engineer turns wasted fruit into hunger fighter for Haiti." Catholic Spirit. (23 Jun 2005): pp. 6A-7A. Print.

[xxxi] Djems, Olivier. "Haïti parmi les dix pays meilleurs producteurs mondiaux de la mangue." Organisation Internationale de la Francophonie. (25 Apr 2006): Print.

[xxxii] The Coca-Cola Company . Haiti Hope Project Fact Sheet. Atlanta, GA: , 31 Mar 2010. Print.

[xxxiii] Harrell, Angela. "The Coca-Cola Company's Haiti Hope Project Momentum Continues With Investment From United States Government." United States Agency for International Development (USAID) (18 Aug 2010): n. pag. Web. 20 Apr 2011. <http://www.usaid.gov/press/releases/2010/pr100818.html>.

[xxxiv] Birdsall, Nancy. "The Indispensable Middle Class." Center for Global Development. (Mar 2010): pp.2. Print.

[xxxv] Birdsall, Nancy. "Do No Harm: Aid Weak Institutions, and the Missing Middle in Africa." Center for Global Development. (Mar 2007): Print.

[xxxvi] Maguire, Robert. "Reconstructing to Rebalance Haiti After the Earthquake." United States Peace Institute. (4 Feb 2010): pp. 5-14. Print.

[xxxvii] Sachs, Jeffrey. The End of Poverty. New York: Penguin Press , 2005. Print.

[xxxviii] Birdsall, Nancy. "The Indispensable Middle Class." Center for Global Development. (Mar 2010): Print.

[xxxix] Rojas, Eduardo. Building Cities: Neighborhood Upgrading and the Quality of Life. New York: Inter-American Development Bank (IADB), 2010. Print.

[xl] Maguire, Robert. "Reconstructing to Rebalance Haiti After the Earthquake." United States Peace Institute. (4 Feb 2010): pp. 5-14. Print.

[xli] Verner, Dorte. "Social Resilience and State Fragility in Haiti: Country Social Analysis." World Bank Group. (27 Apr 2006): Print.

[xlii] Dobbs, Richard, Sven Smit, Jaana Remes, James Manyika, and Charles Roxburgh. "Ubran World: Mapping the Economic Power of Cities." McKinsey Global Institute. (Mar 2011): Print.

[xliii] Rojas, Eduardo. Building Cities: Neighborhood Upgrading and the Quality of Life. New York: Inter-American Development Bank (IADB), 2010. Print.

[xliv] Verner, Dorte. "Social Resilience and State Fragility in Haiti: Country Social Analysis." World Bank Group. (27 Apr 2006): Print.

[xlv] Kristina, Becker. "The Informal Economy." World Bank Group. (Mar 2004): Print.

[xlvi] Dobbs, Richard, Sven Smit, Jaana Remes, James Manyika, and Charles Roxburgh. "Ubran World: Mapping the Economic Power of Cities." McKinsey Global Institute. (Mar 2011): Print.

[xlvii] Maguire, Robert. "Rebuild Haiti, Not Just Its Capital." Current History. (Feb 2011): Print.

[xlviii] Kamal-Chaoui, Lamia, and Alexis Robert. "Competitive Cities and Climate Change." Organisation for Economic Co-operation and Development (OECD). (2009): Print.

[xlix] Marshall, Alfred. Industry and Trade. London: MacMillan & Co. Limited, 1920. Print.

[l] Schmitz, Hubert. "Collective Efficiency and Increasing Returns." Cambridge Journal of Economics. (1999): Print.

[li] Dorothy McCormick, “African enterprise and industrialization: Theory and Reality” in ibid., pp. 1531 – 1551. (Todaro p329)

[lii] World Bank Group. World Development Report, 1999 – 2000 . New York: Oxford University Press, 2000. Print.

[liii] Alkire, Sabina, and Emma Santos. "Multidimensional Poverty Index." Oxford Poverty & Human Development Intiative. (Jul 2010): Print.

[liv]  "FDI in Tourism: The Development Dimension." United Nations Conference on Trade and Development (UNCTD), (Mar 2007): n. pag. Web. 22 Apr 2011. <http://www.unctad.org/en/docs/iteiia20075_en.pdf>.

[lv] Mañón, Jacinto. "Dominican Republic’s foreign investment companies pay US$1.4B in taxes." Dominican Today (10 Mar 2010): n. pag. Web. 22 Apr 2011. <http://www.dominicantoday.com/dr/economy/2011/3/10/38866/print>.

[lvi] FDI in Tourism: The Development Dimension." United Nations Conference on Trade and Development (UNCTD), (Mar 2007): n. pag. Web. 22 Apr 2011. <http://www.unctad.org/en/docs/iteiia20075_en.pdf>.

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