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Haiti business climate is `getting worse'

Factory closings and job losses underscore the grim reality of Haiti's economy as business owners and middle-class families continue to flee abroad.

PORT-AU-PRINCE - Six days a week Laula Jean eked out a living inspecting hems and sweatshirts in a sprawling garment factory near one of this city's most volatile slums.

''I enjoyed what I was doing,'' said Jean, 31, who supported herself and her mother on her $121 a month salary at the A.G. Textiles factory.

But three weeks ago she became the latest casualty of Haiti's weakening economy when the factory closed and she joined the millions of others in this desperately poor nation without a paycheck.

''I've been looking, but I can't find anything,'' Jean said.

Georges Sassine, owner of A.G. Textiles and vice president of the Haitian manufacturer's association, says he shuttered his factory after 35 years under much the same pressures that closed 15 others in the last two years and cost 5,000 jobs.

These include the political turmoil of 2004 that led to the ouster of President Jean-Bertrand Aristide, steep loan interest rates and global competition. The street violence prevalent in the capital has made an impact too: Six of Sassine's workers were wounded on the job when gunfire interrupted in the neighboring slum.

The final straw: His main client, Canada's Gildan Activewear, temporarily cut back orders, costing Sassine $12,300 in lost income per week.

The closings and job losses underscore the grim reality of Haiti's economy as business owners and middle-class families continue to flee abroad. Those left behind say they are steadily losing the fight to stay afloat after years of political instability, violence and negative economic growth.

`A ROUGH TIME'

''We are going through a rough time,'' said Maxime Condé, 55, who added that his own company may soon become the fourth factory to close in three months. His factory, which makes hospital scrubs for a Florida company, has gone from 1,000 workers to 200 in the last two years.

Haiti's apparel assembly industry, largely using U.S. textiles for duty-free export to the U.S. market, once employed 100,000 and had replaced agriculture as the nation's economic backbone. Today, it employs 20,659, reports the Association of Haitian Industrialists. Yet it is still viewed by some as the key to reviving Haiti's economy, if the country can get trade preferences from Washington more beneficial than those it currently enjoys under the 24-year-old Caribbean Basin Initiative.

Haiti's apparel exports to the United States rose from $328.8 million in 2004 to $405.8 million last year. But businessmen here say the increase results from changing the way of measuring the value of the goods rather than any export growth.

A U.S. bill giving Haiti duty-free access to the U.S. market for clothes made here with fabric from third countries has languished in the U.S. Congress for two years, opposed by textile groups that argue it will cost U.S. jobs. A delegation of Haitians and Haitian Americans hopes to push Congress to approve the so-called HOPE bill during the session that began Monday.

''While we've been diddling, a terrible economy has gotten worse,'' said former Florida Sen. Bob Graham, an original sponsor of the Senate version that passed in 2004.

Graham, who recently visited Haiti as part of a four-member assesment team, said ``Préval has got the same problem Franklin D. Roosevelt had in 1933. He's got a country in deep economic and psychological depression, and he needs to show some immediate action that will be seen by the Haitian people as signs of improvement in their lives.''

Incoming House Ways and Means Chairman Charles Rangel, D-NY, has said he wants HOPE to pass in the lame duck session. But Haiti will first have to get the support of the legislation's opponents, and it will have to compete for attention with all the other trade bills the Bush administration is pushing. Even if HOPE does pass, it's not a panacea for Haiti.

''Countries tend to think that passage of these trade measures alone in the U.S. is enough to revive their economies,'' said Daniel Erikson of the Inter-American Dialogue think tank in Washington D.C. ``The reality is a lot of work on the ground has to be done. That is especially true in Haiti.''

Critics say HOPE would quickly outlive its usefulness in the fast-paced world of globalization.

STAYING COMPETITIVE

Despite its wealth of cheap labor, Haiti still needs to address a host of other problems -- security, stable electricity and good roads among them -- to make itself truly competitive.

Haiti's economy is indeed improving. Inflation has dramatically decreased, though still high at 13 percent. Government revenues are up, and the International Monetary Fund projects the economy will grow 2.5 percent this year, up from 1.8 percent in 2005.

But that growth, said Haitian economist Pierre-Marie Boisson, is not being generated by private investments but mainly by the $1 billion in remittances Haitians living abroad sent back last year to relatives. While it helps send kids to school and keeps food in the stomach, it also fuels inflation as domestic production lags.

The same $200 wire transfer from the States three years ago buys much less today because ''prices have gone up by 60 percent while the gourdes [Haiti's currency] has kept the same parity with the U.S. dollar,'' said Boisson, who runs Sogesol, the microlending affiliate of Haiti's largest commercial bank.

All of this creates a bleak reality for people like Ketlie Civil, whose job of five years at A.G. Textiles allowed her to temporarily rise out of the 78 percent of Haitians who live on less than $2 a day.

''When you have a job, you wake up in the morning and you know you have a job to go to. You know you will be able to eat and drink that day,'' said the 43-year-old mother of two. Like the overwhelming number of Haitians who voted for President René Préval, Civil believed life would have vastly improved by now.

She was hopeful when he and Prime Minister Jacques-Edouard Alexis spoke of wanting to create jobs; and she was optimistic when they vowed to tackle the lawlessness that has scared many entrepreneurs out of Haiti.

But like millions here, Civil is still waiting.

If things are moving slow, it's because ''everything is a priority,'' said Alexis, adding the government has created a clearinghouse to help investors, sent out tax letters to collect $525 million in revenue and approved a $1.6 billon budget.

He acknowledged his government has ``to help the private sector to change, to become more progressive so they can see the advantages of investing in their country.''

In Haiti, the loss of one salaried job can have a catastrophic ripple effect for the 80 percent of people who work in the informal economy such as street vending.

''I don't know what I am going to do. I am just waiting,'' said Ademene Charles, 43, who used to offer daily home-cooked chicken and rice specials to the A.G. Textiles workers from a makeshift kiosk nearby.

Today, A.G. Textiles is a lifeless building.

''I haven't dismantled the factory, just in case HOPE passes,'' said Sassine.