The Courier: Credit sought for business

Report

Issue Nr. IV (N.S.) – January/February 2008

Credit sought for business

If you’re selling passion fruit, clothing or music and not up by sunrise, forget about finding a place to pitch in Port-au-Prince or the neighbouring commercial area of Pétionville. Every patch of sidewalk will have already been taken. Street traders eek out a living day-by-day.

With improved security on the streets and a stable government in power, Haitians are looking to a healthier domestic economy to deliver jobs and improve their livelihoods.

What appears to be a brisk business in a market of nearly 9 million consumers at street level hides a lack of organisation, poor internal demand, lack of credit leading to weak investment in the productive sectors, and little value added to products. Haiti’s overall trade balance with the EU in 2004 was minus €77 million, textiles being the only sector registering an export surplus of €2 million to the EU market for the same year.

With improved security on the streets and a stable government in power, Haitians are looking to a healthier domestic economy to deliver jobs and improve their livelihoods. Security issues have recently prevented international companies from investing in Haiti but there are now signs of external investment. Digicel, the Caribbean-wide mobile phone network, is one major regional business realising there are big profits in the Haitian market, the company’s red billboards commanding attention in the capital’s public spaces.

Haiti’s abundant creativity and potentially large domestic market, as well as, those on its doorstep in the United States and the wider Caribbean, are obvious assets but, as far as setting up smaller businesses goes, time and time again those met during our report cited a lack of credit as the biggest obstacle to getting started. The country’s business profile is not enhanced by poor infrastructure, especially roads linking the capital to the rest of the country, frequent power cuts, and the fact that it has few indigenous raw materials.

The PRIMA Project

One European Union (EU) project assisting a push to stimulate national production is PRIMA or in Kwèyol, the ‘Pwogram Ranfosman Entegre na sektè Komès an Ayti’. The four-year €8M project which runs from 2005 to 2009, is helping to give small businesses a leg up. It is already over-subscribed, says its Director, Klaus Dieter Handschuh, prompting the National Authorising Officer (NAO) Price Pady to suggest a follow-up project would be beneficial.

The programme has been inspired by the country-wide success of some Small and Medium Enterprises (SMEs), including INDEPCO for industry and the NGO Vétérimed (see article on agriculture) for the dairy sector, says Handschuh.

INDEPCO, the Institut de développement et de Promotion de la Couture, whose director is Hans Garoute, imports cloth to be made into school uniforms and other finished garments.Vétérimed has improved the livelihoods of farmers with units to process and market dairy produce (see article on agriculture).

PRIMA offers a range of support to budding SMEs and business associations. Grants are available for items such as feasibility studies, workshops, technical assistance, training of individuals, and the purchase of office equipment, participation in tradefair exhibitions and the compilation and printing of promotional flyers. Handschuh says there is a lot of potential for the transformation of fruit and vegetables, and the production of cement and other construction materials.

The project is also funding the strengthening of public-private sector dialogue with the aim of launching joint ventures. “The two sectors were not talking to each other,” says Handschuh. Aiming to reach as many as possible country-wide, in line with the government’s overall decentralisation policy, PRIMA also has an office in Les Cayes in the south of the country. Handschuh says that the aim is for projects underway to eventually be backed by credit agencies. Availability of credit and insurance are currently especially dire in the agricultural sector.

Optimism

Other initiatives in the business sector are underway. A Haiti Trade and Investment Forum (HITF) held in Port-au-Prince, on 15-16 November 2007, brought together representatives of the Haitian government and the private sector to look at how to do more business in Haiti, propelled by easier access to regional markets under the Haitian Hemispheric Opportunity Partnership Encouragement (HOPE) initiative. Areas thought to have potential include tourism, agribusiness, bio-fuels, telecommunications and handicrafts. Assistant Secretary General of the Organisation of American States (OAS), Albert R. Ramdin, who heads the OAS-Haiti task force, told journalists at the event that business generation would underpin democratic governance and security.

Haiti’s Ambassador in Brussels, Raymond Lafontant Jr., also told us that improved rules of origin was one of the main points of interest of the country in the new Economic Partnership Agreement (EPA), which the EU initialed at the end of December with all Caricom countries.* It will enable Haiti to use imported inputs in manufacturing, yet still continue to export the finished item to the EU, duty-free.

*Haiti became a full member of Caricom in 1996 and is the only LDC in the group. Other members are Antigua and Barbuda, Bahamas, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St.Lucia, St. Vincent and the Grenadines, St. Kitts and Nevis, Surinam and Trinidad, and Tobago.

Debra Percival

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Barbancourt: Haiti’s leading brand

Haiti’s world renowned rum brand, Barbancourt, has gone from strength to strength despite recent insecurity in the country, says the company’s Director General, Thierry Gardère. Barbancourt is recognised by drinks magazines as one of the best five rums in the world. Gardère says that white oak casks from France’s Limousin region for maturing and the use of sugar cane, rather than imported molasses both make the difference to the taste of his particularly smooth rum. The company, with 250 employees, currently produces 3 million bottles of 4, 8 and 15 year-old rums annually, with sales especially strong in the US, Panama and Chile.

Gardère is the 4th generation in the family-company started in 1862. He explains that an EU regional project for Caribbean rum producers has boosted production. The €70 million 4-year “one off” project for all Caribbean rum producers was originally started up to offset losses to the industry, for a deal done in the WTO in 1996 in Singapore on the opening of markets for white spirits. Launched in 2002, it was recently extended to June 2010 to use all available funding.