Clintons land in Haiti to showcase industrial park
By Trenton Daniel and Josh Lederman, Associated Press, Oct 23, 2012
CARACOL, Haiti (AP) — Secretary of State Hillary Rodham Clinton encouraged foreigners to invest in Haiti as she and her husband Bill led a star-studded delegation gathered Monday to inaugurate a new industrial park at the center of U.S. efforts to help the country rebuild after the 2010 earthquake.
See further below: 'Celebrities and Foreign Officials Tout Caracol, While Report Finds 95% of Factories Fail to Pay Minimum Wage', by CEPR.
Actors Sean Penn and Ben Stiller, fashion designer Donna Karan and British business magnate Richard Branson were among the luminaries at the opening of the new Caracol Industrial Park, which is projected to create thousands of jobs more than 100 miles from the quake-ravaged capital of Port-au-Prince.
Hillary Rodham Clinton told a roomful of investors gathered for a luncheon that she had made Haiti a priority when she became secretary of state. "We had learned that supporting long-term prosperity in Haiti meant more than providing aid," she said. "It required investments in infrastructure and the economy that would help the Haitian people achieve their own dreams.
"So we shifted our assistance to investments to address some of the biggest challenges facing this country: creating jobs and sustainable economic growth," she added.
Earlier Monday, thousands of Haitians lined the roadway to wave at her motorcade as it wound its way from the newly renovated airport in the seaside city of Cap-Haitien. Clinton and other U.S. officials, including Labor Secretary Hilda Solis and Sen. Patrick Leahy, a Democrat from Vermont, toured a housing development for industrial park workers supported by the U.S. Agency for International Development.
The secretary of state noted there were three presidents gathered in one room to celebrate the opening: her husband, former U.S. President Bill Clinton, current Haitian President Michel Martelly and his predecessor, Rene Preval. Bill Clinton, now a U.N. special envoy for Haiti, arrived in Caracol separately from his wife.
The Clintons and their allies hope that the $300 million industrial facility will transform the northern part of this impoverished country by providing thousands of desperately needed jobs.
But some Haitians say the industrial park does little more than replicate failed efforts from the past and will benefit outsiders more than Haitians. They also worry it will harm some of the few pieces of undamaged environment that still exist in Haiti. "It's really all-in on this project, and there's a high bar to deliver," said Laurent Dubois, a historian who teaches at Duke University and is author of "Haiti: The Aftershocks of History." ''It really needs to deliver in a big way so that people will think, yeah, this was the right thing to do."
The stakes are high in large part because the Clintons have been so heavily involved. The Caracol project was in the works before the earthquake but it became a top priority for the Obama administration soon after the disaster under Preval. Hillary Rodham Clinton's chief of staff, Cheryl Mills, has made almost monthly visits to the site on Haiti's northern coast.
In a nod to President Barack Obama who was preparing for the final, foreign policy-focused debate later Monday, the secretary of state said the Obama presidency had made Haiti a central focus of its international development efforts. The $124 million put in by the U.S. makes the park Washington's biggest single investment in the aftermath of the quake and it is certain to shape the legacy here of the Clintons, who last visited Haiti together in 1975 on a wedding gift following their honeymoon in Mexico. "We've had a deep connection with Haiti ever since," Hillary Rodham Clinton said.
Monday's trip is her third to Haiti since the earthquake, and there have been more than a dozen visits by her husband, who was co-chairman of an earthquake recovery panel before its mandate ended a year ago. "I've been here so much I'm sure I owe taxes to the Haitian government," he joked.
The industrial park inaugurated by the Clintons was built on a 617-acre (250-hectare) site that aims to "decentralize" Haiti's economy away from the crowded capital of Port-au-Prince and help develop the long-neglected countryside. "This is a model of international cooperation and a symbol of Haiti moving forward," said President Michel Martelly.
The park's anchor tenant is South Korean apparel giant Sae-A Trading Co. Ltd, which begun production in May. It has agreed to create 20,000 permanent jobs within six years and also build 5,000 houses. Backers say the entire park has the potential to generate up to 65,000 jobs in all.
Sae-A, which shipped 76,000 T-shirts to Wal-Mart in the United States on Oct. 15, says it is training 1,050 people it has hired, 70 percent of them from the area surrounding Caracol. Daniel Cho, a representative of Sae-A in Haiti, said the employees will be paid almost $5 for eight hours of work.
"What we saw today is something ... where the right steps were being taken and is deserving of our encouragement," Sean Penn, the actor who became Haiti's ambassador at large for his charity work in the country, told The Associated Press. "We hope that Sae-A's maverick nature will be modeled after."
A local paint manufacturing company, Peintures Caraibes SA, became the second tenant in July and will export paint made by Sherwin Williams along with its own paint; production begins next month. It's supposed to hire 350 people.
A third tenant from the neighboring Dominican Republic was announced Monday. D'Clase Apparel, which has investments in clothing and footwear, is supposed to create 5,000 jobs in two years.
Details are still being worked on to bring in other tenants, but the project's architects hope its duty-free status and a 15-year tax holiday will lure more.
Still, investing in Haiti has long been a tough sell, in large part because of security concerns, bureaucratic snags and a weak infrastructure, and those at the exposition got a taste of the challenges. Armored vehicles that belonged to the United Nations' peacekeeping force blocked roads that led to the industrial park. The warehouse itself was airless and humid as people fanned themselves with glossy publications.
"Of course, it's not all rosy," said Rudolph Boulos, a former senator for the region. "There are advantages and disadvantages. Somehow, Sae-A must have done its homework and found some advantages."
Everyone agrees Haiti needs jobs. The country of about 10 million people is among the world's poorest, and unemployment and underemployment hover around 60 percent.
Despite the promises of up to 65,000 jobs at the site, and projections of possibly 133,000 more jobs through related cottage industries, the Caracol project has drawn much skepticism. Critics say it's not much different from the factories to make baseballs for the U.S. sport that were built in the 1970s and 1980s under the regime of playboy dictator Jean-Claude "Baby Doc" Duvalier. Those jobs prompted thousands of farmers to leave their fields for the capital, and agricultural areas suffered from neglect. Shantytowns like Cite Soleil emerged to house the new workers. The factories got tax breaks but there was no income to offset Duvalier's alleged plundering of state coffers.
Haiti was supposed to become the "Taiwan of the Caribbean" but instead suffered through economic collapse brought on by political instability. "This is: Been there, done that," Alex Dupuy, a Haiti-born sociologist who teaches at Wesleyan University in Connecticut, said of the Caracol project.
Because of the tenants' tax breaks, outside investors will have more to gain than Haitians, he said. "This is not a strategy that is meant to provide Haiti with any measure of sustainable development ... The only reason those industries come to Haiti is because the country has the lowest wages in the region," Dupuy said.
Backers of Caracol stress that it will bring tens of thousands of jobs to an area where subsistence farming has long been the only alternative to migration. Jean Cherenfant, mayor of Cap-Haitien, a seaside city 13 miles (21 kilometers) from Caracol, sees the facility as a boon. "We don't have a lot of employers here, and we're talking about several hundred thousand jobs," Cherenfant said by telephone. "I will not go along with those people who are pessimistic."
Celebrities and Foreign Officials Tout Caracol, While Report Finds 95% of Factories Fail to Pay Minimum Wage
Hillary and Bill Clinton arrived in Haiti today (see news report below) with a delegation of foreign investors and celebrities to showcase the Caracol industrial park, “the centerpiece of the U.S. effort to help the country recover from the 2010 earthquake,” reports Trenton Daniel for the AP.
Government officials and international partners have touted the park’s potential to create thousands of jobs, but there have been a host of criticisms on social, environmental and labor issues. Speaking with the AP, sociologist Alex Dupuy notes: "This is not a strategy that is meant to provide Haiti with any measure of sustainable development ... The only reason those industries come to Haiti is because the country has the lowest wages in the region," Dupuy said.
Sae-A will pay employees Haiti's minimum wage, which is $5 a day. Workers will be eligible for bonuses based on performance.
Reports from the ground indicate that the factory is not complying with the minimum wage law, however. Etant Dupain, writing on the Let Haiti Live website, notes: "Before the official inauguration, several thousand employees have been working in the Caracol park for the last three months at a wage of 150 gourdes ($3.75 US) a day. Since October 1st, the new minimum wage law has gone into effect, with the government setting the minimum at 300 gourdes a day. Despite this, the managers of the factory operating at Caracol aren't respecting the new official minimum wage."
The new minimum wage would be 200 gourdes, with piece rate employees earning 300. Caracol would be far from the only factory in Haiti not adequately compensating their employees. The most recent Better Work Haiti report, released last week, found that 21 of 22 factories covered in their analysis (Caracol is not covered yet) were non-compliant with minimum wage laws. This refers to the old minimum wage.
Better Work is a joint program of the International Labor Organization, International Finance Corporation and the U.S. Department of Labor. Of course, whether employees are earning $3 or $5 a day, it is still far below what the AFL-CIO’s Solidarity Center determined to be a “living wage” for workers in the garment industry.
See also, 'SAE-A's "risky" play in Haiti' (how SAE-A's factory complex at Caracol in northern Haiti was subsidized by USAID, the U.S. government and others.