By Duncan Hooper
President-elect Rene Preval might
be Haitis best hope for bridging the gap between the
impoverished Caribbean island and its wealthy neighbour, the
Sharing the Caribbean island of Hispaniola, Haiti and the
Dominican Republic couldnt be more different: one is
the poorest nation in the Americas, where UN soldiers
struggle to keep order on the streets; the other is a paragon
of economic progress, where American tourists relax in
all-inclusive hotels, and farmers market high-value organic
bananas to top-end retailers around the world.
The key challenge for incoming Haitian president Rene Preval
is to narrow the chasm that divides the two neighbours.
The Dominican Republic can be used as a showcase for a
country that successfully implemented economic reform,
says Amelia Santos-Paulina, a former economist at the
countrys central bank and now a researcher at the World
Institute for Development Economics Research.
She traces the countrys success to trade reforms that
cleared the way for imports of components for assembly and
sale to the US, liberalization of exchange rates and
modernization of the tax system.
The Dominican economy, four times the size of its Francophone
neighbour, has flourished assembling textiles and consumer
goods for sale into the US. The success of Leonel
Fernandezs government is illustrated by the speed and
scale of a rebound from a banking crisis in 2003 that wiped
Aside from its over-reliance on the still-shaky banking
system, the biggest near-term threat to the Dominican
Republic may come from its neighbour. Haiti is dependent on
small-scale agriculture, and many of its labourers seasonally
travel across the border to collect meagre wages harvesting
sugar cane or working in the construction industry.
A flood of immigrants across an ill-policed border has put
strain on the already stretched Dominican health and social
security system, and flare-ups between locals and new
arrivals have become increasingly common. Fernandez and
Preval have everything to gain from working together.
Haitians look to Preval to establish a new dawn for the
country, which has witnessed five coups in the last 20 years.
They cling onto his previous term in office, between 1996 and
2001, as a sign of hope. Preval remains the only leader in
Haitian history to see through a full democratic term in
office and hand over peacefully to his successor.
The president-elect has already overcome his first
significant obstacle after his supporters took to the streets
to complain about piles of blank ballot papers diluting his
vote in the February election. Only a subsequent deal with
the electoral authorities allowed the agronomist to claim the
50% support necessary to fill the void left by the 2004
ouster of ally Jean-Bertrand Aristide.
Taking back the streets
The immediate challenge now is to win back the streets from
armed gangs to create an environment conducive to the return
of investors and tourists. Preval is relying on Brazilian-led
UN troops to do the job after noting that Haiti had no need
of its own army. Creating jobs will be essential, perhaps
through a programme of public works to improve infrastructure
and replace the slums of Port-au-Prince with basic housing.
We have to create the security conditions; we have to
create the confidence, says Jean-Claude Paulvin,
president of the Haitian society of economists. He puts an
optimistic estimate of the countrys
unemployment at 60%, and says encouraging factories
assembling products for export and increasing agricultural
productivity are crucial.
Another looming threat is inflation, which has been kept down
to a controllable 15% by the provisional government but has
skyrocketed in the weeks since Prevals election
victory. Unless the government acts to stamp out price
increases immediately, any other progress may be wasted,
according to independent economic consultant Claude
Things can get worse, Beauboeuf notes resignedly.
He warns, We could be returning to
Haiti must follow its neighbours example and develop a
long-term plan for diversifying industries away from
agriculture and revitalizing bankrupt energy and water
companies, according to Beauboeuf. He estimates that 95% of
the foreign aid poured into Haiti has been wasted because of
an absence of strategic thinking.
In Prevals favour the people of Haiti, both urban and
rural, seem willing to back him. Theyve had enough of
strife and poverty and will grant a window of opportunity
that he must capitalize on to push though reforms.
Businesses are desperate after three years without growth or
investment. The hotels that remain open are often running at
less than 15% capacity all year round. Some, like the Coconut
Villa in Port-au-Prince, say they are running at a loss
because constant blackouts mean they have to generate their
own electricity for sometimes just one guest.
Were on a path to extinction, says co-owner
Wilhelm Berthold. Were so busy trying to plug the
holes in the boat, we dont have time to think about the
In its desperate quest to survive, Haiti has been left behind
by many other economies in the region. The last vestiges of
its private industry are dying day by day, and if Preval
doesnt get his rescue act going quickly, he may find
theres nothing left to save.