Haiti’s Economic Prospects ‘Hopeful’

Carlo Dade interviews Paul Collier

FOCAL’s Executive Director Carlo Dade interviewed Oxford University economist Paul Collier about his report, Haiti: From Natural Catastrophe to Economic Security, commissioned by United Nations Secretary-General Ban-Ki Moon about how to re-start the Haitian economy. This report is available on FOCALPoint’s 2009 web page.

Carlo Dade: How did this report come about?

Paul Collier: Ban-Ki Moon asked me to go to Haiti and try and come up with some ideas that would help the government and to build on the security that UN peacekeepers were providing with some credible prospects of greater prosperity. I think especially after the hurricanes, people were a bit demoralized and worried. That was a major setback.

Dade: You had not done work on Haiti before so was he looking for an outsider?

Collier: I’ve done this book, The Bottom Billion, Ban-Ki Moon has been rather keen on. He asked me, ‘Haiti is a classic country of the bottom billion. Can you help to figure out how the international community can help the government to move on?’ That was a pretty sensible request and so I said I would do my best.

Dade: Was this your first visit to Haiti?

Collier: It was, yes, so I was very careful not to assume it was Africa in the Caribbean. What struck me was what a hopeful environment it was. There were many features which basically spelled opportunity and that Africa didn’t have.
First and foremost, Haiti is in a neighborhood of prosperity and the typical African country is very far from being in a neighborhood of prosperity. And neighborhoods matter. That is a big, big opportunity for Haiti.
Second thing, Haiti is not subject to a lot of ethnic division. It’s not ethnically polarized in the way that quite a few African societies are.

Thirdly, it has got this really powerful trade deal with America in the form of Hope II, which as far as I can see is the best trade deal on Earth and is exactly the sort of trade deal that I want to see for the bottom billion and Haiti has got it.

Fourthly, it has got this very big Diaspora in North America. That is a huge potential asset in terms of remittances and skills and lobbying within North America. That is presumably why it has got Hope II because the Haitian community in America set to work and lobbied for it. So that Diaspora community is much bigger relative to population than a typical African society and much more powerful.

Compared to the sort of societies that I was used to, Haiti has a lot of opportunity. That led me to think that Haiti was close to getting out of the trap of stagnation.

I wanted to produce a report that was a very simple and focused agenda, not an overloaded agenda. It’s easy to produce a long list of all the things that would make things better. That doesn’t help at all. What I tried to aim for was the minimum that would need to be done in order to be transformative. Once I started to think about that, I recognized that there was no one party that was in a position to deliver on all of it. Obviously, the government of Haiti is enormously important, but so is the international community and so is the international private sector and the domestic private sector. So that is what led me to the idea that instead of the approach being one of the begging bowl, the approach should be one of mutual commitments to actions that would be mutually reinforcing.

Dade: I’ve worked on Haiti for years and it has led to a great deal of frustration on my end and several others on pushing the private sector agenda. It seems that the focus has been on everything except for economic growth and formal sector job creation. What is your take on that?

Collier: I think that the important thing that people didn’t realize is that there is a big opportunity to scale up and create jobs for ordinary people through the private sector. What is needed is not some sort of sweeping ideological commitment to private business. I think that is not a helpful way forward.

What is needed is a very focused agenda. One of the centerpieces of my work was building export zones, where, if you just get things right or right enough, in a very limited geographic setting [and] once you’re over the threshold of global competitiveness, then you can really expand jobs pretty much without limits. I think it is possible to generate large numbers of jobs through getting export zones up to decent standards of infrastructure and governance.

Dade: Do you think that given the international financial crisis, the opportunity is still present for Haiti or has that window been closed?

Collier: No, I think it is still there. I think that in one sense the opportunities have got stronger. China is now recognizing that in order to avoid a domestic recession, it will have to build its own domestic demand. So you’ll notice, for example, that China is announcing very big domestic expansion in demand. So the Chinese supply, which is the big competition, will start to be diverted to the home market. In two or three years time, when the American market starts to pick up, the Chinese are not going to crash domestic demand right back down again. That will be politically impossible, I think. As global demand rises, I think there will be an opportunity for new entrants.
Also, the amount of resources that Haiti needs is not overwhelming. This is not big money by the standards that are being bandied about now.

Dade: Resources for creating export zones?

Collier: For helping with infrastructure in Haiti and it’s a pretty limited agenda, I think. Recovery from the hurricanes and providing decent infrastructure in particular zones so the jobs creation process can get going. That is really a very do-able agenda that is so strongly in both Canada and America’s interests to do that because they don’t want a fragile state right on their doorstep.

Dade: Do you think the Haitian government has the ability to carry out this focused agenda or is that why you are pushing for the ISAs [Institutional Service Authorities]?

Collier: That is why I made it a very focused agenda so that it is very do-able by the Haitian government. And I think it is. That includes the independent service authorities that are sort of a new institutional architecture for scaling up basic service delivery in a way that I think would be very helpful to the government because the government would be able to get involvement in basic service delivery for ordinary people. At the moment, 90 per cent of basic services are totally bypassed by the government. Within Haiti, there is a lot of enthusiasm for that idea, including from government.

Dade: So what sort of feedback have you gotten from the report? I know that you had the event in Washington, D.C., with the Institute for Peace.

Collier: The Haitian ambassador was there and he appeared very supportive. I have since had direct communication from the Haitian government. I have been invited back next week. Initially it looked like I wouldn’t be able to go [but] I got a desperate plea from someone high in the Haitian government who said, ‘You must come. We really like what you’ve done.’ So that sounds very encouraging.

Dade: Based on this feedback, have you had any adjustments in your thinking?

Collier: Because I’m an outsider and obviously not an expert, in a way it’s neither here nor there whether I adjust my thinking. I don’t see this as my Collier plan. I see this as helping to get the government and the key other actors to think about what would be a really focused, practical agenda, and it will be their agenda, not mine. So, in a way, I’ve done my best and it’s an input into other people’s thinking, rather than being the grand plan. I just hope that it has been found to be a helpful input and that it doesn’t become a complete Christmas tree where people say that is good, just put this and this and this on and we’re back to the problem of an impossible shopping list.

Dade: Right. I’ve started to see that happening a little bit. […] In terms of your visit to Haiti, and in terms of your report, do you see where Canada can play a particular role or that Canada has missed?

Collier: I think there is an enormous role for Canada. Who really, really matters in this? One of the things that makes Haiti so hopeful, compared to Africa, is that there isn’t a donors zoo. In many African countries, everyone and their dog is a donor and in Haiti, it’s Canada, it’s America, I guess it’s France. It’s very, very simple. Of course, Canada matters. Canada is a major, major player and a trusted player, I think. You haven’t got a bad history, which to an extent, history is not on the side of either France or America. But Canada doesn’t have any of that baggage. […] I hope my ideas provide a way forward and that it kinds of helps to guide a little bit of leadership. Canada has that leadership role, if it wants to step into it.

Paul Collier is a Professor of Economics at Oxford University and Director of the Centre for the Study of African Economies. He is the author of the award-winning book, The Bottom Billion: Why the Poorest Countries are Failing and What Can be Done About It? His report can be downloaded at www.focal.ca/pdf/haiticollier.pdf.

Carlo Dade is the Executive Director of the Canadian Foundation for the Americas.