GOOD NEIGHBORS, GOOD FRIENDS
TBY talks to Laurent Salvador Lamothe, Prime Minister of Haiti, on turning Haiti into an emerging economy, ties with the Dominican Republic, and gaining investor confidence.
What are the main goals that need to be achieved to put Haiti on the list of emerging economies by 2030?
The main goals of the Haitian government are to put the country back on track toward economic growth. We are targeting growth of 6% per year based on public investment in key infrastructure sectors. Having said that, we also want to register significant GDP growth. Currently, the unemployment rate here is over 75%, and in rural areas it reaches almost 90%. Our key target is to reduce unemployment by at least 15 percentage points through creating jobs in the agriculture sector, re-launching agricultural production, and investing in production and irrigation so that Haiti can become more independent.
What is the estimated public investment that you need to reach these goals?
The target investment is about $2 billion per year for the next five years. We are currently able to generate $415 million per year, so there is still a gap that we have to compensate for with an increase in state revenues. The government has taken significant measures to tighten border control and fight against tax evasion. Only 3% of Haitians pay taxes, but we are trying to reverse that trend and bring it to at least 15%. At the same time, we are working with international partners to grant Haiti access to the lending market. Currently, Haiti only has access to grants, not loans, because of debt cancellation. We are working with international institutions to take out loans that will allow us to borrow and cover the difference as we invest in the country.
Does Haiti look to the Americas when thinking of partners?
Our biggest trading partner is the US, which is the largest market in the world. We are seeking to increase our ties with the US and collaborate to form other legislative and trade benefits. Currently, we have the Haitian Economic Lift Program (HELP) Act, which assists Haitian manufacturing companies as they export to the US. We are also looking at expanding our relationship with the Dominican Republic and, of course, to make Haitian products available in its markets. We want to improve the competitiveness of Haitian products through wider access to our neighboring market, which will be achieved through an agreement with the Dominican Republic. The agriculture sector is currently worth $1.2 billion in trade. Our aim is to sustain that while still investing in the local sector to put our country back on track toward development. We also have strong ties with other countries in the region such as Colombia, Venezuela, and Cuba, with which we intend to build upon different sectors: commerce, agriculture, and social services. We hope to learn from other countries' experiences and introduce some of the same benefits to the Haitian people.
What is Haiti's interest in the Bolivarian Alliance for the Peoples of Our America (ALBA)?
We're happy with the status we have as an observer. We have a very good relationship with many countries in the region including Venezuela, Ecuador, and Cuba. Haiti is a vulnerable country, so it is in our strategic advantage to maintain good relationships with other countries in the region and maintain our stability.
What is your outlook in terms of Haiti's relationship with the Dominican Republic?
The Martelly government has an excellent relationship with the Dominican administration. We are working to build on that excellent relationship in order to foster more investment here. Haiti can benefit from the expertise that the Dominican Republic has cultivated by building farms. We have to rebuild the entire country, but we lack sufficient resources and manpower to do it. Haiti looks toward its neighbor to work with us and bring both countries forward. In terms of tourism activities, we are looking at multiple destinations in collaboration with Dominican tourism investors to encourage investment in Haiti. We have had several interested parties already, but we are looking for more. The education sector is another area where we can benefit, as we have 700,000 students studying in Dominican schools. There is also a university here that was built by the Dominican government. We want to have exchange programs with the Dominican Republic to work on human and resource development in our country. Right now, our customs teams are working with the Dominicans to formulate a common approach toward border protection, which can ultimately prevent the illegal smuggling of goods and the trafficking of illicit products. Security is an area that we can work together on. Job creation could also come about as Dominican investors come and establish businesses in Haiti. There are many incentives for Dominican businesses to come here, such as the HELP Act, tourism opportunities, good infrastructure, and possibilities in the areas of construction and development. In these key sectors, the Dominican Republic can play an important role. We are very grateful for the relationship we have formed with the Dominican Republic, and we are going to continue to foster ties bearing in mind the mutual respect of both parties.
How do you plan to boost investor confidence in a country that has a strong image of vulnerability?
We are working on rule of law initiatives. The rule of law initiatives are taking several steps in order to bolster the rule of law. We want to tighten up mutual investment agreements with partner countries. This includes working on trade agreements with a number of countries, reviewing the investment code, and making it interesting for an investor to enter our market and take risks. We are working with international institutions to boost our investment grade, which is currently DDD. We have also introduced legislation to fast-track the process of establishing a company here. Our goal is to make Haiti a more business-friendly country. Furthermore, we are still considering the joint-venture model with private investors, which would offer great tax benefits because the government becomes a partner in their investment.
What environmental agreements are there between the Dominican Republic and Haiti?
Haiti has a 98.5% deforestation rate versus the Dominican Republic, which is a very lush country. One of the things that we are working on is a national reforestation policy with the assistance of the Dominican Republic, in which we are striving to exchange skills through technical experience agreements with it. On every front, we have a strategy based on Haitian development, working with—not against—the Dominican government.
What more is there to be achieved for Haiti and the Dominican Republic?
We want to achieve two main goals: to strengthen our trade relationship and market specific key products. Haiti has excellent coffee and mangoes that we would like to export to the Dominican Republic, and we also want to introduce our indigenous beer, Prestige, to the Dominican market. There are several areas where we can improve trade relations with our neighbor, but the relationship we already have is strong. We anticipate that it will continue to be strong for years to come.
© The Business Year - December 2012