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| 2.5.MANUFACTURING AND INDUSTRIAL SECTORS Yesterday and today The manufacturing and industrial sectors are vital to Haiti, representing 22% of the GNP and employing 6% of the active population. These sectors consist of two types of production: products destined for local sale and sub-contracting to North-American plants for the assembly of products destined for the American market, most notably in the text industries and the assembly of electronic components. Haiti is the world’s leading producer of baseballs, one of the Caribbean’s leading supplier of clothes to the United States, and the region’s primary supplier of electronic components to the US. The only mining production on Haiti is bauxite, rising to 377,000 metric tonnes in 1982, after which point mining operations ceased. The country’s marble resources are also exploited, but on a very small scale. Recently, iron ore deposits were discovered in the northern region of the country and their exploitation is slated to commence in the mid-term. |
In the agricultural industries sector, rum rum and essential oils are the most important products. Production for local consumption is insufficient to the extreme. Compared to other Caribbean and Latin-American countries, Haiti produces very little for local consumption. This insufficiency is especially obvious in the food-industries sector. Unfortunately, the situation in the assembly industry has deteriorated enormously: in between October 1990 and June 1991, Haiti lost 8,200 jobs (out of the 40,000 upon which it was dependent at the time) and studies indicated the potential loss of an additional 6,000 jobs by October 1991. Upon the lifting of the embargo imposed on Haiti by the international community, the assembly industry accounted for fewer than 11,000 jobs. |
| Haiti’s manufacturing and industrial offer Numerous opportunities are available to investors in Haiti’s manufacturing and industrial sectors, most notably in small and mid-size businesses specifically targeting the local market. Haiti’s reputation for quality and productivity, especially in the assembly sector, is extremely solid. The size of the assembly industry in Haiti and its rapid growth are due to the fact that it is capable or respecting the most stringent standards in use by multinational corporations. The country is undergoing remarkable changes due to continued economic liberalization. New manufacturing and industrial sectors that were previously the sole province of the state or of certain private monopolies are now open to all local and international investors. The primary reason for the Haiti’s success in these sectors is its exceptional and plentiful pool of workers: the country’s workforce is proud, productive, conscientious, young, plentiful and extremely affordable. Fully half of Haiti’s seven million inhabitants are below the age of 25. A day’s worth of work in Haiti costs less than three American dollars. |
Other key factors to Haiti’s success in these sectors are its direct and preferential access the US market due to preferential treatment programs and its strategic geographical location within a few hours flight of the United States, Canada and Europe. The main markets to be developed are: the exploitation and transformation of local raw materials such as copper, bauxite, manganese, iron, coal, gold, marble, guano, natural gas, petroleum, salt, sand, clay, cement components, tobacco and coffee; the food industry for local consumption, including slaughterhouses, processing and packing of meat, agricultural commodities and dairy products; refrigeration, canning, flour and yeast, coffee, fuel oils, and livestock feed; industries specializing in construction equipment and supplies, such as conveyor belts, spare parts, lime, plaster, farm equipment; chemical and plastic products such as soap, detergent, paint, enamel, fertilizers and containers; housewares industries producing furniture and appliances. |
| Demand The primary demand comes from American, Asian and European manufactures and industries. Above all, these concerns are looking for qualified low-cost labor, as well as direct and preferential access to the American market. In recent years, several events have changed the face of global relations, including the creation of the European Community, NAFTA, the break-up of the Eastern Block, the fall of the Berlin Wall, the repatriation of Hong Kong by China in 1997, etc. Haiti’s geographical location is one of the prime motivators of demand, primarily for European, Japanese, Korean and Hong Kong nationals. |
We can also enumerate 4 indirect stimulators of demand: 1- the institutional framework (foreign commerce, customs), fiscal policy and legislation concerning the formation and operation of corporations; 2- the advantages provided by the investment code; 3- government assistance to development initiatives; 4- legislation and procedures governing industrial parks and free-trade zones. |
| Manufacturing and industry policies of the Haitian government The Haitian government has placed great emphasis on industrial and manufacturing development. Unlike the governments of many developing countries, it is seeking to expand its industrial base by launching a systematic appeal to private investors. The economic activities favored by the Haitian government are those that have a forward and backward linkage as well as a growth generating effect, specifically: |
international sub-contracting that can use the abundant worker pool and operate a technology transfer; activities that make extensive and efficient use of raw materials by maximizing added-vale and recycling eligible materials; and industries that will reduce imports. The government’s goals include: job creation, shift of manufacturing and industrial development from urban to rural areas, the generation of foreign currency and the deployment of small and mid-size companies. |
| They chose Haiti More than 250 companies have chosen, at one time or another, to rely on the potential offered by the manufacturing and industrial sectors in Haiti. Currently, they number 80 and generate 13,000 jobs. In the months and years to come, hundreds more will once again choose to live the Haiti experience. In the area of electronics assembly, more than 28 companies employ 8,000 workers and produce articles such as capacitors, resistors, coils, inductors, electrical cable and wiring, switches and relays, transformers, microchips, etc. “For the last 15 years, a Haitian factory has been producing coils for the biggest American supplier of military radios. This factory also produced other communications equipment, such as headphones for American tank drivers. Another factory has been assembling electronic components for the past 21 years. The factory occupies 120,000 square feet and employs more than 1,200 workers who supply products to more than 35 American companies. This factory added electro-mechanical cutters to its production as part of its own internal initiative.” In the area of textile assembly, one hundred companies employed 25,000 workers and produced articles such as sleepwear, undergarments, shirts and slacks, sportswear, children’s apparel, etc. |
“The productivity levels of our Port-au-Prince plant equaled and even surpassed those of our American factories. We are extremely satisfied with Haitian workers and their ability to learn, their consistent efforts and their willingness to work,” remarked William J. McKenna, President of Kellwood, a Fortune 500 company. “We searched the Caribbean long and hard before we decided upon Haiti. We believe it is the ideal location for the assembly industry. The population is very productive,” added Andrew Postal of Judy Bond Apparel. “Haitians have an aptitude for work, and the work hard. This is one of the economic benefits of our installations in Haiti,” concluded Fred Brook, President of McGregor Sporting Goods. Major corporations that have operated in Haiti or are currently operating in the country include: Sears, Levi's, Toys R Us, K-Mart, J. C. Penney, Mac Gregor, Jordache, Judy Bond, Aries Electronics, IBM, RCL Electronics, Univac-Telex, Unisys, Tempo Instrument, Power System, ITT, Designatronics, Mart White Knight/Edmont, GTE, Company Computer, Compacq, Power General, Electrodynamic, Miron Industries, CII / Etry / Coiles Sales, IMC Electronics, Connection, General Electric, Mitsui, Heineken Malta, Pepsi Co., Coca Cola, etc. |
2.6.EXPORTS
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