28062: Durban (comment): 7 low cost remedies for Haiti (fwd)

[Bob Corbett <corbetre@webster.edu>]

Lance Durban <lpdurban@yahoo.com> writes:

In Corbett 28051, Gill asks, "what can Preval do without big bunches of
new cash?"

Creating an environment where business can operate efficiently simply
does not need to cost a lot of money.  It does need the will to improve
and a certain minimum of administrative competence, neither of which is
certain in today's Haiti.  A good part of the Haitian civil service is
quite happy with things just the way they are.  Assuming Préval and the
new government really were interested in moving the country ahead, here
are 7 low cost steps that they could take to help manufacturers:


1.  Straighten Out Haitian Customs
        Duty-free entry for the assembly industry is already
    there, but simple paperwork delays on duty-free entries
    of material postively kills assemblers who must have quick
    turn-around... the one advantage Haiti could offer over
    the Far East.  The Bureau of Statistics ought to be grading
    Haiti Customs on how long it takes to get shipments out of
    the airport and containers delivered to importers.  Haitian
    Customs starts out with a failing grade that can hardly get
    any worse than it already is.

2.  Provide Electricity
        Haitian manufacturers have to provide their own
    electricity, and this is a major capital investment that
    should not be necessary.  Industrial zones should get ample
    electricity to be able to use their resources on job creation,
    rather than buying another generator.  It should be pointed
    out that industry also pays their Ed'H bills much better than
    many residential zones, so the "cost" of diverting some of
    inadequate supply of electricity into productive use would
    probably increase state revenue.

3.  Reduction of Port Charges
       For U.S. importers, it is actually less expensive to import
    a container from China than from Haiti.  This anomally stems
    partly from cost savings made possible by the size of the huge
    vessels crossing the Pacific, but the fact that Haiti has some
    of the highest port charges in the America's also contributes.
    Replace port charges on raw material shipments with an increase
    in property taxes for a revenue neutral shift that would boost
    private sector investment in job creation.

4.  Land Ownership
        A lucrative job in Haiti is to create legal problems for
    landowners by corrupting judges in land disputes.  The illegal
    claimant doesn't get the land, but eventually the land owner will
    pay him (and the judge) something to be left alone.  Outrageous,
    actually, but one of the main reasons why my own company decided
    not to purchase land and build a plant.  Somehow, there has to
    be a better way of registering land ownership.

5.  Company Registration Process
       Should be doable in a week for $200.  Presently it can take
    a year and costs $3000... a situation the Haitian bar
    association must love.  Very few companies are formed as a
    result.  The informal economy is booming, but for serious
    investors who could create employment opportunities, this is
    just one more reason to go elsewhere.

6.  Cleaning up ONA
       Employers pay 3% of worker's salaries to this state pension
    scheme, and worker's contribute another 3%.  But most workers
    get less than half of this contribution back, the difference
    is eaten up by government.  Needs a drastic overhaul and there
    is presently a creative proposal by the private sector on how
    it could be done.  Entrenched interests in ONA simply aren't
    interested.

7.  Tax treaty with USA
        Negotiate a tax treaty with Washington, giving a tax break
    to U.S. companies who invest.  Corporate taxes paid to the
    Haitian government might then be credited against tax
    obligations due to IRS.  Presently taxes paid by U.S. companies
    in Haiti count as an expense only and cannot be used dollar
    for dollar to reduce the U.S. tax bite.

                ++++++++++++++++++++++++++++++++

Haiti should have a unique advantage in attracting U.S. investment, but
recent governments have made NO effort to tap this source of job
creation.  The relatively modest costs involved in the seven proposals
above would be dwarfed by the long term benefits to the country.

Lance Durban