28481: Durban: Comment of #28474 Beaubeouf's Customs Problem (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Lance Durban <lpdurban@yahoo.com>

Claude Beaubouef's passing reference (Corbett #28474) to a problem
clearing something from Haitian Customs brought to mind 7 low cost
recommendations I tossed out on this forum almost four months ago.
Granted President Preval wasn't inaugurated until May 14th and he does
still retain a lot of goodwill, but the clock is ticking.  People are
looking for positive change, and so far there has been very little.

With our moderator's patience and now that President Preval and Prime
Minister Alexi are in office, here is a repeat of those 7 low cost
suggestions to help the manufacturing (ie. job-creating) sector:

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.

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

What Haiti's new government needs is both the will to implement and a
modicum of administrative competence to get the job done.  And it
cannot expect the Haitian Civil Service to implement needed change on
its own.  Most Haiti government employees are quite happy with the
status quo and distrustful of anything that might benefit the private
sector.

Haiti should have a unique advantage in attracting foreign 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