Haiti's Apparel Sector: Poised for a Comeback?
Bobbin / September 1995
By Larry Luxner
For 11 years, Howell Woltz ran a blue-jeans empire in Haiti. Fluent in Creole -- the lingua franca of Haiti's impoverished majority -- Woltz supervised the cutting, sewing and packaging of 4,000 dozen pairs of jeans a week for major U.S. outlets like Wal-Mart, JC Penney and Marshall's. At its peak in 1987, the plant generated $7 million in annual sales and had 1,486 workers on its payroll -- making Woltz one of Haiti's largest private employers.
These days, the North Carolina businessman wouldn't go back to Haiti for all the tax breaks in the world.
"I got shot three times trying to take my employees to work," recalled Woltz, speaking from the relative safety of his farm in Yadkin Point, N.C. "President Aristide is an avowed Communist. Things aren't going to get better there. If anything, it'll get worse. I was present at a speech in which Aristide said the streets of Port-au-Prince would run red with American blood."
Despite the frightening rhetoric, President Jean-Bertrand Aristide is now firmly pro-American, thanks to the 20,000 U.S. troops in Haiti who secured his return after three years in exile. Legislative elections in mid-June confirmed the popularity of his Lavalas political party, though Aristide himself is banned by law from running again in Haitian presidential elections set for Nov. 26.
Meanwhile, foreign governments and international institutions such as the World Bank and the Inter-American Development Bank have pledged $900 million over the next 12 months to help Haiti get back on its feet, assuming that proper economic policies are followed. But it doesn't mean that private investment will suddenly begin pouring in.
For one thing, it's unclear how much Haiti will be helped by reinstatement into the Caribbean Basin Initiative (Haiti was suspended from the preferential trade program shortly after Aristide's overthrow in 1991). Even with CBI advantages, Haiti faces new competition from other Caribbean and Central American low-wage sites -- not to mention Mexico -- which are far more politically stable.
Sally Yearwood, director of the U.S. Foreign & Commercial Service office in Port-au-Prince, says Haiti deserves the same U.S. duty-free trading privileges already enjoyed by Mexico under the North American Free Trade Agreement.
"Haiti really needs NAFTA parity as soon as possible," says Yearwood, a former official of Washington-based Caribbean/Latin American Action. "They need legislation above and beyond CBI that would help bring Haiti to the level it was at when the coup took place."
At the height of its success in 1987, the Haitian export-assembly industry employed 50,000 people in 130 factories, and generated more than $200 million in annual foreign exchange. Among Haiti's most famous exports was baseballs; companies such as Rawlings Sporting Goods Co. and MacGregor Sporting Goods supplied 90% of the balls used in major-league games. Companies were attracted to Haiti by the country's reliable workforce and wages of only $3 a day, among the lowest in the hemisphere.
But by early 1992 -- with Haiti in total chaos and its dictatorship under an international embargo -- most U.S. companies had pulled out, leaving only 600 workers in the three or four plants still operating. It has since risen to a few thousand, though future growth in the apparel industry is uncertain. During the first three months of 1995, total Haitian exports to the United States amounted to only $29.5 million -- up from $27 million during the same period last year -- and apparel imports had actually dropped by 22% to $11.4 million, from $14.7 million in 1994. By comparison, the neighboring Dominican Republic has seen apparel exports to the U.S. jump by 22%, to a whopping $318.3 million for the first three months of 1995.
Antonio J. Colorado Jr., who as Puerto Rico's former secretary of state attended Aristide's inauguration in 1991, says investment will return to Haiti, but very gradually. "People will take their time before investing largest amounts of funds," said Colorado, a close friend of the Haitian president. "At the beginning, Haiti will get companies that need low-wage workers, but won't invest much. Slowly, if companies see stability, industries will invest more."
Says Richard Bernal, Jamaica's ambassador in Washington, who wants countries like Mexico and Argentina to give Haiti five years of duty-free access: "Two aspects will govern how quickly investment takes place. The first factor is confidence in the country. That's tied up with the restoration of democracy and ending the kind of violence which the military has been carrying out. The second is obviously economic conditions. Haiti would be attractive to low-skilled, labor-intensive industries. Market access will be very important."
To that end, the U.S. Department of Commerce is leading a trade mission to the Haitian cities of Port-au-Prince and Cap Haitien for minority-owned companies seeking business partners. Executives from the apparel, electronics, telecommunications and food-processing industries are all expected to take part. According to a brochure advertising the Aug. 22-24 mission, "Aristide's philosophy is based on the belief that a vibrant private sector with an open foreign investment policy is vital for long-term growth."
The briefing says that in 1995, the Haitian government hopes to achieve 4.5% growth in gross domestic product, and another 6% growth in 1996, adding that "a new tariff law, which reduces customs duties from a 50% maximum rate to a range of 0-15%, should significantly encourage trade activity in Haiti."
Yet all that isn't enough to convince jeans-maker Woltz that he should return to Haiti. When asked if he'd be willing to forget the past and try again, he replied without hesitation: "No way. I spent 11 years there, and that was enough." |
