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Caribbean poverty - hope for Haiti?

According to one of the Americans who does business here, making a sound investment in Haiti requires ''getting beyond the voodoo.'' What the businessman means by voodoo is not the religious cult that many Haitians adhere to, but the dark and mysterious image that Haiti conjures up in the minds of foreigners. That image makes it difficult to see the positive side of this small, mountainous island nation.

Haiti still has its dark side - a repressive government and a small urban elite ruling over a largely rural, illiterate, and impoverished people. A 1984 US State Department human rights report described most of Haiti's people as ''desperately poor.''

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Power is concentrated in the hands of Jean-Claude Duvalier, Haiti's President for Life. The freedoms of speech, press, and association are severely restricted. The government has ''continued ... occasionally to arrest persons arbitrarily and to beat and torture some,'' according to the State Department.

But there is a positive side to this crowded nation of 5 to 6 million people that usually goes unreported: Haiti's hard-working people, many of whom, in the face of great poverty, retain a remarkable dignity. Haiti can boast of skilled handicraft workers and respected international civil servants, as well as painters whose work is known far beyond the Caribbean. Haitian industry benefits from a growing number of young, US-educated entrepreneurs.

With an eye on rapidly growing assembly industries in Haiti, Ernest H. Preeg, a former US ambassador here, has described what might be called the optimistic scenario for this island nation. As Mr. Preeg sees it, if the Haitian government carries out fiscal, policy, and administrative reforms - and foreign aid and technical assistance are increased - a dynamic period of export-driven growth and modernization is possible.

President Reagan's Caribbean Basin Initiative, or CBI, which began to be implemented early this year, presents Haiti with an ''unprecedented opportunity'' to break out of a ''vicious cycle of economic distress and political isolation,'' Mr. Preeg argues in a paper prepared for the University of Miami's North-South Center. Other experts would contend that, given the depth of Haiti's problems, including a high level of corruption, the CBI is not likely to have a significant impact, particularly when it comes to the country's poor majority.

But Preeg acknowledges that exports based on assembly industries - which produce, among other things, coils, capacitors, and computer cables - will not be sufficient to meet the needs of Haiti's largely rural population. A ''reinvigoration'' of Haiti's agricultural production is central to a balanced economic development strategy, the former ambassador says.

The Haitian government has placed a higher budget priority on agriculture. But it has little to show for this.

The United States government is interested in Haiti partly because of its location. Ships carrying strategic minerals and other cargo from South America and the West Coast of the United States pass through the Windward Passage between Cuba and Haiti. Haiti is only 500 miles to the southeast of Florida. Its people constitute one of the largest populations in the Caribbean.

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The US interdiction of Haitian boat people has at least temporarily arrested the flow of Haitians to Florida. But the boat people were a major concern just a few years ago and could reemerge as a significant problem if conditions in Haiti fail to improve.

The US relationship with Haiti under President Jean-Claude Duvalier has been marked at times by tensions. Pressure from the boat people has been one reason American diplomats have encouraged President Jean-Claude Duvalier to implement fiscal and other reforms, ''democratize'' his regime, and put an end to human rights abuses. (None of this was what the Haitian government was at first led to expect from the Reagan administration.) At the same time, US assistance to Haiti has steadily increased, from $2 million in 1970 to about $48 million is fiscal year 1984. Dozens of private American voluntary agencies have projects in Haiti.

US officials insist that despite the continuation of arbitrary arrests and other human rights abuses under Jean-Claude Duvalier, his is a less brutal regime than was that of his father, Francois, the infamous ''Papa Doc.'' The difference between father and son seemed to emerge most vividly during the riots that erupted in five Haitian cities and towns last May.

In the northern towns of Bombardopolis and Jean-Rabel, rioting erupted after police, apparently by accident, wounded a girl when they fired near a crowd demanding food. At Cap Haitien, the country's second-largest city, police were reported to have killed three persons. But in most cases during the rioting, the police and military appeared to exercise restraint.

''Under Francois Duvalier, people would have been mowed down,'' an American diplomat says.

Whether foreign aid alone can alleviate the problems that led to the rioting is doubtful. Haiti is littered with the remnants of foreign aid projects - not all of them American - which have not to involved the local people on any sustained basis and thus failed. Members of private voluntary agencies say that those projects that have succeeded often have done so only by keeping Haitian government involvement to a minimum. A detailed, 162-page study on Canadian development aid to Haiti published earlier this year by the independent, nonprofit North-South Institute in Ottawa says little progress has been made in Haiti in reducing the ''notorious misuse of public revenues for private purposes'' by Haitian government officials.

''Huge sums are still diverted in countless different ways,'' the Canadian study says. It argues that Jean-Claude Duvalier is ''hardly about to put a stop to this integral part of Haitian life, for he is undoubtedly its greatest beneficiary.''

The report also says, however, that even the harshest critic of the Haitian regime must admit that it is ''confronted by economic problems of mammoth proportions that do not lend themselves to quick solutions.'' Although only one-third of the land is arable, 75 percent of the people must depend directly on agriculture. A combination of overpopulation, steep slopes, tree-cutting, and torrential rains has had the predictable effect - soil erosion. Haiti, the report says, may represent ''the most advanced state of environmental degeneration in the world.''

Many Haitians and foreigners seem to be resigned to the view that corruption is all-pervasive in Haiti. But among Haitian businessmen and foreign diplomats, one finds strong resentment against one prominent personality who is widely alleged to have taken advantage of his privileged position: He is President Duvalier's father-in-law, Ernest Bennett, an export-import businessman with a fondness for French literature and West German autos.

When asked about the widespread allegation that he does not pay taxes on the profits he makes from coffee exports, Bennett produces a stack of receipts indicating that he does pay taxes. He also shows a statement signed by a notary in Miami to the same effect. But financial experts who are critics of Bennett say one would have to have access to bank accounts to know the true state of Bennett's finances.

Bennett denies the often-repeated allegation that his wealth came to him only after his daughter, Michelle, married Jean-Claude Duvalier. He says it is simply a matter of his winning out in the coffee export competition through effective business practices. The coffee business, he says, is one in which ''only the strong survive.''

''The house of Bennett has always flourished,'' said Bennett in an interview. ''I don't demand favors.''

The US government and some American businessmen are trying to encourage expansion in the more modern sector of industrial exports, a sector that does not seem to interest Bennett. (His main activities appear to be agricultural exports and auto imports - BMWs and Ladas.)

According to the US Commerce Department, favorable circumstances for the assembly industry have led to the creation of more than 250 companies during the past 10 to 15 years. These have created up to 60,000 jobs, and put dollar earnings from industrial sector exports well above those for coffee, the traditional export commodity.

In addition to electronic components, American companies in Haiti are producing textiles, sports equipment, and toys, including Sesame Street dolls.

According to the Commerce Department, Haiti's unskilled labor is 110 percent more productive than its East Asian counterparts. Haiti's investment incentives include tax holidays of up to 20 years. The minimum wage is only $2.64 a day, with an increase to $3.00 a day to begin today, Oct. 1. But foreign businessmen argue that working conditions in most of the new plants are good and that they are helping to create new jobs where none existed before.

President Reagan's Caribbean Basin Initiative offers added incentives to investors, including a lifting of tariffs on a number of exports to the United States. But in the end, Haiti's bad image deters some foreign businessmen from even considering an investment in the country.

Some foreign aid officials question whether the plight of many rural Haitians can be alleviated in any significant way as long as the Haitian elite, 1 percent of the population, takes home more than 40 percent of the national income. (These figures are World Bank estimates.)

A 1981 World Bank study says the richest 1 percent of the population pays only 6 percent of its estimated income in taxes, including export taxes. (The Haitian government has vowed to increase tax collections.)

But donor countries continue to provide aid. The Canadian study published earlier this year argues that ''some desire to promote development has occasionally been demonstrated and the (Haitian) government has been willing to let much development work by foreigners go on almost behind its back.''

Next: Grenada, test case for the Reagan administration.

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