A business solution to Haiti's poverty
Foreign aid was vital after the Jan. 12 earthquake. But long-term prosperity depends on business development.
Celebrities, not-for-profits, and the multilateral banks have rallied since Haiti's Jan. 12 earthquake. They saved lives and created some order. They also reconnected Haiti to important networks of foreign aid and charity. The question now is, how do we connect Haiti to networks of prosperity?
I was invited by the leaders of Haiti's private sector to speak about enterprise solutions to poverty at a conference last month, held two hours outside Port-au-Prince, the capital. It took place at a former Club Med that is now the interim Haiti headquarters of the World Bank.
The list of not-for-profit organizations advocating this approach grows each day. Haiti's thoughtful president, René Préval, told me that he did have "some reservations about aid," and that he was "open to the private sector" to help rebuild.
Even Bono recently made the pivot away from just charity and debt forgiveness. He is lauding indigenous entrepreneurs, and says, "Smart aid aims to put itself out of business in a generation or two."
But the private sector here has an atrocious record. "The country's elites conspired for two centuries to maintain business models that exploited the poor," says Pierre Marie Boisson, a Harvard-educated, Haitian international banker. "The exchange rate regime is exacerbated by the influx of aid and favors importers and wholesalers, not the poor."
Profiles in business courage
Haitian Richard Coles is a descendent of both the English and Africans. His family has owned land since the world's only successful slave revolution in 1803. He employs 3,000 people at his apparel-assembly plant, pays above-average wages, and provides on-site medical care.
Scores of men and women in long lines do the same work. It is hot, but I am the only one sweating. The combined noise of a thousand sewing machines makes the tin roof vibrate; the plant drones like a beehive.
Mr. Coles speculates that maybe 1,000 lives were saved the day of the earthquake just by being at work in his factory, instead of being unemployed and at home.
"The poor believe the elites were always together, but we weren't," he says. "We supported different politicians, different policies. Things have changed. We agree on one thing: We have failed the nation."
Jean Buteau gave me a tour of his mango processing plant. Haiti has the microclimates to grow over 140 varieties. His suppliers are small farmers, some of whose children attend two schools he built. He could export up to five times what he does now, but Haiti doesn't have the specialized infrastructure: multimodal transportation, refrigeration, or a world-class port.
He has just expanded his plant with help from the Soros Economic Development Fund. It has classrooms, a quality-control lab, and locker rooms with showers for workers. He plans to employ another 150 people this year, and produce a nutritious quick-frozen product for working Haitian families who could then buy it on the street.
"There are two types of people who buy their food every day," he says, "the rich who want it fresh, and the poor who only have enough money for today."
Olivier Barrau runs the Alternative Insurance Company. He built it to serve the well-to-do, as well as the 80 percent of Haitians who live on less than $2 a day. "We don't have a prevention culture in Haiti; and when you react, you are not efficient," he says. "People don't think of insurance for the poor, as if they have nothing to protect. But the goal of insurance is to make sure people can survive hardships."
The challenge, Mr. Barrau says, "is to build a safety net for rural people whose certificate of deposit is their cow, whose demand deposit is their goat, whose cash is a chicken."
Mathias Pierre started GaMa, a computer hardware business. "I could have gone to America, but I stayed and earned my engineering degree," he says. When riots in 2008 engulfed the capital, his store was destroyed. "I realized then, I had a nice car, a fine home; the people didn't know that I was one of them," he recalls.
Mr. Pierre started training programs for disadvantaged youth. He wrote a biography, which sold out in months. When the earthquake hit, he loaded up a truck with computer supplies and went to the president's temporary headquarters. The government was back online in hours – days before the nongovernmental organizations arrived.
Gladys Coupet, Citibank's chief country officer, was injured in the collapse of her building during the earthquake. She returned to work heading up key public-private sector initiatives.
"Our buildings were designed for hurricanes, heavy and inflexible; not earthquakes where we need structures that are light and agile," she says. "It is a metaphor for our economy in the throes of globalization."
The need for a culture of innovation
Much of the information that comes out of Haiti is from celebrities, US-based news crews, and the PR firms hired by donor organizations. One rarely hears the Haitian voice, and almost never that of the Haitian private sector. Even though humanitarian aid helped to lift the country out of crisis, it will never create prosperity for the average person.
Mr. Boisson, the banker, agrees. "We need a national vision of investment-led growth and shared prosperity," he says. This means creating a culture of innovation: finding attractive export market segments to serve with unique products, building new distribution systems, lowering energy costs, and providing skills to Haitian citizens who will be compensated for the high value they create.
During my visit, I saw the value that a large employer can provide to Haiti; how entrepreneurs can meet the changing needs of working Haitian families; that home-grown role models exist. I also saw reservoirs of deep introspection and even compassion inside Haiti's private sector. It remains for those of us outside Haiti to find these men and women and connect them to global networks of productivity and investment.
Kurt Jean-Charles is the founder of Solutions S.A., which creates mobile software applications for the over 1 million cellphone subscribers in Haiti. He evoked the promise of private-led growth when he told me, "Entrepreneurs put aside their comfort to create something new, and in the process, advance society."
Michael Fairbanks is cofounder of SEVEN, a philanthropy run by entrepreneurs. He co-wrote "Plowing the Sea," Harvard Business School Publishing's first book on enterprise solutions to poverty, and edited "In the River They Swim." He advises government and business leaders in Haiti.