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A business solution to Haiti's poverty

Foreign aid was vital after the Jan. 12 earthquake. But long-term prosperity depends on business development.

By Michael Fairbanks / July 12, 2010

Port-au-Prince, Haiti

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?

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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."