Haitian upheaval proves bad for business Union organizing, image of instability cool investment

It's business as usual in this city's teeming marketplaces, odorous and colorful displays of this nation's economy. Everything from live chickens to key chains are hawked loudly in an economy that has changed little through years of political upheaval, including the recent overthrow of Jean-Claude Duvalier.

But politics is proving bad for business on the outskirts of town -- where modern assembly plants for garments, electronics, and sporting goods are located. These assembly operations have become Haiti's biggest source of full-time employment.

Ironically, say business officials, the collapse of Duvalier and last month's lifting of US trade quotas on goods assembled with 100-percent US-made parts should be ideal factors for expansion of the assembly business. But the effects of political upheaval -- delays in production and delivery, a tarnished image for potential investors, and a mushrooming of union organizing -- have sent the assembly plants scrambling to maintain contracts.

Projected to grow by 10 percent this year, assembly businesses instead find themselves facing a drop in their exports of 20 to 30 percent in the first six months of 1986.

The assembly sector, which includes Haitian as well as American firms assembling foreign-made parts for re-export, primarily to the United States, has a ripple effect in an economy of 50-percent unemployment. The average baseball stitcher or electronics assembler earns $4 to $5 a day. Typically, that salary helps support five family members.

Political upheaval only caused minor business disruptions at first, say those running assembly operations. But misreading of headlines, they say, has caused some US companies to drop contracts with assemblers here, out of concern that the orders can't be fulfilled or might be delayed.

``Up to now everything has been very disciplined and stable. Now we're going to have a different kind of stability under democracy,'' explains Claude Levy, a longtime spokesman for the Haitian business community and now a banker.

One well-known Haitian businessman, who asked not to be quoted by name, is bitter about the situation. ``To stay in business under Duvalier you had to, shall we say, invest,'' he says, referring to the bribes necessary to keep business running smoothly during the 30-years Duvalier and his father, Fran,cois Duvalier ruled. Business will be easier now, he says.

Stability and a willing and cheap labor force have been the key factors in the location of assembly plants here.

Haiti, which produces 90 percent of the baseballs used in the US major league, has minimum wage rates of $3 a day. Assembly plants, which are the fastest growing business here, as in most of the Caribbean, reached peak employment in Haiti in 1984, providing 60,000 jobs. But the 1985 slump in the US computer industry started a decline in assembly operations that was compounded by the recent Haitian political events.

Even if the political situation is perceived to settle down, says Mr. Levy, labor issues may take longer to settle. ``With labor unions we're going to have a problem, because the reason the [US] assembly sector comes to Haiti is because of the fierce world competition and because the cost of American labor is high. The appearance of unions in Haiti make it difficult for them,'' he says.

Business associations, such as the Haitian-American Chamber of Commerce and the Haitian Association of Industries, are banking on the high rate of unemployment here to undercut union leverage.

Leaders of the three Haitian union federations admit that their leverage is not great at this point. They note that there are no laws to protect union organizers from being fired, and even some companies admit they have fired organizers.

``US companies are blackmailing Haitians when they say they'll leave if Haiti has unions,'' says one federation official.

Analysts say that business organizations are trying to persuade members to at least talk with the unions. Some businesses have started literacy and medical programs. The 250-member community of assembly plants has even created a publicity arm to promote Haiti and to try to raise funds to improve the infrastructure in order to lure more businesses.

``Let's not fool ourselves. This new attitude of management and worker demands is not a coincidence,'' says one industry representative. There are mixed feelings in management, says the source, but most businesses are trying to appease their workers.

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