Social demands in Haiti are immense and the Haitian economy cannot generate, in the short nor medium term, the income required to adequately address those demands. Rapid economic recovery is therefore an urgent priority. As a solution is found to the political crisis, the Haitian decision makers must design and  implement  in the short run an economic program guaranteed  to achieve rapid and sustainable growth. The challenge remains in choosing priority sectors and regions which can have  a significant spill over effect on the whole economy .    

Material  factors that currently hinder or restrain economic activity are countless. The following major structural impediments to growth should be noted:  

(i) the  low level of income combined with uncertainty and political instability  limits  the opportunities  to create  new or  expand existing  business. 

(ii) the deterioration and lack of  basic infrastructures (transport, communication, energy and water supply) lead to  high production costs, thus low competitiveness and limited choice of sectors to invest in. 

(iii) the limited or lack of access to financial resources particularly by  small businesses operating  in the informal sector constitutes a real constraint to development and growth. Interest rates in the banking sector are high and small business often have to turn to the informal credit market and face prohibitive interest rates.                                                                                  

 Economic recovery requires the immediate rehabilitation and construction of basic infrastructure and  expanded access to credit for the private sector, particularly for SMEs. Considering, however, the low level of  economic development of the country and the scarcity of financial resources , instead of financing small projects here and there, it appears  more productive to concentrate resources on economic sectors and geographical regions where those resources could have a catalytic role  in attracting private investment, both foreign and national.   

Many areas can serve as development  poles in Haiti. They can be selected on the basis of their comparative advantage. Major development poles in Haiti include  the region of Plateau Central around the pentagon formed by Hinche, Maissade, St-Michel de l?Attalaye, St-Raphael and Pignon; the South East, including all the areas comprised between Bainet, La Vallée, Jacmel, Marigot and Grand-Gosier;  the Grande-Anse area from Pestel to Anse-d?Hainault, through Corail, Beaumont, Roseaux, Jeremie, Abricots and Dame-Marie; the NorthWest Region from l?Anse à Foleur to Môle St-Nicolas, through St-Louis du Nord, Port-de-Paix, Jean-Rabel, Bombardopolis and Plaine des Moustiques, etc. It is up to the authorities to fix the selection criteria and evaluate the opportunity cost of choosing one area over another. The availability of pre feasibility and feasibility studies could facilitate the scaling of each development pole  and the final selection process.  

For illustrative purposes, let us consider briefly the potential of the economic centers of the North of Haiti, as we know it now, or the Grand Nord, as our Cap-Haïtien Friends dream about it, and the South of the country, around the area of les Cayes. The  economic expansion of those two centers, combined with the agricultural development of the Artibonite Valley could generate, in the medium term, an important part of the resources required to finance the much needed social progress in the country . 

What about the Port-au-Prince region, one could legitimately ask? Even though this may provoke negative reactions, it is proposed to exclude temporarily that region for the following reasons: The area of Port-au-Prince is overpopulated and has accumulated so many problems due, among others things, to insecurity and  lack of investment in basic infrastructure that it does not seem  capable to attract foreign investments  in the short term.  Except for the social sectors, any new investment in infrastructure in Port-au-Prince, if not included in an integrated rehabilitation program, would have a limited multiplier effect and will very unlikely be able to attract  substantial private and particularly foreign investments. Prioritizing the area of Port-au-Prince means accepting to make massive investments the country cannot afford presently.  Furthermore, it would also imply exclusion, because the rest of the country would have to continue to be completely neglected. Achieving development goals means establishing priorities and making choices, and very often, tough choices. The choice to make is to invest outside of Port-au-Prince.  

Having said that, it is still the responsibility of the Haitian authorities to make sure that basic infrastructures are rehabilitated in the Capital and that the  well being of the population is improved.  

Public investments outside P-au-P in the development poles identified earlier would have in the medium and long term a higher social return and a greater impact in attracting private investments. Job creation in those new development poles would contribute also to reduce the population pressure on Port-au-Prince and improve the living conditions of the population of these regions.  It is obvious that if the port and airport of Cap-Haitien  were expanded and rehabilitated, local  businesses would have known a greater expansion and earned higher returns for their investments.  The deterioration of those facilities as well as the lack of adequate roads/routes connecting to the P-au-P international airport have limited the growth and development of  Cap-Haitien and the Northern region at large. 

The same could be said about the South of the country which has as much as the North a promising agricultural and agro-industrial sector but also with its unspoiled beaches can  attract tourist industries. The combination of  local business community and investments in infrastructures could create the conditions for investment attraction in the short term in agriculture and in the  medium term in  tourism. 

What is proposed here is not to leave  Port-au-Prince to its ill fate, but to stop always putting it blindly on the first priority list for everything. The rest of the country should be at least given this time around a fair chance to compete with Port-au-Prince for the scarce available resources.  

In a nutshell, as a first step, priority should be given to the promotion of economic activities outside Port-au-Prince in one of the development poles selected. It implies : 

(i).-Providing these regions with the required infrastructure (energy provision, transport facilities, potable water) and planning a real development of the urban infrastructure  . 

(ii).-Strengthening local public institutions  as well as creating new institutions that could embody  the public and private partnership  (PPP) required to promote regional development. 

(iii)- Preparing a competitivity study for the tourism sector in both regions while promoting a real dialogue between the public and private sectors.  

This study would be followed by programs tailored around improving  the provision of  non-financial  services required for the growth of businesses, particularly in the area of professional and technical  training.  Resources should be devoted to  promote SME access to credit by encouraging private  banks in implementing initiatives to promote  micro-credit, including for housing . Haitian private banks are willing to  increase their investments outside  P-au-P . A  government strategy based on regional development will  encourage these initiatives.  

Within the framework of the transition strategy, the  government should submit to its international partners (multilateral and bilateral) an Emergency Infrastructure Rehabilitation Program  (EIRP) to deal with the most pressing infrastructure needs. 

If  a sound regional development strategy is designed, our partners will probably respond positively, and the Haitian private sector will be fully willing to contribute to its realization. Indeed, we should not forget that, in Haiti no, we are presently witnessing  the emergence of a new class of entrepreneurs who are trying to manage their business differently and with a strong desire to distance themselves from the bad practices of the past. This new entrepreneurship should be encouraged and supported. 

Ericq Pierre is currently Senior Counsellor at the Office of the Executive Director for Argentina and Haiti at the Inter-American Development Bank’s Board.