Social security benefits are limited to formally employed people. In 1995, the Insurance Agency for Occupational Accidents, Illness, and Maternity (OFATMA), an autonomous body under the umbrella of the Ministry of Social Affairs, provided insurance coverage to 2,500 public and private firms. In 1996 it covered 60,000 workers, an increase from 40,000 covered in 1994.
The estimated per capita expenditure in health for 1995 was G15.7 (US$ 2.0); it represented a decrease compared with that of 1990, which was G24.8 (US$ 3.4). Total per capita expenditure on health reached US$ 9, representing 3.5% of GDP in 1995. According to these estimates, in 1996 the government budget represented about 16% of the total expenditure; external donor agencies, which are mostly channeled through the Ministry of Health and NGOs, 28%; NGOs, 20%; and private expenditures, 36% in 1996. (source: )
School Health. The Ministries of Public Health and of Education, with external financial and technical assistance, are working together to develop school health policies appropriate for Haiti, including early detection of hearing and vision problems; promotion of oral health and detection of dental caries; nutritional surveillance; detection of iron deficiency and diseases caused by intestinal parasites; early detection of poor posture; health education and promotion, including sex education; and the prevention of STDs.
Workers’ Health. Haiti has no national health program for workers, but workers who receive coverage from the Agency for Occupational Accidents, Illness, and Maternity were given annual examinations to detect tuberculosis and syphilis. The Agency has a 30-bed hospital in Port-au-Prince that granted appointments to an average of 30 outpatients a day.
The main health problems of children are prematurity, pneumonia, malnutrition, meningitis, typhoid, and gastroenteritis. Teenagers are particularly vulnerable to tuberculosis, anemia, skin diseases, and sexually transmitted diseases. For people aged 10-19 HIV/AIDS was the leading cause of death! For adult AIDS it is also leading cause of death, intestinal infections come second and maternal causes rank third.
Most of those illnesses are not rightly treated and making life expectancy so low - 56 years (women), 52 years (men). (source: http://www.paho.org) .
In Haiti there is need for a program to make people aware of modern contraception methods and how to avoid sexually transmitted diseases. This can be accomplished by increasing availability and access to youth-friendly reproductive health services and introducing educational materials to improve knowledge of the youth and adults. Haiti can also establish HIV/AIDS speciality care centres which will provide counselling and testing, prevention methods and other services.
Also there must be easier access to see a doctor, maybe locate them at schools and work places.
Labour
Haiti’s Labour Code (Article 335) states that the minimum employment age in all sectors is 15 years, except in the case of children working in domestic service. The Labour Code (Article 341) sets the minimum employment age for domestic work at 12 years of age. All working children between the ages of 15 and 18 must be registered with the Ministry of Social Affairs. The Labour Code prohibits minors from working under dangerous conditions and prohibits children under the age of 18 from working at night in industrial enterprises. Penalties for child labour violations are 1,000 to 3,000 gourdes (US$42 to US$126). The Labour Code prohibits forced or compulsory labour, including forced or compulsory labour by minors. Laws do not prohibit trafficking in persons. The Ministry of Social Affairs’ Institute of Welfare and Research (IBESR) has the authority and the mandate to protect children. The IBESR has approximately 12 social service workers working throughout the Port-au-Prince Metropolitan area.
According to a report published by the US government more than more than 300.000 children a year are being taken out from Haiti and forced to work as beggars, farmers and construction workers by adults who keep their wages. Each year, more than half end up in Dominican Republic. The parents often help their children to work outside the country seeing in this a way of obtaining some additional income. The study shows that the problem is mostly in northern Haiti. While about half of the children go to the Dominican Republic for three of four months and then return in Haiti to attend school, many of them end up staying there as a low-wage farm workers.
In terms of housing and food, they live in very poor condition and often they are physically and verbally abused, but because of their illegal status and their age, they fear going to the authorities and risk to be send back home.
UNICEF official, Alec Fyfe, said that “while labourers have been migrating from Haiti for decades, the worrying new twist is the trafficking in children. The families see the middlemen doing the smuggling almost as benefactors due to the extreme poverty in Haiti”.
UNICEF officials said that parents pay the smugglers $60 to $80 per child to take their children to the Dominican Republic. The smugglers in turn pay Dominican border guards $1 to $3 per child to sneak them across the border.
The U.N. states that many children are physically, emotionally, and sexually abused. And few are given the chance to attend school. Beyond Borders, a non-political volunteer organization which advances the rights of children to be free from abuse and exploitation without regard to race, religion, gender or sexual orientation is supporting a growing movement in Haiti to bring an end to child servitude and exploitation.
Billboards like this are a small part of campaign to end child servitude. The billboard says, "Give me your hand. Give me tomorrow. Down with Child Servitude." The campaign Down with Child Servitude initiated by Beyond Borders organisation that is established in Haiti has developed an extensive public awareness campaign to change attitudes about the practice of exploiting children in domestic servitude, appealing to guardians of these children and government officials to use their power to protect them.
In 1998, the International Labour Organization (ILO) estimated that 24 percent of children between the ages of 10 and 14 in Haiti were working. Child labour in Haiti is generally non-existent in the industrial and commercial agriculture sectors because of high adult unemployment.
A 1997 UNICEF study estimated that there were some 250,000 to 300,000 child domestic workers in Haiti, 80 percent of whom were girls under the age of 14. In Haiti, child domestic workers are commonly referred to as restaveks, a Creole word meaning “to stay with.” They are among the most vulnerable and exploited of all children in Haiti. Isolated from family and peers, restavek children are largely unprotected from abuse. According to UNICEF, most restaveks reach the age of 15 without ever having been to school. Most restaveks work 10 to 14 hours per day and do not receive any compensation for their work. They are often psychologically and physically punished by the master or mistress of the house and sometimes even by their children. Girl restaveks are sometimes sexually abused by the males in the employing families. If a girl becomes pregnant, she will generally be released into the streets. Many such girls become street children or prostitutes.
In the neighbouring Dominican Republic, between 10,000 to 14,000 Haitian workers are contracted annually to work in the sugarcane industry where Haitian children are found working, particularly in the Barahona province. What needs to be done here is firstly to make sure that the education is accessible for every child in Haiti so they won’t have to go abroad and work for a few months and save money so they can go to school when they return.
Education
In Haiti, the traditional education system, based on the French system, begins with six years of primary education followed by seven years of secondary education. Two streams end either in the Baccalaureat I after three years or the Baccalaureat II after four years. In the reform system, the primary cycle lasts for nine years followed by three years of secondary education. Pupils opt for classical, technical, or a professional stream.
Higher education is provided by universities and other public and private institutions and is under the responsibility of the Ministry of Education.
Primary schooling supposed to be free and compulsory, but it is still big expense for families who must pay for uniforms, textbooks and other inputs (all costs are as much as 15% of family income per child). Due to weak state provision of education services, private and parochial schools account for about 90% of primary schools, and only 65% of primary school-aged children are actually enrolled. Less than 35% of those who enter will complete primary school. At the secondary level, the figure drops to around 20%. Haitians realise how important education is, but most of them just cannot afford send their children to secondary schools. 60% of rural households suffer from chronic food insecurity, and food comes before education. Another reason why numbers of students decreased is violence in the country. A nationwide assessment conducted in March 2004 showed that the political conflict in Haiti has had a severe impact on Haiti’s children, particularly the most vulnerable. During the period surrounding Aristide’s resignation, students in eight of 19 major cities received death threats aimed at preventing them from attending school or participating in public events. A number of schools and hospitals were the targets of violence and looting, and many schools were closed for months.
In the field of education, girls and boys have equal opportunities to attend primary school. At the primary school level the gross number of years of schooling for girls is 0.5–2.1 years lower than for boys. Women also enter the job market at an early age; roughly 10% of young girls aged 5–9 years and 33% of girls aged 10–14 may be considered economically active.
With an adult illiteracy rate of 52% (48% of males are illiterate and 52.2% of females are illiterate), education remains a key obstacle to economic and social advancement in Haiti (source: http://www.buildingwithbooks.org)
To help improve attendance at schools many organisations help to support and develop education system. The World Food Programme, USAID, World Bank, Save The Children and many more trying to look after pupils health and provide 1000caloreis meals. There is also UK charity Plan International, which helps provide furniture to Haitians schools and also UNICEF, which help with quality training teachers and improve quality of Haiti’s school infrastructure, specifically through the renovation of school buildings and equipment.
To improve children’s attendance at school, their safety is most important point. Making buildings more secure and also provide school buses taking children to school and home after classes.
Also, to increase children’s attendance Haiti can introduce finance incentive programmes, which have been very successful in Jamaica, such as rewarding classes for outstanding attendance, awarding individual certificates.
Children, who’s families are struggling to afford food, should have meals provided, as a another reason why attend school.
Also important is the quality of teaching, why not make it more attractive doing a teaching placement year in Haiti for French students? It would be a great opportunity for students to develop their skills and make their work experience more interesting for future employers.
RAW MATERIALS:
Haiti’s natural resources are “bauxite, copper, calcium carbonate, gold, marble, hydropower, beans and tobacco.” (). Bauxite was Haiti’s most valuable mineral but extraction in recent years became unprofitable.
Haiti’s river valleys and diverse micro-climates and fertile soil are ideal for commercial agriculture production. Agriculture is the most important sector in Haitian economy, where 67% of the population depend on agriculture for their income. “The country’s largest crop-producing and one of Haiti’s most fertile river valleys is the Plaine de l’Artibonite. Agriculture includes growing of rice, maize and beans. Sugarcane is the second major cash crop of Haiti, whilst coffee is the first.
However, in recent years deforestation has taken place on a large scale, leaving the soil vulnerable to erosion, causing it to become infertile. Trees have been cut down mainly for charcoal production which is the country’s primary source of fuel. The land has become infertile and so crops cannot be grown as efficiently. In the dry season, however there is a periodic drought and water is not available, leaving crops withered and of low yield.
To combat problems of deforestation and low crop yield numerous reforestation efforts have been made by international help. ORE (Organisation for the Rehabilitation of the Environment) are helping farmers become self-sufficient. ORE introduced a system of fruit-tree production with high crop values. The benefits of fruit tree production are that it generates an income to farmers as they can trade the fruits (mostly mangoes), has nutritional benefits i.e. feeds the family and fewer trees are cut down so the environment is saved and there is less soil erosion.
Proposed solutions to help farmers become self sufficient is for international non-government organizations to come to Haiti and educate farmers and introduce methods of subsistence farming and educate them on environmental management practices. Many farmers produce bananas, corn, rice, sorghum, dry and cocoa beans, all of which are exported to neighbouring countries. Haiti can take an example from India where the do intensive rice farming. If Haitians were to implement this method, they would be able to generate an income from trading rice and nutritional benefits as rice can form up to 90% of the total diet, eliminating malnutrition.
In the dry season, to prevent crops from growing of low yield quality, water can be pumped in from the surrounding sea and lakes and can be used to irrigate the land so the crops have a plentiful supply of water. The same method can be used for plumbing in homes.
Most of Haiti does not have electricity or power. A solution to this is to develop hydroelectricity using water from the sea to generate electricity. Haiti receives a lot of sunlight also, and so they can also develop solar panels for solar energy.
Haiti could have a potentially successful fishing industry but a lack of modern fishing equipment has halted this development. Experts from Cuba have, however, been helping Haiti develop its fishing industry. At peak times, Haiti exports lobster and other seafood to the USA. By obtaining the right machinery, the fishing industry could provide Haiti with a regular source of income and increase the country’s economy. It would also provide jobs for people and give them an income and the fish can be used as an export to trade with other countries.
All the given solutions are extremely expensive and Haiti is already in serious debt, owing more than $1 billion internationally.
Imports & Exports
Located just 600 miles southeast of the coast of Florida, Haiti is the poorest country in the Western Hemisphere and is the only country in the hemisphere to be classified by the United Nations as a “least developed country”. It is plagued by corruption, gang violence, drug trafficking, and organized crime. The 30-year Duvalier dictatorship ended with the adoption of a democratic constitution in 1986, but President Jean-Bertrand Aristide (elected in 1991 and again in 2001) did not respect democratic norms, and his regime collapsed in February 2004. René Préval won a U.N.-supervised election in 2006.
Haiti is a country that has to import almost everything.
Haiti's poor economic performance reflects political instability, inappropriate economic policies, pervasive corruption and inefficiency in the public sector, and lack of investment in physical and human capital. Haiti's physical infrastructure is poor (e.g., roads are inadequate and deteriorating), and basic services (e.g., power, water, and telecommunications) are frequently unavailable.
The agriculture sector enjoys the best tariff protection with a simple average tariff of 4.5% and rates varying between zero and 15%. The 15% rate is applied, inter alia, to swine meats; edible poultry meats and offals; mosses and lichens; cut flowers; fresh, chilled or frozen vegetables, plants, roots and tubers; citrus fruits; most sugars and sugar confectionery; basket ware or wickerwork; and cotton.
Even with all this, agriculture is characterized by low investment and maintenance, limited access to credit, poor management of irrigation systems, over exploitation of land owing to population pressure, deforestation in an already fragile natural environment and lack of adaptive variety selection and research and farming on small plots using primitive implements.
The Haitian state during the last 25 years has invested without success in the sugar, edible oil, essential oils and flour industries. The US Agency for International Development (USAID) is active in assisting Haiti with its agricultural programs. The US Department of Agriculture has worked closely with the organisation or mango producers and inspects the treatment facilities to permit the export of fruit to the United States.
Haiti is 95 percent deforested, its infrastructure is deplorable, and unemployment is very high. Many in rural areas have fled to the cities; 80 percent of the economy is informal. Emigrants' remittances are key to survival for some.
Haiti`s landscape is about 75% mountainous and fairly rigged. The climate alternates between a dry season and a raining season. Very little of rural is cultivated and it is the case for the rest of the countru ever since they have been an independent nation. The international belief is that Haiti is essentially an agricultural nation but the condition here are not that good. In order to grow in this sector Haitians should concentrate more in build terraces in the mountains (the total cultivable land in Haiti will increase), replenish terraces with new arable top soil (some of the mountains have arable soil almost two meters deep and some of this land can be transported in the rest of the country). Also Haiti can import arable land from Mexico and Argentina. Finally, in Haiti it can be devise an irrigation system and grow subsistence crop at first.
There are profitable US companies that have assembly operations in Haiti. They import materials from US and then process them in Haiti and send them back. This is only happening because the labour in Haiti is very advantageous.
The following diagram shows the levels of exports and imports of the country over the years. (http://www.economywatch.com/world_economy/haiti/index.html)
The major exportable items pf the country are coffee, sisal and sisal strings and manufacturing items. Exports partners of the country are US, Canada and the Dominican Republic. Importable items of the country are food, fuel and energy and capital goods. The major imports partners of the country are US, Japan and the Dominican Republic.
There are a number of factors that are considered when exporting products to Haiti.
Distribution / Sales Channels
The market prospects for imports of manufactured products is relatively good, since Haiti's manufacturing capacity is focused primarily on textiles and apparel for the export market. American companies have several options for entering the Haitian marketplace, including direct exporting, franchising, licensing, and wholesaling. The most common method involves the use of an official representative or distributor, as the Haitian commercial code does not allow foreigners to engage in wholesale or retail business without first obtaining a professional license. Most foreign firms are represented by agents in Port-au-Prince, who then distribute products throughout the country. The main focus of the commercial code is to protect Haitian citizens who work as agents and distributors for foreign companies.
Agents / Distributors: Finding a Partner
Many firms do business in Haiti through an agent, a relationship subject to Haitian law. The two parties are free to negotiate a contractual agreement, with the agents usually appointed specific tasks and duties. Agents are almost always compensated on a commission basis, as opposed to a salary system or other compensation packages. Arrangements used between the parties are established at their own discretion and do not have to be supervised or approved by the Haitian Government.
Finding a partner in Haiti is possible through a number of channels, including business/industry associations in the country. The can help U.S. exporters find agents and distributors through the following services:
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The International Potential Partner Search (IPS) Program: Provides a report listing up to five qualified potential overseas agents, distributors, manufacturers' representatives, joint venture partners, licensees, franchisees, or strategic partners. Commercial Section Port-au-Prince will conduct a search for suitable partners and prepare a list of companies expressing an interest in a U.S. company's products, services, or licenses, or expressing an interest in otherwise partnering with the IPS ordering company. The price of this service is US$600 per IPS, per category of business partner, with a delivery time of 15 business days after receipt of the requested documentation and payment of the service fee.
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The Gold Key Package: Provides a survey of potential representatives or customers based on the client's requirements and pre-screened meetings with four to six prime prospects. CS Port-au-Prince will also arrange hotel reservations, hotel airport pickup, and bilingual interpreter services. The price for this service is US$500.00 for the first day and US$400.00 for each additional day. Four to six weeks advance scheduling is required.
Direct Marketing
Direct marketing and electronic commerce (e-commerce) is a slow but growing sector in Haiti. The Haitian postal system has greatly improved in the last couple of years. Growing interest in e-commerce has spurred the establishment of several new companies (e.g., Mail&More) and expanded the market for others (e.g., Lynx Air and Haiti Massager). Haiti's principal cellular companies (Comcel and Haitel) have been highly successful and have helped expand interest in wireless internet services. Consumer interest in Haiti's new telecommunications environment has resulted in the expansion of services by TELECO (the state-owned telephony utility), which now offers cellular as well as internet service. Haiti has also benefited from several new internet service providers and additional ISPs now providing wireless connection service. The e-commerce revolution is not confined to mail delivery services and telephone and internet service providers. New companies are investing in local e-commerce infrastructure to expand marketing efforts.
Franchising
Franchising does exist in Haiti, but at this time there are no specific regulatory laws. The Commercial Service conducted a Franchising Readiness Seminar in Port-au-Prince in March of 2000. The seminar served to introduce more than 100 Haitian business participants to the commercial opportunities available through franchising with U.S. companies.
Product Pricing
There is no set pricing structure in Haiti. The cost of products sold in Haiti reflects high operating and transaction costs. Haiti has the highest port fees in the Western Hemisphere as well as various import taxes and duties that apply to all imported products. These high transaction costs add approximately 35% to the final selling price of a product.
Haiti's food crops sector has been hindered by widespread exodus from the countryside and the lack of agricultural capitalization. Many basic agricultural products are imported because Haiti does not produce enough food to meet market demand. Rice, dried beans, poultry and wheat are always good prospects.
In 2002, US$155.2 million of agricultural products from the United States were exported to Haiti, a small increase of 1% compared to the 2001 figure (US$153.5 million). Based on data for 2003, it was estimated that U.S. exports of agricultural products could reach US $137/6 million, an 11 % decrease compared to the 2002 figure (US$155.2 million).
The U.S. Department of Agriculture has authorized US$35 million in credit guarantees to countries in the Western Caribbean Region (specifically Haiti and Jamaica) under the Commodity Credit Corporation's Export Credit Guarantee Program (known as GSM-102). Twenty agricultural commodities are accredited under the GSM-102 authorization. Included on this list are all of the most important food imports to Haiti, such as rice, vegetable oil, and poultry, wheat and wheat flour, and solid wood products (the leading non-food agricultural import to Haiti).
Cereal grains are very important to the Haitian diet. Rice is the main staple food in Haiti. The United States is especially competitive in medium quality (10%to 20% broken) milled rice as well as in the best quality deluxe pack (2% broken). The total amount of rice imported from the United States in 2002 was US$64.7 million, a 44% decrease compared to the US$100 million imported in 2000. Rice exports to Haiti reached only US$6 million, for the first two months of 2003. American exports of milled rice are usually in 50-kilogram bags, which are repackaged locally into smaller 2.2 kilogram bags (5-pound bags).
Processed food is the second largest dollar value of U.S. agricultural exports to Haiti. In 2003, the total value of prepared foods exported to Haiti was expected to reach US$31.5 million. In 2002, the United States exported approximately US$31.0 million of food preparations to Haiti, a 27% decrease compared to the 2001 figure.
Oil sector is the third largest dollar value of U.S. agricultural exports to Haiti. Oil is largely used in the preparation of all Haitian dishes. Most oils imported in Haiti are packed in large containers, which are then transferred to smaller bottles by Haitian importers. Local sales preference is for oil sold in 8- to 10-ounce bottles. According to the data for the first two months of 2003, U.S. oil imports were expected to reach US$16 million for the year, an increase of 13%compared to the 2002 figure (US$14.8 million). Some oils, such as olive oil, are imported from Spain, Italy, and Portugal.
The United States is the major supplier of chickens to the Haitian market. The high increase in U.S. poultry imports is due to the closing of many Haitian poultry farms because of sick chickens and the high price of chicken feed. American chicken exports were projected to reach US$20 million in 2003.
Edible Vegetables / Roots / Tubers includes dry beans, which are part of the Haitian national meal. This sector also includes some vegetables and roots. Between 2001 and 2003, there was a 1.7% decrease in the imports of edible vegetables. Milling products, especially wheat and flour, are main components of the Haitian diet. American products are one of the leading U.S. exports to Haiti, with steady statistics for past years. Haiti does not produce enough flour to satisfy local demand. The local production of ordinary flour is approximately 160,000 tons per year.
TOURISM:
Tourism has been an important source of revenue for Haiti in the past. A new international airport in 1965 helped Haiti’s tourism industry to thrive in the 1970s. Net expenditure on tourism reached their highest level in 1981 at $44 million, before Haiti was made unpopular among tourists. Stories about AIDS on the island scared away many tourists, along with political violence, poverty and general instability. The declining number of tourists forced many hotels to close, causing Haiti to lose a huge source of income and revenue. Without the revenue generated by tourists Haiti fell deeper into debt and as a result poverty and famine struck. Most people in Haiti do not have electricity or access to clean water. Basic infrastructure such as roads and communications are in terrible conditions and cannot be repaired.
Haiti has a number of attractions: beautiful beaches, vibrant exotic culture, “exquisite French cuisine, distinctive and colourful art and handicrafts, castles, hotels, colourful towns and cities” (). It also has steep mountains, lakes and beautiful surrounding scenery. The highest peak is the Morne de la Selle in the south of Haiti, which reaches an altitude of 2,715 meters. The largest lake is Etang Saumatre. All these attractions appealed to tourists and made Haiti a popular holiday destination.
Tourism is Haiti’s key asset, and for Haiti to come out of poverty and develop, it needs to rebuild its tourism industry. It needs funds to develop proper infrastructure such as roads, hotels, power, water, transport etc. These funds can be given from the World Bank, Inter-American Development Bank, USAID, EU, Caribbean Development Bank, UN Development Program, etc. OAS (Organisation of American States) has plaedged to help tourism development in Haiti. It also needs to shed its negative image of violence and instability by introducing more security, so tourists feel safe and secure. Haiti can also try and make an agreement with the Dominican Republic to invest their money and hotels into Haiti. They can make a contract to advertise each other’s island, thereby both islands are profiting and Haiti gets more tourists, and more revenue is generated. Haiti can also introduce mountain climbing and mountain guides with campsites and guest hostels, in the mountains. In the lakes and beaches Haiti can develop water sports, nature reserves, fishing, hotels, restaurants and shops etc.
If the tourism industry is developed, it means more jobs would be available for the people of Haiti. This would lower the unemployment and poverty rates, and allow people to have an income. They would then spend this income on clothes and food etc. and generate revenue and increase the country’s economy and GDP. The government can then spend the money in areas such as health and education and develop those, or invest more in tourism and new infrastructure, and slowly increases the country’s economy and standard of living, and decreases poverty. This will also attract foreign investment which will also help the economy. This is known as the Circular Flow Model.
However, problems that may arise from developing the tourism industry too much are that it may divert government expenditure from other needy areas of the economy. Also the profits that are generated may go overseas to the companies that generated them. The costs of basic amenities such as clothes and food may inflate and become too expensive for Haitians to afford. Tourism can also increase traffic congestion and pollution and destroy land and vegetation.
Suitable Development Models
The most suitable development model for Haiti would be Comparative Advantage and the Fisher Clark’s Theory of Structural Change.
Comparative Advantage
International trade is the exchange of goods and services between countries. Trade improves consumer choice and total welfare.
Economic theory predicts all countries gain if they specialise and trade the goods in which they have a comparative advantage. This is true even if one nation has an absolute advantage over another country.
Absolute advantage occurs when a country or region can create more of a product with the same factor inputs.
Comparative advantage exists when a country has lower opportunity cost in the production of a good or service
Comparative advantage is based on differing opportunity costs reflecting the different factor endowments of the countries involved. The theory assumes free trade, willingness to specialise and factor mobility. Specialisation and trade benefits countries providing at an exchange rate between the respective opportunity cost ratios.
Countries benefit if they specialise in the production of a good or service in which they have a comparative advantage i.e a lower internal opportunity cost
Comparative advantage can be gained or improved through:
· Investment in education and training
· Investment in infrastructure,
· Research & development to improve competitiveness ie lower unit costs, better product design, and reliability
· Lower inflation rates than competitors
The government of Haiti has to comply with all these in order to be successful with comparative advantage.
Haiti is successful in agriculture so they should focus in specializing in crops and fruit to trade with others.
Fisher Clark’s Theory of Structural Change
Two economists, Fisher and Clark, put forward the idea that an economy would have three stages of production
- Primary production is concerned with the extraction of raw materials through agriculture, mining, fishing, and forestry. Low-income countries are assumed to be predominantly dominated by primary production.
- Secondary production concerned with industrial production through manufacturing and construction. Middle income countries are often dominated by their secondary sector.
- Tertiary production concerned with the provision of services such as education and tourism. In high-income countries the tertiary sector dominates. Indeed having a large tertiary sector is seen as a sign of economic maturity in the development process.
Countries are assumed to first pass through the primary production stage then the secondary stage and finally the tertiary stage. As economies develop and incomes rise then the demand for agricultural goods will increase but due to their low income elasticity of demand at a proportionally lower rate than income. However, the demand for manufactured goods will have a higher income elasticity of demand. So as incomes grow further the demand for these goods will grow at a proportionately higher rate. Hence the secondary industry will grow. As incomes continue to grow then people will start to consume more services as these have an even higher income elasticity of demand. Thus the tertiary sector will then grow and develop.
This theory applies to Haiti because they have a growing primary industry which they are heavily dependent on, and that is agriculture. When they successfully develop this industry with new machinery, they can progress to secondary industries and tertiary industries and develop the country. This model, however, would not have applied to Haiti in the past when they had a large tertiary sector due to a large tourist industry, as they had not developed a secondary industry and so skipped a stage.
Conclusion
Haiti is in desperate need of foreign help to bring itself out of poverty and corruption. The main concern for Haiti is its lack of public security. If it improves this sector first, it will slowly start to develop again. Many people fear for their safety and as a result Haiti has turned into an isolated country, which is why it is unable to develop sustainable development activities. With public security in order, Haiti needs foreign funds to help develop again. The USA plays a big role in financing Haiti as most of the finance is from them. Haiti needs to start to get more help from non-governmental organisations (NGOs) and with their help, all of the sectors of the economy will slowly improve.
Health is a major issue in Haiti as it has a wide-spread of HIV/AIDS. With help from NGOs, such as USAID, Haiti can start to control its population increase by establishing more health and birth-control centres, which are easily accessible to both youth and adults, all with skilled nurses and doctors. Haiti needs to follow Jamaica who introduced a highly successful mass media campaign informing the public about HIV/AIDS and reproductive health.
Labour and education need to be improved, and encourage parents to send their children to school to get an education rather than send them to work. By getting an education, children can aim for better paid jobs and a better standard of living.
Haiti needs to focus on using the Comparative Advantage Theory and implement it with agriculture. Haiti is already superior in agriculture than neighbouring countries as it has flat fertile river valleys, and so can maximise crop yield and produce high quality crops and fruit. They can then trade these with neighbouring countries in exchange for other raw materials.
Haiti also needs to re-develop its “once flourishing” tourism industry. It needs money to improve basic infrastructure and introduce activities for tourists to enjoy. Tourism is a key asset to Haiti as it has beautiful landscapes, scenery and luxurious beaches. Through tourism, Haiti can lift people out of poverty, provide jobs, create employment and income.
Though these ideas seem easy on paper, they are much harder to achieve in reality. Not all these ideas can be achieved and success cannot be guaranteed.
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