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PrivateSectorPrioritiesSelectComponentsof2010PSEFPaper

InMarch,2010,representativesoftheHaitianprivatesectormetasthePrivateSectorEconomicForum

(PSEF),todiscussthesustainabledevelopmentofHaiti.Aconsultativepaper,VisionandRoadmapforHaiti,wasproducedoutoftheconferencetocontributeaprivatesectorperspectiveonthe

governments

plan

for

reconstruction

and

development.

The

paper

affirmed

the

commitment

of

the

privatesectortobuildasocialcompactwithgovernmentandcivilsociety.Itwasbasedonconsultation

withmorethan150representativesfromthebusinesscommunity,industryassociations,regional

chambersofcommerce,governments,donoragenciesandmultilateralinstitutions.The

recommendationsweredesignedtoalignwiththoseofthePresidentialCommissiononCompetitiveness.

ThisdocumentcapturesaselectportionoftheVisionandRoadmapforHaitiasaplanningtoolfordelegatesattendingtheFOCALroundtable,TheRoleofthePrivateSectorinSustainableEconomic

DevelopmentinHaitiattheMarch2011meetingoftheInterAmericanDevelopmentBankinCalgary.

ThePSEFvisionforthecountryincludesaNewSocialCompactwherebusinessfromlargebusinessesto

informaltradersandsmallholderfarmersthepublicsector,civilsocietyandtheinternationalcommunityareactinginconcertinthebestinterestofallHaitians.Toachievethisrequirestheprivate

sectorscommitmenttofulltaxcomplianceandthegovernmentscommitmenttomeetingminimum

servicelevelsandmanagingbudgets,decisionmakingandfundinginfulltransparency.Theprivate

sectorisdeterminedtoadheretoitsfiscalobligationswithinthisNewSocialCompact.

Vision2020:By2020,wecommittomakingHaitiadiversifiedandrobusteconomy

opentoall,andrenownedforitsenvironmentalsustainabilityandmoderngovernment.

OurvisionincludesanexpansionofthemiddleclassthroughthecreationofthousandsofSMEs

benefitingfrom

access

to

credit

and

the

elimination

of

barriers

to

expansion.

The

economy

must

be:

- Diversifiedwithagriculture,tourism,lightmanufacturingandeventuallyabusinessprocessoutsourcingindustry;

- Environmentalsustainable;- Competitivewithalevelplayingfieldandafullyfunctioninggovernment;- Vibrant,withGDPgrowthover5%/yearattractingFDIanddiasporainvestment;- RegionallyintegratedwiththeDominicanRepublic,Caricom,LatinAmericaandtheUS.

Fivepriorityprinciplesmustguidethereconstruction:

- Leadershipandmutualaccountability:Leadershipfromtheprivate,civilandpublicsectorsisneededtobuildapartnershipbasedonaccountability,transparencyandsustaineddialogue.

- Decentralizationandequalgrowth:AllregionsandclassesmustgrowtoreducetheextremepovertyinruralHaiti,andallowforeffectivereconstructionofPortauPrince.

- Commitmenttomodernization:Theprivateandpublicsectorsmustchangehowtheygovernanddobusiness.Privatedeliveryofpublicservicescanplayhelpincreaseservicequality.

- Haitianled:RecoveryandreconstructionmustmeettheneedsofHaitiansandbedirectedbyHaitians.Aidprogramsmustreinforcestateagencies.

- Independencefromaid:Haitimustbelessreliantonthedonorcommunity.Everyinternationalplanshouldhaveanexitstrategyorsustainabilitycomponent.

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SelectComponentsofVision2020

JOBSANDSHAREDECONOMICOPPORTUNITY

DriveneartermemploymentforHaitiansinconstruction

Newconstructionmustbalancemultipleneeds:crisisresponse,opportunitiesforHaitians,buildingfor

quality,and

ensuring

provision

for

maintenance.

1. Createfinancial,landandimportdutyincentivestospurmid&lowlevelhousingdevelopment.2. Updatetheconstructioncode.3. Mandateaminimumof70%employmentbeHaitians,andtarget25%ofsubcontractedbusiness

fromHaitiansuppliers.

4. Buildanautomaticlinkagebetweenresourcesforconstructionandformaintenance.5. Prioritizemodernconstructiontechniquesformajorinfrastructureandroadswhilemandating

laborintensivetechniquesforfeederroads,tobalancejobcreationwithspeedyreconstruction.

Createnewcompetitiveeconomicgrowthpolesaroundprioritysectors.

1.North:

Garments:Public

investment

in

an

industrial

park,

port,

and

power

plant

near

Fort

Liberte

Agriculture:ProducewholesalemarketandprocessingfacilitiesnearFortLiberte

Tourism:AirportinCapHaitienandaroadbetweenLabadieandtheUNESCOWorldHeritage

SiteswithinaredevelopedNationalHistoryPark(Citadel,SansSouciandRamiers).

2.ArtiboniteValley:

Agriculture:Betterroadsinagriculturalregions,acontainerportinGonaives,watershed

restoration,andInvestmentsinagriculturalproductivity,storageandcollection.

Tourism:ExpandedinvestmentsontheSaintMarcPeninsulaandnearbyislands.

3.South:

Agriculture:Betterroadinagriculturalregions;watershedrestoration;adeepwaterportinBaie

duMesleandcoastalcabotagelandingpoints;producewholesalemarketandprocessing

facilitiesat

Les

Cayes;

agriculture

program

at

the

University

of

Notre

Dames

facilities

in

Redon.

Tourism:AtouristresortzonebetweenAquinandCotedeFer,plustourisminvestmentsinPort

Salut,IleaVachesandGrandAnse.

Garments:Publicinvestmentinapowerplant,airport,andprivatelymanagedIndustrialPark

nearLesCayes.

4.PortauPrince:

GarmentandLightManufacturing:Expandingexistingindustrialparks;rebuiltairport;rebuilding

andmanagedcontractforpublicport;wholesaleproducemarketandprocessingnearport.

Requirementsfromgovernmenttomakeeconomicgrowthpolessuccessful:

1.CreateRegionalDevelopmentBoardsaroundeachgrowthpolewithrepresentationfrom

government,investors,

businesses,

donors

and

NGOs

and

with

direct

linkage

to

the

senior

most

level

attheHaitiDevelopmentAuthority.

2.Investpublicfundsinindustrialparkswithprivatemanagementthroughcontract.

3.Createflexiblelaborlaws,includinglegalizingthe3x8workshift.

4.Integratepublicplansforhousingandservicesaroundthesezoneswithincreasedsecurity,

particularlytosupporttheproposedexpandedworkshift.Allowhousingwithinzones.

5.Usemanagedcontractsforinfrastructureandestablishminimumbasicserviceguarantees.

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6.Reviseandapplytheinvestmentcode,adoptturnkeylegislation,andprovidelandconcessionsto

attractFDI.SupportastrongCentredeFacilitationdesInvestissements(CFI).

7.LobbyforHopeIIIwith250Mm3importallowanceandadditional15years.

8.Developurbanizationplanoverlaidwithnaturaldisasterriskmap.

9.Createtargetedprogramsfordisabledpeople.

10.Ensure

ICT

solutions

are

available

at

competitive

rates.

AGRICULTURE

Kickstartdomesticproductionbyintegratingintohumanitarianprojects.

Substitutefoodimportswithdomesticproducts.Contractandfundtheprivatesectortobuildand

manage10storageandprocessingfacilities.Createnewprogramstofightruralfoodinsecurity.

Increasefoodsecurityandimprovenutrition.

1.Helpfarmercooperativeswithcreditandservicestoincreaseproductionandincreasefarmer

margins

2.WorkwiththeWFPtoimplementtargetedfortificationoffoodssuchasmilk,flours,oilandsalt.

3.Arrangeforproducethatdoesnotmeetexportmarketstandardstoreachlocalmarkets.

4.Revampthedairyandpoultryindustriesfordomesticconsumption

5.EstablishapermanentIrrigationInfrastructureMaintenanceAuthority(IIMA).

6.Considerdevelopinggreenhouseprojects.Publicinvestmentmaybeneededfortheinitial

development,withlatertransfertocooperativesorprivateenterprises.

7.WorkwiththeWFPtocreateaninsurancemechanismagainstsurgeinthepricesofstaplecrops.

Domesticfoodproductioninitiativesandexportagribusinessinitiativesshouldbecolocatedtoleverage

infrastructureandsupplychaininvestments.

Boostexport

led

agribusiness

by

investing

around

specific

value

chains.

1.InvestincommercialfarmingandgreenhousesontheroadsconnectingCapHaitienandSaint

LouisduSudtoPortauPrincewithaccesstoexportfacilities.

2.IntheNorth,leasegovernmentlandforcommercialfarminginexchangeforcommitmentssuchas

outgrowerschemeswithsmallscalefarmers,andallocatinglandtotreecropsforreforestation.

3.Fixthepostharvestsupplychainthroughpublicandprivateinvestmentsinwholesalemarketsand

storagefacilitiesnearports,andinroadsconnectingproducerswithconsumersandexporters.

4.Makeagriculturalfinancingavailableatallpointsinthesupplychain.

5.IncreaseHaitianvalueadditionforcoffeebyfundingcoffeeprocessingcenters,supportingmarket

linkagesandnormalizingcoffeetradewiththeDR.

EDUCATION

Lessthan

20%

of

education

services

are

provided

by

the

Government,

with

the

largely

unregulated

privatesectorandNGOsdominating.Bothfacilitiesandeducationqualityneedimprovement.

Provideimmediateandlongertermaccessforallstudents.

1.Forimmediatereconstruction,considerprefabricatedoptions.Prioritizeandfundrubbleremoval

onschoollocationsandprovidepubliclandfortemporaryschools.

2.UsevoucherstoimproveenrollmentusingaprepaidcardsystemsuchasinBrazilandIndia.

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a.Nearterm,thevouchersystemwilldrivedemand.Schoolscanreceiveconcessionalfinancing

orgrantstoprocurebasicsuppliesandreestablishprograms.

b.Mediumterm,thevouchersystemwillcreateamarketthatfavorsqualityschoolsandmay

reduceeducationcost,helpingtoaddressgenderbalance.Usecopayvouchersforthepoor.

c.Localprivatesectorinvestment,andpossiblymanagement,willhelpbuildcapacity,improve

qualityand

scale

high

performing

institutions.

3.Inneweconomiczones,integrateschoolsaspartoftheservicesavailable.

Improvethequalityandoversightoftheeducationsystem.

1.EstablishanIndependentServiceAuthority(ISA)tosetstandards,evaluateandlicenseinstitutions,

andfundschools.Useperformancetrackingtosupportscaleupandreplicationofqualityschools.

2.Providesupporttoimproveteachertraining,withafocusonrebuildingPortauPrinceprograms.

3.Revisitcurriculumandnationaltests.Involveprivatesectorincurriculumreviewcommittee.

Preparestudentsforeconomicopportunity.

1.Createvocationalinstitutesateacheconomicgrowthpole.Fundprogramsthroughspecificsector

tax(e.g.,

2%

Taxe

dAprentissage)

or

through

private

employers,

and

develop

curriculums

in

consultationwithindustry.LocationsincludeagricultureprogramsinArtiboniteValley,garments

aroundtheNorth,SouthandPortauPrinceindustrialparksandatourismschoolintheNorth.

GOVERNANCEANDINSTITUTIONALCAPACITY

BuildaNewSocialCompactwithgovernment,civilsociety,andtheprivatesectorthatwillsupportfreeandfairelections,freeenterpriseandacommitmenttoindividualpoliticalandeconomicfreedom.

Committoelectionsandpoliticalstability

1.Avoidprovisionalgovernments,governmentdecreesandministerimpeachmentsbeforeelections.

2.FundandreconstitutetheElectoralCounciltoimmediatelybeginpreparingforelections.

3.Hold

elections

with

voting

where

voters

currently

reside,

provisional

voting

cards,

and

finger

dye.

Expandthefiscalrevenuebase.

1.Reconstituterevenuecollection,perhapscreatinganepaymentsystemthroughbankstotheBRH.

2.Initiateanewtaxcontractbetweengovernmentandtheprivatesectorguidedbythefollowing

principles:alevelplayingfield,adefinedadjustmentperiod,andtransparentfiscalmanagement.

Installmonitoringwithpenaltiesfornoncompliance,andsupportbusinessformalization.

3.Reducecorporateincometaxlevelfrom30%to20%andcreateaflattaxrate.

4.ForSMEs,provideestimatedtaxesbasedonrevenuetoencouragecommitmenttogovernment.

5.Revampcustomstoreducethe20%gapbetweenimportsfromDRanddutiescollected.

6.Set,

monitor

and

publicize

government

service

levels,

possibly

through

awebsite.

Buildamoderngovernmentandincreaseadministrativecapacity.

1.FundandsupportParliamenttoincreasethepublicdiscourse:

ProvidetechnicalsupporttoParliamentconducttechnicalresearchonissues;

Provideaccessiblepublichearings,includingthemedia;

Allowtestimoniestoprovideopendialoguewiththepublic;and,

Supportindependentthinktanksandinstitutionstosubmitreportsandbriefstoparliament.

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2.Buildingageneralconsensusaroundtwoconstitutionalissues:

Allowdualcitizenshiptoenablevoting,elections,landownershipandDiasporaengagement.

Changetheelectoralcycletoevery5yearstohelpefficiency,continuity,andreducedcosts.

3.Reformgovernmenttofocusresourcesandimproveservices:

Consolidateandrefocusministrieswhereappropriate.

InstituteResultsBasedManagementwithserviceleveltargetsandaccountability.

Increasecivilservicepayandtraining.Involvetheprivatesector,civilsocietyanddonorsin

defining,deliveringandfinancingthetraining.

4.Decentralizefunctions,suchastheCentralBankandRevenueAuthority,tomatchthenew

regionalization.Inparticular,increasetheresourcesandcapacityofthelocalDelegates.

Createopportunitiesforsustainedpublicprivatedialogueandcollaboration.

Includeprivatesectorrepresentation,wherepossible,onoversightboardsforSocialSecurity,to

representtheircontributionstoemployeespensions,RegionalDevelopment,tocontributeongrowth

poleplanning,andIndependentServiceAuthorities(ISAs)forhealthandeducation.

Governthereconstructionresponsiblyandeffectively.

WesupportthecreationoftheInterimHaitiRecoveryCommission(IHRC)andtheHaitianDevelopment

Authority(HDA).PrinciplesforgovernanceincludeHaitianownershipandleadership,legalityunder

Haitianlaw,andbroadrepresentation,includingtheprivatesector.Itshouldfocusonregionalization,

sustainabilityofeffortsbeyondthedonorresponse,focuseddonorefforts,andcapitalandrisksharing

betweenpublicandprivatesectors.ConsiderationsforthegovernanceoftheIHRCandHDA:

1.Privatesectorrepresentationontheboard

2.Multidonortrustfundmanagedbytrustedinternationalinstitution

3.Mandatetoincludelandadjudication,solicitationofmanagedcontractsforcriticalinfrastructure

andoversightofhealthandeducationprivateprovidersthroughIndependentServiceAuthority(ISA);

4.Establishment

of

Regional

Development

Authorities

with

local

Delegate,

chamber

of

commerce,

privatesector,civilsocietyanddonorsasadvisorstoIHRCboardandlocaladministratorofHDA;

5.Uponendofmandate,transitionHDAtoAutonomousEconomicDevelopmentAgencytocontinue

coordinatednationalandregionalplanningandimplementationofgovernmentpolicy.