July 6, 2012

Crisis breeds textile manufacturing action in Haiti

Today, an extensive frontpage New York Times piece by Debrah Sontag delves into the Caracol industrial park project, a USAID- and Inter-American Development Bank-backed development that will reportedly bring 20,000 textile jobs to the North of Haiti over the next six years through Korean manufacturer Sae-A.

Sontag reports on how the earthquake of Jan. 2010 sped up the development of the park, quoting an IDB official who says that the disaster precipitated “an immense show of solidarity and will from development bank members to have a bigger program.” Crisis bred action, as it is wont to do.

Farmers who lived on the site of the proposed park were promised compensation and promptly pushed off their fertile land. The Haitian Government chose Caracol as one of three potential sites presented by American consultants, who did no environmental analysis before making their recommendations—before the earthquake, Caracol, with its mangroves and coral reefs, was designated to become Haiti’s first marine protected area. And putting the project on the post-quake fast-track meant sweeping aside concerns over treatment of workers in other Sae-A factories, notably in Guatemala, where AFL-CIO has accused it of “using bribes, death threats and imprisonment to prevent and break up unions.”

The entire piece is available here and is worth checking out, as is the accompanying 10 minute video.

The piece also notes that “Once trade preferences expire in Nicaragua in 2014, [Sae-A spokesman] Mr. Garwood said, Sae-A hopes ‘a lot of product orders now going to factories in Nicaragua can go through the Haiti operation.’” With so much of the project’s costs being borne by USAID and IDB and dependent upon favorable tax and tariff deals in both Haiti and the U.S., you can’t help but wonder whether the company’s product orders will still be going “through the Haiti operation” in 10 years.

Lastly, a word from José Agustín Aguerre, IDB Haiti department manager:

“Creating an exclusively garment maquiladora zone is something everyone — I wouldn’t say tries to avoid, but considers last resort,” said Mr. Aguerre, the development bank manager. “But to be honest, in a country like Haiti, maquiladoras are a good opportunity, a quick employment generator. Yes, it’s low-paying, yes, it’s unstable, yes, maybe tomorrow there will a better opportunity for firms elsewhere and they will just leave. But everyone thought this was a risk worth taking.”

I’ve blogged on similar-but-different issues re textile jobs in Haiti here.

Posted on Jul. 6, 2012 at 9:59 am Link Share Comment
Tagged: #haiti  #manufacturing  

Tate Watkins

Independent Correspondent

Tate Watkins is a freelance economics journalist in Nashville, TN.