March 15, 2011

PrivateSectorPrioritiesSelectComponentsof2010PSEFPaper
InMarch,2010,representativesoftheHaitianprivatesectormetasthePrivateSectorEconomicForum (PSEF),todiscussthesustainabledevelopmentofHaiti.Aconsultativepaper,VisionandRoadmapfor Haiti,wasproducedoutoftheconferencetocontributeaprivatesectorperspectiveonthe governmentsplanforreconstructionanddevelopment.Thepaperaffirmedthecommitmentofthe privatesectortobuildasocialcompactwithgovernmentandcivilsociety.Itwasbasedonconsultation withmorethan150representativesfromthebusinesscommunity,industryassociations,regional chambersofcommerce,governments,donoragenciesandmultilateralinstitutions.The recommendationsweredesignedtoalignwiththoseofthePresidentialCommissiononCompetitiveness. ThisdocumentcapturesaselectportionoftheVisionandRoadmapforHaitiasaplanningtoolfor delegatesattendingtheFOCALroundtable,TheRoleofthePrivateSectorinSustainableEconomic DevelopmentinHaitiattheMarch2011meetingoftheInterAmericanDevelopmentBankinCalgary. ThePSEFvisionforthecountryincludesaNewSocialCompactwherebusinessfromlargebusinessesto informaltradersandsmallholderfarmersthepublicsector,civilsocietyandtheinternational communityareactinginconcertinthebestinterestofallHaitians.Toachievethisrequirestheprivate sectorscommitmenttofulltaxcomplianceandthegovernmentscommitmenttomeetingminimum servicelevelsandmanagingbudgets,decisionmakingandfundinginfulltransparency.Theprivate sectorisdeterminedtoadheretoitsfiscalobligationswithinthisNewSocialCompact.

Vision2020:By2020,wecommittomakingHaitiadiversifiedandrobusteconomy
opentoall,andrenownedforitsenvironmentalsustainabilityandmoderngovernment.
OurvisionincludesanexpansionofthemiddleclassthroughthecreationofthousandsofSMEs benefitingfromaccesstocreditandtheeliminationofbarrierstoexpansion.Theeconomymustbe: - Diversifiedwithagriculture,tourism,lightmanufacturingandeventuallyabusinessprocess outsourcingindustry; - Environmentalsustainable; - Competitivewithalevelplayingfieldandafullyfunctioninggovernment; - Vibrant,withGDPgrowthover5%/yearattractingFDIanddiasporainvestment; - RegionallyintegratedwiththeDominicanRepublic,Caricom,LatinAmericaandtheUS. Fivepriorityprinciplesmustguidethereconstruction: - Leadershipandmutualaccountability:Leadershipfromtheprivate,civilandpublicsectorsis neededtobuildapartnershipbasedonaccountability,transparencyandsustaineddialogue. - Decentralizationandequalgrowth:Allregionsandclassesmustgrowtoreducetheextreme povertyinruralHaiti,andallowforeffectivereconstructionofPortauPrince. - Commitmenttomodernization:Theprivateandpublicsectorsmustchangehowtheygovern anddobusiness.Privatedeliveryofpublicservicescanplayhelpincreaseservicequality. - Haitianled:RecoveryandreconstructionmustmeettheneedsofHaitiansandbedirectedby Haitians.Aidprogramsmustreinforcestateagencies. - Independencefromaid:Haitimustbelessreliantonthedonorcommunity.Everyinternational planshouldhaveanexitstrategyorsustainabilitycomponent.

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SelectComponentsofVision2020
JOBSANDSHAREDECONOMICOPPORTUNITY
DriveneartermemploymentforHaitiansinconstruction Newconstructionmustbalancemultipleneeds:crisisresponse,opportunitiesforHaitians,buildingfor quality,andensuringprovisionformaintenance. 1. Createfinancial,landandimportdutyincentivestospurmid&lowlevelhousingdevelopment. 2. Updatetheconstructioncode. 3. Mandateaminimumof70%employmentbeHaitians,andtarget25%ofsubcontractedbusiness fromHaitiansuppliers. 4. Buildanautomaticlinkagebetweenresourcesforconstructionandformaintenance. 5. Prioritizemodernconstructiontechniquesformajorinfrastructureandroadswhilemandating laborintensivetechniquesforfeederroads,tobalancejobcreationwithspeedyreconstruction. Createnewcompetitiveeconomicgrowthpolesaroundprioritysectors. 1.North: Garments:Publicinvestmentinanindustrialpark,port,andpowerplantnearFortLiberte 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 facilitiesatLesCayes;agricultureprogramattheUniversityofNotreDamesfacilitiesinRedon. Tourism:AtouristresortzonebetweenAquinandCotedeFer,plustourisminvestmentsinPort Salut,IleaVachesandGrandAnse. Garments:Publicinvestmentinapowerplant,airport,andprivatelymanagedIndustrialPark nearLesCayes. 4.PortauPrince: GarmentandLightManufacturing:Expandingexistingindustrialparks;rebuiltairport;rebuilding andmanagedcontractforpublicport;wholesaleproducemarketandprocessingnearport. Requirementsfromgovernmenttomakeeconomicgrowthpolessuccessful: 1.CreateRegionalDevelopmentBoardsaroundeachgrowthpolewithrepresentationfrom government,investors,businesses,donorsandNGOsandwithdirectlinkagetotheseniormostlevel 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.EnsureICTsolutionsareavailableatcompetitiverates.

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. Boostexportledagribusinessbyinvestingaroundspecificvaluechains. 1.InvestincommercialfarmingandgreenhousesontheroadsconnectingCapHaitienandSaint LouisduSudtoPortauPrincewithaccesstoexportfacilities. 2.IntheNorth,leasegovernmentlandforcommercialfarminginexchangeforcommitmentssuchas outgrowerschemeswithsmallscalefarmers,andallocatinglandtotreecropsforreforestation. 3.Fixthepostharvestsupplychainthroughpublicandprivateinvestmentsinwholesalemarketsand storagefacilitiesnearports,andinroadsconnectingproducerswithconsumersandexporters. 4.Makeagriculturalfinancingavailableatallpointsinthesupplychain. 5.IncreaseHaitianvalueadditionforcoffeebyfundingcoffeeprocessingcenters,supportingmarket linkagesandnormalizingcoffeetradewiththeDR. EDUCATION Lessthan20%ofeducationservicesareprovidedbytheGovernment,withthelargelyunregulated 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 qualityandscalehighperforminginstitutions. 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%TaxedAprentissage)orthroughprivateemployers,anddevelopcurriculumsin consultationwithindustry.LocationsincludeagricultureprogramsinArtiboniteValley,garments aroundtheNorth,SouthandPortauPrinceindustrialparksandatourismschoolintheNorth. GOVERNANCEANDINSTITUTIONALCAPACITY BuildaNewSocialCompactwithgovernment,civilsociety,andtheprivatesectorthatwillsupportfree andfairelections,freeenterpriseandacommitmenttoindividualpoliticalandeconomicfreedom. Committoelectionsandpoliticalstability 1.Avoidprovisionalgovernments,governmentdecreesandministerimpeachmentsbeforeelections. 2.FundandreconstitutetheElectoralCounciltoimmediatelybeginpreparingforelections. 3.Holdelectionswithvotingwherevoterscurrentlyreside,provisionalvotingcards,andfingerdye. Expandthefiscalrevenuebase. 1.Reconstituterevenuecollection,perhapscreatinganepaymentsystemthroughbankstotheBRH. 2.Initiateanewtaxcontractbetweengovernmentandtheprivatesectorguidedbythefollowing principles:alevelplayingfield,adefinedadjustmentperiod,andtransparentfiscalmanagement. Installmonitoringwithpenaltiesfornoncompliance,andsupportbusinessformalization. 3.Reducecorporateincometaxlevelfrom30%to20%andcreateaflattaxrate. 4.ForSMEs,provideestimatedtaxesbasedonrevenuetoencouragecommitmenttogovernment. 5.Revampcustomstoreducethe20%gapbetweenimportsfromDRanddutiescollected. 6.Set,monitorandpublicizegovernmentservicelevels,possiblythroughawebsite. 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.EstablishmentofRegionalDevelopmentAuthoritieswithlocalDelegate,chamberofcommerce, privatesector,civilsocietyanddonorsasadvisorstoIHRCboardandlocaladministratorofHDA; 5.Uponendofmandate,transitionHDAtoAutonomousEconomicDevelopmentAgencytocontinue coordinatednationalandregionalplanningandimplementationofgovernmentpolicy.

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