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Haiti's problems continue

Tuesday, April 01, 2014    

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IN AS MUCH as there has been a significant amount of attention placed on the issue of Haitians born in the Dominican Republic being stripped of certain rights by the Dominican Republic, some may argue as just as perverse is what appears to be systematic and apparently sanctioned trade abuses by the Dominican Republic Government. This relates to the export of products into Haiti through gaps in the border shared by the two countries.

Case in point may be in the case of poultry and eggs, where the Dominican Republic exports over 400 million eggs per year to Haiti through several of the more than 50 unofficial trading centres on the Dominican side of the border. While it is clear that there is need for products like poultry and eggs in Haiti, the possible dumping of unregulated, possibly expired, untested and untaxed Dominican products undermines the concept of fair trade and denies the Haitian Government much-needed tax revenue. Importantly, it also belies the argument that Haiti is open for business.

A recent investment by a large poultry company and local partners may well be an example of how the current situation conspires against an effort by investors in Haiti to build out a viable business. For the Haitian small farmer involved in poultry and egg production the future, considering possible unfair trade practices being employed, is bleak and could be catastrophic.

To be clear, the efforts of investors such as Haiti Broilers to produce hatchlings, feed, eggs, and broilers for the local market cannot address the needs of a population of over eight million people. There is, as a result, space for many players, including legitimate Dominican exporters and/or investors. However, the current framework that apparently facilitates the movement of unregulated goods can in no way be allowed to continue.

In trade terms, the quintessential dumping of products into Haiti, without the contest of the Dominican Government, needs to be checked before it destroys a nascent industry and the livelihood of small farmers. The situation can also be viewed as a red flag to other parties interested in investing in Haiti.

To be fair, the unwillingness or inability of the Haitian Government to exercise controls and collect taxes on goods coming across the border serves to highlight a significant problem for Haiti. This, however, does not absolve the Government of the Dominican Republic of responsibility for a situation where the unregulated trade of foodstuff occurs in locations that are insanitary.

While there has been fanfare surrounding the recent signing of protocols by government officials of both countries on the issue of poultry and eggs, the lack of a real regulatory system to ensure the quality of product remains a defiency. Licensing and certifying of facilities, issuing of health permits, and the maintenance of needed storage and refrigerated transportation mechanisms to guarantee safe foodstuff remain unfunded. This while, it is argued, producers in the Dominican Republic continue to flood the weak border infrastructure.

Some solutions that have to be considered include increased support for border control and sanitary systems for Haitian authorities by the international donor community. But failure to support mechanisms to collect lost tax revenue allows for claims of the development community being complicit in perpetuating a system that will have Haiti as an unfettered market for products that may or may not meet international standards. Worse, it dooms those involved in agricultural production to unfair competition, as they are liable for import duties at the seaports they use to bring in necessary inputs, while goods gaining access to the border through other channels are likely to enter freely.

Fundamentally, for investors and small farmers to survive in the face of any trade abuse, the Haitian Government will have to advance a system that protects local businesses from any alleged unfair practices. It has to also promote and incentivise the development of local industries that create employment and address food security. All this with the support of the development community that claims to be committed to seeing the country prosper.

Haiti problems truly continue.

Anton Edmunds is a commentator on Caribbean issues. He is the head of The Edmunds Group International, an advisory service firm that focuses on emerging markets, and a senior associate at the Centre for Strategic & International Studies (CSIS). He blogs at www.onthecaribbean.com, tweets at @theedmundsgroup and can be contacted at anton@theedmundsgroup.com.

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