Does International Aid Keep Haiti Poor?

The Irish Model
Notes from different corners of the world.
Jan. 6 2011 7:13 AM

Does International Aid Keep Haiti Poor?

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Click here to see a slideshow on Haiti one year after the earthquake.

"A lot of people came in [after the earthquake] and said, 'Oh my God, this is awful, blah blah blah blah blah,' " says Conor Murphy. "But it was the same before. It took an earthquake for the whole world to realize, 'Jesus, that place is in big trouble. They need serious help.' " The 28-year-old Irishman is sitting in the lobby of the Hotel Oloffson in Port-au-Prince, the city where he has lived since 2008.

Murphy's notions of helping Haiti are a bit different from most of the young people working in Haiti with NGOs, charity organizations, or religious missions. Murphy is an entrepreneur and a former employee of global financial-consulting firm Ernst & Young. His goal is to bring investment to Haiti in the form of profit-seeking businesses, which he believes are critical to the country's future.

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"It's perfectly fine to make money as long as it's done responsibly. Responsible businesses are what's needed here," Murphy explained. "My own view on the [unregistered] NGOs is that they should all be kicked out. Cut them off, put them all outside, and say whoever wants to come back has to sign up and tell us what you're doing." In the Land of 10,000 NGOs, Murphy's faith in capitalism as a remedy for Haiti's ills feels heretical, but he shares that faith with a surprising number of his Irish brethren.

In the last five years, at least 50 Irish businesspeople have forged trade partnerships, started businesses, or invested money in Haiti. Much of this has occurred through a group called "Soul of Haiti," of which Murphy is the country manager. Its objective is to foster economic partnerships between the two islands. Soul of Haiti has sent Haitian students to Ireland to work with entrepreneurial organizations and has brought Irish investors to Haiti to launch businesses such as plant nurseries, hotels, and large-scale commercial farms. In 2009, the group helped Taxback.com, an online tax-return service, create a call center in Port-au-Prince. In the last 18 months, Soul of Haiti chairman Michael Carey * estimates that more than $6.5 million has been invested in Haiti by Irish businesspeople.

Since the earthquake in January 2010, the importance of direct foreign investment and private sector growth in Haiti's recovery has been emphasized repeatedly. "The real thing we haven't seen in Haiti in the last 25 years, that's really kept this place from taking off, is the lack of investment," said U.S. Ambassador Kenneth Merten. "None of the good work we're going to be doing in health or infrastructure or agriculture is going to be sustainable unless we have an increase in foreign investment." The big question now is whether the sectors to which current investments are being channeled such as garment factories and mango farming can make Haiti competitive in the global market over the long run. "When they think about building a private sector economy, everything is based on sunshine, cheap labor, raw materials, and government favors," said Michael Fairbanks, a development economist. "It's not even close to the answer."

Irish entrepreneurs such as Denis O'Brien say they have better answers. O'Brien is the Irish billionaire with a reputation as a fiercely competitive risk-taker who ignored the skeptics and brought his Caribbean telecommunications company Digicel to Haiti in 2006. It was and remains the largest private-sector investment in the island's history. O'Brien has put $300 million into Digicel in Haiti over the last five years and employs 900 Haitians (making him the largest employer in the country) who serve more than 2 million customers. O'Brien's business venture was no humanitarian mission—before the earthquake, Haiti represented 20 percent of the mobile phone company's revenues—but neither is he simply an opportunist. He is said to have been influenced by his mother, a human-rights activist, and after the Jan. 12 earthquake, O'Brien's investment in Haiti grew: All told, Digicel donated and raised $20 million for relief efforts, and President Bill Clinton made O'Brien the facilitator of the Clinton Global Initiative's Haiti Action Network.

At the 2010 meeting of the Clinton Global Initiative in New York, O'Brien urged the international community to change their attitudes toward Haiti. "It is time to stop romanticizing and marveling at Haitians' seemingly bottomless reserve of resilience," he wrote in an essay presented at the conference. "We need to convince Haitians that their future is truly in their own hands, not those of the NGOs, the politicians, or the international community." It's time, he wrote, to "make Haiti a compelling investment case."

In the aftermath of the earthquake, Soul of Haiti facilitated sales of textiles, rum, and coffee to Ireland in an effort to bolster the Haitian economy. David McKernan, the CEO of Java Republic, an Irish coffee company, bought $100,000 worth of beans and intends to make Haitian coffee as much as 20 percent of Java Republic's inventory in the future. "I'm 100 percent businessman," said McKernan of his motivations. "But I want a coffee company with a conscience. And we're better off trading than giving aid, because when we give aid, we make a mess of it." It isn't that McKernan hasn't tried: a water project he launched in an Ethiopian village has taken years to implement, he said, with little success.

In light of Ireland's own economic history, it isn't surprising that entrepreneurs such as O'Brien and McKernan believe more capital investment is critical for Haiti's future. Well into the 1980s, Ireland was plagued by poverty and unemployment before it transformed into one of Europe's wealthiest nations. A major factor was an increase in direct foreign investment from companies such as Intel and Microsoft. Within two decades, Ireland's unemployment rate dropped 13 percent due to private-sector growth, and it ranked No. 1 in quality-of-life indices. Economists called it the "miracle economy."

These days, Ireland no longer looks like such a miracle as the government receives a $113 billion bailout from the European Union and the International Monetary Fund to keep bankruptcy at bay. Unemployment and emigration are on the rise again. So, can Irish businesspeople still afford to invest in Haiti? Michael Carey says that because Soul of Haiti has virtually no public funding, its work in Haiti will be largely unaffected. And Conor Murphy says the spiritual affinity between Haiti and Ireland is long-lasting. "The difference is that the Irish don't look down on Haitians," he said the Haitians tell him. "We realize there's a problem, but the attitude is: What are we going to do about it? We had a big neighbor that caused us trouble. We had a huge problem with poverty, starvation. But we dragged ourselves out of it."

Correction, Jan. 7, 2011: This article originally misspelled Michael Carey's forename. (Return to the corrected sentence.)

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