Haiti poised to become a regional export champion?
The Haiti Apparel Center, funded by USAID, has been set up to training garment workers
A year after Haiti's textile and apparel industry was devastated by a powerful earthquake, just-style has spoken to industry executives about their hopes for the future. Trade legislation to galvanise US exports, coupled with rising interest from US and global brands to source in Haiti, should position the country as a regional export leader, they say.
Haitian apparel exports to the US during the first three-quarters of 2010 came to US$370m, consisting mostly of T-shirts and knitwear, but also workwear, suits and lingerie.
During the same period, regional export leader Honduras exported nearly five times as much (US$1.76bn).
So the idea that poor Haiti could overtake its Central American competitors, including Honduras within just a few years seems far-fetched. But this is what some economists, politicians and even industrialists believe.
Specifically, they are focused on the positive changes brought about in Haiti by the United Nations Stabilization Mission (Minustah), which was launched in 2004, and to Haiti's unique market access position as an apparel exporter to the US under the Haiti Economic Lift Program (HELP) of 2010.
Haiti, supported by the US and the international community, has ambitions to transform itself into a stable state and a growth economy.
As in Bangladesh, all hopes are set on the apparel industry to create hundreds of thousands of industrial jobs.
But while many Haitian and foreign analysts condemn the "sweatshop" strategy chosen by the UN, the US and the Haitian government, is there a valuable alternative to achieving their goals?
The Haitian Hemispheric Opportunity through Partnership Engagement Act (HOPE) and the HELP Act should persuade apparel buyers and manufacturers alike to bet big on Haiti.
HELP is unique in extending duty-free entrance into the US market to apparel articles wholly assembled or knit-to-shape in Haiti, which are made from yarns, fabric, components, sourced from any country.
This means that Haitian garment exporters can use not only materials from US or regional suppliers, but as well from Asian or European suppliers, while still enjoying duty-free access to the US.
The HELP programme has generously increased the quantitative limits set by HOPE, and extended the time-frame until 2020.
Speaking for the 22 garment companies in Haiti, which between them have 27,500 employees, director Grégor Avril of the Association of Haitian Industries (ADIH) says the HOPE and HELP Acts have had a positive impact.
In 2009, Haitian apparel exports to the US rose by 24.5%, in sharp contrast with falling exports from all other countries in the region. Hanesbrands, Gildan, and several other large companies shifted more orders to Haiti.
But the earthquake that hit Haiti on 12 January 2010 devastated or damaged several factories in Port-au-Prince and strongly slowed the sector's expansion.
Output in the first quarter of 2010 was 21% less than in the first quarter of 2009. But the following quarters' output exceeded the prior year's figures.
Guy Lamothe, director general of CFI Haiti (Investment Facilitation Centre) stresses that thanks to the efforts of the Inter-American Bank for Development, new factory buildings will soon be available in Sonapi, the industrial zone in Port-au-Prince where most of the Haitian apparel industry is concentrated.
There are also plans to create new industrial zones 10km north of Port-au-Prince, in Northern Haiti and along the border with Dominican Republic.
It's not just local Haitian apparel manufacturers who expect strong future growth; the Dominican Grupo M also plans to recruit 4,000 more workers for its sewing factories in Northern Haiti.
Antonio Yang, the general manager of Korean company Willbes Haitian, expects to increase employment from 2,700 to 4,700. Willbes is also planning to build a knitted fabrics plant near Port-au-Prince, mainly to cater to other companies.
But the real explosion of jobs should not come from the five Korean apparel makers who are already producing in Haiti, but from six other Korean companies who claim they are ready to start manufacturing there: Hansoll, Sea-A, Kyungseung, Hansae, Yakjin, and Shinsung.
Kyungseung wants to buy a site to construct its own factory. Hansoll (in August 2010) and Sea-A (in September) signed a memorandum of understanding with the intention of creating many thousands of jobs in new industrial zones to be financed and built by international banks IFC and IBD and the US and Haiti governments.
Director general Georges Sassine of the Tripartite Commission HOPE, who travels the world to promote Haiti's apparel export opportunities, also suggests that Vicunha and Coteminas, among other Brazilians, will try Haiti too.
An apparel exporting industry that's not supported by local textile mills and that's heavily dependent on one market - the US, which currently absorbs more than 90% of Haiti's apparel exports - is vulnerable.
Co-production - encouraged by HELP - with textile companies in Dominican Republic, and market diversification towards the EU, with duty-free entry for apparel under an Economic Partnership Agreement (EPA) with the Caribbean Forum countries, are the two main strategies to diminish the risk.
By Jozef De Coster.
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