The U.S. Economic Agenda: A Sweatshop Model of Development
Briggs, Barbara & Kernaghan, Charles
Over the past decade, U.S.AID has worked hard to promote Haiti as a low-wage site for U.S. companies fleeing offshore. The agency has poured over $100 million into Haiti's corrupt business elite...
...8 Concerned about working conditions in plants closely linked to the U.S...
...market...
...According to the U.S...
...If U.S...
...Prior to the coup (the most recent figures available), U.S...
...0 While freedom of association, the right to strike, and the right to organize are legally provided to all workers in Haiti, few workers actually enjoy such rights whether employed in export-processing operations or local firms...
...business interests...
...This article is adapted from the com- mittee's report Haiti After the Coup: Sweatshop or Real Devel- opment...
...and Haitian business interests, they have done little to alleviate the devastating poverty of residents of Portau-Prince...
...1 2 U.S.AID, which had spent tens of millions of U.S...
...In a 1986 report, the agency observed that "assembly industries in Haiti have a tendency to create a relatively greater demand for female workers who are believed to be better qualified for work which requires detail, dexterity, and patience...
...Labor Department, "it appears that many employers of the export industry are not in fact willing to bargain with trade unions...
...government's eye...
...investment was estimated to represent over 90% of total foreign investment in the country...
...In a 1991 report, the agency noted that, "most of these jobs will be for low-income citizens, with a large proportion of these going to women...
...Agency for International Development (U.S.AID) has worked hard to promote Haiti as a low-wage site for U.S...
...It's like being inside a tin can...
...According to the U.S...
...When the wind blows in off the ocean, the metal roofs strain and rattle...
...Commerce Department again noted, "no reliable data exists" on wages, and "reliable data on employment are nonexistent in Haiti...
...When it rains, the sewage overflows into people's homes...
...tax dollars since 1980 to foster offshore investment in Haiti's low-wage assembly sector, stopped promoting investment when Aristide took office in 1991...
...Haiti," Foreign Economic Trends and Their Implications for the United States, U.S...
...Their business-sector hosts 38 NACIA REPORT ON THE AMERICAS a r 5; 0 0 NACIA REPORT ON THE AMERICAS 38REPORT ON HAITI Above: A street child in downtown Port-au-Prince washes in the gutter outside the ice cream factory because the melting ice provides relatively clean water...
...1 8 While U.S.AID's projects may be a boon for U.S...
...Accordingly, U.S.AID's next move was to quickly allocate $26 million to the "adhoc committee of business organizations" under U.S.AID's control in order to help keep "Haitian production competitive in world markets...
...busi- ness will continue to be investment in export-assembly operations...
...production, while 20% enjoyed savings of between 40 and 60...
...There are no profit-sharing schemes or featherbedding requirements...
...8. The Electrotechnical Industry in Haiti, The Ministry of Economy, Finance, and Industry...
...9 Not one single collective-bargaining agreement is in effect in Haiti's export-assembly sector...
...This is more than just talk...
...7 U.S.AID never documented the most basic working and living conditions of the very people whom they were supposed to be assisting...
...People running for the daily water truck in Cite Soleil...
...Wage systems," U.S.AID said, "should not be the forum for welfare and social programs...
...Worker Rights in Export Processing Zones, Bureau of International Labor Affairs, U.S...
...Haiti," Project Paper/Promotion of Business and Export Project, U.S.AID...
...The US Economic Agenda: A Sweatshop Model of Development 1. "Haiti," Foreign Economic Trends and Their Implications for the United States, American Embassy Port-Au-Prince, U.S...
...6. Country Development Strategy Statement, U.S.AID...
...3. "Haiti," Project Paper/Export and Investment Promotion, U.S.AID...
...13 "Haiti Macroeconomic Assessment," Staff Working Papers, U.S.AID, February, 1991...
...Haiti's "large pool of productive, competitive, labor-seeking employment" would be one of the "factors enhancing" this promotional effort...
...7 In April, 1992, as the military regime that ousted Aristide became increasingly intransigent, the U.S...
...companies flocking to Bangladesh and Haiti...
...As early as 1980, A U.S.AID-funded study found that "women workers tend to be quieter...
...They opposed the Aristide government's attempt to raise the pitifully low minimum wage in Haiti's export-assembly industry...
...95% of Haiti's lightmanufacturing exports are destined for the U.S...
...Department of Commerce, International Trade Administration, April 6, 1992...
...Multiply this by six days, and working people have $4.26 to meet their family's expenses for a week...
...Only quiet women, who "are young and highly motivated" and "who adapt easily to industrial discipline," are strong candidates for employment...
...Open sewers flow down the dirt streets, which are deeply rutted by erosion...
...9. M. Catherine Maternowska, Ph.D...
...Haiti Macroeconomic Assessment," U.S.AID...
...candidate in anthropology, Columbia University, New York...
...Thousands depend upon a public faucet, or a broken water main where the people scoop up water...
...In the recent NAFTA debate on Larry King Live between Vice- President Al Gore and Ross Perot, there was a partic- ularly lively ex- change about the threat of jobs moving south to where wages are cheapest...
...On the other hand, there is no shortage of U.S.AIDsponsored studies about the advantages that Haiti offers U.S...
...Haiti's proximity to the United States, its access to Generalized System of Preferences (GSP), Caribbean Basin Initiative (CBI) and Section 807 U.S...
...1 6 Haiti, the agency seemed to fear, might turn into Switzerland or Denmark...
...Since a working family needs about a third of this to cover rent and other expenses, family members have approximately $2.75 a week with which to feed themselves...
...U.S.AID Barbara Briggs and Charles Kernaghan are staff members of the National Labor Committee...
...companies to produce goods in Haiti than in the United States, even taking into account the costs of relocation, setting up production, freight and customs...
...These workers' average transportation cost to and from work is 44 cents a day...
...2. "Haiti," Project Paper/Export and Investment Promotion (Project Number: 521-0186), U.S.AID, August 8, 1986...
...A meager breakfast and lunch comes to 33 cents...
...trade-union leaders visited Haiti in 1991, just after the military coup...
...6 In 1992, the U.S...
...The "donor"-U.S.AID-was supposed to go backstage...
...Haiti," Project Paper/Promotion of Business and Export Project, U.S.AID...
...in typical fashion, he turned defensive and scoffed that the answer was obvious...
...Commerce Department calmly noted: After an internationally recognized government is reestablished, the best long-term prospect for U.S...
...ristide's unexpected victory in the 1990 elections threw a wrench in U.S.AID's well-laid plans...
...Investment Promotion Division [Haiti], 1981 (Estimated...
...Haiti," Project Paper/Promotion of Business and Export Project, U.S.AID...
...5. "Haiti," Project Paper/Promotion of Business and Export Project (Amendment Number I/Project Number: 521-0186), U.S.AID, June 29, 1991...
...U.S.AID and other "donors" might consider that the foundation for a viable development strategy must be more than the comparative advantage afforded by "cheap labor...
...Of course, it was Vo XXVII, No 4 JAN/FEB 1994 39 VoLXXVII, No4 JAN/FEB1994 39REPORT ON HAITI Haiti's "highly productive, low-cost labor" which was to be the engine for integrating Haiti into this bloc...
...The most common meals for working families are cornmeal with onions or some boiled plaintains with beans-when families can afford beans...
...Worker Rights, U.S...
...A U.S.AID/Haiti Mission internal staff assessment concluded that the incoming government "could benefit from position papers staking out the issues" in order to suggest "possible policy solutions" for economic development...
...At the factory, where fabric is sewn into clothing to be exported to the United States, the highest paid workers receive the equivalent of U.S.$1.48 a day...
...The government doesn't collect garbage...
...off-guard...
...3 U.S.AID took this position despite their caveat that "the conditions under which [women] work are not generally conducive to realizing their productive capacities nor adequately safeguarding their children's welfare...
...A survey of Haitian and U.S...
...This leaves 71 cents to bring home at the end of the day...
...Over the last decade, the U.S...
...This carries a particular advantage in that increased employment for women in urban areas provides additional income which will more directly bear on the welfare of infants and children...
...Many working families have only bread to eat, and rely on sugar-cane water to fill themselves up...
...This study may also have pinpointed the real interest in women assembly workers: "Women workers tend to be quieter...
...The average worker here earns poured over $100 million into Haiti's corrupt and tiny business elite to enlist their support in this effort...
...Department of Commerce...
...investment is almost entirely in the assembly sector...
...The refurbished Prominex/PROBE operation was supposed to work with local business organizations to "develop internationally competitive local production, build constituencies for open-market policies, and move Haiti toward becoming a full partner in the hemispheric free-trade block (sic...
...The agency has poured over $100 million into Haiti's corrupt business elite to enlist their support in this effort...
...Haiti," Project Paper/Promotion of Business and Export Project (Amendment Number I/Project Number: 521-0186), U.S.AID, June 29, 1991...
...Almost everyone eats only one meal a day...
...wanted to place temporary price controls on basic foodstuffs so the people could afford to eat...
...2 According to U.S.AID, one of its primary objectives is to help Haitian women...
...U.S.AID felt that "medium and smaller sized American compan[ies]..., which often do not have overseas VOL XXVI, No 6 JULY 199337 0 o C 8 VOL XXVI, No 6 JULY 1993 37REPORT ON HAITI offices, have to be reached through aggressive outreach efforts...
...But U.S.AID's real wrath was targeted at laborreform efforts...
...With improvement in the social status of its citizens, Haiti's new democracy will be strengthened and the participation of its population assured...
...According to the agency, the proposed minimum-wage increase would price Haiti right out of the low-wage assembly market...
...5 The agency was displeased with the fact that Aristide While U.S.AID's projects may be a boon for business interests, they have done little to alleviate the devastating poverty of residents of Port-au-Prince...
...By the middle of Aristide's short presidency, U.S.AID was declaring that "signals" from the constitutional government "to the business community have been mixed...
...The poor are barely surviving, and they are getting sicker...
...However," continued the study, "in view of legitimate political sensitivities, greater policy ownership by various Haitian interest groups may be more important than more donor-produced studies and reports...
...Left: The Cit6 Soleil slum in Port-au-Prince...
...electronic-assembly plants operating in Haiti established that 38% of the companies enjoyed savings of between 20 and 40% over U.S...
...4 An internal working paper recommended that the ad-hoc committee be organized and placed "under the umbrella of U.S.AID's export and investment promotion project (Prominex...
...companies are only interested in a low-wage labor force, Al Gore asked, why aren't U.S...
...Children can be seen playing and washing in the open sewers...
...What little information exists has to be culled from between the lines, or sought in places other than U.S.AID reports...
...Further, "many employers, domestic and foreign, still question the legitimacy of unions...
...Enhancing indigenous policy dialogue capacities within the private sector," the study concluded, "may be the most productive course of action...
...It piles up everywhere in great mounds that the people bum to reduce the volume and to check the spread of disease...
...Commerce Department, the United States had "an estimated $120 million [$90 million excluding inventory] invested in Haiti as of early 1991...
...5 Despite this professed concern, U.S.AID has no empirical studies documenting the number of jobs created in Haiti's assembly-export sector, nor has it conducted any studies on what percentage of these jobs went to women, whether or not the minimum wage was paid, how many hours were worked, whether overtime and benefits were paid, what working conditions were, how people traveled to and from work, what transportation cost and how long it took, and how families could afford to live on the wages paid...
...In 1986, U.S.AID put $7.7 million into an Export and Investment Promotion Project "to recruit assembly contracts and attract overseas investors" to Haiti...
...4. Country Development Strategy Statement: FY 1986: Haiti, U.S.AID, January 1984...
...U.S.AID allocated $7.7 million to Prominex, $12 million in loans to business, and $7 million to foster democracy "from a business perspective...
...took the delegation to a "model" apparel factory in Haiti's export-assembly sector...
...Only women who are "young and highly motivated" and "who adapt easily to industrial discipline" are strong candidates for employment...
...U.S.AID was funding studies that showed that it was far cheaper for U.S...
...4 The agency's public stance is that its real goal has always been to create decent paying jobs that would allow Haitian families to live in dignity and health...
...U.S.AID went on the attack saying that, "decisions have been made which could be highly detrimental to economic growth, for example in the areas of labor and foreign-exchange controls...
...nbly sector...
...As citizens enjoy employment opportunities, they can then secure their shelter, provide necessary nutrition for their families, place their children in schools and provide adequate health care for their families...
...The question An apparel factory in Haiti's export-asser caught Ross Perot U.S.$11 for a 45-hour week...
...With the exception of several oil companies and banks (Texaco, Exxon, Bank of Boston, Citibank), U.S...
...Prominex, which after a series of scandals changed its name to PROBE (Promotion of Business and Exports), receives 99% of its funding from U.S.AID, and is in fact a U.S.AID front group...
...While the restoration of Haiti's elected government is an urgent and necessary first step, the economic development strategy that Haiti will pursue has great significance for the growth-and sustainability-of democracy...
...7. "Haiti," Foreign Economic Trends and Their Implications, U.S...
...In 1984, the agency observed, "Haiti has no reliable work-force data...
...Department of Labor, August, 1990...
...Department of Labor...
...The study went on to state that "traditional management prerogatives such as the right to hire and fire are respected by the government...
...Department of Commerce...
...Under the Aristide government, observed U.S.AID, "businesses are postponing investment and reducing inventory while waiting to see the future directions of the new government before making significant business growth decisions...
...Neither man seemed to know that Haiti has indeed caught the U.S...
...The United States has a significant economic presence in Haiti...
...It warned that "high distortion in labor costs"-the 50 cent hourly wage proposed by the constitutional government-"can lead to capital-intensive, rather than labor-intensive responses to opening of markets...
...hree months before the coup, the agency mused: "If Haiti's investment climate can be returned to that which existed during the CNG [the National Governing Council headed by Lieutenant General Henri Namphy, a Duvalier loyalist, who took power after Duvalier fled] or improved beyond that, and the negative attitude toward Haiti appropriately countered, Haiti stands to experience significant growth...
...See also Concept Paper Economic Recovery Assistance II, U.S.AID/Haiti, November, 1986...
...1 3 In country after country throughout Central America and the Caribbean, U.S.AID's development strategy is based on working with local business elites in order to help them to more efficiently utilize their large pools of low-wage labor...
...Customs benefits, as well as its abundance of low- wage, productive labor should make it a good location for assembly operations when the country achieves some level of political stability...
...There are no bathrooms, no running water...
...economy, a delegation of U.S...
...The poor continue to live in miles and miles of broken-down shacks made of rough concrete, mud, straw, cardboard and scrap sheet metal...
...After 67.5% of the Haitian people had voted for change, U.S.AID worked with the Haitian business elite to keep things the same...
Vol. 27 • January 1994 • No. 4
