February/1/ 2010

Setting the Stage for Economic Freedom, Economic Opportunities,

Wealth Creation and Social Entrepreneurship

A Blueprint for Action by a Responsible Government of Haiti

Omega Consultant and News

January 12, 2010, a date that changed Haiti forever. After a major 35 seconds earthquake measuring 7.2 on the Richter scale suddenly crippled a country that was already the poorest of the western hemisphere, the world witnessed heart-wrenching scenes of physical devastation and human suffering of biblical proportion, almost unparalleled in universal history, as reported respectfully by the international media led by Mr. Anderson Cooper and Dr. Sanjay Gupta of America’s CNN, the 24-hour cable news giant.

Beyond the Tears and the Wounds: Economic Opportunities and Social Progress

Yet, through all the current losses, pain and suffering, it is also clear that January 12, 2010, will also be remembered as the day that brought a more hopeful and decent Haiti into being, as the international community descended immediately upon the small and poor republic with a new determination and commitment to help the ravaged country not only recover from this latest unforgiving natural disaster, but also to quickly usher in a new era of economic opportunities and social progress for a people whose yearning for liberty and economic prosperity was proclaimed to the world on January 1, 1804, but has since been frustrated by petty dictators, throughout its entire 206-years history as an independent nation.

It should be clearly remembered by all, however, that before the calamity of this earthquake, Haiti suffered from a host of political, economic and social problems, including daily kidnappings and assassinations, as the latest form of political violence, which limited very seriously its ability to grow a healthy economy capable of delivering the goods and services required for its population to live a decent life, out of their usual shocking poverty. Thus, as we now contemplate the challenges of rebuilding Haiti, we should keep these old problems and their solutions in sight, even as we resolutely engage our energies toward a speedy and results oriented recovery effort.

Rebuilding Haiti at once for long term stability, as well as economic and social progress now appears to require three distinct phases. The first has to do with the economic recovery and continuity of business actions that must be taken immediately to bring Haiti’s market economy back to life. The second must deal with devising and implementing a set of appropriate and evolving short-term macroeconomic stabilization policies, including monetary measures by Haiti’s Central Bank, which will soon be necessary to maintain equilibrium between the country’s aggregate demand and aggregate supply. Thirdly, adequate macroeconomic policies must also be devised that meet Haiti’s long term needs to achieve double digit rates of economic growth, better population control, regional development and prosperity, national wealth creation and successful social entrepreneurship.

Keeping in mind the short-term and long term macroeconomic policies that will be necessary to accelerate a successful rebuilding of Haiti, the following is a Blueprint for Immediate Action by the Government of Haiti towards an Effective and Efficient Management of a Post-Disaster Relief and Economic Recovery Program, in support of activities undertaken by the experts of the international community.

Post Disaster Relief and Economic Recovery Management

In Haiti today, no wheel needs to be reinvented to achieve success in implementing a thoughtful and well-coordinated Post-Disaster Relief and Economic Recovery Management Program, as much knowledge, skills, experience and practical know-how have been accumulated in this field by various specialized institutions of the international community, by the United States in particular, where national, state and local communities have long been involved in the preparation, update and execution of such grand scale effort. So, the Government of Haiti will be well advised to seek the assistance of the United States in coordinating the implementation of relief and recovery efforts, even as the country welcomes the best practices accumulated by the specialized institutions of the international community, such as the World Bank Group ([1]), the UNDP Bureau for Crisis Prevention and Recovery ([2]), the U.S. Department of Homeland Security ([3]), and the U.S. Federal Emergency Management Agency ([4]).

More specifically, we recommend the following immediate actions:

1. Secure buildings or rubbles with sensitive information

These include the following:

National Archives

National Palace

Department of Revenue (DGI)

Ministry of Finance

Ministry of Justice

Planning Ministry

2. Designate, Identify, Upgrade Tent Cities

Obtain field tents from international community

Designate Safe Sites for Tent Cities and Identify each by name or number.

Upgrade Tent Cities with Sanitation and Health Care Services

Establish Security Post in each Tent Cities with regular Police patrol

Establish Food and Water Distribution Points in each Tent City

Organize Relief Distribution with one entry and one exit points.

Establish safe free market area in each tent city.

3. Establish and Organize Safe Food and Water Distribution Points throughout Port-au-Prince, Leogane, Jacmel and other cities as needed.

4. Assess and Address Needs of Financial System

Secure Central Bank Building

Secure all bank and Money Transfer locations

Secure Customs Building

Organize meetings of Central Bank, Commercial Banks, Money Transfer Agents

Assess damages to banks and evaluate their operational needs

Assess and meet liquidity needs of the financial system

5. Renew state of emergency

Requisition vehicles for mass transportation, with delayed compensation

Keep curfew in place from 8 p.m. to 6 a.m.

Keep important streets in good repair and free of obstacles for relief vehicles.

Insure police presence throughout strategic points in impacted cities

6. Insure continuity of business

Meet with Chambers of Commerce

Assess and address needs of business community

Restart Production and Distribution of Electricty

In addition, the Government of Haiti must take actions quickly, as early responses increase the effectiveness of recovery efforts. In particular, the Government of Haiti should give proper consideration to the following:

Use of local capacity, private sector links, coordination among partners
Name consultative groups of domestic and international experts, under direction of National Director for Recovery Operations (American Assistance)
Seek assistance that develops the national capacity to absorb international aid, relief and recovery aid, and help improve national and local governance

Short Term Stability and Long Term Economic Growth

Nowhere else in the world will one find a larger number of Haitians living a more successful life, free and prosperous, while enjoying the hard earned respect of society and government than in the United States of America! And, as Haitians living at home measure – with disbelief and envy – the good fortune of relatives and friends in America, their restlessness becomes increasingly acute as they continue to confront Haiti’s successive crop of authoritarian, often brutal, and corrupt political leaders, who, to this day, keep denying to the impoverished masses the freedom and prosperity promised by the nation’s forefathers on January 1, 1804.

The outstanding individual achievements of Haitians in America, and elsewhere in the developed countries of the free world, can be made possible for all Haitians if we can replicate in Haiti the environment which creates economic opportunities that individual Haitians can seize freely to create their own prosperity, to the extent that each chooses, in order to achieve his or her own individual and most personal dreams. For this purpose, a Responsible Government of Haiti must anchor well defined goals, strategies and action plans to establish, through a leadership of execution, the institutional foundations, upon which free and prosperous societies are built, within the context of a continuously developing culture of freedom, and the superior achievements of which can only be hastened with greater efficiency, by a new and supportive culture of execution as abundantly discussed by this author and noted Haitian intellectual, Mr. Ray Killick. As a science of decisions, and of unintended consequences, economics can help bring to light indispensable features of an anti-poverty regional economic development agenda for Haiti, as a key element of a long term growth policy package, that also provides a general framework for sound macroeconomic stabilization policies, investment policies, as well as competition, labor, fiscal, monetary and other policies that maintain a macroeconomic environment, conducive to economic success, that is also free of corruption and serious insecurity issues.

Building Haitian Institutions of Free Societies for Prosperity and Development

Today, fortunately, to build for Haiti the institutions of free societies is not the Herculean task that the nation’s forefathers faced 206 years ago when they declared the country’s independence. For, Haiti now can learn from the experience and emulate the achievements of the industrially advanced nations of the Western hemisphere, the free societies of which have led their individual citizens to enjoy rights, liberties and economic prosperity on a grand and large scale never seen before in the history of mankind. Moreover, by engaging without delay its collective political will, as well as the creative energies and determination of its individual citizens, into the development of a culture of freedom and a process of wealth creation, based on lessons learned from the successes and failures of past and modern economies in transition, including those of the former Soviet Union, as well as on the wealth of academic knowledge, practical know-how and managerial experience accumulated by Haitian expatriates in the United States, and elsewhere, Haiti can once again regain a position of leadership in the world, setting an example for and leading other less developed countries in the global fight against poverty, as well as for economic development, human rights, and democracy.

If, as our forefathers professed, Haitians have a dream of liberty in a prosperous society, then Haiti can find much inspiration and guidance in the goals and public policies as well as in the institutions and organizations of the free societies of the Western Hemisphere, which have been spectacularly successful on their own individual and culturally different path to freedom, economic prosperity, democracy and political stability. What are those goals? While, generally, the political goals include the establishment of a representative system of democratic government, with independent executive, legislative, judiciary branches, and based on political pluralism, the rule of law, as well as the free exercise of individual liberties, political and human rights, economic goals usually focus on economic growth, full employment, economic efficiency, price level stability, economic freedom, an equitable distribution of income, economic security, and a reasonable balance of trade. To achieve such goals, free societies rely also on the institutions and organizations of the free enterprise system of a market economy based on the price mechanism of the market, well-established private property rights, competition, freedom of enterprise, freedom of choice, specialization, capital accumulation, technological changes, and a limited government that provides an accommodating legal structure, maintains competition, promotes stability, redistributes income, reallocates resources, and provides the most basic public goods and services, in infrastructure development, health and education, for example.

Moreover, Haiti also stands to learn significantly from the trials and errors as well as the positive accomplishments of recent economies in transition – China, Russia, the former countries of the Soviet Union – or less recent ones such as the Asian NIEs, i.e. the Newly Industrialized Economies of Singapore, Hong Kong, Taiwan and Korea, if it wholly accepts and embraces the establishment of a free society driven by the free enterprise system of the market economy, as the primary and ultimate goal of renewed and clearly redefined transition efforts, from its current initial conditions of a failed state, of which the small market economy remains heavily burdened by feudal tradition, corruption, lawlessness, and the erratic command of a long string of dictators. To this end, Haiti should examine, adapt and implement recommendations and best practices proposed by transition policy experts, as a basic economic policy framework for accelerating the transition or transformation of a developing country from any given prevailing initial conditions into a well-functioning market economy. And if, as demonstrated by experienced transition experts, such policy prescriptions form the basis of a partnership with international donors for targeted assistance and financial aid, then a successful path may be created for Haiti to turn this rebuilding effort into a path to freedom and economic prosperity.

In a general way, an appropriate Economic Policy Framework for transitioning to a successful Haitian national economy would consist of a set of macroeconomic stabilization policies, i.e. fiscal and monetary policies, aimed at maintaining a short term balance between aggregate demand and aggregate supply in the resource, product and financial markets, as well as setting the stage for an appropriate and longer term macroeconomic environment, in which a set of investment drivers can actually spur capital investments and move a country forward into a well-functioning market economy: (1) liberalization and deregulation of business activities, (2) stability and predictability of the legal environment, (3) good corporate and public governance, (4) liberalization of foreign trade and international capital movements, (5) financial sector development, (6) corruption level, (7) political risk, (8) country promotion and image, and (9) targeted investment incentives.

As Haiti becomes increasingly more able to attract higher levels of foreign direct investments, and successfully integrate the global economy, a concurrent program of internal political and economic decentralization will also be necessary to empower the rural poor and upgrade their living conditions. Toward this end, a serious regional economic development program for poverty reduction and wealth creation has been articulated around the establishment and development of 26 Economic Opportunity Zones (EOZ) throughout Haiti. The Haitian Initiative also calls on Haitian expatriates in the United States and elsewhere to invest in Haiti, and to share their wealth of accumulated academic knowledge, practical know-how and managerial expertise with Haiti ’s new entrepreneurial class. To this end, special guarantees should be offered to Haitian expatriates, including an official recognition of their unrestricted Haitian citizenship.

A Haitian economic miracle remains possible to achieve if the talents and energies of the citizens of Haiti are marshaled and oriented toward building the institutions of liberty and the organizations of a free market economy, as a precondition for creating a free society in which a limited government, constrained by the institutions of an open society and representative democracy, is less able to thwart the creative energies of risk taking entrepreneurs in an environment of flourishing individual liberties. Then, in a partnership with the international community, an agenda for wealth creation can be implemented, the success of which will rest on Haiti’s steady implementation of a well researched and proven program of transition toward a well functioning market economy, representative democracy and the rule of law. For establishing a free and prosperous society, Haiti must also summon the assistance of Haitian expatriates, whose academic knowledge, practical know-how, managerial talents, and experience of democratic life and governance, may help shorten the time necessary for Haitian society to adjust smoothly into to its new path to freedom, economic prosperity, democracy and political stability, where private entrepreneurs take an active and leading role in carrying out an anti-poverty regional economic development agenda that brings real economic opportunities to Haiti’s local populations, and to Haitians everywhere.

Fort Lauderdale, January 30, 2010

Omega Consultant and News