Development is hard. Really, really hard.
That, in a nutshell, is the takeaway from “How the World Failed Haiti,” Janet Reitman’s 11,000-word piece in the latest issue of Rolling Stone. Since the January 2010 Earthquake, an estimated $3.27 billion in aid has been sent to Haiti—with less than stellar results. In fact, Reitman accuses the international development community of creating “a brutal and intractable poverty, borne of a disastrous mix of well-intentioned aid and profit-driven development.”
“Profit-driven development.” It’s a strategy that CGP has discussed extensively, and it’s not nearly as sinister as Reitman makes it out to be. Simply put, this strategy promotes the role of the private sector in economic and social development. It calls on entrepreneurs to develop practices that can respond more quickly to local demands. In terms of economic development, the private sector is uniquely suited to bring jobs and industries to local markets because, after all, it is “profit-driven.”
But Reitman is right to point out that despite several innovative approaches in Haiti, the country still suffers from major problems. Lured by the promise of jobs, Haitians flooded to areas around Port-au-Prince, but the jobs never materialized. In their place have risen tent cities with the accompanying health and sanitation problems (and now structural concerns too with the advent of hurricane season). Poor sanitation management has led to a cholera outbreak, a health disaster that Haiti had not experienced for 60 years. Even now, rubble is still being cleared from streets of Port-au-Prince.
Still, it’s worth noting that one of the only bright spots in Reitman’s depiction of Haiti is, in fact, the work of a private-sector corporation: telecommunications company Digicel. As early as February 2010, Digicel CEO Dennis O’Brien began rebuilding Port-au-Prince’s historic Iron Market. 11 months later, it was completed and open for business. Reitman describes how Digicel is now Haiti’s largest taxpayer, providing jobs to local entrepreneurs.
CGP wrote a post about private initiative in Haiti back in January that discussed not only Digicel but also South Korean apparel company Sae-A Trading. Back then, Sea-A had just inked a deal to build a new factory in Haiti, with the help of the US government and the Inter-American Development Bank. In an April update, the South Korean firm has continued those plans to bring 20,000 jobs to Haiti. In addition, the plant will also use locally-produced Haitian fabric in its apparel. Carol Adelman also discusses the private sector’s role in the Brown Journal of World Affairs, Haiti: Testing the Limits of Government Aid and Philanthropy.
Reitman acknowledges these successes, of course, but she is wary of the shadow of history.
In the 1970s and 1980s, during Haiti’s industrial heyday, tens of thousands of rural residents flocked to Port-au-Prince in search of jobs. Many settled in Cité Soleil, an isolated shantytown on the edge of the city that had been created to house workers… But the factories soon closed in the midst of Haiti’s political upheaval, and today Cité Soleil is the capital’s largest and most notorious slum, one of the poorest and most desperate places in the Western Hemisphere.
This example, she argues, illustrates the foolishness of relying on the “business-friendly model of development.” But what other models of economic growth are there? Perhaps Cité Soleil might not have flourished without the factories, but the underlying poverty would exist regardless.
This lack of a counterfactual is really the most glaring problem of Reitman’s article, says the blog Philanthrocapitalism:
Ultimately, the Rolling Stone article, whilst containing much genuinely disturbing and distressing information, fails to prove its case that the continuing problems in Haiti are due to the bottom line being given too great a role. Nor does it provide any reason to think that an alternative, non-philanthrocapitalistic approach would have worked any better than what was tried.
There’s no doubt that the response to Haiti has a lot of room for improvement, but with rigorous feedback and accountability measures, public and private sector organizations alike can learn from their mistakes. Development is hard, and despite all the theories of change, no one really has all the answers. So that leaves only two options: to try again and try again better, or to give up.