Industrial Policies for Haiti’s Sustainable Development Strategy
As Haiti tries to turn the page with a new council, a new prime minister, and a new government, the perennial question resurfaces: How can this nation, rich in history, grapple with persistent poverty and unemployment? Can it turn the tide and build a prosperous future? The answers can be drawn from a global comparative analysis.
Haitians across the nation, from Mole St. Nicholas to Thomassique, Thiotte, Tiburon, and the bustling streets of Port-au-Prince, share the same fundamental desires as people worldwide: physical and economic security. These two universal needs should guide Haiti's new government. Physical security is the foundational requirement; without it, no development can take root. However, security alone is insufficient. Haiti requires a robust economic foundation that it can build and sustain independently.
The “Leapfrogging” Strategy
Development experts often propose "leapfrogging" as a strategy to accelerate the development of countries like Haiti. They argue that just as these countries bypassed landlines for cell phones, they can jump straight to a high-tech economy. This perspective, while appealing, overlooks three crucial realities in Haiti: the country’s bad governance, limited infrastructure, and its exploding population. With the highest birth rate in the Caribbean, Haiti must create jobs much faster to keep pace with population growth.
The stark truth is that most of Haiti's current infrastructure—from schools to roads—has been devastated. The country relies heavily on remittances and international donors, which is an unsustainable model for genuine development.
Despite these challenges, many Haitian economists believe that the country has the potential to become an economic powerhouse in the region due to its location and large population. According to the Population Research Bureau (PRB), out of the 17 countries in the Caribbean Haiti’s population is the highest with 11.6 million inhabitants followed by the Dominican Republic with 11.3 million and Cuba with 11 million. Those countries’ birth rates are respectively 22, 18, and 9 births per 1,000 inhabitants. To address its rapid population growth, Haiti needs to create a massive number of jobs.
However, Haiti's population demographics further complicate this picture. With a median age of 23.5 years and limited access to quality education, capital, and technology, the leap to a knowledge-based economy is distant. Therefore, traditional sectors like the garment sector and agriculture must bridge the gap.
A Demographic Dividend or a Time Bomb
Haiti's growing youth population presents a double-edged sword. With over 60% under 25, this demographic surge could be a demographic dividend, driving economic prosperity for decades to come. However, without sufficient opportunities, it could become a time bomb, fueling social unrest. The current instability caused by gangs serves as a stark reminder of this risk. Gangs often exploit young men with limited options, offering a sense of belonging and income, however fleeting.
Despite the challenges, Haiti can harness the power of its youth by investing in education. This investment, funded primarily by Haitian resources rather than solely on foreign aid, will unlock their potential and empower them to contribute meaningfully to the economy. During this transition period, Haiti can leverage its traditional sectors, particularly garment manufacturing and agriculture, which have the potential to create a large number of jobs.
The Garment Sector
A 2020 survey reveals that at its peak, the garment sector employed over 53,000 people across 31 companies, contributing “more than 77 percent of total Haitian exports to the United States.” The industry presents a clear opportunity for job creation and economic growth. However, the harsh realities of the sector must be addressed. Jobs can involve backbreaking labor with meager returns, and companies often fall short of sustainable and ethical standards. Growing the industry will require reforms and strategies such as:
Creating more industrial parks near ports to attract foreign investment and improve infrastructure.
Enforcing strong labor laws to ensure fair wages and safe working conditions, attracting a stable workforce.
Investing in worker training programs to improve skills and enable more sophisticated, higher-value work.
The Agriculture Sector
Given Haiti’s infrastructure challenges and the population's education level, agriculture is central to the country’s stability and holds great economic potential.
Similarly, the research firm Statista reports that “in 2022, the employment in the agricultural sector as a share of total employment in Haiti remained nearly unchanged at around 45.52 percent” of Haiti’s workforce. While agriculture exports totaled $20 million, with $11 million in tropical fruits and $8 million in live fish, it represents a fraction of the revenue from the garment sector. However, given Haiti’s infrastructure challenges and the population's education level, agriculture is central to the country’s stability and holds great economic potential. To attract young people to agriculture and realize this potential, the sector must not be seen as risky, backbreaking labor with meager returns. Proven strategies to achieve this include:
Providing subsidies to local farmers while imposing strategic tariffs on imported food products to level the playing field as Haitian agriculture modernizes.
Incentivizing and supporting smallholder farmers’ alliances and cooperatives.
Establishing processing facilities within or near industrial parks allows Haitian farmers to add value to their crops, increase profits, and create additional jobs.
Comparative Analysis: Learning from Other Nations
A comparative analysis of other nations that overcame similar challenges is instructive. China’s economic miracle began with Special Economic Zones, which attracted foreign investment and created millions of factory jobs. According to a 2022 World Bank report, “Over the past 40 years, the number of people in China with incomes below $1.90 per day – the International Poverty Line defined by the World Bank to track global extreme poverty– has fallen by nearly 800 million.” The Ethiopian Herald reported that “Industrial parks’ development has been a catalyst for job creation in Ethiopia.” It was the same strategy for the Philippines and Mexico. Another example is South Korea, which has a rags-to-riches story. In 1962, the country per capita income was $87, “lower than those of Haiti, Ethiopia, and Yemen and about 40% below India’s.”
Perhaps most relevant, the Dominican Republic (DR) started with garment zones and climbed to advanced manufacturing and a thriving service sector. In an interview with LATAM FDI, Promotion and Investment Manager Silvia Cochón said that in 2023, the DR had “84 industrial parks operating in 28 of the 32 provinces on the island,” with 784 companies operating in those parks.
These aren’t just success stories; they are blueprints. They show that starting with labor-intensive industries doesn’t trap countries in poverty; it’s the first rung on the ladder to high-tech economies. Jobs bring stability, and stability attracts investment; investment funds education, and education powers technological advancement. On this front, a coherent diaspora strategy that maximizes remittances, along with the effective use of the existing transfer tax, are important tools in Haiti’s development strategy. In a prior article, “Reimagining the Haitian Diaspora’s Role in Haiti’s Reconstruction,” key recommendations were made to achieve effective diaspora integration.
A Multi-Faceted Path to Sustainable Development
The path forward is multi-faceted but clear. First, establish Haitian-owned industrial parks near ports for garment manufacturing and enforce strong labor laws and fair conditions—development doesn’t mean exploitation. Second, use the revenue from these industries to fund education and infrastructure improvements, creating a virtuous cycle of skills and investment. Third, modernize agriculture to reduce the importation of basic foodstuffs and stimulate rural economies. While not a complete solution, modernizing agriculture is vital for short- to medium-term stability. International aid also has its place, but self-sufficiency must lead. Haiti needs to leverage its resources and talents, not rely on external handouts. This is not just about economics; it’s about dignity and control.
Striking a balance between these seemingly contradictory goals will be a critical challenge for policymakers. They will need to attract investment through liberalization policies, such as reducing tariffs on imported machinery and streamlining the process for foreign and diaspora investors to establish operations in Haiti. At the same time, they will also need to implement some protectionist measures to safeguard the agricultural sector. These efforts could include temporary subsidies for local farmers or tariffs on certain imported food products, like rice, allowing Haitian farmers to compete and establish themselves.
The nations that lifted millions from poverty - from South Korea to Ethiopia to the Dominican Republic - did not have the luxury of waiting for the perfect solutions. They balanced pragmatism with principles, using garment and agricultural jobs as a springboard to better opportunities. These success stories demonstrate that starting with labor-intensive industries can be the first step toward a high-tech economy. In Haiti, given its demography, labor-intensive intensive industries are imperative.
Conclusion: Traditional Industries Can Fuel Haiti’s Economic Growth
Haiti’s path forward requires a delicate balancing act. Taking inspiration from successful nations like China and the Dominican Republic, Haiti can leverage its initial advantage in labor-intensive sectors like garment manufacturing and agriculture. This approach will create jobs, generate revenue, and foster stability.
The garment sector offers a clear opportunity. By establishing Haitian-owned industrial parks near ports, enforcing fair labor practices, and investing revenue in infrastructure and education, Haiti can create a virtuous cycle of growth. These industrial parks can also be leveraged to process agricultural products, add value, and create additional jobs.
To further support agriculture, Haitian policymakers need to devise schemes for temporary subsidies and targeted tariffs on imported food products. This strategy will safeguard the agriculture sector during its modernization, reduce dependence on imported food, and strengthen rural economies. While leapfrogging to a high-tech economy is an appealing vision, the foundational work in these traditional sectors is essential to building the necessary infrastructure and workforce.
Ultimately, self-sufficiency, not reliance on external aid, is the key to lasting development. Haiti has the resources and talent, and with a new government and growing security capabilities, it can apply these proven strategies to achieve economic growth. Ultimately, By leveraging traditional industries, Haiti can stabilize the economy, paving the way for future participation in the technology-driven world.
Haiti Policy House is a not-for-profit institution focusing on Haitian public policy issues. Its research is nonpartisan. Haiti Policy House does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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