The first of two installments looking at the New York Times in depth investigation into the Caracol industrial park. Part two will be posted shortly. Deborah Sontag, writing in today’s New York Times, takes a detailed look at the new Caracol industrial park being built in northeastern Haiti, finding that in their rush to show reconstruction progress the plan’s backers have overlooked labor and environmental concerns. Sontag writes: Two and a half years after the earthquake, Haiti remains mired in a humanitarian crisis, with 390,000 people languishing in tents. Yet the showcase project of the reconstruction effort is this: an industrial park that will create jobs and housing in an area undamaged by the temblor, a venture that risks benefiting foreign companies more than Haiti itself. The park, whose main tenant Sae-A expects to generate some 20,000 jobs over the next six years, has been made possible by generous subsidies from the U.S. and Haitian governments and the Inter-American Development Bank (IDB). Sae-A officials were invited to the U.S. embassy in Seoul to meet with Secretary of State Clinton in 2010. One concern the company had at the time was “uncertainty about whether Haiti’s minimum wage for textile workers, scheduled to increase to $5 from $3.75 a day this October, would continue to rise.” Wikileaks cables later revealed that the U.S. embassy in Haiti, along with some multinational companies had “aggressively moved to block a minimum wage increase for Haitian assembly zone workers,” according to The Nation. While the minimum wage has increased, 18 out of 20 factories monitored by the Better Work Haiti program were found to be non-compliant on the minimum wage in their most recent assessment published in April.Despite the “obstacles,” and convinced by legislation providing tariff-free access to the U.S. market, Sae-A officials were soon heading to sign an agreement -- but not in Haiti, in Washington: By late summer, they were flying with their investment plan to Washington for a meeting with Mrs. Clinton and other international officials in a historic treaty-signing room on the State Department’s seventh floor. While Sae-A originally estimated the project would create 3,000-4,000 jobs, American and international officials wanted more: “We would say, ‘We could probably do a factory with about 3,000 to 4,000 people.’ They’re like, ‘Wow. What would you need to make it bigger?’ I [Lon Garwood, senior advisor to Sae-A] said, ‘If we could get a loan for the machines, we could probably double that.’ They said, ‘What about 10,000?’ We said, ‘If we didn’t have to worry about purchasing the land, if we didn’t have to build the factory shells, then we could double it again.’ That’s where the 20,000 jobs figure came from.” In the end, the land was provided free of charge by the Haitian government (evicting some 350 farmers in the process), the IDB agreed to provide $100 million to finance the building, while the U.S. would contribute $124 million for a power plant, housing and a port. Sae-A, which reported $1.1 billion in export business last year, only needs to invest $39.2 million. The $124 million provided by the U.S. is over a quarter of the money the U.S. earmarked for reconstruction.
The first of two installments looking at the New York Times in depth investigation into the Caracol industrial park. Part two will be posted shortly. Deborah Sontag, writing in today’s New York Times, takes a detailed look at the new Caracol industrial park being built in northeastern Haiti, finding that in their rush to show reconstruction progress the plan’s backers have overlooked labor and environmental concerns. Sontag writes: Two and a half years after the earthquake, Haiti remains mired in a humanitarian crisis, with 390,000 people languishing in tents. Yet the showcase project of the reconstruction effort is this: an industrial park that will create jobs and housing in an area undamaged by the temblor, a venture that risks benefiting foreign companies more than Haiti itself. The park, whose main tenant Sae-A expects to generate some 20,000 jobs over the next six years, has been made possible by generous subsidies from the U.S. and Haitian governments and the Inter-American Development Bank (IDB). Sae-A officials were invited to the U.S. embassy in Seoul to meet with Secretary of State Clinton in 2010. One concern the company had at the time was “uncertainty about whether Haiti’s minimum wage for textile workers, scheduled to increase to $5 from $3.75 a day this October, would continue to rise.” Wikileaks cables later revealed that the U.S. embassy in Haiti, along with some multinational companies had “aggressively moved to block a minimum wage increase for Haitian assembly zone workers,” according to The Nation. While the minimum wage has increased, 18 out of 20 factories monitored by the Better Work Haiti program were found to be non-compliant on the minimum wage in their most recent assessment published in April.Despite the “obstacles,” and convinced by legislation providing tariff-free access to the U.S. market, Sae-A officials were soon heading to sign an agreement -- but not in Haiti, in Washington: By late summer, they were flying with their investment plan to Washington for a meeting with Mrs. Clinton and other international officials in a historic treaty-signing room on the State Department’s seventh floor. While Sae-A originally estimated the project would create 3,000-4,000 jobs, American and international officials wanted more: “We would say, ‘We could probably do a factory with about 3,000 to 4,000 people.’ They’re like, ‘Wow. What would you need to make it bigger?’ I [Lon Garwood, senior advisor to Sae-A] said, ‘If we could get a loan for the machines, we could probably double that.’ They said, ‘What about 10,000?’ We said, ‘If we didn’t have to worry about purchasing the land, if we didn’t have to build the factory shells, then we could double it again.’ That’s where the 20,000 jobs figure came from.” In the end, the land was provided free of charge by the Haitian government (evicting some 350 farmers in the process), the IDB agreed to provide $100 million to finance the building, while the U.S. would contribute $124 million for a power plant, housing and a port. Sae-A, which reported $1.1 billion in export business last year, only needs to invest $39.2 million. The $124 million provided by the U.S. is over a quarter of the money the U.S. earmarked for reconstruction.
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