Economy

Haiti Needs to Build an Economy Like Its Island Neighbors – Bloomberg

Published

3 years ago

July 17, 2021

After the assassination of its president, Haiti is once again in danger of spiraling into political chaos. The country’s chronic dysfunction is both a result and a cause of its chronic poverty. What it needs is to focus on economic growth — and to do that, Haiti should copy its more successful neighbors like Jamaica and the Dominican Republic.

Right now, Haiti is the poorest country in the Western Hemisphere. Even worse, by some measures Haiti’s living standards haven’t grown at all since 1950:

In 1950, Haiti was on a par with Jamaica and the Dominican Republic. As of 2018, it was less than one-third as rich as the former, and less than one-sixth as rich as the latter. This is one of the most spectacularly dismal economic failures in the modern world, and turning the situation around should be a galvanizing mission for Haitians, as well as for the U.S. and other neighbors in the region.

The question , “Why is Haiti so poor?” is an interesting and complex one, rooted in history and politics. But instead of focusing on the past, Haitians should ask, “What will make Haiti less poor?” The likely answers are tourism and better agriculture.

Most Caribbean island countries thrive on tourism. For Jamaica, the industry’s total contribution is estimated at 31% of GDP. Even for the Dominican Republic, with a well-diversified industrial mix of manufacturing and services, tourism sustains an estimated 16.3% of the economy. Caribbean islands are sunny places surrounded by beautiful, warm waters — a perfect spot for a vacation.

But so far, Haiti has only managed to cash in on this advantage a little bit. The only real tourist attraction is the port of Labadee, which is leased by a cruise company and fenced off from the rest of the nation. The biggest reason tourists don’t visit Haiti’s beautiful beaches is fear. Though the country’s murder rate is not usually that high, it tends to spike hugely during the frequent periods of political instability. Haiti has also become an epicenter of kidnapping.

The safety problem in Haiti probably can’t begin to be solved until citizens are able to gain a bit of upward mobility. For now, the country should focus on creating small oases of security where tourists can rest assured that they won’t be kidnapped or robbed. This approach has been used by a number of other countries like Mexico to maintain tourism even during country-wide spasms of violence. And it’s also how the Dominican Republic and Jamaica have successful tourism industries despite their own high crime rates. Haiti should concentrate security forces near these beach enclaves, and build infrastructure to restrict access, as in Labadee.

Haiti can also build one or two airports near the tourist resorts. Because infrastructure is expensive, this, and the hotels and other buildings at the actual resorts, will require foreign financing. So Haiti has to make sure to provide promises of stable property rights to foreign investors. Those property rights will also be a good influence on the country’s governance, because they will eventually allow a culture of entrepreneurship.

The social relationships generated by carving out sections of the country’s coast for tourism will be ugly in some ways — rich foreigners coming to visit Haiti’s most beautiful beaches while ignoring almost all of the locals except for the people who work at their hotels. But right now economic growth takes precedence.

Haiti also needs to improve its agricultural productivity. Farming still represents about half of the country’s economy. Programs like Jamaica’s Rural Economic Development Initiative have been successful at improving crop yields and rural incomes. Increasing yields can also prevent the need to increase cultivated acreage (which causes soil loss), and modernizing small farms can help make them more robust against the island’s frequent natural disasters.

Finally, Haiti could consider becoming a tax haven. Many small Caribbean islands such as Bermuda and the Caymans have succeeded in getting foreign companies to put offices there, or buy local real estate, by offering extremely low corporate tax rates. That’s a cheap trick, of course, and it helps rich-world companies skirt their tax bills. But it would bring in some much-needed money and could help develop a national habit of protecting property rights. This strategy would also require creating enclaves of security for foreigners.

Tourism, agricultural productivity, and tax haven status are modest initiatives. They won’t transform Haiti into a success story like the Dominican Republic overnight. But they’re doable initiatives, because they don’t require fixing the whole country at once — just creating pockets of security to generate some prosperity that can start to help raise normal Haitians out of abject poverty, igniting a virtuous cycle of political stability and growth.

The Haitian diaspora, and international aid agencies, should concentrate their spending on creating growth pockets. The U.S. could provide a further boost by establishing an expanded trade agreement with Haiti similar to the one it has with the Dominican Republic. In fact, many nations should do the same, since an unstable Haiti is in no one’s interests.

Haiti isn’t going to be fixed tomorrow, or the day after tomorrow. But when you’re at rock bottom, the only way to go is up. Growth has to start somewhere.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Smith at nsmith150@bloomberg.net

To contact the editor responsible for this story:
Susan Warren at susanwarren@bloomberg.net

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Business

A timeline of events in the bread price-fixing scandal

Published

5 hours ago

September 19, 2024

Anne Joseph

Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

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Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

Published

5 hours ago

September 19, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

20 hours ago

September 18, 2024

Anne Joseph

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

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