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Overseas Haitians and The Haitian Economy
Patrice Backer PromoCapital
International Development Research Centre
Ottawa, CanadaApril 8, 2005
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• Haitian Diaspora
• Remittances & Investment
• Impact on Haitian Economy
• The PromoCapital Example
• Areas to Explore
Agenda
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Significant Migration Patterns
• 1930s, 40s and 50s– Cuba, French Guyana, Dominican Republic– Primarily rural population, field laborers & sugar cane cutters
• 1960s and early 1970s– US (Northeast), Canada, French-speaking Africa, France
(later to US or Canada), Bahamas– Professionals “brain drain”
• Late 1970s and early 80s– US (Florida), Bahamas, Turks and Caicos– Economic migrants primarily from the North (Cap-Haitien,
Port-de-Paix, La Tortue) and vicinities• Late 1990s/Early 2000s
– Siphoning off by Canada of our “best and brightest”– Age range: between 25 and 40– Professionals “brain drain”– Middle management in private sector affected
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Geographic Distribution
CANADAQuebec82,000 (1st & 2nd)
TRI-STATE AREANY, NJ, CT200,000
FLORIDASouth Florida250,000
BAHAMASNassau, Freeport60,000 DOMINICAN REPUBLIC
Border, Santo-Domingo500,000 (1st & 2nd)
MASSACHUSETTSBoston, Waltham50,000
FRENCH DEPARTMENTSGuadeloupe, Martinique, St Martin, Guyane75,000
FRANCEParis50,000
TOTAL – SELECTED LOCATIONS: 1,267,000
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• Haitian Diaspora
• Remittances & Investment
• Impact on Haitian Economy
• The PromoCapital Example
• Areas to Explore
Agenda
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Remittances are Critical to Haitian Economy …
• 28% of GDP (Est. 2004) 17% in 1999• More than USD 1 billion annually (formal and
informal) mostly from the US• Primarily geared towards consumption
1. Living Expenses (groceries, clothing, rent/mortgage)
2. Education
3. Gifts for special occasion
4. Medical expenses
5. New home constructions
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Comparative Data
(millions of USD) 2000 2001 2002 2003 2004Remittances (official) 578 624 649 811 931y-o-y growth (%) 8.0% 4.0% 25.0% 14.8%
Exports (FOB) 331 305 273 330 373Service exports 172 137 164 131 132Total Exports 503 442 437 461 505
Comparison (%) 115% 141% 149% 176% 184%
Dev. Assistance 221 161 135 137 113Comparison (%) 262% 388% 481% 592% 824%
Source: SOGEBANK
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… But There Are Issues
• Large percentage goes right back to “donor countries” due to purchase of imported products
• Remittances/Investments are sometimes counter-productive or mismanaged– “Assisted” mentality– Waste/theft by family members or recipients
• Long-term:– Haitian migration has slowed to a trickle– Expected tapering-off of remittances in 15-20
years
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Overseas Haitians Also Invest Through SMEs
• Lack of products and services provides opportunities, especially in food exports
• Trade conducted primarily out of Florida– Proximity– Entrepreneurial spirit of local Haitian community
• Businesses are small and face same challenges as their US counterparts– Lack of financing– Deficient management skills– Competition and lack of growth opportunities
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Portfolio Investments Not Common
• Trust factor scams, “cooperative” scandal
• Priority is family or community
• Securities laws in the US major issue !!!
• PromoCapital new approach at the issue
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• Haitian Diaspora
• Remittances & Investments
• Impact on Haitian Economy
• The PromoCapital Example
• Areas to Explore
Agenda
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Impact of Overseas Remittances
• Lack of reliable statistics other than Central Bank data– Regional impact?– Job creation?
• Empirical evidence:– SMEs in provinces, especially in the North– New constructions and home
improvement in low-income areas– “Local tourism” flow, especially during
holidays stability of currency
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Initiatives from the Diaspora: Numerous but Small
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TRANSPORT
IMPORT/EXPORT
LIGHT MANUFACTURING
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DIASPORA INVESTORS HAITI COMPANIES
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• Haitian Diaspora
• Remittances & Investments
• Impact on Haitian Economy
• The PromoCapital Example
• Areas to Explore
Agenda
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PromoCapital Overview
• History– Washington, DC Workshop – June 2003– Incorporation – Fall 2003– Launch – January 1, 2004
• Structure– PromoCapital Haiti S.A. – SFD– PromoCapital USA, Inc. – Wholly owned subsidiary
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PromoCapital Overview (cont.)
• Capital Structure– 400,000 shares sold– Raised USD 1 million– 50% owned by Haitian Americans and US residents– 50% owned by Haitians and Haiti residents– There are 67 shareholders:
• 36 in the US• 31 in Haiti
• Focus on larger investments:– Infrastructure
– Real Estate – larger scale
– National production / Export oriented
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PromoCapital: US Partners
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Channeling Diaspora Investments Differently
Collective Investment Vehicle
Investments
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PROMOCAPITAL FUND
TRANSPORT
DISTRIBUTION
LIGHT MANUFACTURING
FOOD PROCESSING
US OPPORTUNITIES
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• Haitian Diaspora
• Remittances & Investments
• Impact on Haitian Economy
• The PromoCapital Example
• Areas to Explore
Agenda
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Real Estate
• Leveraging credit to facilitate real estate loans– US residents have built credit record– Real Estate financing in Haiti constrained by:
• Scarcity of credit
• High downpayments
• Possible solution:– US resident as “guarantor”/co-payer– Agreement between US and local banks– Application from local relative
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MerciBeaucoup MuchísimasGracias