Transcript Presentation

Overseas Haitians and
The Haitian Economy
Patrice Backer
PromoCapital
International Development Research Centre
Ottawa, Canada
April 8, 2005
Agenda
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Haitian Diaspora
Remittances & Investment
Impact on Haitian Economy
The PromoCapital Example
Areas to Explore
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Significant Migration Patterns
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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
CANADA
Quebec
82,000 (1st & 2nd)
FRANCE
Paris
50,000
MASSACHUSETTS
Boston, Waltham
50,000
TRI-STATE AREA
NY, NJ, CT
200,000
FLORIDA
South Florida
250,000
BAHAMAS
Nassau, Freeport
60,000
DOMINICAN REPUBLIC
Border, Santo-Domingo
500,000 (1st & 2nd)
FRENCH DEPARTMENTS
Guadeloupe, Martinique, St Martin, Guyane
75,000
TOTAL – SELECTED LOCATIONS: 1,267,000
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Agenda
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Haitian Diaspora
Remittances & Investment
Impact on Haitian Economy
The PromoCapital Example
Areas to Explore
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Remittances are Critical to Haitian
Economy …
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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
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Living Expenses (groceries, clothing, rent/mortgage)
Education
Gifts for special occasion
Medical expenses
New home constructions
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Comparative Data
(millions of USD)
Remittances (official)
y-o-y growth (%)
2000
578
2001
624
8.0%
2002
649
4.0%
2003
811
25.0%
2004
931
14.8%
Exports (FOB)
Service exports
Total Exports
331
172
503
305
137
442
273
164
437
330
131
461
373
132
505
Comparison (%)
115%
141%
149%
176%
184%
Dev. Assistance
Comparison (%)
221
262%
161
388%
135
481%
137
592%
113
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
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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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Agenda
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Haitian Diaspora
Remittances & Investments
Impact on Haitian Economy
The PromoCapital Example
Areas to Explore
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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
DIASPORA INVESTORS
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Investor
Investor
Investor
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HAITI COMPANIES
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Investor
TRANSPORT
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Investor
Investor
Investor
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$
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IMPORT/EXPORT
Investor
Investor
Investor
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$
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Investor
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Investor
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Investor
LIGHT MANUFACTURING
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Investor
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Investor
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Investor
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$
Investor
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Agenda
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Haitian Diaspora
Remittances & Investments
Impact on Haitian Economy
The PromoCapital Example
Areas to Explore
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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
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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
TRANSPORT
DISTRIBUTION
$
$
LIGHT MANUFACTURING
FOOD PROCESSING
PROMOCAPITAL FUND
US OPPORTUNITIES
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Agenda
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Haitian Diaspora
Remittances & Investments
Impact on Haitian Economy
The PromoCapital Example
Areas to Explore
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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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MèsiAnpil
ThankYou
MerciBeaucoup
MuchísimasGracias