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Overseas Haitians and The Haitian Economy Patrice Backer Promo Capital. International Development Research Centre Ottawa, Canada April 8, 2005. Agenda. Haitian Diaspora Remittances & Investment Impact on Haitian Economy The PromoCapital Example Areas to Explore.

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Overseas haitians and the haitian economy patrice backer promo capital

Overseas Haitians and The Haitian EconomyPatrice BackerPromoCapital

International Development Research Centre

Ottawa, Canada

April 8, 2005


Agenda

Agenda

  • Haitian Diaspora

  • Remittances & Investment

  • Impact on Haitian Economy

  • The PromoCapital Example

  • Areas to Explore


Significant migration patterns

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


Geographic distribution

Geographic Distribution

TOTAL – SELECTED LOCATIONS: 1,267,000


Agenda1

Agenda

  • Haitian Diaspora

  • Remittances & Investment

  • Impact on Haitian Economy

  • The PromoCapital Example

  • Areas to Explore


Remittances are critical to haitian economy

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

    • Living Expenses (groceries, clothing, rent/mortgage)

    • Education

    • Gifts for special occasion

    • Medical expenses

    • New home constructions


Comparative data

Comparative Data

Source: SOGEBANK


But there are issues

… 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


Overseas haitians also invest through smes

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


Portfolio investments not common

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


Agenda2

Agenda

  • Haitian Diaspora

  • Remittances & Investments

  • Impact on Haitian Economy

  • The PromoCapital Example

  • Areas to Explore


Impact of overseas remittances

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


Initiatives from the diaspora numerous but small

Initiatives from the Diaspora: Numerous but Small


Agenda3

Agenda

  • Haitian Diaspora

  • Remittances & Investments

  • Impact on Haitian Economy

  • The PromoCapital Example

  • Areas to Explore


Promocapital overview

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


Promocapital overview cont

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


Promocapital us partners

PromoCapital: US Partners


Channeling diaspora investments differently

Channeling Diaspora Investments Differently


Agenda4

Agenda

  • Haitian Diaspora

  • Remittances & Investments

  • Impact on Haitian Economy

  • The PromoCapital Example

  • Areas to Explore


Real estate

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


M si anpil thank you merci beaucoup much simasg racias

MèsiAnpilThankYouMerciBeaucoupMuchísimasGracias


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