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Building Haiti First

The best news to come out of PDT’s recent survey of Haiti’s construction sector is that international organizations are starting to put “Haiti First.” That means they are purchasing more goods and services from local companies, an approach to procurement urged on by PDT since we first arrived here in 2009. The number of construction companies contracted by international organizations has jumped from 25% to 45% since the earthquake two years ago.

On the face of it, USAID, one of the largest international organizations working in Haiti, seems to really be embracing the “buy local” concept. New USAID procurement regulations effective next month should increase the ease and frequency that USAID contractors can procure locally. USAID-funded projects will now be able to source needed goods and services directly from the countries in which they operate. (To see more on the reform, check out Edward Rees’ post here.)

But those of us focused on construction in particular should not be celebrating too soon. There’s a catch in USAID’s small print. Although local construction firms can now bid on projects of greater value, they are only eligible if no U.S. construction company wanting to bid is operating in the local market.

The regulation in its entirety can be found here, but have a look at what caught our attention:

“The Final Rule also raises the amount, from $5 million to $10 million, for which foreign-owned (non-governmental) local firms will be eligible for construction procurement because that amount has not been raised in over fifteen years, and confirms the current requirement that USAID determine that no capable U.S. construction company is operating in the cooperating/recipient country or, if there is such a company, that it is not interested in bidding for the proposed contract.

While the overall regulatory reform marks progress, it’s that fine print that perpetuates the idea that some bilateral donors are not necessarily operating in the best interest of the countries where they work. That brings us to some of the more ambiguous findings in our survey: that less than half (46%) of the 303 businesses surveyed believe that international organizations are good for the economy, and only 51% believe that international organizations are interested in working with Haitian construction businesses.

A different picture emerges from the interviews with the 33 international organizations operating in Haiti’s construction sector. Procurement officers spoke enthusiastically about wanting to engage the Haitian market and spend their money locally. Sari Kaipainen, Reconstruction Manager for Finn Church Aid elaborated, “Investing in local industry is extremely important to us. It has to be Haitians who are reconstructing their country–it’s the only way it works.” Many others stated that using local Haitian businesses can save time, money, and effort.

Interestingly, however, very few of the very organizations where these officials work actually have procurement guidelines in place that reflect the enthusiasm of their staff for buying local. So it would seem that on the ground in Haiti, it’s the aid workers themselves, and not necessarily the institutions where they work, that are prioritizing local procurement.

Peace Dividend Trust believes this could easily be changed were international organizations to officially adopt a “Haiti First” policy and visibly give preference to local suppliers.  In the long run, Haiti First is the policy that will best support the country’s economy recovery by generating jobs and investment. Construction—the largest sector of the economy and the pillar of the rebuilding process—would be a great place to start.

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