Page 63 - New Cloth Market November 2022 Digital Edition
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INTERNATIONAL  BUSINESS  PAGES


         6.74% and amounted to US$1,272.37.  Another advantage Haiti offers is its
                                            abundant labor force with competitive
         The apparel and textile industry has  salaries, low turnover and absentee-
         played a key role in the country's econ-  ism rates, government support through
         omy. In 2010 it already employed   the IFC, tax incentives of up to 15
         28,000 workers, produced 80% of ex-  years of tax exemption, access to cred-
         ports and constituted 10% of GDP,  it with local banks, investment funds
         according to a report by the American  and international institutions, as well
         Congressional Research Office. In  as the offer of Industrial Parks and
         2016, according to ADIH figures, the  Free Trade Zones.
         industry employed 41,000 workers; by
         2018 there were 52,000 people work-  Some of the benefits granted by Free
         ing in the sector, and by 2021 the in-  Trade Zones in Haiti include the follow-
         dustry reported 59,060 jobs in the tex-  ing: a total income-tax exemption for a
         tile sector.                       period not to exceed 15 consecutive
                                            years, and a partial exemption applied
         In 2010 Haiti sustained the impact of  for another 5 years as follows: 15%,
         an earthquake that seriously affected  30%, 45%, 60%, 80% of net income;  It employs close to 14,000 Dominican
         the country. The textile sector incurred  a 10-year total exemption from tax on  and Haitian nationals for the textile,
         reconstruction costs of around US$38  income generated by investments in  footwear, and agribusiness industries.
         million and focused on high-volume  Free Trade Zones; exemption from tax-  Salaries are higher than the minimum
         and low- end production, with low wag-  es and tariff rates, which is 0% in most  wage in Haiti, and personnel have ac-
         es and poor working conditions. After  cases. They benefit producers, for ex-  cess to training.
         the earthquake, the South Korean tex-  ample, by not paying customs duties
                                                                               The operations of this industrial park
         tile company Sae-A Trading announced  on equipment and materials needed to
                                                                               are highly efficient since, due to its
         an investment of US$78 million to open  develop special resources, in addition
                                                                               border location, it uses Dominican
         a factory with up to 20,000 jobs, locat-  to an exemption from local taxes, ex-
                                                                               ports.
         ed in the North Industrial Park, a tex-  cept for fixed patent rights for more
         tile complex in the north of the island,  than 15 years. Municipal incentives in  Some companies manufacture textiles
         developed by the governments of Hai-  the Free Trade Zone regime include a  with pieces that come from factories
         ti and the US. The Inter-American De-  total reduction of local taxes and fees  in Free Trade Zones located in Bonao
         velopment Bank (IDB) contributed   for periods of over 10 years.      in the Dominican Republic and are re-
         US$50 million and the US government                                   ceived as imports. Once the pieces are
                                            West Indies Industrial Mills
         US$120 million to build productive in-                                assembled in Haiti, they are re-export-
         frastructure; there is no information on  It is located in Varreux, in the Cité  ed to the Dominican Republic as tran-
         the Haitian government's contribution.  Soleil, and has the potential to gener-  sit merchandise to be exported from
         Sae-A produces for American firms  ate up to 20,000 textile jobs. The initial  the port of Manzanillo to the USA and
         such as WalMart, Target, and Gap;  US$45.5 million investment was made  other destinations.
         Spanish companies such as Mango    with a contribution from the Soros Eco-
         and Zara and the Japanese brand Uniq-  nomic Development Fund (SEDF).  The volume of imported garments can
         lo. It has factories in Nicaragua, Indo-  This investment was doubled through  be measured in dollars but comparing
         nesia, and Vietnam.                an agreement with the Haitian govern-  it in pieces or dozens is not a valid
                                            ment and now stands at US$87.4 mil-  comparison because there are signifi-
         In 2020, tensions continued in the in-  lion.                         cant differences in the sizes of the dif-
         dustry. GOSTTRA, a union affiliated                                   ferent garments. Thus, each type of
                                            Codevi
         with IndustriaALL, reported that the                                  garment is converted into a standard
         industry was not paying social-securi-  This Dominican-owned Free Trade  Square Meter Equivalent (SME) by
         ty contributions. This came to a head  Zone, owned by businessman Fernan-  means of a fixed factor. The use of such
         during the COVID-19 crisis, when con-  do Capellan (Grupo M), is located in  a standard measure shows that Gua-
         sequences included the death of work-  the border town of Ouanaminthe. The  temala adds the highest value to its
         ers when they were denied medical  project received funds from the Clin-  exports ($4.17 average price per gar-
         attention, as well as the dismissal of  ton Bush Haiti Fund, the IDB's Multi-  ment), which is higher than China and
         union members and leaders following  lateral Investment Fund, the Soros  countries in Asia and also in Central
         protests. A third of the 57,000 workers  Economic Development Fund, and the  America. This also shows that the type
         in the apparel industry are reportedly  World Bank, the latter of which provid-  of garments with the highest unit val-
         suspended or were dismissed without  ed $10 million in financing for the ex-  ue require operators with better tailor-
         compensation.                      pansion process.                   ing skills and abilities for tailoring.


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