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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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