Dominican Republic and Haiti: Country Studies

Haiti: The Economy
weak and inefficient, and the DGI is frequently forced to physically
collect payments.
Otherwise, the role of the government in the economy continues
to be minimal. There are few government subsidies, and
goods are traded at market prices. Indeed, the government has
made a special effort to reduce tariff and nontariff barriers and
has reiterated its commitment to further trade liberalization.
During the three years of the international embargo following
the military coup of 1991, the country's imports dropped from
US$449 million to US$141 million, declining more than 65
percent in 1994 alone. By the late 1990s, the government had
eliminated many of the steps formerly involved in importing
goods and simplified the import process to such an extent that
more than 70 percent of all goods on the Haitian market were
imported. Pent-up demand also may have contributed to the
steady rise in imports.
Inducing private-sector participation in state-owned enterprises
was another policy issue the government had to tackle. A
presidential commission of seven government officials and fifteen
private-sector representatives was established in 1994 to
recommend measures for "modernization of the economic and
financial infrastructure" of the country. The law on the modernization
of public enterprises, as proposed by the Council for
the Modernization of Public Enterprises (Conseil de Modernisation
des Entreprises Publiques—CMEP) prompted the government
in 1997 to target nine of Haiti's inefficient parastatals
,
for privatization, including the telephone company (Telecommunications
d'Haiti—Teleco) , electric company (Electricite
d'Haiti—EdH), airport authority, and two commercial banks.
The original aim was to complete the privatization process
by March 1998. However, by mid-1998, even such a small company
as Cimenterie d'Haiti, which was to be one of the first to
be privatized, had not been sold. Claims by about 42,000 state
employees and some members of the governing Lavalas coalition
that the government's plan was tantamount to "putting the
country up for sale" seemed to send another signal to slow
down implementation of the privatization process.
In mid-1999, hundreds of striking longshoremen shut down
the Haitian capital's port for three days running in protest
against the government's plan to put the port authority up for
sale by the end of 1999. They also accused the port director of
mismanagement and demanded an audit of his accounts. The
airport union membership, who feared they would lose their
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