Dial Red for Recovery

Two cell-phone companies in Haiti have outshone the government, the NGOs, and the international community in reconstructing post-earthquake Haiti. How -- and why -- did they do it?

Port-au-Prince, HAITI—Port-au-Prince's skyline consists of a solitary building: a shimmering glass and aluminum frame structure that, at 11 stories, towers over the torn-up city. The owner's name, Digicel, is displayed prominently at the top in red letters that glow even during the often blacked-out nights. Along with its main competitor, Voila, Digicel makes its presence known in Haiti, and not only through the handsets of the almost 4 million wireless customers here. The red Digicel and lime-green Voila logos are more visible than the Haitian flag, the vandalized presidential campaign posters, and the faded emblems on white NGO vehicles.

On the one-year anniversary of the earthquake that devastated much of the country, journalists are issuing scathing assessments of government and international actors that failed to get the country back on its feet. Residents are mourning their losses and cursing the government, which, they say, failed them. And given that a mere 5 percent of the rubble has been cleared, clean water and other services are still missing, a rampant cholera outbreak continues to spread, massive fraud plagued recent presidential elections, and 1 million Haitians still live in tent camps -- it would seem that they have a point.

But no one complains about the phone companies. In fact, Digicel and Voila are widely hailed as the most competent actors amid the reconstruction's larger disarray. At year's end, Haitian newspaper Le Matin's "Great Figures of 2010" lauded both companies' CEOs for supporting the economy and lives of earthquake victims. "I say bravo to Digicel because they do serious work," says Jenary Cyprien, an unemployed musician living with his wife and daughter in the Champs de Mars tent camp.

How have two cell-phone companies maintained such wild popularity, when the government, NGOs, and the nternational community are so reviled? Their interests are in building up a consumer base that has the cash in their pockets and infrastructure on their streets to use their services. And that means a more functional Haiti -- especially if it comes with a shiny red Digicel label.

When the Irish company Digicel arrived in Haiti just half a decade ago, it noticed that the very things that chased so many investors away -- the lack of infrastructure and basic services -- were a massive opportunity for growth. Haitians were increasingly spread out, moving into the city and overseas. They wanted to stay in touch and transfer money to family back home, and for a largely illiterate and remote population, mail wasn't the answer. Yet the inefficient state-owned land-line company, Teleco, served just over 1 percent of the population, and the mobile providers reached less than 5 percent. Costs were high because infrastructure like roads and electricity simply wasn't there.

So Digicel created its own infrastructure. Instead of waiting for the government, the company built roads to many of its sites and kept its reception towers going with hundreds of generators. Annual diesel costs alone are in the millions. All in all, Digicel has poured more than $400 million in Haiti -- more than any other international company ever. Phone prices have dropped from $100-plus to just $10, with free minutes on offer. Yet the company is turning out a profit.

More recently, in addition to building infrastructure and other social goods -- things that served their own network as much as Haitians themselves -- Digicel began to invest directly in charity. "They wanted to be big in the market," says Kesner Pharel, a Haitian economic consultant based in Port-au-Prince, "So they gave $1 million to the soccer federation. Haitians love soccer so much, so it was a good thing for them. They invested in education, and Haitian people love investing in education for our kids."

Some called it the Digicel Revolution, or the "red wave": a visible sweep of red-hued advertising that covered the roofs and walls of entire neighborhoods. But rather than swamping the competition, Digicel forced it to adopt similar tactics to stay competitive. Voila, which had opened in Haiti in 1998 under the name Comcel, also reduced prices and increased corporate social responsibility, funding programs that sound very similar to Digicel's: scholarships, soccer programs for at-risk kids, and so on.

In the aftermath of the earthquake, the cell-phone companies have continued to provide the same level of corporate support, despite losing millions of dollars in equipment. They have provided free minutes for customers to call for help and reach loved ones. They gave out emergency aid in the form of shelter, medicine, food, and water, with Digicel Foundation spending more than $20 million on relief alone. And both companies now work with NGOs to provide cholera education in the form of text messages.

On Jan. 11, a celebration unveiled the only reconstructed building in the pummeled downtown business district. The historic Marché Hyppolite, a lofty metal marketplace that was demolished in the earthquake, is now open for business, an elegant, turreted structure that gleams amid the grime. And it's all thanks to Digicel, whose billionaire founder, Denis O'Brien, paid for the reconstruction himself and coordinated with the city of Port-au-Prince to carry it out.

Clearly, whatever they are doing is working to help rebuild Haiti -- and brand loyalty. A public opinion study conducted last summer by Pharel's consulting firm shows a widespread love of the two companies, especially Digicel.

CEOs of both companies say their programs help the country while helping themselves. For Voila CEO Robin Padberg, helping Haiti develop means more potential business: "If we as a society can raise the bar and create a better standard of living, then for us as a company we have a much larger target and subscriber pool."

In other words, the cell-phone companies know what Haitians want; their business depends on responding to the customers' needs. Internationally backed aid organizations -- not to mention the government -- don't have the same immediate incentive to do so.

But of course, the cell-phone companies' interests do not always align exactly with Haiti's. One drawback of depending on their largesse is the potential for clientelism, or offering services only to customers. While Voila distributes water indiscriminately at camps, for example, it only offers other handouts such as tents to its clients, in organized contests. Digicel and Voila are also constantly seeking to take credit for their good deeds, something that Haitians here roll their eyes at and that blurs the line between advertising and social responsibility. For example, Digicel plans to illuminate dark streets with solar lamps -- emblazoned with the Digicel logo.

The relationship between the cell-phone companies and Haiti's beleaguered public sector has some issues as well, according to former Haitian Prime Minister Michèle Pierre-Louis. During her tenure in 2009, she pushed for the taxation of international calls to provide some much-needed revenue for the state. Instead of agreeing to pay the tax and swallow the cost, she says, Digicel announced that the government was forcing their customers to pay more. Angry protests ensued, and the government backed down. "I have no problem with corporations wanting to do their thing here," Pierre-Louis says now, "but from a public-sector point of view, in a government that is so dependent and that needs to raise revenues in order to respond to the people's needs, I think this is very unfair."

Like it or not, however, the cell companies are here to stay, and they're growing faster than the Haitian economy and government. The companies are looking to expand network coverage beyond the current 37 percent and increase Internet services, and Digicel plans to invest another $120 million in the country in the coming year. Last year, Voila and Digicel both launched mobile banking, enabling the transfer of funds through cell phones, a development for which Digicel won a $2.5 million grant from the Bill and Melinda Gates Foundation.

But the most important role the cell-phone companies could play, says Maarten Boute, CEO of Digicel Haiti, is a catalyst. He thinks the end-of-year showcase of the new and improved Marché Hyppolite might have a ripple effect among other businesses: "We're hoping that others will follow suit, that a lot of other countries and other companies will say, ‘We also want to do our project down there. We'll do a cathedral, we'll do a hospital, we'll do a school, we'll do whatever,' and we'll kick-start the whole reconstruction process." The question is, would that mean a new wave of colorful ads splashing their way across the country? And would Haitians mind?



The Referendum Hangover

January 9 may well have been the happiest and most hopeful day Southern Sudan has seen in half a century. But there is a danger in celebrating too soon.

JUBA, Sudan — Euphoria permeated the atmosphere in the Southern Sudanese capital on Sunday, and for good reason. For a people who have fought and endured decades of conflict, all for the remote prospect of finding independence at the end, this week is for celebrating. A new state in the south seemed finally within reach when voting began in a weeklong referendum on whether to secede from greater Sudan. Nearly 4 million Southern Sudanese are expected to cast ballots in what the region's leaders are dubbing their "Final Walk to Freedom." Popular sentiment almost unanimously favors secession, and it was impossible not to notice the unbridled joy of many of the voters at a number of polling stations I visited in Juba on Sunday. At one station under a mango tree in a dusty open field, a middle-aged woman dropped her ballot in the plastic box, dipped her finger in blue ink, and proceeded to literally skip out of the station, ululating as she went.

That the voting is happening at all is incredible. Despite tough odds and scores of doomsday analyses that warned it could be delayed, marred by violence, or stopped altogether (mea culpa: I am among those who had such fears), polls opened on time in 10 southern states, in northern Sudan where many southerners have resided since the war, and in eight countries worldwide that host a Sudanese diaspora.

Still, there is a danger in celebrating too early. Voters may call for an independent Southern Sudan as they cast their ballots this week, but the means by which the new country would split off is still subject to difficult negotiations and thorny details. There is no agreement over a border, citizenship, the sharing of natural resources, and one contentious border region called Abyei. So while its people are celebrating, Southern Sudan's leaders are eager to get back to the negotiating table with Khartoum, where a long agenda awaits after the voting finishes. If international attention wanes after the votes are cast, those negotiations could easily take a turn for the worse.

It would be impossible for there not be a "hangover" following the announcement of the results of the ballot, which will not be certified and officially announced until Feb. 6 at the earliest, according to the referendum commission. The voting here in Juba has captured international attention. News crews from around the world have flooded the city, usually a relatively quiet capital with an expatriate community made up mostly of aid workers and frontier businessmen.

There was also a huge diplomatic push to get to this moment. Last fall, U.S. President Barack Obama's administration ramped up its efforts to ensure that the voting was carried off on time. The White House sent its special envoy, Scott Gration, as well as a seasoned Africa hand from the Council on Foreign Relations, Princeton Lyman, to do the diplomatic legwork on the ground. A high-level meeting in New York during the U.N. General Assembly in late September ensured that the international community was acting in lockstep -- and around the clock -- to help Sudan hold the referendum on time and in peace.

But the spotlight may well lift after the last voters go to polls later this week -- at exactly the moment when the politics of secession will become even more fraught. From the moment the results are known, the clock starts ticking on independence talks: The African Union-brokered negotiations between the ruling party in Khartoum and the governing party in the south -- now on hold while the voting takes place -- have to be completed by the summer. The 2005 north-south peace agreement governing the referendum calls for an "interim period" between the voting and secession, to expire on July 9, 2011. This is also the date the south will declare independence if the referendum passes.

That leaves just a few months for some of the most contentious issues in Sudan's recent history to be resolved. The parties will have to decide who becomes a citizen, a tricky question since tens of thousands of southerners now live in the north. A security arrangement along the border will have to be worked out -- as will the actual border demarcation itself. It's also not clear yet how north and south Sudan will share oil wealth, much of which will be concentrated in the new independent state. But perhaps most controversial of all is the status of Abyei, which lies along the disputed border. Oil rich, ethnically diverse, and politically explosive, Abyei was supposed to hold its own referendum this week over whether to be in Sudan or the new Southern Sudanese state. Disputes over who would be able to vote, however, have delayed the polls. Clashes have broken out there in recent days between settler and nomad populations, the former preferring to go with the south and the latter favoring the north. The situation on the ground on Monday was reportedly calm, but any further flaring of violence in the area is likely to raise tensions between Khartoum and Juba over an issue on which neither side wants to cede ground.

In the run-up to the referendum and on the first day of polling, a flurry of VIPs who had descended on Southern Sudan underlined their collective concerns about Abyei. U.S. Senator John Kerry was among them, promising that Abyei was "not forgotten." Former U.S. President Jimmy Carter and actor George Clooney have also added their voices. Without Abyei settled, Clooney told Time, "then this whole thing falls apart."

There is a good chance that the negotiations will move too slowly to meet the July deadline. Insider accounts of the AU-brokered talks suggest that Khartoum is intentionally stalling. Moderator and former South African President Thabo Mbeki has reportedly chided Khartoum on at least one occasion for what appears to be a lack of seriousness in the negotiations. A popular theory here in Juba is that Khartoum will move as slowly as possible so as to extract the maximum concessions from the south last minute, when the south will be desperate to wrap things up.

And what happens if the deadline isn't met at all? No matter where the talks stand in July, Southern Sudan is likely to move forward with its claim for independence. And that, many fear, could escalate in the worst-case scenario into a new north-south war. "If we don't take these issues like Abyei and the wealth- sharing and other post-referendum and Comprehensive Peace Agreement issues seriously and leave them on the back burner and declare success with the southern referendum and walk away, I'm pretty sure that war will resume in Sudan," warns John Prendergast, founder of the Enough Project, referring to the 2005 agreement that ended the civil war. A renewed conflict isn't all that far-fetched: Both north and south Sudan have bulked up their arms and soldiers in contentious zones such as Abyei -- something that becomes alarmingly apparent whenever a small skirmish turns into a deadly fight with heavy arms.

Yet war is far from assured. There are many reasons for Khartoum and Juba not to take up arms. For one, there's the price tag. A recent report estimated that another bloody conflict between the two former foes would cost $100 billion. Sudanese President Omar Hassan al-Bashir also sounded a conciliatory note last week when he visited Juba, pledging to the south that he'd give "anything you need" and suggesting that he sees a benefit in both sides moving forward peacefully, even if Sudan does become two states. (He may also realize that the world is watching how the referendum unfolds, and is merely biding his time.)

When the last polls close at 5 p.m. on Jan. 15, the true test of international attention span begins. The Obama administration deserves credit for putting Sudan near the top of its foreign-policy agenda. But if the White House's focus on Sudan wanes after the referendum, then all its extra efforts will have been for naught. Obama's team will have to keep in close contact with Mbeki's team in order to present a united front to the Sudanese parties. If this cooperation breaks down, Khartoum will exploit confusion and gaps among the diplomats.

The vote is off to a good start. But July is a long way off. The international community cannot afford to rest until north and south have signed the papers to make the divorce official and equitable.