Similar plans have long been mooted for Haiti. President Michel Martelly, who likes to proclaim that "Haiti is open for business," is trying to set up a series of integrated economic zones that use local inputs for foreign manufacturing, and make Haiti an attractive destination for foreign investment. Martelly's scheme echoes one broached over 30 years ago by then-President Jean-Claude ("Baby Doc") Duvalier. Duvalier spoke of transforming Haiti into the "Taiwan of the Caribbean," a vast factory complex where foreign firms could assemble textiles, electronics, and baseballs for the nearby U.S. market.
For a while, indeed, industry thrived, but it became obvious that the export-zone strategy was incapable of making a significant dent in the country's rate of poverty and unemployment. Coups, crumbling infrastructure, and trade embargoes by the United States and the United Nations directed against the country's military regime created unemployment at around 40 percent in 2010.
Is there any reason to be optimistic this time? The answer, fortunately, is yes. The world economy has changed dramatically since the first wave of export zones were set up in the 1970s. A conspicuous feature of globalization is the decentralization of production, which has benefited large numbers of workers in the developing world. Technological change, lower transport costs, and the resulting creation of global supply chains are shifting comparative advantage in many areas of manufacturing to Haiti's favor. Rising labor costs in China and East Asia are pushing many U.S. firms to move production from those parts of the world to new ones. This movement of manufacturing back to the United States will likely create an expanding manufacturing sector ideally supplied by nearby low-cost countries like Haiti. Complementing these developments, U.S. legislation such as the Hope Act has provided Haiti with access to the American market on very favorable terms. Leveraging the interest of investors from the Haitian diaspora -- though not only them, of course -- could provide the necessary catalyst.
We now also have access to a fairly long history of export zones in developing countries, enabling in-depth studies to identify why some succeeded and others failed. It turns out there are a number of success stories that could be easily replicated in Haiti. The idea is to focus reconstruction and aid efforts toward economic zones as a way of replacing the current haphazard system of allocating foreign aid. Haiti's new economic strategy is evolving along these lines. For what it's worth, the International Monetary Fund is projecting growth in Haiti to accelerate to 6.5 percent in 2013 from 4.5 percent in 2012.
By lifting large segments of the population out of poverty, grassroots movements such as Fonkoze and Zafen have the opportunity to empower the country's population to overcome and reform the traditional impediments posed by the national government -- corruption, inefficiency, and the extractive institutions that have plagued the country for decades. Many Haitians are beginning to gain a sense of what needs to be done to make their government more efficient and accountable. They are beginning have a frame of reference for what is possible. After years of bad luck, a number of key elements are finally coming together for a prosperous new Haiti.
An earlier version of this piece reported that Haiti has been independent for 199 years. Haiti has been independent for 209 years.
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