Dominican Republic and Haiti: Country Studies

Dominican Republic and Haiti: Country Studies
plants reopened within a year after the reestablishment of constitutional
government in October 1994. The sector managed
to revive slowly; by mid-1997 (latest data available), it employed
approximately 23,000 people—considerably fewer than the
100,000 employed prior to the miliary coup—and its contribution
to GDP had reached 1 1 percent.
Manufacturing recorded strong growth that averaged about
10 percent per year in the 1970s and almost 12 percent per
year by 1980. Manufactured goods replaced agricultural commodities
as the country's leading exports during this decade.
In 1991 manufacturing accounted for 14 percent of GDP. By
the end of the 1980s, the manufacturing sector comprised 500
enterprises, most of which were family owned and small or
medium-sized (latest available data). Major products include
processed foods, electrical equipment, textiles, toys, sporting
goods, clothing, and handicrafts. Most of these items are not
destined for local consumption, however. Principal production
for the local market is in the area of food and beverages.
Assembly Sector
In the late 1980s, attracted to Haiti by the prevalence of
extremely low wages, more than 150 firms, mostly United
States-controlled, set up operations on the edge of Port-au-
Prince to assemble light industrial products for re-export. The
factories generated about 60,000 jobs (two-thirds held by
women) for workers assembling electronic components, toys,
sporting goods, and clothing. Their contribution to government
revenue was insignificant, however, since they were
exempted from taxation for up to fifteen years and were free to
repatriate profits. In its attempt to attract the assembly industry,
Haiti had benefited from both its proximity to the United
States and its access to such organizations as the Generalized
System of Preferences (GSP—see Glossary) and the CBI. Its
special position in assembly production was eventually eroded,
however, as other countries in the region, such as the Dominican
Republic, Jamaica, and Costa Rica, began to capitalize
more aggressively on the advantages of the CBI. Haiti's prospects
in the assembly industry were hampered by a combination
of factors, including an underdeveloped infrastructure, an
illiterate work force, scarce managerial personnel, and — perhaps
most important—the highest utility costs in the Caribbean.
The country's chronic political instability was another
major factor that prompted many companies to relocate their
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