Telecommunication Infrastructure

1   2   3 

IT Labor Market and Financing

There is a national university that has about 60% of all the students in higher education in Haiti. The University of Haiti faced a strong increase of the student subscription (34%) with the election of President Aristide and is now suffering terribly because of the political situation (firings of teachers, military occupations...) The university is composed of 11 units, physically and administratively separated, most of them located in Port au Prince. There is no PhD level, neither Masters, nor specific budget for research. The private universities receive 20% of the students; they are numerous and, in general, very expensive, the most notable is named Quisqueya. The remaining 20% of students attend non-national universities. The most notable research domains are agronomic and health.
There are also a number of technical schools in Haiti where people can get basic computer skills such as Microsoft Word, Access, and Excel. Higher level education in IT is acquired by those who have done their studies abroad, mainly in the US and in Canada.

Financing for IT programs comes mostly from Haitian banks, and Haitian and international NGOs. USAID is preparing a program to modernize government policies in order to create a nurturing environment for the growth of IT in the business and education sectors as well as connecting the provinces to telecom networks. Some of their short-term initiatives include:
• Sending a U.S. management team to advise CONATEL and Teleco.
• Establish regulator-to-regulator relations between CONATEL and the FCC by funding travel for CONATEL senior authorities to visit the FCC and for the FCC to provide assistance to the Haitian government on policy.
• Send a small U.S. team to advise the Haitian government on the President's initiative on electronic commerce (including domain name issues--a real problem for Haiti), and on the WTO agreement on basic telecom services, especially on the reference paper on regulatory principles.
• Develop a bilateral mechanism for providing advice on a continuing basis to the GOH on its plans to restructure CONATEL and privatize Teleco.
• Send a small USAID team to investigate rural applications of the Internet for development.

There are millions of dollars in foreign aid that has been frozen over the past 8 years due to political instability in Haiti. Most of this money is scheduled to be allocated to NGOs for various programs including modernization of the Information Technology industry.


Government Policies and Legal Environment


The only Telecom regulator in Haiti is Conatel, which is part of the Ministry. In fact, the Minister of Works, Transport and Communication is the Chair of CONATEL. 95% of Conatel's fees are paid by Teleco. Internet service providers pay 10% of their revenues to Conatel as license fees. Conatel finds itself in the unfortunate position of being directed by a Minister who is himself subordinate to the principle representative of Teleco. In fact, Conatel is subordinate to the two most powerful representatives of Teleco's owners: the Chairman and Vice Chairman of the Central Bank. Regulators subordinate to Ministries of Communication are fairly common in both developing and developed countries, but a regulator that is subordinate to the telephone company is uniquely problematic. This would be like the Chairman of the FCC and its Commissioners being subordinate to the CEO of AT&T.

Both Conatel and Teleco have entered into agreements with cellular and Internet providers without consulting each other, which has led to a number of conflicts and contradictions. In fact, in September 1999 Teleco and Conatel charged ACN with violating the Teleco monopoly by selling international telephone cards and providing international telephone service. Saying the illegal activity cost it $5 million in revenues per month, the government regulators and Teleco took over and closed ACN's operating center. Alpha Communications officials denied they had done anything wrong. Teleco cut off ACN's phone lines two years ago, prompting the company to transfer to a wireless network, sidestepping Teleco's expensive, outmoded communications grid. The company was able to reopen its operations by gaining support from other political leaders.

Although the government ahs promised to allow modernization and liberalization of the IT industry, it constantly contradicts itself by engaging in arbitrary acts such as the attacks on ACN and Radio Vision 2000. Until Haiti is lead by a transparent and law-abiding government, it will have to face the same obstacles laid by its current decision makers.


IT Strengths and Weaknesses – Analysis


Strengths
The major advantage that exists in Haiti is that the country is a virgin playground for innovation and opportunity. Nevertheless, major constraints prevent the Haitian people to reach what has become a commodity in developed countries. We will first look at the strengths in the different sectors, then the weaknesses that injure the country's development.

Business
As stated before, banks play a major role in the Haitian economy. They have proven to be the fastest growing industry and the most innovative. By forming consortiums to create other lines of business including real estate and even radio (Radio Vision 2000), financial institutions have been at the forefront of the country's development. Another driver of development has been the considerable number of NGOs, national and foreign, that has worked relentlessly in order to create new ventures in technology, infrastructures, and improving communications between the public and private sectors. The Center for Free Enterprise and Democracy (CLED) is a Haitian run NGO, funded by USAID and the Center for International Private Enterprise (CIPE), involved in projects ranging from journalists training to political mediation to empowering chambers of commerce. Organizations such as CLED have contributed greatly in the reinforcement of the notion of democracy and basis for free enterprise. Furthermore, the increase in the number of cyber cafes and the demand for Internet connection are clear indicators that the people of Haiti want to be part of the information superhighway.

Weaknesses

Government
The Haitian government is one of the biggest obstacles for economic growth. Over the past ten years, Haiti has experienced a deterioration of its public office. After years of dictatorship and military rule, the Haitian people felt relief when Aristide's party won Haiti's first free elections. The relief turned into turmoil when the government proved to be more like a dictatorship involved in drug trafficking and composed of leaders that called themselves "Anti-Liberals", meaning "anti-progress". By using the government's monopolies in the various industries to their means, the political leaders seriously impaired the evolution of Haiti's economy. Not until the government stops intimidating businesspersons in order to insure their own profits will the country start its journey on the road to development.

Economy
Haiti's economy steadily declined in the 1980's, with real per capita gross domestic product falling two percent (2%) a year from 1980 - 1991. Haiti's poor economic performance reflected political instability, pervasive corruption and inefficiency in the public sector, and lack of investment in physical and human capital. Haiti's economic decline accelerated after the military coup in 1991 and the subsequent imposition of international trade sanctions. Most external aid was also suspended. Real GDP declined by about 30% over the period 1991 - 1994. Inflation rose from 14% in 1992 to 52% in September 1994. By 1994 estimated per capita GDP had fallen to $260. During the three years of the embargo, the public deficit was financed mainly by central bank credit and the accumulation of arrears. Net central bank credit to the public sector rose by an average of 65% yearly from 1992 to 1994. Exports declined from $202 million in 1991 to $57 million in 1994, and total imports fell from $449 million to $141 million, declining approximately 66% in 1994 alone. Investment fell dramatically, from 11% of GDP in 1991 to 1.7% in 1994, damaging the country's already weak economic infrastructure and industrial production.

Infrastructure
Haiti's physical infrastructure is poor -- roads are inadequate, and basic services such as power and telecommunications are frequently unavailable. The country also lacks a railroad system, making the shipment of goods around the land a tedious and dangerous endeavor.



Impacts on the Business Environment – Analysis


Improved infrastructures in public utilities and telecommunication will have a great impact on the way people do business in Haiti. In order to illustrate this, we will look at a proposed business plan for an existing business in Haiti. PROVALSA is a wholesaler of food products located in Port-au-Prince. Buyers come to the capital from every corner of the country in order to buy products like flour, rice, and sugar every week in order to resale them in small shops in their respective locations. Some of them come with trucks that are filled, and then take on the perilous roads to get back to their towns. Most of the transactions are paid with cash; and with the rising inflation more paper currency, making even the trip to PROVALSA a dangerous one. Others come by boat and receive their merchandise from trucks owned by PROVALSA, which delivers to the port.

If a railroad network existed in the country, the need for trucks would be eliminated, making the roads safer and longer lasting. The capacity held by on train is equivalent to about eight trucks. A railroad network would dramatically improve the distribution of goods from Port-au-Prince to the provinces, lowering transportation cost for retailers. The next step that should be taken is an alliance with banks. PROVALSA's property is large enough to accommodate the opening of a bank's branch, making it possible for clients to deposit their funds. When transactions are made in the store, a considerable amount of time is wasted in counting and recounting money. Having an alliance to a bank would transfer this chore to the bank, and therefore allow PROVALSA to make more transactions.

The third step would consist of opening stores in the provinces where customers could place orders. This system resembles the infrastructure used by poittransfer.com, discussed earlier. The stores would be a combination of PROVALSA's services and a bank where customers could open accounts as well. These stores would communicate with PROVALSA in Port-au-Prince through a wireless network (the country being very mountainous, it is easier to implement wireless networks) in order to speed up the order processing. By having orders placed on their networks, PROVALSA would simplify its bookkeeping system by not having to manually enter all the daily entries. When orders are received, PROVALSA would ship the goods via trains, making it more convenient for customers who have, in the past, been incurring very high transportation and security costs.

The most interesting factor here is security. The rise of violent crimes has greatly injured business in Haiti, and the commerce industry is a high-risk market. By minimizing cash transactions, PROVALSA will create a safer environment for its customers and make itself more attractive to new clients. This plan would not only benefit the commerce industry but other sectors as well. A railroad system would allow a great number of provinces to open to national and international markets. By improving communications, physical, voice, and data, is crucial for Haiti's economy.

1   2   3