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Making the Shift From Aid to Trade

Within their new book, From Aid to Trade: How Aid Organizations, Businesses, and Governments Can Work Together: Lessons Learned From Haiti, co-authors Jacqueline Klamer and Daniel Jean-Louis advocate the realignment of aid to Haiti’s market-based economy to ensure long-term growth and job creation. Jacqueline and Daniel both began their roles with Partners Worldwide in Haiti in 2008. Following the earthquake in 2010, they organized numerous Partners Worldwide events in Port-au-Prince to equip individuals and NGOs to “Buy Haitian, Restore Haiti”. Today, Daniel serves on the advisory team of the 100,000 Jobs in Haiti Initiative, and Jacqueline serves as Regional Facilitator of Southeast Asia and Greater China.   

Last month, I stumbled across an email I sent to friends and colleagues just days following the January 12th, 2010 earthquake in Haiti.

It included this prayer request:

Pray that the relief pouring into Haiti will meet the immediate needs to sustain life, but will be administered in such a way that sustains dignity and hope. Pray that financial aid empower the local economy. Pray that leaders use money justly. Pray that Haitian businesses that survived can supply various needs with local resources. Pray that investments be made in the agricultural communities throughout the country. Pray that government, NGOs, and non-profits approach this trauma in a manner that empowers people to step forward with ownership and insight as a society.

Effects of aid in post-quake Haiti

Around the world, communities big and small have the resources, talent, acumen, and an overall grit philosophy needed to innovate through any and every challenge they may face.

Yet in the weeks, months, and even years post-quake, we observed first-hand the negative consequences of aid provided with the sincerest of good intentions—donations that ultimately undermined local businesses and wiped out jobs.

The biggest competitor Haitian businesses faced was the frantic distribution of donated cash and subsidized foreign goods—especially products for free or below market value.

And that aid model only caused NGOs to compete with the backbone of Haiti’s market-based economy: business.

Twelve months following the earthquake, Associated Press reported that of every $100 spent by US government funded reconstruction contracts, $1.60 was won by Haitian contractors. A mere $1.60. When more than 98 percent of foreign aid is spent outside the country it is assisting, that doesn’t leave much opportunity for local businesses to create wealth, employ people, and reinvest back into the economy that needs a boost.

Most aid organizations did not partner with Haiti’s business sector.

However, with the help of Partners Worldwide, some did.

Moving from aid to trade

In our book From Aid to Trade, Daniel and I confront the inadequacies of current foreign aid strategies. In turn, we propose practical solutions to help aid realign itself to the market-based economy in which it operates to create jobs and help Haiti and other developing nations move forward.

Based on primary research and dozens of interviews, we found stories to share of Haitian businesses and NGOs who partnered through trade.

One business, Maxima S.A., had been involved with Partners Worldwide for years within a mentoring partnership. Post-quake, Partners Worldwide helped make a connection for which Maxima successfully adapted its wood manufacturing services to fill orders of a well-respected Christian community-development NGO.

The NGO had made it a top priority to source locally in their post-disaster response in 2010. By contracting with Maxima, the NGO purchased and installed thousands of transitional housing units for Haitian families—while Maxima grew from 65 employees to over 250.

Further, as the post-disaster NGO funding decreased, Maxima innovated their product lines to meet new market demands.

Today, the company supplies high-quality interior design and installation services within Haiti’s growing construction industry for office buildings, hotels, homes, restaurants and retail centers springing up throughout Port-au-Prince. (Click here to see Maxima’s video about their work proudly “Made in Haiti”.)

Where do we go from here?

This story, and many others in the book, shares how entrepreneurship and business can be the basic engine toward growth and job creation within Haiti’s economy and others around the globe.

The message is simple: People need jobs. And profitable businesses, not aid, are one of the most dignifying ways a person can create them.

These days, we continue to pray. But now, we pray that people commit to make the shift from aid to trade.