Haiti and the Dominican Republic

Why is Haiti so poor? At $390 per capita, its people are some of the poorest  in the world.

Compared to its neighbor, the Dominican Republic, things are bad in Haiti. What’s the reason?

Haiti population: 8 million. Dominican Republic population: 9 million.

Latitude: identical. They share the same island. So geography, natural resources, enthnicity, and history is similar between the two.

Dominican Republic income per capita is $2,100, or 5 times higher.

The difference is in government. The Wall Street Journal reported that Haiti sufffers with government corruption, excessive business regulation, and insecure property rights. No wonder they are poor. Nations that refuse to establish the rule of law, that tolerate overbearing governments, and punish business and entrepreneurship with high taxes and harsh regulations suffer with poverty.

Haiti need not be poor. They need only to honor individuality, personal liberty, competition, restraints on government, property rights, all preconditions for success and flourishing.

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One Response

  1. In November 2002, the Haitian Parliament passed an investment law prohibiting fiscal and legal discrimination against foreign investors. The 2002 law explicitly recognizes the crucial role of foreign direct investment in spurring economic growth and aims to facilitate, liberalize, and stimulate private investment in Haiti. Foreign investment protection is also provided by the Haitian Constitution of 1987, which permits expropriation of private property for public use or land reform with payment in advance. American firms enjoy free transfer of interest, dividends, profits, and other revenues stemming from their investments, and are guaranteed just compensation paid in advance of expropriation, as well as compensation in case of damages or losses caused by war, revolution, or insurrection. The U.S. and Haiti have a bilateral agreement on investment guarantees that permits the U.S. Overseas Private Investment Corporation to offer programs in Haiti. The two governments also signed a bilateral investment treaty in December 1983, but it was not ratified.

    US State Department

    Haiti per capita: $1300
    Denmark per capita: $36K
    Haiti Education Expenditures: 1.4%
    Denmark Education Expenditures: 8.3%
    US Education Expenditures: 5.3%

    There were no quantifiers for individuality, personal liberty, competition, government restraint or property rights, although the State Departments information seems to suggest the some alternative causes for Haiti’s economic problems.

    Here is a informational link:
    http://www.state.gov/e/eeb/rls/othr/ics/2009/117840.htm

    The government welcomes foreign investment, granting important concessions to new industries not competing with local production. Such enterprises are exempt from import and export duties for the life of the enterprise and enjoy a full tax exception for the first five years of operation. Companies locating in the industrial park are entitled to tax exception for a further three years. For companies that locate outside the Port-au-Prince metropolitan area there is a 100% income tax exemption for 5 to 15 years with 15% to 20% of the income tax payable thereafter. Additionally, for export and import oriented business, there is an exemption without time limit from customs duties on imported machinery, equipment, raw materials, and accessories needed for production. Foreign capital enjoys equal status treatment with Haitian capital. The National Office for Investment Promotion is in charge of foreign investment.

    Read more: Foreign investment – Haiti – tax, import, export, area, annual http://www.nationsencyclopedia.com/Americas/Haiti-FOREIGN-INVESTMENT.html#ixzz0e4hcuuJm

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