Moderator: Patrick McRae
August 16, 2010
10:43 am CT
Coordinator: Welcome and thank you for standing by. At this time all participants will be able to listen-only until the question and answer session of the conference. At that time if you would like to ask a question you may do so by pressing star 1. I would also like to remind participants that today's conference is being recorded, if anyone has any objections you may disconnect at this time.
And now I will turn the meeting over to Mr. Patrick McRae. Sir, you may begin.
Patrick McRae: Hello everyone, good morning and good afternoon. My name is Pat McRae. I'm an International Trade Specialist with the US Department of Commerce, the US Commercial Service and a member of our Global Design and Construction Team.
We're delighted to have you joining us today for the discussion on reconstruction opportunities in Haiti. We're fortunate to have some excellent speakers joining us that have generously offered to share their knowledge and expertise on the Haitian market, the current situation there and opportunities available for US companies.
Before launching into the Webinar content I'd like to take just a couple minutes to define the Commercial Service for those of you that might not be familiar with us and also further define the Global Design and Construction Team then we'll introduce our speakers and go over a few housekeeping items.
The US Commercial Service is the trade promotion arm of the US Department of Commerce's International Trade Administration. We are the premier federal export promotion agency. We are located in over 100 cities and in 80 countries.
Our mission is simple and it's - we exist in order to facilitate the export of Us products and services; that's why we exist to help you export your products and services to (unintelligible) markets overseas.
Some of the services that our staff domestically and overseas provide include development of international marketing strategies, obtaining market and industry research, helping you identify strategic partners perhaps representatives, sales agents, distributors, JV partners, that sort of thing in international markets.
We provide one on one export counseling and due diligence services to help you look into the background of your potential partners. You tell us what you need with respect to your export objectives; we can develop customized services and programs that will help you accomplish those. We are here to help you at every stage of the export assistance - of the export process.
Now within the Department of - within the Commercial Service groups of specialists organize themselves into teams with specific industry focus. Within the Commercial Service we have the Global Design and Construction Team which is a group of industry-focused staff that serve and support the US design and construction industry with international business development.
Our Website is listed there and we invite you to visit our Website to get some more insight on our activities. And I'd also like to mention that we are now available on Twitter and our Twitter address is cs_designteam and I want to invite you to join us there as well.
Now moving along to today's production, having completed the introduction portion we will hear from two speakers, Bob Jones and Mac Tadeu and then we'll have a question and answer sessions.
Now I'd like to introduce our first speaker, Bob Jones, who is the currently the Regional Commercial Counselor for the Caribbean Region based at the US embassy in Santo Domingo, Dominican Republic.
Prior to being assigned to the Dominican Republic Bob was the Commercial Counselor at the US embassy in Panama and before Panama he was the Counsel for Commercial Affairs at the US Consulate General in Vancouver, Canada.
From 1998 to 2011 Bob served as the Commercial Attaché at the US Embassy in Quito, Ecuador and served as the Counsel for Commercial Affairs in Monterey Mexico from 1994 to 1998. Before entering the Commercial Service in 1994 Bob managed international programs for three major US trade associations.
As the son of a foreign service officer Bob grew up in Lahore, Pakistan from 1965 to 1970 and later graduated from the University of Maryland with a degree in international relations and economics and later obtained his MBA in international management from the Thunderbird School of Global Management in Phoenix.
Our next speaker will be Americo, Mac, Tadeu and he is currently the Director of Business Liaison to the Inter-American Development Bank, the IDB, in Washington Dc.
His mandate is to assist US companies to identify opportunities in doing business with the IDB. Prior to coming to Washington he served as the Commercial Counselor at the US embassy in Santiago, Chile. He also served from 1999 to 2002 as the Action Regional Director for East Asia Pacific Region of the US Commercial Service in Washington DC overseeing one of the most dynamic regions of the globe for our Service.
Mac has also served as the Deputy Senior Commercial Officer at the US Commercial Service embassy in Brasilia, Brazil. And prior to Brazil Mac was the Senior Commercial Office in Panama for two years and prior to that the Principal Commercial Officer at the Consulate General in Guadalajara, Mexico.
Mac has his masters in - his MA in international affairs from the School of International Service at the American University in Washington DC and a BA from Drew University located in Madison, New Jersey. So as you can see we have some significant expertise here to give you a perspective on opportunities in the region.
And with that being said I'll - oh final note, at the end of the presentation we will have a question and answer session. You will have an opportunity to submit both verbal and text or email questions. If you're not able to get your question through you may email Terri Batch whose contact information appears on the registration documents that you submitted. With that I'll be happy to turn it over to Bob Jones.
Bob Jones: Thank you very much Pat, appreciate it. And thanks to you and to Terri for all of your hard work in putting this program together today. Let's see now. Now this - let's see - now the slides - I've still got your slides here Pat, on the left. Oh here we go, okay.
Patrick McRae: Let me get - to yours?
Bob Jones: Yeah, there we go. Okay now we've got it here, perfect. Okay well I want to thank everybody for joining us today. I know we have a number of people on the call that have participated in some other programs that we've organized in regards to Haiti so I apologize if I'm a little repetitious for some of you but the idea is to give information to people which could be valuable and you can follow up with specific questions either after the program today or if you don't get a chance to do it then via email. If you send it to Terri Batch she'll forward it onto myself and/or Mac.
Just before I start talking about Haiti - and I know we don't have a lot of time today - we want plenty of time for questions so just going to touch briefly on the idea of looking at the Caribbean region when we talk about Haiti not just Haiti. And of course these PowerPoint slides will be available for you as well later on to refer to so I don't need to go into a lot of detail.
But basically our Commercial Service office based in the Dominican Republic covers the Caribbean region. So in addition to being able to offer our Commercial Service market development program to US companies for the DR we also have what we call partner post arrangements with other US embassies, the economic sections in those embassies in four other islands where we can also offer you our Commercial Service programs.
That includes the Bahamas, Jamaica, Barbados and Trinidad and Tobago. Now the reason I'm not mentioning Haiti in that list is because we do not currently have any staff or arrangement in Haiti to better provide our services.
The good news is that we are currently in the process of identifying and hiring a contractor who we will have based in Port-au-Prince probably within the American Chamber of Commerce office there who will be able to work with us and US companies to provide services such as contact lists, setting up appointments, market research, etcetera.
So that should be coming down the road shortly. And as soon as that person is in place we will advise everybody. And we also hope that happens sometime in September.
And we looked at the region as opposed to just the DR or Haiti. The Caribbean as a region is pretty significant. Last year exports had dropped to the region just because of the overall economic problems worldwide but this year again it's over $20 billion of US products and services and well over $40 billion in products and services worldwide that are exported to the Caribbean.
The other thing I want to mention is now when we're talking about the Caribbean region companies should certainly have a regional plan or strategy so you don't want to just look at one market. There are a variety of markets, different sizes, cultures and languages spoken, etcetera so it can be a little confusing.
But we have our Website which is listed at the end of the presentation and you can go to that and get information about the different markets and also working with your local US export assistance centers people such as Terri and Pat are in those local offices around the country. They can also give you information about our programs.
But when you're looking at the region certainly you want to look at also Espanola as an overall market; you don't want to just think of Haiti or the Dominican Republic; these are integrated markets just by the very fact that they share the same geographical area.
And traditionally over the years for historical reasons they have not had a great deal of cooperation and joint economic developments so their economies have not been very well synched together. But since the earthquake there has a been a real (unintelligible) change in that regard where the Dominican government as well as the business community now is very actively trying to establish more links and relationships with their counterparts across the island of Espanola in Haiti.
And the Haitians also are reaching out to the Dominicans. So a lot of times when you're doing business in this region on this island you will find for instance you might be working with a distributor in Santo Domingo or business partner who's also going to be doing business in Haiti or vice versa so you want to look at both sides of the island when you think about this market.
We all know about of course the devastating earthquake on January 12. This earthquake destroyed 120% of the entire gross domestic product of Haiti which is really an historical disaster. There's really been no other natural disaster on record that has destroyed 120% of a countries economy. So really is not rebuilding Haiti it's building a new Haiti in every sense of the word.
Now on March 31 there was the well-known donor's conference in New York that the United Nations sponsored. And at that time over $9 - close to really $10 billion was pledged by 59 different donor countries to donate money into a fund that would be used for the building of a new Haiti.
Now the trick is even though that money was pledged less than 10% of it has actually been disbursed at this point. That's one of the reasons that there've been some delay in moving some of these projects forward and we'll talk about other reasons for that as well.
Now there's a couple of places where you can look for a number of the documents I'm going to be discussing but one of them is this Website, haiticonference.org where you can find the action plan for national recovery and development of Haiti. And that document is also on some other sites as well.
But this is a good overall plan to give you a feel for what is the general plan for building a new Haiti because we're talking about all sectors of the economy, all businesses and industries and so it really is something much more complex than you normally have with disasters in other countries.
And there's a number of different organizations that are involved in the various aspects of the building of a new Haiti; we'll be talking about some of them shortly here one of them being Inter-American Development Bank which of course I'm not going to touch on since Mac will be doing a very good job covering that.
But the complaint we often get from US companies is that there's no one place to go to to get all the information at once about participating in projects to rebuild Haiti and that's because there is no single source of information. So you really have to do your homework, you have to work with a number of different organizations.
Also depending on what your objectives or goals are you have to approach it in different ways depending for instance if it's a large company you might be looking for primary contracts or if it's a small company looking for subcontracting opportunities that would be another approach as well.
But just to start off at the first organization here, the Interim Haiti Reconstruction Commission, this commission was formed at the March 31 donor's conference. And the idea was to put together a commission made up of representatives from the Haitian government as well as representatives from the donor community and other organizations as well as the Haitian Diaspora, the NGO community, etcetera to have an overview and a process in terms of reviewing projects, approving projects, supervising and monitoring projects.
So this commission is the single most important organization in terms of that almost $10 billion being spent on projects if that money comes through. Even if all of it doesn't a significant amount of it it will certainly in the medium term. As a result this Website is very instrumental in terms of getting information about a lot of projects that are going to be moving forward.
It'd be very interesting for everybody to look at the Website, learn about the commission, the makeup of the commission. They list the 27 members of the commission both in the Haitian government as well as the international community. There are non-voting members as well including a representative of the Dominican government.
So that gives you a good feel for what the commission is, what it does, how it operates. In order to facilitate activities also for instance the executive director of the commissioner who hasn't yet been hired, hoping that's going to happen shortly, is able to individually approve projects of $1 million or less.
The two heads or chairs of this commission are former President Bill Clinton and Haiti Prime Minister Jean-Max Bellerive. And Mr. Clinton and Mr. Bellerive they can also approve projects, just the two of them, between $10 million and up to - I believe it's $100 million. We'll look at that slide in a minute.
And then after that it has to be approved by the entire commission which obviously will slow things down somewhat. So the idea is to have the smaller projects approved more rapidly to facilitate that activity.
Now the second organization, of course, of course USAID is pretty well-known to everybody. This Website, the sto.gov is a federal government Website for opportunities and so you have to type in the keyword Haiti to get to the listing of projects relating to Haiti.
There are a number of projects already on there that you can look up. A number of these kinds of projects will probably be won by companies that are most used to dealing with AID and know about the procurement processes and so on.
And as a result there would be a good amount of opportunity for subcontracting. However if you get involved in finding out the details about how the procurement process works you can also qualify and bid and possibly win some of these projects directly. So depending what your company's objectives are, the size of your operations, etcetera, those would be a couple of options.
The third Website is the grants.gov also using the keyword Haiti which will give you information about specific grants coming from different organizations and that also could be helpful in terms of finding out about opportunities.
In terms of a lot of the different projects from World Bank and other organizations including donor countries and the Inter-American Development Bank as well this United Nations site is www.devbusiness.com is a primary site for information on projects.
Now this is a site that you have to subscribe to, it's not free. But once again if somebody is interested and looking for information - detailed information about a lot of the projects that's important especially in terms of subcontracting opportunities.
See the second paragraph here this site also includes the contract awards section so that you can see all the organizations or companies that win each one of the awards that's contracted and get contact information specifics for those companies and organizations. So for subcontracting that would be a very important tool to use to find out information.
Another Website this is Development Gateway Haiti Portal. And this development gateway is an international NGO which coordinates global international aid programs. They've gotten specifically involved in Haiti based on a request by a UN special envoy former President Clinton. And so they're involved as well and you can get information about some of the projects that are involved in.
It's not going to be always - it's everything where you see a lot of bids but to know what's going on and keeping up to date with some of the developments that's going to be an important site.
In addition there will be information that will only be available locally in Haiti. If it's a World Bank and other organizations and NGOs or in many cases (unintelligible) certain amount of the projects only for local companies in Haiti so they will not be advertised outside of Haiti. Some of those projects will only be advertised in places such as newspapers.
Now the newspapers in Haiti of course, the language in Haiti is French and as a result one of the key newspapers is Le Nouvelliste and if you are French-speakers you can read that yourselves and get information or you could look on this other site, the online newspapers where they have some English papers as well for Haiti.
But the best thing really is to establish an in-country contact and that's what we're going to be doing once we get our in-country capacity developed where we can help you establish relationships with Haiti companies and organizations because then if you have a partner in Haiti there'll be a couple of good things that will happen from that.
First of all you will have someone that can be reading the local newspapers and getting the local information about projects that you can bid on through a local company there in Haiti.
And also it's very important to try to have an established Haiti connection; a Haitian company either in Haiti or a member of the Haitian Diaspora in the United States because all these organizations want to make sure the donor countries, the NGOs, the international multi-development banks, etcetera, they want to make sure that Haitian companies and Haitians are going to be involved in this reconstruction process and to make it long-term sustainable.
And as a result having local partners will be a big part of being successful in regards to getting involved in Haiti. Now in terms of financial support for projects we have a number of companies coming to us interested either in establishing a plant in Haiti, for instance in the housing sector, a number of companies want to build modular housing products, etcetera.
Or they want to get involved in real estate development, hotel construction, etcetera. And they're getting involved with Haitian Diaspora groups or companies in Haiti and they need to find sources of financing. There's a number of excellent sources of financing in that regards.
The Overseas Private Investment Corporation is a US government agency that provides loan guarantees, sometimes even direct loans as well as insurance when a project normally has about 25% US equity involved. Now there are some exceptions to that minimum.
But OPEC has a specially in depth interest in getting involved in more projects in Haiti. (Suzanne Echavarria) was one of the participants in our Haiti conference at the Hotel Indigo last June and she did a presentation. And so she would be the right person to contact.
In terms of her presentation from last June there were a number of presentations at the Haiti conference that we co-sponsored with the American Chambers of Commerce from the DR in Haiti. If you go to our Website once a gain at the end of the presentation where it's listed, www.buyusa.gov/Caribbean a lot of the presentations are included from both that even in June and from some of the other Haiti seminars we've done up an down the East Coast over the last four or five months. So please go to that Website also for more details.
The Clinton-Bush Haiti Fund is a relatively small fund; right now they only have $50 million but they are constantly obtaining more resources on a daily basis. And they're looking to participate themselves in projects; they don't really give much in the way of grants. They're looking for projects that have some kind of a socioeconomic benefit, creating jobs, training elements, etcetera.
But they're very interested in taking an equity position in interesting projects and it includes things from building hotels to training centers for the apparel industry, etcetera. And so the contact information is there for that organization as well.
International Finance Corporation is another organization that wants to support the private sector development in Haiti. So once again they're not putting out a lot of projects for bid; what they're doing is they want people to come to them that are looking for another financial contributor - or not contribution - another financial component of a financing package for a project.
So if somebody has some other financing in the private sector as well as OPEC, etcetera, they can go to IFC and get more details on what they're interested in. If you go to their Website and click on Haiti you'll also get country-specific information about what they're doing in Haiti.
The Inter-American Development Bank, once again, we'll leave that up to Mac. But that's also an organization you can check out on their Website and get information on Haiti via the link. And we have contacts for both of those organizations as well that are looking for participation from US companies in different projects.
Another thing to keep in mind in regards to doing business in Haiti are the elections coming up on November 28. And this is going to be for the - well 10 senate seats, 99 deputies and the president as well. So in some ways the private sector has become recently a little more reluctant to get involved in investing in big projects because they're a little bit nervous about what's going to happen with the election, this happens in (unintelligible).
So something to keep in mind things are not coming to a halt by any means but when you talk to people in the business community you'll hear them talk about that so it's something to keep in mind.
Now as mentioned before, you know, why does it seem like the process is moving forward so slowly in regard to these projects. And a lot of people complain about that. There's a couple of reasons. First of all, as I mentioned there was not a lot of money yet in the donor fund at the World Bank.
Many countries - there were 50 - have pledged to donate money but very few have actually done it. Even though only about 10% or a little less have done it up to now it is expected that we're going to get a significant more of those resources disbursed in the coming months so that's the good news.
The other thing is the commission, as I mentioned the commission doesn't yet have an executive director, they don't have some of the staff members that are very important for their activities. And as a result it's taken them a while to get that organization up and running.
That organization has to review a number of the projects - many of the projects will be going through the commission before they can be approved then they have to go out for bid. The bids have to be reviewed, etcetera, etcetera so that's a process of several months.
As a result we don't really expect to see a lot of these bigger projects moving forward probably until we get really into 2011 because of the fact it's just going to take some time. There's also real important focus on making sure that this process is open and transparent and that there's not an issue with corruption and some of the other problems we've seen in the past.
And as a result that's - people prefer to be a little slower and make sure that it's done right rather than do it a little too quickly. So those are all reasons why the process sometimes is a little slower than everybody would like to see.
But now things are finally gearing up so that I do expect in the next few months things will fall into place and by early next year I think we'll see a number of these things moving forward.
As I mentioned with some of these Websites I said (unintelligible) and some of the other ones you'll also see things listed at this point that are already moving forward. Some of the NGOs, etcetera, as I mentioned in Haiti and other organizations in Haiti also have had local contracts, World Bank, etcetera. So there are things happening but the larger amount of activity is not going to really move forward until we get these other factors in place.
So to get anymore information feel free to send me an email. My Deputy, (Megan), she'll get (unintelligible) are also working with me on Haiti and you can feel free to send us a note. I'm going to personally be out of town until next Tuesday but if you send an email I will get back to you in a couple of days and feel free to stay in touch with us.
Also another thing if you go to our Website it's as I mentioned with the www.buyusa.gov/Caribbean you can register, if you haven't already done so, on our Haiti interest form. We have over 600 registrants already in our database.
And then as information comes out and we hear about specifics we send out what we call Haiti business bullets and - to everybody on our list so that would give you the chance to stay informed. So we look forward to keeping you up to date, up to speed with what's happening and to supporting your interest in getting involved in the building of a new Haiti. Thank you.
Okay now I think we're going to turn it over to Mac. Thank you Mac.
Americo Tadeu: Hi yes, good afternoon and good morning to all. Can you hear me?
Patrick McRae: Yeah you're coming through Mac.
Americo Tadeu: Okay. What I'm - I'm having trouble, Pat, I can - I have a blank screen as far as the slides. So I'll just start at the top of my presentation and ask you to move it along. Hopefully we're on the same page. I have a hard copy of my presentation so I'm following along what I had given you.
Patrick McRae: Okay we're on Slide 1 of your...
Americo Tadeu: Okay you can go to Outline of Presentation which should be the second one, IDB overview. So for many of you who have not worked with the IDB - and I did take a look of those who are participating and several of you have been through my office or I know of the work that you're already doing in Haiti. Congratulations for a great job that's being done so far.
I wanted to offer a brief background on the IDB and its mission and expanding role particularly what it's doing now in the reconstruction of Haiti which is a first-time effort; they've never done this in the 50-plus years they've been here quite to the extent of what they're doing today in Haiti.
So my intent is to demystify as much as possible the IDB process. It can get confusing and bureaucratic for many of you. And offer some counsel that will help you make a decision as to working with the IDB which parts of the IDB are there for you - for your commercial use.
My core objective here is to ensure that US companies - that's why we have an office in the bank here to give a fair opportunity to US businesses in relationship with their activities here at the bank.
Next slide. We have an overview of the IDB. It was founded over 50 years ago and is the largest single source of multilateral lending to Latin America and the Caribbean. While the IDB shares many similarities with other credit institutions some of which are quite active in the region or homegrown in the particular countries such as many commercial banks the IDB is also unique in some other respects.
When it makes a loan it does expect it to be repaid. It is - does try to make a profit because it reinvests those profits back into the region. But the core objective is not a high return on the capital but rather to promote the economic and social development of the 20-some odd borrowing countries.
Besides loans it's good to know that the bank provides grants, technical assistance, cooperative research and cooperative efforts with other ministries as well as private association groups in the country.
The US government's participation in the IDB is based on the core principal that economic and social development of the region will lead to greater security and stability and investment and prosperity which is good not only for all those people living in Latin America and the Caribbean but also important for us here in the US.
Next slide. As far as the division of capital shares and voting power you see the pie there. There are 48 total member countries of which 26 are borrowers. The voting power of each member country of the bank is based on a shareholding in the IDB's ordinaire capital which means exactly what dollars or currency they're investing in the pool.
The US is by far the largest shareholder. We have slightly more than 30% of the voting power so we hold the quorum for any meeting. The 26 Latin American and Caribbean countries have 50.2% in theory being that this bank belongs to its borrowers; to the Latin American and Caribbean countries.
Next slide. The lending history and what it's able to do, the IDB is a AAA rated credit rated institution. It allows it to borrow cheaply and lend at competitive rates in many places where the private sector is unwilling to lend because of the perceived risk.
At the bank's annual conference this year in April the Board of Governors of the bank agreed in principal to increase the bank's capital in order to double the lending capacity while still maintaining its outstanding rating. So they're looking to historically move from lending $6-$7 billion a year to a minimum of $12 billion a year.
Last year you'll see that the bank invested $15.6 billion. That was basically an infusion of some temporary capital in order to address the global financial crisis and make up for the gap from the private sector.
Next slide. It's priorities, in order to achieve a greater impact on development in Latin America and the Caribbean the IDB has identified these key areas for you to work with. They launch new initiatives aimed at merging challenges that face the region.
The IDB partners with countries try to combat poverty and promote social equity through its programs tailored to the local conditions. That's important here, it's not about transferring technology as its used in developed economies but what fits and works best in developing - in developing economies.
Working with governments as well as the private sector the bank seeks to achieve sustainable economic growth, increased competitiveness among groups there, modernize public institutions so that they can regulate and offer reliable oversight of industries and sectors and foster free trade and regional integration which is good for everyone.
Next slide, Pat, please. Overview of the project distribution, this gives you an idea of the programming and how it's spread among a wide range of industries and development activities from investments in infrastructure projects like roads and highways to less visible but critical projects that promote the modernization of the government, for example, judicial reform or other type of health policy, education policy reform.
So now let's drill down to Haiti specifically, next slide. And its role here is to be a major payer in the reconstruction and redevelopment of Haiti. The IDB has for many years been lending and the key lending source, more than the World Bank, for long term financing.
About 40% of the financing is in infrastructure projects, 20% in agriculture and the environment, 25% in basic services and 15% in governance and institutional capacity building to strengthen the Haitian public sector.
Since the earthquake the IDB shareholders have agreed to provide $479 million to cover the cost of completely eliminating Haiti's debt to the IDB. As part of this process $323 million will be made available for grants for direct assistance to the country.
In addition the IDB shareholders have agreed to provide another $2.2 billion in grants to Haiti over the next 11 years so you're looking at about $20 million a year. So this year the bank is busy looking at about $400 million over the next 12 months.
And these are again extra money that's used by freeing up what debt reduction efforts that they've made to use toward direct grants. The IDB established a Haiti response group, first time ever in the history of the bank, is headed by (Augustina Gery) who's been in and out of the region since the earthquake. He's based here at headquarters here in Washington.
To work with the government of Haiti and the Haiti reconstruction and development agency that Bob mentioned to develop the proposals from the bank and what its interests are according to the post-disaster needs assessment plan which the IDB developed with the government of Haiti. And to complement what other agencies as well as private sector groups are looking to do.
Some of the key areas we're looking at are housing, transportation, water, education, disaster prevention, private sector and budget support for the government.
Next slide. IDB commitments, the IDB is also looking at cash for work programs, agricultural assistance and reforestation projects. Much of the work that would be happening before the earthquake to support Haiti's efforts to foster again the - concentrating on economic development above and beyond what happened to Port-au-Prince and those cities that were hit by the earthquake.
And a bit to help the Haitian private sector boost economic activity and job creation it is also looking to promote local and foreign investment in new industrial parks. They're working with consortium groups on that. And textile manufacturing plants to bring them up and running as well as expanding the current services that were available.
The Multilateral Investment Fund, it's the MIF, and the International - the Inter-American Investment Corporation, the IIC, are part of the IDB bank group and working at a more private sector level offering financial system assistance.
The MIF, the Multilateral Investment Fund, is particularly active in ensuring that micro-finance institutions are available, they're still making loans to their clients and distributing remittances especially in the countryside which after the earthquake a lot of people left the principal city and have gone to the countryside or their former hometowns and many services are needed there as much as in Port-au-Prince.
Next slide, the Haiti Response Group mentioned who's the head of it now, how they're setting themselves up. They work with a very active team in Haiti through the country representative in (Guarde La Meda) and a fairly large staff.
My office, both (Barbara White) and I meet regularly with these teams - with the people coming to and from as far as what bank projects are coming onboard. I'm going to give you the Website, iadb.org, that's www.iadb.org to find out the country Web link and where you can find that information.
We've been working regularly with US companies and other third-country firms to partner as much as possible so that's part of my counsel to you in addition to what Bob's talking about aside from working with local firms and individuals trying to partner and build the team not only from the United States but oftentimes a complimentary consultation and equipment as well as other services can be found through Canadian groups as well as the French who work quite closely with a lot of US firms in-country already.
Next slide, identifying business opportunities for you. So there's that Website I mentioned. In the case of procurement opportunities you can get started right there. The procurement page provides information on how to pursue business opportunities throughout the bank.
So in this case you'll see a large icon that takes you direct to the Haiti group and where the projects are. The great news here is that you can sign up for electronic alerts that provide timely information on the categories, the countries and the sectors that are of interest to you. This is a simple three-step process you can follow. You can select and customize your search and it comes straight to your work or email box.
Let's take a look at some samples, next slide. These are some of the projects that the IDB has in process. These are - this is just a small cadre of a large set of projects that keep on coming on board. Many of them are still in the preparation stage so many of the players involved with this - these project proposals are looking for more input, looking at new systems of how to and possible ways of doing things the best way possible for the country.
Note that these projects aren't all in Port-au-Prince. As I mentioned earlier they're scattered among the principal cities and agricultural sectors of the country. They're running - and the ID projects are running concurrently and not always through that main executive agency that Bob mentioned.
So the larger projects are working complementary with the executive committee making sure that there's as much of efficiency of scale and doubling of efforts where monies can be used in other areas. So the bank is in constant contact but looking at this Website will give you a clear idea of what the IDB is doing on its own and independently in many respects.
Next slide, project listings. This is the type of information that's going to tell you everything you're going to need, the project description, the status of it, who are the different players, what type of financial information is important. Is it provided in a grant, equity loan, loan guarantees? Who are the principal players both in the IDB as well as the local - what I mean by executing agency - the local ministry in Haiti or entity that's on the ground that will be running the project.
It provides PDF files of all the relevant documents you need. Some of it you'll see initially in French. If it is appearing first in French you will then - a week or so afterwards usually see English and/or Spanish copies of all the documents. Many of them do appear originally in English and remain in English also.
Next one. Business strategy for success. Following along the lines of what Bob told you already it's about building your strategic team, reaching out to our office, Bob's office down there as well as the US embassy there as well as the IDB offices in Haiti. They have a specialized team working - covering most of the industries that Bob mentioned and certainly all of the ones that I talked about in my presentation.
It's important to do due diligence when you're working in any foreign market. Our offices can also help you with that or working through other entities that can provide that information for you. If we don't have the information we'll refer you to the right person.
Again most important build those relationships with both public and private sector officials. Keep in mind elections are coming up, some of the players will be changing and so you need to be very strategic in how you're approaching Haiti.
Last one, there's our contact information both myself as well as (Barbara White). We're here to assist you and look forward to receiving your emails as well as telephone calls. Thank you. Hello?
Patrick McRae: Hey, thank you Mac.
Americo Tadeu: Okay.
Patrick McRae: With that I think we can proceed to the question and answer session. I think the Operator will come on to assist us with that.
Coordinator: Thank you. At this time if you would like to ask a question please press star 1, please record your first and last name when prompted. To withdraw your request press star 2. Once again to ask a question please press star 1. One moment please.
Terri Batch: Just a real quick question while we're waiting for others to chime in, Mac, would the IDB offer private loans to individuals or businesses?
Americo Tadeu: Not directly. What is important is to know that there's a local partner involved that - think again in economic develop terms. The bank's principal purpose is to know that whatever loans or projects or feasibility studies is going to be benefiting directly local partners.
Much of that is once you have a local partner having them work with the IDB for that loan assistance or grant assistance. When it goes directly to a US entity or interested party it's oftentimes with pilot projects.
But again oftentimes looking for who will your local partner be, what type of job capacity or capacity building will be made available through this project rather than just assisting like in the (XM) bank side just helping in working capital loans for US firms to export abroad. Think in terms of economic development and the local players.
Coordinator: Your first question comes from (Bruce Johnson), your line is open.
(Bruce Johnson): Yes. Do we get a copy of the PowerPoint for all these Websites and addresses and names?
Patrick McRae: Terri, can you respond to that?
Terri Batch: Yes I'll send you a follow up email with a link to the recording and also with the PowerPoints that have been included in today's presentation.
(Bruce Johnson): Thank you.
Terri Batch: I have another question while we're waiting for the next person. We mentioned a lot of NGOs. So far you guys have mentioned a lot of NGOs or funds looking for investors. Is there a private industry beginning to do rebuild projects or particularly local businesses? And how can they get that contact information?
Bob Jones: If I could address that, there is a private sector. The private sector before the earthquake wasn't even large and it also obviously was somewhat decimated like the rest of the country by the earthquake. However that being said there are a number of key businesses that are certainly looking for partners. There's a real desire also to try to facilitate the development of small business and training of Haitians as well.
And in terms of facilitating those kinds of relationships and contacts unfortunately we can't do that today once again because we don't have an (unintelligible) capability. And we will let people know as soon as we're able to have that capability which we hope will happen by sometime in September and then we can try to help set up some more programs such as meetings and so on, key lists, that type of thing and working also with the key chambers.
There's an American Chamber of Commerce in Haiti which is also a good point of contact. There's also a Chamber of Commerce of Haiti. So there are a number of business organizations but the other thing to also remember is the Haitian Diaspora.
Now the Department of Commerce organized several seminars directed to the Haitian Diaspora for the most part in Brooklyn, Philadelphia and Miami over the last few months. And there are a number of organizations some of them are investor groups of Haitian Diaspora that are getting involved in projects.
For instance one is (Jacquemel) in Southern Haiti is a real estate hotel agriculture project and that is basically from money - from medical professionals all members of the Haitian Diaspora in the New York City area and they're investing money in that project.
So you can link up with the Haitians that have contacts in Haiti that are based in the US as well as Haitian companies that are based in Haiti. We will look forward to helping you to develop those contacts because that is an important part of being successful.
Coordinator: Your next question comes from (Collin Ward), your line is open.
(Collin Ward): Good afternoon gentlemen and thanks for having me on the call. I'm specifically interested in technology; I represent a technology company that deploys solutions globally. And I was wondering whether or not you could provide some commentary on (IFCT) in education in Haiti and what projects or programs are underway right now to bring some technologies to the schools that as they are built?
Bob Jones: I'm sorry, go ahead.
Americo Tadeu: If I could just stress just because specifically about a month or so ago the IDB signed an MOU with the government of Haiti for an entire revamp of - and the study of the education process. As you know most children were in some sort of private form of education in which tuition was being paid by the families.
These are oftentimes disposable income used towards education which could otherwise be used to help the family in other areas such as healthcare and building lives as well as expanding and improving their home and work situation.
The IDB is very committed to looking at setting up an entire nationwide system in which there can be an overview from the public sector, in case the Ministry of Education, and then utilizing all the private sector healthcare - I'm sorry, private sector education providers in the country since there is expertise there raising standards, providing nationwide certification so that schools in one area are providing the same public education as in another, something that will have a long term affect for generations to come.
So check on the Website, there's quite a bit of information there.
Bob Jones: Following up on Mac's comments the important thing to remember that this is a huge project on a national scale. This is not the kind of thing where there are individual projects happening for the most part. And so it's - that's once again the reason the reason it's a little bit slow.
But you have to realize they're basically trying to implement this action plan for national reconstruction and development, as I mentioned you can find on a couple of those Websites, which include six regional development centers around the country where they want to distribute the population.
Most of these really don't have any infrastructure or population base today so they have to basically build new cities for all practical purposes. They have plans to build 30 new hospitals, hundreds of new schools, 600 kilometers of new roads.
So once again this activity is going to be part of all these large projects that have to go before this commission and be approved. There'll be primary contractors and then there'll be a tremendous amount of subcontracting. So in terms of ITT equipment of course there will be significant opportunities but not so much in the short term, it's going to be medium and long term.
Now there is a ITT association in Haiti and the current president of that association is the newest, youngest member on the Board of Directors at AmCham, the American Chamber of Commerce in Haiti. If you shoot me an email I'd be glad to give you his contact information and I would recommend him as an initial contact and he can sort of tie you into some of those activities.
But this is something - once again we have to remember the scale of this activity. This is something that is going to be so huge and it's so complex that it's not something going ahead piece by piece. A lot of companies come to us and they're sure that somebody else - one of their competitors is already getting all these contracts and the truth is these contracts haven't been given out yet because contracts haven't been awarded because of all these other processes, forming the commission and having the money actually disbursed to the fund, etcetera, etcetera.
The Haitian government in many ways will be decision makers on some of these projects, for instance some of the World Bank and other projects. However most of the projects will have to go through the commission process, the review process. And so it's going to be something that's going to take time.
There's going to be a lot of opportunities; for people that are willing to take the longer term outlook and be patient there will be very significant opportunities.
Patrick McRae: Bob and Mac, we've received a couple of related questions, maybe I'll insert those here. For the construction firms do you know if there were previously or are there now sources of information such as topographical maps, boundary surveys, soil quality maps, you know, wind charts, that sort of things that relate to the actual practical aspects of construction? You know if there is or was a source of that sort of information nationally?
Bob Jones: No basically - not in any depth. And also once again we're talking about the six regional population centers. These are areas that have had no significant populations in the past so there will be - that process will have to go forward - all that type of work will have to be done, the groundwork, before they can build the cities.
We're talking about housing, schools, hospitals, sewage systems, energy plants, roads. It all has to be interconnected. So it's part of this master plan. The trick is to getting it down to the implementation stage. So there is not a lot of information like that available in the short term; that's going to be part of this process and there's going to be a great need for the services to obtain that information.
Americo Tadeu: On the bank - on the part of the IDB you'll be seeing projects come along in which consulting services in the - in the area of environmental studies as well as feasibility studies coming from the bank. So US services and consultancy expertise will be needed there too so watch for that.
Coordinator: Your next question comes from (Laura Ma Jean Pierre), your line is open.
(Laura Ma Jean Pierre): Hi. My question is about IDB. It has been mentioned that IDB is one of the - the institutions that's available to sponsor certain organization. I would like to know is IDB sponsoring a project to a private firm or individual? Will there be any help, for example, if somebody lose their business and stuff like that or if small startup company they want to get involved would IDB be a sponsor or is IDB only for government?
Americo Tadeu: No it's for private as well. Most of the monies are used towards larger projects that are for - that involve public sector or a public private partnership which will be seen coming down the pike also. When I mentioned the multilateral investment fund and the Inter-American Investment Corporation that's where they're getting into more small grants and micro-lending to individuals in Haiti.
(Laura Ma Jean Pierre): Where I can send for information on the Website about that?
Americo Tadeu: On the Website I mentioned www.iadb.org and type in - and you'll see a link for the MIF, M-I-F, or the IIC, all that information is there.
(Laura Ma Jean Pierre): Thank you.
Coordinator: Your next question comes from (Mike Connier), your line is open.
(Mike Connier): Thank you. Mac, can you speak to the regulatory or government oversight environment as it relates to design and construction professionals working in Haiti?
Americo Tadeu: As far as specific outlines as far as work permits and things like that?
(Mike Connier): Well both the licensure of professionals and then permitting and those type of things that are - that we sort of take for granted here in the States.
Patrick McRae: Building codes, that sort of thing.
Americo Tadeu: Oh well as far as building codes and such much of that is probably in flux. I'm going to defer to Bob because in the case of the - anything that's tied to the bank and bank loans that is oftentimes handled because you're being hired by a government entity.
But as far as someone else looking to start a business there, Bob, as far as the AmCham being the best resource or...
Bob Jones: Yeah, well in terms of building standards and codes part of the problem is they haven't had them - the ones they had were not enforced and you can see what happened as a result of that earthquake. So they are in the process of developing those. They want to make sure that when these new construction projects go forward that they have international standards and codes that will be in effect and will be, you know, enforced.
So that is not something that's developed now, that's part of the process that they're doing at this point. In terms of certification licensing that is something that's in disarray at this point not just for construction but for other industries as well.
It wasn't very well developed or enforced before the earthquake much less afterwards, you know. Every single government ministry had significant or total damage from the earthquake except for one. Seventeen percent of the federal workforce of the country died in the earthquake. So these are all things that have complicated the procedures to try to move forward in some of those areas.
There's not a lot of things on the ground now. Once again, yes, AmCham would certainly be a point of contact to start with but it's not an area that is yet developed to the point it needs to be. And the international community and the Haitian government are both very interested in making sure that there are the right standards and codes that are developed and also enforced in regards to a lot of this new construction.
Americo Tadeu: Another thing that's occurred along the way thought it wasn't well designed or maintained before the earthquake but as far as tracking people, social services, unemployment benefits, healthcare benefits and then as far as slowing down the issues as far as development you're looking at titles to land, who owns the property.
So that's been quite a challenge here for people at the bank or anybody looking at manufacturing facilities, setting up centers either just for light manufacturing or setting up these clusters, economic clusters and land for residential living or even agricultural use has been a challenge.
Bob Jones: That's a good point, Mac. Yes that's a terrible problem right now because so many of the records were destroyed in the earthquake. The records weren't even complete before but since the earthquake it's much worse so that is a big issue.
It's also important to remember because of all these kinds of issues that we're talking about, I mean, before the earthquake Haiti had about 38% illiteracy; only 10% of the population had access to electricity; that was before the earthquake. So those things have gotten even worse.
My point is it's a difficult environment to do business in which is one of the reasons you want to have a local partner. It's also important to realize it's going to take more time to do things. Right now the US embassy has a policy where visitors or embassy employees or US government visitors can only stay in hotel rooms that have been certified to be solid by the security office of the embassy. In the entire city of Port-au-Prince there's only 100 hotel rooms that they've approved of.
We have a lot of visitors that go to Port-au-Prince and go to - have meetings there that are staying in tents at the US embassy still today. Now that's getting better, the (Caribe) Hotel is supposed to open up again in October. We'll see some improvements and other new hotel projects are moving forward.
But it is important to realize that it's not like flying into Mexico City, Buenos Aires, or Santo Domingo. When you go to do business it's going to take more time and you have to allow that and factor that in when you're looking at doing things. Once again it's a business environment and also can be complicated, it also has tremendous opportunities because there is such a need for so many different products and services.
And so if you're patient take a medium to longer term outlook there will be significant opportunities for many industries and sectors, construction obviously one of the primary ones.
Americo Tadeu: Think in terms also of just getting around the country just by car, four by four, the necessity there or roads that were unused before no longer being used or just the travel times from place to place.
Bob Jones: Exactly. For instance we had a couple of meetings recently in Port-au-Prince, in another city I would have had five or six meetings in a day; we had two meetings because it took us two hours just to drive back and forth to each meeting; that was four hours so half the day was just driving to the two meetings.
You add in the meeting time itself and a quick lunch and that was the whole day. So it is very difficult because of the lack of good infrastructure but there are very ambitious plans to put in a lot of new infrastructure in terms of roads and other areas as well. So hopefully those things will be improving significantly in the coming months and years.
Patrick McRae: We have another question by text. Will import duties be waived and if so for how long?
Bob Jones: That's a good question. Mac, if you don't mind if I...
Americo Tadeu: Please.
Bob Jones: ...address that one. This has been a big problem because a lot of the aid organizations also, the donor organizations that are sending in donations are getting taxed. But at this point the Haitian government has said they need to have the revenues; they have not offered any waivers for import duties.
I know that that's being discussed. Former President Clinton was also discussing that with the Haitian government. I think that's something that might change in the future but at this point everybody is being charged full custom duties whether they say it's donated or not.
The Haitian government says well they don't have the resources to prove that actually once it's in the country it's not being sold. So at this point duties are not being waived but that might change at least for some products in the future.
Terri Batch: Excuse me, it is now four minutes after the hour and our hour-long time for the Webinar has passed. If you guys want - can stay on the line for another say 5 or 10 minutes to answer more questions please do but if people have to get off we want to respect your time. This is being recorded and you can access it at another time.
Mac and Bob can you guys answer more questions or do you need to get off now as well?
Americo Tadeu: I have...
Bob Jones: No, no...
Americo Tadeu: ...time for another five minutes.
Bob Jones: Yeah, I do to.
Terri Batch: Okay let's do five minutes and...
Bob Jones: Okay.
Terri Batch: ...we have some that have been typed. Pat do you want to read some of those...
Patrick McRae: Yeah.
Terri Batch: ...questions that have been typed?
Patrick McRae: Yeah. There's one here, what can you - Bob, this might be a good one for you. What can you describe that is being done to address or limit the corruption factor that has previously, you know, existed or that Haiti is known for?
Bob Jones: Exactly. Well just a couple of things, first of all the fiduciary fund that's been set up at the World Bank is being supervised and managed by the World Bank. And for funding to come out of that fund for any projects it has to be projects that have been approved and reviewed and are being monitored and supervised by the commission, the Interim Haiti Reconstruction Commission.
There's also an international accounting firm being used as well in that regard. And transparency and openness is a priority for everybody. I mean, we're talking to the same people we say, you know, IDD, same thing with World Bank, UN and even though sometimes it makes the process slower it's something that's very important to everybody concerned.
The Haitian government is not receiving a lot of the funds and then able to do things on its own; it has to do things in cohort with the international community. Now there are some funds that have gone to fill their budget gaps for this year because they have a fairly significant budget deficit and they had more control of those funds, I think about $130 million or so.
But in general in terms of the billions of dollars we're hearing about most of that will not be totally controlled by the Haitian government it will be monies that are utilized (unintelligible) international community support and oversight as well.
Patrick McRae: Okay thank you. Mac, perhaps for you, what is the breakdown between IDB loan versus grants? And what is the determining factor for providing a loan versus a grant for a project?
Americo Tadeu: Okay with regard to a loan just like you would for your commercial bank they are lending to you the money, they are offering you the capital. And there's an agreed interest rate and cost and payment terms involved.
As far as a grant certainly much smaller amounts compared to what an IDB loan can be hundreds of millions of dollars. A grant usually in the case of the multilateral investment fund no more than $10 million.
Grants are oftentimes used in the case of startup industries looking to enhance an industry that may already be in country but looking to improve their competiveness at another component to it. So a grant would be available to, again, either a private sector or public sector entity and there's no payment terms for that.
Patrick McRae: Thank you.
Terri Batch: And do you want to check with the operator just to see if there's anyone waiting to ask a question?
Patrick McRae: Yes, Operator if you're listening do we have a phone-in question ready?
Coordinator: Yes sir, your next question comes from (Richard Barbor), your line is open.
(Richard Barbor): Hi this is (Rich Barbor). Actually my question was answered earlier. I just wanted to know where you can get a copy of the presentation.
Terri Batch: Okay...
Patrick McRae: Those will be forthcoming to the registrants, correct Terri?
Terri Batch: Yes it will be. Next question - we've got two minutes.
Coordinator: The next question comes from (Jude Avril), your line is open.
(Jude Avril): Thank you for taking my call. My question is there are representatives that you guys have in Haiti how do we make sure that our business partners over there are not going to be treated, you know, like (unintelligible) business as usual where we can expect more sort of an American way of doing business?
Americo Tadeu: Bob?
Bob Jones: Well that's an interesting question. There's not really any way of guaranteeing any type of culture in terms of doing business. Now we will have a person, a contractor, based there who will help with contacts and information lists and some appointments. But they'll be working there within the local business community.
It is very important to try to get information certainly about potential business partners; you want to know who you're dealing with. And that's harder to obtain that information in Haiti than it is in many other countries. So it is a challenge.
But through contacts at the economic section at the embassy and the key chambers and so on we would be able to try to help you identify organizations to get some background information. We have a service where we try to do some background information checks. And so we can help with some of our Commercial Service programs.
And those of you who don't know about our programs once again get in touch with your local US export assistance center; we have over 100 around the country. We are required to charge for our services by the Office of Management and Budget but certainly reasonable fees. But we will be more than happy to try to help you and assist US companies with some of these programs once we have somebody on the ground.
It won't be like a full office of course operating there. I mean, in Santo Domingo we have 10 people here and we get backed up. So with one person it's going to be - it'll be a little bit overwhelming initially. But we will certainly try to help you identify the right people and then get you information that's available on who those people are as well.
Patrick McRae: There are a number of questions remaining I'm sure but unfortunately I think we've run out of time. I did replace the slide with the contact information for Bob Jones' team down in the Dominican Republic. A question to him or to Mac can be forwarded from there to any relevant office or specialist so I would invite everyone to submit their questions perhaps via email and we'll try to get to you all as soon as we can.
Terri any final words?
Terri Batch: No they can also send questions to me, terri - T-E-R-R-I .batch - B-A-T-C-H @trade.gov and I will forward them on to either to Bob and his team or to Mac at the IDB. So we're sorry we couldn't get to everyone but we will let - try our best to answer your questions after the call.
Terri Batch: All right thank you everyone.
Bob Jones: Thank you.
Americo Tadeu: Good day.
Bob Jones: Take care. Bye-bye.
Coordinator: This does conclude today's conference. Thank you for attending. You may disconnect at this time.
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