The Political Economy of Haiti’s Textile, Apparel and Food Systems from 1955 to the Present
- Marina Moore
- Jan 23
- 10 min read
The 1955 announcement that the Rockefeller Foundation and the Ford Foundation would jointly finance half the operating costs of a World Bank–affiliated training institute marked a foundational moment in the construction of the post‑war development architecture. Although modest in financial terms, the initiative institutionalised a particular economic worldview within the Bank and across the Global South. The Institute’s purpose was to train planners, economists and public officials in the emerging orthodoxy of development economics: national income accounting, foreign‑exchange gap models, project appraisal, macroeconomic stabilisation and the belief that development required external capital and technical expertise. This intellectual infrastructure, funded by US philanthropic capital and embedded within the World Bank, would later underpin the conditionality regimes imposed on countries such as Haiti (World Bank 1955).
The intellectual project of the 1950s hardened into policy during the 1970s and 1980s. As the IMF and World Bank shifted from project lending to structural adjustment, the doctrines taught in the 1955 Institute became the basis for mandatory reforms. Trade liberalisation, currency devaluation, fiscal austerity and privatisation were presented as technical necessities rather than political choices. Haiti, already constrained by a narrow export base and a fragile state, became one of the most extreme test cases of this model. The dismantling of tariff protections, the removal of state support for domestic producers and the opening of markets to subsidised imports were justified through the very analytical tools the Bank had spent decades disseminating (Dupuy 2010).
The consequences were most visible in the food system. Under pressure from the IMF, World Bank and US government, Haiti reduced its rice tariff from around 35 per cent to 3 per cent in the mid‑1990s. This reform aligned with US agricultural interests, particularly those of Arkansas rice producers. President Bill Clinton supported the policy during his administration and later acknowledged that it “may have been good for some of my farmers in Arkansas, but it has not worked”
for Haiti, describing it as a mistake that destroyed domestic rice production (Clinton 2010). The mechanism was straightforward: heavily subsidised US rice entered Haiti at prices local farmers could not match, leading to the collapse of domestic production, mass rural displacement and long‑term dependence on imported food. Haiti, once capable of meeting much of its own rice demand, became one of the world’s most import‑dependent countries for its staple grain. When global food prices rose, Haitian households faced immediate hardship because the country had lost the capacity to buffer external shocks.
A parallel dynamic unfolded in the textile and apparel sector. From the 1970s onward, Haiti was encouraged to specialise in low‑wage assembly for US brands. This model intensified under Clinton‑era and post‑Clinton trade legislation, particularly the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act and the Haiti Economic Lift Program (HELP). These programmes granted duty‑free access to the US market for garments assembled in Haiti, even when the fabric and most inputs were imported. The rules of origin were crafted to integrate Haiti into US‑controlled supply chains, ensuring that the highest‑value activities—fabric production, design, branding and distribution—remained offshore (USTR 2015). Haiti’s role was confined to labour‑intensive assembly, justified by the claim that low wages would attract investment and generate employment.
The export‑processing zones created under HOPE/HELP were structured around extensive tax advantages. Firms received exemptions from corporate income tax, duty‑free import of machinery and inputs, and relaxed labour and environmental enforcement. These incentives produced significant leakages. Profits were largely repatriated to foreign parent companies; machinery, fabric and management services were imported, meaning that most of the value embodied in Haitian exports originated elsewhere; and the Haitian state captured little fiscal revenue because of the tax exemptions. The zones functioned as enclaves, spatially and economically disconnected from the broader economy, with limited backward linkages and minimal technology transfer (Schuller 2016).
For Haitian workers, the model translated into a structural mismatch between wages and the cost of living. Minimum wages in the garment sector have consistently fallen below the level required to meet basic needs. Workers’ earnings are spent primarily on food, rent and transport, yet the price of food is shaped by the very trade liberalisation that destroyed domestic agriculture.Because Haiti imports most of its rice, wheat, cooking oil and other staples, global price fluctuations and currency depreciation directly raise household costs. The same system that relies on Haitian labour to produce cheap garments for US consumers simultaneously forces those workers to purchase imported food at prices they cannot control. The result is a closed circuit of extraction: rural livelihoods are undermined by subsidised US rice; displaced workers enter low‑wage garment factories; their labour produces low‑cost clothing for the US market; and their wages are spent on imported food whose price is determined by external actors.
This dynamic reflects the deeper continuity between the 1955 Institute and contemporary trade regimes. The development paradigm funded by Rockefeller and Ford and operationalised by the World Bank created an intellectual environment in which external dependency was normalised, and domestic productive capacity was undervalued. Clinton’s rice and apparel policies were not deviations from this paradigm but its logical extension. Haiti’s food insecurity, de‑industrialisation, fiscal fragility and low‑wage export dependence are outcomes of a system designed to integrate the country into global markets on terms that favour foreign capital and consumers rather than domestic development.
The cumulative effect is a political economy in which Haiti’s sovereignty over its food system, industrial strategy and labour market has been systematically eroded. The country’s textile and apparel sector generates employment but captures little value; its food system feeds the population but depends on volatile imports; and its fiscal system supports export zones but receives limited revenue from them. The intellectual origins of this model lie in the mid‑century development institutions that framed external expertise and foreign capital as the engines of progress. The lived reality in Haiti demonstrates the profound asymmetries embedded in that vision.
Leakage map of Haiti’s textile, apparel and food systems
Haiti’s economy leaks value at almost every node of its textile, apparel and food chains. The first and deepest leak is in food production, especially rice. Under IMF, World Bank and US pressure, Haiti slashed its rice tariffs in the 1980s and 1990s, opening the market to heavily subsidised US rice. Domestic producers, lacking comparable subsidies, infrastructure and credit, could not compete. As local rice production collapsed, Haiti became structurally dependent on imported rice for basic caloric intake. Every shipload of US rice represents not only an outflow of foreign exchange but also the loss of potential domestic value creation in farming, milling, storage, transport and input supply. The leak is therefore both financial and structural: money flows out to pay for imports, and the domestic productive base that could have retained that value has been dismantled.
A second leak runs through the apparel export model. Haiti’s garment sector is organised around export‑processing zones that assemble clothing for US brands under preferential trade schemes such as HOPE and HELP. The value chain is designed so that the highest‑value activities—fabric production, design, branding, marketing and logistics—are located outside Haiti. Fabrics and trims are imported; designs and orders are controlled by foreign buyers; and finished garments are shipped directly to the US. Haiti captures only the narrow slice of value associated with cut‑and‑sew labour and some local services. Profits are largely repatriated to foreign owners, and the imported inputs embody value created elsewhere. The export figures look impressive in gross terms, but the net retained value is small because so much of the chain is external.
A third leak is fiscal. Export‑processing zones and foreign investors benefit from extensive tax holidays, duty exemptions and relaxed regulatory regimes. The Haitian state provides infrastructure, security and administrative support but collects little in corporate income tax or customs revenue from these operations. At the same time, the state’s capacity to tax wealth and high incomes more broadly is weak, in part because of political resistance from domestic elites aligned with external interests. The result is a chronic fiscal gap: the sectors most celebrated as “engines of growth” contribute relatively little to the public purse, forcing the state to rely on regressive consumption taxes, external aid and debt.
A fourth leak is in wages and the cost of living. Garment workers earn wages that are widely documented as insufficient to cover basic needs. Because Haiti imports most of its food, fuel and manufactured goods, workers’ wages quickly flow out of the country through the purchase of imported products. When the gourde depreciates, the local price of these imports rises, eroding real wages. The domestic multiplier effect of each wage dollar is therefore weak: it circulates briefly in local markets but ultimately exits via the trade deficit. Low wages, which are justified as necessary for competitiveness, thus become a mechanism for exporting value rather than retaining it.
A fifth leak is institutional and political. Decades of structural adjustment, aid dependence and NGO‑isation have hollowed out state capacity. Key functions—service delivery, project implementation, even elements of policy design—are outsourced to international agencies and NGOs. This creates a parallel governance system in which decisions about priorities and resource allocation are made outside democratic structures. The leak here is one of policy sovereignty and institutional learning: the state is prevented from building the capabilities that would allow it to design and implement its own industrial and social strategies, and the knowledge generated by projects often resides in external organisations rather than in Haitian institutions.
A sixth leak is intellectual and cultural. Development doctrine, trade policy and industrial strategy have been heavily influenced by external actors, from the World Bank and IMF to bilateral donors and US trade negotiators. Haitian policy elites are often trained in institutions funded by the same philanthropic and multilateral actors that designed the liberalisation agenda. This creates an epistemic dependency: the frameworks used to think about development are imported, and alternative paradigms rooted in Haitian history, peasant movements and labour struggles are marginalised. The leak here is of imagination and narrative power, which in turn shapes what policies are considered “realistic.”
Taken together, these leaks form a system in which Haiti is locked into a role as a provider of cheap labour and a consumer of imported food and goods, with limited fiscal capacity, weak state institutions and constrained policy space. The country’s productive potential is systematically undercut, and the value generated by Haitian land and labour is captured elsewhere.
Policy alternative grounded in industrial sovereignty
An industrial‑sovereignty alternative for Haiti has to start from the opposite premise of the current model. Instead of asking how Haiti can be made attractive to foreign capital seeking low‑cost labour and lax regulation, it asks how Haitian land, labour, knowledge and institutions can be organised to meet domestic needs first, while engaging with external markets on negotiated, conditional terms. This does not mean autarky, but it does mean re‑centring food security, domestic value chains and democratic control over key economic levers.
The first axis is food sovereignty, with rice at its core. Rebuilding domestic rice production requires a phased reintroduction of protective tariffs and non‑tariff measures, combined with serious investment in irrigation, storage, rural roads, credit and farmer organisations. Tariff policy cannot simply be flipped overnight without risking urban food insecurity, but it can be sequenced: gradual increases in rice tariffs, targeted subsidies or vouchers for low‑income consumers, and public procurement programmes that buy Haitian rice for schools, hospitals and social programmes. The goal is to create a stable, predictable demand for domestic rice at remunerative prices, allowing farmers to invest and rebuild capacity. Over time, as domestic production rises, reliance on US imports can fall, and the foreign exchange currently spent on rice can be redirected to capital goods and strategic imports.
The second axis is a reorientation of the apparel sector from enclave export platform to domestically embedded industry. This means renegotiating the terms of HOPE/HELP and similar schemes to include stronger local‑content, wage and fiscal‑contribution requirements, and being willing to lose some footloose investors if they are unwilling to operate under those conditions. Haiti can prioritise firms that commit to higher wages, local sourcing where feasible, training and promotion of Haitian workers into technical and managerial roles, and partial local ownership. At the same time, the state can use public procurement and domestic market development to support a parallel garment sector oriented toward Haitian consumers and regional markets, producing school uniforms, workwear and everyday clothing. This dual strategy reduces dependence on a single, externally controlled export niche and begins to build a more diversified industrial base.
The third axis is fiscal and financial sovereignty. Haiti needs to reverse the logic of tax incentives that give away more than they attract. This involves conducting transparent cost–benefit analyses of existing exemptions, phasing out those that do not deliver clear, measurable gains in domestic value retention, and strengthening tax administration to reduce evasion and avoidance by both foreign and domestic elites. On the expenditure side, public resources should be directed toward infrastructure and services that support domestic production—rural electrification, ports and roads that connect producers to markets, vocational training—rather than toward projects primarily designed to satisfy donor priorities. Over time, a stronger domestic tax base reduces dependence on external aid and increases the state’s bargaining power in negotiations with investors and creditors.
The fourth axis is institutional reconstruction. Industrial sovereignty requires a state capable of designing, implementing and enforcing policy. That means investing in public administration, planning, statistical capacity and regulatory agencies, and doing so in a way that is insulated as far as possible from partisan patronage and external capture. International support, where accepted, should be channelled through Haitian institutions rather than parallel project units, with explicit plans for knowledge transfer and handover. The aim is to reverse the NGO‑isation of governance and rebuild a public sector that can coordinate industrial, agricultural, trade and social policy in a coherent way.
The fifth axis is labour and social policy. Raising wages in the garment sector and beyond is not just a matter of justice; it is a macroeconomic strategy. Higher wages increase domestic demand for locally produced goods and services, strengthening the internal market and making domestic production more viable. To avoid simply driving firms out, wage increases must be paired with productivity‑enhancing investments and with trade and industrial policies that protect and nurture domestic producers. Social protection—healthcare, education, housing support—reduces the vulnerability that forces workers to accept any wage at any cost, and it builds the human capabilities that underpin long‑term development.
The sixth axis is epistemic and cultural sovereignty. Haiti has rich traditions of organising, cooperative economics and anti‑imperial thought. An industrial‑sovereignty project would bring those traditions into conversation with contemporary industrial policy debates, rather than treating external blueprints as the only source of expertise. Universities, unions, organisations and women’s movements can be central actors in defining development priorities. This is not a soft add‑on; it is a way of ensuring that policy is grounded in Haitian realities and accountable to Haitian constituencies, rather than to donors and foreign investors.
None of this is easy in a context of political instability, insecurity and external pressure. But the leakage map makes clear that the status quo is not neutral or inevitable; it is the product of specific choices and power relations. An industrial‑sovereignty alternative would not eliminate all leaks—no open economy can—but it would change their direction and scale. Instead of land and labour being organised primarily to supply cheap food and clothing to the United States, they would be organised first to feed, clothe and employ Haitians on dignified terms, with external trade and investment serving that project rather than defining it.
References
Clinton, W.J. (2010) Testimony before the US Senate Committee on Foreign Relations, 10 March.
Dupuy, A. (2010) Haiti: From Revolutionary Slaves to Powerless Citizens. New York: Routledge.
Schuller, M. (2016) Humanitarian Aftershocks in Haiti. New Brunswick: Rutgers University Press.
USTR (2015) HOPE/HELP Trade Preference Programmes: Eighth Annual Report. Washington, DC: Office of the United States Trade Representative.
World Bank (1955) Press Release No. 419. International Bank for Reconstruction and Development.
Democracy Now, 11 October 2016. “Bill Clinton’s Trade Policies Destroyed Haitian Rice Farming, Now Haiti Faces Post-Hurricane Famine”.
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