The first of two installments looking at the New York Times in depth investigation into the Caracol industrial park. Part two will be posted shortly.

Deborah Sontag, writing in today’s New York Times, takes a detailed look at the new Caracol industrial park being built in northeastern Haiti, finding that in their rush to show reconstruction progress the plan’s backers have overlooked labor and environmental concerns. Sontag writes:

Two and a half years after the earthquake, Haiti remains mired in a humanitarian crisis, with 390,000 people languishing in tents. Yet the showcase project of the reconstruction effort is this: an industrial park that will create jobs and housing in an area undamaged by the temblor, a venture that risks benefiting foreign companies more than Haiti itself.

The park, whose main tenant Sae-A expects to generate some 20,000 jobs over the next six years, has been made possible by generous subsidies from the U.S. and Haitian governments and the Inter-American Development Bank (IDB). Sae-A officials were invited to the U.S. embassy in Seoul to meet with Secretary of State Clinton in 2010. One concern the company had at the time was “uncertainty about whether Haiti’s minimum wage for textile workers, scheduled to increase to $5 from $3.75 a day this October, would continue to rise.” Wikileaks cables later revealed that the U.S. embassy in Haiti, along with some multinational companies had “aggressively moved to block a minimum wage increase for Haitian assembly zone workers,” according to The Nation.  While the minimum wage has increased, 18 out of 20 factories monitored by the Better Work Haiti program were found to be non-compliant on the minimum wage in their most recent assessment published in April.

Despite the “obstacles,” and convinced by legislation providing tariff-free access to the U.S. market, Sae-A officials were soon heading to sign an agreement -- but not in Haiti, in Washington:

By late summer, they were flying with their investment plan to Washington for a meeting with Mrs. Clinton and other international officials in a historic treaty-signing room on the State Department’s seventh floor.

While Sae-A originally estimated the project would create 3,000-4,000 jobs, American and international officials wanted more:

“We would say, ‘We could probably do a factory with about 3,000 to 4,000 people.’ They’re like, ‘Wow. What would you need to make it bigger?’ I [Lon Garwood, senior advisor to Sae-A] said, ‘If we could get a loan for the machines, we could probably double that.’ They said, ‘What about 10,000?’ We said, ‘If we didn’t have to worry about purchasing the land, if we didn’t have to build the factory shells, then we could double it again.’ That’s where the 20,000 jobs figure came from.”

In the end, the land was provided free of charge by the Haitian government (evicting some 350 farmers in the process), the IDB agreed to provide $100 million to finance the building, while the U.S. would contribute $124 million for a power plant, housing and a port. Sae-A, which reported $1.1 billion in export business last year, only needs to invest $39.2 million. The $124 million provided by the U.S. is over a quarter of the money the U.S. earmarked for reconstruction. 

In January, we asked our friends and supporters to pledge a donation to CEPR for every time the Washington Post, New York Times, Wall Street Journal and National Public Radio reported that eurozone countries are facing sovereign debt crises because of a pattern of profligate spending that led to unsustainable deficits. We figured that if the reporters couldn’t be counted on to get the story straight, at least CEPR could earn some much needed revenue from their inaccuracies.

The results are in, and the four media sources misrepresented the cause of the eurozone crisis a total of 57 times from February through June.  The individual totals are as follows:

New York Times – 23
Washington Post – 21
Wall Street Journal – 8
NPR – 5

July 6, 2012

July 6, 2012 (Jobs Byte)

Mark WeisbrotSacramento Bee (CA), July 5, 2012McClatchy-Tribune Information Services, July 5, 2012Bellingham Herald (WA), July 5, 2012Bradenton Herald (FL), July 5, 2012Hanover Evening Sun (PA), July 5, 2012Janesville Gazette (WI), July 5, 2012West Hawaii

Mark WeisbrotThe New York Times, 2 de julio, 2012En Inglés

Dean Baker
The Guardian Unlimited, July 3, 2012

Mark WeisbrotThe New York Times, July 2, 2012En Español

David Brooks devotes his column today to telling the Republicans that if they don't like Obamacare then they will have to have with an alternative to the one that President Obama and Governor Romney developed. His preferred alternative is a plan that appears in the conservative journal National Affairs.

It's not worth going through all the details, but the essential line in the story is that if we all had individual policies somehow the market will constrain health care costs. The plan would look to move quickly in this direction by replacing the tax preference for firms with less than 200 employers with an individual tax credit. This would add tens of millions of people to the individual market. 

The plan would also dissolve Medicaid. Medicaid beneficiaries would get a tax credit just like anyone else, with states deciding how much they would add to the federal credit. In principle, this would add even more people to the individual market.

The faith in the individual market is striking since we already have a large individual market today and it works horribly. The authors apparently believe that the heavy hand of stronger government regulation combined with a larger market will somehow make the individual market work. The authors key regulation is that insurers would be required to issue policies to all applicants and to charge them a uniform rate regardless of their health status. This would apply to anyone who maintained continuous coverage.

I always like to play the Dean Baker gaming game. Let's see if we can get around this restriction. Suppose we have Joe's insurance that charges a very low fee and provides coupons for restaurants and gym clubs to its beneficiaries. Healthy people can buy into Joe's insurance and get most of their premiums rebated to them in its savings on restaurant meals and gyms, with Joe keeping the rest for his profit.

Mark WeisbrotThe Guardian Unlimited, 29 de junio, 2012En Inglés

Last week, the International Organization for Migration (IOM) announced a drop in Haiti’s internally displaced persons (IDP) population to below 400,000. AP reports:

The reduction in the camp population is attributed to a combination of forced removals, rental subsidies and voluntary departures, but it is not clear where the bulk of the people have gone or if their living arrangements are better than the camp conditions.

While previous reports of IDP population decreases were held up uncritically as signs of progress, this time IOM spokesperson Leonard Doyle provided a more nuanced response. While the government-backed relocation efforts have only reached a small portion of the IDP population, Doyle notes that “As for the rest we don't know [where they ended up],” adding, “[a] lot of these people we know have pitched tents on the side of the mountains.” Indeed, a simple look at the available numbers suggests that many of those that have left the IDP camps monitored by the IOM have not found adequate shelter.

The IOM touts a 75 percent reduction in the camp population since July 2010, amounting to a decrease of over 1.1 million people. Yet as of April 2012, only 12,000 rental subsidies were given out, 13,000 houses were repaired and just fewer than 5,000 new homes were constructed. In total, these three solutions account for only about 12 percent of the reduction in IDP population. Additionally, about 108,000 transitional shelters have been built, which would account for an additional 42 percent. However this likely overstates the effects of the transitional shelter, as it is estimated that only about 40 percent of transitional shelters actually went to IDPs.

Figure I compares the number of households exiting the camps with the number of new housing solutions completed. As can be seen, the majority of the IDP population decrease occurred when shelter implementation was far too low to absorb all the people exiting the camps. This backs up previous studies which have shown that forced evictions and declining services were the primary drivers of the reduction in IDP population.

Figure I.

Graph: CEPR, Author's Calculation Source: E-Shelter and CCCM Cluster

Dean Baker
Truthout, July 2, 2012