Opening a business in a specific country requires consideration of various factors, which will determine the success or failure of the business in future. The investor should conduct a research study to assess the situation regarding the market availability, political stability, legal requirements, amount of taxes, treatment of foreign investors, availability of labor, the status of infrastructure, and many other factors. Such factors will determine the final decisions whether to invest in the country or consider moving to another country ( Perutka, Balaban, & Herman, 2018 ). Competition is another important factor, which should be considered in the country one is anticipating to establish a business. In in the case of competition, one should consider the prices of the products, which will enable the investor to determine the prices that products will be sold and whether the business will make a profit or a loss. Throughout this essay, I will consider such factors while anticipating to establish shoe manufacturing firm in Haiti.
Haiti is a unitary semi-presidential republic where the prime minister heads the government while the president is the head of state. The state, as well as the government set up, shows that the president is ceremonial as the prime minister is powerful than the president ( The World Fact Book (n.d.) . Political stability in Haiti has been considered unstable for many years due to frequent conflicts and organized coups against the government. The recently organized coup was experienced in 2004 against the president Jean-Bertrand Aristide ( Gasseling, 2017 ). The coup was organized with the help of the US and French governments, as the soldiers from the two countries were on the ground when the coup was perpetuated. It is difficult to establish and operate a business in such political environment, as losses will be incurred due to destructions, poor economic status, and lack of customers. With the election of the first president in 2006, the reports indicate that Haiti has improved but still under the category of fragile states.
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Haiti is open to Foreign Direct Investment (FDI). The country considered being open to FDI as a strategy to improve its economic status, create employment, and address the poverty problem. FDI reached $ 160million in 2013, where the inflows stood at $104.4 in 2016, which was slightly lower than that of 2015 at $105.7 million ( The World Fact Book (n.d.) . Haiti’s currency was fluctuating between 1991 and 2000. Comparing gourde as the official exchange rate in Haiti with the US dollar was 7.5% in 1991, 16.2% in 1995, and 22.5% in 2000. During this period, the cost of imported goods had increased drastically due to poorest sectors in Haiti ( The World Fact Book (n.d.) . Inflation was very high in the 1990s that it reached 39.3% in 1994 but to was later reduced to 15.4% in 1998 and has been stable up to date ( Perutka, Balaban, & Herman, 2018 ). With the currency and inflation being stable, one can establish a business without any challenge.
It is important to assess the general demographics regarding the ethnic groups, population growth rate, and the population sizes in the urban areas, as it will determine the market of the shoe products. The ethnic groups in Haiti are black, mulatto, and the white. The black is the major ethnic group consisting of 95% while the mulatto and the whites share the remaining 5%. The official languages spoken are French and Creole ( Mugendi, 2017 ). Establishing a business in such environment will be stable as there are minimal ethnic conflicts considering that only three ethnic groups are available. The language barrier will not be a major problem as the only two languages can be learned and used in the market. The population growth rate stands at 1.34 %, the birth rate is 23 births/1000 population, and the death rate is 7.6 deaths/1000 population as per the reports of 2017. The major urban area is Port-Au-Prince which is the capital with 2.44 million people as per the reports of 2015 ( The World Fact Book (n.d.) . Most of the people are living in the coastal areas as they are focused water for irrigation with agriculture the major economic activity in the country.
In the reports of 2017, the urban population was 60.9% of the total population while the anticipated urbanization growth rate between 2015 and 2020 was 2.93% ( The World Fact Book (n.d.) . As Haiti is reported to be the poorest country in the Western Hemisphere, education attainment is a challenge to its citizens. Most of the people employed to undertake the white-collar jobs come from outside the country especially the US and France ( Gasseling, 2017 ). The labor force in Haiti stands at 4.594 million where the most of them are the unskilled labor due to lack of education. The labor force is divided into three groups; agriculture 38.1%, industry 11.5%, and services 50.4% but the lack of sufficient qualified labor is a challenge ( The World Fact Book (n.d.) . The unemployment rate is higher standing at 40.6% with two-thirds of the labor force living without formal jobs.
The current GDP as per the 2017 reports is $8.3 billion with its growth rate fluctuating since 2015; 1.2% in 2015, 1.4% in 2016, and 1% in 2017. The GPD using the Purchasing Power Parity (PPP) has been at $ 1800 since 2015 ( The World Fact Book (n.d.) . The inflation rate based on the consumer prices was 13.4% in 2016 and 14.7% in 2017 ( Mugendi, 2017 ). The current exchange rate has been increasing since 2013 considering the comparison of Gourdes (HTG) with the US dollar. It was 45.22 in 2013, 50.71 in 2014, 63.34 in 2015, 63.34 in 2016, and 65.21 in 2017 ( The World Fact Book (n.d.) .
The major industries in Haiti are textile, cement, flour milling, sugar refining, and light assembling. Light assembling uses the parts imported from other countries. The industrial production rate stands at 4% as per the reports of 2017. One air carrier is registered, one registered inventory aircraft, fourteen airports, four paved runways, ten unpaved runways, 4266 km roadways with 768 km paved and 3498 km unpaved, and four merchant marines ( Perutka, Balaban, & Herman, 2018 ).
The major imports to Haiti are fuels, raw materials, manufacturing goods, food, machinery, and transport equipment. The imports to $3.183 billion in 2016 and $3.621 billion in 2017. The major exports outside Haiti are mangoes, oils, coffee, cocoa, apparel, and manufactures ( Gasseling, 2017 ). The major exports as per the reports of 2016 were the US with 80.8% and the Dominican Republic with 5.1% while my immediate competitors include JL Fine Shoes and TOMS since they produce shoe products both local market and international market. TOMS is the major competitor in the industry as it has well established economic and financial base being The US owned company.
After conducting an extensive analysis, the information will help in determining the best strategy to apply when establishing shoe manufacturing industry in Haiti. The major areas of concentration will be financial resources, market, taxes, labor availability, and competitors offering the same products in the market ( Mugendi, 2017 ).
References
Gasseling, K. (2017). The Threads of Justice: Economic Liberalization and the Secondhand Clothing Trade between the United States and Haiti. BCL Rev. , 58 , 1279.
Mugendi, D. (2017). Corporate social responsibility at TOMS shoes.
Perutka, L., Balaban, M., & Herman, J. (2018). The presence of the Baťa Shoe Company in Central America and the Caribbean in the Interwar period. América Latina en la Historia Económica .
The World Fact Book (n.d.). https://www.cia.gov/library/publications/the-world-factbook/geos/ha.html
