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Is it easier to start an NGO than a business in Haiti?

From today’s NYT:

Alain Armand, 36, a Haitian-American lawyer from Fort Lauderdale, Fla., who is now trying to open several businesses here in Port-au-Prince, the capital, including a bed and breakfast.

Trying is the operative word, he said: “It costs $3,000, and it takes at least three months to get incorporated. There is no organized structure in which we, outsiders to NGO-land, can operate.”

Meanwhile, one list for Haiti lists 822 NGOs operating.

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10 Comments

  1. Dan Kyba wrote:

    What he is saying is nothing new; it is not just the red tape issues ala de Soto, there is cash flow. Starting and successfully operating a MSME is bloody hard work especially when you have extended family and social obligations. If you form a local NGO or CSO and act as the local stake holder (e.g. representing ‘the poor’) for an international NGO, the money can come easier.
    It gets even more bizarre when you have NGOs promoting MSME and other entrepreneurship programmes but whose administrators have no private sector experience and will subscribe to beliefs that undermine the very programme they are administrating. A common example is the misuse of the term ‘exploit’ which is taken to mean: if you are rich, it is because you made someone else poor. This idea of a fixed amount of wealth in a market economy is a continuation of the bag of jobs fallacy.

    Posted May 30, 2010 at 1:26 pm | Permalink
  2. terence wrote:

    And your point is? That international NGOs are to blame for this?

    For what it’s worth, in much of the developing world it is every bit as hard (i.e. far too hard) to set up a locally registered NGO as it is a for-profit business.

    Posted May 30, 2010 at 6:15 pm | Permalink
  3. Daniel O'Neil wrote:

    It took me around 12 months and the services of a lawyer when I registered an international NGO in Haiti. Note that many of the NGOs in Haiti are not fully registered (just as many small businesses are not fully registered either).

    Posted May 30, 2010 at 6:37 pm | Permalink
  4. Robert Tulip wrote:

    If NGOs focussed on improving the investment climate in Haiti they would do much more to reduce poverty than they will with their dinky charity projects. The problem is that NGOs care more about the left wing prejudices of their supporters than about achieving results. Doing Business indicators are a useful organising framework for effective sustainable development, setting a strategic vision grounded in economic reality.

    Posted May 30, 2010 at 7:32 pm | Permalink
  5. terence wrote:

    “If NGOs focussed on improving the investment climate…”

    Excellent point Robert! You should set one up; you could call it, oh, I don’t know, Transparency International, or something like that.

    Posted May 30, 2010 at 8:06 pm | Permalink
  6. Rising Tides wrote:

    Rest of the NYT article talks about how slow government response has been in basic services or planning – picking up rubble or trash to help clear the city, for example. Remarkable that there are not the resources to get the streets clean(er), but there is still somehow the time for bureaucracy and red tape.

    Posted May 30, 2010 at 8:35 pm | Permalink
  7. Robert Tulip wrote:

    Thanks Terence. Even better, donor countries could coordinate and harmonise to support effective private sector development, beyond the issue of bribery and corruption. They could maybe call it, I dunno, the World Bank, or the International Finance Corporation, or perhaps the Foreign Investment Advisory Service. Wouldn’t the charities just love that!

    Posted May 30, 2010 at 10:26 pm | Permalink
  8. aki wrote:

    I’m afraid that it might be quite easy to make an NGO then a real business not only in Haiti. I’m taking as an example East Europe. After the fall of communism thousands of NGOs came eager to help, other probably with some different intentions. To establish an NGO you need practically to register it and then around 6 more steps to do depends also of your activity. the idea is it was much more profitable to build an NGO then a business. I think one should just check World Bank and see how many papers you need for a business. After that you should number how many offices you should go which will also represent the number of “gifts” you should make to take the papers you need.
    Then behind some NGO local and international entire businesses started to develop. Bringing cars from outside under the NGO name without taxes, adoption businesses, even agricultural business that is far from being in favor of the locals etc. The consequence? the political parties used the non profit sector mistakes to present them as the source of evil. Today in Romania an NGO has less credibility then the parties which means is somewhere at the bottom of the list. The chaos in the NGO sector did jeopardize many good actions that had nothing to do with all the situation.

    Posted June 4, 2010 at 12:43 am | Permalink
  9. Katie McKenna wrote:

    This American Life used the figure of 10,000 NGOs in Haiti pre-quake. I wonder how they came to such a different figure than the one quoted above? If anything, you’d think it would be higher now: http://www.thisamericanlife.org/radio-archives/episode/408/island-time

    Posted June 7, 2010 at 12:16 pm | Permalink
  10. Recovery wrote:

    If NGOs focussed on improving the investment climate in Haiti they would do much more to reduce poverty than they will with their dinky charity projects. After the fall of communism thousands of NGOs came eager to help, other probably with some different intentions. To establish an NGO you need practically to register it and then around 6 more steps to do depends also of your activity. the idea is it was much more profitable to build an NGO then a business. I think one should just check World Bank and see how many papers you need for a business. After that you should number how many offices you should go which will also represent the number of “gifts” you should make to take the papers you need.
    Then behind some NGO local and international entire businesses started to develop. Bringing cars from outside under the NGO name without taxes, adoption businesses, even agricultural business that is far from being in favor of the locals etc. The consequence? the political parties used the non profit sector mistakes to present them as the source of evil. Today in Romania an NGO has less credibility then the parties which means is somewhere at the bottom of the list. The chaos in the NGO sector did jeopardize many good actions that had nothing to do with all the situation.

    Posted June 8, 2010 at 7:22 am | Permalink

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  3. By Rightwing Links (June 3, 2010) on June 3, 2010 at 6:17 pm

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