Lugar Calls for “Haitian-American Enterprise Fund”
New Haitian President Supports Initiative
Thursday, May 12, 2011
Senator Richard G. Lugar, the Ranking Republican on the Senate Foreign Relations Committee, yesterday introduced legislation that would lead to the establishment of the “Haitian-American Enterprise Fund,” to focus on strengthening the private sector and promoting job creation in post-earthquake Haiti.
In a recent letter to Senator Lugar, Haitian President-elect Michel Martelly endorsed the creation of an enterprise fund, and pledged that his commitment to attracting additional foreign investments would be demonstrated by enacting long awaited economic reforms.
“Nearly 16 months have passed since the earthquake and too little progress has been realized in Haiti.
USAID and their development partners do important work, but we must ensure U.S. foreign assistance is promoting a culture of democratic capitalism and not dependency. I am encouraged by President-elect Martelly’s pledge to enact reforms that will lead Haiti towards economic growth and self-sufficiency. Congress and the Administration should aide him in this effort by honoring his request for a Haitian-American Enterprise Fund,” Lugar continued.
“The May 14, 2011 inauguration of Mr. Martelly as President of Haiti provides an opportunity to start anew,” Lugar said. “Enterprise funds are not silver bullets. However, at a time when we face significant domestic and global economic challenges, the enterprise fund model, if implemented effectively, provides a cost-effective, proven vehicle by which the U.S. government can leverage the extensive intellectual and financial capital in the American business community in order to help underdeveloped economies such as that of Haiti.”
Last month, at Senator Lugar’s request, six of the most distinguished directors of the former enterprise funds in Eastern Europe and the former Soviet Union traveled to Haiti to evaluate the current status of Haiti’s private sector, the scope of U.S. Government efforts targeting sustainable job creation, and the role, if any, an enterprise fund might play there in promoting economic growth.
Led by Kim Davis, a founder of the private equity firm Charlesbank Capital Partners, each member of the Delegation has had a very successful private sector career and each traveled to Haiti at his or her own expense in order to provide the Congress an experienced perspective as to whether proven economic growth strategies they employed to strengthen other fragile countries might work in Haiti. They were also asked to describe what immediate actions they would recommend, if any, to jump-start Haiti’s private sector, with a particular emphasis on entrepreneurship, and other initiatives that could assist Haiti in its necessary transition to a nation with a middle class and a market economy.
The Haiti Fund is modeled after successful post-Cold War enterprise funds originally introduced by Senator Lugar some 20 years ago.
In 1990, the Polish-American Enterprise Fund was created by Congress with a grant of $240 million for the purpose of providing economic capital to small and medium sized companies. The recently liquidated Polish Fund produced net proceeds of some $370 million and used the original grant to attract more than $2.3 billion to Poland over the next several years. Of this, $120 million was returned to the U.S. Government and the balance contributed to the creation of the Polish Freedom Foundation, which supports educational and civil society initiatives in rural Poland. Similar funds were created in Albania, Hungary, Russia, and the Baltic States – with each experiencing considerable success.
The Delegation’s full report to Senator Lugar, and the above-mentioned letter from Haitian President-elect Martelly are attached.