Low Income Developing Country (LIDC)

MACROECONOMIC DEVELOPMENTS IN LIDCS: 2014 REPORT by the International Monetary Fund examining 11 States, including Haiti.

 

Box 1. Falling Behind

While most LIDCs have recorded sustained growth since 2000, there is a sizeable group of countries (almost one-fifth of the total) that did not record any increase in output per capita over the period.

 

The weak performance occurred across several macro and structural indicators. Over 2000–13, these 11 countries have been less successful in reducing inflation, attracting FDI, developing the financial markets, and improving social indicators, such as the level of educational attainment.

 

A common feature to all countries in the group is that they are fragile states—countries either with very weak institutions or significantly affected by conflict over the period. The role of fragility in hampering growth is easy to understand in countries affected by sustained internal conflict and political instability over an extended period (such as Côte d’Ivoire, Guinea-Bissau, Comoros, and Yemen). Natural disasters, such as the massive 2010 earthquake in Haiti, result in loss of life, can account for sizeable shocks to output, and have persistent effects. Over the long-term, however, weak institutions and recurrent political instability play a key role in explaining Haiti’s weak performance as the poorest country in the Western Hemisphere. But a review of the country listing shows that bad policy choices, unlinked to fragility, can also produce income contraction over time, as in Zimbabwe (which experienced hyperinflation) and Eritrea (a tightly regulated/controlled economy).

____________________
1 In terms of total GDP growth, all 11 countries had average growth rates in the bottom quartile of the LIDC group (less than 3.5 percent).

Macroeconomic Developments in Low-Income Developing Countries

Africa Renewal, a website created by Africa Section, Strategic Communications Division, Department of Public Information of the United Nations interviewed Amadou Sy, Director of the Africa Growth Institute at the Brookings Institution.

Sy mentions in the interview the International Monetary Funds article Macroeconomic Developments in Low-Income Developing Countries, “which examines what countries are doing, case by case, and it has looked at only six countries: Djibouti, Kenya, Mozambique, Ghana, Haiti and Honduras.”

Haiti Wages

Someone got paid about 4 dollars a day in Haiti to make your Gildan shirt.
Haiti is one of many countries to establish a minimum wage that varies across employment sectors, with different daily rates established for domestic workers, electricians, bank employees, and other professions.
“As opposed to the bulk of Gildan’s operations, which are vertically integrated, sewing operations in Haiti are subcontracted by Gildan to third parties. Therefore, to address the concerns which were raised regarding the issue of minimum wages in Haiti, Gildan made a commitment in November 2013 to require its third party contractors in the country to comply with the payment of 300 gourdes per day in an eight hour work day to their piece rate workers, based on the expectation that they continue to operate at a reasonable efficiency rate.”