US embassy cable - 05PORTAUPRINCE1212

UNCLAS SECTION 01 OF 02 PORT AU PRINCE 001212 
 
SIPDIS 
 
STATE FOR WHA/CAR 
WHA/EPSC 
INR/IAA/MAC 
STATE PASS TO AID FOR LAC/CAR 
USDOC FOR 4322/ITA/MAN/WH/OLAC/ (SMITH, S.) 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EIND, EINV, HA 
SUBJECT: Jacmel Crafts Sector: Struggling to Come Back 
 
1.   SUMMARY:  Once touted as a model for growth, Jacmel's 
handcrafts sector has been shrinking for over a decade, 
sharing in the nationwide decline in crafts sales from USD 
20 million to 2 million a year.  All sales channels are 
hurting: tourism is down, many U.S. wholesale buyers are 
sourcing elsewhere, and Haitian items are not very cost- 
competitive in the Caribbean gifts market.  Aid to Artisans, 
an NGO, recently closed its crafts showroom in Jacmel after 
continued losses and reductions in USAID funding.  Despite 
recent initiatives to reinvigorate the sector, no immediate 
turnaround is in sight. Without security to foster tourism 
and trade, cottage industries like handcrafts will continue 
to struggle. END SUMMARY. 
 
Jacmel: the Heart of Haitian Crafts 
----------------------------------- 
 
2.   Jacmel is a sleepy town on the south coast of Haiti, 
with architecture reminiscent of New Orleans and a culture 
of arts and festivals.  Historically, a lucrative coffee 
industry and direct shipping links to Europe fostered a 
wealthy cosmopolitan community that was a haven for artists 
and a magnet for tourists.  Today the town is still renowned 
for colorful Carnival celebrations, driving an annual demand 
for elaborate masks such as those featured at the 2004 
Folklife Festival in Washington.  Although scaled down since 
its heyday, Jacmel remains the heart of Haitian handcrafts, 
especially ornaments of paper mache and painted wood. 
 
Long-term Decline of Tourism 
---------------------------- 
 
3.   Retail sales among Jacmel craft shops are driven by 
tourism, which has long been ailing throughout Haiti due to 
insecurity, negative media image, and poor infrastructure. 
Foreign tourists are now reduced to a trickle of 
missionaries and aid workers -- few in number and on tight 
budgets.  Overseas Haitians are also making fewer visits, 
even during the annual peak of Carnival, because of the 
risks of transiting through the capitol.  The bulk of local 
sales are now to Haitians from Port-au-Prince: a minority of 
these are wholesale orders for gift shops, but mainly they 
are small one-off purchases by individual travelers.  Even 
this limited local trade may be threatened by a recent rash 
of car jacking in Jacmel, which could lose its cachet as a 
peaceful retreat from big-city violence. 
 
Exports Crippled by Embargo 
--------------------------- 
 
4.   Although reliable statistics are hard to find, industry 
observers believe wholesale sales overseas peaked in the 
late 1980's.  Thereafter exporters say that sales were hit 
by the embargo in the early 1990's: shipping became so 
cumbersome via certificates from the U.S. Embassy that 
buyers defected to cheaper, more convenient suppliers in 
other developing countries.  Post-embargo, the challenge is 
to regenerate a U.S. client base.  Gift shows are the 
primary marketing forum for the trade, but the costs of a 
booth, travel, and shipping are prohibitive for small-scale 
Haitian enterprises.  Aid to Artisans (ATA), an NGO, attends 
U.S. and EU shows on their behalf, promoting Haitian items 
alongside those of other developing markets.  Beyond this, 
however, craft makers have not pooled their efforts for 
marketing; they are more competitive than cooperative.  Only 
a handful of businesses still export individually.  The 2004 
Folklife Festival in Washington, DC, held promise in 
showcasing Haitian crafts to U.S. customers; but 
unfortunately it yielded poor sales, reportedly due to a low- 
traffic location off of the main festival path. 
 
Cost Competition in the Caribbean 
--------------------------------- 
 
5.   For the past ten years, as U.S. sales dwindled, some 
Haitian craft exports have shifted to Caribbean retailers 
selling to U.S. and European vacationers.  Sales track the 
U.S. economy and consumer travel; these have been weak in 
the past five years, particularly after the shock of 
September 11.  The sales season is short (December to 
March), with shops tending to under-purchase to minimize 
inventory.  A more serious problem is that Haitian crafts 
are not cost-competitive due to high transport costs and 
Caricom tariffs.  Input costs are also high, since specialty 
materials like paints and lacquer are not made in Haiti and 
must be imported.  Further, the sector is one of small 
workshops making labor-intensive products without the scale 
of Asian competitors.  ATA has landed orders in the 
Caribbean through a concerted combination of shipping 
subsidies, materials supply programs, and proactive 
marketing. 
 
Scaling Back Aid to Artisans 
---------------------------- 
 
6.  Reflecting the fall in tourism, Aid to Artisans closed 
its Jacmel crafts store and showroom in October 2004. 
Opened in 1999 through a USAID grant, it was intended to 
become self-sustaining through sales but never broke even. 
Meanwhile, after investment of more than USD 5 million in 
the crafts sector, USAID reduced its contributions when 
funding for economic growth were cut in 2003-4.  ATA has 
reallocated its resources in Jacmel to sourcing products and 
supporting local retailers in lieu of its own storefront. 
The Port-au-Prince shop has survived through an emergency 
allocation requiring ATA to focus on short-term job creation 
for unskilled youth rather than traditional artisans.  While 
ATA has indeed made strides in increasing product sales, it 
has not achieved the goal of transferring its activities to 
a self-sustaining private sector. 
 
Crafts Fairs: If We Build It, Will They Come? 
--------------------------------------------- 
 
7.  To stem the decline of the crafts sector, one proposal 
is to sponsor arts fairs to attract international buyers 
back to Haiti.  An oft-cited model is a recent event in Port- 
au-Prince promoting products made by tradeswomen (Femmes en 
Production).  This concept is welcomed by the crafts 
community but is problematic: while it would relieve 
artisans of overseas travel costs and visa obstacles, it is 
predicated on the willingness of foreigners to travel to 
Haiti despite security risks and a negative image of the 
country.  It also does not resolve the question of the cost- 
competitiveness of Haitian products. 
 
Arts Centers: A New Hope? 
------------------------- 
 
8.  Two other initiatives aiming to promote a renaissance in 
Haitian arts and crafts are arts centers geared to training 
the next generation of artisans.  Situated in refurbished 
warehouse space, the Sant d'A (Arts Center) comprises two 
adjacent studios, one for crafts and one for fine arts.  The 
aspiration is that the two areas would cross-fertilize, i.e. 
arts innovations would inform new craft designs while 
handcraft revenues would fund training of a new generation 
of artists.  The near-term aim is to house 150 artisans and 
50 artists in five such centers throughout the south of 
Haiti; ultimately the vision is for centers nationwide.  The 
building itself is the contribution of the founder, a London- 
trained Jacmelian artist; the EU and Alliance Francaise have 
provided additional funding. 
 
9.  Similarly, the Sant Kominote Art Kiltirel pou Avansman 
Jacmel (SKAKAJ, or The Community and Cultural Arts Center 
for the Advancement of Jacmel) is a non-profit venture 
founded in 2002 by an American educator living in Jacmel. 
It focuses on artists' creative education and skills 
development, from craft production to marketing methods. 
SKAKAJ is the organizer of upcoming arts expos and street 
fairs to revive interest in Jacmel arts and crafts.  Like 
the Sant d'A, it is still a young venture, yet to show a 
major impact but hopeful to reverse the craft sector's 
decline. 
 
A Rising Security and Economic Tide Lifts All Boats 
--------------------------------------------- ------ 
 
10.  COMMENT: The outlook for the crafts sector will follow 
that of Haiti overall.  Improved security would foster trade 
and tourism, the twin engines of demand, once wholesale 
buyers and vacationers alike are willing to come to Haiti. 
Outreach marketing must also be sustained and even stepped 
up, to generate overseas orders.  At the same time, on the 
supply side a sector that thrived during Haiti's golden age 
of cruise tourism must broadly cut costs, improve 
productivity, and increase product innovation to compete in 
a global crafts market. END COMMENT.