Clarke Asks President Obama to Establish a Haitian Enterprise Development Fund

Today, Congresswoman Yvette D. Clarke attended the White House Rose Garden ceremony with Haitian President René Préval and President Barack Obama. President Préval addressed the nation after meeting with President Obama on the crisis in Haiti and the American response in the aftermath of the earthquake.

“I am thankful for President Obama’s commitment to helping Haiti through their relief efforts as the country continues to recover. This was one of the worst disasters in Haiti’s history,” stated Rep. Clarke.

Today, Congresswoman Yvette D. Clarke sent a letter to President Obama requesting that he create a Haitian Enterprise Development Fund through executive order.

“After returning from a trip to Haiti last week and witnessing the destruction firsthand, it is clear that we must develop a long term strategy to cultivate lasting stability in Haiti,” stated Rep. Clarke. “That is why we need to create a Haitian Enterprise Development Fund (HEDF), which would make investments in Haiti’s private sector and foster economic stability and job creation.”

Enterprise Development Funds, established by the U.S. Congress in 1989, are modeled after private equity and venture capital funds and financed by U.S. foreign aid dollars. The purpose of Enterprise Development Funds is to encourage sustainable economic development through loans and equity investments in small-medium sized indigenous businesses in countries where such funding is unreliable or inaccessible.

“It is imperative that we act now to establish a Haitian Enterprise Development Fund. I want to thank former United Nations Ambassador Andrew Young for making this suggestion in the February 5, 2010 issue of Politico,” said Rep. Clarke.

“I look forward to working closely with the Obama Administration, Haitian President René Préval, and former U.N. Ambassador Young on this endeavor and similar solutions for Haiti,” concluded Rep. Clarke.

Text of letter sent to President Barack Obama, Secretary of State Hillary Clinton, and USAID Administrator Rajiv Shah follows:

March 10, 2010

President Barack Obama
The White House
West Wing
1600 Pennsylvania Avenue, NW
Washington, DC 20502

Dear Mr. President,

I am writing to urge you to issue an executive order to create a Haitian Enterprise Development Fund.

I commend you and your entire Administration on your efforts to support the Haitian people since January 12, 2010. In the aftermath of the massive earthquake, resources have been directed toward immediate rescue and relief. As we seek to develop long term recovery initiatives in Haiti, we must focus on economic development. It is vital that we help Haitian citizens establish the institutions which will foster job creation and sustainable wealth.

Spurring economic development will require a robust toolkit. History has taught us that the Enterprise Development Fund model is an extremely effective tool for fostering growth in recovering nations. Enterprise Development Funds have the unique purpose of encouraging sustainable economic development through loans and equity investments in small and medium-sized indigenous businesses. These investments have proven crucial because these firms operate in countries where such funding is unreliable or inaccessible. The Funds are operated by independent boards of talented and committed business people. In addition to supplying sorely needed financing, the experienced investors working for an enterprise fund also provide extensive technical assistance to entrepreneurs, maximizing business success, and return on investment dollars.

These Funds have helped transform former command economies into healthy free market economies. The combination of public aid funding with private sector participants’ skill and experience has encouraged job growth and economic stability. According to the University of California San Diego’s Beyster Institute, Enterprise Development Funds have invested more than $1.5 billion in more than 100,000 companies, in areas covering 18 countries. As a result, the funds have helped create more than 250,000 jobs affecting more than 346 million people worldwide.

As you know, Congress initially authorized Enterprise Development Funds in the SEED Act of 1989 (P.L. 101-179) in order to promote the development of robust private sectors in former Soviet Bloc countries. The Southern Africa Enterprise Development Fund, known as SAEDF was created in 1994 on a handshake between South African President Nelson Mandela and U.S. President Bill Clinton to help South Africa emerge from its apartheid rule by providing economic opportunity to its formerly disenfranchised population. Former U.N. Ambassador Andrew Young, who has chaired the SAEDF since its inception, has spoken extensively on how the SAEDF model could help in rebuilding Haiti.

A Haitian Enterprise Development Fund would contribute to the creation of a robust private sector in the struggling nation. Congress created the Enterprise Development Fund model in response to rapid and unprecedented political and economic changes within former Soviet satellite nations. The deadly Haitian earthquake presents the same kind of unprecedented political and economic upheaval, and the U.S. government should respond accordingly. Sadly, the earthquake has killed over 230,000 people, leaving another 300,000 injured and millions homeless. The tremendous loss of life and property has compromised the Haitian people’s ability to return to work and resume normal functions that affect all aspects of Haitian society. This has severely impaired the already fragile government, devastated the overall gross domestic product of the nation, and will likely stunt its economic growth for years to come.

There is a strong case for using foreign aid dollars to encourage private sector development. A Haitian Enterprise Development Fund would likely create a favorable return on investment over a reasonable period of time. The fund would also help cultivate a new generation of talented Haitian entrepreneurs who will be at the forefront of rebuilding their homeland. Twenty years after the SEED Act, we now have the opportunity to use this important tool to aid a nation in our own Western Hemisphere to reap substantial security and economic benefits for years to come.

I appreciate your attention to this important matter.

Sincerely,

Yvette D. Clarke

CC: Secretary of State, Hillary Rodham Clinton
USAID Administrator Rajiv Shah

###