UNCLAS PORT AU PRINCE 002571

SIPDIS

SENSITIVE

STATE FOR WHA/CAR
EB/IFD/OMA
EB/IFD/ODF
WHA/EPSC
INR/IAA/MAC
S/CRS
TREASURY FOR MAUREEN WAFER
USDOC FOR 4322/ITA/MAN/WH/OLAC (SMITH, S.)

E.O. 12958: N/A
TAGS: EFIN ECON PREL PGOV HA
SUBJECT: HAITI: IMF VOTE POSTPONED DUE TO UNANTICIPATED
GOVERNMENT SPENDING

REF: PORT AU PRINCE 02519


1. (U) The October 14 IMF Board meeting scheduled to vote on
the EPCA II program for Haiti was delayed due to new,
unanticipated spending by the Interim Government of Haiti
(IGOH).


2. (SBU) Econ Counselor spoke to a contact in the Ministry
of Finance October 15 who explained that the new spending was
a bonus to civil service employees, equivalent to about 70
percent of their monthly salaries, to buy school clothing and
school supplies. Most children in Haiti attend private
schools where they are required to purchase their own
uniforms and supplies. This is a significant financial
burden to parents and it is traditional for employers to help
with this expense. It has not been historically traditional
for the IGOH to pay a bonus, although they have for the past
two years. The IGOH had planned to give the bonus in
October, however, since the IGOH was running a slight
financial surplus at the end of September, it decided to move
up disbursement of the bonus by one month.


3. (SBU) Econ Counselor also spoke to the outgoing and
incoming IMF ResReps on October 15 who confirmed the account
from the Ministry of Finance official. The ResReps said that
they were aware of the bonus and had expected it to be paid,
but not in September. They added that in their opinion the
IGOH,s action was not a major violation of its agreement
with the IMF. They said they expected there to be an
informal meeting at the IMF on October 17 to discuss the
matter, with an agreement to reschedule the vote for October

19.
CARNEY