HAITIAN FINANCE MINISTER ON TRANSITION AND THE

UNCLAS PORT AU PRINCE 000114

SIPDIS

SIPDIS

STATE FOR WHA/CAR
EB/IFD/ODF
EB/IFD/OMA
WHA/EPSC
INR/IAA/MAC
S/CRS
TREASURY FOR JEFFERY LEVINE
STATE PASS LAC/CAR
USDOC FOR 4322/ITA/MAN/WH/LAC (SMITH, S.)

E.O. 12958: N/A
TAGS: EFIN ECON PGOV HA
SUBJECT: HAITIAN FINANCE MINISTER ON TRANSITION AND THE
STATE OF THE ECONOMY


1. (SBU) SUMMARY: In a conversation on the upcoming
transition to an elected government, Haitian Finance Minister
Henri Bazin told Econ Counselor of his two goals before
stepping down: implement a code of ethics for Haitian civil
servants and introduce a requirement that public officials
release a financial statement detailing their income and
assets. He said that he would make no major decisions after
February 7 except those necessary under the country,s IMF
agreement. Econ Counselor cautioned the Finance Minister
about irresponsible spending during the last days of the
interim government; Bazin conceded that this was going to be
a problem. On the macro front, he said that both revenue and
spending had picked up and he estimated the financing gap at
around USD 23-24 million. Bazin asked for help from the USG
on the covering the financing gap, funding for elections and
on passage of preferential trade legislation. END SUMMARY.

The Transition
- - - - -

2. (SBU) Economic Counselor met with Haitian Minister of
Finance Henri Bazin January 13 to discuss the transition to
an elected government and the state of the economy. Bazin
noted that his office is working with a Canadian official, on
loan to the Prime Minister,s office, to document reforms
made during Bazin,s tenure for the incoming administration,
especially regarding the budget process. Bazin said that he
had two goals left to achieve before he stepped down. First,
he wanted to implement, by decree, a code of ethics for
Haitian civil servants. Second, he wanted to introduce a
requirement, also by decree, that nationally elected public
officials release a financial statement detailing their
income and financial assets.


3. (SBU) Bazin added that his government planned not to
issue decrees after February 7, nor would he make major
decisions after this date, with the possible exception of
financial decisions necessary under the country,s Emergency
Post Conflict Agreement (EPCA II) with the IMF. (NOTE:
February 7 was the date that the Interim Government of Haiti
was supposed to have turned over power to an elected
government. Due to election delays, the transition has been
postponed until March 29, although the first round of
elections will take place February 7. END NOTE.)

Irresponsible Spending Could be a Problem
- - - - -

4. (SBU) Econ Counselor cautioned the Finance Minister
about irresponsible spending during the last days of the
interim government. Bazin agreed that this was going to be
a problem, commenting that every minister wants to leave
his/her mark before departing government. Each one hoped to
be positively associated with some large spending project as
the government left office. Bazin said he warned his fellow
Ministers at the most recent Cabinet meeting not to do this.

Update on Macro Situation
- - - - -

5. (SBU) Looking at the macroeconomic situation, Bazin said
that revenue receipts were on target or slightly above
target. Spending had picked up too, mostly related to
purchases for security and support for elections. Reserves
were holding steady at around USD 70 million. In a follow-up
conversation with Econ Counselor January 16, Bazin said that
his staff was in the process of estimating the financing gap
for FY 2006, but that it was likely to be around USD 23-24
million.

Help on Finances and Preferential Trade Legislation
- - - - -

6. (SBU) Bazin asked for help on two fronts. The first was
for donor assistance to the UNDP for funding elections and
also donor support to cover the anticipated financing gap for
the second half of FY 2006. The second was on passage of
preferential trade legislation (HERO or HOPE) for Haitian
textile products. Bazin said that he understood that it was
important to have good, clean elections in order for
preferential trade legislation to pass, but that once
elections were over he hoped that the U.S. administration
would demonstrate its support of the democratic process in
Haiti by supporting such legislation. He noted that

preferential trade legislation would immediately provide jobs
and give the Haitian economy a much-needed boost.
TCARNEY