NEW WORLD BANK PROGRAM FOR HAITI UNDER DISCUSSION

UNCLAS PORT AU PRINCE 000482 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/CAR WHA/EPSC EB/IFD/ODF EB/IFD/OMA INR/IAA/MAC STATE PASS TO USAID FOR LAC/CAR TREASURY FOR JEFFREY LEVINE USDOC FOR 4322/ITA/MAN/WH/OLAC (SMITH, S.) E.O. 12958: N/A TAGS: EFIN EAID ECON PGOV HA SUBJECT: NEW WORLD BANK PROGRAM FOR HAITI UNDER DISCUSSION This cable is Sensitive but Unclassified ¶1. (SBU) SUMMARY: World Bank Country Manager Mathurin Gbetibuou told Econ Counselor that he is currently in discussions with headquarters in Washington about the size and scope of the Bank's program that would cover the next three fiscal years. The plan currently on the table calls for a combination of grants and loans totaling approximately USD 133 million over the next three years, but Gbetibuou is arguing for more funding and more quick-disbursing projects. The donors, conference to extend the Interim Cooperation Framework will likely take place in Port-au-Prince in July. Gbetibuou expressed his frustration at Haitian inaction that has delayed disbursement of approximately USD 15 million. Post agrees with Gbetibuou that program, as envisioned, is insufficient and requests Department and Treasury to engage the World Bank to increase the total and speed of disbursements. END SUMMARY. ¶2. (SBU) Econ Counselor met with World Bank Country Manager Mathurin Gbetibuou March 10 to discuss World Bank programs in Haiti, once the current program expires on June 30, 2006. Smaller World Bank Program for Haiti -------------- ¶3. (SBU) Gbetibuou told Econ Counselor that he is currently in discussions with Bank headquarters in Washington about the size and scope of the program that would cover the next three fiscal years (July 2006 ) June 2009). The plan currently on the table calls for a combination of grants and loans totaling approximately USD 133 million over the next three years. The first year of the program would total USD 50 million and would include around USD 30 million of budget support. ¶4. (SBU) Gbetibuou lamented the reduced size of the program (the preceding program was approximately USD 150 million over two years) and told Econ Counselor he is arguing to increase the program. Especially troubling to Gbetibuou is that none of the projects envisioned in the first year are quick disbursing. Most of the spending is for long-term projects that would begin disbursing at the end of the fiscal year, i.e. spring and summer of 2007. Gbetibuou is arguing with his headquarters that spending needs to take place much earlier in the fiscal year, in order to support the newly elected Preval government. Even one additional USD 5 million quick disbursing project would help. Donors Conference in July -------------- ¶5. (SBU) Looking forward to the remainder of the fiscal year, Gbetibuou said that the World Bank is planning on a large donors conference, similar to the one that took place in Washington in July 2004, to extend the Interim Cooperation Framework another year. Gbetibuou said the World Bank envisions the donors, conference taking place in Port-au-Prince in July 2006. The conference needs to take place as soon as possible so that financing is in place before the IMF takes a proposed Poverty Reduction and Growth Facility (PRGF) to its board in August or September. Before that, a follow on to the February Washington meeting originally scheduled to take place in March in Port-au-Prince-- has been moved to Brasilia in May, after the Preval inauguration. Frustrations over Delayed Disbursement -------------- ¶6. (SBU) Gbetibuou expressed his frustration at Interim Government of Haiti (IGOH) inaction that has delayed disbursement of approximately USD 15 million. The disbursement was supposed to have happened in December 2005, but the IGOH did not take the actions required for disbursement. At the moment, in mid-March 2006, the World Bank is still waiting for one signature and one decree (already approved) to be published in the official newspaper, Le Moniteur. The IGOH,s inaction on those two simple steps has prevented disbursement of the much-needed USD 15 million. ¶7. (SBU) COMMENT: IGOH inaction delaying the disbursement of the much-needed USD 15 million tranche, is, sadly, nothing new. We have seen the same before on other projects and throughout the run-up to the elections. We will push the Prime Minister to finalize the disbursement as soon as he gets back to Haiti. Post agrees with Gbetibuou that USD 133 over 3 years, particularly if there are few or no fast-disbursing projects, is insufficient for Haiti,s development assistance needs. Post requests EB/IFD/ODF and the Department of Treasury to work with the World Bank to increase the total and speed of disbursements for Haiti. The new Preval administration will desperately need the funds. END COMMENT. GRIFFITHS