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
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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