HAITI TAPS PETROCARIBE REVENUE FOR DISASTER

UNCLAS PORT AU PRINCE 001364 SIPDIS STATE FOR WHA/CAR STATE PASS TO AID/LAC E.O. 12958: N/A TAGS: ASEC EAID EAGR ETRD ECON PGOV HA SUBJECT: HAITI TAPS PETROCARIBE REVENUE FOR DISASTER RELIEF/RECONSTRUCTION ¶1. (U) Summary: Haiti is using state of emergency legislation to withdraw nearly USD 200 million from PetroCaribe funds held in the national bank to finance reconstruction projects and other urgent government needs after the country was devastated by hurricanes and flooding beginning in August. End Summary. ¶2. (U) Prime Minister Michele Pierre Louis and several other Cabinet Ministers announced in a press conference September 22 the use of approximately USD 197,560,000 (7.9 billion Haitian Gourdes/HTG) from revenue generated by PetroCaribe sales to respond to hurricane victim needs and rebuild infrastructure damaged in the recent storms and flooding. This decision to dispense these funds is authorized in Haiti state of emergency law. (Note: Under the PetroCaribe agreement, Venezuela, through its state-owned petroleum company PDVSA, sells refined oil products to the Government of Haiti (GoH) under preferential terms -- half paid for up front, and the other half repayable over 20 years at below-market interest rates when the amount of a barrel surpasses USD 100. In turn, the GoH sells at the market prices to oil companies operating in Haiti. The funds from the price difference accrue to the GoH. End Note.) ¶3. (U) The Office of the Prime Minister, the Ministry of Economy and Finance and the national bank will manage the funds collected from the GoH's PetroCaribe revenue and held in an account in Haiti,s national bank, the Republic Bank of Haiti. Each Ministry receiving an emergency allocation will be responsible for providing documentation of spending to Parliament. Of the USD 197,000,000, over a quarter (USD 57,500,000) will be allocated to the Ministry of Agriculture and Natural Resources. Minister of Agriculture and Natural Resources Joanas Gue announced the money would be used to finance emergency agricultural programs targeted at short-term food production and the purchase of 500,000 farm implements and 835 tons of seed. ¶4. (U) The Ministry of Interior announced a USD 20,550,000 emergency program, of which USD 17,750,000 will be distributed to Haiti,s municipalities; USD 2,250,000 for distribution of food and water; and USD 550,000 for humanitarian aid. The Ministry of Public Works, Transportation and Communication will use its USD 14,750,000 allocation to finance the rehabilitation of electrical infrastructure (USD 7,000,000),USD 2,000,000 to repair roads and bridges in affected areas such as Miragoane (Nippes Department),Montrouis and Cabaret (West Department),USD 3,750,000 to clean affected areas and USD 2,000,000 to rehabilitate hydraulic infrastructure. ¶5. (U) The Minister of Finance indicated that USD 23,800,000 would be used to pay an additional month,s salary to civil servants to offset their children,s school expenses for the upcoming school year. (Note: School re-opening is scheduled for October 6. End Note.) The Ministry of Education plans to use its allocation of 37,380,000 to repair 100 schools and construct 33 additional schools. The Ministry, in collaboration with NGOs on the ground, will also supply school kits to 250,000 public schools and subsidize school fees for 100,000 private school students. ¶6. (U) The Ministry of Public Health was awarded USD 24,380,000. The Ministry of Justice will use the remaining USD 2,000,000 to rehabilitate prisons, police stations and courthouses. TIGHE