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