PREVAL STATE OF THE UNION: STATE MODERNIZATION AND

UNCLAS SECTION 01 OF 03 PORT AU PRINCE 000091

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/EX AND WHA/CAR
S/CRS
INL FOR KEVIN BROWN AND ANGELIC YOUNG
SOUTHCOM ALSO FOR POLAD
STATE PASS AID FOR LAC/CAR
INR/IAA
WHA/EX PLEASE PASS USOAS
STATE PASS TREASURY FOR FINCIN

E.O. 12958: N/A
TAGS: PGOV PREL KDEM KCRM SNAR KCOR ECON HA
SUBJECT: PREVAL STATE OF THE UNION: STATE MODERNIZATION AND
INVESTMENT ARE THE FUTURE

REF: A. PORT AU PRINCE 0038


B. 07 PORT AU PRINCE 2039

C. 07 PORT AU PRINCE 1989

D. 07 PORT AU PRINCE 0042

PORT AU PR 00000091 001.2 OF 003



1. This message is sensitive but unclassified -- please
protect accordingly.

Summary
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2. (SBU) In his constitutionally-mandated speech at the
opening of the new parliamentary session January 14,
President Preval defined his vision for Haiti over the coming
years as 1) security, justice, and anti-corruption; 2)
modernization of the state; and 3) stimulating investment.
True to his political style, Preval highlighted efforts at
dialogue and consensus-building as his basic approach to
governance. At the same parliamentary session, Prime
Minister Alexis gave a nearly 2-hour discourse on his
government's achievements in 2007, focusing on public
security, infrastructure, and macroeconomic improvements.
Both leaders made specific references to USG-funded
assistance programs in their remarks. Preval's declaration
of policy priorities and his proposed specific -- albeit
somewhat disjointed -- policy measures were the most specific
statement we have seen from him thus far of how he hopes to
meet the basic challenges facing Haiti. End summary.

Dialogue the Supreme Virtue
--------------


3. (U) President Rene Preval on January 14 gave his
constitutionally-mandated annual address at the opening of
the new parliamentary session before an audience of
government ministers, members of the diplomatic corps,
Provisional Electoral Council members, and the President of
the Supreme Court. Speaking entirely in Creole and echoing
many of the themes of his January 1, Independence Day speech
(ref A),Preval opened with the theme, ''In dialogue, we find
solutions.'' He praised the agreement among the parliament,
the executive and political party leaders that allowed all of
the sitting senators, even those serving two-year terms, to
remain in office until Parliament passes a new electoral law
(septel). He promised that his administration will work
quickly on that law so that Senate elections and indirect
elections can be completed ''as quickly as possible'' and in
''good conditions.'' (Note: Both elections are long
overdue. End note.)

Security/Law Enforcement Still Top Priority
--------------


4. (U) Preval identified improved justice and security the
major accomplishment of 2006-07. He noted that kidnappings
had decreased dramatically but were still too numerous. He
asked MINUSTAH to help the judicial police (DCPJ) arrest
kidnappers and to prevent such crimes. Noting that restoring
justice to Haiti is not an easy task, he repeated his January
1 praise of the Presidential Commission on Justice Reform,
thanking its principal members by name.


5. (SBU) Turning to corruption, Preval specifically thanked
the USG for the financial crimes and money laundering
agreement signed between Haiti and the US Treasury
Department. (Note: Preval was referring to the INL-NAS
program funding US Department of Treasury Office of Technical
Assistance (OTA) implementation of a two-year, USD 350,000
program to improve investigation and prosecution of financial
crimes. OTA is providing training to the Financial
Intelligence Unit (UCREF),the Haitian National Police and
the criminal justice system on moving old cases forward and
investigating new ones. Preval has shown consistent,
passionate interest in this program. End note.)

State Structures Need Reform
--------------


6. (U) This address revealed a new umbrella policy priority
for Preval: ''Modernization of the state.'' Instead of
laying out an overall strategy or plan, Preval listed a
series of specific measures focused on new information
technologies and communications systems. He called for
modernization of customs and ports in order to cut down on
corruption, and reduce customs processing times and port fees
that cut into Haiti's regional competitiveness. He
encouraged the work of the national identity office (ONI) to
register citizens, emphasizing the need for the GoH to have
good data on its citizens as well as on state properties.
DGI (General Direction of Taxes) must begin registering
informal economic activity, folding the informal sector in
the formal and allowing the state to better monitor economic
activity. Archives and judicial records must be digitalized
for safekeeping.

Investment in the Service of ''National Production''
-------------- --------------


7. (U) Demonstrating he is beginning to focus on economics,
Preval pronounced that Haiti must increase investment,
specifically to spur ''national production'' and combat the
social ills of hunger, unemployment and the high cost of
living. He identified multiple sectors such as agriculture,
tourism, industry and services as targets for investment.
Haiti needs to put all of its energy toward preserving
domestic peace and security, the underlying condition for
investment. The second condition is an equal playing field
for all, which makes fighting corrupt business, practices a
key to encouraging investment.


8. (U) Rather than propose investment incentives, Preval
spotlighted various barriers to foreign and domestic
investment and trade. As he did on Independence Day, Preval
criticized the National Port Authority (APN) for impeding
investment with its high fees. He compared fees in Haiti
unfavorably to those of Panama and the Dominican Republic,
claiming Haitian fees are more than double. He also
denounced the lack of electricity in Haiti, joking that
although prices are higher in the Dominican Republic, Haiti's
neighbors to the east at least have power. (Note: This
understated joke engendered laughter from the audience, but
Preval did not crack a smile. End note.) The President
mentioned the three fossil fuel power stations Haiti is
building to address this critical shortfall. (Note: plants
being built with Cuban expertise and Venezuelan funding --
see ref C. End note) Preval emphasized the importance of
credit, stating, ''Without credit, there is no business'' --
without proposing how to increase business access to credit.
He called for raising the minimum wage, and said he will
discuss the possibility with different social sectors and the
parliament. (Note: The Chamber of Deputies is already
discussing a minimum wage increase proposed by Deputy Steven
Benoit. End note.)

The Vision Thing
--------------


9. (U) Preval made clear that he did not intend to examine
each individual sector in his speech, as the Prime Minister
had done in his presentation. Instead, the President said
his objective was to ''define a vision'' for the future. He
announced that he is beginning to meet with ''reflection
groups'' from different sectors to hammer out priorities,
beginning with education and sports, and moving on soon to
finance, the environment, health and justice. Preval said he
wants to move the various sectors of the entire country in
the same direction. He lamented the lack of continuity in
GoH activity in recent years, which he said had impeded
development.

Prime Minister Lists His Successes
--------------


10. (U) The implicit self-criticism in the President's
remarks were nowhere to be found in the address of Prime
Minister Jacques Edouard Alexis. Speaking for one hour and
fifty minutes, the PM listed his government's accomplishments
over the previous year. He pointed to new projects to
improve the national road network, rehabilitation of police
commissariats and courthouses, literacy programs and
distribution of school materials. He made specific
references to USG-funded programs, including USAID projects.
He noted macroeconomic improvements, including increasing GDP
and a lower rate of inflation. (Note: Alexis cited inflation
figures from September 2007, prior to the November rise in
inflation. Ref B. End note.) Alexis spoke highly of
Haiti's burgeoning participation in regional and global
organizations like CARICOM, the OAS and the UN, noting with
pride Haiti's new role as president of the UN Economic and
Social Council (ECOSOC) for 2008. He concluded by saying
that although they have made real progress, more is needed to
realize their objectives.

Comment
--------------


11. (SBU) Preval's address was the most focused effort of
his presidency to date to present a broad vision for moving
Haiti forward. It reiterated his top priority: fighting
crime and corruption. Until recently, Preval remained
riveted on that issue and would talk about little else. This
speech, however, was a welcome sign that Preval is beginning
to move beyond the security challenge to focus on basic
problems of governance and the economy. His address to the
new legislature exhibited, however, many shortcomings
inherent in his governing style: laying out grand goals that
are incontestable, while he immerses himself in myriad
details of implementation that together fail to add up a
coherent plan. As for the Prime Minister, his rather
pedestrian address showed that he remains the President's
faithful servant, enumerating one small success after
another, but leaving the vision dimension to his Chief of
State.
SANDERSON