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 -------------- ¶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