HAITI ECONOMIC MONTHLY UPDATE FOR MARCH 2009

UNCLAS PORT AU PRINCE 000370 STATE FOR WHA/EX AND WHA/CAR S/CRS SOUTHCOM ALSO FOR POLAD STATE PASS AID FOR LAC/CAR INR/IAA WHA/EX PLEASE PASS USOAS E.O. 12958: N/A TAGS: ECON ENRG EAID EAGR EINV ETRD BEXP HA SUBJECT: HAITI ECONOMIC MONTHLY UPDATE FOR MARCH 2009 ¶1. (U) Summary: This is a monthly report on a variety of topics of interest which do not merit full reporting cables. End summary. ¶2. (U) Joint Bilateral Commission between DR and Haiti. Haiti and the Dominican Republic re-established a joint Dominican/Haitian Commission on March 5, 2009, in Santo Domingo. The commission will focus on areas such as trade, agriculture, tourism, development, immigration, education, culture, health, sports, public safety, and human rights. ¶3. (U) Haiti/DR Trade Increase. According to official Dominican Republic estimates, trade between Haiti and the DR increased dramatically over the past four years. Trade between the two countries grew from USD 120 million in 2004 to over USD 500 million in 2008. In 2008, trade volume increased by 30 percent over 2007. ¶4. (U) Tax Collection. The Haitian Tax Authority (DGI) collected HTG 12.3 billion (USD 303.4 million) in taxes through mid-February, a 4 percent increase over the same period in FY 08. Current revenues represent nearly 45 percent of last year's total fiscal revenues, signifying a great improvement in DGI and the Customs collection system. The GoH is improving tax collection efficiency to support current expenditures, which total HTG 14.3 billion (USD 354.2 million) so far in FY 09, a 19 percent increase over last year. ¶5. (U) Decrease in Bank Loans. Haitian commercial bank credit declined during the first 5 months of FY 09, which could compromise the projected annual GDP growth of 2.5 percent. From October 2008 to February 2009, the value of loans in Haitian Gourdes declined 0.7 percent, compared to an increase of 2.7 percent over the same period last year. The decrease in dollar loans was 0.4 percent compared to a 0.5 percent decrease last year. According to an official of the Haitian Central Bank (BRH),the reduction of bank credit during the first half of FY 09 indicated a decreasing demand for credit by local importers, in response to falling world commodity prices, not to a lack of willingness to grant credit by the commercial banks. (Note: Haitian commercial banks are currently lending to their best customers at between 13 and 14 percent interest for local currency loans and at 8-9 percent for loans in USD. End note.) ¶6. (U) Decrease in February Remittances: February 2009 remittances totaled USD 84.2 million, a 22 percent increase compared to January 2009 and a 6 percent decrease compared to February 2008. Total remittances from October 2008 to February 2009 were USD 411.3 million, USD 3 million more than the same period last year. (Note: preliminary indications are that this rate of decline could get even worse in the coming months. End note.) ¶7. (U) Parliament Ratification. Parliament ratified the following international agreements on March 12, 2009: The Inter-American Convention (OAS) for the Elimination of All Forms of Discrimination Against Disabled People; The United Nations Convention on Disabled People's Rights; and The United Nations International Convention Against Transnational Organized Crime and its three protocols, including two on human trafficking. ¶8. (U) Ministry of Tourism Report. The number of tourists to Haiti increased from 450,000 in 2002 to 868,000 in 2007, accounting for 4.5 percent of the tourists in the Caribbean region. In 2007, tourism generated approximately USD 14.5 million in Haiti. The GoH receives USD 30 for each tourist staying in country and USD 6 for each cruise ship passenger that comes ashore. (Note: Tourism figures for 2002 were low due to the security situation at that time. End note.) ¶9. (U) Agriculture Program. The International Fund for Agricultural Development (IFAD) and the Organization of Oil Exporters (OPEC) are financing a USD 26.9 million project in Fort Liberte (northeastern Haiti, near the northernmost border with the DR) providing support to small farmers, increasing food production, and reducing food insecurity. This project focuses on small-scale irrigation. A similar project is slated for the Central Plateau. ¶10. (U) National Budget Reduced. The GoH draft National Budget, as submitted to Parliament, was decreased from HTG 100 billion (USD 2.5 billion) to HTG 96.5 billion (nearly USD 2.4 billion) and finally to HTG 80 billion (USD 2.0 million) during the course of March. Six months into the fiscal year, the draft finance law has still not been passed. The GoH's spending priorities for 2009 were changed from infrastructure and agriculture to energy and education.