HAITI ECONOMIC MONTHLY UPDATE FOR MAY 2009

UNCLAS PORT AU PRINCE 000533 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 MAY 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) REMITTANCES CONTINUE SLOWDOWN. April remittances amounted to USD 81.8 million, down 16 percent compared to March. Year-to-date remittances total USD 590 million, USD 3.8 million (0.6 percent) less than last year for the same period. ¶3. (U) IMF FORECASTS IMPROVEMENT IN HAITI'S INFLATION. The IMF revised Haiti's FY 09 year-end inflation forecast from 9 percent to 1 percent. Primary factors for the change were the continuing decrease of world commodity prices and the Haitian Central Bank (BRH) regulation of the money supply. ¶4. (U) SLIGHT RISE IN MONTHLY INFLATION. The CPI index for April indicated a slight increase of 0.1 percent, up from 159.8 to 160.0. The positive change in the CPI is attributed to higher transportation and clothing prices during the month of April. ¶5. (U) CENTRAL BANK RELAXES MONETARY POLICY. The BRH decreased its interest rates again in May: the 7-day bond interest rate went from 4.7 to 3.9 percent (it was 5 percent in March),and the 90-day bond interest rate went from 7 to 6 percent (down from 8 percent in March). ¶6. (U) CARICOM CENTRAL BANK GOVERNORS MEET IN HAITI. CARICOM Central Bank Governors convened in Port-au-Prince and renewed their commitment to strengthen financial control measures and make concrete proposals to their governments in order to stimulate their economies and deal more effectively with the global crisis. The committee of governors will meet again in Port-au-Prince in November. ¶7. (U) THE NATIONAL BUDGET. The national budget was passed by the Lower House, with some revisions, on May 5. It is now waiting for final approval from the Senate. The Senate's vote is stalled on the issue of a HTG 40 million (USD 1 million) compensation fund for former employees of Teleco (the telecom parastatal). The fund was rejected by the Lower House. This dispute between representatives and senators has delayed salary payments to civil servants, particularly public school teachers and police officers. ¶8. (U) PANAMA TRADE INITATIVES. The GoH announced new measures to regulate trade with Panama and facilitate greater transparency between Haitian merchants and GoH tax and customs authorities. ¶9. (U) H1N1 VIRUS. The GoH refused receipt of a bulk food shipment from Mexico, fearing the entry of the H1N1 virus. The humanitarian aid cargo was part of the USD 243 million in Inter American Development Bank (IDB) support pledged at the Washington Donor's Conference in April. ¶10. (U) H1N1 VIRUS (cont.). The GoH announced the availability of Tamiflu in preparation for the H1N1 Virus. The Ministry of Health has 20,000 courses of the drug available and more will be provided by USG if necessary. The Tamiflu is not for sale and will be dispensed free of charge only to those who test positive for the virus. ¶11. (U) NEW CANADIAN AIRLINE. Sunwing Airlines, from the Canadian Sunwing Vacation Group, will begin flying between Haiti and Canada on June 17. The airline will feature one direct flight between Port-au-Prince and Montreal per week. ¶12. (U) TORTUGAIR FLIGHTS TO THE DR. Dominican Civil Aviation authorities announced limited resumption of TortugAir Flights from Port-au-Prince to Santo Domingo. Three flights per week have been authorized between Haiti and the Dominican Republic. Restoration of the additional 59 authorized charter flights will be re-discussed at a later date ¶13. (U) DOMESTIC WORK LAW. Parliament passed a new law regulating domestic work. The law, granting domestic workers the same rights as employees working in the formal sector, was passed unanimously. Domestic workers will have the right to rest (one and a half days per week),15 days of annual leave, and salary bonuses. The employer must allow domestic workers to attend training courses, without reducing his/her salary. (Note: Domestic employees are not/not covered by the recent minimum wage increase from HTG 70 to HTG 200/day, and generally earn much less than employees in the industrial/commercial sector. End note.) ¶14. (U) DOMINICAN REPUBLIC BANS CATTLE/SWINE IMPORTS. The DR has banned imports of cattle and swine, livestock and products, from Haiti due to the discovery of an as-yet unidentified illness in Haitian pigs. ¶15. (U) DR/HAITIAN CHAMBER OF COMMERCE. The Dominican and Haitian Chamber of Commerce held a 2-day meeting to discuss investment opportunities, strategic alliances, and technological exchanges between Dominican and Haitian entrepreneurs on May 20-21. ¶16. (U) PROTESTS AT HAITIAN/DR BORDER. Intermittent protests by both Haitian and Dominican truckers unions at the border through May have interfered with transportation across the border, occasionally blocking it completely. Haitian transportation workers initiated the actions in protest against Dominican treatment of Haitians. The Dominican trade unions reciprocated. ¶17. (U) DESTRUCTIVE WEATHER CONDITIONS. Two weeks of heavy rains at the end of May resulted in serious flooding in many parts of Haiti. 11 deaths were attributed to the floods. Approximately 3,000 people were evacuated and 1,200 people are in temporary shelters in the Southern region. In some parts of the South, Grande Anse, and Artibonite areas fields were devastated and livestock swept away.