HAITI'S PRESIDENT PREVAL MAKES CASE FOR GREATER

C O N F I D E N T I A L STATE 012332 E.O. 12958: DECL: 02/04/2019 TAGS: PREL EFIN EAID SNAR ECON SOCI HA SUBJECT: HAITI'S PRESIDENT PREVAL MAKES CASE FOR GREATER ASSISTANCE IN MEETING WITH THE SECRETARY FEBRUARY 5 CLASSIFIED BY ASSISTANT SECRETARY THOMAS A. SHANNON FOR REASONS 1.4B AND 1.4D. ¶1. (SBU) Summary: Secretary Clinton met with Haitian President Rene Preval on February 5. Preval described the economic devastation caused by the hurricanes and asked for additional USG assistance to help cover a $75 million budget shortfall. The Secretary assured Preval of continued U.S. support and an agreement to review high-level coordination of USG assistance to Haiti. She also underscored the importance of holding Senate elections on time. End summary. ¶2. (SBU) The Secretary met with Haitian President Rene Preval February 5 in the Department. Preval was accompanied by Haiti's Ambassador in Washington, Raymond Joseph, and advisors Gabriel Verret, Raymond Lafontant, and Paul Denis. On the U.S. side, U.S. Ambassador to Haiti Janet Sanderson, WHA A/S Thomas Shannon, PA DAS Robert Wood, Special Advisor Vicki Huddleston, and Chief of Staff Cheryl Mills joined the Secretary. ¶3. (SBU) Preval outlined recent development setbacks and economic challenges in Haiti and acknowledged that donor fatigue was a problem. He said the biggest threats to political stability were drug trafficking and a crippled economy, and noted that many police, judges, and government officials were being corrupted with the surge in narcotics transiting the country. He urged the USG to to expand its counternarcotics programs and assistance. ¶4. (SBU) Turning to the economy, Preval said during his first two years as president, his government had implemented macroeconomic changes that reduced inflation and promoted growth. All of these gains were wiped out in 2008 by spikes in petroleum and commodities prices and a devastating hurricane season. Preval said the World Bank estimated that in 2008, 15 percent of Haiti's GDP had been lost, roughly one billion dollars. ¶5. (SBU) Preval complained that, in spite of these difficulties, international financial institutions (IFI) were cutting back on direct budgetary assistance to his government. In light of the ruinous events of 2008, Preval said Haiti had not met its IMF-negotiated goals and the IFIs were reducing budgetary support by 47 percent. Preval argued that Haiti needed a stimulus package to finance public works (job creation) and to help the private sector exand and tool up for Hope II, which had already resulted in 11 thousand new jobs and had the potential to create many more. ¶6. (C) Preval admitted that his government still needed to "clean up" certain state-owned industries. In this vein, his government is removing superfluous workers from its telecommunication company and port sector, and he just signed an order raising the price of gasoline by 25 percent. Nevertheless, Preval calculated that his government will suffer a $75 million budget shortfall this year. Preval then asked the USG to help cover this gap. ¶7. (SBU) The Secretary thanked Preval for his impassioned advocacy on behalf of the Haitian people. She agreed that 2008 had been a very difficult year for Haiti and welcomed the chance to open a dialogue with Preval and to begin to identify ways to help Haiti progress. The Secretary underscored the importance of elections in maintaining and promoting political stability and of promoting unity within Haiti's government. ¶8. (SBU) The Secretary told Preval that she had just come from a meeting with the President and that they had discussed Haiti and its challenges. Accordingly, the Secretary said she would mount a special effort -- working with the Assistant Secretary, our Ambassador to Haiti, and others - to target and coordinate USG assistance. CLINTON