Via IMF (Den Internationale Valutafond)

IMF Staff Concludes Article IV Consultation Mission with Haiti







November 25, 2019







End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.





  • Haiti is facing a grave political, economic, and social crisis. Repeated protests and lock-downs in the country since the summer of 2018 have led to recession and high inflation. Despite considerable efforts by officials at the central bank and ministry of finance, the economic and human costs of this political crisis have surged in recent months and are taking a heavy toll on an already poor and vulnerable population.
  • In the short term, the priorities are to restore macroeconomic stability, mobilize fiscal revenues, take steps to tackle corruption, and start to build a better social safety net, including developing a new pilot program of cash transfers to the poor.
  • The government should provide the agencies responsible for combating corruption with the legal and financial means necessary to fulfill their mandate. Elected officials, senior public servants, and judges need to comply with the asset reporting obligations required by law.

An International Monetary Fund (IMF) team, led by Ms. Nicole Laframboise,
met with Haitian authorities in Port au Prince and Washington to conduct
discussions on the Article IV Consultation. Upon conclusion of the
meetings, Ms. Laframboise issued the following statement:

“We would like to extend our sincere thanks to the Haitian authorities,
government officials and representatives of the private sector and civil
society for their time and assistance over the past two weeks. They made it
possible to undertake this consultation, in spite of a very challenging
situation in Haiti.

“The political, economic, and social crisis confronting Haiti is without
precedent. As a consequence of repeated lock-downs in the country in
November 2018 and February, June, and September 2019, growth for the 2019
fiscal year is expected to be negative, at about -1.2 percent, while
inflation rose to above 20 percent at end-September. This has worsened
poverty and insecurity and deprived the government of the means to make
productive investments and support activity.

“The ad referendum program agreed with Fund staff under the
Extended Credit Facility (ECF) in March was shelved because of the absence
of a government ratified by Parliament and able to commit the country to an
economic reform program. This also led to the suspension of most external
financial assistance.

“The staff outlook assumes a stabilization of the political situation but
no fundamental political or economic reforms—which are unrealistic to
assume at this juncture. Over the course of 2020, this would permit output
to stabilize before a slight resumption of growth to around 0.9 percent in 2021.
Under this scenario of low growth and external assistance, inflation is
expected to remain close to 20 percent over the next two years.
Likewise,
potential growth is estimated at 1.5 percent per year over the longer term.

“It is important to note that a continuation of the current political
crisis would have devastating consequences for the country over the
longer-term owing to the likely losses of physical and human capital.

On the other hand, a rapid resolution to the crisis could lead to a strong
rebound in activity. The appointment of a government committed to reforming
the economy and the resumption of support from the international community
would permit a loosening of budgetary constraints and an increase in public
spending—investment in particular. This would reduce the need for financing
from the central bank, thereby helping to lower inflation and boost growth
in the short and medium-term.

“The immediate priority should be to stabilize the economy. In the absence
of a formal budget submission to parliament, it is critical that the
government prepare and publish a budget framework for 2020 as soon as
possible. This notional budget should include measures to boost domestic
revenues by strengthening tax administration and collection and reducing
tax exemptions and take steps to rationalize non-priority spending.

We commend the authorities for adhering to the economic governance
agreement between the central bank (BRH) and the Ministry of Economy and
Finance which contributed to stabilizing inflation and the exchange rate
over the summer. Renewal of this agreement would be key to again limiting
monetary financing of the budget deficit, a key source of inflation.

“Staff commend the authorities for their efforts to finalize the draft of
the National Plan for Social Protection and Social Progress (PNPPS) and
urge the Council of Ministers to formally adopt this policy. The PNPPS
should reduce the fragmentation and overlap of existing programs which at
present lead to inefficiencies and hinder their effectiveness. IMF staff
recommend establishing, within the PNPPS framework, a limited number of
cash transfer programs for vulnerable groups —under the auspices of the
Ministry of Social Affairs and Labor (MAST)—and to launch a pilot program
as soon as possible.

“Combating corruption is another short-term priority. The Anti-Corruption
Unit (L’Unité de Lutte Contre la Corruption, or ULCC) should be
granted the legal and financial means to enable it to carry out its mandate
in full. The government should set up the Steering Committee conceived
under the 2009 National Anti‑Corruption Strategy, importantly with
independent representatives from civil society, and it should participate
in the drafting of the new anti-corruption strategy. In addition, the asset
reporting obligations of elected officials, senior public servants, and
judges—as stipulated in legislation (February 12, 2008)—must be enforced.
Finally, as part of key anti‑money laundering measures to support
anti-corruption efforts, banks should meet their obligations to “verify and
know their customers”, particularly politically exposed persons.

“We sincerely hope that political stability will return and allow the
government to build a consensus with key stakeholders in the country on a
package of more extensive reforms in the areas of public finance
management, governance, the structure and functioning of the energy sector,
and the social safety net.

Haiti has the potential for much stronger and more inclusive growth. The
IMF continues to provide policy advice and technical assistance, and stands
ready to help with more intensive support when political conditions
permit.”


IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








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