Haiti - Current economic position and prospects (Vol. 1 of 2) : Main report

FIE 'CRY Report No. 1243-HA Current Economic Position and Prospects of Haiti (In Two Volumes) Volume l: Main Report flU L1A & fILE December 7, 1976 Latin America and the Caribbean Regional Office FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Fank authorization.  Currency Equivalents Currency Unit = Gourde (G) US$1 = G5.00 Gl = US$0.20 GI million = US$200,000 Fiscal Year October 1 - September 30  FOR OFFICIAL USE ONLY CURRENT ECONOMIC POSITION AND PROSPECTS OF HAITI. Latin America and the Caribbean Regional Office This Report is based on the findings of an economic mission which visited Haiti in April 1976. The mission was led by Alexandre Nowicki and included the following members: Alberto Eguren (Economist), Jean-Paul Pinard (Economist), Laszlo Garamfalvi (IMF - Public Finance) and Michael Zuntz (OAS - Balance of Payments). The mission also benefitted from the brief assistance of Gerardo Soto (Agriculture). TPA docwnSnt has a utricted diWibution UM may be wed by recipents only in the performance of their official duties. Its contents may not otlwise be diuciced without World bank authorization.   CURRENT ECONOMIC POSITION AND PROSPECTS OF HAITI Table of Contents VOLUME I: MAIN REPORT Page No. COUNTRY DATA MAP SUMMARY AND CONCLUSIONS ................................ i-v I. INVENTORY OF RESOURCES FOR GROWTH ...................... 1 II. LONG-TERM TRENDS ....................................... 5 Fconomic fTLends ......................, 5 Social Trends ..................... 7 III. RECENT DEVELOPMENTS .................................... 11 Growth ...................... ...................... 14 Foreign Trade ..................................... 14 Private Consumnption and its Social and Economic Implications ..... ...................... 15 International Comparisons .......... .. ............. 16 IV. MANAGEMENT OF TIhE ECONOMY ......................... .... 19 Institutions .. ............ 19 Money and Prices ....... .......... ................. 26 Public Finance .................. .................. 30 Balance of Payments .................. 45 V. STRUCf[JRE,(DF TfIE ElCONOMY ................................ 63 Agriculture ................... .................... 63 Manufacturing .. 69 infrastructure .. ........... 72 Transport .. ....................................... 72 Telecommunications ................ ................ 73 Water Supply and Sewerage . . 74 Social Sectors ....... ........... .................. 75 Education .................... ..................... 77 VI. FUTURE PROSPECTS ....................... 81 Reorganization of Public Finance Management ... .... 81 Inivestment Requirements ........................... 82 Financing of Public Investment .................... 86  TABLE OF CONTENTS (Continued) TEXT TABLES (Continued) Page No. Table 22 Expenditures on Health 42 Table 23 Health Expenditures per capita 42 Table 24 Financing of Public Sector Development Expenditures 43 Table 25 Financing of the Public Sector Deficit 44 Table 26 Summary Balance of Payments 46 Table 27 Gross and Net Exports, 1970-75 47 Table 28 Small Industry Exports Including Assembled Components 52 Table 29 Tourism: Some Indicators of Trends, 1973-75 54 Table 30 Merchandise Imports 55 Table 31 Imports of Large Groups of Products 56 Table 32 Capital Goods Imports 57 Table 33 Estimate of Non-essential Imports 59 Table 34 Capital Movements and Reserve Position of the Banking System of Haiti 61 Table 35 Health Indicators in Selected Countries 75 Table 36 Public Investment 86 Table 37 Public Sector Finance, 1976-80 88 Table 38 Financing of Development Expenditures of the Public Sector: 1976-80 89 Table 39 Public Savings Requirements 89 VOLUME II: STATISTICAL APPENDIX  TABLE OF CONTENTS (Continued) TEXT TABLES Page No. Table 1 Basic Aggregates of Haitian Development 13 Table 2 Financing of Private Consumption 16 Table 3 Basic Economic Indicators Compared with Expected Values 18 Table 4 Public Revenue Collection in Haiti 21 Table 5 Role of the Public Institutions In the Collection and Expenditure of Public Funds 22 Table 6 Execution of Investment Plans 24 Table 7 Money and Price Movements 28 Table 8 Transactions Demand for Money 29 Table 9 Sources of Financing of Net Domestic Credit of the Banking System 29 Table 10 Source of Expenditure Growth 31 Table 11 Public Finance Deficit and its Financing 31 Table 12 Consolidated Public Sector Savings 1974-75 32 Table 13 Revenues in Percentages of GDP 33 Table 14 Growth of Central Government Revenue, 1971-75, in Percentages Per Annum 34 Table 15 Composition of Tax Revenues 35 Table 16 Customs Duty Collections 36 Table 17 Central Government Revenue and Deficit 37 Table 18 Central Government Budgetary Current Expenditures by Function 38 Table 19 Central Government Extrabudgetary Expenditures - Development and Current 39 Table 20 Expenditures on Education 40 Table 21 Current Expenditures on Primary Education 41   Page 1 of 2pages ECONOMIC INDICATORS 11 GROSS NATIONAL PRODUCT IN 1975 ANNUAL RATE OF GROW1H (%, constant prices) US$ Mln. S 1960 -67 1967 -72 1972-1975 GNP at Market Prices 870.5 100.0 0.1 2.9 3.0 Gross Domestic Investment 98.0 11.3 .3.0 18.5 12.5 Gross National Saving 55.1 6.3 -16.5 44.2 -23.0 Current Account Balance -2.8 -0.3 Exports of Goods, NFS 118. 3 13.6 -2.2 9.2 -1.2 Imports of Goods, NFS 154.4 17.7 0.2 7.0 11.0 OUTPUT, LABOR FORCE AND PRODUCTIVIITY IN 1975 Value Added Labor Force V. A. Per Worker US$ EIn. . % U Agriculture 398.3 45.4 ,, Industry 150.0 17.1 Services 329.0 37.5 * Unallocated Total/Average 877.3 100.0 ,. .. 100.0 GOVERET FINANCE General Goverrment 2/ Central Government G Mln.) __ of GDP ( G ln.) % of GDP 1 1975 197475 1-97 1975 1974- 75 Current Receipts 489.4 3/ 11.2 10.5 3/ 475.4 10.8 10.2 Current Expenditure 456.4 / 10.4 9.8 4/ 452.6 10.3 9.8 Current Surplus 33.0 O.o7 2 ob7 Capital Expenditures./ 288.4 6.6 5.7 213.9 4.9 L.1 External Assistance (net)4t 206.3 4.7 3.1 182.0 4.1 2.8 MONEY, CREDIT and PRICES 1970 1971 1972 1973 1974 l975 (Mllion G outstanding end periodT Money and Quasi Money 198.2 251.2 321.1 408.4 530.7 595.5 Bank credit to Public Sectorl/ 189.2 202.5 215.3 244.7 331.6 415.6 Bank Credit to Private Sector 6s.3 78.5 92.1 170.6 310.6 451.3 (Percentages or Index Numbers) Money and Quasi Money as % of GDP1 9.7 11.3 13.8 14.4 14.8 13.6 General Price Index (1965 - 100) - 109.8 112.8 116.2 145.8 164.3 201.6 Annual percentage changes ins General Price Index 3.3 2.8 3.0 25.5 12.7 22.7 Bank credit to Public Sector 7/ -2.1 7.0 5.4 13.7 35.5 25.3 Bank credit to Private Sector 9.9 20.2 19.6 85.2 82.0 45.3 NOTEt All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ Data refers to fiscal years ending September 30 2/ Consolidated 4ccounts of.the-2entral Government and Puiblic Enterprises 3/ Includes net operating surpluses of public corporations / Includes net operating deficits of public corpcrations 5/ Includes technical assistance expenditures 6/ Net loans and grants 7/ Includes IDB and ID: credits to the nublic seeto' channeled through the National Bank 8/ GDP deflator not available not applicable  TRADE PAYMENTS AND CAPITAL FL0WS BALANCE OF PAYMENTS MERCHANDISE EXPORTS '-AGE 1 Liyj 197 4 197 5 US $ Mln % (Millions US $) Exports of Goods, NFS 7.-0 115.2 118.3 Coffee 21.0 25.8 Imports of Goods, NFS 95.7 134.9 154.4 Sugar 4.7 5.8 Rsr GP(fi= -) - 7 Essential Oils 5.0 6.1 Resource Gap (deficit -17.7 -19.7 3 Sisal 3.0 3.7 Interest Payments (net) -o.6 -o.6 -0.5 Bauxite 7.9 9-7 Small Industries 37.9 46.5 Other Factor Payments (net) -3.c -5.3 -6.3 Net Transfers 19.1 26.9 40.1 All other comnmodities 2.0 2 4 Balance on Current Account -3.o 1.3 - Total .5 _ 00.0 Direct Foreign Investment 7.0 7.9 2.6 EXTERNAL DEBT DECEMER 31, 1975 Net MLT Borrowing Disbursements .2 8.4 22.4 US Mln Amortization -6.1 -4.8 -6,9 Subtotal -2.9 3- 1.2 Public Debt, incl. guaranteed 62.0 Non-Guaranteed Private Debt Total outstanding & Disbursed 62.0 Other items n.e.i -2.2 -2-7 -39.5 3/ Increase in Reserves (+) 1.1 -19.9 -23.5 DEBT SERVICE RATIO for 1975- Gross Reserves 2 20.1 14.7 12.8 Net Reserves 4 19.5 -0.b -24.1 Public Debt, incl. guaranteed 5-7 Non-Guaranteed Private Debt Fuel and Related Materials Total outstanding & Disbursed 5.7 Imports 4.3 12.4 11.2 Exports - - - IBRD/IDA LENDING, (I C -,157s (Million US $): IBRD IDA RATE OF EXCHANGE _ Outstanding & Disbursed - 1'.3 Throth -1971 Since -1971Unibre US $ 1.00-Undisbursed US 1.00 US = 1.00 G5.0 Outstanding incl. Undisbursed - 51.6 G 1.00 = TJS $ 0.20 G 1.00 = IJS $ 0.20 1/ Data refers to fiscal years ending September 50. 2' September 50 Ratio of Debt Service to Exports of Goods and Non-Factor Services. not available not applicable Country Programs I Latin America and the Caribbean Regional Office r'.tober 26, 19 76  73' 7; 7 72 ~~~~~~~~~~~~~~~~~~~~~~~~~~~IBRD 10955 s S A I' } A < rD ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~7772' i t ,, v ~~~~~~~~~~~~~~~~~~A T Z A N T C ot- _ OC A 2 \ r,: ~~~~~~~~A 7 I A N) t / O