Haiti - Restoration of growth and development

Report No. 9523-HA Haiti Restoration of Growth and Development May 20, 1991 Country Department Ill Latin America and thc Caribbean Region FOR OFFICIAL USE ONLY 0~~~~~ 0 o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i I C:S~~~C (C Doumn of t5 Wol B Kb~~~~t). Thsdcmn hsarsrceddsrbto admyb sd yrcpet on. in th eomn&3 hi iildte. It otnsmy o tews be diclse wihu ol akatoiain 0 ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ .  FISCAL YEAR October 1 - September 30 WEIGHTS AND MEASURES Metric System CURRENCY AND EQUIVALENCY UNIIS Currency Unit - Gourde (G) US$1.00 G G 5.00 An economic mission visited Haiti ir, June-July 1990. The members of the economic mission were Feliciano Iglesias (Chief of Mission), Henri Henner (Consultant, Trade), Julio Linares (Water Supply), Adrian Guissari (Consultant, Public Finance), Marie-Helene Ewenczyk (Consultant, Education), Fernando Vio (Consultant, Health and Nutrition), and Coby Frimpong (Researcher). Christian Delvoie (Transport) and Carlos Mena (Consultant, Electric Power) provided inputs for the chapters on Transport and Electric Power sectors respectively. Jose Sokol (Lead Economist) travelled to Haiti in early March 1991 for an updating economic mission. He and Raj Nallari (Consultant) prepared the final draft of the report. Mrs. Maria Pilar Reyes has provided excellent secretarial assistance at all the stages of the report.  FOR OFFICIAL USE ONLY GLOSSARY OF A8DREVIATIONS APN Autorite Portuaire National (National Port Authority) BNC Banque Nationale de Credit (National Credit Bank) BNDAI Banque Nationale de Developpement Agricole et Industriel (National Agricultural and Industrial Development Bank) BRH Banque de la Republique d'Haiti (Bank of the Republic of Haiti - Central Bank) CAIiEP Centrale Autonome Metropolitaine d'Eau Potable (Metropolitan Water Authority) CdH Cimente d'Haiti (Cement Plant) EdH Electricite d'Haiti (Electricitv Company) ENAOL Entrepise Nationale des Oleagineux (edible oil company) HA Hectare HASCO Haitian American Sugar Company ICOR Incremental Capital Output Ratio IDA International Development Association ILO International Labor Organization IMF International Monetary Fund MARNDR Ministere de l'Agriculture, des Ressources Naturelles et du Developpement Rural (Ministry of Agriculture, Natural Resources and Rural Development) MdH Minoterie d'Haiti (Flour Mill) MENJS Ministry of Education, Youth and Sports MEF Ministry of Economy and Finance MP Ministry of Planning and External Cooperation MSPP Ministere de la Sante Publique et de la Population (Ministry of Public Health and Population) MTPTC Ministry of Public Works, Transport and Communications NGOs Non-governmental Organizations NFS Nonfactor Services OFATMA Office d'Assurance--Accidents du Travail, Maladie et Maternite (Workers' compensation, sickness and maternity insurance agency) OPRODEX Office de Promotion des Denrees Exportables (Commodity Export Promotion Agency) POCHEP Postes Communautaires d'Hygiene et d'Eau Potable (Community Health and Drinking Water Posts) SEN Societe d'Equipement National (Construction) SEPPRN Service d;Entretien Permanent du Resseau Routier National (National Road Maintenance Organization) SNEP Service National d'Eau Potable (National Water Service) SONAPI Societe Nationale des Parcs Industriels (National Industrial Park Company) TELECO Telecommunications d'Haiti (Telephone Company) USAID United States Agency for International Development UNESCO United Nations Scientific and Cultural Organization USN Usine Sucriere du Nord (National Sugar Refinery at Citadelle) USND Usine Sucriere Nationale de Darbonne (National Sugar Refinery at Darbonne) 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 Bank authorization.  TITLE I HAITIs TOWARDS RESTOiATICN OF GROWTH AND DEVELOPMENT COUNT8IY a HAITI REGION t LATIN AMERICA AND THE CARIBBEAN SECTOR s COUNTRY ECONOMIC REPORT NO M E CLASSIF NM|YY ANGUAGES 9523-HA CEM Restricted 05/91 English PUBDATE ABSTRACT s Haiti's economy has suffered a decade of stagnation and disequilibrium caused in part by political instability. Ropulation pressure, inappropriate agricultural policies, protection in industry, trade distortions, fiscal indiscipline, and sharp reductions in foreign aid since 1988 have exacerbated the economic decline. A stable macroeconomic environment and clear rules of the game are needed to restore the confidence of the private sector for it to invest. To restore growth, the new Government needs to promote export- oriented agriculture and industry, and develop tourism in conjunction with domestic resource mobilization to finance much needed rehabilitation of infrastructure facilities, fiscal discipline, and tight monetary policy. The Government's role is found to be most productive if it invests in neonle (mainly primary education, basic health care, nutrition, and family planning), in infrastructure (operations and maintenance, rehabilitation of transport, power, water and irrigation systems) and concentrates in institution building (restructuring public utilities, improving civil service, technology transfer, and defining and protecting property rights). Growth in income should reduce poverty and infant mortality and raise life expectancy. At the same time, better primary health care and education, family planning and nutrition can, in their turn, promote growth. Opening up to trade promotes domestic and international competition leading to lower prices, importation of technology for productivity gains, and improvements in health and nutrition which is the hallmark of economic development. Haiti is beset by institutional weaknesses which result in haphazard policy implementation. Investment in institution building should be an ongoing process. Haiti is heavily dependent on external assistance from grants and at highly concessional terms to undertake priority investment, strengthen the institutional capacity, and embark on policy changes to avert further economic decline and restore growth and development.  Paeg 1 of 2 HAITI - COUNTRY DATA SHEET Area: 27,600 sq km Population: 6.4 million (1989) Density: 228 per sq km Rate of growth: 1.8 X (1989) Population characteristics, Health Crude birth rate (per 1,000): 84.4 Infant mortality (per 1,000 live births): 117 Crude doeth rate (per 1,000): 12.7 Populntion per physician: 7179 Population per hospital bod: 1897 Income distribution Distribution of land ownership --_---------- I............... __ ......... ------------------------------ X of national income, highest quinti:s ..X owned by top 10X of owners: lowest quintile: X.. X wned by smallest IOX Access to safe water Access to electricity --_------------