Haiti - Economic memorandum

Report No. 3444-HA Memorandum of the Haitian Economy FILE COPY May 13, 1981 Latin America and the Caribbean Regional Office FOR OFFICIAL USE ONLY Document of the Wofrd Bank This document has a resricted distnbution and may be used by recipients only in the performance of their offial duties. Its contents may not otherwise be disclosed without World Bank authorization  CURRENCY EQUIVALENTS Currency Unit: Gourde (G) $1: G5 Gl: $0.20 (The Gourde has, since 1919, been pegged to the U.S. dollar at the rate of G5=$1) WEIGHTS AND MEASURES Metric British/U.S. Equivalent 1 meter (m) 3.28 feet (ft) 1 kilometer (km) 2 0.62 mile (mi) or 1,093 yards (yd) 1 square kilometer (km ) 0.386 square mile (sq. mi) I metric ton (mt) 2,200 pounds (lb) 1 kilogram (kg) 2.24 (lb) I hectare (hg) 2.47 acres 1 liter (1) 0.908 quarts (qt) ABBREVIATIONSf BRH Banque de la Republique d'Haiti (Central Bank) EFF Extended Fund Facility GDP Gross Domestic Product IDB Inter-American Development Bank IHS National Statistical Institution SDR Special Drawing Rights FISCAL YEAR October 1 - September 30  FOR OFFICIAL USE ONLY MEMORANDUM OF THE HAITIAN ECONOMY Table of Contents Page No. COUNTRY DATA MAP IBRD 13769R I. Introduction ....... ...................... ... ............ 1 II. Structural Characteristics ............................ 1 III. Recent Economic Developments .......... * ............... 4 A. Economic Growth .. * . .. ............. 5 B. Poverty and Income Inequality .... ...... 6 C. Balance of Payments .............. . ................ 7 D. Public Finance ........ .......................... ........ 9 E. Medium-Term Projections ............ .. ............ 13 Summary of Projection Results .................. 19 F. The Public Sector Development Program, 1982-84 ... 20 Scope of the Program ........... ................. 20 Main Sectoral Issues ...... ..................... 24 Agriculture .............. ................ ..... . 24 Industry ......... ............................. 24 Energy ................... .......................... 25 Housing and Urban Development ................. 25 Education .* .......................... 25 Water Supply, Transport, Communications and Health. . 25 Mining, Tourism and Social Affairs .25 IV. Statistical Appendix A-1 Gross Domestic Product by Sector, 1975-79 A-2 Gross Domestic Product by Expenditure, 1975-80 A-3 Gross Domestic Product by Expenditure, 1975-80 A-4 Exports, 1978-80 A-5 Balance of Payments, 1978-80 A-6 Central Government Revenues, 1978-80 A-7 Central Government Revenues and Expenditures, 1978-80 A-8 Functional Classification of Operational Budget, 1978-80 This report is based on the work of an economic mission composed of Mr. Dominique Hachette and Homi Kharas (Young Professional) which visited Haiti between November 17-December 12, 1980. The mission took advantage of the assistance given to the Haitian Government by Mr. Denis Fortin (Consultant) in the preparation of the project inventory. 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.  Table of Contents (Continued) A-9 Public Sector Investment Program, 1978-81 A-10 Foreign Assistance Investment, 1978-81 A-li Budgeted Allocation of National Resources between Counterpart Funds and Other Investments, 1981 A-12 Merchandise Export Projections, 1981-90 (Base Case) A-13 Balance of Payments Projections, 1981-86 (Base Case) A-14 Government Revenue and Expenditure Projections, 1981-90 (Base Case) A-15 Development Program, 1982-84 A-16 Volume and Structure of Development Expenditures, 1982-84 A-17 Summary of Projects under Execution A-18 Summary of Projects under Preparation A-19 Summary of Project Ideas LIST OF TABLES OF MAIN TEXT Table Page 1 1 Income and Geographical Inequalities, 1976 ...... ........ 6 2 The Import Content of Growth ........................*... 14 3 Central Government and Foreign Savings Requirements .... 15 4 The Terms of Trade Effect, 1981-90 ......... *............ 16 5 Debt-Service and the Terms of Borrowing-Public Sector .. 17 6 The Balance of Payments Impact of a Rural Development Strategy . ..... ........a....... ............ 19 7 Types of Projects ...................................... 21 8 Structure of Development Expenditures .................. 22 9 Financing Requirements of the Inventory, 1982-84 ....... 23 10 Development Expenditures in Selected Sectors ........... 23  1/ HAITI - CCUNTRY DATA AREA POPULATION DENSITY 27,S00 *q km 4.8 million (mid.1977) 173 per sq x Rate of Growth: 1.77. (from 1974 to 1977) 345 per sq km of agriculturl land POPULATICN CHARACTERISTICS (1977) HEALTH (1976) Crude Birth Rate (P`r 1,000) 43.0 Population per Physician 5,936 Crude Death Rate (Per 1,000) 17.0 Population per Hospital Bed 1,219 INCOME DISTRI3UTION DISTRIBUTION OF LANlD OWNERSHIP 7. of National Income - highest quintile n.a. 7. owned by top 57 of owners lowest quintile n.a. 7 owned by smallest 10% of owners ACCESS TO SAFE WATER (1978) ACCESS TO ELECTRICITY (1973-76) . of population total 14.0 7 of dwellings total 2.9 urban 38.0 rural 7.0 EDUCATION 41976) NUTRITION (1976) Adult Literacy Rate (7) 23.0 Primary School Enrollment (%) 71.0 Per capital Supply of Calories as % requirements 93.0 Per-capitaprotein intake (grams per day) 51.0 GROSS NATIONAL PRODUCT IN 1979 ANNUAL RATE OF GROWTH (7. constant prices) US$ Million % 1965-70 1970-75 1975.79 GNP at market prices 1,259.8 100.0 -0.1 3.7 4.1 Gross Domestic Investment 180.8 14.4 11.6 13.8 2.5 Groas National Savings 2/ 32.5 2.6 42.3 15.9 -41.7 Current Account Balance -63.3 5.0 Export of Goods, NFS 190.0 15.1 4.4 -3.7 2.2 Import of Goods, NFS 324.0 25.7 4.4 0.9 9.6 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1979 Value Added Labor Force V.A. P.r Worker US$ Million % US$ million % USS Million Agriculture 507.1 39.8 .. Industry 3/ 282.9 22.2 .. Services 484.2 38.0 .. Total/Average 1,274.1 ... I 100.0 GOVERNMENT FINANCE GCnerol Soverninent 4/ Central Government (0 Million) - of GDO (G Million) f of GDP 19-79 -1979 1975 1979 1979 1975 Current Receipts 877.1 13.8 13.1 588.0 9.2 9.3 Current Expenditures 803.8 12.6 11.7 567.7 8.9 8.2 Current SurpluslDeficit 73.3 1.2 1.4 20.3 0.3 1.1 Capital Expenditures 574.6 9a0 7.5 436.4 6.9 5.5 External Assistance (net) 5/ 426.5 6.7 5.2 388.5 6.1 4.5 MONEY. CREDIT AND PRICES 1970 1975 1976 1977 1978 1979 (Million G Outstonding Snd Period) Money and Quasi Money 198.2 583.4 779.9 930.6 1,159.7 1,353.5 Rank Credit to Public Sector 189.2 318.0 346.3 288.9 332.0 393.2 Rank Credit to Private Sector 65.3 451.3 519.7 657.9 791.5 921.8 (Percentages or Index Numbers) ioney and Quasi Money as % of GDP 10.0 14.7 15.9 16.8 19.9 21.2 Gonsumer Price Index (1965 . 100) 114.6 199.9 218.7 234.9 228.8 250.3 Annual Percentage Changes in: Cooaumer Price Index 3.3 18.0 9.4 7.4 -2.6 9.4 Bank Credit to Public Sector -2.1 10.4 8.9 16.6 14.9 18.4 Rank Credit to Private Sector 9.9 45.3 15.2 26.6 20.3 16.5 Note: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ Data refers to FY ending September 30. 2/ Does not include current transfers. 3/ Mining, manufacturing, public utilities and construction. 4/ Consolidated accounts of Central Government and Public Enterprises. 3/ Net disbursements of loans and grants.  HAITI - Ca.NTRY DATA BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1976-79) 1975 1976 1977 1978 1979 (USTSMillion) USSMillion 2 E.port of Goods, NFS 105.7 140.6 173.9 199.2 189.6 Coffee 53.0 39-3 Import of Goode, NFS -165.1 -218.8 -262.8 -293.7 .323.5 Sugar 1.0 0.7 R*..orce Cop (deficit- ) - .78.2 _889 -94.5 -1 Essentlal Oil. 8.0 5.9 Steel 1.3 1.0 Interest Payments (net) 1/ _7.0 .7.2 -12.1 .14.7 .14.3 Bauxit. 17.7 13.1 Otber Factor Paymnts (net) ... .. .. .. .. Asambly Indutry (net) 18.2 13.5 Net Tranfers 39.4 65.0 63.5 67.9 85.0 Smll Industries andeHndicr.ft 16.1 11.9 Balnm.e on Current Account *T7w 7T * . All Other Codities 19.5 14.5 Total 134.8 16U50 Direct Foreign lnv-st.nt 2.7 6.8 8.0 10.0 15.0 Net MLT Borro.ing 19.7 24.8 62.5 48.1 38.2 EXTERNAL DEBT, SEPTEMBER 30 1979 US$Million Di.bureent 4.9 -33.3 70.8 733:1 i Amortiz.tion 5.2 8.5 8.3 9.2 6.7 Public Debt, including guaranteed 208.6 Mon-Guarenteed Private Debt Other Itm n.e.i. -18.5 7.5 -19.3 -2.6 26.3 Total Oustanding and;Dimbta.d Increase in Receive. (.) -23.1 18.8 13.6 14.2 16.2 DEBT SERVICE RLifo FoR 1979 Gro.. Regerve 12.7 28.3 35.9 46.8 53.1 Net leerree -23.7 -4.9 8.6 22.9 39.0 Public Debt, including Guaranteed 4.1 Non-Cuaranteed 'rivate Debt . Fuel mid Related Materiale Total Outstanding and Disbuirsed loport. 12.9 17.1 23.6 24.5 n.e. EIports - - - - IBRD/IDA LENDING (SEPTEMBER 30. 1979) USSMillion IBRD IDA RATE OF EXCHANGE Outstanding nd Diebured - 45.3 sioce 1901 Undisburaed .48.2 US51.00. C5.00 DOute tnding including Undisbursed - 313 01.00 - US50.20 1/ Include. all factor mervices. not applicable LClDC not vailable J6 ,y 30, 1981  \U SA ~ ~ _ .A ? 30U 73 D 7U'5U 00 RU~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~' S00 A t7<-_ >0 A N / ~~~~~~~~~~~~~jAtAoA-~~~~~~~~~~ , o ,~~~ 00 .2,00 s ou A T / A N T C C-A,v A I I A I N I C O C EA At - Of P ,,, C U BA - "A AooRAOdOo0-l} _ GRAVEL 2 0 A,