haiti: country strategy with the idb (2007-2011)

DOCUMENT OF THE INTER-AMERICAN DEVELOPMENT BANK

HAITI

IDB: COUNTRY STRATEGY WITH HAITI 2007-2011

NOVEMBER 2007

This document was prepared by an IDB team coordinated by G. David Rosas Shady (SCL/SPH) and comprising Sylvia Gabriela Andrade (CCB/CCB), Vera Chiodi (SCL/SPH), and Federico Presciuttini (CID/CID). The document was reviewed by: Philippe Dewez (COF/CHA), Anna Cecilia McInnis (COF/CHA), Marco Nicola (COF/CGY), Rafael Rodríguez Balza (CID/CID), and Peter Sollis (VPC/GCM). Input was also provided by Agustín Aguerre (INE/TSP), Diego Arias (INE/RND), Sandra Bartels (ICF/FMM), Gianfranco Carassale (SCF/SCF), Virgilio Galdo (Consultant), John Horton (INE/RND), Alison Laclau (Consultant), Marcelino Madrigal (INE/ENE), Emma Naslund (SCL/EDU), Susana Sitja (ICF/FMM), and Kati Suominen (INT/INT). Dora Currea (CCB/CCB) made the final review of the document.

CONTENTS

EXECUTIVE SUMMARY I.

INTRODUCTION ................................................................................................................1

II.

CURRENT CONTEXT, MAIN DEVELOPMENT CHALLENGES, AND GOVERNMENT AGENDA ........................................................................................................................................1 A. B.

C.

III.

PREVIOUS STRATEGY AND PORTFOLIO: LESSONS LEARNED FOR THE NEW STRATEGY..5 A. B. C.

IV.

The current context in Haiti..................................................................................1 Haiti’s main development challenges...................................................................2 1. Consolidating economic recovery ................................................................2 2. Improving living conditions..........................................................................3 3. Strengthening governance and building institutional capacity.....................3 The government’s development strategy and the Bank’s new cooperation framework.............................................................................................................4 1. The government’s priorities..........................................................................4 2. Priorities assigned to the Bank......................................................................5

Alignment of the 2005-2006 Transition Strategy with the country’s challenges 5 Portfolio execution challenges and main outcomes .............................................6 Lessons learned and recommendations ................................................................8

COUNTRY STRATEGY WITH HAITI 2007-2011 ................................................................8 A.

B.

Objectives and target areas ...................................................................................9 1. General objective ..........................................................................................9 2. Strategic objectives .......................................................................................9 Strategy implementation.....................................................................................14 1. Strengthening of the Bank’s Country Office..............................................14 2. Operational criteria......................................................................................14 3. Size and sequencing of the operations program .........................................15 4. The Bank’s relative weight in the country..................................................17 5. Country financing parameters and fiduciary risk .......................................17 6. Tracking of strategy implementation..........................................................18 7. Coordination with other donor agencies.....................................................18 8. Risks ............................................................................................................20

- ii -

TABLES

Table 1 Table 2 Table 3

Approved operations (2005-2006) Projected disbursements and net flows (US$ millions) Financing requirements

CHARTS

Chart 1 Chart 2

Per capita gross domestic product and growth Governance indicators

ANNEXES

Annex I-A Annex I-B Annex I-C

Program of operations Active portfolio Strategy matrix for the Bank’s country strategy with Haiti 2007-2011

ELECTRONIC LINKS TO TECHNICAL ANNEXES

Annex II:

Haiti’s current context and main development challenges http://idbdocs.iadb.org/WSDocs/getDocument.aspx?DOCNUM=991630

Annex III:

Economic developments in Haiti from 1960 to 2006 http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=991805

Annex IV:

Public debt in Haiti http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=991836

Annex V:

The Bank’s country financing parameters for Haiti http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=991909

Annex VI:

Aid from multilateral and bilateral donors: further information http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=991955

- iii -

ABBREVIATIONS

FAES FSO GDP GPRSP HIPC ICF IDA IIC IMF InfraFund INT LAC MDGs MIF MINUSTAH MPCE MTPTC NFPs NGO OVE PBG PBL PEFA PEMFAR PEU PNEF PRI PRODEV SMEs UNDP UNICEF

Economic and Social Assistance Fund Fund for Special Operations Gross domestic product Growth and Poverty Reduction Strategy Paper Heavily Indebted Poor Countries Interim Cooperation Framework International Development Association Inter-American Investment Corporation International Monetary Fund Infrastructure Project Preparation Fund Integration and Trade Sector Latin America and the Caribbean Millennium Development Goals Multilateral Investment Fund United Nations Stabilization Mission in Haiti Ministry of Planning and External Cooperation Ministry of Public Works, Transportation, and Communications Nonfinancial products Nongovernmental organization Office of Evaluation and Oversight Policy-based grant Policy-based loan Public Expenditure and Financial Accountability Public Expenditure Management and Financial Accountability Review Project execution unit National Plan for Education and Training Private Sector Department Program to implement the external pillar of the Medium-term Action Plan for Development Effectiveness Small and medium-sized enterprises United Nations Development Programme United Nations Children’s Fund

EXECUTIVE SUMMARY

1.

The Bank’s country strategy with Haiti for 2007-2011 aims to support that country in strengthening its economic and social recovery process. There has been political stabilization in Haiti, together with a significant improvement in the economic and security situation following the transition process in 2004-2006.

That process, however, remains fragile and has not translated into a substantial improvement in social conditions.

2.

The Préval administration has prepared a medium-term development plan that accords priority to modernization of the State and development of private investment. That plan, together with Haiti’s Growth and Poverty Reduction Strategy Paper (GPRSP), to be implemented in late 2007, constitute the frame of reference for national and international efforts, which the Government of Haiti will coordinate. Against this backdrop, country authorities and the Bank have together identified four sectors in which to target Bank actions supporting Haiti’s objectives: transportation and electricity infrastructure, agriculture, education, and economic governance.

3.

The Bank’s country strategy will have three objectives: (i) strengthen the underlying foundation for economic growth, targeting the transportation and electricity infrastructure sectors, the agricultural sector, and the private sector; (ii) improve access to and coverage of basic services in the areas of water supply and sanitation, education, and vocational training; and (iii) strengthen the governance and institutional capacity of the Government of Haiti, particularly economic governance.

4.

The expected outcomes in the infrastructure sector are aimed at reducing transportation time and costs and increasing electric power service in the target areas. With respect to the private sector, the country’s ranking in the business climate index would be gradually improved. The percentage of the population with access to basic services, particularly water supply and sanitation and education, will be increased. The governance outcomes will reflect greater efficiency in the government’s collection capacity and fulfillment of the recommendations from the Public Expenditure Management and Financial Accountability Review (PEMFAR) and the Public Expenditure and Financial Accountability (PEFA) indicators.

5.

The financial program under the new FSO allocation is at least US$230 million for the period covered by this strategy. For 2007-2009, US$50 million in nonreimbursable resources will be available per year. After 2009, Haiti will be eligible for a blend of nonreimbursable resources and FSO loans, US$40 million of which can be nonreimbursable in accordance with the Debt Sustainability Framework and Performance-based Allocation (DSF/PBA). Part of the annual program will be provided through a new Bank instrument—the policy-based grant (PBG).

- ii -

6.

The financial program is based on technical-cooperation operations for which different funding sources will be sought, in response to fewer FSO resources being available. In 2007, nearly 40% of technical-cooperation resources will come from other funds, and the Bank will seek to maintain at least that level in subsequent years. For the private sector, financing will be provided for nonsovereign guaranteed operations, particularly from the Multilateral Investment Fund (MIF) and special funds, such as the InfraFund. The Bank also has a young portfolio with 21 investment programs and sector policy-based programs totaling US$637 million, with 64% of that amount still to be disbursed. Cofinancing resources will be pursued for programs in the sectors led by the Bank.

7.

The financial support to achieve operating results includes a lending scenario with US$520 million in disbursements for the 2007-2011 period. This will ensure positive net flows for the country averaging US$85 million per year.

8.

As regards operational considerations, country systems are still being developed and need support. There are various initiatives for strengthening the fiduciary system. Based on the diagnostic assessment of the PEFA and PEMFAR, which was prepared jointly with the Government of Haiti, an action plan has been crafted that will be the road map for public finance reforms and will be applied to donor interventions.

9.

For the purposes of coordination with other donors, active efforts will be made to reach agreements and achieve synergies in the sectors the Bank is spearheading, particularly in terms of cofinancing. In recent years, cofinancing was secured for approximately 15 cents of each dollar in the active portfolio for infrastructure and education. In the future, the aim is to leverage double that amount in the infrastructure sector and to maintain at least the same level in other sectors (education, water and sanitation). For portfolio management, the portfolio will be used as an active programming instrument and tool for meeting the government’s support needs.

10.

The risks to the strategy’s objectives are related to the fragile political and security situation, macroeconomic stability, continued support from other donors, and potential natural disasters. Although some of these risks are outside of the Bank’s purview, it will seek, to the extent possible, to target efforts to mitigate and prevent them.

SUMMARY STRATEGY MATRIX FOR THE BANK’S COUNTRY STRATEGY WITH HAITI 2007-2011 Government strategy

IDB program of operations 2007-2009

Performance indicators

1. Objective: Strengthen the underlying foundation for economic growth Transportation • Build and rehabilitate the highway system to link the country’s main cities and production centers.

• Implement a sustainable road maintenance policy.

Electric power • Reform the sector to promote increased coverage and sustainable investment.

Grants - Rehabilitation of road infrastructure (contributions 1 and 2) - Rehabilitation of the Péligre hydroelectric plant Technical cooperation - Strengthening the preinvestment capacity of the Ministry of Public Works, Transportation, and Communications (MTPTC) - Medium-term strategy for the electric power sector MIF - Strengthening airport security

Transportation: • Reduce average travel time by 30% in the sections targeted by the Bank (Baseline = 6 hours between Jérémie and Les Cayes; 4 hours between Miragoâne and Petit Trou) Energy: • In six years, increase by 20% delivery of electric power from recovering losses in the areas targeted by the Bank (Baseline = 287 MWh per sixmonth period) • Reduce the average number of monthly power outages per circuit to 15 in six years (Baseline = 126 outages).

Agriculture • Modernize institutions and production in the sector • Improve access to credit and basic inputs • Rehabilitate infrastructure • Make land titles more secure

Grants - Supplemental financing for the Agricultural Intensification Program - National Watershed Management Program Technical cooperation - Strengthening capacity for natural disaster prevention and protection of economic infrastructure - Natural disaster prevention in priority watersheds - Support for preparation and implementation of the National Watershed Management Plan I and II. MIF - Support for agroindustrial fruit processing in the Camp-Perrin region - Competitiveness and profitability of milk processing plants (Lèt Agogo) - Compliance with international phytosanitary and quality standards for fruit

•

Increase by 25% the average income of farming households in the targeted areas (Baseline = US$1,200)

- ii Government strategy

IDB program of operations 2007-2009

Private sector • Create conditions for economic growth driven by private initiative • Increase the country’s economic bargaining power • Promote financial sector liberalization and modernization • Boost public and foreign investment • Secure resources from local banks and remittances from the diaspora.

Technical cooperation - Innovative financing for small and medium enterprises (FINPYMES), Haiti - Pilot program for public-private partnerships in education - Microfinance for rural companies - Trade and investment promotion forum - Investment promotion initiative - Support for the private export sector MIF - Promotion of rural women entrepreneurs - Promotion of microentrepreneurship in Haiti - Strengthening the capacity of SMEs in Cap-Haïtien - Rural community tourism in Dondon - Support for agroindustrial fruit processing in the Camp-Perrin region - Competitiveness and profitability of milk processing plants (Lèt Agogo) - Compliance with international phytosanitary and quality standards for fruit

Performance indicators •

Raise Haiti’s business climate index ranking (Baseline = 136/176)

2. Objective: Improve access to and coverage of basic services Water and sanitation • Increase the coverage and improve the quality of water and sanitation.

Solid waste • Increase solid waste collection through a sustainable management system.

Technical-cooperation operation - Feasibility study for a sanitary landfill for the Port-au-Prince metropolitan area

Water and sanitation • 90% of the population has access to drinking water in the targeted areas (Baseline = 54% nationwide and 35% in the targeted areas).

• Stage one of the Master Sanitation Plan executed in each target city.

- iii -

Government strategy

IDB program of operations 2007-2009

Education • Implement the National Plan for Education and Training (PNEF), supporting the Ministry of National Education and Vocational Training and the National Vocational Training Institute.

• Tie gains in basic and secondary education to health and food services.

• Promote partnerships with the private sector.

Technical cooperation - Assessing education quality - Early education pilot - One Laptop Per Child (OLPC) pilot in Haiti - Collective remittances and investment in delivery of basic services - Study on primary education accountability - Pilot program for public-private partnerships in education - Institutional mechanism for education quality control

Performance indicators •

Primary school enrollment rate of 100% in 2015 (Baseline = 71%).

•

The budget is structured to increase its coverage to 6 of the 9 criteria set under the PEFA framework (Baseline = 4).

Tax collection effectiveness rises by 75%-90%; collected balances are transferred to the Treasury weekly (daily in Port-au-Prince, and monthly in the provinces); The time it takes to reconcile taxpayer contributions collected against the payments due to the Treasury is reduced to a maximum of three months.

Payroll delays are reduced.

3. Objective: Strengthen governance and build institutional capacity Justice and security • Strengthen justice, security, and democratic institutions.

• Strengthen risk prevention and management.

Technical cooperation - Support for the Haitian parliament (in execution)

Economic governance and institutional capacity • Fight corruption • Modernize the central government and governmentowned companies • Decentralize administration • Strengthen investment promotion mechanisms • Promote gender equity

Grants - Strengthening public resources management (PBG) I & II - Programmatic PBG for economic governance (I) Technical cooperation - PRODEV I - Phase three of the 1-2-3 Survey - Program to support monitoring of the Ministry of Finance’s Programming Unit - Continuing education in project management - Strengthening the Ministry of Public Works, Transportation, and Communications to build its technical capacity - Training technical staff in construction companies - Action plan for gender equity and women’s rights - Strengthening the Ministry of Women’s Affairs and Women’s Rights - Strengthening the Ministry of Trade and Industry MIF - Promotion of rural women entrepreneurs

•

•

I. 1.1

INTRODUCTION

This country strategy with Haiti for 2007-2011 is divided into three chapters. Chapter I outlines the current context in the country, the main development challenges, the government’s priorities, and priorities for Bank action. Chapter II reviews how the previous strategy was aligned with the country’s challenges and presents the lessons learned from portfolio performance. Chapter III presents the proposed strategic axes, the program of operations for the first three years, and issues related to implementing the strategy.

II. CURRENT CONTEXT, MAIN DEVELOPMENT CHALLENGES, AND GOVERNMENT AGENDA

1

2.1

After a difficult transition process (2004-2006), Haiti is beginning to show clear signs of improvement.2 This recovery is fragile, and the numerous and sizable core development challenges remain. To tackle them, a strategy is needed that gives priority to key problems hindering the country’s economic development, together with ongoing, predictable support from the international community.

A.

The current context in Haiti

2.2

Progress on political stability and security. The political situation has been stabilizing since 2004. In February 2006, the Haitian people elected President Préval.3 His new administration brings together members of different political parties. It has been working with civil society to prepare the Government Agenda, and they are now working on Haiti’s Growth and Poverty Reduction Strategy Paper (GPRSP). Moreover, the joint efforts of the National Police of Haiti and the United Nations Stabilization Mission in Haiti (MINUSTAH)4 in surveillance and control of various critical urban areas has reduced the lack of security. Country authorities are committed to locking in the security gains and hence are seeking, among other things, to reform the justice system, restore the State’s presence in fringe neighborhoods, and improve living conditions for the people living there. This is a major challenge since security and living conditions among the very poor remain precarious.

2.3

Economic recovery. Following two years of difficult transition, the economy is recovering thanks to the preservation of fundamental macroeconomic equilibria and strengthening of economic governance. Gross domestic product (GDP) grew 2.3% in 2006 and, following many years of continual decline, per capita GDP rose 0.7%.

2.4

The economic outlook is positive since the Government of Haiti, in the framework of the IMF Poverty Reduction and Growth Facility (PRGF), is committed to furthering the reforms and projects annual growth rates of roughly 4% for 2007-2009. What’s more, Haiti

1

The first two sections of this chapter are based on Annexes II and III, which provide a more complete analysis.

2

From 2004-2006, the recovery took place in the context of the Interim Cooperation Framework (ICF) that was prepared and implemented with support from the international community.

3

Legislative, municipal, and local elections were also held that year.

4

MINUSTAH’s mandate was renewed on 15 February 2007 for an additional eight months.

-2-

was declared eligible for the Heavily Indebted Poor Countries (HIPC) initiative and reached the decision point on 21 November 2006. It is expected to reach the completion point in 2009. This program will free up resources associated with debt reduction, to support economic recovery and poverty reduction.

2.5

Economic recovery has not yet translated into a substantial improvement in the population’s standard of living. Poverty and inequality rates in Haiti are high. In 2001, 78% of the population, on average, lived on less than two dollars per day, and this has not changed.5 There are significant regional disparities in poverty levels, which are higher in rural areas.6 The richest 10% of the population accounts for 47% of national income, compared to only 1.1% for the poorest 20%. Similarly, women in Haiti have a high level of vulnerability—Haiti ranks last in the Western Hemisphere on the United Nations Development Programme’s gender-related development index.

B.

Haiti’s main development challenges

2.6

Haiti’s main development challenges are concentrated in three main areas: (i) consolidating economic recovery; (ii) improving living conditions for the population; and (iii) building institutional capacity and strengthening governance, in order to achieve the foregoing objectives.

1. Consolidating economic recovery

2.7

Economic growth in Haiti has generally been volatile, due to the fact that the few, short periods of growth have traditionally been interrupted by severe economic crises (see Chart 1). To be on a path of long-term growth, the country needs to maintain the political and social stability of the last few years and lock in the underlying foundation for that growth. The main pillars of this economic growth are related to: (i) improved basic infrastructure to support production; (ii) agricultural sector development and improved environmental quality and natural disaster prevention; and (iii) development of productive sectors and private services, primarily in sectors in which Haiti has the greatest competitive advantages in the international marketplace.

5

There are no current socioeconomic data for households that would allow for a complete diagnostic assessment of the current status of poverty.

6

Rural living conditions are generally difficult due to the absence, low coverage, and poor quality of basic services, coupled with the lack of basic infrastructure, geographic isolation, and socio-political exclusion. In the Northeast region, for example, 81% of the population lives on less than one dollar a day.

-3-

Chart 1. Haiti: Gross domestic product 15.0

1000 900

10.0

800

Growth (%)

600 0.0

500 400

- 5.0

Per capita GDP

700

5.0

300 GDP growth (real annual) GDP per inhabitant (2000)

- 10.0

- 15.0 1961

1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

200 100 0

Source: World Development Indicators, IMF-Statistics

2. Improving living conditions 2.8

Rolling back the high levels of poverty and inequality will require several years of sustained, equitable growth. In the short term, increasing access to quality basic services is essential for improving living conditions. Although such services have improved, thanks to efforts under the ICF, access, coverage, and quality are still precarious. For example, only 54% of the population has access to water supply services, and 30% to sanitation.

Education and vocational training are another example where coverage levels and quality are low. The supply of public education is extremely limited (less than 10%), preschool education is virtually nonexistent, and some 70% of schools outside of the public system are not certified, while 60% of teachers do not have proper training.

3. Strengthening governance and building institutional capacity

2.9

Haiti ranks low in many areas of governance and institutional capacity (see Chart 2), so the efforts that have been made since 2004 must be continued. It is particularly important to continue strengthening political stability, public resource management, and institutional capacity. There is evidence that countries that rank high on various governance indicators tend to have low infant mortality rates, high literacy rates, and high per capita income.

-4-

C hart 2 . G overnance indica to rs V o ice and A cco untability 1 .5 0

R isk index*

P o litical stability

1 .0 0 0 .5 0 0 .0 0

Q ua lity o f bureaucracy

G o vernm ent effectivene ss

-0 .5 0 -1 .0 0 -1 .5 0

R egu latory qualit y

C o rruptio n*

R isk o f expro priatio n* E nfo rceabilit y o f go vernm e nt co ntracts*

Haiti LA C HIPC

R u le o f law

C o ntro l o f co rruptio n

Source: Kaufmann, Aart Kraay and Massimo Mastruzzi (2005).

Note: The statistical data were normalized (value of the series minus the average, over the standard deviation). For easier reading and presentation, variables with an asterisk were normalized inversely.

C.

The government’s development strategy and the Bank’s new cooperation framework 1. The government’s priorities

2.10

The authorities, working with various social stakeholders (civil society and political parties), have prepared a long-term (25-year) vision for national development that contains a medium-term (five-year) Government Agenda.7 The chief medium-term priorities are modernization of the State and development of private investment, primarily in agriculture and tourism. The Government Agenda will be complemented by Haiti’s GPRSP. The National Forum to Validate the GPRSP was held in Port-au-Prince on 26 September 2007, and implementation of the strategy is expected to begin in late 2007.

2.11

The authorities have also indicated that they intend to uphold the principles of the Paris Declaration to better coordinate international support, with a view to making it more predictable and effective.

7

This strategy was presented at the International Conference for Haiti’s Economic and Social Development held in Port-au-Prince on 25 July 2006. Authorities at the highest level and over 30 representatives of multilateral and bilateral donors participated in the event. The international community pledged US$750 million for fiscal year 20062007. The Government Agenda contains eight action areas (“chantiers”), considered prerequisites, that must be implemented progressively and that would be the focus of national and international efforts over the next five years.

They are: (i) public works; (ii) social pacification; (iii) justice and security; (iv) raising incomes; (v) strengthening the State; (vi) education; (vii) health; and (viii) agriculture and the environment. The government presented the average medium-term cost for each “chantier,” which together totaled US$7.1 billion.

-5-

2. Priorities assigned to the Bank 2.12

The Government of Haiti and the Bank have agreed to target the Bank’s efforts at four main sectors: infrastructure, primarily for transportation and electric power; agriculture; education; and economic governance. These sectors are part of the country’s main development challenges and were identified as priorities in the GPRSP. Moreover, the Bank has already been working in these sectors, giving it a comparative advantage (e.g. specific sector knowledge and stronger executing units) that will give its actions greater value added. Haiti has also designated some of these same sectors as priorities with other donors, so external coordination will be a key element of the country strategy, to ensure complementarities and avoid duplication of efforts. Chapter IV contains the Bank’s operational response.

III. PREVIOUS STRATEGY AND PORTFOLIO: LESSONS LEARNED FOR THE NEW STRATEGY8

A.

Alignment of the 2005-2006 Transition Strategy with the country’s challenges

3.1

The Transition Strategy approved in March 2005 was to run more or less through March 2006. Its objective was to support the reactivation and transition process under the ICF and to strengthen the portfolio in execution. A related objective was to lay the groundwork for shifting the Bank’s approach from transition to long-term development by putting together a more comprehensive strategy. The Transition Strategy was geared towards laying the foundation for governance by promoting growth and contributing to long-term poverty reduction, with a view to furthering the country’s economic and social recovery.

3.2

The portfolio and how it relates to the program of operations. Of the 11 projects proposed in the Transition Strategy (US$271 million), eight were approved during the transition period, and the remaining three were approved between April and December 20069 (See Table 1). The approved technical-cooperation operations focused on institutional strengthening of counterparts and preparing studies for program design and execution. The Structured and Corporate Financing Department (SCF) and the InterAmerican Investment Corporation (IIC) did not approve any operations for Haiti. The Bank also conducted nonfinancial activities and studies (NFPs), although their contribution was

8

This chapter takes into account the Country Program Evaluation 2001-2006 for Haiti prepared by the Bank’s Office of Evaluation and Oversight (OVE) and two reports prepared by Management in late 2006: the Country Portfolio Review and the self-assessment of flexibility measures.

9

Looking at how the Transition Strategy was distributed among the ICF’s strategic pillars, 21% of the total went to pillar 2 (compared to the programmed level of 20%), 45% to pillar 3 (compared to 41%), and 34% to pillar 4 (compared to 39%). The Transition Strategy had not programmed any loan operations under pillar 1, but did include a technical-cooperation operation on gender violence, as well as a MIF project, both of which were approved.

Three other projects were approved from April 2006 to August 2007 (two in the economic governance sector and one in the electric power sector), together with supplemental financing for the Transportation Infrastructure Rehabilitation Program.

-6-

focused on coordination with other donors to leverage the portfolio’s contribution to Haiti’s development.10 Table 1 Approved operations (2005-2006) Type Loans Technical-cooperation operations (FSO) Technical-cooperation operations (other funds) MIF Total

Number 11 17 18 4 50

Approved amount (US$ millions) 260.0 2.5 2.8 2.3 267.6

3.3

As of 1 October 2007, the Bank’s active portfolio had 72 operations totaling US$652 million. Twenty-one of these were investment programs and sector PBLs totaling US$637 million. In all 64% of the total amount of these operations is still pending disbursement, primarily because the portfolio is so young. The total disbursed in 2006 (US$56 million) was less than the programmed amount, although for investment programs it was 24% higher than in 2005 (US$45 million).11 The current challenge for the government and the Bank is therefore to implement the portfolio, picking up the pace of disbursements, in order to achieve the development objectives. Performance in 2007 is looking positive, with disbursements at 1 October already exceeding US$100 million.

3.4

The loan portfolio is aligned with the strategic pillars of the ICF (see Table 2, Annex I-B). The Bank participated in the ICF’s 19 sector coordination forums12 and on the ICF’s Coordination Committee. Both of these mechanisms helped to promote synergy between Bank projects and those financed by the international community.

B.

Portfolio execution challenges and main outcomes

3.5

The primary obstacles to portfolio implementation continue to be: (i) limited institutional capacity for execution, particularly in terms of the civil service structure and human resources; (ii) the small local market and saturation of local companies’ operating capacity; and (iii) scant participation by foreign companies, primarily due to the perception that security is lacking.

10

For example, in 2005, the Bank assigned a staff member from Headquarters to the Country Office for six months to support Bank participation in ICF coordination mechanisms, including the sector coordination forums, and in communicating the results of Bank activities in the country. The Bank also participated in several ICF follow-up meetings: Port-au-Prince (2005); Cayenne (2005); Montreal (2005); Port-au-Prince (2006); Madrid (2006); and Washington, D.C. (2007).

11

The pace of disbursements rose from US$28 million in 2004 to US$70 million in 2005, US$25 million of which was for PBLs. In 2006, US$66 million was disbursed, with US$10 million in PBLs, although US$94 million in disbursements was originally expected. The election period and change in authorities are part of the reason for the “slow” disbursements in 2006.

12

It was the focal point for those on economic governance, transportation, agriculture, water and sanitation, and local development.

-7-

3.6

These challenges notwithstanding, portfolio execution performance has been acceptable. The pace of execution has stepped up considerably since September 2006, and most projects have not needed an excessive amount of time to meet the conditions precedent to disbursement. As of August 2007, 17 projects reported that execution was satisfactory, while three had major difficulties. The Bank has already taken steps to resolve the problems affecting the latter and improve their execution.13

3.7

The strategy for enhancing flexibility. The Transition Strategy included the following special measures for addressing the aforementioned obstacles: (a) temporary waivers of Bank rules, policies, and procedures; (b) strengthening execution capacity; and (c) improving security on the ground14. The Bank recently evaluated these measures and found that they helped to streamline project implementation. The government and the Bank are also facilitating increased participation by local companies and NGOs, through steps such as easing the requirements in the company rating criteria; reducing callable guarantees for works contracts; direct contracting of NGOs to manage project execution; and promoting NGO participation in bidding processes. To strengthen monitoring of project execution, the government and the Bank agreed to institute Steering Committees (“comités de pilotage”) made up of representatives of the Ministry of Finance, Ministry of Planning and External Cooperation (MPCE), the project executing units, and Bank specialists.15

3.8

Outcomes and progress. Through two transition strategies, the Bank has been supporting economic recovery and improved living conditions for the population since late 2003. The IDB is currently one of Haiti’s main sources of long-term financing and the main multilateral organization operating there. Its portfolio was reactivated roughly three years ago and projects under the Transition Strategy began no more than a year and a half ago, which is a very short period for measuring program outcomes and impact.16 The exception to this were economic governance operations (loans for reforms and to support sector investment). In this area, the Bank contributed to the approval and implementation of the Budget Appropriation Act, which made the use of public sector resources more effective, efficient, and transparent and implemented a regulatory and operational framework for preparing, executing, and monitoring the national budget. The Bank has also supported implementation and strengthening of the public procurement system, the establishment of the anti-corruption unit, and revenue reform. Furthermore, the Bank helped to establish a

13

Reform programs in the water and sanitation, basic education, and strengthening of environmental management sectors.

14

The key elements of that strategy are: (i) decentralizing authority to the Country Office (Annex II of document GN-2217-7 of 9 March 2005); (ii) adopting a single procurement document called the “Ad Hoc Annex”; (iii) the Bank and government jointly reviewing project execution periodically during special missions; and (iv) eliminating the requirement that there be local counterpart financing, given the severe constraints on the availability of resources.

Lastly, the Bank has placed particular emphasis on making headway on actions to have new loans become eligible more quickly.

15

The Steering Committees are monitoring and coordination bodies for anticipating execution problems that would require decisions from higher up to resolve. They have opened a more direct channel of communication between the sector ministries and the ministries responsible for programming and planning foreign aid.

16

The Transition Strategy included 16 outcome indicators and 23 impact indicators. Most were at the project level, but a few were strategic indicators.

-8-

modern regulatory framework for the banking system and to close fiscal gaps in the country.

C.

Lessons learned and recommendations

3.9

This section is consistent with the main recommendations that OVE made in its Haiti Country Program Evaluation 2001-2006.

3.10

The process of reactivating Bank operations in Haiti and the Bank’s subsequent participation in the ICF led to a scattered portfolio, which the Bank needs to channel towards strategic sectors identified with the government. To improve portfolio implementation, the flexibility measures need to be extended and expanded, and institutional strengthening of the Government of Haiti needs to be supported. To that end, the Bank has to continue working with executing units in the public sector, to ensure that they in turn strengthen the line ministries, and to incorporate the expenditures into the State budget. Support must also be provided to the government for developing and consolidating a national monitoring and evaluation system. The Country Office needs to be strengthened so it can be a key strategic advisor on government policies.

3.11

Bank support for the private sector has been low, except from the MIF, which has had strong involvement. It is very important for the IDB Group’s private sector windows to explore different ways of increasing their involvement in Haiti and develop a joint strategy to directly support the private sector. The Bank also needs to explore innovative ways to build local companies’ capacity and attract foreign firms.

3.12

The ICF made it possible to coordinate the actions of the international community and the country. The Government of Haiti plans to spearhead international coordination but needs support from the international community. The international community has to support the strengthening of the Prime Minister’s office and the MPCE, so they have the capacity for effective planning and coordination. Donors’ various procedures also still need to be harmonized and shared.

IV. COUNTRY STRATEGY WITH HAITI 2007-2011

4.1

17

The Inter-American Development Bank’s country strategy represents a commitment to Haiti’s economic and social recovery. It is consistent with the National Growth and Poverty Reduction Strategy Paper (GPRSP) and fits within the framework of the HIPC and MDRI initiatives. The Bank’s new mechanism for concessional finance and debt relief, approved by the Board of Governors in March 2007, calls for at least US$230 million in financial support to Haiti over the course of the country strategy period, along with US$525 million in debt relief to be delivered once the country reaches the HIPC completion point in 2009, and an additional US$20 million in debt forgiveness in 2007 and 2008 as interim relief under the HIPC initiative. Accordingly, US$50 million in nonreimbursable resources will be provided annually in 2007-2009.17 After 2009, Haiti will be eligible for a blend of

This does not include the annual amount of nonreimbursable financing that the Bank allots to Haiti for technical assistance.

-9-

nonreimbursable resources and FSO loans, the nonreimbursable portion of which can be US$40 million in accordance with the DSF/PBA framework.18 4.2

This strategy seeks to address the country’s many development challenges in line with the priorities set by the Government of Haiti and the Bank, concentrating on targeted operations and specific sectors. This will, on the one hand, make efficient use of limited resources, and, on the other, channel the Bank’s sizeable portfolio of loans in execution toward the set priorities. Through this process, main areas of strategic focus have been identified for the period 2007-2011, frontloading the nonreimbursable financing in 20072009. This offers advantages, in that it will enable the authorities to: (i) finish the work being done under the Extended Interim Cooperation Framework; (ii) begin implementing the GPRSP; and (iii) postpone settling the Bank’s project pipeline for 2010-2011 until a later time.

A.

Objectives and target areas 1. General objective

4.3

The general objective of this country strategy is to help Haiti pursue its process of economic recovery and improve living conditions for its population. To accomplish this, three interrelated strategic objectives have been set in line with the government’s priorities: (i) strengthen the underlying foundation for economic growth; (ii) improve access to and coverage of basic services; and (iii) strengthen governance and build the institutional capacity of the Government of Haiti.

4.4

The programmatic package to support these strategic objectives is described in the matrix attached as Annex I-C. 2. Strategic objectives a. Strengthen the underlying foundation for economic growth

4.5

Locking in economic growth in Haiti is a core priority. Yet the needs are many. The Bank’s work will focus on key areas, seen as prerequisites for the country’s productive development, that can have a greater catalytic effect on economic activity and employment, and where the Bank already has a comparative advantage. The Bank will work to support government initiatives in three strategic areas: (i) improvements to basic infrastructure that supports productive activities; (ii) strengthening of the agricultural sector to boost output and agricultural exports; and (iii) private sector development. (i)

4.6

Improvements to basic infrastructure that supports productive activities

Transportation sector. The Bank and the Government of Haiti both recognize the importance of ongoing improvements in transportation to rekindling economic activity and galvanizing domestic industry. The Government Agenda’s top priority is construction of a national highway system linking the country’s main cities.19 A sustainable road maintenance policy will also need to be introduced.

18

See document CA-474 and Resolution AG-0307.

19

The program calls for construction of five main highways: Cayes–Jérémie; Miragoâne–Petit Trou de Nippes; Gonaïves–Port-de-Paix; Mirebalais–Hinche, and Hinche–Carrefour La Mort.

- 10 -

4.7

The transportation sector is the top priority that the government has assigned to the Bank.

The Bank has a comparative advantage in this area, in that transportation infrastructure represents the largest volume of resources in its portfolio. The Bank’s work will focus on: (i) supporting restoration of the transportation system to serviceable condition; and (ii) rebuilding/repairing segments of the Haitian road system that provide access to areas with productive potential, so as to enhance the country’s international competitiveness. For the future, the Bank and the Ministry of Public Works, Transportation, and Communications (MTPTC) have agreed on a roadmap that includes: (i) supplemental financing for work on the primary and rural road networks; (ii) support for the MTPTC in creating a structure for responding to emergencies and performing maintenance work on certain road segments; and (iii) labor-intensive paving of city streets. Priority financing will go to rebuilding/repairing highways with significant potential impact on economic growth.

4.8

To support the transportation sector, the Bank will approve a multiple works program with four annual contributions of US$25 million each, cofinanced by Canada.20 The full support package, including programs in execution, is described in the matrix attached as Annex I-C.

4.9

Electric power sector. This sector’s weakness and its impact on economic activity and public welfare make it a critical point for intervention. The Government of Haiti believes that sector reform and expanded coverage are necessary. The Bank will work to improve the sector’s finances, as well as shore up and increase its poor coverage and service quality.

The government could also receive support in finalizing its medium-term strategy.

4.10

The Bank’s contribution will be concentrated in one project to overhaul the Péligre hydroelectric power plant, which may be in danger of being torn down in the medium term.

This overhaul will help maintain the generating capacity of the plant, which currently produces approximately 25% of the country’s power. The Bank is also exploring the possibility of promoting alternative energy sources, such as biofuels. (ii)

Strengthening of the agricultural sector

4.11

The agricultural sector is one of the main pillars of the Government Agenda. The Government of Haiti and the Bank believe that, in order to boost output and exports of the country’s principal agricultural and rural cottage industry products, the following areas must be addressed: (i) the absence of secondary roads connecting small-scale producers to major markets; (ii) minimal electricity coverage in rural areas; (iii) institutional weakness of the Ministry of Agriculture, Natural Resources and Rural Development (MARNDR); (iv) lack of access to rural finance; and (v) obstacles to export of agricultural products. The Bank will closely coordinate roadway and infrastructure projects in rural areas with agricultural productive development. The shared vision with the Government of Haiti emphasizes income enhancement using alternatives that better protect natural resources, especially competitive supply chains that employ antierosive production methods, actively contributing to better watershed management. Biofuel promotion is being explored specifically in this context.

4.12

The Bank has three programs in execution, and is considering supplemental financing for the Artibonite Agricultural Intensification Program, as well as a National Watershed

20

In 2006, Canada provided some Can$20 million to support the Transportation Infrastructure Rehabilitation Program.

- 11 -

Management Program (see the matrix attached as Annex I-C). The private sector windows will pursue mechanisms to leverage investment in the sector, while the MIF will keep working to strengthen small microfinance institutions. (iii)

Private sector development

4.13

Haiti needs a dynamic, efficient private sector that contributes to the country’s productive development, assumes the risk of generating economic activity, and creates jobs. Private sector development is a top priority of the government’s development plan. The Bank will work to improve the business climate in Haiti and identify opportunities for working with the private sector, creating the mechanisms to pursue them. This will first require diagnostic assessment of the main advantages and obstacles to investment, as well as identification of the most effective initiatives and procedures in the Haitian context. More systematic work will also be done to find potential partners, and provide advice and support as they complete the steps to become eligible for the Bank’s private sector products.

4.14

As political and economic stability improves, there is greater interest in investment in Haiti.

The Bank will support the efforts of firms wishing to invest in Haiti, both through direct financing and through events to promote and publicize opportunities both inside and outside the country. As part of this effort, the Bank plans to jointly organize a Trade and Investment Promotion Forum with the Organization of American States (OAS) and the Government of Haiti in the first half of 2008, in order to marshal potential investors around the opportunities identified by the private sector windows and help develop the project portfolio. This event will lay the groundwork to identify the mechanisms and partnerships necessary for potential projects. The Bank has also been pursuing an Investment Promotion Initiative that seeks to create the institutional conditions and facilities necessary for investment in Haiti.

4.15

The Bank will also support the development of private-sector exporters, as a way of boosting foreign trade. This will entail preparation of a technical note on trade integration in Haiti, a study on the opportunities offered by the United States tariff preferences, and possibly support for strengthening of the Ministry of Trade and Industry. The Bank will also continue to foster microfinance development as a mechanism for channeling credit to the private sector, and is exploring the possibility of introducing the Innovative Financing for Small and Medium Enterprises (FINPYME) program in Haiti.

4.16

The efforts of the private sector windows to identify opportunities in productive sectors will complement the Bank’s work to improve macroeconomic governance and promote investment in infrastructure and human capital as a way of enhancing the business climate. b. Improve access to and coverage of basic services

4.17

Although the main points of this strategic objective are necessary to reduce poverty and improve living conditions, they are not sufficient. The country is in need of actions with short- and medium-term impacts on the population’s standards of living. The Bank will therefore work in two strategic areas: (i) water and sanitation, and solid waste collection; and (ii) quality vocational education and training. (i)

4.18

Improvements in water and sanitation, and solid waste collection

Water and sanitation. In the context of the Millennium Development Goals (MDGs), the Government of Haiti is committed to providing more and safer drinking water, and

- 12 -

improving sanitation infrastructure. To accomplish this, the authorities believe it is necessary to: restructure the sector institutions, increase the water coverage rate to 70% by 2010, introduce reforestation and watershed protection programs in water sources, and increase the sanitation coverage rate to 40% by 2010 through the construction of sanitation infrastructure. The Bank’s strategy is in line with these priorities. Specifically, the Bank has been supporting sector institutional reform (with additional support from the MIF) and works construction in secondary cities and rural systems.

4.19

Solid waste. Solid waste collection and disposal problems have reached a critical point, so the Government of Haiti has requested Bank support, which should have an immediate impact on living conditions. The Bank is already responding with a short-term intervention to support municipal solid waste collection in the Port-au-Prince metropolitan area, which is being conducted by the Ministry of Public Works, Transportation, and Communications (MTPTC). In future, options will be explored with the government for a potential sector intervention. (ii)

Increased coverage and access to quality vocational education and training

4.20

The Government of Haiti has requested Bank support for implementation of the principal points of the National Plan for Education and Training (PNEF), originally drafted in 1997 and now being updated. Is also preparing an “Education for All” strategy, geared toward meeting the MDGs.

4.21

Bank support will be given mainly through two investment programs in the pipeline (see the matrix attached as Annex I-C). Cooperation on an early childhood development operation is also being explored, for which resources from the active portfolio will be used to leverage additional cofinancing from other donors. c. Strengthen governance and build institutional capacity

4.22

Weak political processes and unsustainable economic practices are obstacles to long-term economic growth and lasting improvement of the population’s living conditions. More democratic institutions are another necessary condition for fulfillment of the principles of alignment, harmonization, and management by results established by the Paris Declaration.

The Bank’s work in this area will focus on strengthening: (i) democratic institutions and local development; (ii) economic governance; and (iii) institutional capacity and gender equity. (i)

Strengthening of local development and democratic institutions

4.23

Local development is necessary to ensure political stability and balanced and sustained economic development. Local government capacity will have to be strengthened to handle the resulting transfer of responsibilities. The Bank will support the country’s objective of strengthening its local development process mainly through the Economic and Social Assistance Fund (FAES).

4.24

The need for checks and balances between the executive and legislative branches and the challenge of restoring the country’s institutions and laws demand a Parliament with strengthened capabilities. The Bank’s strategy is to support the initiative of the speakers of both Houses of Parliament, who sought to create a Bicameral Commission to develop a two-phase program for their modernization. The first phase would provide a frame of

- 13 -

reference for international community support to the legislative branch. The second phase would strengthen Parliament’s legislative, oversight, and representative functions. The Bank will support design and implementation of this program with technical cooperation resources (see the matrix attached as Annex I-C). (ii)

Strengthening of economic governance

4.25

President Préval has promised to work to strengthen economic governance, and has requested Bank support for donor coordination in the area of greater transparency. The Bank will support the government’s objective of instituting a regulatory, operational, and institutional framework for public finance that would gradually improve: (i) efficiency and effectiveness in the use of public resources; (ii) the State’s ability to collect taxes; (iii) transparency in the use of public resources; and (iv) the statistical information system.

4.26

To improve public expenditure management, support will be provided for the incorporation of funding sources into the national budget, program-based budgeting, investment planning capacity-building at the Ministry of Planning and External Cooperation (MPCE), and the introduction of an information system. To improve public revenue management, support will be provided for enhancement of the organizational structure of the Revenue Office (DGI), review of tax laws, implementation of a new Customs Code, strengthening of the Customs Administration (AGD), improvements to customs infrastructure, and the introduction of an automated customs management system.

To improve transparency, support will be provided for the introduction of an asset declaration system for public officials and staff of the Inspector General’s Office (IGF).

Lastly, to improve the system of statistics and indicators, support will be provided for phase three of the “1-2-3 Survey,” so as to complete the core survey package now being implemented.

4.27

This support will be delivered mainly via a mix of sector and investment programs (see the matrix attached as Annex I-C). Two new programs integrated into a programmatic policybased grant (PBG) for the strengthening of public resource management, as well as PRODEV I and II, will be approved in 2007 and 2008. (iii)

Strengthening of institutional capacity and gender equity

4.28

Strengthening the institutional capacity of the Government of Haiti for the design and implementation of policies, programs, and projects is a development challenge that cuts across all sectors and keeps the country from locking in gains made in economic growth and better living conditions.

4.29

The strategy adopted by most other donors to deal with this has been to employ project execution units (PEUs) outside the government, which means that the majority of projects are being executed outside the national budget. This, in turn, has created enclaves that do not contribute to strengthening government institutions. The Bank is aware of this problem, and so has been making an effort to work with PEUs within the public sector. Bank projects generally include an institutional strengthening component, and PEU operational capacity was rebuilt in 2003 and 2004, thereby strengthening sector institutional capacity.

The Bank has also been supporting institutional strengthening through technical assistance and financing of high-level consultants.

- 14 -

4.30

The Bank’s strategy will be chiefly to strengthen human resource management in the public sector by supporting implementation of the regulatory framework for human resources approved in 2005 and developing tools for human resource management and efficient public administration structures and operations at line ministries. This is expected to improve service delivery and strengthen the policymaking and project execution capacity of those ministries. Special attention will be paid to strengthening existing human resources through training, as well as recruiting members of the Haitian diaspora. Specific support will be provided through pipeline programs, as well as innovative measures instituted with nonfinancial products and technical cooperation resources to enhance the project delivery capacity of the Government of Haiti.

4.31

Promote gender equity and women’s rights. This will be a key component of the Bank’s work with the country. Its strategy in Haiti will focus on: (i) making gender equity a part of all operations, not just social sector programs; (ii) promoting the active participation of women in the provision of water and sanitation resources in rural communities, and income generation for women in the transportation sector; (iii) promoting women’s access to productive inputs and the labor market; and (iv) strengthening the Ministry of Women’s Affairs and Women’s Rights, so that gender considerations can be built into government policies.

B.

Strategy implementation 1. Strengthening of the Bank’s Country Office

4.32

To facilitate effective program implementation and provide more responsive and closer support to the country, the Bank will significantly increase the number of staff at its Country Office in Port-au-Prince, as well as contract international specialists in the priority sectors led by the Bank.

2. Operational criteria

4.33

To meet the strategy’s stated development objectives and provide efficient and effective support, the Bank’s work will be guided by the operational criteria described below.

4.34

In program targeting, prioritize budgetary assistance operations and other large investment programs. With the Bank providing US$50 million in nonreimbursable resources per year in 2007-2009, its work must be targeted for the support to be relevant.

The Bank will employ the new programmatic PBG instrument to support economic governance reforms in an institutional setting that calls for close donor coordination, and to adjust its approach and measures based on the outcomes of each program. It will structure certain investment programs as multiple-works programs, so as to address the needs of different sectors (e.g. the Economic and Social Assistance Fund) and secure funding over time (e.g. in the transportation sector).

4.35

Supplemental operations with technical cooperation resources and nonfinancial products. Technical cooperation resources and nonfinancial products should be used strategically to meet objectives and address priority sectors. In addition to technical cooperation resources funded from the net income of the Fund for Special Operations (FSO), optimal use will be made of nonreimbursable resources from such funds as the InfraFund, Disaster Prevention Fund, Social Fund, Fund of the Sustainable Energy and

- 15 -

Climate Change Initiative (SECCI), and PRODEV. These operations will also serve to explore and prepare a future, larger-scale Bank intervention.

4.36

Adapt the criterion of flexibility and measures to make the Bank’s work more efficient and effective. As part of the transition strategy, special steps were taken to support execution of the Bank’s activities in Haiti. While these steps had a positive impact on execution under such circumstances, they will now be adapted to the Bank’s new matrix structure to ensure that they meet the country’s needs.

4.37

Contribute to closer donor coordination and adherence to the Paris Declaration principles. The Bank will also promote the participation of other donors in its programs, so as to leverage limited resources. This support will make the Bank’s operations more relevant, and those of other donors more efficient, by preventing duplication and dispersal of efforts.

3. Size and sequencing of the operations program

4.38

The proposed country strategy pipeline will draw upon the FSO allocation and possibly resources from the portfolio of active programs, as well as additional resources from bilateral donor cofinancing.

4.39

FSO allocation. The Bank’s new concessional finance mechanism provides for at least US$230 million in financial support to Haiti over the country strategy period.

US$50 million in nonreimbursable resources will be provided annually in 2007-2009.21 During that period, the Bank will concentrate resources in the key sectors of transportation and electric power infrastructure, agriculture, and economic governance. In the area of economic governance, in 2007 the Bank approved the first programmatic PBG operation for the strengthening of public resource management. Table 1 in Annex I-A presents the program of operations with the FSO allocation for the period 2007-2009. After 2009, Haiti will be eligible for a blend of nonreimbursable resources and FSO loans, the nonreimbursable portion of which can be US$40 million in accordance with the DSF/PBA framework.22

4.40

Resources from active programs. The portfolio will be used as an active tool to address, insofar as possible, priorities consistent with the country strategy and the government’s plans.

4.41

Cofinancing operations. Cofinancing will make it possible to increase the dollar amount of Bank projects. With such funding, high-priority programs for which financing has not yet been identified due to FSO resource limitations can be implemented. In recent years, cofinancing was secured for approximately 15 cents of each dollar in the active infrastructure and education portfolio. At least the same level should be maintained in sectors such as education and water and sanitation, and double that figure is expected to be leveraged in the infrastructure sector. For example, the United States and Spain will participate in the rural water and sanitation program, and the Bank is exploring Canadian participation in economic governance and education sector projects.

21

This does not include the annual amount of nonreimbursable financing that the Bank allots to Haiti for technical assistance.

22

See document CA-474 and Resolution AG-0307.

- 16 -

4.42

Disbursements. The country strategy proposes a disbursement scenario that reflects the country’s absorptive capacity and efforts since 2005 to accelerate portfolio execution.

Allowance is also made for the country strategy activities to strengthen the project delivery capacity of the Government of Haiti. The scenario entails an annual 17% increase in the amounts disbursed for investment projects during the 2007-2009 period, based on the targets set by the flexibility measures for Haiti. For the remainder of the period, the annual increase will rise gradually to 20% and 25%. Also included are active PBLs and new PBGs. Projected disbursements total US$520 million for the 2007-2011 period, generating positive net flows with the Bank averaging US$85 million per year.23 Table 2 Projected disbursements and net flows (US$ millions) 2007

1. Disbursements 2. Debt service: principal* 3. Debt service: interest 4. Net cash flow (1-2-3) *

101.7 9.9 13.5 78.3

2008 127.0 11.5 15.2 100.3

2009 94.2 5.7 8.5 80.0

2010 102.1 5.7 9.7 86.7

2001 94.8 5.7 10.5 78.6

2007-2011 average 104.0 7.7 11.5 84.8

2007-2011 total 519.8 38.5 57.4 423.9

Based on projections for debt service of principal in amounts approved as of 30 June 2007 and included in IDB-2007 and HIPC debt relief.

4.43

Calculations were also done to show the impact of Bank disbursements on the country’s financing requirements during the 2009-2011 period, for which the IMF assumes that no financing has been identified to cover the gross requirements.24 Once the Bank disbursements have been made, financing requirements for the 2009-2011 period would be reduced by 2.6% of GDP, to 1.3% on average.

23

In this scenario, Haiti’s debt with the Bank would decline from 12% of GDP in 2007 to 6.6% in 2009, once the IDB-2007 debt relief takes effect. By end-2011, Haiti’s debt with the Bank will represent 7.3% of GDP.

24

IMF projections presented in the Article IV consultation report, July 2007.

- 17 -

Table 3 Financing requirements (US$ millions)

1. Central government balance sheet* % of GDP 2. Repayments** 3. Financing requirements (1) – (2) % of GDP 4. Financing identified*** % of GDP 5. Financing gap (3) – (4) % of GDP 6. IDB Disbursements 7. Financing gap after IDB disbursements (5) – (6) % of GDP GDP

2009

2010

2011

-208.0 -3.0 5.6 213.6 3.1 55.5 0.8 158.1 2.3 94.2 63.9 0.9 6,933

-266.9 -3.5 9.8 276.7 3.6 61.0 0.8 215.7 2.8 102.1 113.6 1.5 7,626

-276.8 -3.3 14.3 291.2 3.5 67.1 0.8 224.1 2.7 94.8 129.3 1.5 8,389

2009-2011 average -250.6 -3.3 8.0 260.5 3.4 61.2 0.8 199.3 2.6 97.0 102.2 1.3

*

Assumes no budget grants until confirmation is received from donors.

Approximate after HIPC, MDRI, and IDB-2007 debt relief. *** Assumes that the financing identified is 0.8% of GDP, according to IMF estimate for 2009. **

4. The Bank’s relative weight in the country 4.44

Haiti’s public debt stood at US$1.39 billion at fiscal year-end 2006, equivalent to approximately US$997 million in net present value terms (see Annex IV). Multilateral agencies are the main creditors with 81% of the debt stock (US$1.124 billion). The IDB holds the largest share with US$609 million (44% of the total), followed by the IDA with US$515 million (37%).25 Bilateral creditors account for 17% of the total debt, or US$238 million. Of that amount, US$193 million is owed to the Paris Club. Haiti’s debt with the Bank represented just 1.15% of the institution’s total portfolio in 2006.

5. Country financing parameters and fiduciary risk

4.45

The country financing parameters were updated as part of country strategy preparation, and their values remain unchanged from 2005 (see Annex V). These parameters provide the general framework for financing of Bank investment projects in the country.

4.46

Haiti has made substantial improvements in public financial management over the past three years, yet the country systems are still in development and need support. Various initiatives are under way to strengthen the fiduciary system. Based on a diagnostic assessment of the Public Expenditure and Financial Accountability (PEFA) and Public Expenditure Management and Financial Accountability Review (PEMFAR) indicators, jointly conducted with the Government of Haiti and the World Bank, an action plan has been crafted that will serve as roadmap for public finance reforms, and be incorporated into donor activities. To successfully institute these reforms, the government will have to take specific steps, such as finalize the legal framework for public financial management and

25

These figures do not include HIPC or MDRI debt relief.

- 18 -

pass a new procurement law that is nearly ready. Notable progress has been made: for example, the SYSDEP computerized public expenditure management system has been introduced at several ministry departments, although improvements are needed.

Additionally, under PRODEV the Bank will support the design of a strategic and business planning methodology, as well as the design of a system of indicators to facilitate monitoring and evaluation.

6. Tracking of strategy implementation 4.47

The country strategy will be reviewed each year, so that the necessary adjustments can be made in the Bank’s work in Haiti to stay in line with the country’s objectives and the priorities set for the Bank by the authorities. Specifically, this will enable the changes necessary to keep the country strategy in alignment with the GPRSP. For this reason, a set of indicators tied to the country’s objectives have been established in each area of the Bank’s work. These indicators will be tracked in close coordination with the Government of Haiti.

7. Coordination with other donor agencies

4.48

Progress under the ICF. The Interim Cooperation Framework (ICF) kept international aid relatively coordinated and enabled the government and other social stakeholders to participate in the country’s economic recovery process, operating in some sectors through coordination forums. The new authorities extended this coordination mechanism through September 2007, but the sector roundtables were not renewed.

4.49

Between January 2004 and December 2006, the international community disbursed 46% of the total amount approved under the ICF (US$1.557 billion disbursed of US$3.378 billion approved). Canada holds the largest share of the total approved amount (25% of the total), followed by the IDB (21%). The United States leads in terms of funds actually disbursed, followed by Canada, the United Nations, and the IDB.26

4.50

Consistent with the ICF’s main areas of strategic focus, the sectors receiving the most attention were access to basic services and economic governance. Disbursements in the area of economic recovery were slower, but the amount approved represents some 30% of the total. The World Bank concentrated on economic governance, the European Union on better access to basic services, and the IDB on both economic recovery (transportation infrastructure) and access to basic services.

4.51

Progress under the current administration. The Government of Haiti has taken the lead in coordination, consistent with the Paris Declaration principles. Haiti and the international community are making progress together on adherence to those principles. For example, substantial headway has been made in the areas of: (i) ownership, in that the government has prepared a medium and long-term development vision, as well as the GPRSP; and (ii) alignment, in that the ICF enabled coordination between donors and the government,

26

The United States disburses almost immediately upon approval, since its programs are executed by various agencies or nongovernmental organizations. In addition, the United Nations data provided relate exclusively to United Nations Development Programme (UNDP) activities. This causes confusion, since the UNDP executes funding from both the United Nations and other donors.

- 19 -

and international aid is relatively well aligned with the country’s needs.27 But this is not enough, and substantial efforts still need to be made. For example, there is no up-to-date information on amounts approved and disbursed since 2004, nor on commitments for the 2007-2011 period by donor and sector, which makes duplication and dispersal of efforts more likely. Donors should also work together more, and there should be greater transparency, fewer parallel PEUs, and fuller use of country systems. By the same token, there should be a better use of common provisions among donors and simplification of their different procedures. Missions should be conducted jointly, and diagnostic assessments coordinated and shared.

4.52

On 23 March 2007, the major donors and the Government of Haiti met at World Bank headquarters in Washington, D.C., to discuss coordination and budgetary assistance.

Among other things, it was agreed that donor coordination would take place principally at the Port-au-Prince level, and an actual donors meeting would be organized. The European Union would also conduct a study of the country’s technical assistance needs, so as to avoid duplication of effort, and the government would institute a mechanism to compile and distribute up-to-date information on aid. In the short term, a disbursement matrix would be prepared and updated on a quarterly basis. A more integrated and sustainable system would be introduced in the medium term. It was also agreed to assist the government in preparing a three-year matrix of economic governance reforms. A donors meeting hosted by the Government of Haiti is scheduled for 2008, as part of GPRSP implementation. The IDB will host the following meeting in the second half of 2008, to take stock of these agreements and continue working toward consensus for better coordination.

4.53

The Bank’s coordination efforts. The Bank will actively coordinate with the principal donors in the areas or sectors where it is working. It will also seek cofinancing to leverage resources in the key sectors where it has the lead. In transportation infrastructure, the Bank will continue to meet informally with other donors, so as to reduce duplication of effort. A map of donor activities has been prepared, and is being used by the international community and the Government of Haiti. Additionally, the Bank will work with Canada to finance road programs. It already works closely with the World Bank in the power sector, and the two institutions share the same PEU for their programs. In education, where coordination is strong, the IDB will continue to lead the vocational training working subgroup.28 In water and sanitation, the IDB will continue coordinating with the World Bank, the Organization of Petroleum Exporting Countries, Spain, France, and the European Union.29 Coordination will also remain fairly strong in the economic governance sector, inasmuch as the IDB will work closely with the IMF and World Bank on public finance reform. Lastly, although coordination is not as strong in the agricultural sector, in August 2006 the Bank launched the “Groupe de Filières” initiative to meet informally with the

27

Aid is also more predictable, given the international community’s commitments made in 2004 (ICF) and 2006 (Extended ICF).

28

Three other subgroups have been formed: (i) basic education, led by UNICEF; (ii) information system, led by Canada; and (iii) higher education, led by the Organization of French Universities.

29

For example, it has worked with the World Bank on the design of the rural water and sanitation program, and the World Bank has provided US$5 million to supplement the program.

- 20 -

United States, France, and the European Union. Information is exchanged at these meetings on the progress of the respective programs, and an activity matrix is updated to identify opportunities for complementary efforts.

4.54

The Bank will support the Government of Haiti by spearheading donor coordination to ensure that international aid is effective and the country maintains the aid flows necessary to provide the enormous resources needed to bridge its financing gap. Accordingly, one of the country strategy’s key activities is Bank support for preparation of the matrix of reforms, as well as indicators for monitoring and evaluation of international aid. In addition, jointly with Argentina, the Bank may support the introduction of an integrated system for investment management.

8. Risks

4.55

Given the short time that has passed between the two, the country strategy is subject to several risks identified in the Transition Strategy. Some of these risks, by their nature, are outside the Bank’s sphere, pertaining rather to the country or the work of other donors.

These risks will be subject to ongoing monitoring by the Bank.

4.56

Political stability and security. Political stability and security have improved, but still remain fragile. The public’s high expectations for rapid improvement in economic and social conditions, the absence of a culture of democracy, organized and well armed criminal gangs, interests tied to drug trafficking and smuggling, and the weakness of the country’s security forces all conspire to make the political situation highly vulnerable. To mitigate this risk, the international community needs to continue supporting the government’s efforts to strengthen governance (e.g. reforms of the justice system and national police). While the necessary reforms are ongoing, it is crucial to continue renewing the mandate of the United Nations Stabilization Mission in Haiti (MINUSTAH).

For its part, the Bank is building on the efforts of other donors to strengthen Parliament as a way of shoring up political stability.

4.57

Maintaining macroeconomic stability. There are risks that the authorities may not continue to pursue the reforms necessary to lock in economic gains, and that social pressures and increasing external flows may widen the fiscal deficit. The strong interest shown by the government in the GPRSP negotiation process with the IMF, and the fact that the decision point has been reached under the HIPC initiative, are strong signals that the authorities remain determined to pursue reforms in economic governance and sound macroeconomic management. To mitigate this risk, the Bank, for its part, will coordinate with the IMF, the World Bank, and key bilateral agencies to track the agreed targets closely, and will continue providing budgetary assistance to the country.

4.58

International community support for long-term efforts in Haiti. The country needs continued significant, long-term support from the international community, to achieve sustained growth and significantly better the living conditions for the population.

Moreover, in the medium term, Haiti will continue to require substantial volumes of external financing to bridge its fiscal gap. Fragile political stability and the security problem, as well as troubles in other parts of the world, may lead to a reduction in international aid. The Bank will assist the Government of Haiti in developing a reform agenda to secure its access to predictable program-based budget support from the international community.

- 21 -

4.59

Natural/environmental risks. Haiti is geographically located in the middle of a hurricane corridor, and so is subject to severe tropical storms from June through October. Frequent flooding and periodic droughts, mudslides, and the collapse of already deteriorating infrastructure have had an enormous impact on its economic performance. In addition, the degradation of natural and environmental resources has accelerated, making the country more vulnerable to natural phenomena. To mitigate this risk, the Bank is introducing two sector programs: the National Early Flood Warning Program and Institutional Strengthening for Environmental Management. The Bank is also supporting development of forestry policies, as well as policies for the environmental management of road infrastructure. The National Watershed Management Program will be approved in 2009.

Annex I-A Page 1 of 2

PROGRAM OF OPERATIONS TABLE 1 PROGRAM OF OPERATIONS 2007-2009 FSO Allocation Project No. HA-L1017 HA-L1019 HA-L1021 Total HA-L1023 HA-L1024 HA-L1032 Total HA-L1029 HA-L1028 HA-0033 NA NA HA-L1012 HA-L1027 NA NA NA NA HA-L1015 HA-L1025

Title Year 2007 Programmatic PBG, Strengthening of Public Resource Management I Rehabilitation of Road Infrastructure I Supplemental financing for the Agricultural Intensification Program (HA-0016) Year 2008 Programmatic PBG, Strengthening of Public Resource Management II Rehabilitation of Road Infrastructure II Rehabilitation of the PĂŠligre Hydroelectric Plant

Amount (US$ millions) 12.5 25.0 12.5 50.0 12.5 25.0 12.5 50.0

Year 2009 Programmatic PBG, Economic Governance I 12.5 Rehabilitation of Road Infrastructure III 25.0 National Watershed Management Program 12.5 Pipeline of potential operations for the period 2010-2011 Supplemental financing for the National Watershed Management Program New Programmatic PBG, Economic Governance II Strengthening of Customs and Revenue Administration Rehabilitation of Road Infrastructure (contribution 4) New Education Program Program to Support FAES Expanded Support for Rural Supply Chain Development Solid Waste Collection and Management in the Port-au-Prince Metropolitan Area (with portfolio resources) Early Childhood Development Program (with portfolio resources and possible cofinancing from Canada and the Caribbean Development Bank) Water and Sanitation Program

Annex I-A Page 2 of 2

TABLE 2 TECHNICAL-COOPERATION PROGRAM FOR THE SECOND HALF OF 2007 (AS OF 1 OCTOBER 2007)

Strategic objectives and sectors

Economic governance

Infrastructure Agriculture Private sector Water and sanitation Education

Fund

FSO FSO PRODEV FSO FSO Other Other FSO FSO FSO Other

Project number

Project name

2007 Calendar Year Strengthening governance HA-T1062 Program to support monitoring of the Ministry of Finance’s Programming Unit HA-T1056 Phase III of the 1-2-3 Survey HA-T1053 PRODEV I Consolidating economic growth HA-T1055 Strengthening the preinvestment capacity of the MTPTC HA-T1058 Strategy for private-sector participation in the electric power sector HA-T1054 Support for integrated management of high-priority watersheds HA-T1065 Trade and Investment Promotion Forum Improving access to and coverage of basic services HA-T1060 Feasibility study for a sanitary landfill for the Port-au-Prince metropolitan area HA-T1063 Sector study on education – quality assessment HA-T1061 Early education pilot HA-T1059 Collective remittances and investment in delivery of basic services Total

US$ thousands

150,000 300,000 450,000 300,000 200,000 150,000 136,000 300,000 150,000 150,000 140,000 2,426,000

Annex I-B Page 1 of 2

ACTIVE PORTFOLIO TABLE 1 LOAN PORTFOLIO (AS OF 1 OCTOBER 2007) Proposed active loan portfolio Strategic objectives Project number and sectors Strengthening governance Political governance HA-0079 HA-L1002 Economic governance HA-0082 HA-L1001 HA-L1008 HA-L1018 HA-L1017 Total – Strengthening governance

Date of approval

12 November 2003 6 July 2005 21 June 2005 20 July 2005 6 December 2006 13 December 2006 1 August 2007

Project name

Local Development Program Urban Rehabilitation Program Strengthening Economic Governance Institutions Fiscal Reform and Governance Program (PBL) Program to Support Financial Sector Reform (PBL) Support for Public Sector Human Resources Management Strengthening Public Resource Management

HA-00075 HA-0087 HA-0093 HA-L1014

5 March 1997 29 June 2005 12 November 2003 6 December 2006

Agriculture

HA-L1009 HA-0016 HA-L1003 Environment HA-L1005 HA-L1006 Total – Promoting economic recovery

20 July 2005 12 November 2003 24 October 2006 20 July 2005 21 October 2005

Consolidating economic growth Rural and Secondary Roads Program Transportation Infrastructure Rehabilitation Program Basic Economic Infrastructure Rehabilitation Program Port-au-Prince Electricity Distribution System Rehabilitation Program Ennery-Quinte Agricultural Intensification Project Agricultural Intensification Program Rural Supply Chain Development Program National Early Flood Warning Program Institutional Strengthening for Environmental Management

Water and sanitation

12 August 1998 20 September 2006 30 September 1998 31 May 2005 12 August 1998

Improving access to and coverage of basic services Water and Sanitation Sector Reform Program Rural Water and Sanitation Program Program for Basic Education Vocational Training Program Reorganization of the National Health System

Infrastructure

HA-0014 HA-L1007 Education and training HA-0038 HA-0017 Health HA-0045 Total – Improving living conditions Total

To be disbursed

% to be disbursed

Amount

Disbursed

65.0 50.0 5.0 25.0 25.0 10.0 12.5 192.5

36.3 10.0 1.6 20.3 10.0 0.0 12.5 90.7

28.7 40.0 3.4 4.8 15.0 10.0 0.0 101.9

44.2 80.0 67.6 19.0 59.9 100.0 0.0 52.9

50.0 77.1 70.0 18.1

33.2 15.9 23.5 0.0

16.8 61.2 46.5 18.1

33.6 79.4 66.4 100.0

27.1 41.9 17.8 5.0 5.0 312.0

2.6 22.0 0.0 0.4 0.6 98.1

24.6 19.9 17.8 4.6 4.4 213.9

90.6 47.5 100.0 91.2 88.8 68.5

54.0 15.0 19.4 22.0 22.5 132.9 637.4

13.6 0.0 12.0 3.0 9.69 38.3 227.1

40.4 15.0 7.3 19.0 12.8 94.6 410.3

74.9 100.0 37.9 86.5 56.9 71.2 64.4

Note: * The amount for this program includes the supplemental financing for transportation infrastructure (HA-L1013) for US$14.5 million, which was approved in 2006.

Annex I-B Page 2 of 2

TABLE 2 PROJECT PORTFOLIO BY ICF PILLAR (AS OF 1 OCTOBER 2007) Amount Amount disbursed approved (US$ millions) (US$ millions) Pillar 1: Strengthen political governance and promote national dialogue Loans 0 0 0 Technical-cooperation operations 4 0.4 0.20 MIF 1 0.7 0.07 Social Entrepreneurship Program 0 0 0 Subtotal 5 1.1 0.27 Pillar 2: Strengthen economic governance and its contribution to institutional development Loans 5 77.5 44.2 Technical-cooperation operations 10 5.9 3.7 MIF 2 0.6 0.1 Social Entrepreneurship Program 0 0 0 Subtotal 17 84.0 48.0 Pillar 3: Promote economic recovery Loans 9 312.0 97.0 Technical-cooperation operations 12 1.9 0.6 MIF 3 1.2 0.6 Social Entrepreneurship Program 0 0 0 Subtotal 24 315.1 98.20 Pillar 4: Improve access to basic services Loans 7 247.9 83.3 Technical-cooperation operations 17 2.9 1.2 MIF 2 1.5 0.2 Social Entrepreneurship Program 0 0 0 Subtotal 26 252.3 84.7 Total 72 652.5 231.2 Strategic areas and active operations

Number of Operations

Annex I-C Page 1 of 6

STRATEGY MATRIX FOR THE BANK’S COUNTRY STRATEGY WITH HAITI 2007-2011

IDB Actions Government objectives

IDB Strategy areas

Active portfolio* (as of 1 October 2007)

Program of operations 2007-2009

Pipeline of operations 2009-2011

Strategy objective 1: Strengthen the underlying foundation for economic growth Transportation National highway system linking the country’s main cities; introduce a sustainable road maintenance policy.

1.1 Improve basic infrastructure to support production i.

Electric power Regulate and enhance transparency in electric power trading; institute comprehensive sector reforms to expand coverage and ensure sustainability.

Agriculture Implement a sector institutional and productive modernization program. Top priorities are access to credit and to basic inputs; rehabilitation of agricultural infrastructure; and land title security.

ii.

Transportation sector: Support restoration of the transportation system to serviceable condition, and rebuild/repair segments of the road system.

Power sector: Shore up and increase the sector’s poor coverage and service quality, as well as improve its finances; design and fund an investment program to foster a shift in management approach.

1.2 Strengthen the agricultural sector i.

ii.

Increase technical assistance, and improve access to rural finance; Improve electricity service in rural areas and secondary access road infrastructure;

Loans

Grants

Loans / grants

-

Rural and Secondary Roads Program (33.6%)

-

-

Transportation Infrastructure Rehabilitation Program (79.4%)

Rehabilitation of Road Infrastructure (contributions 1, 2, and 3)

Rehabilitation of Road Infrastructure (contribution 4)

-

Basic Economic Infrastructure Rehabilitation Program (66.4%)

Rehabilitation of the Péligre Hydroelectric Plant

Technical cooperation

-

Rehabilitation of the Electricity Distribution System in Port-auPrince (100%)

-

Strengthening of the preinvestment capacity of the Ministry of Public Works, Transportation, and Communications (MTPTC)

-

Medium-term Strategy for the Electric Power Sector

MIF -

Strengthening of Airport Security (100%)

Loans

Grants

Loans / grants

-

Ennery-Quinte Agricultural Intensification Program (90.6%)

-

-

Agricultural Intensification Program (47.5%)

Supplemental financing for the Agricultural Intensification Program

-

Rural Supply Chain Development Program (100%)

National Watershed Management Program

Supplemental financing for the National Watershed Management Program

Technical cooperation

-

-

Rural Finance Strategy

Annex I-C Page 2 of 6 IDB Actions Government objectives

IDB Strategy areas iii. Develop competitive supply chains compatible with better watershed management.

Active portfolio* (as of 1 October 2007) -

Financial Reform Program (PBL) (59.9%) (includes a real estate collateral system).

-

National Early Flood Warning Program (91.2%)

-

-

Support for Preparation and Implementation of the National Watershed Management Plan

-

Strengthening of Capacity for Natural Disaster Prevention and Protection of Economic Infrastructure

-

Natural Disaster Prevention in Priority Watersheds

-

Support for Preparation and Implementation of the National Watershed Management Plan I and II

Institutional Strengthening for Environmental Management (88.8%)

MIF -

Program of operations 2007-2009

Support for the Competitive Position of Haitian Coffee (66%)

MIF

Private sector Create conditions for economic growth spearheaded by private initiative; increase the country’s economic bargaining power; promote the liberalization and modernization of the financial

1.3 Private sector development i.

Support enhancement of the business climate and the country’s image.

ii.

Strengthen microfinance institutions.

-

Support for Agroindustrial Fruit Processing in the CampPerrin Region

-

Competitiveness and Profitability of Milk Processing Plants (Lèt Agogo)

-

Compliance with International Phytosanitary and Quality Standards for Fruit

Loans

Technical cooperation

-

-

Financial Reform Program (PBL) (59.9%) (includes a real estate collateral system)

Innovative Financing for Small and Medium Enterprises (FINPYMES), Haiti

Pipeline of operations 2009-2011

Annex I-C Page 3 of 6

IDB Actions Government objectives sector; consult the sector on public finance reform; boost public and foreign investment in infrastructure, telecommunications and tourism; secure resources from local banks and remittances from the Haitian diaspora.

IDB Strategy areas iii. Supply financing for private-sector initiatives. iv. Increase private-sector participation through PRI, INT, the MIF, and the IIC.

Active portfolio* (as of 1 October 2007) Technical cooperation -

Program of operations 2007-2009 -

Pilot Program for PublicPrivate Partnerships in Education

-

Microfinance for Rural Companies

-

Trade and Investment Promotion Forum Support for the Private Export Sector

Investment Promotion Initiative (20%)

MIF -

Reform of the Water and Sanitation Sector and Regulatory Agency (84%)

-

Institutional Strengthening of ACME, microenterprise line of activity (54%).

-

-

Institutional Strengthening of Micro Credit National S.A. (90%)

-

Promotion of Rural Women Entrepreneurs

-

Microfinance Strengthening of the “Caisses Populaires” (85%)

-

Promotion of Microentrepreneurship in Haiti

-

Support for the Competitive Position of Haitian Coffee (66%)

-

Strengthening the Capacity of SMEs in Cap-Haïtien

-

Program to Develop Alternative Dispute Resolution Mechanisms (90%)

-

Rural Community Tourism in Dondon

-

-

Strengthening of Airport Security (100%)

Support for Agroindustrial Fruit Processing in the CampPerrin Region

-

Enhancement of the Remittances Services to and within Rural Haiti (100%)

-

Competitiveness and Profitability of Milk Processing Plants (Lèt Agogo)

-

Compliance with International Phytosanitary and Quality Standards for Fruit

MIF

Pipeline of operations 2009-2011

Annex I-C Page 4 of 6 IDB Actions Government objectives

IDB Strategy areas

Active portfolio* (as of 1 October 2007)

Program of operations 2007-2009

Pipeline of operations 2009-2011

Strategy objective 2: Improve access to and coverage of basic services Solid waste Improve solid waste collection and processing.

Water and sanitation Improve the coverage and quality of water supply and sanitation.

Education Implement the principal points of the National Plan for Education and Training (PNEF), which addresses governance, quality, access, and vocational training.

Provide the Ministry of National Education and Vocational Training (MENFP) with the resources necessary to implement the PNEF, and strengthen the National Vocational Training Institute (INFP). Tie gains in basic and secondary education to health and food services. Promote partnerships with the private sector.

2.1 Improve water and sanitation, and solid waste collection services. i.

ii.

Help to increase coverage and access to water and sanitation.

Support design and implementation of a sustainable solution to the solid waste problem.

2.2 Increase coverage and access to quality vocational education and training

Loans

Technical cooperation

Loans / grants

-

Water and Sanitation Sector Reform Program (74.9%)

-

-

Rural Water and Sanitation Program (100%)

Water and Sanitation Program in Port-auPrince

Feasibility study for a Sanitary Landfill for the Port-au-Prince Metropolitan Area

Solid Waste Program in the Port-au-Prince Metropolitan Area

MIF -

Water and Sanitation Sector Reform (84%)

Loans

Technical cooperation

Loans / grants

-

Basic Education Program (37.9%)

-

-

Vocational Training (86.5%)

Assessment of Education Quality

Early Childhood Development Program

-

Early Education Pilot

-

One Laptop Per Child (OLPC) Pilot in Haiti

New Program in Education

iii. Improve the quality of public and nonpublic education;

-

Collective Remittances and Investment in Delivery of Basic Services

iv. Promote public-private partnerships.

-

Study on Primary Education Accountability

-

Public-Private Partnerships in Education

-

Institutional Mechanism for Education Quality Control

i.

Improve governance;

ii.

Improve access at all educational levels;

Annex I-C Page 5 of 6

IDB Actions Government objectives

IDB Strategy areas

Active portfolio* (as of 1 October 2007)

Program of operations 2007-2009

Pipeline of operations 2009-2011

Strategy objective 3: Strengthen governance and build institutional capacity Strengthen justice and security, democratic institutions, and risk prevention and management.

3.1 Strengthen local development and democratic institutions

Technical cooperation

Loans / grants

Support for the Haitian Parliament II

Program to support FAES

Loans

Grants

Loans / grants

-

Strengthening of Economic Governance Institutions (67.6%)

-

-

Program to Support Financial Sector Reform (PBL) (59.9%)

Programmatic PBG, Strengthening of Public Resource Management I and II (25.0)

Program to Strengthen Administration and Customs

-

New Programmatic PBG, Economic Governance (I) (12.5)

-

i.

Strengthen local development

Urban Rehabilitation Program (80%)

-

ii.

Strengthen the Haitian Parliament;

Local Development Program (44.2%)

Technical cooperation

iii. Create an integrated Vital Records Bureau.

Combat corruption; modernize and strengthen the central government and public enterprises; strengthen and promote the administrative decentralization of investment promotion mechanisms.

Loans

3.2 Strengthen economic governance

-

Promote: i.

ii.

Efficiency and effectiveness in the use of public resources; The State’s ability to collect taxes;

iii. Transparency in the use of public resources; iv. Statistical information systems; and v.

The continuation of economic governance reforms.

-

Support for the Haitian Parliament

Fiscal Reform and Governance Program (19%)

MIF -

Institutional Strengthening of ACME, microenterprise line of activity (54%)

-

Institutional Strengthening of Micro Credit National S.A. (90%)

-

Microfinance Strengthening of the “Caisses Populaires” (85%)

-

Program to Develop Alternative Dispute Resolution Mechanisms (90%)

Technical cooperation -

PRODEV I and II

-

Phase III of the 1-2-3 Survey

-

Support for Monitoring of the Ministry of Finance’s Programming Unit

-

Strengthening the Ministry of Trade and Industry

-

Preparation of Customs Operation

New Programmatic PBG, Economic Governance (II)

Annex I-C Page 6 of 6 IDB Actions Government objectives

IDB Strategy areas

Active portfolio* (as of 1 October 2007) -

3.3 Strengthen institutional capacity and gender equity i.

ii.

Strengthen human resources in the public sector; improve service delivery and strengthen the policymaking and project execution capacity of ministries; Make gender equity a part of all operations; promote women’s access to productive inputs, the labor market, and water services; strengthen the Ministry of Women’s Affairs and Women’s Rights; improve conditions for women living in poverty; and prevent gender violence.

Note: * Undisbursed amounts are given in parentheses.

Program of operations 2007-2009

Enhancement of the Remittances Services to and within Rural Haiti (100%)

Loans

Grants

-

Strengthening of Economic Governance Institutions (67.6%)

Technical cooperation

-

Support for Public Sector Human Resource Management (100%)

-

Vocational Training (86.5%)

-

Continuing Education in Project Management

-

Strengthening the MTPTC to build its technical capacity for works execution and supervision

-

Support for the training of technical staff of construction sector firms and business skills development

-

Action plan for gender equity and women’s rights

-

Strengthening the Ministry of Women’s Affairs and Women’s Rights

MIF -

Promotion of Rural Women Entrepreneurs

Pipeline of operations 2009-2011