Above: Miragoane, Haiti (UN Photo/Victoria Hazou)
By the Caribbean Journal staff
Haiti’s economy has as a favourable outlook, and continues to recover, though economic and political risks remain, according to the International Monetary Fund.
The International Monetary Fund’s Executive Board has completed the second and third reviews of Haiti’s performance under the Extended Credit Facility Arrangement, allowing for the disbursement of about $15.1 million.
Haiti’s ECF arrangement was approved on July 21, 2010, along with full relief on the country’s outstanding IMF debt of about $274 million. Both are part of a strategy to support Haiti’s longer-term reconstruction plans.
“Haiti’s economy continues to recover,” said Naoyuki Shinohara, deputy managing director and Acting Chair. “The sustained efforts of the authorities and the international community have helped rekindle growth, keep inflation at single-digit levels and strengthen the fiscal and extended accounts.”
“However, the reconstruction and the pace of implementation of structural reforms have generally been slower than anticipated, reflecting predominantly the protracted electoral process and the country’s limited administrative and absorptive capacity,” he said.
According to Shinohara, significant challenges remain for the country, with most Haitians living below the poverty line and more than a half million people still living in temporary shelters.
The IMF did call Haiti’s economic outlook favourable, although “subject to risks, including a weaker global economic environment and a deterioration in the domestic political and security situations,” he said.
In order to support recovery, Haiti needs to pursue appropriate macroeconomic policies, accelerate reconstruction and implement structural reforms, the fund said, with continuous engagement from the international community.
The fund called the Haitian government’s macroeconomic policy mix for 2012 “appropriate,” with higher government revenue and restraint on non-priority spending helping to create additional fiscal space to ramp up spending on poverty-related and other projects.
According to Shinohara, the structural reform agenda focuses on “strengthening revenue administration, enhancing institutional capacity for better public investment implementation and monitoring, improving public financial management and economic governance and strengthening the financial sector.”