[HaitiReport] Haiti Report for March 22, 2008
 
Date: Sat, 22 Mar 2008 15:02:53 -0500 (CDT)



Haiti Report for March 22, 2008

The Haiti Report is a compilation and summary of events as described
in Haiti and international media prepared by Konbit Pou Ayiti/KONPAY.
It does not reflect the opinions of any individual or organization.
This service is intended to create a better understanding of the
situation in Haiti by presenting the reader with reports that provide
a variety of perspectives on the situation.

To make a donation to support this service: Konbit Pou Ayiti, 7 Wall
Street, Gloucester, MA, 01930.

IN THIS REPORT:
- IMF Notes Haiti's Good Performance for PRGF
- Enforcement of Tax Laws in Haiti Compounds Problems Caused by Rising
Food Costs
- DIgicel Makes a  Profit in Haiti
- Judge with Record of Two Major Unsolved Cases Names to Top
Corruption Post
- BOSTON GLOBE EDITORIAL: Reprieve for a beleaguered Haiti

IMF Notes Haiti's Good Performance for PRGF:
The International Monetary Fund (IMF) has given Haiti good marks for
the economic programme it's implementing under the Reduction and
Growth Facility (PRGF). In fact, officials say they expect the growth
it has noted to continue. The comments came as the IMF's Executive
Board completed its second review of Haiti's programme and approved
the immediate disbursement of US$12.2 million to the initiative. The
PRGF arrangement was approved since November 20, 2006 and will see a
total of US$118.1 million being given to the Caribbean's poorest
island nation. "Haiti has continued to perform remarkably well under
its PRGF-supported program despite numerous challenges, including the
devastating effects of Hurricane Noel late last year," indicated
Deputy Managing Director and Acting Chair of the executive, Mr
Takatoshi Kato. "During fiscal year 2007, growth accelerated for the
third year in a row and inflation declined. The authorities are also
to be commended for developing a poverty reduction and growth strategy
that prioritises needed reforms, with a focus on restoring basic
public goods and services, targeting sectors for growth, and repairing
infrastructure."

Noting that Hatian authorities have a "strong commitment to reform",
he added that the prospects for a further acceleration of growth and
continued strong implementation of the PRGF-supported program are
favorable even though there are many remaining challenges. Mr Kato
explained that during this second year of the PRGF-supported
programme, the key goals will be to create conditions for higher
growth and to consolidate the stabilisation gains achieved so far.
"One key element of the programme is to accelerate the execution of
public expenditures needed to improve the provision of public goods
and services, as well as to upgrade infrastructure, while preserving
the quality of spending," he explained. The IMF official added that
prudent monetary policy will be vital in light of inflationary
pressure from high international oil and food prices. He said the key
was to keep inflation in single digits." An ambitious plan to
recapitalize the central bank is being embarked upon, in order to
ensure the independence of monetary policy," Mr Kato noted.

Haitian authorities have also indicated they will implement most of
the recommendations of a recent joint IMF-World Bank Financial Sector
Assessment. Among those suggestions were improvement of regulation and
supervision; passage of a new banking law; and strengthening of
insolvency and creditor rights, audit and accounting, and the payments
system. Meantime, the United Nations peacekeeping mission in Haiti has
announced it will fund six projects that are expected to eventually
provide temporary jobs to more than 7,000 people living in the
capital's Citi Soleil and Martissant neighbourhoods, renowned as
centres of high crime, poverty and unemployment. The projects which
will begin at the beginning of April will focus on street paving,
sanitation and rebuilding and improving public spaces. Both former
gunmen and the victims of violence are expected to benefit from the
jobs produced by the projects. (Caribbean360.com, 3/6)

Enforcement of Tax Laws in Haiti Compounds Problems Caused by Rising
Food Costs:
While millions of Haitians go hungry, containers full of food are
stacking up in the nation's ports because of government red tape 
leaving tons of beans, rice and other staples to rot under a
sweltering sun or be devoured by vermin. A government attempt to clean
up a corrupt port system that has helped make Haiti a major conduit
for Colombian cocaine has added new layers of bureaucracy  and led to
backlogs so severe they are being felt 600 miles away in Miami, where
cargo shipments to Haiti have ground almost to a standstill. The
problems are depriving desperate people of donated food. Some are so
poor they are forced to eat cookies made of dirt, salt and vegetable
oil to satisfy their hunger.

An Associated Press investigation found the situation is most severe
in Cap-Haitien, Haiti's second-largest city. One recent afternoon,
garbage men shoveled a pile of rotting pinto beans that had turned
gray and crumbled to dust as cockroaches and beetles scurried about.
  The men had found the putrid cargo by following a stench through
stacked shipping containers to one holding 40,000 pounds of beans. It
had been in port since November. "So many times, by the time (the
food) gets out of customs it's expired and we're forced to burn it,"
said Susie Scott Krabacher, whose Colorado-based Mercy and Sharing
Foundation has worked in Haiti for 14 years. "The food is there. It is
available. It just can't get to the people."

Though it is unclear how much of Haiti's food supply is tied up in the
port delays, the effects could be serious. Haiti imports about 75
percent of its food supply, according to the U.S. Department of
Agriculture. And there is little room for error in a country where the
U.N. Food and Agriculture Organization reported that almost half the
population was undernourished in 2002. The U.N. World Food Program and
large-scale U.S. rice growers say they have been able to get their
food into Haiti by hiring local agents to handle bureaucratic
procedures. But smaller charities, merchants and private citizens have
often been forced by the delays to throw away containers of food or
pay exorbitant fees. The problems stem in part from efforts to clean
up a port system the World Bank recently ranked as the second-worst in
the region, ahead of only Guyana. (AP, 3/6)

Along Haiti's border with the Dominican Republic, merchants long
accustomed to not paying customs duties now spend days trying to clear
goods while others walk away from their merchandise. Along the Miami
River, which once churned with cargo ships headed to Haiti, scores of
loaded shipping containers, used cars and bales of second-hand
clothing gather in parking lots with no scheduled date of departure.
As rising fuel prices drive up food costs in Haiti, a government
campaign to clean up the corruption-plagued customs system by
enforcing tax laws is adding to the misery. ''Because of the taxes
they are now forcing you to pay, you have no choice but to raise your
prices,'' said Yolette Marcelin, 47, a trader in this southwestern
port city who until recently made her living by traveling to the
Dominican Republic once a week, buying goods there and selling them
here. She called it quits last month, deciding it was no longer a
profitable business. ''People do not have any money. There are people
here who cook every eight days,'' said Marcelin, 47, the mother of
three teens. ``It's all so discouraging.''

And not just in Haiti. In Miami, freight consolidators, vessel owners
and terminal owners are also frustrated. They say that while they
support the government's anti-corruption efforts, the red tape has
lead to losses in South Florida. Consider the plight of Haiti Shipping
Lines, which services the port of Cap-Haitien. Owner Richard Dubin
said tightened customs rules, along with a three-week strike by
customs agents in the northern city, forced him to stop taking cargo
in February. ''My customers can't ship,'' Dubin said as he toured the
port last week after flying to Haiti to meet government officials and
see the problem first-hand. What he found was a four- to eight-week
backlog of rotting cargo that officials were only now trying to clear.
''This is creating a humanitarian crisis . . . at a time when the
latest news coming out of Haiti is people dying from hunger,'' said
Munir Mourra, a shipping terminal owner, noting that South Florida
Haitians now have fewer options to send food to their families. And,
he said, additional paperwork and required permits have forced vessel
owners to raise their shipping fees. For example, South Floridians
used to pay between $5 and $10 to ship a 110-pound bag of rice. The
price now: between $12 and $15 per bag. ''The people that we deal with
are people who are sending food to their families: rice, beans,
cornmeal,'' said Mourra, who used to send ships weekly to the ports in
Gonaives, in the north, and Miragoane, in the west, but has sent only
one boat since the beginning of the year. That boat, he said, didn't
even have ``50 bags of food on it.''

Food commodities going to Haiti, he said, have dropped 90 percent.
Haiti Finance Minister Daniel Dorsainvil said he hears the concerns
but the government also has a job to do: curb contraband and collect
taxes. ''The government doesn't want to keep people from sending food
to their needy families here,'' he said. ``On the other hand, the
government has a responsibility in keeping with the priorities to make
sure the procedures are followed.'' Dorsainvil said Haiti, which
imports almost all of its foods, loses between $150 million and $300
million a year in taxes from contraband, smuggled in across the
Dominican border and through seaports. Haiti, he said, has not
increased its tax on imports but is enforcing regulations long on the
books.

Under the new procedures, vessels destined for Gonaives, where the
port has been in and out of gang control, must now unload in Port-au-
Prince. Both cities are separated by a four-hour drive on rotted
roads. Vessels that are allowed to unload bulk cargo in outside ports
must wait for inspectors to travel from the capital to clear the cargo
while those carrying containers also must receive authorization from
Port-au-Prince before offloading, creating days and weeks of delays,
Miami River business owners say. The result: Haiti-bound river traffic
has dropped by about 60 percent, said Beau Payne, who owns a towing
and transportation company on the river. ''I'm losing money every
week,'' said Payne. He recently laid off four workers.

Last fall, the Haitian-American Chamber of Commerce and the Miami
River Marine Group -- a coalition of terminal operators, vessel owners
and operators, and shipping lines -- wrote separate letters to
Dorsainvil, requesting a meeting to discuss the policy. They also
pleaded their case to Haitian senators visiting South Florida.
Dorsainvil said the government is trying to better train employees and
educate the public about the customs regulations, noting that the
agency's director has been on Haitian radio discussing the new
procedures. Also, he said, the government is proposing new laws to
help the process run more smoothly, such as updating the customs code
to allow agents to charge duties ''on the price people actually
paid,'' rather than on the value of their merchandise. He and other
Haitian officials disagree that the enforcement is adding to Haiti's
skyrocketing food prices, noting that boats continue to use all of the
country's ports.

''Those are two separate issues,'' Dorsainvil said. ``Prices on the
international market have risen; commodities prices have risen.''
Despite the tightened oversight, Haitian officials say some continue
to attempt to cheat the government by lying about their cargo. In
October, after the new rules kicked in, authorities found that one
owner had failed to declare a vehicle and 60,000 boxes of whole
chicken and drumsticks. He fled to Miami after a warrant was issued
for his arrest. ''The government has set a priority on increasing
revenues in order to finance important expenditures in education and
healthcare, and the president himself has set as a priority the fight
against contraband and corruption,'' said Dorsainvil. As for the
island's rising food prices, Dorsainvil said the government is working
on a plan to create jobs and to help increase Haitians' purchasing
power. So far, however, a government proposal to raise the daily
minimum wage from $1.81 to $3.87 has met resistance. Critics say it
would increase inflation at a time when the government's focus should
be on creating jobs. (Miami Herald, 3/7)

DIgicel Makes a  Profit in Haiti:
Denis OBriens Digicel has managed to turn a profit and make a
difference to the lives of the inhabitants of one of the worlds
poorest countries, writes Samantha McCaughren, Business Correspondent
in Haiti. The Caribbean may conjure up images of idyllic beaches and
crystal-blue waters, but few holiday-makers reach the shores of Haiti.
The country is the poorest in the western hemisphere and has a nasty
track record for the kidnapping of foreigners. Global investors have
largely ignored the country. But when you arrive at the sparse airport
in the capital of Port-au-Prince, you are greeted by a band playing
upbeat Haitian music and wearing Digicel T-shirts. The mobile phone
company, owned by telecoms entrepreneur Denis OBrien, has had an
impact on the country that goes far deeper than the carnival tone set
by the musical welcoming committee. The impact of Digicel in Haiti
confounded even those in the company. Digicel expected to build up a
customer base gradually, but it has reached two million in less than
two years. When the shops first opened there were queues every day for
several weeks.

This may sound like enthusiastic spin from over-eager publicists, but
Digicel is by far the biggest investor in the country. It has put in
$260 million and has said it will continue to invest heavily in the
market. The business plan sounds unfeasible. This impoverished country
is home to one of the worlds worst slums, and conditions for the vast
majority of people are dire. But they have embraced communications,
and affordable mobile phones have been the key to Digicels success.
At the moment people are spending $12 to $13 a month, which is
pretty good for an economy which has limited capacity. You have to
take aten-or-20-year view. Peoples standard of living will rise and
that will lead to more and more spending power, OBrien told The
Sunday Business Post.

The interesting point about this is that 50 per cent of people in
Africa have a mobile phone today, and people wouldnt have predicted
that seven or eight years ago, he said. Prior to Digicels arrival,
mobile phone companies targeted a small, wealthy segment of society,
with phones at $250 or more, well out of the price range of most
people. Digicels prices start from $15, and two million of the nine
million population are customers. Digi has become a colloquial word
for bringing progress to the overlooked majority in this country.
Trade is done on the street corners of Haiti and it was this cash
economy that prompted OBrien to invest. The company has prided itself
in bringing First World standards to this poor nation. A new flagship
Digicel store would be impressive if it stood on Grafton Street, never
mind the run-down, dusty streets of Port-au-Prince.

OBrien said that it worked because costs were low in the country,
although more investment would be needed by the company. By their
very nature, if youve got a network and youre adding more and more
customers, you have to keep investing in capital expenditure,
expanding more networks and towers, he said. So could he have done it
more cheaply? We could have, yes, probably for half the price, but
we would only have a third of the customer base we have today. You
could creep in and spend maybe $100 million or $125 million, but if
you want to go and really take the market, youve got to go and build
the network, your staff, your infrastructure, he said. The job is
made all the more difficult by the fact that most of the country has
no electricity and only dirt roads.

While the Haiti experience was Digicels, most dramatic ever launch,
the group is already in many parts of the Caribbean and is expanding
further. We have 23 licences here and we set up another vehicle to
make the investments in Central America. Weve got Honduras, which we
just brought at auction before Christmas, and were interested in
getting into four other markets there, like Nicaragua, Panama, Costa
Rica, Belize, Guatemala, he said. We have another company out in
the Pacific, where we hope to be in around eight countries by about
Christmas, he added. So that would be 32 countries for Digicel.

While Digicel has made an impact in terms of providing communications
for the less well-off, the company also has a foundation that has
built 20 schools in Haiti over the past year. Some 400,000 children
dont have a school place, so the Digicel-funded schools have a
tremendous impact on communities. Last week, OBrien assessed a number
of locations for charitable investment in the current year. He and
others believe education will help Haiti to improve its economic lot.
If you read a World Bank report on Haiti, you wouldnt get on the
plane to come here. Thats why people shouldnt be turned off by
opportunities in places off the beaten track, he said. Id rather
invest here than in Germany or France. There are now 3.2 million
phone users, two million of whom are Digicel customers. When the
company entered that market, mobile phone penetration was 2 to 3 per
cent; less than two years later, it is approaching 35 per cent. (The
Sunday Business Post, 3/16)

Judge with Record of Two Major Unsolved Cases Names to Top Corruption
Post:
The Haitian judge responsible for releasing millions of dollars
belonging to ousted President Jean-Bertrand Aristide's charitable
organization has been named to a top corruption post by Haitian
President Reni Prival. Judge Jean Ostrict Hercules was installed
Monday as head of Haiti's financial crimes investigative unit,
replacing Jean-Yves Noel. The appointment stunned both Prival
supporters and critics, who say it shows Prival is not serious about
fighting corruption. ''This is a huge step back they have taken in
their battle against corruption,'' said Pierre Esperance, executive
director of the Port-au-Prince-based National Human Rights Defense
Network. He added that it ``is nothing less than a victory for
impunity in Haiti.'' As an investigative judge, Hercules was in charge
of two high-profile dossiers: the April 2000 murder of prominent
Haitian journalist Jean Dominique and the allegations of corruption
and money laundering during Aristide's government. Both remain
unresolved. In 2006 under the watch of the U.S.-backed interim Haitian
government, Hercules signed an order releasing $8 million from bank
accounts of the charitable Aristide Foundation and related accounts.
The funds had been frozen at the request of Noel, who was subsequently
arrested after trying to block the order. Haitian Senate President
Kily Bastien said he plans to speak with Prival about his decision.
The financial crimes chief should be someone with integrity, he said.
''You don't want to have a judge with allegations of corruption,'' he
added. (Miami Herald, 3/8)

BOSTON GLOBE EDITORIAL: Reprieve for a beleaguered Haiti
LAST MONTH, Haiti's president, Reni Prival, wrote to President Bush
asking for a favor: For the time being, please stop deporting Haitians
who are in the United States without legal status. It's a
controversial request - one that would affect perhaps 20,000 people
who entered this country illegally, are seeking asylum, or are
appealing immigration decisions. The proposal is a tough sell
politically, but it makes global sense. Prival wants Bush to grant
Haitian immigrants "temporary protected status." It's a legal time-out
for immigrants who come from countries facing crises such as armed
conflicts and natural disasters. The status already applies to certain
Nicaraguan immigrants, who are covered because of devastation caused
in nbn    q 1998 by Hurricane Mitch. Immigrants from El Salvador are
covered because of earthquakes there in 2001.

To make his own case, Prival points to devastating storms that struck
Haiti in 2004, causing thousands of deaths, widespread homelessness,
and the destruction of fertile land. Prival does not say so in his
letter, but as Bush knows, Haiti is also chronically racked by
poverty, AIDS, violence, and illiteracy. Haitian workers in the United
States play a key role in combating those problems. Prival points to
how much his country relies on money that Haitians earn in the United
States and send to relatives at home. In 2007, remittances to Haiti
from the United States totaled an estimated $1.26 billion - about 24
percent of Haiti's gross domestic product, according to the Inter-
American Development Bank, which finances development projects in
Latin America and the Caribbean. It dwarfs the $129 million in foreign
aid that Haiti got in 2007 from the US Agency for International
Development.

Remittances act as an unofficial antipoverty program. Haitians use the
money for food, clothes, medicine, educational costs, as well as
opening bank accounts, building homes, and launching small businesses.
Given this economic benefit, granting temporary protected status for
Haitians is a simple way to help their native country build a better
future. Temporary status would only apply to Haitians who could prove
they were in the United States before a set cutoff date. New
immigrants would not be covered. The plight of Haitians at risk of
deportation only underscores the inadequacy of US immigration policy.
Haiti now depends upon workers who have found a place in the US
economy despite their lack of legal status. These Haitian immigrants
probably would have gotten some protection last year. But immigration
reform efforts in Congress failed. Now, Bush should direct the
Department of Homeland Security to grant temporary protected status,
to help preserve the remittances that finance Haiti's fragile quest
for progress. (3/16)
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