## 3. Summary Accounts of the Banking System, 2008/09-2012/13

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### I. Economic context — background and program implementation
- Political and security:
  - New government under Prime Minister Lamothe formed on May 15; he also remains Minister of Foreign Affairs.
  - Passage of key legislation expected to remain protracted given the President’s lack of a majority in Parliament and the upcoming electoral cycle (originally scheduled to begin in November 2011, now expected to start in November 2012).
  - Overall security situation described as fragile.
- Post-earthquake reconstruction and donor support:
  - Reduction by more than half of the 1.3 million people living in camps.
  - Removal of more than 50 percent of earthquake-related debris.
  - Reconstruction of several schools.
  - Donors’ disbursements remain slow, especially relative to March 2010 New York conference pledges.
- Program implementation:
  - All end-December 2011 indicative targets met except the floor on poverty-related spending.
  - End-March 2012 quantitative performance criteria were observed; floor on poverty-related spending still not met.
  - All structural benchmarks from previous reviews were met except two; for the fourth review, two out of three were not met.
  - Final version of the public debt law ready and expected to be sent to parliament by mid-August.
  - Structural benchmark related to creation of a debt unit not observed; completion predicated on reorganization of the MEF, delayed by political transition.
  - New government indicated steps to accelerate submission to parliament of reorganization legislation by mid-summer.

### II. Recent economic developments
- Growth and sectoral performance:
  - Agriculture accounts for about 25 percent of GDP and rebounded from last year’s contraction.
  - Buoyancy in manufacturing, commerce and services.
  - Construction weakened; political crisis slowed execution of public investment spending significantly.
- Inflation and exchange rate:
  - Consumer price inflation receded to 5.2 percent in May 2012 (down from a peak of 10.4 percent in September 2011).
  - Gourde depreciated 4.1 percent against the dollar on a 12-month basis through end-May 2012.
- External and fiscal balances:
  - Balance of payments outcome for first semester of 2012 broadly in line with expectations.
  - Gross international reserves increased by US$0.1 billion to US$2.1 billion (5.5 months of imports) by end-March 2012.
  - Fiscal outcome better than programmed due to strong revenue mobilization and under-execution of domestically-financed investment spending; current spending in line with program targets.
- Credit and banking:
  - Year-on-year credit to the private sector grew by close to 30 percent through end-March 2012.
  - Expansion mainly fueled by rising demand for short-term trade credits; long-term private sector investment adversely affected by political uncertainty.
  - Deposit and credit dollarization remain high.
  - Nonperforming loans are low; sector appears relatively liquid and profitable.

### III. Outlook and risks
- 2012 outlook (revised):
  - Growth target revised to 4.5 percent in 2012, down from 7.8 percent.
  - Twelve-month inflation objective for end-FY 2012 (September 2012) adjusted to 6 percent.
  - External current account deficit likely somewhat larger than programmed due to a slump in exports (loss of a textile order from a U.S. retailer).
  - Gross international reserves target for FY 2012 remains well within reach given over-compliance at end-March.
- 2013 outlook:
  - Real GDP growth projected to reach 6.5 percent.
  - Inflation projected to remain in the low single digits.
  - Exports, particularly textiles, projected to rebound.
  - Reconstruction-related imports would widen the external account deficit by about one percentage point of GDP to about 5.3 percent.
  - Gross official reserves projected to decline slightly to about 5 months of imports.
- Key risks:
  - Persistent weaknesses in administrative and absorptive capacities.
  - Continued political instability with a new round of elections.
  - Delays in implementing critical reforms to enhance transparency, governance, and public financial management.
  - Vulnerability to natural disasters and global downside risks that could reduce grants, exports, and remittances.
  - Debt vulnerabilities: last DSA (IMF Country Report 12/74) concluded Haiti’s debt continues to be assessed as high risk.
  - Current level of official reserves (covering more than five months of imports) provides a reasonable buffer.

### IV. Fiscal policy and reforms — findings and planned measures
- FY2012 and FY2013 fiscal stance:
  - 2012 fiscal deficit likely about half as high as programmed, at 3½ percent of GDP.
  - Domestic revenues slightly below projections due to lower custom duties; current spending lower mainly due to lower transfers.
  - Domestically-financed capital expenditure expected not to exceed 2/3 of initially budgeted amount, or 6.4 percent of GDP.
  - Budget support revised to US$55 million, down from US$114 million.
  - FY2013 projections:
    - Domestic revenue projected to rise to 13.9 percent of GDP (up from 13.5 percent in FY2012).
    - Wage bill projected to decline slightly to 5.1 percent of GDP.
    - Transfers and subsidies to the energy sector expected to be curtailed to 1.9 percent of GDP, down from 2.7 percent of GDP in FY2012.
    - Total current spending projected to fall by 0.8 percentage points of GDP, to 10.5 percent.
    - Domestically-financed capital spending forecast to rise to 8.9 percent of GDP, up from 6.4 percent in FY2012.
    - Overall deficit target for FY2013 projected to reach 4.7 percent of GDP, to be financed primarily by foreign resources.
    - Budget support for FY2013 projected to reach US$80 million, including US$27 million from the IDB, US$30 million from IDA, €8 million from the EU, and US$13 million from Spain.
  - Contingency measures: slow some domestically-financed capital spending and/or issue additional Treasury bills in case of external support shortfall.
- Revenue administration and tax policy:
  - Adoption of e-declaration, tightening controls, and establishment of units in charge of NGOs and SMEs.
  - Plan to establish a unit to coordinate tax policy reforms and to reduce/eliminate tax expenditure in line with laws and thorough analysis.
  - Staff and authorities expect a tax strategy mission (September) to assess ways to rationalize tax exemptions and expand revenue.
- Public financial management (PFM) and procurement:
  - Transition to a Treasury Single Account (TSA); first phase (closing dormant accounts) moving on schedule.
  - Introduction of SYSGEP to track and report capital spending execution; populate SYSGEP with timely data.
  - Reinforce UEP and UTE units in line ministries; tie disbursements of subsequent project tranches to proper documentation/reporting.
  - Urgent need to strengthen procurement, external and internal supervisory/control institutions and CNMP authority and capacity.
  - Audit finding: 41 contracts amounting to about US$450 million were unlawfully awarded under post-earthquake emergency law in 2010/11; final report submitted to the High Audit Court in June 2012.
- Debt management:
  - New public debt law requires supplementation by a medium-term strategy.
  - Early creation of a debt unit with operational middle and back-office functions is important; interim strengthening of the Debt Directorate planned.

### V. Social policies and new poverty reduction initiatives
- Overall objective: protect the poor while building a coherent institutional framework for poverty alleviation.
- Three main initiatives:
  - Education — PSUGO:
    - Objective: bring about 508,000 children aged 6-12 to school for free over four years (about 25 percent each year).
    - Forty percent to public schools; remaining to private schools (which will receive subsidies).
    - During 2011-12, about 165,500 children have been sent to school.
    - For each child enrolled: government gives about US$90 to private schools and about US$6 to public schools.
    - Program expected to cost about US$43 million a year.
  - Conditional cash transfer (“Ti-manman-cheri”):
    - Pilot transfers: government transfers about US$10 per month to each woman who sends one child to school, US$15 for two children, and US$20 for three children or more.
    - Program would reach about 100,000 mothers and cost around US$15 million.
  - Food production and distribution (“Aba grangou”):
    - Aim: help poor neighborhoods cope with natural risks, promote agricultural projects and food distribution, and provide better educational and health services.
    - Expected to cost about US$15 million.
- NGOs and coordination:
  - More than 10,000 NGOs in Haiti; NGOs:
    - Provide acutely needed services to large segments of the poor population.
    - Account for more than 2/3 of the country’s total expenditure on economic and social development.
    - Supply close to 50 percent of foreign exchange.
    - Employ large numbers of local staff.
  - Only 5 percent of NGOs are officially registered with the Ministry of Planning; very few share progress reports with authorities.
  - Initiatives under consideration: survey to record NGOs, channel NGO actions within government-defined sector programs, and enhance regular reporting of all registered NGOs.

### VI. Monetary policy, exchange rate, and financial sector measures
- Monetary policy:
  - Price stability is main objective; monetary policy neutral in recent months with no change in the policy rate since early 2011.
  - BRH should be ready to adjust policy to contain inflationary pressures and achieve its inflation target for 2013, barring commodity price spikes.
  - Constraints: high financial dollarization and structural excess bank liquidity weaken monetary transmission.
- Measures planned or underway:
  - BRH measures to contain dollarization welcomed; staff encouraged to monitor rising dollar‑denominated loans and tighten prudential regulations if necessary.
  - Authorities intend to request TA to develop stress testing and a credit model using loan-by-loan information.
  - Plans to deepen FX market and request TA to introduce a system of single price foreign exchange auctions; allow more participants including exporters.
  - BRH interventions to smooth excessive temporary volatility, not to resist fundamental developments.
- Financial sector stability and governance:
  - Strengthen operations of the Partial Credit Guarantee Fund, including launching a second pillar to boost lending.
  - Update financial legislation, improve regulation and supervision, reinforce insurance sector (insurance law and regulator), and create a private credit bureau.
  - Central bank governance measures: complete FY2011 audit, dispose BRH subsidiaries, convert central bank credit to securities, full adoption of IFRS, reconstitute Investment Committee, appoint compliance officer.
- AML/CFT:
  - Amend AML/CFT legal framework in line with FATF standards; prioritize implementation elements critical for program performance.
  - Critical measures identified: create a reliable system for citizen identification, enhance anti-corruption legal framework, and improve law enforcement capacity.

### VII. Structural benchmarks, program monitoring, and IMF reviews
- Monitoring framework:
  - Quarterly quantitative benchmarks and semi-annual quantitative performance criteria (PCs).
  - TMU defines definitions, data sources, and frequency for monitoring through March 30, 2013.
  - Authorities to provide daily, weekly and monthly monetary and fiscal indicators as specified.
- Selected structural benchmarks (end-March 2013 unless noted):
  - Reduce number of domestically-funded imprest accounts to three by ministry or institution; deploy network of public accounting offices; gradually grant signature authority on these accounts to public accountants appointed by the MEF.
  - Roll out GL-software in all ministries and start to record project and imprest accounts expenditure when effectively paid rather than on replenishment.
  - Strengthen the debt unit and complete public debt law transmission to Parliament (draft to be sent by mid-August).
  - Establish unconstrained single price foreign exchange auctions (end-September 2012—status noted as delayed).
- Status of implementation (selected):
  - Met: increase in excise tax on tobacco and alcohols; publication of various fiscal reports; selection of international firm for FY2011 audit (with delay); adoption of global reserves management policy.
  - Not met/delayed: setting up debt unit at MEF; submission of public debt law (draft being finalized); several PFM institutional units to be established by end-September 2012.

### VIII. Key macroeconomic and financial indicators (selected figures preserved)
- National income and prices (selected indicators and projections):
  - Nominal GDP (2011): US$7.4 billion
  - Population (2009): 9.9 million
  - GDP at constant prices: 2.9, -5.4, 8.6, 5.6, 7.8, 4.5, 6.5
  - GDP deflator: 3.4, 4.7, 6.2, 5.9, 7.2, 5.7, 5.3
  - Consumer prices (period average): 3.4, 4.1, 7.0, 7.4, 7.7, 6.8, 5.9
  - Consumer prices (end-of-period): -4.7, 4.7, 9.1, 10.4, 8.0, 6.0, 5.0
- Money, credit, and reserves (selected):
  - Credit to private sector: 14.7, -5.6, 21.6, 24.5, 16.8, 18.6, 18.0
  - Base money: 9.5, 31.2, 15.2, 6.0, 11.2, 9.0, 10.9
  - Broad money (incl. foreign currency deposits): 11.0, 22.7, 20.3, 10.4, 16.1, 11.2, 13.0
  - Net international reserves (program, US$ millions): 416, 1,095, 772, 1,177, 979, 1,221, 1,057
  - Liquid gross reserves (US$ millions): 948, 1,792, 1,539, 2,000, 1,843, 2,060, 1,970
  - Reserves in months of imports of the following year: 2.8, 5.2, 4.1, 5.8, 4.7, 5.5, 5.0
- Central government operations (millions of Gourdes / US$ and percent of GDP highlights):
  - Nominal GDP (millions of Gourdes): 266,559; 264,039; 308,335; 297,687; 345,680; 328,807; 368,630
  - Total revenue and grants (millions of Gourdes): 47,717; 75,004; 86,794; 88,801; 102,066; 91,786; 99,386
    - Domestic revenue: 29,881; 31,425; 36,459; 38,893; 46,950; 44,516; 51,411
    - Grants: 17,836; 43,579; 50,335; 49,907; 55,116; 47,270; 47,975
  - Total expenditure (commitment basis): 60,030; 68,704; 104,100; 99,811; 128,847; 103,677; 116,861
  - Domestically financed capital expenditure (millions of Gourdes): 10,959; 14,689; 25,335; 17,621; 38,007; 21,025; 32,942
  - Overall balance (millions of Gourdes): -12,313; 6,299; -18,984; -11,010; -26,781; -11,891; -17,475
  - Overall balance (percent of GDP): -4.6, 2.4, -6.2, -3.7, -7.7, -3.6, -4.7
- External sector and savings:
  - Gross investment: 27.4, 25.4, 38.9, 28.0, 32.6, 27.0, 29.0
  - Gross national savings: 24.0, 22.9, 34.6, 23.8, 28.1, 22.7, 23.7
  - External current account balance (including official grants, percent of GDP): -3.5, -2.5, -4.2, -4.6, -4.5, -4.3, -5.3
- Public debt:
  - External public debt (end-of-period, percent of GDP): 19.0, 13.2, 8.8, 8.9, 12.4, 13.1, 16.4
  - Total government debt (end-of-period, percent of GDP): 27.7, 17.3, 14.9, 11.7, 15.1, 16.6, 20.1
  - External public debt service (percent of exports of goods and nonfactor services): 3.9, 1.6, 0.9, 0.6, 0.7, 0.8, 1.4
- Banking system indicators (selected):
  - Total assets (millions of Gourdes): 107,913; 137,937; 140,814; 146,247; 149,851; 153,995
  - Total deposits (millions of Gourdes): 92,460; 119,253; 122,261; 127,149; 131,099; 135,549
  - Credit/GDP: 13.3, 11.6, 12.2, 12.3, 13.0, 15.0
  - Deposits/GDP: 37.8, 44.7, 45.8, 47.6, 49.1, 50.8
  - NPLs to gross loans: 8.5, 5.7, 5.4, 4.8, 5.0, 3.7

### IX. Program financing, IMF engagement, and recommendations
- IMF financing and reviews:
  - Proposed disbursement under the ECF for completion of the fourth review: SDR 4,914,000 — July 15, 2012.
  - Subsequent scheduled tranches: SDR 4,914,000 each on January 15, 2013 and July 15, 2013, contingent on performance.
  - IMF Executive Board completed the fourth review on July 20, 2012; immediate disbursement of SDR 4.914 million (about US$7.4 million).
  - Total disbursements under the program to date were SDR 31.122 million (about US$46.9 million).
  - Full relief on the country’s outstanding debt to the Fund of about SDR 178 million (equivalent to US$268 million) provided via PCDR Trust Fund.
- Staff recommendation:
  - Staff recommends completion of the fourth review under the ECF arrangement in view of good performance to date and authorities’ commitment to the rest of the program.
- Key conditionality and monitoring highlights:
  - Continuous performance criteria on zero accumulation of public sector external arrears.
  - Ceilings on contracting and guaranteeing non-concessional external debt set at zero throughout the program period (with prior waiver noted).
  - PetroCaribe-related inflows treated as central government spending until a bi‑national company is legally established; outstanding PetroCaribe balance as of March 2012: $263 million (US$1.5 million at BRH; US$262 million at domestic commercial banks).
  - Adjustors specified for PetroCaribe movements and for budgetary donor grants equivalent to G3.5 billion (about $80 million).

*Source: _cr12220 (excerpts).*

### 3. Summary Accounts of the Banking System, 2008/09-2012/13 .......................................17

### 3. Summary Accounts of the Banking System, 2008/09-2012/13

### I. Economic Context — Background and Program Implementation
- Political developments:
  - New government under Prime Minister Lamothe formed on May 15; he also remains Minister of Foreign Affairs.
  - Prime Minister emphasized continuity and commitment to the program and reform agenda.
  - Passage of key legislation expected to remain protracted given the President’s lack of a majority in Parliament and the upcoming electoral cycle (originally scheduled to begin in November 2011, now expected to start in November 2012).
  - Overall security situation described as fragile.
- Post-earthquake reconstruction:
  - Reduction by more than half of the 1.3 million people living in camps.
  - Removal of more than 50 percent of earthquake-related debris.
  - Reconstruction of several schools.
  - Donors’ disbursements remain slow, especially relative to March 2010 New York conference pledges.
- Program implementation:
  - All end-December 2011 indicative targets met except the floor on poverty-related spending (impacted by under-execution of public spending).
  - End-March 2012 quantitative performance criteria were observed, but the floor on poverty-related spending still was not met.
  - All structural benchmarks from previous reviews were met except two; for the fourth review, two out of three were not met.
  - Final version of the public debt law is ready and expected to be sent to parliament by mid-August (after submission of draft FY2013 budget).
  - Structural benchmark related to creation of a debt unit not observed; completion predicated on reorganization of the Ministry of Economy and Finance (MEF), delayed by political transition.
  - New government indicated steps to accelerate submission to parliament of reorganization legislation by mid-summer.

### II. Recent Economic Developments
- Growth:
  - Agriculture accounts for about 25 percent of GDP and rebounded from last year’s contraction.
  - Buoyancy in manufacturing, commerce and services.
  - Construction weakened; political crisis slowed execution of public investment spending significantly.
- Inflation:
  - Consumer price inflation receded to 5.2 percent in May 2012 (down from a peak of 10.4 percent in September 2011).
- Fiscal position:
  - Fiscal outcome was better than programmed due to continued strong revenue mobilization and under-execution of domestically-financed investment spending.
  - Current spending was in line with program targets.
- External position:
  - Balance of payments outcome for first semester of 2012 broadly in line with expectations.
  - Small overall balance of payment surplus allowed for a US$0.1 billion increase in gross international reserves, to US$2.1 billion (5.5 months of imports) by end-March 2012.
- Credit and banking sector:
  - Year-on-year credit to the private sector grew by close to 30 percent through end-March 2012.
  - Expansion mainly fueled by rising demand for short-term trade credits; long-term private sector investment adversely affected by political uncertainty.
  - Deposit and credit dollarization remain high.
  - Nonperforming loans are low; key stability indicators suggest the financial sector is relatively liquid and profitable.
  - Gourde depreciated 4.1 percent against the dollar on a 12-month basis through end-May 2012.

### III. Outlook and Risks
- 2012 outlook (revised):
  - Growth target revised to 4.5 percent in 2012, down from 7.8 percent.
  - Twelve-month inflation objective for end-FY 2012 (September 2012) adjusted to 6 percent.
  - External current account deficit likely somewhat larger than programmed due to a slump in exports (loss of a textile order from a U.S. retailer).
  - Gross international reserves target for FY 2012 remains well within reach given over-compliance at end-March.
- 2013 outlook:
  - Real GDP growth projected to reach 6.5 percent on expected pickup in reconstruction efforts and acceleration in major projects (transportation and services).
  - Inflation projected to remain in the low single digits.
  - Exports, particularly textiles, projected to rebound.
  - Reconstruction-related imports would widen the external account deficit by about one percentage point of GDP to about 5.3 percent.
  - Gross official reserves projected to decline slightly to about 5 months of imports.
  - Authorities broadly agreed with staff’s outlook but were somewhat more optimistic about real GDP growth and investment.
- Risks:
  - Persistent weaknesses in administrative and absorptive capacities.
  - Continued political instability with a new round of elections.
  - Delays in implementing critical reforms to enhance transparency, governance, and public financial management could reduce international support and complicate program execution.
  - Vulnerability to natural disasters and global downside risks that could reduce grants, exports, and remittances.
  - Debt vulnerabilities remain a risk; the last DSA (IMF Country Repot 12/74) concluded Haiti’s debt continues to be assessed as high risk.
  - Current level of official reserves (covering more than five months of imports) provides a reasonable buffer.

### IV. Policy Discussions — Fiscal Policy and Reforms
- Fiscal outcomes and projections:
  - 2012 fiscal deficit likely about half as high as programmed, at 3½ percent of GDP.
  - Domestic revenues slightly below projections due to lower custom duties; current spending also lower mainly due to lower transfers.
  - Domestically-financed capital expenditure expected not to exceed 2/3 of initially budgeted amount, or 6.4 percent of GDP.
  - Budget support revised to US$55 million, down from US$114 million (delays in passage of FY2012 budget and prior actions).
- FY2013 fiscal stance:
  - Domestic revenue projected to rise to 13.9 percent of GDP (up from 13.5 percent in FY2012).
  - Wage bill projected to decline slightly to 5.1 percent of GDP (notwithstanding new hiring to improve absorptive and administrative capacity).
  - Transfers and subsidies to the energy sector expected to be curtailed to 1.9 percent of GDP, down from 2.7 percent of GDP in FY2012.
  - Total current spending projected to fall by 0.8 percentage points of GDP, to 10.5 percent.
  - Domestically-financed capital spending forecast to rise to 8.9 percent of GDP, up from 6.4 percent in FY2012, assuming higher PetroCaribe- and PCDR-related project spending.
  - Overall deficit target for FY2013 projected to reach 4.7 percent of GDP, to be financed primarily by foreign resources.
  - Budget support for FY2013 projected to reach US$80 million, including US$27 million from the IDB, US$30 million from IDA, €8 million from the EU, and US$13 million from Spain.
  - In case of shortfall in external budgetary support, options include slowing some domestically-financed capital spending and/or issuing additional Treasury bills.
- Project implementation and capacity:
  - Need to enhance project management within implementation units in line ministries.
  - Improve coordination between government agencies responsible for project design and implementation.
  - Finalize recruitment of an international firm to assist in project management.
  - Emphasis on meeting public investment targets in priority sectors: infrastructure (including reconstruction of public buildings), education, agriculture, health, and energy.
- Social spending:
  - Authorities and staff agreed on importance of protecting and ramping up social spending.
  - Major initiatives launched to assist the most vulnerable and to create a more coherent institutional framework for poverty alleviation.
  - Need for closer coordination with NGOs and other stakeholders to better target social spending and improve poverty alleviation outcomes.
  - Authorities expressed concern that many NGOs do not coordinate with the government, sometimes compete in domestic labor and goods markets, and large NGO flows can bypass government institutions.

### V. New Poverty Reduction Initiatives and Coordination with NGOs (Box 1)
- Institutional steps:
  - Creation of a new Ministry delegate in charge of Human Rights and the Fight against Extreme Poverty.
  - Launching of three key programs with an action plan to develop in close coordination with civil society.
- Three new initiatives:
  - Education (Programme de Scolarisation Universel Gratuit et Obligatoire or PSUGO):
    - Objective: bring about 508,000 children aged 6-12 to school for free over four years (about 25 percent each year).
    - Forty percent of these children will be sent to public schools; remaining to private schools, which will receive government subsidies.
    - During 2011-12, about 165,500 children have been sent to school under this initiative.
    - For each child enrolled: government gives about US$90 to private schools and about US$6 to public schools.
    - Program expected to cost about US$43 million a year.
  - Conditional cash transfer (“Ti-manman-cheri”):
    - Objective: help women in very poor neighborhoods in the Port-au-Prince area.
    - Under pilot: government transfers about US$10 per month to each woman who sends one child to school, US$15 for two children, and US$20 for three children or more.
    - Program would reach about 100,000 mothers and cost around US$15 million.
  - Food production and distribution (“Aba grangou”):
    - Aim: help poor neighborhoods deal with natural risks, promote agricultural projects, and food distribution programs; provide better educational and health services.
    - Expected to cost about US$15 million.
- NGO landscape and coordination measures:
  - More than 10,000 NGOs in Haiti; NGOs:
    - Provide acutely needed services to large segments of the poor population.
    - Account for more than 2/3 of the country’s total expenditure on economic and social development.
    - Supply close to 50 percent of foreign exchange.
    - Employ large numbers of local staff.
  - Recent data suggest only 5 percent of NGOs are officially registered with the Ministry of Planning, and very few share progress reports with authorities.
  - Initiatives under consideration:
    - Launching a survey to record NGOs in operation and put monitoring systems in place.
    - Channeling NGOs’ actions within sector programs defined by the government and a platform to enable the national government to provide services.
    - Enhancing regular reporting of all registered NGOs.

*Source: _cr12220 - 3. Summary Accounts of the Banking System, 2008/09-2012/13 (excerpts)*

### 13.      The government’s medium-term fiscal strategy hinges on a further increase in

### 13.      The government’s medium-term fiscal strategy hinges on a further increase in

### Fiscal strategy and revenue administration reforms
- Reforms to increase domestic revenue intake focus on strengthening tax and customs administrations:
  - Adoption of an electronic system for tax declaration (e-declaration).
  - Tightening controls of revenue collections.
  - Establishment of two tax units in charge of NGOs and SMEs (MEFP, ¶14).
- On tax policy the authorities plan to:
  - Establish a unit to coordinate related reforms.
  - Reduce and eliminate tax expenditure in line with current laws and regulations and thorough analysis of their impact and motivation.
  - Initiate work to overhaul the legal framework for taxation.
- Staff and authorities expect a tax strategy mission (September) to assess ways to rationalize tax exemptions and expand revenue.
- Customs modernization measures include:
  - Full implementation and use of the ASYCUDA WORLD system in major customs offices nationwide.
  - Improvements in import valuation processes and risk management.
  - Reinforcement of customs controls.

### Public financial management and quality of spending
- Key PFM reforms and tools:
  - Transition to a Treasury Single Account (TSA); execution of the first phase (closing identified dormant government accounts) is moving on schedule (MEFP, ¶16).
  - Introduction of a tracking and reporting mechanism for capital spending execution (SYSGEP) to improve investment budgeting, spending, and execution (MEFP, ¶15).
- Implementation caveats and priorities:
  - Continued diligence and strong political commitment required to make systems fully operational and effective.
  - Reinforce network of units in charge of project assessment and programming (UEP) and technical execution (UTE) in line ministries.
  - Apply regulations tying disbursements of subsequent project tranches to proper documentation and reporting of initial tranche execution.

### Anti-corruption, procurement, and governance
- Authorities expressed determination to combat corruption and improve transparency in public resource use.
- Urgent priorities:
  - Speedy resolution of contracts signed after the earthquake that did not meet procurement code provisions to signal commitment to better governance.
  - Strengthen public procurement, external and internal supervisory/control institutions.
  - Strengthen authority, capacity, and resources of the Commission Nationale des Marchés Publics (CNMP) with donor technical and financial assistance.
  - Ensure timely submission of the bulk of public contracts to CNMP scrutiny, in line with a national procurement plan.
- Audit findings referenced:
  - An audit concluded that 41 contracts (amounting to about US$450 million) were unlawfully awarded under Haiti’s post-earthquake emergency law in 2010/11.
  - The final report was submitted to the High Audit Court in June 2012.

### Electricity sector (EDH) restructuring
- Restructuring EDH is critical to reduce budgetary transfers and improve electricity supply.
- Recent actions and commitments:
  - A Memorandum of Understanding to strengthen the electrical sector was agreed between the government and partners including the U.S., IDB, and the World Bank.
  - A managing director and four directors appointed at EDH to improve management, reduce production and distribution losses, and raise bill payments proceeds (MEFP, ¶18).
  - Council of Ministers to agree a strategy and policy paper for the electricity sector to be discussed with donors in July.
- Staff recommendation: accelerate efforts to fully restructure EDH and bring it back to financial sustainability over the medium term while gradually allowing for a reliable supply of energy.
- Progress to date described as slow and disappointing.

### Debt management
- The new public debt law requires supplementation by a medium-term strategy.
- Importance of early creation of a debt unit with operational middle and back-office functions.
- Interim focus: strengthen capacity of the current Debt Directorate by:
  - Providing adequate training to staff.
  - Conducting front and back office operations (MEFP, ¶19).
  - Enhancing capacity to conduct debt sustainability analyses.

### Monetary policy, exchange rate, and financial sector policies
- Price stability remains the main objective of monetary policy.
  - Monetary policy has been neutral in recent months, with no change in the policy rate since early 2011.
  - BRH should be ready to adjust monetary policy to contain inflationary pressures and achieve its inflation target for 2013, barring commodity price spikes.
- Constraints on policy effectiveness:
  - Relatively high financial dollarization and structural excess bank liquidity weaken the monetary transmission mechanism.
  - Successful dedollarization depends on policies maintaining macroeconomic and price stability.
- Recent and planned measures:
  - BRH measures to contain dollarization welcomed; staff encouraged monitoring risks from rising dollar-denominated loans and tightening prudential regulations if necessary.
  - Authorities intend to request technical assistance (TA) from the Fund to develop stress testing and a credit model using loan-by-loan information.
  - Plans to deepen FX market and request TA to introduce a system of single price foreign exchange auctions; allow more participants including exporters.
  - BRH interventions to smooth excessive temporary volatility, not to resist fundamental developments.
- Financial sector stability measures:
  - Strengthen operations of the Partial Credit Guarantee Fund, including launching a second pillar to boost lending to investors.
  - Update financial legislation and improve regulation and supervision.
  - Reinforce the insurance sector: submit an insurance law to Parliament and set up a regulatory authority (MEFP, ¶20).

### Central bank governance, AML/CFT, and safeguards
- Implementation of January 2010 Safeguards Assessment follow-up continues:
  - Complete FY 2011 audit (progressing with delays).
  - Measures to strengthen accounting, financial reporting, and auditing capacities of the central bank (MEFP, ¶12) include:
    - Disposition of all BRH subsidiaries.
    - Conversion of central bank credit to the Haitian government into securities.
    - Full adoption of IFRS and establishment of a special committee to monitor implementation.
    - Reconstitution of the Investment Committee as an independent oversight body and appointment of an officer to monitor compliance with investment guidelines.
- AML/CFT improvements:
  - Authorities committed to improving compliance with FATF standards and follow a risk-based approach.
  - Action plan elements:
    - Amend AML/CFT legal framework in line with FATF standards.
    - Focus implementation on elements critical for program performance (e.g., enhance revenue collection, increase procurement transparency, prevent financial sector abuse).
    - Critical measures identified: create a reliable system for citizen identification, enhance anti-corruption legal framework, and improve law enforcement capacity.

### Other structural reforms
- Continuing structural reforms are critical to sustain growth, reduce poverty and unemployment, and address imbalances.
- Doing Business action plan underway to streamline numerous, complex, and cumbersome regulations over the next two years.
- Additional priorities:
  - Improve legal regime for collateral and establish a registry for movable assets as collateral.
  - Prepare a new law to strengthen microfinance (MEFP, ¶17).
- Staff note: these reforms, while outside core IMF expertise, are critical to boost private sector growth and reduce poverty.

### Program monitoring and structural benchmarks
- Program design and monitoring remain broadly unchanged:
  - Quarterly quantitative benchmarks and semi-annual quantitative performance criteria (PCs) continue to monitor implementation.
  - Understandings reached on revised end-December 2012 indicative targets, end-March 2013 quantitative performance criteria, and new indicative targets for the remainder of FY2013 (Table 1 attached to the MEFP).
- Structural benchmarks proposed to improve cash management and transparency in accounting (Table 2c attached to the MEFP):
  - Reduce the number of domestically-funded imprest accounts to three by ministry or institution (for revenue collection, capital spending, and other transactions, respectively), deploy network of public accounting offices at line ministries, and gradually grant signature authority on these accounts to public accountants appointed by the MEF (end-March 2013).
  - Roll out GL-software in all ministries and start to record projects and imprest accounts expenditure when effectively paid, not when replenishment occurs (end-March 2013).

### Staff appraisal: progress, risks, and recommendations
- Recent assessment:
  - Despite political instability, steady implementation of appropriate policies has continued to deliver on program objectives.
  - Economic activity picked up at a lower-than-planned pace; inflation decelerated.
  - Credit growth continued and banking sector indicators remain sound.
  - Fiscal adjustment is in line with medium-term sustainability.
  - Business environment reforms underway but slower-than-anticipated; structural challenges remain.
- Revenue and expenditure management:
  - Recent tax revenue performance suggests revenue administration reforms are paying off, but scope remains to broaden the tax base, reduce tax expenditures, and improve efficiency of tax and customs administration.
  - Need to provide additional fiscal space for priority spending to boost growth and reduce poverty.
  - Ramp-up of capital spending must be accompanied by further PFM improvements; SYSGEP should be populated with timely and credible data.
  - Procurement system must be durably improved to realize PFM gains.
- Monetary policy:
  - Stance broadly appropriate but constrained by dollarization and excess liquidity.
  - Staff welcomes dedollarization measures, improved liquidity management, development of domestic financial markets, and greater use of market-based monetary operations.
- Structural reforms:
  - Sound macroeconomic policies need to be accompanied by structural reforms to achieve competitiveness gains for sustained growth and job creation.
  - Government initiatives to address structural impediments, reduce excessive regulation, improve transparency, and frame actions in an overall strategy are welcomed.

*Source: IMF staff report excerpt.*

### 30.      Staff recommends completion of the fourth review under the ECF arrangement in

### 30.      Staff recommends completion of the fourth review under the ECF arrangement in view of the good performance so far and the authorities’ commitment to the rest of the program.

### Recommendation
- Staff recommends completion of the fourth review under the ECF arrangement in view of the good performance so far and the authorities’ commitment to the rest of the program.

### National income and prices (selected indicators and projections)
- Nominal GDP (2011): US$7.4 billion
- Population (2009): 9.9 million
- GDP at constant prices: 2.9, -5.4, 8.6, 5.6, 7.8, 4.5, 6.5
- GDP deflator: 3.4, 4.7, 6.2, 5.9, 7.2, 5.7, 5.3
- Consumer prices (period average): 3.4, 4.1, 7.0, 7.4, 7.7, 6.8, 5.9
- Consumer prices (end-of-period): -4.7, 4.7, 9.1, 10.4, 8.0, 6.0, 5.0
- Exports (f.o.b.) percent changes: 12.4, 2.2, 10.7, 36.3, 23.9, 0.0, 22.8
- Imports (f.o.b.) percent changes: -3.6, 38.3, 7.2, 7.3, 15.1, 0.0, 12.0
- Real effective exchange rate (end of period; + appreciation): 2.1, 0.8, ..., 1.6, ..., n.a., n.a.

### Money, credit, and banking system (selected)
- Credit to the nonfinancial public sector (net): 24.5, -122.7, -91.7, 229.4, -107.4, -0.2, -6.3
  - Net credit to the central government: 35.7, -104.3, ..., 930.9, -157.3, 8.0, -5.2
- Credit to private sector: 14.7, -5.6, 21.6, 24.5, 16.8, 18.6, 18.0
- Base money: 9.5, 31.2, 15.2, 6.0, 11.2, 9.0, 10.9
- Broad money (incl. foreign currency deposits): 11.0, 22.7, 20.3, 10.4, 16.1, 11.2, 13.0
- Net international reserves (program): 416, 1,095, 772, 1,177, 979, 1,221, 1,057 (In millions of U.S. dollars)
- Liquid gross reserves: 948, 1,792, 1,539, 2,000, 1,843, 2,060, 1,970 (In millions of U.S. dollars)
- Reserves in months of imports of the following year: 2.8, 5.2, 4.1, 5.8, 4.7, 5.5, 5.0

### Central government operations (levels and percent of GDP)
- Nominal GDP (millions of Gourdes): 266,559; 264,039; 308,335; 297,687; 345,680; 328,807; 368,630
- Nominal GDP (millions of U.S. dollars): 6,552; 6,551; 7,620; 7,388; 8,335; 7,895; 8,529
- Total revenue and grants (millions of Gourdes): 47,717; 75,004; 86,794; 88,801; 102,066; 91,786; 99,386
  - Domestic revenue: 29,881; 31,425; 36,459; 38,893; 46,950; 44,516; 51,411
  - Grants: 17,836; 43,579; 50,335; 49,907; 55,116; 47,270; 47,975
- Total expenditure (commitment basis except domestically financed capital expenditure): 60,030; 68,704; 104,100; 99,811; 128,847; 103,677; 116,861
  - Current expenditure: 31,136; 29,849; 33,997; 35,231; 39,452; 37,089; 38,537
  - Capital expenditure: 28,894; 38,855; 70,103; 64,579; 89,395; 66,588; 78,324
    - Domestically financed: 10,959; 14,689; 25,335; 17,621; 38,007; 21,025; 32,942
    - Foreign-financed: 17,934; 24,166; 44,767; 46,958; 51,388; 45,563; 45,382
- Overall balance (millions of Gourdes): -12,313; 6,299; -18,984; -11,010; -26,781; -11,891; -17,475
  - Excluding grants (millions of Gourdes): -30,149; -37,279; -67,641; -60,918; -81,897; -59,161; -65,450
  - Excluding grants and externally financed projects (millions of Gourdes): -12,214; -13,113; -22,873; -13,959; -30,509; -13,599; -20,068
- Financing (millions of Gourdes): 11,749; -5,040; 18,984; 12,184; 26,781; 11,836; 17,475
  - External net financing (loans net): 8,141; 9,050; 13,867; 13,548; 14,661; 14,719; 15,052
    - Disbursements: 9,935; 9,356; 14,079; 13,625; 14,685; 14,743; 15,560
    - Budget support: 5,963; 9,114; 12,772; 13,082; 13,686; 14,160; 14,695
      - Of which: Petrocaribe: 5,963; 9,114; 12,747; 13,214; 13,686; 14,160; 14,695
  - Internal net financing: 2,082; -14,090; 5,117; -1,363; 12,120; -2,882; 2,423

- Central government (percent of GDP) highlights:
  - Total revenue and grants: 17.9, 28.4, 28.1, 29.8, 29.5, 27.9, 27.0
  - Domestic revenue: 11.2, 11.9, 11.8, 13.1, 13.6, 13.5, 13.9
  - Total expenditure: 22.5, 26.0, 33.8, 33.5, 37.3, 31.5, 31.7
  - Capital expenditure: 10.8, 14.7, 22.7, 21.7, 25.9, 20.3, 21.2
  - Overall balance: -4.6, 2.4, -6.2, -3.7, -7.7, -3.6, -4.7

### Savings and investment, external current account
- Gross investment: 27.4, 25.4, 38.9, 28.0, 32.6, 27.0, 29.0
  - Public investment (of which): 10.8, 14.7, ..., 21.7, 25.9, 20.3, 21.2
- Gross national savings: 24.0, 22.9, 34.6, 23.8, 28.1, 22.7, 23.7
  - Central government savings: 1.0, 4.0, 3.0, 2.4, 3.5, 3.0, 4.4
- External current account balance (including official grants): -3.5, -2.5, -4.2, -4.6, -4.5, -4.3, -5.3 (percent of GDP)
- External current account balance (excluding official grants): -9.5, -29.8, -23.3, -24.2, -22.9, -21.2, -21.0 (percent of GDP)

### Public debt and debt service
- External public debt (end-of-period, percent of GDP): 19.0, 13.2, 8.8, 8.9, 12.4, 13.1, 16.4
- Total government debt (end-of-period, percent of GDP): 27.7, 17.3, 14.9, 11.7, 15.1, 16.6, 20.1
- External public debt service (in percent of exports of goods and nonfactor services, includes HIPC, MDRI, and PCDR debt relief): 3.9, 1.6, 0.9, 0.6, 0.7, 0.8, 1.4

### Balance of payments (selected)
- Current account (including grants, millions of U.S. dollars): -226, -163, -323, -339, -375, -341, -453
- Trade balance (millions of U.S. dollars): -1,481, -2,247, -2,384, -2,246, -2,438, -2,246, -2,433
  - Exports of goods (millions of U.S. dollars): 551, 563, 626, 768, 943, 768, 943
  - Imports of goods (millions of U.S. dollars): -2,032, -2,810, -3,010, -3,014, -3,381, -3,014, -3,376
  - Petroleum products (imports): -385, -546, -630, -770, -815, -815, -871
- Current transfers (net, millions of U.S. dollars): 1,635, 3,097, 2,826, 2,757, 2,894, 2,700, 2,753
  - Official transfers (net): 395, 1,790, 1,450, 1,446, 1,530, 1,336, 1,334
    - Budget support component: 94, 225, 169, 871, 145, 580 (selected entries)
  - Private transfers (net): 1,241, 1,307, 1,376, 1,311, 1,364, 1,364, 1,419
- Capital and financial accounts (millions of U.S. dollars): 501, 1,003, 505, 921, 943, 793, 348
  - Capital transfers (HIPC/MDRI/PCDR): 1,069, 1,360, 486, 656, 333
  - Debt stock reduction (HIPC/MDRI): -1,092, -334, -486, -486, 0, 0, 0

### Banking system indicators (selected)
- Total assets (millions of Gourdes): 107,913; 137,937; 140,814; 146,247; 149,851; 153,995
- Total assets (US$ millions): 2,583; 3,454; 3,531; 3,656; 3,746; 3,850
- Total deposits (millions of Gourdes): 92,460; 119,253; 122,261; 127,149; 131,099; 135,549
- Credit/GDP: 13.3, 11.6, 12.2, 12.3, 13.0, 15.0
- Deposits/GDP: 37.8, 44.7, 45.8, 47.6, 49.1, 50.8
- NPLs to gross loans: 8.5, 5.7, 5.4, 4.8, 5.0, 3.7
- Regulatory capital to risk-weighted assets: 16.4, 13.4, 16.4, ..., ..., ...

### Indicators of external vulnerability and Fund capacity to repay
- Current account (in percent of GDP): -3.5, -2.5, -4.2, -4.6, -4.5, -4.3, -5.3
- Gross liquid international reserves (millions of U.S. dollars): 947.5, 1,792.0, 1,999.7, 2,060.0, 1,970.0
  - In months of imports of the following year: 2.8, 5.2, 5.8, 5.5, 5.0
- Total external public debt (percent of GDP): 19.0, 13.2, 8.9, 13.1, 16.4
- Exports (percent change, 12-month basis in U.S. dollars): 11.6, -13.7, 26.8, 5.8, 19.3
- Remittances and grants in percent of gross disposable income: 19.9, 32.0, 27.1, 25.4, 24.3

### Fund obligations, outstanding credit, and proposed disbursements (schedule)
- Proposed schedule of disbursements and availability under the ECF arrangement (selected lines):
  - SDR 8,190,000 — July 15, 2010 — Executive Board approval of the three-year arrangement — Completed
  - SDR 8,190,000 — January 15, 2011 — Observance of performance criteria for September 2010 and completion of the first review under the ECF arrangement — Completed
  - SDR 4,914,000 — July 15, 2011 — Observance of performance criteria for March 2011 and completion of the second review under the ECF arrangement — Completed
  - SDR 4,914,000 — January 15, 2012 — Observance of performance criteria for September 2011 and completion of the third review under the ECF arrangement — Completed
  - SDR 4,914,000 — July 15, 2012 — Observance of performance criteria for March 2012 and completion of the fourth review under the ECF arrangement.
  - Subsequent scheduled tranches listed for January 15, 2013 and July 15, 2013 (SDR 4,914,000 each) contingent on observance of performance criteria and completion of the fifth and sixth reviews.

*Source: IMF staff and Haitian authorities as presented in the provided content unit.*

### APPENDIX I. LETTER OF INTENT

### APPENDIX I. LETTER OF INTENT

### Program status and request
- Implementation of the program supported by an arrangement under the Extended Credit Facility (ECF) has been "broadly satisfactory."
- All end-March 2012 performance criteria were met.
- Request to conclude the fourth review and approve the fifth disbursement for an amount equivalent to SDR 4.914 million.
- Upcoming reviews:
  - Fifth review (assessing end-September 2012 targets) scheduled for January 2013.
  - Sixth review (assessing end-March 2013 targets) envisaged for July 2013.
- Government authorizes IMF publication of this letter, the attached MEFP, and the related Staff Report following the IMF Executive Board's conclusion of the review.

### Political background and recent economic developments
- Political transition following the resignation of the former Prime Minister contributed to delays in structural reforms and under-execution of domestically-financed capital spending; compounded by lower disbursement of international assistance.
- New government formed in early May; FY 2012 budget approved by Parliament; new cabinet took office on May 15.
- Growth and inflation:
  - Economy expected to grow by 4.5 percent for the year as a whole, against a program target of 7.8 percent.
  - Headline inflation declined from a peak of 10.4 percent in September 2011 to 5.2 percent in May 2012.
  - FY2012 consumer price inflation now expected to reach 6 percent, compared with an initial target of 8 percent.
- Sectoral developments:
  - Manufacturing, services, and commerce remained buoyant.
  - Agricultural output picked up significantly during the main crop season.
  - Construction and transportation remained modest due in part to low execution of public investment.
- Balance of payments and reserves:
  - Overall balance of payments recorded a surplus in the first semester of 2012.
  - Gross international reserves rose to US$2.1 billion at end-March (5.5 months of imports).
  - On a 12-months basis, the Gourde depreciated by 4.1 percent against the U.S. dollar through end-May 2012.
  - Both merchandise exports and imports were significantly lower than programmed; textile exports affected by the loss of a major order.

### Performance under the program
- All end-March 2012 performance criteria observed.
- End-December 2011 indicative targets met, except the floor on poverty-related spending (impacted by under-execution of public spending).
- Structural benchmarks:
  - Met: increase in excise tax on tobacco and alcohols (included in FY2012 budget).
  - Finalized the public debt law; to be submitted to parliament at the latest by mid-August.
  - Not yet completed: creation of a debt unit due to lack of progress in MEF reorganization (Parliament approval required); plan to strengthen current Directorate of Debt and complete the benchmark by 2013.

### Government program for the remainder of 2012 and FY2013 — Risks and objectives
- Core objectives: keep inflation in single digits; increase domestic revenue intake; enhance quality of spending; improve governance to attract investment and promote private sector-led growth.
- Noted risks:
  - Upside: reversal of rising international food and energy prices.
  - Downside: delays in disbursements of international assistance; continued sanitary challenges (cholera epidemic); security and political environment; natural disasters; weak administrative capacity.

### A. Macroeconomic policies

Fiscal policy
- Revised FY2012 fiscal deficit projection: 3.6 percent of GDP, against an initial target of 7.7 percent—reflecting significantly lower domestically-financed capital spending.
- Domestic revenue and current spending in Gourdes expected to remain broadly in line with forecasts.
- Draft 2013 budget (to be submitted to Parliament in June) aims to balance reconstruction support and medium-term debt sustainability.
- Revenue and spending targets:
  - Target tax-to-GDP ratio: 13.9 percent of GDP (from 13.5 percent in FY2012).
  - Wage bill expected to decline slightly by 0.1 percentage points of GDP, despite new hiring in education, health, agriculture, and security.
  - Transfers and subsidies to the energy sector to be reduced by 0.8 percentage points of GDP.
  - Overall current spending to be brought down to 10.5 percent of GDP, from 11.3 percent of GDP in FY2012.
  - Domestically-financed capital spending planned to ramp up to 8.9 percent of GDP, up from 6.4 percent of GDP in FY2012 (assumes higher PCDR- and PetroCaribe-related project spending).
  - Overall deficit target for FY2013: 4.7 percent of GDP, to be financed by domestic (0.7 percent of GDP) and external resources (4 percent of GDP).
  - Contingency: in case of shortfall in external budgetary support, delay some domestically-financed capital spending and/or issue additional T-bills.

Monetary and exchange rate policies
- Monetary policy objective: price stability; no action on the policy rate anticipated as inflationary pressures subside, but authorities remain vigilant and ready to adjust.
- Measures to improve monetary transmission and promote de-dollarization:
  - Improve liquidity management, deepen domestic financial market, and strengthen market-based monetary operations.
  - Since beginning of the year, steadily increased portion of reserve requirement on foreign currency deposits to be held in dollars up to 100 percent by May 16.
  - Plan to resume implementation of the 2008 FSAP measures in the near future.
- Exchange rate policy:
  - Greater exchange rate flexibility recognized as beneficial; exercise caution in short term due to pass-through.
  - Use comfortable level of reserves to initiate reforms to enhance market mechanisms and develop the foreign exchange market.
  - Work with IMF staff to increase number of participants in the FX market and allow gradual transition to a weekly auction system.
  - FX interventions will aim at smoothing large exchange rate movements while not resisting fundamental trends.

Safeguard assessments and AML/CFT
- Commitment to implement recommendations of the January 2010 Safeguards Assessment follow up mission.
- Central bank reforms underway:
  - Complete the FY2011 audit.
  - Execute BRH’s plan to dispose of all subsidiaries.
  - Finalize conversion of central bank credit to the government into securities.
  - Adopt IFRS; creation of a special committee to monitor implementation.
  - Reconstitute the Investment Committee and appoint a compliance officer to monitor compliance with investment guidelines.
- AML/CFT framework:
  - Prepare amendments consistent with the 2007 CFATF assessment and current FATF standards; to be submitted to Parliament by end-2012.
  - Develop an action plan prioritizing implementation of AML/CFT elements to address risks including corruption, tax evasion, financial sector abuse, and lack of reliable citizen identification.
  - Technical assistance to be critical for these efforts.

### B. Structural reforms

Revenue administration
- Planned measures to enhance revenue collection:
  - Adoption of an electronic system for tax declaration (e-declaration).
  - Tightening of controls in revenue collection.
  - Establishment of two tax units: one in charge of NGOs and another responsible for SMEs.
- Customs administration improvements following 2010 action plan review and donor support: corrective measures to improve customs administration, strengthen import valuation, and enhance customs collections.
- Tax policy:
  - Establish a tax policy unit to coordinate reforms in revenue administration and address tax expenditure to expand the tax base.
  - Launch modernization of the legal framework with technical assistance from partners.

Public financial management (PFM) and economic governance
- SYSGEP implementation:
  - SYSGEP established as a modern tracking and reporting mechanism for capital spending execution.
  - Action plan being prepared to ensure regular updated information from project managers and to reinforce UEP and UTE units in line ministries.
  - Introduction of advanced SYSGEP WORLD and further staff training contingent on additional budget resources.
  - Noncompliance with documentation requirements for initial tranches of disbursement will trigger legal dispositions suspending disbursement of subsequent project tranches.
  - Strengthen project implementation capacity by finalizing contract with selected international consulting firm and completing the manual on project management.
- Treasury single account (TSA) and accounting reforms:
  - First phase (closing inactive accounts) conducted in a timely fashion.
  - Timetable for subsequent phases to be agreed by September 2012.
  - Specific measures and structural benchmarks (end-March 2013):
    - Reduce number of domestically-funded imprest accounts to three by ministry or institution (one for revenue collection, one for capital spending, one for other transactions, including current spending) and deploy network of public accounting offices at line ministries level and gradually grant signature on these accounts to public accountants appointed by the MEF (end-March 2013 structural benchmark).
    - Roll-out in all ministries the GL-software in offices of government accountants and start to record projects and imprest accounts expenditure when they are effectively paid and not any more when the replenishment of the account is made (end-March 2013 structural benchmark).
- Business climate reforms:
  - Action plan for a legal framework on Public-Private Partnerships in infrastructure, public utilities, export industries, and tourism.
  - Simplification of legal and regulatory framework for investment; resolve land title issues; strengthen legal regime for collateral and establish a registry for movable assets as collateral.
  - Prepare a new law aimed at strengthening microfinance.
- Electricity sector:
  - Signed memorandum of understanding with key partners including the U.S., IDB, and the World Bank to reform the sector.
  - Hired an international firm to modernize and improve management of EDH.
  - Develop plan with partners to bring EDH back to financial soundness: reduce production leakages, improve distribution network, enhance bill collection, and strengthen energy supply.

External debt management
- Accelerate administrative reorganization of the Ministry of Economy and Finance, including creation of a Directorate General of Treasury that will have authority over the new debt unit (end-March 2012 structural benchmark).
- Plan to send to Parliament the draft law reorganizing the MEF by mid-summer; draft public debt law completed and to be sent to parliament by mid-August after transmission of the draft FY2013 budget law.
- Strengthen current Directorate of Debt in the interim to include fully operational middle and back office functions.
- Move to complete a medium-term debt strategy.

*Source: APPENDIX I. LETTER OF INTENT (June 25, 2012) and beginning of APPENDIX II. UPDATED MEMORANDUM OF ECONOMIC AND FINANCIAL POLICIES from the provided PDF content.*

### 20. We will seek to deepen further the stability of the financial sector. To that effect,

### _cr12220 - 20. We will seek to deepen further the stability of the financial sector. To that effect,

### Financial sector stability: planned measures
- Strengthen the operations of the Partial Credit Guarantee Fund, including launching a second pillar aimed at boosting new loans to investors.
- Accompany the recently-adopted banking law by Parliament with additional steps to update the financial legislation and improve regulation and supervision.
- Step up work to reinforce the insurance sector, notably through the submission of an insurance law to Parliament and the setting up of a regulatory authority.
- Continue work aimed at creating a private credit bureau.

### Social policies — objectives, programs, and costs
- Overall objective: Protection of the poor remains a central objective of policy; three new initiatives launched to help the most vulnerable and create a coherent institutional framework.

- Education (Programme de Scolarisation Universel Gratuit et Obligatoire or PSUGO)
  - Estimated out-of-school children aged 6 to 12 in 2011: about 508,000.
  - Enrollment target: bring them all to school for free over a period of four years (about 25 percent each year).
  - Allocation between school types: Forty percent to public schools; the remaining to private schools (to receive government subsidies).
  - Progress in 2011-12: about 165,500 children sent to school; new teachers hired; new public schools built.
  - Per-child subsidy: about US$90 to private schools; about US$6 to public schools.
  - Program expected annual cost: about US$43 million.

- Conditional cash transfer (“Ti-manman-cheri”)
  - Pilot transfers (monthly): G 400 (about US$10) to each woman who sends one of her children to school; G 600 for two children; G 800 for three or more children.
  - Pilot period: May 2012 to May 2013.
  - Expected reach and cost: about 100,000 mothers; cost about US$15 million.

- Food production and distribution (“Aba grangou”)
  - Multisectoral poverty-combat program: develop poor neighborhoods to better cope with natural risks; promote agricultural projects and food distribution; include educational and health service improvements.
  - Expected cost: about US$15 million.

- Coordination with NGOs and stakeholders
  - Improve coordination and supervision of NGO activities to better target social spending and alleviate poverty.
  - Identified issues: direct competition of NGOs with government and private sector in domestic labor and goods/services markets; low level of coordination with public entities.
  - Exploring initiatives to enable NGOs to operate lawfully within guidelines to strengthen capacity building consistent with long-term development needs.

### Program monitoring, governance, and cash/accounting reforms
- Monitoring framework: program monitored using definitions, data sources, and frequency set out in the revised TMU; government to make available reconciled data as specified in the TMU.
- Commitment on accounting and cash management (end-March 2013 deadlines):
  - Reduce the number of domestically-funded imprest accounts to three by ministry or institutions (one for revenue collection, one for capital spending, one for other transactions, including current spending).
  - Deploy the network of public accounting offices at the line ministry level and gradually grant signature on these accounts to public accountants appointed by the MEF (end-March 2013).
  - Roll-out for all ministries the GL-software in the offices of the government accountants and start to record projects and imprest accounts expenditure when they are effectively paid and not any more when the replenishment of the account is made (end-March 2013).

- IMF reviews under the ECF arrangement:
  - Fifth review (assessing end-September 2012 performance criteria): expected to be completed by January 2013.
  - Sixth review (assessing end-March 2013 performance criteria): expected to be completed by mid-July 2013.

### Quantitative performance criteria and indicative targets (selected items as presented)
- Net international reserves of central bank (in millions of U.S. dollars) - floor:
  - 416, 762, 370, 786, 384, 772, 683, 563, 538, 764, 513, 723, 682, 641

- Net central bank credit to the non-financial public sector - ceiling (row present in table; full sequence of values in table)
  - 21,549, -16,273, -8,525, -17,318, -7,309, -19,578, -15,926, -12,090, -11,33 1, -13,776, -10,572, -13,163, -12,551, -11,938

- Net domestic assets of the central bank - ceiling:
  - 14,448, -18,309, -15,784, -17,883, -17,448, -20,381, -11,488, -5,383, -3,014, -13,251, -645, -10,323, -7,395, -4,467

- Change in base money - ceiling (indicative targets / actuals shown in table):
  - 31,080, 12,156, 21,352, 14,005, 20,027, 10,481, 15,843, 17,128, 18,497, 17,328, 19,866, 18,609, 19,890, 21,171

- Net domestic credit to the central government - ceiling:
  - 19,540, -19,863, -6,067, -22,785, -6,585, -28,647, -11,361, -6,710, -1,698, -22,221, -509, -21,615, -21,010, -20,404

- Poverty reducing expenditures - floor (domestically-financed spending in health, education, and agriculture):
  - n.a., 17,794, 23,689, 17,915, 26,808, 22,309, 20,258, 24,313, 29,584, 31,175, 34,855, 36,446, 41,717, 46,988

- Memorandum items (selected):
  - Change in currency in circulation: 13,448, 4,953, 12,117, 8,254, 9,728, 6,221, 6,626, 7,161, 7,764, 7,921, 8,368, 8,494, 9,067, 9,640
  - Government total revenue, excluding grants: 29,881, 70,319, 78,402, 81,181, 89,649, 91,475, 104,203, 117,269, 171,180, 127,253, 234,025, 139,283, 151,969, 166,245
  - Government total expenditure, excluding externally-financed investment: 42,096, 97,390, 117,637, 111,445, 134,584, 124,633, 167,343, 162,735, 167,343, 171,677, 162,735, 188,152, 207,199, 226,645

- Continuous performance criteria and public sector arrears:
  - Public sector external arrears accumulation (in millions of U.S. dollars): 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0

### Structural benchmarks, status of implementation, and governance actions (selected items)
- Completed or met actions (examples):
  - Completion of the audit of foreign reserves to confirm end-September 2009 and end-September 2010 unencumbered reserves — Completed (End-September 2010).
  - Continue publishing quarterly reports on poverty-reducing expenditures on the MEF website — Met.
  - Start publishing central government monthly transfers to investment project accounts, project by project, including PetroCaribe projects — Met with delay.
  - Start publishing central government monthly transfers by beneficiary entity — Met.
  - Start preparing monthly consolidated Treasury balances (TMU ¶38) — Met with delay.
  - Prepare an inventory of all government and donor accounts at the BRH and BNC (TMU ¶39) — Met with delay.
  - Prepare quarterly reports with monthly data on the performances of the tax system and the tax administration (TMU ¶40) — Met.
  - Start publishing a quarterly report that identifies all fiscal expenditure by beneficiary sectors — Met.
  - Select an international firm to conduct ISA compliant external audit for the FY 2011 audit, for a period of 3 to 6 years — Met with delay.
  - Adoption of a global reserves management policy by the investment committee, covering all foreign exchange reserves — Met.
  - Identify and consolidate all sources of transfers to EDH in regular monthly reports — Met.
  - Launch bids for selection and hiring of the international consulting agency to assist UCP and other PIUs — Met.
  - Continue publishing reports listed under prior benchmarks — Met (various deadlines).

- Not met or delayed actions (examples):
  - Complete the setting-up of the debt unit at the MEF and build capacity to prepare a medium-term debt strategy — Not met (End-March 2012); delayed due to delayed creation of the Directorate General of Treasury.
  - Submit to Parliament a public debt law to establish a sound legal and institutional framework for public debt management — Not met (End-March 2012); draft being finalized.
  - Put in place within the Directorate General of Taxes a unit in charge of medium & large enterprises — End-September 2012 (status shown in table).
  - Put in place the fiscal policy unit within the MEF — End-September 2012 (status shown in table).
  - Close all dormant accounts of the central government at the central bank or commercial banks and establish the list of accounts used by public entities — End-June 2012.
  - Reduce the number of domestically-funded imprest accounts to three by ministry or institutions and deploy network of public accounting offices; grant signature authority to public accountants appointed by MEF — End-March 2013.
  - Roll out GL-software in all ministries and start to record projects and imprest accounts expenditure when effectively paid — End-March 2013.
  - Establish unconstrained single price foreign exchange auctions — End-September 2012.

### Technical Memorandum of Understanding (TMU) — monitoring framework (selected points)
- TMU defines quantitative performance criteria, specification of certain structural benchmarks, and indicative targets for period July 1, 2010–March 30, 2013, as specified in Tables 1 and 2 of the MEFP.
- TMU lays down monitoring and reporting requirements; Haiti’s performance under the ECF will be assessed on observance of quantitative performance criteria and compliance with structural benchmarks.
- Institutional definitions:
  - Central government comprises presidency, prime minister’s office, parliament, national courts, treasury, line ministries and “organismes déconcentrés,” and includes expenditures financed directly by foreign donors through ministerial accounts (comptes courants).
  - Non-financial public sector includes the central government plus non-budgetary autonomous organizations, local governments and public sector enterprises (government controls >50 percent of shares).
  - Total public sector comprises the non-financial public sector and the central bank, the Bank of the Republic of Haiti (BRH).

*Source: _cr12220 - 20. We will seek to deepen further the stability of the financial sector. To that effect,*

### 5.      Net BRH credit to the non-financial public sector equals net central bank credit to the

### _cr12220 - 5.      Net BRH credit to the non-financial public sector equals net central bank credit to the

### Definitions and measurement of Net BRH credit to the non‑financial public sector
- Net BRH credit to the non‑financial public sector = net central bank credit to the central government + net central bank credit to the rest of the non‑financial public sector.
- Change in net BRH credit to the central government (measurement):
  - Change in net domestic credit to the central government from the BRH according to Table 10R of the BRH.
  - Exclude change in the stock of project accounts (“Comptes de projets”) included in Table 10R.
  - Exclude change in the stock of Special Accounts (“Comptes spéciaux”) and seized values (“Valeurs saisies UCREF”) included in Table 10R.
- Change in net central bank credit to the rest of the non‑financial public sector (measurement):
  - Change in “créances nettes sur le secteur public” minus change in “créances nettes sur l'état”, according to Table 10R of the BRH.
- All changes measured on a cumulative basis from the stock at end‑September 2009.

### Net domestic financing to the central government (components and exclusions)
- Net domestic financing to the central government = change in net banking sector credit to the central government + change in nonbank financing (amortization, counterpart funds, and net issuance of Treasury bills and other government securities to non‑banks).
- Net domestic banking sector credit to the central government (measurement):
  - Change in net domestic credit to the central government from the BRH (Table 10R) + change in net domestic credit of the central government from domestic banks (Table 20R of the BRH), which includes net issuance of treasury bills and other government securities for government financing purposes.
  - Exclude securities issued for the recapitalization of the BRH.
  - Exclude change in the stock of project accounts (“Comptes de projets”).
  - Exclude change in total stock of Special Accounts (“Comptes Spéciaux”) and seized values (“Valeurs Saisies UCREF”).
- Changes measured on a cumulative basis from the stock at end‑September 2009.

### Net International Reserves (NIR): definition, measurement, and valuation
- Measurement of change in net international reserves:
  - a. Change in net foreign assets (“Réserves de change nettes” of the BRH Table 10R);
  - b. Minus change in foreign currency deposits of commercial banks at the BRH (“Dépôts à vue en dollars U.S. et en Euros des BCM à la BRH”, and the “CAM transfer” of the BRH Table 10R);
  - c. Minus change in the stock of project accounts (“Comptes de projets”);
  - d. Minus change in the stock of Special Accounts (“Comptes Spéciaux”) in dollars and Euros (excluding gourdes), and seized values (“Valeurs Saisies UCREF”);
  - e. Plus change in the stock of the Special Drawing Rights (SDR) allocation (“Allocations DTS”) from BRH Table 10R.
- Data expressed in U.S. dollar terms and valued at the corresponding end‑period market exchange rate from BRH Table 10R.
- Program definition of NIR: BRH’s gross foreign assets (monetary gold, all claims on nonresidents, SDR holdings, and BRH claims in foreign currency on domestic financial institutions) minus reserve liabilities (liabilities to nonresidents of one‑year maturity or less, use of Fund credit, and excluding the full SDR allocation, and trust funds). Swaps in foreign currency with domestic financial institutions and pledged or otherwise encumbered reserve assets are excluded from NIR.
- Notes:
  - Letters of credit and guarantee (“Lettres de crédit” and “Lettres de garantie”) are reported in Table 10R as part of BRH foreign liabilities and therefore are already netted out of NIR.
  - Program NIR does not net out the full SDR allocation on the liability side since it is a long‑term liability to the SDR Department (and not the Fund).
- Changes measured on a cumulative basis from the stock at end‑September 2009.

### Net domestic assets of the BRH (program definition)
- Change in net domestic assets (measurement):
  - a. Change in base money (program definition; see Section I);
  - b. Minus change in the U.S. dollar amount of net international reserves (program definition), converted into gourdes at the program exchange rate.
- Program exchange rate to be used: G 40.0 per U.S. dollar for the period June 2010- March 2013.
- Changes measured on a cumulative basis from the stock at end‑September 2009.

### PetroCaribe‑related funds: balances and treatment
- Outstanding balance as of March 2012: $263 million.
  - US$1.5 million held in U.S. dollar‑denominated sight deposits of the central government at the BRH.
  - US$262 million in U.S. dollar‑denominated deposits of the central government at domestic commercial banks.
- Authorities exploring channeling new PetroCaribe/ALBA‑related inflows through a binational Venezuela‑Haiti corporation. Until institutional arrangements and statutes of the new sociéte mixte are published in the “Journal Officiel” (Le Moniteur), PetroCaribe‑related inflows will:
  - Continue to constitute direct external debt of the central government.
  - Be under direct control of the central government and fully reflected in program fiscal tables.
  - Be treated as budget support loans, with proceeds partly or entirely deposited in government accounts in the banking system (Petro Caribe deposits).
  - Spending from Petro Caribe resources (up to US$400 million in FY 2012), financed with a drawdown of Petro Caribe deposits in the banking system, will be fully reflected in program tables.
- Following ratification of the sociéte mixte:
  - Annual budgets of the company to be published on the MEF website before the beginning of the fiscal year.
  - Audited annual financial statements to be published within six months of the end of each financial year.

### Non‑concessional public sector external and foreign‑currency‑denominated debt (definitions and limits)
- Definition of debt: all forms of debt (loans, suppliers’ credits, leases) that constitute current liabilities created under a contractual arrangement providing value in the form of assets or services and requiring future payments, per Executive Board Decision No. 6230-(79/140), revised August 31, 2009 (Decision No. 14416-(09/01)).
- Ceiling applies to contracting and guaranteeing by the public sector of new non‑concessional debt with nonresidents with original maturities of one year or more; applies to value not yet received and includes private debt with official guarantees.
- Guarantee of a debt for program purposes: any explicit legal obligation of the public sector to service a debt in the event of nonpayment by the debtor (payments in cash or in kind).
- Debt concessionality rule for program purposes:
  - A debt is concessional if it includes a grant element of at least 35 percent.
  - Grant element = (PV of debt subtracted from nominal value) / nominal value, using PV calculated by discounting debt service using currency‑specific commercial interest reference rates (CIRRs) as laid out by the OECD.
  - For debt maturity ≥ 15 years: use ten‑year‑average CIRR; for maturity < 15 years: use six‑month average CIRR.
  - Add margins for differing repayment periods: 0.75 percent for <15 years, 1 percent for 15 to 19 years, 1.15 percent for 20 to 29 years, and 1.25 percent for 30 years or more.
- Exclusions from the ceiling: short‑term import‑related credits, rescheduling arrangements, borrowing from the Fund, non‑resident purchases of treasury bills, and guarantees for the electricity sector in the form of letters of credit.
- Ceilings for contracting and guaranteeing non‑concessional debt by the total public sector set at zero continuously throughout the program period. A waiver was granted during the previous ECF arrangement for the US$33 million nonconcessional loan contracted with BANDES in Q4 2009.

### Arrears of the central government
- External payment arrears: overdue payments (principal and interest) to non‑residents on debt contracted and guaranteed by the central government, defined per creditor terms. Criterion of zero accumulation of external arrears monitored continuously.
- Domestic arrears of the central government include:
  - (i) any supplier bill received and verified for goods/services delivered with payment not made within 90 days after due date;
  - (ii) wage, salary, and other payments to government employees (including direct and indirect allowances) due in a given month but unpaid on the 30th of the following month;
  - (iii) interest or principal obligations unpaid 30 days after due date.
- Definition excludes changes in arrears stock due to interest, penalties, and valuation changes.

### Base money (program measurement)
- Change in base money measured using:
  - a. Change in currency in circulation (Table 10R of BRH).
  - b. Change in reserve deposits of commercial banks at the BRH using gourde sight deposits of commercial banks (“dépôts a vue en gourdes des BCM a la BRH”) and cash‑in‑vault of commercial banks (“encaisses des BCM”).
- Changes measured on a cumulative basis from the stock at end‑September 2009.

### Poverty‑reducing expenditures (measurement)
- Growth in poverty‑reducing expenditure = sum of domestically‑financed spending for the Ministries in charge of agriculture, health, and education.
- Measured as a flow on a cumulative basis from end‑September 2009.

### Quarterly adjustments to performance criteria and indicative targets
- Adjustment for domestic arrears accumulation:
  - Ceilings for net BRH credit to the central government and net domestic banking sector credit to the central government adjusted downwards by the amount of outstanding domestic arrears accumulation.
- Adjustment for PetroCaribe‑related inflows:
  - Until the bi‑national company is legally established, any drawdown of PetroCaribe deposits will be considered central government spending for program purposes.
  - Ceilings for net domestic credit to the central government will include movements in PetroCaribe accounts in the banking system and be adjusted for the difference between actual and programmed stock of PetroCaribe deposits in the banking system.
  - Ceilings for net BRH credit to the central government, on BRH net domestic assets, and the floor for NIR will include movements in PetroCaribe accounts at the BRH and be adjusted for the difference between actual and programmed PetroCaribe deposits at the BRH.
  - Adjustor calculated on a cumulative basis from October 1, 2009.
- Adjustment for budgetary cash grants in second half of FY2013:
  - Performance criteria reflect expected budgetary donor grants equivalent to G3.5billion (about $80 million), including IDB US$27 million, IDA US$30 million, EU €8 million, and Spain US$13 million.
  - If actual grant inflows are lower (higher) than programmed, performance criteria ceilings will be adjusted upward (downward), and the performance criterion floor adjusted downward (upward), by the amount of the difference between actual and programmed inflows.
  - Adjuster calculated on a cumulative basis from October 1, 2009.

### Clarification of structural conditionality — Fiscal sector benchmarks
- Continued publication requirements during program period for specified items in Tables 2a and 2b: items 1a, 2a, 2b, 2c, 3a, 3b, and 2h, published on the specified regular basis (monthly or quarterly) with no gaps or unjustified delays.
- Specific structural benchmarks and requirements:
  - Revenue mobilization: design and implement monitorable performance indicators for DGI and AGD by end‑December 2011, including detailed information by industry (AGD) and taxpayer segment (DGI), and ratios to verify “tax effort” and efficiency; reports to be published monthly on the MEF website.
  - Excise tax on cigarettes and alcohol: apply stamps (“vignettes”) on tobacco and alcoholic beverages and upward revision of specific or ad valorem excises to approach international averages.
  - Fiscal policy unit within MEF: create a separate service within MEF to analyze fiscal measures and simulate impacts on budget balances and economy; delimitation by written communication of Minister or Director General to be shared with IMF, nominating officer in charge, staffing and duties.
  - DGI unit for small and medium enterprises: official act (to be shared with IMF) establishing a separate unit for medium taxpayers, addressing administrative issues, with adequate staffing and office space and nomination of person in charge.
  - Closing of dormant accounts and census: compile a census of accounts at the Central Bank and commercial banks and create permanent rules governing closing of dormant accounts (list and rules to be shared with IMF), including time lags since last activity, balance thresholds, and rules for transfer to the Treasury.
  - Strengthening the debt unit: provide permanent office space and staffing; nominate officer in charge and set tasks via official communication to be shared with IMF; MEF to produce annual debt sustainability analyses and make them available to the Fund, all MEF services, the BRH and the MPCE.
  - Public debt law: transmit to Parliament (and share with IMF) a draft debt law in line with international standards and TA recommendations.

*Source: _cr12220 - 5.      Net BRH credit to the non-financial public sector equals net central bank credit to the central government plus net central bank credit to the rest of the non-financial public sector.*

### 46.      The new structural benchmark on reducing the number of domestically-funded

### The new structural benchmark on reducing the number of domestically-funded imprest accounts to three by ministry or institutions (one for revenue collection, one for capital spending, one for other transactions, including current spending) and deploy the network of public accountants offices at the line ministries level and gradually grant signature on these accounts to public accountants appointed by the MEF will imply the identification of all the accounts as well as the names of the officials currently authorized to sign. On this basis, the authorities will reduce the number of accounts as specified in the benchmark and provide signature power to public accountants designated by the ministry of finance.

### Structural benchmarks and implementation requirements
- Reduce number of domestically-funded imprest accounts to three by ministry or institution:
  - one for revenue collection,
  - one for capital spending,
  - one for other transactions, including current spending.
- Deploy the network of public accountants offices at line ministries level.
- Gradually grant signature on these accounts to public accountants appointed by the MEF.
- Implementation implies:
  - identification of all accounts; and
  - identification of the names of officials currently authorized to sign.
- Authorities will reduce accounts as specified in the benchmark and provide signature power to public accountants designated by the ministry of finance.

### GL-software roll-out and recording of expenditure
- New structural benchmark: roll-out for all ministries the GL-software in the offices of the government accountants.
- Change in recording practice required: start to record projects and imprest accounts expenditure when they are effectively paid and not any more when the replenishment of the account is made.
- Implementation requirements:
  - provide to all ministries a copy of the software and ensure it is adequately installed;
  - follow up on the recording of expenditure at payment level.

### Monetary policy and financial sector benchmark
- Benchmark on strengthening exchange rate management:
  - involves development of an exchange rate management strategy also encompassing reform of the foreign exchange market (end-December 2011).

### Provision of information to IMF staff
- Authorities will provide daily, weekly and monthly monetary and fiscal indicators to IMF staff, details of any loan contract or guarantee to be ratified by a non-financial public sector entity (including public enterprises) before signature, and other data upon request.

- Daily
  - The exchange rate.

- Weekly — Monetary Indicators (maximum five-day lag preliminary data; four weeks for final data where specified)
  - (a) Stock of BRH bonds;
  - (b) Deposits at commercial banks (in gourdes and U.S. dollars);
  - (c) Credit to private sector (in gourdes and U.S. dollars);
  - (d) Credit to central government and public sector (net);
  - (e) Currency in circulation;
  - (f) base money;
  - (g) details of inflows and outflows of gross foreign exchange reserves;
  - (h) volume of foreign exchange transactions, of which BRH sales and purchases;
  - (i) gross international reserves; and
  - (d) net international reserves (NIR).
  - The NIR data will be reported using the following table format.

- Weekly — Fiscal Indicators
  - (a) Revenues (internal, external, other);
  - (b) Expenditures on cash basis (wages and salaries, goods and services, external debt, current accounts).
  - These data will be reported with maximum five-day lag preliminary data (four weeks for final data).

### Monthly reporting requirements (maximum 30-day lag for final data unless otherwise noted)
- Table 10 R and Table 20 R with a maximum of 30-day lag for final data.
- Tableau on the current accounts with a maximum of 30-day lag for final data.
- “Project Accounts”, by donor, with a maximum of 30-day lag for final data.
- Table on foreign currency treasury flows with a maximum of 30-day lag for final data.
- Tableau des Operations Financières de l’Etat (within 20 days).
- Table underlying the TOFE which enables the determination of checks in circulation and balance on investment project accounts (TOFE-extension).
- Set of external debt tables with a maximum 30-day lag for final data.
- Report of revenue collection of DGI (Rapport d'activités), with a maximum 30-day lag for final data.
- The aide memoire table, which includes monetary policy indicators (foreign exchange interventions, Gourde and foreign currency credit and deposits, monetary financing).
- Tables of revenue collection of AGD (Indicateurs d’activités aux ports, Rapport analytique des perceptions douanières à l'importation), with a maximum 30-day lag for final data.
- Balance of Bureau de Monetization accounts, including spending from “fonds de contrepartie” those movements related with flows linked to the ALBA-PetroCaribe agreement.
- Balance of PetroCaribe/ALBA-related deposits at commercial banks and the BRH, with a maximum 30-day lag for final data.

### Quarterly reporting
- Report on poverty-reducing expenditures, with a maximum 30-day lag for final data.

### Other information to be shared with IMF staff
- By-laws of the new binational (Venezuela-Haiti) entity (as soon as they are enacted), including any and all needed information to assess the nature of such new entity.
- Financing terms of any funds received by such entity, including any and all information needed to assess whether any financing flows received by such new entity constitute public debt (direct and/or contingent) of any form.

### Key balance and reserve figures (Haiti: Net International Reserves BRH, End-April 2012; In millions of U.S. dollars)
- A. Gross Foreign Exchange Reserves 2,172.9
- B. Gross Liabilities 268.8
- C. Net Foreign Assets (=A-B) 1,904.1
- D. FX deposits of commercial banks and CAM transfer at the BRH 843.6
- E. Project accounts 7.0
- F. Special accounts in U.S. dollars and euros 3.3
- G. Seized values 0.0
- H. SDR allocation (liability) 121.7
- J. NIR (=C-D-E-F-G+H) 1,171.9

- Source: Haitian authorities; and Fund staff estimates.

### PetroCaribe deposits and government account balances (reported series and stocks)
- Series presented include cumulative flows and stocks in G (gourdes) and US$ (millions), covering periods from September 2009 through September 2012 with multiple intermediate observations.
- Labels shown:
  - Haiti. PetroCaribe Deposits
  - Total deposits in government accounts in the banking system
  - Deposits in government accounts at the BRH
  - Deposits in government accounts in commercial banks
- Sources: Haitian Authorities and IMF Staff estimates and projections.

### IMF Executive Board action (Press Release No. 12/269, July 20, 2012)
- The Executive Board completed the fourth review of Haiti’s performance under the Extended Credit Facility (ECF) arrangement on July 20, 2012.
- Completion of the review enabled an immediate disbursement of SDR 4.914 million (about US$7.4 million).
- Total disbursements under the program to date were SDR 31.122 million (about US$46.9 million).
- Haiti’s ECF arrangement was approved on July 21, 2010.
- Full relief on the country’s outstanding debt to the Fund of about SDR 178 million (equivalent to US$268 million) was provided, financed by the Post-Catastrophe Debt Relief (PCDR) Trust Fund.

*Source: Extracted from the IMF staff report and press release text provided in the content unit.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2012/_cr12220.pdf_