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The IMF and Civil Society

Public transportation in Port-au-Prince, Haiti — where efforts to improve public sector governance helped stabilize economy (photo: Eduardo Munoz/Reuters)

Letter from Haiti

February 12, 2008

Ugo Fasano, IMF Resident Representative in Haiti

IMF staff visiting Port-au-Prince, Haiti in November 2007 discussed the country's economic progress with a range of stakeholders. The IMF team was in Haiti to review progress under the Poverty Reduction and Growth Facility (PRGF) program.

Representatives of local civil society organizations noted that while macroeconomic developments were generally positive, they were still missing a noticeable improvement in job creation and in overall living conditions. In addition, the political situation remained fragile. CSOs called on the Fund to work more closely with local groups to discuss and monitor economic policies agreed with the government.

In meetings with Fund staff, representatives of the private sector acknowledged that Haiti's security and economic situation had improved, and noted that the improvements now need to be consolidated. They added that more enabling investments by the government were essential before a significant increase in private investment could take place.

Discussions with the banking sector focused on the reasons behind modest private sector credit growth and high lending rates. Bankers stressed that market and credit risks remained high and structural impediments, such as legal restrictions on mortgage lending, blocked the expansion of credit to nontraditional clients.

During the visit, the authorities and staff agreed on a program for the new fiscal year. The program covers several aspects that were brought up in the discussions with stakeholders, including measures to accelerate the execution of public investments and steps to remove some of the structural impediments to credit growth. The IMF Board is expected to complete the second program review in late February 2008.