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Cablegate: Haiti Monthly: December 2008

P 311559Z DEC 08
FM AMEMBASSY PORT AU PRINCE
TO SECSTATE WASHDC PRIORITY 9362
INFO HAITI COLLECTIVE PRIORITY
AMEMBASSY SANTO DOMINGO

UNCLAS PORT AU PRINCE 001776


STATE FOR WHA/EX AND WHA/CAR
S/CRS
SOUTHCOM ALSO FOR POLAD
STATE PASS AID FOR LAC/CAR
INR/IAA
WHA/EX PLEASE PASS USOAS

E.O. 12958: N/A
TAGS: ECON ENRG EAID EAGR EINV ETRD BEXP HA
SUBJECT: HAITI MONTHLY: DECEMBER 2008

SUMMARY
-------

1. (U) This is a monthly report on various topics of interest which
do not merit full reporting cables. End summary.

FOREIGN ECONOMIC ASSISTANCE
---------------------------

2. (U) THE INTER-AMERICAN DEVELOPMENT BANK (IDB). IDB approved a
USD 12.5 million grant for the rehabilitation of Haiti's main
hydroelectric dam at Peligre in order to improve the electricity
supply for Port-au-Prince. The IDB will finance this first stage of
the program estimated at approximately USD 40 million. OPEC's
International Develop Fund and the IDB will co-finance the total
project.

3. (U) EUROPEAN AID. The European Commission Humanitarian Aid
Office (ECHO) is donating USD 9 million to implement food security
programs and projects to improve the drinking water supply and
agricultural production in Haiti. ECHO will open an office in
Port-au-Prince in January 2009.

4. (U) EUROPEAN AID. The European Union granted USD 60 million to
the Dominican Republic and Haiti for bi-national coordination
projects. The project aims to protect the border area and develop
cultural, social and economic infrastructure.

5. (U) VENEZUELAN EXPANSION IN HAITI. Venezuela is increasing its
cooperation with Haiti. The PetroCaribe program has increased its
potential supply of petroleum products from 7,000 to 14,000 barrels
per day. New projects will include a fuel refinery, airports, and
electricity generation.

6.(U) TAIWANESE PROJECTS. The Taiwanese have announced several
projects in cooperation with the GoH. An agricultural mission went
to the Artibonite valley to improve rice production and there are
future plans to develop bamboo production in southern Haiti. The
Taiwanese are also financing road construction in the southern claw
from Cayes to Port Salut to Port a Piment.

7. (U) HAITI-CUBA FISHERIES COOPERATION. At a cost of USD 120,000,
3 million fingerlings were given to Haiti by the Cuban government,
for the recovery of animal production. According to the Ministry of
Agriculture, the fish will revive fish production in Haiti. They
were transported to a central station based in Pont-Sonde and will
be used to restock lakes and ponds in the Artibonite Valley

AGRICULTURE AND FORESTRY
------------------------

8. (U) MINISTRY OF AGRICULTURE PROGRAM. The Haitian Ministry of
Agriculture launched a program to increase the supply of
agricultural inputs in Haiti. The program will last 15 months and
will be financed by the GoH and executed by the World Food Program.
It is expected to create 72,000 jobs nationwide.

INDUSTRY AND MANUFACTURING
------------------------

9. (U) LAY-OFFS IN APPAREL SECTOR. In late December Dominican
apparel company Group M laid off 2,700 workers due to high
production costs and local effects from the recession in the U. S.

ECONOMIC CONDITIONS
-------------------

10. (U) INFLATION RATE SLOWING DOWN. Deflation continued during
November. The consumer price index dropped from 169.4 in October to
165.4 in November, a 2.4 percent monthly decrease. 12-month
inflation is now down to 13.8 percent. According to the Haitian
Institute of Statistics and Data Processing (IHSI), this decrease
can be attributed to the decrease in fuel and imported food prices.
The exchange rate has remained stable at around 40 HTG /USD.

11. (U) LATIN AMERICA AND CARIBBEAN/2009 GROWTH FORECASTS.
According to the Economic Commission of Latin America and the
Caribbean (ECLAC), the economies of Latin America and the Caribbean
will experience a slowdown. The regional GDP growth is forecast to
drop from 4.6 percent in 2008 to 1.9 percent in 2009. The current
global financial and economic crisis will have an impact not only on
GDP growth but also on living conditions in the region.

12. (U) BUDGET 2008-2009/SUBMISSION AT PARLIAMENT. The budget was
submitted December 23, 2008 to the Parliament Assembly and received
by the Assembly Finance Commission. The draft 2009 budget is valued
at HTG 100 billion (USD 2.4 billion). 60 percent of the budget will
be financed externally, and 40 percent by internal GoH revenue.
Projected public investment is HTG 56 billion (USD 1.4 billion), and
functional expenses are HTG 32 billion (USD 790 million). Priority
sectors are agriculture, infrastructure, health and education.

13. (U) REMITTANCES DOWN. Monthly remittances to Haiti in November,
which amounted to USD 81.5 million, decreased by 2.7 percent from
October. Besides remittances, the U.S. recession is also impacting
foreign direct investment which, as of June 2008, amounted to 19.3
million USD, down 75 million from FY 08.

14. (U) MINIMUM WAGE/DISCUSSION BETWEEN PARLIAMENT AND GOH.
Discussions are currently underway between the Assembly Commission
for Social Affairs and the Ministry of Social Affairs to set a new
minimum wage. The Assembly would like a HTG 200 (USD 5.00) daily
minimum wage, while the Ministry wants to set it at HTG 150 (USD
3.75). (Note: Establishing a new minimum wage will have significant
impact on the sectors affected by this law, particularly the
assembly sector, hence the need for consensus. End note.). The
daily minimum wage is currently HTG 70 (USD 1.75).

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