Haiti : Economic Recovery Program

The GOH will provide an equivalent amount of foreign exchange to the private sector to import petroleum products. Special conditions precedent (CP"s), on which phased disbursements will depend, are that the GOH agree to: (1) provide budgets for its prospective foreign exchange expenditures and accounts of the foreign exchange expenditures it actually makes; (2) establish, under the Ministry of Commerce (MOC), a petroleum import and price analysis unit with the authority to regulate importation and pricing of petroleum products and staffed with at least two professionals acceptable to A.I.D.; (3) establish formulae and operating procedures needed to ensure the use of least cost resources in the importation of petroleum products; (4) establish, after consulting with the IMF, World Bank, and A.I.D., monetary and fiscal targets for FY87 compatible with the country"s economic recovery; (5) transfer the 2% consular fee paid in dollars to overseas consulates on petroleum product imports to a fee payable in gourdes to the public treasury; and (6) comply with the covenants relating to the above CP"s and with covenants relating to trade liberalization and to management of parastatals and of Ministries. A.I.D. funds will allow Haiti to meet most of its petroleum product needs for the next 6-7 months. An equivalent amount in local currency will be provided by the GOH to cover USAID/H operating expenses and counterpart funding of development projects. Under another project, USAID/H will develop a training program for the MOC, thereby strengthening GOH capability to develop and implement sound petroleum sector policies. Cash transfer in FY87 continues support for GOH economic reform efforts. Disbursement of the first tranche in 1/87 will be contingent upon continued GOH compliance with quarterly fiscal and monetary targets established in consultation with A.I.D. and on a substantial reduction of quantitative restrictions on imports. Release of the second tranche, in the third quarter of FY87, will be contigent upon continued compliance with monetary and fiscal targets; evidence of removal of all remaining export taxes; initiation of management/financial audits of four or more government entities, and completion of a plan to make this an ongoing program within the GOH; and compliance with covenants. (PD-AAU-962)