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Viewing cable 09PORTAUPRINCE498, HAITI ECONOMIC MONTHLY UPDATE FOR APRIL 2009

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Reference ID Created Released Classification Origin
09PORTAUPRINCE498 2009-05-21 14:52 2011-08-26 00:00 UNCLASSIFIED Embassy Port Au Prince
P 211452Z MAY 09
FM AMEMBASSY PORT AU PRINCE
TO SECSTATE WASHDC PRIORITY 9940
INFO HAITI COLLECTIVE PRIORITY
AMEMBASSY SANTO DOMINGO
UNCLAS PORT AU PRINCE 000498 
 
 
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 ECONOMIC MONTHLY UPDATE FOR APRIL 2009 
 
1. (U) SUMMARY:  This is a monthly report on a variety of topics of 
interest which do not merit full reporting cables.  End summary. 
 
2. (U) IMF FORECASTS SLOWDOWN:  The IMF forecasts a slight slowdown 
in Haiti's economic growth to 1 percent in 2009, but predicts the 
growth will strengthen in 2010 to 2 percent. 
 
3. (U) DECREASE IN INFLATION.  The CPI Index decreased from 160.3 in 
February to 159.8 in March.  The inflation is estimated at -0.3 
percent on a monthly basis, and at 1 percent on a yearly basis.  The 
decline in inflation is mainly due to the reduction of prices of 
imported goods, while prices of local products have stagnated. 
Import prices have fallen, which has helped bring inflation down 
rapidly, but this decline can lead to a shortfall in customs 
revenue.  The IMF forecasts a deterioration of the overall fiscal 
deficit to 4 percent of GDP or more (2.8 percent in 2008), and the 
fiscal gap could rise well beyond the level of 50 million dollars 
originally estimated in the IMF Poverty Reduction and Growth 
Facility (PRGF) program. 
 
4. (U) SLIGHT INCREASE IN REMITTANCES: Based on provisional figures 
through March 2009, private remittances (USD 508.5 million) for FY 
090 are 1 percent below the FY 08 level by March 2008, 3 percent 
below the quarter ending in March 2008, and 0.2 percent above the 
semester ending in March 2008.  These figures indicate that the 
negative impact of the international crisis has been less than 
expected in the first semester of the year.  However, IMF projects a 
decline in remittances for the year as a whole. 
 
5. (U) TAX REVENUE COLLECTION:  To date, GoH fiscal revenue amounts 
to HTG 17.2 billion HTG (USD 425 million), that is 52 percent of the 
fiscal revenue projected in the budget.  The fiscal revenue so far 
in FY 09 is 6 percent higher than what was collected in the same 
period last year.  According to the deputy director of Direction 
Gnrales des Impots (DGI), the performance meets their 
expectations.  Revenue forecasts for the rest of the year, however, 
remain modest. 
 
6. (U) EXTERNAL TRADE: From October 1 through end February 2009, 
total exports (USD 186.5 million) increased by only 0.7 percent 
compared to the same period last year.  This increase was mainly 
supported by exports of the assembly sector which grew by 4 percent, 
while traditional exports (coffee, mangoes and essential oils) have 
decreased (-39 percent, -26 percent and -32 percent respectively). 
 
7. (U) INVESTMENT LOSSES:  412 Haitians are reported to have lost 
USD 220 million in the scandal involving Stanford Bank.  None of the 
investors' names have been made public, but the GoH has said that it 
would like to see the names for the purpose of tax collection. 
Haiti is said to be one of the top 10 countries in terms of total 
amounts invested in Stanford Bank. 
 
8. (U) VENEZUELAN ASSISTANCE:  Venezuelan President Hugo Chavez 
announced that the Bank of the ALBA (Bolivarian Alternative for the 
People of our America) approved a USD 9 million project for rice 
production in Haiti.  The announcement was made during the closing 
ceremony of the Summit of the ALBA on April 16.  In addition, the 
Summit approved USD 5 million to launch a literacy campaign in 
Haiti. 
 
9. (U) AGRICULTURAL PROJECT:  The Pan American Development 
Foundation (PADF) announced last Friday the launch of a USD 1.1 
million project on the Haitian-Dominican Republic border to improve 
agricultural training and to make marketing and planting more 
profitable for Haitian farmers.  In this one-year initiative, PADF 
will work with 30 producer groups in seven communities on both sides 
of the border.  The project will be funded by the Organization of 
American States (OAS) and IDB. 
 
10. (U) MINING:  A new Canadian mining company has entered the 
Haitian market.  Majescor Resources Inc. signed an agreement with 
SIMACT Alliance Copper Gold Inc. to acquire a 10 percent interest in 
SIMACT, which controls property with both gold and copper potential 
located in the North-East mineral district of Haiti.  SIMACT is a 
Montreal-based private company headed by a group of Canadian and 
Haitian-American developers who hold 66 percent of the Haitian 
mining company Societe Miniere du Nord-Est S.A. 
 
11. (U) FUEL PRICE INCREASE:  Haitian fuel price increases were 
announced by the GoH on April 24.  The price of 95 octane gasoline 
rose from HTG 134 to 151 (13 percent); 91 octane gasoline rose from 
HTG 127 to 146 (14 percent); diesel, from HTG 85 to 95 (12 percent) 
and kerosene from HTG 79 to 89 (13 percent). As in the past, fueling 
stations immediately suspended fuel sales until they could reprogram 
their pumps for the new prices, thereby raising the value of their 
stock on hand. 
 
12. (U) BIOFUELS: Sirona Fuels, a San Fransisco-based company in 
alternative fuels, has begun Jatropha planting operations in Haiti 
during the past month in a joint venture with an NGO called 3C 
Missions.  The company intends to harvest and crush the Jatropha 
locally, and then refine it into a high-quality B100 Biodiesel in 
the United States.  They are developing a business model to provide 
equipment and technical assistance to Haitian farmers. 
 
13. (U) FRENCH AIRLINE SERVICE:  The French airline, Corsair, is 
initiating flights from Paris to Port-au-Prince starting June 24. 
Service will only be for summer months from June 24, 2009, to 
September 2, 2009. 
 
14. (U) HAITI/DOMINICAN REPUBLIC AIR SERVICE:  On April 24, Haitian 
company Tortug'Air suspended its flights to the Dominican Republic. 
The Dominican authorities declined to renew the license of 
Tortug'Air, citing the Haitian authorities refuse to issue permits 
to Dominican companies. 
 
15. (U) HAITI - DOMINICAN REPUBLIC TRADE:  Official trade between 
Haiti and the Dominican Republic totaled USD 631.14 million in 2008. 
 USD 507.3 million, or about 80 percent of the total, went from the 
DR to Haiti.  When informal trade, especially border markets, is 
considered, Haiti is the second largest trading partner of the DR 
after the U.S. 
 
16. (U) EUROPEAN UNION ASSISTANCE:  The Bilateral Joint Commission 
between Haiti and the DR announced that the European Union will 
provide more than 650 million dollars over the next five years for 
joint projects between Haiti and the Dominican Republic, including 
economic and social development, infrastructure, education, and 
culture.