VZCZCXRO9259
RR RUEHQU
DE RUEHPU #0644/01 1971444
ZNR UUUUU ZZH
R 161444Z JUL 09
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC 0132
INFO RUEHZH/HAITI COLLECTIVE
RHEHNSC/NSC WASHDC
RUEABND/DEA HQS WASHDC
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL

UNCLAS SECTION 01 OF 02 PORT AU PRINCE 000644

SENSITIVE
SIPDIS

STATE FOR WHA/CAR

E.O. 12958:  N/A

TAGS: EAID EAGR ENRG ECON EFIN HA

SUBJECT: CHIEF OF STAFF MILLS MEETS WITH GOH MINISTERS AND
PARLIAMENTARY LEADERS

¶1. (U) Summary.  The Secretary's Counselor and Chief of Staff Cheryl
Mills, along with staff aide Meghann Curtis, assessed Haiti's
development and reconstruction needs in a visit July 6-7 that
included a tour of a USAID-funded IOM projects outside
Port-au-Prince, and meetings with the Prime Minister, Ministers of
Agriculture, Planning, and Public Works, and the Presidents of the
two chambers of parliament.  They also joined the program for UN
Special Envoy Clinton, beginning the evening of July 6, which
included a helicopter visit to Gonaives, the city most damaged by
the 2008 hurricanes.  End summary.

¶2. (U) Counselor and Chief of Staff Cheryl Mills, accompanied by
staff aide, Meghann Curtis, visited Haiti July 6-7.  Accompanied by
the Charge, their visit began with a meeting with Prime Minister
Michele Pierre-Louis and Agriculture Minister Joanes Gue at the
Ministry of Agriculture Office for the West Department located in
Croix des Bouquets.  PM Pierre-Louis said that GoH support of the
agriculture sector, and hence to food security, is a priority,
emphasizing the fact that 60 percent of the population is still
engaged in agriculture but that the sector is suffering from neglect
and disinvestment.

¶3. (U) Minister Gue outlined the GoH agricultural sector strategy,
noting that of an estimated 400,000 hectares (about one million
acres) of arable land in Haiti, less than one quarter (ca. 85,000
hectares, just over 200,000 acres) is currently under irrigation.
He stated that Haiti needs agricultural infrastructure and inputs,
including seed, fertilizer, equipment, and genetic material.  He
noted that despite last year's hurricanes, there had been a 14
percent increase in domestic cereal production between June 2008 and
March 2009.  He attributed this increase to subsidized fertilizer
and equipment provided to farmers by the GoH in the wake of the
storms.  (Note: much of this "post-hurricane" reaction was funded
from some USD 200 million of PetroCaribe Fund monies, amassed during
the previous year and a half from GoH sales of subsidized fossil
fuels from Venezuela.  End note.)  Gue worried that the higher
productivity would depress prices, leading to lower investment
levels by farmers.  (Note: Sales of imported rice still far exceed
sales of domestically produced rice, mainly because the
locally-produced product costs more.  End note.)  Gue told Mills
that his own ministry needs to be restructured.

¶4. (U) Immediately thereafter, the visitors proceeded to the nearby
agricultural zone known as the Plaine de Cul de Sac for a brief
visit to a short-term jobs project implemented by the International
Organization for Immigration (IOM).  The workers were cleaning out
long-clogged irrigation canals, thereby bringing water back to the
Plaine and allowing both dry season planting and the cultivation of
crops that depend on regular irrigation.  (Note: At the time of the
visit, it had not rained for over a week, yet rainy season crops
such as sweet potatoes, various peas/beans, and other vegetables
were growing well.  End note.)  Mills observed a "konbit" (a
field-planting party that helps individual farmers get their crops
in the ground) in action, making use of the newly-restored
irrigation water in that part of the valley.  Farmers reported being
able to plant crops that they had not grown in years, thereby
increasing incomes and food security for the region.  One farmer
told Econoff that he had come back from Canada to farm land that he
had practically abandoned years earlier.  One problem that remained
to be solved, however, was how the water would be shared once the
entire area was returned to cultivation.

¶5. (U) Mills then met with the Minister of Planning, Jean-Max
Bellerive, and Minister of Public Works, Transportation and
Telecommunications Jacques Gabriel, in their downtown offices.  They
were accompanied by USAID Mission Director Beth Cypser.  Bellerive
and Gabriel discussed GoH efforts to decrease deficits and reduce
subsidies in the electricity sector.  (Note: It is estimated that
the Haitian Electric Company (EDH) costs the GoH some USD 100
million per year between unpaid bills and the subsidization of
fuel-driven generators.  End note.)  These included a new rate
structure (and enforcement of payment); more regular provision of
electricity to the biggest corporate customers; and making sure that
GoH's own ministries pay their EDH bills.  Gabriel's Energy Advisor,
Rene Jean-Jumeau, noted the adverse environmental effects caused by
using wood and charcoal to satisfy 75 percent of Haitian energy
needs.  He also noted that despite the concessionary terms of the
Haiti-Venezuela PetroCaribe Fund arrangement, Haiti is still facing
balance of payment issues due to the high volume of fossil fuel
imports.  Further discussion centered on EDH administration,
electricity production versus distribution, and the idea of
mini-hydroelectric plants.  The ministers noted that Haitian law
allows for private sector participation in electricity production
but not distribution, and that USAID had rehabilitated two
mini-hydro plants successfully in 2008.

¶6. (U) Mills then met with two parliamentary leaders, Senate
President Kely Bastien and Chamber of Deputies Levaillant
Louis-Jeune.  Mills emphasized the strong U.S. partnership with
Haiti and that the USG was considering increasing its commitment to
this country.  They discussed conditions in Haiti and the measures
necessary to attract foreign direct investment (FDI).  Bastien said
that continued political stability, a key result of the
international presence in Haiti, depends upon job creation.  He
underscored that only the private sector Q domestic and foreign
could create jobs.  With the capital Port-au-Prince overrun by rural
migrants packed into vast slums, Haiti had to create more jobs in
the provinces.  Haiti also had to improve its health care system to
give equal access to all citizens, and guarantee access to education
at all levels.

¶7. (U) Bastien said that he has asked President Preval to bring
potential investors and GoH officials together to identify and
overcome obstacles to foreign and domestic investment.  Investors
worried about security of land ownership, access to justice, and
inadequate infrastructure.  Mills mentioned that one obstacle to
investment was the long time it takes to start a business in Haiti.
Bastien agreed that this process should be streamlined with a
"one-stop shopping" approach managed by the Haitian Chamber of
Commerce and Industry to help potential investors prepare their
business registration files for submissions to the relevant
ministries.  Haiti, Bastien declared, should give the "red carpet
treatment" to investors.  Louis-Jeune talked to Mills about the
minimum wage bill, which would nearly triple the current 70 gourdes
per day (about USD 1.75) to 200 gourdes/day (USD 5.00), calling the
current wage a pittance that doesn't allow a worker to feed his or
her family.  He conceded that parliament should also consider the
need to preserve jobs, and find a "fair middle ground."  (Note: The
Chamber of Deputies is currently studying President Preval's
proposed modifications to the law, originally passed in mid-June but
sent back to Parliament, and should vote to amend or reaffirm it
sometime in July (Septel).  End note.)

¶8. (U) Mills met privately with Prime Minister Pierre-Louis later in
the evening, where the PM shared her perspectives on development
assistance and the relative impact on different sectors.  She then
joined President Clinton at a working dinner at the National Palace
late that evening.  On July 7, Mills and Curtis, along with CDA
Tighe, flew by UN helicopter to Gonaives, scene of massive
destruction and loss of life in last year's hurricanes, to visit
rehabilitation projects and observe progress on measures to prevent
a recurrence during the 2009 hurricane season, already over a month
old.  While in Gonaives they also visited a UN-sponsored hospital
and a neighborhood renewal project funded in part by USAID.  Upon
returning to Port-au-Prince, Mills accompanied Clinton on a visit to
a mango processing plant where mangos are pretreated, boxed, and
cleared for export to the U.S.