Haiti must dramatically improve management of its economy, IMF says

Dow Jones News

WASHINGTON -(Dow Jones)- Haiti, the poorest nation in the Western Hemisphere, must dramatically improve management of its economy, the International Monetary Fund (news – web sites) (News – Websites) said Monday.

The IMF “expressed deep concern about Haiti’s worsening economic and social conditions, and in particular, the widening of the fiscal deficit, the accumulation of external arrears, and further increases in poverty,” the IMF said in a press summary of its annual “Article IV” review of the

economy.

Haiti‘s economy has worsened during the last two years, with rising deficits financed mainly by the central bank and through accumulation of arrears. International reserves held by the central bank have declined from efforts to support the currency, the gourde ($1=HTG41.00), which has also fallen in value.

“Political difficulties have deterred the authorities from taking corrective measures aimed at stemming the loss in international reserves, containing inflation, and promoting growth,” the IMF said. Top priorities for 2003 should be rebuilding central bank reserves, now at $45 million or two weeks of imports, and containing inflation.

The government needs to improve transparency and accountability of its spending, the IMF said. The IMF “emphasized the importance of strengthening cash management by restricting the use of discretionary ministerial accounts.”

The IMF also recommended enhanced banking and credit supervision, and action to privatize state-owned firms in the energy, telecommunications and transportation sectors.