The International Monetary Fund has approved $15.6 million in emergency post-conflict assistance to Haiti.

It said the assistance is intended to help Haiti’s recovery from an extended period of political conflict and will support the interim government’s efforts to strengthen key institutions and governance, promote economic recovery, improve access to basic services and restore security.

Emergency Post-Conflict Assistance (EPCA) is designed to help IMF member countries with urgent balance of payments financing needs in the wake of armed conflicts.

The IMF said EPCA financing, which can play an important role in catalysing donor support, is designed to be fast-disbursing but is coupled with IMF policy advice, covering the full range of macroeconomic policies and supporting structural measures, as well as technical assistance.

“Haiti is emerging from an extended period of political conflict and poor economic performance. Financial and economic stability has been restored under the six-month Staff Monitored Programme (SMP) implemented in 2004,” IMF Deputy Managing Director Takatoshi Kato said.

He said the exchange rate has stabilized, inflation is declining and official international reserves have increased.

In addition, good progress has been made in implementing key structural measures, in particular the steps to improve public sector governance and transparency, he said.

“The key challenge for the authorities will be to use the pledged international support effectively to implement the social and economic agenda agreed with donors, strengthen security, and ensure safe and timely elections.”

“The authorities’ programme for fiscal year 2004/05, which will be supported by the Fund’s Emergency Post-Conflict Assistance, focuses on maintaining financial stability, strengthening institutional capacity and reviving economic growth, drawing on the Interim Cooperation Framework that has been prepared in collaboration with the international community.”

Kato said that substantial resources have been allocated for Haiti’s immediate reconstruction needs and for increasing the provision of basic services while eliminating budget deficit financing by the central bank.

In particular, the budget allows for recruiting and maintaining quality staff in the key security, education and health sectors, and for doubling of public investment in line with the priorities agreed with donors.

“The recent decline in inflation is welcome. The authorities appropriately stand ready to tighten monetary conditions if necessary to achieve the programme’s targets and protect financial stability.”

He said the authorities were also working with donors to accelerate the disbursement of external assistance and that Haiti has regularised its arrears to the World Bank, which has resumed lending to the former French colony.