Haiti’s new government has to prove itself in order to receive millions in blocked aid

The decision by Haitian President Jovenel Moïse to appoint a new prime minister and cabinet to run the country’s daily affairs — without a political agreement with the opposition — will not guarantee that the country will get millions of dollars in desperately needed international aid.

The International Monetary Fund — which had agreed to provide Haiti with $229 million in loans at zero percent interest before the country’s Lower Chamber of Deputies fired Prime Minister Jean Henry Céant last March 18 — said it is in a wait-and-see mode.

“The Fund stands ready to engage with Haiti on potential financial support when conditions permit,” IMF Mission Chief for Haiti Nicole Laframboise told the Miami Herald, adding that the IMF has no position on the recent political appointments by Moïse, which were done by presidential decree and without consulting with the opposition.

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“What we need is some evidence that the government in place — whatever form it takes — is willing and able to implement policies that would restore economic stability and put the economy on the path to sustainability. Based on recent history and policy implementation, this may take some time,” she added.

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In January, Moïse began ruling by executive order after the terms of most members of Parliament expired because the country had failed to hold legislative elections on time. Foreign diplomats, who had led the failed negotiations to resolve the crisis, had pressed Moïse and the opposition to reach a political accord to form a consensus government so that elections could be scheduled and the international aid could be unlocked.

In addition to the aid package from the IMF, which now has to be renegotiated, Haiti also stood to receive an additional $60 million from the European Union, Inter-American Development Bank and World Bank if certain IMF conditions were met. They included adopting a social protection policy for the most vulnerable, setting up a steering committee to help combat corruption and reporting the assets of elected officials.

Earlier this week, the United Nations issued a humanitarian appeal for $253 million, saying millions of Haitians are potentially facing famine. Days later, the U.S. State Department, citing a resurgence in kidnappings for ransom, raised the travel warning for U.S. citizens to Level 4 — Do Not Travel to Haiti.

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Following its most recent visit to Port-au-Prince, the IMF’s executive board issued a catastrophic and bleak outlook for Haiti’s immediate future. The political crisis and civil unrest that had shut down most economic activity in the country last year had taken a toll on the economy and an already vulnerable population, the board concluded. Inflation had exceeded 20 percent annually; the country’s budget deficit had widened to 3.8 percent of gross domestic product, or $297,785,320, and the government was significantly behind on debt payments.

“Absent sustained implementation of good policies and comprehensive reforms, the outlook remains grim,” the board said.

The board also said a resolution of the current crisis, coupled with the appointment of a new government committed and able to implement reforms, and return of support from the international community, could lead to higher investment and potential growth.

Though members of the international community attended Wednesday’s swearing in of newly appointed Prime Minister Joseph Jouthe, who appealed to the opposition for peace in his acceptance speech, the crisis appears far from resolved.

In the wake of the appointments, the leaders of political parties — among them OPL, Fusion and INIFOS — made it clear that they were not part of the consultations Moïse said he held before presenting his new government. Leaders also quickly distanced themselves from ministers in the government claiming to be members of their political parties.

“Agénor Cadet is not even an INIFOS sympathizer,” Paul Denis, a former justice minister said, referring to the education minister, Pierre Josué Agénor, who was reappointed to his post. “I never met him in my life or talked to him.”

In a radio interview on Thursday, Denis, who had been part of the negotiations for a political accord to establish a consensus government, called the president “a bluffer,” and said the opposition needed to give him a response.

Andre Michel, a leader in the radical opposition, which had refused to negotiate with Moïse, said supporters would soon meet to re-mobilize anti-government protests.

The Inter-American Development Bank, one of Haiti’s main funders, said that as a result of the civil unrest, disbursements of its investment operations in Haiti have not followed the regular pace.

“Regardless of the situation, our funds have remained available,” the IDB said. “We hope that the change of government will bring political and economic stability, which will allow the execution of our projects, and therefore the pace of disbursements to return to the planned schedule.”

The European Union’s ambassador to Haiti, Sylvie Tabesse, said that while the formation of a new government “is a positive and necessary step toward political and economic stabilization in Haiti,” it is also not sufficient to meet its rep-requisites. The government needs to among other things, urgently establish an economic program to stabilize the economy.

“One cannot disburse millions of dollars — in our specific case we are talking about more or less $30 million this year, out of a total of $120 million — if the country is one, unstable politically; second, if its economy is destabilized; and third, if its public finance system is not improving and its fight against corruption is not progressing,” Tabesse told the Herald. “The funds disbursed in such circumstances would not produce the desired effect of economic growth.”

The EU, she added, plans to pay special attention this year to “the government’s will and capacity to effectively address fundamental challenges on both the revenue and expenditure sides of the budget. Decisive reforms are expected and their content will be examined cautiously before disbursement by the EU, in close coordination with our other partners the IMF, the [World Bank] and the IDB.”

Laframboise, the IMF mission chief, told the Herald that discussions with Haitian authorities have been ongoing and they have discussed “a number of measures that would help build our confidence in their ability to implement policies — so that we can move to engage more intensively.”

“We are committed to working closely with them on the way forward and wait to see if they are able to implement policies that would go in the right direction... put the economy on a path to stability and sustainability,” she said.

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