PORT-AU-PRINCE, Mar 15 (IPS) — The International Development Association (IDA), the World Bank’s soft-loan window, has warned that any development strategy for Haiti is doomed to failure if the government does not succeed in getting the economy moving again along a growth path.

Its comments were contained in a report distributed here during a seminar dedicated to informing Haitian journalists and members of parliament (MPs) on the nature and aims of the World Bank.

IDA said any improvement in the economic and social situation of the Caribbean nation would depend on the application of a strategy for growth based on the creation of an environment propitious for the development of the private sector.

Political stability, security and an effective judicial system constituted ‘’the three facets of governance most propitious for the development of the private sector in Haiti’’, according to IDA.

IDA is the World Bank’s principal vehicle for channelling concessional development aid to the world’s poorest countries.

‘’The World Bank has organised this seminar to try and convince Haiti’s parliament of the necessity of implementing the Structural Adjustment Programme (SAP), which the Bank has drawn up in collaboration with the International Monetary Fund (IMF),’’ one member of the Senate finance committee, who requested anonymity, told IPS.

But the majority of MPs are firmly opposed to several features of this reform, notably the privatisation of state companies. IDA has been closely collaborating with the IMF mission to Haiti in preparing a reformed SAP to help the government to elaborate medium-term economic reforms.

In the framework of this collaboration, IDA controls the management of government expenditures and cooperates with the management services of the International Finance Company (IFC), another division of the World Bank, charged by the government to lead the privatisation campaign.

IDA’s medium-term strategy, according to its memorandum, is also centered on reinforcing institutional capacity and the repair and maintenance of Haiti’s basic infrastructure.

The weakness of its institutions is at the origin of the bottlenecks which handicap implementation of priority projects of the Haitian administration, the authors of the memorandum claim.

But the strengthening of Haiti’s infrastructure will be extremely costly, they estimate. In 1991 only 20 percent of the surfaced roads and four percent of the rest of the road network had been properly maintained. The country’s main port, Port-au- Prince – always congested, under-equipped and badly managed – is considered the most expensive in the Caribbean.

Haiti’s energy production runs at around 140 megawatts maximum, only one seventh of the capacity of the neighbouring Dominican Republic. Only six out of every 1,000 inhabitants have a telephone line.

The reorientation of Haitian agricultural production towards the needs of the foreign market, and the privatisation of public enterprises are the parts of the reform which are running into the liveliest opposition from the trade unions and large sectors of civil society, noted IDA observers.

‘’Haitian agriculture, already strongly eroded by the lowering of Customs barriers, must give as much importance to satisfying the domestic requirements of the population as to exporting products destined to equilibrate the country’s balance of payments position,’’ said one source close to the Association of Haitian Agro-Professionals.

‘’IDA considers local rice and sugar production as non- competitive crops intended to replace imports, but for us they represent an effort that must be supported if we are to end our dependence on imported foodstuffs,’’ explained the same source.

Two thirds of the Haitian population work in the agricultural sector but account for only one third of the gross domestic product (GDP).

The absence of a legal code governing property, rural financial markets and inadequate irrigation and transport systems have discouraged new investments and provoked a steady decline in farm productivity, estimate World Bank economists, who reveal in their memorandum that only 50 percent of the 200,000 arable hectares of land are irrigated.

In his maiden speech to parliament March 4 presenting his new government’s policy, Prime Minister Rony Smarth said he would guarantee the country’s food security by assuring selective protection for the farm produce most in demand for domestic consumption.

On privatisation, he made a public commitment to negotiate this issue with Haiti’s international financial partners. Smarth’s constant concern would be to defend the nation’s interests and to avoid liquidating the patrimony of state enterprises, he emphasised.

The World Bank, which installed a permanent mission here in the capital last year, is facing numerous critics who are accusing it of wanting to increase the country’s food dependence and promote measures disengaging the state from direct participation in Haiti’s economic life, a move which would permit foreign capital to gain control over key sectors of the economy.

But the most virulent criticism being made against the Bank remains its strog ideological bias in favour of the private sector.

‘’We are not disposed to help public companies, as we did in West Africa, unless they reach the level of organisation attained by the private sector. Money simply cannot be lent to a sector which is not organised,’’ concluded Brian Ngo, a highly placed official in the Institute of Economic Development, another division of the World Bank. (END/IPS/HA/tt/96)

Origin: Amsterdam/HAITI-ECONOMICS/ ----

[c] 1996, InterPress Third World News Agency (IPS) All rights reserved

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