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#5011: Fuel hike could spell new woes for poor Haiti (fwd)

From: nozier@tradewind.net

Fuel hike could spell new woes for poor Haiti
Updated 12:05 PM ET September 3, 2000 By Trenton Daniel

PORT-AU-PRINCE, Haiti (Reuters) - Antoine Phillip, a cab driver for 26
years, fears that the Haitian government's 44 percent hike in fuel
prices will generate new misery in the Western Hemisphere's poorest
country."This is the next problem, a new problem," Phillip said,
standing in downtown Port-au-Prince. "People don't want that."
 Just five days after Haiti's controversial decision to seat a new
parliament following national elections widely considered tainted, the
government said Friday it was raising the prices of gasoline, diesel and
kerosene by an average of 44 percent to match escalating international
prices. The government also cited the falling value of the gourde,
Haiti's currency, for its decision. The gourde now hovers around 22 to
the U.S. dollar, the lowest rate since a United Nations economic embargo
ended in July 1994, compared to 18 to the dollar before the first round
of elections in May.Business people and consumers fear the fuel price
hike will only add to the  woes of the Caribbean nation of 7.5 million
people mired in political chaos for years.  Political observers within
and outside Haiti had hoped the recent round of national elections, the
first in more than three years, would be a key step toward a stable
democracy after decades of dictatorship and military rule. Instead, they
plunged Haiti deeper into trouble when international observers
decided election officials miscalculated results in first-round voting,
tainting the runoff. Eighty percent of Haiti's people live in poverty
and the per capita annual income is under $400. The minimum wage is just
more than $2 a day.The fuel price hike amounted to 51 percent for
premium gasoline, 37 percent for regular, 35 for diesel and 44 for
kerosene, which many people use to run generators during frequent
nightly electricity blackouts. The price hikes took the cost of premium
to about $2.54 a gallon, regular to $2.09, diesel to $1.38 and kerosene
to $1.18. The increases would likely force up the price of
transportation and food quickly, business owners and consumers said.

 Particularly in Haiti's teeming capital, Port-au-Prince, many Haitians
rely on "tap-taps" -- small, colorfully decorated vans and pickup trucks
-- to get around, and much of the food is trucked in from outlying
provinces.  "There will be trouble," said Phillip, the cabby. "Maybe the
customer will kill the driver, or the driver will kill the customer.
This is heavy for Haitians because there are too many problems for
Haitians. We don't need anything up. We need it down."


 Before prices changed early Saturday, cars lined up at gas stations in
the capital and suburbs to purchase fuel. Some gas station owners closed
Friday afternoon to preserve gasoline to take advantage of higher prices
the next day. The price of staples like rice, mangoes, coconuts and
bananas would probably rise in coming days, said Kesner Pharel,
president and general director of Group Croissance, a consulting firm.
The fuel price hike will also likely worsen Haiti's political turmoil.
Foreign investment has been slowed by the government's virtual paralysis
since early 1997 when national elections were declared fraudulent and
the prime minister resigned. "There is no foreign investment, no
purchase of goods ... Investors aren't motivated," said Pharel, who
believes poverty will rise with the fuel price increase.

The economy could also be hurt by last Monday's inauguration of a
parliament contested by international observers and local opposition
parties. The United States said last week it would get tough on
multilateral aid for Haiti and would not "pursue a collaborative
relationship with Haiti's parliament." International monitors found that
results from the May 21 election were skewed in favor of Lavalas Family,
the party of former President  Jean-Bertrand Aristide. Ten Lavalas
senators should have gone to a runoff because they did not win an
absolute majority, the observers said.  The parliament is Haiti's first
since January 1999 when President Rene Preval dissolved the legislature
and began ruling by decree. Aristide, a former Roman Catholic priest who
was restored to the presidency by a U.S.-led invasion in 1994, is widely
expected to run and win the presidential election scheduled for Nov. 26. 



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