16200: (Hermantin)Miami-Herald-Haiti will receive $146 million (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: leonie hermantin <lhermantin@hotmail.com>

Posted on Fri, Jul. 25, 2003

Haiti will receive $146 million
Inter-American Bank loans to improve roads, healthcare
BY MARIKA LYNCH
mlynch@herald.com

For the first time since the United States and international donors blocked
some financial aid to Haiti three years ago, the Caribbean nation is finally
set to receive $146 million in loans for water, health, road and education
projects.

Haiti also will have access to $317 million more in loans from the
Inter-American Development Bank, said Gerard Johnson, the bank's director.
The plans will be finalized today in a ceremony in Port-au-Prince.

''This is very important for the population at large, and for the poor,''
Faubert Gustave, Haiti's finance minister, said in a telephone interview
from the Haitian capital.

The Inter-American Development Bank loans will help rebuild 300 miles of
roads in southeast Haiti and make more potable water accessible in a country
where only a fifth of the homes have running water, the bank said. Loans
also will be used to expand basic education in rural Haiti and to help
reform the healthcare system.

The money was held up after Haiti's flawed legislative elections in May 2000
-- the seed of the country's now 3-year-old political crisis. The opposition
movement and the Organization of American States disputed the way Haiti
counted the votes for seven seats in the Senate.

AID UNFROZEN

The senators eventually resigned, but the country still has not been able to
call elections to overcome the political deadlock. In September,
international leaders decided that withholding money from Haiti's government
was only hurting the country's fledgling institutions, and voted to unfreeze
the aid. Getting the money carried conditions. Haiti still owed the
Inter-American Development Bank $30 million in back payments. The country
also had to make other reforms.

In the spring, Haiti reached an agreement with the International Monetary
Fund on economic reforms that included cutting its deficit spending by half
and reducing inflation. Haiti also sought help in paying its loan arrears,
asking other Caribbean nations for loans.

At one point, a group of private Haitian banks appeared poised to lend the
government the money. But the deal collapsed, and Haiti was forced to use
nearly all of its dwindling reserves to pay off the arrears. This week, the
Inter-American Development Bank granted another loan to Haiti.

President Jean-Bertrand Aristide has often blamed the lack of international
donations for Haiti's problems, and his government has spent hundreds of
thousands of dollars on lobbyists in Washington in part to gain access to
more aid.

While the $146 million in loans will be a boost for the country of eight
million, however, it will be dispersed over three to five years, some of it
to international contractors, and won't solve the country's economic
problems.

`NOT A PANACEA'

''This is not a panacea. This is not a magic bullet for Haiti's problems,''
Johnson of the Inter-American bank said, adding that funds would go straight
to contractors and be monitored by the bank. The money will help Haitian's
government agencies that have weakened without the money to keep them going,
he said.

The Inter-American Development Bank's loans are just one part of Haiti's aid
puzzle. For example, the European Union and the United States give millions
to private, nonprofit agencies for health and other projects, but give only
a fraction directly to the government.

The United States, which will give $70 million this fiscal year to private
groups, has worried about the way the Haitian government accounts for its
donations, while the European Union has stressed it will not give money
directly to the nation until Haiti cleans up its human rights record.

The World Bank also has been wary about lending to Haiti because of its
track record with spending -- which former country director Orsalia
Kalantzopoulos said in an interview this spring was one of the worst of any
of the bank's recipients.

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