Haïti : Questions spécifiques - crédit au secteur privé, fiscalité pétrolière, viabilité du compte courant

[page 1] © 2002 International Monetary Fund February 2002 IMF Country Report No. 02/18 Haïti: Selected Issues This Selected Issues paper for Haiti was prepared by a staff team of the International Monctary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on January 4, 2002. The views expressed in this document are those of the staff team and do not necessary reflect the views of the government of Haïti or the Executive Board of the IMF. The policy of publication of staff reports and other documents by the IMF allows for the deletion of market-sensitive information. To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to Publicationpolicy@imf.org. Copies of this report are available to the public from International Monetary Fund Publication Services 700 19th Street, N.W. Washington, D.C. 20431 Telephone: (202) 623 7430 Telefax: (202) 623 7201 E-mail: publications@imf.org Internet: http:/www.imf.org Price: $15.00 a copy International Monetary Fund Washington, D.C. [page 2] INTERNATIONAL MONETARY FUND HAITI Selected Issues Prepared by the staff team consisting of Oscar Melhado, Adedeji Olumuyiwa, and Mercedes Vera Martin (all WHD) Approved by Western Hemisphere Department January 4, 2002 Contents Page Basic Data... inner L OVET VIEW ere einrnininnn en eeeneneesneernenineesnsssee Ô Il. The Recent Evolution of Credit to the Private Sector in Haïti 7 À Introduction... sise B. The Evolution of Credit... 8 C. The Contributions of Supply and Demand Factors... 9 D. Conclusions... sense JO HT. Petroleum Taxation and the Application of the 1995 Law 12 À. Introduction... issnssnrrrrnsnnneenn 12 B. Petroleum Products—Imports, Prices, and Tax Revenue 13 C. Sensitivity Analysis US innnrrrsnes. 16 D. Conclusions... ss 17 IV. Exchange Rate and Current Account Sustainability in Haiti 19 À. Introduction... sinus 19 B. Current Account and Exchange Rate Issues 20 C. Current Account Sustainability..…......................…...... 22 D. Vulnerabilities Affecting the Current Account Sustainability.….................25 E. Conclusions... sise 27 Figures L 1. Real Credit Growth-Constant Exchange Rate 8 2. Real Credit Growth-Constant Exchange Rate and GDP Growth Rate…...........8 3. Risk-Weighted Assets to Capital... ss] 4. Risk Credit Growth-Constant Exchange Rate and Real Lending Rate.….….…......10 [page 3] -2- IL. 1. Tax per Gallon, by Product... 14 2. Tax Gap per Gallon........................…........ sn 1O IL. 1. Real Effective Exchange Rate 20 2. Composition of Exports... 21 3. Donations and Remittances..…............................... 22 4. Current Account Deficit ........................................ ss sssss..22 5. Sensitivity Analysis 26 Tables I. 1. Import Volumes by Petroleum Product, 2000-01 14 2. Evolution of Domestic Prices, 2001-02 IS 2. Evolution of Tax Revenues, 2001-02... LS 3. Taxation Impact per Gallon lé III 1. Current Account Inflows in Selected Countries in 2000 20 2. Composition of Exports ss nn2T 3. Minimum Current Account Sustainable Balance 24 4. Medium-Term Projections... ss... 25 Statistical Appendix Tables 1. National Accounts at Current Prices... 28 2. National Accounts at Constant Prices... sss29 3. Origin of Gross Domestic Products... ss30 4. Agricultural Production 31 5. Savings and Investment... nne32 6. Monthly Changes in the Consumer Price Index 33 7. Consumer Price Index... ssssssss.34 8. Changes in Consumer Prices by Category... s…35 9. Prices of Selected Items... ss..36 10. Selected Price Indicators.…................................ 37 11. Minimum Wage Rates nu 3B 12. Summary Operations of the Nonfinancial Public Sector…...................................39 13. Summary Operations of the Central Government 40 14. Central Government Current Revenue................ ss 4l 15. Consolidated Accounts of the Main Public Enterprises 42 16. Accounts of the Telecommunications Company... 43 17. Accounts of the Electricity COMpany …..........................….…...….......44 18. Accounts of the Port Authority... 45 19. Accounts of the Airport Authority... ss... 46 20. Accounts of the Water Supply Company... ss ss.47 [page 4] -3- 21. Accounts of the Central Bank of Haiti... A8 22. Accounts of Commercial Banks 49 23. Consolidated Accounts of the Banking System.…...….....................................S0 24. Sectoral Distribution of Commercial Bank Credit... st 25. Origin, Destination, and Financing of Bank Credit …..…................................52 26. Annual Change in Credit Extended by the Banking System ….......................53 27. Summary Indicators of Commercial Banking Sector …..................................54 28. Interest Rates... nine DO 29. Reserve Requirements by Category of Deposit and Institution.…..................56 30. Reserve Position of the Commercial Banks.......................................57 31. Summary Balance of Payments 58 32. Net International Reserves ss) 33. Selected Foreign Trade Indices... 60 34. Composition of Exports... sen 35. Exports of Light Manufactures to the United States…................................62 36. Principal Commodity Exports..." n03 37. Composition of Imports... sens 04 38. Official Grants iii 0 39. Loan Disbursements..…....................................06 40. Stock of External Public Debt................... sn 07 : Al. Scheduled External Public Debt Service... ss..68 42. Stock of External Arrears..................................... 69 Appendix 1. Summary of the Tax System... 70 [page 5] -4- Haiti: Basic Data IL. Social and Demographic mdicators 1/ Area (sq. km) 27,800 Nutrition (1997) Calorie intake (daily per capita) 1,869 Population (2000) Total (million) 80 Annual rate of growth (percent) 2.0 Access to safe water (1903) 46 Density (per sq. km.) 289 Percent of dwellings Urban 49 GDP per capita, (FY 2000/01, US$) 461 Rural 45 Population characteristics (1999) Education . Life expectancy at birth (years) 53 Illiteracy males (2000, in percent) 49 Crude birth rate (per thousand) 31 Illiteracy females (2000, in percent) 53 Crude death rate (per thousand) 13 Net enrollment rates, in percent Infant mortality (per thousand live births) 69 Primary education (1997/98) 22 Under 5 mortality rate (per thousand) 118 Secondary education (1997/98) 19 Tertiary education (1996) 13 Health Physicians (1995, per thousand) 02 GDP (FY 2000/01) G89,048 million Hospital beds (1996, per thousand) 0.7 US$3,687 million IL Economic Indicators, 1996-2001 ne — 2 —+—_—_—— Fiscal Year Ending September 30 1996 1997 1998 1999 2000 2001 {In percent) Origin of GDP (at market prices) Agriculture and mining 30.9 29.6 28.9 27.4 26.2 25.9 Manufacturing and construction 14.5 147 15.0 15.0 15.3 15.5 Services 48.6 49.4 49,9 50.0 50.8 51.5 Indirect and import taxes 6.0 63 62 7.6 78 7.1 (Annual percentage changes, unless otherwise indicated) National accaunts and prices Real GDP 28 14 3.1 22 1.2 -17 Real GDP (per capita) 0.5 0.8 1.0 o.1 -1.0 -3.9 GDP deflator 212 163 13.1 7.6 112 16.8 Consumer prices (annual average) 219 16.2 12.7 8.1 11.5 16.8 Consumer prices (end-of-period) 20.1 17.0 83 9.9 153 123 (Ratios to GDP} Gross domestic investment 28.1 24.5 26.0 27.7 273 22.8 Of which : public investment 54 5.9 5.2 55 5.5 27 Gross national savings 22.1 18.8 20.5 227 20.9 18.0 External savings 6.0 57 5.5 5.0 6.4 4.8 Public finances Central government Total revenue 72 8.9 8.5 9.1 8.1 73 Total expenditure 9.7 9.4 9.3 99 10.1 9.8 Ofwhich: interest . 0.7 07 0.8 0.9 0.9 Savings . 0.8 0.9 LI 0.6 0.7 Primary balance . 02 -0.1 0.0 -1.1 -1.6 Overall balance -2.5 -0.6 -1.1 -1.4 2,5 -2.7 Consolidated public sector Overall balance -7.6 -3.0 -3.2 -3.8 -5.2 -3.6 [page 6] -5- IL Economic Indicators, 1996-2001 Fiscal Year Ending September 30 1996 1997 1998 1999 2000 2001 (12-month percentage changes, unless otherwise indicated) Money and credit Broad Money 10.2 15.4 147 17.7 362 53 Of which Currency 20.8 44 48 13.5 32.4 7.0 Deposits 2.9 24.3 17.2 18.7 37.1 49 Net domestic assets of the banking system 3/ 137 1.6 114 15.1 18.1 9.2 : Ofwhich Credit to nonfinancial public sector (net) 3/ 9,5 4.9 3.0 73 7.9 83 Credit to the private sector 3/ 83 17.5 7.6 4.4 16.9 -3.1 (In millions of US. dollars, unless otherwise indicated} Balance of payments Current account (including grants) -38.5 9.7 17.6 51.5 -31.0 -16.3 : Merchandise trade balance Exports 169.9 205.5 2994 348.7 327.1 317.4 Imports -639.8 -703.3 -822.2 940.0 -1,014.4 -981.6 Services and transfers (net) 430.9 488.1 5404 642.9 656.2 647.9 Of which : interest 4 -140 -129 -202 -13.8 -15.9 Capital and financial account -12.8 36.8 146 28.1 -20.8 12.5 Public sector (net) 107.2 93.9 72.2 57.9 443 16 Banks (net) -28.4 15.9 -17 -3.9 -55.1 16.0 Foreign direct investment 4.1 4.0 10.8 30.0 8.0 2.0 Other (including errors and omissions) “957 -77.0 -66.6 -112.1 -17.9 -7.1 Change in net international reserves 513 27.2 32.2 23.5 45.8 8.0 Exports (in percent of GDP) 111 11.4 12.9 13.0 12.6 12.6 Imports (in percent of GDP) -28.0 -26.3 -27.5 -28.3 -32.2 -33.4 Current account (in percent of GDP) -112 -6.9 -5.5 -5.0 -6.4 4.8 Merchandise exports (in US$, annual % change) 7.6 20.9 45.7 16.5 -6.2 -3.0 Merchandise imports (in US$, annual % change) -0.9 9.9 16.9 143 7.9 -3.2 Terms of trade (annual percentage change) -0.5 -03 11 0.2 0.0 2.0 Real effective exchange rate (12-month % change) 153 11.4 82 8.9 -6.1 6.3 International reserve position and external debt (as of end-September) Gross official reserves 215.6 265.7 292.7 3292 281.5 289,5 Gin months of imports of goods and services) 34 3.8 3.4 3.4 2.6 2.8 Net official reserves 135.0 162.5 1947 218.i 1723 180.4 Net reserves ofthe banking system 258.0 269.6 303.6 330.9 340.1 332.0 Outstanding external debt, in percent of GDP Public (excel. IMF} 29.5 28.8 28.2 26.4 27.9 30.2 Private ma un Es mn en en Total debt service ratio (in % of exports of gds. & serv 72 8.5 8.0 83 7.9 9.4 Ofwhich Interest 3.8 3.7 -2.7 -3.8 -2.8 -3.4 Short-term debt/Gross reserves (in percent) 4/ 0.0 0.0 0.0 0.0 0.0 0.0 IMF data (as of Septemher 30, 2001) Article VIII status Exchange rate 5/ US. dollar at G 25 Quota SDR 60.7 million Fund holdings of gourdes SDR 75.8 million As percent of quota 124.9 percent Outstanding purchases and loans SDR 30.4 million ESAF arrangements SDR 15.2 million First credit tranche SDR 15.2 million Special Drawing Rights Department Net cumulative SDR allocation SDR 13.7 million Holdings of SDRS (as percent of allocation) 0.7 Sources: Haitian authorities; World Bank; and Fund staff estimates and projections. 1/ Social indicators of development, the World Bank. 3/ In relation to broad money at the beginning of the period. 4/ Haïti has no short-term debt. 5/ Average reference exchange rate of the central bank for August 2001. [page 7] -6- IL OVERVIEW 1. This report presents a set of chapters that examine various topics of current interest in Haïti. Chapter 1 focuses on the observed reduction in outstanding real bank credit to the private sector and analyzes its possible causes. In examining the issue of whether the observed reduction was driven by supply or demand factors or a combination of them, the chapter examines the evolution of credit and real GDP growth and uses demand and supply indicators to characterize the reduction in credit allocation to the private sector. 2. Chapter 2 provides an overview of the taxation system for the major petroleum products under the present fixed pricing policy and an hypothetical implementation of the 1995 Jaw, introducing a flexible pricing mechanism. This chapter analyzes the implication for tax revenues and prices under the two scenarios. Would the authorities apply the law during FY 2001/02, they would collect tax revenue close to those under the present policy, owing to the downward trend in international oil prices, with marginal impact on prices, while eliminating the uncertainties coming from changes in international oil prices and the exchange rate. 3. Chapter 3 analyzes the sustainability of Haiti’s current account, assessing whether the continuation of the current policies and trends are sustainable in the medium term. Following an analysis of the behavior of the exchange rate, the main factors of vulnerability affecting the current account are identified, and a sensitivity analysis of the current account to petroleum prices, grants, and remittances is carried out. [page 8] -7- IL. THE RECENT EVOLUTION OF CREDIT TO THE PRIVATE SECTOR IN Haïri Abstract The broad similarity in the recent evolution of real GDP growth and of the growth of bank credit to the private sector since 1998 raises the issue of whether the reduction in bank credit to the private sector was driven by supply or demand or a combination of both. This chapter establishes that the increased issuance of bonds by the central bank at attractive interest rates, the increase in required reserves ratios on both gourde and dollar liabilities, coupled with rising nonperforming loans, are the supply factors that appear to have contributed to the crowding out of private sector credit. Exogenous factors, including a prolonged political impasse, a massive reduction in foreign aid and a slowing down of exports, combined with a reduction in imports and declining private investment, are the demand factors that may have contributed to the observed decline in credit to the private sector. Overall, the supply factors appear to have dominated the demand factors. This would explain the observed negative association between the real growth of credit to the private sector and the increase in the real interest rate in the last two years. A. Introduction 1. Over the last four years, Haiti”’s economic growth has gradually weakened, as the real GDP growth rate fell from about 3 percent during FY 1997/98 to an estimated negative 2 percent during FY 2000/01. During the same period, real bank credit growth to the private sector fell from about 7 percent to around negative 11 percent. The broadly similar evolution of real GDP growth and real private sector bank credit growth raises the issue of whether the reduction in bank credit to the private sector resulted from a decline in the supply of credit, from a weaker demand for bank credit, or from both lower supply and demand. 2. The supply of bank credit to the private sector may have been negatively affected by tight monetary conditions, as the central bank gradually tightened monetary policy in FY 1999/2000 and FY 2000/01. Supply may also have been lowered by a perceived increase in lending risk and a cautious bank lending behavior, emanating from an increase in nonperforming loans. 3. The observed decline in real bank credit growth by itself does not constitute evidence of a reduction in credit supply, as it may reflect lower demand for bank credit by the ! Prepared by Olumuyiwa Adedeji. [page 9] . _g. private sector, in the context of the weakening of economic activity. As will be explained in this chapter, there is evidence that in the context of Haiti’s economy, both supply and demand factors played a role in the observed decline in real credit to the private sector, in particular in the last two years. 4. The remainder of this chapter is organized as follows. Section B examines the evolution of credit and real GDP growth between FY 1997/98 and FY 2000/01. Section C applies demand and supply indicators to characterize the credit slowdown during that period. Section D presents some conclusions. B. The Evolution of Credit ga A eee re 5. The estimated real growth rate of h Le Ce credit? to the private sector (12-month En | percentage changes) showed a downward trend À 1m over the period (Figure 1}, declining from SE about 7 percent in September 1998 to an " A average of around zero percent during Va 8 3 8 8 & © EELE FY 1998/09 and FY 1999/2000, and about Rai ii EE negative 11 percent during FY 2000/01. 6. Real bank credit to the private sector declined at a faster pace than the growth rate of the economy (Figure 2), entailing a decline in bank credit to the private sector outstanding relative to GDP. It should be noted that there is no capital market in Haïti, Haitian businesses and individuals have to turn to the banking sector for borrowing. As there is no evidence of an increasing recourse to foreign bank Figure 2 : Real Credit Growth-Constant Exchange Rate (RCGE) and GDP Growth Rate borrowing, the observed reduction in 10 — bank credit as a ratio to GDP may be ai. D interpreted as an indication that shrinking real credit supply was a causal factor EL" LL — I that contributed to the weakening of ol NC | economic growth. However, caution is required in interpreting the data, as the AT NT elasticity of real GDP to real credit may 1. be significantly different from unity, 1978 19982 199900 zroovt reflecting sectoral differences in the recourse to bank credit. It is therefore necessary to examine a broader set of supply and demand indicators (see section C below). ? For any given month, credit in U.S. dollars outstanding is converted into gourdes at the end- of period exchange rate prevailing 12-month ago, thus eliminating the effect of exchange rate changes. The real growth of credit (in gourdes and in dollars) is estimated using the contemporaneous CPI. [page 10] -9- C. The Contributions of Supply and Demand Factors Supply 7, Factors affecting negatively the banks’ supply of credit are likely to have played a significant role in the decline of real bank credit to the private sector during the period. These factors included the following elements: «+ The central bank issued bonds in increasing amounts and at rising interest rates, to offset the liquidity impact of continuing high budgetary deficits’. This offered banks with an attractive, risk-free alternative to private sector credit. The budget deficit appears to have crowded out private sector credit through the enlarged issuance of central bank bonds. e In addition, required reserves ratios were raised in several steps between July 1997 and September 2001, on gourdes liabilities from 26 percent to 31 percent, and on dollar liabilities from 12 percent to 21 percent. Other things being equal, these changes reduced the ability of banks to lend and increased their intermediation costs, thus lowering credit supply. e __ Coupled with these supply factors, there was an increase in nonperforming loans (from 6.8 percent of total loans in September 2000 to 8.9 percent in June 2001), that induced banks to be cautious and | Co | : . . . Figure 3 : Risk-Weighted Assets to Capital selective in private sector lending, as 20 LL : evidenced by the declining trend of risk-adjusted assets relative to RER capital. Banks lowered their ratio of OU risk-weighted assets to capital from Éul............................ about 11 percent in September 1999 À nb... de to 7 percent in June 2001 (Figure 3), | more than required by prudential RIT guidelines.* Von De ui dei QU De duo ai Demand 8. A number of indicators suggest that credit demand was also a major factor behind sluggish credit growth. ? The commercial banks gourde lending rate increased from 23 percent in September 1998 to 32 percent by September 2001, while the three-month BRH bonds interest rate rose from 21 to 27 percent during the same period. * Based on prudential guideline, the minimum risk-weighted asset to capital in Haiti is 8.3 percent. [page 11] -10- e Exogenous factors had a strong negative impact on domestic demand and on the private sector’s expectations. These factors included a prolonged political impasse, a massive reduction in budgetary aid and a marked slowing down of foreign-funded investment projects. Negative expectations appear to have contributed to a weakening of economic activity, a reduction in imports and declining private sector investment, all of which entailed a fall in the private sector demand for bank credit. e In addition to weak domestic demand and pessimistic expectations, representatives of the Haitian private sector have cited the exogenous slowing down of exports to the United States as an important factors underlying the sluggish economic activity, and hence the reduced demand for bank credit. Figure 4: Real Credit Growth-Constant Exchange Rate (RCGE) and Net effect of supply and demand shifts ne Real Lending Rate (RLR) e Since early 2000, real interest rates and NP ee te 20006 real private sector credit have tended ON to move in opposite directions Ë an [w pa (Figure 4). The negative correlation 4 50 M was particularly strong during 4001 --------...-....... ER FY 2000/01, with sharply rising real 9 ---------- lending rates” associated with a PR RESsssssesssssss EE marked contraction in real credit. This FRAIS IS REA TIRÉS SSS evolution suggests that Haitian borrowers reduced their demand for credit as real financial costs soared, and that the credit market settled at a new equilibrium reflecting lower supply and demand. D. Conclusions 9. It appears that over the last four years, and especially during FY 1999/2000 and FY 2000/01, both supply and demand factors have contributed to the shrinking real bank credit to the private sector. While demand for credit seems to have been constrained by pessimistic expectations on the part of borrowers and swelling financial costs as a result of rising real lending rates, credit supply appears to have been negatively affected by increased issuance of central bank bonds, raised required reserves ratios, and higher perceived lending risks by banks. However, the observation that the increase in the real interest rate was associated with a decline in the private sector credit since early 2000, suggests that the supply $ Real interest rates are estimated by adjusting the average of commercial banks’ minimum and maximum lending rates for expected inflation. Expected inflation is estimated by observed 12-month ahead inflation [page 12] -li- factors were the main driving force behind the reductions in credit to the private sector. The decline in real credit exacerbated the slowdown of the economy underway as a result of the sluggish domestic demand and the exogenous weakening of exports to the United States. [page 13] -12- JUL. PETROLEUM TAXATION AND THE APPLICATION OF THE 1995 LAW Abstract Petroleum-based revenue in Haïti is vulnerable to changes in international oil prices and in the exchange rate, as the authorities follow a policy of fixed prices at the pump. However, in 1995, the Haitian authorities promulgated a law introducing a flexible pricing mechanism for petroleum prices, which has never been consistently applied. This chapter analyzes the implications for prices and tax revenue of the continuation of the present policy, and of a hypothetical application of the law during FY2001/02. The flexible pricing mechanism is projected to yield revenues very close to those under the current policy, owing to the present downward trend in international oil prices, with marginal impact on prices. The chapter analyzes the sensitivity of revenue to an increase in international oil prices and to a depreciation in the exchange rate. A. Introduction 10. In 1995, the Haitian authorities promulgated a law introducing a flexible pricing mechanism for petroleum products. The aim of the law was to eliminate uncertainties in petroleum taxation revenue due to changes in international prices and in the exchange rate. The law has never been consistently applied, as prices at the pump have remained fixed during extended periods of time. Most recently, prices at the pump have been kept unchanged during FY 2000/01, following a long-delayed increase in September 2000, by 40 percent on average. Taxes fluctuated widely within the wedge between the variable imports and distribution costs and the fixed price at the pump. As a result, changes in the international price of oil and in the exchange rate of the gourde vis-à-vis the U.S. dollar, led to large fluctuations of petroleum-based government revenue over the last five years. 11. In this chapter, tax revenue from petroleum products’ during FY 20001/02 is studied under two alternative scenarios: the continuation of the present fixed-price policy, or the hypothetical application of the 1995 law in FY 2001/02. In both scenarios prices and revenues were projected on the basis of the future prices of oil as of end- $ Prepared by Mercedes Vera Martin. ? The paper considers the four major products: Gasoline (regular and premium), gasoil and kerosene. These products represented 80 percent of total petroleum imports in 2000. [page 14] -13- November 2001%, and assuming a stable exchange rate throughout the year” as well as stable volumes of oil imports, consistent with the projected weak economic activity during FY 2001/02. 12. Revenue projections for FY2001/02 show that both scenarios yield about the same amount of revenue, at almost identical prices at the pump. However, whereas the present policy of fixed prices at the pump introduces uncertainties in petroleum-based revenues, the flexible pricing mechanism provided under the 1995 law would shield budget revenue from fluctuations in the international oil prices and the exchange rate. Moreover, the flexible pricing policy would secure petroleum-based fiscal revenues with almost no change in prices at the pump. 13. The remaining of the chapter is structured as follows. Section B describes the evolution of the petroleum products, focusing on imports, prices and tax revenues. Section C analyzes the sensitivity of tax revenues to changes in the exchange rate and changes in oil international prices. Section D concludes. B. Petroleum Products —Imports, Prices, and Tax Revenue 14. Petroleum imports accounted for 16 percent of total imports in FY2000/01, with an estimated CIF cost of US$115 million (3 percent of GDP). Import volumes for the major products decreased in FV2000/01 except for kerosene (Table 1}. Gasolines and diesel imports dropped significantly, reflecting the weakening in economic activity over the last fiscal year. Kerosene experienced an annual increase of almost 3 percent in volume terms. In gourde terms, imports dropped by 11 percent in FY 2000/01 with respect to 2000, kerosene being the only product for which imports in value terms increased in FY 2000/01 (by 3 percent). Regarding the relative importance of each product in the total value of petroleum products imports, diesel accounts for more than half the imports in 2001 (53 percent of total imports), followed by kerosene (22 percent of major petroleum imports), regular gasoline (20 percent of total major petroleum imports), and premium gasoline for 5 percent of petroleum imports. 8 This chapter uses monthly data on future oil prices reported by the Research Department of the IMF, that are close to the quarterly WEO projections. Monthly data better reflects the periodicity of oil shipments in Haïti than quarterly data. ? In the first section, exchange rate is assumed to be constant at G26/USS for FY 2002. In the third section, a sensitivity analysis is performed to study the impact of a 15 percent depreciation in the annual average exchange rate. [page 15] - 14- Table 1: Import Volumes by Petroleum Product, 2000-01 (In barrels) 2000 2001 Variation Regular gasoline 678,554 601,662 -10% Premium gasoline 235,709 140,360 -29% Diesel 2,085,800 1,740,235 13% Kerosene 675,900 694,250 3% 15. The authorities use the actual import cost (inclusive of insurance and freight) as the base for the computation of the domestic prices. The components of taxation are the following: (1) a fixed excise applied only to gasoline (set at 3.3033 gourdes per gallon); (ii) a variable excise!° set initially at 6.8 gourdes for gasoline, 4 gourdes for diesel and 0.44 for kerosene in the 1995 law: (iii) a verification fee (4 percent of the landed value! !}; and (iv) a custom duty (5.78 percent of the landed value). !? The first two taxes constitute specific rates of duty as they are based on the quantity of the product sold, while the latter two are ad valorem rates based on the CIF value." 16. In order to Keep prices at the Figure 1: Tax per gallon, by product pump fixed, the authorities need to adjust taxes per gallon to make up for DS EE LT changes in costs per gallon. Figure 1 2 LP LATE | describes the evolution of the tax per 3 . ee AT | gallon charged for each of the petroleum H NN NU ue me ee ne en products in FY 2000/01. Gasoline was star 2 TS ee Es ES gl heavily taxed, and kerosene was DRE subsidized by around 3 gourdes per gallon, GL00 Kevd0 Dec-00 JamOl FubO1 Mur-O! Apr-O1 MeyOI Juno OL Aupôt Sepôl with a total cost for the budget of —4— Gasoline Regular —6— Gasoline premium —#— Gasoil —8— Kerosene 10 The variable excise is the difference between the price at the pump and the base price (defined as the sum of the CIF price, all other taxes and other charges except for the variable excise). Prices at the pump would remain unchanged if there is a less than 5 percent change in the base price, with the variable excise being adjusted. 1 CIF price for the petroleum product plus financial fees. 12 Specific rates have some advantages as they are administratively easier to apply and, if the international price of the product is subject to wide variations, the quantity of the product consumed may be more stable than the valued of the petroleum product consumed. 5 Gupta and Mahler (1994) describes the CIF cost as the appropriate base for applying ad- valorem petroleum taxes. [page 16] -15- G92 million. "* From a social viewpoint, petroleum taxation and pricing policy has considerable implications for the distribution of income in Haïti. While kerosene is widely used for cooking by the poor segments of the population, premium gasoline is consumed by the better off. 17. Prices would change only marginally under the 1995 law for FY2001/02 (Table 2). Regular and premium gasoline prices would have decreased (by an annual average decrease of 1 percent and of 14 percent respectively in 2002), with prices for kerosene increasing by only 2 percent. Table 2: Evolution of Domestic Prices, 2001-02 (in million of gourdes) Present Ne 2001 Policy nn (2001) 2002 Regular gasoline 46.00 46.00 45.56 -1.0% Premium gasoline 56.00 56.00 48.30 -13.8% Diesel 30.50 30.50 30.76 0.8% Kerosene 26.00 26.00 26.54 2.1% 18. Petroleum-based fiscal revenues were estimated at almost G550 million in FY 2000/01% (0.6 percent of GDP, and 8.5 percent of total budget revenue). Under the present pricing policy petroleum-based revenues for FY2001/02 are projected to reach around G1.2 billion (1.4 percent of GDP)(Table 3). Would the authorities apply the 1995 Law for FY2001/02, projected revenues (to nearly G1.2 billion) would be almost at the same level as under the current policy. This is mainly due to the downward trend in oil international prices. Table 3: Evolution of Tax Revenues, 2001-02 (In million of gourdes) Present Policy Variation 1995 Law Variation 2001 2002 (to 2001) 2002 {to 2001} Regular gasoline 391.9 549.6 40.2% 538.4 374% Premium gasoline 131.3 165.8 263% 122.9 -64% Diesel 116.8 428.6 266.9% 442.8 279.0% Kerosene -92,7 67.5 172.9% 81.4 187.9% Total 547.4 1,211.6 121.3% 1,185.5 -22% 14 Social and environmental reasons explain the subsidy of kerosene as it is used by the poorest segment of the population and it is a close substitute of firewood. 15 Fund staff estimates, October 2001. [page 17] -16- 19. Notwithstanding total revenue from petroleum taxation estimated at almost G550 million in FY2000/01, there was a revenue loss relative to the taxes that would have been due under the 1995 law. Figure 2 describes the evolution of the tax gap during FY 2000/01 and its projection for FY 2001/02 under the present pricing policy. The tax gap is the difference between the price at the pump that would prevail would all taxes be fully charged as per the 1995 law, and the actual price at the pump. À negative tax gap implies that the authorities are not charging the full amount of taxes, thereby incurring a revenue loss in the form of an opportunity cost. A positive tax gap implies that the authorities are charging more than the legal amount of taxes (which may happen under the present pricing policy if the international price of oil drops below a 10 BE 2: Tax Gap per Glen certain threshold). In FY 2001/02 the lossin Up A A revenues was estimated at G844 million o A AN LE , {1 percent of GDP). The projected loss in i sl. LP SE nl RER revenues for FY 2001/02 would be reduced À ,,# Pa) D to around G70 million, as the treasury would A À keep under-collecting revenues from the three | major products (regular gasoline, diesel and Owt-00 JamOl Apr0l JukOl OO dn02 Aprf2 Jui02 kerosene) for an amount of G112 million, while nc oran over-collecting about G40 million on gasoline. —#— Gasoi M Kerssene 20. Under the future international oil prices as of end-November 2001, the budget would collect taxes during FY 2001/02 on all four products including kerosene, even if the present policy of fixed prices is maintained. Table 4 summarizes the average impact per gallon under two scenarios : under the present policy, or assuming the application of the 1995 law during FY 2001/02. Under the former, taxation would increase on all four products, with the highest rise in taxes on diesel. Under the latter, taxation of premium gasoline would drop by 11 percent, while taxes on the other products would increase substantially, especially for diesel (from almost 2 gourdes to 7 gourdes per gallon) and kerosene. The large increase in the impact per gallon for diesel and kerosene reflects the elimination of the negative tax gaps in FY2001/02. Table 4: Taxation Impact per Gallon (In gourdes) 2001 2002 Variation (1995 Law Variation Regular gasoline 14.6 19.9 36% 19.6 34% Premium gasoline 22.2 27.3 23% 19.7 -11% Diesel 1.8 6.8 280% 7.2 302% Kerosene -3.4 24 -169% 3.0 189% [page 18] -17- C. Sensitivity Analysis 21. Although the loss in revenues is projected to be low in FY 2001/02 given future international oil prices as of end-November 2001, the fixed price policy introduces serious uncertainties in government revenue collection. If international oil prices or the exchange rate go up substantially, the treasury may end up paying importers negative taxes as CIF prices and distribution costs may become higher than the price at the pump (this was the case with respect to kerosene in FY 2001/02). If international oil prices increase to US$31 per barrel, petroleum-based fiscal revenues would be reduced to zero. 22. This section assesses the sensitivity of petroleum-based revenue to (i} a 15 percent depreciation in the annual average exchange rate (to G 28.2 per US dollar from G 24.5, see Figure 3); and (ii) an increase in oil prices by US$10 per barrel in the second half of FY 2002, under the present pricing policy and the hypothetical application of the law. 23. In terms of revenues, a 15 percent depreciation in the exchange rate would imply a drop of an estimated 20 percent with respect to revenues projected for FY2001/02 under the present pricing policy and under present trend in international oil prices (to less than G 1 billion). Would the authorities apply the flexible pricing policy, revenues would increase by 5 percent’? and prices would increase by an average of 7 percent, as the changes in the exchange rate would be passed through to prices at the pump. 24. An increase by US$10 per barrel (50 percent relative to the price as of end- November) to 28 dollars per barrel would reduce petroleum-based revenue by an estimated 44 percent compared to the level projected for FY 2001/02 under the fixed price policy (to around G700 million). Under the flexible pricing policy, revenue would increase by around 10 percent (to some G 1.3 billion) (1.5 percent of GDP)), reflecting higher custom duties and verification fees (that are based on ad valorem rates). Prices per gallon would increase by an average of 18 percent. D. Conclusions 25. The present policy of fixed prices at the pump introduces large uncertainties in petroleum-based revenue, as taxation fluctuates with variations in international oil prices and in the exchange rate. By contrast, the flexible pricing mechanism provided under the 1995 law would shield budget revenue from fluctuations in these two factors. Barring exceptional turbulences on the international oil market, it would also ensure more frequent but smoother adjustments of prices at the pump, in contrast with the infrequent but very large 16 Considering the average of U.K. Brent, Dubai and West Texas intermediate, which are the basis for the WEO projections on future oil prices. 17 The increase in revenues is due mainly to more frequent adjustments in the prices. [page 19] -18- price changes under the fixed price policy. Given the level of international oil prices prevailing at end-November 2001, introducing the flexible pricing policy at that time would have secured petroleum-based revenue with almost no change in prices at the pump. 26. From the point of view of income distribution, the 1995 law provides for a progressive taxation of petroleum products, as gasoline is more heavily taxed than kerosene. The latter however would no more be subsidized under the full implementation of the law. In view of the importance of kerosene for the poor and of environmental considerations, one may argue that it should remain subsidized. [page 20] -19- IV. EXCHANGE RATE AND CURRENT ACCOUNT SUSTAINABILITY IN HAITI‘? Abstract The export sector in Haïti is weak and current account financing from non-debt-creating flows is small. Against this background, the country has not experienced a currency crisis and the real exchange rate has slowed its appreciating trend in the last two years. However, the lack of improvement in the macroeconomic fundamentals, the low level of net international reserves, and the unsettled political situation, make the country vulnerable to external shocks. The analysis presented in this chapter shows that Haïti's current account deficit appears sustainable; however, the medium-term projections are based on optimistic views regarding economic growth. The results of a sensitivity analysis on petroleum prices, grants and remittances underscore the high vulnerability of Haïti’s external sector. A. Introduction 27. The export sector in Haïti is weak and current account financing from nondebt- creating flows is small. Grants and official external financing have become permanent inflows, reflecting the traditional dependence on foreign assistance. Foreign direct investment is almost nonexistent. Remittances rank as the first source of foreign exchange, reflecting the increasing migration of Haitians. Against this background, the country has not experienced a currency crisis and the real exchange rate has slowed its appreciating trend in the last two years, However, the lack of improvement in the macroeconomic fundamentals, the low level of net international reserves, and the unstable political situation, make the country vulnerable to external shocks. This chapter focuses on the sustainability of the current account, analyzing whether the continuation of the current policies and trends are sustainable in the medium term. Following an analysis of the behavior of the exchange rate, the sustainability of the current account is assessed. The assessment its extended to the identification of the main factors of vulnerability affecting the current account and to a sensitivity analysis of some relevant variables such as petroleum prices, grants, and remittances. 18 Prepared by Oscar Melhado. [page 21] -20- B. Current Account and Exchange Rate Issues 28. Haiti’s CPI-based real effective pu HR Er Edge er exchange rate (REER) has appreciated since 1995. During 1995-99, the REER æ appreciated at an average annual rate of about 11 percent. In the last two years the REER s appreciation has slowed, reflecting the more w frequent adjustments to the gourde. Despite the overall appreciating trend, the current ” account deficit has been narrowing, " indicating the growing role of remittances and grants, and the changing structure Of “ne am da mm dr ne da 2e de me de an an exports and imports in Haïti. In 2001, grants and remittances represented 60 percent of the current account inflows while exports of goods and services accounted for 37 percent. With imports driven in large part by current transfers, Haitiÿs current account is not highly responsive to real exchange rate developments. The analysis of current account sustainability has to consider the issue of lack of effectiveness of real exchange rate policy to adjust the current account. 29. The CPI-based REER does not take into account unit labor costs. Therefore, it does not capture competitiveness gains from production and wages. This explains the growth of free-trade-zone exports when the CPI-based REER is appreciating. Labor costs have remained low and thus competitive to attract investment to the free-trade zones. Table 1: Current Account Inflows in Selected Countries in 2000 (In percent of total current account inflows) Mexico Dominican Republic El Salvador Colombia Haiti 1/ Exports of goods 86 50 52 76 25 Services credit 7 28 12 11 11 Income credit 3 2 2 4 2 Current transfers 3 18 32 8 59 100.0 100.0 100.0 100.0 100.0 1/ Corresponds to FY 2000/01. [page 22] -21- 30. The export sector in Haïti is the ns smallest in the Latin American and : Caribbean region, representing only = 8.6 percent of GDP in 2001 compared to an … . Mas average in Latin America of 18.1 percent and un EE f ES DE an average of 48.1 percent for the CARICOM £° HE RL 1 countries. Haiti’s structure of exports has : mm :5 1 changed markedly in the past several years TETE ES pare se NS from relying mainly in agriculture to Herbe he LEE exclusively on light manufactures, both of ES which accounted, respectively, for 9 percent and 83 percent of total exports in 2001. The change of structure that took place in the second balf of the 19905 is explained by the emergence of free-trade-exports zones after the lifting of the embargo attracted mainly by low wages and market access granted by United States. The new structure of exports is comprised of a buoyant free-trade-zone exports sector, |? a weak agricultural, and other exports sector. Table 2: Composition of Exports {In percent of total exports) 1985 1995 2001 Agricultural products 30 36 9 Light manufactures 58 51 83 Others 11 12 8 Total 100.0 100.0 100.0 31. A key issue is the increasing importance of remittances in the economy and the immediate impact on the welfare of those receiving remittances. A depreciation of the nominal exchange rate increases the income of those receiving remittances.? Hence, aggregate private consumption goes up and the demand for imports of those receiving remittances remains unchanged.?! In addition, nontradable become cheaper in dollar terms. 1 Though the rate of growth has decelerated in 2000 and 2001, 2 Evidence from other countries indicates that remittances are mainly spent on basic consumption goods and nontradable such as education and housing. 21 The inflow of remittances represented about 18 percent of private consumption in 2001. [page 23] -22- C. Current Account Sustainability 32. Despite a widening of the trade deficit nes for the period 1995-2001, the current account is almost covered by current transfers to the " : government (in the form of grants) and to ” households (in the form of remittances). Both » grants and remittances have become not only key | ; ; HE BOP characteristics, but also permanent inflows En Fi) = to the economy. Remittances have increased from Ér | 4 ; levels lower than US$100 millions at the TELLE EE beginning of the 1990s to a preliminary estimate Boon Mtina of US$582 millions in 2001. As evidence from other countries indicates, due to the increasing migration trends the inflow of remittances is not expected to decelerate in the medium term.?? Grants have been a regular inflow, reaching a peak of US$410 millions following the lifting of the embargo in 1995 and declining thereafter. According to donors the level of US$161 millions in 2001 is the minimum amount kept for humanitarian reasons. In the medium term, following the resolution of the political impasse, grants are likely to increase. 33. The relevant estimation of the Fa Gare At Def apr ar QD current account deficit should include : D = grants. In the past, the staff”s estimation of ‘ —— = E = the current account deficit excluded grants * | based on the assumption that were transitory inflows. Since grants are a regular and « predictable inflow, an appropriate estimation of the current account deficit should include them.? During 1994-2001, the current h account including grants has hovered #— — — — Er" around balance, This low current account Den mctuinenns | BEN intadenammn deficit indicates moderate stress to net international reserves with the exception of periods of exogenous shocks such as sudden increases in petroleum prices, natural disasters, and banking and private sector outflows motivated by political events. 2 The experience of countries like El Salvador and Ecuador is that increasing migration particularly to the United States yields increasing inflows of remittances. # The fifth edition of the Balance of Payment Manual classifies grants as current transfers in the current account, comprising international cooperation from governments or form international organizations. Grants include cash transfers, gifts of foods or other consumer goods, gifts of certain military equipments, payments by governments or international organizations for salaries of assistance staff and related expenses. [page 24] -23- Current account sustainability assessment 34. Using the standard definition of sustainability, the fact that Haiti was in default with its foreign financial obligations in 2001 would define its current account position as unsustainable. However, the accumulation of arrears reflects a political decision rather than the lack of resources to service the external debt. Haiti’s net international reserves stood at US$180 million at end-September 2001, while its stock of arrears amounted to US$17.8 million at end-2001. Haiti decided not to pay some of its financial obligations, responding to the decision of the international financial institutions and the international community to withhold further disbursements until a political solution is achieved and the country builds a macroeconomic track record under an IMF’s staff monitored program. The assessment of sustainability has to ignore these circumstances and concentrate on the medium-term external debt dynamics. 35. The criterion used here to define current account sustainability is the constant total- external-debt-to-GDP ratio, by which a current account deficit is defined as sustainable if does not exceed a minimum required to maintain the external-debt-to-GDP ratio constant. The stock of total public external debt is US$1.2 billion, equivalent to 31.9 percent of GDP in 2001. Table 3 shows the minimum noninterest current account balance for different combinations of real GDP growth and real interest rates on foreign debt. The values are obtained by using the following formula: Current Account/GDP = (real interest rate-real GDP growth rate) * (Total-debt-to-GDP ratio) The current account values to be compared in the table need to consider only the noninterest current account less all the financing through nondebt-creating flows. Since Haiti does not receive substantial amounts of foreign direct investment or equity, and the behavior of bank’s net flows is unpredictable, there is no need to adjust the noninterest current account for predictable financing components of the capital and financial account. This is a conservative approach as the current account position would be stronger in the medium term if some nondebt-creatins flows, such as foreign direct investment, become active components of the external sector. # On November 28, 2001, the government of Haiti signed a US$40 million contract with an investors group to build a Hilton-operated hotel by 2004. [page 25] _-24- Table 3: Minimum Current Account Sustainable Balance (In percent of GDP) Growth Rate (percent) 0.0 1.0 2.0 3.0 4.0 5.0 Real Interest on External Debt (percent) 1.0 03 00 -03 -06 -10 -13 0.5 0.2 -0.2 -0.5 -0.8 -1.1 -1.4 0.0 0.0 -0.3 -06 -10 -13 -16 -0.5 -0.2 -0.5 -0.8 -1.1 -1.4 -1.8 -1.0 03 “06 -10 -13 -16 -19 -L.1 -04 -0.7 -1.0 -13 -1.6 -1.9 36. Most of Haitis external debt is on concessional terms. In the medium term the average-nominal-interest rate for the external debt is only 1.0 percent and the average-real- interest rate is -1.1 percent (the medium-term international inflation is 2.2 percent). The medium-term projections envisaged in the staff report assume a medium-term real GDP growth rate of 4 percent. From Table 3, the minimum noninterest current account balance is a deficit of 1.6 percent of GDP, i.e., a higher deficit is deemed unsustainable. The staff projects a gradual decline of total-external-debt-to-GDP ratio from 31.9 percent in 2001 to 22.9 percent in 2006. The assumptions for the medium-term are presented in Table 4. The projected noninterest current account values over the medium term are less negative than the minimum sustainable value of -1.6 percent. In consequence, in the basis of the medium-term assumptions in the macroeconomic framework, Haiti’s current account deficit would be sustainable. However, the medium-term projections are based on optimistic views regarding the political scenario, entailing a growth rebound in 2003. Grants are assumed to pick up, as it happened in the mid-1990s after the embargo lifting and remittances will continue growing. The medium-term projections have benefited from the prevailing low oil prices— oil imports represented about 17 percent of the total value of imports in 2001. [page 26] -25- Table 4: Medium-Term Projections (In percent of GDP; unless otherwise indicated) 2001 2002 2003 2004 2005 2006 Real GDP growth -1,7 0.0 2.5 5.0 6.0 6.0 Non-interest current account 0.0 -0.1 -0.6 0.1 -0.3 -0.5 Total public external debt 31.9 30.2 28.3 26.1 24.3 22.9 Oil international prices (level) 27.0 19.4 19.5 19.0 19.0 19.0 Remittances growth 148 2.8 2.9 4,5 9,3 11.6 Grants growth -27.4 -0.7 13.5 37.0 2.8 0.8 D. Vulnerabilities Affecting the Current Account Sustainability 37. There are vulnerabilities that could affect the sustainability of the current account. The key identified vulnerabilities include: increases in oil prices, decline in remittances, low foreign aid, and low level of net international reserves. External shocks 38. The current account in Haïti is extremely vulnerable to external shocks particularly to a surge in petroleum prices, and natural disasters such as hurricanes. Oil price shocks have a direct impact on the balance of payments, and the recent decline in oil prices will represent a gain from a lower oil bill. À surge in petroleum prices will put pressure on the current account due to the somehow inelastic demand of oil, which translates to immediate higher current account deficits. Grants 39. Donors have indicated that the current level of grants at about US$161 million in FY 2000/01 is at the minimum level, and no further curtailment of grant is envisaged. A pessimistic scenario would entail the minimum level of grants in the medium term, rather than the increase in foreign aid assumed in the staffs projections. Indeed, it can be argued that an important proportion of grants are food aid, imported goods, and technical assistance, hence grants are in a one-to-one relation with imports and service debits. Therefore, any change in grants is offset by a symmetric change in imports or service debits leaving the current account deficit unchanged. [page 27] -26- Decline in remittances Figure 5: Sensitivity Analysis (noninterost current account defcit) 40. Remittances is an important variable an Se Em HET FE HE of vulnerability. In other countries the decline «lit Fes HE) HE pa in remittance inflows occurs more than one is JE | se fe sa generation after migration subsides. In Haiti 44 FE fit HE migration continues, suggesting that more 320 sn remittances are expected in the medium term, :,, .. The economic slowdown in the U.S. economy ,, has only transitory effects. Remittances are M | likely to return to the same increasing trend … when the US. economy recovers. However, : the huge negative errors and omissions in the . os x a 2e second half of the 1990s,Ÿ raise the possibility ofan Pre … overestimation of remittances. Lower remittances may translate in higher current account deficits; however, there is not a one-to-one relation since remittances also translate in less imports . Low level of net international reserves 41. The low level of net international reserves has been a permanent vulnerability factor faced by Haiti. There is no cushion to face a sudden deterioration of the current account. In September 2001, NIR stood at USS$180 million(less than 2 months of imports of goods and services). The central bank foreign exchange liabilities arise only from obligations to pay public sector debt service. However, other obligations have been paid by drawing down reserves such as the construction on the central bank new building and the issuing of new currency bills. In times of crisis the private sector approaches the central bank to meet its foreign currency needs. Thus, although evidence shows that the economy has weathered shocks such as hurricanes and oil price surges in the past without a foreign exchange crisis, the current low coverage justifies a larger level of reserves. Sensitivity analysis 42. The extension of the sustainability assessment entails a sensitivity analysis of the vulnerabilities affecting the external sector. The sensitivity of the medium-term current account will be evaluated separately on three key variables: petroleum prices, donation inflows, and remittance inflows. In three different scenarios, petroleum international prices are assumed to remain at the same level of 2001 for the whole medium term, grants are assumed to remain at their minimum level of about US$160 million, and remittances remain unchanged at the same level of USS582 millions in 2001. À combination of the scenarios 3 Errors and omissions have been sharply reduced in FY 1999/2000 and FY 2000/01. [page 28] _-21- would yield a worse current account deficit. Figure 5 presents the medium-term current account deficit under those assumptions. 43. The results of the sensitivity analysis indicates a vulnerable situation of Haiti’s external sector. In the three scenarios the noninterest current account becomes unsustainable. All deficits below the -1.6 percent value line are unsustainable. While the less likely scenario is a flat behavior of remittances over the medium term, the accuracy in the measuring of remittances is at stake. À more likely scenario is the continuation of grants at its minimum levels, this is the current policy held by donors under the situation of no solution to the political impasse. Haiti is highly sensitive to petroleum prices, the change of the somewhat optimistic scenario of declining petroleum prices will put pressure on the current account. However, the impact of lower donation inflow, or lower remittances inflow needs to be assessed on a net basis net impact. For example, lower donation or lower remittances causes lower imports also, and thus does not have a one-to-one impact on current account or NIR. E. Conclusions 44. The analysis underscore the weaknesses of Haiti’s external sector. There is no substantial effects on exports from the appreciation of the REER since the lifting of the embargo in 1995. The large shift in the composition of exports, away from traditional agricultural products, to light manufacturing in export processing zones is due to cheap labor and market access to the U.S. market. Further competitiveness enhancements require speeding the pace of structural reforms. The correct estimation of the current account deficit should include grants, since they have become a permanent component of the economy. Finally, the sustainability assessment indicates a sustainable situation over the medium term; however, the sensitivity of the external sector to key variables such as petroleum prices, grants, and remittances indicates a lightly vulnerable situation. The current account deficit becomes unsustainable under the sensitivity scenarios assumed. This situation is aggravated by the low level of international reserves and the lack of foreign direct investment. [page 29] -28- Table 1. Haïti: National Accounts at Current Prices 1/ Fiscal Year Ending September 30 1996 1997 1998 1999 2000 (hi millions of gourdes) Gross domestic expenditure 54841.8 62639.6 73529.7 81339.1 93653.9 Consumption 41,719.5 49,392.7 57,148.1 62,156.9 72,446.2 Central government 3,138.0 4,583.2 4,296.0 4,725,7 5,387.2 Other 38,581.4 44,809.5 52,852.1 57,4313 67,059.0 Gross domestic investment 13,122.4 13,246.9 16,381.6 19,182.2 21,207.7 Public sector 2,527.3 2,925.9 3,369.9 3,805.5 4,367.9 Private sector 10,595.1 10,321.0 13,011.7 15,376.7 16,839.8 Balance of trade in goods and nonfactor services -8,195.0 -8,634.1 -10,532.9 -12,085.3 -16,073.8 Exports 5,283.6 5,645.9 6,237.0 8,482.4 9,848.9 Imports -13,478.7 -14,280.0 -16,769.8 -20,567.7 -25,922.7 Gross domestic product at market prices 46,646.8 54,005.4 62,996.8 69,253.8 77,580.1 (Annual percentage change) Gross domestic expenditure 12.6 142 17,4 10.6 15.1 Consumption 9.6 18.4 15,7 8.8 16.6 Central government 14,5 15.8 11.8 15.9 11.6 Other 25.8 -2.6 27.0 17.4 10.3 Gross domestic investment 23.5 0.9 23.7 17.1 10.6 Public sector 14.5 15.8 15.2 12.9 14.8 Private sector 25.8 -2.6 26.1 18.2 9.5 Balance of trade in goods and nonfactor services 2.7 5.4 22.0 14.7 33.0 Exports 42.0 6.9 10.5 36.0 16.1 Imports 15.2 5.9 17.4 22.6 26.0 Gross domestic product at market prices 145 15.8 16.6 9.9 12.0 (In percent of GDP) Gross domestic expenditure 117.6 116.0 116.7 117.5 120.7 Consumption 89.4 91.5 90.7 89.8 93.4 Central government 6.7 8.5 6.8 6.8 6.9 Other 82.7 83.0 83.9 82,9 86.4 Gross domestic investment 28.1 24.5 26.0 27.7 27,3 Public sector 54 5.4 53 5.5 5.6 Private sector 22.7 19.1 20.7 22.2 21.7 Balance of trade in goods and nonfactor services -17.6 -16.0 -16.7 -17.5 -20.7 Exports 11.3 10.5 9.9 12.2 127 Imports -28.9 -26.4 -26.6 -29.7 -33.4 Sources: Haitian Institute of Statistics; Bank of the Republic of Haiti; and Fund staff estimates. 1/ Based on the new national accounts published by the IHSI in April 2001. The national accounts have been benefited of technical assistance by the STA department. [page 30] -29- Table 2. Haiti: National Accounts at Constant Prices 1/ Fiscal Year Ending September 30 1996 1997 1998 1999 2000 (In millions of 1986/87 gourdes) Gross domestic expenditure 18,808 19,499 19,917 22,052 25,442 Consumption 15,970 16,446 16,962 18,389 21,107 Gross domestic investment 2,837 3,054 2,955 3,663 4,335 Balance of trade in goods and nonfactor services -6,724 -7,089 -7,236 -9,027 -12,304 Exports 1,688 1,929 2,378 2,770 2,945 Imports -8,412 -9,017 -9,614 -11,797 -15,249 Gross domestic product at market prices 12,083 12,410 12,681 13,025 13,138 (Annual percentage change) Gross domestic expenditure 13.2 3.7 2.1 10.7 15.4 Consumption 13.4 3.0 3.1 8.4 14.8 Gross domestic investment 11.8 7.6 -3.2 24.0 18.3 Exports 27.3 14.2 23.3 16.5 6.3 Imports 32.6 7.2 6.6 22.7 29.3 Gross domestic product at market prices 4.1 2.7 2.2 2.7 0.9 Sources: Haitian Institute of Statistics; Bank of the Republic of Haiti; and Fund staff estimates. 1/ Based on the new national accounts published by the IHSI in April 2001. The national accounts have been benefited of technical assistance by the STA department. [page 31] -30- Table 3. Haiti: Origin of Gross Domestic Product 1/ Fiscal Year Ending September 30 1996 1997 1998 1999 2000 (In millions of gourdes at 1986/87 prices) Primary sector 3,732 3,677 3,670 3,567 3,437 Secondary sector 1,753 1,820 1,899 1,947 2005,9 Manufacturing 889 897 903 879 869 Other 773 827 903 978 1,055 Electricity and water 92 96 94 90 82 Construction and public works 649 708 788 870 942 Services sector 5,870 6,133 6,325 6,518 6,675 Utilities, transportation, communications 495 531 569 665 748 Commerce 2,494 2,646 2,736 2,877 3,039 Government 1,411 1,428 1,446 1,444 1,422 Other 1,470 1,528 1,574 1,532 1,466 Gross domestic product at factor prices 11,355 11,630 11,894 12,032 12,118 Indirect and import taxes 728 781 787 992 1,020 Gross domestic product at market prices 12,083 12,410 12,681 13,025 13,138 (Percentage change over previous year) Primary sector 0,9 -1.5 -0.2 -2.8 -3.6 Secondary sector 13.7 3.8 4.4 2.5 3.0 Manufacturing 6.2 0.9 0.7 -2.6 -1.2 Other 25.8 6.9 9.2 8.3 7.9 Electricity and water 0.6 5.2 -2.7 -3.6 -9,2 Construction and public works -7.9 9.1 11.2 10.4 8.3 Services sector 7.5 4,5 3.1 3.0 2.4 Utilities, transportation, communications 7.2 7.2 7.1 17.0 12.5 Commerce 8.3 6.1 3.4 5.1 5.7 Government 1.8 1.2 1.3 -0.1 -1.6 Other 12.4 4.0 3.0 -2.7 -4.3 GDP at market prices 4.1 2.7 2.2 2.7 0.9 (Percentage distribution) Primary sector 30.9 29.6 28.9 27.4 26.2 Secondary sector 14.5 14.7 15.0 15.0 15.3 Manufacturing 74 7.2 7.1 6.8 6.6 Other 6.4 6.7 7.1 7.5 8.0 Electricity and water 0.8 0.8 0.7 0.7 0.6 Construction and public works 5.4 5.7 6.2 6.7 7.2 Services sector 48.6 49,4 49.9 50.0 50.8 Utilities, transportation, communications 4.1 43 4.5 5.1 5,7 Commerce 20.6 21.3 21.6 22.1 23.1 Government 11.7 11.5 11.4 11.1 10.8 Other 12.2 12.3 12.4 11.8 11.2 Indirect and import taxes 6.0 6.3 6.2 7.6 7.8 Gross domestic product at market prices 100.0 100.0 100.0 100.0 100.0 Sources: Haïtian Institute of Statistics; Bank of the Republic of Haiti; and Fund staff estimates. 1/ There are serious problems with national accounts in Haïti including incomplete coverage, outdated activity surveys, and poor quality of raw data. [page 32] -31- Table 4. Haiti: Agricultural Production (In thousands of metric tons) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 I. Major Commodities for Domestic Consumption Green Corn (maize) 230 . . . 2 Millet (sorghum) 195 nn .. …. Rice 120 160 101.3 100 130 Bcans 49.2 50 35.1 35.5 33.2 Bananas 239.2 250 287.7 290 322.5 IT. Exportables Coffee 27 27 27 28 30 Sugarcane 1200 1100 1000 1000 800 Cocoa 4 4,2 4.5 4.5 4.5 Source: Food and Agricultural Organization (FAO). [page 33] -32- Table 5. Haiti: Savings and Investment 1/ Fiscal Year Ending September 30 1996 1997 1998 1999 2000 (In millions of gourdes) Gross domestic investment 13,122 13,247 16,382 19,182 21,208 Public sector 2,527 2,926 3,370 3,806 4,368 Private sector 10,595 10,321 13,012 15,377 16,840 Gross domestic savings 10,308 10,734 12,914 15,721 16,214 Public sector 922 960 1,260 1,593 621 Private sector 9,386 9,774 11,654 14,128 15,594 Current account 1/ -2,814 -2,513 -3,468 -3,421 -4,963 External savings 2,814 2,513 3,467 3,462 4,993 Official transfers 2,194 1,661 1,666 1,922 1,656 Official capital (net) 2/ 802 703 540 433 332 Private capital (net) 3/ 31 30 1,502 1,282 2,663 Changes in net foreign assels (increase -) -213 119 -242 -176 343 (In percent of GDP, at current market prices) Gross domestic investment 28.1 24.5 26.0 27.7 27,3 Public sector 5.4 54 53 5.5 5.6 Private sector 22.7 19.1 20.7 22.2 21.7 Gross domestic savings 22.1 19.9 20.5 22.7 20.9 Public sector 2.0 18 2.0 2.3 0.8 Private sector 20.1 18.1 18.5 20.4 20.1 External savings 6.0 4.7 5.5 5.0 6.4 Public transfers (grants) 47 3.1 2.6 2.8 2.1 Official capital (net) 17 13 0.9 0.6 04 Private capital 0.1 0.1 2.4 1.9 34 Changes in net foreign asscts (increase -) 0.5 02 -0.4 -0.3 04 Memorandum item: Nominal GDP {in millions of gourdes) 46,647 54,005 62,997 69,254 77,580 Sources: Haitian Institute of Statistics; Bank of the Republic of Haiti; and Fund stalf estimates. 1/ Excluding grants. 2/ Includes Trust Fund, publicly guaranteed capital, SDR allocation, and other unrequited earnings. 3/ Includes monetary capital and net errors and omissions. [page 34] -33- Table 6. Haiti: Monthly Changes in the Consumer Price Index Fiscal Year Ending September 30 1996 1997 1998 1999 2000 2001 (Monthly percentage change) Average 15 13 0.7 0.8 12 1.0 October 2.9 1.5 1.3 0.6 0.7 3.1 November 1.9 1.0 0.4 0.9 0.5 1.2 December 1.7 LS LS 0.9 0,9 1.0 January 0.3 0.7 0.9 0.8 1.1 0.8 February 0.8 1.0 0.2 0.7 1.1 0.7 March 1.5 2.4 0.6 0.6 2.0 0.5 April 2.0 12 1.2 0.7 1.0 0.9 May 2.0 1.6 0.8 0.9 0.5 1.1 June 1.6 1.4 0.5 1.0 0.7 0.5 July 1.4 1.4 0.3 0.9 1.1 0.4 August 0.8 0.7 0.1 0.7 1.4 0.6 September 1.6 1.0 0.2 0.8 3.3 9 (Cumulative change during the fiscal year) October 2.9 15 1.3 0.6 0.7 3.1 November 4.8 2.5 1.6 14 12 44 December 6.6 43 3.1 2.3 2.1 54 January 6.9 5. 4.0 3.2 3.2 6.2 February 7.8 6.2 4.2 3.9 44 6.9 March 9.4 8.7 4.9 4.6 6.5 74 April 11.6 10.1 6.1 5.3 7.6 8.4 May 13.9 11.8 7.0 6.3 8.2 9.6 June 15.7 13.4 7.5 7.4 8.9 10.2 July 17,3 15.0 7.9 8.4 10.1 10.7 August 18.2 15.8 8.0 9.1 11.7 11.4 September 20.1 17.0 8.3 9.9 153 12.5 {12-month change) October 23.7 15.7 16.7 7.5 10.1 18.0 November 28.1 14.6 15.9 8.0 9.7 19.0 December 25.5 14.6 15.6 74 9.7 19.0 January 20.6 15.1 15.7 74 10.0 18.6 February 17.5 15.2 14.8 7.9 10.5 18.1 March 20.3 16.9 12.8 7.9 12.0 16.3 April 22.0 16.4 12.8 7.5 12.3 16.2 May 22.5 16.6 11.9 7.6 11.9 16.9 June 22.0 16.9 10.9 8.1 11.5 16.7 July 21.8 17.3 9.7 8.7 11.6 16.0 August 20.4 17.6 9.1 9.3 12.5 15.0 September 20.1 17.0 8.3 9.9 15.3 12.5 Sources: Statistics Department; Bank of the Republic of Haiti; and Fund staff estimates. [page 35] -34- Table 7. Haiti: Consumer Price Index (Percentage change in period averages) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 2001 Average 91.7 106.6 120.1 129.9 144.8 169.1 October 85.6 99.0 115.5 124.2 136.7 161.4 November 87.3 100.0 115.9 125.2 137.3 163.4 December 88.8 101.8 117.6 126.4 138.6 164.9 January 89.1 102.5 118.6 127.4 140.1 166.2 February 89.9 103.5 118.9 128.3 141.7 167.3 March 90.7 106.0 119.6 129.1 144.6 168.2 April 92.2 107.3 121.1 130.1 146.1 169.7 May 93.5 109.0 122.0 131.3 146.9 171.6 June 94.6 110.6 122.7 132.6 147.9 172.6 July 95.7 112.2 123.1 133.8 149.4 173.3 August 96.0 112.9 123.2 134.7 151.6 174.4 September 97.5 114.1 123.5 135.7 156.5 176.1 Growth rates Average 21.9 16.2 12.7 8.1 115 16.8 End of period 20.1 17.0 8.3 9.9 15.3 12.5 Sources: Haitian Institute of Statistics; Bank of the Republic of Haïti; and Fund staff estimates. [page 36] -35- Table 8, Haiti: Changes in Consumer Prices by Category (Percentage change in period averages) Fiscal Year Ending September 30 Est. 1996 1997 1998 1999 2000 2001 Total 21.9 16.2 12.72 8.1 115 16.8 Food 22.7 18.7 14,5 1.3 6.0 78 Clothing 26.2 15.3 11.4 9.5 6.0 31.8 Housing 13.8 20.8 16.8 16.7 15.6 5.3 Furniture and household items 17.1 6.1 8.2 15.2 18.2 6.3 Services 20.8 . . . Health ee 10.1 9.2 19.6 14.3 4.80 Education es 15.2 17.1 12.5 19.6 1.00 Transportation mn 10.3 5.0 5.9 9.2 10.38 Other goods and services 11.5 8.3 14.8 12.2 6.67 Sources: Haitian Institute of Statistics; Bank of the Republic of Haïti; and Fund staff estimates. [page 37] - 36 - Table 9. Haïti: Prices of Selected Items (In gourdes per unit) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Rice Mme Gougousse (1 pound) 8.4 7.2 6.2 6.7 7.3 Imported (1 pound) 5.4 5.0 5.6 2e …. Corn (1 pound) 33 34 4.2 4.1 4.8 Sorghum (1 pound) 3.3 3.2 3.7 3.1 En Beans (1 pound) 7.9 7.4 9.5 9.3 9.6 Chicken (1 pound) 22.7 19.0 20.9 23.1 25.2 Eggs (pack of three) 5.7 5.1 5.2 5.4 6.0 Fish (1 pound) 29.8 20.7 22.0 23.6 28.17 Charcoal (sack of 60 kilograms) 98.6 79.2 110.6 141.7 129.7 Sources: Haïtian Institute of Statistics; and Bank of the Republic of Haïti. [page 38] -37- Table 10. Haïti: Selected Price Indicators (Average for year ended September 30; base year, FY 1975/76 = 100) Consumer GDP Import Export Terms of Real Effective Fiscal Price Implicit Price Price Trade Exchange Rate Year Index 1/ Deflator Index 2/ Index 2/ Index 2/ Index 3/ 1976 100.0 100.0 100.0 100.0 100.0 n 1977 107.4 110.9 108.3 110.9 102.4 1978 104.3 109.3 122.8 126.0 102.6 . 1979 114.4 112.4 161.9 143.7 88.8 en 1980 135.0 134,3 184.0 158.4 86.1 . 1981 146.1 142.4 174.7 148.9 85.3 120.9 1982 158.1 148.0 164.7 144,7 87.9 126.9 1983 171.4 161.2 158.3 140.2 88.6 137.4 1984 185.1 179.1 153.1 136.3 89.1 147.6 1985 200.7 197.1 150.9 136.9 90.7 133.8 1986 217.8 228.5 161.3 164.5 102.0 129.5 1987 206.8 203.4 185.7 183.9 99.1 116.3 1988 212.8 181.1 193.1 196.2 101.6 105.5 1989 236.1 95.1 200.3 193.9 96.8 105.0 1990 284.2 110.8 223.3 211.7 94.8 100.8 1991 338.2 98.6 217.3 210.7 97.0 102.3 1992 410.1 116.6 222.7 216.6 97.3 99.1 1993 487.4 170.1 208.2 205.1 98.5 86.5 1994 669.8 246.2 213.2 216.6 101.6 97.7 1995 872.3 256.6 235.0 238.2 101.4 119.8 1996 1,063.3 285.2 237.3 229.7 96.8 127.0 1997 1,235.6 324.0 219.0 215.4 98.3 149.5 1998 1,392.5 348.5 204.8 2113 103.2 167.7 1999 1,505.3 380.1 213.6 207.7 97.3 180.8 2000 1,678.4 432.5 . . M ne 2001 1,871.1 492.2 . . .. . —— Sources: Haitian Institute of Statistics; and Fund staff estimates. 1/ Data before 1980 were obtained by splicing the old consumer price index bascd on 1948. Before 1991 the index covered only the Port-au-Prince area and since 1992 the whole country. 2/ Estimate based on calendar year data from the IMF World Economic Outlook. 3/ IMF Information Notice System data rebased to FY 1980/81 = 100. [page 39] -38- Table 11, Haiti: Minimum Wage Rates Fiscal Vear Ending September 30 Standard Wage Rate Real Wage (Gourdes per day) Index 1/ 1972 5.0 101.0 1973 5.0 82.5 1974 5.0 71.6 1975 6.1 74,4 1976 6.5 71.7 1977 6.5 67.1 1978 8.0 85.0 1979 8.0 77.6 1980 11.0 90.4 1981 13.2 100.0 1982 13.2 92.4 1983 13.2 85.2 1984 13.2 78.9 1985 15.0 72.8 1986 15.0 67.1 1987 15.0 70.6 1988 15.0 68.7 1989 15.0 61.9 1990 15.0 51.4 1991 15.0 43.2 1992 15.0 35.6 1993 15.0 30.0 1994 15.0 21.8 1995 36.0 16.7 1996 36.0 13.7 1997 36.0 11.8 1998 36.0 10,5 1999 36.0 9,7 2000 36.0 8.7 2001 36.0 7.8 Sources: Ministry of Social Affairs; Haïtian Institute of Statistics; and Bank of the Republic of Haiti. 1/ Last quarter of 1971=100. Deflated by consumer price index for Port-au-Prince until 1991. Deflated by an index covering the whole country beginning in 1992. [page 40] -39- Table 12. Haiti: Summary Operations of the Nonfinancial Public Sector Fiscal Year Ending September 30 Est. 1996 1997 1998 1999 2000 2001! (In millions of gourdes) Central government current account -1,281 417 509 783 94 -862 Current revenue 3,178 4,828 5,371 6,292 6,272 6,509 Current expenditure 4,459 4,410 4,862 5,509 6,178 7,37} Public enterprises current account balance 1/ 177 871 679 434 100 103 Public sector savings -1,104 1,288 1,188 1,218 194 -759 Capital expenditure 2,610 2,929 3,271 3,793 4,232 2,350 Overall balance -3,714 -1,641 -2,083 -2,575 -4,038 -3,109 Financing 3,714 1,641 2,083 2,575 4,038 3,109 External 2/ 2,393 1,752 1,635 1,395 2,192 532 Domestic 3/ 1,321 -111 448 1,180 1,846 2,577 Ofwhich Central bank 1,081 -38 687 1,090 1,951 2,248 (In percent of GDP) Central government current account balance -2.7 0.8 0.8 1.1 0.1 -1.0 Public enterprises current account balance 0.4 1.6 1.1 0.6 0.1 0.1 Public sector savings -2.4 2.4 1.9 L.8 0.3 -0.9 Capital expenditure 5.6 5.4 5.2 5.5 5.5 2.6 Overall balance -8.0 -3.0 -3.3 -3.7 -5.2 -3.5 Financing 8.0 3.0 3.3 3.7 52 3.5 External 2/ 5.1 3.2 2.6 2.0 2.8 0.6 Domestic 3/ 2.8 -0.2 0.7 1.7 24 2.9 Ofwhich Central bank 2.3 -0.1 1.1 1.6 2.5 2.5 Memorandum item: Nominal GDP (millions of gourdes) 46,647 54,005 62,997 69,254 77,580 89,048 Sources: Ministry of Economy and Finance; Bank of the Republic of Haiti; and Fund staff estimatcs. 1/ Refers to five major cnterprises (sec Table 15). 2/ Includes budgctary support, project and technical assistance, and support for the clearance of arrears accumulated in FY 1995. 3/ Includes domestic arrears. [page 41] - 40 - Table 13. Haiti: Summary Operations of the Central Government 1/ Fiscal Year Ending September 30 1996 1997 1998 1999 2000 2001 {In millions of gourdes) Total revenue 3,417 4,828 5,371 6292 6,272 6,509 Current revenue 3,178 4,770 5,252 6084 6,256 6,509 Internal 2,678 3,731 4,174 4,779 4,605 4,504 Customs 499 1,039 1,078 1306 1,651 1,772 Transfers from public enterprises 238 57 119 207 16 0 Total expenditure 4,604 5,084 5,838 6,827 7,850 8,728 Current expenditure 4,459 4355 4680 5310 5,795 7,150 Wages and salaries 2,083 2698 2815 2926 3,243 3,387 Operations 895 1473 1434 1735 1,794 2,678 Interest payments 211 374 437 616 628 767 External 143 206 215 339 323 436 Internal 68 168 222 276 305 331 Transfers and subsidies 2/ 622 268 243 326 292 369 Other 3/ 648 -459 -249 -293 -161 -51 Capital expenditure 4/ 145 737 1,219 1,488 2,063 1,578 Net lending û -7 -11 30 -9 0 Current account balance -1,280 416 571 715 4él -641 Overall balance excluding cost of reforms -1,187 -257 -517 -535 -1,577 -2,219 Cost of structural reforms 0 55 181 435 387 221 Overall balance including cost of reforms -1,187 -313 -699 -970 -1,964 -2,440 Financing 1,187 313 699 970 1,964 2,440 Extemal 77 294 390 -280 -26 25 Domestic 5/ 1,110 18 309 1,249 1,990 2,415 Of which Central bank 1,081 -38 687 1,090 1,951 2,248 (ln percent of GDP) Total revenue 7.2 8.9 8.5 9.1 8.1 7.3 Current revenue 67 LAS 8.3 8.8 8.1 73 Transfers from public enterprises 0.5 0.1 0.2 03 0.0 0.0 Total expenditure 9.7 9.4 9.3 9.9 10.1 9.8 Current expenditure 9.4 8.1 7.4 77 T5 8.0 Capital expenditure 0.3 14 1.9 2.1 27 1.8 Current account balance -2.7 0.8 0.9 11 0.6 0.7 Overall balance excluding cost of reforms -2.5 0.5 -0.8 -0.8 -2.0 -2.5 Cost of structural reforms 0.0 0.1 0.3 0.6 0.5 0.2 Overall balance including cost of reforms -2.5 -0.6 -1.1 -14 -2.5 -2.7 Financing (net) 2.5 0.6 11 1.4 2.5 27 External financing 0.2 0.5 0.6 -0.4 -0.1 0.0 Domestic financing 2.3 0.0 0.5 1.8 2.6 2.7 Ofwhich Central bank 2.3 0.1 1.1 1.6 2.5 2.5 Memorandum item: Nominal GDP (millions of gourdes) 47,537 54,005 62,997 69,254 77,580 89,048 Sources: Ministry of Economy and Finance; Bank of the Republic of Haiti; and Fund staff estimates. 1/ Does not include expenditures on projects and technical assistance financed with concessional loans and grants. 2/ Includes transfers to public enterprises. 3/ Comprises spending over discretionary checking accounts, regular float, extraordinary carry-over, and discrepancies. 4/ May include outlays on goods and services and other current expenditures. 5/ Includes domestic arrears. [page 42] -41- Table 14. Haiti: Central Government Current Revenue Fiscal Year Ending September 30 TT Pr 1996 1997 1998 1999 2000 2001 (In millions of gourdes) Total current revenue 3,178 4,770 5,252 6,084 6,256 6,509 Customs 499 1,039 1,078 1,306 1,651 1,772 Internal 2,678 3,731 4,174 4,778 4,605 4,737 General sales tax 619 1,271 1,420 1,555 1,737 2,040 Internal 214 313 362 425 1,276 531 Customs 405 958 1,058 1,130 461 1,509 Taxes on income and profits 485 688 671 921 1,255 1,231 Corporate 223 378 410 516 540 338 Individual 263 310 261 405 715 893 Taxes on property Le 10 3 0 0 Ô Other taxes and fees en 1,761 2,080 2,302 1,613 1,466 Excise 495 705 855 971 258 275 Petroleum 460 563 459 538 1 84 Cigarette su 23 21 18 36 21 Other excises . 119 375 415 221 170 Motor vehicles ee 57 82 103 181 156 Consular services 235 26 5 6 82 59 Other 2 973 1,138 1,222 1,093 976 (In percent of GDP) Total current revenue 6.8 8.8 8.3 8.8 8.1 7.3 Customs 1.1 1.9 1.7 1.9 2.1 2.0 Internal 5.7 6.9 6.6 6.9 5.9 53 General sales tax 13 2.4 2.3 2.2 2.2 2.3 Internal 0.5 0.6 0.6 0.6 1.6 0.6 Customs 0.9 L8 17 1.6 0.6 17 Taxes on income and profits 1.0 13 1.1 13 1.6 1.4 Corporate 0.5 0.7 0.7 0.7 0.7 0.4 Individual 0.6 0.6 0.4 0.6 0.9 1.0 Taxes on property …. 0.0 0.0 0.0 0.0 0.0 Other taxes and fees . 33 33 3.3 2.1 L.6 Memorandum item: Nominal GDP (millions of gourdes) 46,647 54,005 62,997 69,254 77,580 89,048 Sources: Ministry of Economy and Finance; and Bank of the Republic of Haiti. [page 43] - 42 - Table 15. Haiti: Consolidated Accounts of the Main Public Enterprises 1/ (In millions of gourdes) Fiscal Year Ending September 30 Est. 1996 1997 1998 1999 2000 2001 Total revenue 1,955.5 2,528.7 2,718.1 2,612.9 2,415.0 2,242.5 Domestic revenue 1,039.6 1,240.2 1,261.9 1,374.0 1,4792 1,611.8 Teleco international services 506.7 1,236.7 1,330.0 1,181.7 875.9 526.7 Other 2/ 409.2 SE.8 126.2 57.2 59.9 104.0 Total expenditure 2,266.0 1,993.4 2,344.3 2,646.5 3,031.7 2,417.7 Current 1,540.6 1,601.2 1,920.2 1,971.4 2,2989 2,139,5 Wages 451.3 503.4 579.8 729.6 831.2 818.3 Interest 115.4 105.0 184.1 120.1 106.8 91.6 Repair and maintenance 136.0 149.4 242.2 187.0 203.5 120.6 Other 3/ 837.9 843.3 914.2 934.6 1,1574 1,108.9 Capital 718.0 383.8 413.2 661.9 717.1 265.0 Transfers (net) -238.0 -57.0 -119.0 -207.0 -16.0 0.0 Current account balance 4/ 176.9 870.5 678.9 434,5 100.1 103.0 Overall balance -541.1 486.7 265.7 -227.4 -617.0 -162.0 Financing 541.1 -486.7 -265.7 227.4 617.0 162.0 Central bank 110.5 -8.6 75.4 -116.7 147.3 120.0 Other 5/ 430.6 -478.1 -341.1 344.1 469.7 42.0 | Sources: Public enterprises, Bank of the Republic of Haiti, Ministry of Economy and Finance; and Fund staff estimates, 1/ Cash basis consolidation, 2/ includes gain or loss from the exchange rate fluctuation. 3/ Does not include depreciation expenditure. 4/ IMcludes transfers. 5/ Includes external financing. [page 44] -43- Table 16. Haiti: Accounts ofthe Telecommunications Company (in millions of gourdes) Fiscal Year Ending September 30 Prov. 1996 1997 1998 1999 2000 2001 Balance sheet Assets 3,193.4 3,656.1 4,294.8 4,748.1 4,822.5 4,822.5 Cash and receivables 1,289.3 1,672.2 2,090.1 2,124.0 1,968.8 1,968.8 Fixed asscts (depreciatcd) 570.9 627.5 835.3 1,254.7 1,484.3 1,484.3 Lending to public sector 182.7 182.7 182.7 182.7 182.7 182.7 Long-term investments 106.1 129.2 142.2 142.2 142.2 142.2 Other assets 1,044.5 1,044.5 1,044.5 1,044.5 1,044.5 1,044.5 Liabilities 3,193.4 3,656.1 4,294.8 4,748.1 4,822.5 4,822.5 Short-term debt and payables 1,282.7 1,120.8 1,332.5 1,603.7 1,759.0 1,759.0 Long-term debt 124.0 198.8 198.6 164.0 223.5 223.5 Capital and undistributed profits 1,786.7 2,336.6 2,763.8 2,980.5 2,840.0 2,840.0 Profit and loss statement Total revenue 1,027.5 1,387.7 1,572.0 1,382.8 1,152.4 1,152.4 National services 115.1 109.4 136.9 152.8 228.0 228.0 International services 506.7 1,236.7 1,330.0 1,181.7 875.9 875.9 Other 1/ 405.7 41.6 105.1 483 48.5 48.5 Total expenditure 495.0 551.9 930.8 1,135.0 1,005.8 1,005.8 Current 440,3 473.6 846.I 1,032.1 900.7 900.7 Wages 182.6 219.2 263.7 396.2 478.1 478.1 Interest 9.5 7.3 96.8 47.1 39.8 39.8 Repair and maintenance 27.0 343 33.8 SES 64.9 64.9 Other 221.2 212.8 451.8 536.9 317.9 317.9 Depreciation 54.7 78.3 84.7 102.9 105.0 105.0 Earnings before taxes 532.5 835.8 641.2 247.8 146.6 146.6 Taxes and transfers 186.3 284.4 249,7 86.6 53.5 53.5 Earnings after taxes 346.2 551.4 391.5 161.2 93.1 93.1 Cash basis accounts Gross capital expenditure 151.4 134.9 292.5 522.3 334.7 334.7 Transfers from government -114.7 -54.8 -249,7 -14,0 -4.4 -4,4 Current balance 472.5 859.3 476.2 336.8 2472 247.2 Overall balance cash basis 321.1 7244 183.8 -185.6 -87.4 -87.4 Financing -321.1 -724.4 -183.8 185.6 87.4 87.4 Domestic -299.6 -589.2 -187.5 -39.3 80.1 18.5 BRH 110.7 10.8 71.2 -114.0 150.0 30.0 Commercial banks 8.4 0.0 0.0 0.0 0.0 0.0 Other -418.7 -600.0 -258.8 74.7 -69.9 -11.5 External -21.5 -135.2 3.8 224.9 7.3 68.9 Sources: Telephone company, and Haitian authorities. 1/ Includes gains and losses from exchange rate changes. [page 45] - 44e Table 17. Haiti: Accounts of the Electricity Company (In millions of gourdes) Fiscal Year Ending September 30 Prov. 1996 1997 1998 1999 2000 2001 Balance sheet Assets 1,856.2 1,867.4 2,250.5 2,337.0 2,298.6 2,361.1 Cash and receivables 300.2 269.5 347.5 392.1 417.9 516.0 Fixed assets (depreciated) 1,457.0 1,422.5 1,708.9 1,647.0 1,570.9 1,510.0 Other assets 98.9 175.4 194.1 298.0 309.8 335.1 Liabilities 1,856.2 1,867.4 2,250.5 2,337.0 2,298.6 2,361.1 Short-term debt and payables 1,583.6 1,752,3 1,891.2 1,899.6 2,388.7 2,513.3 Long-term debt 2,618.2 3,049.7 3,352.3 3,536.8 5,741.3 5,807.0 Capital and undistributed profits -2,345.6 -2,934.6 -2,993.0 -3,099.3 -5,831.4 -5,959.2 Profit and loss statement Total revenue 461.0 495.4 553.5 585.0 601.1 680.0 Sales 457.5 485.2 532.4 576.2 589.6 670.7 Private sector 385.5 406.1 441.3 489.6 488.6 517.3 Public sector 72.0 79.1 91.1 86.6 101.1 153.3 Other 3.5 10.2 21.1 8.8 11.4 9.3 Total expenditure 768.3 1,046.9 706.8 560.6 989.7 910.0 Current 694.2 711.6 590.0 453.5 882.7 800.0 Wages mn . en En . 130.0 Interest 88.9 88.9 78.1 64.7 53.5 70.0 Oil purchases 272.7 321.7 247.1 196.6 420.0 550.0 Repair and maintenance 93.3 87.7 178.8 96.9 98.0 50.0 Other en .. En . 0.0 Depreciation and special charges 74.1 335.2 116.8 107.1 107.0 110.0 Earnings before taxes -307.3 -551.5 -153.3 24.5 -388.6 -230.0 Taxes and transfers 2.5 2.9 3.2 3.2 3.4 3.2 Earnings after taxes -309.8 -554.3 -156.4 21.2 -392.0 -233.2 Cash basis accounts Gross capital expenditure 1.8 22.8 34 32,5 25.0 20.0 Transfers from government es 153.8 0.0 0.0 0.0 250.0 Current balance mn -62.4 -36.5 131.5 -281.6 130.0 Overall balance cash basis -85.2 -39.9 99.1 -306.6 110.0 Financing . 85.2 39.9 -99.1 306.6 -110.0 Domestic un 85.2 39.9 -99.1 306.6 -110.0 Commercial banks mn . . me En External 0.0 0.0 0.0 0.0 0.0 0.0 Sources: Electricity company, and Haitian authorities. [page 46] -45- Table 18. Haiti: Accounts of the Port Authority (in millions of gourdes) Fiscal Year Ending September 30 1995 1996 1997 1998 Balance sheet Assets 560.1 608.2 985.3 1,052.0 Cash and receivables 119.3 142.3 506.5 555.1 Fixed assets (depreciated) 312.5 338.5 352.6 360.7 Lending to public sector -0.4 -0.4 -0.4 -0.4 Other assets 128.7 127.8 126.6 136.6 Liabilities 560.1 608.2 985.3 1,052.0 Short-term debt and payables 192.4 198.6 222.6 242.4 Long-term debt 148.0 174.7 165.3 155.9 Capital and undistributed profits 219.8 234.9 597.4 653.7 Profit and loss statement Total revenue 245.7 344.6 4193 440.9 Total expenditure 199.0 301.5 310.1 345,3 Current 189.0 292.1 299.5 331.8 Wages . . . . Repair and maintenance 7.6 9.5 20.3 17.4 Interest 4,5 4,3 4.6 4,3 Other ne . en .. Depreciation 10,9 9.5 10.7 13,5 Earnings before taxes 46.7 43.1 109.2 95.6 Taxes and transfers 38.2 22.0 18.0 18.0 Earnings after taxes 8.6 21.1 91.2 77.6 Cash basis accounts Gross capital expenditure 43 4.5 7.1 13.5 Transfers from government -38.2 -22.0 -18.0 -18.0 Current balance 18.6 30.6 101.8 91.1 Overall balance cash basis 14.2 26.0 94.7 77.6 Financing -14.2 -26.0 -94,7 -77.6 Domestic . -52.7 -85.3 -68.2 BRH . -5.7 -5.4 11.0 Commercial banks un 0.0 0.0 0.0 Other " -47.0 -79.9 -79.1 External . 26.7 -9.4 -9.4 Sources: Port Authority; and Haitian authorities. [page 47] - 46 - Table 19. Haiti: Accounts of the Airport Authority (In millions of gourdes) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Balance sheet Assets 128.0 162.1 175.4 201.2 226.5 Cash and receivables 67.9 94.8 78.9 97.5 103.1 Fixed assets (depreciated) 60.1 67.3 96.5 103.7 123.4 Liabilities 128.0 162.1 175.4 2012 226.5 Short-term debt and payables 22.7 42.1 49.6 62.6 33.8 Long-term debt 47.1 47.2 47.2 472 45.2 Capital and undistributed profits 58.2 72.9 78.7 91.4 147.5 Profit and loss statement Total revenue 74.9 79.1 80.8 90.4 112.6 Total expenditure 718 644 75.6 80.6 97.9 Current 64.4 56.0 64.7 67.4 82.2 Wages 31.8 31.2 34.2 33.3 41.8 Interest 0.0 0.0 0.0 0.0 0.0 Repair and maintenance 4.9 3.5 3.9 6.1 8.8 Other 277 21.3 26.6 28.0 31.6 Depreciation 74 8.4 10.9 13.2 15.7 Earnings before taxes 3.1 147 5.1 9.7 14.7 Taxes and transfers 0.0 0.0 0.0 0.0 0.0 Earnings after taxes 3.1 14.7 5.1 9.7 147 Cash basis accounts Gross capital expenditure 18.4 18.9 42.5 30.7 17.9 Transfers from government 0.0 0.0 0.0 0.0 0.0 Current balance 10.5 23.1 16.0 23.2 30.4 Overall balance cash basis -7.9 CA! -26.4 ue 12.6 Financing 7.9 -4.1 26.4 . -12.6 Domestic 74 6.6 30.5 ee -12.6 BRH -3.4 5.8 3.6 . 0.0 Commercial banks 0.0 0.0 0.0 ee 0.0 Other 10.8 0.8 27.0 " -12.6 External 0.5 -10.7 -4.1 0.0 Sources: Airport Authority; and Haitian authorities. [page 48] -47- Table 20. Haiti: Accounts of the Water Supply Company (In millions of gourdes) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Balance sheet Assets 331.3 486.1 631.1 681.8 963.8 Cash and receivables 157.8 140,9 139.4 156.2 152.8 Fixed assets (depreciated) 135.2 310.8 432.7 469.4 744.4 Other assets 38.3 34.4 59.0 56.2 66.6 Liabilities 331.3 486.1 631.1 681.8 963.8 Short-term debt and payables 59.8 105.1 102.9 128.5 216.4 . Long-term debt 251.6 377.2 576.9 604.1 547.1 Capital and undistributed profits 19.9 3.8 -48.8 -50.8 200.3 Profit and loss statement Total revenue 47.6 65.2 71.0 113.7 107.9 Total expenditure 45.3 68.8 103.4 112.8 136.2 Current 42.2 60.5 87.6 86.6 100.8 Wages 24.1 29.0 36.7 45.0 51.1 Interest LS 42 4,8 4.0 9.2 Repair and maintenance 1.3 3.6 8.3 14.8 14.3 Other 15.0 23.7 37.8 22.8 26.2 Depreciation 3.1 83 15.8 26.2 35.4 Earnings before taxes 2.3 -3.6 -32.4 0.9 -28.3 Taxes and transfers 0.9 0.0 0.0 0.0 0.0 Earnings after taxes 2.3 -3.6 -32.4 0.9 -28.3 Cash basis accounts Gross capital expenditure 105.5 185.0 61.3 62.9 310.4 Transfers from government 0.0 0.0 0.0 0.0 0.0 Current balance 5.4 4.7 -16.6 27.1 7.1 Overall balance cash basis -100.1 -180.3 -77.9 -35.8 -303.3 Financing 100.1 180.3 77.9 35.8 303.3 Domestic -85.2 54.7 -121.8 612.7 3633 BRH -9.8 2.6 6.8 2.6 0.0 Commercial banks 0.0 0.0 0.0 0.0 0.0 Other -75.4 52.1 -128.6 610.1 303.3 External 185.3 125.6 199.7 -576.9 0.0 Sources: Water Supply Company, and Haitian authorities. [page 49] - 48 - Table 21. Haiti: Accounts of the Central Bank of Haiti (In millions of gourdes, unless otherwisc indicated) Fiscal Year Ending September 30 Prov. 1997 1998 1999 2000 2001 Net foreign assets 1/ 2,754.3 3,281.4 3,695.5 4,881.2 4,593.7 Assets 1/ 4,503.6 4,931.3 5576.9 7710.9 7,062.5 Liabilities -1,749.3 -1,649.9 -1,881.4 -2,829.7 -1468.8 Liabilities to the IMF 2/ -724.9 -636.6 -855.1 -1,116 -893.6 Other -1,024.4 -1,013.4 -1,026 -1,714 -1,5753 Net domestic assets 600.4 234.8 294.4 402.5 1,059.8 Net credit to public sector 5,661.4 6,263.5 7,665.4 9,491.9 12,0843 Central government 6,360.2 6,930.1 7,952.5 9,885.2 12,133.8 Special accounts 3/ -558.3 -521.0 -214.0 -184.5 -193 Rest of public sector -140.5 -145.7 -73.1 -208.8 -30.2 Net claims on commercial banks -4,187.6 -5,532.3 -7,029.3 -8,465.2 -10,446.7 Cash-in-vault and reserve deposits -3,105.1 -3,810.6 -3,764.1 -6,899.2 -7,669.7 BRH bonds -954.0 -1,629.0 -3,105.0 -1,30L.0 -2,777.0 Net claims on other financial institutions 13.2 -4.5 -95.1 -59.2 -70.2 SDR allocation -316.9 -316.4 -322.0 -503.7 -450.1 Capital and surplus -866.1 -927,4 -973.8 -4,101.3 -3,560.3 Other 140.8 512.5 760.9 3,696.4 2,983.5 Currency in circulation 3,354.7 3,516.2 3,989.9 5,283.7 5,653.5 Sources: Bank of the Republic of Haiti; and Fund staff estimates. 1/ Includes commercial banks' foreign currency deposits. 2/ Includes liabilities to the general resources and ESAF Trust Accounts. 3/ Special accounts of donors. [page 50] - 49 - Table 22. Haiti: Accounts of Commercial Banks 1/ (In millions of gourdes, unless otherwise indicated) Fiscal Year Ending September 30 Prel. 1997 1998 1999 2000 2001 Net foreign assets 1,815 1,834 1,910 4,754 3,863 Assets 2,108 2,047 2,116 5,349 4,374 Liabilities -292 -214 -206 -595 -S11 Claims on the BRH 4,099 5,412 6,873 8,497 10,647 Currency holdings 628 710 735 836 860 Deposits with the BRH (including reserves) 2,517 3,073 3,034 6,360 7,010 BRH bonds 954 1,629 3,105 1,301 2,777 Net domestic assets 8,515 9,738 11,184 14,509 14,430 Net claims on the public sector -430 -511 -249 -216 -71 Central government -128 -199 79 29 ol Special accounts 2/ -298 -309 -324 -240 -159 Rest of the public sector -3 -3 4 -5 -3 Credit to the private sector 7,724 8,885 9,658 13,342 12,217 In gourdes 6,025 6,215 5,847 7,062 6,995 In US. dollars 1,700 2,669 3,811 6,279 5,222 Net claims on other financial institutions -13 -65 -31 -138 -120 Interbank float 352 389 502 -85 574 Unclassified assets 882 1,040 1,303 1,605 1,830 Liabilities to the BRH 71 39 35 498 32 Liabilities to the private sector 14,358 16,945 19,932 27,262 28,907 Deposits 13,059 15,308 18,168 24,905 26,121 In gourdes 9,514 10,816 12,443 14,084 15,395 In US. dollars 3,544 4,492 5,725 10,821 10,725 Demand deposits 3,288 3,833 4,522 5,865 6,322 Saving deposits 6,008 6,472 7,739 9,897 10,035 Time and other deposits 3,763 5,004 5,907 9,144 9,764 Private capital and surplus 1,300 1,637 1,764 2,357 2,787 (Percentage change from end-period a year earlier) Private sector deposits 17.1 17.2 18.7 37.1 49 In gourdes 12.0 137 15.0 13.2 93 In US. dollars 33.5 26.7 27.4 89.0 -0.9 Credit to private sector 47.1 15.0 8.7 38.1 -8.4 In gourdes 30.9 3.2 -5.9 20.8 -0.9 In US. dollars 161.4 57.1 42.8 64.8 -16.8 Memorandum items: Percent in foreign currency Bank deposits 27.1 29.3 31.5 434 41.1 Credit to the private sector 22.0 30.0 39.5 47.1 42.7 Net foreign assets of commerical banks/ Dollar deposits 51.2 40.8 33.4 43.9 36.0 Sources: Bank of the Republic of Haiti; and Fund staff estimates. 1/ Includes the povernment-owned banks, BNC and BPH. 2/ Special accounts of donors. [page 51] - 50- Table 23. Haiti: Consolidated Accounts of the Banking System (in millions of gourdes, unless otherwise indicated) Fiscal Year Ending September 30 - Prel. 1996 1997 1998 1999 2000 2001 Net foreign assets 3,883 4,570 5,115 5,605 9,635 8,457 Assets 5,169 6,611 6,979 7,693 13,060 11,436 Liabilities -1,287 -2,041 -1,864 -2,087 -3,424 -2,980 Üsc of Fund credit -374 +725 -637 -855 -1,116 -894 Other -913 -1,317 -1,227 -1,232 -2,308 -2,086 Net domestic assets 10,340 11,844 13,709 16,552 20,554 23,318 Net credit to the public sector 5,925 5,232 5,753 7,417 9,276 12,013 Central government 6,278 6,232 6,731 8,032 9,914 12,224 Special accounts 1/ -350 -857 -830 -538 424 -178 Rest of public sector -3 -143 -148 -77 -214 -33 Credit to the private sector 5,393 7,880 9,124 9,946 13,685 12,736 Net claims on other financial institutions -3 0 -70 -126 -197 -190 Capital and surplus -1,663 -2,166 -2,564 -2,738 -6,458 6,347 Interbank float 130 192 230 311 -551 742 Net other assets 558 706 1,236 1,742 4,798 4,363 Broad money 14,223 16,413 18,825 22,158 30,189 31,774 Narrow money 6,360 6,643 7,349 8,512 11,148 11,976 Currency in circulation 3,070 3,355 3,516 3,990 5,284 5,654 Demand deposits 2/ 3,289 3,288 3,833 4,522 5,865 6,322 Time and savings deposits 2/ 7,863 9,771 11,476 13,646 19,041 19,798 (Percentage change from end-period a year earlier) Broad money 10.2 15.4 14.7 17.7 36.2 5.3 Narrow money 20.8 44 10.6 15.8 31.0 T4 Currency in circulation -1.9 93 48 13.5 32.4 7.0 Demand deposits 2/ 54.2 0.0 16.6 18.0 29.7 T8 Time and savings deposits 2/ 2.9 243 17.4 18.9 39.5 4.0 (Percentage change relative to broad money a year earlier) Net forcign assets -3.5 4.8 3.3 2.6 18.2 -3.9 Net domestic assets 137 10.6 11.4 15.1 18.1 92 Credit to the nonfinancial public sector 9.5 -4.9 3.2 8.8 8.4 9.1 Credit to the private sector 8.3 17.5 7.6 44 16.9 -3.1 Other -4.0 -2.0 0.6 1.9 -72 32 Memorandum item: Money multiplier 3/ 4.6 4.9 54 5.6 57 5.6 Sources: Bank of the Republic of Haiti; and Fund staff estimates. 1/ Special accounts of donors. 2/ Includes dollar-denominated deposits 3/ Ratio of broad money to currency in circulation. [page 52] - 51- Table 24. Haiti: Sectoral Distribution of Commercial Bank Credit 1/ Fiscal Year Ending September 30 1996 1997 1998 1999 2000 (In millions of gourdes) Total 4,072.0 5,520.3 7,605.8 8,282.5 11,822.70 Retail and wholesale trade 1,341.2 2,180.0 3,470.5 4,392.2 6,365.6 Loans to individuals 1,023.1 1,483.2 1,804.2 1,605.2 2,252.8 Manufacturing 1,176.7 1,347.8 1,573.5 1,338.5 1,685.9 Electricity, gas, and water 149.8 161.0 156.3 9.8 11.6 Construction 72.3 129.3 204.1 387.7 442.7 Insurance and real estate 73.0 87.8 266.8 313.7 436.4 Transport and communication 54.7 42.4 35.4 160.6 532.0 Agriculture 48.9 30.4 27.9 20.0 1.8 Other services 132.3 58.4 67.1 54.8 93.9 (In percent of total credit) Total 100.0 100.0 100.0 100.0 100.0 Retail and wholesale trade 32.9 39.5 45.6 53.0 53.8 Loans to individuals 25.1 26.9 23.7 19.4 19.1 Manufacturing 28.9 24.4 20.7 16.2 143 Electricity, gas, and water 3.7 2.9 2.1 0.1 0.1 Construction 1.8 2.3 2.7 4.7 3.7 Insurance and real estate 1.8 1.6 3.5 3.8 3.7 Transport and communication 1.3 0.8 0.5 1.9 4.5 Agriculture 1.2 0.6 0.4 0.2 0.0 Other services 3.2 1.1 0.9 0.7 0.8 Source: Bank of the Republic of Haïti. 1/ Excludes loans below G 75,000. [page 53] - 52 - Table 25. Haiti: Origin, Destination, and Financing of Bank Credit (In millions of gourdes) Fiscal Year Ending September 30 Prel. 1997 1998 1999 2000 2001 Total Credit 13460.3 15662.7 18638.2 23413.9 26554.4 Origin 13460.3 15662.7 18638.2 23413.9 265544 BRH 5104.9 6083.6 76457 9,371.40 11,956.64 Central government and special accounts 1/ 5801.9 6409.1 7738.5 9,700.77 12,114.52 Rest of public sector 1/ -140.5 -145.7 -73.1 -208.83 -30.22 Private sector 155.6 239.6 288.2 343.54 519.32 Other -712.0 -419.4 -308.0 -464.09 -646.98 Commercial banks 8163.0 9349.2 10681.6 14,593.30 13,855.68 Central government and special accounts 1/ -426.8 -508.0 -244,8 -210.89 -68.46 Rest of public sector 1/ -3.0 -2. -3.8 -5.05 -2.68 Private sector 7724.22 8884.6 9657.9 13,341.72 12,217.00 Other 868.7 975.2 1272.2 1,467.52 1,709.81 Interbank float 192.33 229.84 310.89 -550.75 742.10 Destination 13460.3 15662.7 18638.2 23413.9 26554.4 Public sector 5231.6 5752.8 7416.8 9,276.00 12,013.17 Central government and special accounts 1/ 5375.1 5901.2 7493.7 9,489.88 12,046.06 Rest of public sector 1/ -143.5 -148.4 -76.9 -213.88 -32.90 Private sector 78797 9124.2 9946.2 13,685.27 12,736.32 Other 156.6 555.8 964.2 1,003.44 1,062.84 Interbank float 192.3 229.8 310.9 -550.75 742.10 Financing 13460.3 15662.7 18638.2 234139 26554.4 Liabilities to private sector 17713.1 20461.3 239214 32545.5 34561.0 BRH 3354.7 3516.2 3989.9 5283.7 5653.5 Commercial banks 14358.3 16945. 19931.6 27261.8 28907.5 Net foreign assets -4569.7 -5115.1 -5605.3 -9635.2 -8456.6 BRH -2754.3 -3281.4 -3695.5 -4881.2 -4593.7 Commercial banks -1815.4 -1833.7 -1909.8 -4754.0 -3862.9 SDR allocation 316.9 316.4 322.0 503.7 450.1 Sources: Bank of the Republic of Haiti; and Fund staff estimates. 1/ Credit less deposits. [page 54] -53- Table 26. Haiti: Annual Change in Credit Extended by the Banking System (in millions of gourdes) Fiscal Year Ending September 30 Prel. 1997 1998 1999 2000 2001 Total credit 1935.0 2202.4 2975.5 4775.8 3140.5 Origin BRH -293.8 978.7 1562.1 1725.7 2585.2 Central government and special accounts 1/ -166.0 607.2 1329.4 1962.3 2413.7 Rest of public sector 1/ -138.1 -5.2 72.6 -135.8 178.6 Private sector 147 84.0 48.7 553 175.8 Other -4.4 292.7 111.4 -156.1 -182.9 Commercial banks 2166.9 1186.2 1332.4 3911.7 -737.6 Central government and special accounts 1/ -386.7 -81.1 263.2 33.9 142.4 Rest of public sector 1/ -2.5 03 -1.1 -12 2.4 Private sector 2472.3 1160.5 773.3 3683.8 -1124.7 Other 83.8 106.5 297.0 195.3 242,3 Interbank float 61.9 37.5 81.1 -861.6 1292.9 Destination Public sector -693.3 5212 1664.0 18592 2737.2 Central government and special accounts 1/ -552.7 526.1 1592.6 1996.1 2556.2 Rest of public sector 1/ -140.6 -49 71.5 -137.0 181.0 Private sector 2486.9 1244,5 822.0 3739.1 -948.9 Other 794 3992 408.4 39.2 59.4 Interbank float 61.9 37.5 81.1 -861.6 1292.9 Financing Liabilities to private sector 2601.8 27483 3460.1 8624.1 2015.5 BRH 2843 161.5 473.6 1293.8 369.8 Commercial banks 2317.5 2586.7 2986.5 7330.2 1645.7 Net foreign assets -687.1 -545.4 490.1 -4030.0 1178.6 BRH -722.7 -527.1 414.1 -1185.7 287.5 Commercial banks 35.6 -18.3 -76.1 -2844.2 891.1 SDR allocation 20.3 -0.5 5.6 181.7 -53.6 (Change with respect to total Liabilities Lo the private sector 12 months earlier) Total credit 12.8 12.4 145 20.0 9.6 Origin BRH -1.9 5.5 7.6 72 7.9 Commercial banks 143 6.7 6.5 16.4 -2.3 Interbank float 0.4 0.2 04 -3.6 4.0 Destination Public sector -4.6 2.9 8.1 7.8 84 Central government and special accounts 1/ -3.7 3.0 7.8 83 7.9 Rest of public sector 1/ -0.9 0.0 0.3 0.6 0.6 Private sector 16.5 7.0 4.0 15.6 -2.9 Other 0.5 2.3 2.0 0.2 02 Interbank float 0.4 02 0.4 -3.6 4.0 Sources: Bank of the Republic of Haiti; and Fund staff cstimates. 1/ Credit less deposits. [page 55] - 54- Table 27. Haiti: Summary Indicators of Commercial Banking Sector —————————————".—…——————————————————_— Fiscal Year Ending September 30 Dec. Mar. Jun. 1997 1998 1/ 1999 2000 2000 2001 Capital Capital, reserves, undistributed profits/totai assets 54 5.7 5.2 5.1 5.7 5.5 5.8 Capital/risk-weighted assets (capital adequacy ratio) Le. en 9.4 12.1 13.5 13.3 14.1 Nonperforming loans Nonperforming loans/total loans 4.9 8.6 7.9 6.8 9.1 T8 8.9 Excluding BNC 3.2 67 6.5 5.5 7.5 63 7.6 Provisions/nonperforming loans 79.5 56.2 62.3 62.6 56.4 71.0 65.0 Nonperforming loans/capital, reserves, undistributed profits 8.5 30.3 247 20.5 29.1 16.1 20.3 Excluding BNC 1.8 27.5 213 17.7 25.7 13.4 19.8 Profitability Return on assets (in percent) 1.4 0.6 1.0 17 0.8 19 1.4 Excluding BNC 1.4 1.1 0.9 1.6 0.6 14 11 Return on equity (in percent) 28.1 10.1 18.5 32.8 14.1 333 24.7 Net interest income/gross interest income 59.3 55.8 60.2 60.2 53.4 54.6 55.4 Operating costs/net interest and noninterest income 75.5 78.4 77.2 69.4 76.3 70.3 74.9 Excluding BNC 74.9 75.9 78 70.0 80.1 73.1 79.2 Net income/employee 634.4 594.6 606.5 793.4 830.7 873.5 756.9 Number of branches 68 82 99 115 116 118 121 Number of employees 2,234 2,591 2,659 2,989 2,991 3,179 3,077 Liquidity Total loans/total deposits 2/ 58.6 57.3 53.8 53.9 52.2 482 47.5 Foreign currency loans/foreign currency deposits 3/ 48.0 59.4 66.6 58.0 53.1 47.4 48.2 © Foreign currency loans/total loans 21.6 29.3 38.3 45.9 38.9 38.1 38.1 Foreign currency deposits/total deposits 27.1 29.3 31.5 43.4 38.9 39.9 39.8 Intermediation Private sector bank deposits/broad money 79.6 81.3 82.0 82.5 80.1 822 82.5 Private sector credit/GDP 14.6 14.5 14.4 17.6 ue En A Sources: Bank of the Republic of Haiti; and Fund staff estimates. 1/ Criteria for loan classifications were tightened in March 1998. 2/ Denominated in gourdes and in foreign exchange. 3/ Foreign exchange operations of the private sector only. [page 56] -55- Table 28. Haiti: Interest Rates (In percent per annum) Gourde Denominated Dollar Denominated Memo: Deposits 1/ 91-day Deposits 1/ Annual Time Savings Lending 1/ BRH Bonds Time Savings Lending 1/ Inflation 2/ 1996 March 11.0 5.5 29.0 es = en eu. 20.3 June 11.5 53 27.8 ce es en en 22.0 September 113 5.5 274 en ms en mn 20.1 December 10.5 5.5 23.0 19.4 En en . 14.6 1997 March 10.0 5.5 210 153 . = . 16.9 June 10.0 5.5 20.0 18.0 . Es "A 16.9 September 113 5.5 21.5 17.7 43 2.0 12.5 17.0 December 10.5 5.5 23.5 17.2 48 28 12.0 15.6 1998 March 12.5 5.5 22.5 22.5 43 28 10.8 12.8 June 13.5 5.5 23.5 23.5 45 2.8 110 10.9 September 14.8 5.5 22.5 213 4.8 3.0 125 83 December 11.0 3.0 23.5 9.2 5.0 2.8 14.0 7.4 1999 March 7.5 3.0 23.0 10.3 44 15 12.0 7.9 June 7.0 33 24.5 103 38 1.5 12.5 8.1 September 6& 3.5 22.5 10.3 4.0 2.3 12.5 9.9 December 9.6 3.5 22.5 21.1 48 2.0 13.5 97 2000 March 9.8 33 243 233 3.8 18 14.0 12.0 June 10.5 3.3 25.3 23.3 48 1.5 143 11.5 September 15.0 38 25.0 26.7 4.9 18 15.5 153 December 14.0 3.8 28.0 26.7 5.1 2.0 143 19.2 2001 March 14.0 3.8 28.8 26.7 46 2.0 16.3 16.5 June 14.0 3.5 29.0 26.7 4.4 15 150 17.1 September 13.5 3.5 32 26.7 5.0 1.8 14.0 12.3 Source: Bank of the Republic of Haiti. 1/ Interest rates shown here are a simple average of the lowest and highest end-of-period deposit and lending rates reported by the commercial banks. 2/ Change in consumer prices compared to same period 12 months earlier. [page 57] - 56- Table 29. Haiti: Reserve Requirements by Category of Deposit and Institution (In percent) Local Currency Depasits Time Deposits Foreign Demand Saving Less Than More Than Currency Deposits Deposits One Year One Year Deposits L Commercial Banks March 1, 1993 to May 31, 1995 7% 46 20 20 0 June 1, 1995 to August 27, 1995 48 48 48 48 0 August 28, 1995 to September 4, 1995 50 50 50 50 (9 September 5, 1995 to October 9, 1995 1/ 53% 53% 53% 53% 0 October 10, 1995 to May 5, 1996 1/ 51% 51% 51% 51% 0 May 6, 1996 to July 3, 1996 1/ 50 50 50 50 0 July 4, 1996 to November 18, 1996 2/ 48 48 48 48 0 November 19, 1996 to November 24, 1996 44 44 44 44 0 November 25, 1996 to December 1, 1996 42 42 42 42 0 December 2, 1996 to December 8, 1996 35 35 35 35 0 December 9, 1996 to February 15, 1997 30 30 30 30 0 February 16, 1997 to March 16, 1997 27 27 27 27 0 March 17, 1997 to May 15, 1997 26 26 26 26 12 May 16, 1997 to July 15, 1997 25 25 25 25 12 July 16, 1997 to November 15, 1997 26 26 26 26 12 November 16, 1997 to November 15, 1999 26% 264 26% 26% 12% November 16, 1999 to April 15 , 2000 26 A 264 26% 264 15 April 16, 2000 to August 31, 2000 28 28 28 28 17 September 1, 2000 to September 14, 2000 30 30 30 30 20 September 15, 2000 to June 15, 2001 31 31 31 31 21 June 16, 2001 to present 31 31 31 31 31 IL Mortgage Banks March 1, 1993 to May 31, 1995 0 23 10 10 0 June 1, 1995 to August 27, 1995 24 24 24 24 0 August 28, 1995 to September 4, 1995 25 25 25 25 0 September 5, 1995 to October 9, 1995 3/ 26% 26% 26 #4 26 Ys 0 October 10, 1995 to May 5, 1996 3/ 25 % 26% 26 a 26 0 May 6, 1996 to July 3, 1996 3/ 25 25 25 25 (0 July 4, 1996 to November 18, 1996 4/ 24 24 24 24 0 November 19, 1996 to November 24, 1996 22 22 22 22 û November 25, 1996 to December 1, 1996 21 21 21 21 0 December 2, 1996 to December 8, 1996 174 17% 17% 174 (1 December 9, 1996 March 16, 1997 15 15 15 15 û March 17, 1997 to November 15, 1999 15 15 15 15 12 November 16, 1999 to April 15, 2000 15 15 15 15 4% April 16, 2000 to August 31, 2000 16% 16% 16% 16% 16 September 1, 2000 to September 14, 2000 18% 18 4 18% 18% 18 September 15, 2000 ta present 19% 19% 19% 19% 19 June 16, 2001 to present 31 31 31 31 31 Source: Bank of the Republic of Haiti. 1/ This includes mandatory (remunerated) secondary reserves of 3/4 percent. 2/ This includes mandatory (remunerated) secondary reserves of 114 percent. 3/ This includes mandatory (remunerated) secondary reserves of 1% percent. 4/ This includes mandatory (remunerated) secondary reserves of % percent. [page 58] -57- Table 30. Haiti: Reserve Position of the Commercial Banks Fiscal Year Ending September 30 1997 1998 1999 2000 2001 (In millions of gourdes) Deposit liabilities 13,059 15,308 18,168 24,905 26,121 Actual reserves 3,105 3,811 3,764 6,899 7,670 Required reserves 2,899 3,428 4,013 6,639 8,097 Excess/deficiency (-) 206 383 -249 261 -428 (In percent of deposit liabilities) Actual reserves 23.8 24.9 20.7 27.7 29.4 Required reserves 22.2 22.4 22.1 26.7 31.0 Excess/deficiency (-) 1.6 2.5 -1.4 1.0 -1.6 Sources: Bank of the Republic of Haïti; and Fund staff estimates. [page 59] - 58 - Table 31. Haiti: Summary Balance of Payments (In millions of U.S. dollars, unless otherwise indicated) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Current account, excluding grants -331.6 -231.6 -205.0 -205.2 -252.3 Trade balance -469.8 497.8 -522.8 -5913 -687.3 Exports, £o.b. 169.9 205.5 299.4 348.7 327.1 Imports, £o.b. -639.8 -703.3 -822.2 -540.0 -1,014.4 Services (net) -28.2 -2.8 -19.6 424 -86.7 Income (net) 14.4 13.0 10.1 6.6 152 Of which Interest payments -8.4 -14.0 -12.9 -20.2 -13.8 Private transfers, net 1/ 152.0 256.0 327.3 421.9 506.4 External grants 293.1 221.9 222.6 256.8 221.3 Current account, including grants -38.5 9.7 17.6 51.6 -31.0 Capital account -12.8 36.8 14.6 -28.t -20.8 Public sector capital flows, net 107.2 93.9 72.2 57.9 44,3 Loan disbursements 121.5 112.3 974 82.4 69.9 Amortization -143 -18.3 -25.2 -24.5 -25.7 Banks (net) -28.4 159 17 39 -55.1 Direct investments 4.l 4.0 10.8 30.0 8.0 Other 2/ -95,7 -77.0 -66.6 -112.1 -17.9 Overall balance (deficit -) -513 27.2 32.3 23.5 -51.8 Financing 513 -27.2 -32.3 -23.5 51.8 Change in arrears (reduction -} 0.0 0.0 0.0 0.0 6.0 Change in net international reserves (increase -) 513 -27.2 -32.2 -23.5 45.8 Debt rescheduling 0.0 0.0 00 0.0 0.0 Memorandum items: Current account balance, excludimg grants {in percent of GDP) -11.2 -6.9 -5.5 -5.0 -64 Gross official reserves (US$ million, end of period) 215.6 265.7 292.7 329.2 272.5 (In weeks of imports, fob) 12.5 14.5 13.8 13.5 10.3 Exports of goods and services {in percent of GDP) 11.1 114 12.8 13.0 12.6 Imports of goods and services (in percent of GDP) -28.0 -26.3 -27.5 -28.3 -32.2 Sources: Data provided by Bank of the Republic of Haïti, and Fund staff estimates. 1/ Based on private remittances transferrcd through the authorized "transfer houscs” and BRH estinates of such transfers channeled through other means. 27 Includes errors and omissions. [page 60] - 59 - Table 32. Haiti: Net International Reserves (in millions of U.S. dollars at end of period) September 30 June 30 1997 1998 1999 2000 2000 2001 Net foreign assets of the banking system 270 304 331 340 356 349 Official reserves (net) 1/ 162 195 218 172 190 188 Assets 266 293 329 273 291 285 Gold 6 6 0 0 0 0 Liquid assets 209 237 280 222 241 236 Other assets 50 50 50 50 49 49 Liabilities 103 98 ill 100 100 97 Liabilities to the Fund 43 38 50 44 40 35 Other 60 60 61 56 60 62 Net foreign assets of commercial banks 107 109 113 168 166 159 Assets 124 122 125 189 187 178 Liabilities 17 13 12 21 22 19 Memorandum items: Gross official reserves in weeks of imports, fob 15 14 14 10 13 14 percent of broad money 27 26 25 26 22 23 Sources: Bank of the Republic of Haïti, and Fund staff estimates. 1/ Bank of the Republic of Haïti. [page 61] - 60 - Table 33. Haïti: Selected Foreign Trade Indices (FY 1991/92=100) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Exports Value index, f.0.b. 143.5 173.5 252.8 294.5 276.3 (Annual change in percent) 11.2 20.9 45.7 16.5 -6.2 Price index 108.8 107.9 108.6 109.6 110.3 (Annual change in percent) -0.1 -0.9 0.7 0.9 0.7 Volume index 131.9 160.9 232.8 268.7 250.4 (Annual change in percent) 11.4 22.0 44.7 15.4 -6.8 Share of traditonal exports 32.5 24.1 16.6 13.6 10.8 Imports Value index, fo.b. 244.3 268.6 314.0 359.0 387.4 (Annual change in percent) -17 9.9 16.9 143 7.9 Price index 102.8 102.2 101.8 102.5 103.2 (Annual change in percent) 0.3 -0.6 -0.4 0.7 0.7 Volume index 237.6 262.7 308.4 350.2 375.3 (Annual change in percent) -2.1 10.6 17.4 13.6 7.2 Terms of trade Index 105.8 105.5 106.7 106.9 106.9 (Annual change in percent) -0.5 -0.3 1.1 0.2 0.0 Memorandum items: US. consumer price index (period average) 2/ 111.9 114.5 116.8 119.1 121.5 Annual change in percent 3.0 2.3 2.0 2.0 2.0 Sources: Bank of the Republic of Haiti (BRH) and Fund staff estimates. 1/ Value and price indices are U.S. dollar based adjusted for imports and exports of the assemly industry. 2/ Index for all urban consumers (CPI-U). [page 62] -61- Table 34. Haiti: Composition of Exports, f.o.b. Fiscal Year Ending September 30 1996 1997 1998 1999 2000 (In millions of U.S. dollars) Total exports, £o.b. 169,9 205.5 299.4 348.7 327.1 Agricultural exports 41.0 34.1 40.7 37.7 32.4 Coffee 24.6 19.1 21.8 18.0 13.5 Sisal and sisal strings 0.6 0.8 2.0 4.6 2.0 Mango 5.0 7.0 5.8 6.7 8.0 Cocoa 3.8 43 7.5 6.0 6.5 Essential oils 7.0 2.9 3.7 2.4 2.5 Light manufactures 1/ 126.6 159.7 244.9 295,5 2813 Domestic inputs 20.1 24.1 33.7 30.4 23.6 Imported inputs 106.5 135.6 211.2 265.1 257.7 Other items 2.4 11.6 13.8 15.5 13.4 (In percent of total exports) Agricultural exports 24.1 16.6 13.6 10.8 9.9 Light manufactures 1/ 74.5 77.7 81.8 84.7 86.0 Others 1.4 5.7 4.6 44 4.1 (Annual percentage changes) Total exports 11.2 20.9 45.7 16.5 -6.2 Agricultural exports -17.4 -16.7 19.4 -7.4 -14.0 Light manufactures 1/ 30.7 26.1 53.3 20.7 -4.8 Sources: Bank of the Republic of Haïti; and Fund staff estimates. 1/ Includes valuation and classification adjustments made by the Bank of the Republic of Haïti. [page 63] - 62 - Table 35. Haiti: Exports of Light Manufactures to the United States (n millions of U.S. dollars) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Total value exported 1/ 117.6 148.0 222.7 281.3 270.3 A. Products from domestic materials 2/ 11.1 12.6 18.4 153 9.4 Textiles: yarns, fabrics, and manufactures 3.1 5.0 4.0 1.5 1.6 Wood manufactures 0.7 0.6 1.0 0.3 0.2 Leather manufacturers 3.7 3.4 3.5 5.0 3.6 Other 3.5 3.6 9.9 8.5 4.0 B. Products from imported materials 3/ 106.5 135.4 204.3 266.1 261.0 Textiles, apparel, etc. 99.3 128.5 192.8 262.4 256.1 Wear, apparel, accessories, and articles made from fur 97.3 125.4 189.2 259.2 255.3 Travel goods, handbags, and similar articles 19 3.1 24 2.8 0.8 Footwear, excluding military and orthopedic 0.0 0.0 12 0.4 0.0 Machinery and electronics 3.4 3.6 3.9 2.3 1.4 Miscellaneous manufactures 3.8 3.3 7.6 13 3.4 Sporting goods, toys, and other similar products 3.5 3.3 2.1 Li 2.8 Articles of rubber and plastic 0.2 0.0 1.8 0.2 0.5 Other manufactures 0.2 0.0 3.7 0.0 0.1 Sources: Bank of the Republic of Haïti, U.S. Department of Commerce; and Fund staff estimates. 1/ Exports to the United States represent about 90 percent of Haïtï's light manufacturing exports. 2/ Fiscal year figures are estimates based on calendar year data. 3/ For 1993 only, fiscal year figures are estimates based on calendar year data. [page 64] - 63 - Table 36. Haïti: Principal Commodity Exports (Value in millions of U.S. dollars, volume in thousand tons, and unit value in USS/kg, unless otherwise specified) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Total value 1/ 35.9 27.1 34,9 31.0 24.4 Coffee Value 24.6 19.1 21.8 18.0 13.5 Volume 2/ 252.3 127.0 203.0 217.9 194.9 Unit price 3/ 97.4 150.2 107.2 82.8 69.0 Sisal and sisal strings Value 0.6 0.8 2.0 4.6 2.0 Volume 1.3 19 3.8 8.3 4.1 Unit price 0.5 0.5 0.5 0.5 0.5 Cocoa Value 3.8 43 7.5 6.0 6.5 Volume 6.5 6.6 11.2 13.2 18.0 Unit price 0.6 0.6 0.7 0.5 0.4 Essential oils Value 7.0 2.9 3.7 2.4 2.5 Volume 7.0 2.9 3.7 2.4 2.5 Unit price 0.2 0.1 0.1 0.1 0.1 Sources: Bank of the Republic of Haïti; and Fund staff estimates. 1/ Some value figures may not be equal to the product of volume and unit value because of rounding. 2/ In thousands of 60 kilogram bags. 3/ US. dollars per 60 kilogram bag. [page 65] - 64 - Table 37. Haiti: Composition of Imports, c.if Fiscal Year Ending September 30 1996 1997 1998 1999 2000 (In millions of U.S. dollars) Total 687,91 756.21 883.92 1010.6 1090.7 Food and others 1/ 289.2 281.2 307.9 361.6 308.87 Of which Food 219.6 209.6 236.5 279.0 247.8 Fuel and lubricants 79.4 74.9 80.8 83.2 186.6 Machines and transport equipment 125.0 126.8 142.1 164.9 1715 Raw Materials 7.9 20.1 22.5 21.1 19.8 Manufactured goods 130.6 164.6 223.2 257.2 289.11 Other imports 55.7 88.7 107.4 122.7 114.9 (ln percent of total) Food and others 42.0 37.2 34.8 35.8 28.3 Fuel and lubricants 11.5 9.9 9.1 8.2 17.1 Machines and transportation 18.2 16.8 16.1 16.3 15.7 Raw materials 1.2 2.7 2.5 2.1 1.8 Manufactured goods 19.0 21.8 25.3 25.4 26.5 Other imports 8.1 11.7 12.2 12.1 10.5 (Annual percentage change) Total -1.7 9.9 16.9 14.3 7.9 Food and others 6.2 -2.8 9.5 17.4 -14.6 Fuel and lubricants 14.7 1.4 12.0 16.0 4.1 Machines and transportation 14,7 1.4 12.0 16.0 4.1 Raw materials -56.9 153.3 12.3 -6.5 -6.2 Manufactured goods 0.5 26.0 35.6 15.2 12.4 Sources: Bank of the Republic of Haiti, U.S. Department of Commerce; and Fund staff estimates. 1/ Includes beverage, oils and fats, and pharmaceutical products. [page 66] -65- Table 38. Haïti: Official Grants (In millions of U.S. dollars) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Total 293.1 221.9 222.6 256.8 221.3 Bilateral donors 187.3 141.2 143.2 183.1 145.9 Canada 34.3 26.7 24.8 33.2 29.4 France 7.2 21.0 10.0 13.5 9.4 Germany 4.3 3.0 5.0 3.6 3.7 Japan 0.3 7.2 12.7 12.9 12.2 Netherlands 2.9 1.0 2.0 5.5 5.5 Switzerland 54 0.4 2.3 2.8 1.4 Taiwan Province of China 2/ …. 9.5 17.4 8.9 8.4 United States 112.9 64.8 64.2 102.8 76.0 Other bilateral donors 20.0 7.7 4.7 0.0 0.0 Multilateral donors 105.8 73.9 79.4 70.6 36.6 European Union 61.1 44.5 49,9 32.1 14.6 UNDP 16.7 14.3 12.8 IL8 2.2 WHO-PAHO 2.6 4.5 04 0.5 LS WFP 3.0 2.9 3.4 1.4 4.8 Other UN organizations 12.1 5.6 11.3 20.4 10.6 Other multilateral donors 10.3 2.1 1.6 44 2.6 Nongovernment organizations 3/ 0.0 6.8 0.0 3.0 38.7 Sources: U.S. Monitoring Report, World Bank survey on donor financing; and Fund staff estimates. 1/ Includes US$64 million for grants for clearance of arrcars to international financial institutions. 2/ For 1995-96, grants provided by the Taïwan Province of China are included under other bilateral donors, 3/ During 1992-94, most official aid was channeled through nongovernment organizations (NGOs). Beginning in 1995, some grants channeled through NGOs may be included in the figures for grants by bilateral donors, but explicit data on grants by NGOs arc not readily available, [page 67] - 66 - Table 39. Haiti: Loan Disbursements (in millions ofU.S. dollars) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Total 121.5 131.9 97.4 103.0 69,9 Bilateral 9 11.7 5.7 15 16.2 France 9 11.7 5.7 1.5 0 Taïwan 0 0 0 0 15.5 Others 0 0 0 0 0.7 Muiltilateral 112.5 100.5 91.7 80.9 53.7 EIB 1 3.5 0 0 1.5 IDA/IBRD 66.7 39.9 37.8 14.6 7.9 IDB 44.8 57.1 524 64.8 42.7 OPEC/FIDA 0 0 1.5 1.5 1.7 IMF 0 19.7 0 20.6 0 Memorandum item: Total, excluding the IMF 121.5 112.2 97.4 82.4 69.9 Sources: Bank of the Republic of Haiti, donors, and Fund staff estimates. [page 68] - 67 - Table 40. Haiti: Stock of External Public Debt 1/ September 30 1996 1997 1998 1999 2000 {in millions of US. dollars) Total 897.0 1,007.1 1,085.8 1,146.1 1161.8 Medium and long-term debt 897.0 1,007,1 1,084.8 11460 1,155,9 Bilatcral creditors 141.1 172.7 173.2 155.8 163.0 United States 2/ 11.9 11.8 10.8 10.6 10.3 France 43.6 52.4 53.9 48.4 41.5 Others 3/ 811.4 898.6 9763 1,049.2 1,044.7 Multilateral creditors 755.9 834.4 911.6 990.2 992.9 BIRD/IDA 447.1 463.8 502.5 514.7 486.2 FIDA 25.1 22.3 21.4 22.3 22.0 IDB 255.3 298.2 344,9 397.7 420.1 OPEC special fund 3.1 4.1 4.8 4,0 4.2 IMF and IMF trust fund 25.3 46.0 38.0 51.5 60.4 Other debt 4/ 0.0 0.0 1.0 0.1 5.9 Short term 0.0 0.0 0.0 0.0 0.0 Arrears 0.0 0.0 1.0 0.1 5.9 (In percent of GDP) Total 30.4 30.1 29.2 27.7 29.5 Medium and long-term debt 30.4 30.1 29.2 27.7 29.3 Bilateral creditors 4.8 5.2 4.7 3.8 4.1 United States 2/ 0.4 0.4 0.3 0.3 0.3 France 1,5 1.6 14 1,2 1.1 Others 3/ 27.5 26.9 26.3 25.3 26.5 Multilateral creditors 25.6 25.0 24.5 23.9 25.2 BIRD/IDA 15.1 13.9 13.5 12.4 12.3 FIDA 0.8 0.7 0.6 0.5 0.6 IDB 8.6 8.9 9.3 9.6 10.7 OPEC Special Fund 0.1 0.1 0.1 0.1 0.1 IMF and IMF trust fund 0.9 1.4 1.0 1.2 1.5 Other debt 4/ 0.0 0,0 0.0 0.0 0.1 Short term 0.0 0.0 0.0 0.0 0.0 Arrears 0.0 0.0 0.0 0.0 0.1 Memorandum item: Nominal GDP (millions of U.S. dollars) 2,955.1 3,340.9 3,718.8 4,143.5 3,944.1 Sources: Data provided by the Bank of the Republic of Haïti ; and Fund staff estimates. 1/ Includes concessional and commercial public debt, officially guaranteed debt, and central bank liabilities, including use of Fund resources. 2/ Debt cancellation by the United States in 1991 was accounted for only in 1995 after Haiti's return to constitutional rule. 3/ Increase in 1995 rcflect recognition of debt in dispute. 4/ Excludes overdue suppliers' credits in dispute ("dette en litige"). [page 69] 68 - Table 41. Haiti: Scheduled External Public Debt Service (In millions of U.S. dollars) Fiscal Year Ending September 30 1996 1997 1998 1999 2000 Total scheduled payments 25.0 31.9 43.4 55.9 42.4 Interest 8.1 12.3 12.9 20.2 13.8 Bilateral creditors 0.7 4.0 2.3 8.0 2.9 United States 0.0 0.8 0.7 0.5 0.7 France 0.5 1.7 1.0 2.1 1.5 Others 1/ 0.2 1.5 0.6 5.4 0.6 Multilateral creditors 7.4 8.3 8.6 10.0 10.9 IMF 0.0 0.0 2.0 2.2 0.9 IBRD/IDA 3.0 3.0 3.3 3.8 3.8 IDB 4.2 5.0 4.9 5.6 5.9 OPEC Fund/FIDA 0.2 0.3 0.4 0.5 0.3 Amortization payments 16.9 19.6 30.5 35.7 28.6 Bilateral creditors 2.6 42 10.1 8.1 8.7 United States 0.0 0.3 0.5 03 Le) France 0.8 1.2 2.0 4.0 3.1 Others 1/ 1.8 2.7 7.6 3.8 5.0 Multilateral creditors 143 15.4 15.1 16.4 17.0 IMF 2.6 1.3 5.3 112 2.9 IBRD/IDA 3.8 43 5.1 6.4 6.5 IDB 6.4 8.3 8.2 8.5 8.7 OPEC Fund/FIDA 1.5 1.5 1.8 1.5 1.7 Sources: Data provided by the Bank of the Republic of Haiti; and Fund staff estimates. 1/ The main creditors are Venezuela, Argentina, and Canada. [page 70] - 69 - Table 42. Stock of External Arrears (ln millions of U.S. dollars) September 30 1994 1995 1996 1997 1998 1999 2000 2001 Total 120.9 0 0 0 0 0 6.0 17.8 Mhuiltilateral creditors 79.8 0 0 0 0 0 2.1 11.3 IDB 27.4 0 0 0 0 0 0.2 4.0 World Bank/IDA 15.1 0 0 0 0 0 0.8 6.1 IMF 34.4 0 0 0 0 0 0.2 0.0 Other (OPEC and FIDA) 2.9 0 0 0 0 0 0.9 1.1 Bilateral creditors 41.1 0 0 0 0 0 3.9 6.6 US. (AID, EXIMBANK, and DOD) 15.6 0 0 0 0 0 0.1 0.7 Canada (Wheat Board) 5.4 0 0 0 0 0 0.1 0.1 France (Bank de France, CFD, and COFACE) 0 0 0 0 0 0 2.1 3.3 Italy (SACE) 0 0 0 0 0 0 0.6 1.3 Spain (CESCE) 0 0 0 0 0 0 0.6 1.3 Others 20.1 9 0 0 0 0 0 0 Sources: Bank of the Republic of Haiti ; World Bank; and Fund staff estimates. [page 71] -70- APPENDIX Summary of the Tax System (As of September 30, 2001) Nature of Tax (Base) __} Exemptions and Deductions | Rates" | 1. Tax on net income and profits (Amended by decree of September29, 1988) 1.1 Corporate income tax Tax on net industrial and | Enterprises with a lurnover not DT pros regime (vie réa subject to the commercial profits of enterprises | exceeding G 50,000. Agricultural (including state enterprises) and | cooperatives, mutual loan The actual profits regime includes the following companies, including capital associations, and enterprises schedule of marginal rates: gains and after deduction of all granted privileges under the legitimate charges; dividends Investment Code. Fifty percent of Profits in gourdes Percentage paid to affiliated companies are capital gains on developed property not taxed, and 25 percent on undeveloped 120,000 10 20,001--100,000 15 property. 100,001-250,000 20 250,001-750,000 30 Over 750,000 35 Enterprises are required to make an installment payment equal to 1 percent of the previous year’s profits plus 1 percent of the current value of imports. Undistributed profits are taxable at the rate of 15 percent aller five years unless reinvested. Foreign companies: In addition to the actual profits regime, a surcharge representing 30 percent of net profits after tax, constituting the final tax on profits to be distributed to foreign shareholders. 12 Personal income tax Based on aggregate income, Exemptions: Foreign diplomatic For income, a progressive general schedule with the including income from real and consular personnel, following marginal rates: estate; industrial, commercial, and agricultural profits; Deductions: (1) deficits carried Income in gourdes Percentage investment incoms; income from | over from previous fiscal years; literary works and patented (2) for a principal residence: 20,001-100,000 10 inventions; wages and salaries; 20 percent of the annual rent or the | 100,001-250,000 15 interest and dividends received; sum of real estate tax and mortgage | 250,001-750,000 25 | and all types of capital gains. interest payments; (3) donations to | Over 750,000 30 ! charitable or public-interest ! institutions, up to 20 percent of with the application of tax credits and source income; and (4) 50 percent of withhoïding. | capital gains on developed property and 25 percent on undeveloped For profits, applicable rates are as follows: l property. Presumptive regime: G 50,000-250,000 1 percent of tumover 2 percent of the value of imports, c.i.f. {in both cases, conslituting payment in full) Actual profits regime: See 1.1 above. Taxpayers whose noncommercial profits are less than G 20,000 are subject to a presumptive tax of 1 percent of their gross income, with a minimum of G 600, deductible from the final tax but not rcfundable Source withholding on: wages (1/4 of the tax paid the previous year), unreported bonuses {10 percent, in full payment), commissions and capital gains on developed land (2'4 percent) and undeveloped land (10 percent), and on interest and dividends (15 percent). [page 72] -71- APPENDIX Summary of the Tax System (As of September 30, 2001) - 2. Social security contributions 2.1 ONA (old-age pensions) A monthly contribution by Monthly contribution private sector employers and (Wages in gourdes) (Percentage) cmployces to the pension Less than 201 2 scheme, based on actual wages, 201-500 3 with a daily minimum of 501-1,000 4 G 13,50. Over 1,000 6 Payable by employer and employee. 2.2 OFATMA (work-related Monthly contribution paid by Paid by the employer: accidents) employers to assist employees who are victims of work-related 2 percent for commercial enterprises; accidents or illnesses, based on actual wages, with a daily 3 percent for agricultural, industrial, and minimum of G 8.50, construction enterprises; 6 percent for mining operations. 3. Payrolltax Paid by employers and based on 2 percent the total value of the cash and (Decree of October 14, 1988) noncash emoluments of public and private sector employees. 4. Property taxes Based on the net annual rental Full exemption for the buildings of | Annual Rental Value Rate value of land and buiïldings government departments providing | ({n gourdes) {In percent) (Land tax on developed property) (Decree erected with nontraditional nonprofit public services; buildings of April 5, 1979, as amended through materials. used for religious activities; and Up to 2,400 6 January 1982). Diplomatie missions, NGOs, and | buildings belonging to cultural 2,401-3,300 7 international organizations. associations, educational 3,301-7,200 8 institutions, and diplomatic 7,201-9,600 9 missions. 9,601-12,000 10 12,001-14,400 11 Reductions: 14,401-16,800 12 16,801-19,260 13 Single-rental apartments 19,201-21,600 14 (furnished): Over 21,600 15 30 percent, Multiple-rental apartments: Furnished: 50 percent. Unfurnished: 33 percent All buildings in locations other than Port-au-Prince and Pétionville: reductions of 75 percent (1st year), 50 percent (2nd year), and 25 percent (3rd year). Owner-occupied property with a rental value of less than G 480 im urban areas and G 900 in rural areas is exempt. 4.2 Stamp tax Stamp tax on sales of tangible or On the selling price or the value of the assets: intangible assets or inheritances. (Decree of September 28, 1977) Sales of tangible assets: 2 percent Sales of intangible assets: 3 percent Inheritances: 1-8 percent. depending on the type of goods and the degree of relationship between the parties involved. [page 73] -72- APPENDIX Summary of the Tax System (As of September 30, 2001) Nature of Tax (Base) 5. Taxes on goods and services 5.1 Value added tax (Decree of General tax on sales of goods Exemptions: (1} business 10 percent of the price of goods and services, September 19, 1982, as amended through (including agro-industrial), on persons with a turnover of less than | including other duties and taxes. June 1996) the provision of services G 100,000; (2) service providers (including water, electricity, and | with a turnover of less than local bank premiums and G 100,000; (3) international charges), and on imports, services (transportation equipment calculated at each stage in the maintenance); (4) interest on bank production/distribution/import Joans and on banking and insurance chain, with credit for tax paid on | operations; (5) wages and purchases. education and health care expenses; (6) operations of nonprofit organizations; (7} exports and re- exports; (8) imported petroleum products; (9) equipment and inputs for agriculture, livestock, and fisheries; and (10) supplies for education. Deductions: The tax collected on inputs of a taxable operation is deductible from the tax applicable to that operation. 5.2 Excise duties (Decree of September 3, 1971, as amended in August 1987) 5.2.1 Excise duty on tobacco Specific regular and Tobacco cultivated and dried Cigarettes (per pack of 20) products supplementary duty on domestically with no further cigarettes. processing and powdered tobacco Regular duty are exempt. Domestic production G 1.00 Imports G1.25 Supplementary duty (per kg) Domestic G 7.00 Imports G 14.50 Cigars Domestic production G 0.01-0.05 Imports G 0.05-0.50 Tobacco (per kg} Local G 0.10-0.50 Imported G 0.20-2.00 [page 74] -73- APPENDIX Summary of the Tax System (As of September 30, 2001) Nature of Tax (Base 5.2.2 Excise duties on alcoholic Specific duties on imported and (In gourdes per liter) beverages domestically produced spirits, wines, and malted beer. Regular duties: (Decree of April 1984, as amended in 1988 and 1993) Local Alcohol (>25 percent natural Cartier cane juice) G 100 per month Molasses (<25 percent natural Cartier cane juice) G 150 per month Imported Liqueurs G 2.50 Gin, vodka, and cognac G 10.00 Whisky G 15.00 Stout, malted ale (per 24 bottle case) G 2.00 Wine and champagne G 2.00 Local and imported Beer (per 24-bottle case) G1-G7,35 Rum (per liter) G2.25 Supplementary duties on local and imported beer {per 24-bottle case) G1-G 7.35 Beer G2.25 Stout G. 2.25 5.2.3 Excise duties on petroleum Specific duties collected by Electricité d'Haiti and government Fixed duties (in gourdes per gallon): products Customs at the time of bodies; diplomatie missions; and Gasoline G3.30 ; importation. certain NGOs. Diesel oil G3.10 (Decree of February 1995, as amended in Kerosene G2.50 May 1996) Aviation fuel G025 Lubricants G0.15 Heating oil G 0.19 Variable duties (in gourdes per gallon): Based on original reference levels, as follows: Gasoline G 6.80 Diesel G 4.00 Kerosene G 0.44 The price at the pump is to be adjusted upwards or downwards when the change in the landed cost exceeds 5 percent. 5.24 Excise duties on other items Specific duties on refined sugar, Sugar G 20.00 per 100-Ib bag and on carbonated beverages flour, and carbonated beverages Flour G 3.75 per 100-Ib bag manufactured localty. Carbonated beverages 07.20 per 144 bottles 5.2.5 Excise duties on luxury 3 percent of the value, c.i.f. gone ot | [page 75] -74- APPENDIX Summary of the Tax System | (As of September 30, 2001) 5.3 Business fees and licenses 5.3.1 Business fees Annual presumptive professional | Local governments, farmers, stock | Professional fee (business license): fee payable by any individual or | breeders, fishermen, wage carners, {Decrec of September 28, 1987} legal entity engaged in a cooperatives, artists, authors, Group E: From G 40 (small retailers) to G 2,000 professional activity in Haiti, musicians, and singers. {mining industries) levied by the commune of which Average: G 400-1,000 the taxpayer is a resident For exempt export industries: G 7,500 Communes are classified into three groups, the main one being Groups II and IT: 2 and %, respectively, of the Port-au-Prince and its suburbs. Group 1 rate. This fee is either fixed, on the basis of the schedule and depending on the location of the business and the sector of economic activity involved; or variable, based on the difference between the turnover and the wage bill of the business. : 5.32 Licenses Annual tax on the authorization Tobacco factories G 2,500 to engage in certain industrial or Breweries G1,500 {Decree of January 13, 1978) commercial activities or certain Distilleries G 20 per boiler professions. AIl foreign and Local factories G250-1,000 domestic enterprises are subject based on turmover to this tax, as are manufacturers of products for local consumption, distilleries, brewcrics, and tobacco factorics. ñ 5.4 Motor vehicle tax . 5.4.1 Tax on initial registration Based on the value, c.i.f. 25-seat van Van (12-24 seats): 5 percent of the value, c.i.f. 2-ton truck Truck (<2 tons): 5 percent of the value, c.if (Decree of February 18, 1987) Other vehicles G 0-35,000 3 percent G 35,000-55,000 10 percent G 55,000-75,000 15 percent Over G 75,000 29 percent 54.2 Annual fee (April 1993, as Based on the cylinders, weight, Excise of 10 percent on all vehicles with à capacity amended in May 1996) and number of wheels of private of at least 2000 cubic centimeters. and public vehicles. Private (gasoline): 4-8 cylinders: (Registration tags) Gé0-110 Public {gasoline}: 4-8 cylinder G60-120 Public (diesel): 2-8 cylinders: G60-100 Public (trucks): 4-8 tons, 4-6 whccls: G 80-240 [page 76] -75- APPENDIX Summary of the Tax System (As of September 30, 2001) Nature of Tax (Base) Exemptions and Deductions Rates 6. Taxes on international trade and The tariff currently contains 21 sections with a total transactions of 99 chapters. | Except in the case of certain staples and the items | (Regime amended in February 1995) mentioned below, the following tariff structure is i temporarily applicable i 6.1 Import duties Î General rate 6.1.1 Customs tariff À minimum tariff is applied to Certain industrial machinery, Previous rate New rate mérchandise originating from tractors, works of art, plant seeds (In percent} countries that have entered into and bulbs, fertilizers, and a few | trade agreements with Haiti. A other chemical products. 0-10 L] reduced tariff is applied to Educational materials; health 15-20 5 merchandise originating from products; gasoline; kerosene; all 25-30 10 WTO member countries. A products destined 10 agriculiure; 35-50 15 maximum tarif, generally and chemicals. double the minimum tariff, is Specific rates applied to merchandise Rice 50 3 originating from other countries. Grains 50 0 Vegetable oils 20 0 Sugar 20 3 Cement 10-33 3 Gasoline 57.8 57.8 6.1.2 Verification fee Import surtax, now levied atthe | Assembly sector, personal imports; | 4 percent ofthe c.i.f. import value, Haïitian port of entry rather than | and diplomatic missions. atthe foreign port of shipment. 7. Other taxes 7.1 Identification card tax Annual tax for the issuance or Diplomatic and consular services. Legal entities: G 600 validation of the identification Sole proprictorships: G 50-150 (PDecree of September 28, 1987, as card levied on all individuals, amended through May 1993) legal entities, and sole individuals proprietorships. Wage earncrs (<G 20,000): G 15 Wage earners (G 20,000-100,000): G 150 Vehicle owners: G150 Persons subject to property taxes: G 150 Wage earners (>0 100,000}: G 250 Source: Ministry of Economy and Finance