HAITI First Review Under the Extended Credit Facility

April 25, 2011
Mr. Dominique Strauss-Kahn
Managing Director
International Monetary Fund
700 19th Street N.W.
Washington, D.C. 20431
USA

Dear Mr. Strauss-Kahn:

1. The Government of Haiti continues to make good progress in achieving key objectives under its national action plan, which is supported by the IMF under an ECF arrangement. Basic government functions are now restored and the reconstruction is under way. The macroeconomic situation has improved significantly on account of prudent policies and donor support. Despite some delays or postponements in donor disbursements, the outlook for 2011 is favorable, although we are well aware of the risks stemming from domestic factors as well as uncertainties surrounding the global economic outlook and the corresponding need to maintain a cautious macroeconomic policy stance.

2. We are pleased to report that implementation of the program is on track despite the challenging domestic and international environments. All quantitative performance criteria for end-September 2010 were met. However, the indicative target on poverty-related spending was not fully observed, reflecting a slower-than-expected response in the
immediate aftermath of the earthquake. All end-December 2010 indicative targets and end- March 2011 performance criteria are expected to be met.

3. Key challenges for FY 2011 are to accelerate the reconstruction, improve public services, and strengthen economic governance to support the recovery while maintaining macroeconomic stability. Facilitating the transition from disaster recovery to policies aimed at ensuring high and sustained growth and reducing poverty and the country’s vulnerability to external and natural shocks are also important challenges. We believe that the policies set forth in the attached Memorandum of Economic and Financial Policies, which supplements the July 2010 MEFP, are adequate to achieve these objectives.

4. In support of its policies and in view of the progress made in implementing the program supported by the ECF arrangement, the government requests the completion of the first review and the approval of the second disbursement of an amount equivalent to SDR 8.19 million. The second program review, assessing performance based on end-March 2011 performance criteria and structural benchmarks will be conducted in July 2011. The third review, assessing performance at end-September 2011, is envisaged for November 2011.

5. We will regularly update the IMF on economic and policy developments and will provide the data needed for adequate monitoring of the program. The government will continue its policy dialogue with the IMF and is prepared to take any further measures as appropriate to meet its program objectives. We will consult with the Fund ahead of any revisions to the measures outlined in the MEFP, in accordance with the Fund’s policies on such consultation. We have no objection to publication of this letter of intent, the attached MEFP, and the staff report on the first ECF review.

Sincerely yours,
/s/
Ronald Baudin
Minister of Economy and Finance
Republic of Haiti

/s/
Charles Castel
Governor
Bank of the Republic of Haiti
Republic of Haiti