Haiti - Enhanced HIPC Debt Initiative : decision point document

This paper presents an assessment of Haiti's qualification for assistance under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The Executive Boards of the IMF and IDA discussed the Preliminary HIPC document for Haiti on September 6 and 7, 2006, respectively. On these occasions, Directors made a preliminary determination that Haiti could qualify for assistance under the HIPC Initiative in view of (i) it's status as a PRGF-eligible and IDA-only country; (ii) it's NPV of debt-to-exports ratio, which is above the indicative threshold of the HPC Initiative even after the application of traditional debt relief mechanisms; and (iii) satisfactory performance under the two comprehensive Emergency Post-Conflict Assistance (EPCA) programs (October 2004-September 2006) and the IDA-supported EGRO I (since January 2005), with important achievements in the areas of macroeconomic stabilization and structural reforms. Directors also agreed that Haiti could reach its Decision Point before end-2006, together with the approval of a Poverty Reduction and Growth Facility (PRGF) arrangement by the IMF Board, provided that (i) the country remains on track with its macroeconomic program, supported by the EPCA; (ii) an agreement is reached on appropriate completion point triggers; and (iii) the Interim Poverty Reduction Strategy Paper (I-PRSP) is finalized. Directors supported the possible triggers and key policy measures outlined in the preliminary document. This paper is organized as follows: section two provides background information on Haiti's eligibility for assistance under the HIPC Initiative; the nature and extent of poverty; recent political and security developments; and the policy track record. Section three discusses the medium-to-long-term macroeconomic framework and the future reform agenda for poverty reduction. Section Four summarizes the results of the Debt Sustainability Analysis (DSA) and presents possible HIPC and MDRI assistance. Section five discusses the floating completion point triggers, specifies how HPC Initiative assistance after the decision point will be used and tracked, and reports the views of the authorities. Finally, section six presents issues for discussion by the Executive Directors.