Document of The World Bank Group FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 48284-HT INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION Public Disclosure Authorized COUNTRY ASSISTANCE STRATEGY FOR THE REPUBLIC OF HAITI FOR THE PERIOD FYO9-FY12 Public Disclosure Authorized May 4,2009 Caribbean Country Management Unit Latin America and the Caribbean Region The International Finance Corporation Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance oftheir official Duties. Its contents mav not otherwise be disclosed without World Bank authorization. [Board discussion date of last strategy, the Interim Strategy Note: January 30,2007 CURRENCY EQUIVALENTS (Exchange Rate Effective April 20,2009) Currency Unit = Haitian Gourde US$1= HTG 40.723 FISCAL YEAR October 1 - September 30 ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory Activities ICF Interim Cooperation Framework AFD Agence Franqaise de Dkveloppement - French IDA International Development Association Development Agency IDB Inter-American Development Bank BRH Banque de la Rkpublique d 'HaWi - Haitian IFC International Finance Corporation Central Bank IMF International Monetary Fund CAS Country Assistance Strategy I-PRSP Interim Poverty Reduction Strategy Paper CARICOM Caribbean Community JSAN Joint Staff Advisory Note CDD Community Driven Development LIC Low-Income Country CCRIF Caribbean Catastrophe Risk Insurance Facility LICUS Low Income Countries Under Stress CEM Country Economic Memorandum M&E Monitoring and Evaluation CEMLA Center for Latin American Monetary Studies MDG Millennium Development Goal CFAA Country Financial Accountability Assessment MDFU Multilateral Debt Relief Initiative CIDA Canadian International Development Agency MEF Ministdre de I'Economie et des Finances - CNMP Commission Nationale des Marchis Publics - Ministry of Economy and Finance National Commission for Public Procurement MINUSTAH UN Stabilization Mission in Haiti CNRA Commission Nationale pour la Reforme MPCE Ministdre de la Plan8cation et de la Administrative - National Commission on Coopkration Externe - Ministry of Administrative Reform Planning and External Cooperation CPAR Country Procurement Assessment Report MTPTC Ministdre des TravamPublics, Transports CPIA Country Policy and Institutional Assessment et Communication - Ministry of Public CSCCA Cour Supkrieure des Comptes et du Works, Transport and Communications Contentiem Administratif- Supreme Audit NGO Non-GovernmentalOrganization Institution NLTA Non-Lending Technical Assistance CSA Country Social Assessment NPV Net Present Value DGI Direction Ginkrale des Imp& - Tax OAS Organization of American States Administration Authority OED Operations Evaluation Department DPG Development Policy Grant PCF Post-Conflict Fund DR Dominican Republic PDNA Post-Disaster Needs Assessment DSA Debt Sustainability Analysis PEFA Public Expenditure and Financial DSNCRF' Document de Stratkgie Nationale pour la Accountability program Croissance et la Rkduction de la Pauvretk - PEMFAR Public Expenditure Management and National Growth and Poverty Reduction Financial Accountability Review Strategy Paper PNH Police Nationale d 'Hai'ti - Haitian National Police EDH Electricitk d 'Hairi - National electricity PPP Public-Private Partnership company PRSG Poverty Reduction Support Grant EFA-FTI Education For All - Fast Track Initiative PRGF Poverty Reduction and Growth Facility EGRO Economic Governance Reform Operation ROSC Report on the Observance of Standards and Codes E-HIPC Enhance Heavily Indebted Poor Countries RMG Ready-Made Garment (sector) Initiative SPF State and Peace-BuildingFund EPCA Emergency Post Conflict Assistance SDR Special Drawing Rights EU European Union SMEs Small and Medium Enterprises FER Fonds d'Entretien Routier - Road SMP Staff Monitored Program Maintenance Fund SWAP Sector-wide Approach FIAS Foreign Investment Advisory Service TS S Transitional Support Strategy FDI Foreign Direct Investment ULCC Unite' de Lutte Contre la Corruption - FY Fiscal Year Anti-Corruption Unit GDP Gross Domestic Product UN United Nations GFDRR Global Facility for Disaster Reduction and UNDP United Nations Development Programme Recovery USAID United States Agency for International HIPC Heavily Indebted Poor Countries Initiative Development HOPE Haitian Hemispheric Opportunity through WBG World Bank Group Partnership Encouragement Act WFP World Food Program Director Yvonne Tsikata Atul Mehta Pierre Nadji I Country Manager I Mathurin Gbetibouo I Salem Rohana I Acknowledgements The following World Bank Group staf contributed to the preparation of the CAS: Diego Arias, Amparo Ballivan, Karen Bazex, Ana Bellver, Raja Bentaouet, Benu Bidani, Susana Carrillo, Alan Carroll, Alejandro Cedeiio, Garry Charlier, Erwin De Nys, Gabriel Demombynes, Joseph Denis, Michael Drabble, Pablo Fajnzylber, Jennifer Fievre, Henri Fortin, Ross Gartley, Joana Godinho, Christophe de Gouvello, Afef Haddad, Linn Hammergren, Peter Holland, Brendan Horton Francesca Lamanna, Chingboon Lee, Patricia Macgowan, Christina Malmberg Calvo, Christine de Mariz, Ulrich Myboto, Jimmy Pannett, Vanessa Paul, Nicolas Peltier, Emmanuel Pinto Moreira, Thouria Nana-Sinkam, Manuel Schifler, Atou Seck, Fily Sissoko, Catherine Tovey, and David Warren. In addition, the team is grateful to the following for their comments: Elizabeth Adu, Laura Bailey, Andreas Bauer (IMF), Jacques Bouhga-Hagbe (IMF), Genevieve Boyreau, Todd Crawford, Elizabeth Cushion, Corinne Delechat (IMF), Sebastien Dessus, Phillippe Dongier, Greg Ellis, Talib Esmail, Ana Paula Fialho Lopes, Mozammal Hoque, Shyam KC (GFDRR), Omowunmi Ladipo, Haeduck Lee, Magdalena Manzo, Ferenc Molnar, Marisela Montoliu, Mary Mulusa, Christine Richaud, Denis Robitaille, Klas Sander, Claudia Sepulveda, Saadat Siddiqi, Julio Vega, and Vara Vemeru. HAITI CAS FYO9-FY12 TABLE OF CONTENTS Executive Summary ........................................................................................................................... i I. Introduction.................................................................................................................................... 3 I1. Country Context..................................................................................................................... 4 A . Political and Social Context ............................................................................................. 4 B. Governance and Institutions ............................................................................................ 4 C . Poverty Profile. Gender and Progress Towards MDGs ................................................... 6 D. Economic Performance. Challenges and Outlook ........................................................... 7 I11. Country Development... Program ......................................................................................... 13 A . Country Pnonties and Agenda ....................................................................................... 13 IV. Bank Group Program in Haiti since 2003 ......................................................................... 14 A . Overview of World Bank Activities since 2003 ............................................................ 14 B. Selected Results Achieved under the ISN.................................................................... -16 C . Portfolio Performance ................................................................................................... -16 D. The IFC in Haiti since 2004 ........................................................................................... 17 E. Lessons fiom Program Implementation since FY05 ..................................................... 18 V.Proposed Assistance Strategy for FYO9-FY12 .......................................................................... 19 A . Overview ofthe Strategy ............................................................................................... 19 B. CAS Pillar 1 - Promoting Growth and Local Development ......................................... -23 C . CAS Pillar 2 - Investing in Human Capital ................................................................... 26 D. CAS Pillar 3 .Reducing Vulnerability to Disasters ...................................................... 27 E. Cross-Cutting Themes: Institutional Strengthening and Results ................................... 28 F. CAS Consultations.. ....................................................................................................... 31 G. Analytical Underpinnings .............................................................................................. 31 VI. Donor Assistance .................................................................................................................. 32 VI1. Results-Based Monitoring and Evaluation........................................................................ 33 VI11. Managing Risks .................................................................................................................... 34 TABLES Table 1: Haiti Medium Term Macroeconomic Framework. FY08-FY 12 ......................................... 11 Table 2 Projected IDA Operations ..................................................................................................... 22 Table 3 AAA/ESW/NLTA Program.................................................................................................. 22 Table 4: Commitments by MainDonors