Document of The World Bank Group FOR OFFICIAL USE ONLY Report No. 65112-HT INTERNATIONAL DEVELOPMENT ASSOCIATION AND INTERNATIONAL FINANCE CORPORATION INTERIM STRATEGY NOTE FOR THE REPUBLIC OF HAITI FOR CY 2012 November 1, 2011 Haiti Country Management Unit Latin America and the Caribbean Region The International Finance Corporation Latin America and the Caribbean Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's Policy on Access to Information. Board discussion date of last strategy, the Country Assistance Strategy: June 2, 2009 CURRENCY EQUIVALENTS (Exchange Rate Effective October 7, 2011) Cur r ency Unit = Haitian Gour de US$1 = HTG 40.84 FISCAL YEAR October 1 – September 30 ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory Activities IEZ Integrated Economic Zone AECID Spanish Agency for International Development IFAD International Fund for Agricultural Development AFD French Development Agency IFC International Finance Corporation CAS Country Assistance Strategy IHRC Interim Haiti Recovery Commission CDB Caribbean Development Bank IMF International Monetary Fund CDD Community Driven Development IOM International Organization for Migration CDEM Caribbean Disaster Emergency Mgt Agency ISN Interim Strategy Note A CEML Center for Latin American Monetary Studies JSDF Japan Social Development Fund A CEPAL UN Economic Commission for Latin America KfW Reconstruction Credit Institute and the Caribbean CIDA Canadian International Development Agency MARNDR Ministry of Agriculture, Natural Resources and Rural Development CPI Consumer Price Index MDG Millennium Development Goal CPIA Country Policy and Institutional Assessment MDRI Multilateral Debt Relief Initiative CRW Crisis Response Window MENFP Ministry of Education and Vocational Training CSO Civil Society Organization MINUSTAH UN Stabilization Mission in Haiti CY Calendar Year MTPTC Ministry of Public Works, Transport and Communication DHS Demographic and Health Survey NGO Non-Governmental Organization DSNCR National Poverty Reduction and Growth Strategy OFID OPEC Fund for International Development P Paper DPO Development Policy Operation PAHO Pan-American Health Organization DRM Disaster Risk Management PARDH Haiti Action Plan for National Recovery and Development DSA Debt Sustainability Analysis PDNA Post-Disaster Needs Assessment ECHO EC Humanitarian Aid Office PDVA National Agriculture Extension Strategy EDH National electricity company PRSP Poverty Reduction Strategy Paper ESMAP Energy Sector Management Assistance Program RSR Rapid Social Response FAO Food and Agriculture Organization SDR Special Drawing Rights FIRST Financial Sector Reform and Strengthening SFLAC Spanish Trust Fund for Latin America and the Initiative Caribbean FY Fiscal Year SMEs Small and Medium Enterprises GAFSP Global Agriculture and Food Security Program SPCR Strategic Program for Climate Resilience GBV Gender Based Violence UN United Nations GDP Gross Domestic Product UNDP United Nations Development Program GFDRR Global Facility for Disaster Reduction and UNESCO United Nations Educational, Scientific and Recovery Cultural Organization GHF Global Heritage Fund UN-Habitat United Nations Human Settlements Program HIPC Highly Indebted Poor Countries UNICEF United Nations Children’s Fund HNP Haiti National Police UNOPS United Nations Office for Project Services HOPE US Hemispheric Opportunity through Partnership USAID US Agency for International Development Encouragement Act HRF Haiti Reconstruction Fund USDA United States Department of Agriculture IATA International Air Transport Association WBG World Bank Group ICAO International Civil Aviation Organization WDR World Development Report IDA International Development Agency WFP World Food Program IDB Inter-American Development Bank WORLD BANK IFC Vice President Pamela Cox Thierry Tanoh Director Alexandre Abrantes Paolo Martelli Task Team Leader Michelle Keane Ary Naim Acknowledgements: The following World Bank Group staff contributed to this Interim Strategy Note: Kanae Watanabe, Ali Alwhati, Diego Arias, Alexandre Arrobbio, Betty Bain, Amparo Ballivian, Karen Bazex, Franck Bessette, Pierre Bonneau, Jean-Martin Brault, Juan Buchenau, Caroline Cerruti, Alan Carroll, Alejandro Cedeno, Sylvie Debomy, Bernard Drum, Jennifer Fièvre, Pedro Tarrisse Fontoura, Ross Gartley, Gregoire Gauthier, Sarah Haddock, Peter Holland, Peter Kolsky, Auguste Kouame, Francesca Lamanna, Michel Layec, Josef Leitmann, Christina Malmberg-Calvo, Thomas Moullier, Miriam Muller, Ary Naim, Nyaneba Nkrumah, Maria Beatriz Orlando, Jean-Francois Pean, Fabio Pittaluga, Patrick Ramanantoanina, Luc Razafimandimby, Maryanne Sharp, Ayat Soliman, Frederic Verdol, Gaetano Vivo, , David Warren, Jun Zhang. In addition the Team is grateful to the following for their comments: Elizabeth Adu, Bruce Courtney, Lucia Fort, Manuela Francisco, Anders Hjorth, Boileau Loko (IMF), Ana Paula Fialho Lopes, Marialisa Motta, Laurent Msellati, Mary Mulusa, Reynaldo Pastor, Apurva Sanghi, Eduardo Wallentin, and Tevfik Yaprak. TABLE OF CONTENTS Executive Summar y ....................................................................................................................... i I. Countr y Context................................................................................................................. 1 A. Impact of the Earthquake .................................................................................................... 1 B. Political Update................................................................................................................... 3 C. Economic Update and Outlook ........................................................................................... 4 D. MDGs and Human Development........................................................................................ 6 E. International Support and Pace of Reconstruction.............................................................. 7 II. Gover nment Pr ogr am ........................................................................................................ 9 III. Pr eliminar y Lessons fr om the 2009 CAS and ear ly ear thquake r esponse ................. 10 IV. Pr oposed Inter im Pr ogr am ............................................................................................. 11 A. Flexible two-phased approach .......................................................................................... 11 B. Strategic Framework and Priorities .................................................................................. 12 Strategic Objective 1 - Reducing Vulnerability and increasing resilience ................................... 12 Strategic Objective 2 – Sustainable Reconstruction..................................................................... 13 Strategic Objective 3 – Building Human Capital ......................................................................... 16 Strategic Objective 4 - Revitalizing the Economy ....................................................................... 17 Cross cutting theme: Strengthening Governance ........................................................................ 18 Gender, Environment and Fragility .............................................................................................. 19 Selectivity and Partnerships ......................................................................................................... 20 V. Managing Risks ................................................................................................................ 22 VI. Annexes Annex A: Results Framework Matrix Annex A2: Haiti at a Glance Annex B2: Bank Portfolio Performance and Management Annex B5: Haiti Social Indicators Annex B6: Key Economic Indicators Annex B7: Key Exposure Indicators Annex B8: Operations Portfolio (IBRD/IDA and Grants) IFC Committed and Disbursed Outstanding Investment Portfolio Annex C: Major Donor Investments by Sector Annex D: WBG Pledge of Support to Haiti Annex E: Evolution of Selected MDG Indicators Annex F: Haiti Active Trust Funds Annex G: Haiti Map INTERIM STRATEGY NOTE REPUBLIC OF HAITI CY 2012 E XECUTIVE SUMMARY 1. This Interim Strategy Note (ISN) proposes a World Bank Group (WBG) Program for Haiti for calendar year 2012. An ISN is proposed to rapidly provide substantial support to Haiti’s reconstruction, while Haiti’s new Government takes office. Though it draws upon the WBG’s longstanding efforts to improve Haiti’s development results (as articulated in the 2009 WBG Country Assistance Strategy), the proposed strategy responds to new challenges and priorities thrown up by the January 12, 2010 earthquake and consolidates the WBG’s early response to the crisis. 2. The Interim Strategy programs about half of the SDR329 million (approximately US$530 million) allocated to Haiti for FY12-14 by the International Development Association (IDA) from its Crisis Response Window. It also lays the groundwork for the remaining funds to be programmed under a new Country Partnership Strategy for 2013-2014. IDA16 resources are substantial compared to past performance-based allocations. 3. The ISN prioritizes investments for reconstruction in areas where the World Bank has experience and can deliver results. It is presented for Board Approval, together with US$180 million in investments in Disaster Risk Management, Education and Agriculture. Context 4. The earthquake, which struck Haiti on January 12, 2010, was devastating. It significantly worsened poverty, increased the vulnerability of Haiti’s entire population and, exacerbated the country’s development challenges. Widespread loss of life, destruction, and massive economic losses left Haiti facing a monumental task of recovery and reconstruction. With over a million people homeless, the bulk of its infrastructure destroyed, the civil service decimated (one in three staff died), Government buildings, data and information lost, the earthquake also weakened the Haitian administration’s limited capacity. 5. The shock ushered in promises of US$5.6 billion in international support, a call to “build back better� and high expectations of rapid reconstruction. The Post Disaster Needs Assessment (PDNA) set damages and losses at US$7.8 billion and reconstruction needs at almost US$11.5 billion. At the March 2010 pledging conference, international donors promised $5.6 billion in support of the Government of Haiti’s National Recovery and Development Action Plan (PARDH) for 2010-2011. The WBG pledged to provide US$479 million over two years in new funding, disbursements, debt relief, and IFC support, of which 87% has been provided. 6. Response to the crisis coincided with a lengthy presidential and parliamentary election process (November 2010– October 2011). Though contentious, the presidential election resulted in May 2011 in the first peaceful handover of power to a President from the opposition in Haiti’s history. However, it took five months for President Michel Martelly to obtain Parliamentary agreement on a new Prime Minister and Government. With the new Government taking office mid October 2011, it is hoped that the swift and decisive action needed to accelerate the pace of reconstruction will materialize. i Government Reconstruction Program and World Bank Group Response 7. The Government’s strategy for reconstruction and development is chiefly outlined in its National Recovery and Development Action Plan (PARDH) for 2010-2011. The April 2011 progress report on Haiti’s 2008 Poverty Reduction Strategy Paper (DSNCRP), and the President’s emphasis on Environment (including housing), Employment, Etat de droit or Rule of Law, Education and Energy also shed light on national priorities. The PARDH aims to improve infrastructure, decentralize economic activity, reduce vulnerability, support social reconstruction and develop growth industries, such as agriculture, manufacturing and tourism. In addition to outlining immediate needs, it seizes on reconstruction as an opportunity to spur sustainable development and donors have aligned their programs with its “build back better� principle. 8. The ISN will provide the framework necessary for the delivery of rapid and substantial support to reconstruction by programming about US$255 million in the next 12 months, the first phase of the WBG’s reconstruction response. It will seek to deliver early results to build public trust and confidence and strengthen institutions. The remaining resources (about US$275 million) allocated by IDA will be programmed in collaboration with the new government during the course of 2012. This phased approach provides the needed flexibility to adjust the proposed program to Government’s evolving priorities. Proposed Program 9. The overarching objective of the Interim Strategy is to support the Government of Haiti in implementing sustainable post-earthquake reconstruction. The ISN has four Strategic Objectives: (i) to reduce Haiti’s vulnerability to disasters and crises and increase its resilience to shocks, (ii) to sustainably reconstruct key infrastructure, (iii) to build human capital, and (iv) to revitalize the economy through improvements in the business climate and jobs. The strengthening of governance in favor of reconstruction is the strategy’s cross cutting theme and will drive the content of budget support operations. The ISN takes into account Haiti’s development challenges as set out in the 2009-2012 CAS, but focuses primarily on reconstruction and policies adequate for reconstruction. Its results are set out in an updated Results Framework, which reflects the changes in context, content, and focus of the strategy. 10. The ISN will cover the following areas: Strategic Objective 1: Disaster Risk Management, Cholera Prevention; Strategic Objective 2: Urban Upgrading and Housing, Electricity; Strategic Objective 3: Education and Social Protection; Strategic Objective 4: Job Creation and Private Sector Development, Agriculture and Rural Development. IDA will also provide budget support. Specific activities are foreseen within each project to strengthen Government capacity. Gender issues will receive particular attention within ISN activities. 11. The ISN will emphasize selectivity with regard to new IDA grants. Criteria used to select operations to be supported by this ISN include: (i) government commitment, (ii) IDA’s comparative advantage vis-à-vis other development partners, (iii) readiness for implementation, and (iv) implementation capacity. The Portfolio is being consolidated to concentrate human and financial resources on the achievement of critical outcomes in key areas for reconstruction. 12. Five new IDA projects are being prepared for this ISN period. These are: Disaster Risk Management and Reconstruction (US$60 million); Education for All Adaptable Program Grant II (US$70 million); Re-launching Agriculture (US$50 million, of which US$10 million from GAFSP); Job Creation (US$55 million); and a Development Policy Operation (US$25- 30 million). Implementation of emergency operations approved during 2010 in the Housing ii Sector (US$95 million) and in support of Institutions and Infrastructure (US$65 million) will continue. The results expected are summarized in Annex A. 13. IFC will intervene under Strategic Objective 2 by continuing its knowledge activities on Housing Finance and Strategic Objective 4 by making investments that create jobs and income opportunities, while undertaking advisory activities to help improve Haiti’s investment climate, build capacity and improve the business environment for SMEs, and address key infrastructure challenges through public-private partnerships. Instruments 14. The ISN will rely on a mix of instruments to deliver its support. These will include Sector Investment Grants, in the form of emergency operations where needed, a Development Policy Operation, and Trust Fund resources to strengthen or complement IDA interventions in key sectors. IFC will continue to provide debt and equity instruments for the private sector and develop public private partnerships for investment in infrastructure. IDA knowledge activities and IFC advisory services will be used in a complementary fashion to promote an infrastructural and business environment propitious to growth. Partnerships with other donors will continue to play a crucial role in the effectiveness of IDA investments in core sectors and in policy dialogue. 15. Flexibility in implementation. The ISN aims to provide flexible but substantial support in the face of great needs. Early during the ISN period a review of procedures for the Haiti portfolio will be held under the aegis of the Ministry of Finance, to streamline procedures, reduce fiduciary risk and maximize capacity. Risks 16. Delays in establishing a new government have heightened uncertainty and tensions between the executive and legislative branches of government could persist. Together with a lack of improvement in living conditions, this remains a source of potential instability. The ISN aims to contribute to concrete, achievable outcomes in the upcoming 12 months, through projects already being implemented by the Executive. 17. Limited Government capacity remains a risk for the implementation of the Strategy. The ISN proposes large commitments only in sectors where agreement has been reached with Government on policy content, where the Bank is already active, implementation mechanisms exist, and their capacity is known. The housing sector presents some challenges in this regard, and special efforts are needed to support government capacity in this area. 18. The climatic shocks to which Haiti is subjected every year continue to present a risk for WBG investments. With the increased vulnerability of Haiti’s population, climatic and other shocks are likely to have more profound impacts. The ISN addresses this by strengthening its support to Government’s capacity to shield population and infrastructure from disasters. Also, emergency funds have been foreseen in every new project to rapidly respond to adverse shocks. The ISN also supports better preparedness for food price and cholera-related shocks. 19. Governance Environment. An environment of weak transparency and accountability and uneven efforts toward improved governance are compounded by Government’s limited capacity. To promote governance improvements, IDA will continue to support transparency and accountability measures in public financial management, explore anti-corruption measures with the new Government, and subject Bank managed projects to governance reviews and a high level of fiduciary scrutiny. iii I. COUNTRY CONTEXT 1. Haiti remains the poorest country in the Americas and one of the poorest in the World (GDP per capita of US$673), with significant need for basic services. It is also one of the most unequal, as indicated by a Gini coefficient of 0.59. Over half of its population of 10 million lives on less than US$1 per day, and 78% live on less than US$2 per day. The country lags in social indicators, ranking 148 out of 172 in the 2010 Human Development Index, and has suffered from repeated exogenous and political shocks. In 2008, rising food and fuel prices led to riots and the fall of the Government. Tropical storms and hurricanes that year caused losses estimated at $900 million (15% of GDP). Despite this, Haiti experienced modest but stable growth in the 2000s, with an average real growth of 2.2 % p.a. 2004-2009. A. I MPACT OF THE E ARTHQUAKE 2. The January 12, 2010 earthquake killed 220,000 people, wounded 300,000, destroyed the equivalent of 120% of GDP and is estimated to have wiped out a decade of poverty gains. The disaster struck very close to Port au Prince, the capital, where an estimated 65% of GDP and 85% of government revenues were generated. In addition, it deeply affected the South West, South and Nippes departments, including the cities of Jacmel and Leogane. The March 2010 Post Disaster Needs Assessment (PDNA) set damages and losses at US$7.8 billion and reconstruction needs at almost US$11.5 billion, the highest cost of a disaster relative to the affected country’s economy in the last 35 years. Crucial sectors were dealt a severe blow: education lost 1200 teachers and 4200 schools; over 500 health personnel and workers died and more than 60% of the country’s hospitals were damaged or destroyed; electricity services to most of Port au Prince were interrupted; and 300,000 houses became uninhabitable, leaving 1.3 million people homeless. By killing one out of three civil servants, many in middle management, collapsing government buildings (13 out of 15 Ministries), and destroying archives, the disaster considerably weakened the Haitian administration’s capacity. The private sector suffered an estimated 70% of total damages and losses. Hurricanes and a cholera epidemic in the second half of 2010 compounded the devastating impact of the earthquake. 3. The International Community quickly mobilized to respond to the emergency. About $1.6 billion in humanitarian relief was provided in 2010. Support came from all of Haiti’s partners, including MINUSTAH and the US Army, countless Emergency Relief Organizations, churches and volunteers. Temporary camps and support programs were set up for over a million displaced persons, food was distributed, clean water and sanitary facilities were put in place, and education, feeding and health services were provided by countless NGOs, UN Agencies and other organizations. Initial concerns that massive epidemics and unrest would spread through the camps never materialized. 4. The World Bank Group responded within 24 hours. The Bank Group and the Global Facility for Disaster Risk Reduction (GFDRR) made staff available to support the Prime Minister’s office, the Ministry of Finance and the Ministry of Public Works. Existing resources were used to provide computers, get information, and start compiling data on the destruction through satellite imagery. Within six weeks, the World Bank Group approved US$65 million in 1 emergency funds. Together with funds from the existing portfolio, these resources financed school feeding and food supplements (through WFP and UNICEF), essential health services for pregnant women and children under two (through PAHO), made available disaster relief staff and expertise at several levels of government, launched a massive building safety assessment, and provided temporary offices, computers, funding and organization to enable the Ministry of Finance to operate. 5. At a March 2010 pledging conference, international donors promised an unprecedented $5.6 billion in support of Haiti’s recovery, as set out in the Programme d’action pour le redressement et le développement d’Haïti (PARDH) for 2010-2011. The PARDH seized on reconstruction as an opportunity to spur sustainable development by improving infrastructure, decentralizing economic activity, reducing vulnerability, and developing growth industries. Donors expressed strong support for the “build back better� principle and expectations were high for rapid reconstruction. By the end of September 2011, 90 percent of the pledges announced had been committed, with the top 30 donors having approved US$1.1 billion in debt relief and $4.0 billion in projects and programs, of which US$2 billion has been spent. 1 6. The WBG pledged to provide US$479 million in support in new funding, disbursements from existing projects, debt relief, and IFC support over 2010-2011. More than US$410 million has been delivered (Annex D provides a breakdown). New projects funded by IDA and through Trust Funds have been approved for US$145 million, and US$187 million have been disbursed from existing projects since the earthquake, with an average monthly disbursement of around US$9 million. Haiti’s US$39 million debt to IDA was cancelled in May 2010, and IFC has provided US$45 million in support to the Haitian Private Sector. IDA funds were used to rebuild roads, bridges and government facilities, protect displaced persons from flooding, help respond to cholera, launch neighborhood upgrading and community housing reconstruction, keep children in school and train teachers. Budget support enabled the Government to close its 2009-2010 fiscal gap. The IFC also approved emergency funding to its existing customers in Haiti to enable them to restart their businesses, and made new investments in the hospitality and mining sectors. 7. To help coordinate reconstruction, the Government created an Interim Haiti Recovery Commission (IHRC) composed of key national and international stakeholders and co-chaired by the Prime Minister of Haiti and former US President Bill Clinton (also UN Special Envoy for Haiti). The IHRC served as the locus for a high level dialogue with the objective of providing strategic direction for reconstruction and ensuring that reconstruction projects were consistent with Government priorities. Since August 2010, it has approved 96 projects for US$3.2 billion, of which US$1.8 billion were funded. Until the lapsing of its mandate end October 2011, the IHRC selected projects for submission to the Haiti Reconstruction Fund (HRF), a Multi Donor Fiscal Intermediary Fund for which the World Bank serves as a trustee. 8. The HRF allows donors to pool resources for priority reconstruction activities approved by the Government of Haiti 2. About 20% of reconstruction finance is channeled through the Fund, which provides financing to fill gaps in priority sectors such as housing, debris 1 Pledges are monitored by the Office of the UN Special Envoy to Haiti. 2 Until end October 2011, this approval was provided in the context of the IHRC. 2 management, disaster risk reduction, and public finance. Since June 2010, the HRF has received US$352 million in contributions. As of November 2011, the HRF has allocated US$269 million to 15 activities implemented by four partner entities (IDA, IDB, IFC, and the United Nations). Two activities are implemented by IDA: an Emergency Development Policy Grant for US$25 million, fully disbursed in August 2010, and a Neighborhood Upgrading and Housing Reconstruction Project of US$65 million approved in May 2011. An operation of US$15 million to support expenditures in agriculture and education is under discussion. 9. Despite weak capacity, much has been done. Half of 11 million m3of debris have been removed, camp occupancy has dropped by 700,000 from an estimated 1.3 million, capacity to prepare for hurricanes has been strengthened as demonstrated in the face of Hurricane Tomas in October 2010 and during the 2011 hurricane season, schools have reopened for 2011-2012, and temporary shelter projects are making way for neighborhood repair and reconstruction programs, which will build social capital and revitalize the economic life of Port au Prince’s poorest neighborhoods. B. P OLITICAL UPDATE 10. Response to the crisis coincided with a lengthy presidential and parliamentary election process (November 2010 to October 2011). Though tumultuous, the Presidential Elections launched in November 2010 led, in May 2011, to the first peaceful handover of power to a President from the opposition in Haiti’s history. President Michel Martelly received a strong majority of cast votes, while the former Government’s party, Inité, retained a majority in both houses of Parliament, resulting in a “cohabitation.� It took five months for a new government under Prime Minister Gary Conille to be approved in mid-October. Collaboration between the executive and legislative branches is crucial to enable Haiti’s new Government to implement its program. Such collaboration is needed to underpin decisive Government action to accelerate reconstruction. 11. A key challenge for any new administration will be to overcome a legacy of distrust of the State by Haitian citizens. Although it has not been at war, the country displays classic signs of fragility as described in the 2011 World Development Report. Over the years, persistent social inequity, concentration of power, a lack of social justice and of the rule of law have repeatedly led to eruptions of violence. Lack of transparency and inefficiencies in the public sector, including in service delivery, have severely damaged the credibility of the State. Any new Government will have to prove to its citizens that it will bring about positive change for the people. In this vein, over the last months, President Martelly has pledged to significantly increase access to education and provide basic social protection to the most vulnerable. He has also underlined his commitment to the Rule of Law and filled the long vacant post of Chief Justice (President of the Cour de Cassation), a first gesture toward the much-needed judicial reform called for by many, including organizations of civil society and the private sector. Nevertheless, corruption remains a significant concern for Haiti, as indicated by its low rating on various perception indices and its modest Country Performance and Institutional Assessment (CPIA) score, as measured by IDA. 3 12. MINUSTAH, the multilateral UN stabilization force of 12,000 present in Haiti since 2004, continues to provide the backbone of Haiti’s security apparatus. The Haitian army was disbanded in 1995. On October 14, 2011, the Security Council renewed its mandate for a further 12 months, while returning its size to pre-earthquake levels (about 10,000). Training of the Haitian National Police (HNP) has been a mainstay of donor efforts, with the objective of handing over security responsibilities to the HNP in the medium term. However, this will take time as further efforts are needed to strengthen its human and organizational capacity. Anti- MINUSTAH rhetoric is recurrent in the political discourse and demonstrations have erupted periodically, pointing to concern in Haitian society over excessive foreign influence. C. E CONOMIC UPDATE AND O UTLOOK 13. The Haitian economy is recovering, mainly driven by the agriculture, textile and construction sectors. The economy is projected to have grown by 6.1% in 2011 in large part due to reconstruction efforts after having declined by 5.4% in 2010 following the earthquake. The sources of growth remain the same as prior to the earthquake: agriculture, construction, assembly manufacturing, and market services (predominantly commerce, hotels, and restaurants). The agricultural sector was only moderately affected by the earthquake and has sustained 2009/2010 production levels. The textile industry recovered quickly above pre-earthquake levels, boosted by the extended duty free access to the US granted by the new HOPE initiative. Construction and commerce have also received a considerable boost. Over the coming two years, GDP growth is projected to accelerate and average 7%, driven by the reconstruction efforts and expanding economic activities. 14. The macroeconomic situation is improving. First, on an upward trend and driven by increasing imports and recovery efforts, domestic tax revenues amounting to 11.9% of GDP in 2010 and 12.9% in 2011 have more than covered current expenditures. Supported by generous grants from donors, total expenditures sharply increased to 15.9 % of GDP in 2010 before falling in 2011 to 9.8% of GPD on account of the capital expenditure performance. This trend in 2011, partially explained by the political uncertainty, is projected to be reversed in the coming years. Improved revenue collection, issuance of T-bills, and continued donor support are expected to support government budget and expanding development program in the coming years. Second, as expected, imports have been on an upward trend due to reconstruction efforts. They have been, and are projected to be matched by inflows of official transfers, and to a lesser extent by faster-than-expected export recovery driven by the textile sector through 2012-2013. The current account deficit is projected to remain between 4 and 6 percent of GDP over the same period. 15. In the short run, inflation remains a concern given rising international commodity prices. After the relatively low inflation of 4.7 % in FY2009/10 (end September), inflation has accelerated to 9.8% in FY2010/11. Much of the rise was driven by food prices (up 11%). Haiti’s vulnerability to rising food prices is compounded by the high share of food in household consumption. In fact, Haiti stands out as the most vulnerable country in the region due its high level of poverty and high net food imports to GDP ratio. Close monitoring of commodity prices, including local prices and price transmission channels, is needed to assess potential impact on the poorest in a timely fashion. The current pressure on consumer prices is now projected to 4 gradually fade in 2012 and 2013, with end-of-period inflation expected to drop to 6.2% in FY2011/12 and 4.9% the next year. 16. A significant share of Haiti’s external debt has been cancelled by multilateral and bilateral donors since the earthquake. Haiti’s risk of debt distress was high after HIPC and MDRI, as shown in the latest Low Income Country Debt Sustainability Analysis (DSA) dated July 2010. However, the debt relief provided by key creditors after the earthquake is likely to improve long-term debt sustainability significantly. Nonetheless, the debt situation needs to be monitored closely. First, debt dynamics remain sensitive to external shocks, pointing to the need for highly concessional borrowing, aggressive diversification of exports, and continued efforts to increase domestic revenue. Second, Haiti’s debt under the PetroCaribe Agreement has soared. Despite the cancellation of Haiti’s debt to PetroCaribe amounting to US$395 million in the aftermath of the January 2010 earthquake, continued accumulation of PetroCaribe borrowing (projected at US$230-285 million a year) could pose some risk for external debt sustainability. A new DSA will be conducted early 2012. 17. Haiti’s key challenge is to sustain high growth and reduce poverty in the medium- term. This will require the adoption of an effective growth strategy focused on improving the efficiency of the few “traditional� economic sectors. In the short-run, growth is projected to be underpinned by construction (housing and urban development), agriculture (the main source of income for over 60% of Haitians and 25% of GDP), tourism and textile manufacturing. However, the growth strategy should aim to foster the emergence of new economic activities in areas such as light manufacturing, assembly, new agricultural products, and agro-industry. Given the structure of the economy, its import constraints and limited public savings, this could be achieved through a private sector, export-led growth strategy, which would require: (i) openness to foreign direct investment and a regulatory environment favorable to private investment, including in land titling; (ii) efficient infrastructure development, including financial infrastructure; (iii) building human capital (education); and (iv) aggressively promoting the development of non-traditional exports. 18. Such a growth strategy would also be facilitated by improving the efficiency and quality of public spending. Better targeting and programming of public investments would be needed, as would a continuation of reforms in procurement, transparency in public transfers, and public expenditure management. In addition, decision-making processes could be accelerated and made more predictable. Technical and financial capacity at the level of Ministries could be enhanced by drawing on and expanding Haiti’s cadre of well-educated and capable senior officials. Considering the vulnerability of Haiti’s economy to natural disasters, making prevention and mitigation of such disasters central to government investment and policy decisions can lead to more sustainable growth. 19. The ISN takes these constraints and recommendations into account by continuing to emphasize economic governance and public financial management reform and by investing in private sector development, diversification of the sources of growth, infrastructure development, and capacity building. 5 Table 1: Selected Macroeconomic Indicators (Fiscal year ending September 30; in percent of GDP) 2008/9 2009/10 2010/11 2011/12 2012-3 Est. Prov. Proj. Proj. Proj Real GDP growth 2.9 -5.4 6.1 7.5 6.9 Inflation (end of period) -4.7 4.7 9.8 6.2 4.9 Central Government finances (% of GDP) Total revenue and grants 17.9 29.6 20.4 28.0 26.1 Domestic revenue 11.2 11.9 12.9 13.5 14.2 Grants 6.7 17.8 7.5 14.5 11.9 o/w Budget support 1.5 3.4 1.1 0.7 0.1 Total expenditure 22.3 27.5 19.7 32.6 31.2 Current Expenditures 11.5 11.5 10.0 11.1 10.9 Capital expenditure 10.8 16.0 9.8 21.5 20.3 o/w Domestically financed 4.1 5.5 3.2 7.2 8.4 Primary balance -3.6 2.7 0.3 -4.2 -4.8 Overall balance (inc. Grants) -4.4 2.1 -0.2 -4.5 -5.2 Financing 4.4 -2.1 0.2 4.5 4.1 External net financing 3.1 3.4 4.4 5.9 5.1 Loans (net) 3.1 3.4 4.4 5.9 5.1 Internal net financing 0.8 -5.5 -4.2 -1.3 -1.0 Banking system 0.2 -6.4 -4.7 -1.8 -1.7 BRH 0.2 -4.2 -2.3 1.4 0.9 Commercial banks 0.0 -2.1 -2.4 -3.2 -2.6 Net purchase of T-bills 0.0 0.1 -0.1 0.4 2.5 Nonbank financing 0.5 0.9 0.6 0.4 0.7 HIPC interim relief 0.5 0.0 0.0 0.0 0.0 Unidentified financing 0.0 0.0 0.0 0.0 1 External sector Current account balance incl. official transfers -3.5 -2.4 -4.1 -6.0 -5.1 Exports of g. (change over previous year) 12.4 2.6 28.4 10.5 10.7 Imports of g. (change over previous year) -3.6 38.2 7.2 12.4 3.2 Capital and financial accounts balance ($US millions) 501 877 528 262 369 Overall balance of payments ($US millions) -108 1,042 224 -246 -116 Gross official reserves (months of import cover) 2.8 5.2 5.4 4.7 4.5 Memorandum items Nominal GDP (billions of gourdes) 266.6 265.0 297.7 343.8 391.0 Total public debt as % of GDP (end of period) 27.7 17.1 10.3 16.5 22.4 Source: Staff estimates based on IMF and Government projections. D. MDG S AND H UMAN DEVELOPMENT 20. Haiti ranks 148th out of 172 Countries in the 2010 Human Development Index. Pre- earthquake Haiti was unlikely to meet most Millennium Development Goals (MDGs) by 2015. The DSNCRP of 2008 found little or no progress over the two previous decades on MDG indicators for poverty, hunger, primary education, child mortality, maternal mortality, and the environment. Annex E shows the evolution of selected indicators since the early 1990s. Comprehensive data is not currently available to measure post-earthquake evolution of the MDG indicators. • Although Haiti had nearly achieved the goal of eliminating gender disparities in primary and secondary education in 2009, school enrollment overall remained very low, with 6 enrollment rates of 76% at primary level, 22% at secondary level, and only 23% for pre- school. Around 400,000 children in Haiti, more than a quarter of all children 6-14 in the poorest income quintile, did not attend school prior to the earthquake. Adult literacy remains low, particularly for women. • Haiti has some of the highest under-five and maternal mortality rates in the world at 87 per 1,000 live births and 630 per 100,000 live births in 2005, respectively, due to inadequate access to skilled staff at delivery, poor quality antenatal care, and a persistently high unmet need for contraception. At current service levels, it is projected that by 2015 under-five and maternal mortality rates will remain at the same level. • Malnutrition remains a particularly serious issue in both pregnant women and children, with nearly one-third of all children under five suffering from stunted growth. Estimates point to losses in productivity associated with malnutrition of $525 million (14% of GDP) per annum of which one tenth are from micronutrient deficiencies alone. • Progress had been notable in reducing the incidence of HIV-AIDS, roughly halving incidence rates over the 2000 decade. However, Haiti still shows the highest national rates outside sub-Saharan Africa, with women disproportionally affected (2.3% for women vs. 2.0% for men). 21. Over its short implementation period, the ISN will continue to work toward Haiti’s achievement of the MDGs, through continued improvements in access to primary education, including for girls, and to school feeding, the reduction of malnutrition through better utilization of health and nutrition services by the most vulnerable households in a pilot area, the provision of cholera prevention and treatment services, and the strengthening of capacity at the Ministry of Health. Reducing the vulnerability of displaced populations who return to rehabilitated neighborhoods and increasing their access to basic services are also key vectors of IDA’s action in the urban sector. E. I NTERNATIONAL SUPPORT AND P ACE OF R ECONSTRUCTION 22. When compared with other countries, a multiplicity of development partners and actors are present in Haiti, many of them with very substantial resources. Most of Haiti’s public capital investments are externally financed. In addition to key bilateral and multilateral partners, at the time of the Earthquake, an estimated 9000 NGOs were active in the country. Due to the multiplicity of actors and the vast number of areas in which they are active, donor coordination is a substantial challenge for the Haitian administration and the international community, as illustrated by Figure 1 (top 5 donors). 23. Donors are active in all sectors critical to reconstruction. Donor programs cover a broad range of sectors and the multiplicity of actors continues to present a challenge. Donors are eager for enhanced coordination through Sector Round Tables and Groups under the guidance of the new Government and with the support of lead partners. Further efforts are underway to enhance strategic coordination and implementation to achieve better results and avoid overburdening government resources and capacity. 7 Figure 1: Donor Investments by Sector Groups 24. Following the Crisis Response Window (CRW) Allocation, the World Bank became Haiti’s 5th largest donor. The US Government, the Inter-American Development Bank and Canada are currently Haiti’s largest donors. Each has promised close to a billion dollars in support since the earthquake. The US program includes substantial support to the Haitian National Police and to the electoral process, as well as investments in health, agriculture, electricity generation and distribution, new housing development, civil service strengthening and civil society capacity building. The IDB program includes large investments in the Northern Integrated Economic Zone, as well as substantial programs in roads, health and education (including school reconstruction), agricultural productivity, and in the water and energy sectors. Canada supports institutional reform, in particular the justice sector, security, education, and agriculture. The European Union has promised US$570 million for investments in institutional strengthening at the municipal level, urban infrastructure development and a large portion of the road network. In addition, Brazil, France and Spain are key bilateral partners for Haiti. Annex C summarizes areas of donor intervention. 25. Although it remains difficult to measure the impact of the overall reconstruction effort due to the lack of a centralized monitoring tool for results, much progress has been made. Half of the debris has been removed from Port-au-Prince resulting in improved circulation and noticeable reconstruction activity, though a sustained effort is needed to continue to clear rubble. About 700,000 people have left the camps, a 60 percent reduction. Port-au-Prince’s buildings have been assessed under Bank financing in collaboration with the Government and 8 UNOPS. This database is critical for all actors in the reconstruction effort. The assessment also allowed occupants to return to green tagged (inhabitable and safe) houses and stay out of unsafe red tagged homes. Tuition waivers financed by the World Bank, CDB, Canada and the IDB allowed about 180,000 children to attend schools open during the 2010-2011 school year, some in makeshift shelters. Cholera prevention and treatment systems have functioned relatively well, resulting in a dramatic reduction of the nationwide fatality rate. The IFC E-Power project increased electricity capacity for Port-au-Prince by 30 percent and some private investment in integrated economic zones has materialized. In an environment of extremely low government capacity, overstretched non-governmental actors, and high fiduciary risk, these achievements are significant. 26. However, progress has not kept pace with the expectations of the population, which increases the risk of volatility, and has led to criticism of the international community in the media. While new and increasingly local capacity is being built, this takes time. Under much better circumstances, reconstruction after the 2004 tsunami in Indonesia and Hurricane Katrina took 4 to 6 years. Given the Haiti’s capacity challenges and its fragility, reconstruction in Haiti could take longer. II. GOVERNMENT PROGRAM 27. The Government’s strategy for reconstruction and development is chiefly outlined in its National Recovery and Development Action Plan (PARDH) for 2010-2011. The April 2011 progress report on Haiti’s 2008 Poverty Reduction Strategy Paper (DSNCRP), and the President’s emphasis on Environment (including housing), Employment, Etat de droit or Rule of Law, Education and Energy (known as the “five E’s�) also shed light on national priorities. The PARDH is based on the PDNA and sets out the Government’s post-earthquake recovery and reconstruction objectives in addition to establishing the “Build Back Better� principle. It aims to improve infrastructure, decentralize economic activity, reduce vulnerability, support social reconstruction and develop growth industries, such as agriculture, manufacturing and tourism. However, the strategy says little on relative priorities and sequencing and is a challenge to use as a road map for reconstruction and coordination. Nevertheless, the Government has underlined the following immediate priorities: a) protecting the population in the 2011 rainy season, b) moving 5000 families out of 6 refugee camps into 16 upgraded and reconstructed neighborhoods, c) early confirmations of direct investment, and d) providing 250,000 children with education. A second PRSP is being developed to respond to the new reality of a post-earthquake Haiti. 28. The PARDH organizes reconstruction priorities into four large categories: Territorial, Social, Economic and Institutional. These underpin the ISN’s strategic objectives. Territorial priorities include: reconstruction (with emphasis on housing), transport and other infrastructure, and disaster risk management. Social priorities include: increasing education access and training, child nutrition, improved maternal and infant health, access to clean water and sanitation, and social protection. Economic priorities include: increasing employment, expanding investment, improving access to credit, promoting SMEs, increasing agricultural productivity, developing industry (including electricity), and decentralizing economic activity. The final group of priorities aims to strengthen the authority and the role of the state, re-establishing justice and security, increasing decentralization, supporting democratic institutions and increasing government capacity. 9 III. PRELIMINARY LESSONS FROM THE 2009 CAS AND EARLY EARTHQUAKE RESPONSE 29. The objectives of the FY09-FY11 Haiti CAS have been partially achieved, one year before its closing date. Severe external shocks (food price spikes, four successive hurricanes in 2008, and the 2010 earthquake) diverted resources away from Haiti’s Development Program and weakened implementation capacity. Also, the program’s ambitious objectives did not match IDA resources, which were spread too thinly across projects and sectors. 30. The Program was successful in setting up mechanisms for service delivery and channeling resources to the local level. Institutional work to strengthen disaster risk management capacity proved effective in the aftermath of the earthquake and continues to be strengthened. Systems developed to channel resources to Communities through the CDD mechanism were very effective, the tuition waiver program put in place under the IDA Education Project is now used by other donors and the Government, and a system of rural water delivery financed by IDA is now being scaled up through a large IDB program. However, in many sectors, outcomes achieved and services delivered were more modest than planned. 31. In the aftermath of the earthquake, the WBG adjusted its program in an effort to provide a flexible response to the crisis. The World Bank Group moved rapidly and flexibly to help restart Government, support the Haitian people and support donor coordination. Commitments exceeded the initial IDA allocation ($249 vs. $114 million) with substantial resources added by IDA to respond to crises. Disbursement rates after the earthquake peaked at around 40%, some of the highest in the Bank, and disbursements have remained at US$9 million per month on average since the earthquake. Emergency resources were delivered in record time (50-60 days from request to delivery for several emergency IDA operations) by both IDA and IFC. IDA made good use of delivery mechanisms of other agencies and NGOs, while providing global post-crisis experience, knowledge and capacity to Government with the collaboration and support of the Global Facility for Disaster Risk Reduction (GFDRR). 32. IFC’s activities have supported sustained private sector growth prior to the earthquake and early recovery in the aftermath. IFC funding and technical support have helped create improved conditions for economic recovery and increased access to infrastructure over the CAS period. In the energy sector, IFC structured and financed the thermoelectric power plant E-Power which represents 18% of national installed capacity and provides an estimated US$20 million of cost savings for the state-owned utility, compared to existing thermoelectric plants. In the telecom sector, IFC led the structuring, on an advisory basis, of the partial privatization of NATCOM, leading to US$100 million in foreign investment towards acquisition and additional capital expenditures for the expansion and quality of the network. IFC’s FY09 investment in the capital of Sogebank has strengthened the bank’s governance, and supported an SME finance unit that has played an important role in financing small businesses post- earthquake. Immediately after the earthquake, IFC approved an emergency package to support its existing clients and committed new investments. While Eurasian Minerals supports 800 jobs, the CODEVI textile zone created 4,000 new jobs. A new business hotel, Oasis, is being built with IFC financing. IFC has also ramped up its advisory services, including a strategic study on the port sector, in-depth investment generation work with a focus on investment promotion and integrated economic zones, and SME capacity-building activities through its Business Edge product. IFC’s combined investment and advisory projects have helped create 5,000 new jobs 10 and has safeguarded 5,000 existing jobs. IFC's interventions to stimulate private sector job creation and capacity have proven effective to achieve quick results. 33. Key lessons from the CAS and the Emergency Response include: • Simplify implementation and add flexibility including crisis resources in projects • Reduce dispersion: fewer, bigger projects in critical areas and greater efficiency • Reinforce government capacity while providing external support for quick wins • Commit to the continued decentralization of staff and in-country implementation support • Continue IFC interventions to stimulate private sector-led job creation IV. PROPOSED INTERIM PROGRAM A. F LEXIBLE T WO -P HASED APPROACH FOR THE IDA 16 ALLOCATION 34. Phase I - The objective of this ISN is to deliver rapid and substantial support during the first 12-month phase of the WBG’s reconstruction response under IDA 16. Commensurate with lessons from the 2011 World Development Report, Phase I seeks to deliver concrete results in a short time frame to help build public trust and confidence and bridge the gap between emergency response and reconstruction. Phase I will therefore: (i) focus on a limited number of results; (ii) work through fewer, larger projects in areas where delivery mechanisms have been tested; and (iii) simplify project implementation and increase flexibility. The latter will be achieved by introducing contingency funding at the project level, to facilitate responses to new shocks. During Phase I, IDA will work with the new Government on the preparation of Phase II. 36. Phase II – A second phase of catalytic investments and a more ambitious reform program will be developed for the 2013-2014 period in collaboration with the new Government, using the remaining resources available for Haiti during the IDA16 period. This phased approach provides the needed flexibility to adjust the proposed program to Government’s evolving priorities. Preliminary areas of interest for investment during Phase II include electricity, infrastructure reconstruction, social protection and programmatic budget support. 35. The ISN will allow urgent projects in areas of strong collaboration to move forward and commit about 50% of available IDA16 funds under Phase I. Of these, US$170 million are presented to the Board together with this ISN. Phase I will also benefit from US$10 million from GAFSP. The Strategy will focus on the reconstruction of physical, economic, social and institutional assets, in sectors where the Bank has a comparative advantage. The ISN’s short term results will be derived chiefly from existing projects in Disaster Risk Management, Housing and Education. They aim to achieve concrete outcomes in the short time frame, but to build momentum and lay the foundation for sustainable and amplified results in the next phase. The bulk of the impact of new investments will accrue beyond the ISN period. To respond to Haiti’s specific challenges related to vulnerability, governance, and capacity constraints, projects in the program will: (i) include contingency funding to respond to emergencies and disasters, (ii) be subject to periodic governance and accountability reviews, (iii) and support capacity shifts where possible, while promoting speed and ensuring appropriate fiduciary oversight. 11 37. The proposed ISN is in line with the Government’s Action Plan, PARHD, the PRSP, the priorities established by the IHRC over the last year and responds to priorities set out by the President. The strategy has been discussed with Government and comments have been sought from the Haitian members of the IHRC, including representatives of civil society, Parliament, the justice system, the private sector, and trade unions, as well as from key donors. B. STRATEGIC F RAMEWORK AND P RIORITIES 38. In addition to the phased approach, World Bank Group's Strategy is built around its various comparative advantages as Haiti's development Partner. The WBG will use its convening power to continue to coordinate the Budget Support Group, provide leadership in the Disaster Risk Management and Housing Sectors, including on housing finance with IFC, and in the development of Social Safety Net options for Haiti. The World Bank will continue to administer the Haiti Reconstruction Fund. The WBG will invest considerable resources in key sectors for reconstruction as detailed below through IDA, IFC, and Trust Fund resources. Finally, it will continue to provide knowledge services and just in-time advice to the Government of Haiti to support its reconstruction and development program. 39. The overarching objective of the Interim Strategy is to support the Government of Haiti in implementing sustainable post-earthquake reconstruction. The ISN will be built on four Strategic Objectives and one cross cutting theme. The Strategic Objectives are: (i) Reducing vulnerability and increasing resilience; (ii) Sustainable reconstruction; (iii) Building human capital; and (iv) Revitalizing the economy. Strengthening governance will be its only cross cutting theme. It will permeate all operations and drive the content of budget support operations. See Figure 2 for strategic areas and outcomes below. 40. Though the ISN takes into account Haiti’s longstanding development challenges as set out in the 2009-2012 CAS, it focuses primarily on reconstruction in earthquake affected areas, accelerated capacity building for disaster risk management, and laying the foundation for policies adequate for reconstruction. Its results are expected to be modest in magnitude over the 12 month ISN period, but significant by the end of the IDA 16 period. These are set out in an updated Results Framework (Annex A) which reflects the substantial changes in context, content, focus, and funding 3 of the strategy. Strategic Objective 1 - Reducing Vulnerability and Increasing Resilience 41. The Strategy aims to strengthen Haiti’s capacity to respond, manage and prevent disaster related crises nationwide. Reducing vulnerability and building resilience to shocks and disasters is vital for Haiti, which has one of the highest exposures to multiple natural hazards in the world. Combined with high population density (up to 40,000 per km2 in Port-au-Prince) and weak building and infrastructure norms, disasters render Haiti’s population particularly vulnerable. 3 Over US$175 million in emergency funding was approved for Reconstruction, DRM and Cholera in 2010. 12 42. IDA will intensify its longstanding support to the Government’s Disaster Risk Management system. Directly and through GFDRR, IDA has provided substantial financial and technical support to Disaster Risk Management (DRM) throughout the post-earthquake period. In particular, this support has been crucial to developing the information database of detailed building-by-building structural information upon which all government and donor reconstruction activities now rely. Three projects for US$113 million are under implementation in this area. Through the proposed Disaster Risk Management and Reconstruction Project (US$60m) substantial resources would be devoted to reducing the physical vulnerability of communities (flood prevention, emergency shelter, soil consolidation etc.), strengthening civil protection units nationwide, educating and preparing the public for disasters (evacuation drills), and supporting the incorporation of disaster risks into the policy decisions of key line ministries. The project will also improve the resilience of critical transport infrastructure and build capacity to manage public infrastructure. In addition to improving infrastructure access overall, it will protect communities from isolation and flooding when natural disasters occur. Continued implementation of the Cholera Emergency Response Project ($15m) approved in January 2011 will help reduce Haiti’s vulnerability to the epidemic by supporting prevention training and education, treatment, monitoring of the epidemic, and capacity building. 43. Results - Activities supported by the ISN over the next 12 months will improve civil protection presence and capacity, improve knowledge of cholera and provide treatment, and rehabilitate roads and bridges to reduce the vulnerability of Haiti’s population to natural disasters and cholera. Strategic Objective 2 – Sustainable Reconstruction 44. The main focus of the World Bank’s work over the last 20 months has been to contribute to sustainable reconstruction in post-earthquake Haiti. The quality and adequacy of reconstruction choices will determine whether investments will have a transformative impact on Haiti’s longstanding development challenges and benefit future generations. ISN activities will restore urban and housing infrastructure destroyed by the earthquake. Projects will upgrade affected neighborhoods and aim to provide basic services to communities. It is also expected that discussions will continue around a large investment to expand electricity access in 2013 beyond the scope of this ISN. 45. The World Bank Group will upgrade several neighborhoods, repair housing, and transfer services from camps to communities to encourage people to return. This will be achieved through existing IDA and HRF financed housing projects with the support of IFC in the area of Housing Finance. Returning people to permanent housing is a key objective of the Government’s program. IDA has played a significant role in the early development of a community driven approach to large scale neighborhood reconstruction under the current IDA Urban Community Driven Development Project Additional Financing (US$30 million). This approach is being scaled up with financing from the HRF (US$65 million). Over the next four years, 300,000 people will benefit from neighborhood upgrading such as improved road access, drainage and water, marketplace rehabilitation, and improvements in lighting, and 17,000 families will benefit from housing repairs or reconstruction. A US$10 million urban road paving component of the new DRM project will complement these efforts. IDA and IFC together with USAID have also developed recommendations to promote housing finance. 13 Figure 2: Haiti ISN CY12 Strategic Objectives and Outcomes Strategic Objective 1 Strategic Objective 2 Strategic Objectives 3 Strategic Objective 4 Reducing Vulnerability and Sustainable Building Human Capital Revitalizing the Economy Increasing Resilience Reconstruction Enhanced disaster Upgraded Increased Access to Business environment response capacity Neighborhoods and Schools Improved repaired housing Rehabilitated selected Continued School public infrastructure Feeding Improved services in Access to Finance Strengthened resilience upgraded neighborhood Enhanced of critical transport system Reducing vulnerability Increased access to of women and girls Enhanced Agricultural electricity (Pilot) Services to Farmers More effective Improvement in EDH prevention and Cash recovery index treatment of Cholera Exploring avenues for Social Protection Cross Cutting Theme Strengthening Governance Improved transparency and accountability in Public Financial Management 14 46. Implementation of the housing program will require particular attention. The broader sector presents many challenges, in particular with regard to land titling, information on land occupancy and resettlement. The IDA financed program uses community based participative approaches to identify neighborhood upgrading choices (such as the broadening of access roads and the organization and infrastructure for common spaces such as marketplaces) and to housing occupancy (enumeration process). These approaches, together with strong oversight on the application of social and environmental safeguards, mitigate risks of social tension and conflict over project benefits and provide transparent information to neighborhood residents and returnees on what benefits can and will accrue to them from the project. 47. Work under the existing Emergency Infrastructure and Institutions Project approved in March 2010 will continue to develop instruments and capacity at the Ministry of Public Works to support reconstruction. These include among others: maintaining and updating the database of 400,000 building assessments carried out since the earthquake, developing technical guidelines for repairs and reconstruction including for schools and health centers, disseminating new building codes, engineering capacity to support municipalities in reconstruction activities, and coordination and cooperation between the civil protection units responsible for disaster management and the Ministry of Public Works, where the equipment and technical capacity for reconstruction resides. 48. Continued support to improve the performance of the Electricity Sector is envisaged, though no new grants are foreseen during the ISN implementation period. The World Bank Group has played a central role in a coalition of donors invested in improving poor electricity sector performance. With an electrification rate of 15%, poor financial performance of the utility EDH, and high transfers from the Government’s budget to cover losses, the sector urgently requires greater transparency, improved management of the utility and substantial investments in order to rebuild, update, and modernize the distribution system. Over the next 12 months, IDA will remain actively involved in the electricity sector through technical assistance support and modest investments and continue to discuss a significant investment in the sector with Government for the second phase of the program. 49. Results - During the ISN period, the Housing projects will return 22,500 people to neighborhoods and benefit 75,000 people through community wide upgrading. Fifty percent of beneficiaries will be women. Urban hazard mapping and planning, enumeration (determining who lived where and who is eligible) and significant preparation at the community level will be continued and health and education services will be moved from camps into the first neighborhood to support the return of households. Displaced children will benefit from the Bank’s tuition waiver program provided under the IDA Education for All Grant. Further work in Housing Finance will help better understand opportunities to strengthen mortgage lending. Results in the electricity sector will continue to focus on the financial and management performance of EDH. 15 Strategic Objective 3 – Building Human Capital 50. Haiti’s growth prospects are intertwined with the country’s ability to make significant progress in the development of its human capital. Improvement in services is also important to slow out-migration from rural areas to congested urban areas and mitigate the potential for civil unrest. Placing Haiti on a virtuous cycle of improved human development, increased productivity and accelerated poverty reduction requires substantial investment in enhancing access to basic social services. 51. Haiti’s education sector faced tremendous challenges following the earthquake, including significantly diminished capacities. The loss of 4,200 schools and 1,200 teachers as well as staff at the Ministry of Education (MENFP) compounded pre-earthquake problems, such as the shortage of schools, trained teachers and effective governance mechanisms as well as the cost of tuition and lack of access. There are simply not enough slots for children to enroll in school. It is estimated that 400,000-500,000 children aged 6-12, most in rural areas, are not attending. The availability of education is also a large factor in the relocation decisions of families living in camps. The average tuition cost of $70 per child/per year is prohibitive for poor families. Generally, the quality of schools is very low, learning outcomes are poor, and the Ministry’s capacity to set policy for and regulate the education sector is weak. 52. IDA and other donors co-finance Haiti’s national strategy to rebuild the education system, which aims to improve the access and quality of primary education, reinforce governance, and strengthen institutional capacity. The proposed US$70 million Education for All Adaptable Program Grant II would: i) expand the government’s tuition waiver program and improve quality; ii) support rural communities in delivering education services; and iii) finance the government’s school health and nutrition program. President Martelly has put Universal Primary Education (UPE) at the heart of his policy priorities and moved toward greater stewardship of the sector by the Government. He has raised US$16 million in funds from fees on financial transactions and telephone calls to finance private tuition for children, who are not yet attending school (90% of schools are private). With all available funds, it is expected that 655,000 children will benefit from free education this year, of which 355,000 in private schools. 53. Other human and social development activities are being developed and will also be supported under the ISN. Knowledge is being shared with the new Government on best practice social protection programs, notably through collaboration with Brazil, and a study on the social impact of reconstruction is planned. 54. Results – Over the ISN period, IDA will increase its support to tuition waivers to 100,000 children per year, qualify 900 additional teachers, and feed 56,000 children daily. A cohort of 1000 girls, including from camps, will be trained and supported in their transition into the workplace, and 6000 women will benefit from a program on awareness and defense against gender based violence. Also, 450,000 workdays will be financed through cash for work, of which at least half will go to women in earthquake affected poor neighborhoods of Port-au- Prince. Continuous technical assistance will be provided to the Government of Haiti on the development of social protection options and objectives for Haiti. 16 Strategic Objective 4 - Revitalizing the Economy 55. Creating jobs, economic opportunity and a environment favorable for Private Sector investment are priorities for Haiti. Haiti ranks of 162 out of 182 countries in the 2011 Doing Business report. Areas in particular need of reform include trade logistics, land titling, streamlining of procedures to start and operate a business, corporate governance, and insolvency and restructuring frameworks. In addition, improvements are needed in the country’s financial infrastructure (credit bureaus and movable collateral) and regulatory frameworks (insurance). Haiti would also benefit from an increase in the skill level of workers and SME entrepreneurs and the decentralization of economic activity. Improvement in road networks, power and water infrastructure will make Haiti more attractive for investment particularly in tourism, agri- business and manufacturing, where there are untapped growth opportunities. 56. IDA and IFC will work together to develop new areas of economic growth outside of Port au Prince in support of the government’s decentralization and job creation strategy. IFC will continue to support the establishment of Integrated Economic Zones (IEZ) to stimulate private investment and consider specific investments in such zones. IDA will invest in the development of regional growth poles through a US$55 million Job Creation and Growth Project, which will finance infrastructure and aim to create jobs outside of Port au Prince. The project is also expected to support improvements in the national business climate. IDA and IFC activities will be designed to be mutually supportive and complement the initiatives of other donors. Opportunities to develop housing around IEZs will also be explored. 57. During the ISN period, IFC will continue to support investments that directly create jobs and income opportunities, undertake advisory activities that help improve the investment climate (including for SMEs), build capacity, and address key infrastructure challenges through public-private partnerships. On the investment side, IFC will prioritize telecom, logistics, manufacturing, building materials and hospitality areas, endeavor to foster a local real estate development industry and strengthen the insurance sector. On the advisory side, IFC is engaged in: Investment Climate (jointly with IDA), Access to Finance (jointly with IDA), Public Private Partnership, and Sustainable Business Advisory Services. 58. IDA will increase its support for Agriculture, a major source of growth for the country’s economy and one of the two sectors showing positive growth in 2010. The proposed Re-launching Agriculture Project (US$40m from IDA and US$10m from GAFSP) would invest in public agriculture services vital to greater agricultural growth, competitiveness, and increased rural incomes. Agriculture plays a dominant role in the economy, contributes 25% of GDP, and is the main source of income for over 60% of Haitians. It accounts for 66% of employment in rural areas and 75% for low income households. In line with the National Agriculture Investment Plan, IDA will strengthen the Ministry of Agriculture’s capacity and increase small farmers’ access to agriculture extension services and training on animal and plant health in priority regions. Most of these results will accrue beyond the timeframe of this ISN. 59. Results - Over the ISN period IFC and IDA will support a reduction in the cost of starting a business, increase lending to SMEs, and contribute to the submission to Parliament of a new insurance law and a new law on secured transactions. 17 Cross cutting theme: Strengthening Governance 60. The cross cutting objective of the ISN is to strengthen Governance by promoting sound policies in economic governance and capacity development in key areas for reconstruction. Dialogue with a new Government provides the WBG with a fresh opportunity to pursue concrete improvements in economic governance and capacity. The ISN will do this first by continuing to provide budget support in the context of a Development Policy Operation (DPO), which will focus on continued macroeconomic stability and improvements in Public Financial Management, including the implementation of procurement reform and transparency measures, particularly with regard to the energy sector. Inclusion of anti-corruption measures will also be considered, building on IDA’s earlier support of the anti-corruption commission and the publication of the assets of senior government officials under previous DPOs. In addition, throughout the program, operations will seek to strengthen institutional capacity at the level of line ministries, in sectors where IDA has critical investments (see Results Framework, Annex A, for details of capacity building activities planned for various operations). 61. To help sharpen the focus on governance and capacity, key operations under preparation and implementation will be assessed periodically through a governance and capacity lens. These governance reviews aim to examine all aspects of governance risk in project design and implementation and to identify opportunities to contribute to governance objectives. They will be held twice a year for all major projects and conducted by a team including project and country management staff and the GAC coordinator for the LAC Region. Other experts will be associated as needed. Review outcomes will be discussed with Government. 62. Support to Public Financial Management will be provided through two existing instruments. The Infrastructure and Institutions Emergency Recovery Project’s Institutional Component will support the provision of equipment, buildings, and technical assistance to key governance institutions, including the Ministry of Finance, the procurement regulatory body, and the Court of Accounts, with the objective of helping restore and reinstate economic and financial oversight in the aftermath of the earthquake. Also, building on previous technical assistance efforts, a GPF Grant will provide short-term support to strengthen auditing and procurement, build the capacity of the Inspector General, and improve the quality of internal audit standards. 63. New activities would include a Budget Support (DPO) leveraging policy actions in PFM. The Bank and the new Government intend to define the content of programmatic budget support for the coming years. The Government has requested that the Bank continue to provide leadership in coordinating donors. At the request of Government, a comprehensive approach to the strengthening of the public sector will be discussed. IDA DPOs will build on the Economic Governance Reform Operation (EGRO) series (2006-2009) and the Emergency Budget Support (2010), which focused mainly on economic governance and public finance management. Medium-term support is likely to be provided through a Technical Assistance Project in 2013 to support budget preparation, execution, and control; procurement reform; and key reforms contributing to reconstruction. 18 64. Results – Greater transparency and accountability will be promoted by the completion of a procurement review for the past two Haitian fiscal years and of audits of financial transfers to the electricity sector and subsidies for textbooks and uniforms. Also, capacity to manage disasters including cholera will be enhanced in several ministries; management capacity for the electricity sector at the Ministry of Public Works will be strengthened; and inspection capacity will be reinforced in the Education sector. In addition, several communities will strengthen their capacity by developing community based plans for urban development. Gender , Envir onment and Fr agility 65. Gender - The program will mainstream gender in design and implementation. In the absence of a Bank-financed Gender Assessment, the team has drawn on assessments prepared by other donors to develop a gender approach for the ISN. New projects will be designed to respond to the specific needs of women and enable them to benefit fully from IDA financed activities. They will also generate gender disaggregated data and their overall impact on women will be assessed. 66. The Interim Strategy will pay special attention to the vulnerability of women in the current crisis, emphasizing inclusion and voice in neighborhood reconstruction including safety aspects (street lighting, safe spaces), increasing access to nutrition and reproductive health services in a pilot area, promoting access to labor intensive work in urban areas, as well as access to education and vocational training. Targeted investments will be piloted to help adolescent girls transition from school to work (Adolescent Girls Initiative) and help protect camp residents from gender based violence through a Rapid Social Response Grant. Future Bank activities in agriculture will incorporate lessons on gender-sensitive approaches and the gender assessment carried out under the ongoing CDD project. 67. Environment and Climate Change - Haiti’s environment is depleted and extremely vulnerable to climate impacts. Activities related to infrastructure and disaster risk management are the ISN’s key operational entry points to address environmental issues. Projects will seek to strengthen local capacity for sound environmental management practices and increase resilience to natural hazards. Flood protection will be enhanced through large scale debris management, the periodic dredging of drainage canals in Port-au-Prince, and the recycling of usable material clogging canals. Transport sector projects will plant specific varieties of vegetation to combat coastal erosion. During the ISN period, Haiti will develop a Strategic Program for Climate Resilience (SPCR) financed by the Climate Investment Fund. The SPCR seeks to strengthen capacities for climate adaptation planning, and will finance climate resilient investments in the areas of food security, coastal zone management and reconstruction. The SPCR will pay special attention to improving climate and hydro-meteorological information and services so as to improve disaster risk management capacity. 68. Fragility - Although Haiti does not present the classic features of a country in conflict, it has the hallmarks of fragility—insecurity, crime, violence, and longstanding low intensity political instability. As recommended by the 2011 World Development Report on Conflict, Security and Development, the ISN prioritizes the delivery of quick wins to build public trust: education services (tuition waivers and school feeding) and housing repairs and neighborhood upgrading in earthquake affected neighborhoods in Port-au-Prince. It will also build coalitions with the private sector to improve the business climate in collaboration with IFC. The program 19 will encourage greater governance accountability and transparency by continuing to support transparency in economic governance and strengthening the capacity of line ministries through projects in core areas. To achieve results more quickly, the portfolio will be subjected to an operational and fiduciary review aimed at raising thresholds, consolidating financial management capacity, and finding solutions to implementation challenges, including rapid response frameworks where relevant. Table 2 – Indicative IDA Grant, Trust Funds and AAA Program for Haiti – CY2012 New IDA Grants Indicative Grants and AAA CY2012 In millions of US$ New IDA Grants Objective 1 • Disaster Risk Management and Reconstruction (P126346) 60 Strat. AAA • Multi-hazard Assessment TF096220 ($0.99m) Feb-2012 • Reducing Disaster Risk in Haiti’s Health Infrastructure TF099459 ($ 1.42m) Dec 2012 New IDA Grants Strat. Objective 2 No New Grants, Existing IDA Grants US$ 109 m in Housing, Electricity and Cash for Work - AAA • Sustainable Housing Policy and Finance Framework P127497 ($0.58m) May 2012 +TF099445 ($0.3m) Dec 2012 • Energy Sector Mgt. Program (ESMAP) TA P125192 ($0.5m) 30-Oct-2012 • Social Impact of Reconstruction (FY13) New IDA Grants • Education For All APGII P124134 ($70m) 70 Strat. Objective 3 Trust Funds • Adolescent Girls Initiative P123483 ($2.0m) 31-Dec-2012 • Preventing Gender Based Violence P125150 ($0.5m) 30-Sep-2012 AAA • Poverty Measurement and Household Survey P123160 ($0.3m) 15-Dec-2011 • Just-in-Time Advice Developing Social Safety Nets New IDA and other Grants • Job Creation and Growth (P123974, WB & IFC) Q4 FY12 55 Strat. Objective 4 • Re-launching Agriculture P126744 ($40m IDA + $10m GAFSP) Q2 FY12 50 Trust Funds • IFC/Caribbean Regional Credit Bureau Program • Financial Sector Reform and Strengthening Initiative TF095115 AAA • Diagnostic Trade Integration Study P116035 ($0.4m) June 2012 • Country Economic Memorandum (FY13) New IDA Grants Governance • Development Policy Operation ($25-30m) 30 AAA • GPF Trust Fund– Support to Institutions for Economic Governance (GPF $0.5m) Total New Grants 255 20 Flexibility, Selectivity and Par tner ships 69. Flexibility in implementation. The ISN aims to provide flexible but substantial support in the face of great needs and uncertainty. Flexibility is embedded in the design of the operations proposed so they can absorb and respond to external shocks. Early during the ISN period the team intends to undertake a review of procedures for Projects in the Haiti portfolio, together with implementers and the Ministry of Finance, to identify and address operational, fiduciary, and legal implementation bottlenecks with the objective to streamline procedures, reduce fiduciary risk and maximize capacity. 70. Selectivity will mean focusing on key sectors and exiting from others. The World Bank group will continue to play a central role in Disaster Risk Management (including Cholera response); become a leading donor in the Housing Sector; and make significant investments in the Education, Private Sector Development (jobs), and Agriculture sectors. In terms of sequencing, Housing, Education and Disaster Risk Management have been given priority. The Bank will not be present in building backbone roads, ports and airports, where other large donors are present, nor in health, where others take the lead. The Bank will gradually exit from rural water and sanitation, where it has piloted useful models, which the IDB will scale up. 71. To bring greater efficiency, the Existing IDA portfolio has been consolidated. By end FY12, 8 of the current 18 operations will be closed and the remaining projects grouped into programs. As a result, the average size of operations will double to US$52 million per project by the end FY12, ensuring the concentration of financial, human and management resources on key results. Efforts to maintain high disbursement rates and improve outcomes under the existing portfolio will be intensified. Major IDA operations will be complemented by analytical and advisory activities (AAA) to (i) build institutional capacity in high-priority sectors, (ii) support the rapid implementation of reconstruction programs, and (iii) generate urgently-needed data and knowledge to underpin IDA-financed programs. The AAA program draws on a core of Bank budget resources while leveraging a substantial volume of Trust Funds, which are also being consolidated. 72. Partnerships. Two aspects of the coordination with other partners are critical to achieving results: (i) division of labor to allow for selectivity and the optimal use of available resources, and (ii) joint policy dialogue and programming in common areas. The Bank coordinates closely with major donors. WBG already works closely with the US and Canada in housing, education and agriculture. Joint policy dialogue is carried out regularly with the IDB. IDB and IDA finance coordinated programs in education, private sector development, and agriculture and conduct joint training on harmonized safeguards policies. The Bank works closely with UN Habitat, UNOPS, OIM and AFD on the return of internally displaced persons to neighborhoods and with the World Food Program in improving nutrition and coordinating school feeding. The Bank also works closely with UNOPS on multi-hazard risk mapping and building assessments. The new Government has asked the Bank to continue to lead donor coordination for budget support (working with the AECID, the EC, France, the IDB and the IMF) and to play a convening role in the housing sector (working with AFD, the EC, IDB, the UN, USAID, the Red Cross and NGOs). The Bank Group will respond to calls for deeper coordination from development partners by supporting common dialogue these areas as well as in Energy sector 21 reform (with IDB and the US), Education (with Canada, the EC, IDB and USAID), Health and Social Protection (with the US, Canada and the UN), Agriculture (with Canada, the EC, IDB, and USAID) and Private Sector Development (with the EC, IFC, IDB, and USAID). V. MANAGING RISKS 73. Although political uncertainty has abated with the approval by the Parliament of the new Government, tension between the executive and the legislative branches could persist, hampering reconstruction efforts. The ISN mitigates this risk by deriving its results mostly from existing projects currently implemented by the Executive. Furthermore, continued lack of improvement in living conditions, particularly for the most vulnerable, could also result in unrest. The ISN aims to contribute to improving living conditions by focusing on concrete, achievable reconstruction outcomes in the upcoming 12 months. 74. Limited Government capacity remains a risk for the implementation of the Strategy. Given its timeframe of 12 months, the ISN proposes large commitments only in sectors where agreement has been reached with Government on policy content, where the Bank is already active, implementation mechanisms exist, and their capacity is known. The housing sector presents the most prominent challenge in this regard as responsibilities for the sector within Government have yet to be clarified, projects are highly complex, and coordination across sectors and actors is needed for success. Policy dialogue and close supervision will be crucial in this area. Discussion of investments with ambitious reform content, such as electricity and a programmatic series of DPOs, will continue and will be financed in the second phase of IDA 16, if they correspond to Government priorities and if benchmarks of government engagement and implementation readiness are met. 75. The many adverse climatic shocks, which hit Haiti every year, continue to present a risk for WBG investments, particularly in an environment where Government has been weakened. With the increased vulnerability of Haiti’s population since the earthquake, the hurricanes, storms and floods, which Haiti can expect during this ISN period, are likely to have more profound impacts than before. However, the existing portfolio successfully supports the Government’s preparation capacity and preventive actions to shield the population and infrastructure from disasters, which is being strengthened under the new project. In addition, emergency funding has been included in every new project to rapidly respond to adverse shocks including food or fuel price shocks and epidemics. Knowledge services will also be provided for the establishment of safety net structures, but the outcomes of this work are likely to accrue beyond the scope of this ISN. 76. Corruption and the Governance Environment. An environment of weak transparency and accountability and inconsistent efforts toward improved governance is compounded by Government’s weak capacity and presents risks for the implementation of the ISN. To mitigate these risks, IDA will continue to support measures to promote transparency and accountability in public financial management, engage the new Government in a dialogue about future reform, and subject Bank managed projects to a high level of fiduciary and safeguard scrutiny as well as periodic governance reviews. 22 Annex A1: Results Framework Matrix STRATEGIC OBJECTIVE 1: REDUCING VULNERABILITY AND INCREASING RESILIENCE Country Development Goals Key Issues Outcomes Bank Programs Haiti’s Vulnerability To Existing IDA Grants ($128m) Natural Disasters and Cholera is Reduced • Infrastructure and Institutions Disaster Risk Management Emergency Recovery P120895 Vulnerability of the population living 1) Extreme vulnerability to 1) Disaster Risk Management ($65m) 30-Jun-2012 in risk zones reduced; remaining natural disasters and weak Disaster preparation and response capacity enhanced • Emergency Bridge Reconstruction private and public infrastructure response capacity at the national • Share of population living in a municipality with a certified and Vulnerability Reduction safeguarded and local level CCPC (Comité Communal de Protection Civile) P114292 ($20m) 30-Jun-2012 (PARDH) Baseline: 20% (2011); Target :25% (2012) • Transport and Territorial Development P095523 ($28m) 30- Increase the capacity of the central 2) Infrastructure Jul-2012 and regional civil protection 2) Damages from natural Selected public infrastructure rehabilitated and resilience of • Cholera Emergency Response agencies. disasters have isolated several critical transport infrastructure strengthened P120110 ($15m) 30-Jun-13 (DSNCRP) regions, with severe effects on • Additional km of roads rehabilitated and critical bridges and their economies. road sections repaired to satisfactory standards Existing Trust Funds Targets: 30kms and 15 repairs (2012) • Structural Assessment Program TF096218 ($1.3m) 10-Feb-2012 3) Cholera • Multi-hazard Assessment 3) Ongoing cholera epidemic Reduce the population’s vulnerability to cholera through TF096220 ($0.99m) 10-Feb-2012 improved prevention and wider treatment. • Reducing Disaster Risk in Haiti’s • Percentage of population in project intervention areas who Health Infrastructure TF099459 know the cholera early warning symptoms ($ 1.42m) 31-Dec-2012 Baseline: 81.7% (2011); Target: 86.7% (2012) • National Cholera Prevention Program in Post-Earthquake Haiti TF098259 ($0.2m) 31-Oct-2011 New IDA Grants under this ISN • Disaster Risk Management and Reconstruction P126346 ($60m) 23 STRATEGIC OBJECTIVE 2: SUSTAINABLE RECONSTRUCTION Country Development Goals Key Issues ISN Outcomes Bank Group Programs Physical infrastructure, including housing, reconstructed and Existing IDA Grants ($95m) service delivery improved • Urban CDD AF: Housing Housing 1) Housing Reconstruction P106699 ($30 m) 31- Damaged housing repaired and new 1a) Over 600,000 people remain 1a) The return to permanent housing of people displaced by the Mar-2014 permanent neighborhoods in camps and many lack earthquake is facilitated • Port au Prince Neighborhood Housing constructed with sustainable permanent housing • # of displaced households that have returned to Reconstruction (HRF), P125805 infrastructure and basic services neighborhoods upon completion of housing repair or ($65m) 30-Jun-2015 (PARDH) reconstruction works Existing Trust Funds Baseline: 0 (2011); • JSDF Emergency Cash for Work Target: 4,500 HH(2012), 22,500 beneficiaries o/w 11,000 women P123205 ($2.8m) 31-Mar-2012 • Sustainable Housing Policy and Contribute to sustainable urban 1b) Significant lack of services in 1b) Improve urban planning and access to services in project Finance Framework TF099445 development and poverty reduction neighborhoods damaged by the neighborhoods ($0.3m) 30-Dec-2012 through the design and earthquake • # of households benefitting from community-wide upgrading • Housing Reconstruction Support implementation of development Baseline: 0 (2011); TF098974 ($0.5m) 18-Mar-2014 plans and neighborhood Target: 15,000 HH(2012), 75,000 beneficiaries o/w 37,500 AAA rehabilitation women • Housing Finance AAA P127497 (DSNCRP) ($0.58m) 8-May-2012 Electricity 2a) Limited and unreliable 2) Electricity Existing IDA Grants ($11m) Electricity infrastructure restored, access to energy services Access to and quality of energy services and commercial viability • Electricity Loss Reduction Project generation increased, the national of sector improved P098531 ($11m) 28-Feb-2013 transmission and distribution 2a) Access and quality of energy services Existing Trust Funds network improved (PARDH) 2b) Lack of financial viability in • System Average Interruption Duration Index (SAIDI) • Energy Sector Mgt. Program (ESMAP) the electricity sector Baseline: 10hrs/day(2010) TA P125192 ($0.5m) 30-Oct-2012 Strengthen electricity infrastructure. Target: 8hrs/day (2012) • Energy Access Expansion in Haiti (DSNCRP) TF099467 ($0.1m) 27-Jul-2012 2b) Commercial viability of the sector New IDA Grants • EDH Cash Recovery Index • Development Policy Operation ($25- Baseline: 22% ( 2011) 30m) Q4 –to include energy policy Target: 30% (2012) measures 24 STRATEGIC OBJECTIVE 3: BUILDING HUMAN CAPITAL Country Development Goals Key Issues ISN Outcomes Bank Group Programs Education and Training Invest in Human Capital by increasing access to education, Restart school activities, support reducing the vulnerability of women and girls, and exploring school canteens, and advance avenues for social protection towards the long-term goal of free Existing IDA Grants ($60m) universal access to primary 1) Lack of educated work force. 1) Increased access to schools, improved quality of education, • Education for All Adaptable Program education Investment in human capital is a and school feeding provided Grant (APG) I P099918 ($60m) 31- (PARDH) critical factor for economic • # of children receiving enrollment subsidies (per year) May-2012 recovery and growth in Haiti. Baseline: 80,000 (2011); Target: 100,000 (2012) Existing Trust Funds Improve education access and • Additional qualified primary teachers • EFA Multi-Donor Trust Fund quality and strengthen the Baseline: 0 (2011); Target: 900 (2012) TF097009 ($22m) 31-Oct-2015 governance of the education • # of children participating in integrated nutrition/health New IDA Grants system. program, person/years • Education For All APGII P124134 (DSNCRP) Baseline: 28,000 (2011); Target: 56,000 (2012) ($70m) Reduce the vulnerability of women 2) Lack of training and education 2) Reduced vulnerability for women and girls Existing Trust Funds Implement basic social protection opportunities for girls and • # of girls that received training, life skills, and placement • Adolescent Girls Initiative P123483 system taking into account women; and services ($2.0m) 31-Dec-2012 increased vulnerability of women widespread gender based Baseline: 0 (2011); Target: 1,000 (2012) • Preventing Gender Based Violence (PARDH) violence, particularly in camps • Camp residents are equipped with Gender Based Violence P125150 ($0.5m) 30-Sep-2012 (GBV) prevention kits and receive training in GBV prevention Baseline: 0 (2011); Target: 6,000 (2012) Existing Trust Funds • JSDF Emergency Cash for Work P123205 ($2.8m) 31-Mar-2011 Social Protection 3) Cash transfers to residents of earthquake affected 3) Lack of an adequate social • Household Development Agent Pilot Provide labor-intensive jobs to neighborhoods protection mechanisms to target TF097211 ($1.5m) mitigate the negative effects of the • # work days temporary employment opportunities created in and support the poorest and the • Nutritional Security the implementation areas, including female beneficiaries earthquake on the living standards most vulnerable Baseline: 0 (2011); Target: 450,000 workdays (2012), of which TF097257 ($0.2m) 30-Jun-2012 of the population (PARDH) 225,000 for women AAA • Social Impact of Reconstruction Reduce social exclusion and 4) Government has an understanding of options and • Just-in-Time Advice Developing Social implement basic social protection international models to build a social protection mechanism Safety Nets system (DSNCRP) • A roundtable on Social Protection options and Objectives is held with key officials and stakeholders (2012) 25 STRATEGIC OBJECTIVE 4: REVITALIZING THE ECONOMY Country Development Goals Key Issues ISN Outcomes Bank Group Programs Enhancing Economic Opportunity Revitalize the economy improving conditions for investment, Existing IDA and IFC Grants and improving the productivity and sustainability of agriculture, Investments Investment and Credit and promoting rural development • Infrastructure and Institutions Ensure the proper functioning of Emergency Recovery P120895 economic and financial channels ($65m) 30-Jun-2013 crucial for funding reconstruction 1) Private Sector Development: • Post-Disaster Partial Credit and relaunching growth (PARDH) Improved business environment and access to finance for SMEs Guarantee Program Support • % Reduction in the cost of starting a business P121391 ($3m) 280-Feb-17) Improve the legal and regulatory 1a) Need for more hospitable Baseline: 2011 Doing Business (2011); Target: 15% lower than • IFC investments in following framework, improve the business environment to 2011 Doing Business Baseline (2012) sectors: manufacturing, competitiveness of the textile and increase private investment agribusiness, financial agro-industrial sectors, improve • Increased volume of lending to SMEs through Partial Credit institutions, housing, quality control, promote domestic 1b) Liquid but risk averse Guarantees at the end of each calendar year (including infrastructure, construction, and foreign investment, increase financial institutions disaggregated reporting on lending to SMEs run by women) tourism exports, re-launch light industry and Baseline: HTG 28.5b (2011); Target: 33.0 (2012) Existing Trust Funds crafts, improve the business • Business Edge (IFC and CDB) environment (DSNCRP) • Insurance law submitted to Parliament TF094597 ($0.4m) 29-Feb-2012 1c) Undercapitalized, opaque, Baseline: No draft (2011); Target: Submitted (2012) • Micro, Small and Medium Regional Development: conservative insurance sector is Enterprises (IFC) TF098033 Consolidate Cabaret, Cap Haitien, constricting investment • Amendment of the February 2009 Secured Lending Law ($0.28m) 28-Feb-2013 Les Gonaives, St-Marc, Hinche, and • Business Environment Baseline: Being drafted (2011); Target: Submitted (2012) Les Cayes as regional development 1d) Economy overly centralized Improvement (Doing Business centers in metropolitan areas Trust Fund) • Approval of regulatory texts for Integrated Economic Zones (PARDH) Baseline; not yet approved (2011); Target: Signed by executive • Investment Generation (IFC) Branch or submitted to Parliament (2012) TF095092 ($0.3m) 31-Dec-2011 and TF098706 ($0.9m) 28-Feb- 2013 • IFC/Caribbean Regional Credit Bureau Program • Financial Sector Reform and Strengthening Initiative TF095115 New IDA Grants • Job Creation and Growth P123974, WB&IFC, ($55m), Q4 FY12 26 STRATEGIC OBJECTIVE 4: REVITALIZING THE ECONOMY Country Development Goals Key Issues ISN Outcomes Bank Group Programs Agriculture and Rural Development 2) Low productivity in 2) Agricultural productivity improved, agriculture risk better Existing IDA Grants Promote a modern agriculture that agriculture, food insecurity and managed, and income in rural areas increased through • Strengthening the Management creates wealth, respects the entrenched rural poverty; weak improved access to agriculture extension services by small of Agriculture Public Services environment, provides food security local government and high farmers P113623 ($5m) 30-Jun-2014 and improves the living standards of unemployment in rural areas • Community Driven farmers. • # of farmers that have access to improved agriculture Development PRODEP P093640 (DSNCRP) information, technologies, inputs, material, and services ($61m) 30-Jun-2013 (also disaggregated by gender) Baseline: 0 (2011); Target: 3,000 (2014) (2012) Existing Trust Funds • Strengthening Agriculture Public Decentralization • # of residents in the CDD project area that improved their Services TF092088 ($0.8m) 31- Bring government closer to the access to basic social and economic infrastructure and/or benefit Dec-2016 people through deconcentration and from productive subprojects. decentralization. Baseline: 1,160,000 (2011); Target: 1,180,000 (2012) New IDA Grants (DSNCRP) Re-launching Agriculture P126744 ($40m IDA + $10m GAFSP) New IDA Grants • Development Policy Operation ($25-30m) AAA • Diagnostic Trade Integration Study P116035 ($0.4m) June 2012 • Just in time advice on the basis of CEM work (to be delivered FY13) 27 CROSSCUTTING THEME: STRENGTHENING GOVERNANCE and CAPACITY Country Development Goals Key Issues Outcomes Bank Programs Governance in Reconstruction and Strengthen Government’s ability to make and implement • Infrastructure and Institution Revitalization decisions that drive reconstruction Emergency Recovery Project P120895 ($65m) 30-Jun-2013 Institutional Rebuilding Weak capacity of key ministries 1) Disaster response capacity enhanced • Emergency Bridge Reconstruction Make state institutions operational to deliver quality policy • # of Disaster Risk Management Units in line Ministries that are and Vulnerability Reduction again, redefine the legal and decisions, public spending, and able to incorporate hazard risk analysis into their programs P114292 ($20m) 30-Jun-2013 regulatory framework, implement a service delivery is hampering Baseline: 0 (2011); Target: 2 (2012) • Cholera Emergency Response structure to manage reconstruction reconstruction; and • Capacity to respond to cholera outbreaks is improved based on P120110 ($15m) 30-Jun-2013 (PARDH) revitalization of the economy implementation of departmental plans (2012) • NEW: Disaster Risk Management •MTPTC bridge management unit operational (2012) P126346 ($60m) Central Administration Reconstruct key government • Urban CDD: Housing buildings and reconstitute the civil 2) Institutional capacity for housing repair and reconstruction Reconstruction P106699 ($30m) service(PARDH) strengthened (urban planning + community based approach) 31-Mar-2014 • Community urban development plan completed and approved • Port au Prince Neighborhood by targeted communities Housing Reconstruction (HRF) Baseline: 0 (2011); Target: 4 (2012) P125805 ($65m) • Electricity Loss Reduction Project 3) MTPTC’s energy policy and planning capacity strengthened P098531 ($11m) 28-Feb-2013 • Energy sector master plan completed • Education for All APG I P099918 ($60m) 31-May-2012 4) Education institutional capacity strengthened • NEW: Education For All APG II • # of schools receiving at least 1 inspector visit per year P124134 ($70m) Baseline: N/A (2011); Target: TBD (2012) • School Management Committees report on use of funds to • Business Environment National Ministry of Education or National Education Partnership Improvement (Doing Business Office (NEPO) Trust Fund) Baseline N/A (2011); Target: >80% (2012) • Investment Generation (IFC) TF095092 ($0.3m) and TF098706 ($0.9m) 5) Capacity to implement the National Agriculture Extension • Strengthening the Management Strategy (PDVA) strengthened of Agriculture Public Services •Adoption of National Agricultural Extension Strategy P113623 ($5m) 30-Jun-2014) 28 CROSSCUTTING THEME: STRENGTHENING GOVERNANCE and CAPACITY Country Development Goals Key Issues Outcomes Bank Programs Economic Governance and Public Transparency and accountability Improved Transparency And Accountability In Public Financial Existing IDA Grants Sector Accountability of public sector management Management • Infrastructure and Institution remains weak Emergency Recovery Project Capacity-Building •CNMP to complete procurement review P120895 ($65m) 30-Jun-2013 Strengthen State capacity by Baseline: No procurement review completed since 2007-08 modernizing public administration Target: CNMP has completed procurement review for 2008-09 Existing Trust Funds and improving financial and 2009-10 (2012) • Strengthening Accounting and management Auditing Practices TF095115 (DSNCRP) • Audits of key public transfers ($0.28m) 30-Jun-2012 Baseline: No audits completed (2011) Institutional Rebuilding Target: Audits of transfers to the electricity sector, subsidies on New IDA Grants Establish a culture of transparency textbooks and uniforms for 2011 have been completed (2012) • Development Policy Operation and accountability ($25-30m) (PARDH) 29 Annex A2 Haiti at a glance 11/1/11 Latin Key Development Indicators America Low Haiti & Carib. income Age distribution, 2009 (2010) Male Female Population, mid-year (millions) 10.0 572 846 75-79 Surface area (thousand sq. km) 28 20,394 17,838 60-64 Population growth (%) 1.3 1.1 2.2 Urban population (% of total population) 50 79 29 45-49 30-34 GNI (Atlas method, US$ billions) 5.4 4,011 431 15-19 GNI per capita (Atlas method, US$) 560 7,007 509 GNI per capita (PPP, international $) .. 10,286 1,220 0-4 10 5 0 5 10 GDP growth (%) -5.1 -1.9 4.6 percent of total population GDP per capita growth (%) -6.3 -3.0 2.4 (most recent estimate, 2004–2010) Poverty headcount ratio at $1.25 a day (PPP, %) 55 8 .. Under-5 mortality rate (per 1,000) Poverty headcount ratio at $2.00 a day (PPP, %) 72 17 .. Life expectancy at birth (years) 61 74 57 160 Infant mortality (per 1,000 live births) 70 19 76 Child malnutrition (% of children under 5) 19 4 28 140 120 Adult literacy, male (% of ages 15 and older) 53 92 69 100 Adult literacy, female (% of ages 15 and older) 45 90 55 80 Gross primary enrollment, male (% of age group) .. 118 107 60 Gross primary enrollment, female (% of age group) .. 114 100 40 20 0 Access to an improved water source (% of population) 58 93 64 1990 1995 2000 2009 Access to improved sanitation facilities (% of population) 19 79 35 Haiti Latin America & the Caribbean a Net Aid Flows 1980 1990 2000 2010 (US$ millions) Net ODA and official aid 104 167 208 1,120 Growth of GDP and GDP per capita (%) Top 3 donors (in 2008): United States 35 50 91 320 180 Spain 0 1 1 145 160 140 Canada 5 10 20 120 120 100 80 Aid (% of GNI) 7.2 5.9 5.6 11.5 60 Aid per capita (US$) 18 23 24 114 40 20 0 -20 Long-Term Economic Trends -40 95 05 Consumer prices (annual % change) 17.8 21.3 13.7 5.7 GDP implicit deflator (annual % change) 21.4 14.1 11.1 5.4 GDP GDP per capita Exchange rate (annual average, local per US$) 5.0 5.0 21.2 39.8 Terms of trade index (2000 = 100) .. .. .. .. 1980–90 1990–2000 2000–10 (average annual growth %) Population, mid-year (millions) 5.7 7.1 8.6 10.0 2.3 1.9 1.4 GDP (US$ millions) 1,462 2,864 3,665 6,710 -0.2 4.5 0.6 (% of GDP) Agriculture .. .. 28.4 .. -0.1 9.0 -0.5 Industry .. .. 16.6 .. -1.7 10.5 1.1 Manufacturing .. .. 9.0 .. -1.7 2.3 0.1 Services .. .. 55.0 .. 0.9 15.5 0.9 Household final consumption expenditure 81.9 81.4 90.6 93.1 0.9 .. .. General gov't final consumption expenditure 10.1 8.0 7.8 9.1 -4.4 .. .. Gross capital formation 16.9 13.0 27.3 25.0 -0.6 12.2 1.2 Exports of goods and services 21.6 17.5 12.7 12.1 1.2 8.9 4.1 Imports of goods and services 30.5 20.0 33.4 57.3 2.3 20.1 3.1 Gross savings .. 5.6 22.8 .. Note: Figures in italics are for years other than those specified. 2010 data are preliminary. Group data are for 2009. .. indicates data are not available. a. Aid data are for 2009. Development Economics, Development Data Group (DECDG). 30 Haiti Balance of Payments and Trade 2000 2010 Governance indicators, 2000 and 2009 (US$ millions) Total merchandise exports (fob) 331 530 Total merchandise imports (cif) 1,091 2,932 Voice and accountability Net trade in goods and services -863 -3,273 Political stability Current account balance -82 -1,458 Regulatory quality as a % of GDP -2.2 -21.7 Rule of law Workers' remittances and compensation of employees (receipts) 578 1,376 Control of corruption Reserves, including gold 182 1,335 0 25 50 75 100 2009 Central Government Finance Country's percentile rank (0-100) higher values imply better ratings 2000 (% of GDP) Current revenue (including grants) 8.5 29.4 Source: Kaufmann-Kraay-Mastruzzi, World Bank Tax revenue 7.8 11.5 Current expenditure 8.4 11.4 Technology and Infrastructure 2000 2009 Overall surplus/deficit -2.3 2.1 Paved roads (% of total) 24.3 .. Highest marginal tax rate (%) Fixed line and mobile phone Individual .. .. subscribers (per 100 people) 1 37 Corporate .. .. High technology exports (% of manufactured exports) 3.5 .. External Debt and Resource Flows Environment (US$ millions) Total debt outstanding and disbursed 1,173 1,326 Agricultural land (% of land area) 62 65 Total debt service 44 29 Forest area (% of land area) 4.0 3.8 Debt relief (HIPC, MDRI) 164 665 Terrestrial protected areas (% of land area) .. .. Total debt (% of GDP) 32.0 19.8 Freshwater resources per capita (cu. meters) 1,453 1,338 Total debt service (% of exports) 4.0 3.4 Freshwater withdrawal (billion cubic meters) 1.2 .. Foreign direct investment (net inflows) 13 38 CO2 emissions per capita (mt) 0.16 0.25 Portfolio equity (net inflows) 0 0 GDP per unit of energy use (2005 PPP $ per kg of oil equivalent) 4.9 3.7 Composition of total external debt, 2009 Energy use per capita (kg of oil equivalent) 232 281 IDA, 39 0 Private, IBRD, 0 Short-term, 0 IMF, 166 World Bank Group portfolio 2000 2009 (US$ millions) Bilateral, 559 IBRD Total debt outstanding and disbursed – – Other multi- Disbursements – – lateral, 481 Principal repayments – – Interest payments – – US$ millions IDA Total debt outstanding and disbursed 480 39 Disbursements 8 0 Private Sector Development 2000 2010 Total debt service 10 13 Time required to start a business (days) – 105 IFC (fiscal year) Cost to start a business (% of GNI per capita) – 212.0 Total disbursed and outstanding portfolio 0 0 Time required to register property (days) – 405 of which IFC own account 0 0 Disbursements for IFC own account 0 0 Ranked as a major constraint to business 2000 2010 Portfolio sales, prepayments and (% of managers surveyed who agreed) repayments for IFC own account 0 0 n.a. .. .. n.a. .. .. MIGA Gross exposure – – Stock market capitalization (% of GDP) .. .. New guarantees – – Bank capital to asset ratio (%) .. .. Note: Figures in italics are for years other than those specified. 2010 data are preliminary. 11/1/11 .. indicates data are not available. – indicates observation is not applicable. Development Economics, Development Data Group (DECDG). 31 Annex B2 Selected Indicators* of Bank Portfolio Performance and Management As Of Date 10/13/2011 Indicator 2009 2010 2011 2012 Portfolio Assessment Number of Projects Under Implementation a 16 15 15 15 Average Implementation Period (years) b 2.2 2.9 3.3 3.6 Percent of Problem Projects by Number a, c 6.3 20.0 20.0 20.0 Percent of Problem Projects by Amount a, c 2.9 4.3 5.4 5.4 Percent of Projects at Risk by Number a, d 56.3 33.3 60.0 66.7 Percent of Projects at Risk by Amount a, d 70.1 17.9 58.6 77.2 Disbursement Ratio (%) e 23.7 40.3 33.1 10.0 Portfolio Management CPPR during the year (yes/no) Supervision Resources (total US$) Average Supervision (US$/project) Memorandum Item Since FY 80 Last Five FYs Proj Eval by OED by Number 36 3 Proj Eval by OED by Amt (US$ millions) 550.6 11.5 % of OED Projects Rated U or HU by Number 57.6 66.7 % of OED Projects Rated U or HU by Amt 51.7 89.7 a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP) d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year. 32 Annex B5 Haiti Social Indicators Latest single year Same region/income group Latin Am erica Low - 1980-85 1990-95 2004-10 & Carib. incom e POPULATION Total population, mid-year (millions) 6.4 7.9 10.0 572.5 846.1 Grow th rate (% annual average for period) 2.3 2.0 1.4 1.2 2.2 Urban population (% of population) 23.3 32.6 49.6 79.0 28.7 Total fertility rate (births per woman) 6.0 4.9 3.5 2.2 4.2 POVERTY (% of population) National headcount index .. .. .. .. .. Urban headcount index .. .. .. .. .. Rural headcount index .. .. .. .. .. INCOME GNI per capita (US$) 280 320 560 7,007 509 Consumer price index (2005=100) 13 50 372 123 141 INCOME/CONSUMPTION DISTRIBUTION Gini index .. .. .. .. .. Low est quintile (% of income or consumption) .. .. .. .. .. Highest quintile (% of income or consumption) .. .. .. .. .. SOCIAL INDICATORS Public expenditure Health (% of GDP) .. 2.7 1.4 3.9 2.2 Education (% of GNI) .. .. .. 4.0 3.5 Net prim ary school enrollm ent rate (% of age group) Total 49 21 .. 94 80 Male 51 21 .. 94 82 Female .. 22 .. 93 79 Access to an im proved w ater source (% of population) Total .. 54 58 93 64 Urban .. 65 71 97 85 Rural .. 45 55 80 56 Im m unization rate (% of children ages 12-23 months) Measles 21 49 58 93 78 DPT 19 42 59 92 80 Child malnutrition (% under 5 years) .. 24 19 4 28 Life expectancy at birth (years) Total 52 57 61 74 57 Male 51 56 59 71 56 Female 54 58 63 77 59 Mortality Infant (per 1,000 live births) 116 90 70 19 76 Under 5 (per 1,000) 169 141 72 23 118 Adult (15-59) Male (per 1,000 population) 348 353 287 190 312 Female (per 1,000 population) 275 291 225 103 275 Maternal (per 100,000 live births) .. 620 300 86 580 Births attended by skilled health staff (%) .. 20 26 89 41 CAS Annex B5. This table w as produced from the CMU LDB system. 11/01/1 Note: 0 or 0.0 means zero or less than half the unit show n. Net enrollment rate: break in series betw een 1997 and 1998 due to change from ISCED76 to ISCED97. Immunization: refers to children ages 12-23 months w ho received vaccinations before one year of age or at any time before the survey. 33 Annex B6 Haiti - Key Economic Indicators Actual Estimate Projected Indicator 2005 2006 2007 2008 2009 2010 2011 2012 2013 National accounts (as % of GDP) Gross domestic product a 100 100 100 100 100 100 100 100 100 Agriculture .. .. .. .. .. .. .. .. .. Industry .. .. .. .. .. .. .. .. .. Services .. .. .. .. .. .. .. .. .. Total Consumption 101 101 101 95 103 102 120 .. .. Gross domestic fixed investment 29 29 29 .. .. .. .. .. .. Government investment 4 5 7 .. .. .. .. .. .. Private investment 25 23 22 .. .. .. .. .. .. Exports (GNFS)b 15 14 14 13 13 14 12 .. .. Imports (GNFS) 44 43 45 39 44 44 57 .. .. Gross domestic savings -1 -1 -1 5 -3 -2 -20 .. .. Gross national savings c .. .. .. .. .. .. .. .. .. Memorandum items Gross domestic product 3660 4154 4880 5971 6408 6479 6710 .. .. (US$ million at current prices) GNI per capita (US$, Atlas method) 370 400 410 560 0 0 0 .. .. Real annual growth rates (%, calculated from 87 prices) Gross domestic product at market prices -3.5 1.8 2.3 3.3 0.8 2.9 -5.1 -100.0 .. Gross Domestic Income -3.5 1.5 0.4 5.9 -6.1 6.5 -10.8 .. .. Real annual per capita growth rates (%, calculated from 87 prices) Gross domestic product at market prices -5.0 0.3 0.8 2.0 -0.5 1.6 -6.3 .. .. Total consumption -5.2 4.3 -0.2 0.9 0.4 2.5 13.9 .. .. Private consumption .. .. .. .. .. .. .. .. .. Balance of Payments (US$ millions) Exports (GNFS)b 518 605 689 779 833 933 802 0 0 Merchandise FOB 377 460 495 522 490 551 565 0 0 Imports (GNFS)b 1562 1853 2142 2384 2854 2813 4076 0 0 Merchandise FOB 1210 1309 1548 1704 2108 2032 2809 0 0 Resource balance -1044 -1248 -1452 -1605 -2021 -1880 -3273 0 0 Net current transfers .. .. .. .. .. .. .. 0 0 Current account balance -63 7 -85 -86 -289 -232 -1458 0 0 Net private foreign direct investment 6 26 161 75 30 38 150 0 0 Long-term loans (net) -14 52 40 52 284 760 -145 0 0 Official .. .. .. .. 322 186 .. .. .. Private .. .. .. .. -37 574 .. .. .. Other capital (net, incl. errors & ommissions) 121 -63 -6 168 146 -320 608 0 0 Change in reserves d -50 -22 -109 -208 -171 -246 845 0 0 Memorandum items Resource balance (% of GDP) -28.5 -30.0 -29.8 -26.9 -31.5 -29.0 -48.8 .. .. Real annual growth rates ( YR87 prices) Merchandise exports (FOB) .. .. .. .. .. .. .. .. .. Primary .. .. .. .. .. .. .. .. .. Manufactures .. .. .. .. .. .. .. .. .. Merchandise imports (CIF) .. .. .. .. .. .. .. .. .. 34 Haiti - Key Economic Indicators (Continued) Actual Estimate Projected Indicator 2005 2006 2007 2008 2009 2010 2011 2012 2013 Indicator Public finance (as % of GDP at market prices)e Current revenues 11.6 13.6 13.8 15.8 15.1 17.9 29.4 Current expenditures 9.7 10.0 9.3 8.6 10.7 11.5 11.4 Current account surplus (+) or deficit (-) 1.9 3.6 4.4 7.2 4.4 6.4 18.0 0.0 0.0 Capital expenditure 3.9 4.7 5.4 7.0 7.5 10.8 15.9 Foreign financing 0.5 1.0 1.3 0.4 3.1 3.6 3.4 Monetary indicators M2/GDP 24.6 23.2 21.7 20.3 20.1 20.5 24.7 Growth of M2 (%) 13.7 12.9 10.1 4.3 12.3 9.1 20.5 -100.0 .. Private sector credit growth / 40.8 100.2 -326.6 125.2 453.2 61.9 20.4 86.3 total credit growth (%) Price indices( YR87 =100) Merchandise export price index .. .. .. .. .. .. .. Merchandise import price index .. .. .. .. .. .. .. Merchandise terms of trade index .. .. .. .. .. .. .. .. .. Real exchange rate (US$/LCU)f 95.5 100.0 109.6 122.7 126.0 122.8 129.9 0.0 0.0 Real interest rates Consumer price index (% change) 22.8 15.7 13.1 8.5 15.5 0.0 5.7 -100.0 .. GDP deflator (% change) 21.5 17.6 14.8 8.0 12.9 3.5 5.4 .. .. a. GDP at b. "GNFS" denotes "goods and nonfactor services." c. Includes net unrequited transfers excluding official capital grants. d. Includes use of IMF resources. e. Consolidated central government. f. "LCU" denotes "local currency units." An increase in US$/LCU denotes appreciation. 35 Annex B7 Haiti - Key Exposure Indicators Actual Estimated Projected Indicator 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total debt outstanding and 1327 1505 1580 1946 1244 1325 1376 1398 1380 a disbursed (TDO) (US$m) Net disbursements (US$m)a .. .. 0 0 0 0 0 0 0 Total debt service (TDS) .. .. 26 24 15 13 19 19 19 a (US$m) Debt and debt service indicators (%) TDO/XGSb .. .. .. .. .. .. .. .. .. TDO/GDP .. .. .. .. .. .. .. .. .. TDS/XGS .. .. .. .. .. .. .. .. .. Concessional/TDO 93.4 86.8 94.2 92.9 86.6 87.4 87.9 88.1 88.4 IBRD exposure indicators (%) IBRD DS/public DS .. .. .. .. .. .. .. .. .. Preferred creditor DS/public .. .. .. .. .. .. .. .. .. c DS (%) IBRD DS/XGS .. .. .. .. .. .. .. .. .. IBRD TDO (US$m)d .. .. .. .. .. .. .. .. .. Of which present value of guarantees (US$m) Share of IBRD portfolio (%) .. .. .. .. .. .. .. .. .. IDA TDO (US$m)d 505 511 518 507 39 39 39 39 39 IFC (US$m) Loans Equity and quasi-equity /c MIGA MIGA guarantees (US$m) a. Includes public and publicly guaranteed debt, private nonguaranteed, use of IMF credits and net short- term capital. b. "XGS" denotes exports of goods and services, including workers' remittances. c. Preferred creditors are defined as IBRD, IDA, the regional multilateral development banks, the IMF, and the Bank for International Settlements. d. Includes present value of guarantees. e. Includes equity and quasi-equity types of both loan and equity instruments. 36 Annex B8 Operations Portfolio (IBRD/IDA and Grants) As Of Date 10/13/2011 Closed Projects 44 IBRD/IDA * Total Disbursed (Active) 179.74 of w hich has been repaid 0.00 Total Disbursed (Closed) 138.74 of w hich has been repaid 139.28 Total Disbursed (Active + Closed) 318.48 of w hich has been repaid 139.28 Total Undisbursed (Active) 155.42 Total Undisbursed (Closed) 0.00 Total Undisbursed (Active + Closed) 155.42 Active Projects Difference Between Last PSR Expected and Actual a/ Supervision Rating Original Amount in US$ Millions Disbursements Development Implementation Project ID Project Name Fiscal Year IBRD IDA GRANT Cancel. Undisb. Orig. Frm Rev'd Objectives Progress P099918 HT (APL1) Education For A S MS 2007 37 2.622366 -9.795799 -0.51992 P111667 HT Avian Human Influenza MU MU 2009 1.557 1.119914 1.0925372 1.092757 P093640 HT CDD Project (PRODEP)S S 2006 61 13.8082 -11.39613 -3.49613 P120110 HT Cholera Emergency ResS S 2011 15 11.77061 5.2547318 P098531 HT Electricity Project MS MU 2007 11 5.405037 -0.13686 4.512732 P114292 HT Emerg Bridge Reconst & MS MS 2009 20 11.56907 8.4528248 P090159 HT Emergency Recov.& DisS S 2005 19.4 1.044452 -6.563492 0.486508 P120895 HT Infra. & Instit. Emerg ReS S 2010 65 51.49041 36.772398 P106621 HT Meeting Teacher Needs MS MS 2008 6 2.004912 0.5843051 1.300155 P121391 HT Post-Disaster Part Cred S S 2011 3 0.71882 P089839 HT Rural Water and SanitatS MS 2007 5 0.361112 0.1994086 0.199409 P113623 HT Strength. Mgmt of Agr PMS MS 2009 5 4.232415 1.5824142 P095523 HT Transport and Territorial S S 2006 28 9.074588 -4.993999 P106699 HT Urban CDD / PRODEPUS S 2008 45.7 38.35303 1.1029485 P115261 HT: Emergency School RecMS MU 2009 5 1.842073 1.4582349 -1.10617 Overall Result 327.657 155.417 21.113521 2.469335 37 Annex B8 Committed and Disbursed Outstanding Investment Portfolio As of 9/30/2011 (In USD Millions) Committed Disbursed Outstanding **Quasi Partici **Quasi Partici FY Approval Company Loan Equity Equity *GT/RM pant Loan Equity Equity *GT/RM pant 0/11 E-power 16.65 0 0 0 11.61 16.65 0 0 0 11.61 0/10 Grupo m 3 0 0 0 3 3 0 0 0 3 2010 Sciop sa 5 0 2.5 0 0 0 0 0 0 0 2009 Sogebank 0 2.99 0 0 0 0 2.99 0 0 0 Total Portfolio: 24.65 2.99 2.5 0 14.61 19.65 2.99 0 0 14.61 * Denotes Guarantee and Risk Management Products. ** Quasi Equity includes both loan and equity types. 38 Annex C: Major Donor Investments by Sector Agriculture DRM Education Energy Health IDB, USAID, WB, IDB, France, WB, IDB, US Infrastructure Contingency Governance Infrastructure Cholera IFAD, EC, AFD WB,ECHO, IOM UNESCO, AECID, IDB, OFID, Planning Investments UNICEF, CIDA, USAID KfW, IFC, Brazil, CIDA, Canada, US, Health Services WB, IDB, CIDA, USAID, EC Cuban Brigade, Production Early Warning USAID, FAO, EC, IDB, IOM UNESCO, CIDA, WB, UNICEF, PAHO, Systems Programs and Curricula AFD OIF Institutional WB, AFD WB,UNDP, EC, WB, IDB, Capacity-building Strengthening IOM/ECHO WB, Switzerland, USAID,EC Agriculture Human Resources Institutional USAID/ USDA, France, IDB, UNESCO, - WB, IDB Services Strengthening WB, IDB, EC EC, AECID EU, WFP, Equipment CDEMA,WB Early childhood and UNICEF, WB, CDB, Basic Education WB,US CIDA, IDB, USAID, FTI, Facilities Southern UNESCO, WFP, AECID Command, WFP Government Housing Jobs, Finance Private Transport Water & Sector Dev. Sanitation WB, EC, IDB, IDB, WB, Budget Support Transitional National Level Reforms Air Transport Rural FR, Norway, USAID, UNOPS, WB, IDB, USAID, Shelter and SME Development Studies AECID, Brazil AECID, EC ICAO, IATA, AECID, EC IDB, USAID, WB, IFC, USA, EC Venezuela IDB, USAID, WB,EC, IDB, AECID, Public Financial Permanent Growth Poles Urban WB, USAID, EC, GHF, UNESCO, AFD, EC Mgt, including Shelter WB, EC, IMF, UN-Habitat, IDB, City of Suresnes, City IFC Procurement Ports Studies IDB, US, USAID, Oxfam, Habitat of New Orleans, AFD, AECID, for Humanity, Brazil, Norway, AFD IDB, EC, AFD, Roads CIDA, CEMLA CIDA, USAID, Financial Sector WB, IMF, IDB, US WB Strengthening Treasury Debris WB, Norway, WB, UNDP, EC Anti-corruption management Brazil WB, US Treasury, Insurance IMF WB, USAID, IFC Housing Finance 39 Annex D: WBG Pledge of Support to Haiti NY International Conference on Haiti - May 31, 2010 (US$ millions) Support Pledge to end Delivered to Key Projects and Programs 2011 date US$ 65 Emergency Infra. & Institutions US$ 14 Budget Support (in addition to US$27.5 already planned) New Funding US$130 US$145 US$ 15 Community Driven Dev. (CDD) AF IDA + Trust US$ 30 Housing AF Funds US$ 3 Partial Credit Risk Guarantee US$ 15 Cholera Emergency Project US$ 3 State Peace Building Fund US$ 42.5 Budget Support Disbursements US$ 58.5 Rec. Infrastructure + DRM+ Transport New + Existing US$250 US$187 US$ 32.1 Education Projects US$ 18.9 CDD US$ 4.8 Electricity US$ 35 IFC Emergency Package made available for existing clients (i.e. Garments Grupo M and E- IFC Private US$60 US$45 Power) Sector Support US$ 7.5 Oasis Hotel Loan US$ 1.2 Other (Eurasian Minerals and Capital Bank Trade Line) Debt Relief US$39 US$39 All debt to IDA was relieved in May 2010 TOTAL US$479 US$416 40 Annex E: Evolution of Selected MDG indicators (1990-2008/09) ‘08/ Goals Indicators ‘90 ‘95 ‘00 ‘05 ‘09 ‘15 Progress Gap 1. Eradicate *Employment/population 56 54 55 55 56 78 extreme ratio, 15+ total (%) Slow Large poverty and % of underweight children 26.8 27.5 17.3 22.2 … 13.4 hunger 2. Achieve Net enrollment in primary 22.1 … 54.3 49.6 … 100.0 Slow Large universal education primary Literacy of 15-24 year olds 54.8 … 64.4 82.4 85.0 100.0 Fast Small education Literate & partially literate 3. Promote G/B ratio in primary 0.95 0.95 … 1.00 … 1.00 Fast Small gender education equality and Proportion of seats held by empower women in national … 4 4 4 4 50 Slow Large women parliament Proportion of 12-23 year olds immunized against 31 49 55 58 58 … 4. Reduce measles child mortality Under-1 mortality rate* per 105.0 98.0 78.0 65.0 57.0 36.7 Slow Large rates thousand live births Under-5 mortality rate per 152 98 109 84 76 60 Slow Large thousand live births Maternal mortality rate per Very 457 474 520 630 … 114 Reversal 100,000 live births Large 5. Improve *Antenatal care coverage 71 68 79 85 85 … maternal (%) health *Contraceptive prevalence rate (% of women ages 15- 10 18 28 32 32 … 49) Proportion of tuberculosis 6. Combat cases detected and cured … 2 19 44 49 … HIV/AIDS, under DOTS malaria and HIV prevalence rate in the other diseases … 5.0 5.5 2.2 2.2 1.5 Fast Small population % of population with 7. Ensure sustainable access to an 52 54 56 58 58 94 environmental improved water source Slow Large sustainability % of population with access 29.0 29.7 24.0 19.0 24.0 … to improved sanitation 8. Develop a Per capita aid (current US$) 24 92 24 54 73 … global partnership Cellular subscribers per 100 for 0 0 1 5 33 … population development 41 Annex F: Haiti Active Trust Funds TF # Trust Fund Name US$000 1. Reducing Vulnerability and Increasing Resilience TF010119 Haiti Pilot Program for Climate Resilience Phase 1 450 TF094203 Haiti Disaster Recovery and Risk Reduction Coordination Unit 1,900 TF096217 Support to National Institutions for Haiti Earthquake Recovery 1,100 TF096218 Haiti: Structural Assessment Program 1,300 TF096220 Haiti: Multi-hazard Assessment 990 TF099459 Haiti: Reducing Disaster Risk in Haiti's Health Infrastructure 1,425 TF098259 Haiti - Cholera: WB response (GFDRR: Track III TA) 200 2. Sustainable Reconstruction TF099445 Development of Sustainable Housing Policy & Finance Framework 300 3. Building Human Capital and Social Capital TF097743 Haiti Emergency Community Cash for Work Project 160 TF010631 Women & Girls in Reconstruction: Addressing & Preventing GBV 500 TF098347 GAP: Adolescent Girls Initiative - Haiti 1,000 TF098780 Supervision Funds for Rapid Social Response Gender Based Violence (GBV) Haiti 81 TF095870 Haiti: Scaling Up Nutrition 80 TF096726 Haiti-Household Development agent-Preparation and supervision 189 TF097211 Consultation for a Household Development Agent pilot in Haiti 48 TF097257 Haiti Nutritional Security 200 TF098331 Haiti Nutrition Security and Social Safety Nets 70 TF099663 Haiti HRBF K&L Grant 125 TF092807 Strengthening Government Capacity for Policy Design 500 TF097965 Haiti Supervision 181 TF097966 Supervision and Technical Assistance to EFA 110 4. Revitalizing the Economy TF098676 Haiti TA household and other energy sector 250 TF099467 Energy Access Expansion in Haiti 100 TF098088 Haiti - Strengthening Agriculture Public Services Project II 800 TF095092 Haiti Investment Generation Strategy 250 TF098033 NIPP: MSME Haiti 295 TF098706 NIPP: Haiti Investment Generation 874 TF094597 CDB: BE IN HAITI 398 TF094416 FIAS NIPP - HAITI INVESTMENT GENERATION 300 TF095027 FIAS NIPP - Haiti Investment Generation-SEZ (Phase II) 633 TF097088 FIAS NIPP - Haiti Investment Generation-SEZ (Phase II) 920 Strengthening Governance TF094822 Enhancing Political Leadership to Improve Governance & Public Sector Performance 500 TF098709 Accountability for Effective Poverty Reduction in Haiti 300 TF095115 FIRST: Haiti Strengthening Accounting and Auditing Practices 275 Total 16,804 42 73°W 72°W HA I T I AT LA NT IC OCE AN This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank SELECTED CITIES AND TOWNS Île de la Tortue Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Palmiste DEPARTMENT CAPITALS 20°N 20°N Port-de-Paix e NATIONAL CAPITAL ag ss RIVERS Pa To d MAIN ROADS OUEST NORD - OUE ST Monte Les Môle St.-Nicolas ar e e Christi dw Tro Cap-Haitien r r i RAILROADS s s s in W Limbé DEPARTMENT BOUNDARIES Gros-Morne Fort-Liberte To Baie de NORD Santiago INTERNATIONAL BOUNDARIES Trou- Ferrier Henne Grande Rivière du-Nord du Nord 74°W Ennery Saint- NOR D NORD - EST Gonaives Raphaël Saint Michel C n de l'Attalaye e e e tr Gu G G Golfe de a aya l m mp m la Gonâve Pl u uo u at ARTIBONITE ea Maïssade HAITI u Hinche DOM I N I CAN Ar Verrettes on CENTRE tttiii b ite 19°N Lac de Péligre R E PUB L I C La Cayenne Île de la Gonâve Anse-à-Galets Mirebalais To San Juan Pointe-à-Raquette Grande Jeremie Cayemite Roseaux Croix des PORT-AU-PRINCE Bouquets GRANDE- Anse d'Hainault ANSE Léogâne Étang Lago To f de la Ho tte NIPPES OUEST Saumâtre Enriquillo Barahona Massi Miragoâne Miragoâne Petit- Goâve Chaine de la Selle (2680 m ) Les Anglais Camp-Perrin SUD Vieux Bourg d'Aquin SUD - EST Belle- Anse Thiotte Jacmel Côtes-de-fer Marigot Les Cayes Port-Salut Île à Vache 18°N 18°N IBRD 33417R JANUARY 2006 0 10 20 30 40 Kilometers To Caribbean Sea Oviedo 0 10 20 30 Miles 74°W 73°W 72°W