US embassy cable - 05PORTAUPRINCE2571

UNCLAS PORT AU PRINCE 002571 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA/CAR 
EB/IFD/OMA 
EB/IFD/ODF 
WHA/EPSC 
INR/IAA/MAC 
S/CRS 
TREASURY FOR MAUREEN WAFER 
USDOC FOR 4322/ITA/MAN/WH/OLAC (SMITH, S.) 
 
E.O. 12958: N/A 
TAGS: EFIN, ECON, PREL, PGOV, HA 
SUBJECT: HAITI: IMF VOTE POSTPONED DUE TO UNANTICIPATED 
GOVERNMENT SPENDING 
 
REF: PORT AU PRINCE 02519 
 
1.  (U) The October 14 IMF Board meeting scheduled to vote on 
the EPCA II program for Haiti was delayed due to new, 
unanticipated spending by the Interim Government of Haiti 
(IGOH). 
 
2.  (SBU) Econ Counselor spoke to a contact in the Ministry 
of Finance October 15 who explained that the new spending was 
a bonus to civil service employees, equivalent to about 70 
percent of their monthly salaries, to buy school clothing and 
school supplies.  Most children in Haiti attend private 
schools where they are required to purchase their own 
uniforms and supplies.  This is a significant financial 
burden to parents and it is traditional for employers to help 
with this expense.  It has not been historically traditional 
for the IGOH to pay a bonus, although they have for the past 
two years.  The IGOH had planned to give the bonus in 
October, however, since the IGOH was running a slight 
financial surplus at the end of September, it decided to move 
up disbursement of the bonus by one month. 
 
3.  (SBU) Econ Counselor also spoke to the outgoing and 
incoming IMF ResReps on October 15 who confirmed the account 
from the Ministry of Finance official.  The ResReps said that 
they were aware of the bonus and had expected it to be paid, 
but not in September.  They added that in their opinion the 
IGOH,s action was not a major violation of its agreement 
with the IMF.  They said they expected there to be an 
informal meeting at the IMF on October 17 to discuss the 
matter, with an agreement to reschedule the vote for October 
19. 
CARNEY