Haiti: Public Expenditure Management and Financial Accountability Review (World Bank Country Study)

This book summarizes the key findings and policy recommendations of a comprehensive diagnosis of a Public Expenditure Management and Financial Accountability Review (PEMFAR). The PEMFAR is an exercise which integrates the analysis of a Public Expenditure Review (PER), a Country Financial Accountability Assessment (CFAA), and a Country Procurement Assessment Report (CPAR). The analysis focuses on the linkages between public finance, growth, and poverty. Haiti made good progress over the past three years but major challenges remain to accelerating growth and reducing poverty. After the lost decade 1994-2004, marked by political instability and economic decline, Haiti reformed significantly and revived growth, especially in the past three years. Macroeconomic policies implemented since mid-2004 helped restart economic growth, reestablish fiscal discipline, reduce inflation and increase international reserves. Financial sector stability has been maintained though weaknesses have emerged. Significant progress was also achieved in the implementation of economic governance measures, mainly in the area of legal framework, core public institutions and financial management processes and procedures. Notably, basic budget procedures were restored, the public procurement system strengthened, and anti-corruption efforts stepped up. Efforts were also made to improve efficiency and transparency in the management of public enterprises. This wave of reforms led to renewed confidence and translated into higher growth. Real Gross Domestic Product (GDP) is estimated to have grown by 2.3 percent in FY2006, implying an increase of about 0.6 percent in per capita GDP, compared to -0.2 percent in FY2005. The successful implementation of its stabilization program helped Haiti benefit from a three year International Monetary Fund (IMF) - Poverty Reduction and Growth Facility (PRGF) supported program. In addition, in November 2006, Haiti qualified for debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative by reaching the decision point under the initiative This book summarizes the key findings and policy recommendations of a comprehensive diagnosis of a Public Expenditure Management and Financial Accountability Review (PEMFAR). The PEMFAR is an exercise which integrates the analysis of a public expenditure review, a country financial accountability assessment, and a country procurement assessment report. The analysis focuses on the linkages between public finance, growth, and poverty. Over the past years, Haiti has made good progress in reforming its public financial management system, however, significant challenges remain to improve efficiency, transparency, and accountability. Moreover, the growth-poverty response of the improved system has been limited. Haiti remains one the poorest countries in the world. Accelerating growth and reducing poverty will require bold policy actions with a strong emphasis on fiscal reforms. However, even with the best fiscal reforms, it is unlikely that Haiti will achieve in the near future the high growth rates required to significantly move the country out of the poverty trap. More foreign aid and predictable flows are needed to support economic growth and help overcome some of the dynamic circles that lock Haiti in a low growth/high poverty equilibrium, and improve living standards. In this context, effective management of aid flows is crucial to ensure that their potential growth-enhancing, poverty-reducing, and human development-improving effects materialize.--Publisher's description. "This book summarizes the key findings and policy recommendations of a comprehensive diagnosis of a Public Expenditure Management and Financial Accountability Review (PEMFAR). The PEMFAR is an exercise which integrates the analysis of a Public Expenditure Review, a Country Financial Accountability Assessment, and a Country Procurement Assessment Report. The analysis focuses on the linkages between public finance, growth, and poverty."--BOOK JACKET.