Haiti is working with the US tax authorities to improve its revenue base in order to tackle major issues facing the island nation, Prime Minister Laurent Lamothe has told Emerging Markets.
Haiti’s budget is approximately $3bn, of which one-third is covered by taxes and the rest by international assistance. GDP currently stands just below $10bn and macroeconomic numbers are improving: annual growth averaging 4.5%; FDI is up 20%; exports are up 4.5% and inflation under control at 5% so far this year.
Lamonthe said more needed to be done. “We are doing a lot with little, but the challenges are great for scarce resource,” he told Emerging Markets on the sidelines of this week’s World Bank/IMF meetings.
The government is currently working with the US tax service on improving its tax system. A process is underway to automate the VAT collection to increase the tax haul.
The prime minister said that new investment in infrastructure, including transportation and power generation, will help facilitate growth. On the agenda of his visit to Washington are meetings with U.S. officials to secure support for a new 85MW to improve generating capacity.
CHOLEREA OUTBREAK
Lamonthe used the bank’s annual meeting to present the government’s new plan for water and sanitation project to deal with the continued effects of a cholera outbreak that began in 2010 and has killed more than 7,000 people and infected more than 700,000. The cholera outbreak began 10 months after the devastating earthquake in January 2010 that killed more than 200,000 people and harmed another 3 million.
The initial push is for $310m for 16 communities that have been hardest hit by cholera, which continues to infect more than 30 people daily. The overall plan would require $2bn in investment to provide water and sanitation to the bulk of the country’s 10.3 million people. Right now only around 38% of the population has access to clean drinking water.
“The Haitian government will not be able to solve this on its own. We need to have the support of the international community, of all donors. This will not only address cholera, but help prevent future water-borne diseases,” said Lamothe.
World Bank President Jim Kim announced a $50m pledge from the bank to the water and sanitation project. He said that while there have been statements of support, “what we need to do now is find the money. We can fix this problem.”
Dealing with cholera is not only a health issue, but eliminating it will create new opportunities to rebuild a tourism industry so that Haiti can join other Caribbean countries earning revenue from visitors.
The country has been attracting investment in tourism, with around $100m invested in tourism infrastructure in the past 18 months. The country signed a deal with the Carnival cruise line to begin receiving tourists.