International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper examines opportunities and challenges for growth in Haiti. Achieving a sustained increase in living standards in Haiti will require deep-seated reforms across a range of areas. Diversifying the export base is needed to cushion the impact of severe shocks that have reduced per capita income and prevented a sustained increase in the capital stock. Integration into global-value chains would also allow Haiti to take advantage of its proximity to the U.S. market and favorable trade preferences to generate employment, spur the creation of human capital, and allow Haiti to begin climbing the value added chain.
This paper reports on progress made on Nicaragua’s National Human Development Plan as of 2010. The operational goal for Nicaragua’s National Human Development Plan is economic growth with increased employment and reduced inequality and poverty. The results for 2007–10 highlight a significant reduction in inequality among Nicaraguans based on better distribution of income and consumption. This has been possible owing to redistributive government policies with positive results, economic recovery, and positive economic growth in the midst of a world financial and economic crisis.
This poverty reduction strategy paper on Nicaragua shows that the main obstacles to poverty reduction are related to culture, historical, and structural factors, as well as weak public policy. The lack of proper physical infrastructure, the weaknesses in the energy matrix, the flaws in the health, education, and potable water systems, and the precarious presence of state institutions in the territory have all contributed to the lack of success in poverty reduction. The country’s potential in agriculture and natural resources are the main areas of opportunity regarding economic growth and poverty reduction.
The current government has succeeded in reorienting economic policies after a series of shocks and an initial weak policy response. Revised real GDP growth targets are feasible with sustained prudent macroeconomic policies and institutional reforms. The medium-term macroeconomic framework centers on sustained prudent fiscal and monetary policies. The Poverty Reduction Strategy Paper (PRSP) could include a more detailed description of the actions being implemented to strengthen the financial system. The pursuit of fiscal discipline to restore macroeconomic stability has dominated the second year of strategy implementation.
The government of Nicaragua has worked toward adopting the necessary economic measures to put the country’s economy on the course of fiscal sustainability and those that guarantee transparent and austere management, not affecting the most vulnerable population. The government has managed to protect social spending, providing resources for strategic sectors, improving performance indicators for health and education, and implementing reforms that will have a greater impact on these sectors. It is expected that the tendency for social spending will be maintained in the coming years.
International Monetary Fund. External Relations Dept.
IMF economists and researchers from outside the institution gathered at the IMF’s Third Annual Research Conference on November 7-8. The conference had an overarching theme of capital flows and global governance but also dealt with an eclectic array of other issues that economists at the IMF and elsewhere are exploring.
This note reviews the effects of dollarization on the ability of the Bank of the Republic of Haiti (BRH) to conduct monetary policy and the risks to macroeconomic stability and the banking system. Haiti's external indebtedness has been compared with that of countries eligible for debt relief under the Initiative for Highly Indebted Poor Countries (HIPCs). Haiti's accession to the Caribbean Common Market and the impact of trade liberalization measures on the strategic rice sector is discussed. The causes of poverty in Haiti are also analyzed.