New Q&A feature in this issue focuses on "Seven Questions about Recessions" (by Marco Terrones); IMF research summaries on financial stress (by Selim Elekdag) and on the real effects of the 2007–08 financial crisis (by Hui Tong); listing of visiting scholars at the IMF during April–June 2009; listing of recent IMF Working Papers; listing of contents of Vol. 56 No. 2 of IMF Staff Papers; listing of recent external publications by IMF staff; and a feature on Staff Position Notes, the IMF’s new policy paper series, including a list of recent papers.
International Monetary Fund. Western Hemisphere Dept.
Significant progress has been made in Haiti to safeguard macroeconomic stability after the January 2010 earthquake. However, the pace of the reconstruction has been slow and the business environment remains unattractive. Further development and strengthening social safety nets are essential. The monetary policy stance is appropriate and continuing commitment to exchange rate flexibility is appreciated. Improving the business environment is important to raise productivity, enhance competitiveness, and achieve higher and more inclusive growth.
International Monetary Fund. Western Hemisphere Dept.
This 2019 Article IV Consultation discusses that driven by popular frustration with high levels of corruption and inequality, Haiti has been experiencing a protracted political crisis and prolonged civil unrest. The baseline scenario assumes some stabilization in the political situation by early 2020 but no major political or economic reforms. This would allow growth to recover only gradually and in the absence of sustained implementation of good policies and structural reforms, potential growth would remain low at about 1.4 percent over the medium term. Downside risks, both domestic and external, remain elevated. A prolongation of political instability, extreme natural disaster, drop in remittances, and/or a contraction in exports because of trade tensions would worsen the outlook, particularly given the absence of buffers and fragile social conditions. The challenge is to stabilize the macroeconomic situation in an unstable political context. The IMF Staff encourages the authorities to continue their efforts to contain the fiscal deficit and its monetary financing by the central bank. Improving domestic revenue collection and redirecting current spending would help create space for much needed social and capital expenditures. Together with steps to strengthen the central bank’s autonomy and legal framework, this would help reduce fiscal dominance.
A 28-month Stand-By Arrangement (SBA) for the Dominican Republic was introduced against the global recession. The main objective of the program is to limit the procyclicality of policies. The countercyclical macroeconomic program improved confidence and fostered aggregate demand. Monetary policy remained accommodative with a record low policy rate. Fiscal policy became countercyclical. All structural benchmarks were observed. IMF staff supports the waiver requests and the completion of the first SBA review given the proposed actions and satisfactory performance.
The paper provides an assessment of poverty and inequality on the basis of the data gathered from the most recent surveys. The vision of state and nonstate actors as well as the challenges to be met by 2015 was outlined; the paper also summarizes the major areas of work decided upon by the government of Haiti. Macroeconomic framework and policies are also discussed. Finally, this study covers financing, implementation, and monitoring of the poverty reduction strategy. The growth strategy is based on four key areas or growth vectors.
This Technical Assistance Report discusses the findings and recommendations made by the IMF mission regarding the balance of payments and international investment position in Dominican Republic. The Central Bank of the Dominican Republic has made considerable progress in disseminating external sector statistics. It will soon disseminate monthly the international reserves and foreign currency liquidity data template to the IMF and data for Table 6 (Gross External Debt Position: by Sector) in the Quarterly External Debt Statistics to the World Bank. Much progress has also been made on the project to compile data on manufacturing services on inputs owned by others.
In this study, owing to the global financial crisis, a Stand-By Arrangement (SBA) for the Dominican Republic was approved. The aim is to limit the procyclical policies in the short-term and discussions focused on policies necessary to ensure that the end-2011 and 2011 targets are observed. Administrative measures such as proindustria, withholding income tax, and indexation of specific tax are estimated to increase revenues. The conditional cash program “Solidaridad” is explained. Finally, various issues under the financial program are discussed.
This Selected Issues paper reviews key trends in Haiti’s fiscal performance over the past decade and discusses various options for strengthening the fiscal system. It suggests that a key challenge will be to generate adequate resources to support development, which requires an increase in outlays on social programs, security, and infrastructure investment to at least the levels observed in other low-income countries. The paper reviews revenue trends and key features of the tax system. It also illustrates that Haiti’s public sector employment is far smaller than in other countries.