IMF Chief Emphasizes Support for Haiti

"Budget support this year is absolutely essential," Strauss-Kahn said during the meeting in New York on March 31, which included Haitian President René Préval, United States Secretary of State Hillary Clinton and U.N. Special Envoy for Haiti Bill Clinton.

Strauss-Kahn encouraged donors to provide Haiti with the $350 million in budget support needed in 2010, according to IMF forecasts. The country faces higher spending needs and a halving of its revenues, and the alternative of high central bank financing could lead to spiraling inflation, which would erode the purchasing power of the poor.

IMF led the way with funds and help

In the days after the devastating earthquake hit the Caribbean nation on January 12, the IMF responded rapidly to Haiti’s needs, and quickly approved $114 million in assistance, the first international organization to provide help in the aftermath of the quake.

The money was used to get cash circulating in the economy so that people could buy food and employees could be paid. The funds are also helping Haiti pay for urgently needed imports.

The IMF’s economic forecast for Haiti is encouraging, according to Strauss-Kahn, with average growth expected to be 8 percent for the next five years. This will help boost the country’s GDP to $1000, compared to $600 prior to the earthquake.

The UN estimates the cost of the total damage and losses in Haiti is roughly $7 billion. A total of $11.5 billion is being sought over the next 10 years for Haitian reconstruction.

Strauss-Kahn said the involvement of the private sector will be important to get the economy working again, and the IMF is working closely with the Haitian government to build a partial credit guarantee fund, which will help the private sector get back to work.

IMF accompanies Haiti on road to recovery

Countries and organizations attending the conference have pledged more than $8 billion so far to help Haiti’s people and economy in the aftermath of the massive earthquake that struck the country two months ago, according to the UN.

Strauss-Kahn also told the UN conference the IMF will present a proposal for the approval of the...