Haiti: Proposals to Change the Structure of the 2009 Haitian National Budget by Stanley Lucas

• The 2008 Haitian national budget and the process by which it is developed need a major overhaul. Most importantly in order to fight poverty, the budget should be developed to reflect the priorities of Haiti’s 140 geographic municipalities and ten departments. This was not the case for fiscal year 2008 which was so centralized that it did not reflect or incorporate local priorities. The centralized process resulted in an inequitable – and unfair – distribution of resources. The average Haitian pays taxes (a national sales tax, market taxes, all types of rural taxes). However, these taxes do not go back to the local entities to support development and local public works projects.


• The budget process should be revamped and decentralized to include systematic input from all ten departments. If not, the Haitian Parliament should pursue a legislative strategy to put forward these changes. This is long overdue.


• Key Concerns Regarding the 2007-2008 Budget
  The 2007-08 budget actually reduces the allocations for key budget areas, including: safety, health, education, and agriculture. These areas are matters of critical importance to the local levels of government. Instead, the budget allocates 22 million gourdes (about US$619 million) to the Ministry of Public Infrastructure and Communications (TPTC), of which 9 billion gourdes (or US$250 million) will be awarded to a foreign energy company contracted by a close personal friend of President Preval. Another 13 billion gourdes (or US$361 Million) will be awarded to Preval’s former campaign director to fulfill purchasing contracts for heavy transport and construction materials for the government in Haiti. He will also be the decision maker for 50 million dollars allocated by the Inter-American Development Bank. Analysts portrayed this Preval protégé as the prince of kickback.


• Some key facts about the budget:
  The 2007-08 budget is 77.7 billion gourdes (about 2.2 billion dollars), taxes account for 35% of the budget and the rest is provided by the international community donations and credit. Haitians living in America remit an additional US$1.7 billion a year. More than 85 percent of the national budget is spent in the capital, Port-au-Prince while 78 percent of Haitians live outside of the capital. For example the Department of Grande Anse that is comprised of 16 municipalities got 0.04% of the total budget


• The Ministry of Infrastructure received 22.8 billion gourdes ( about US$619 million), which is almost double the previous year. Last year, after eight months, this ministry spent only 8% of its budget. This year, they have increased the management budget leading analysts to speculate about political corruption.


• Education received only 6.7 billion gourdes (about US$188 million). In comparison to last year, the budget for education has been reduced from 8.66% last year 8.61% this year. A negligible reduction, but the vast majority of Haitians does not have access to education.


• The Ministry of Public Health received only 2.04 billion gourdes (US$), a severe reduction in comparison to last year’s budget in which Health accounted for 8.09% of this overall budget – and this year a mere 2.62%.


• Agriculture went from 3.8 billion gourdes last year to 2.7 billion this year (about US$76 million).


• Clearly this does not reflect the priorities of the country. The 2008-2009 budget process should be revamped to include a systematic process for including input from the local level (mayors) and the national level (the ministerial cabinet). If, however, the Executive branch resists this input, we suggest taking up a legislative strategy that strongly advocates these changes. The efforts for change in Haiti and the resolution of the vast problems of the Haitian people must begin with the modification of the structure of the national budget.


• In the first section of this proposal, we propose a strategy to deal with the eventuality that the Executive branch does not take into account the need to more equitably distribute the national budget. The second part recommends a course of action should the Executive branch demonstrate willingness to incorporate broader input into the budget process.


• Budget Decentralization Proposal: Without Executive Branch Support Given recent legislative initiatives undertaken by President Preval, we believe this is the most likely case scenario. In February 2008, Senators and Deputies of each Department should meet to:


• Form a Departmental Parliamentary Budget Committee (CPDB) in each of Haiti’s ten Departments to work on formulating the departmental programs and budget.


• Write a letter from the CPDB to the mayors of each commune requesting that they submit seven priority projects that they recommend including in the department level budget.


• CPDB to prepare the departmental annual programs and budget based on the input received from the mayors.


• Submit the finalized departmental budget to the Prime Minister and the Ministers for Finance and Planning through a joint letter signed by the Senators, Deputies and Mayors of that department.


• The deadline for submitting the programs and budget for each of the ten departments is April 30, 2008.


• The Chamber of Deputies and the Senate must have a common plan strategy to defend the budget of each department. The ten Departmental associations of mayors that form the National Association of Mayors should also develop a complementary plan strategy.


• The two Chambers must also inform President Preval and the Prime Minister that the budget will be taken up in Parliament on June 30, 2008 according to constitutional requirements and deadlines set by Haiti’s constitution. This time the national budget should include the programs and budget submitted by the ten departments and language clearly allocating these funds to the departments. If the budget is not submitted to Parliament on this date, in order to give to the members of Parliament the opportunity to analyze and modify the budget, a vote of no confidence of the Prime Minister should follow on July 10, 2008.


• Budget Decentralization Proposal: With Executive Branch Support


• The delegation (and the vice delegation) function as the decentralized coordinating structure of the Executive branch. As such the delegation should create the Departmental Program and Budget Committee (DPBC) that will include the two principals of the delegation and the departmental directions of all the ministries including the two directions which interest us: departmental directions of planning and finances. In order to prepare the annual programs and budget of each department the DPCB will propose a work plan to:
  
  · The association of the elected officials of a department (senators and deputies)
  · The departmental association of mayors
  · The departmental association of the CASEC
  · The departmental council
  · The various assemblies (secondary road, communal, of the communal section)


• The technical team of the DPBC should organize workshops with all locally elected officials and community leaders in order to understand their priorities. Many levels should be consulted:


• The CASECs and the town councils (supported or not by their respective assemblies) should make proposals for projects to be included in communal budgets.


• These projects and budgets prepared by the elected officials should be evaluated, analyzed, documented and formatted by the DPBC, the departmental Directors of the Ministries; Planning, Finance, Health, Agriculture, Infrastructure which should also contribute to the preparation of the program and budget of their respective department.


• Thus, all the elected officials of the department (CASECs, mayors, deputies, senators, etc.) will be included in providing input into the departmental programs and the budget. An official copy of the departmental projects and budget recommendations should be addressed to the government via the DELEGUE who is the decentralized coordinator of the Executive branch. The various ministers will receive a copy via the good offices of their representatives in the department. If an Interdepartmental Council is formed, it would be its role to present and defend the budgets of the departments to the Council of Ministers. Every single elected officials of the department should receive a copy of the final document.


• Finally, the national budget prepared by the Ministry of Finance and submitted to the Parliament by the government by June 30, 2008, should then contain programs and budgets from the ten departments previously submitted to the Prime Minister. The elected officials Senators and Deputies of each department will review the budget to ensure their input has been taken into account. If not, they can vote not to pass the budget and sanction the prime minister.


• The Prime Minister should submit the budget to parliament in accordance to the constitutional deadline that fixed the date to June 30, 2008. If the Prime Minister failed to a. include the ten departments programs and budget into the national budget with specific languages of allocations or parliament do not receive the budget by July 15, parliament will give the Prime Minister a vote of no confidence.