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Haiti ECONOMIC POLICY
Fiscal Policy
Despite irregularities in the allocation of funds under
the
François Duvalier regime, government revenues
traditionally
equaled, or surpassed, budget outlays, technically
yielding
balanced budgets. Jean-Claude Duvalier's unprecedented
intervention in the economy in the 1980s, however, broke
this
tradition. The public sector under Duvalier established,
or
expanded, its ownership of an international fishing fleet,
a
flour mill, a cement company, a vegetable-oil processing
plant,
and two sugar factories. Duvalierist officials based these
investment decisions primarily on the amount of personal
profit
that would accrue to themselves, to Duvalier, and to the
rest of
his coterie. They ignored the potential negative impact on
the
economy. Poorly managed, the state's newly acquired
enterprises
drained fiscal accounts, causing the overall public-sector
deficit to reach 10.6 percent of GDP in fiscal year
(FY--see Glossary)
1985, despite sharp reductions in spending on
already
meager social programs in accordance with an IMF
stabilization
program. In July 1986, the Ministry of Finance, under the
CNG,
revamped fiscal policies through tax reform,
privatization, and
revisions of the tariff code. Although the CNG greatly
increased
spending on health and education, the reform measures
served to
lower the government's deficit to 7 percent of GDP by FY
1987.
General Avril's FY 1989 budget attempted further to
curtail
deficit spending, but that prospect remained unlikely
without
stable flows of economic assistance.
Data as of December 1989
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