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Press Release No:2008/336/LCR
Contacts
In Washington: Alejandro Cedeño (202) 473-3477
acedeno@worldbank.org
Patricia da Camara (202) 473-4019
pdacamara@worldbank.org
WASHINGTON, May 29, 2008 – The World Bank Board of Directors today approved a US$10 million grant for the Republic of Haiti to help the Government respond to the food price crisis and help it continue with the implementation of its poverty reduction strategy.
The grant is part of the Fast-Track Facility for Food Crisis launched by the World Bank today, which would support global efforts to overcome the global food crisis with a new US$1.2 billion rapid financing facility, including US$200 million in grants targeted at the vulnerable in the world’s poorest countries.
”This grant will support the Government’s program aimed at maintaining gains in macroeconomic stability,” said Yvonne Tsikata, World Bank Country Director for the Caribbean. “The World Bank grant complements the efforts of other international development partners, with whom we are coordinating, while supporting the Government’s efforts to put in place a better safety net system that improves Haiti’s resilience and response to shocks.”
The aim of the grant is to safeguard the Government’s ongoing reform and poverty reduction program--which the World Bank is supporting through the Economic Governance Reform Operation series--by helping to partially fill the unanticipated financing gap created by the food price crisis. The food crisis has put pressure on the state to increase its expenditures on social assistance, directly (through school feeding programs, mother-child programs, and labor intensive public works) and indirectly (through subsidies on food commodities, such as rice).
Soaring food prices hit the poor especially hard because they spend a large percentage of their income to feed themselves. In Haiti, the prices of rice, corn, beans, cooking oil and other foodstuffs have increased significantly since late 2007. Food inflation increased from 6.4 percent in July 2007 to 20.8 percent in April 2008, while overall inflation rose to 16.5 percent in April 2008. This jump was explained by higher prices for food, fuel, and public transportation.
The protection and subsidization of the production of grains for biofuels, the increased costs of diesel fuel and fertilizer, and bad weather in traditionally big food production regions have been among the factors triggering the world-wide food price increases. In addition to global factors, food prices have also risen in Haiti because of hurricanes and flooding in the latter part of 2007, which considerably damaged the agricultural sector.
In addition to this grant, the World Bank will also contribute to the Haitian Government’s efforts to address the crisis by extending the school feeding program underway through the Education for All Project. The program will be adapted to cover 15,000 children over the summer break and to expand coverage of the program to approximately 45,000 in the new school year starting September 2008. The Bank will also provide technical assistance to the Government to develop medium-term solution towards improved agricultural productivity, risk management, and a well functioning social safety net.
Since 2005, the World Bank has provided approximately US$220 million in grants in support to Haiti.
