IMF: Haiti should cut fuel subsidies gradually, avoid unrest

PORT-AU-PRINCE, Haiti — Haiti should eliminate fuel subsidies but do so gradually and help cushion the effects to avoid the kind of unrest that erupted last week when abrupt price hikes were announced, an International Monetary Fund official said Thursday.

The Haitian government had agreed earlier in the year to eliminate the fuel subsidies as part of a broader agreement in which IMF member nations of would provide more direct assistance to Haiti, spokesman Gerry Rice told reporters.

Part of the plan was for Haiti to strengthen its revenues through increased tax collection and elimination of the fuel subsidies. That "would allow for the Haitian government to provide for badly needed public investment and a better social safety net," Rice said.

He said fuel subsidies "disproportionately benefit the well-off" and divert spending from health and education.

But Rice said subsidies should be withdrawn gradually and combined with "targeted" assistance such as transportation vouchers that would ease the effects to ease the transition.

Haitian officials announced July 6 that increases of up to 50 percent would take effect the following day, sparking protests throughout the country in which dozens of businesses were looted and several people killed as demonstrators clashed with police.

Prime Minister Jack Guy Lafontant abruptly canceled the increases but is facing calls for his resignation from members of parliament, threatening further turmoil for the country.

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