IMF to disburse $114 mln to Haiti by Friday
* Funds will help government rebuild, restart economy
* IMF says Haiti textile plants are still able to produce
(Adds details, quotes; byline)
By Lesley Wroughton
WASHINGTON, Jan 27 (Reuters) - The International Monetary Fund said on Wednesday it will disburse $114 million to Haiti by Friday to help the government get back on its feet and restart the economy devastated by a earthquake.
The loan includes $102 million in new emergency funding approved by the IMF's board on Wednesday.
The IMF said Haiti will not pay interest on its IMF loans until the end of 2011, part of a package of measures agreed last year to help poor countries cope with the impact of the global financial crisis.
"The emergency augmentation will provide urgently needed financing for essential imports, and make cash available to banks and transfer houses," the IMF said in a statement.
The 7.0-magnitude earthquake that struck Haiti on Jan. 12 has killed as many as 200,000 people. While international rescue teams still sift for survivors in collapsed buildings in the capital Port-au-Prince, there are parallel efforts being made to get the country functioning again.
The IMF funding will be used to import equipment for the government to resume operations after state buildings were flattened and records destroyed.
"It will also enable the authorities to maintain an adequate reserves cushion in the face of very large import needs linked to reconstruction," the IMF said.
IMF mission chief to Haiti, Corinne Delechat, told reporters on a conference call that once imports resume, the government expects a surge in demand for foreign exchange. Therefore, it was critical for the authorities to hold foreign exchange in reserves to be able to manage large spikes in demand, which would otherwise translate into very high inflation.
She applauded the government for its efforts to restore the state and said the central bank was "in the best shape of all and able to operate."
Delechat said it would take a "long-term effort" by the international community to put the country on a sustainable development path.
She said about 80 percent of Haiti's textile capacity, which is located outside the capital Port-au-Prince, was capable of still operating, and that once the main port was repaired, textile exports could resume.
Textiles make up about 90 percent of Haiti's exports and generates a lot of revenue for the government.
Delechat said international agencies including the IMF, World Bank and United Nations would begin an assessment in February of the extent of the damage, which would help determine how much aid will be needed for reconstruction.
A donor conference in March will nail down specific pledges from different governments for Haiti's rebuilding.
"The government has a fairly clear idea what needs to be done," she said.
Haitian Prime Minister Jean-Max Bellerive told a donor conference in Montreal this week the earthquake had set his country back by between four to five years and it would take up to 10 years to rebuild.
Anti-poverty groups have called on the IMF and other international institutions to cancel Haiti's debt and Delechat said it was a "political decision" among donor countries.
Some $1.2 billion of Haiti's debts to the IMF and World Bank were written off in July last year as a reward by the international community for progress the country was making in economic reforms and management.
(Reporting by Lesley Wroughton; Editing by Leslie Adler and Eric Walsh)
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