Long-term food aid risk to Haiti economy - Preval

* Preval, Obama to meet in Washington on Wednesday

* Job creation a priority for Haitian government

PORT-AU-PRINCE, March 8 (Reuters) - Haitian President Rene Preval plans to tell U.S. President Barack Obama on Wednesday that food aid to the earthquake-devastated Caribbean nation should be stopped because of the risk of damaging its economy.

The two men will meet at the White House in the wake of a Jan. 12 quake that killed 230,000 people, according to Haitian government estimates, crippled the economy and devastated much of the capital Port-au-Prince and other cities.

Donations of food and water have proved a lifeline for more than 1.2 million people displaced by the quake, but Preval told a news conference on Monday the aid could in the long term hurt the economy of the poorest country in the Western Hemisphere.

“I will tell him (Obama) that this first phase of assistance is finished,” said Preval, standing in front of the ruined presidential palace in Port-au-Prince.

“If they continue to send us aid from abroad -- water and food -- it will be in competition with the national Haitian production and Haitian commerce,” he said.

Preval said the priority should instead be to create employment in Haiti, a country where a high percentage of the population lacked work even before the quake.

The Haitian government, working with the international community, is preparing a master plan for reconstruction that would have ambitious goals, Preval said after a meeting with Canadian Governor General Michaelle Jean.

A trust fund with voting and nonvoting board members would manage donor funds, Preval said.

RECONSTRUCTION

Priorities for reconstruction include strengthening buildings to withstand future earthquakes and rehabilitating the environment, much of which is denuded, to protect against flooding from tropical storms and hurricanes, which last battered Haiti in 2008.

Some $38 million was needed for storm protection, Preval said.

Reopening the country’s schools was also key, Preval said, though he gave no date for when that would happen. Education is considered critical to development in Haiti, where 38 percent of the population is under age 15 and nearly half of those 15 and older are illiterate.

“I will also tell him (Obama) that our vision is to rebuild Haiti and if we don’t take advantage of this historic event to reinvent Haiti, to reinvent Port-au-Prince, we will be making a mistake of historical proportions,” Preval said.

“Our generation has the obligation to shoulder this responsibility,” he said.

Many Haitians have criticized the government’s performance since the earthquake and argued that Preval has not done enough to communicate with the people or to marshal government aid, instead leaving international aid groups to fill the gap.

Jean’s two-day visit is significant because she was born and raised in Port-au-Prince, arriving in Canada as a refugee, and has worked to promote Haiti’s needs since the quake.

“We are here ... to say to Haitians that they are not alone ... We have suffered with you,” she said in an impassioned speech after her meeting with Preval.

As Canada’s governor general, Jean represents Britain’s Queen Elizabeth, who is Canada’s head of state.