Press Release: IMF Managing Director Rodrigo de Rato's Statement at the Conclusion of his Visit to Gabon, August 3-4, 2004

August 4, 2004

Mr. Rodrigo de Rato, the Managing Director of the International Monetary Fund (IMF), made the following statement today at the conclusion of his visit to Libreville, Gabon:

"This is my first visit to Africa as Managing Director of the IMF. I am grateful to President Bongo for having invited me to Gabon and for the opportunity to meet with the heads of state of the Communauté Économique et Monétaire de l'Afrique Centrale (CEMAC) region and São Tomé and Príncipe. I came primarily to listen, and would like to express my thanks to all my interlocutors, including those from civil society.

"The challenges facing the region are significant. But the strengthening global recovery will also benefit Africa: we anticipate economic growth in Sub-saharan Africa reaching close to 5 percent this year and somewhat higher in 2005. The CEMAC region, in particular, will benefit from high oil prices and a substantial expansion in production in some countries. To seize fully the economic potential of its natural resource wealth, and make decisive inroads in the fight against poverty, will require strong policies. My discussions with leaders from the region make me optimistic that this will be possible.

"The key priority, supported by all leaders, is to harness the revenue from oil production for development and poverty alleviation. This will require continued sound macroeconomic policies, including fiscal policies that deal prudently with the windfall gains from current high oil prices. These policies need to be cast within a medium-term framework, and the Fund stands ready to support the efforts of all countries in the region. I also found a broad consensus on the need to accelerate structural reforms that raise the productive capacity of the region's economies and promote economic diversification; and the development of sound institutions that provide an environment conducive to investment and private sector development, including through improving governance at all levels.

"I welcome the importance that leaders attach to accelerated regional integration, which can play a key role in sustaining growth. Ensuring the region's competitiveness is an issue of common concern, and requires reinforced commitment to efficient regional institutions. Establishing a truly unified regional market by eliminating all barriers to trade among CEMAC members can play a significant role in boosting the region's economic potential. It will be important to assure that regional integration does not become inward looking, but will be a means for stronger integration also into the global economy. The IMF will pay increasingly attention to regional issues, and we have decided to hold annual regional surveillance discussions with CEMAC authorities.

"Both the advanced and the developing countries bear responsibilities in the fight against poverty. It is natural that while in Africa, much of our discussions are about the policy requirements for Africa itself. But there is no doubt that the advanced economies must also play their part, and the IMF will continue to remind them of their responsibility in two areas in particular: more, and better coordinated official development assistance, primarily in the form of grants; and improved opportunities for African and other low-income countries' exports. Improving market access to the advanced economies, and dismantling trade-distorting subsidies in these markets, are on the table in the Doha Trade Round. This is a critical opportunity to make a significant advance in multilateral trade liberalization that will truly benefit the poorest countries.

"The visit provided also an opportunity to discuss economic developments and challenges in Gabon. I very much share President Bongo's view that economic performance was generally good in 2004 under the stand-by arrangement with the Fund. Economic growth has remained fairly robust—although it is slower than in the CEMAC region, and more remains to be done, especially to strengthen performance in the non-oil sector, if Gabon is to achieve the Millennium Development Goals.

"Looking ahead, the government's commitments to proceed with fiscal consolidation and reforms are well placed. With improved prioritization, fiscal consolidation should be possible without curtailing spending in priority areas. Indeed, I was deeply moved by my visit to the Ambulatory Center for treatment of HIV/AIDS—but also encouraged by the endurance of the human spirit and the success that can be achieved in these well-targeted efforts. I hope very much that these and similar initiatives can be expanded in the coming years. To fully harness Gabon's growth potential will also require further structural reforms, for example in the forestry sector, and steps to strengthen governance. With respect to the latter, I welcome in particular the government's announcement that it would adhere to the Extractive Industries Transparency Initiative, and look forward to further concrete actions in this area.

"In concluding, I would like to again express my appreciation for this opportunity to listen to leaders from the region as well as to members of civil society. These exchanges have further strengthened my belief that the Fund has an important role to play in improving economic growth and alleviate poverty in Africa—and we are firmly committed to play our role along this path."


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