Democratic Republic of the Congo and the IMF
The IMF's Poverty Reduction and Growth Facility (PRGF) -- A Factsheet
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Opening Statement by Horst Köhler |
Managing Director, International Monetary Fund
Joint Press Conference
Kinshasa, Democratic Republic of Congo
April 30, 2002
Ladies and Gentlemen, this country suffered for too long under exploitation, government mismanagement, war, and economic turmoil. This led to a dramatic decline in the national income, so that today the average Congolese person is trying to survive on only about 23 cents a day. It is essential for this downward spiral to be stopped, so that the Congolese people can have peace and security, and the opportunity to realize their potential and build a better life.
Last year, at the request of President Kabila, the IMF helped the DRC to design a staff-monitored program to stabilize the economy. There has clearly been progress since then. The economic team has instituted budgetary discipline and tackled exchange rate and price distortions in the economy. The Central Bank has conducted a prudent monetary policy. And there have been important improvements in the judicial and regulatory environment. As a result, hyperinflation and the free fall in the value of the currency have come to an end.
Based on these accomplishments, I see good prospects for further intensifying our cooperation with the DRC to rebuild confidence, normalize relations with the international community, and restart economic growth, job creation, and poverty reduction. The appropriate instrument for that intensification would be a three-year program supported by the IMF's Poverty Reduction and Growth Facility (PRGF). The key priorities should be:
· Restoration of the payments system and restructuring of the banking sector.
· Strengthening the legal framework and rebuilding public administration and accountability, to enable the country to fight corruption.
· Development of an appropriate social safety net.
· And starting work on a poverty reduction strategy paper (PRSP), which will engage the full international community, including the World Bank and African Development Bank. This would be part of a work process for designing a comprehensive poverty reduction strategy, with particular focus on health, education, and basic infrastructure.
Putting such a program in place would require broad-based support. Our work in the DRC assumes the implementation of a regional program of disarmament, demobilization, repatriation, resettlement, and reintegration (DDRRR) for combatants and refugees, with the help of the World Bank. And I would expect that sustained implementation of a program under the PRGF would also prepare the way for DRC to receive debt relief through the enhanced Highly-Indebted Poor Countries (HIPC) Initiative, and from the Paris Club.
I wanted to come to the Democratic Republic of the Congo at a rather early stage, to help prepare the ground for full support by the international community as the peace process and the unification of the country advances. While recognizing the political efforts so far, I urge the parties to the inter-Congolese dialogue to continue working for an inclusive agreement which brings all Congolese together and provides the platform for genuine economic and social reform and democracy.
In conclusion, the IMF wants to help the DRC to overcome the difficult situation it has been living through for so long. It will be crucial to build on the successes already achieved in the economic area. And it goes without saying that further progress in implementing the Lusaka peace accords and the inter-Congolese dialogue will be essential. We wish the Congolese people every success.
IMF EXTERNAL RELATIONS DEPARTMENT