Transcripts

Botswana and the IMF

Côte d'Ivoire and the IMF

Uganda and the IMF

United States and the IMF

Conditionality

Heavily Indebted Poor Countries -- A Factsheet

The IMF's Poverty Reduction and Growth Facility (PRGF) -- A Factsheet

Poverty Reduction Strategy Papers -- A Factsheet

IMF Quotas -- A Factsheet

Technical Assistance -- A Factsheet

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PRESS BRIEFING
AFRICAN MINISTERS

World Bank/IMF Spring Meetings
Saturday, April 15, 2000
11:00 a.m.

P R O C E E D I N G S

MR. CHAMBRIER: Good morning ladies and gentlemen, and welcome to this Press Conference of Finance Ministers and Central Bank Governors from Africa.

My name is Alexander Barro Chambrier. As an Executive Director in the Fund I represent a number of African countries in the Executive Board of the IMF. Today's briefing affords you the chance to hear the views of leading officials from some of the countries at the heart of the discussion on poverty alleviation and debt reduction that is dominating this year's spring meetings of the IMF and World Bank.

Let me introduce our distinguished panel. I will start with Mrs. Mohohlo, who is Governor of the Central Bank of Botswana. Then I will introduce Mr. N'Golo Coulibaly, who is the Minister of Finance of Côte d'Ivoire. You have on my left Mr. Emile Doumba, who is the Minister of Finance of Gabon. Mr. Mamalepot, at the extreme left, is the Governor of the Central Bank of the BEAC, the Bank of Central African States. I suspect that we will have Governor Konan Banny, who is Governor of the Central Bank of West African Countries. He has been delayed and I am sure he will come later.

I would like also to introduce to you my colleague on the IMF Executive Board, Mr. Cyrus Rustomjee, who is representing also an important group of African countries in the Fund.

Today's briefing is under embargo until its conclusion; simultaneous translation is available in French and English. I will ask our panelists to say a few words and then invite questions.

So, before I come to that stage, perhaps I could say a few words. Let me thank first, Mrs. Lucie Mboto Fouda and Mr. David Hawley for their efforts for allowing us to hold these events. My thanks also go to all the journalists who were able to make it and to all the participants. This is an important event for Africa. Indeed, as we enter the third millennium, as you know, Africa faces tremendous development challenges associated with the need to accelerate growth and to reduce poverty in a significant manner. At the same time, African countries are facing the challenge of globalization. Africa needs to be prepared in order to benefit from globalization; in particular, economic and structural reform are essential if Africa is to compete successfully in international markets.

In that context, African countries need technical and financial assistance from the Bretton Woods Institutions. They expect from the IMF advice on how to maintain a stable and sound macroeconomic framework that is essential for private investment and production. They also need World Bank advice on how to remove the obstacles to private activities and on how to promote a dynamic class of domestic entrepreneurs.

As underlined in the Libreville Declaration, African countries are determined to deepen their economic, structural and political reform efforts and count on the continued support of the international community. At the Libreville Summit that was held in January 2000, 30 heads of State and Government endorsed the approach adopted by the IMF and the World Bank to reduce poverty. In particular, they counted on concessional loans from the Fund and the World Bank and of the poverty reduction strategy framework and on the strengthening of the HIPC initiative, which could help them fulfill Africa's growth potential and improve living standards. Unfortunately, a number of recent Fund critics appear to threaten concessional financing from the IMF. I refer here to the Meltzer Commission Report that appears to suggest that the IMF should play no role in Africa.

Let us make it clear, African countries do not want prolonged assistance from the IMF. They would like to graduate rapidly from concessional assistance and to join the ranks of the emerging markets economies. African countries really want to become more successful in attracting foreign direct investment and gaining increased access to the international capital market. However, this is not an overnight process. It requires sufficient preparation and will certainly take some time.

It is in this context that my colleague, Mr. Cyrus Rustomjee, and I felt that it was essential to give the floor to African policymakers around the table to give their views on the ongoing debate on the role of the IMF.

So, now, I will invite my colleague, Cyrus, perhaps you want to add something?

MR. RUSTOMJEE: Thank you, Mr. Barro Chambrier. I will be very brief because I believe floor time should be assigned to the key decision makers and policymakers in Africa who are assembled here. I think this is a particularly important time and an appropriate time that we discuss this set of issues. I would like to say that I think that there is good news coming from Africa. I believe you will hear more of it in a few moments. I would like to point to the Fund's flagship document released a couple of days ago: the World Economic Outlook document, which projects growth rate for African countries in excess of the average projected for the global economy in the year 2000, ahead of population growth in Africa, which indicates that African countries have achieved inflation rates on average of 6 percent through very hard substantive efforts over many, many years. That indicates that fiscal deficits have very substantially declined in the last decade. That also indicates that structural reforms are pressing ahead in every direction in African countries, but which also brings back the reality that African countries are the locus of major developmental, structural, macroeconomic challenges.

I would like very briefly before stopping to mention that Africa is a very important part of the Fund. It may not be a well-known statistic, but by country membership in the institution , African countries represent 27 percent of the membership by country. They are the largest users of the Fund's concessional resources. And I very much share the comment made by Mr. Barro Chambrier that the objective is to graduate from concessionality and to access international capital markets. And as I said, Africa is the locus of the most pressing developmental and macroeconomic challenges in the institution. So, I have nothing further to add. Thank you.

MR. CHAMBRIER: Thank you very much, Cyrus.

Now, I will ask our panelists to say a few words and then invite questions. Perhaps Mrs. Mohohlo would like to open the floor?

MRS. MOHOHLO: Thank you.

I hope everybody can hear me. I will restrict my comments to many of the issues that were included in the Meltzer Report that the two speakers have already alluded to. I think that in general terms there are a number of issues that one is appreciative of included in the Meltzer Report. But at the same time I think one of the things that hits you straight in the eye is the time that the Meltzer Report was given, to look at what I consider to be major issues. And to me six months is not enough. I think they needed much more than that. Not only that, within the six months they only met, I think, about 12 times. I just don't believe that the issues that they had to address needed that short of a period.

And there are three specific issues that I think, I believe were contained in the Meltzer Report. The first one, obviously, is enhancing the Fund's role in protecting and enhancing the stability of the international financial system. Obviously, that means the promotion of stability enhancing developments, as well as having the resources where necessary in order to intervene to prevent panic and the deterioration of African economies. I have no quarrel with that.

Then, of course, the second issue that I believe was very pertinent in the report was the aspect of reducing overlap and duplication with other institutions. That is what I deduced from the report. Obviously, the proliferation of the IMF's activities that has taken place, especially in the last 25 years, has inevitably resulted in an overlap of functions. In many respects, overstepping some of the boundaries that should take place between the Fund and other institutions that are relevant with respect to restructuring economies in various countries.

Now, in this respect, I have the IMF in mind and in our view, certainly in Botswana, I think we believe that the IMF should be involved in general development activities. I have to correct that. They should not be involved in that, issues of structural changes in developing economies should be left for the World Bank and other related institutions.

Again, the IMF should not be involved in poverty alleviation but it should concentrate on financial system and short-term stabilization issues. And, therefore, one of the recommendations of the Commission that we support in Botswana is the proposal to terminate the PRGF. In our view, poverty alleviation should be the work of the World Bank and not of the Fund. The termination of the PRGF should, however, be tied with the suitable measures to ensure that the World Bank has sufficient resources to ensure that crucial poverty alleviation efforts are not undermined and are, indeed, strengthened.

Now, moving to the third issue, which I believe relates to moving away from long-term lending with respect to the Fund. The Fund should cease lending to countries for long-term development assistance. We believe that there are institutions which are in place for that kind of lending. The IMF is unnecessarily duplicating the functions of other institutions if they were to get into long-term lending. And we do not believe and support the Commission's proposals for ending the long-term lending role of the World Bank is the right thing to do. I think the World Bank should concentrate on long-term lending and the Fund should concentrate on the issues that I believe they are best structured for.

Now, with respect to the issues that were raised at the Libreville Commission, my own head of state did make a statement there. And that statement, obviously, we fully support. The statement primarily posed the question, whether the conditionality that has to come is justified. And that is coming with the introduction of what is called the PRSP, which I understand that acronym stands for Poverty Reduction Strategy Paper.

The other thing that I think comes with the PRSP is the element which I believe that if we were to go ahead with it the Fund will be prepared to facilitate. This is the implied need for additional technical assistance because the resources that are required to prepare the strategy paper to me are extremely enormous. And I don't believe that many of the countries that will be expected to prepare the strategy paper are well endowed to be able to successfully present a paper that will be acceptable to the IMF.

Now, again, one wonders whether IMF staff, at the present moment expressing poverty alleviation issues, if we are not going to be taking the IMF staff skills away from where they should be, which I believe is macroeconomics and finance, instead of beginning to train them in something that will take some time. And they will be expected to be experts with a view to be able to read all these strategy papers and come up with a position for all parties involved.

I mean, obviously, there is no intention of casting aspersions on those who are the proponents of this PRGF. We are simply just saying this is a thought-provoking issue and I think we have to pay attention to the fact that it is easier said than done.

And we are very interested to see whether the deadline that has been put in place--I think the deadline is June this year--for those countries that would like to qualify for Fund resources in order to move on with poverty reduction issues, whether it will be met and that really to me is the test. With those remarks I think, Mr. Chairman, I would like to conclude.

MR. CHAMBRIER: Thank you, Madam Governor.

Now, I give the floor to Mr. N'Golo Coulibaly. I believe as I told you at the beginning there is a simultaneous translation. So, you can use the equipment that is there.

Mr. Minister, you have the floor.

MR. COULIBALY: [Translated.] Thank you.

Let me begin by thanking all of those who are involved in organizing this morning's meeting. My name is N'Golo Coulibaly and I am the new Minister of Finance and Economy in Côte d'Ivoire. And as many of you are aware, we have had a change of government in Côte d'Ivoire. The change in government took place under an unconstitutional environment and given this situation, one could ask oneself a lot of questions, but I would like to say that a major reason for the change has to do with the fact that the policies in the past did not take into account a large part of the population.

And this led to fairly widespread dissatisfaction, which in turn led to confrontation, and as a result our army had to intervene to resolve the problems. And I say this so as to put you in the proper perspective. Given the present context, we think that the new policies that the Bretton Woods institutions are committed to, that is the poverty reduction policies, the increase in growth and development are well-founded policies because in order for any policy to succeed, we believe, you need to have the involvement of the population.

I know the problem raised by the well-known report that each institution should deal with its own bailiwick and deal with its own problems that it is an expert in and that the IMF not concern itself with development and remain as a lender of last resort. We don't share that view completely. Perhaps some issues can be revisited, but we believe that the intervention of the IMF in poverty reduction issues has led to additionality in resources. Any effort to help us and does not propose replacing the resources would be incorrect.

In fact, in our countries we believe that the intervention of the IMF and the World Bank, who are working more and more as a team, does, indeed, respond to the need to try to coordinate macroeconomic policies and we believe that they are concerned with project financing.

I don't want to go into any further details but I would like to say that the report we referred to earlier is one which one cannot completely disregard but is a report that does need to take into account the reality of the situation, the reality out in the field. The fact that we need to have financing in all sectors, particularly in the rural sectors, which covers more than 60 percent of the population of each of our countries, and a population that is presently not covered if you only have the intervention of the World Bank, and if you limited the World Bank's activities merely to giving out grants.

Now, we realize that some are able to pay back and will continue to pay back. Some will benefit from grants and they will continue to benefit from grants but a lot depends on our ability to rationalize the interventions done by the Bretton Woods Institutions.

Mr. Moderator, these are the introductory comments I wish to make. And I hope that in the future before such a report is produced that we give an opportunity to the authors of such a report to go to the field, go to the countries, so, as not to just look at the technical aspects. We can't challenge them on that, they are experts in that field but theoretical expertise, we believe, has to be supplemented by the reality that can be seen in the field and the reality is that today everywhere, worldwide, we have regions, we have sectors, that need aid and will continue to need assistance from the Fund and from the World Bank, even if it is deemed inadequate.

Thank you.

MR. CHAMBRIER: Thank you very much.

Mr. Minister, I believe that we had two introductory remarks that are very stimulating. I would like to thank you again for coming and I believe that it is time for the questions. I am sure you have many questions to raise.

So, I will invite you to identify yourself and the microphone will be brought to you.

So, we can start.

A QUESTIONER: I appreciate the concerns that are raised as well as the introductory remarks. They were quite informative and I would like to just place this for a general response for anyone on the panel.

Some of the concerns that are raised within the countries, themselves, as well as the international concerns that people are expressing, either through demonstrations or just through analysis that comes through the media. One is the fact that there would not be a need for debt relief if the resources were not originally raped or taken out of Africa. Primarily they talk about the resources of gold, the resources of cobalt and bauxite and diamonds and so forth and they recognize in the founding of the Fund as well as the World Bank that Africa was not a concern at the time that it was founded. It was founded strictly to enhance the growth of Europe and European nations, to rebuild and develop there as well as gather whatever resources that they could acquire. These are arguments that are being expressed, sentiments.

My question, generally to bring it more focus, is that Africa has not benefited tremendously as of yet from the reforms proposed, and the initiatives that have been introduced over the last decade by both the Fund and the Bank. Many have not yet qualified for the debt relief or the poverty relief programs. The question that I am asking is, our unique experience as Africans to suffering, it has obviously qualified us to raise solutions. One, does the Fund and Bank or even other additional outreach programs, do they respect the expertise that the African nations, the Ministers, themselves, bring to the table to help to correct or resolve problems?

The second part of the question is, how much more effective would it be for African nations to work along transnationally with other nations in helping to resolve crisis?

MR. CHAMBRIER: Who wishes to respond?

Mrs. Mohohlo.

MRS. MOHOHLO: Thank you, Mr. Chairman.

I will attempt to respond to the questions. I think--let me start with the second one, where it was somewhat implicit in the suggestion that maybe there is room for bilateral relations between and among countries, developed and Africa, in order to resolve problems rather than directly with the World Bank and the Fund. I am not so sure that once a country strikes a relationship with the IMF that stops that country from obtaining either financial resources or technical assistance from the countries with whom they would like to work with. I would like to give you an example of my particular part of the world which has a body called SADC, which is the Southern African Development Community. Those countries, many if not all of them, are members of the Fund and many of them have, I think, enjoyed facilities extended by the Fund under the old ESAF. Hopefully now with this PGRF they will continue to enjoy that kind of relationship.

Before I carry on with the response about how countries can group themselves together to get out of problems I think that one of the issues that I highlighted when I earlier made a statement was that I think the conditionalities that are now being brought by this new Fund facility are beginning to be increasingly onerous. And I hope that the Fund will continue to review those conditionalities to enable countries to have access to this facility.

But having said that, I think that there are strong indications that countries can resolve their problems not necessarily with those that are developed but also with the developing countries which are seen to have some kind of prowess with the problem that any particular country may be facing.

But the other question that you posed is whether or not the IMF and the World Bank are cognizant of the skills that may be abundant in Africa, which could assist them in diagnosing the problems a little bit better than the Fund coming in to stay in a particular country for as long as two weeks and coming up with that diagnosis which may not be in the best interests of the country.

Therefore, I would like to agree that there is a view out there that the Fund sometimes misses out on some of the good that some countries may be having because probably they are concentrating more on isolated data that may or may not be representative of the true state of affairs.

So, I think there is room for the Fund and the World Bank to work together with countries that are trying to access the facilities, whether it is in the old ESAF or in the new poverty reduction scheme.

Thank you, Mr. Chairman.

MR. CHAMBRIER: Thank you. Minister Doumba would like to respond.

MR. DOUMBA: Thank you, Mr. Moderator.

I would like to respond to the comment made by the questioner and what my colleague has already said. I think the problem with Africa and its relations with the developed world is the fact that we need an outlet to market our products. Africa has made monumental efforts to improve the quality of its products and improve their competitiveness. And in spite of this, we continue to be hindered by obstacles put in our way by other countries. You know, what happened with our banana exports some time ago.

But I believe that there is widespread agreement now with regard to the need to open European and U.S. markets to African products in order to allow us to further our development, so, that we can participate more actively in the fight against poverty.

Allow me to add a second point. Perhaps in order to remedy the suffering in Africa would it not be possible for African nations to work together? As you know, there are quite a number of subregional initiatives flourishing in Africa but that will only work if we have the wherewithal we need to develop our basic infrastructure. We don't have enough roads connecting our countries. We have problems in organizing our transportation sector, be it ground transportation, maritime transportation, or air transportation and this does have an impact on our debt situation. If we are able to obtain some debt relief, we could invest more in our infrastructure and organize our subregional markets which we believe will be one way for us to make progress in improving the growth of our countries.

MR. CHAMBRIER: Thank you.

A QUESTIONER: What we are hearing from critics of the IMF and the World Bank and one of the reasons the IMF and the World Bank are adding these new conditionalities about poverty reduction is that the resources that were spent, particularly in Africa, but in other places, loaned by the IMF and the World Bank, haven't been used to help the situation of the common people or the poor people.

Do you think that there is a cause for people to say that, specifically in your countries; and how do you balance these new, what you call, onerous conditionalities with the need, people are saying, to use the resources in a meaningful way?

MR. CHAMBRIER: Mr. N'Golo Coulibaly.

MR. COULIBALY: Thank you, sir.

Before I answer that question let me add to what was said earlier. I think that in Africa, or at least in Côte d'Ivoire, we support the slogan, Trade Not Aid. And that is why very often when there are trade problems we try to express our views and sometimes we feel like we are talking to a wall.

For instance, with the problem with cocoa, where the whole issue is whether we add fat to it or not. We talked to our trading partners and at one point we thought they had understood our views but in the end measures were added and fat is going to be included, oils are going to be included. Now, what does that mean for Côte d'Ivoire? That means a loss of billions in our export income.

And I say this so that you can understand this because very often they say, well, the Africans need to do this, they need to do that, but the best way for us to earn income, to become independent, to depend less on the international community is to earn our living through trade. And that is why I wanted to add this point to what was said earlier.

Now, as to the question you've asked. It is true that in some countries resources were borrowed and were not properly used. And we can't hide that. But it is a problem that exists elsewhere as well. And the very fact that this problem has existed does not necessarily mean in my opinion that one has to react as follows, which is: Well, since money was not used properly in the past, well, let's put a stop to it completely now. That, I don't think, is the appropriate reaction.

The proper reaction is to work together to try to find the reasons why those resources were diverted from their objective to be used elsewhere in areas where I don't think we need to dwell on this now, and find the reasons why that happened and make the necessary corrections.

That is what I think we need to do. And I think the fact that the World Bank, in the last few years, has included in its concern, policies to combat corruption is a positive step and that is what needs to be done, not only at the level of international institutions but also at the country level. So that the resources that are misspent, either nationally or through international cooperation, are not misspent and, so that they are used for the purposes for which they were envisaged, for the projects for which they were lent.

Now, as to conditionality. I am one who is very involved in this. When I was a young staff member, I was radically against any form of conditionality, but as I have become older I have realized that conditionality, well, it depends on the type of conditionality. Sometimes it is helpful. It shouldn't be redundant conditionality. It shouldn't be beyond the ability of the borrowing country, but I don't agree with those that say you should lend without any conditions because it would be strange to find a lender that lends money and doesn't try to ensure that there are means of verifying that the money lent is properly used.

Those are my comments, thank you.

MR. CHAMBRIER: Mrs. Mohohlo.

MRS. MOHOHLO: Yes, just one small comment.

I would like to fully endorse what the Minister has just said but also indicate that we cannot deny that there are certain things that could be done much, much better in our continent. I hasten to add that there are very good things that are done. And we should be able to look at those things and see how we can replicate them elsewhere in Africa. As he rightly pointed out, these problems of bad governance are not just prevalent in Africa. They are more or less, you can find them anywhere in the world.

Now, I would like to commend the World Bank for having, I think, established either a unit or a department whose intention it is to ensure that good standards of good governance are going to be followed and ensure that they are put in place. In Africa, when there are bad governments we don't like it. When there are good governments we would like to copy it. But I don't think we should be punished simply because there are one or two rotten potatoes in the continent.

Thank you.

MR. CHAMBRIER: Thank you very much, Madam Governor.

A QUESTIONER: Earlier this week, the IMF Executive Board postponed a decision on debt relief for Uganda citing the planned purchase of an aircraft which is meant to be a personal aircraft, as I understand it, for the President. In the minds of many people on the Board this is a sign of the old type of misuse of allocations. And I wonder if you could comment, given the fact that Uganda has been held up as a case study of how to do things right for HIPC, what is the overall potential impact of this delay?

MR. CHAMBRIER: Thank you. I believe that my colleague, Cyrus, will take this question. Cyrus?

MR. RUSTOMJEE: Thank you very much, Mr. Chairman.

The reason I am taking the question is because I am the alternate Executive Director in the Board representing Uganda. My response would be that the Executive Board is simply further deliberating the issue of Uganda achieving its second completion point.

There are some aspects which Board members are seeking a bit more clarification to. My own anticipation is that the matter would not take more than a few days to resolve. So, in a sense, if I were to address directly the question you asked, I wouldn't read anything more than a couple of days delay to the issue. I wouldn't extend that to a broader discussion about the integrity of the HIPC process or any of the other things that you are alluding to.

A QUESTIONER: [inaudible]

MR. RUSTOMJEE: I think this is one of the questions that some Executive Directors are asking, and I think it is not asked in a challenging way. To some extent it is an issue about the overall nature of expenditure of any country. From the perspective of our Chair, representing Uganda, we don't recognize this as being any extraordinary expenditure and we have elaborated to the colleagues in the Executive Board the reasons why.

I would prefer to await two or three days before amplifying but certainly I would minimize any broader consequences of the issue. I believe it is a two-day delay or something of that order.

MR. CHAMBRIER: Thank you.

A QUESTIONER: Given the improved growth and fiscal statistics and in the context of the PRSP, have you had positive signals from the IMF that there is room for flexibility and negotiation on the macroeconomic framework that they will find acceptable?

And secondly, in the introduction it was said that your countries represent 27 percent of countries in the IMF and that you are exceedingly the important borrowers and, yet, 43 Sub-Saharan African countries only have less than 5 percent of the votes. Do you think that there is a need for change in the governance structure and what sort of changes do you think are needed to bring African issues into the Board and into the decision making processes?

MR. CHAMBRIER: This is a very, very important and sensitive question. I wonder whether we could not start? Perhaps I will say some words. It is true that there is a strategy of the PRSP that is intended to have a higher growth prospect for our countries and this is going to be something very, very important. And we will have, at the same time that you have the debt relief, you can focus more on the social, education and health expenditure and rural infrastructure.

This is the purpose of all that and we will own the participatory process and the ownership. This is something very important where the country has to be in the driving seat. And we have seen that to have a reduction of poverty, have a reduction for 2015 as it was stated in the Copenhagen Summit, we really need to reach a growth rate of beyond 7 percent, a real growth rate.

So, to achieve that you really have to tackle structural reforms and mobilize the contribution from the international community. And we need the additionality of resources. So, this is something clear. The PRSP must be primarily owned by the countries so our staff in the Fund and in the Bank should bring the technical assistance to assure that the macroeconomic framework is consistent with the objective.

We also have to deal with the way to correct the inequality of income. We also have to deal with the need to have a better repartition of the resources in the country. This is also going to enhance growth prospects.

With regard to the change of government in our Executive Board, I believe that, of course, there is a committee that is looking at the revision of the quotas.

But we believe that it is important to take into account all of the membership and this is characteristic of the Fund. This is a cooperative institution, and as you know, the decisions are made in consensus building process. So, we need to continue to work on that, perhaps to correct weaknesses in terms of economic size, by taking into account the need to really listen to all the membership. And we have something that we call the "basic" vote to correct the fact that we should not take into account only the economic size of a country.

But the reality is as it is. We have to acknowledge at the same time that those countries that have the resources that contribute mostly to the institution also have their say in the institution and there is no difficulty with that. But we really need to have inside the Board a way to take into account most of the views to have consensus, with each one part of the process.

Thank you.

A QUESTIONER: A few days ago the World Bank issued an upbeat forecast for the world economic growth this year. That was predicated in large part on the growing U.S. economy. Then Friday we had the plunge in stock prices on the U.S. markets. Surely, this must concern you because it has to do with the availability of aid funds. How much does it concern you? Is this a bump in the road or a harbinger of bad things to come?

MR. CHAMBRIER: Thank you.

Mrs. Governor, please?

MRS. MOHOHLO: That is very true. I think that development in the stock markets—to me what happened on Friday—was a welcome correction. I think that it was about time that we had a healthy correction to the stock market because it has been rising phenomenally to the point where we were worried that we were just getting perilously close to what happened in October of 1987. And no one wants to get back to that.

And, therefore, to me, it doesn't undermine the broad-based economic growth that has already been forecast. Because I think worldwide there is a strong indication that economic growth is going to increase. In Africa, too, economic growth is going to increase. There are countries in Africa which are growing at an impressive rate, something in between 8 and 10 percent. And I think that what the stock market was simply doing was an indication that growth needs to be tapered in many of the other stocks that are exaggerating developments in the stock market.

I may be wrong. There are many economists who may have a different view. But as I indicated earlier, to me, I think that it was a welcome development in the stock market and there will be other people who will take advantage of what happened on Friday to buy more stocks and, therefore, another correction will take effect.

Thank you, Mr. Chairman.

MR. CHAMBRIER: Thank you, Madam Governor.

A QUESTIONER: Starting from something Mr. Doumba said, that Europe and North America basically should open their markets more to African products to help. Now, according to IMF numbers, it seems that a real liberalization, opening of, above all, of course, of agricultural products coming from Africa, in Europe and North America, would amount to something like $40 billion a year. This is more than all the aid if I'm not wrong. And is there any plan to set up a kind of negotiation framework on a regional basis or on a continental basis, so that every now and then Africa—like Europe does with the U.S. or Japan does with the U.S.—can lock horns in order to get more access to its markets?

MR. CHAMBRIER: I will ask perhaps Governor Mamalepot to respond to this question.

MR. MAMALEPOT: Thank you, Mr. Chairman.

Do we have a plan or a framework for negotiations which would make it possible for our products to gain better access to U.S. and European markets? I believe that was your question. Before asking such a question, I think we should first ask ourselves, what is the best way to assist developing countries, in general, and African, in particular, so, that these countries and Africa can develop and gradually eliminate poverty, thus, reaching more acceptable standards of living.

I believe there would be two ways of doing this and I may be wrong. But, first, the assistance provided by Bretton Woods institutions, and that is why the process or processes established for participation by the IMF and the World Bank may be too slow. That would lead me to ask if the two institutions are truly playing the role they should play in helping reduce poverty?

The role, itself, their functions are appropriate but the pace is not right. It is too slow. Africa clearly needs trade. We need to have better exchanges between Africa and the African countries and the markets of industrialized nations, the nations which have the capital. Africa has great economic potential. Among its resources are mines, its agriculture, and it is in a position to develop products and export them. Industrialized nations have two things: technology and capital.

So, before we go to the question as to whether or not we are ready to negotiate, I would first say that we are already exporting these products to European markets and to some Asian countries and even to the United States. But it is important to look at how the prices for these commodities are set. Who sets the prices? And are the prices for these commodities fair? Fair for the African countries who are the producers.

Thank you, Mr. Chairman.

MR. CHAMBRIER: Thank you, Governor. Minister Doumba.

MR. DOUMBA: Thank you. I will be very brief. As you know, until very recently, exports were the purview of some quasi-public enterprises. We really were not involved in negotiations. We did not know how to negotiate. We undertook structural reform to transfer these enterprises to the private sector, thus, enhancing our capacity to know and, therefore, penetrate those markets. That is one strategy.

But we are still working within the state, because as you know, we just signed a new agreement between the ACP countries and the European Community in particular.

MR. CHAMBRIER: We have three questions.

A QUESTIONER: My first question is a very brief question. In the initial remarks Governor Madam Mohohlo expressed some kind of a dissatisfaction with the Meltzer Report. And by implication you said that they should have done with greater intensity and interest a better exercise than what they have done. Meeting 12 times in 6 months or so was not enough for a report of this nature.

Do you suggest, Madam, that there should be a new group constituted to prepare a report which gives the realities, the harsh or the optimistic reality, better for the African countries? So that they could help the international monetary institutions understand the problems better? That is my first question.

The second is that at the September annual meeting of the Fund and the Bank, on the sidelines there were certain agreements and announcements of huge funds created for African development. And one huge fund was initiated by what you call the African Development Fund. An attempt of this kind of public/private partnership or coming from the private sector, is it forthcoming or is it desirable?

The last very brief question is, regarding the location of funds to fight the deadly disease of AIDS in African countries. Are you satisfied with that or what is the progress?

Thank you.

MR. CHAMBRIER: Thank you.

A QUESTIONER: I have a question for Mr. Rustomjee.

Well, I think that the German Ministry of Development is going to protest against the debt relief for Uganda if that case of that aircraft that the President of Uganda wants to buy is not discussed any more, isn't discussed again. I thought that this poverty reduction strategy paper has to be worked out with participation of the NGOs in the country but I can't believe that these NGOs would agree with those kind of public expenditure. Does the IMF really focus on NGO participation?

MR. CHAMBRIER: Thank you.

A QUESTIONER: My question is for Mr. Coulibaly who talked about conditionality and the Clinton Administration's policy towards Africa in terms of aid and debt relief being tied to the democratization process. My question to you is, is Côte D'Ivoire under any pressure with the Bank to hold elections? And, if so, when are the elections likely to take place?

MR. CHAMBRIER: Thank you.

The order of response is going to be Madam Governor, Minister Coulibaly, and Mr. Rustomjee, please.

MRS. MOHOHLO: Thank you, Mr. Chairman.

I think the simple answer to your question is, no. I am not suggesting that there has to be a redo of the Meltzer Commission. I was simply making a judgment as to the fact that I don't think the time that they took to address what I consider to be a complex issue is enough. And one of the things that I noted indirectly was the fact that what is addressed in the report is tantamount to suggesting that the Fund should become the lender of last resort. And to me that could lead to a possible termination of IMF lending to African countries, and obviously there would be economic disruption.

Now, one of the speakers here did comment about the fact that maybe in the future if such a complex issue is being addressed the countries that are going to be affected—and by this I mean all the member countries of the Fund—have to be given the opportunity to have a say in this report rather than just be given the report when it is in its final stage and just due for implementation. That is what I said earlier.

And, in fact, many of the Commission's proposals are acceptable to us, certainly in Botswana, and I think they are acceptable to many of the member countries of the Fund, not all of them. The proposals for greater accountability and transparency and public ownership are very, very good. But it's just some of the issues that are addressed in there and the recommendations that are coming in there, which tend to worry the IMF countries to the extent that they are wondering whether they will ever be in a position to access Fund facilities, be it a loan or the facilities which are extended by the World Bank and other lending agencies, because in fact experience suggests that if things are not going right between the IMF and other countries you can forget about facilities from other lending agencies.

Thank you, Mr. Chairman.

MR. CHAMBRIER: Thank you.

Minister Coulibaly.

MR. COULIBALY: Thank you.

Let me respond to the question that was addressed to me, specifically. The question was, given the policy of conditionality, is there any pressure on the Côte d'Ivoire to hold elections?

I would say that there is and there isn't pressure. That may sound like a strange answer, but there is no pressure because there's no formal pressure being put on Côte d'Ivoire. There is no government, no country saying to Côte d'Ivoire you have to have elections.

But the global situation is such that a government that is functioning under what is not really a constitutional framework doesn't have full relations; it can't enjoy good relations with other trade partners, and has no access to financing. You may be aware that in Côte d'Ivoire the events of December 24th took place after foreign aid to Côte d'Ivoire had been suspended for a period of three years. So our financial flows were negative at the time.

So that's why my answer is partially yes, because there is some pressure that Côte d'Ivoire needs financing, needs to relaunch its economy, so it needs to have a positive inflow of resources to achieve this. So there is pressure to put on regular transparent elections.

Now, a schedule has been announced by the President of the Republic, but, of course, necessary consultations have to take place before October 31st. There are certain deadlines that have to be met before then.

There was a referendum that had been scheduled for April, but it has now been postponed until the end of May. In the meantime, you should be aware that the government strategy is to act in the time frame between now and October 31st, in such a manner that that deadline is not postponed again.

MR. CHAMBRIER: I'm sure you're going to complete the question that was raised with regard to power sharing in the Board.

MR. RUSTOMJEE: Thanks, Mr. Chambrier. But if I may first respond to the question that was asked on Uganda.

Firstly, I would like to reiterate the matter is pending in the Executive Board, and to reiterate that, in my judgment, I believe it's a short time frame, a matter of a few days, before it will be resolved. I would like to also reiterate that it is a matter that is certainly being discussed by the Executive Board. I think it's important not to prejudge the issue until all the facts are out.

I think there are four particular aspects which will be useful to have more information on. One is the issue as to whether this is an entirely new issue, or whether there has been prior knowledge about the issue. And, of course, prior knowledge would be both within the multilateral institutions, the World Bank, IMF, and also in the public domain. I think that's one important issue.

I think the second would be whether an item has been budgeted or not. Is it in the budget, is it in the expenditure framework or not?

I think a third issue here before coming to a conclusion would be would an expenditure of this nature result in any substitution of resources going to poverty relief, or not.

I think the fourth issue is, in a sense, related to the issue of prior knowledge, how can one verify whether there has been prior knowledge of this issue. I believe, as the Board member representing Uganda, that these answers will be fully, thoroughly and adequately provided. I believe they will satisfy the inquiries that are being made, fully, substantively, and I believe we'll move on from this matter in a few days.

The question does give me an opportunity to also mention that, of course, as is the norm when any Board discussion takes place and further details are asked for, then if it's a country matter, usually in the Fund one deals with policy matters and country matters. If it's a country matter, the authorities in this case are providing all the information that is being requested, in detail.

I would like to, if I may, turn to the issue that the lady raised, the issue of voting. Again, as was explained by Mr. Barro Chambrier, our Chair represents the two larger African constituencies in the IMF. In my case, we have 21 countries represented in the board.

I believe that the substantive issue is how countries—African countries, I think, was the issue being raised—how can they raise their influence? One very direct way is increasing the voting share. I had a few comments to make on this, if I may.

The first is that I think there are several ways of improving and increasing influence. In some legislatures, which ask for accountability for the participation of their members in the IMF, the phrase is "the voice and vote".

Now, on the issue of the voice, I think there are three key areas where the voice of African countries can be enhanced, and substantive issues which address the very profound challenges that are clearly being demonstrated, indicated by the Ministers and Governors that we have here, three of them. One, increased access to technical resources by the IMF in this case, and, of course, by all the multilateral institutions in general.

Second, increase the financial resources, and third, increase, in the Fund's case, the Fund's expertise in surveillance. Because these are the three roles that the Fund and the countries in Africa, the broad membership: surveillance, financial resources, and technical assistance.

If mechanisms can be found to enhance those, then certainly the voice of the country is augmented. We would certainly argue for an improvement in the voice.

On the issue of the vote, I think an unambiguous response is that, if one moves beyond African countries as one element of developing countries, and to developing countries in general, I believe there is clearly a case for improvement in the votes of developing countries in the institution. I say this as a board member of the African countries. Because these developing countries are the recipients of the vast share of the resources of the institutions, the beneficiaries of the largest share of the advice of the institutions, and access the largest share of the technical resources of the institutions, in the interests of their own development. So I think there is a clear issue there.

Why I really wanted to come to is the issue of the basic vote. Now, without boring you to death, at the founding of the institution, and ongoing, there was the establishment of a basic vote. What that really said was that there's sort of a constant vote, regardless of the size of membership, plus a voting share determined by quota.

Now, that basic vote has stayed constant, whereas quotas have increased over time. So the influence of the basic votes for the smallest countries, the influence in their total voting strength, has diminished. We believe that the basic vote issue needs to be addressed so that that can be augmented in line with developments since the establishment of the institution. I hope that aspect is clear.

I do want to go back to one more issue, and that is the issue that Mr. Barro Chambrier raised about the consensus-based nature of the institution. Many African countries benefit strongly from this consensus-based approach. We see it in action every day in the Executive Board on country matters, because development issues are not sort of a clear cut, yes/no resolution. They are, in many respects, a resolution of competing issues and competing challenges. I think that also needs to be preserved as one goes forward discussing the issue of their relevant voice and vote in the institution.

Thank you.

MR. CHAMBRIER: Thank you very much.

MRS. MOHOHLO: Mr. Chairman, I just thought I should mention one point in support of what was just said. He mentioned a very important point, that the votes for the African Continent can be increased, should be increased, primarily because many of these countries use Fund resources and, therefore, I think they can make a contribution with respect to how accessibility and conditionality can be improved.

A very important facet is that there also has to be a recognition of some of the countries in the developing world which are making a contribution to Fund resources. Because it's not only the developed world that makes a contribution to ESAF and what we now call PRGF. There are countries in Africa and elsewhere in the world which are developing and which are making a contribution. I want to believe and hope that the Fund, while they're reviewing these issues, will also take cognizance of the fact that they also have a vested interest in assuring that the Fund and what happens between the member countries is done very well.

Thank you, Mr. Chairman.

MR. CHAMBRIER: Thank you, Madam Mohohlo. I think this is a very useful contribution.

A QUESTIONER: Thank you. The question is, how can one be positive and optimistic about Africa when Africa is such an amalgamation of different countries and circumstances?

For example, we have successful studies like Botswana, and at the same time in the neighboring country, Zimbabwe is going through a crisis. We have countries that have disappeared completely from the international scene, states like Somalia. We are reviving again the situation in the eighties, when the Horn of Africa was ravaged by drought and hunger, and at the same time there are countries ravaged by civil war, like Congo, with all its riches, and the Great Lakes.

And we have an epidemic of AIDS. It was said in this very same room the other day that the expectancy of life in African countries is now lower than it was prior to the Second World War. So how can anyone be thinking of Africa in positive terms, even though the World Bank and International Monetary Fund are so optimistic?

MR. CHAMBRIER: Thank you. Your question is very clear.

A QUESTIONER: I'd like to ask you, you raised the trade issue several times this morning. Can you respond specifically to the compromise between the House and the Senate on the African Growth and Opportunity Act which appears to put very tight caps on the amount of clothing and textiles South African countries will be able to export to the United States, duty-free.

Are you disappointed by the U.S. offer?

MR. CHAMBRIER: Behind there. One more.

A QUESTIONER: The gentleman from Spain asked a question—very interesting. As a Cuban of African descent, in connection with this issue, President Rawlings was at the White House last year, on February 24th, and explained that we, the people, of African descent, that are Latino, in the diaspora, have the responsibility to do the same thing that the Jewish people have been doing in the world for the State of Israel. All the people of African descent in the diaspora must be united to help Africa to prosper and to be a great continent, because we have the talent, the experience, or the system here, and we must do the same thing that the people of Israel are doing across the world for that state which is smaller than the African continent.

MR. CHAMBRIER: Thank you very much for your conviction, thank you, for the testimony.

A QUESTIONER: You commented on the Meltzer Commission Report. I'm wondering if you have any comment on some of the criticism being voiced by the demonstrators, their contention, for instance, that the debt of the poorest African countries should be forgiven, without conditions, that the conditions are bad. You mentioned onerous conditions.

Do you think—are they right, that the debt should just be wiped out? And they also contend that the IMF and the World Bank are agents of global capitalism, and that corporations are sucking the wealth out of the African countries.

I wonder if you could talk perhaps to some of these issues, directly.

MR. CHAMBRIER: Thank you. I think that Governor Banny will address at least one question.

MR. BANNY [through interpreter]: Thank you. First of all, I'd like to make a remark and a statement, but, first, let me congratulate you for having organized this press conference. For me, it is emblematic of Africa in the world, or Africa before the world, facing the world, facing the media. You have Africa in front of you. We are Africa in its diversity, but also in its unity, and I would like to emphasize that. Africa is both diverse. Africa is not one single country. Africa is a continent which is made up of a number of countries, countries with different living conditions, and, yet, Africa, is a united continent. That is my first statement.

And I believe that the panel you have before you attests to that unity. I would like you to take note of that.

I'd also like to say that this panel is also symbolic of Africa, an Africa which is optimistic, an Africa which is struggling, an Africa which is the Africa of modern times.

The proof of this is that I'm the Governor of a Central Bank and I move within the community of the Central Bank Governors of the world, and here is a lady, an African, who is also a Governor of a Central Bank. That is Africa. That is today's Africa. That is tomorrow's Africa.

It is Africa which wants to pool all its strength to fight together. I'd also like you to take note of that.

My third comment is that Africa accepts its position in the global economy. It wishes to participate, provided that there is equity, provided that there is accountability. As Africans, we want ownership of our programs. We want these programs to provide us with the solutions to the problems we need to tackle. Today, unfortunately, Africa is the continent of poverty, but it is not a poor continent.

So, again, although it is fraught with poverty, Africa is not a poor continent. How can we join forces to tap our resources, so that we can truly participate in our global economy? That is the task we must face.

The new world economy has the world markets as its underpinnings, but it still needs our old systems, our old resources, and, in that sense, Africa remains intact. Africa is the continent which has the greatest potential for the future because it offers the greatest potential for growth, because it has a wealth of resources.

So what we want to know is how, working with the rest of the world, we can tap those resources and put them at the service of the world economy. And I can identify two main hurdles which stand in our way. Well, I could limit that to one; perhaps two. How can we put together macroeconomic policies that will truly enable us to maintain a sustained rate of growth?

We need to improve our design skills. We need human resources with the technical qualifications, and that is, indeed, a problem. The first problem. The second is how can we free financial resources? In other words, how can we make it so that Africa's debt of the past, and the weight, the burden imposed by that debt, can be alleviated?

So we need to improve our abilities to design programs. We are ready to work with the rest of the world and we welcome any technical assistance, provided that our internal, or domestic skills in this regard are developed. But we do need the help of other countries.

Our second handicap is the debt burden. All the formulas that have been tested, to date, have faced limitations because they have not made it possible for Africa to take strong steps along the path of sustained and vigorous growth, so that it could, at the same time, reduce poverty and fight diseases, some of which have been mentioned here.

The debt is a constraint. It is a constraint which stands in our way. So we need to address the debt problem, but we need new formulas, new ways to do this. We want to find a lasting solution to this problem and, therefore, we welcome initiatives in this regard. The NGOs believe that the debt should be forgiven. They may not be entirely wrong. They may not be entirely wrong, and I think that most Africans would have to be in favor of such an initiative.

The third element I'd like to mention, that would make it possible for Africa to truly participate in world trade, given its enormous trade potential, because that is where most of our natural resources lie, that is where the potential demand is greatest, but we need to have fair trade. We need access to world markets for our commodities, without further obstacles, without nontariff barriers, without other types of hurdles. We need free and fair trade, and we need fair prices for our raw materials, so that it is possible for us to remunerate Africans for their work.

These are the conditions that we're here to speak about. These are the problems that have brought us here. That is the context in which we need to look at our partnership with Africa. We are Afro-optimists. We are not merely optimistic. We're also realistic, because we do know Africa's potential, and we want to tell the rest of the world about this.

I have come here because I believe that you are the channel, you are the way for me to get the message out, for the rest of the world to get to know this Africa which sits in front of you today, and that is what I'd like to say to the questions that have been asked and the discussions we have heard here this morning.

MR. CHAMBRIER: Now, Minister Doumba, you have the floor.

MR. DOUMBA [through interpreter]: Thank you. How can one be optimistic about Africa? That's a terrible question, and yet you, through your presence here, have demonstrated that you're optimistic about Africa, because a few years ago, you wouldn't even be in this room. The President himself, in 1994, brought us together to talk about his optimism on Africa. 750 million inhabitants today; 1.5 billion in 2025. We now have better-trained populations. We have a growth rate that did not exist in the past.

Yesterday, Madam Governor, gave you some statistics—8 to 10 percent growth rate. That didn't exist a few years ago. As long as there are men and women, there's hope, ladies and gentlemen, and there is no greater wealth than our people. I just support whatever the Governor has just said.

MR. CHAMBRIER: Madam Governor, you have the floor, now, for your conclusion.

MRS. MOHOHLO: Thank you, Mr. Chairman. I think that there's no point going over issues that have been raised by eloquent colleagues to my right, but let me just echo the sentiments that I have already mentioned. I don't believe that we have to be brutal in the way that we look at Africa. I think that as has already been mentioned, there are many good things that are happening in Africa.

Now, it is through you, the press, that we can hear all the things that are happening in Africa. Please sing praises. Don't only single out countries that are having problems. Some of our countries that I believe are in the right stream would like to be known, internationally, and we would like to be able to diversify economies to move away from depending on one dominant contributor to all our GDP, or, really, the respective countries. If you don't do that, we're going to be in trouble.

Now, again, the question that was asked was, to say the least, debilitating, because you can say that there are good things happening in Africa and there are bad things happening in Africa, and how can we think, positively?

Now we certainly are charting a new course in our quest to find solutions to the seemingly, so to speak, intractable problems of poverty in Africa. The continent certainly does need help to free it from the current misery and poverty.

Now, one of the questions was related to HIV/AIDS, and the fact that the age limit has been reduced to an extent where even productivity's going to be affected--and no question, that's very true. But I want to appeal to you. We can't afford to be holier than thou. I think this is a problem that is covering, more or less, the whole world.

Now that it is confronting us, and we don't have the experience that you currently have, primarily because you were affected first, and therefore, you've got to know what to do with it, please come to our rescue. It is not an issue that we should all be shy about because it happens in the most private of the things that we all enjoy, and therefore, this holier than thou attitude, I think, should not be encouraged. Thank you very much, Mr. Chairman.

MR. CHAMBRIER: Thank you, Madam Governor.

Minister Coulibaly. You have the floor, Mr. Minister.

MR. COULIBALY [through interpreter]: Thank you. I'd like to make a few comments. Let me begin by saying that I am pleased by the very fact that we've had this press conference this morning. I think this meeting demonstrates that a lot can be accomplished, if we communicate with one another. If we all take on the attitude of saying things as we feel them, as we see them, instead of letting others speaking on our behalf. That's my first comment.

Second, that however serious a situation may be, one must keep a cool head. The Governor has said Africa is diverse, and you therefore have to get used to seeing it as a diverse continent. Even in the developed world, there are some countries that have problems and there are others that are very prosperous, and very calm. It's the same situation in Africa.

It's true that, recently, there have been problems in a lot of countries, but that doesn't mean that we should all become discouraged, because there are areas, there are regions in Africa where, in the last few years, there has been progress, there has been an improvement in the economic situation, and that, in turn, has led to an improvement in the standard of living of the population, which is the very essence of economic activity. That's the raison d'etre for it.

Earlier, when I said I was happy with this meeting, I said that I basically was in agreement with the new facility that is being proposed, because it is comprehensive, it is internalized, in other words, the countries have to be involved throughout the entire process, and, in addition, it must have the financing and conclude with solving the basic problem, which is the debt problem.

If macroeconomic steps are taken, it will lead to alleviating the debt, which is the problem that all of us see with our economies.

So if we can solve that problem, we can devote more to the social sectors, to training, to capacity-strengthening, and that is what is going to allow us to resolve the AIDS problem, the useless war problem.

So, as I said earlier, there are problems, yes, but we need to find solutions, calmly. They might be long-term solutions but they are there, and I think by working together, we can find solutions to the problems.

MR. CHAMBRIER: Thank you. Governor Mamalepot, now you have the floor for your conclusion.

MR. MAMALEPOT [through interpreter]: Thank you. I also would like to say that I'm very pleased that we've had this meeting, and that we've had this exchange of ideas between the press and the representatives of Africa.

Let me conclude by saying two things. First, that the Fund and the Bank were created many years ago, and it would be difficult to say, at this point in time, that these institutions are no longer useful. At least as far as Africa is concerned, these institutions are necessary, particularly because of their resources, their expertise, the experience, and the fact that they insist on discipline in the management of financial affairs.

Secondly, there are two problems in Africa—poverty and debt—and we can't say that enough. Some believe that in some African countries debt service represents almost 60 percent, if not more, than the national GDP.

So what can we do to promote investment? How can we spend money on social matters, on improving the life of the population, after such a heavy debt burden? Very little.

So as long as we cannot find an appropriate solution to the debt problem, Africa is not going to be able to attract investment or improve the standard of living of its population.

Everything is based on the resolution of that problem. The international community has the moral duty to help Africa. Now there's some who argue that Africa is asking for too much, and, in my opinion, they're wrong. Human solidarity means that those who have the means to do so should help the weaker, or those who don't have enough, and what Africa is asking for is not just liquidity. We are asking to help us find solutions to a heavy debt burden, because by solving that problem we will have taken one step forward.

So let's begin by making sure that the products Africa exports receive a fair price. Thank you.

MR. CHAMBRIER: Thank you, Mr. Governor.

Now I give the floor to Mr. Rustomjee for the conclusion.

MR. RUSTOMJEE: Thank you. I would like, if I may, to address two of the questions that have come, as briefly as I can. Firstly, starting with the question that was raised on debt. I believe you've raised a very crucial issue in this discussion, I'm glad you raised it, and I think you had some substantive responses. I would like to embellish them a little. I'd like to then quickly move to the issue of diversity, one of the other questions that was raised.

On the issue of debt, I think you've heard both arguments founded on the moral aspect and on the economic aspect. My understanding of the orientation of the HIPC initiative which took place at the last annual meeting was that the advanced industrialized economies had understood also the economic aspect of debt, the economic benefits that flow from a releasing of debt relief resources.

That having been said, then I think that the next step that followed quite naturally was a tension between the issue of waiting for performance in an institutional framework to accommodate debt relief resources, on the other hand, and then providing that liquidity to enable the countries then to address poverty itself.

So this tension has been inherent in the design of the debt relief package, subsequently.

At the annual meetings, five key issues were addressed—this is six months ago—that relate to this issue. The one was the augmentation of the HIPC initiative, substantial augmentation from the original HIPC initiative which was put in place in 1996.

The second was there was then an explicit linkage between augmented HIPC debt relief and poverty reduction, and we've heard in earlier remarks what the nature of that linkage is, the preparation of a poverty reduction strategy paper.

The third aspect was a linkage between the use of the resources of the institution, the IMF, and on the other side of the street, The World Bank, linkage between the use of resources of the Bretton Woods Institutions and poverty reduction, again, embedded in that preparation of a poverty reduction strategy paper.

Then there was the fourth issue that arose at the annual meetings, last year, was the issue of the preparation of this report, the poverty reduction strategy report, and the operational modalities to do that.

The fifth issue was the establishment of a further year of compliance by countries wishing to enjoy debt relief, over and above the first four stipulations that I've mentioned.

Now at this time, in the context of the debt relief issue that's being raised, again from the perspective of the 21 countries we represent in the board, there appear to be three or four key issues that are emerging, which I think respond, in some sense, to the—now I come, specifically, to the question you raised about debt relief.

The one is the issue of the speed at which debt relief is being delivered. In the countries in our portfolio, that we represent in the Executive Board, believe that the speed of debt relief should be significant.

At the annual meetings, the stress was laid on the possibility of three-quarters of the HIPC-eligible countries reaching what is termed the decision point. This is, in brief, the point when debt relief resources start to flow in an interim period, reaching that decision point by the end of the year 2000, and the concern of the 21 countries--and I'm sure it must be shared, right across African countries--is that the speed at which this decision point has been reached in individual countries needs to be speeded up, because it was part and parcel of what was agreed at the annual meetings.

The second issue that's emerging is the resource burden necessary to qualify for debt relief on the part of the recipient countries.

We've heard, I believe, several Ministers of Finance and IMF Governors here, saying that the preparation of the poverty reduction strategy paper is a resource constraint in itself. The issue of preparing the document and making the commitments necessary that are embedded in that document, which can then release resources, the preparation of household surveys, and many other issues, are resource burdens on the recipient countries. So that's an issue embedded in this.

The issue of the additional year of qualification after this new report is prepared, certainly, that's a strong issue, I believe, among the African countries in my portfolio, that there should not be that additional year for the qualification. I'm reflecting what we hear from the countries.

The conditionality issue, I think to some extent, was addressed, and as I said, overarching all of this is this issue--once we've agreed that there's an economic basis for providing debt relief, which is to release the resources to address poverty, there is this tension between ensuring that you have the framework to receive the resources and the other side of the tension which is that you need those resources to release the tension, to release the constraints, the ability to address poverty, and African countries are saying that we've now addressed that tension and we believe that the resources need to flow more strongly, and more promptly.

If I may quickly go to the diversity issue, Mrs. Chairman. I thought most of the answers have been given. I have just a few further points.

The one is I keep on mentioning 21 African countries. This is a great strength of our constituency. We have an emerging market economy in South Africa in the portfolio, and we have many, many very low-income economies. It's a strength. It certainly has not presented itself as a weakness.

I don't think that was a suggestion, in a sense, but I'm conveying that I believe it's a strong element of African country constituencies in the Fund.

I also think it's important to cite the fact that many, many publications, both within and outside of the Fund are citing things like the ability of African countries to identify institutional best practice, to identify the benefits of regional integration and to implement them through SADC, ECOWAS, in many substantive areas, particular as it concerns the Fund, the area of financial sector development, and the success that they are having in implementing best standards and practices, codes and standards, fiscal policy and monetary policy. They're doing that.

I think part of the proof of the pudding is coming back to some of the documentation that I cited right at the beginning. The predictions for African economic growth are higher than the average for the world economy. Of course they're coming from a much lower base, but they've been doing this quite consistently, now, for the last few years.

If I can conclude with one point, Chair. African countries are often asked, despite all this claim of policy efforts, we seem to be slipping back. I like referring to a quote in Lewis Carroll, "Alice In Wonderland." There's an area there, where Alice is, at that point, about two feet tall, and because she's been miniaturized, and the Red Queen comes rushing up to Alice and grabs her hand, and rushes off with her, and Alice says, "Well, where are we going?"

So the Red Queen says, "Run." So Alice starts running, and looks at the Red Queen, and the Red Queen says, "Well, run, run faster, run faster." And so Alice runs faster. And then she says, "Well, why are we doing this?" She says, "Don't know; just run." And Alice runs even faster and this dialogue keeps on going until Alice is completely puffed out but continues to run.

And at the end of it they sit next to a tree which they've been in fact running around, and the Red Queen says, "Well, did you get the lesson there?" So Alice says, "No, I'm not sure what lesson I got, but the one lesson I did get is that it takes all the running to stay in the same place."

So Alice has been running as Africa has, very, very hard, making profound changes in institutional structures, in legal structures, the financial sector, right across the board, but because the pace of globalization has been rapid, it appears that Africa's staying in the same place.

I think the answers given here is that the pace of acceleration is now increasing. Thank you.

MR. CHAMBRIER: Thank you very much, Cyrus, for this conclusion. I would like to thank the Ministers and the Governors for taking the time for this press conference. I would like also to thank you journalists for coming in so numerous number. I would like to thank Mrs. Lucie Mboto Fouda for helping us to organize this event. I believe that the discussion has been fruitful. It was important for you to listen to those policymakers that are facing the challenge of development and reducing poverty in Africa.

You have seen that our authorities are ready to take the responsibility, and there are signs for optimism in our continent. For our part, we are confident that the African will continue to undertake the necessary reforms with a strong ownership that is needed. You can also count on us to be very vigilant on reform, and our colleague from the World Bank also found that an important role to play is the catalytic role. We believe that these spring meetings are an important time to deepen the dialogue with the demonstrators, even with those parts of the Meltzer Report that we are not in agreement, but this is, I believe, the life of the country, this is the life of the institution. There are transition periods; but we need to deepen the dialogue.

Once again, thank you very much, and I believe that we will have the opportunity in the future to have this kind of event. Thank you very much, all of you. Thank you.

[Whereupon, at 1:00 p.m., the Press Briefing concluded.]




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