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Côte d'Ivoire and the IMF

Cameroon and the IMF

Kenya and the IMF

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South Africa and the IMF

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Transcript of a Press Conference
on the Outcomes of the Recent Köhler/Wolfensohn Trip to Africa
by
IMF African Department Director
G.G. Gondwe
and
World Bank Vice-President African Region
Callisto Madavo

Wednesday, March 7, 2001

MR. UKU: Okay. I think we can get started. Good afternoon, ladies and gentlemen. Thank you all very much for coming, especially at such short notice. My name is Richard Uku. I'm head of External Affairs for the World Bank's Africa Region. I think most of you, if not all, already know Mr. Gondwe and Mr. Madavo, but just in case there's anybody new in our group of keen Africa watchers, let me just introduce them to you.

To my right is Mr. G.E. Gondwe, Director of the IMF's African Department, and to my left, Mr. Callisto Madavo, Vice President for Africa here at the World Bank.

Both Mr. Gondwe and Mr. Madavo accompanied Mr. Wolfensohn and Mr. Köhler on the recent trip they both made to Africa to meet with African heads of state. They had a chance to speak with you before the trip where they talked about the objective of the trip. And if I can just recap, the genesis of this trip by Mr. Wolfensohn and Mr. Köhler was, of course, a commitment they made at the Fund-Bank Annual Meetings last year in Prague to put Africa at the center of the activities and the agenda of both institutions and to meet with African heads of state early this year, to listen to them about their vision of how Africa can accelerate growth, listen to them talk about their most serious development challenges and priorities, and look at ways that both the Fund and the Bank can lend support in furthering these objectives.

What we plan to do this afternoon is to invite both Mr. Gondwe and Mr. Madavo, now that they are back, to share with you their reflections on the outcomes of the trip and take questions from you. So at this juncture, perhaps I should invite Mr. Gondwe--

MR. GONDWE: The last time I started the issues.

MR. UKU: All right, then. I'll invite Mr. Madavo to start off. Mr. Madavo?

MR. MADAVO: Well, you can see that we are growing closer and closer, the World Bank and the IMF, and a new partnership is growing, in which we believe and share with my good friend, Mr. Gondwe.

We are very pleased with the way in which the trip proceeded. We thought there were extremely useful exchanges between the two heads of our institutions and African leaders. They met in Bamako and Dar es Salaam with about 22 heads of state from Africa, covering every spectrum of countries from the big ones--Nigeria, South Africa--to countries that are going through some very difficult periods, such as Sierra Leone and, of course, countries like Rwanda in the Great Lakes area.

What was achieved? From where we sit, I think what's new from this trip is that, for the first time, I think we have the African leaders in a sense taking ownership of what they want to do in Africa, what is their vision, what are their programs, what are their constraints, on one side, and, therefore, what are the responsibilities that they need to discharge, and then asking the Bank and the Fund, given the backdrop of those objectives, to help. So that a new partnership, therefore, is emerging in which, in a certain sense, the African leaders are telling us what they want to do, and in turn they are then asking the Bank and the Fund as their external partners to provide support.

We were extremely pleased with the areas covered in the discussions, and perhaps on that, I will throw the ball to my colleague, Mr. Gondwe, who might perhaps elucidate some of the areas that were discussed.

MR. UKU: Mr. Gondwe?

MR. GONDWE: Thank you very much, Mr. Vice President.

I think that the first remark I would like to make, of course, is how overwhelming the response was from the heads of state. They all came and from what we hear, a number of those who were not probably invited felt that they, too, should have had the opportunity to come. So those meetings were very popular ones.

The second one is the enthusiasm of participation that the Vice President has just referred to. One of the characteristics of those meetings with the heads of state, at least those who attended, is that in most cases there has been a tendency to point at third parties as being responsible for the problem that Africa has.

This time, as the Vice President has just said, there was a very, very, clear understanding of what the problems were and the enthusiasm of taking responsibilities for what has to be done. I'll give you an example.

One very important subject matter that was discussed was issues of governance, corruption, and issues of that sort, questions of the problems of conflicts that impair economic development. Instead of pointing fingers as to who is responsible and who should help, it was quite clear that here was an acceptance that these are problems that they themselves have to solve.

One head of state declared very clearly that, as far as they were concerned, corruption and governance issues, the prevention of those, was the first responsibility of a head of state, and that it was quite clear that where a head of state takes that to be the main responsibility, you could see that solutions were taking place and that there was less problems; whereas, in countries where a head of state did not take that as a first responsibility, problems were not being solved.

So that was quite new, because in most cases they would say, well, we have corruption because this one is doing that, people in the West are doing this, and so forth. This time there was this responsibility and ownership of problems.

It was similar on other issues, questions of how Africa should integrate itself into the global economy. In most cases, African countries would say, well, it's because of this and that and so forth that we are marginalized. This time, there was a positive approach, issues with how do we position ourselves so that we, too, can benefit from globalization.

I thought those were very positive points. It showed, I think, that the purpose of these meetings was achieved. We wanted to hear from the Africans themselves how they solve the problems, what was their vision -as the Vice President has said, what is their vision for accelerating growth so that Africa can catch up with other parts of the world, how will we position ourselves, in fact, that we should benefit from a global economy that is having very good results in other parts of the world. And the African countries, the leaders were quite forthcoming in what they saw to be solutions to these problems.

They were also quite forthcoming, of course, in asking for support from particularly the Bank and ourselves at the IMF, realizing that the main responsibility is theirs, and we were just complementing here the efforts that they have to take.

MR. UKU: Thank you, Mr. Gondwe and Mr. Madavo.

Let's go interactive a bit and perhaps take some questions from the audience and perhaps more details may emerge. Please, could I ask that you identify your establishment and your name as you take the microphone?

QUESTION: Damien Milverton from Dow Jones. How do you think the acceptance of greater responsibility and the awareness of self-determination that was evidenced by the leaders will actually be reflected in their dealings with the Bank and the Fund in the future? Will there be a different approach, perhaps, to the way that programs are originated and looked at, implemented? Might it even affect the degree that there will be less money, more responsibility, those sort of notions? So, in other words, how do you think that attitude will be reflected?

MR. UKU: You were looking at Mr. Gondwe most of the time, so--let's start with Mr. Gondwe, and then Mr. Madavo can follow up with his views.

MR. GONDWE: How this will translate itself operationally and in practice, of course, we would have to see. By the way, the heads of state and the two heads of institutions agreed that they should meet again in 12 months time, at which point they will try to see how what they discussed has translated into action, so we will see in the course of the year just what has happened.

But my view would be that, at least it is our hope that starting from now, we'll receive more and more of African countries coming out with their own programs and their own proposals for solutions, and for the Bank and Fund to look at those and advise on how they could be formulated into action. Indeed, as far as my organization is concerned, just now the Board is discussing ways of streamlining conditionality so as to emphasize ownership of the countries, and emphasizing that we should reduce the number of conditionality.

So the meetings took place, as far as we're concerned, at the right time. We will get probably more of ownership than conditionality. And I hope that, as we implement these policies, as we implement what was discussed between the heads of the two organizations, we will try to see that they are setting changes, the ones you actually described.

MR. UKU: Callisto, your reflections?

MR. MADAVO: Well, let me add two or three footnotes, perhaps. The first is that one of the interesting features of this trip was that Mr. Köhler and Mr. Wolfensohn met with President Mbeki, Bouteflika and Obasanjo to talk about the Millennium African Renaissance Plan that these three leaders are spearheading on behalf of Africa. So, you know, we expect, as it is out of this kind of shift, to see more and more of an African plan, but also within individual countries we expect to see a more participatory formulation of programs. You know, which then we would expect the leaders to indicate as to what the indicators are that they're going to use to measure progress. And once you begin to do that, then the question of the conditionality becomes, in some sense, a reflection of what are, in fact, the shared objectives, what are the areas of progress, of benchmarks for progress that need to be achieved.

But that is less imported from outside and more generated from inside. And we hope this will spear or push forward a much more robust economic growth and broadly shared economic growth in Africa, and therefore, a reduction in poverty.

QUESTION: Diana Gregg with BNA. Just to follow up on what you said, because I don't really know that much about that Millennium Plan. Could you give us some examples of what you just said about measuring progress and more participation, what kind of things the Bank would look for in that plan?

MR. MADAVO: The Millennium African program is very much a work in progress, so what was discussed in Africa was a progress report given by these heads of state and their technical people as to where they are.

I think what is interesting for me was that there was a lot of convergence around some of the key areas that need to be addressed if Africa is to move forward: governance, conflict resolution, the importance of investing in people, education, capacity building, a vigorous attack on HIV/AIDS, a competitiveness and linking African economies to the global economy, improving infrastructure and so on.

And then the issues of the financing of development to Africa. Market access for African products so Africa can begin to earn its way in terms of financing its own development.

The second thing to remark on is that, for example, under the MAP Program, the leaders were talking about fast-tracking some of the programs, and what was interesting was that HIV/AIDS was seen as one area where they wanted really to fast track action and activities, in information and technology to bridge the digital divide. So those are some of the examples of the kinds of things that we would hope to be emphasized going forward.

QUESTION: Mark Drajem from Bloomberg News. I'm wondering if you could contrast your take on more responsibility from the African sides with the specifics of your interaction with Kenya. It seems like in that case it's really a sense of the World Bank and the IMF on the outside saying, "We want these certain anti-corruption measure, and without it, we're not going to support you." Could you give us the specifics on where things stand with Kenya and how that relates to this overall vision?

MR. UKU: Mr. Gondwe, can we start with you on that?

MR. GONDWE: I think it's important to remember that probably what we discussed with the heads of state will find expression later. The coming year, as I said, will be very interesting to watch how we actually develop. But if you're asking where we are with Kenya, I would say that one of the problems we have in Kenya, of course, is that the governance issues in Kenya somehow have clouded ability to grow, and we would be expecting that the government itself will be highlighting that as a problem, and coming out with policies of how to do something about that. As I said, the heads of state were of the view that they regarded governance issues and corruption to be one of the worst things that has impeded development. So if we were to be dealing with Kenya now, we would be expecting that the anti-corruption authority (KACA) would come out. If it did not come out, if they did not do it, then of course, we will be advising them that in our view this shouldn't be taking place. In other words, where a government probably does not identify clearly what impedes growth and development, it will be the responsibility of the Bank and Fund to advise governments what probably should be done, and that's how we would proceed with Kenya.

Now, where are we with Kenya? Mr. Wolfensohn and Mr. Köhler had a very engaging meeting with President Moi. I can only repeat what they told me they discussed because this was more or less a tête-à-tête meeting; neither Mr. Madavo, the Vice President, and myself were there. I think we were happy, Mr. Madavo and I that issues that make it difficult for us to move forward in Kenya were in fact solved, and now it's left to us, at the staff level, to move forward. So that happened. And we are very happy that was the case.

QUESTION: Was there a meeting between the heads of BWIs and President Mugabe ?

MR. MADAVO: Yes, there was a meeting between President Mugabe and Mr. Wolfensohn, for example, on the Bank side, at which we listened to President Mugabe about the situation, the ongoing situation in Zimbabwe, covering the areas of the fundamental question of land reform, the fundamental question of the importance of putting in place a robust economic program, and putting in place, in fact, actions that would erase some of the deterioration in the social fabric, education, health, and of course, the devastating tragedy of HIV/AIDS. As you know, one in four Zimbabweans is affected by this epidemic.

And, you know, we offered, if Zimbabwe moves forward in a constructive way, we offered to be there to help, but at the end of the day it was really up to Zimbabwe and to Zimbabwe's leaders to chart the course to the future.

Again, in the spirit of this new relationship, we would, you know, let them take the lead, and we would support, if there is a basis on which we can support.

MR. GONDWE: We also, Mr. Köhler and myself, assisting him, saw the President of Zimbabwe, and I think that this occasion afforded Mr. Köhler to know more about Zimbabwe. The President took quite some time--this was the first time that Mr. Mugabe met Mr. Köhler--to explain historical background of the problems there, explained where the economy is and the problems that it's facing. And I think that that was very useful for Mr. Köhler.

Of course, the President also wanted--and actually did request--to have re-engagement with the IMF, but again, we discussed what probably would be the conditions that we would have to have to start the process. That again was extremely useful, because on both sides it was possible to exchange views on how we can help Zimbabwe.

Mr. Köhler made a very strong pitch on putting it across that as far as the Fund was concerned, Zimbabwe was a member of the IMF and the World Bank, and that Zimbabwe should expect support from the two organizations. And that depending upon the circumstances, we should move in Zimbabwe. As a matter of fact, we are still discussing with the minister--we have a mission there now just to see--to survey the economy in Zimbabwe. So I thought that these discussions were useful and we will see how much progress will be made in Zimbabwe that can enable us to engage even more.

MR. UKU: Let's go to Philip first, I think, and we'll come back to you.

QUESTION: I'm sorry about that. I came in late. The question I have to ask is very, very pressing. Last week we had--

MR. UKU: Philip, just identify yourself for the benefit of all.

QUESTION: My name is Philip Tasian. I'm the President of the African Correspondent's Association.

Last week we had an opportunity to meet with the representatives of the American pharmaceutical industry, and we also met with researchers who were working on AIDS around the world. And I just wanted to ask a couple of questions regarding how, I mean, after your trip to Africa, some of the answers you brought back with you. It's quite possible that you've already answered the questions, but I would really like to hear from you.

First, I would like for you to comment on the case which is going on currently in South Africa regarding issues of patent.

And, secondly, I would like to know if you stopped over in Cameroon, and given the very particular nature of Cameroon, which is very typical of Africa, that most of the money that has left the West has typically gone into private pockets. What measures are the Bank, as well as the IMF, what measures do you have in place to make sure that money that was sent is located towards the fight against AIDS and is being used appropriately?

MR. UKU: Thank you. Let's perhaps just deal with the specific question of South Africa and maybe invite our guests to talk a bit about the other segment of the question, Cameroon, regarding the broader nature of the trip.

Yes, both Mr. Gondwe and Mr. Madavo did talk about that at the beginning, and I would invite them to make some concluding remarks, share some words of wisdom at the end. So perhaps we'll keep that portion of your question until that time.

MR. MADAVO: First of all, on Cameroon, we did not make a stop in Cameroon. The itinerary of the trip was Bamako, then we made a short trip to Abuja and then Dare-es-Salaam, and then an afternoon spent in Kenya. That was the planned itinerary, and we stuck to that itinerary.

Now, on the issue of retroviral for HIV/AIDS, obviously the debate that's ongoing is an important debate about trying to find ways in which the course of drugs can be reduced and brought within range of the possibility of Africa and Africans benefiting. I think we would like to see more progress being made.

But we need to put this in perspective, and we have been talking about reducing these drugs from $10,000 or $15,000 a year to $600 or something in that neighborhood. But let's not forget that the per capita health expenditures in these countries, per capita annual expenditures are on the order of $5. So, if you reduce the price to $600, and the per capita expenditures are $5 per annum, it means that you still have a huge affordability problem.

So, yes, we need to push these prices, but I think we shouldn't be under any illusions that all of a sudden a lot of Africans are then going to be able to afford this. They are still going to be out of reach for a very large number of people, which, therefore, places particular importance to a balanced program on HIV/AIDS that emphasizes prevention, as well as treatment. Because treatment alone, given the poverty levels, at the kind of prices we're talking about is going to be out of reach for a lot of people, unfortunately.

QUESTION: Mark Wilkinson from Reuters.

Now that you've come back from your trip, and you might have a better sense of how the countries you have visited are doing, I was wondering if you could give me some information, especially Mr. Gondwe, about whether you're planning by the end of this month to give debt relief to Nigeria and also whether you're considering--there's a mission right now in Kenya, or next week in Kenya, I believe, to discuss whether you will be resuming aid to the country, and I was wondering if you could also comment on that, please.

MR. GONDWE: In the case of Nigeria, the plan is that after the Paris Club rescheduling of its debt this year, should their performance under the program that we have with them now be good, we will be going in there with a three-year program, a PRGF program. If that is to be the case, then the plan is that the Paris Club would meet again and discuss debt relief relating to a reduction of the stock of debt, as well as the lightening burden on the debt service of that debt.

So it very much depends upon the progress that the Nigerians and ourselves will have made in the course of this year for us to progress with issues of debt relief in Nigeria.

In Kenya, as I did explain, what was impeding our progress was the setback that we had; one, the anticorruption agency in Kenya was ruled by the court to be unconstitutional. That agency was extremely important in that it underpinned our anticorruption, our good governance program, and therefore what the Kenyans and ourselves tried to do is to re-establish the anticorruption.

Now the discussions between Mr. Wolfensohn and Mr. Köhler was on just how we do that, and they agreed on a framework. And the mission that you are talking about will be looking at the redrafting of the legislation of that agency. And also, of course, as you know, we have had a problem on the ethics field which, again, the three agreed that we'll move forward, and they also agreed on total bill that you are aware of. On that, too, I think that understandings were reached.

And so the broad outline of policies that would enable us to move forward were agreed, and the mission that is going there now takes over from there, as I did say. Both the Bank and ourselves are now in Kenya, and from the Bank's point of view, of course, they are going to have an operation, particularly relating to privatization of the telecom. All of these things are now being looked at.

It is now possible, after the last mission, for us to move forward. Will we succeed? You and I can only guess, can only hope that we will, but at least the forward movement of these activities is now possible.

MR. UKU: Any other questions? Of course, I should reemphasize that, while many of these important bilateral discussions did take place with regard to Kenya, with regard to Nigeria and other countries, Zimbabwe, the essence of the joint trip was, of course, regional in nature, to look at regional issues, regional development objectives and priorities affecting countries of the region as whole.

QUESTION: Stephan Caulfield, Newsweek International.

I'd like to know what are your analyses on the economic performance of Cote D'Ivoire, and if there is a question, what are the results of your talks with the Cote D'Ivoire authorities?

MR. MADAVO: On Cote D'Ivoire, as you are aware, the Prime Minister of Cote D'Ivoire and the Finance Minister have been visiting Washington. They met this morning with Mr. Wolfensohn, explained basically where they are in terms of the transition in their country, explained where they are in terms of the importance as to formulating a sound and persuasive economic program and to request that, assuming that there was, in fact, a program that could be put in place, that they would like very much a reengagement by the World Bank and the Fund to support them, in partnership with other important players in the Cote D'Ivoire situation. There are bilateral countries that have been very important in supporting the development program there, such as France. There is also the European Union which has been quite active there.

And so these were very good discussions, and my expectation would be that we would follow this up at the technical level to see whether, in fact, progress can be made in terms of putting together a sound economic program.

The other issue that we also discussed on Cote D'Ivoire was the fact that they have accumulated arrears to us and are in no accrual status at the moment. And so we talked of their thinking about how they might address their arrears problem. We were very pleased that they were able to make a payment last Monday-today in Washington-- which was a signal of the importance they attach to finding a solution to their arrears.

MR. UKU: I believe the Prime Minister has also met with the Fund. We're going to wrap up now, but I would invite Mr. Gondwe to just add to those comments.

MR. GONDWE: Yes, we have had meetings with the Prime Minister of Cote d'Ivoire, who was raising issues that my colleague just referred to. And we emphasized the ability of the Fund, to move forward with them very much depends upon the other donor community also being in a position to do similarly. They are important donors of Cote D'Ivoire. One of them is the EU, very important. And before coming here, they had meetings in the EU with which they agreed on a number of things that they have to do between now and May.

And what we did emphasize is that if --most of these are on human rights and political things--that were to be done, and then the other donor countries, bilateral countries like France, also felt the same, it is possible for us to start agreeing with them a program that would establish a track record before we can actually engage in a formal program sometime towards the end of the year.

MR. UKU: We do need to wrap up. Mr. Gondwe, you kindly yielded to Mr. Madavo at the beginning of this meeting, so I'll give you the last word and turn to Mr. Madavo for any of his final comments, any words of wisdom he would like to share about the trip, in general, and then I'll come back to you.

MR. MADAVO: Good. I'm going to invite you to start.

MR. GONDWE: Well, I don't think I have something to say that is different from what I said before. For us, these meetings were extremely important, and it was good that they also coincided with a discussion of what the Vice President has referred to, and that is the MAP, this program that South Africa, Algeria, and Nigeria have put forward. It enables us to look at how we can accelerate growth because this is a challenge to Africa as much as it is a challenge to us, particularly Mr. Madavo and myself being responsible for African affairs in the two organizations.

Elsewhere, growth is very high. Elsewhere, countries are benefiting very robustly from globalization. What can we do to cope with that? And the things in the meetings that we heard were extremely important for us to start looking at how to get to that.

And I think that the challenges that came out for both the heads of state and ourselves are clear, and I hope that at the end of next year we can point to some positive results. This is a tall order, but I hope it is possible to do that, and I'm looking forward to that. Both Mr. Madavo and I talk very frequently. Both of us I think are energized from these meetings. I think that probably something positive will certainly come out of it.

MR. UKU: Mr. Madavo, you have the final word.

MR. MADAVO: Three footnotes. I want, first, to simply join Mr. Gondwe in the hope that now the challenge really is, the next steps: what is going to happen over the next 12 months? Are we going to see real progress? And this is going to very much depend on the Africans, but we are quite willing to roll up our sleeves in the two organizations to assist Africa, make progress forward.

I think I very much agree with Mr. Gondwe that we all came back energized. In fact, I think the two heads of our institutions were very impressed by the determination by African leaders to write their own future, in essence, and felt that, given that commitment, that they should be advocates, advocates for Africa, in terms of market access, in terms of ODA floors, in terms of continued efforts on debt relief, so that we can, in fact, put together the resources that would enable the Africans to do what they told us they wanted to do.

So, you know, we are optimistic.


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