Transcript

International Monetary Fund
Washington, D.C., April 17, 2005

Participants:
Marcelino Owono Edu, Finance Minister for Equatorial Guinea;
Timothy T. Thahane, Finance Minister of Lesotho
Abdoulaye Diop, Minister of Finance for Senegal
Joseph Bandabla Dauda Finance Minister for Sierra Leone

MS. BHATT: Ladies and gentlemen, good afternoon. I am Gita Bhatt, a Senior Press Officer of the IMF's External Relations Department and I would like to welcome all of you to this press conference of the Ministers of Finance from Africa.

We have here today a very distinguished panel of four finance ministers. As in the past, they have agreed to spare some time to discuss issues of importance to us all. Let me introduce them. We have Mr. Marcelino Owono Edu of Equatorial Guinea, Mr. Timothy Thahane of Lesotho, Mr. Abdoulaye Diop of Senegal and Mr. Joseph Dauda of Sierra Leone.

I will ask each minister to offer brief remarks and then I will open the floor to questions. We have simultaneous translation. English is on channel four, French is on channel three and Spanish on channel two. Thank you very much.

MR. OWONO EDU: [Interpreted from Spanish] Thank you very much, ladies and gentlemen. I would like to express my gratitude for this opportunity to make some brief comments at the press conference of African Governors. I believe you have received the Fund's economic report on sub-Saharan Africa.

I'm going to focus on a few brief comments on our sub-region and Equatorial Guinea.

Our sub-region is known for its wealth of natural resources, but we have the same economic poverty indicators as other developing countries. On the occasion of the IMF-World Bank spring meetings, I have the honor of taking the floor as Minister of Finance and Budget representative of Equatorial Guinea, which is the country which is currently presiding the Central African Economic and Monetary Community (CEMAC).

Economic and financial developments in CEMAC in 2004 were largely affected by the oil sector. Indeed, five of the six countries of the zone are oil producers. In 2004, CEMAC saw a growth increase of 7.7 percent of GDP. This growth was due to the rise in prices of raw materials, especially oil, and to the implementation of government finance reforms.

The increase in oil production also led to a rise in the budget surplus of 4.3 percent of GDP. The current account deficit fell by 1.2 percent of GDP. Net foreign assets increased as a consequence of continued monetary consolidation. Finally, inflation in the zone was 2.8 percent, which reflects improved supply of national markets. For 2005, the outlook for CMAC is for continued growth. We expect that in medium turn, the macroeconomic climate will continue to be favorable.

Recent developments suggest that the favorable cycle in Equatorial Guinea will continue to be driven by the fossil fuels market, which accounts for 90 percent of GDP, 98 percent of exports and 86 percent of government revenue. Real GDP increased by about 34 percent, showing oil GDP expansion of about 36 percent. Likewise, the non-oil GDP increased by 13 percent because of dynamic development of the infrastructures and services sectors. Net foreign assets increased 233 percent, thanks to fossil fuel sector income. There was an overall budget surplus of 14 percent. The trade balance surplus was 36 percent, and the balance of payment surplus was sustainable because of major accumulation of official reserves. Inflation was at around 5 percent.

With regard to the Bretton Woods Institutions, in cooperation with the Bretton Woods Institutions, aside from the Article 4 consultations with the IMF, in addition to the consultations, my country is carrying out actions to comply with the initiative on the extractive industries transparency. We are also examining possibilities for establishing technical assistance with the IMF, and we have requested assistance from the World Bank for the oil sector. Thank you very much.

MR. THAHANE: Thank you very much. My initial remarks will focus first on Lesotho as a case in point of the low income countries, and then I will deal with the role of the Fund in such countries, low income countries, where we don't have a program but there is a need for defining a new role for the Fund.

First, Lesotho has experienced, in the mid-90s and '80s, a high rate of growth. And at the end of '98, we had a small textile sector. But with Africa Growth and Opportunity Act (AGOA), our exports improved very substantially, from less than 100 million to about 450 million in a matter of three or four years and created a large number of nonagricultural employment.

So the problem then that comes consists of challenges with the end of the multifiber agreement and also with the end of the special preferences. We have a challenge of diversifying our product base, diversifying our market access, and these are the things we are now engaged in. And of course, if you look throughout Africa, you find a number of countries have gone into the textile sector as a result of AGOA, where they look at Namibia, Botswana, Malawi, Uganda, and Senegal as well. So we are all facing a transition challenge and therefore market access for African products and for identification of new products is critical.

Second, once you are dealing with the private sector in terms of persuading your export-led growth, you suddenly now have to look at the investment climate and the environment in which investment takes place. We find then that the infrastructure is a major constraint, whether you're talking of road infrastructure, you are talking of telecommunications, you are talking of water, that becomes very important. So it is here also that the role of the multilateral institutions and our partners becomes extremely important.

The third point, I think, to note is that countries like Lesotho have improved their macro economic management. In our case, we have concluded a program with a poverty reduction and growth facility and macroeconomic stability stands out as one of the main achievements. But the question that then comes about is what do you do in countries such as Lesotho which still face a need for massive resources? PRGF resources are uncertain. And the balance of payments may not be a critical need. But governors have certainly improved and they are aware of what has happened with corruption in the different companies we have had. But we feel that the Fund needs to redefine its role in terms of providing support for policy monitoring and support for policy advice, and perhaps for providing assurance to our other cooperating partners about our macroeconomic management.

But that does not come cheap. It has to come with an adjustment on the part of the Fund. It means it has to develop a broad understanding among its staff of the policy processes and the trade-offs and the development issues. And so increasingly, I think the Fund will be drawn in as we deal with issues of debt sustainability and looking to the future of what the Fund is going to imply, is going to have to broaden its skills base in terms of providing support to low income countries.

Also, institution building is an area that is very complex and that the Fund will have to expand its knowledge to provide technical assistance, capacity building and institution building for many of these countries.We believe that the Fund has a role to play in a changed African environment where macroeconomic stability has been attained, where growth for 2004 is the highest in eight years, and where you also have the Millennium Goals becoming a challenge. Let me stop there.

MS. BHATT: Thank you very much, Mr. Thahane. Can I call upon Mr. Diop, please.

MR. DIOP: [Interpreted from French] Thank you for this opportunity to have a discussion with you on the problems of our continent. I want to speak specifically about Senegal, which is one of the countries, as my friend Timothy said, which has handled its macroeconomic management.

I will focus on the problems of the continent as a whole, and what we have addressed at a meeting we had with IMF management and the Managing Director, a meeting that went very well and which met our concerns.

Our basic concerns today is to put our countries on a growth track so that we can significantly reduce poverty on our continent. To do this, we have faced a number of issues with the Managing Director and his staff, emphasizing the necessary effort that the IMF must make to participate in the efforts of the Doha Round, in particular regarding our country's access, African products access to industrial countries' markets to sustain growth.

We also expressed concern during that meeting with the Managing Director on the end of the Textiles Preference Agreements in 2005, which is going to have a negative impact on all of our budgets and will no doubt impose the need for temporary preference agreements, at least for our countries. We also addressed the question of regional integration. Our continent is in the process of integrating, by putting in place NEPAD, which we think that the IMF, the World Bank, and all donors should support

We are somewhat concerned with the IMF and inequality of treatment that currently exists because the reference programs seem to be designed for African countries alone and we don't think there are any specific rules for this kind of program. We are concerned at the fact that there are no specific roles for post-conflict countries, which need to have access to much more flexible access to HIPC and PRGF resources. And we also raised the issue of special treatment, where Iraq and Afghanistan benefited from special treatment, and which concerned us in terms of the inequality of treatment I was referring to earlier.

Regarding the HIPC initiative, we also saw that many countries have reached completion point under that HIPC but are still heavily indebted. This raises the overall issue of debt and its treatment at the global level. In broader terms, we spoke of debt and the need to mobilize additional resources worldwide, this with the Millennium Development Goals in mind. We also addressed the issue of voice and participation in the Bretton Woods Institutions because, as you know, 44 African countries, most of which have IMF supported programs, only have 4.4 percent of the votes in the Executive Board. So we think this situation needs to be corrected.

So these are the issues that we raised and which we think are important and deserve a positive response from Bank and Fund management. Thank you.

MR. DAUDA: Thank you very much, ladies and gentlemen. As you might be aware, my country, Sierra Leone, recently emerged from a period of material and protracted civil war and we have been undertaking post-conflict economic recovery. So my intervention will be based on the role of the IMF in post-conflict economies.

The war insurgence saw a widespread displacement of the population, as looting, destruction of the economic and social infrastructure, a major dislocation of the financial system. Economic activity was seriously affected, contributing to a collapse in the revenue base and to significant increases in the budget deficit, bank financing and domestic and external payment areas.

Government support therefore, focused on restoring peaceful conditions for the country. In this, we are constrained by the limited availability of budget and technical resources. The economic situation was difficult because of the adverse impact of armed conflict in the major commercial areas. The Fund's strategy of support was based on the need to rebuild Sierra Leone's administrative and institutional capacity. To be eligible for emergency post conflict assistance, certain conditions must be met, such as: disruption of institutional and administrative capacity; insufficient capacity for planning and policy implementation; demonstrated commitment; urgent balance of payments need; catalytic role of IMF support; concerted international effort; and intention by the member to move in a short time frame to an upper credit tranche stand-by or to an arrangement under the poverty reduction and growth facility.

It is against this background that I will like to focus my intervention on the role of the IMF in post-conflict economics. In my view, the IMF has two critical roles to play in post-conflict countries, namely stabilization through staff monitored programs and the strengthening of basic macroeconomic and fiscal frameworks through the provision of technical assistance. Another area that may need collective responsibility includes developments in the structural area.

I believe that the IMF should be proactive in its approach in post-conflict economics and should coordinate its efforts with other international institutions including the World Bank. It is also important that the IMF engage post-conflict economics at an early stage. Such early involvement is, of course, not without risks but it is essential to create a momentum and catalyze support inside and outside the country involved in the conflict.

A lasting peace process must include an economic period that takes into account the particular characteristics of the country or region exiting from war. This is crucial to galvanize support for the peace process and to buttress the peace dividends that will gradually benefit the entire population.

Let me now turn to the two issues mentioned earlier, namely stabilization, and strengthening of institutions through technical assistance. During times of conflict, there is often a sharp deterioration in most economic and social indicators, including contraction of per capita GDP, acceleration of inflation, and the collapse of fiscal institutions, including breakdown of revenue-collecting agencies and the public administration in general.

In situations like these, early IMF technical assistance is critical in helping stabilize the economy and address macroeconomic structural bottlenecks in a sequenced manner. In this connection, it should be noted that AFRITACs have assisted sub-Saharan Africa to build capacity of institutions. The Fund should proceed with its original program of establishing AFRITACs in the various regions of Africa. Although the IMF could take a lead in rehabilitation of fiscal institutions, good coordination with other donors is critical for the success of IMF involvement in post conflict countries.

Countries exiting from conflict often experience a complete breakdown in their expenditure management systems. Basic principles of sound expenditure management are not respected, with no budget, and a complete breakdown in the expenditure process. Often large parts of government revenue and expenditure are undertaken outside the Treasury, while government expenditure is no longer reported in an orderly fashion. Because of resource constraints and disturbances arising from civil unrest and war, large parts of the public administration become dysfunctional. I believe that in such a situation the IMF could play a lead role in rehabilitating fiscal institutions, by assisting countries bring back the annual budget through restoration of orderly budget execution process, including rebuilding of effective control systems. I believe, the IMF is the institution best equipped, in terms of technical expertise, to assist countries emerging from post conflict to achieve these objectives.

In conclusion, ladies and gentlemen, let me say that the main challenges facing post-conflict countries are to consolidate and begin the peace process, address the social dislocations caused by the conflict, and implement a comprehensive program of economic reforms. An early resolution of the conflict is crucial to progress in all these areas. I'm happy to report that the U.N. peacekeeping force in Sierra Leone will be phased out at the end of this year.

MS. BHATT: Thank you very much, Mr. Dauda. I'll now take questions from the floor. Barry?

QUESTION: I'd like to ask you, Minister Thahane, to just share with us a bit of this transition challenge that you have spoken of. What are the alternatives that you consider as you try to answer the question you posed of what do we do in terms of developing alternative development paths or industry paths past the multifiber arrangement?

MR. THAHANE: Thank you very much. I think one has to start from the premise that if I were to take Lesotho as an example, the textile center was the first one we started on in the industrialization process. What it also proved is that we can be efficient producers, given the access to market and other conditions. Therefore, what is critical is market access for other products. It also says internally, we need to be organized enough to identify those opportunities for other products.

So if I were to take our case, Lesotho is a very small market by itself, but it is part of the Southern African Customs Union so the market is for 50 million rather than 2.2 million. My colleague here mentioned regional integration in Africa. That is very important for the small markets to have. So the first part is you need to strengthen regional integration in Africa all across the continent. But in addressing regional integration, you immediately have to address the infrastructure that links the two countries. To be able to export from Lesotho through to Dar es Salaam, it's very difficult. But equally, to support from Senegal to Nigeria, or from Nigeria to Niger, the infrastructure, the road infrastructure, and equally the telecommunications for addressing the markets demands.

So we have chosen in Africa that we are going to have export-led growth, it's going to be private sector led, and the role of government is to level the playing field. It does involve the developed countries cooperating with us in addressing issues such as the rules of origin and the subsidies in the Africa trans-sector where we can do a lot of value-adding activities, but there is a need to open the access. We also need to look at, for example, we have identified, through exploration, the potential for diamonds. But these require heavy, large investments and we need to look at the natural resources, the water resources in that case of Lesotho and Addis. These are areas that we need to work on. But they require from our cooperating partners increased contribution in terms of aid to facilitate the private sector which will probably not be able to go into some sectors. But we also need to be innovative in looking at our legal and regulatory environment to facilitate private sector investment in the public sector. So there are those areas that need to be explored, the alternatives, in order to ensure that the growth is high and sustainable, investment is high and continues to flow in. Then you remove the impediments to it.

QUESTION: [Interpreted from French] Mr. Diop, I was saying that you have the same identity as our minister of Mali, [inaudible] Diop, but you're talking about integration, and a day or a day and-a-half ago you were saying that there were 40 control points between Mali and Senegal. Does this mean integration? The CDL is invoked. Have you something in terms of integration to propose apart from NEPAD? In terms of infrastructure, what can be done? What do you expect from the Bretton Woods Institutions? And finally, the Bretton Woods Institutions, you accused them of lacking democracy in terms of representation of African countries in those institutions. Forty-four African countries, and 4.4 percent of participation. Is that true democracy? I hope I haven't asked too many questions. Thank you.

MR. DIOP: I haven't able to note everything down but I'll do my best. You were saying, and you were quite right, that there is a lot of difficulty now in the area of integration in Africa. That's why this is one of the areas that we debated with IMF management calling for meaningful support in our efforts regarding integration. But we don't expect just from the Fund or the Bank. We in our own countries have set up institutions, which for better or worse, function.

You spoke of CEMAC, which is about to celebrate its thirtieth anniversary, but it has certain difficulties in terms of its economic performance, although Economic Community of West African States (ECOWAS) has done a lot in peace efforts there are many things to be done. And it's not just integration. We need to resolve the peace issues before we can turn to the economic matters. ECOWAS has made several years significant progress in the area of external tariffs, common external tariffs. There's been a common external tariff, and put in place, economic policies among our states and has been trying to coordinate economic policies together.

So ECOWAS has made efforts in some areas but has not been able to deal with other economic areas, and integration we think should come through economics. Free circulation of goods and individuals is a reality, a single ECOWAS passport has been created in West Africa and I think these are achievements. But we need to make efforts elsewhere in accordance with what is done by the West African Economic and Monetary Union (WAEMU), which includes eight West African countries. That institution is working well and it's only been in existence for 10 years. So common policies have been implemented and we are hoping that WAEMU will catch up with ECOWAS.

There are a number of control points between member countries of the ECOWAS or of the WAEMU which they shouldn't exist anymore. We are putting in place for the past two years joint control posts where traffic in goods and merchandise is only controlled at the border and only once. Between Senegal and Mali it does not exist yet but between Niger and Burkina Faso it does. Between Burkina Faso and Cote d'Ivoire it exists, and we want to increase this number of joint control posts throughout our partnership.

A lot still has to be done, of course. It has to be government-wide or region-wide but it can't be done instantaneously. It takes time. It's taking place in Europe where their countries are more developed, and we sometimes have gotten ahead of Europe in this area in terms of having, say for a currency, a single currency among countries, the CFA franc, that is functioning very well. We also have put in place a multilateral surveillance policy among our countries whose works very well, with sanctions proposed or clear directives, and I think that is something that has been which is excellent. And WAEMU is an example in Africa of very advanced integration; a common currency, common economic policies, common fiscal policies, et cetera.

The lack of democracy in the Bretton Woods Institutions, that's a reality. Forty-four countries only have 4.4 percent of the voting strength. Unfortunately, we, since the creation of the IMF and the World Bank, have lost representation that was granted us, between 10 to 11 percent less it was then. And we're doing our level best to get it back. IMF management has been very sensitive to this problem and has promised to make proposals. Unfortunately, it is not for management. It's a political issues involving the countries. Do countries wish to give up part of their votes to give to the African countries so they can be better represented?

So until this political issue can be resolved, the Fund management as well as Bank management, expect to have diversity in their recruitment, and that at least helps us be better represented in all of the IMF departments at the highest level. We have professional staff here. You have one here behind you, Mr. Gondwe, who was one of the great directors of the African department. We have senior staff here who are in important roles.

QUESTION: So what is holding up implementation of these policies?

MR. DIOP: This is designed by heads of states and presidents. It's an initiative to be adhered to by the whole continent and which is at the level of the African Union now. It's not the OAU now, it's the African Union and we need significant economic integration is its activity. We consider this every year. A number of heads of states will meet—heads of states of the G-8, the G-8 meetings, to make them further aware of the situation. We have seen since in Italy—I don't know which city it was, but the G-8 members are very aware of the need to support and to help this initiative.

But so far, in my view, in my humble opinion, we lack the people to implement this idea, the people to implement this. We have thought about the issues, but people who address these issues are heads of state, and there's the decision to recruit in the African level, in the diaspora, professional staff who can implement this policy. But what we lack above all is resources, and the African Development Bank has been identified as the financial arm the world—follow this process. So we have thought about this issue. We have regional contacts, and NEPAD is by my region, of course, five regions of Africa, east, west, north, center, and south. Initiatives are undertaken in the context of integration institutions as the ECOWAS, as you said. Thank you.

MS. BHATT: Thank you. We have a lot of other questions.

QUESTION: Thank you. Apart from the economic potential of the continent in some countries such as Equatorial Guinea, apart from the major development projects, one of the things holding up development in Africa is health, public health. I'm thinking of AIDS, et cetera. But there's also malaria and I don't know whether in African terms what is being done with the support of the Bretton Woods Institutions to combat these plagues. I'm thinking of malaria in particular.

Perhaps Mr. Diop could respond because a few weeks ago there was a major incident in his country, event in his country, and there was a major problem with malaria in this country. So with the IMF and the World Bank, what are you doing to combat this plague? Thank you.

MR. DIOP: [Interpreted from French] Thank you. I can say that the Bretton Woods Institutions, in particular the World Bank, are doing a great deal to help us fight AIDS, malaria and other pandemics. Aside from the World Bank which has set up major funds, the U.N. is dealing with this, and all of the international community is focusing on this problem. At this time we don't really have the means to effectively fight these diseases without the mobilization of the international community.

With regard to my country, which is unique in that it has 1.5 percent rate of the disease, which is quite low, malaria is our main concern and our utmost priority. Of course, we're not losing sight of the fight against other pandemics. Much has been done already. A number of initiatives have been taken, but we can't let our guard down. The World Bank and U.N. and other development partners, the Americans, the Europeans are all rallying to help us in this effort. But what's happening in Africa now is impacting the whole continent, and if we don't put a stop to these diseases it will be very tragic for humanity.

MS. BHATT: Thank you. Mr. Thahane?

MR. THAHANE: Briefly, I think what we're trying to convey here, it's a message that is very simple. A lot of good things are happening in Africa on the growth and inflation and economic management. Equally, on the health side, HIV/AIDS is a problem across all the continent and in southern African. In most of the countries there are internal structures for working with the communities on the education for prevention, and the training for prevention. Second, on the care and treatment of those who are affected, whether by malaria or any other diseases that we have, there is a problem of the antiretrovirals, for example, for HIV, which are too expensive for most of our countries. In all these we need to have our cooperating and development partners to work with us. In malaria, there is a lot of work that is being done equally in East Africa. In Tanzania they are testing some other new drugs and treatment, ways of prevention. I think the message I would like to say, let's look at Africa. There are a lot of good things happening, and my colleague mentioned also on the regional integration the practical side, having a joint inspection team across the border and simplifying immigration. They have done it in Mali. We are working on some of those in southern Africa. But we need the cooperation, and the NGOs are there, and our development partners are there, but we need more. I think that's the message.

MS. BHATT: Thank you very much. Can I take a group of questions, given the time? The gentleman over there.

QUESTION: I was going to ask the gentleman from Sierra Leone whether he could make my life easy because I'd like to do a case study on post-conflict society. And I haven't been able to find much information on what's happening in the monetary system with the currency and inflation and so on. That may be due to my failing, but that's what I had intended to ask.

But I have one further point, which is that at a press conference yesterday, there was a discussion about the African brain drain, which seems to be quite severe. The problem appears to be that obviously when people leave your continent, they come to countries with much higher standards of living and the incentive to return is very low. Has anybody considered the possibility of a special arrangement whereby these people could be encouraged to return so that it's made economically worthwhile for them to do so?

MS. BHATT: Thank you. Any other questions? The gentleman back there.

QUESTION: This is related to the debt issue mentioned by Mr. Diop. Everybody knows that it's a burning question to achieve more financing and debt is part of the solution.

My question to the panel is do you have any preferences for the various proposals on the table? We have one from the U.K., including the proposal for selling off part of the IMF gold reserves. We have one from the USA mentioning that the two organizations need to find the resources within themselves. And there are various others. So any preferences from the perspective of the African financial ministers? Thank you.

MS. BHATT: Any other questions?

QUESTION: I'd like to come back to the meeting you had yesterday with Mr. de Rato. You mentioned that the IMF management have been sensitive towards your request for greater representation. Did he give you any encouragement that he'd be able to help you with any of your other requests? Specifically you mentioned trade, the end of the textiles deal and the DOHA Round.

MS. BHATT: Can I ask Mr. Dauda to speak on the post-conflict question and then I'll ask Mr. Thahane and Diop to speak about the African brain drain and the debt issue. And last, I'll ask Mr. Thahane to speak on the meeting with Mr. de Rato yesterday. Mr. Dauda.

MR. DAUDA: Yes. If I understood the question clearly, it was what has happened to the Sierra Leone currency. You said you have conducted some research on other currencies. As I said in my opening remarks, Sierra Leone faced a conflict that destroyed the basis of our economy. And we have been undertaking a lot of reforms to restore the economy, including of course rehabilitating the Leone. The Leone is our currency, which has remained reasonably stable during the period of stabilization. It's current rate to the dollar is about 2900 Leones to the dollar. It still continues to be stable.

MS. BHATT: Thank you. Mr. Thahane on African brain drain and the IMF meeting with Mr. de Rato yesterday.

MR. THAHANE: I guess I am part of that brain drain, having worked with the World Bank and so on and then returned home. I think we need to be blunt and realistic. Human beings will migrate to the best opportunities to whatever those are. There needs to be a consideration within the countries about the push factors that encourage the movement out. There needs to be also the demand factors that need to be looked at. Clearly, compensation is one. But for many of our scientists and so on, without the investments in research and development and in the institutions that provide intellectual challenge, these people will go abroad and study and so on.

So it is part and parcel of the development process. And what we need to look at is really what incentives can we put to encourage those who have acquired the skills to go back and make the contributions in the development of their countries, particularly because they know their culture, they know their environment more than anybody else. I know the Dutch have encouraged, I think it's in West Africa, where they have encouraged, in Ghana, some of the doctors, West African doctors, to go back and work in Ghana. Now here we need the cooperation of everybody. But I think it would be also wrong to simply say we put a blanket freeze on Africans from getting into the international market, because there is the importance of cross-fertilization of ideas. I probably will leave it at that and say there is a need to look at both the push factors and the pull factors and whether or not we can put incentives in place to address the issues.

MS. BHATT: Mr. Diop on the debt issue and gold sales.

MR. DIOP: [Interpreted from French] I think the matter of the debt deserves extensive reflection. There are a number of international initiatives on the table, put forward by the big industrialized countries. You will recall in Monterrey the commitment was to increase ODA so as to work toward the Millennium Development Goals. Seven years later, at the September meeting in U.N., they're going to take stock. And I think we'll find that there has been very little increase and it's highly unlikely that the MDGs will be achieved.

This means that any attempt to increase resources, of course, will be welcome. The African Ministers are of the view that there shouldn't be a substitution of initiatives. Japan put forward a very interesting proposal yesterday. They will contribute 20 percent to a special trust fund in the ADB. There is the British IFF, among other initiatives and U.S. initiatives.

But I don't think we should have to choose one initiative over any other. The important thing is to not to theorize about initiatives. We have to implement them. What we need is a substantial increase in resources dedicated to be MDGs. And we need to be able to say in 2015 that we'll be able to achieve those goals. I think we need more resources to make that possible.

Nevertheless, even in spite of the Japanese initiative, efforts need to be made off the market. We shouldn't drive gold prices down because that would have an adverse impact. We believe that this could be done but the terms should be negotiated with an organization such as the IMF and the World Bank and only at that level. That's what I have to say on that. Thank you.

MS. BHATT: Mr. Thahane, would you like to speak a bit on debt relief and gold issues, as well, and also on our meeting with Mr. de Rato yesterday.

MR. THAHANE: Thank you very much. I think there is very little to add to what Abdoulaye has said. First, on the gold sales. We do not want to disrupt the market and drive the prices down. But if we look back in history, there has already been a precedent where gold sales have been managed. The creation of the PRGF, it did include, and the HIPC did include the gold sales. It was done in an orderly manner and it did not depress the prices. So there is no need, I think, to be afraid that such as gold sales will be done in a way that will depress prices. A lot of our countries produce gold. We are not interested in low gold prices.

Number two, I think as Abdoulaye has said, the key is not to say we prefer this to that, but let's find a compromise and move quickly. That is a major constraint. We divert a lot of resources to servicing debt, and at the same time have to ask for more money to be able to sustain growth. It is important that the question be addressed very quickly.

So far as the meeting with the Managing Director was concerned, maybe it's best to put it in context because the Managing Director did meet with a few African Governors yesterday. The purpose is to continue and deepen the dialogue on the various African issues and we expect that he will, in future, be meeting with other African Governors on a continuing basis and that the topics will be more focused, selected and the time perhaps be stretched to allow for more extensive review.

The meeting focused on the regional economic outlook for sub-Saharan Africa. This is a very important document. It is coming out for the first time. And it brings growth issues in Africa and their achievements. And that was one of the topics.

The second, as was highlighted, we did discuss the issue of debt and what the Fund can do. We did discuss the role of the Fund in providing policy support. I think there was also a recognition that the Fund can play an important role in terms of bringing the good things that are happening to Africa out in the public domain through its network of publications and this particular meeting, for example.

I think the issue of the voice came up and the management, I think as the Managing Director said, is willing and recognizes that ownership of development processes in Africa requires that the institutions have exposure to the African voices and experience. But the management is constrained because that issue is a political one, is linked to the subscriptions, is linked to the quotas. And what he did say is that his personal commitment was to try and find a way of continuing to engage Africans so that he benefits from their experience, whatever the institutional mechanisms, and changes that require consensus at the membership level.

I think it was a very useful meeting and it was a useful initiative on the Managing Director's part and we certainly will hope that we'll have future such meetings because it is essential for our good relations.

QUESTION: Thank you. My question is for Mr. Owono. Generally in this country, the most recent news reports here concerning your country have been in connection with a possible political coup and a banking scandal. What is your message to reassure investors, potential investors, about both the political stability in your country and efforts to reconcile and account for your oil wealth and make it public and reconcile offshore accounts?

QUESTION: [Interpreted from French] Generally, in Africa, we see that women and children are the hardest hit by AIDS and also postnatal mortality, death in childbirth. Is there a connection?

MS. BHATT: Mr. Owono Edu, would you take the question on Equatorial Guinea?

MR. OWONO EDU: [Interpreted from Spanish] Thank you very much. I would like to begin by answering the question on political stability in my country. I can assure you that there is total political stability in my country at this time. There is no political upheaval. Foreign direct investments are assured. And with regard to the coup, there was much talk about it and there was an attempted coup and the facts came to light and the media and international opinion and public opinion in the country are informed of everything that happened. The reports are true. Those who tried to lead the coup have been brought to justice and the situation has returned to normal in my country.

With regard to the scandal that you mentioned with the bank accounts, I can tell you of that my country is not aware of any such scandal. You are aware that for about 15 years American oil companies have been operating in Equatorial Guinea and, in agreement with the government, they decided to open a correspondent account in Riggs Bank in Washington. Certain hidden sources tried to spread rumors of scandals linking these accounts to Pinochet's accounts and draw a connection, particularly with regard to an account held by the government which contained oil revenue from U.S. companies operating in our country. Thank you.

MS. BHATT: Can Mr. Thahane and Diop answer the last question? And then I'd like to have each Minister make a one minute concluding remark after that.

MR. THAHANE: I think the evidence is there of a link between HIV/AIDS and the transmission. And clearly the issue of maternal child health and the importance of addressing the special circumstances of women within the context of HIV/AIDS in Africa, they are there.

And what we are finding in Lesotho and in Southern Africa, is that yes, you have to deal with the cultural aspects, you have to deal with the special circumstances facing the women. You have to deal with the issue of childbirth and the training in that whole area.

And addressing maternal and child health issues is not just an HIV issue. It is a broad public health issue and it needs to be linked and addressed as such. But there is a link because of the circumstances and there are medical case issues that have also have been adduced in terms of the transmission and other factors.

We need to do more. I think I'll just stop there and I won't say anything in closing, except to say HIV and AIDS is a cross-cutting issue. It is critical if the substantial economic gains made are not to be reversed. The population growth and other matters are bringing changes in the market relationships and so on. And we need to be sensitive and attuned as part of our planning and development.

MR. DIOP: [Interpreted from French] I would like to point out, first of all, with regard to health problems, I think the world is aware of them. These items have been put on the top of the agendas, especially mother and child health and death in childbirth. Earlier we mentioned AIDS and in my country, as I say, the rate of AIDS infection is 1.5 percent in my country, and that is very rare and quite low, and this is thanks to a long-standing policy of awareness-raising at all levels of society, civil society, faith-based movements, governments and the whole of the domestic and international communities. So that's something to be proud of.

On malaria, we distribute free mosquito nets that have repellent on them and that is good prevention. I think that has yielded good results. This links in with medical research, and the results are increasingly encouraging. We are rolling back malaria increasingly. In my country, maternity care is 100 percent free as are vaccinations for children age one to five. We have a special immunization program which was implemented by the government and is up and running. So we are implementing policies in our countries, and there is also international policy, but the eternal problem is the lack of resources. To fight all of these diseases we need outside resources because our budgets are too small, so we have to turn to the international community to support our national policies.

MS. BHATT: Mr. Dauda, would you like to make a brief concluding remark?

MR. DAUDA: As I said, the challenges facing post-conflict country [inaudible] Sierra Leone. Government has addressed the most immediate ones, particularly those dealing with disarmament, demobilization, resettlement and reintegration. We are now about to embark upon rebuilding this country from the effects of war, which we had experienced weak economic growth, high unemployment, and particularly [inaudible] because most of unemployed constitute ex-combatants, so that there must be conscious effort by government to ensure that these ex-combatants are employed, gainfully employed to prevent a return to their old ways.

Most of the effects of the war, those things which really caused the war are those which we are now addressing; the work institutions, good governance, good and sound macroeconomic management, and creating jobs, promoting human development, and above that, promoting private sector development so that jobs could be created.

At the end, we have also laid a very solid foundation for all of these by consolidating the peace which we achieved. Since conflict, normally the problems that are created in Africa, we have reestablished peace. We are building upon that, and we think is a very good, sound foundation for sustained economic growth.

MS. BHATT: Thank you. Mr. Owono Edu, would you wish to say a few words to conclude?

MR. OWONO EDU: [Interpreted from Spanish] As previous speakers have stressed, we are fighting pandemics which afflict our countries today, in particular AIDS and malaria. The government, together with international organizations is implementing special programs to fight AIDS. A national anti-AIDS committee has been established. They have been tasked with raising awareness about the pandemic and ways to prevent it. They are using a lot of resources to purchase medicines, and also conducting research. There is a drive nationwide to help fight AIDS.

For malaria, for a long time we have been cooperating with friendly countries and international organizations, the WHO and other organizations. The government is implementing special anti-malaria programs. The health system offers free doctors' visits to children of school age and pregnant women. There is also limited distribution of medications free of charge by the government. Thank you.