January 17: Reuters- IMF officials, African leaders start Gabon
06:45 a.m. Jan 17, 2000 Eastern
By Luke Baker
LIBREVILLE, Jan 17 (Reuters) - Senior IMF officials and
African leaders met in Gabon on Monday for talks on growth
and poverty reduction, a meeting the IMF hopes will help Africa
move towards conquering decades of debt and economic
``There is a window of opportunity... A new chance for Africa,
but not without effort, not without exorcising the demons of war
and removing the frustrations that remain,'' IMF Managing
Director Michel Camdessus told reporters ahead of the opening
of the three-day summit.
``The prospects for sustainable growth and poverty reduction in
Africa are improving, particularly given the improvement in the
world economy,'' he said.
High on the agenda at the summit is a debate on the IMF's latest
initiative for helping the world's poorest and most indebted
countries, the Poverty Reduction and Growth Facility.
The new programme, introduced in November last year,
replaces the Enhanced Structural Adjustment Facility (ESAF)
which for more than a decade has been the macro-economic
benchmark for unstable and often war-torn countries.
ESAF focused on strict budget deficit, growth and privatisation
targets as pre-requisites for funding -- targets countries often
failed to meet -- and was regarded as too bitter a pill for many
patients to swallow.
The new facility is supposed to take a kindlier approach, putting
the onus of designing an adjustment programme onto the loan
recipient and taking into account the views of development
agencies and civil society.
Coupled with the new initiative is the IMF's on-going debt relief
scheme which, via the revaluation of gold holdings and pledges
from the Paris Club of creditor nations, aims to cut the debts of
33 of the world's poorest countries to about $45 billion from
``DEVELOPMENT TRUCK HAS NEW TYRES''
Camdessus said the decision to shift to the new lending
framework had come about after intensive examination of
ESAF's successes and drawbacks.
The new initiative, he said, attempted to look at poverty
reduction not in pure macro-economic terms but as part of a
virtuous circle that could be created once growth is achieved.
``We have not reinvented the wheel, but let us say that the
development truck has new tyres,'' he said.
Several Latin American and African countries have already
received funds under the new facility and other African states --
including Malawi, Mozambique, Tanzania, Kenya and Ivory
Coast -- are expected to use the Gabon summit to push to be
shifted onto the new standard.
In a declaration ahead of the opening, African heads of state
pledged to meet the IMF half way in the challenge of halving by
2015 the number of people who live on less than a dollar a day,
currently 1.3 billion.
``We recognize that poverty reduction is a challenge which we
must address ourselves, through our own solutions. We are
determined to move ahead in confronting this challenge head on,
with the support of our development partners,'' they said.
While growth and poverty are the focus of the summit, the
presence of Camdessus with two senior colleagues, First Deputy
Managing Director Stanley Fischer and Deputy Manging
Director Eduardo Aninat, has brought other issues to the fore.
Camdessus said earlier on Monday that Ecuador's decision 10
days ago to dollarize its economy, making U.S. currency the
legal tender, was probably not the best way to resolve the
country's economic crisis.
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