January 17: Reuters- IMF officials, African leaders start Gabon

January 17: Reuters- IMF officials, African leaders start Gabon

meeting

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

                        upheaval.

 

                        ``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

                        $90 billion.

 

                        ``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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