5 July 2007
Critics question whether the Fund has the expertise to engage countries emerging from conflict, and are concerned that the it might exert undue leverage over cash-strapped governments with little bargaining power.
The IMF's Director for Africa, Abdoulaye Bio-Tchane, reportedly told Reuters that the Fund will prioritize financial assistance to African countries emerging from conflict in order to "re-energise the economy of the world's poorest continent." He said that the Fund is currently negotiating agreements with four post-war countries – Cote d'Ivoire, Democratic Republic of Congo, Liberia and Guinea-Bissau – adding that "they are countries which really need the Fund."
The Fund is reportedly aiming to strike a deal with Cote d'Ivoire in July for a $60 million loan, conditioned on progress in political reunification and reform of the country's crucial cocoa and oil sectors. In August 2006, then-Prime Minister Charles Konan Banny acknowledged that earlier World Bank- and Fund-led reforms of the cocoa sector were a failure that had worsened the plight of the country's small farmers.
In his interview with Reuters, Fund Director Mr. Bio-Tchane also commended the Democratic Republic of Congo for improvements in its fiscal situation, adding that the country appears on track to qualify for a Poverty Reduction and Growth Facility (PRGF) lending program with the Fund next year. A few weeks ago, the IMF predicted that Congo would soon "reap the benefit" of the surge in mining investments since the end of the war. Many observers remain doubtful about these projections, citing persistent corruption and generous terms granted to foreign mining companies, and suggest that very few Congolese stand to benefit at all from the country's lucrative mineral sector.
Critics have questioned whether the IMF has the necessary expertise to engage countries emerging from war, and are concerned that it might exert undue leverage over cash-strapped governments with little bargaining power to resist economic reforms that are contrary to their best interests.
In related news, Rodrigo de Rato announced last week that he would step down from his post as the IMF's Managing Director, citing personal reasons. Considering that recent public outcry over the US government's prerogative to choose the president of the World Bank led to naught when it came time to replace outgoing President Wolfowitz, there is little doubt that Europe will be left to choose de Rato’s replacement, without opposition. Last week, the Bank's Board of Directors confirmed Robert Zoellick as the next President, after the member governments that publicly criticized the untransparent selection process failed to nominate a single alternate candidate for the post.
Resources
- IMF sees post-war states as priority in Africa by Daniel Flynn, Reuters, June 14, 2007 (Reuters website)
- Ivorian Prime Minister admits failure of Bank/IMF cocoa reforms, Bank Information Center, August 11, 2006 (BIC website)
- IMF predicts DR Congo to "reap the benefit" of its mineral wealth, Bank Information Center, June 15, 2007 (BIC website)
- EU stakes claim to nominate next IMF chief by Lesley Wroughton and Paul Taylor, Reuters, June 29, 2007 (Reuters website)
- US won't challenge Europe on IMF - Paulson by Lesley Wroughton, Reuters, July 2, 2007 (Reuters website)