UNIVERSITY OF PENNSYLVANIA - AFRICAN STUDIES CENTER
Africa: Economy and Debt Date distributed (ymd): 990223 Document reposted by APIC
Region: Continent-Wide Issue Areas: +economy/development+ Summary Contents: This posting contains two documents: (1) the annual joint statement on economic issues from the Chief Executives of the Organization of African Unity, Economic Commission for Africa and African Development Bank, and (2) a questionnaire posted on the World Bank web site requesting public comments on the Heavily Indebted Poor Country (HIPC) Debt Initiative.
Joint Statement, Chief Executives of OAU, ECA and ADB,
Ouagadougou, Burkina Faso -- 5 February 1999
Please find as follows the Joint Statement of the Chief Executives of the Organization of African Unity (OAU), Economic Commission for Africa (ECA) and African Development Bank (ADB), issued in Ouagadougou, Burkina Faso on 5 February 1999 at the end of their Ninth Consultative meeting.
Highlights of the Statement include:
* Emphasis on the importance of the ownership by African countries of their development programmes and the need for strong partnership between Africa and the international community;
* Welcome and support for the creation by ECA of the African Development Forum (ADF) to build consensus on policies and programmes pertaining to Africa's development;
* A call to the international community to support African initiatives and the support of the OAU, ECA and ADB in conflict prevention, management, resolution, and post-conflict reconstruction;
* A call for a favourable international response to the new German proposal on improving the HIPC initiative on debt.
The Chief Executives of the Joint Secretariat meet once a year to review development issues facing the continent and bring them to the attention of key stakeholders. Through this annual consultative meeting, the heads of the organizations can advocate and provide leadership on key regional issues, and speak with one voice. The Eighth Consultative Meeting took place on 23 January 1998 in Abidjan, Cote d'Ivoire. The Joint Statement from last year's meeting is available on the ECA Website (see foot of this message for the address).
NINTH CONSULTATIVE MEETING OF THE CHIEF EXECUTIVES OF THE ORGANIZATION OF THE AFRICAN UNITY, THE ECONOMIC COMMISSION FOR AFRICA AND THE AFRICAN DEVELOPMENT BANK
Ouagadougou, Burkina Faso, 5 February 1999
We, the Secretary General of the Organization of African Unity (OAU), the Executive Secretary of the Economic Commission for Africa (ECA), the President of the African Development Bank (ADB), held our Ninth Consultative Meeting in Ouagadougou, Burkina Faso on 5 February 1999.
This meeting gave us the opportunity to review the political developments as well as economic and social trends in Africa since our last meeting in Abidjan, in January 1998, with a view to defining ways and means of further enhancing coordination and harmonization of the activities of our organizations, to enhance our development effectiveness for the benefit of our member countries.
We welcome the participation of COMESA and ECOWAS in our deliberations.
We note with satisfaction, the continuing progress made by African countries in promoting socioeconomic development and democratization which augurs well for the future of Africa in the 21st Century. In order for Africa to effectively meet the challenges involved, it is imperative that sustained efforts be made to ensure peace and security and achieve high rates of growth so as to reduce poverty.
We view with great concern the continuing conflicts in certain regions of our continent resulting in loss of lives and the destruction of economic and social infrastructures. We are encouraged by the resolve of our leaders to take bold initiatives in tackling these conflicts. We are determined to reinforce the coordination of the efforts of our institutions, within their respective mandates, in conflict prevention, management and resolution, as well as in post-conflict reconstruction. We call on the international community to support the initiatives of the African countries and our assistance in this area.
We re-affirm the importance of good governance characterized by transparency, accountability and the rule of law. We urge our member countries to ensure that these ideals are fully entrenched in their legal, political and social structures. We urge them to continue combatting corruption.
The current external economic environment is a source of concern. However, we are encouraged by the implementation of policy reforms in a growing number of our countries, which has been largely responsible for maintaining positive overall economic growth.
We welcome the conclusion of the negotiations on the Fifth Capital Increase of the African Development Bank which resulted in the increase of the capital-base of ADB by 35 per cent; and, the 8th replenishment of the ADF at the level of US $3.3 billion to support operational activities in the low-income African countries during 1999-2001. We noted with satisfaction that up to US $10 billion of the IDA-12 replenishment will be also available for investment in our low-income countries.
We are concerned that Africa's external debt burden continues to seriously impede its socioeconomic development. We welcomed the progress being made in the context of the international HIPC Initiative, in which the African Development Bank is an active participant. However, the international community will need to go beyond current initiatives, so that more African countries can expeditiously benefit from debt relief and, thereby, enhance their growth prospects. In this regard, we welcome the recent proposal put forward by the Federal Republic of Germany to enable highly indebted poor countries to obtain debt relief within a shorter time-frame than currently provided for; and also to benefit, on exceptional basis, from cancellations, under the auspices of the Paris Club, of guaranteed commercial debt and official development aid. We urge donors to adequately contribute to the HIPCs Trust Fund. We call on the international community to respond positively to the German proposal. We also call on for the international community to establish facilities for heavily indebted countries coming out of conflicts.
We underscore the important role African women play in contributing to social and economic development. We will continue to mainstream gender perspectives in all policies and programs of our institutions. We are committed to ensuring the success of the Sixth Regional Conference for mid-decade evaluation of the implementation of the platforms for action to be held in November 1999, in Addis Ababa.
We also note with concern that some endemic diseases are claiming too many lives in our continent, thus undermining the present and future human resource base of many of our countries. The AIDS pandemic is of particular concern because it is spreading at an alarming rate. We urge African countries and the international community to maintain and expand their programmes aimed at combatting this deadly disease.
We are also committed to pooling the resources and capabilities of our three institutions, to enhance the economic integration process, under the auspices of the African Economic Community. We welcome the efforts of the African Development Bank Group in setting aside 5 to 10 per cent of ADF-VIII resources for multinational projects. We call on our member countries to demonstrate greater commitment to the promotion of multinational projects and regional integration. We see activities in this regard as critical for the integration of African economies in the globalization process. In this connection, the rapid spread of the impact of Asian financial crisis emphasizes the need for Africa to be part of the globalization process and build the necessary capacities to mobilize domestic resources to ensure accelerated growth and sustainable development. We call on the international community to support these efforts, through increased concessional resource flows, enhanced market access and debt relief.
We underscore the importance of the ownership by African countries of their development programmes, and the need for strong partnership between Africa and the international community. To this end, we welcome and support the creation by ECA of the African Development Forum, to build consensus on policies and programmes pertaining to Africa's development. We also welcome the Joint African Institute established by the ADB and the Bretton Woods institutions aimed at training officials from member countries, in financial, economic and development issues.
We draw the attention of African countries to the need to take the necessary steps for addressing the Year 2000 Computer Problem to avoid potential adverse effects.
Finally, we wish to express our deep appreciation to His Excellency President Blaise Compaore, the Government and people of Burkina Faso for the warm welcome extended to all delegations to this meeting, as well as for the keen interest shown by Burkina Faso in the activities of our three institutions.
Done in Ouagadougou, on 5 February 1999
For more information, please contact:
Peter K.A. da Costa Senior Communication Adviser Office of the Executive Secretary Economic Commission for Africa United Nations P.O. Box 3001 (official) or 3005 (private) Addis Ababa, Ethiopia Tel: +251-1-515826 (direct), +251-1-517200 ext. 35486 Fax: +251-1-510365 (direct), +251-1-512233, +251-1-514416 E-Mail: email@example.com, firstname.lastname@example.org Web: http://www.un.org/depts/eca
1999 Heavily Indebted Poor Country (HIPC) Debt Initiative: Review and Consultation Prepared by the Staffs of the International Monetary Fund and the World Bank
February 9, 1999
[For more information see http://www.worldbank.org/html/extdr/hipc.htm Questions on this review should be addressed to Gita Bhatt at (202) 623-7968 or via e-mail at email@example.com.]
In 1996, the World Bank and the International Monetary Fund (IMF) launched the Heavily Indebted Poor Country (HIPC) Initiative. The objective of the Initiative is to reduce the external debt of the world's poorest, most heavily indebted countries to sustainable levels. The Initiative provides substantial debt relief to countries which implement critical social and economic reforms as part of an integrated approach to lasting development.
1999 HIPC Review
The Initiative has accomplished a great deal over the little more than two years it has been in place. But more needs to be done. We all want the HIPC to be as effective as it can possibly be. Toward that end, the Boards of the World Bank and IMF have called for a comprehensive review of the HIPC Initiative, including updated cost estimates.
To be a valuable exercise, this review would benefit from the ideas and perspectives of the many organizations and individuals dedicated to the complex challenge of development and poverty reduction. Indeed, from the very beginning the HIPC process has benefited from consultation with civil society in all parts of the world. Staff and management from the World Bank and IMF have participated in more than 100 seminars, meetings, conferences, town halls and other opportunities for dialogue with non-governmental organizations, schools, churches, journalists, the private sector, and others on all aspects of the Initiative. Recently, a number of organizations have produced detailed and insightful analyses on the HIPC Initiative and debt relief more broadly. We want to build on this existing consultative process as we carry out this year's comprehensive review.
In late January, Chancellor Schroeder announced the Cologne Debt Initiative (see Financial Times, January 21). This presents both an opportunity and a challenge. The opportunity is that at the G-7 Summit in Cologne, world leaders could provide a major impetus to the HIPC Initiative. The challenge is to assure that the views of the international community in general, and your views in particular, can feed into the policy discussions leading up to the Cologne Summit.
To meet this challenge we are undertaking a two-stage consultative process:
Phase one: We would appreciate your general views on the HIPC Initiative as well as your input on quite technical questions on defining debt-sustainability, time-frames, and links to macroeconomic and structural policy reforms. Given the timetable outlined above, we are requesting your input on a first set of questions by March 15. We can then add these contributions to those we have been collecting and studying as part of our continued analysis. These views will be reported to the Boards of the World Bank and IMF for their April deliberations, leading up to the Interim and Development Committees on April 27 and 28.
Phase two: On a more extended time-frame, there are a second set of questions on the relationship between debt relief, social policies and poverty reduction. We would appreciate your reactions to these questions by mid-June. These responses will be reported to the Boards of both institutions as they make decisions on the HIPC Initiative in the run-up to the 1999 Annual Meetings in late September.
PHASE ONE-To be completed by March 15, 1999
In addition to your general views on the HIPC Initiative, we welcome in particular your views on the following specific questions:
Debt Sustainability: Does the current HIPC Initiative framework achieve debt sustainability? Do you agree with the eligibility criteria and debt sustainability targets (both relating to present value and debt service)? If not, how should they be changed to meet the needs of poor, heavily indebted countries?
Fiscal Targets: Do you agree with the fiscal criteria and the thresholds for qualifying for the net Present value (NPV) of debt-to-fiscal target? If not, how should they be modified? How should domestic debt be treated under the HIPC Initiative?
Policy Link and Timing: Are there countries which should receive debt relief sooner than is scheduled? If so, why? What conditionality, length of track record and timing would you recommend for HIPC debt relief? How can we best ensure that the mix of resources provided-including balance of payments and budgetary support plus debt relief-promotes broad-based growth and development, is used effectively, and moral hazard is minimized?
Financing. Do you have any suggestions for the financing of any additional cost arising from changes in the HIPC framework? Given current aid budgets, should resources be diverted from less indebted poor countries to finance debt relief for HIPCs? Should aid budgets be increased to finance additional debt relief for HIPCs? What if this is not possible?
PHASE TWO: To be completed by Mid-June, 1999
While we anticipate that the dialogue between now and March 15 will yield a number of important new questions, which we will post on this page, we would like to pose the following for consideration in the meantime.
Poverty Reduction: How can the link between poverty reduction and debt relief be strengthened in the programs supported through the HIPC Initiative? How should they be linked to be the achievement of the international development goals set for 2015? How can the debt relief provided be most effectively used to foster social development particularly in the health and education fields?
Delivery of Debt Relief. Under the current framework, the HIPC Initiative focusses primarily on reducing the debt overhang, i.e., reducing the debt stock which reduces debt service over the long-run. Do you think that more weight ought to be given to reducing debt service burdens in the short term?
Debt Management: Do you have any suggestions for improving debt management within HIPC countries?
All responses should be sent by March 15 (Phase One) and by June 18 (Phase Two) to both the IMF and the World Bank -- firstname.lastname@example.org and email@example.com. Please address any questions you may have to Gita Bhatt at (202) 623-7968 or via e-mail at firstname.lastname@example.org.
************************************************************ From: email@example.com Date: Tue, 23 Feb 1999 19:43:11 -0500 Subject: Africa: Economy and Debt
Editor: Ali B. Ali-Dinar, firstname.lastname@example.org