UNIVERSITY OF PENNSYLVANIA - AFRICAN STUDIES CENTER
Africa: Finance Ministers Conference Date distributed (ymd): 990509 Document reposted by APIC
Region: Continent-Wide Issue Areas: +economy/development+ Summary Contents: This posting contains the opening and closing press releases from the three-day meeting from May 6 to May 8 in Addis Ababa of African Ministers of Finance and Economic Development and Planning, hosted by the Economic Commission for Africa (ECA). The meeting considered issues of debt, aid and foreign investment, among others, and made a strong statement on the need for additional debt reduction efforts. As noted below, additional statements and background documents are available in the following section on the ECA web site (http://www.un.org/depts/eca/joint/index2.htm). Documents of particular interest include: an Aide-Memoire on The Challenges of Financing Development in Africa (http://www.un.org/depts/eca/joint/aidemem.htm), and a summary background statement on Africa's External Debt (http://www.un.org/depts/eca/joint/africa.htm).
The full text of the Ministerial Statement (in English and French) as well as speeches, press releases and other relevant documents from the Conference can be found on the ECA Website at http://www.un.org/depts/eca.
PLEASE NOTE: The Website will shortly feature the English and French text of a presentation made to the Conference by the ECA Executive Secretary, Mr. K.Y. Amoako, on the economic and social situation in Africa. The document presents the findings of ECA's 1999 Economic Report on Africa. The Foreword, Introduction and Executive Summary of this Report will be available on the Website early next week.
For further information, please contact:
Peter K.A. da Costa, Senior Communication Adviser, Economic Commission for Africa (ECA) United Nations, P.O. Box 3001 (official) or 3005 (personal), Addis Ababa, Ethiopia Tel: +251-1-51 58 26 Fax: +251-1-51 03 65 E-Mail: firstname.lastname@example.org, email@example.com Web: http://www.un.org/depts/eca
May 6, 1999
ECA Press Release No. 75
ECA MINISTERIAL CONFERENCE KICKS OFF WITH STRONG WORDS ON AFRICA'S DEBT OVERHANG
Addis Ababa, 06 May 1999 (ECA) - Strong words on Africa's debt crisis marked the opening here today of the Joint Conference of African Ministers of Finance and Ministers of Economic Development and Planning, convened under the theme "The Challenges of Financing African Development".
In his opening statement to the Conference, Ethiopian Prime Minister Meles Zenawi, acknowledged the large number of declarations made and initiative s launched by creditor nations and institutions -- including the World Bank and International Monetary Fund-led Highly Indebted Poor Countries (HIPC) initiative.
Although it constituted "a step forward towards addressing the problem", the Ethiopian leader said practice had shown that the steps envisaged by HIPC were "half-hearted and far from adequate", a fact he believed was recognized by the authors of HIPC themselves.
"What I find most objectionable about this initiative and most of the other debt reduction initiatives, is that they are being used as the whip to enforce unquestioning acceptance of the economic orthodoxy, the so-called Washington consensus, that is being promoted by some international financial institutions", said Prime Minister Zenawi.
Suggesting that the failure of this orthodoxy as well as the recent crisis in Asia had brought renewed scepticism, Prime Minister Zenawi added: "The choice which we are left with under HIPC is thus to either abandon all independent and rational thinking in economic policy making or wallow in the quagmire of unsustainable debt. It is a choice between the devil and the deep blue sea. To use the whip of the debt overhang to enforce this orthodoxy in debt-ridden countries, is in some ways tantamount to blackmail and is therefore both unviable and immoral."
Zenawi stressed the need for African countries to "seek solutions, mostly relying on our own resources and on our own resolve and determination, to the obstacles we face to our economic development".
Some 500 participants from the public, private, inter-governmental and bilateral partner sectors are participating in the three-day conference - which combines two biannual major gatherings of the Economic Commission for Africa (ECA).
In his opening address, ECA's Executive Secretary, Mr. K.Y. Amoako, commented that of all the finance issues being considered by the Conference, "the debt one is most likely to move soon". Expressing his hope that the increasingly realistic partner community would be more receptive to a clear position from Africa, Mr. Amoako urged the meeting to work constructively towards the best possible position on resolving the debt crisis. He informed participants that ECA planned to consolidate the Conference's recommendations and views into common positions to feed into the upcoming G-7 Summit and the next Joint Annual Meeting of the World Bank and IMF.
UN Secretary-General Kofi Annan, whose message to the Conference was read on his behalf by ECA Deputy Executive Secretary Ms. Lalla Ben Barka, repeated the thrust of his 1998 report to the UN Security Council on Africa. Stressing that significant movement on lifting the continent's debt burden would require sustained political action at the highest levels, he urged that "the scope of HIPC should be greatly expanded to enable more African countries to qualify". Mr. Annan reiterated that "all creditors should convert into grants all remaining official bilateral debt of the poorest countries, and creditors should consider clearing the entire debt stock of the poorest African countries".
The need for an urgent resolution to the African debt crisis was also echoed by Organization of African Unity (OAU), whose Assistant Secretary-General, Mr. Vijay Makhan, also stressed the "imperative for [African] governments to take the lead and initiative to press the case f or greater coherence in global economic management and for addressing the imbalances of globalization".
Aside from the debt question, and under the rubric of the Conference theme, a number of issues are being addressed, including Official Development Assistance, Capital Flight, Domestic Resource Mobilization, and the Impact, Lessons and Policy Implications for Africa of the East African Crisis.
The Conference continues with two panel discussions featuring senior officials and key policy makers. The first panel on "Policy Reforms and Aid Effectiveness" began early this afternoon, featuring: Ms. Eveline Herfkins, Minister for Development Cooperation of the Netherlands, Professor Paul Collier, Director of the Development Research Group, the World Bank, and Ms. Carol Lancaster, a former Deputy Administrator of the United States Agency for International Development who has just published "Aid to Africa: So Much to Do, So Little Done". Mr. Y. Seyyid Abdulai, Director-General of the OPEC Fund, moderated the panel for International Development.
Tomorrow's panel, entitled a "Review of the African Debt Situation and Domestic Resource Mobilization in Africa", will be moderated by Mr. Ahmedou Ould Abdallah, Chairman of the Global Coalition for Africa. Panelists will include Mr. Rubens Ricupero, Director-General of the United Nations Conference on Trade and Development (UNCTAD) and Mr. Ernesto Hernandez-Cata, Associate Director of the Africa Department of the IMF.
Also scheduled for tomorrow are three plenaries: a Report on the Current Economic and Social Situation in Africa; a Ministerial Policy Debate on t he Economic and Social Situation and the Challenges of Financing Development in Africa; and the consideration of the report of the technical meeting of experts which preceded the Conference (30 April - 4 May 1999).
The plenary discussing the African economic and social situation will draw on findings and analysis from ECA's 1999 Economic Report on Africa (ERA 99), which this year evaluates performance (outcomes) and policy efforts in terms of progress towards a well-defined long-term goal of reducing poverty by half by the year 2015, and further the sustainability of observed outcomes. The main findings of ERA 99 will be summarized by the ECA Executive Secretary.
One of the greatest threats to poverty reduction and sustainability in Africa is the HIV/AIDS pandemic. With only 10 per cent of the world's population, Africa accounts for 63 per cent of global HIV/AIDS cases. In this context, the plenary will also feature a presentation by the Director of the United Nations Programme on HIV/AIDS (UNAIDS), Dr. Peter Piot, who will highlight the magnitude of the problem on the continent, its complex economic and social impact, and the role that African policy makers and development partners need to play in addressing the challenges posed.
The Conference concludes on Saturday with the adoption of the report, as well as a Draft Ministerial Statement.
May 8, 1999
ECA Press Release No. 76
CONFERENCE ENDS WITH CONCRETE PROPOSALS ON DEBT, ODA, CAPITAL FLIGHT
Addis Ababa, 08 May 1999 (ECA) - African Ministers of Finance and Economic Development and Planning have ended a three-day conference with concrete proposals on what Africa and its partners need to do to address some of the continent's key development challenges.
In a Ministerial Statement issued today at the end of the conference - convened under the theme "The Challenges of Financing African Development" - the Ministers called for wide-ranging measures to address the continent's debt burden, dwindling overseas development assistance (ODA), the need for foreign direct investment (FDI), and the scourge of capital flight.
On Africa's external debt, the Statement noted that there was a "consensus both on the defects of current arrangements to cope with the debt crises as well as on the need to substantially revise and augment" current measures. Among other things, it called for:
- The restructuring of the Heavily Indebted Poor Countries (HIPC) initiative to "provide deep, broad and fast relief, with greatly relaxed eligibility criteria, greatly shortened period required to benefit under the initiative, and substantially greater resources";
- G-7 countries to completely cancel debts arising from bilateral aid for the poorest countries;
- Moves by the G-7 countries to improve on the current threshold of 80 per cent to cancellation of at least 90 per cent of all other bilateral debt of the poorest countries;
- Agreement by leading IMF and World Bank countries to refinance HIPC through gold sales "without hurting the interests of Africa's gold exporting countries";
- Measures to ensure that debt relief for the poorest countries should not be provided at the expense of ODA funding for development programmes and projects;
- Exceptional debt relief - with the possibility of full cancellation of debts -- for post-conflict countries, as well as countries affected by natural disasters and spillover effects of conflict situations in neighbouring countries;
On ODA, the Ministers stressed that despite internal donor community pressures to reduce aid, and in view of its importance in achieving fundamental development objectives at a time when Africa was undergoing recovery, aid should be expanded, not contracted. To address the problem of aid dependency, Ministers stressed the importance of "improved African ownership and commitment to aid-funded projects and programmes, the need for strengthening institutional aid delivery mechanisms, the importance of a strategic vision of aid-funded activities, and the importance of reforming the current consultative fora".
On FDI, it was noted that despite commendable efforts made by many African countries to implement economic and financial reforms, FDI flows to most of them remained marginal. As such, the Ministers affirmed the need to accelerate trade and investment, and stressed that trade, development investment and its financing - including ODA, debt relief and private domestic and foreign financial flows - are intertwined.
A key aspect of the Conference follow-up strategy is that these and other positions on the international dimension of financing Africa's development will be conveyed by the Economic Commission for Africa (ECA) - which organized the conference - to the Development Assistance Committee of the Organization for Economic Cooperation and Development (OECD) as well as to the upcoming G-7 meeting in Cologne, Germany in June.
At a press conference after the close of the Conference, ECA Executive Secretary Mr. K.Y. Amoako told journalists that a meeting would be convened in Addis Ababa in late July this year to flesh out the technical modalities of the proposals made at this week's Conference. The meeting would form a part of the HIPC review process.
The Ministers recognized the dramatic negative impact of capital flight on development, and resolved to "take the necessary steps to stem and reverse capital flight, including preventing macroeconomic policy lapses or policy inconsistencies, which are likely to trigger, or contribute to, capital flight." They also resolved to strengthen anti-corruption measures "using political, administrative, diplomatic, legal and economic policy instruments targeting the bribing agents, who are resident overseas in partner States, and the recipients of corruptly obtained funds in Africa".
In addition, the Statement took note of the need to draw lessons from the Asian crisis. While integration into the global financial system remained a fundamental objective, it was stressed that "a globalized financial economy carries risks, which must be managed both domestically and internationally".
Five hundred participants from the public, inter-governmental and bilateral partner sectors - including some 30 ministers and several governors of African central banks -- participated in the three-day conference, which combined two major biannual ECA gatherings.
The Conference also commended ECA's 1999 Economic Report on Africa (ERA 99), which this year evaluates performance (outcomes) and policy efforts in terms of progress towards a well-defined long-term goal of reducing poverty by half by the year 2015, and further the sustainability of observed outcomes. The main finding of ERA 99 is that despite the recent economic growth and progress in economic policy reforms, most African countries lack the fundamentals for sustained future growth at rates required to realize globally-agreed poverty reduction targets.
From: firstname.lastname@example.org Date: Sun, 9 May 1999 10:57:08 -0500 Subject: Africa: Finance Ministers Conference
Editor: Ali B. Ali-Dinar
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