East African countries on Friday called for a bigger say in the running of the International Monetary Fund (IMF) and hailed a new era in relations with the global lenders new chief, according to the World Bank press review Monday.
IMF Managing Director Rodrigo Rato met leaders of Uganda, Kenya and Malawi, and finance ministers from Rwanda and Burundi during a regional meeting at the end of his first African tour since taking office two months ago.
– We see that we are now on the threshold of a new era in our relations between Africa and the IMF, Malawis President Bingu Wa Mutharika said after the discussions. – We have found the new managing director very receptive, very responsive but also sympathetic to the problems we have.
A communique by the leaders called on the fund to be “careful and responsible” in the way it publicly assessed countries economic performances, which influences private investment and donor perceptions. They also urged Rato to improve Africas representation in the IMF. African nations are represented by just two executive directors on the funds 24-member board, even though nearly half of all IMF loans go to the continent.
Ratos support for homegrown African reforms, more effective assistance and debt relief addressed criticism that the Washington-based IMF was out of touch with problems in Africa. – It is very refreshing to us, Malawis leader, Bingu wa Mutharika, said. – It is what we have been saying all along. For us it is signaling that there is some winds of change at the IMF.
Nearly half of all IMF programs focus on Africa, where poverty and attendant social ills outstrip development efforts for the more than 800 million people. During the trip, Rato made clear he wanted to be seen as an advocate for Africa rather than an agent for world powers in dealing with the troubled continent.
Agence France Presse and Reuters further note that Rato said East African states have made big strides towards sound economic policies in recent years, but have not yet achieved growth rates needed for major advances in the battle against poverty.
Combined, the countries economies have been growing about 7 percent on average over recent years, compared with 3 percent growth for Africas economic powers, Nigeria and South Africa. Rato said Africa must take advantage of a global recovery, forecasting 4,5 percent growth for this year and next.
He forecast sub-Saharan Africa growth would likely exceed 5 percent next year, supported by improved economic stability in many countries, rising commodity prices and a recovery in agricultural production following severe droughts in 2003.
He said, however, the challenges Africa faced remained enormous, with poverty and conflict stunting development, and HIV/AIDS still taking its toll. To fight these threats, he said, Africa needed higher rates of private investment and more effective use of public resources, including donor support.
The Panafrican News Agency (08/06) adds Rato explained that improper policy management continues to deny many African economies the desired growth, resulting to high poverty levels and a slump in foreign investments.
Addressing a public dialogue with MPs, the business community and civil society, IMF Managing Director Rodrigo de Rato cited Uganda as “a classic example” of African countries that have registered economic progress but continue to suffer high poverty levels.
– The lack of proper policy management and failure to scale down on public expenditure are issues that need to be addressed by many African governments, Rato observed. Reacting to criticisms that IMF aid was not helping poor African countries, Rato agreed that “developing economies are angry with us, accusing us of not being humane.”
– But no African country has reduced poverty without balanced macro-economic policy. If Africa wants to reduce its vulnerability… it will have to increase debt sustainability, Rato said. Responding to calls for intervention in the politics of beneficiary countries, Rato maintained that the “IMF would not get involved in instituting democratic changes in governments.”
– It is not our core business. We are not in that business. But society has to realize they have to demand for good governance,” he added.
The Monitor (Uganda) meanwhile comments that Rato is wrong to suggest that the IMF should not get involved in attempting to institute changes of government. The IMF needs to recognize that good governments respect democratic contracts with the people, encourage the enjoyment of civil liberties and abhor political violence and repression of dissent.
The IMF needs to recognize that good governments choose good policies. The IMF needs to recognize that it can help create good governments, notes the opinion piece.
Kilde: www.worldbank.org
