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Note: This document is from the archive of the Africa Policy E-Journal, published
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Africa: Finance Ministers Conference
Africa: Finance Ministers Conference
Date distributed (ymd): 990509
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
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).
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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: dacosta@un.org, dacosta@igc.org
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.
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC's primary
objective is to widen the policy debate in the United States
around African issues and the U.S. role in Africa, by
concentrating on providing accessible policy-relevant
information and analysis usable by a wide range of groups and
individuals.
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