congo gets $36 mill from imf

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    Congo receives $36m from IMF


    The peace deal has not stopped the jockeying for resources
    The Democratic Republic of Congo (DRC) has won $36m (£23m) of aid for development spending, despite having missed several of the conditions being demanded in exchange.
    The money takes the amount loaned by the International Monetary Fund (IMF) to the DRC to $569m of a total $786m available.

    The loan is intended to help the country recover from three decades of despotic rule and 12 years of economic contraction.

    Internal conflict within the massive country has dragged in seven other African nations, all of whom have - to a greater or lesser extent - taken advantage of its rich reserves of oil, timber, coltan, copper, gold and other resources.

    'Turnaround'

    The IMF recognised that, in this environment, economic changes would be difficult, praising the government in Kinshasa for its "bold macroeconomic and structural reforms".

    Both sides want to control the oil, gold and diamonds produced in Ituri and the local population is caught in the middle



    More on the internal struggle for control of resources
    "The turnaround in economic and financial policies has already yielded significant results," said IMF First Deputy Managing Director Anne Krueger, noting that 2002 was the first year of growth since 1989.

    "Lasting peace is a crucial condition for the economic reconstruction and development of the DRC," she stressed.

    Under the current government of President Joseph Kabila, inflation, for example, is down to 10% from more than 500% under his father's regime.

    Resource wars

    But Ms Krueger also urged the government to do more to strengthen its tax base and to control public spending - a difficult task in a country which throughout its history has been a byword for corruption.

    Countries like the DRC are forced to take on new debt in order to be eligible for debt relief

    Jubilee Research
    The situation is further complicated by the fact that much of the DRC remains under the control of rebels opposed to the Kinshasa government - or of neighbouring countries including Uganda and Rwanda, whose own disagreements have recently spilled over the border into the northwestern Ituri province.

    Both are working to solidify their hold on the rich province's resources in advance of the implementation of peace agreements reached in South Africa earlier in March.

    The IMF warned the government that it must also work to stamp out money laundering and terrorism finance - as well as urging the international community not to backslide on its financial commitments, lest the country slide further into chaos.

    Debt upon debt?

    But critics of the IMF say that throughout the reign of dictator Mobutu Sese-Seko, who ruled till his death in 1997, the Fund was quite prepared to lend it money despite being well aware that most of it was going into the pockets of the regime's domestic and foreign supporters.

    The DRC currently owes more than $12bn to international creditors, while its annual output is just $32bn - 23 cents a day for each of its 55 million people.

    Debt reduction lobby groups such as Jubilee Research also point out that winning the $786m poverty reduction loan was a prerequisite for being admitted to the international debt relief programme, HIPC.

    "Countries (like the DRC) are forced to take on new debt in order to be eligible for debt relief," the organisation says.




 
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