ECA Ministerial Conference Kicks off with strong words on Africa's debt overhang: thirty-third Session of the Commission/twenty-fourth meeting of the Conference of Ministers/ Seventh Conference of African Ministers of Finance

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CECA Ministerial Conference Kicks off with Strong Words on Africa's Debt Overhang

ECA Ministerial Conference Kicks off with Strong Words on Africa's Debt Overhang

Thirty-third Session of the Commission/Twenty-fourth Meeting of the Conference of Ministers/ Seventh Conference of African Ministers of Finance

Addis Ababa, Ethiopia 6-8 May 1999

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 initiatives 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

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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 for 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 the 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 ExecutiveSecretary. 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.

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The ECA Website is regularly updated with statements and other relevant documents from the Conference. You can visit the site at http://www.un.org/depts/eca.

For more information, please contact:

Peter K.A. da Costa

Senior Communication Adviser

Economic Commission for Africa (ECA) United Nations

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P.O. Box 3001 (official) or 3005 (personal) Addis Ababa, Ethiopia

Tel: +251-1-51 58 26 Fax: +251-1-51 03 65

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