- For the first time since 1998, the economy of Côte d'Ivoire last year grew faster than its population. Analysts speak of a "recovery" of the Ivorian economy.
Dominique Strauss-Kahn, leader of he International Monetary Fund (IMF), in an extraordinary step has written a letter to "members of the international financial community," to inform about recent economic developments in Côte d'Ivoire, and the country's relations with the Fund.
"Still emerging from its socio-political crisis, Côte d'Ivoire has made significant progress in restoring macroeconomic stability, strengthening economic growth, and normalising its relations with the international financial community," Mr Strauss-Kahn informs, in an attempt to attract investors and promote halted debt restructuring processes.
Since 2007, favourable terms of trade had supported "the recovery in economic growth," he adds. New IMF statistics showed that, in 2009, growth was estimated to "have accelerated to 3.7 percent, increasing per capita income for the first time since 1998." Economic activity had been little affected by the global financial crisis, benefitting from high world cocoa and oil prices, as well as from an abundant harvest and strong oil extraction.
Also other economic indicators were now favourable, the IMF leader informed. After rising in 2008, inflation had declined, with consumer prices falling by 1.6 percent during 2009 as food, energy and transport prices eased. Fiscal policy had been restrained despite large spending needs to overcome the internal conflict and strengthen government services, as well as to clear large arrears to external creditors. The external current account surplus was estimated to have doubled to 2.1 percent of GDP in 2009.
Mr Strauss-Kahn also emphasised that Côte d'Ivoire was receiving IMF support for its economic policies. Initially the Fund provided support through Emergency Post-Conflict Assistance in 2007-2008. Since March 2009, Ivorian authorities have embarked on a comprehensive IMF-supported reform programme. The program aims at achieving stronger sustained growth, reducing poverty, and restoring fiscal and external sustainability, including a restructuring of public external debt.
The IMF and the World Bank also determined in April 2009 that Côte d'Ivoire qualified for debt relief by reaching the decision point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. However, debt relief negotiations with major creditors have seen little progress.
As the Ivorian conflict still has not found its solution and national elections now are five years delayed, investors, donors and creditors still are shy to commit to the Ivorian government. There is still no guarantee fighting will not break out again and distrust in President Laurent Gbagbo, who repeatedly prolongs his presidency without elections, is widespread.
Since the civil war broke out, the Ivorian population has been victim of not only armed incursion, but also of a decade-long economic detraction. While the IMF sees increased international financial engagement in Côte d'Ivoire as a way forward for the Ivorian people, others demand President Gbagbo must organise elections and end the Ivorian conflict before investments in the country can return.
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