Mr. Agustin Carstens, Deputy Managing Director, IMF,
Honourable Ministers and Governors,
Members of the Diplomatic Corps,
Distinguished Participants,
Ladies and Gentlemen,
1.
May I on behalf of the Government of the United Republic of
Tanzania and on my own behalf, take this opportunity to welcome
you all to Tanzania and to this important regional seminar on the role
of IMF in low-income countries. We are also quite gratified that, in
spite of your busy schedules, you have spared your precious time to
attend this seminar as an expression of your practical commitment to
poverty reduction in the countries of our region.
2.
Mr. Chairman and delegates, Low-income countries faced
many challenges, poverty being the most difficult. But there is no
doubt that this is also a time of great opportunity. There is now a
consensus among us about the road map in facing the challenges.
Many low-income countries have adopted PRGF supported programs
and are implementing policies aiming at delivering macroeconomic
stability and in some countries growth has been realized. One of our
main challenges is on how we can mobilize domestic resources for
financing our programs given the frequent external shocks such as
drought, floods and low international commodity prices and dwindling
aid. We should discuss how we can use the Fund to respond better
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to the real needs of our countries and to help achieve the high and
sustained growth needed to reduce poverty and make decisive
progress towards the Millennium Development Goals. The Fund
should continue in the medium term to be a valuable supporting
institution to address the low-income countries’ own development
agenda in the context of a more challenging global set up.
Low-income countries are voluntary members of the IMF.
As
members, we have benefited from services of the fund in many ways
and over many years. I believe, we are satisfied with this relationship
generally, otherwise we would not remain as members. Perhaps we
may have problems and ideas which could help in improving
whatever may be our status quo, or future relationship with and
expectations from the IMF. This is why, we are here today. I suggest
that we take this opportunity to inform the IMF, represented today by
its Deputy Managing Director, Agustin Carstens and his other senior
colleagues, about what we think they can do for us tomorrow; in the
medium term.
We can do a good job at it, by speaking from
grassroot experience, not from ideological stances; from an analysis
of the problems we face today as a stepping stone to solving them
tomorrow, not by pointing fingers or finding fault. At this juncture, I
must congratulate the IMF for mooting the idea of this meeting and
for sending such a high powered delegation to listen to us. Welcome
Mr. Casterns and please open your ears!
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3.
Mr.
Chairman
and
delegates,
most
of
the
countries
represented here today are the regional Highly Indebted Poor
Countries (HIPC). Others, like Kenya or Zimbabwe, have passed this
classification, but do in reality still have very many poor people,
among their populations. They have a contribution to make for this
seminar seen from their specific experiences and realities. One of
the issues which we can not neglect is the role of our governments in
managing our economies and creating conditions necessary for
overcoming our poverty. All of us recognize the presence of abject
poverty in our countries and are very eager to get rid of such a status.
We know that even in Africa some countries are richer than others;
that in Asia some countries which became independent at about the
same time with us are today far richer than ours. In both cases the
IMF was involved as advisor or donor in one form or another. We are
not certain whether these countries did better because of or in spite
of the IMF. Some people say both, some say none, some say either.
Perhaps we will hear more about this from Mr. Casterns. We too,
have something to say from our own experiences.
Mr. Chairman and delegates, whatever the situation, we can safely
say that successive governments and regimes in emerging market
economies have had the following characteristics in their recent
histories: Strong political leadership, democratic governances as
defined by the local people themselves, strong national cohesion and
consensus on major issues, strong macroeconomic balances, strong
export oriented, sustainable economic growth trends, and limited or
harmless interference by foreign governments and agencies in their
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internal affairs. While the IMF can be cited as one of the influential
external agencies in the South and South East Asian countries, the
same may not be so true of countries such as China. There, the role
of the Community Party and Government in directing the economy
continues to be paramount, and is today one of the fastest growing by
world standards.
characterized
It can also be said that, the Asian tigers were
by
strong
governments
practicing
homemade
democracy. Is it possible to say that in Africa the IMF weakened
governments by undue pressures directed at our governments to get
them fulfill conditionalities which were perhaps ill-timed or irrelevant
or misconceived and therefore harmful? When we dismantled our
parastatals in a swoop by selling them lock stock and barrel, did we
not at the same time lose political power or our economic source of
budgetary support through lost dividends? Did we not in the process
create more unemployment and loss of skills created through past
public training of our people? Did we by privatization and
liberalization of trade not weaken our cooperatives and the
democratic governance that was their way of life? Did we not expose
our export crop producers to the manipulation of clever businessmen,
local
and
foreign
who
offered
lower
commodity
prices
………………………………………… thus exacerbating rural poverty?
When we embraced globalisation, did we not do harm to our farmers
who due to opened up markets, WTO style found themselves unable
to compete with rich farmers in Europe and America who enjoy
subsidies and higher prices? Don’t our farmers now earn less and
less from their exports in spite of WTO? Are their incomes not lower
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and poverty higher than before WTO? If the benefits of globalisation
are as is the argument indisputable, is it not possible for the IMF and
other international economic agencies to help the WTO, the
developed countries and world business communities generally to be
more considerate so that the poor share the cake equally or
substantially?
We are aware that, in all our countries the destruction of the
environment is progressing at an alarming rate and that its poverty
outcomes are frightening. Governments have the responsibility to
stop this form of rape. But the crisis is now so immense that willing
governments need more advice and money to stop further destruction
and thus more impoverisation. If those who are doing more harm to
the environment can dilly-dally or be left to get away with murder,
such as when it comes to signing international treaties on
environmental issues, can the IMF sit back with their hands folded?
Can they not even intellectually arm or finance the poor to enable
them to attend important international forum with which to make
noices or protests such as happened in Mexico last year on trade?
Mr. Chairman and delegated, we all know that, regardless of
whether or not we are HIPCs or post HIPCs, the reforms we are
undertaking are yet to be comfortably felt at grassroot level, with
notable exceptions such as in universal primary education and rural
roads. Even in those areas which show clear successes, problems
still remain, such as inadequate physical and academic facilities. In
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areas where cost sharing is being practiced, such as in water supply,
and health care, there are serious shortcomings, arising mainly from
inability for the poorest to afford current minimalist rates. At the same
time our budgets are unable to further subsidise the poor, in spite
even of budgetary donor support to a limited extent.
Achieving
higher
economic
growth
rates
through
increased
investments, local and foreign in strategic sectors is often cited as a
sure way to combat unemployment and poverty in our countries. It is
also an important way of achieving peace and controlling crime. The
IMF could perhaps take initiatives to operationalise these ideas over
a sustained period and on a country by country by country basis. It is
important to address the question of creating a local middle class to
act as a market, a better tax base, and cushion against social and
political unrest arising from the gap which is an inevitable outcome of
the directions our economies are headed for as a consequence of the
current measures which we are taking in partnership with the IMF and
others.
Mr. Chairman and delegates,, I would now like to share with you
some thoughts about how low income countries can best address
poverty in the long run, challenges facing the region and opportunities
in developing countries like ours. Let me also attempt to outline how
the IMF can help us to eradicate poverty and to accelerate growth
and raise living standards of our people.
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The Challenges before us are many, but I would like to pose the
following and suggest that you ponder over them during the
seminar:
First, how should the Fund further support our remaining reform
agenda to accelerate poverty reduction and achieve the MDGs.
Second, how can the Fund work with the broader international
community in order to make substantive progress in multilateral trade
negotiations in the context of the Doha Round, after the disappointing
outcome at Cancun. As I believe you will agree with me, the unfair
international trade system is today probably the biggest hurdle in the
road to prosperity for most developing countries.
We in low-income countries would continue to enhance cooperation
and seize the opportunity provided by the IMF to further enhance our
growth prospects and poverty reduction through sound economic
policies and good governance. We have been receiving support from
the IMF under the framework of enhanced consultations. The IMF
has been re-engineering its approach to the management of policy
changes in our countries for the past many years. The consultation
process has worked well in some countries while in other countries
has delayed policy reforms and programs implementation due to
cumbersome procedures and benchmarks to be met. Based on past
experience, there is a need to review the practice so as to make the
process less burdensome to us. The idea is to have minimum
conditionality that would enable us timely access to resources from
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the Fund to address structural constraints and meet the MDGs. It is
also important for the Fund to appreciate the technical capacity that
exists in our countries in terms of analysis and policy formulation.
Issues in the program design specific for low-income member
countries and incorporating the lessons and experience for
effective program design and Fund financing in the future. As
you will note, most of our countries are about graduating from
post HIPC PRGF. The issue then is what follows next.
The low-income countries faces may challenges, but there is no
doubt that this is also a time to great opportunity. There is now
a consensus among us about the road map in facing the
challenge.
May low-income countries have adopted PRGF
supported programs and are implementing policies aiming at
delivering stability macroeconomic and in same countries
growth has been realized.
Mr. Chairman and delegates, our being here today is a result of the
good effort and preparations by the IMF which organized and
financed this seminar. I would like at the outset to pay special tribute
to them as well as the Governments of Sweden and the United
Kingdom as co-sponsors.
I thank you all for your attention.
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