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Thursday, 2 May, 2002, 09:19 GMT 10:19 UK
Hope for the Congo
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by Andrew Walker
BBC Economics correspondent in Kinshasa

This is one in a series of pieces from Africa, where Andrew Walker is travelling with IMF head Horst Koehler.

The International Monetary Fund chief has held out the prospect of new financial help for the conflict-torn Democratic Republic of Congo.

Output per person is $85 per year - lower than in 1990.

IMF Assessment
Speaking during a six hour visit to the capital, Kinshasa, the IMF's Managing Director Horst Koehler also said he thinks that the country's foreign debt will not be a problem.

He said he thinks Congo will qualify for extensive debt relief under a scheme run by the IMF and the World Bank.

Debt problems

Congo owes a total of $13bn (8.2bn) to the IMF and other creditors.

It was built up during the Cold War years when the country, then known as Zaire, was run by the kleptocratic dictator Mobutu Sese Seko.

But the country has been cut off from the IMF and the World Bank since the early 1990s.

It's widely thought that Western donors knew perfectly well that their aid money was being pillaged by the previous regime.

Speaking at a press conference in Kinshasa, Mr Koehler acknowledged that the IMF was open to criticism for its role in the country's unhappy history.

But he said he wants to help the Congolese people overcome the difficult situation they have been living through for so long.

Aid promises

Mr Koehler gave no figures for debt relief or IMF financial assistance.

But the Congolese Economy and Finance Minister Matungulu Mbayamu Ilankir told the BBC that he anticipates $10bn (6bn) worth of debt relief.

On the unhappy history of the debt, he said that many Congolese people feel they were abandoned by the rich countries after the Cold War. But he wants to think more about the future.

Economic decline

First, however, Congo will have to perform to the IMF's satisfaction in terms of economic reforms.

It is likely to get new soft loans during this period.

The IMF lending that Mr Koehler held out would be under an arrangement called the Poverty Reduction and Growth Facility.

Mr Matungulu said that is likely to be $730m.

Once that has been agreed, probably in a few months, he said the World Bank and rich country governments are likely to chip in. Total loans, including the IMF's would be approaching $3bn.

A recent assessment by the IMF said that since 1990, the Congo economy had suffered a vicious spiral due to economic mismanagement, political conflict and war with the result that the economy is now smaller than it was then.

In 2000, the IMF said, output per person was equivalent to just $85 a year, or 23 cents a day.

Congo's finance minister, Matungulu Mbayamu Ilankir
"The idea is to create this environment that is conducive to investment"
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