|The Courier N° 133 - May - June 1992 - Dossier : Environment and Development - Country Reports - Côte d'lvoire - Papua New Guinea (EC Courier, 1992, 104 p.)|
'It will take work to reach the level of other countries'
In this interview with the Courier, the Prime Minister of Cd'lvoire explains the actions of the Government, during the current period of political and economic uncertainty.
· Prime Minister, I should like to start with current events, if I may. I should like to ask you to look beyond any judgments made in the heat of the moment about those events, and beyond the violence, open or latent, affecting Cd'lvoire at the moment and say what you see as the root cause of this trouble. Some analyses, for example, suggest that no-one has put any' blame on State powers based on a single-party system, particularly when it comes to the administration, the State media, the army and the police force.
-I am deeply sorry about the violence in February. But I should like to make clear once again that Cd'lvoire has always been a State of law, that it has had a Constitution providing for a multiparty system since 1960, that it has had pluralist elections, albeit in the framework of a single party, since 1980 and that a multiparty system was actually set up in April 1990. So as far as we are concerned, your general analyses don't apply to this country.
'The State is working better and more efficiently'
We completely overhauled the administration a year ago. People now feel younger, the authorities are more dynamic and the private investors who come to see us here agree that the State is working better and more efficiently. Violence is something we deplore, because we set great store by a State of law. We wish to continue to nurture and develop the pluralist democracy set up, as I said, in April 1990-and we shall give it all we've got. But it is also the authorities' duty to protect people and property so the Government will do whatever is required here too.
· What about the other things - the army and the police and the State media:' Have you completely liberalised in these areas too ?
-When it comes to the media, Cd'lvoire is one of the rare countries in Africa south of the Sahara to have two public TV channels without any State interference in programme management.
The army is a professional body whose job is to protect our borders and ensure that the citizens feel safe from the problems which some of our neighbours have had for many years and which have led to a large influx of refugees coming here. So as far as we are concerned, when it comes to the army and the press, the problems you mentioned don't apply to this country.
Relaunching the economy
· What major reforms have there been since you became Prime Minister two years ago ?
-The answer to that could take a very long time, but I shall do my best to summarise. First of all, I was made Chairman of an Inter-Ministerial Committee on Economic Affairs in April 1990 and Prime Minister in November of that year, so I have indeed been coordinating the nation's economic management for nearly two years now.
The guidelines of our economic policy are very simple-to get our production apparatus off the ground again despite an international economic and financial crisis which of course has repercussions at national level too. We all know what caused the crisis. The terms of trade declined suddenly. In particular, cocoa and coffee prices dropped by two thirds in three years, depriving us of important export revenue. In spite of that, 1 think our policy has contrived to stop the decline in public finances and even stabilise them, because, in 1990, we cut the public sector deficit by 5% of GDP. I don't know any other country in the world which has managed that. If the industrialised countries manage a point or half a point of GDP, the Group of Seven congratulates them. And we managed five points in 1990 and we think we made almost two or two and a half points in 1991 ... We had to do it too, so that we could strike a fresh macro-economic balance in our budget and our finances.
While applying this policy, we also ran sectoral programmes to make the economy more efficient. We had financing and loans from the African Development Bank and the World Bank to help us here, particularly with farming and energy and other schemes. These programmes went well and recently we overhauled the administration and developed human resources, with technical and financial support from our external partners too. We got one of the loans to improve competitiveness in the financial sector, because the banking system had also been hard hit by dwindling cash flow. It was impossible to cash a cheque at one stage because the banks had no liquid assets and several of them had to close down. But all that is more or less behind us now.
The stabilisation of sectoral restructuring is going to mean we can start moving along the path to strong, lasting growth. That is one of the aims of our current privatisation policy, whereby we can release new, extra resources both to maintain our infrastructure-some of the best on the continent-and go in for new, productive investments. We are now in the active phase of privatisation, a committee is working on a range of dossiers and 1992 will see a series of former State and semi-public firms go private. All that will help get the Ivorian economy off the ground again.
· Boosting export trade is one of the keys to economic revival and growth. What outlets are you aiming for with a strong export policy?
-As you know, cocoa and coffee were more than half the country's export trade until very recently, but they only brought in just over a third of our export revenue in 1991.
We have gone into diversification in a big way with cotton, palm oil and bananas-products also destined for markets in the North, if you like-but at the same time, industry has developed a great deal and we are starting to try and capture regional markets. The countries around us like Ivorian products. We now have an aggressive policy here and the drive for regional integration is a help.
'Competitive with everybody'
· The policy of growth and competitiveness which you want to apply is taking place against a background of poor domestic demand and heavy competition from abroad and particularly from the countries of South East Asia. How are you going to cope with these two handicaps?
-Competition from South East Asia is everybody's problem, not just Cd'Ivoire's. We want to be competitive with everybody, on regional markets and international markets alike. Our idea is to be universally competitive-which is why we have a structural adjustment and competition plan which has gone a long way to freeing trade and distribution. Things are going well here and the figures bear this out, because our exports are still going up in spite of the crisis.
It is growth which will make domestic demand grow. I do not share the view of economists who think demand has to be created by injecting money, because, ultimately, all that leads to is inflation or a deficit in the balance of payments. That is obvious from one or two of our neighbours and countries a little further afield which have an annual inflation rate of 1 000% or 2 000%. I do not know what benefit people with modest incomes may derive from recovery based on demand. As we see it, recovery has to be based on investments and exports.
· Are you counting on national investments first and foremost or on investments from abroad ?
-Savings can be national savings or foreign savings. It doesn't matter. What we want is maximum savings so the investment rate can go up.
· But they still say that Ivorians don't invest enough at home, so perhaps they have no confidence in their own economic situation. You know better than anyone that foreign investors will only invest their money if they think nationals believe in their own Government's investment policy. What do you think about that?
-I'm surprised to hear it, because, while there are foreigners coming here to invest, I can see no reason for Ivorians not to believe in their country. I don't have the exact figures, but we have plenty of small and medium-sized firms, young Ivorians using their savings and running up debts with the local banks to make a go of their businesses.
· So what about the report that the Ivorians have a lot of money abroad and, if only they could spend some of it on investments in their country, the economic situation would improve far more quickly ?
-You hear so many stories. I should like to see the statistics on the Ivorians' assets abroad. I heard that tale in 1990 when I arrived at the head of the Government and asked people to make an effort. 'Listen', they said, 'get them to bring the capital back'. I don't know where all this capital was. But what I do see is that activity is getting going again now and that the privatisation programmes are generating enthusiasm among foreigners and Ivorians alike and I think we should continue along these lines. If by chance there were a mass of resources abroad, I think the economic policy we are following at the moment should provide adequate assurance for all and sundry.
Exports halved in two years
· Where does the Government stand on the coffee and cocoa negotiations which have now reached stalemate ?
-We hope to see an agreement, of course, and we hope to see the work and the efforts of the peasants in the producing countries taken into proper account. But these are negotiations and the producers have to get on with each other. Our position is one of several among the producers and we are trying to find as much common ground as possible so as to improve our chances of success. Fluctuation is behind some of the current problems I have already mentioned. I cannot think of any developed nation which could have had its exports cut in half in two years without experiencing very serious social upheaval.
· Are you for an agreement with or without a quota ?
-These are under negotiation and the important thing is that we have specialists discussing in London. A great deal of open-mindedness is needed to reach agreement and the sooner we reach it the better.
Delays in disbursement
· Have you any criticism of your cooperation with the European Community ?
- We hope people will notice the efforts being made in this country and that the procedures are speeded up so the payments come in time to relieve our problems and back up the drive we are making. I have no special criticism of the Community. Overall, ours is a relationship of a developing country with an industrialised country, in which each is trying to take account of the constraints of the other. Implementation should perhaps be faster. Our experience leads me to say that payments are sometimes very, very slow.
· Is this the Community's fault, do you think ?
-Of course it is, because we ourselves have tried to be up to date with our dossiers for some time now. You can check it with the World Bank and the International Monetary Fund, where there isn't the same slowness and difficulty we have with the Community.
· So how do you account for the fact that implementation of the 5th Fund is only now coming to an end although the 7th Fund started up nearly' two years ago ?
-Things may well have been slow in the past, but I think we have done something about it.
· Parity of the CFAF, and the Ivorian CFAF especially, is a handicap for some of your exports. Do you think that, from the Community' policy any/e, you will eventually have to review where the CFAF stands in relation to the French franc and perhaps to the ECU, the forthcoming European currency?
-The CFAF is a sound currency. It is the only convertible currency on this continent and even in the developing world as a whole and having a strong currency isn't a weakness, you know, it's the opposite.
· A strong currency in a weak economy'?
-We haven't got a weak economy. With declining terms of trade and in times of soaring prices, we should perhaps have adjusted the parity of our currency. But we didn't. We opted for stability. The terms of trade are deteriorating further at the moment, but we are maintaining the stability of our currency because it means we can contain and even stabilise our prices. That is essential for us here in the poor countries.
We are in a monetary union and the monetary policy is not the business of just one State-even Cd'lvoire.
As I said, we are restructuring the economy and it is going well. France and the international institutions are backing our competition programme geared to improving exports, so things are going well. The matter of parity of the CFAF is a matter for France and the French treasury too and as long as all the parties think the present arrangements are in their interest, I think things will continue as they are. I don't find your questions on the CFAF difficult. I am a banker, as you know, and sometimes it is right to manipulate the exchange rate and at other times it is pointless. Furthermore, in the case in point, it would take a joint decision by France and the 14 African countries making up the franc zone.
· How do you see the present broader political situation in the African countries and, more generally, what do you think about the way they are developing?
-I think it is true that the countries of Africa are coming up against all kinds of problems and I persist in thinking that economic constraints are behind many of them in many places. As you said, economic problems and political problems go together. In our case, if we had not lost between a third and a half of our export revenue and a third to a half of our budget revenue as a result, we would not have had so many problems and would have had better conditions in which to implement our political reforms. So they go hand in hand. The economy has to look up before the political reforms can go any further.
'Reforms will never be successful in a poverty situation'
· Political problems are currently overshadowing economic reform, aren't they? What is the answer? Tackle the economic issues first or find a political basis on which to tackle the economic reform ?
-In running a State, I think, there is no such thing as an isolated subject. Politics cannot be separated from economics and those who have tried to separate them have soon realised it doesn't work. There are countries which have set up what are called national conferences in the mistaken belief that this would solve all their problems, only to find six months later that they couldn't pay their civil servants or their students' grants and that the people who claimed to be going for democracy were on strike. So economic issues too are central to all this and I think it is wise to continue with both together. I am not a partisan of aid. I prefer to see things achieved through savings and trade. Yet the more the industrialised countries realise that they have to give economic and financial support to the poor ones, the better the political reforms will be, because we cannot convince people who are living in poverty if they do not believe in what we are doing and reforms will never be successful in a poverty situation. Many African countries are in total poverty at the present time, alas, but they really have to get it behind them.
· Do you agree with those who claim that the collapse of communism in Eastern Europe will lead to the African countries being marginalised on the international scene because Africa's partners win be looking more to the countries of Central and Eastern Europe than they have done so far?
-We never joined the communist world, as you know. Politically and economically speaking, Cd'Ivoire has always been a liberal country and we believe that we need a competitive economy and that we should go on exporting and developing our trade and be sufficient unto ourselves. What is all this about the marginalisation of Africa ?
I don't know what it means. Does it mean that we want no more aid?
· It's something I have heard plenty of African Ministers say...
-Yes, and I should like to know what it means. Why marginalise? Because there's someone's cake to share? That is not the way we see our national policy. We want to do without other people, like any country which has its self-respect. We want to live from our own national resources and manage our own affairs so as to be self-sufficient in food and trade. Our trade balance is showing a surplus, so, one or two products apart, we do actually produce enough food and we have programmes going to develop the sectors with deficits so we can compete at international level and sell things like everybody else. Talking about marginalisation is always tantamount to holding your hand out. That is no policy of ours.
When it comes to Eastern Europe, perhaps you know that Cd'Ivoire is one of the four or five countries where Russia has kept an embassy. I see these new countries as an opportunity to develop trade rather than something that will marginalise Africa. It will take work to reach the level of the other countries of the world. Interview by L.P.