INTERNATIONAL MONETARY FUND (IMF) - FONDS MONETAIRE INTERNATIONAL - FONDO MONETARIO INTERNACIONAL
Mr. Justin B. Zulu, Director, United Nations Office of the International Monetary Fund (IMF)
Thank you for the opportunity to address this important meeting on world food security.
First let me say that the International Monetary Fund (IMF) wholeheartedly supports the worthy goals of the World Food Summit. Ensuring a stable, secure and affordable food supply for a country's population is a fundamental objective of any society and any international community. There are a number of ways in which the IMF indirectly assists member countries in achieving this objective. These include our macro-economic and structural policy advice, our financial and technical assistance and our collaboration with other international agencies and bilateral donors and creditors in support of member countries' development efforts.
At the outset I would like to stress that it is a matter of great encouragement for us in the Fund, to see what is going on in countries which are implementing far-reaching adjustment programmes with the support of the IMF in Africa. For sub-Saharan Africa as a whole, real GDP growth is expected to average about 4 percent in 1995 and 5 percent in 1996, a dramatic change after years of stagnation. Moreover, this growth is more widespread: whereas in 1991 only 20 of the 46 sub-Saharan countries recorded positive per capita growth, there are now twice as many such countries today. Indeed we see exemplary economic progress in several economies, including Botswana, Ethiopia, Ghana, Kenya, Lesotho, Mauritius, Mozambique, Uganda and, more notably, the CFA Franc countries. It is a remarkable change but more must be done.
In that context, I would like to emphasize that the performance of the CFA Franc countries is very encouraging. The CFA Franc devaluation has permitted a massive transfer of wealth to the agriculture sector, notably through the increase in producer prices from 12 percent to something like 200 percent for cash crops. Meanwhile, the structure of consumption has also shifted in favour of locally produced goods, such as food crops, vegetables and livestock. This has produced a certain effect on the income of the rural population which have been affected the most by the distortions in relative prices during the period preceding 1994.
While it is well recognized that a rise in a country's output is a necessary condition for economic development, rapid growth alone does not ensure that the fruits of development will accrue broadly or equally, or that the environment will be safeguarded. In order to achieve these objectives of sustainable economic development, IMF policy advice has been putting increasing emphasis on the quality of development and the social aspects of each member's policy reforms.
Recent IMF programmes have incorporated a range of social safety instruments, including targeted subsidies or cash compensation aimed at protecting the most vulnerable groups in society, while staying within the country's resource constraints. Furthermore, agriculture reforms frequently increase incomes in the rural areas where many of the poor reside, particularly women and children. Working in close collaboration with the World Bank, the IMF programmes have considered ways to improve the quality of basic care and proper education expenditures. For example, retargeting public expenditures away from military spending and towards social sector areas, such as education and health.
International Monetary Fund policy advice has also increasingly stressed the importance of good governance through accountable institutions, elimination of excessive government regulations, a transparent and fair legal framework and participatory development through active involvement of all groups in society. Such a strategy is crucial to poverty alleviation, employment promotion and social integration, which are all necessary to achieve the objectives of this Food Summit.
To implement policy strategy and achieve the goals I have described, financial resources are made available to members through a range of mechanisms giving balance of payments needs and in support of appropriate policies. These mechanisms include regular IMF loan facilities, which provide either short-term balance of payments assistance for deficits of a temporary nature or support for medium-term programmes that aim to overcome balance of payment difficulties stemming from medium-term micro-economic and structural imbalances.
A special facility - especially relevant in the context of today's meeting - is the Compensatory and Contingencies Financing Facility, the CCFF. The CCFF provides financial assistance to members experiencing temporary declines in exports or increases in cereal imports. Over the years, a significant number of countries have received such assistance under this facility in large increases following increases in cereal exports.
In conclusion, I would like to reflect that IMF support for the goals of this Summit is strong. The IMF will continue to do its part in working towards a world in which all people have access to food and where all the means to satisfy their basic food needs are explored.