From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Sat Nov 14 2009 - 06:01:10 EST
IMF promotes Eritrea in its recovery
Charles Diggers
14/11/2009
The delegation of the International Monetary Fund (IMF) in its mission to
Eritrea 14 to 29 September 2009, has held important consultations under
Article IV, following the previous ones held in April 2008. The IMF
delegation met with Minister of Energy and Mines, Ali, with the Governor of
the Bank of Eritrea, Woldemariam, with the Director General of Treasury,
Woldeghiorghis, with the Director-General of Budget (Ministry of Finance) ,
Tessfaldet, and with senior officials and representatives of the
international community and civil society. The head of the IMF delegation in
Eritrea, Mario de Zamaróczy, thanking the Eritrean authorities for the warm
hospitality received and for their fruitful discussions, highlighted by the
completion of the work, the mission of the International Monetary Fund has
been able to examine, in a depth, all the economic developments since the
last consultation and discussion with the Eritrean authorities macroeconomic
policies adopted in response to severe drought of 2008, the international
crisis of food prices and oil prices and global recession. Economic growth
in Eritrea, because of these serious events, has been weakened, with growth
not as large as estimated, while inflation is rising and progress in fiscal
consolidation is at the moment, stopped. The mission noted, however, a
number of areas where significant progress has been made, related to the
continuous and significant investment in farms, in irrigation projects for
agriculture in the country gradually away from dependence on irregular
rainfall and significant advances in industry. The delegation expressed
great appreciation for the valuable programs of public investment in various
sectors such areas as education, health, mining, infrastructure, cement
production, tourism, green energy and fisheries. The delegation noted that
these major investments should contribute to a resumption of economic growth
Eritrea already in the medium term. The economy of this small but very
hard-working country in the Horn of Africa, you will have for the
foreseeable future, other important growth factors, such as that of the next
mining and increasing domestic production of cement, although there could be
downside risks linked to budgetary difficulties, the current account
deficits, levels of foreign debt and domestic inflation and a growing.
Economic growth, even with the positive effects of the massive investments
made, could, however, still remain in the short term, below the level needed
to achieve a more substantial reduction of poverty. Been analyzed, because
in the course of discussions between the IMF and economic authorities from
Eritrea, a number of possible policy measures to boost the overall growth
and develop the economic activities of the private sector. In the short term
the focus should be on the restoration of macroeconomic balance and
financial, through fiscal consolidation, reduction of budget deficit
financing from the banking sector, reduction of controls over imports, to
boost imports of basic goods and intermediate . It was agreed that
international pressure will stop when caused by serious economic world in
place, it’s time to bring inflation under control, with gradual fiscal and
monetary policies, not to slow down the process for future economic growth,
triggered by the massive investment public place in all economic sectors.
Spending priorities will be identified by the Eritrean government to
increase the effectiveness of public spending in an environment where
financial resources are still too limited. The IMF also suggested the
adoption, in the medium term, measures that promote external
competitiveness, liberalization of the financial industry, elimination of
administrative bottlenecks and encouraging private investment in productive
sectors. The IMF concludes his report by stating that, with proper reform
policies, with the development of human wealth and the potential of mineral
resources, Eritrea could be well positioned to resume after the global
recession.
This report confirms the goodness of the new Berlusconi government policy of
opening to Africa, and Eritrea, in particular, whose gigantic effort to
stake complete elimination of poverty and economic development to bring
prosperity to their people, must be supported by Italy. Our country will,
thus, the trade and economic partner of reference of a very industrious
people and to us so closely linked by strong historical and cultural
constraints, ranging, however, strengthen and better exploited.
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