- Mauritania, one of the countries hardest struck by the international rise in food prices, is advised against stepping up government action to meet the crisis. The International Monetary Fund (IMF) holds that government action so far has been "timely and adequate," while the poor majority demands stronger action.
Food riots have sprung up in great parts of the world as poor households are unable to make ends meet when world market food prices are hiking. Mauritania is one of the countries experiencing the worst food riots so far, much due to the fact that the desert nation has to import most of its staple foods.
Government in April announced a US$ 160 million emergency programme to respond to galloping food prices. Most of this investment however was directed towards lifting national food production to 99,000 tonnes by next year, by tackling desertification and buying new farming equipments. These actions did little to address the immediate price shock experienced by consumers, causing fears of continued food riots.
However, according to the latest IMF review of the economy of Mauritania, the Fund sends a clear signal authorities should not do more to meet the immediate needs of the poor. It its report, the IMF, which has a strict policy on opposing any kind of subsidies, says Mauritanian authorities' "response to the potential food access crisis is timely and adequate, and their commitment to continue to monitor closely the situation and the impact of the emergency measures is reassuring."
The IMF's Murilo Portugal, who headed the Fund's revision of Mauritania, explains why authorities should not do more: "In light of the downward revision of the oil revenue outlook and the high increases in food and fuel prices, it will be important to maintain a cautious fiscal stance, based on the mobilisation of additional tax revenue, and the acceleration of public sector reforms." The Fund thus holds that long-term investments in governance and economic growth must remain priority; not seeking immediate and short-time solutions to the food crisis.
According to the same report, the Mauritanian economy has only had a "satisfactory" development lately, despite the great hopes pinned to the new-found offshore oil wealth. Indeed, oil production had experienced "a steeper-than-expected decline and a "difficult external environment", which included hiking food prices, had had a negative impact on the economy. Nevertheless, authorities had managed to assure growth under these circumstances, which was hailed by Mr Portugal.
"Significant progress was achieved in the governance and structural reform areas, including the submission to parliament of a new mining code, the publication of oil production sharing contracts and the introduction of a centralised taxpayer database covering the main cities," the IMF team added.
In approval of the "cautious" budget spending of Mauritanian authorities, in addition to their meeting of all reform targets, the Fund announced a disbursement of US$ 3.1 million to finance its poverty reduction programme. This IMF approved programme is to further structural reforms, improve governance and assure long-term economic growth, thus fighting poverty on the long run. Funds cannot be used to tackle the immediate needs of the poor.
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