Comoros
Comoros economic figures on sharp decline

afrol News, 3 August - As the International Monetary Fund (IMF) for the first time in years has been able to assess the economic trends in Comoros, the figures show a sharp decline due to the "political turmoil". Trends on the separatist island of Anjouan seem even worse.

- Large fiscal imbalances led to serious disruptions in government services in 1997-98, which were further exacerbated by the political instability, the IMF report concludes. "Against this background, real GDP, which grew by less than the population during much of the 1990s, declined by 1.1 percent in 2000." 

GDP per capita thus has decreased significantly in year 2000 (an estimated 5 percent). Prospects for this year are somewhat more positive, with a GDP growth of 1 percent, though still far below population growth, producing yet another year with a negative GDP per capita growth.

The IMF accounts the negative GDP per capita numbers on "a slowdown in donor support, mounting disruptions in electricity supply, and the lack of investment in the main agricultural export products." These products include vanilla, cloves and the natural essence ylang-ylang. The Comoros thus missed an opportunity of increased welfare as the IMF reports "a sharp increase in export prices." On the other hand, sharply increasing petroleum prises have had a negative effect.

The economic downward trends are attributed to "the political turmoil" on the Indian Ocean archipelago, including the conflict with the separatist government on the island of Anjouan since 1997 and the military coup in the capital Moroni in 1999. By recognising a de facto split up of the state last year, the Comoros military government was sanctioned by the Organisation of African Unity (OAU), following a blockade that gave a serious blow to the external trade of the nation.

In February 2001, with international support, representatives of the federal government, the national opposition, and the island of Anjouan reached agreement on reintegrating Anjouan into the Comoros and restoring democratic political institutions by the end of 2001. 

Although there are few data about the situation on the island of Anjouan, indications are the situation there is even worse. The IMF assesses that "the fiscal situation on Anjouan is very difficult, as evidenced by large wage arrears." afrol News has earlier reported about widespread poverty, hunger, cholera epidemics on the islands, locally blamed on the fierce OAU blockade.

The IMF further reports that there are great difficulties in obtaining reliable data of the economic situation in Comoros because "the macroeconomic database of the Comoros remains weak, despite the authorities' recent efforts to strengthen it." This situation also "complicates the design and monitoring of economic policies." Consultations with the IMF could not be held in 1998-1999 due to the disruptions, which had led to "large gaps in recent data".

There are, however, signs of recovery in Comoros. The IMF especially counts on the reconciliation process between the Moroni government and Anjouan. It however also recognises that the Moroni government is making positive steps towards recovery. 

- The federal government has made progress in reducing fiscal imbalances and improving public services, according to the IMF. It has also launched a comprehensive staff-monitored program (SMP) for the period July 2001-June 2002 to begin the process of economic rehabilitation, and has stated its intention to begin preparing a comprehensive poverty reduction strategy, with the assistance of the UN Development Program.

Conditional IMF support
On its side, the IMF plans to support the Comoros government under the Fund's Poverty Reduction and Growth Facility and the HIPC Initiative (debt reduction). The government was invited to discuss "a preliminary HIPC document, possibly by mid-2002, provided performance under the SMP is satisfactory." 

The IMF thus emphasised its condition that the authorities further should "reduce employment in the public sector as part of a civil service reform program" and "complete expenditure reviews in the education and other sectors". Although these policies should "not adversely affect social services and the poor," the IMF gave no hints on how this seemingly Utopian goal was to be achieved.

In their report, the IMF directors considered that tackling some main problems - namely "unstable political conditions and weak macroeconomic and structural policies in recent years" - should be the main priorities of economic policy. The government was also urged to tackle "the widespread poverty in the country".

Meanwhile, other international institutions reward the slow peace process between the Moroni government and the Anjouan separatists. In July, the World Bank awarded a US$ 11.5 million aid package in a show of support for the islands' peace process. The 12-month funding cycle was aimed at "fighting poverty and improving basic social services, reinforcing institutions and kick-starting the stagnating local economy," the World Bank's Comoros representative Hafez Ghanem told AFP last month.

Sources: Based on IMF and afrol archives

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