IMF, World Bank Back $4 Billion Côte d’Ivoire Debt Relief

from the International Monetary Fund..

  • Present value of Côte d’Ivoire’s external debt reduced by more than 60 percent
  • Debt relief reflects recent progress, notably since 2010-11 postelection crisis
  • Pursuit of ambitious reform agenda key to harnessing growth potential

The IMF and the World Bank approved debt relief with a present value of $4.4 billion for Côte d’Ivoire. Combined with other debt relief, the total will be $7.7 billion.

Relief under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, and additional multilateral and bilateral relief, will reduce the external debt of one of West Africa’s largest economies by slightly more than 60 percent in present value terms.

The Executive Boards of the IMF and the World Bank agreed, on June 25 and 26 respectively, that Côte d’Ivoire had satisfied the requirements to reach the final stage, or completion point, of debt relief under the HIPC Initiative.

Côte d’Ivoire will benefit from $7.7 billion in total debt reduction in present value terms, consisting of $3.1 billion in HIPC debt relief, $1.3 billion in debt relief from multilateral creditors under the Multilateral Debt Relief Initiative, and a further $3.3 billion in additional relief from the Paris Club of official bilateral creditors.

Total HIPC debt relief from the IMF and the World Bank would be $38.7 million and $412.6 million, respectively. Côte d’Ivoire’s graduation from the HIPC process brings to 33 the number of countries that have attained completion point under the HIPC Initiative since 1996 (see box).

The thirty-three

Burkina Faso
Central African Republic
Republic of Congo
Democratic Republic of Congo
Cote d’Ivoire
The Gambia
São Tomé and Príncipe
Sierra Leone

“Reaching the HIPC completion point represents a milestone for Côte d’Ivoire and its population,” said Doris Ross, IMF mission chief for Côte d’Ivoire. “It reflects the significant progress achieved in economic management since the Ouagadougou peace accord of 2007 and the end of the post-election crisis in April 2011,” she added.

Ross stated that reaching completion point would also help Côte d’Ivoire normalize relations with its external creditors, which would entail an increase in debt service payable in the medium term and help further catalyze support from donors and potential investors (see chart).

“Judicious macroeconomic management will remain critical to make the country’s enormous growth potential a reality and bring prosperity to its people, while maintaining debt sustainability,” Ross said.

Engagement with IMF

Côte d’Ivoire reached the HIPC decision point, under which the country was declared eligible for debt relief, in April 2009 but progress toward the completion point was delayed in part due to the 2010–11 post-election crisis.

Since then President Ouattara’s government has maintained a sustained engagement with the IMF, starting with $129 million in support under the Rapid Credit Facility in July 2011 that served as bridge toward further support under an Extended Credit Facility arrangement of $600 million in November 2011. Prompt technical assistance also promoted capacity building and contributed to post-crisis recovery.

To reach the HIPC completion point, the authorities have advanced policy in a number of areas, including

• Poverty reduction: Preparation of a poverty reduction strategy in a participatory process, and satisfactory implementation;

• Macroeconomic stability: Satisfactory performances under the Rapid Credit Facility and the Extended Credit Facility arrangements;

• Public financial management: Publication of budget execution reports and establishment of a public procurement regulation authority;

• Health care: Increase in number of childbirths assisted by trained personnel;

• Education: Distribution of textbooks in public primary schools;

• Debt management: Quarterly publication of external and domestic public debt data;

• Transparency: Regular publication of: (i) report on payments made to, and revenue received by, the government from extractive industries—mining, petroleum, and gas—in line with Extractive Industries Transparency Initiative criteria; and (ii) certified financial accounts of the national oil company;

• Cocoa reform: A new institutional and regulatory framework, coupled with lower taxation of cocoa production.

Reaching the HIPC completion point complements Côte d’Ivoire’s economic revival and ongoing political and social normalization. Economic performance since May 2011 has surprised on the upside, with a lower than anticipated economic contraction in 2011, a fall in inflation, and rebounding fiscal revenues coupled with prudent spending, while including increases in pro-poor spending and public investment.

Business climate

The institutional strengthening that has begun will continue over the medium term to enhance economic planning, budgeting, and transparency, and to improve the business climate. Mobilizing domestic revenue and grants, and keeping nonconcessional borrowing within a sustainable range, will be crucial to finance the envisaged significant scaling up of investment that should help to raise economic growth, fulfill the country’s potential, and create jobs and thus help reduce poverty.

In anticipation of the debt relief decision, Charles Diby, Côte d’Ivoire’s Minister of Economy and Finance, said that the debt relief is a platform of opportunity for a new era of growth and prosperity for his nation. “For almost 30 years, our country has had financial problems, stemming particularly from the unsustainable burden of external debt. Under these conditions, it has not been possible to envisage a viable development program,” Diby said.

“Debt relief should permit the debt burden to reach an acceptable level. The completion point will permit the country, through hard work, transparency, and sound management, to define and execute a financeable development program to benefit all Ivoiriens,” Diby added.

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Kenyans use coffins to protest corruption

from News24..

Nairobi – Demonstrators in the Kenyan capital Thursday left mock coffins at the gates of parliament to bury “years of impunity,” charging political rulers of corruption and calling for change ahead of elections due next year.

Demonstrators in the Kenyan capital have left mock coffins at the gates of parliament to bury "years of impunity," charging political rulers of corruption and calling for change ahead of elections. (Khalil Senosi, AP)

Around 200 protestors left 49 coffins – marking the number of years of Kenya’s independence from British colonial rule – at the parliament building and waved placards with slogans such as “Wanted, leaders who pay taxes.”

“We have a present for MPs : 49 coffins for 49 years of impunity in this country,” said Boniface Mwangi, a photographer and demonstration organiser.

“We need young Kenyans to vote and know who they vote for,” he added.

Kenya has been mired in multiple corruption scandals since independence in 1963, but despite political promises to crack down on graft, high level suspects have seldom faced justice.

“For quite a long time, we had leaders who exploited us,” said Edwin Ochieng, a demonstrator in the peaceful protest, where there was a small uniformed police presence. “We ask for an accountable leadership.”

Kenya is due to hold the first general election since deadly post-poll violence fours years ago in March 2013.

“We want a peaceful ballot revolution,” one placard read. “Wanted: competent leaders,” read another.

Kenya plunged into violence after the 27 December 2007 general election in which Raila Odinga – then opposition chief, now prime minister – accused Mwai Kibaki as the incumbent president of having rigged his re-election.

What began as political riots soon turned into ethnic killings targeting members of Kibaki’s Kikuyu tribe.

The Kikuyu in turn launched reprisal attacks in which homes were torched and people hacked to death in the country’s worst violence since independence in 1963.

Kibaki will not contest the next election.

Two presidential hopefuls, Deputy Prime Minister Uhuru Kenyatta and former minister William Ruto, face trial in the International Criminal Court for crimes against humanity over the post-election killings, charges they deny.

They face counts including orchestrating murder, rape and persecution in the aftermath of the poll. The trial date has not been set.

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Ukraine: Corruption blamed for AIDS non-treatment

from the San Francisco Chronicle..

By Maria Danilova, Associated Press

Hryhoriy, a retired police officer suffering from AIDS looks at an Orthodox Cathedral near his AIDS clinic in Kiev, Ukraine, Friday, June 29, 2012.  Advocacy groups are accusing the government of embezzling millions of dollars in corrupt drug tenders and thus depriving patients of vital treatment. They also say that with AIDS deaths up 20 percent since last year as a result of non-treatment, Ukraine can hardly afford to spend billions of dollars on hosting the Euro 2012 football championships ending Sunday. Photo: Sergei Chuzavkov / AP

Hryhoriy, a retired police officer suffering from AIDS looks at an Orthodox Cathedral near his AIDS clinic in Kiev, Ukraine, Friday, June 29, 2012. Advocacy groups are accusing the government of embezzling millions of dollars in corrupt drug tenders and thus depriving patients of vital treatment. They also say that with AIDS deaths up 20 percent since last year as a result of non-treatment, Ukraine can hardly afford to spend billions of dollars on hosting the Euro 2012 football championships ending Sunday. Photo: Sergei Chuzavkov / AP

KIEV, Ukraine (AP) — Two years ago, Hryhoriy, a retired police officer from a provincial Ukrainian town, nearly died of AIDS. Yet the ghostly, emaciated father of two considers himself lucky because he eventually got treated at a Kiev clinic and is now slowly recovering.

Unlike the 53-year-old Hryhoriy, tens of thousands of fellow Ukrainians infected with HIV are not getting any treatment at all because the state says it doesn’t have enough money.

A day before Elton John and Queen sing in the Ukrainian capital in a charity concert to raise AIDS awareness, advocacy groups are accusing the government of embezzling millions of dollars in corrupt drug tenders and thus depriving patients of vital treatment. They also say that with AIDS deaths up 20 percent since last year as a result of non-treatment, Ukraine can hardly afford to spend billions of dollars on hosting the Euro 2012 football championships ending Sunday.

Ukraine has one of Europe’s biggest AIDS epidemics with about 1 percent of the adult population infected with HIV, the virus the causes AIDS, according to the World Health Organization. Ukraine is a leading recipient of aid from The Global Fund to Fight AIDS, Tuberculosis and Malaria, which covers about 10 percent of the country’s needs, the rest coming from state coffers.

Of the estimated 450,000 Ukrainians who are HIV-positive, 70,000 require urgent treatment today. But only 28,000 are receiving it, leaving over 40,000 of patients without anti-retroviral therapy, which could greatly prolong their lives, according to WHO.

In a country where the state has declared its commitment to procuring HIV medication and providing treatment, those patients are left to the mercy of the disease.

“It’s alarming. These figures definitely show that the country, the government and international organizations should pay much more attention,” said Dr. Igor Pokanevych, head of the WHO Country Office in Ukraine. “More resources should be allocated to fight against AIDS in this country.”

But advocacy groups charge that the government in fact has the necessary funds to treat all of its AIDS patients. They accuse Health Ministry officials of embezzling money that should be used to treat patients by buying AIDS drugs at hugely inflated prices and then pocketing kickbacks.

Pokanevych said that a complicated system of tenders for drug procurement allows the government to purchase drugs up to 5 times the market price. Had the drugs been purchased at a fair price, the government would have had the money to treat all those 40,000 patients who are left untreated today, Pokanevych said.

Dmytro Sherembey, an activist with the All-Ukrainian Network of People Living with HIV, a leading AIDS advocacy group in Ukraine, said his group recently purchased a package of an anti-retroviral drugs for 3.5 hryvna per tablet, while the government bought 14 million hryvna ($1.8 million or euro 1.4 million) worth of the same drug for 7.80 hryvna per tablet. He accused the Health Ministry of purchasing AIDS drugs from friendly middlemen companies and then pocketing millions of dollars in kickbacks.

“If a patient is not receiving vital drugs, in the end he dies,” Sherembey said. “Corruption is a bulldozer that is destroying Ukrainians.”

Health Ministry officials were not available for comment due to public holidays. Previously, the Health Ministry has denied accusations of corruption and insisted that major drug buyers like the Global fund, which paid for Sherembey’s drug purchase, had better deals because they bought more.

Sherembey, who is now leading a campaign to get the government to earmark 400 million hryvna ($50 million or euro 40 million) for AIDS treatment and prevention for next year, says Ukraine should not have spent $6.4 billion on hosting Euro 2012, when tens of thousands of AIDS patients are at risk of dying without treatment.

“I also love football, I love many things, but I love life more,” Sherembey said.

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Battle to keep Papua New Guinea ballot boxes safe

from The Sydney Morning Herald..

By Hamish McDonald, Mount Hagen, Papua New Guinea

Sister Susan prepares to cast her vote in East New Britain.

Sister Susan prepares to cast her vote in East New Britain. Photo: AFP

ELECTIONS are falling behind schedule across the densely populated Highlands of Papua New Guinea as poor preparations cause angry scenes and security forces battle to keep ballot boxes safe.

Voting in the country’s elections has been staggered over a week to allow thousands of soldiers and police to be focused on polling security in the Highland provinces, where the most feverish and violent campaigning has been expected.

The opening day in the Southern Highlands and Hela provinces was extended to an extra day on Sunday as polling stations were not set up on time, and Wednesday’s vote in Enga was stretched to yesterday.

In Hela province on Wednesday, supporters of the 81 candidates contesting the elections there went on a rampage through the town of Tari after a radio station reported that ballot boxes would be shifted to a bigger centre, such as Mount Hagen, for counting because of mounting tensions over ballot-stuffing and voter intimidation.

Local media said crowds felled trees and pushed large rocks onto the road out of Tari, while others drove a vehicle onto Tari’s airport runway to prevent the ballot boxes full of votes being taken out by land or air.

Police and soldiers fired warning shots to stop a stone-throwing crowd approaching the Tari police station where the ballot boxes are stored.

Electoral Commissioner Andrew Traven announced that counting would be held within the province, once a secure place was decided. ”Options were Port Moresby and Mount Hagen but it was considered that the people of Hela province need to embrace the elections and take responsibility for their own destiny,” he told the Post-Courier newspaper.

Elsewhere in Papua New Guinea’s coastal regions and island provinces, voting has been mostly peaceful, said Jerry Bagita, operations manager of the corruption watchdog Transparency International, which is monitoring the election. But there have been widespread discrepancies in the electoral rolls, with many would-be voters finding their names missing.

In the Western Highlands, officials postponed today’s scheduled vote until Sunday to allow the security forces to be brought in from the Southern Highlands and Enga, and are ready to further postpone until Monday or Tuesday.

”Any postponement of polling is a burden to them because they have to keep disbursing money,” said businessman Paul Ogil, whose is helping the campaign of his cousin, former foreign secretary Gabriel Pepson. ”This means they have to spend hundreds of thousands of kina a day extra.”

Most candidates operate a ”campaign house” where all comers are given a meal, a place to sleep, and a send-off with their fares to go home.

Senegal’s Sall Seeks Parliament Control For Graft Fight

from Bloomberg News..

By Rose Skelton

Senegal’s President Macky Sall is seeking to win a parliamentary majority in a July 1 election to push ahead with plans to combat corruption and cut government spending.

Sall, 51, leads the Benno Bokk Yakaar coalition that’s running for the National Assembly’s 150 seats. The main challengers are the Parti Democratique Senegalaise, headed by ex-PresidentAbdoulaye Wade, and the Bokk Gis Gis coalition led by the current head of the parliament’s upper house, Pape Diop.

The president needs control of parliament to help implement changes, such as audits of government departments, that he’s made since defeating 86-year-old Wade in a March presidential election, said Abdou Fall, a Senegal analyst at the Institute for Security Studies in Pretoria, South Africa.

“Sall’s real political moves will start after the legislative elections,” Fall said in a June 26 interview. “He will see the audits through to the end, he will revive the economy and he will replace the heads of all national companies. The change of power will be complete.”

Since taking office, Sall has shut 59 state institutions, such as the National Agency for New Ports of Senegal and the National Agency for the High Authority of the Desert, begun audits of government programs and created a special court to prosecute fraud and financial crimes.

Eurobond Yield

Sall has pledged to cut government spending by banning first-class travel and curbing mobile-phone costs for government officials. He is also selling one of two presidential jets and he may reduce the presidential term to five years from seven, reversing a policy enacted by Wade in 2008.

Senegal’s economy, which earns much of its foreign currency from exports of fish and peanuts, is forecast to expand 3.9 percent this year compared with 2.6 percent in 2011, according to theInternational Monetary Fund. That’s lower than the 5.3 percent expansion forecast for the eight-country West African monetary union for this year, which includes Senegal, Ivory Coast andMali.

Sall’s coalition will probably win an “overwhelming majority,” Samir Gadio, an analyst at Standard Bank Group Ltd. in London, said in an e-mail today.

‘Positive News’

“This would in turn ensure a favorable environment in which the authorities will be able to push through key pieces of legislation and maintain the momentum for reform,” Gadio said. “Such an outcome would be positive news for the holders of the Senegales Eurobond.”

Since the presidential election, the yield on Senegal’s $500 million Eurobond due 2021 has declined 86 basis points, or 0.86 percentage point, to 7.181 percent at 9:24 a.m. in Dakar today.

Some of Wade’s former ministers have been questioned by state prosecutors over allegations they used their positions for personal gain. Ousmane Ngom, Wade’s interior minister, was arrested briefly on June 22 for failing to turn up for questioning after being summoned by state prosecutors.

Mineral Deposits Ltd. (MDL) of Australia mines zircon in Senegal, while Vancouver-basedOromin Explorations Ltd. (OLE) is developing a gold project and Teranga Gold Corp. (TGZ)produces the metal from the Sabodala mine. France Telecom SA (FTE) has a 42 percent stake in telecommunications company Sonatel (SNTS), the largest company on the regional stock market in Abidjan, Ivory Coast by market capitalization.

Political Partnerships

Even with 66 percent voter support in the presidential election, Sall would be forced to seek partnerships to meet his pledges if he doesn’t win a majority in Senegal’s parliament, Alpha Diedhiou, a senior Africa analyst at Bath, U.K.-based risk advisory company Maplecroft, said in an e-mailed response to questions on June 27.

“He will most likely need to build a pro-reform political alliance in order to carry on enacting his promised public policy overhaul,” he said. “Sall and his team may have already identified political groups, especially among the new and smaller parties, which are amenable to accepting a role in government.”

Under the Senegalese political system, taken from former colonial rulers France, if the president’s party does not win a majority in the lower house, Sall will have to choose a prime minister and government acceptable to the other members of the house. The majority of those members will come from the PDS and Bokk Gis Gis.

“If this happens, this will be a completely new thing for Senegal,” said the ISS’s Fall. “There could be a complete deadlock.”

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Vietnamese parents panicky about nation’s poor schools

from The Washington Times..

By Mike Ives – Associate Press

Students take the graduation exam June 3 at a high school  in Danang. Schools at all levels in Vietnam are rife with cheating and bribery. The result is that a record number of students are attending international-style private schools and later enrolling in overseas colleges and universities. (Associated Press)

HANOI — Dao Quoc Huy and his wife joined other anxious parents camped outside Thuc Nghiem primary school at 3 a.m.

When the sun came up, the crowd pressed against the metal entrance gate until it fell – then stampeded, hurdling bushes and losing flip-flops in a frenzied rush to grab coveted application forms.

The school is one of Vietnam’s only public institutions emphasizing American-style learning instead of rote memorization. About 600 kindergartners from around the capital were vying for the 200 or so spots available this fall.

“It’s like playing the lottery,” said Mr. Huy, 35, who hoped his daughter would be among the chosen. “We need luck.”

The recent stampede, which resulted in a few minor bruises but no arrests, underscores a problem experts say weighs heavily on Vietnam’s graying communist leadership: Nearly four decades after the Vietnam War, the country’s education system remains so corrupt and backward that it’s impeding economic growth.

Vietnamese parents panicky about nation's poor schools

And the rising middle class is now desperate for alternatives.

In this Confucian nation where education is a national obsession, schools at all levels are hampered by cheating, bribery and a lack of world-renowned programs and researchers. As a result, a surging number of Vietnamese students are attending international-style private schools and later overseas colleges and universities.

Although average income here is just $1,400, more than 30,000 Vietnamese were studying at foreign higher learning institutions last year. Vietnam ranks fifth-highest worldwide for its student enrollments inAustralia, and eighth for enrollments in the U.S., placing it aboveMexicoBrazil and France.

A crisis in education

The number of Vietnamese studying in the U.S. has increased sevenfold from about 2,000 over the past decade.

Most of the nearly 15,000 who were studying in the U.S. last year were not on scholarships to well-known schools, but instead attending community colleges paid by their families, according to the New York-based Institute of International Education.

Unlike universities in neighboring China where communist leaders enacted sweeping reforms in the 1980s, Vietnam’s schools are not keeping pace with an increasingly globalized world, experts say.

The government instead has preserved a system promoting inefficient central management and a lack of critical thinking. Up to 10 percent of course work remains devoted to the teachings of Marx, Lenin and late Vietnamese President Ho Chi Minh.

Vietnam’s educational model is “one size fits all,” and the country’s leaders “should have done more to make education one of its assets,” said Mai Thanh, a World Bank senior education specialist in Hanoi. “I see it as a missed opportunity.”

As Vietnam’s annual growth rate holds at 6 percent despite having one of Asia’s highest inflation rates and an economy burdened by stagnant state-owned companies, analysts say the education crisis threatens to stunt the domestic workforce and further hinder the country’s development.

Intel, the world’s largest computer chipmaker, has struggled to recruit skilled workers for its manufacturing facility in Ho Chi Minh City, researchers from Harvard University’s Kennedy School have said.

The U.S. Embassy in Hanoi has said Vietnam’s “human resource infrastructure” does not support its rising education demands, and the Harvard researchers say reform in the country’s higher education system has been “glacial” since it embarked on economic reforms and liberalization in the mid-1980s.

Although Vietnam invests more in education as a percentage of gross domestic product than many countries in the Asia-Pacific region, the researchers say, the problem is less about lack of investment than a failure of governance.

Corruption in the classes

“The government is keenly aware that there is widespread dissatisfaction with the current state of the education system, among economic and political elites as well as at the popular level,” said Ben Wilkinson, co-author of a critical 2008 report and associate director of the Kennedy School’s Vietnam Program in Ho Chi Minh City.

He added that it’s too early to tell what effect the migration of students to overseas universities will have on the country’s future.

Another problem is that parents bribing teachers for high marks and degrees has become commonplace. In a 2010 report, Berlin-based Transparency International concluded that education was perceived as the country’s second-most corrupt sector after law enforcement.

State media regularly report on education-linked scandals, including a recent case at a private high school in northern Bac Giang province where a proctor handed out cheat sheets during a national high school graduation exam. After a student filmed the incident with a hidden camera, six teachers and staff were dismissed.

Earlier this month, Vietnam’s National Assembly passed a law designed to give more autonomy to the country’s universities, but education reformers remain skeptical.

“Many universities are just interested in recruiting as many students as possible,” National Assembly Deputy Dang Thi My Huong told state-controlled media in May. “Where graduates go and whether they can get a job is their business.”

The Foreign Ministry did not respond to written questions submitted by the Associated Press.

Middle-class Vietnamese now are wondering how to help their children shine in spite of a broken school system. One strategy is to sign them up for night classes often run by public school teachers who earn around $250 a month.

Unlike high-ranking Vietnamese officials, most families simply can’t afford private schools and overseas colleges.

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Burger King set to enter Cambodia

from The Phnom Penh Post..

By Don Weinland

Burger King will start operations at Phnom Penh International Airport as early as November before moving into the capital, a representative from the local franchise holder AFC Company said yesterday.

The American burger chain would join the likes of KFCDairy Queen and several other international and domestically owned eateries.

Success in neighbouring countries such as Vietnam and Thailand prompted AFC to bring the fast food brand to the Kingdom, Somuch Sovary at the company’s human resources department said.

Like Dairy Queen, which is represented by RMA group in Cambodia, the franchise will start at the airport and then potentially open restaurants in the city.

“We have a plan to enter the city but first we must find a location. There are many burger and pizza places right now in Phnom Penh, so it’s difficult to find a good place,” she said.

She declined to give a dollar figure for the investment.

RMA will open a Dairy Queen branch in the capital’s Riverside district this week, according to an RMA employee.

Cambodia’s KFC franchise, which is represented by Kampuchea Food Corporation, saw losses in the first quarter of the year on high domestic food prices, the brand’s Malaysian parent company QSR Brands reported last month.

Kampuchea Food chief executive Benjamin Jerome said the market potential for fast food in Cambodia was “huge”, however he also noted the toll high food prices took on restaurants.

“The cost of food in Cambodia is quite high, but this depends … on the company’s business model and supply,” he said yesterday. KFC has 10 restaurants in Cambodia.

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