DR Congo

DR Congo News Brief 23 Jun 1997

A senior World Bank delegation is in Kinshasa to meet with the Government of Congo. Ties between the Bank and Zaire were terminated in 1993 (ties with the International Monetary Fund were broken off shortly thereafter). The Bank's team is scheduled to visit with Finance Minister Mawapanga, and then with President Kabila, and then with local bankers and citizens. The Bank officials say they are in Congo to listen to the government's plans and strategies. The Bank has several major concerns:
Repayment of debt. The Bank's assessment is that Mr. Mobutu spent about 67% of loans received on the presidency and about 33% on the rest of the country. Bank officials indicate that member countries are not willing to forgive the debt because they are angry at the way the Mobutu government wasted the money. On the other side of the ledger, Kabila administration officials will likely chastise the Bank for making loans to Mobutu knowing full well that the money was going to be wasted. Mr. Kabila's staff will likely argue that it should not be held responsible for the Bank's poor lending management.

Structural adjustment will also be an issue. Bank officials will no doubt be looking for willingness on the part of the Kabila administration to make the needed economic and political reforms required under the Bank's Structural Adjustment Program SAP). Compliance with the requirements of SAP might cause the Bank to resume assistance programs. However, SAP will be a tough pill for Mr. Kabila to swallow politically, and perhaps philosophically. Mr. Kabila is thought to have an economic philosophy that promotes high government activism in the economy, which means high government content in the ownership of industry and substantial government spending on social welfare programs. The SAP requires just the

opposite --- increased privatization, increased liberalization, and decreased government spending.