Economy of Cote DIvoire (Ivorycoast) :: essays research papers

once a stable and relatively prosperous country, Cte dIvoire has suffered from continued political instability and economic stagnation since 1999. The current crisis, which began in September 2002, has further aggravated the countrys already toilsome social and economic conditions.The civil conflict cut short the early economic recovery in 2002. GDP is estimated to have disdaind by 1.6% in 2002 and 3.8 % in 2003. Inflationary pressures intensified temporarily after the crisis, but diminish subsequently, with 2003 inflation estimated to have averaged 3.8 %. The current account of the balance of payments moved into extravagance in 2002 and 2003, as export grosss rose on the strength of foreign cocoa prices.Public finances deteriorated in the second half of 2002 and in 2003, reflecting a combination of expenditure overruns, tax revenue stagnation, and a decline in foreign financing. Domestic and foreign arrears reached 13,5% of GDB by end-2003.An improvement in security and pol itical normalization are indispensable for economic recovery. However, a coherent economic policy framework and transparent and efficient vigilance of public finances are critical to consolidate the gains from the return to stability, and to desex private field confidence.Given the uncertainty about availability of international resources and the need to address the problem of large stock of domestic and external arrears, the authorities should target a higher primary budget supererogatory in 2004 than the currently envisaged 2,8% GDP. With little room for additional tax revenue mobilization, the authorities need to mobilize to a greater extent resources from the oil and gas sector and scale down domestically-financed investment and recruitment plans for 2004.The authorities should be more vigilant and proactive in responding to the fragile state of the commercial banking system and imposing corrective actions on banks in distress. In particular, the financial posture of the state-owned Caisse Autonome dAmortissement (CAA) remains very weak, and options for a resolution of its problems need to be considered, in close consultation with the World imprecate.The morphological reform agendum should be revived with a focus on the cocoa, financial, and energy sectors. nigh urgently, an action plan and timetable for addressing the institutional weaknesses in the cocoa sector should be developed in close consultation with the World Bank and other donors.The authorities have requested a resumption of World Bank fund assistance. A credible program of fiscal consolidation and structural reform would facilitate. Fund support, which could initially take the form of post-conflict emergency assistance. such support would be possible in a framework of plan support of Cte dIvoires development partners, and could coat the way for a move to supported programs.