July 6, 2005

Angola/IMF approximation effort might be affected, says Finance minister

The relationship between Angola and the International Monetary Fund (IMF) might come to a brusque coolness of unpredictable consequences that could put at stake all effort of approximation and understanding so far attained and which imparts an environment of trust the two parties have been building. This is implicit in a strong letter of protest the Angolan Finance minister, José Pedro de Morais Júnior, sent to the IMF director general, Rodrigo De Rato, in reaction to the publication called "The Main Institution in the Country is Corruption", on that world financial institution's official website, of a study by the US academician, John McMillan. In the defence of the sovereign interest, the Finance minister says in his letter, that Angolan Government will be left no other choice but an "immediate cancellation of the talks that were being held between Angola and the IMF for the signing of a monitored accord.”
Meanwhile, with the purpose of leaving a door open for the relationship between the two parties, maintaining on the agenda the democratic debate of the Angolan case, in the letter José Pedro de Moarais further says that the Government had no objection, should the discussion of the document focus on the chapters on oil production and revenues, contained in the latest IMF report on Angola, released in April this year. On the said report, the letter says that "its serene language, impartial and truly technical is not contaminated with any pamphleteer bias," With effect, the study by the US professor, John McMillan, with Stanford University, that caused great indignation to the Government, is considered, by the Finance minister, as of "pamphleteer character", starting from the offensive content of its designation, and other identical references that are seen as unacceptable to the Government of Unity and National Reconciliation (GURN).
Completely perplex with the development, José Pedro de Morais says he cannot understand how can renowned multilateral academic institutions of respect like the IMF "be inadvertently used (as we do not believe that their distinguished leaders were not aware of the working papers' pamphleteer content) for the divulgation of sensationalist and dishonest versions, already denied by facts and by decisions from foreign courts." Pedro de Morais considers that, in sponsoring the discussion of such document "marred by sophisms and offensive terms", the IMF is clearly "feeding the incomprehension of the international community and foreign investors on a true situation of the country and the effective progress in the transparency in the budgetary performance, including the oil revenues. This, according to the minister, is an attitude that contrasts with other international evaluations of the Angolan economy, "starting from a new perspective, an example of which is the speech by president Bush, on 30 June, in Washington, on the goals of the G-8 Summit, announcing that Angola, Tanzania and Uganda, will be African countries to benefit, in a first phase, from the US$ 1,2 billion grant from the United States, to fight malaria in Africa and, consequently, reduce poverty in the continent."
The Finance minister recalled the content of the IMF's most recent missions to Angola that, contrary to the "pamphleteer working papers" "recognise that the 4 April 2002 peace accord, as well as the increase in the 2004 oil revenues, transformed Angola's economic panorama, enabling that four million displaced people returned to their communities and, above all, that the unification of the budget and the publication of information on the oil revenues improved the transparency in the fiscal operations." According to the content of the report, the Angolan oil sector is recording "an unprecedented expansion." In addition to the recent rise in the prices, the expansion should have led to a substantial increment of the Government's revenues that, from US$ 3,2 billion in 2001, should have gone up to 4.5 billion, at an annual rate, in the first half of 2004.
However, the IMF experts came to the conclusion that during the same period, the share of the Government in the oil revenues suffered a significant reduction by 52 percent to an estimated 43 percent. One of the main reasons mentioned by the IMF, to explain this negative trend, was the re-orientation of the oil production to new ultra-deep waters exploration fields, which forcibly led to a rise in investments in this sector. This reference to the IMF report, contained in José Pedro de Morais's letter, seems to be a clear answer from the Finance minister to all those that have been raising doubts about the Government's account in the field of oil revenues. "For justice, and taking as a basis the diagnosis done by the IMF staff in their two visits mentioned, it is easy to recognise that the prolonged war and the volatility of the prices in 1982 and 2001 - not fiscal and monetary irresponsibility or corruption - were the real causes of the macro-economic imbalance until 2002," states the Finance minister in his letter. (Angola Press Agency, Luanda)

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