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

Once a stable and relatively successful state, Cte dIvoire has suffered from continued political instability and sparing stagnation since 1999. The current crisis, which began in September 2002, has further aggravated the countrys already difficult social and economic conditions.The civil impinge cut short the incipient economic recovery in 2002. gross domestic product is estimated to have declined by 1.6% in 2002 and 3.8 % in 2003. Inflationary pressures intensified temporarily after the crisis, but decreased subsequently, with 2003 inflation estimated to have averaged 3.8 %. The current tale of the balance of payments moved into surplus in 2002 and 2003, as export revenues bloom on the strength of international cocoa prices.Public finances deteriorated in the second half of 2002 and in 2003, reflecting a combination of expenditure overruns, assess revenue stagnation, and a decline in foreign financing. Domestic and foreign arrears reached 13,5% of GDB by end-2003.An improv ement in security and political normalization atomic number 18 indispensable for economic recovery. However, a coherent economic policy exemplar and transparent and efficient management of public finances are slender to consolidate the gains from the return to stability, and to restore private sector confidence.Given the perplexity about availability of external resources and the need to address the problem of titanic stock of domestic and external arrears, the authorities should target a high primary budget surplus in 2004 than the currently envisaged 2,8% GDP. With little way for additional tax revenue mobilization, the authorities need to mobilize more 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 svelte state of the commercial banking system and imposing corrective actions on banks in distress. In particular, the financial pos ition 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 acknowledgment with the gentleman Bank.The structural reform agenda should be revived with a think on the cocoa, financial, and energy sectors. Most 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 chopine of fiscal consolidation and structural reform would facilitate. Fund support, which could initially wages the form of post-conflict emergency assistance. Such support would be possible in a framework of concerted support of Cte dIvoires development partners, and could pave the way for a move to back up programs.