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North-South Roundtable - 9 luglio 1991
AFRICA'S DEBTS AND ECONOMIC RECOVERY

North-South Roundtable, Abidjan, Cote d'Ivoire - 8-9 July, 1991

SUMMARY: A substantial reduction of external debt burden of many African countries is needed, for four reasons. First, the present debt burden of Africa is needed, for four reasons. First, the present debt burden of Africa is extremely heavy. Africa's debts are equivalent to more than 100% of its GNP, compared to less than 50% in Latin America another heavily indebted region and even less elsewhere. The weight of Africa's burden is exacerbated by its lower per capita income than elsewhere in developing regions. Secondly, Africa is experiencing adverse effects of falling commodity prices more than any other region because of its greater dependence on primary products than other regions. Over the last forty years, export commodity prices other than oil have fallen by 50% in real terms, a staggering development with far reaching adverse effects on many producers. Between May 1989 and January 1991, commodity prices other than oil fell 23% in SDR terms speed of decline similar to that experienced in the

great price fall l98O 82 which marked the beginning of the debt crisis of the l98Os. Cocoa and coffee, two major exports of Sub Saharan Africa, were particularly badly hurt. Thirdly, while debt in other debt affected areas has stabilized in recent years, that of Africa has continued to grow as interest is charged on interest and capitalized. Many African countries have been compelled to suspend their debt service payments; according to World Bank calculations, less than one half of Africa's debt service due is now being paid. Even so, debt servie which is still being paid absorbs 27% of Africa's shrunken exports - a proportion which severely curtails Africa's capacity to import and to grow.

Fourthly, debt settlement is needed to clear the way for resumption of Africa's economic development, now virtually stagnant for a decade in aggregate terms and falling in per capita terms. Africa has the capacity to modernize and grow, and this has been proven in one critical area and against all odds. Between l98O and 1987, exports of manufactures from Sub Sahara African countries rose 42% in U.S. dollar terms or 5.7% per year. In 1988, out of 33 countries for which data are available, exports of manufactures rose in 28, and the overall increase for the 33 was 15.8% . In 1988, eleven Sub Saharan countries exported manufactures in excess of US $ 100 million each, compared to seven countries in 1980; and in 1969, tere was none. There also have been setbacks, for various reasons. But taking Sub Sahara as a whole, to achieve a 60% increase in exports of manufactures to US $ 4 billion on a non negligible base of US $ 2.5 billion in 1980, over an eight year period marked by a commodity collapse, droughts

, debt crisis, wars and policy disasters, is a remarkable achievement by any standard. In North Africa, exports of manufactures more than doubled between l98O and 1987, and then accelerated at 18% per year in 1988 89. North African exports of manufactures are now running at US $ 5 billion per year.

This diversification and growth of African exports must be sustained. For this purpose, African countries must have realistic exchange rates, undistorted product prices across the economy, sufficient supply of industrial inputs and hence adequate growth of agricultural and mineral output, and they must reconstruct the existing capital stock, in many places obsolete, and add new facilities. Their investment, a crucial element for further growth, has fallen sharply in the last decade of the debt crisis in Sub Saharan Africa: the fall has been so severe that some countries have not even been able to fully replace depreciating capital. At the present level of domestic savings and international commodity prices, most of Africa cannot undertake the reconstruction, modernization and expansion out of domestic resources to any significant extent. Foreign capital inflow is needed to initiate the recovery and to help sustain it thereafter. But such capital inflow will not take place until the present debt situat

ion is cleared up. This is a necessary condition, even though it is not sufficient: it must be supported by domestic efforts single mindedly dedicated to economic recovery and social justice.

Past efforts at the solution of the debt problem, some of them imaginative and generous, have proven insufficient and uncoordinated. A newdeal is needed, attacking the core of the Sub Saharan problem: debts held by some multilateral financial institutions and debts held by the private sector, in addition to a further shrinking down of service on official bilateral debt or its total cancellation in an imaginative proposal. In North Africa, the acute liquidity squeeze of Algeria debt service absorbing almost 70% of exports of goods and services per year - needs to be alleviated through debt rescheduling over the long term, thus releasing resources for needed economic recovery.

Algeria's debt outstanding is relatively low; it is the service structure which needs radical change.

While Africa's commodity problem is not on the agenda of the Abidjan Roundtable, one specific commodity situation can perhaps be handled: the cocoa crisis which affects severely a large part of West Africa and for which remedy seems relatively easily in hand. It is proposed that a consortium of international financial institutions be organized to finance, through loans of, say, 15 years duration, the sale of surplus cocoa stocks to Eastern Europe, thus contributing to cocoa price recovery and hopefully stabilization, and improvement of food supply in Eastern Europe. The operation would be no more risky than other balance of payments structural adjustment lending. Cocoa producing countries in parts of Latin America, the Caribbean and Asia would be also beneficiaries.

Adjustment and development programmes should be prepared, and seen to be prepared, by national authorities of African countries rather than by foreign advisers and international organizations. Otherwise commitment will be lacking.

CONTENTS

Summary

I INTRODUCTION

II DEBTS

A. Sub-Saharan Africa

Present debt position

Debt strategy

Major-Pronk proposals on official bilateral debt

Open issues in Sub-Saharan debt

B. North Africa

Country review

Algeria's liquidity problem

C. Africa's debts and economic recovery

III MODERNIZATION AND INDUSTRIALIZATION OF AFRICA

A. Exports of manufactures

Growth

Product range

B. Competitive position of Africa's manufacturing

Labour costs

Problems of labour discipline and 'industrial'

culture

Rates of return

C. Requirements for future growth

Realistic exchange rates and undistorted product prices

Sufficient supply of industrial inputs and trade credit

Reconstruction of capital stock and improvement of

infrastructure

IV INTERNATIONAL FRAMEWORK

A. Commodity problem

B. Conditionality

I INTRODUCTION

Three issues are discussed in this paper. First, a broad outline of the African debt problem is briefly set out: its

size, burden, and approaches needed for its solution.

Second, modernization and industrialization of Africa are discussed: the progress already made against all odds, and the requirements for future advance.

Third, the international context of the African economic recovery is partly sketched: commodity problem and conditionality of assistance, and what can be done for progress in these two difficult areas.

II DEBTS

A. Sub Saharan Africa

Present debt position

The World Debt Tables of the World Bank 1990 91 have summarized the debt situation of Sub Saharan Africa as follows:

"At the end of 1989, Sub Saharan Africa's debt was about US $ 147 billion, roughly 12% of the total debt of developing countries. Compared with Latin America's debt of US $ 422 billion, Sub Saharan Africa's debt appears small. Yet, standard debt indicators show that, relative to its current productive capacity, Sub Saharan Africa is at least as seriously indebted as Latin America. Debt, relative to GNP, was 100 percent in 1998 in Sub Saharan Africa and 49 percent in Latin America. In the same year, Sub Saharan Africa made debt service payments equal to 27 percent of exports; Latin American debt service payments were 40 percent of exports. These latter statistics should not be taken as an indication of a lighter debt burden in Africa. Scheduled debt service payments were about 5O percent of export earnings in both regions. Lower actual debt service payments in Africa are a measure of the weaker and poorer economies in the region.(1)

One imoortant point needs to added to this summary. While Latin American debt outstanding ceased to grow several years ago and is now slowly declining, the Sub Saharan debt continues to grow at almost 10 percent per year as interest is added on interest. As its GNP stagnates in recent years, there is the prospect of a vicious debt development which threatens to engulf the entire production structure unless debt growth is stopped in its tracks.

The incidence of non payment of debt service falls severely on bilateral official creditors (governments and their agencies in developed countries): they received only 20 percent of the debt service due to them in 1989. Multilateral official institutions receive preferred treatment (86% paid). Private creditors were paid almost one third. "The payments to private creditors have been virtually suspended by most of the African countries. The results are thus generated by the behaviour of a few big debtors such as Nigeria and Zimbabwe, which serviced their private debt. The only exception is short term debt. Active short term trade credits are fully serviced by most borrowers even when they are accumulating arrears on long term debt to the same creditors." (2)

Scheduled and Actual Debt Service

Payments of Sub Saharan Africa. l989

(US $ millions)

Payment Amount Actual Paid as

due to due pald percentage of

amount due

Official 10,203 4,869 48

Multilateral 4,206 3,604 86

Bilateral 5,997 1,265 21

Private 7,994 2,305 29

Total 18,197 7,174 39

Note: Payments on short term debt and private unguaranteed debt are not included. (They amounted to O.55 billion and 1.14 billion respectively, in l989.) Payments to the IMF are included.

Source: World Bank, op.cit., page 89.

Debt strategy

Non payment has been by far the most important 'debt relief' in Sub Saharan Africa. The major traditional form of debt reorganization debt reschedulings on conventional terms - have proved ineffective. They have led to "steady accumulation of debt to bilateral creditor governments, resulting from repeated debt reschedulings and the resulting capitalization of interest, including arrears. (3)

The other form, debt forgiveness by official bilateral creditors, has also proved of limited effectiveness so far. "Nine donor countries in the OECD have so far anounced plans to cancel or convert bilateral loans owed by various low income African countries into grants. The total amount of debt forgiven or converted up to the end of l989 is almost US $ 6 billion... Scheduled debt service payments of these countries in 1990 are lower by an estimeted US $ 100 million as a result of this ODA forgiveness. The impact on debt service has been small in the aggregate because of the original highly concessional nature of these loans" (4).

The reduction of US $ 6 billion of official bilateral debt represents less than 10% of the aggregate of this debt of about US $ 64 billion; this less than 10% reduction compares to the official bilateral debt reduction in Poland of 50% or more. The reduction of debt service of 100 million dollars a year compares with scheduled aggregate debt service of Sub Saharan Africa of US $ 18,197 million (0.5%) and with actual payment of US $ 7,174 million (1.5%).

The World Bank, which as a matter of policy neither reschedules its loans nor scales them down, has individual country programmes of accelerating quickly disbursing loans to Africa, such as Special Program of Assistance (SPA), so as to assure that there will be no net financial transfers to the 8ank/IDA from severely indebted african countries. As a result, net transfers from the World Bank/IDA to Sub Saharan Africa amounted to US $ 1.2 billion in fiscal 1990 and averaged US $ 1 billion annually during the latter half of the 1980s. (5) This does not mean, however, that each African country individually obtained resources net from the Bank IDA in these years. The large majority did, but such important debtors as Cote d'Ivoire and Nigeria were transferring resources net during 1987 89, and also, so did such important borrowers as Zimbabwe and Mauritius. These adverse transfers of resources may occur as a result of technical factors which delay loan disbursements (such as project execution engineering dif

ficulties), or because of policy disagreements between borrowing countries and the 8ank which delay commitments of new loans or may even slow down the disbursements on existing loans. Policy disagreements most frequently, almost always, occur on conditionality issues.

In another programme, introduced three years ago, the World 8ank approved an allocation of 10 percent of IDA reflows and investment income to eligible countries in proportion to their IBRD interest payments, so as to help these countries to pay interest due. As of 30 June 1990, IDA credits totalling US $ 159 million have been provided to eight Sub Saharan countries for this purpose. In support of this initiative, Norway and Sweden also made grants available to help meet IBRD debt service in four Sub Saharan African countries.

International Monetary Fund has been withdrawing resources from Sub Saharan Africa for years. Adverse net financial transfers averaged US $ 0.7 billion per year in the five years 1986 90, and the debt outstanding to the Fund amounted to US $ 6.4 billion at the end of 1990. Withdrawal of resources has occurred despite the introduction by the Fund of special facilities on concessional terms (SAF Structural Adjustment Facility, and ESAF Enhanced Structural Adjustment Facility). (6)

No substantial remedy has yet been applied to Sub Saharan Africa's debts owed to private banks and other private parties. The proposal of the African Development Bank, prepared with the advice of Warburgs, the British investment bank, three years ago, which envisaged the retirement of these debts through a sinking fund on favourable terms, was not implemented, for reasons which would be of interest to explore. The World Bank established in 1989 the "IDA Debt Reduction Facility" which will provide grants up to US $ 10 million per country to the poor countries with adjustment programmes to buy back or exchange commercial bank debt at a discount. Fourteen African countries with commercial bank debt of US $ 1.6 billion have requested the use of this facility. Niger was the first to draw on the facility in February 1991 to buy back US $ 108 million of its commercial debt at 18 percent of their face value. (7) The price of 18 % appears quite high compared to Bolivia's buyback at 11 % in 1986 and Costa Rica's

18 % in 1990. (8) The French and Swiss Governments also contributed to Niger to finance this transaction. The second user of the DRF was Mozambique, which just concluded an agreement with commercial banks to buy back US $ 308 million at a 90 percent discount (price of 10 %), with additional support likely by Sweden, Switzerland, the Netherlands and France. (9) Much of the delay in drawing the resources of this IDA facility is due to the reluctance of banks to participate in part to avoid setting precedents for other debtor countries where their exposure is larger. (10) Where is the application of the case by case principle for which creditors have fought so strongly7 Furthemore, this facility cannot be used to help countries such as Nigeria and Cote d'Ivoire, major debtors to private banks and suppliers in Africa, first because they are not classified as IDA only (very poor), and secondly because they need much more than US $ 10 million to buy back any significant portion of their commercial debt or neg

otiate its scaling down: Nigeria's debt to private creditors amounted to US $ 16.8 billion at the end of 1989 and that of Cote d'Ivoire at least US $ 4 billion.

The conclusion inevitably follows that, while efforts of some institutions and countries have been both imaginative and generous, the overall debt strategy has been weak, uncoordinated and of limited effectiveness.

Major Pronk proposals on official bilateral debt

On 7 September 1990, the Netherlands Development Minister Jan Pronk proposed that creditor countries collectively extend a complete forgiveness of bilateral official debt to the poorest developing countries facing severe debt problems, particularly the least developed countries and other belonging to the group of low income countries. Forgiveness should be conditional on the debtor countries implementing sound economic policies.

On 20 September 1990, the then U.K. Chancellor of the Exchequer, John Major. proposed at a conference in Trinidad the following changes in the present "Toronto terms" for official bilateral debt and debt service reduction of the poorest countries ("Trinidad proposal"):

(a) The amount of debt written off should be two thirds of

the total stock of eligible debt instead of one third.

(b) When the Paris Club (official creditors) deals with one

of the eligible countries, it should tackle the total

stock of debt in a single longterm operation; it should

not just reschedule one year's maturities at a time.

(c) The repayment period should be lengthened from 14 to 24

years.

(d) Interest payment occurring in the first five years should

be capitalized and repaid in a phased manner in a

steadily increasing total payment of principal and

interest as the export capacity of the debtor country's

economy grows.

It is likely that these proposals will be discussed at the London summit of the Group of 7 industrialized countries in mid-July 1991. One source reports that it is the "Trinidad proposal" which is likely to be adopted.

Open issues in Sub Saharan debt

Adoption of the Pronk Major proposals would represent a significant step forward in solving the Sub Saharan Africa's debt problem, in two ways. First, it would provide cash relief to those poorest debtors which are still servicing their bilateral official debts. (Actual payment in l989 US $ 1,265 million, see the table on page 2.) Secondly, it would regularize the situation of those countries which are not paying now.

However, not all problems would be resolved by these proposals, not by a long shot. The number of African countries eligible for debt relief must be widened so that an effective remedy applies to a larger group than at present.

Furthemore, additional measures are needed to provide relief for debts to multilateral institutions and to private creditors. Paid debt service on official bilateral debt now accounts for only Z3 percent of total debt service; and within this, the Paris club creditors account for seven tenths or only 15 percent of total debt service of Sub Saharan Africa. In contrast, debt service paid to multilateral institutions and to private creditors accounts for as much as 63 percent of total debt service. (11)

The share of debt service paid to multilateral institutions more than doubled in the last ten years, from 15% in 1980 to 33%~ in 1990. It follows that alleviation of the position of Sub Saharan debtors and the solution of the Sub Saharan Africa's debt problem are practically hardly possible without new actions of these institutions, particularly those which are withdrawing resources net from this region.

Composition of Debt Service Paid by

Sub Saharan Africa, by Creditor Source, l990 (a)

(percentage shares)

Creditor source 1990

Medium and long term 86.0

Official 55.l

Multilateral (b) 32.5

World Bank/IDA 14.6

IMF 10.2

Others 7.7

Bilateral 22.6

Paris club 15.l

Arab 2.6

CMEA 2.0

Others 2.9

Private 30,9

Total commercial banks 22.9

Suppliers and others 8,1

Short term 14.0

Total external debt 100.0

Notes: (a) Preliminary.

(b) Includes IMF.

Source: World Sank, World Debt Tables, op.cit., page 91.

With respect to private creditors which still absorb as much 31% of Sub Saharan Africa's aggregate debt service (and 45% if service on short term debt is included, see the above table), the World Bank makes the following suggestion:

"Commercial banka also must expect to share the debt relief burden. If comprehensive settlements through discounted purchases are blocked, debtor countries may want to use concessional aid available for this purpose to buy out those creditors willing to settle. The resolution of the bond debt crisis of the 1930s followed that pattern: debtor countries repurchased bonds at a deep discount on the secondary market, followed, often after many years, by settlements at less than par with the remaining bond holders." (12)

But in order to buy their debts in the secondary market, debtor countries need funds. Some, perhaps most, aid funds are not available for this purpose; and those that are need to be diverted from other uses in meeting frequently vital current expenditures and essential investment needs. Debtor countries normally need additional resources to be able to buy their debts, even at a deep discount. Strapped for cash, they need to borrow. Again the main prospective lenders are international financial institutions, from their existing resources or from additional resources they might be able to mobilize; unless a special institution for repurchase of Sub Saharan Africa's debts is created, which will need resources from developed countries.

B. North Africa

Countrv review

Of the four major debtor countries in North Africa, the largest, Egypt, is now on the verge of getting a 50 % reduction of its US $ 20 billion debt to official bilateral creditors. This comes on top of the 1990 forgivness of US $ 7 billion debt owed to the U.S. Government and US $ 6 billion debt owed to Saudi Arabia, Kuwait, the United Arab Emirates, and Quatar. As a result of these decisions, Egypt's aggregate debt will shrink to about US $ 25 billion from almost US $ 50 billion in 1989. (13) Morocco signed an agreement with its commercial bank creditors in September 1990, which provides for rescheduling, buy back of debt at market prices and a debt equity swap, which is contingent on obtaining an IMF agreement by December 1991. (14) Tunisia is not considered a severely indebted country.

North Africa: Debt Burden Indicators. l9B9

(selected countries)

Total debt Debt stock Debt stock Debt Net finan-

stock,US $ as % of GNP as % of service cial tran-

mln exports as % of sfer, US $

of goods exports million

& of goods

services &

services

_____________________________________________________________

_

Algeria

26,067 58% 249 % 68.9 % 1,984

Egypt

48,799 159 355 21.8 1,744

Morocco

20,851 96 329 32.2 372

Tunisia

6,899 72 136 22.5 113

Source: World Debt Tables 1990 91, op.cit.

Alqeria's liquidity problem

From the liquidity pressure viewpoint, the most difficult is the position of Algeria. Its debt service ratio (debt service as a proportion of exports of goods and services) is running at 70 %, one of the highest in the world. Yearly debt service is US $ 7 billion, equal to almost 30 % of aggregate debt i.e., on present schedule the entire debt of Algeria needs to be repaid in three and a-half years. This pressure on Algeria's resources is a major obstacle to an expansionary economic programme needed to alleviate unemployment and accelerate economic growth. The liquidity pressure is a result of an unfavourable debt structure rather than of the overall level of debt: as a proportion of GNP, Algeria's debt is substantially lower than in the other countries of North Africa. (15) An urgent effort seems indicated to re arrange boldly Algeria's debt service and place it on a long term basis, thus relaasing resources'for the immediate needs of an economic revival.

C. Africa's debts and economic recoverv

Africa's debt servicing problem and international cooperation for their solution need to be considered against the background of possibilities of African countries becoming self sustaining economies over the next, say, 10 15 years. Under what conditions can this happen? One of these conditions for most of them is alleviation of the debt servicing burden. If it is granted in a clear, decisive and substantial measure, can a combination of domestic and international measures be realistically envisaged which could support Africa on a self sustaining path? What can be learned from the past experience?

III - MODERNIZATION AND INDUSTRIALIZATION OF AFRICA

A. Exports of manufactures

Growth

Most of Africa is a primary product dependent continent, and expansion of non traditional exports has long been considered an essential condition for achieving its economic independence, for at least three reasons:

1) - diversification of the production and trade structures; 2) - additional employment and other value added in

processing activities for whose output the markets at

satisfactory prices are predominantly abroad;

3) - acquisition of foreign exchange needed to support

domestic growth and settlement of balances in intra

African trade.

Perhaps the most striking and the least known development in Africa during the last two decades has been a powerful growth of manufactured exports. Specifically:

(a) Between 1980 and 1987, exports of manufactures from

Sub Saharan African countries rose 42 % in U.S. dollar

terms, or at 5.7 % per year. For l988, out of 33

countries for which data are available, exports of

manufactures rose in 28, and the overall increase for the

33 was 15.6 %. For 1989, out of 6 Sub Saharan countries

for which data are available, exports of manufactures

rose in five.

(b) In 1988, eleven Sub-Saharan African countries exported

manufactures ln excess of US $ 100 million each, compared

to seven in l980; in I965 (and in 1969), there was none.

Exports of manufactures from Sub Saharan

Africa above US $ 100 million each in 1988

(US $ millions)

1965 1980 1988

Mauritius 0 125 692

Zimbabwe 61 404 638

Botswana 1 353 540

Cote d'Ivoire 15 295 317 (a)

Kenya 14 210 200 (a)

Senegal 4 72 182

Gabon 10 26 165

Cameroon 6 50 164

Nigeria 17 130 155

Congo 24 64 149 (b)

Zaire 28 158 144

Notes: (a) 1989

(b) 1987

Source: World Bank, Sub Saharan Africa:

From Crisis to Sustainable Growth, 1989, page 250;

World Bank, World Tables 1991.

There also have been setbacks, for various reasons. But taking Sub Sahara as a whole, to achieve a 60 % increase in exports of manufactures to US $ 4 billion on a non negligible base of US $ 2.5 billion in 1980, over an eight year period marked by a commodity collapse and associated curtailment of the capacity import, droughts, debt crisis, wars and policy disasters, is remarkable.

(c) North African exports of manufactures more than doubled between 1980 and 1987(increase of 12.7 % per year). In 1988, they shot up 31.5 % and in l989 by 5.3 %, averaging 17.6 % p.a. over the two years. North African exports of manufactures are now running at US $ 5 billion per year, with Morocco (US $ 1,815 million), Tunisia (1,697) and Egypt (1,244) in leading positions (year 1989).

Product range

Two pieces of "revealed comparative advantage" analysis - export expansion faster than the average are available. First, a World Bank staff study on intra African trade (Sub Saharan), 1989, found that:

"Despite the predominance of commodity exports, some countries do show positive RCA results for manufactures. Zaire shows a revealed comparative advantage in exporting cement, Cameroon and Cote d'Ivoire reflect an advantage in woven cotton cloth, Congo exports winches, hunting equipment and jewellery. Cote d'Ivoire and Nigeria both export cargo vessels... A less formal analysis also reveals interesting potential not only in such basic manufactures as textiles that might be expected, but also for spectacles and frames; watches, movements and cases; and toys and indoor games. There is also potential in treated metals and cement. In five countries examined in greater detail Cameroon, Cote d'Ivoire, Congo, Nigeria and Zaire the products with an RCA are mainly exported to the industrialized world." (16)

The second analysis was undertaken in the Overseas Development Institute, London, for the negotiators in the Lome Convention negotiations. The analysis identified manufactured, semi manufactured and other non traditional products in which the African, Caribbean and Pacific developing countries, but mostly African, had achieved faster growth of sales in the EEC market than any other suppliers during 1976 87. The identified products included clothing and linen, canned tuna, wood products, yarns and fabrics, processed tropical agricultural goods, leather and products, vegetables and fresh flowers. The study concludes that "contrary to a fairly widespread view, the ACP countries have succeeded in diversifying their exports into semi manufactures, manufactures and other non traditional goods. Such goods already account for some 8 % of non oil exports to the European Community and are also significant in ACP exports to some non EC markets, most notably the USA." (17)

8. Competitive Position of Africa's manufacturing

Labour costs

Labour costs in Africa are now among the lowest in the world. Real wages have been falling since about 1975, as a result of insufficient job creation, rapid labour force growth, inflation, stagnation, structural adjustment and devaluations. Data are available for 13 countries in the period 1975 80 and 24 countries in l98O 87. In 1975 80, real wages fell on the average by 39 %; in 1980 87, the average fall amounted to an additional 29 %, giving a 1987 average real level at 44 % of 1975. (18) Some individual country figures are difficult to believe, such as those, for example, when on top of a 50 % decline in the first period 1975 8O comes another 50 % or so decline in the second period 1980 87, resulting in a cumulative reduction in the real wage of 75 % over 10 12 years. But the overall trend is difficult to doubt. Over the entire period from the mid 1970s to the mid 198Os, non agricultural and minimum wages have been cut by about one half.

African wages historically have been higher than those in Asia. Has the recent decline of African wages erased the difference? No direct comparison between the African and Asian wages for manufacturing as a whole is available for a large number of countries. Partial comparisons suggest that in some West African countries (Benin, Burkina Faso, Burundi, Chad and Rwanda) wages in October l988 were still considerably higher than in Bangladesh, Indonesia and India; while wages in Sierra Leone and Zambia were lower than in Asia. (19) But this sample of countries is not good: Burundi and Burkina Faso are among the few African countries where wages did not fall. These problems are avoided in a survey of labour costs in the textile industry, a major industry into which Africa has already moved and will be pushing forward. The survey, prepared by an international management consulting firm specializing in textiles, (20) shows that the lowest cost per hour among 48 countries in l989 was in Uganda (16 U.S. cent

s), followed by Indonesia (23 cents) and Nigeria (26 cents). India, China and Pakistan show considerably higher hourly costs (65, 40 and 37 cents, respectively); and Taiwan, South Korea and Hong Kong have more than ten times the Indonesian Nigerian labour costs. A later source indicates the average hourly wage rate in Nigerian textiles of only 16 cents compared to 58 cents in India. (21)

In an across the industries comparison, i.e. for manufacturing as a whole, it appears that Nigeria has lower labour costs than Indonesia. "Nigeria's labour force is good and one of the cheapest in the world", according to Mr. H.B. Osmann, president of the Michelin Nigeria, a large investment of the large French tire manufacturing company. The minimum wage is 150 French francs (US $ 26) per month, and the average is barely 500 francs (US $ 87)" (22) "In Jakarta, Indonesia, the official factory minimum wage is equivalent to US $ 42 a month." (23)

The World Bank reports that devaluations have brought the dollar cost of African wages close to its competitors' in Ghana, Guinea and Tanzania, for example" (24) ... "Hourly compensation in dollar terms fell in Madagascar to US $ 0.29 in l987 as against US $ 0.40 in India and US $ l.89 in Hong Kong" (25) ... The Bank's well known trade economist, Dr. Donald Keesing, lndicated that particularly in Madagascar and Ethiopia the wages are very low, which will help their expansion of garments. (26) In North Africa, low labour costs are a major attraction for the revival of French investments: in Morocco, "the Asians are defeated on their own ground." (27) In the Egyptian textile industry, labour costs are barely above the Chinese, and are below those of India, as indicated by the Werner textile wage survey. Dr. Mark Leiserson, formerly high official of ILO and the World Bank, now an economic consultant, made a general point recently: African real wages have been falling, while the Asian ones are risin

g, so at this point one does not know whether the Asian wages are lower. (28) Dr. Zafer Shahid, an ILO economIst responsible for following lnternational wage trends, indicated that African wages are now lower than the Asian. An exception may be Bangladesh; but generally, he would say that African wages are as low as they can be, at the Asian level or below. (29)

It is sad that African wages have been driven down so brutally. What can now be done is to extract maximum benefit from this social cost, through rapid expansion of exports and development of competitive imports and the associated employment growth.

Problems of labour discipline and 'industrial culture'

During a discussion of resource allocation in Africa, a prominent World Bank economist remarked that an international financial institution had paid the cost of preparing food processing industry studies, but production has fallen in many places lack of a disciplined labour force. The same point is made by the official in charge of training at the Michelin factory in Nigeria: "Young apprentices are capable, creative and very intelligent. One problem: they have no sense of collective discipline, and no industrial culture." (30)

And yet, there is evidence concerning the speed of mastering the industrial process and its discipline and acquiring 'industrial culture', even though problems undoubtedly exist:

(a) Mauritius has become an example of successful development through an export drive which has propelled it from a sugar dominated island with apparently untractable unemployment into an important international textile producer with full employment reached in barely a decade.

(b) Zimbabwe has developed a capital goods industry initially to meet domestic needs, and much of it is competitive, with many firms being able to move into exporting and others having a good prospect of exporting; there are no severe shortages of skilled labour at present; and exporting succeeds largely because of good quality and competitive prices. (31) Zimbabwe now sells steel not only to other African countries, but also to the Far East.

(c) The same Nigerian Michelin factory "holds two thirds of the domestic market and produces each year, in and out, sufficient numbers of tires which supply all the vehicles, from trucks to bicycles, all the way to Cameroon and Ghana...The quality and productivity are perfectly equal, and the material is equal, to the performance of European factories ... Great importance is attached to training professional personnel, obligatory Nigerian." (32)

(d) In Morocco, "the French have invested much into the textile sector during the last decade, as textile industry for a long time has offered the fastest return on capital. A young entrepreneur, which produces outer garments for children in a factory located in the industrial zone of Casablanca, said that he had recovered his initial investment in eighteen months. This is not exceptional." (33)

Rates of return

A recent study of modern African entrepreneurs and enterprises, prepared on the basis of data available to the African Project Development Facility (AFDP), established in 1986 on the initiative of the International Finance Corporation (IFC), a member of the World Bank Group, presented the results of independent assessments by AFDP staff and consultants of 83 projects approved in 22 Sub Saharan African countries. They showed an average projected rate of return of 29.5 %. Variation in profitability among different sectors, countries and sizes of projects was relatively small. (34) Findings regarding the actually achieved returns, as compared with projected, are not yet available in view of the short time in which the Facility has operated. A 30 % return is a formidable order of magnitude for any reasonably made forecast. Dr. Mardsen, the author of the study, finds support for this finding in an investigation of a sample of 106 modern manufacturing enterprises in Kenya conducted by the World Bank in 19

86. The actually achieved rate of profit averaged 18 percent, (35) an impressive result, comparable with rates achievable in developed countries.

These findings are at variance with another IFC estimate. For a sample of projects IFC has financed, it has found an actual average rate of return in all developing country regions of 12 % per year. In Africa, a comparable rate has been 6 %. (36) But the Project sample has included agricultural projects; and these projects, probably heavily represented in the African sub sample, have shown particularly poor results in Africa. (37) Further analysis of this IFC estimate is needed.

C. Requirements for future growth

Among the many requirements for a continuing advance in modernization and industrialization of Africa, three can be singled out: realistic exchange rates and undistorted product prices; sufficient supply of industrial inputs and of trade credit; and reconstruction of capital stock and improvement of infrastructure.

Realistic exchange rates and undistorted product prices

Overvalued and undervalued currencies have proved unsustainable in most countries, and certainly in Africa. Overvalued rates have arrested diversification, led to balance of payments difficulties and massive black markets, and discouraged output for both the domestic and foreign markets. Sharply undervalued rates have led to acceleration of inflation, deterioration of the terms of trade and aggravation of inequalities in income distribution, with sharp falls in real wages. (Experience has shown that the best policy for accelerated economic development is a marginally undervalued rate, as it stimulates output growth and diversified sales on foreign markets, while it avoids significant inflationary pressures and declines in real wages and maximizes employment.) Concerning prices of goods and services, significant distortions lead to output shortages of certain classes of goods and surpluses of others, growing dlsequilibria in consumer markets, distortions in incentives to invest, and difficulties in balanc

es of payments.

Sufficient supply of industrial inputs and trade credit

Africa has lost world market shares in a number of primary products. Recent analyses have indicated several agricultural products where output expansion would both recover the sales abroad and improve the domestic supply: oils and fats are an outstanding case, followed by cotton. Recovery of foreign sales would improve the foreign exchange situation directly; and improvement in domestic supply would do it indirectly as it would help keep down the cost of wage goods and thus assist competitive industrial growth. (38) This is particularly important in the case of Nigeria, the potential industrial giant of Africa, in view of its vast agricultural base. "Structural adjustment in Nigeria has placed greater emphasis on agriculture, and textile firms report increased security of supply for their cotton requirements." (39) In imports, a liberalized policy in meeting the demand for industrial raw materials and intermediate goods is needed to assure steady industrial growth and expansion of manufactured export

s. And both with respect to internal and external trade, sufficient credit is required to finance both the work in progress and inventory supply. Foreign trade credit has been reduced in Africa since the emergence of the debt crisis as foreign lenders have partly withdrawn, and this gap needs to be filled if Africa's foreign trade and production are to recover.

Reconstruction of capital stock and improvement of infrastructure

Investment has fallen sharply in most debtor countries in the l98Os, primarily under the impact of shortage of finance. (40)

Investment-to-GDP Ratios, Selected Low and

Middle-Income Regions, 1980-1988

Sub-Saharan

Africa

1980 1981 1982 1983 1984 1985 l986 1987 1988 1989(a)

20.5 20.8 17.8 14.2 11.3 12.5 14.6 15.4 15.4 14.2

Latin America

& Caribbean

24.2 23.6 21.4 16.8 16.7 17.6 17.4 19.7 21.5 20.6

Europe,

Middle East

& North Afrca

30.6 30.8 29.6 30.2 29.1 28.3 26.9 25.9 24.1 24.2

Note: (a) - Preliminary estimate.

Source: The World Bank, Annual Report 1990, page 30.

"The fall in investment has been so severe that some countries may not even have been fully replacing depreciating capital. In Africa, the minimum inuestment needed to replace depreciated capital is estimated at 13 percent of GDP, and seven Sub Saharan countries had investment rates below that level in l987. Similarly, the minimum investment rate to replace capital in Latin America is estimated at 14 percent and three countries were below that level in 1987." (41)

The situation probably worsened further in l988 and 1989. In addition to the adverse impact this trend has on the economic and social conditions of these countries, it has aggravated their environmental situation significantly. "One consequence of low investment is an ageing capital stock.

(In Nigeria) one survey found that three quarters of manufacturing equipment is between 10 and 20 years old, and 15 percent more than 20 years old. Only 10 percent was installed in the last seven years." (42)

Infrastructure bottlenecks are significant in many countries, they contribute to inefficiency and to a considerable extent may offset the effects on total costs of low real wages. Again in Nigeria, "infrastructure costs are extremely high 92 percent of a sample of 179 firms have their own electricity generators. Nearly half the firms have their own boreholes, two thirds have their own truck and van fleets and 37 percent their own telecommunications equipment. Manufacturing industry is at a competitive disadvantage because of the operating and capital costs of providing this infrastructure." (43)

At present level of domestic savings and international commodity prices, most of Africa cannot undertake the reconstruction, modernization and expansion of the capital stock out of domestic resources, to any significant degree. Foreign capital inflow is needed to initiate the recovery and to help sustain it thereafter. But such capital inflow will not take place until the present debt situation is cleared up. This is a necessary condition, even though it is not a sufficient condition. It needs to be supported by domestic efforts and policies dedicated to resumption of economic growth and improvement of social conditions.

IV INTERNATIONAL FRAMEWORK

A. Commoditv Problem

In country after country in the developing world, adjustment objectives have been vitiated by price collapses in the export market or by collapses of supply, which affect strongly the country's earnings and thus its budgetary and investment objectives. This has been a general case in developing countries, but has affected the African economies with a particular violence in view of their pronounced dependence on commodity exports in their total exports and national income. Between 1990 and l987, aggregate African exports fell from US $ 94.7 billion to US $ 53.2 billion, almost by one half, and the whole decline was due to the commodity problem, in this case to the shifting fortunes of petroleum, from its unsustainable peak price in l98O to an unsupportable trough in 1986 87. Of the US $ 21 billion decline in total exports of Sub-Saharan Africa, declines in Nigeria and Gabon, major petroleum producers, account for some US $ 20 billion. In Nigeria alone, exports fell from US $ 26 billion in 1980 to US $

7,3 billion in 1987: a shock of a magnitude which probably no country has ever sustained in time of peace.

Over the last forty years, ezport commodity prices other than petroleum have fallen by 50 % in real terms, a development of staggering proportions, with far-reaching effects on many producers. Between May 1989 and January 1991, commodity prices other than oil fell as much as 23 % in SDR terms: speed of decline similar to that experienced in the great price fall 1980-82 which marked the beginning of the debt crisis of the 1980s. (44)

There are recent instances of traders and trade bankers withdrawing from commodity finance because of increased risks associated with deep price falls and resulting losses on inventory: a development which will make the producers even more vulnerable than so far.

This Roundtable is not focused on the commodity problem and therefore I will refrain from making general suggestion as to what should and can be done. But I will discuss briefly a specific proposal concerning one commodity which is of great importance for

Africa and which is one of the most critically affected by the present commodity crisis : cocoa. The collapse of the cocoa price in the last three years has a devastating effect on West Africa, the main producing region. The currently generated surplus is nowdeclining, but large surplus stocks are overhanging the market, keeping the price and producer's income deeply depressed. Consumption of cocoa in Eastern Europa is low, about 300,000 tons for a population of 397 million, or 760 grams per head per year (1987). Western European consumption per head is 1,853 grams. The Western European consumption standard would raise the Eastern European aggregate consumption to 735,000 tons per year. In less than two years, the entire present surplus stock would be absorbed, if the sale of stock could be financed. Cocoa is a valuable food, and the demand for it will be high. Nonetheless, two years is probably too short a period for absorption in view of competing demands on Eastern European consumer's incomes, but i

t would not take much longer.

A consortium of international financing agencies (African Development Bank or an African Export-Import Bank if established, Inter-American Development Bank, Asian Development Bank, (45) World Bank/IDA, European Bank for Reconstruction and Development) should be established to finance disposal of 650,000 tons to Eastern Europe, estimated to cost US $ 760 million at a price of US $ 1,175 per ton (early March 1990 price). These institutions would extend credits of, say, 15 years duration to the Eastern European countries (or to cocoa producing countries in the case of regional development banks which may be prohibited to lend outside their respective regions) for the purchase of cocoa stocks. It would be a transaction similar to the present structural adjustment loans which are used for general balance of payments purposes. It will be necessary that cocoa obtained on credit does not turn up at lower than market prices in non Eastern European markets and thus impair regular sales; but tnis can be kept

in check through a combination of proper pricing in the domestic markets of the Eastern European countries and administrative supervision. This transaction, arranged within a framework of an agreement between the producing countries and the consortium, aiming at preventing e reccurrence of new massive surpluses, would be a valuable adjunct to stabilization in both the developing and Eastern European countries. Cocoa prices would be lifted, benefiting the producers, and probably stabilized, benefiting both the producers and the consumers; while Eastern Europe would get additional, for them essentially wage goods. International financial institutions, members of a possible cocoa lending consortium, would not run greater risk than in their ordinary structural adjustment lending.

B. Conditionalitv

At a 'Brainstorming Meeting' for a Conference on Security, Stability, Development and Cooperation in Africa, convened by General Obasanjo, Chairman of the Africa Leadership Forum, Dr. Salim A. Salim, the Secretary General of the Organization of African Unity, and Professor Adebayo Adedeji, the Executive Secretary of the UN Economic Commission for Africa on 17 l8 November 1990, two conclusions were adopted concerning conditionality:

(i) "Africa cannot emerge out of the current

economic problems on the basis of orthodox

structural adjustment programmes.

However, consensus is increasingly emerging for

a convergence of some of the IMF/IBRD

conditionalities with the African Alternative

Framework to Structural Adjustment for

Socio Economic Recovery and Transformation "

[Paragraph 16]

(ii) "Increasingly there is a tendency of donor

countries to introduce a new political

conditionality in addition to the existing

economic conditionalities for aid and

concessionary resource flows to Africa. This

new conditionality is unacceptable.

Multipartyism is being used as one of the

criteria for certification for aid. Yet,

multipartyism is no guarantee for democracy.

African countries must ensure genuine

democracy and popular participation which

should be self induced and sustained rather

than externally imposed."[Paragraph 40] (46)

The position on political conditionality is clear. Further elaboration is needed concerning possible convergence of lMF IBRD conditionalities and ECA's Alternative Framework positions, and this is an area which may be usefully explored.

In order to facilitate such exploration, set forth below is the summary of my study Conditionality: Facts, Theorv and Policy (47) which attempts to distinguish between different aspects of conditionality and suggests a possible course of action that may be followed:

"Three changes in conditionality of loans are proposed in this study, in order to improve the relations between developing country borrowers and international lending agencies, and make the international cooperative effort at development and stability more effective. First, the agencies should encourage member country governments requesting adjustment assistance to submit their own programmes of adjustment. The present practice of the agencies preparing country programmes should be discontinued. Secondly, the agencies should decide on their loans on the basis of their assessment of the debt servicing capacity and financial management of the borrowers, with loan conditions being normally confined to factors bearing on these two areas. This would modify the present primary emphasis of conditionality on influencing national economic policies of the borrowers in a particular direction. Thirdly, a system of regular exchange of information and economic policy views between the borrowers and the agencies should be

instituted. This would enable the policy dialogue to be continued, but in a consultative manner. Brief comments on these proposals follow.

Transfer of responsibility for preparing adjustment programmes to national governments would enable the adaptation of programmes the choice of objectives and policy instruments to economic and social conditions in each individual case. Furthemore, this would increase the commitment of governments to the implementation of programmes.

Serious doubts exist concerning validity of several important points of economic theory and associated policy on which the present practice of conditionality rests, and this suggests the need for its modification. These doubts refer to, first, monetary programming with its pre set money supply targets which may lead to restrictions on output more than needed to accomplish the required balance-of-payments turnaround; secondly, financial 'liberalization' required virtually under all circumstances, which may lead to exacerbation of inflation through rising money costs and to sustained excessive real interest rates destructive of investment over extended periods; thirdly, import liberalization, when requested in countries experiencing foreign exchange shortages, which raises further their external deficits and may lead to reductions in output and employment; and fourthly, general agency resistance to selective policies and measures which many governments wish to apply in order to minimize the deflation due to ad

justment and influence the burden sharing among different social classes. [More generally], conditionality has two aspects: changes in economic policy, and the need for orderly financial and administrative management. Economic policy is a matter which by its nature does not tolerate uniform treatment or a uniform doctrine or ideology. It affects income distribution, the strategy of resource allocation, the role of the government in economic life, the degree and the method of involvement in international trade, in short the essential philosophy of public policy. The interest of creditors in the economic policy of their debtors cannot be denied as it affects the service and safety of their claims. However, creditors should not assume the role of makers of national policy in debtor countries; it is the political leaders of these countries who carry the responsibility for possible mistakes and pay for them with their jobs, and in extreme cases even with their lives. On the other hand, there should be no serious

objections to the second aspect of conditionality focused on orderly financial management in debtor countries and their debt servicing capacity. Included here are orderly tax administration and enforcement, tight public expenditure control, realism of investment and financing plans, control over foreign borrowing, anti corruption drives and enforcement, drives for accountability and sound management of public enterprises, stopping the use of government agencies to provide jobs, speed in decision making and in the implementation of government decisions, policies to discourage, and measures to prevent capital flight.

The proposed initiation of regular periodic exchanges of information, experiences and economic policy views between borrowing country officials and the staff of the agencies would enable the economic discussions to continue. The agencies have contributed to several important policy developments in borrowing countries in the past, such as increased emphasis on export expansion, improved public enterprise finances, higher domestic agricultural prices; and the proposed exchanges would enable them to make similar contributions in the future...The agency staff, in turn, would be able to continue to draw on the growing development management experience in developing countries and their increased ability to absorb and adapt modern technology ... The consultative nature of the arrangement should reduce frictions between lenders and borrowers and, hopefully, make for a fruitful and continuing cooperative effort." (48)

The recent establishment of The African Capacity Building Foundation, sponsored by the World Bank, African Development Bank and the United Nations Development Fund (UNDP), aims, through a fund of US $ 100 million over four years, "to put Africa more in control of its economic future" by strengthening local skills and institutions in the fields of public policy analysis and development management. The Foundation will be headquartered in Harare, Zimbabwe. Its stated objective goes along the main line recommended in this study: adjustment and development plans should be prepared and implemented by national governments rather than by external bodies. The same thought was expressed by a high official of an international financial agencies at a recent meeting on Eastern Europe and included in its conclusions: "It is essential that reform programmes be prepared, and to be seen to be prepared, by the governments concerned rather than by foreign advisers." (50) It may be noted also that Hermann Abs, the German

banker who designed and negotiated the successful Indonesian debt settlement of 1970, indicated that, if I recall correctly, its objective was to restore to Indonesia independence in its economic decision making.

NOTES

(1) World Bank, World Debt Tables 1990 91: External Debt of Developing Countries, Volume I, Appendix 6, December 1990, page 89.

(2) Ibid.

(3) Ibid., page 93.

(4) Ibid.

(5) Ibid., page 92.

(6) Percy S. Mistry, African Debt Revisited, paper prepared

for the Abidjan North South Roundtable, 8 9 July 1991,

page 21 (revided).

(7) Financial Times, 20 February 1991.

(8) Mistry, Op. cit., page 30.

(9) World Bank News, 13 June 1991.

(10) World Bank, World Debt Tables, op. cit., page 94.

(11) These figures refer to medium and long term debt. Debt service on short-term debt accounts for 14 percent of total debt service (see table on page 6).

(12) World Bank, World Debt Tables, op. cit., pages 29 30. Debt

settlement experience following the crisis ot the 1930s has

been discussed in several studies by professors Barry

Eichengreen and Richard Portes, from the Centre for Economic

Policy Research (CEPR), London.

(13) As reported in The New York Times, 27 May 1991

(14) World Bank, Review of Progress Under the Program to

Support Debt and Debt Service Reduction, 1 March 1991, page 4; World Bank, World Debt Tables, op.cit., page 31.

(15) Please see the second column in the table on page 7.

(16) Ali Mansoor, Salomon Samen, Paul Morawetz, Manesha Vaishampayan, Cristina Corado, Muna Salim, Intra Reqional Trade in Sub Saharan Africa, World Bank 1989, page 55.

(17) Mathew Mc Queen and Christopher Stevens, ACP Trade with the EEC in Semi Manufactured and Manufactured Products for the Period 1089-92, Volume 1, Overseas Development lnstitute, London, July 1989, page 8 and 9 55.

(18) Dragoslav Avramovic, An African Export Import Bank:

Feasibilitv Study, 28 March 1990 (mimeo.).

(19) ILO, Bulletin of Labour Statistics, October Inquiry

Results, 1967 and 1988, Geneva l989.

(20) Werner International Inc., Management Consultants, New

York and Brussels, 1990.

(21) Tony Hawkins, Nigeria: an upbeat mood in industry,

Financial Times, 12 March 1991.

(22) Veronique Maurus, Nigeria, Le Monde, 16 February 1990. (23) International Herald Tribune, 16 February 1990.

(24) World Bank, Sub Saharan Africa: From Crisis to

Sustainable Growth, op. cit., page 29.

(25) Ibid., pzge 117.

(26) Interview in early December 1989.

(27) Emmanuel Pradiel, in Le Monde, 16 February 1990.

(28) Conversation on 7 December 1989.

(29) Conversation on 29 January 1990.

(30) Maurus, op.cit.

(31) World Bank, Zimbabwe: The Capital Goods Sector.

Investment and Industrial Issues, 30 June 1989, pages

23,24 and 27.

(32) Maurus, op.cit

(33) Pradiel, op clt.

(34) Keith Mardsen, African Entrepreneurs: Pioneers of

Development, Discussion Paper 9. IFC The World Bank

1990, pages 11-12

(35) Ibid., page 12.

(36) Based on a conversation with Dr. G.P.Pfeffermann, Chief

Economist and Director of the Economic Department, IFC,

26 June 1991.

(37) Ibid.

(38) See, Uma Lele and Associates, Summary and Conclusions

of Nigeria's Economic Development, Agriculture's Role

and World Bank Assistance, 1961 88, May 1989, page 1

(mimeo.l; also, Syntesis: Aid to African Agriculture,

1989, page 240 (mimeo.).

(39) Hawkins, op.cit. (Financial Times, 12 March 1991)

(40) For analysis of various factors, see Bert Hofman and

Helmut Reisen, Debt Overhang, Liquidity Constraints and

Adjustment Incentives, OECD Development Centre,

Technical Paper N.32, Paris 1990.

(41) The World Bank, Report on Adjustment Lending II, 26

March l990, page 85

(42) Hawkins, op.cit.

(43) Ibid.

(44) UNCTAD, Monthly index of commodity prices, preliminary,

March 1991

(45) Latin America (17%) and Africa (15%) are also cocoa

producers, although smaller than Africa (65%).

(46) Report on the Brainwashino Meeting, Addis Ababa, 1990, pages

3 and 40.

(47) Development and South South Cooperation, Belgrade, June 1987;

WIDER Working Paper WP 37, Helsinki, 1 February 1988; WIDER

Research for Action study, Helsinki, July 1989.

(48) Conditionality, ibid., WIDER 1989, pages 5 6 and 31 32.

(49) World Bank News, 14 February 1991.

(50) Statement of the Chairman of the International Seminar on

International Economic Trends and Policies, their Effects on

Eastern Europe, and Problems and Prospects of Eastern

European Economies, Milocer, Yugoslavia, 26 June 1991,

page 3.

 
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