Country Brief

History                                                              Country Brief Last updated September 2007

Since Congo's independence in 1960, its history has been marked by a series of conflicts, including three presidential coups and one presidential assassination between 1958 and 1979. In 1968, a military government came to power and later established a Marxist-Leninist regime. The Sovereign National Conference, which took place from February 25 to June 10, 1991, restored democracy to the country, paving the way for free and transparent elections. Between 1993 and 1999, the country was ravaged by three civil wars.

A political liberalization process took place in November/December 1999 (the ceasefire agreements called for the reestablishment of political parties), and a new constitution was adopted in January 2002 , which was followed by presidential, legislative, local, and senatorial elections. These elections created an environment for reconciliation and dialogue, with the representation of opposition parties in Parliament. When the 2007 legislative elections were held, the presidential majority won 125 of the 137 seats, a victory that gave it a comfortable parliamentary majority.

This progress was strengthened by the March 2003 signing of a peace agreement between the Government and virtually all remaining rebel groups. This agreement enabled the Government to launch a program to demobilize former combatants and strengthen democratic institutions. The presidential appointment on May 21, 2007of Frédéric Bintsamou, also known as Pastor Ntumi, Chair of the National Council of Republicans [Conseil National des Républicains CNR], to the position of Delegate General for the promotion of peace and war reparations was intended to put an end to the atrocities wrought by this last bastion of rebellion .

Economy

The economy of the Republic of Congo is heavily dominated by the oil sector, which accounts for approximately 52 percent of its GDP, more than 85 percent of its exports, and 70 percent of public revenue. The non-oil sector, in particular industry, remains very underdeveloped, despite Congo's great potential .  S uccessive post-independence governments have not, however, been able to use the country's great economic potential to achieve tangible improvements in the living conditions of the majority of the population.

Formerly ranked as a lower middle-income country, per capita income in Congo has declined steadily since the late 1980s. This situation was exacerbated by the effects of the war that ravaged the country during the 1990s. These conflicts have exacted a heavy toll on the country's infrastructure. Entire provinces are without drinking water and a number of institutions lie in ruins. The poverty rate was estimated at close to 50 percent in 2005, after peaking at close to 70 percent in the period immediately following the conflicts.

The United Nations human development index ranks Congo 144 th out of a total of 177 countries. According to UNICEF, 11 percent of children under age 15 are orphans, 60,000 women and girls have been victims of rape, and 5,000 children fought during the war. In 2005, close to 4.7 percent of the Congolese population in the 15 – 49 age group was estimated to be living with HIV/AIDS . The primary enrolment rate dropped from 90 percent in 1990 to 40 percent in 2000, and during the same period life expectancy declined, going from roughly age 52 in the early 1990s to age 48.6 in 2002. The unemployment rate among the active population is estimated at close to 50 percent, with young people in particular being the most hard hit.

As as result of the work done by the authorities in 2003-2004, Congo managed to conclude an agreement with the International Monetary Fund under the Poverty Reduction and Growth Facility in December 2004. Congo also reached the decision point under the HIPC Initiative in March 2006. The main reforms supported by the international community under this program are poverty reduction; strengthening the public finance management system (including public investment management); improving goverance, particularly in the area of natural resource management (including oil and forest resources); and combating corruption, among others.

External Debt

Congo is a heavily indebted country, which makes it eligible for the HIPC Initiative . Its public and publicly guaranteed external debt stood at US$8.5 billion in nominal terms at end-December 2004 (US$8.4 billion in net present value (NPV) terms) This level of debt in NPV terms corresponds to 806 percent of fiscal revenue, 338 percent of exports, and 235 percent of GDP. Approximately two-thirds of Congo’s external debt is owed to multilateral (8 percent) and official bilateral (59 percent) creditors. The remaining debt (33 percent) is owed to commercial creditors.

Since reaching the decision point under the HIPC Initiative , Congo has benefitted from debt relief from a number of donors, among them the World Bank. The Government is continuing efforts to normalize its relations with the Paris Club and, in particular, with the London Club, with which the Government plans to conclude a memorandum of understanding in the months ahead.

World Bank Role

The Bank resumed its activities in Congo in 2001 in the context of a Transitional Support Strategy (TSS), which was submitted for discussion by the Board on January 16, 2001.

A new TSS, discussed by the Board in September 2003, was aimed at helping Congo break the vicious cycle of conflict. It revolves around four strategic elements: (a) supporting the growth and diversification program for the Congolese economy; (b) helping enhance and reposition the public sector; (c) mitigating social risks, in the short- and medium-term, faced by Congo; and (d) increasing resources for peace and development.

• The Interim Strategy Note for the Republic of Congo adopted on July 31, 2007 for the period 2007-2009, focuses on two main areas: (i) improving governance and transparency in the oil and non-oil sectors; and (ii) expanding access to basic social services by the poor, in order to begin to lay the foundation for equitable growth. The total amount of new commitments by the Bank for its new strategy stands at approximately US$98 million, in the form of grants.

In order to support the development of Congo, the Bank is currently funding five projects, representing a total volume of commitments of US$122 million ($69 million in grants).

• Transparency and Governance Capacity Building Project - PRCTG (US$7 million, approved in February 2002; effective in February 2003, plus an additional US$15 million approved in May 2007): to help the country improve its public finance management and, in particular, increase transparency in the management of its natural resources;
• Emergency Recovery and Community Support Project - PURAC (US$41 million, approved in June 2003; effective in September 2003): to help strengthen economic stability and support structural reforms in such areas as reform of the legal and regulatory framework in key sectors, improved business incentives, and market liberalization .
• HIV/AIDS & Health Project - PLVSS (US$19 million, approved in April 2004; effective in October 2004): to support actions by the Government to slow the spread of HIV/AIDS and strengthen support and care provided to people infected with or affected by HIV/AIDS;
• Support to Basic Education Project  - PRAEBASE (US$20 million, approved in September 2004; effective in March 2005): to enhance efficiency in the allocation and management of resources, improve the quality of the educational services, and reduce the inequities in access to these services; and
• Agricultural Development and Rural Roads Rehabilitation Project  - (approved in June 2007; projected effective date—December 2007): to support rural activities, particularly those of farmers, agricultural producers, and fishermen, with a view to boosting production and revenue through the development of rural roads, improved market access, and the promotion of sustainable fisheries activities.

In addition to World Bank-financed activities, Congo is receiving resources from a multi-donor fund for the demobilization and reintegration of former combatants.

• National Program for Disarmament, Demobilization, and Reintegration (PNDDR) of Former Combatants (approved January 3, 2006: US$25 million, US$17 million of which was mobilized by the World Bank). Objective: to help strengthen the peace process, political stability, and security in the country and thus in the subregion, as well as national reconciliation and social and economic reconstruction.

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