This week Devnews focuses on the World Bank’s development work in conflict areas. Eighty percent of the world's 20 poorest countries today have suffered from a major conflict in the recent years. Devnews has talked to Bank staff on the ground, to get a clearer sense as to what this work entails on a daily basis, what progress is being made, what challenges are faced and what lessons they have learnt. "Conflict and Development: a View from the Ground" is a series of five stories, that will run from May 12-16. May 14th will also see the launch of a new World Bank report, "Breaking the Conflict Trap" by Paul Collier et al, on the causes of civil war.
May 15, 2003—At one point, nine countries were involved in the conflict that engulfed the Democratic Republic of Congo after the downfall of Mobutu Sese Seke. The geopolitical melee led The Economist magazine to dub the fighting "Africa’s First World War." Under the radar of much of the international news media, an estimated 200,000 people, mostly civilians, were killed in almost five years of fighting. Another 3 million died of starvation or diseases that would have been treated in the absence of war. The DRC’s conflict took more lives than any since World War II and was the deadliest documented in Africa’s history.
A peace agreement was signed on April 2, and foreign forces have pulled out of the country. Inter-ethnic fighting continues in Ituri, a mineral rich district in the Eastern Province, but relative stability has returned to most of the country. The World Bank, however, had already begun assisting the Congolese government more than two years before. It was this head start that makes the Bank’s strategy in DRC unique compared to other conflict countries and, arguably, even contributed to the sealing of a peace deal, World Bank Country Vice President for Africa Callisto Madavo said.
"The Bank took the lead in reengaging with the Congo, together with the IMF, before the peace agreement was signed," Country Director Emmanuel Mbi said. "We felt very strongly that the peace process in the Congo needed to be accompanied with this type of support to show the Congolese people light at the end of the tunnel and to allow sufficient credibility for the Congolese state to be accepted by others as a negotiating partner." The approach was not without controversy.
Joseph Kabila, the son of Laurent Kabila, the rebel leader who deposed Mobutu in 1997, came to power in January 2001 and stocked his government with technocrats who had drawn up viable reform plans, Mbi said. The Bank’s early engagement was meant to convey the message that the "international community has the obligation to respond to a government that puts together a responsible and sound economic reform program, and from that to create a sort of ‘train on rails’ image," he said. "The train is moving and it can’t be stopped."
The Bank—which had suspended financial assistance in 1993—provided substantial support to underpin an IMF-monitored stabilization program. This included the first grant through IDA 12’s post-conflict window: $50 million that went toward testing implementation mechanisms for high-priority areas like road construction, HIV/AIDS and community-based projects. The focus reflected another part of the Bank’s strategy. "That was to try to defy the notion out there that one could not usefully and in a fiduciary responsible way spend money in the Congo, which was of course very much burdened by the reputation of Zaire, its former incarnation," said Onno Ruhl, Country Manager for the DRC and task manager of the Emergency Early Recovery Project. "Getting this project implemented fast and well was key."
War and decades of mismanagement and corruption under Mobutu had devastated Congo’s economy. "There was rampant inflation, over 500 percent per year, and complete economic chaos," Lead Economist Brendan Horton said. The economy had shrunk for 12 years in a row, per capita income had dropped below $100 and the country had racked up almost $14 billion in debt.
In 2002, the economy saw positive growth and inflation returned to about 10 percent by year-end. Results of the reconstruction program are visible. The road from Kinshasa to the port—the main supply route for the capital city of 8 million people—now takes under a day for a truck to traverse, compared to a week just a year ago, explained Country Economist Eric Nelson. In health care, the price of a blood transfusion dropped from $11 to $5, Eva Jarawan, Lead Specialist for Social Sectors, pointed out. Some 6,500 bags of blood infected with HIV were detected, in effect preventing that many new infections, she said.
Because of the country’s history under Mobutu, many donors at first were hesitant to commit funds. To adapt to this environment, the Bank put together a $1.7 billion reconstruction framework, committing in August 2002 a $410 million IDA credit and a $44 million grant under IDA-13 FY03 window, and working to bring in other donors, mostly on a parallel financing basis.
"The key thing we were looking for was an agreement between the government and the donors that there would be only one strategic framework for the financing of public investment and reconstruction," said Abdelmoula Gzhala, the Bank’s task manager for the Emergency Multi-sector Reconstruction and Rehabilitation Project, which was financed with the $454 million. A Consultative Group meeting of donors was chaired by Mbi in December 2002 and raised nearly $2.5 billion.
In June 2002, the Bank had also approved a $450 million credit to support economic reforms and provide DRC with foreign exchange immediately after the government cleared its arrears of nearly $340 million on debt service to the Bank. In sum, the Bank’s financial commitment came close to $1 billion in one year.
Technical advice from the Bank has focused on a range of areas, from public expenditure reviews to developing frameworks for regulating management of the DRC’s vast natural resources, such as minerals and forests. Education (more than half of Congolese children don’t attend school) and the fight against HIV/AIDS will also be important areas for assistance. But Madavo noted that debt relief under the HIPC program is the immediate priority. "Without it, the country has no economic future," he said.
Ruhl reopened the Bank’s office in the DRC in early 2002, initially working from his laptop from a hotel room with a receptionist and a driver. The office has since expanded to 22 people, and is expected to grow by another five by the end of the year.
Useful links: For an interview with Mbi on the Bank’s country offices in the South-Central Africa region, click here.
For more information on the Bank’s lending in DRC, click here.
To hear the radio news release on the "Breaking the Conflict Trap" report, please click here.
A typical scene from the Matadi road before an IDA grant helped rehabilitate it. The road links Kinshasa to the coast and is the main supply route for the capital's 8 million residents.
The same road under construction with IDA financing.
The Bank's DRC team.
A precariously crammed commuter train rolls into Kinshasha, capital of the Democratic Republic of the Congo. Corruption and civil war have saddled Congo-DRC with few maintained roads and a decaying transportation network in a country nearly the size of western Europe.
© Pettersson, Per-Anders 2002/ from A Day in the Life of Africa
Matungulu Mbuyamu, Minister of Finance and Budget for the Democratic Republic of Congo, with Emmanuel Mbi, World Bank Country Director for South Central Africa and Great Lakes region, in Paris during the Consultative Group meeting last December.