Comoros President Azali Assoumani met with Managing Director Rodrigo de Rato on February 24 in Washington, D.C., to discuss the country’s commitment to a 12-month staff-monitored economic program for the country and to thank the IMF for its support. Staff-monitored programs are designed for countries that want to establish a track record of improved macroeconomic performance and reform and frequently serve, if they are successful, as a stepping-stone for more ambitious reform efforts and supportive financing under the IMF’s Poverty Reduction and Growth Facility.
Comoros is seeking to emerge from nearly a decade of political strife. The country, which consists of three islands that had no common political history before French rule, has seen its post-1975 period of independence marked by political instability, coups, and secessionist efforts. Until recently, tensions between the three island governments and the union government had stymied economic development. With the signing of a transition arrangement in December 2003 and parliamentary elections in March-April 2004, however, there is renewed hope that a lasting political arrangement and sustained economic progress are achievable.
The cornerstones of the reasonably ambitious Comoros program are macroeconomic stabilization—centered around implementation of a consolidated budget for the union and island governments—and fast-track progress on a number of structural reforms, notably privatization of the Comoros Hydrocarbon Company and Comore Telecom by the end of 2005.
Progress will hinge on continued interisland cooperation and a growing realization that coherent economic policies and normalized relations with donors and creditors offer the only way to rekindle growth and obtain debt reduction under the enhanced Initiative for Heavily Indebted Poor Countries.