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05730-9781452794273.Pdf © 2004 International Monetary Fund July 2004 IMF Country Report No. 04/231 Republic of Congo: Selected Issues and Statistical Appendix This Selected Issues paper and Statistical Appendix for the Republic of Congo was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on May 21, 2004. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of the Republic of Congo or the Executive Board of the IMF. The policy of publication of staff reports and other documents by the IMF allows for the deletion of market-sensitive information. To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to [email protected]. Copies of this report are available to the public from International Monetary Fund ● Publication Services 700 19th Street, N.W. ● Washington, D.C. 20431 Telephone: (202) 623 7430 ● Telefax: (202) 623 7201 E-mail: [email protected] ● Internet: http://www.imf.org Price: $15.00 a copy International Monetary Fund Washington, D.C. ©International Monetary Fund. Not for Redistribution This page intentionally left blank ©International Monetary Fund. Not for Redistribution INTERNATIONAL MONETARY FUND REPUBLIC OF CONGO Selected Issues and Statistical Appendix Prepared by a staff team consisting of Mr. Ghura (head), Mr. Leite, Mr. Karangwa (all AFR), Mr. Op de Beke (PDR), and Mr. Moussa (FAD) Approved by the African Department May 21, 2004 Contents Page I. Introduction ............................................................................................................................4 II. Political and Security Situation.............................................................................................6 A. Background ...............................................................................................................6 B. Recent Developments................................................................................................8 C. Cost of Conflicts........................................................................................................9 III. Economic Performance During 1970–2003.......................................................................11 A. Output Expansion, 1970–84....................................................................................11 B. Output Collapse, 1985–99.......................................................................................14 C. Recent Output Recovery, 2000–03 .........................................................................16 D. Observations and Evaluation ..................................................................................17 IV. Recent Reforms in Public Finance Management...............................................................20 A. The Budget Framework ..........................................................................................20 B. Revenue Mobilization .............................................................................................21 C. Expenditure and Cash Management........................................................................22 D. Future Steps.............................................................................................................22 V. Constraints to Economic Growth and Poverty Reduction ..................................................24 VI. Sources of Economic Growth, 1970–2003........................................................................36 VII. Prudent Management of Oil Wealth.................................................................................41 A. Fiscal Sustainability................................................................................................41 B. Fiscal Policy in the Congo ......................................................................................42 VIII. Key Lessons and Challenges...........................................................................................46 A. Avoiding Conflicts..................................................................................................46 B. Avoiding Pro-Cyclical Government Spending .......................................................46 ©International Monetary Fund. Not for Redistribution - 2 - C. Promoting Private Sector Growth ...........................................................................47 D. Alleviating the Debt Burden ...................................................................................47 Boxes II.1. Chronology of Key Political Events Since Independence ............................................7 III.1. Performance Under Fund Programs, 1986–2003 ........................................................13 III.2. Program Implementation in 2003 ...............................................................................19 Tables II.1. Selected Economic and Social Indicators, 1970–2003 ...............................................10 III.1. Selected Indicators of Economic Performance, 1970–2003......................................12a V.1. Cross Section Comparative Economic and Social Performance: 1970–99 ................34 V.2. Cross Section and Time Series Comparative Economic and Social Performance: 1970–99 ..........................................................................35 VI.1 Sources of Growth: 1970–2003 ..................................................................................39 VII.1 Fiscal Sustainability Approach Based on Intergenerational Objectives, 2003–13 .....45 Figures III.1. Macroeconomic Performance, 1970–2003 .................................................................12 III.2. Selected Economic Indicators, 1970–2003 .................................................................17 III.3. Oil Price, Government Spending, and Non-Oil Output, 1975–2003 ..........................18 V.1. Per Capita GDP: Republic of Congo and Comparator Groups, 1970–2001 ...............24 V.2. Per Capita Real GDP Growth: Republic of Congo and Comparator Groups, 1970–99 .................................................................................25 V.3. Natural Resource Dependence: Republic of Congo and Comparator Groups, 1970–99 .................................................................................26 V.4. Government Size: Republic of Congo and Comparator Groups, 1970–99 ................26 V.5. Financial Depth: Republic of Congo and Comparator Groups, 1970–99 ...................27 V.6. Adult Illiteracy Ratio: Republic of Congo and Comparator Groups, 1970-99 ...........28 V.7. Secondary School Enrollment Ratio: Republic of Congo and Comparator Groups, 1970–99 .................................................................................29 V.8. Life Expectancy at Birth: Republic of Congo and Comparator Groups, 1970–99 .....29 V.9. External Debt: Republic of Congo and Comparator Groups, 1970–99 ......................30 V.10 Institutions and Governance: Republic of Congo and Comparator Groups, 2002 ......31 VI.1. Sources of Economic Growth, 1975–2003 .................................................................38 Statistical Appendix Tables Basic Data, 1997–2003 ............................................................................................................49 1. Gross Domestic Product at Constant 1990 Prices, 1997–2003..........................................53 2. Gross Domestic Product at Current Prices, 1997–2003.....................................................54 3. Supply and Use of Resources at Constant 1990 Prices, 1997–2003..................................55 4. Supply and Use of Resources at Current Prices, 1997–2003.............................................56 5. Saving and Investment Balances, 1996–2003 ...................................................................57 6. Production of Principal Crops, 1996/97–2002/03 .............................................................58 7. Fishing Production, 1997–2003.........................................................................................59 8. Wood Production, 1997–2003 ...........................................................................................60 ©International Monetary Fund. Not for Redistribution - 3 - 9. Oil Production by Field, 1997–2003..................................................................................61 10. Oil Refinery Production, 1997–2003.................................................................................62 11. Consumption of Refined Petroleum Products, 1997–2003................................................63 12. Industrial Production, 1997–2003......................................................................................64 13. Electricity Generation, 1997–2003....................................................................................65 14. Rail and River Traffic, 1997–2003 ....................................................................................66 15. Price Indices for Brazzaville, 1997–2003..........................................................................67 16. Representative Retail Prices of Major Food Items in Brazzaville, 1997–2003.................68 17. Central Government Employment by Ministry, 1997–2003 .............................................69 18. Central Government Financial Operations, 1997–2003 ....................................................70 19. Central Government
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