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Burundi: Structural Adjustment Policy The Government of the Republic of Burundi with The Center for Research on Economic Development of the University of Michigan present BURUNDI: STRUCTURAL ADJUSTMENT POLICY Report on the Conference held in Bujumbura, Burundi May 23 - 25 1990 The Government of the Republic of Burundi with The Center for Research on Economic Development of the University of Michigan present BURUNDI: STRUCTURAL ADJUSTMENT POLICY Report on the Conference held in Bujumbura, Burundi May 23 - 25 1990 Prepared by The Center for Research on Economic Development at the University of Michigan for The United States Agency for International Development (USAID) Grant No. 623-0000-G-00-001 2-00 September 1990 Published by The Center for Research on Economic Development The University of Michigan 340 Lorch Hall 611 Tappan Street Ann Arbor, Michigan, 48109-1220 USA Tel. 313-764-9490 Fax. 313-747-2743 PREFACE This volume contains the proceedings of a Conference on Structural Adjustment, held In Bujumbura on May23 - 25, 1990. The Conference was initiated and managed by the Government of Burundi, and in particular by the Permanent Secretariat of the Monitoring Committee of the Structural Adju3tment Program. Funding for the Conference was provided by the Burundi Mission of the United States Agency for International Development (USAID) and by the European Economic Community. Contributions towards the organization of the Conference were made by the Center for Research on Economic Development (CRED), which was also responsible for the editing of this volume. The volume contains complete versions of the formal addresses and papers presented at the Conference, along with summaries of the discussions which followed. A detailed summary of the entire proceedings was prepared by the staff of the Permanent Secretariat, and is Included In the introductory section of the volume. This is followed by the addresses and papers, which fall into four categories: 1. A formal address by the Minister of Finance, Mr. Gerard Niylbigira; 2. Presentations by representatives of three international organizations: the European Economic Community, the Economic Commission for Africa, and the United Nations Industrial Development Organization; 3. Presentations on experience with structural adjustment in Madagascar and Ghana; 4. Papers on four themes central to structural adjustment: e;change rate policy, agricultural pricing policy, public firiance, and privatization. We at the Center for Research on Economic Development were impressed by the quality and quantity of the effort which went into the Conference, and appreciated the opportunity to work in genuine collaboration with the Permanent Secretariat, USAID/Burundi, and the other institutions involved. It is our hope :hat the Conference itself and this volume of proceedings will be a useful contribution towards the process of structural adjustment in Burundi, and will be of interest to government officials, development assistance officials and scholars in other countries. Ernest J. Wilson, III, Director Center for Research on Economic Development September 30, 1990 iii Table of Contents Page Preface ii Ust of Participants vii Ust of Acronyms and Abbreviations Ix Summary of Proceedings 1 Opening Speech 23 by G6.rard Niyibigira African Economies and Structural Adjustment 31 by Dominique David The African Experience with Economic Reforms 41 by Patrick Bugembe Examination of the Development of the Industrial Sector in Africa 49 by Philippe Scholtes Examination of Some Experiences of Madagascar 55 by Nirina Andriamanerasoa Examination of Some Experiences of Ghana 65 by Abner Bab Klu Exchange Rate Policies in Africa and the Requirements of 79 Stabilization and Structural Adjustment by Patrick Plane Is Price Policy Still Important? Structural Adjustment 103 and the Reform of Agricultural Price Policy by B. Lynn Salinger Burundian Fiscal Policy and its Impact on Private Savings 121 by Prime Nyamoya presented by Joseph Akilimali A Theoretical Treatment of Tax Policy 145 by Apollinaire Ndorukwigira V List of Participants Local Participants Mr. Gerard NIYIBIGIRA, Ministre des Finances et Vice-Pr6sident du Comlt6 de Suivi du PAS, Opening Speech Mr. Salvator MATATA, Secrdtalre Permanert du Comit6 de Suivi du PAS, Closing speech Professor Apollinaire NDORUKIWIGIRA, Uni¢ersit du Burundi, "ATheoretical Treatment of Tax Policy" Mr. Joseph AKIUMAU, repr6sntant le SG de la CCIAA, pr6sentateur de l'expos6 de Mr. Prime NYAMOYA, "Burundian Fiscal Policy and Its Impact on Private Savings" Mr. Berrnrd SUNZU, Conseiller au MINIRECOOP Directeur de Cabinet au Secretariat d'Etat chargs de la Coop6ration Consei!ler Assistant 6 la Pr~sidence - Cellule 6conomique Conseiller aupr~s du Cabinet du Premier Ministre - Cellule 6conomique Direcieur G.nral du Plan Directeur G6n6ral des D6penses Dirncteur Gin6ral des Recettes Directeur Gn6ral de I'lndustrie Directeur Gin6ral de la Vulgarisation Agricole Directeur G~n6ral de la Planification Agricole et de I'Elevage Directeur G6n(ral de I'OCIBU Directeur GUn6ral du Travail et de Formation Professionnelle Directeur Gnral de I'Artisanat et des Coop6ratives Directeur Gn6ral du FNG Directeur de la Planification Directeur de la Programmation Directeur de 'Etude du Milieu et des Syst~mes de Prcductior (SABU) Directeur du Commerce Ext6rieur Direcleur G6n6ral pour I'Europe, I'Amrique du Nord et les Organisations Intemationales Directeur des Organisations Intemationales Directeur des Imp6ts Directeur des Douanes Directeur des COGERCO Directeur de I'OTB Directeur de la Comptabilit6 vii Directeur de I'APEE Directeur des Etudes et Documentation Industrielles Directeur du Bureau des PME Directeur de la Tr6sorerie Responsable national du projet PASA Repr6sentants de la BRB (4) Repr6sentants du SCEP (3) Conseillers du Secrdtariat d'dtat au Plan (3) Conseillers du Secretariat Permanent du CS du PAS (3) Assistants techniques (au Secretariat d'Etat au Plan) (4) Mr. Andre NKUNDIKIJE, Priv Mr. KIRAHUZI, Priv6 Mr. Gaspard-Emery KARENZO, Priv6 Mr. Jean SINDAYIGAYA, Priv Mr. Albin NYAMOYA, Priv Foreign Delegates: GPresenting the case of Ghana: Mr. Abner BAB KLU, Directeur des Recettes Madagascar: Presenting the case of Madagascar: Mr. Nirina ANDRIAMANERASOA, Conseiller Economique du President Rwanda: Mr. Joseph HAKIZAMUNGU, Directeur G6n~ral au Ministbre des Finances, Chef de la d~lgation Mr. Vedaste SENYANA, Chef de la division analyse 6conomique au Min!stbre du Plan Mr. Bonaventure NIYIBIZI, Charg6 du secteur priv6 Mr. Damascene NGABOYIMANZI, Charg6 des 6tudes agricoles et de I'analyse des projets Mr. Japhet NGENDAHAYO, Ministate du Plan LMr. Kwassi KLUTSE, Directeur G6nral du Plan et du D6veloppement Mr. Assimaidou KOSSI, Directeur Adjoint de la Coordination du Plan viii University of Michigan, Center for Research on Economic Development (CRED): Professor Ernest J. WILSON, IIl, Director, "The Private Sector" Professor Robin BARLOW, Research Scientist Mr. Patrick PLANE, (CNRS, CERDI, Universit6 de Clermont I),"Exchange Rate Policies in Africa and the Requirements of Stabilization and Structural Adjustment' Ms. B. Lynn SALINGER, (Senior Economist, Associates for International Resources and Development), "Is Price Policy Still Important? Struciural Adjustment and the Reform of Agricultural Price Policy" USAID - Burundi: Mr. Donald F. MILLER, Reprdsentant de I'USAID au Burundi Mr. Cam WICKHAM, Program Officer Mr. Donald HART, Private Enterprise Officer Ms. Larraine DENAKPO, Training Ccordinator Representatives from Intemational Organisations: ECA: Mr. Patrick BUGEMBE, "The African Experience with Economic Reforms" Professor 0. TERIBA, Directeur de la Division de la Recherche et de la Planification socio conomique Professor Onimode BADE Mr. Kashala THISEN Mr. Francis MASAKHAUA EEC: Mr. Dominique DAVID, Conseiller au Directeur G6n~ral du D6veloppement, "African Economies and Structurel Adjustment" UNIDO: Mr. Philippe SCHOLTES, Service de la Planification Industrielle, "Examination of the Development of the Industrial Sector in Africa" Ix Ust of Acronyms and Abbreviations ACP African, Caribbean and Pacific States AFSAP African Framework for Structural Adjustment Programs BCC Burundi Coffee Company CRED Center for Research on Economic Development, The University of Michigan EEC European Economic Community ECA Economic Commission for Africa GDP Gross domestic product IBRD International Bank for Reconstruction and Development IMF International Monetary Fund UNIDO United Nations Industrial Development Organization USAID United States Agency for International Development Colloquium on The Structural Adjustment Program Bujumbura 23 - 25 May 1990 SUMMARY OF PROCEEDINGS prepared by le Secr6tariat Permanent du Comit6 de Suivi du Programme d'Ajustement Structurel Premier Ministbre et Ministbre du Plan R6publique du Burundi June 1990 I. OBJECT OF THE COLLOQUIUM Towards the goal of internalizing more and more the program of structural adjustment, the government of Burundi has asked USAID to help it organize a symposium on a few aspects of the structural adjustment program for the Burundian officials. The request of the government was well received by USAID as far the U.S. government by chance equally decided during the same time to support the program of economic reform of Burundi by support with balance for balance of payments and private sector promotion. The colloquium was conceived in a manner to permit our officials to communicate with other foreign officials the real life experiences of adjustment in following areas in particular: a) Exchange rate policies;
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