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INTERVIEW-Congo needs new budget to start recovery
27 May 2007 13:38:07 GMT
Source: Reuters
By Joe Bavier

KINSHASA, May 27 (Reuters) - Congo's parliament must approve a long-delayed 2007 budget quickly if the central African nation is to get back on its feet after decades of mismanagement and war, budget minister Alphonse Muzito said on Saturday.

Expectations are high in Democratic Republic of Congo since polls last year elected Joseph Kabila as the country's first democratically-chosen president in more than 40 years, ending a three-year transition following a 1998-2003 war.

But when the new government, headed by Prime Minister Antoine Gizenga, took office in February it was left with no budget and mounting internal debt.

The state has been forced to run off monthly credits from the central bank, which are based on the 2006 budget and cover only its basic operating costs.

"It's keeping us from carrying out new programmes, because the operating costs that we have to work with are those from 2006," Muzito told Reuters in an interview. "It is important that we have this budget for the second semester."

For more than three decades of rule under former dictator Mobutu Sese Seko, Congo's vast natural resources were systematically pillaged. A six-year war that killed an estimated 4 million people, mostly through conflict-related hunger and disease, further wrecked the economy and infrastructure.

Congo's new government is having to start from zero.

"The double priority is first to construct the state and then there's the construction of the economy through basic infrastructure like roads, schools, sanitation, job creation, water and electricity investment," Muzito said.

"You can put billions into Congo, but as long as there is not water or electricity, it is not going to function."

CRITICISM

A $2.14 billion budget proposal was sent to parliament last week, long-delayed partly due to protracted negotiations with donors.

The proposal has already been criticised as falling far short of Congo's needs. Some 40 percent of the budget will need to be financed by yet to be secured donor funds.

More than half of state resources, or about one third of the total budget, will go to servicing Congo's $10 billion external debt. Another 23 percent are set aside to pay government salaries, leaving only around $500 million for state projects.

"It's certainly not enough," Muzito said. "But it's not the public sector with a budget of less than $1 billion that is going to construct the country. It's with private investment."

Muzito said economic reforms, due to be voted on by parliament in coming months and including the privatisation of several state-run industries, should cut costs and boost income.

Recent government efforts to bring order to Congo's chaotic but potentially lucrative mining sector would also pay off.

A review of all current mining contracts, aimed at ensuring the state gets a fair share of revenues, is due to open next month.

Congo's lower house of parliament, the National Assembly, is due to open debate on the budget beginning on Tuesday, before it is sent the Senate for final approval. The proposal is expected to be the subject of fierce discussion.

"In parliament, there are people that want to torpedo the government. That's politics," Muzito said. "But they need to ask if their criticisms are objective."


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