International Donors Resume Aid to Kenya

But they caution that full resumption will hinge on continuation of reforms

RECENT economic reforms in Kenya have prompted international donors to partially thaw their freeze on aid. But they did so cautiously, recognizing that the corruption and human rights abuses that brought the freeze in 1991 remain widespread.

The donors, meeting this week in Paris, pledged an overall $850 million in aid to Kenya in 1994, roughly the same amount the country received the past two years. The `thaw' in frozen aid funds largely involves a specific form of aid, balance of payment assistance.

Some $170 million of the promised $850 million aid for 1994 is balance of payment assistance from the World Bank. As opposed to project aid, balance of payment assistance goes directly to the Kenya Treasury, to help provide hard currency for key imports.

But donors warned that continued disbursement would depend on progress on political and economic reforms.

``Donors are trying to support those in government like the minister of finance who is perceived as bringing things around,'' said Richard Cobb, deputy assistant administrator for Africa for the US Agency for International Development, at the meeting.

But ``the clamps are still on,'' Mr. Cobb later said in a telephone interview from Paris.

A senior Kenyan official says the Kenyan government is ``happy'' with the aid promised at the Paris meeting. ``There will be no stop to the reforms. You can't paint your house and leave it half way,'' the official says.

According to Cobb, the donors made ``very strong statements'' that for the Kenyan government to receive additional aid, there needs to be ``much stronger evidence the government is dealing with corruption, human rights - specifically, tribal clashes, not suppressing the multiparty system, and [providing] freedom of the press.''

Kenyan President Daniel arap Moi on Tuesday visited an area where there has been tribal fighting - ``stressing the law'' and promising added police protection for clash victims.

Tribal clashes in the past two years have left more than 1,000 dead and 300,000 displaced, and government harassment of opposition leaders and journalists continues, say diplomats and human rights groups.

``There has been great progress since the last [donors] meeting in 1991,'' says Masaki Koito, a Japanese diplomat in Nairobi. ``But most donors, including us, are not satisfied 100 percent with the situation. Corruption and human rights are our two major concerns.''

At the time of the 1991 meeting, the human rights and political scene in Kenya was turbulent, which prompted donors to freeze the aid. A week after the freeze, President Moi agreed to hold multiparty elections in December 1992. Moi won the elections, and the government began to make economic reforms.

But the progress has been slow and sporadic, donors say. At the 1991 meeting, ``we sought assurances that very determined action would be taken'' to curb corruption, says one European diplomat. ``That action hasn't come,'' he adds.

Earlier this year, the World Bank made available some $85 million in balance of payments aid, but a World Bank official said it as an old commitment. With the International Monetary Fund, the Bank plans to loan a similar amount if the Kenyan government cleans up the scandal-ridden Trans National Bank. ``Operate it legally, or close it,'' says one World Bank official.

The bank is one of several so-called `political banks' in Kenya through which millions of dollars worth of Kenya shillings have been funneled for private gain, according to diplomats and Kenyan opposition figures.

A US official at the Paris meeting said in a telephone interview that the World Bank and most other donors would provide more aid to Kenya if the country did more to clean up its act.

The US, for example, pledged ``no increase'' in its project aid as compared with the last two years, keeping it at about $20 million. Some $28 million pledged in 1991 remains suspended pending further improvements.

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