Foreign donors throw lifeline to struggling Congo
Justin Olondo's shop once did a modest but steady business from the civil servants and casual laborers living in the Yolo neighborhood here. But as customers feel the pinch of the government's economic reforms, their buying habits are changing.Skip to next paragraph
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"Instead of [selling] a can of milk powder, I have to open it and sell them five or six spoonfuls," says Mr. Olondo. "People can afford that much, but not a whole can." Instead of selling rice or sugar by the sakombi (about 2 pounds), he sells them by the glass. He even has to cut tiny tins of tomato paste in half.
Olondo's shop is a barometer of the Congolese economy as it stumbles from bad to worse. Bordered by nine nations, and with a wealth of resources and 55 million people, Congo could be an African economic powerhouse. Instead, its annual gross domestic product (GDP) of $78 per capita is one of the lowest in the world, down from $250 in 1990, when it was known as Zaire.
Now, in an effort to prevent Congo's economy from shriveling to nothing, some of the world's big donors - the International Monetary Fund, the World Bank, and the European Union - are resuming the flow of development assistance cut off since the era of Mobutu Sese Seko. "A lot of water has gone under the bridge since Mobutu's behavior and corruption caused us to suspend our activities there in 1990," says a World Bank official. "If we all sit back and wait, the tense economic and financial situation risks causing unrest in the country, and this would make the peace process more difficult."
But the idea of flowing millions of dollars into a riven country raises a longstanding debate over "constructive engagement" versus economic sanctions. What promotes democracy most - cutting economic ties, as the US has with Cuba, or reaching out with open arms, as with China?
Embroiled in civil war, Congo is a country where corruption is "a way of life," in the words of one Western diplomat. Congo's external debt is about $13 billion - the equivalent of foreign aid given to Mobutu's government - and most of it is in arrears.
Congo has never held a democratic election and, although President Joseph Kabila has vowed to hold them, there are no plans. International human rights groups condemn the government for trampling on journalists, students, and opposition figures.
It is for these reasons that donors should be putting money into Congo - and making aid conditional on progress toward peace and democracy, says J. Brian Atwood, a former administrator of the US Agency for International Development (USAID). "They're never going to move in that direction unless they're given some sort of encouragement," says Mr. Atwood, who visited Congo earlier this year for his Boston-based organization Citizens International. "There are serious problems, but this is probably the best Congolese government that has come around in decades."
In coming days, the EU plans to formally commit to $108 million in government aid, previously frozen because of what it considered a lack of democratic progress. On the heels of a $50 million grant for technical assistance - its largest injection in more than a decade - the World Bank plans to convene a "resource mobilization meeting" in March. And an IMF delegation made positive noises during a mission to assess President Kabila's economic reform program.