Prospects for Development in the Republic of Congo in Central Africa - Case Study Example

Prospects for Development in the Republic of Congo in central Africa Introduction The development of the Congo Republic is indeed achievable due to the mineral endowment and environmental condition of the country. In a more surprising revelation, the country is rated among the poorest nations in the world, with very remote road networks, which cannot facilitate economic development (Clark 24). Indeed, due to constant conflicts resulting from the scramble for resources, the country has not used the favorable climatic condition and their fertile land to boost its agricultural condition. The situation has thrown the country into famine, which is a very serious condition that the population faces. In addition, the country has depended on food aid for a long time and they should realize that it is through fostering peace and promoting agriculture that they can eradicate famine. In fact, the population had also realized that foreign interests are mainly targeting the country’s resources, with little regards to the suffering locals (Edgerton 11). Therefore, developing a local prospect could be of great importance to the country. In essence, the countries prospects range from oil, gold, diamond, general agriculture, and trade, which should be handled with caution to make sure that the county’s population benefit (Johnson 3). Since the country lies in the equatorial rainforest, it could reap from agriculture and create stability in economic development. The country’s prospects are therefore based on the internal capability of exploiting the local resources, particularly oil and land (Stearns 17). Prospects for the Future of Congo Due to the high consumption of oil in Africa as a whole, the Republic of Congo has a better chance of using the available statistical figures to maximize the production of oil so that it could reap the full benefits of the resource (Boya 39). For example, in 2001, oil consumption of the countries in the Great Lakes and East African region stood at a daily rate of 84, 000 barrels (Johnson 7). Theoretically, the oil refinery in Mombasa and Dares-salaam cannot satisfy the regional demand, because the refinery at Mombasa is operating below its capacity and the one in Dares-salaam was closed due to its incapacity (Johnson 7). The situation leaves the Republic of Congo with an opportunity to increase its production to serve the countries in the Central African Republic. First, let us look at the country’s situation. In the Republic of Congo, there is one refinery situated in Matadi that has a theoretical daily capacity for producing an average of 15, 000 barrels (Johnson 7). With their current low operating rate of almost fifty percent of its capacity, the country still cannot fully exploit its oil reserves. In fact, the country uses its earning from crude oil exports to finance whatever the refinery requires to operate, thereby creating an imbalance leading to deficit (Johnson 7). For the country to realize the benefits of its oil reserves, there is need, to increase the capacity of the refinery. This would enable the country to meet the oil demands for the region (Mukenge 41). Ngolet argues that the Republic of Congo is one area that if fully exploited would result to the development of the country (Ngolet 104). For example, utilizing the domestic reserve would reduce oil dependency by significant margins, increase revenue and create employment, consequently fostering development of the region. Table 1 Micro Economic Indicators of the Republic of Congo Indicator 2009 2010 2011 2012 (Projected) Real GDP Growth 2.8 6.1 6.7 6.4 CPI Inflation 46.2 23.2 10.2 9.8 Budget Balance % GDP -4.1 -0.5 -8.3 -6.6 Current Account % GDP -10.1 -15.7 -16.7 -14.3 Source: African Economic Outlook As shown in the table, the country’s economy despite slight growth between 2010 and 2011, it is expected to drop in 2012. This indicates that the country should implement urgent measures to address the situation, as discussed in this presentation. In addition, the CPI Inflation has shown tremendous drop, signifying the possibility of economic prosperity in the country. Impact of the World Trade Organization Since Congo has a membership in World Trade Organization (WTO), Eichstaedt explained that the economic and trade policies and sanctions that the WTO imposes on the members affects the country (Eichstaedt 27). This has led to closer ties with various developed countries including France, United States, China, and Britain among others (Bureau of African Affairs, 1). Yenyi claimed that through such relationships, the Republic of Congo has achieved substantial development by influencing the developed countries to increase their trade relationships with the country (Yenyi 32). Moreover, the country has benefited from the Heavily Indebted Poor Countries (HIPC) initiative, in which the country was granted debt relief (Bureau of African Affairs 1). The relief was to assist the country get financial resources for funding the strategic plans for poverty reduction. There were other multi-stakeholder initiatives from other international organizations, including the Kimberley Process readmitted in 2007, after being suspended in 2004 (Bureau of African Affairs 1). World Trade Agreements on African Development In order to demonstrate that the Republic of Congo government is committed to, and respects World Trade Agreements with development partners operating in the region, the events that begun in 2002 could explain the matter better (Johnson 19). In that year, the government signed an agreement with Heritage Oil Company to develop the oil rich land covers 7.7 million acres in Eastern Congo (Johnson 19). The strategy aimed at securing the crude oil that is available in the area, to extract and refine crude oil for developing the country. The company, thereafter, mapped the area so that they could start their extraction. In reality, this was a prospect of development in the country, and its full articulation would improve the image of the whole region. In addition, the agreement aimed at enhancing research that would encourage development in the country and region at large (Renton, Seddon and Zeilig 55). Notably, the legitimacy of the agreement indicates that the people could have confidence in the process and join hand in its articulation (Bureau of African Affairs 1). Oil is a natural resource with high demand due to the increase in global energy requirement (Autesserre 80). Perhaps, the country could only achieve sustainable development if the oil reserves are exploited for the economic interest of the citizens, not the foreigners. Therefore, a careful consideration of the people’s needs would make sure that the prospects developed, create an impact on the majority (Scherrer 96). In addition, the country signed a bilateral agreement with donor countries, china being an example. In fact, the agreement was the resumption of aid in the country (African Development Outlook 1). Furthermore, the agreement has re-energized the sectors development, including road development, improvement in electricity supply and increase in mining activities (Trefon 8). Conclusion In order to attain sustainable development, the country’s authority has the mandate to create workable structures, to utilize the oil resources in the country. In addition, the country, being a member of international organizations, including WTO, has signed many bilateral agreements to encourage trade between them. Some of the solution for developing the Republic of Congo include, formulation of proper political and economic policies, increasing security and diversification. Considering the political and economic policies, the country should develop administrative and infrastructure that would stimulate development. For example, the policies should eliminate corrupt practices among government officials to create good public image, improving transport and communication networks, lowering taxation rate, and encouraging industrialization. Concerning security, the country should embrace diplomacy in solving its domestic problems. Indeed, guaranteed security would attract foreign investors and encourage the local entrepreneurs to start businesses. Therefore, minimizing persistent conflicts in the country would promote its development strategies. On diversification, the country should not rely on oil production, but diversify to include extraction of other mineral resources including gold, diamond and others. In addition, the country should make use of the favorable climatic condition to enhance agricultural production. This should include cash crops and those for subsistence. Finally, the country should engage in trade with regional and western countries, because this would increase its bilateral relationships with other nation. Consequently, the country may be at a position of getting foreign aid, both in financial and material terms. Works Cited African Economic Outlook. Congo, Democratic Republic. African Economic. africaneconomicoutlook.org, 2011. Web. Dec 02, 2011. Autesserre, Séverine. The Trouble with the Congo: Local Violence and the Failure of International Peacebuilding. Cambridge: Cambridge University Press, 2010. Print. Edgerton, Robert. The Troubled Heart of Africa: A History of the Congo. New York: St. Martins Press, 2002, Print. Eichstaedt, Peter. Consuming the Congo: War and Conflict Minerals in the Worlds Deadliest Place. New York: Lawrence Hill Books, 2011. Print. Boya, Loso. D.R. Congo: The Darkness of the Heart: How the Congolese Have Survived 500 Years of History. New York: Xlibris Corp., 2010. Print. Bureau of African Affairs. Republic of the Congo. Oct 24, 2011. Web. Dec 02, 2011. Clark, John. The Failure of Democracy in the Republic of Congo. New York: Lynne Rienner Publishers, 2008. Print. Johnson Dominic. Shifting Sands: Oil Exploration in the Rift Valley and the Congo Conflict. 2003. Web. Dec 02, 2011 Mukenge, Tshilemalema. Culture and Customs of the Congo. New York: Greenwood Publishers, 2001. Print. Ngolet, François. Crisis in the Congo: The Rise and Fall of Laurent Kabila. London: Palgrave Macmillan, 2010. Print. Renton, David., Seddon, David., and Zeilig, Leo. The Congo: Plunder and Resistance. New York: Zed Books, 2007. Print. Scherrer, Christian. Genocide and Crisis in Central Africa: Conflict Roots, Mass Violence, and Regional War. New York: Praeger Press, 2001. Stearns, Jason. Dancing in the Glory of Monsters: The Collapse of the Congo and the Great War of Africa. New York: Public Affairs Press, 2011. Trefon, Theodore. Congo Masquerade: The Political Culture of Aid Inefficiency and Reform Failure. New York: Zed Books, 2011. Print. Yenyi, Trésor. Journey to the Heart of Darkness: Remembering Congos Forgotten. New York: iUniverse, 2010. Print. Read More