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Mauritania
Index
Figure 10. Current Account Balance, 1973-85
The economic stagnation that had begun by the mid-1970s led
to deficits in the country's current account balance
(see
fig. 10). These deficits were largely the result of a slump in the
international iron industry and a rise in the price of oil. They
were exacerbated, however, by drought and by Mauritania's
involvement in the Western Sahara conflict. Between 1975 and
1982, the current account deficit more than quadrupled, rising
from US$62 million to US$277 million. This trend slowed after
1982 as the trade deficit improved, principally because of
increased fish exports and because of IMF- and World Banksupported stabilization programs. By 1985 the current account
deficit had been reduced by more than half from its 1982 high.
By 1985 Mauritania had one of the worst international debt
situations in the world. In that year, total accumulated mediumand long-term external public debt stood at US$1.8 billion, which
amounted to nearly 250 percent of GDP. By 1987 arrears on
scheduled payments amounted to around US$200 million. The bulk of
the loans falling due were contracted in the mid-1970s to finance
the nationalization of the iron mining industry and to pay for
the country's involvement in the Western Sahara war.
Mauritania's clear inability to meet its debt service
obligations resulted in international intervention. In 1985 the
World Bank held a special donor conference, and in 1985 and 1986
the Paris Club (see Glossary)
held several meetings on the issue.
During this series of meetings, Mauritania presented a new
economic and financial recovery program to the donors. This group
endorsed the recovery program and rescheduled external debt
service due in 1985 and 1986. As a result, all arrears on debt
services were eliminated, and Mauritania's external current
account deficit was reduced. In 1987 Mauritania signed a
comprehensive Structural Adjustment Program with the World Bank
that was further to ease its debt burden.
Foreign assistance was vital to Mauritania to satisfy the
country's need for food, equipment, technical assistance, and
public investment. Some forty nations and multilateral
institutions extended aid averaging about US$270 million a year
between 1980 and 1985--equivalent to US$170 per capita.
Particularly important has been aid from oil-rich Arab nations
who look favorably on Mauritania because of its largely Muslim
population. Typically, foreign assistance funded humanitarian
efforts or investment projects. Much of this assistance was in
the form of outright grants or loans carrying low interest rates,
long maturity terms, and grace periods.
* * *
Economic data on Mauritania are scarce. The most
comprehensive information was gleaned from publications of
international development organizations, such as the World Bank,
International Monetary Fund, and assorted agencies of the United
Nations. Several United States government offices also have
produced studies on certain aspects of the economy, such as
mining, trade, and agriculture. The annual Africa South of the
Sahara provided up-to-date information, as did the
periodicals Africa Economic Digest, the Economist
Intelligence Unit's Country Report, and Marchés
tropicaux et Méditerranéens. (For further information and
complete citations,
see
Bibliography.)
Data as of June 1988
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