Burundi - Economic development
Burundi began a complete review of economic and financial policy with the help of the UN in 1986, when a reform of the currency and the first of a series of devaluations occurred. The first five-year plan was designed to improve economic growth, reduce inflation, and diversify export production. Few of these objectives were met, and the program was discontinued in 1991. A second reform of the currency and further devaluation took place in 1992. These reforms led up to the gradual decline of living standards and exacerbated ethnic tensions, resulting in the ethnic clashes of the 1990s.
Burundi is dependent on foreign assistance for both development programs and current operations. Diversification of its export base and financial stability are key goals. The African Development Bank, European Union, and Belgium are Burundi's principal providers of development financial and technical support. Support has been pledged for the health sector, education, refugee rehabilitation, and general reconstruction.
The International Monetary Fund (IMF) approved $13 million in assistance to support Burundi's reconstruction and economic recovery program in 2003, following the 2000 Arusha Peace and Reconciliation Agreement. It was the first such IMF assistance to Burundi since the outbreak of hostilities in 1993. The program addresses security and humanitarian assistance needs, as well as the improvement of basic infrastructure. Low world coffee prices in the late 1990s and early 2000s resulted in a reduction of foreign exchange earnings, and the government resolved to find other ways to generate growth.