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3. Poverty Analysis Report No. 34553-GW I Volume Assessment (IPSA) andSocial Poverty Guinea-Bissau Integrated Report No. 34553-GW Guinea-Bissau Integrated Poverty and Social Assessment (IPSA) TransitionPublic Disclosure Authorized Public Disclosure Authorized from Post Conflict to Long-Term Development: Policy Considerations for Reducing Poverty (In Two Volumes) Volume I: Main Report May 26, 2006 PREM 4 Africa Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank Public Disclosure Authorized Public Disclosure Authorized MOE Ministry of Education MOH Ministry of Health MOL Ministry of Labor NGOs Non Governmental Organizations NRRP National Reconciliation and Rehabilitation Program OHADA Organization for Harmonization of Business Law in Africa PAIGC Partido African0 para a IndependCncia da GuinC-Bissau (African Party for the Independence of Guinea- Bissau) PDDAA Programme de'taille pour le de'veloppernent de 1 'agriculture Africaine PEASA Programa de Ernergencia do Apoio ri Seguranca Alimentar PER Public Expenditure Review PNDS Programme National de DCveloppement de la SantC PNDS National Health Development Plan PRGF Poverty Reduction and Growth Facility PRS Partido de Renovaqgo Social (Social Renovation Party) PRSP Poverty Reduction Strategy Paper PSR Public Sector Reform QS Qualitative Survey SMP Staff Monitored Program SSR Security Sector Reform TEC Tarifa Externa Comum (Common External Tariff) TIPS Trade and Investment Promotion Support TOT1 Terms of Trade TR Transition Rate UF User Fees UNCDF United Nation Capital Development Fund UNDP United Nation Development Fund UNOGBIS United Nation Office in Guinea-Bissau USAID United States Agency for International Development's USD United States Dollars VAR Vector Auto Regressive WAEMU West African Economic and Monetary Union Vice President: Gobind T. Nankani Country Director: Madani M. Tall Sector Manager: Robert R. Blake Task Team Leaders: Boubacar-SidBarry Estanislao Gacitua-Mario ... 111 Table of Contents ACKNOWLEDGEMENTS .................................................................................................................... VI11 EXECUTIVE SUMMARY ......................................................................................................................... X VOLUME 1: TRANSITIONFROM POST CONFLICT TO LONG-TERMDEVELOPMENT: POLICY CONSIDERATIONS ....................................................................................................................................... x VOLUME 11: CONFLICT, LIVELIHOODSAND POVERTY IN GUINEA-BISSAU XXIV 1. INTRODUCTION TO VOLUME I................................................................................................... 1 A. BACKGROUNDAND LINKWITH THE PRSP ................................................................. B. DATAAVAILABILITY AND EXISTING STUDIES , ...... C. THEANALYSIS ........................................................................................................... 2. INSTITUTIONAL CONTEXT OF THE POST-CONFLICT PERIOD ........................................ 6 A. A LONGHISTORY OF POLITICAL INSTABILITY. ............................ ......... B. A HISTORYOF WEAK GOVERNANCEAND ACC ............................................. c. FACTORSBEHIND THE WEAK GOVERNANCEAND INSTITUTIONAL DEVELOPMENT.......... D. SECURITY SECTOR, LANDREGULATION AND CONFLICT ..................................................... E. CONCLUSION AND POLICY CONSIDERATIONS ................................................................................. 23 3. POVERTY ANALYSIS .................................................................................................................... 24 ............................................... 43 D. CONFLICTAND POVERTY........................................ 4. MACROECONOMIC AND FISCAL POLICIES FOR PROMOTING SOCIOPOLITICAL STABILITY AND ECONOMIC GROWTH................................................................................. 54 A. RECENTMACROECONOMIC PERFORMANCE .................................................................................... 55 B. SHORT TERM FISCALPOLICY FORSOCIOPOLITICAL STABILITY c. MEDIUMAND LONGTERM POLICY FOR MACROECONOMICSTABILIZATION AND GROWTH... c. FACTORSTHAT MAY CONSTRAIN IMPLEMENTATION OF D. CONCLUSION AND POLICY CONSIDERATIONS . .................... 70 5. MAKING AGRICULTURE MORE PRODUCTIVE AND SUSTAINABLE FOR POVERTY REDUCTRION ................................................................................................................................ 71 A. MAINOPPORTUNITIES AND CONSTRAINTS IN AGRICULTURE ............. B. TRANSACTIONCOSTS AND POVERTY REDUCTIONIN THE CASHEW NUTSECTOR. C. SUSTAINING POVERTYREDUCTION AND GROWTHIN AGRICULTURE.............................................. 84 D. CONCLUSION AND POLICY CONSIDERATIONS .......................................... .............................. 85 6. MAKING BASIC EDUCATION AND HEALTHCARE MORE AFFORDABLE FOR THE POOR ................................................................................................................................................ 86 A. EFA AND EDUCATIONSERVICE ...................................................................................................... 86 B. UF AND HEALTHSERVICE .......................... .... 103 C. A COMMUNITY-BASEDSERVICE DELIVERYFOR REDUCING POVERTY ......................................... 1 1 1 D. CONCLUSION AND POLICY CONSIDERATIONS ... ......... ...... ...... 113 REFERENCES ......................................................................................................................................... 114 ANNEXES ................................................................................................................................................. 122 ANNEX1. VAR MODEL.......................................................................................................................... 122 ANNEX2. PUBLIC SECTOR DOWNSIZINGAND SEPARATION PACKAGES ................................................. 129 iv List of Tables Table 1.1: Population Distribution (percent) by Age and Sex in 2005 ..................................................... 2 Table 2.1: Selected ICGR Indicators of Cohesion for Guinea.Bissau. 2005 .......................................... 12 Table 2.2: Institutions That Are Trusted the Most by the Population in 2005 ..................................... 13 Table 3.1: Poverty Decomposition by Region in 2002 (in percentage) ................................................ 25 Table 3.2: Subjective Perceptions of Well-Being in 2005 ........................................................................ 28 Table 3.3: Main Source of Inequality in 2005 .......................................................................................... 30 Table 3.4: Poverty by Age in 2002 ............................................................................................................. 31 Table 3.5: Poverty by Demographic Characteristics in 2002 (in percentage) ....................................... 31 Table 3.6: Educational Attainment and Poverty in 2002 (in percentage) .............................................. 32 Table 3.7: Poverty and Sector of Employment in 2002 (in percentage) ................................................. 32 Table 3.8: Poverty by Distance from Basic Services - Bissau Region in2002 (in percentage) ............. 33 Table 3.9: Poverty by Distance from Basic Services - Rest of the Country in 2002 (in percentage) ... 33 Table 3.10: Access to Energy for Cooking and Lighting in 2002 (in percentage) ................................. 34 Table 3.11: Poverty Decomposition by Recipients of Prenatal Care in 2002 (in percentage) .............. 34 Table 3.12: Poverty by Type of Healthcare Provider Used (in percentage) .......................................... 34 Table 3.13: Revenue Shares by Economic Status in 2002 (in percentage) ............................................. 36 Table 3.14: Revenue Shares by Region in 2002(in percentage) .............................................................. 36 Table 3.15: Impact of Various Characteristics on Household Welfare in 2002 .................................... 42 Table 3.16: Impact of the Conflict on Poverty ......................................................................................... 51 Table 3.17: Number of Years Required to Achieve Cumulative Growth and Poverty Targets .......... 52 Table 3.18: Millennium Development Goals and draft PRSP Targets ................................................. 52 Table 3.19: Perceptions on the Security Situations and Sources of Conflict in 2005 ............................ 53 Table 4.1: Comparative Military Data for Selected African Countries in 2003 .................................... 63 Table 4.2: Impact of a Reduction of Wage spending on Growth in Guinea-Bissau, 2005-08 .............. 68 Table 4.3: Efficiency in Tax Collection and Medium-Term Fiscal Sustainability, 2005-08 ................. 68 Table 5.1: Cashew Sales by Tercile in 2005 .............................................................................................. 80 Table 5.2: Impact of change in cashew prices on poverty, Guinea-Bissau ............................................ 82 Table 5.3: Stochastic Relationship Between Households’ Non-agricultural and Agricultural Incomes ...........................................................................................................................................................
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