© 2003 International Monetary Fund February 2003 IMF Country Report No. 03/39 Mali: Poverty Reduction Strategy Paper Poverty Reduction Strategy Papers (PRSPs) are prepared by member countries in broad consultation with stakeholders and development partners, including the staffs of the World Bank and the IMF. Updated every three years with annual progress reports, they describe the country's macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. This country document for Mali, dated May 29,2002, is being made available on the IMF website by agreement with the member country as a service to users of the IMF website. To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to [email protected]. Copies of this report are available to the public from International Monetary Fund • Publication Services 700 19th Street, N.W. • Washington, D.C. 20431 Telephone: (202) 623-7430 • Telefax: (202) 623-7201 E-mail: publications(S)imf.org • Internet: http://www.imf.org Price: $15.00 a copy International Monetary Fund Washington, D.C. ©International Monetary Fund. Not for Redistribution Translated from French REPUBLIC OF MALI One People — One Aim - One Faith FINAL PRSP DOCUMENT PREPARED AND ADOPTED BY THE GOVERNMENT OF MALI MAY 29, 2002 Poverty Reduction Strategy Paper The government of Mali has, in recent years, expressed its desire to make the fight against ßöv^nty th>0 priority among all development priorities. This desire responds to a twofold need: on the one hand; $gt ift&kfe dçv£Î0pflïÊni programs more effective to the benefit of poor people; and on the other, to define new policies, «fcw aciesis a»d finally to take appropriate short- and medium-term measures permitting the government to öiafcfevrÄl(loöid,^ttd efficient use of internal and external funding. / f^m^m^a«Aae |¥*V ©International Monetary Fund. Not for Redistribution -1 - Executive Summary l The Challenge and Significance of the PRSP l Status Review of Poverty, Employment and Growth 1 Long-Term Strategic Vision 2 The Main Themes of the Strategy 2 Overall Objectives and Macro-economic Framework 4 Costs and Financing of the PRSP 4 Implementation, Monitoring and Evaluation 4 Presentation of the PRSP Document 5 1. Introduction: The Challenges and Significance of the PRSP 7 1.1 Challenges and the Long-Term Strategic Vision 7 1.2 Participatory Process of the PRSP: An Exercise off to a Good Start and to be Continued 8 2. Recent Economic Developments in Mali, 1994-2001 11 3. Status of Poverty 12 3.1 Definition of Poverty 12 3.2 Measurement and Profile of Poverty 12 3.3 Spatial Analysis 13 3.4 Analysis of the Link between Poverty and Health 17 3.5 Analysis of the Link between Poverty and Education 17 3.6 Analysis of Other Factors Affecting Living Standards 18 3.6.1 Drinking Water and Sanitation 18 3.6.2 Living Conditions.... 18 3.6.3 Pollution and Nuisances 19 4. Status of Progress on Priority Areas Requiring Strengthening 19 4.1 Institutional Context 19 4.1.1 The Performance of the Public Sector 21 4.1.2 The Democratic Process and Decentralization / Devolution Process . 22 4.1.3 Corruption 25 4.1.4 Culture, Religion, Harmony and Security 25 4.2 The Social Sector 26 4.2.1 Health 26 4.2.2 Education 26 4.2.3 Employment 27 4.2.4 Social Protection 28 4.2.5 Involvement of Women 28 4.2.6 The Position of Children 28 4.2.7 The Position of the Malian Family 29 4.3 Infrastructure 29 4.4 The Productive Sector 30 4.4.1 The Primary Sector 30 4.4.2 The Secondary Sector 32 4.4.3 The Tertiary Sector 32 4.4.4 Development of the Private Sector 33 ©International Monetary Fund. Not for Redistribution -11 - 5. Strategie Vision and Foundations of the PRSP 34 5.1 The ENP Mali 2025 34 5.1.1 The Mali 2025 vision 34 5.1.2 Ambitions and Determining Factors Necessary for Achieving the Desired Future 35 5.2 Strategic Components of the National Strategy for Poverty Reduction (SNLP)3 5 6. Obj ectives of the Poverty Reduction Strategy Paper 36 6.1 General Objectives 36 6.2 Specific Objectives 37 6.2.1 Pre-requisite Pillar: Macroeconomic Objectives 37 6.2.2 Pillar 1 : Ensuring Institutional Development and Improved Governance and Participation 37 6.2.3 Pillar 2: Developing Human Resources and Access to Basic Social Services 37 6.2.4 Pillar 3 : Developing Basic Infrastructure and Productive Sectors 38 7. Policies and Macroeconomic Framework 40 7.1 Budgetary and Fiscal Policy 40 7.2 External Debt 41 7.3 Monetary Policy 41 7.4 Macroeconomic Framework 41 8. Improving Public Sector Performance 43 8.1 Improving the Performance of the Public Administration 43 8.2 Strengthening National Development Planning and Management Capabilities44 8.3 Improving Public Expenditure Management 45 8.4 Coordination, Effectiveness of Foreign Aid and Poverty Reduction 46 9. Consolidation of the Democratic, Participatory and Decentralization process 47 9.1 The Democratization Process 47 9.2 Decentralization / Devolution 47 9.3 Strengthening Civil Society Capabilities 48 10. The Fight Against Corruption 48 10.1 The Anti-corruption Strategy 48 10.2 Strengthening the Capabilities and Credibility of the Judicial System 49 11. Culture, Religion, Harmony and Security 50 12. Strengthening Health, Nutrition and Population Services 51 12.1 "fflV/AIDS and Development" 52 12.2 Population Strategy 53 12.3 Results Sought 54 13. Strengthening Education and Literacy Programs 54 13.1 Strategic Orientations 55 13.2 Anticipated Results 55 14. The Fight Against Poverty: Improvements in Living Standards 56 ©International Monetary Fund. Not for Redistribution -Ill - 14.1 Water Supply and Sanitation 56 14.2 Living Conditions 57 14.3 Pollution and Nuisances 57 15. Cross-Cutting Issues 57 15.1 The Role of Women in the Poverty Reduction Process 57 15.2 Improving the Position of Children and the Role of the Family 58 15.3 Employment and Vocational Training 60 15.3.1 Employment Strategy 60 15.3.2 Strategy on Vocational Training 61 15.4 Solidarity and Social Protection 61 16. Development of Basic Infrastructure 63 16.1 Transport Infrastructure 63 16.2 Telecommunications Infrastructure 63 16.3 Development of Industrial Zones 64 16.4 Development of the Energy Sector 64 17. Development of the Productive Sectors 64 17.1 Development of the Primary Sector 64 17.1.1 Rural Sector Development 64 17.1.2 Sustainable Management of Natural Resources 68 17.2 Development of the Secondary Sector 68 17.2.1 Development of Industry and Handcrafts 68 17.2.2 Development of the Mining Sector 69 17.3 Development of the Tertiary Sector 70 17.3.1 Trade 70 17.3.2 Monetary and Financial Sector 70 17.4 Stimulating Private Sector Development 71 17.4.1 The Government Action Plan 71 17.4.2 Elements of the Action Program 72 18. Developing Revenue-Generating Activities 73 18.1 Strategic Components 73 18.2 Priority Actions 73 19. Costs and Financing of the PRSP 75 19.1 Financing of the PRSP 75 19.2 Proposed Allocation of FflPC Funds 79 19.3 Medium-Term Expenditure Framework 79 19.4 Distribution of Funds between the Priority Pillars 81 20. The Monitoring and Evaluation Mechanisms 82 20.1 Institutional Framework and Role of the Actors 82 20.2 Monitoring Indicators 84 20.3 Anticipated Evolution of the Monitoring and Evaluation Process 85 ©International Monetary Fund. Not for Redistribution - IV - Boxes 1. The Participatory Approach of the PRSP 15 2. The Solidairy Pact for Growth and Development 27 3. Review/Reform of the Framework for International Aid to Mali: An Original Experience 22 Tables 1. Incidence and Depth of Poverty by Region in 1998 12 2. External Financing and Internal Financing of the PRSP 75 3. Sectoral Distribution of the Government Budget Financed by Domestic Resources 2002-05, in Billions of CFA francs 77 4. Sectoral Distribution of Budgetary Expenditures 2002-05, in Millions of CFA francs 78 5. Priority Distribution of Funds within the Three Pillars 81 Annexes: 1. Poverty Reduction Targets 97 2 Note on the Is Methodology 99 3. Objective Identified Within the World and Reginal Context 100 4. Macroeconomic Framework 101 5. The Medium-Term Expenditure Framework (MTEF) 102 6. Distribution of fflPC Funds over the Period 2002-04 102 7. Action Matrix 103 8. Table of the Macroeconomic Framework 104 Annex Tables A-l List of indicators in the education and health sectors 97 A-2 Indicative list of indicators for each PRSP pillar 98 A-3 Partial scores by types of infrastructure 99 A-4 Results of Alternative Scenarios Relative to the Base Case A-5 Proposed Distribution of HIPC Resources (in Millions of CFA francs) A-6 Real Sector Data and (Volumes and Growth) A-7 Population Data and Projections A-8 Sources and Uses of Funds of GDP (in volume- 1987 price) A-9 Sources and Uses of Funds of GDP (current price) A-10 Hypotheses for the TOEF Forecast A-11 Table of Government Financial Operations A-12 Balance of Payments Hypotheses A-13 Balance of Payments A-14 Main economic and financial indicators Annex Figues A-1 Map of Incidence of Poverty A-2 Map of Severity of Poverty A-3 Evolution and Projection of Principal Crops 1991-2006 102 A-4 Evolution of Public Finance Indicators A-14 Main economic and financial indicators ©International Monetary Fund.