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growth exist in the expansion o f mining, development o f the tourism and handicrafts industries and promotion o f small and medium-sized enterprises in services


Private Sector Development. The G o M has concentrated on creating a legal and

regulatory framework conducive to private sector development. It has been able to attract private investmentinthe gold, telecommunications, energy and water sectors, as well as large external funding in infrastructure. Measures have been taken to harmonize the legislative and regulatory environment under the Organization for the Harmonization o f Business L a w inAfrica (OHADA) Treaty; measures have also beentaken to address core labor standards (see Attachment 4). Furthermore, the G o M instituted a public enterprise reform action plan for 1999-2002 in order to reduce the number o f state-owned enterprises

from thirty-three to eighteen. Currently, the G o M retains a majority holding inten non-bank enterprises and minority holding in eight. However, about 90% o f Mali’s economy still remains inthe informal sector. Small and medium enterprises (SMEs) comprise a significant share (over 65%, although largely informal) o f the private sector. Limitedaccess to short, medium and long-term credit instrumentsfor business startup and investmenti s a primary constraint for SMEs. As highlightedinthe JSA o f the PRSP, there i s a risk o f slower-than- anticipated development o f the private sector into a dynamic engine o f growth. Therefore, the G o M will needto continue to pushahead with reforms and incentives for developing the

private sector.


Financial Sector. Private sector development i s contingent upon financial sector

development and access to sustainable finance. The G o M has been implementingvarious reforms to improve confidence and competitiveness inthe financial sector. In 1992, the G o M began consolidating and liberalizing the state-owned and uncompetitive sector while opening it up to competition and creating the necessary legal and regulatory framework for

sustainable growth. In2001, the B M C D bank was restructured, privatized and mergedwith BDM-SAto create the largest bank inM a l i and the twelfth largest bank inthe UEMOA, thereby increasing Mali’s presence inthe regional financial market. The BIM-SA bank i s currently being restructured and privatized. The G o M i s further creating a financial enabling environment by continuing to lay the necessary legal and regulatory framework, especially on a regional level (having adopted the Uniform Acts o f OHADA), diversifying the financial sector to support non-bank financial institutions, fostering access to credit on a decentralized

level through micro credit, and modernizing financial systems as a whole.


Transport Sector. The program o f reforms and investments inthe transport sector in

the 1990s targeted the following: (ienhance and sustain efficiency o f the sector’s operation; (iiimprove and maintain infrastructure, especially for roads and rail; and (iiiopen access to the remote and poorest areas. Progress on this reform program to date has been insufficient and transport costs are extremely high inMali, accounting for approximately 30% o f product prices. While railway transport i s the cheapest mode for long distance and bulk traffic, about 80% o f international traffic i s by road due to inefficient railway operations and the poor condition o f railway track and equipment. Before the crisis in C8te d’Ivoire, between70 and 80% o f Mali’s trade was transported along the Bamako-Abidjan corridor. The crisis highlights the importance o f improving alternative transport corridors to Conakry, Lomi, Cotonou, Dakar, Accra, and Takoradi, inthe context o f a regional approach to transport infrastructure. However, until these alternatives are better developed, the use o f ports further

away than Abidjan has resulted in significant price increases. The railway company’s

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