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Attachment 6

Mali: IMF-World Bank Relations

Partnership in Mali’s Development Strategy

Mali’s development objectives place increased emphasis on poverty reduction and growth, as reflected inits Poverty Reduction Strategy Paper (PRSP) approved by the Government in May 2002. Thejoint assessment o f the PRSF by the staff o f the World bank and IMF was presentedand approved by the respective Boards o f Directors inMarch 2003. The PRSP process enabled the country to articulate an integrated growth and poverty strategy framework for medium and long term development, buildingupon the national poverty strategy formulated in 1998 with UNDP assistance and situating Mali’s main poverty reduction challenges explicitly withina sound macro-economic framework. M a l i also reached its HIPC completion point in March 2003, supported by the joint debt sustainability analysis.

The IMF continues to take the lead inassisting M a l i inmaintaining macroeconomic stability and financial sustainability through setting quantitative targets withinthe framework o f the Poverty Reduction Growth Facility (PRGF), which has been inplace since August 1999 and will expire inAugust 2003. Structural measures inthe program are coordinated with the World Bank and structural conditionality limitedto areas with significant macroeconomic, typically fiscal, implications. Thus the IMF’s structural performance criteria focus on cotton sector reforms (measures impacting on the government’s transfers to the sector), and structural benchmarks include measures related to public expenditure management (efficient use o f HIPC and other resources) as well as civil service reform (primarily issues impacting on the wage bill).

The World Bank continues to lead the policy dialogue on structural, social and institutional reforms in a number o f sectors. A U S 7 0 million Structural Adjustment Credit was approved by the World Bank Board in December 2001,comprising cotton sector reform and public expendituremanagement reform measures. Other Bank operations that address, respectively, private sector development, financial sector development, education sector reforms and investmentprogram, and health sector reforms and investmentprogram, have beenunder implementation for varying lengths of time. Progress i s beingmade inall these operations, albeit slower than anticipated in some sectors.

The World Bank i s also leading the diagnostic trade study under the IntegratedFramework for Trade (IF), an initiative supported by the World Bank, IMF, World Trade Organization, the UNConference on Trade and Development, UNDP, and the International Trade Commission. The M a l i IF, which i s beingundertaken in collaboration with USAID, aims to enhance Mali’s integration into the world economy and international trade policy discussions. The trade diagnostic study will highlight Mali’s comparative advantages and formulate an action plan for capacity building and technical assistance to promote export-led growth, centered around selected agro-industries and some traditional knowledge industries (namely music and handicrafts). The diagnostic report will be discussed at the next UN Round Table for Trade, which i s tentatively anticipated to be heldDecember 2003.

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