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Bank-Fund Collaborationin Specific Areas

The IMF and World Bank staff maintain a collaborative relationship in supporting the Government’s structural reforms. The recent April World Bank-IMF joint mission inM a l i reinforced the good working relationships the two institutions entertain. As part o f its overall assistance to M a l i through lending, country analytic work andtechnical assistance, the Bank supports policy reforms inthe following areas incollaborationwith the Fund:

Cotton sector reforms

The objectives o f the cotton sector reforms are to safeguard the main source o f growth and income generation o f the economy. Difficulties experienced inthe late 1990s highlightedthe sector’s vulnerability to external shocks such as the continued decrease o f cotton prices on the international markets. The Government’s decision to pull out o f productive, industrial and commercial activities has led it to design a reform strategy with the following objectives: (ithe improvement o f the flexibility and responsiveness o f the institutional structure o f the cotton sector; (iithe reduction o f the risks associated with having only one operator; and (iii) the establishment o f a higher visibility (transparency and capacity to anticipate) inthe management o f the sector. These objectives will be achieved through a comprehensive program to redefine the parastatal company’s role in core cotton production activities, increasing participation o f producers and the private sector inmanaging the cotton sector, and liberalizing cotton and cottonseed oil markets and enterprises.

Inview o f the budgetary impact o f cotton sector losses, the Bank and the Fundcollaborate closely on the reform program, with the Bank taking the lead inthe policy dialogue and program implementation under the SACIII.

Public expenditure management

M a l i has made significant progress inthe last several years to move the public expenditure system closer to the desiredlevel o f effectiveness, and the Government i s steadily implementingmeasures in its ongoing reform program. The objectives o f the current reform program are: (iimproving the budget preparationprocess in order to progressively reach a systemthat establishes solid links betweenthe allocation o f public resources and the poverty reduction objectives o f the development programs; (iiimproving the efficiency and effectiveness o f public expenditure execution; and (iiiimproving financial transparency and managerial accountability inthe use o f budget resources, through an effective expenditures monitoring and control system and information reports on budget execution. These reforms have beensupported by the donor community including through successive World Bank projects, and the donor community continues to work with the Government on the ongoing reform program.

The reform program i s supported by the Bank under the SACIII which includes, among other actions, a better integration o f the various budget documents, improving classification o f expendituresto enable better poverty-oriented monitoring (including at the decentralized level), automation o f budget execution through an integrated information system, actions to improve the timeliness o f government account preparation, strengthenedinternal and ex-post

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