M a l i i s one o f the poorest countries inthe world due to its limitedresource base, land-
locked status, vulnerability to external shocks, poor infrastructure, l o w levels o f human development and weak administrative capacity. Despite these constraints, M a l i has made commendable progress on the economic, political and social fronts over the past decade. Annual real growth rates for 1994-2002 averaged about 5 percent. The private sector i s increasingly playing a much larger role inthe economy, and civil society and stakeholders are strengthening partnershipswith Government with greater responsibility for development
activities. M a l i has also recorded important improvements incertain social indicators since the mid-1990s which indicates that it should make progress towards meeting some o f the Millennium Development Goals (MDGs).
Inparallel with this progress, M a l i achieved a remarkable political transformation
with an increasingly strong democratic process taking root throughout the 1990s, culminating inthe peaceful transfer o f power betweentwo democratically elected leaders in 2002. This has placed M a l i inthe forefront o f African countries moving to a truly democratic and pluralistic political system and provides a strong platform for pushingforward on further economic and institutional reforms under the leadership o f a committed Government. While
governance, capacity and institutions s t i l l need strengthening, the overall framework for a more effective, transparent and decentralized administration i s gradually taking shape.
Board Discussion. The following issues are suggestedfor Board discussion:
I s the proposedprogram an appropriate support to the implementationo f Mali’s PRSP?
I s the proposed approach to programmatic lending and PRSCs suitable?
Are the triggers applied to the CAS for the base, highand l o w cases appropriate?
Does the CAS identify sufficient mitigating measures to address the risks, including the risk posed by the impacts o f the crisis in C6te d’Ivoire?
PRSP. M a l i recently finalized its Poverty Reduction Strategy Paper (PRSP) which
lays out a comprehensive strategy for fighting poverty and provides a cohesive framework for all donors and development partners. The issue o f sustained and equitable growth i s the cornerstone o f the PRSP. Despite achieving strong average growth rates since 1994, there i s a considerable degree o f fluctuation inthe annual growth rates, e.g. the growth rate i s estimated to drop from 9.7 percent in2002 to -1.1 percent in2003. This i s a result o f the economy’s vulnerability to external factors such as unfavorable climatic conditions, terms o f trade shocks and record l o w prices inthe cotton sector due to cotton subsidies inthe US and Europe. Inaddition to these traditional vulnerabilities, Mali’s economy in2002-3 was severely affected by the crisis inneighboring CGte d’Ivoire which disruptedtransport, trade, investmentand private sector activity inthe westernAfrica region. Continued strong support from the international community i s neededto help M a l i manage these external shocks, sustain robust growth and make progress on achieving the PRSP goals and the MDGs.
The implementationof the Bank s FY99-01CAS has been satisfactory as M a l i
fulfilled nearly all o f the triggers inthe base case scenario and most o f the triggers inthe high case scenario. The CAS focused on supporting stable economic growth and sustainable human development. The Bank supported Mali’s macroeconomic stabilization, economic