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  • I.

    INTRODUCTION

    • 1.

      The last ten years have witnessed significant economic and political change inMali.

Since 1994, economic growth rates have averaged more than 5 percent. This strong performance was the result o f a series o f macroeconomic stabilization, economic liberalization and structural reforms that were supported by the World Bank, IMF and other donors. The comprehensive reform program has transformed Mali’s economy into a market- oriented one where the private sector i s playing an increasingly important role, thus laying a more solid foundation for accelerated growth.

2.

Inparallel with the positive economic developments, the political landscape inMali

has also beentransformed. In 1991, the 23-year dictatorship o f General Moussa TraorC was overthrown and PresidentKonare was democratically elected a year later. Since then, Mali has beencharacterized by an increasingly stable democracy, culminating inthe 2002 elections won by President TourC. This peaceful transfer o f power betweentwo democratically elected leaders was a first inMali’s history andplaces M a l i inthe forefront o f

African countries moving to a truly democratic and pluralistic political system.

3.

Notwithstanding this progress, M a l i remains one o f the poorest countries inthe world

and i s ranked 164 out o f 173 countries inthe 2002 UNDP HumanDevelopment Index. The country’s limited resource base, land-locked status, vulnerability to external shocks, under- developed infrastructure, l o w levels o f human development and weak administrative capacity combine to create difficult social and economic conditions. In2001,63.8 percent o f the population was estimated to be living inpoverty. Between75 and 80 percent o f Mali’s population o f 11.3 million lives in rural areas and i s dependent on agriculture. The economy i s vulnerable to recurrent drought, poor environmental conditions and large fluctuations in international commodity prices. However, while Mali’s social indicators remain among the

poorest inthe world, some are showing progress, particularly since 1998 (see Table 1). Building on and strengtheningthis progress will be critical for M a l i as it faces major challenges in achieving the MillenniumDevelopment Goals (see Attachment 1for details).

4.

M a l i reached the Completion Points o f the Original and Enhanced HIPC Initiatives in

September 2000 and March 2003, respectively. The debt relief provided to M a l i under the Enhanced HIPC Initiative was sufficient to allow the debt sustainability ratio to drop to an acceptable level. InM a y 2002, the Government adopted the Poverty Reduction Strategy Paper (PRSP) which lays out a comprehensive strategy for fighting poverty and provides a strong and cohesive framework for all donors and development partners. The Bank’s FY04- 06 Country Assistance Strategy (CAS) i s designedto support the PRSP. The Bank’s strategy builds on the lessons learnt from implementingthe previous CAS and i s based on the outcome o f a one-year consultative process with representatives from central and local Government, civil society, private sector, non-governmental organizations (NGOs) and other

development partners. The PRSP, with the support o f the Bank’s CAS, provides a solid framework for moving towards achieving the MDGs.

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