Last updated September 2009 Political Background 
Comoros is a small (population: approximately 700,000 ), fragile state with a long history of political and institutional instability. Most political fighting is based on differences regarding: (i) the degree of federalism, including the sharing of power and resources between the three islands; (ii) the status of Mayotte; and (iii) the relationship with France. In 2001, following various secessionist attempts during the 1990s first in Mohéli and later in Anjouan, which led to a failed military intervention by the federal government, a reconciliation agreement was signed in Fomboni, capital of Moheli. In December of that year a new constitution was adopted creating the Union of Comoros with considerable autonomy accorded to each of the three islands. While these achievements have allowed the establishment of a more representative institutional structure and a more stable political environment, the process suffered a significant setback during national elections in June 2007. The Union government postponed the poll in Anjouan citing irregularities and intimidation in the run-up to voting. The Anjouanese authorities refused to postpone the polls and Mohamed Bacar claimed a landslide victory, which the Union government and the African Union refused to recognize. The standoff led to a military intervention led by the African Union in March 2008. New elections took place in June 2008 and resulted in the election of Moussa Toybou as President of Anjouan. An agreed constitutional amendment in May 2009 enhanced the central government’s authority over budget and economic management and provided an opportunity to correct some of the shortcomings of the disorderly decentralization process initiated in the 2001 Constitution. The constitutional amendment is seen as an important step toward enhanced stability between the islands and improved governance. Economy The economy of Comoros is characterized by limited resource endowments, a small domestic market, weak institutional capacity and a narrow export base, which make it particularly vulnerable to external shocks. The economy is centered on the primary sector and retail services, which account respectively for about 51 and 18 %% of gross domestic product (GDP). The primary sector is geared towards the production of three high-value export crops: vanilla, cloves and ylang-ylang, which provide the bulk of export earnings (around 95 %). Production of food crops, mostly bananas, cocoa, and tubers, as well as fishing for local consumption remains underdeveloped. The global food price crisis has a strong impact in Comoros. Imports—mostly rice, meat and cooking oils—cover about half of food consumption, and food price increases in world markets are affecting Comoros and increasing food insecurity. Vegetable oils and meat products in particular have increased by over 50 % in the past year. The price of imported dairy products–mostly dried milk–has doubled. It is too early still to assess the impact of the global economic crisis on the economy, but a reduced flow of remittances in addition to a reduction in tourism is expected to have major negative implications. Economic development in the past two decades has been hindered by a combination of recurrent political crises, macro-economic imbalances, and external shocks. This has resulted in a progressive decline in real GDP per capita at an average annual rate of about one % since mid-1990s. Income per capita (GNI) in 2007 was estimated at about US$680. Growth in 2008 was about 0.5 %, with end of year inflation projected at about 10 %, due to the higher internal prices for food and oil. Fiscal performance weakened further in 2008, with domestic primary deficit estimated at about 2.5 % of GDP. Comoros has carried an unsustainable external debt burden for over two decades and is in debt distress. At the end of 2007, Comoros’ public external debt was estimated at about US$280 million (about 70 % of GDP). Poverty Reduction Strategy Poverty remains pervasive in Comoros, with 37 % of households living below the poverty line (estimated at about US$700 income per capita per year). The incidence of poverty varies across islands and is generally higher in rural areas. Comparison of 1995 and 2004 data shows that the overall situation seems to have improved (from 47 to 37 % of poverty), albeit inequalities in per capita expenditures also increased substantially, mostly due to variances in inflows of remittances from the diaspora. There has been good progress on several of the Millennium Development Goals (MDGs), namely: achieving universal education, promoting gender equality and empowering women, and reducing child mortality. One of the most challenging targets—especially in the wake of the food price crisis—will be to halve the proportion of people who suffer from hunger. Comoros completed its Interim Poverty Reduction Strategy Paper (I-PRSP) in October 2005. The I-PRSP–endorsed by the Board of Directors of the World Bank on May 16, 2006—is the first comprehensive economic and social strategy document prepared through a participatory process. The I-PRSP centers around three main objectives: (i) sustained economic growth; (ii) improved human capital development; and (iii) improved governance and political stability. To achieve these objectives the I-PRSP sets seven core strategic axes, defined into 35 programs over the period of 2006-2009: - Establishing supportive conditions for sustainable economic development by strengthening public finances and developing the country’s infrastructure;
- Promoting private sector growth, with a particular emphasis on tourism, agriculture, and fishing;
- Strengthening the justice system and promoting good governance;
- Improving health conditions, with a particular focus on combating priority diseases, improving maternal health, and improving health system management;
- Promoting education and vocational training;
- Promoting a healthy and sustainable environment; and
- Strengthening security and combating crime.
Achieving the PRSP objectives will require unwavering efforts to improve public financial management as well as continuous inter-island cooperation. It will also require higher international financial aid in the form of immediate support to finance pressing social services, public investment and technical assistance needs, but also in the form of comprehensive debt relief. World Bank assistance to Comoros The Bank’s previous Interim Support Strategy (ISN), presented to the Board in December 2006, focuses on two objectives: (i) providing basic services to the most disadvantaged communities; and (ii) consolidating national reconciliation through building state capacity and increasing accountability. A new ISN is planned for 2010 which will continue to focus on the same objectives. . The Bank supports the first objective of the ISN through a community-based Services Support Project of US$13.3 million, effective since 2004, for which an additional financing of US$5 million was approved in December 2006. To contribute to the second objective, the Bank is planning to provide technical assistance to strengthen government capacity aimed at strengthening of government core personnel and financial management systems and improving the transparency and accountability of government operations. The Bank has approved support to Comoros in response to the global food prices crises, with a US$1 million grant from the —the Global Food Response Program (GFRP). The funds support three specific measures identified by the authorities to foster agricultural sector medium-term response: (i) Support access to seeds and inputs for the production of traditional staples; (ii) Support the revision of the national agricultural development strategy, with a special emphasis on the identification of risk management instruments; (iii) Facilitate access to credit for agricultural producers through the development of specific credit lines/financial instruments. The Bank also continues to support the formulation and implementation of Comoros' Poverty Reduction Strategy. Supported activities include (i) strengthening the poverty analysis and monitoring capabilities through the development of the knowledge base on poverty and demography in Comoros and the establishment and implementation of monitoring and evaluation systems; (ii) supporting the move towards a full PRSP by supporting better prioritization of policy actions and finalizing and disseminating the full PRSP; and (iii) strengthening the participatory process through training and capacity building activities. In addition, the Bank supports the preparation of a National Strategy for Statistical Development. Donor coordination In an environment characterized by extreme capacity constraints, donor coordination is critical to minimize the government transactions and maximize development outcomes. In an effort to move toward an integrated communal or local development mechanism, the Services Support Project is coordinating closely with the European Commission supporting the decentralization dialogue, strengthening democracy and good governance, and supporting local development initiatives. Finally, the French Development Agency (AFD) and the Bank are providing capacity building to communities who are benefiting from small water projects financed by the AFD. In the public sector and good governance reform agenda, the Bank is working closely with the European Commission, France, the International Monetary Fund (IMF), and the United Nations Development Program. The IMF is monitoring the macroeconomic framework with a special focus on the debt sustainability analysis and possible scenarios of debt relief. Contacts For contacts, click here. |
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