WASHINGTON, D.C. - The World Bank’s Board of Executive Directors today discussed the Interim strategy note (ISN) that sets out the Bank Group’s support to the Guinea-Bissau government’s reform program for the period FY09-10. On the same occasion the Board of Executive Directors approved a US$8 million grant to Guinea-Bissau to better implement its Poverty reduction strategy paper (PRSP) discussed by the Board two years ago.
“The ISN’s approval is indubitably a strong message that the World Bank is committed to support the Government in its efforts to implement a basic transitional program in a challenging environment”, said Barbara Weber, the World bank task team leader of the ISN.
Ten years after the first Country Assistance strategy to Guinea-Bissau, the ISN advocates—for the medium term—a stronger, more ambitious approach requiring a critical mass of resources from external partners, including the World Bank Group.
“Determined efforts aiming at strengthening the key drivers for an improvement of the situation are essential to sustainably break the interlocking vicious circle of low economic growth, weak government performance and political instability in which Guinea-Bissau has been trapped in the last ten years since the civil war in 1998-99. This includes the provision of much higher resources by the international community.”, added Ms. Weber.
This transitional program is articulated around two pillars: strengthening economic management and lay the foundations for growth in existing productive sectors, and increasing access to and quality of basic services. Capacity development will be a cross-cutting theme for the World Bank strategic approach.
These pillars justified the first of a programmatic series of two Economic Governance Reform grant (EGRG 1) approved by the Board of Executive Directors will support reforms that aim to promote efficiency, transparency and accountability in the use of public resources through improved public financial management (PFM).
Alain D’Hoore and Julien Bandiaky, co-task team leaders of the project in the World Bank, underlined that the EGRG 1will also “foster private sector development mainly through the development of a modern legal framework for private investment and improvements in the business environment”.
Although Guinea-Bissau is a small west African fragile state with significant country and fiduciary risks, M. D’Hoore argued that the “greatest risk, however, is failing to support the stabilization and recovery process and missing a window of opportunity for helping to stabilize a fragile country”.
This is why, he said, “reforms supported by the proposed operation have been chosen carefully in the government’s own PRSP, among measures that were technically ready and politically achievable thanks to numerous consultations with stakeholders”.
In fact, most measures of the EGRG 1 are built on government’s longstanding commitments towards regional integration in the context of WAEMU and OHADA, which mitigates risks of reversibility. In addition to mitigate any potential risk, Mr. Bandiaky noted that “the operation will support the development of the private sector to rekindle economic growth and achieve visible results for the population”.