Mali 1993 PA
(Official Use Only)
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Poverty in Mali is pervasive. Food sufficiency is highly dependent on the harshness and unpredictability of the climate (for example, rainfall patterns). This is compounded by seasonal variations in the weather, which tend to be particularly acute during the pre-harvest period. Although poverty is predominantly a rural phenomenon, it is also a cause for concern in urban areas, where traditional solidarity networks are breaking up and getting access to food is more difficult than in rural areas.
The poor are, of necessity, engaged in diverse economic activities, either inside or outside their own village, throughout the year -- all members pitch in either seasonally or when the opportunity arises. As a result of adjustment measures, favorable rainfall conditions, and sustained world cotton prices until 1992, overall per capita incomes have risen since 1985.
Yet Mali's social indicators are among the worst in the world, the most worrying being the low and declining primary school enrollment rate (23 percent overall and 17 percent for girls) and the low immunization rate among children (16 percent vaccinated against the six main childhood diseases -- 30 percent in urban areas and 6 percent in rural areas).
Incentive and Regulatory Framework
The impact of on-going adjustment policies is highly debated in Mali. The assessment does not address all the nuances of the issues, but presents an overview of the key facts and themes. The government has implemented a program of structural reforms, while pursuing an "internal adjustment" strategy. This internal strategy aims to depreciate the real exchange rate by using austere monetary and fiscal policies to repress wage and price increases as well as to force Mali's costs down relative to international competitors.
Despite the fact that real incomes have improved overall, there is discontent with the slow pace of the improvement in living conditions. One reason for this is the fact that not all measures have been implemented as quickly or as thoroughly as is necessary, as well as the fact that the impact of certain measures will take time to be felt. Another reason is the fact that, in the adjustment strategy for Mali (unlike more comprehensive adjustment strategies), the gains in competitiveness from internal measures accrue only gradually as domestic costs are either forced down or, at least, contained, and thus the full impact on supply and growth is deferred. Available data indicates that producer prices increased marginally and consumer prices decreased slightly, but that, surprisingly, producer and consumer prices varied very little. As long as price competitiveness is not resolved, there is likely to be little private investment and thus no significant employment creation in the formal sector.
The civil service reform and public enterprise restructuring under the Structural Adjustment Program have led to a decline in public sector employment, which will, at best, stagnate in the medium term. The reinsertion program for voluntary departees has had a limited effect, leading to higher unemployment and a growing informal sector.
Since no recent review of public expenditure exists (one is being prepared), the assessment briefly reviews public expenditures in the social sectors and finds that recent budgetary allocations to education and health have been inadequate relative to needs. Given the tight budgetary situation, the limited tax base, and the nature of the internal adjustment strategy adopted by the government, the report advocates the efficient use of resources, both budgetary and human, in order to improve the delivery and financing of social services.
In particular, intra-sectoral allocations in the education sector budget (representing around 20 percent of the recurrent budget) require special attention as secondary and higher education (mainly scholarships and student subsidies) continue to receive disproportionately large shares.
In the health sector, using the sector's resources rationally, decentralizing planning and management, and relying on community support and on cost recovery are key policies, although cost recovery measures in public health centers need to be monitored to ensure that the ability-to-pay principle is not being ignored. Health expenditures have averaged about 2.5 percent a year since 1980.
The extended family is the most important safety net in Mali. Associations are another form of traditional safety net that strengthens community ties and contributes to community development initiatives (as in village-based associations) or have a more economic base (such as the "tontine", which encourages savings).
In general, NGOs are often regarded as being safety nets for the communities they serve, both in terms of their emergency assistance and their development activities. The number and growth of NGOs attests to their contribution to meeting basic needs and to the effectiveness of their integrated participatory approach.
Safety nets to cover transitory shocks include the national food security stock program, food-for-work programs, a voluntary departure program for civil servants, and a redeployment program for laid-off public enterprise employees. The food stock program is working well, thanks to a good early warning system for targeting people who are food insecure. The possibility of improving the distribution of food aid at the local level by ensuring that food is available in deficit areas through food-for-work programs, cereal banks, and school canteens before drought hits is being studied.
The voluntary departure program has had poor results, mainly because of an inadequate information campaign, an unresponsive financial system, and delays in start-up. Similarly, the redeployment program has run into financial difficulties due to the breakdown of its screening and administrative procedures and the fact that compensation costs were underestimated.
The assessment emphasizes that, for a poverty reduction strategy to succeed, policies that promote growth, employment, and income generation have to be designed, implemented, and monitored. The design of policies will depend on the progress of human resources initiatives (raising the quality of the labor force, slowing down population growth, and preventing the spread of AIDS) and on the extent to which adjustment can ease long-term structural and organizational barriers to efficiency and can restructure public expenditures towards human resources. It will also depend on whether Mali's production costs can be held down enough to give its products an edge vis-à-vis competing nations.
Accelerating measures that will strengthen competitiveness is the only sustainable solution to dealing with low growth. In the short to medium term, labor-intensive investments (such as the Public Works and Employment Project) will temporarily generate employment for mainly unskilled workers. Efforts will need to be made to extend these projects to rural areas.
Strengthening key economic and social institutions is critical to improving the implementation of policies and programs. This includes increasing the capacity to monitor the socioeconomic situation, defining appropriate policy measures, disseminating information on these measures, raising the competency levels of staff in social sectors, and assessing the administrative and financial capacity of decentralized public institutions. Also if a poverty alleviation program is to be implemented effectively, it will need the support of "civil society", which implies the need for an effective legal system backed up by an independent judicial system, the participation of NGOs and other grassroots associations, and communication strategies targeted to the appropriate audience.
A system for monitoring social conditions is essential to ensure that policies achieve their intended results. In the assessment, a system is recommended that would use both quantitative and qualitative methods. At the core of the system would be a household budget survey complemented by qualitative forms of investigation that would capture the sociological aspects of poverty.
The assessment also proposes that a Poverty Monitoring and Analysis Unit should be set up that would coordinate the different elements of the monitoring system. It also recommends that a review should be made of poverty and social trends that would be used to translate the findings of the analysis into policies and concrete programs/projects involving all parties interested in reducing poverty.
Since comprehensive and reliable household data are not available in Mali, the assessment uses a number of surveys (on employment, health, and demographic characteristics), qualitative assessments (a beneficiary assessment of urban poverty and rapid rural appraisals), and other information from baseline studies done by NGOs and from donor reports. A household survey targeted to poorer regions and groups is being prepared. An important element of the process is to design a survey that takes into account the human, physical, and institutional capacity of the country so as to ensure that it can be sustained.