Search

 

Cablegate: Imf Review: Contrasting Views On Mali's

VZCZCXRO3320
RR RUEHMA RUEHPA
DE RUEHBP #0771/01 3342105
ZNR UUUUU ZZH
R 302105Z NOV 09
FM AMEMBASSY BAMAKO
TO RUEHC/SECSTATE WASHDC 0924
INFO RUEHZK/ECOWAS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 BAMAKO 000771

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN ETRD EINT EAGR EAID ML
SUBJECT: IMF REVIEW: CONTRASTING VIEWS ON MALI'S
PERFORMANCE UNDER POVERTY REDUCTION FACILITY

REF: BAMAKO 349

1. Summary: On November 11, the International Monetary Fund
(IMF) completed the third review of Mali's performance under
the poverty reduction and growth facility (PRGF) and gave
Mali a generally clean bill of financial health. The IMF
noted that the GOM was well positioned to reach its 2009
targets: it has a low budget deficit, a low inflation rate,
and has shown progress on structural reform. Others in the
donor community who provide direct budget support and focus
on different benchmarks before disbursing development aid
gave a more nuanced assessment. Opposition political parties
in Mali have in recent weeks decried what they describe as
irregular methods used by the GOM to account for revenue from
privatizations. End summary.

-----------------------
High Marks From the IMF
-----------------------

2. From October 30 through November 11, a visiting team from
the International Monetary Fund (IMF) conducted its third
review of Mali's performance under the poverty reduction and
growth facility (PRGF). The review focused on Mali's
macroeconomic performance in 2009 and the proposed 2010
budget. The IMF praised the GOM's prudent economic policies,
which they projected would allow Mali to reach its 2009
targets. Inflation is projected to remain below two percent,
comfortably lower than the Central Bank of West Africa
(BCEAO) ceiling of three percent. Mali's budget deficit is
projected to be 1.5 percent for 2009, lower than the 1.8
percent previously forecast (reftel). GDP growth in 2009 is
expected to be 4.3 percent, higher than the world average in
spite of the global economic downturn. The IMF attributed
Mali's relative macroeconomic success to limited exposure to
global financial markets and to favorable rains, allowing
better grain harvests. The IMF also praised the Malian
government for its progress toward structural reforms,
notably the completion of the privatization of the
telecommunications company, SOTELMA, earlier this year.

--------------------------------------
Donor Partners Describe A Mixed Record
--------------------------------------

3. The IMF's review was coordinated to some extent with
Mali's bilateral and multilateral donor partners, who rely on
the IMF's assessments in making determinations for the
disbursal of aid. Mali has a large donor community that
provides direct budget support to the government, and
assistance is contingent on the GOM's attainment of a number
of benchmarks. In 2009, the donor group set 38 benchmarks,
including the adoption of anti-corruption legislation and the
strengthening of capacity of the accounting section of the
Supreme Court. Mali's performance under the PRGF is also a
benchmark, and for this reason, the donor group has pushed
toward greater coordination with the IMF during periodic
reviews. Of the 38 benchmarks, the donor group reported 14
had been met, 5 partially met, and 19 not met. These
shortcomings could impede the disbursement of aid in the
first quarter of 2010.

4. Donors cited the irregular way in which the GOM is
accounting for the revenue from SOTELMA's privatization.
Rather than counting the revenue as current receipts in the
2009 budget, it is instead be held in an irregular bank
account and included piecemeal in the national budget over a
multi-year period. In 2010, 25 billion CFA of the total 180
billion CFA has been allocated toward pension payments for
SOTELMA employees laid off during privatization. The
remaining funds are to be held in the bank account until the
GOM decides to allocate it in out-year budgets. Donors
feared the SOTELMA revenue would not be used to encourage
economic growth, as they believe it should, and worried about
a lack of transparency.

-------------------------------------------
Opposition Political Parties Raise Concerns
-------------------------------------------

5. In a November 23 meeting with Poloff, Konimba Sidibe,
National Assembly Deputy and from the opposition party
PARENA, sounded similar concerns about the proceeds from
SOTELMA's privatization. Sidibe said the National Assembly
had no control in future years over whether the funds would
be allocated according to the GOM's initial pronouncements.
By way of illustration, he said that when the Banque
Industrielle du Mali (BIM) privatization generated 39 billion
CFA in 2008 the GOM promised 10 billion CFA would be used in
2008 to finance the internal deficit, 20 billion CFA would be
budgeted for use in 2009, and the remaining 9 billion CFA

BAMAKO 00000771 002 OF 002


would be budgeted in 2010. While the first two tranches of
the money had been used as stated, the remaining 9 billion
CFA did not appear in the 2010 budget. Sidibe complained the
GOM kept cash sitting in a bank account while Mali operated
under a deficit. In 2009, the government failed to service a
significant amount of domestic debt. Sidibe said the GOM had
26 billion CFA 3 months in arrears, 20 billion CFA 3 to 6
months in arrears, and seven billion CFA more than six months
in arrears. He asserted that these payment delays had forced
certain domestic service providers into bankruptcy (reftel).
Additionally, Sidibe worried that the SOTELMA sales revenue
could easily be manipulated by the GOM in the months leading
up to the 2012 elections.

6. Comment: Concerns expressed by some donors and opposition
elected officials are not without merit. Yet more striking
to us is that the Malian system is sufficiently transparent
that such concerns, including that over the SOTELMA
privatization funds, are the subject of lengthy analysis in
the press and discussion in the National Assembly. The issue
in that case is less one of alleged corruption than a dispute
over whether the government should have broad discretion in
how and when to allocate the funds and whether its choices
are the right ones. Such debate suggests the beginnings of a
healthy open system, one that would be envied by many others
in Africa and elsewhere. End comment.
MILOVANOVIC

© Scoop Media

 
 
 
World Headlines

 


UN: Bachelet Alarmed By Number Of Palestinian Children Killed In Latest Escalation

UN Human Rights Chief Michelle Bachelet today expressed alarm at the high number of Palestinians, including children, killed and injured in the occupied Palestinian territory this year, including in intense hostilities between Israel and Palestinian armed groups in Gaza last weekend... More>>

Save The Children: One Year Under Taliban Rule, Girls Are More Isolated, Hungry, Sad: New Report
One year since the Taliban took control of Afghanistan, an economic crisis, crippling drought and new restrictions have shattered girls’ lives, excluding them from society and leaving them hungry...
More>>

Palestinian Ministry of Health: Developments In The Health Situation During The Israeli Aggression On The Cities & Governorates Of The Gaza Strip
For the second day in a row, the Israeli aggression against the Gaza Strip continues by targeting overcrowded residential areas and neighborhoods, as the death toll rose to 13 citizens, including a 5-year-old girl and a 23-year-old woman... More>>


Somalia: ‘We Cannot Wait For Famine To Be Declared; We Must Act Now’
Rising acute food insecurity in Somalia has caused more than 900,000 people to flee their homes in search of humanitarian assistance since January last year, the Food and Agriculture Organization (FAO) has warned... More>>

UN: American West Faces Water And Power Shortages Due To Climate Crisis
Two of the largest reservoirs in the United States are at dangerously low levels due to the climate crisis and overconsumption of water, which could affect water and electricity supply for millions in six western states and Mexico, the UN Environment Programme (UNEP) warned on Tuesday... More>>



Singapore: UN Experts Call For Immediate Moratorium On Executions For Drug Offences

UN experts* today condemned the execution of Nazeri Bin Lajim, a 64-year-old Malay Singaporean national convicted of drug offenses and urged the Government of Singapore to halt plans to execute individuals on death row for drug related charges... More>>