Speech

"Together for a New Mali", Remarks by Mr. Min Zhu, Deputy Managing Director of the International Monetary Fund (IMF)

May 15, 2013

Your Excellencies,

Ladies and Gentlemen,

Last year we were all reminded that the road to development—political and economic—often is neither straight nor smooth. During 2012, Mali was hit by no less than three crises at the same time. Still in the grip of a food crisis, it experienced a security crisis, and then a constitutional crisis. The impact on the country was immediate and severe. The humanitarian consequences of the conflict in the North were compounded by an economic contraction as foreign financing declined sharply. Fortunately the Malian people proved resilient, democratic forces prevailed, and the international community came to the country’s defense.

The government responded swiftly and effectively with a budget that safeguarded the greatest priorities. The IMF supported this response with a loan from our Rapid Credit Facility and assisted the Malian government in designing an economic framework that facilitated the resumption of donor support.

At this Conference, the Malian government is seeking continued support from the international community. It has proposed a Plan for the Sustainable Revival of Mali, which aims to rehabilitate infrastructure and accelerate development and poverty reduction. The IMF believes that this plan—and the third Growth and Poverty Reduction Strategy Paper which forms its backdrop—deserve full support. Both are comprehensive and ambitious, and benefited from broad consultation. Together they form a thorough strategy.

The Plan focuses on the immediate priorities: humanitarian assistance, the organization of transparent elections, the return of government’s authority in the North, and reconciliation among the various segments of the population.

Both the Revival Plan and the Poverty Strategy rightly emphasize that sustainable growth and poverty reduction depend on fiscal sustainability, public financial management reform, a good business climate, anti-corruption efforts, and aid effectiveness. To support development, they envisage a substantial scaling-up of public spending. This will require steady implementation of ongoing reforms in public financial management. Such reforms are necessary to mobilize the necessary domestic resources and ensure that both domestic and foreign resources are utilized efficiently.

The Plan and the Strategy both recognize the private sector as the engine of economic growth and the generator of employment. A healthy private sector requires a favorable economic and business environment, including an effective judicial system, adequate and reliable infrastructure, a well-functioning financial system, and strong education and health sectors.

As Mali addresses the great challenges ahead, the IMF will be at its side. A second disbursement under the Rapid Credit Facility is planned for June. We stand ready to work with the new government after the elections to design a medium-term economic program to support Mali’s continuing recovery. This could receive IMF financing under our concessional Extended Credit Facility. Our programs will be accompanied by substantial capacity-building, including training and technical assistance, notably in public financial management. I would like to take this opportunity to thank many of the donors present here for their generous financing of the IMF’s capacity-building program.

This year, it is exactly 50 years ago that Mali joined the IMF. There has been sustainable economic and social progress, as well as a few crises during this period. Our relationship has always been constructive. Mali can count on the IMF as it works to overcome this latest crisis and reposition itself on its path towards higher growth and decisive poverty reduction.

Thank you.