International Bank for Reconstruction and Development International Development Association 86876 International Finance Corportation Multilateral Investment Guarantee Agency FOR OFFICIAL USE ONLY CONFIDENTIAL EDS97-224 June 16, 1997 Board Meeting of June 17,1997 Statement by Jan Piercy MAURITANIA- Country Assistance Strategy and Rainfed Natural Resource Management Project 1. We thank Bank staff for a straightforward assessment of Mauritania's development experience and prospects, and we commend the Mauritanian authorities for their solid efforts at economic stabilization and adjustment. 2. This CAS clearly makes the point that Mauritania's recent growth rates are inadequate to make a serious dent in poverty until well into the next century. We commend the CAS for its focus on strengthening the private sector's role in achieving increased growth. This will require improvements in economic governance: better management of public investment, a transparent regulatory environment, an independent judiciary, and a more accountable and efficient public sector. 3. Given the GIRM' s consistent track record on economic reforms, the CAS indicates that reforms already undertaken are unlikely to be reversed. It also notes that the next phase of reform will be more complex and difficult to adopt and implement, as it would have to take into account the social segmentation that still exists. Could staff comment on the nature of the social segmentation and steps that are being taken in this CAS to address this issue? 4. We commend the Bank's plans for lending to finance comprehensive tax and tariff reform. Mauritania, along with much of Africa, remains overly dependent on trade-based taxes that impede its integration into the global economy. 5. With over half of its population already in urban areas, Mauritania needs to address the incentives driving its high rate of urbanization. We support the emphasis this CAS places on rural development and the alleviation of rural poverty. 6. A vibrant informal sector can contribute to economic development if microenterprises are able to grow and have both the capacity and the incentive to cross over into the formal sector. However, the fact that Mauritania's informal sector is large and growing suggests that conditions are not favorable for this kind of "graduation process." We note that the CAS does . . . 2 microcredit activities and efforts to improve the policy environment will be adequate to sustain the dynamic contribution which Mauritania's microenterprises are making to the economy. 7. The authorities have made significant progress in the allocation of expenditure to basic health and education. Gains in primary enrollment are impressive, and the commitment to universal primary education laudable. Similarly, the gains in health spending and in health indicators are impressive, but expenditure on basic health remains low as a share of GDP. 8. We noted with interest that discussions held in the context of the CAS highlighted the implementation difficulties resulting from insufficient consideration of cross-sectoral issues in project design. The CAS indicates that multi-sectoral project teams will now be established to design and implement IDA projects. This seems to be a very important lesson that should be applied more broadly to the Bank's work. Could Bank staff please comment on their experience in this area and the potential for broader application of lessons learned throughout Africa and elsewhere. What is the nature of the multi-sectoral teams? Do such teams include gender, social, and environment expertise? 9. We commend Bank staff for integrating gender concerns into ESW and the design and implementation of investment operations. We are also pleased that the Government of Mauritania has created a government structure (Secretariat d'Etat a la Promotion de la Femme - SEPF) for planning and monitoring the socioeconomic situation of women. In this context, we suggest that the Bank include a dialogue on ways it can help to reduce the incidence of female genital mutilation (FGM) and build on the efforts underway by public health workers to provide education on the harmful effects of FGM. 10. We welcome the Social and Gender Analysis (SAGA) initiative that is to be implemented in cooperation with EDI. There is little mention of EDI elsewhere in the CAS. Could staff comment on the role of EDI in this CAS? 11. The proposed Rainfed and Natural Resource Management Project puts villages at the center of land use planning, priority-setting, and investment decisions through an innovative process of needs identification and decision-making. It uses a similar approach to the participatory community-based natural resources management project in Mali that, in site visits by U.S. officials, we found so successful. The Mali project, which has a comparable design, is ahead of schedule and has produced substantial results on the ground. We hope that the approach taken by this project will lead to similar economic benefits, environmental improvements, and community empowerment (especially women). In addition, the project's focus on small-scale and locally-available technologies contributes to its financial, social and environmental sustainability. We strongly support the Bank's participatory approach in this project and hope that it can be used in future operations.