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                  DEMOCRATIC REPUBLIC OF SÃO TOMÉ AND PRÍNCIPE:
                             INTERIM STRATEGY NOTE

                                       CHAIR’S SUMMING UP 

                                     Meeting of Executive Directors

                                              May 19, 2011

        The Executive Directors discussed the joint IDA/IFC Interim Strategy Note (ISN) for São Tomé
and Príncipe (STP) for FY2011-FY2012 (IDA/R2011-0135; IFC/R2011-0091).

        Directors commended STP’s sustained economic growth and significant progress achieved in
important indicators of human development since the approval of the last Country Assistance Strategy in
2006. They welcomed the authorities’ commitment to promoting good governance by strengthening
public financial management, improving accountability in the public sector, and strengthening the
fiscal policy framework. Directors noted the challenges related to the uncertainty of future oil
production and welcomed the shifting focus of the country’s development strategy to other relevant
areas. In this connection, several Directors stressed the importance of diversifying the economy and
boosting productivity in all major sectors of the economy, while putting in place a sound legal
framework and improving the business climate to attract more foreign investment. The need to
improve the country’s infrastructure and financial system was also highlighted.

        Directors expressed broad support for the proposed Interim Strategy and noted its alignment
with the Africa Strategy and the recommendations of the 2011 World Development report. They
appreciated the flexible and realistic approach taken, especially in light of the serious capacity
constraints in STP. Some Directors, noting the limited IDA envelope and that oil revenues are not
expected in the near term, urged the Bank to use its convening power to mobilize more resources for
the country, as well as explore innovative financing avenues including with non-traditional donors.

        Directors noted the strategy’s focus on consolidating macroeconomic stability and
underscored the importance of putting the right medium term development framework in place,
through the initiation of a wide range of institutional reforms. The need to strengthen the country’s
monitoring and evaluation arrangements was also emphasized. Some Directors encouraged greater
emphasis on gender-related issues as well as the need to explore regional integration potential. With
regard to the private sector, Directors welcomed the close coordination between the Bank and IFC in
supporting private sector development, especially IFC ’s engagement in the energy sector.

       Directors stressed the importance of enhanced donor coordination between the World Bank
Group and the IMF and other development partners. To this end, they welcomed the establishment
of a UNDP-executed Multi-donor Trust Fund.

          Finally, Directors urged the authorities to make the most of this interim strategy period to
finalize the new poverty reduction strategy and to prepare a full-fledged CAS.




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    This summary is not an approved record.