Sociolingo’s Mali

Press Release: IMF Executive Board Approves US$45.7 Million PRGF Arrangement for Mali with Front-Loaded Disbursement to Address Higher Food and Fuel Prices
http://www.imf.org/external/np/sec/pr/2008/pr08126.htm

Source: IMF

Mali: Poverty Reduction Strategy Paper

Mali: Joint Staff Advisory Note of the Poverty Reduction Strategy Paper

Source: Rural Poverty Portal

Rural poverty in Mali

National poverty reduction strategies have reduced the proportion of the country’s poor people from 68.3 per cent in 2001 to 59.2 per cent in 2005. Still, Mali is one of the world’s poorest countries, ranking 175th out of 177 countries in the United Nations Development Programme’s 2006 Human Development Index.

Three forms of poverty affect people in Mali:

• poverty of living conditions, defined as inadequate access to water, education, health care and housing
• monetary poverty, characterized by a lack of assets and income
• poverty of potential, characterized by scant access to land, equipment, credit and employment

More than 73 per cent of the country’s rural people live below the poverty line. Poverty is widespread in rural Mali, but it does not affect all poor people in the same way. Over the past decade trends have shown a shift in the geographical distribution of poverty.

Read the full article 

Source: IMF

Working Paper No. 07/295: Modeling Inflation for Mali

Author/Editor: Diouf, Mame Astou

Summary: This paper investigates how consumer price inflation is determined in Mali for 1979-2006 along three macroeconomic explanations: (1) monetarist theories, emphasizing the impact of excess money supply, (2) the structuralist hypothesis, stressing the impact of supply-side constraints, and (3) external theories, describing the effects of foreign transmission mechanisms on a small open economy. The analysis makes use of cointegration techniques and general-to-specific modeling. Average national rainfall, and to a lesser extent deviations from monetary and external sector equilibrium are found to be the main long-run determinants of inflation. The paper offers policy recommendations for controlling inflation in Mali.
http://www.imf.org/external/pubs/cat/longres.cfm?sk=21518.0

News from the IMF

http://www.imf.org/external/np/sec/pr/2007/pr07244.htm 

IMF Executive Board Completes Sixth Review Under Mali’s PRGF Arrangement and Approves US$2.1 Million Disbursement
Press Release No. 07/244
October 31, 2007The Executive Board of the International Monetary Fund (IMF) today completed the sixth and final review of Mali’s economic performance under the Poverty Reduction and Growth Facility (PRGF) arrangement. The completion of the review allows the release of SDR 1.34 million (about US$2.1 million) to Mali, which will bring the total amount drawn under the arrangement to SDR 9.33 million (about US$14.6 million).In completing the review, the Executive Board also approved Mali’s request for waivers of nonobservance of performance criteria pertaining to the implementation of two structural performance criteria on the Caisse des Retraites du Mali (CRM) and the Banque de l’Habitat du Mali (BHM) as well as the nonobservance of the performance criterion on the concessionality of external financing. The Executive Board also approved a short extension of the arrangement to November 30, 2007 to allow the final disbursement. The three-year PRGF arrangement with Mali was approved on June 23, 2004 (see Press Release No. 04/125) in a total amount of SDR 9.33 million (about US$14.6 million).

The PRGF is the IMF’s concessional facility for low-income countries. PRGF-supported programs are based on country-owned poverty reduction strategies that are adopted in a participatory process involving civil society and development partners and articulated in the country’s Poverty Reduction Strategy Paper. This is intended to ensure that PRGF-supported programs are consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5½-year grace period on principal payments.

Following today’s Executive Board discussion of Mali, Mr. Murilo Portugal, Deputy Managing Director and Acting Chair, stated:

“Mali’s economic program supported by the IMF through its Poverty Reduction and Growth Facility has broadly succeeded in maintaining macroeconomic stability. As a result of the authorities’ efforts and the Multilateral Debt Relief Initiative, the public debt is well within sustainable levels. However, economic growth per capita remains below the level required to significantly reduce poverty or achieve the Millennium Development Goals (MDGs), and the economy remains highly vulnerable to external shocks.

“Mali needs to accelerate growth and poverty reduction through vigorous implementation of structural reform. Important reforms are under way, although implementation of some measures under the program has remained incomplete. A key reform would be to disengage the government from commercial activities, including those in the cotton, banking, and telecommunications sectors. In this context, the authorities’ renewed commitment to restructure the state-owned housing bank and improve governance at the loss-making state-owned cotton ginning and energy companies is welcome.

“Fiscal policy should maintain its focus on macroeconomic stability. The authorities are committed to closing the 2008 budget financing gap through spending measures, if necessary, while protecting social outlays. It will be important that legislation to reform the civil service pension fund be submitted to the national assembly soon, as it remains essential to longer-term fiscal sustainability.

“It is important to keep strengthening debt management and increasing the transparency of borrowing. The recent nonconcessional financing for the electricity sector was an exceptional stop-gap measure in response to urgent needs for power generation. Going forward, it will be important to avoid recourse to high-cost financing to maintain debt sustainability.

“With a renewed political mandate, the authorities have an opportunity to reinvigorate the reform agenda. Implementation of the Poverty Reduction Strategy through a detailed action plan could give a renewed impetus to reforms and accelerate progress towards achieving the MDGs,” Mr. Portugal said.

Seen on IRIN NEWS

MALI: Rural youth rarely find fortunes in the city

BAMAKO, 12 October 2007 (IRIN) - When Nouhoum Sangaré left his wife, three children and village in southern Mali for the capital Bamako 240km away, he expected to find stable work and a comfortable life, and eventually have his family join him.

He found a different and unglamorous reality. He goes from small job to small job, barely making ends meet. He often comes home after a day’s work with 100 CFA francs (22 US cents).

“It’s not easy,” Sangaré told IRIN, “because I have to share the crumbs I earn with my parents and my family in the village.”

Sangaré is one of a growing number of young rural Malians who are leaving their homes to find work in the city.

Mali’s capital, Bamako, is the fastest growing city in Africa and the sixth-fastest growing city in the world, according to data compiled by the Mayor’s Association, a global network of city officials.

Urban areas are booming throughout West Africa. In Mali’s western neighbour Mauritania, more than 60 percent of the traditionally nomadic people there are estimated to have moved to towns and cities.

Analysts say most do not find what they are looking for and in some cases end up worse off.

Fleeing poverty

No national study has been conducted to gauge the magnitude of migration within Mali; but in the western region of Kayes - one of the hardest hit by migration - a non-governmental organisation (NGO) found that 40 percent of its population had left the region in the period 1993-2002 to move either to Bamako, elsewhere in West or North Africa, or to try to get to Europe.

Sangaré, 26, blames decline in his village for his decision to flee. “The fields don’t produce any more. The fruits rot because we don’t have the means to turn them into other products [for example, juice] or to take them into town,” where there is more of a market for them, he said.

“After the rainy season we have nothing to do but rub shoulders with poverty every day.”

Observers say the majority of the young men and women who move to Bamako and other urban areas do not fare much better there than they did in the countryside, because in the city they have to start from scratch and pay for things they used to just pull out of the ground.

Worries

“At first they are busy trying to find work. They do whatever work they can find - labourer, factory worker, hawker - and if they don’t find anything to provide for their immediate needs, they get into theft and robbery,” Drissa Guindo, national director of youth at the Ministry of Youth and Sport, told IRIN.

“It’s really only a handful that succeed.”

Sangaré has tried everything from selling sunglasses to building work, and shoe-shining. He is now a rickshaw driver by day and a security guard by night. He says his children are no better off since his move to the city: he gave his daughter up for adoption to his aunt, and none of his children are in school.

“In the village, we worry more about what we will feed our children than their education,” he said. “I’d like to put them in school, but our financial situation makes that impossible.” He hopes in two years to make enough money to enrol his youngest son.

Sanogo, unable to find work in Bamako, is now planning to go abroad. It is a choice that 70 percent of young migrants make after internal movement fails to produce results, the NGO Mali-Folkecenter said.

Working girls

The situation is worse for young girls, who are increasingly migrating because of poverty and in search money for a dowry. They find work as cooks, maids, nannies and in small businesses.

According to the Association d’aide aux aides ménagères, an agency that places girls looking for work with families, many girls are exploited because they are young, easily manipulated, unaware of their rights and afraid to expose their employers. In the worst of conditions, the association says, they work more than 15 hours a day, are beaten, badly fed, poorly paid and treated like quasi slaves.

“If we don’t go to work in a town to prepare our future as wives, who will? It’s the only way we can afford clothes, shoes and cooking utensils to take back to our village,” said 15-year-old servant Amina Coulibaly. “Our mothers and sisters did the same.”

“We have to give rural youth the means to stay in their communities,” said Soumana Satao, director-general of the government’s Agency for the Promotion of Youth Employment. “Otherwise, we will not be able to stop this rural exodus.”

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From Reuters Africa

UPDATE 2-Low prices slashing Mali cotton output by 25 pct

Wed 21 Feb 2007, 15:20 GMT

(Recasts with background, details throughout)

By Tiemoko Diallo

BAMAKO, Feb 21 (Reuters) - Cotton production in Mali is expected to have dropped by more than a quarter in 2006 as farmers in the impoverished West African nation give up on the crop in the face of tumbling world prices.

Export earnings in Mali, the leading cotton producer in West and Central Africa, are heavily reliant on cotton, known locally as “white gold”. The government has long blamed U.S. domestic farm subsidies for the slump in world prices.

State cotton company CMDT said cotton output was expected to have dropped to 435,000 tonnes in the 2006 season from 585,000 tonnes the previous year as farmers struggled to earn enough money to maintain their fields.

More 

From Deutsche Welle

Immigration | 07.02.2007

EU Offers Legal Jobs to Africa In Bid To Stop Illegal Immigration

 

Großansicht des Bildes mit der Bildunterschrift: Many flee extreme poverty in Mali for Europe without a plan on how to support their new life

 

The EU is piloting a new guest worker scheme for Africa which aims to kill two birds with one stone - boosting the economies of developing countries through foreign wages and stopping illegal immigration in the process.

The European Union plans to open a job centre in Mali, in an experiment aimed at boosting the migration to the EU that is skilled, legal and temporary immigration from Africa to the EU. The scheme was announced on Jan. 22 by the EU Immigration Commissioner Franco Frattini.

 

“It will be something flexible which will coordinate job offers and job hunters between Mali and the EU,” Frattini told the European parliament. EU Development Commissioner Louis Michel will discuss the pilot project during a trip to Mali’s capital Bamako on Feb. 8.

From IMF

IMF First Deputy Managing Director John Lipsky’s Statement at the Conclusion of his Visit to Mali, November 8-10, 2006

Press Release No. 06/250

November 10, 2006Mr. John Lipsky, the First Deputy Managing Director of the International Monetary Fund (IMF), made the following statement today in Bamako at the conclusion of his visit to Mali:“This is my first visit to Mali as First Deputy Managing Director of the IMF. I want to thank President Touré, whom I have had the privilege of meeting, and other Malian officials for their wonderful hospitality. I am also grateful for the opportunity to meet with Ministers and officials of the West African Economic and Monetary Union (WAEMU), Mauritania and Guinea. I came primarily to listen—to hear from policy makers and others in the sub-region about their priorities, and how they feel the IMF can help. I would like to express my sincere thanks to all my interlocutors, including those from civil society.

“I believe this is a moment of great opportunity for Africa, where many countries have taken advantage of solid global economic growth and of debt relief to successfully implement reforms. These reforms, in turn, are improving economic performance. The goal is to create a virtuous circle of reform and faster growth, paving the way for sustained poverty reduction.

“I have been given a broad exposure to Mali in just three days. I have visited cotton farmers in Fana and a rice irrigation project outside Timbuktu. I have spent time at a health clinic here in Bamako that has benefited from resources made available by HIPC debt relief. I have had the opportunity to learn of Mali’s rich heritage, including by visiting the elders of the founding families of Bamako. I am deeply impressed by all that I have seen and heard—especially the determination of both Malians and their neighbors to achieve a better life in the years ahead.

“The visit provided an opportunity to discuss economic developments and challenges in Mali. I very much share President Touré’s view that economic performance has broadly been good under Mali’s economic program that is supported by the IMF’s Poverty Reduction and Growth Facility. Despite adverse external shocks in 2005, the pace and momentum of economic activity have been maintained, owing to good cereal harvests in 2005 and 2006 as well as to higher gold export revenues. My discussions, including with Prime Minister Ousmane Issoufi Maïga, President of the National Assembly Ibrahim Boubacar Kéïta, and Minister of Economy and Finance Abou-Bakar Traoré, revealed a shared understanding of the policies needed to achieve sustained growth and poverty reduction, and to make progress toward meeting the Millennium Development Goals. Mali should strengthen its record of macroeconomic stability and fiscal sustainability, and above all accelerate the pace of structural reforms. Implementing key planned reforms is the important step it has to take next. Looking ahead, Mali’s Poverty Reduction Strategy Paper for 2007-11 should provide a coherent growth strategy. The IMF stands ready to support these efforts.

“I also had very productive discussions with the Ministers and officials, civil society and the media from neighboring countries at the regional seminar on the scaling up of aid that we organized jointly with the Agence Française de Développement. With the expected doubling of aid to Africa by 2010, plans in the region to increase spending on infrastructure and social sectors are very welcome,” Mr. Lipsky said.

The conference on scaling up of aid discussed macroeconomic challenges arising from scaling up aid. These include: (i) the strengthening of institutions and governance; (ii) the importance of increasing the supply response (in the form of improved productivity and higher employment) to aid flows; (iii) avoiding loss of competitiveness from exchange rate appreciation; (iv) coordinating fiscal and monetary policies (v) reducing aid volatility; (vi) identifying key issues and policies to absorb higher aid flows, and (vii) formulating an exit strategy and planning to depend less on aid over time. The focus of the seminar was on how recipients and their development partners can address these challenges.

Mr. Lipsky said, “WAEMU member states have experienced challenging environments in the last few years, both internally and externally. Many saw deteriorations in terms of trade, largely induced by commodity prices. Some countries experienced adverse agricultural shocks, while others suffered from socio-political problems. In my discussions, I noted that the key priority, which all ministers fully supported, is the continued implementation of sound macroeconomic and fiscal policies needed to make decisive inroads in the fight against poverty. The IMF stands ready to support the efforts of all countries in the region. I also found a broad consensus on the need to accelerate structural reforms that raise the productive capacity of the region’s economies and promote economic diversification. Similarly, we agreed on the need for the development of sound institutions that provide an environment conducive to investment and private sector development. This would include improving governance at all levels.”

IMF EXTERNAL RELATIONS DEPARTMENT

From IRIN

MALI: Culture of migration faces tough new realities

[This report does not necessarily reflect the views of the United Nations]

BAMAKO, 2 November (IRIN) - Eighty-year-old Amadou Keita spent his working life as a schoolteacher trying to understand and influence young people. Knowing them well, he doubts efforts to stop the tens of thousands of youths who migrate abroad every year will ever work.

“We Malians have been travelers since the dawn of time,” he said. “Some go seeking knowledge, others to taste adventure and still others to make their fortunes. Before Christopher Columbus discovered America, a young Manding king named Aboubakri II left to discover the world. He never returned.”

Today, more Malians are migrating than ever before. Four million, or over a third of the country’s 11.7 million people, are currently located in other countries, according to Mali’s Ministry of Foreign Affairs.

They join thousands of other West Africans who are escaping poverty and joblessness for a chance at a better life in Europe or elsewhere. Abroad, they can make better money to send back home and achieve a level of success and social status unattainable in their own countries. Through songs, the Internet and word of mouth, the more young people hear of others who make it to Spain, Italy or France the more there are who want to follow in their footsteps.

Ingrained in culture

Migration expert Sally Findley dates Malian migration back to the 4th Century. And she says that for at least the last two centuries rural Malians have been leaving home during the dry season and returning for the rainy season or when life improves.

“Migration is an apt response to the cyclical swings of poverty in this region,” wrote Findley, a professor of population and family health at New York’s Columbia University, in a 2004 paper published by the Washington-based Migration Policy Institute.

Migration is so deeply ingrained in the culture that in certain regions young people are not allowed to marry until they have gone abroad, according to Malian historian Amadou Sylla. He said that people aged 18-35 from all strata of society deeply believe that only migration will provide a sense of worth, allow them to help their families and eventually enable them to build a life back home.

The sums they remit each year exceed over US $200 million, according to the Ministry of Foreign Affairs. That is more than half of all of Mali’s export earnings.

“Malians are making an investment in their country by migrating,” said Abdramane Cherif Haidara, chairman of the High Council for Malians Living Abroad. “Some are funding schools in their home regions and health centres.”

On the other hand, migration drains the country of its rural labour force, according to a study from the Kayes region in western Mali. Yet the author of the study, Flore Gubert of the University of Auvergne, also found that remittances constitute the most reliable mechanism to protect agricultural households from food-insecurity.

“Without the financial support of the migrants, the two droughts of 1973 and 1984 would have had much worse consequences,” he wrote.

Why Europe?

Malians used to only travel to neighbouring African countries but that changed during the colonial era, according to Findley.

“When Malians began serving under the French in wars they were introduced to France, and particularly after World War II, many former soldiers and a long line of subsequent migrants headed for France to work in its automobile factories and to serve the growing French urban populations,” she said.

Today at least a half a million Malians reside across Europe and North America. And while European authorities are stepping up efforts to limit arrivals, Malians are intensifying their efforts to leave home.

One reason is that numerous armed conflicts in Africa over the past decade, including one in northern Mali, have disrupted the old patterns of inter-African migration. The most significant conflict for Malians is in Cote d’Ivoire on Mali’s southern border where many migrants once went for work.

With the fighting there partly over citizenship rights, tens of thousands of migrants from Mali and Burkina Faso have been forced out and remittances have plummeted. So has trade because merchants from landlocked Mali are unable to access Cote d’Ivoire’s ports.

“With the additional pressures of the conflicts on their borders, the impetus to go farther to Europe and the US is likely to continue to increase,” Findley said. “The pressure is likely to come both from individual families benefiting from these moves, and from the government, which sees the enormous value added from the remittances.”

She wrote that the challenge for Mali’s government is to “continue to balance the significant stakes it holds in these migrations against pressure from foreign governments, both near and far, to restrict emigration”.

Higher risk

In the past year, many nations have intensified efforts to stem illegal migration. Hundreds of Malians and other West Africans attempting to illegally enter Spain’s North African enclaves at Ceuta and Melilla from Morocco have been rounded up.

At least a dozen were killed in 2005 while attempting to mount barbed-wire barriers on the border. Some were shot dead; others were crushed to death, according to London-based Amnesty International. Other migrants brought to the Sahara Desert died of dehydration and exhaustion as they walked south, crossing those on their way up north, Amnesty said.

Some illegal migrants take different routes. Police at Bamako airport recently told IRIN of a young man they arrested in September with fake travel documents attempting to board a plane for Europe. He had sold his family property for the 3 million CFA [US $5,820] to pay his travel costs and now had nothing, the police said.

Still others have abandoned the old overland routes north and head west instead to the coasts of Senegal and Mauritania. There they join the tens of thousands of West Africans who each year head into the high seas on fishing canoes for Spain’s Canary Islands.

Untold numbers drown along the way. The Spanish government says it knows of least 500 suspected migrants who have died at sea. The bodies of others can be seen washed up on the African shore.

“Some have also committed suicide,” said Mamadou Keita, chairman of a Malian association helping returnees called Return-Work-Dignity. It is an endless traffic going nowhere in which few ever make it to the top where they want to go, he said.

Faced with the compounded risks and dangers he and other Malians are looking for alternatives.

“Many of us wouldn’t go if we could just find jobs at home,” said Alfousseiny Kampo, who tried but failed to make the journey and is a member of Return-Work-Dignity. “We dream of the West only because we think it is our only chance of having a real life.”

What hope?

In September, the European Union promised to give Mali’s government 426 million euro (US $542 million) over five years “to control the migration flow”. The money, however, was not given to increase border controls but for projects that promote job creation.

“There is not going to be magical solutions,” Irene Horejs, the head of the European Commission’s delegation in Bamako, said at the time. “We must attack the fundamental problems of Mali’s poverty and development.”

Few Malian leaders believe the money will change things.

“Immigration is going to continue unless we address fundamental issues like the unequal terms of trade,” said Malian Foreign Minister Oumar Hamadoun Dicko, referring to the subsidies that Western governments give their farmers. “African farmers can’t compete and are out of world markets.” Mali’s cotton farmers have been especially affected.

For Malian sociologist and former minister of culture Aminata Dramane Traore, the West’s war on illegal migration is really a war on Mali’s youth, who on the one hand can’t work because the West has undermined Mali’s agriculture base and who on the other hand can’t leave to find work elsewhere. Worse still, she said, “African governments are not speaking out about the biased and superficial polices emanating from Europe because of the promise of new aid.”

Unlike traditional forms of seasonal migration, Malians who end up in Europe find it hard to return home. That has been devastating for mothers such as Coumba Diallo.

“My first born, Madou, got up and went on his adventure one bright sunny morning in 2000,” she said. “I have never heard from him again; I don’t even know if he is dead or alive. I want him here again more than all the money in the world.”

Yet the way Moussa Maiga sees the world he has no choice but to leave.

“I got a bachelor’s degree four years ago and was supposed to be the hope of my family,” he said. “I can’t just sit here and not do anything.”

Maiga plans to leave for Spain soon, choosing the risk of drowning at sea over dehydrating in the desert.

“I am not afraid,” he said. “Everyone must follow their destiny. If I die or go to prison it is my destiny and nothing can change it.”

This is a telling report about Mali and US cotton subsidies - and they wonder why they are unpopular!

“If BT cotton is so profitable, why do they have to subsidise their cotton farmers with billions of dollars in the United States?” Ms Samake asks.

“Our farmers in West Africa achieve record production using just their digging sticks and regular seeds and they have great difficulty selling what they produce, because subsidies in America and Europe have made the world price for cotton fall.

“So why do they come now with their GMOs and technology to solve a problem that they created? It’s a big farce!” adds Ms Samake, who is a member of the Coalition to Protect Mali’s Genetic Heritage that formed when word leaked from IER about the USAid-funded project on BT crops.”

Yesterday I wrote about the World Bank ‘giving’ $35 million dollars to Mali for education as part of the World Bank Education Sector Investment Program II. I did a bit more research and found a World Bank statement on it. This makes it quite clear that it is a loan not a gift. There is a 10 year ‘grace period’ where Mali does not have to pay back the loan and the loan has to be paid back in 40 years. Here is a portion of the Press Release from the World Bank:

The project will support the set up of a reading area for 25 percent of classrooms, the transfer of grants to all schools of basic education having an operational School Management Committee, training to certify 3,000 teachers and recruit 1,800 new teachers, along with equipping teacher libraries. It aims to construct and equip primary and secondary schools, while introducing vocational training through apprenticeship. The project will also improve education service delivery through a variety of mechanisms, such as the creation of a school mapping system, textbook management, and annual audits.

 

*The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period

There has been great publicity about debt relief for heavily indebted poor countries (HIPC) since 1996. Not long ago Mali, along with many other countries was the recipient of yet another round of this debt relief after fulfilling the stringent requirements/conditions demanded. The World Bank Independent Evaluation Group published Debt Relief for the Poorest: An Evaluation Update of the HIPC Initiative this year (2006). The AFRICAN STUDIES CENTER - UNIVERSITY OF PENNSYLVANIA states that

‘the report notes that net transfers to HIPC countries doubled from $8.8 billion in 1999 to $17.5 billion in 2004. These additional resources have increased budget flexibility on supporting social programs. But changes in exchange rates as well as new borrowing have left program graduates Rwanda, Ethiopia, Uganda, Tanzania, Mauritania, Burkina Faso, Ghana, and Mali with newly unsustainable levels of debt’.

For me this raises even more questions:

• Does this mean that Mali is getting back into the same situation again?
• Are loans to countries like Mali, who are realistically never going to be able to pay them back, really the best way to achieve the Millenium Development Goals - which are being pushed by the very lenders (i.e. World Bank) who encourage the decent into debt in the first place?