Mauritania - Islamic Development Bank

% in 2009). The short-lived oil boom in 2006-
2007, which accounts for only a small share of
the natural resource rents accumulated during
several decades, seems to have had little effect
on the REER.
28. Evidence of “pronounced Dutch Disease
effects” during the three decades from 1970
-2000 has also been noted in independent
analysis 6 focusing on governance issues arising
from windfall gains. This assessment is based on
evidence indicating: (a) stagnation in the share of
agriculture (including livestock) with its 2004 share
in GDP of 16 percent “barely half that expected for
a country at Mauritania’s level of development”
and noteworthy for a country with “150,000
irrigable hectares which, with improved livestock
management and roads to access markets, could
lift agriculture’s share of GDP above the expected
one-third level”, (b) manufacturing is “two-thirds
the size expected”, and (c) the remarkably low
commercial farm output has cut the agricultural
sectors capacity “to stimulate agro-processing”.
The root cause of this economic stagnation is
attributed to a “rent driven economy” which in the
three decades received sustained high rents from
iron ore extraction, fishing and aid amounting to
“one-third of GDP” and with political allocation of
the rents, encouraged by lack of transparency and
poor governance.
29. It is vital that the Government develops a
strategy to manage economic rents from natural
resources extraction to mitigate the adverse
economic effects of long-term exchange rate
appreciation and strengthen the links between
the two economies. It can do this by among other
things: (i) Moving towards more value-added
production in all areas where it has a comparative
advantage in terms of resources—fisheries,
livestock, mineral ores, and oil. (ii) Addressing
other constraints to enhancing linkages between
the two dual economies for example human
development and capacity building; and (iii)
Facilitating investment in activities such as
construction, that is less vulnerable to exchange
rate appreciation.
6 See “Aid and Rent-Driven Growth: Mauritania, Kenya and Mozambique
compared, Richard M. Auty, 2007.
10
III. MAURITANIA’S VISION, DEVELOPMENT
CHALLENGES AND PRIORITIES
1. Poverty Reduction Strategy Paper 2001-2015
30. The PRSP (2001-15) sets out the vision
of Mauritania as a politically stable and
democratic country, which transforms itself
into a decentralized and modern state, well
integrated with the regional and global economy
on the path of sustainable economic and social
development. The Government is implementing
this vision through multi-year action plans the
latest of which, PRSP III covering the period 2011-
2015, is in the final phase of preparation following
consultation with civil society, private sector and
development partners. PRSP III has been designed
taking account of the lessons learnt from the
implementation of PRSP II and I (see Box 1).
31. For PRSP III, the Mauritanian government
intends to maintain the objectives set in the two
previous PRSPs. PRSP III outlines development
priorities and interventions in a five-year action
plan, clustered around four strategic objectives
outlined below with increased emphasis on
private sector development, monitoring and
evaluation and donor coordination as a crosssector
theme.
i. Acceleration of Growth and Stabilization of
Economy: The Plan will meet this objective
through interventions designed to stabilize
macroeconomic balances, improve the
business environment for private sector
development, support sectors with a potential
for high growth, and reform the state
owned enterprise sector to facilitate fiscal
consolidation.
ii. Anchoring Growth in the Economic Sphere
of the Poor: The Plan aims to achieve this
objective through interventions that support
rural development, target pockets of urban
poor, promote microfinance and SMEs,
enhance food security, reduce environment
degradation and reorient policies to focus
on targeted poverty reduction programs.
Expected outcomes of these interventions are
an increase in the contribution of rural sector
MCPS for Mauritania, 2011-2015