Mauritania - Islamic Development Bank

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Human Development (Primary Healthcare) IDB TABLE 9: Indicative IDB Group MCPS Financing Program for 2011-2015 (1432-1436H) (in US$ Million * ) IDB Group Envelope: US$ 700 Million** 2011 2012 2013 2014 2015 140 140 140 140 140 Rural Development and Food Security ITFC, ICD, and ICIEC Private Sector Development+ Trade Finance Human Development (Primary Healthcare) IDB Rural Development and Food Security ITFC, ICD, and ICIEC Private Sector Development + Trade Finance Human Development (Primary Healthcare) IDB Rural Development and Food Security MCPS for Mauritania, 2011-2015 29 ITFC, ICD, and ICIEC IDB ITFC, ICD, and ICIEC 30 50 60 30 50 60 30 50 60 30 50 60 30 50 60 Private Sector Development + Trade Finance Human Development (Primary Healthcare) Rural Development and Food Security Private Sector Development + Trade Finance Human Development (Primary Healthcare) IDB Rural Development and Food Security ITFC, ICD, and ICIEC * Subject to absorptive capacity and other constraints outlined in this report. Also, total includes US$ 2 to 3 million for TA. ** The framework agreement signed between the IDB Group and the Government of Mauritania on 29 Rajab 1429H (1 August 2008G) envisaged investing a similar amount of US$ 700 Million through Y2012G. generation activities to identify and prepare profiles of viable projects. VI. RISKS AND UNCERTAINTIES 111. The short period since the establishment of the new government is insufficient for affirming the ability of this government to maintain the political stability that the country really needs. Political instability continues to threaten the sustainability of the reforms that the country is trying to put in place to enable its development process. To mitigate this risk, the MCPS team has consulted widely in Mauritania on the proposed IDB Group interventions, including members of the opposition parties in parliament and civil society. Also, the MCPS is based on the objectives in the PRSP III which the Government has prepared after involving all concerned parties. Therefore the priorities outlined in the MCPS are likely to be relatively immune to political economy developments. 112. Vulnerability to external shocks is exacerbated by the dependency of Mauritania on foreign aid. In the future, at least in the short and medium term, the success of its strategies will be Private Sector Development + Trade Finance contingent on the magnitude of the impact that the external shocks could exert on its economic growth. The speed of diversification of the economy would be determinant in reducing this dependency of Mauritania on external resources. Good governance of natural resource rents is a pre-requisite to the sound implementation of development strategies. Implementation of this MCPS will help to mitigate this risk by enhancing diversification of the economy. 113. Vulnerability to natural disasters (mainly droughts and floods) and environmental degradation have been very serious issues in Mauritania. Support provided under pillar II is designed to reduce the risks faced by those most vulnerable to these risks (i.e. the rural poor). 114. The size of the financing envelope. The size of financing indicated in this MCPS was agreed with the Government and is in accordance with the baseline growth scenario outlined in the PRSPIII. Under a higher growth scenario, which could result from either the discovery of more mineral resources or better management of windfalls leading to increased spillovers to the ‘subsistence economy’, financing requirement
could be higher and will be reconsidered at the mid-term review stage. In case of lower growth resulting from political instability, external shocks, and natural disasters, the financing needs could also be reassessed in mid-term review. 115. Commitment of other donors for sustained support to Mauritania. As noted in the report, Mauritania is highly dependent on foreign aid and thus any interruption in this aid (for example following unexpected political developments) will make it difficult for Mauritania to meet its PRSP III targets. In these circumstances, the continued IDB Group support will help to soften the impact from such a shock. 116. Impact of the MCPS Program. The results matrix outlining the expected impact of the MCPS program has been prepared taking into account the planned investments of the Government, the private sector, and the interventions of other development partners. Expected impact depends on implementation of the MCPS, in coordination with the Government and other development partners. Therefore, IDB Group will continue active dialogue with Government and development partners during implementation. VII. CONCLUSION AND WAY FORWARD 117. The dichotomy between the subsistence poor economy and the modern enclave economy poses unique challenges to Mauritania’s development. This unique economic structure has produced mixed results: on the positive side, the enclave economy has provided high and consistent rents that have allowed the Government to finance development activities including infrastructure for irrigated agriculture. On the negative side, the enclave economy has only limited links with the subsistence economy. In particular as the value added to raw material exports is limited and given the capital-intensive nature of extraction activities, the demand for labor is negligible. 118. Thus, despite a moderate economic growth, poverty has remained high especially in rural areas. Thanks to sound macroeconomic policies, prudent economic management, structural 30 reforms and a surge in oil production in 2006, economic growth averaged 5% in the 2004-2008 periods. However, the deterioration in economic activity resulting from domestic and external shocks revealed the structural weaknesses inherent in the economy. 119. The prospects for significantly reducing poverty to 25% and achieving a stable economic growth of 5.5%, as envisaged in PRSPIII, and creating more jobs hinge on the performance of subsistence sectors, especially agriculture and livestock, and manufacturing, which face several constraints. These include: underdeveloped human capital, poor performance of agriculture, livestock, and manufacturing sectors, weak business environment for private sector activity, and absence of link between the modern mineral economy and traditional sector. 120. The MCPS outlines a substantial IDB Group program of cooperation spread over the next five years (2011-2015), to help Mauritania address the aforementioned constraints. Key steps in the way forward to ensure success include more detailed programming, enhancing the effectiveness and role of IDB Group entities particularly to facilitate private sector development, and a mid-term review to access progress and make needed corrections. These steps will help to encourage effective implementation of the MCPS as an instrument of IDB Group’s partnership with Mauritania. 121. There are significant benefits to both sides of the partnership. The partnership will help Mauritania in its quest to achieve its long term vision of a stable modern democracy, well integrated with the regional and global economy and set on the path of sustainable economic and social development. For the IDB Group the MCPS will form the cornerstone of its dialogue with Mauritania — it will leverage internal Group synergies and enhance the country’s ownership, and with it, the development impact of the IDB Group interventions. MCPS for Mauritania, 2011-2015
Page 2: MCPS for Mauritania, 2011-2015 ISLA
Page 6 and 7: CURRENCY US$1 = 283.500 UM Euro 1 =
Page 8: Country Department (Coordinator) AC
Page 12 and 13: As part of its new Vision, the IDB
Page 14 and 15: I. INTRODUCTION 1. As part of its n
Page 16 and 17: construction) accounted for 48% of
Page 18 and 19: Reduce child mortality TABLE 1: Mil
Page 20 and 21: the vulnerability created by the de
Page 22 and 23: gold, copper, oil and deep-sea fish
Page 24 and 25: Box 1: Lessons Learnt from the Impl
Page 26 and 27: TABLE 7: High Growth Scenario 2010
Page 28 and 29: 3. Other Donors Involvement in Maur
Page 30 and 31: • The current rate of progress of
Page 32 and 33: strategy giving priority to strengt
Page 34 and 35: Integrated Rural Development progra
Page 36 and 37: Figure 13: Survey of Constraints Fa
Page 38 and 39: (e) the conservation of the environ
Page 40 and 41: 3. The flexibility to finance other
Page 44 and 45: ANNEXES MCPS for Mauritania, 2011-2
Page 46 and 47: MAURITANIA AT A GLANCE Selected Mac
Page 48 and 49: PILLAR 2 -- RURAL DEVELOPMENT AND F
Page 50 and 51: PILLAR 2 -- RURAL DEVELOPMENT AND F
Page 52 and 53: PILLAR 3 -- ENHANCING AND DIVERSIFY
Page 54 and 55: Cross-cutting Theme: CAPACITY BUILD
Page 56 and 57: Cross-cutting Theme: CAPACITY BUILD

Mauritania - Islamic Development Bank

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