Mali - Domestic policy



President Touré's priorities are to liberalize the economy, fight corruption, consolidate the tax base, and manage public expenditure in favor of economic growth and poverty reduction. While none of these represents a major departure from former President Konaré's policies, the 2003 budget places a much stronger emphasis on poverty reduction and social welfare. For example, the combined budgets of education, health, and rural development account for over 60% of Touré's US $1.5 billion budget for 2003, and if Mali meets the benchmarks of the enhanced Heavily Indebted Poor Countries (HIPC) initiative by early 2003, more expenditures in these sectors will be possible. The government will also increase the wage bill by almost 30% to meet trade unions' demands for salary increases in the public sector.

The Touré administration also has pledged itself to structural reform. The government has tendered a divestiture of the cotton parastatal, Companie Malienne pour le dévelopement des textiles (CMDT), long considered a symbol of top-down inefficiency. The CMDT is expected to be fully privatized by 2005, but low pricing in cotton due to European Union (EU) and U.S. farm subsidies could disrupt the plan, and efficient private-sector operators with sufficient resources will need to fill the gap. Reforms to other sectors— including finance, energy, transportation, and telecommunications—are specified in Mali's three-year poverty reduction and growth facility (PRGF) of the International Monetary Fund (IMF).

Although the Konaré administration bequeathed Touré a modestly robust economy with a growth rate expected to remain at about 5% or higher in 2003–04, civil conflict in neighboring Côte d'Ivoire drove inflation up to 4.5% in 2002, and the rebel insurgency blocked the transit of goods across Mali's southern border. As a result, the costs of such staples as sugar, rice, and fuel have risen while the collection of import duties—an important source of budget revenue— has declined.

Touré's budget also will be affected by the loss of jobs held by Malians working in Côte d'Ivoire, which means fewer remittances to stimulate the economy.

Touré also finds himself having to take a firm stance against protectionist G-7 agricultural legislation such as the American Farm Act passed in early 2002. Protectionist policies in the United States and in EU countries hurt Malian producers, and Touré has sent representatives of the Malian agricultural producers to meet World Bank and IMF officials in Washington to voice his concerns. Malians, however, will also have to streamline their own production, given the inefficiencies and inappropriate technology that characterize Malian agriculture and textile production.

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