Mali is a sparsely populated, predominantly desert country with a highly undiversified economy. It is vulnerable to commodity price fluctuations and to the consequences of climate change, which, in addition to having one of the highest population growth rates in the world, have fueled food insecurity, poverty and instability in the country. Delivery of services to the large, sparsely populated territory poses severe challenges in these conditions, and has a negative impact on geographic equity and social cohesion. Mali has a population of 15 million, 10% of which are living in the three northern regions of Gao, Kidal and Timbuktu, areas that represent two-thirds of the entire country. These northern regions contributed 9.5% of the country’s GDP prior to the crisis.
The government of Mali successfully conducted legislative elections in two rounds from November 24 to December 15, 2013, demonstrating technical improvements to the voting process that was implemented following the presidential elections in July and August. An alliance of parties supporting the current president Ibrahim Boubacar Keita, won 115 of the 147 national assembly seats, according to provisional election results announced by the government on December 20th.
The new assembly is dominated by the Rassemblement pour le Mali (Rally for Mali or RPM), who have 67 representatives out of 147, and as well as by the Alliance pour la Démocratie au Mali (Alliance for Democracy in Mali or Adéma), RPM's main ally, who obtained 16 seats. The Union pour la République et la Démocratie (Union for Democracy and the Republic of Mali or URD) of Soumaila Cissé, who lost the last presidential election, is considered to be the leading opposition party. The URD obtained 17 seats in the new assembly.
Municipal elections are still to be held; they were planned for April 2014 but ultimately will not be held before October 2014. The terms of all current territorial elected officials have been extended for another six months until October.
Malian president Ibrahim Boubacar Keita appointed Moussa Mara on April 7th as the country's prime minister, replacing Oumar Tatam Ly who resigned from the position. Mr. Mara was previously the minister for urban planning and development.
Prior to the crisis, Mali was ranked 175 on the UN Human Development Index. The poverty rate has declined from 49.1% to 36.2% between 2001 and 2010, yet the high population growth rate has kept the absolute number of poor unchanged. Since 2010, poverty has most likely increased from 36.2% to 38.1% as a result of the drought of 2011 and the political crisis of 2012. Poverty has also presented terrorist groups with ample recruitment incentives for unemployed youth. Geographic disparities continue to characterize the prevalence of poverty in Mali.
As of February 2014, the United Nations Office for the Coordination of Humanitarian Affairs said there were still approximately 200,000 internally displaced people in Mali and 170,000 refugees in neighboring countries such as Mauritania, Niger and Burkina Faso. As a result of the crisis in the north and reduced agricultural production, more than 800,000 people are in need of urgent food assistance.
In 2013, economic growth rebounded to 2%, up from 0% in 2012. However, there still remains considerable uncertainty regarding the magnitude of the economic impact of the political crisis in 2012, and its subsequent recovery as security conditions continue to improve. In 2012, economic activity was negatively affected by the suspension of aid and foreign tourism and by a broad disruption due to the deterioration of security conditions. However, external factors not related to the political crisis have had a positive effect. These factors include excellent terms of trade and an exceptional agricultural harvest. In 2013, foreign aid resumed, representing an additional external inflow of over 10% of GDP compared to 2012, stimulating demand for domestic goods and services. First post-crisis household surveys suggest that per capita consumption decreased in southern regions from 2011 and 2013, with the exception of Bamako. Benefiting from an abundant food supply produced in 2012, consumer price inflation strongly decelerated to -0.6% in December 2013, down from 5.4% in 2012, in spite of some reduction in energy subsidies.
Being part of a monetary union with a fixed peg to the Euro, Mali's economic policy is anchored around the maintenance of a basic primary balance (excluding grants, debt service and foreign-financed investment) close to zero. Its overall deficit is financed through non concessional external borrowing and restrained domestic and regional financing. In 2013, public investments strongly resumed, financed through aid and increased domestic revenues. Current public expenditures also increased with security and electoral needs. The overall deficit nonetheless remained contained to around 1.9% of GDP (down from a revised 2.9% of GDP in 2012 accounting for recently uncovered arrears), and was easily financed with domestic and regional financing and budget support, notably from the World Bank.
An economic recovery is under way thanks to an improving political and security environment. Real gross domestic product (GDP) is projected to increase by close to 5% given the progressive recovery of the service and construction sectors. Beyond 2013, growth is projected to accelerate to over 6% in response to a fiscal impulse financed by donor inflows. However this outlook remains uncertain as vulnerabilities due to climate change and commodity prices fluctuations are still latent.