With a sparsely populated, predominantly dry land, Mali is a highly undiversified economy exposed to several drivers of fragility. Vulnerability to commodity price fluctuations and to the consequences of climate change, combined with a population growth rate among the highest in the world, have fueled food insecurity, poverty and instability. 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 for the Malian population of 15 million. Only ten percent of the population lives in the three Northern regions of Gao, Kidal and Timbuktu, which represent two-thirds of the entire country territory, and contributed 9.5 percent of the country’s GDP before the crisis.
Mali was ranked 175 on the UN Human Development Index before the crisis and is currently ranked 182 as the social indicators have deteriorated in 2012. The poverty rate (percentage of population living below the national poverty line) declined from 55.6 to 43.6 percent between 2001 and 2010, yet the high population growth rates have kept the absolute number of poor unchanged. Since 2010, poverty has likely increased as a result of the drought of 2011 and the political crisis of 2012. The poverty rate is roughly estimated to have increased from 43.6 percent in 2010 to 46.1 percent of the population by the end of 2012 or 7.2 million poor. In the South, the poverty rate would stand at 46.2 percent, including the displaced populations. In the North, the poverty rate would stand at 44.3 percent, including the refugees. Poverty has also granted terrorist groups with ample recruitment material in unemployed youth. Geographic disparities continue to characterize the prevalence of poverty in Mali.
The economy, characterized by a narrow source of export concentrated in gold and cotton, is estimated to have contracted by 2 percent in real terms in 2012. This is the combined result of the impact of the crisis and positive external factors which partially mitigated this impact. The crisis has had a severe economic impact through the suspension of ODA, and the drop in revenues from tourism as a result of the deteriorated security situation, as well as the general livelihood of Northern populations. On the other hand, exogenous factors, not related to the political crisis, had a positive effect, including the increase in gold price and steady growth in production, as located in the South and not affected by domestic developments; and favorable climatic conditions to agricultural production (mostly located in the South).
Consistent with the improving political and security environment, an economic recovery is under way. Real GDP is projected to increase by close to 5 percent on account of the progressive recovery in the service and construction sectors. After 2013, growth is projected to accelerate above 6 percent in response to a fiscal impulse financed by donor inflows. But this outlook remains uncertain. Traditional sources of vulnerability (climate change, commodity prices fluctuations) are still latent. The security situation in Mali and the region remains fragile despite recent improvements. In addition, past experience has shown Mali's relatively limited absorption capacity.
The Bank Group has maintained a continuous engagement throughout the crisis and will continue to support the country with a selective post-crisis program framed in the new Interim Strategy Note (ISN, FY14-15). The ISN proposes a focused program organized around three areas of engagement: (i) laying the foundations for long term accountability and stability; (ii) protecting human capital and building resilience; and (iii) preparing the conditions for economic recovery. By June 2013, Mali had been granted two emergency operations and one additional financing, followed by a DPO (Development Policy Operation). An Emergency Reconstruction and Economic Recovery project (USD 100 million, in response to the crisis, is under preparation for Board approval by the end of December 2013. That project is aimed at improving the basic infrastructure and socio-economic opportunities of communities impacted by the crisis in Mali. The Bank will continue to be a leading partner in support of the Government’s development agenda in coordination with other donors.
After 18 months of a challenging political transition, in the summer of 2013 Mali held its first presidential elections since the coup d’état of 2012. Ibrahim Boubacar Keïta, popularly known as IBK, won a landslide victory in a presidential contest held with strong support from the international community. Given the political, logistical and security challenges, the July 28 presidential elections were considered successful on nearly all counts: First, the entire country was able to participate, although voter turnout in Kidal, in northern Mali, was low. Second, no major security incidents were reported during the polls. Third, participation by eligible voters exceeded all predictions, amounting to 48.98 percent and 44.41 percent in the first and second rounds respectively. Analysts initially feared a close election in which the winner might lack legitimacy, but Keïta, leader of the Rally for Mali (RPM), garnered an overwhelming majority of 77.62 percent of votes in the second round. And while some feared that post-election protests could call the results into question, Keïta’s rival, Soumaïla Cissé of the Union for the Republic and Democracy (URD), conceded defeat even before the announcement of the provisional results.
President Keïta, a former prime minister and former president of the National Assembly, took office in September. With Keïta’s accession to power, efforts to resolve the complex crisis facing Mali enter a new phase, one that will be decisive in consolidating the security and political gains of the past months. Prior to the elections, a preliminary peace agreement was signed on June 18 in Ouagadougou, Burkina Faso. President Keïta appointed as Mali’s prime minister Mr. Oumar Tatam Ly, former special adviser to the governor of the BCEAO (Banque Centrale des États de l’Afrique de l’Ouest). A 34-person cabinet was formed September 8, more than a year after the country lost half its territory to rebel groups including Tuareg separatists.
The new authorities are fully aware of the urgent need to confront the thorny security issues in northern Mali. The Keïta government plans to organize a national conference on northern Mali as a prelude to negotiations for the final comprehensive agreement, and to lay the foundations for dialogue and reconciliation. To fully address the security dimension, the Mali government, with the support of external partners, will also need to tackle reform of the defense and security sectors ¾ a topic that figured prominently in the election campaign ¾ and the development of regional cooperation. The inclusive dialogue will also consider ways to improve administrative, economic and political governance; the return and resettlement of refugees and internally displaced persons; and the protection and promotion of human rights, justice and reconciliation.
Major challenges remain for the country to consolidate the political gains and continue the installation of democratic institutions, including the renewal of the National Assembly. The parliamentarians’ mandate, which had expired over a year ago, was extended to allow the Assembly to serve until the next parliamentary elections. However, since the transitional government announced that the first round of these elections would take place October 27, 2013, the Malian political class has been divided. One sector of the political class, especially supporters of the United Front for the Protection of Democracy and the Republic (FDR), wants the elections to be held as soon as possible. Others, especially those close to the coalition led by Keïta, believe the pre-election period should be used to attend to problems that arose during the presidential election, such as inclusion of voters who recently turned 18, refugees and internally displaced people. In some areas of Mali, especially in the Kidal region, the parliamentary elections will be watched with keen interest. The next steps in the democratic process will largely depend on the ability of the government to create the conditions for a constructive working relationship with the opposition.
Progress on MDGs
Despite some progress made prior to the crisis, Mali is not expected to achieve any of the MDG by 2015. The primary education completion rate in 2010 was only 58.1 percent compared to a Sub Saharan average of about 70 percent. The under-five and maternal mortality rates stood respectively at a high 191 per 1,000 and 830 per 100,000. Education and health coverage remain limited and quality of services poor, in particular in rural areas; utilization of modern family planning methods is low as is coverage of maternal health interventions, and safety nets are extremely scattered and scarce. Nutrition programs are also segmented and insufficient with 2012 data pointing to about 240,000 children of between 6 and 59 months (representing about 10 percent of this overall age group) in a state of serious malnutrition just in the southern provinces of the country. Access to safe drinking water in Mali is estimated at 73 percent of the population (77 percent in urban areas, 71 percent in rural areas). Sanitation is lagging with only one third of households having access to improved sanitation services in rural areas, and 45 percent in urban areas. In order to achieve the MDGs, Mali needs to increase access to safe drinking water and improved sanitation services for respectively 420,000 and 710,000 additional people annually. Rapid urban growth poses a particular challenge in Bamako, where eradicating recurrent water shortages in most neighborhoods of the capital city will require doubling of the water production capacity, as well as expansion of the network.
The crisis has further aggravated the human development outlook. The crisis has resulted in a large displacement of people from the Northern provinces to neighboring countries (more than 265,000 people) and the south (more than 200,000 people), including more than 35,000 students to the southern provinces, resulting in the overcrowding of social services in the south. The total number of people displaced by the conflict is equivalent to about one third of the population of the three Northern Provinces of Timbuktu, Gao and Kidal. Agricultural output in the North has been impacted by the disruption of farming activities, marketing channels, inputs and financing. At the same time, the displacement puts increased pressure on the already stressed infrastructure and livelihoods of host communities. The water supply networks in the three Northern provinces have become unstable as a result of the lack of fuel, electricity, spare parts, water treatment chemicals, and personnel. In rural areas it has been reported that water supply systems have been vandalized, with solar panels and pumps stolen. Schools have also been damaged, pillaged and occupied, with the loss of materials and furniture. Some mobile phone network assets have been destroyed, and technical teams have been withdrawn. Transport and trade facilities have also been impacted, with much of the equipment and vehicles used by customs to facilitate movements along key transit corridor stolen or vandalized.
Last Updated September 2013