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Program Update, May 15, 2010

May 15, 2010

ANTANANARIVO, May 15, 2010--The World Bank's program in Madagascar continues to be guided by its Operational Policy 7.30, Dealing with de facto governments, designed to deal with situations where a government comes into power by means not provided in the country’s constitution.

The protracted political crisis has not only adversely affected the Malagasy population particularly poor people but also the viability of the portfolio of development projects financed by the World Bank. These projects had to stop operations, payments to contractors and in certain cases let staff go. This situation puts at risk years of capacity building, project assets and the integrity of the portfolio. Confronted with this situation, the World Bank initiated a process aimed at safeguarding the human and physical assets of the various Project Implementation Units (PIUs) and resolving a number of fiduciary and administrative issues such as the extension of the project closing dates that lapsed in the course of 2009, and the payment of arrears to contractors for goods and services already delivered under contracts signed before the application of OP 7.30.

The World Bank is working closely with development partners, and has resumed, on an exceptional basis a limited number of projects on humanitarian and poverty grounds, including those benefiting disadvantaged populations. These measures were initiated some time ago and are not linked to the recent turn of events, and the World Bank remains aligned with the position adopted by the rest of the international community The World Bank will continue to monitor the situation closely, including political developments and periodically review the conditions under which further engagement may be warranted.