Statement by Ms. Jiayi Zou at the executive directors' meeting of March 21, 2006

CONFIDENTIAL EDS2006-0260 March 20, 2006 05:08:08 PM Statement by Jiayi Zou, Executive Director for China Date of Meeting: March 21, 2006 Mozambique: Country Assistance Strategy Progress Report and the Technical and Vocational Education and Training Project We welcome this opportunity to discuss the Mozambique Country Assistance Strategy Progress Report and the Technical and Vocational Education and Training Project. We would commend staff for preparing a very informative and well-structured report, and broadly concur with the comprehensive assessment of the progress in implementing the first two years of CAS. We fully support the proposed the Technical and Vocational Education and Training Project. We are delighted to see that the Government and the People of Mozambique have made remarkable economic progress during the last years. With support of the macroeconomic stability, deregulation, privatization and, market reforms, Mozambique experienced a sustained period of high real GDP growth. We agree that the large-scale inflows of foreign aid have also played a key role. Average GDP growth for 2005 and 2006 is projected to be about 7 percent a year and the inflation is expected to maintain at single digit levels. We strongly support the integrated approach of the whole CAS progress report with alignment with PARPA, PAF, and the African Action Plan. We concur with this Progress Report’s proposal of a harmonization of the CAS with the PAF outcomes and with the AAP Country Monitoring Tool, with the objective of defining the CAS Results. It’s important that the CAS outcomes will constitute a subset of the AAP, and the CAS Results Framework will become a mechanism to ensure consistency between the country system, the PAF, and the AAP Country Monitoring Tool. We are pleased to see that the Mozambique overall portfolio ranks above the Bank’s overall program and the Africa region’s average with respect to portfolio quality indicators, and disbursements are currently on track. Mozambique has maintained strong ownership during implementation of the CAS, with clear priorities linked to the Medium-Term Economic Framework and the Economic and Social Plan. As one of the main challenges to achieve Mozambique’s development objectives, the HIV/AIDS has been particularly worrisome when the rise of HIV/AIDS has been higher than expected. The Bank has made great efforts on fighting the epidemic in Mozambique. Particularly, IFC’s HIV/AIDS programs to increase private sector’s participation should be highly commended. Nevertheless, the situation of HIV/AIDS in Mozambique has been worsened. We are concerned that the HIV/AIDS Response project is in problem status, and would like to hear from staff how  2 to increase the Bank’s responsiveness to the HIV/AIDS issue. We would underscore the urgent importance of capacity building. As we can see from the risk assessment that one of the issues affecting the portfolio quality is the weak implementation capacity. We would strongly encourage the Bank Group to further enhance its engagement in capacity building through technical assistance in the non-lending program. We commend WBI for recently including Mozambique among its group of Focus Countries, and committed to expanding its program of activities. Capacity building efforts from different units within the Bank Group, including IFC and MIGA, should be well coordinated, aiming at a better targeted approach to meet country needs. With those remarks, we fully support the CAS progress report and the technical and Vocational Education and Training Project. We wish the people and the Government of Mozambique all the best in the implementation of the CAS and in its endeavor to achieve MDGs. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without the consent of the Executive Director concerned.