Conformed Copy - C3147 - Second Fiscal Restructuring and Deregulation Technical Assistance Project - Supplemental Letter 2

Page 1 REPUBLIC OF MALAWI December 4, 1998 International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Dear Sirs: Credit No. 3147-MAI (Second Fiscal Restructuring and Deregulation Technical Assistance Project) Paragraph 2 (a) of Schedule 4 to the Development Credit Agreement We refer to paragraph 2 (a) of Schedule 4 to the above-mentioned Development Credit Agreement and to the Borrower’s undertaking therein, to maintain policies and procedures adequate to enable it to monitor on an on-going basis, in accordance with indicators satisfactory to the Association, the carrying out of the Project. Attached to this letter are the said indicators. Very truly yours, REPUBLIC OF MALAWI By Authorized Representative Attachment Performance Indicators Activity Date Completion of study evaluating the impact of structural reforms on Malawi's economy, in particular by examining the effects of liberalizing trade and exchange rate policy on manufacturing. 1999 Completion of study evaluating the effects of liberalizing of agriculture production and trade in the agriculture sector. 1999 The Borrower to commission consultants to write papers that will develop the agenda for the next round of macroeconomic and sectoral policy reforms. 1999 Provision of adequate training and equipment to Ministry officials in Malawi that will lead to the successful implementation expenditure prioritization under the MTEF as per the plan set out under the Program. Page 2