Statement by Enzo Del Bufalo at the Board meeting of November 11, 1997

International Bank for Reconstruction and Development 86896 International Development Association International Finance Corporation Multilateral Investment Guarantee Agency FOR OFFICIAL USE ONLY CONFIDENTIAL EDS97-413 November 11, 1997 Board Meeting of November 11, 1997 Statement by Mr. Enzo Del Bufalo NIGER: Country Assistance Strategy Niger's extreme poverty places this country among the poorest in the world, making the World Bank assistance of special importance in its potential impact on this country's economic development. Niger's economic performance during last year, in terms of inflation and public finances, gives room for optimism. Nevertheless, the economic growth continues to be lower than the rate of birth, contributing to a decrease in income per capita. On the other hand, we support the structural reforms initiated by the previous government. Notwithstanding, the current government's commitment to continue this reform, we believe that the World Bank must closely monitor the development in this area, specially on politically sensitive issues, such as privatization and bill of wages. Due to extreme and widespread poverty in Niger, we agree that the World Bank must concentrate in some areas, where it can maximize the impact of its assistance. For this reason, we support the three main objectives set in the CAS: human capital development, water management and open economic policies and regional linkages. Regarding the first objective, we acknowledge the population growth of this country (3.3%), well above sub-Saharan countries (2.7%), and low-income countries (1.7%). However, we do not agree with the trade off mentioned in the CAS: the lower rate of population growth, the higher productivity, and consequently, increase of income per capita. This reasoning is mathematically correct since the rate of increase in productivity q' depends on dQ/dM, and obviously you can increase it, either augmenting dQ or reducing dN. When you have poor output growth it seems almost natural to resort to the reduction in the increase in population. Unfortunately, this line of reasoning fails to take into account the sociological, political and psychological factors of development in relation to which mathematical relations are The electronic version of the document is provided for convenience. (The official record is the version printed by the Corporate Secretariat). 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.  2 nothing, but of secondary importance. A long standing distortion in the economic profession that, since Mr. M. Friedman had decided to replace statistic for understanding real phenomena, have caused such a short sight in the comprehension of development as social phenomenon. Population control per se leads nowhere. It sounds good, but it is hollow. In low-income countries, the only sound way to increase q' is through increasing dQ, which means improving human capital, access to technology and appropriate social behavior, as well as adequate political and civil society institutions. The Bank must understand this if it really wants to incorporate the social aspect of development into its behavioral knowledge. We believe, that the way the Bank is dealing with this issue has led to a partial failure of the population project, due to a lack of ownership of both government and population. In our opinion, Family Planning must be the consequence of a wider policy. Improvement in the access of women to the working force, girls' higher level of education and development of social services reducing direct dependency on descendants will give Nigerien other personal choices in this crucial area. In sum, the World Bank policy must be economic growth driven, rather than a population control-inducement. In our opinion this message must to be conveyed. Water management must also be a crucial objective for Niger for two reasons mentioned in the document. On the one hand, it will reduce the time wasted by women and girls gathering and transporting water, which prevents them to engage in other education programs, such as literacy. On the other hand, it can improve agricultural performance with direct implications on food security. We think that due to the special characteristics of projects in this area (e.g., reduced size), the Bank must reinforce the allocation of resources to implementation and supervision. For this reason, we would like to know why are supervision resources envisaged to drop over the next year from $891,000 in 1997 to $87,000 in 1998? We also agree with the third objective aimed to improve open economic policies and regional linkages. We consider that development in neighboring Nigeria is crucial for the future of Niger. Nevertheless, we do not see in the CAS any action envisaged for this area in the coming years. Neither the economic and sector works nor the projects have any link with this issue. Finally, we would like to express the importance of capacity building in Niger. Good governance will be critical to keep pace with foreign aid. We would like to know if the development grant facility is already operating in this country and what are the prospects for the future? EDI program in education and training, as well as disseminating structural reforms, will also be important. Summarizing, the World Bank action will also have to give priority to this area which will increase Niger's absorption capacity of IDA resources. The electronic version of the document is provided for convenience. (The official record is the version printed by the Corporate Secretariat). 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.