Statement by Jannes Hutagalung at the meeting of June 15, 2000

86910 International Bank for Reconstruction and Development International Development Association International Finance Corporation Multilateral Investment Guarantee Agency FOR OFFICIAL USE ONLY CONFIDENTIAL EDS2000-180 May 1, 2000 06:58:48 PM Statement by Jannes Hutagalung Date of Meeting: June 15, 2000 TANZANIA: (i) Joint CAS; (ii) PSAC; (iii) Health Sector Project I would like to thank management and staff for the preparation of the joint CAS and the two accompanying projects. This chair supports the proposed joint CAS for the United Republic of Tanzania and the focus on the four areas of strategic importance as noted in paragraph 46. With increasing macroeconomic stability and the reemergence of sustained growth, the pressing issue for Tanzania now appears to be more on the social and structural dimension of development, as the CAS rightly focused on. The Government has shown remarkable commitment to renew its economic reform efforts, which would be complemented by the preparation of the PRSP, and the laying out of a framework of strategic priorities for donor assistance. We also believe that the CAS has been prepared well on the basis of the participatory approach, strong account of the Bank’s country experience and lessons learnt, clear selectivity criteria, and good donor coordination. Let me make a few remarks on the CAS. First, we appreciate the focus of the Bank’s non-lending services in addressing Tanzania’s weak information base and analytical capacity. Government’s intention to develop a National Information and Communications Strategy is a significant initiative that should be reinforced by capacity building programs assisted by donors. Institutional measures should also be put in place to ensure that the Government, in the longer term, be able to sustain the core information base and analytical capacity necessary for systematic monitoring and evaluation of poverty reduction programs. Such capacities should also be built in key areas such as basic education and health care, HIV/AIDS, and access to clean water. Second, we agree with the proposed level of lending but believe that there should be greater clarification on the assumption regarding progress expected to be made on budget management and governance. Whilst paragraph 42 mentions the close PER-MTEF link, OED’s findings in Box III make only a brief reference to the budget issue. We would appreciate staff elaboration on how the implementation of the MTEF would be monitored and what initiatives are being planned to strengthen budget management processes. On the governance issue, we would like to have more information on progress made and challenges encountered so far. Third, we agree with the CAS implementation risks as elaborated in the document. In this regard, the Bank’s performance benchmark as noted in paragraph 66, is of critical importance. The upcoming Country Portfolio Performance Review, together with a strong monitoring and evaluation feedback system, should help address some of these risks. Finally, we would like to lend our support to the two accompanying proposals for the Programmatic Structural Adjustment Credit and the Health Sector Development Program Project. The PSAC should help create a policy and regulatory environment conducive for private sector development. Sustained commitment by the Government is necessary and the Bank’s support should be geared towards the development of a strong implementation capacity to achieve the program’s objectives. On the Health project, we support the use of the adaptable lending program as an appropriate instrument for this preparatory phase of a broader, government-led sector wide program.