## _cr0414

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---

### Introduction and context
- Burundi pursued wide-ranging economic reform programs for nearly two decades; a structural adjustment program was in place from July 1986 until the socio-political crisis of October 1993.
- During 1986-1992:
  - economic growth was positive (+ 3.8 percent on average);
  - annual population growth averaged 2.7 percent;
  - inflation stabilized at 4.5 percent in 1992.

### Political context and the peace process
- Transitional institutions and milestones:
  - National Unity Government established on November 1, 2001.
  - First 18-month transitional government ended April 30, 2003; President Buyoya handed power to Vice-President Domitien Ndayizeye for the second 18-month period.
  - Nation-wide elections scheduled by end of transition (October 2004).
- Cease-fire and monitoring:
  - Cease-fire agreements with rebel groups in October and December 2002.
  - Mixed commission to monitor cease-fire established February 2003 under CSA.
  - African Union observers and mission deployed from March 2003.
  - Armed groups party to the Cease-fire Agreement pledged to transform into political parties.

### Socio-economic decline and humanitarian impact
- Macroeconomic and fiscal deterioration:
  - GDP declined by nearly 20 percent in real terms over 1993-2002.
  - External payment arrears stood at US$148.5 million in 2002.
  - Foreign exchange reserves declined from 4.1 months of imports in 1992 to less than two months in 2002.
  - External public debt estimated at nearly 180 percent of GDP for 2002; Burundi's external debt amounted to US$1.132 billion in 2002.
  - Debt service amounted in 2002 to 157 percent of exports; debt service estimated at 157 percent of exports of non-factor goods and services for 2002.
- Aid, investment, and exchange rate shocks:
  - International aid transfers fell from nearly US$300 million in 1992 to less than an annual average of US$100 million between 1992 and 2002.
  - Investment rate fell from more than 15 percent to 9 percent between 1992 and 2002; investment rate declined from nearly 18 percent of GDP in 1992 to less than 9 percent in 2002.
  - Exchange rate decline: 346.8 percent over 10 years, from 208.3/U.S. dollar in 1992 to 930.7/U.S. dollar in 2002.
- Humanitarian and social outcomes:
  - Proportion living below the poverty line rose from 35 percent in 1992 to more than 60 percent in 2002.
  - About 400 thousand people fled abroad or were displaced internally (earlier and later figures: internally displaced more than 600,000; fled abroad more than 400,000).
  - More than 20 thousand children are orphans and street children.
  - HIV/AIDS prevalence: more than 13 percent sero-positive in 2002; urban prevalence more than 18 percent and rural more than 7 percent in later estimates.
  - Life expectancy at birth: 50 years in 2002; infant mortality rate: 116 per thousand live births in 2001-2002.
  - Hunger and malnutrition affected 68 percent of the population over 1996-2002.

### Poverty profile, distribution and trends
- National poverty incidence and trends (selected series):
  - Rural poverty: 35.1 (1990) → 68.7 (2000–2002 provisional series indicate 68.7).
  - Urban poverty: 32.4 (1990) → 68.2 (2000) → 66.0 (2001 Prov./2002 Prov.).
  - National: 34.9 (1992) → 68.0 (2002 Prov.).
- Monetary-poverty thresholds (survey-derived):
  - Relative poverty line (1990): BF 17,980 (rural) and BF 46,180 (Bujumbura).
  - Updated (1998-2000): BF 53,650 (rural) and BF 251,580 (urban).
  - Natural-region absolute poverty lines (2001-2002 provisional): BIF 410,499 (Bujumbura city); BIF 91,947 (plains, mountains, western plateaus, eastern plateaus); Total absolute poverty line BIF 107.994; incidence of poverty Total 68.7.
- Socio-economic correlates:
  - Households of one or two individuals: 57 percent poverty rate; households of six or seven people: 67 percent poverty rate.
  - Incidence of poverty by occupational status (2000-2002 provisional; poverty line BF Urban 410,499 / Rural 91,947):
    - Farmer, export sector: Urban 100.0; Rural 70.2.
    - Farmer, other: Urban 94.2; Rural 70.8.
    - Public and para-public: Urban 51.6; Rural 57.3.
    - Informal private: Urban 58.3; Rural 56.7.
    - Informal: Urban 83.4; Rural 57.7.
    - Unemployed: Urban 81.0; Rural 62.4.
  - Education and poverty (2000-2002 provisional; poverty line BF Urban 410.499 / Rural 91.947):
    - No schooling — Incidence Urban 93 / Rural 72.
    - Primary — Incidence Urban 87 / Rural 65.
    - Secondary 1st Cycle — Incidence Urban 71 / Rural 39.
    - Secondary 2nd Cycle — Incidence Urban 51 / Rural 56.
    - Higher education — Incidence Urban 27 / Rural 0,0.
  - Human Development Index (HDI) stood at around 0.3 between 1995 and 2002; prior to conflict (1992) HDI 0.341, ranked 165 out of 174.

### Principal constraints to growth and poverty reduction
- Six broad constraint categories from participatory consultations:
  - (i) Problems of governance and the domestic and subregional political crisis.
  - (ii) Limited access to the factors of production.
  - (iii) Inadequate quality and accessibility of basic social services.
  - (iv) Increased number of people at risk due to conflict impact.
  - (v) Heavy prevalence of HIV/AIDS.
  - (vi) Persistent gender inequality problems.
- Structural rigidities:
  - Economy dominated by low-yield subsistence agriculture; more than 90 percent dependent on subsistence farming.
  - Average farm size in most regions is less than 1/2 hectare.
  - Secondary sector underdeveloped (~15 percent of GDP in later description); private sector marginal and SMEs constrained.
  - Low domestic savings: domestic savings rate frequently negative in the 1990s, by as much as -2 percent in 1998 and 9.9 percent in 2002.
  - Gross fixed capital formation shrank by 38.2 percent between 1992 and 2002; fell to 28 percent of its 1990 level in 1998.

### Macroeconomic framework and reform objectives
- Interim phase macro targets:
  - achieve average annual growth rate of about 5 percent by 2006;
  - keep inflation to 5 percent in 2006, and to 5 percent by 2004;
  - achieve a primary budget surplus of 4 percent of GDP by 2006;
  - maintain foreign exchange reserves higher than three months of imports of non-factor goods and services.
- Fiscal and revenue measures:
  - expand tax base, reduce exemptions, introduce VAT, establish single taxpayer identification, improve tax and customs administration; IMF technical assistance provided in 2003 and to be reinforced.
  - public expenditure priorities: protect social sectors (health, education), rural revival, socio-economic reintegration of war victims and demobilized groups; control payroll and subsidies.
  - enhance public spending efficiency via systematic Public Expenditure Reviews (PERs), PIP and PDP integration.
- Monetary policy and external sector:
  - primary objective ensure price stability so real interest rates become positive; rely on indirect monetary instruments; create money and interbank markets; strengthen BRB supervision with technical assistance.
  - external strategy: restore exports and cooperation, gradually remove trade restrictions, pursue flexible exchange rate policy, promote export diversification and competitiveness, participate actively in regional integration (ZEP, COMESA).
- Debt strategy:
  - external payment arrears: US$148.5 million in 2002.
  - two-front strategy: adopt responsible debt management domestically and seek bilateral creditor solutions.
  - Burundi appealing to bilateral creditors to forgive or cancel debts amounting to approximately 14 percent of total indebtedness.
  - savings from debt relief to be allocated to socio-economic reintegration, social sectors, housing, water and sanitation, agriculture, and infrastructure.

### Rural development, agriculture and natural resource priorities
- Rural economy targets and outcomes:
  - rural economy contributes nearly 50 percent of GDP and supports more than 90 percent of the population.
  - additional annual growth in value added for the sector expected to average 6.0 percent until 2006.
- Short- and medium-term rural actions:
  - revive seed nurseries; extension work and training; reconstitute herds; restore soil fertility via lime and agroforestry; revive and diversify cash crops; strengthen producer support services and applied research.
  - medium-term: support non-government initiatives, CDCs and cooperatives to adopt business approaches; improve irrigation using wetlands (Imbo, Bugesera, Moso).
- Research, inputs and seed strategy:
  - strengthen ISABU, FACAGRO, IRAZ and universities; establish national plant and biotechnology program; involve farmers’ associations/cooperatives in seed production.
  - target high-yield seed varieties for corn, beans, roots/tubers, bananas; develop varieties for crops amenable to processing (peanuts, soy).
- Marketing, processing and microcredit:
  - rehabilitate marketing centers, roads and preservation/processing facilities; establish small processing units; promote microcredit via collective lending to cooperatives and DFS expansion; donor support for technical and institutional capacity.
- Livestock, fisheries and environmental protection:
  - reconstitute livestock, promote genetic improvement, artificial insemination; rehabilitate fish ponds and modernize fishing equipment around Lake Tanganyika; environmental strategy to restore vegetation, expand reforestation, combat land degradation, and prepare water master plan.

### Private sector revival, privatization and industrialization
- Private sector objectives and measures:
  - State to disengage from productive activities; promote private investment, SMEs, agroindustry, manufacturing of fertilizers/pesticides/pharmaceuticals, and non-traditional exports (fruits, vegetables, flowers).
  - tax incentives and customs preferences to be reformed and extended to investment-related equipment and spare parts.
  - investor support: rehabilitate business centers, create private sector recovery fund, clear government domestic arrears, risk mitigation via ATIA regional scheme.
- Privatization record and constraints:
  - State disposed of only 15 percent of its holdings (target was 59 percent); privatization produced limited results and public enterprise costs rose via subsidies, exemptions and debt forgiveness.
  - Constraints: hostility from management and labor, policymaker hesitation, weak asset appraisal capacities, low private domestic savings, and the social/political crisis.
- Mining and industry:
  - mining potential: lateritic nickel estimate of 300 million tons; vanadium estimate of 9.7 million tons at 0.63 percent content; other resources include gold, colombo-tantalite, kaolin, limestone, precious stones, cassiterite, wolfranite, rare earths and peat.
  - explicit medium- to long-term mining estimates:
    - lateritic nickel: estimate of 300 million tons; planned annual production of 45 million tons as extended to 20 years for a total of US$1.6 billion.
    - colombo tentalite: planned annual production of 24 million tons as extended to 25 years for a total of US$57 million.
    - vanadium: estimate of 9.7 million tons at a content of 0.63 percent.

### Social sectors: health, education, water, housing and social protection
- Health sector diagnostics and targets:
  - Life expectancy at birth: 50 years in 2002.
  - Infant mortality: 116 per thousand (2001-2002).
  - Vaccination coverage changes: Tuberculosis 91 percent (1992) → 64 percent (1996) → 100 percent (2002); Measles 75 percent (1992) → 49 percent (1996) → 67 percent (2002).
  - Antenatal care: nearly 90 percent in 1992 → 66 percent in 1997.
  - In 1998, an estimated 37 percent of children under five were underweight.
  - Short- and medium-term health actions: rehabilitate and re-equip health centers, strengthen preventive and curative programs, improve drug availability, redeploy and train personnel, define new drugs policy and financing (mutuals/insurance), encourage private providers under cost control.
- Nutrition and communicable disease program:
  - strengthen LMTC to address vitamin, iodine and iron deficiencies; treat severe malnutrition; implement nutritional education nationwide.
- Education objectives and actions:
  - restore and exceed pre-crisis performance by 2005; universal primary enrollment by 2015 (national target), with specific interim targets: universal enrollment for primary-age children by 2015.
  - gross primary enrollment: 67.3 percent in 1992; 42.9 percent in 1995; 60 percent in 1998; 67 percent in 2000; 73 percent in 2001-2002.
  - short-term: rehabilitate facilities, redeploy teachers, supply materials, organize teacher training.
  - medium-term: train trainers, update technical education, improve teacher status and school mapping, launch national vocational training policy.
- Water, sanitation and housing:
  - rural drinking water: 55 percent (1992) → 43 percent (2000-2002).
  - urban water supply: 93 percent (1992) → 95 percent (2000-2002).
  - priority: rehabilitate and upgrade water sources, expand sanitation, promote community management of standpipes/wells, increase housing credit access and local construction material production.
- Employment and social security:
  - prepare a national employment policy; promote private employment-generating investment and labor-intensive projects; integrate employment variable into macro planning; prepare social security policy covering informal sector and farmers (2004-2006).

### Reintegrating conflict victims and vulnerable groups
- Scope of problem and priorities:
  - crisis affected roughly 15 percent of the population as refugees/displaced; street children and orphans estimated at 20,000.
  - short-term priorities: food assistance, housing construction, distribution of agricultural inputs, establishment of a minimum social fund.
  - measures: restore land or arrange new properties, establish CNRS (operational since February 2003), socio-economic reintegration funds and programs, vocational training and hiring preference in public works.
- Targeted assistance for groups:
  - provide free basic services to war victims, disabled, orphans, street children and the Batwa; use special socio-economic reintegration funds to promote income-generating activities.

### Combating HIV/AIDS and gender equality
- HIV/AIDS strategy:
  - strengthen prevention (mother-to-child prevention centers; awareness campaigns; WHO syndrome approach); expand care and antiretroviral access; strengthen NGOs and data systems; establish legal protection for PLHA.
  - priority actions (2002-2003): extend mother-child prevention centers — Since 2003; make antiretroviral drugs more accessible — Since 2002; distribute condoms — Ongoing process; strengthen institutional capacities — Since 2003.
- Gender objectives:
  - women constitute nearly 52 percent of population and >52 percent of economically active population; women are 55.2 percent of agricultural workforce; agriculture is 56 percent of GDP.
  - targets: raise education levels for women; create technical training centers and vocational training; expand women's access to land via egalitarian succession legislation; develop credit systems appropriate to women's needs; strengthen women's associations and community organizations.
  - specific maternal-child health and family planning actions are ongoing.

### Participatory process, monitoring, evaluation and capacity building
- Participatory foundations:
  - I-PRSP prepared from nation-wide participatory consultations (July 2000–January 2002); more than 3,400 community delegates from 17 provinces participated; 30 percent were women.
  - Consultations used Accelerated Participatory Research Method (APRM) and included sectoral, community, private sector, civil society and parliamentary consultations.
- Monitoring and evaluation system:
  - three components: monitoring poverty; monitoring execution of the strategy; evaluating impact of policies.
  - data strategy: conduct comprehensive poverty surveys every 5–10 years and short surveys every two years; CWIQ household survey conducted in 2002.
  - indicators to be tracked include per capita GNP, GDP growth rates, government finances, inflation, external accounts, access to productive resources, health and education indicators, institutional development, DFS coverage and vulnerability factors.
  - ISTEEBU responsible for publishing regular poverty information bulletins and updating the poverty profile.
- Institutional arrangements:
  - EOCPP (Organizing and Coordinating Team) reporting to Vice President via SP/REFES to supervise participatory methodology and consultations.
  - Provincial and Communal PRSP committees and Community Development Committees (CDCs) to be formed for decentralized participation and monitoring.
- Financing and coordination:
  - mobilize domestic revenues, external assistance (including funds announced at Geneva roundtables in December 2001 and November 2002), grassroots initiatives, and savings from debt relief allocated to priority social sectors.
  - public expenditure reviews, medium-term budgetary frameworks and PIP alignment to improve resource allocation and absorption.
  - PRSP serves as operational framework for harmonizing partner activities and supporting donor coordination.

### Key numeric benchmarks, targets and schedules
- Development objectives (selected targets and timelines):
  - achieve economic growth averaging at least 5 percent over 2003-2006, and at least 6 percent over 2005-2010.
  - reduce proportion below poverty line to 35 percent in 2010 and to 25 percent in 2015.
  - achieve universal primary enrollment by 2015.
  - reduce illiteracy rate to 50 percent by 2006, to 25 percent by 2010, and to 10 percent by 2015.
  - make basic health care access universal by 2010.
  - reduce infant mortality rate to 105/thosand in 2006 and to 50/thousand in 2015.
  - ensure 70 percent of population supplied with drinking water by 2006, and 100 percent by 2015.
- Summary of selected priority action schedules:
  - Strengthening peace and security: ongoing; transitional institutions completed by 2003.
  - Finalizing public procurement reform and creating independent Audit Court: 2003-2004.
  - Preparing national decentralization policy: 2003-2005.
  - Rural development, irrigation and agricultural performance measures: 2002-2006 with specific items 2003-2006 and 2004-2006.
  - Preparatory period for full PRSP: July 2003 to December 2004; drafting and submission milestones concentrated in 2003–2004 (draft committee, submission to Government October 2004, transmission to World Bank and IMF November–December 2004).

*Source: Executive summary i-v of the Interim PRSP (I-PRSP) content unit _cr0414*

### Executive summary i-v

### _cr0414 - Executive summary i-v

### Introduction and context
- Burundi has been pursuing wide-ranging economic reform programs for nearly two decades.  
- A structural adjustment program was in place from July 1986 until the outbreak of the socio-political crisis in October 1993.  
- Over the structural adjustment period (1986-1992):
  - economic growth was positive (+ 3.8 percent on average);
  - annual population growth averaged 2.7 percent;
  - inflation fell considerably and stabilized at 4.5 percent in 1992.

### Political context and the peace process
- The I-PRSP was prepared after the Peace and National Reconciliation Accord and creation of transitional institutions, including establishment of the National Unity Government on November 1, 2001, and a Parliament and a Senate expanded to include all political parties as of February 2002.
- Key transitional milestones and arrangements:
  - The first 18-month transitional government period came to an end on April 30, 2003.
  - President Buyoya handed over power to his Vice-President, Domitien Ndayizeye, who will lead the country for the second and final 18-month period of the transitional government.
  - Nation-wide elections will be organised by the end of the transition period scheduled for October 2004.
- Cease-fire and monitoring arrangements:
  - Cease-fire agreements with rebel groups reached in October and December 2002.
  - A mixed commission to monitor the cease-fire was put in place in February 2003 under the Committee to Monitor the Application of the Peace Accord (CSA).
  - A group of observers and an international military force from the African Union were sent to Burundi to supervise implementation from March 2003.
  - The armed groups party to the Cease-fire Agreement pledged to transform themselves into political parties.

### Socio-economic context and recent developments
- The Interim PRSP was prepared amid difficult post-conflict socio-economic conditions:
  - GDP declined by nearly 20 percent in real terms over the period 1993-2002.
  - Galloping inflation and drying up of public revenues.
  - International aid transfers fell from nearly US$300 million to less than an annual average of US$100 million between 1992 and 2002.
  - The investment rate fell from an annual average of more than 15 percent to 9 percent between 1992 and 2002.
  - Accumulation of domestic and external deficits and external payment arrears which stood at US$148.5 million in 2002.
- Social indicators and humanitarian impact:
  - The proportion of people living below the poverty line rose from 35 percent in 1992 to more than 60 percent in 2002.
  - About 400 thousand people have fled abroad or been displaced internally as a result of the conflict.
  - More than 20 thousand children are orphans and street children.
  - Deterioration in quality and accessibility of basic social services and high prevalence of AIDS.

### Long-term development vision and policy focus
- The I-PRSP offers a long-term development vision and sets firm targets for reducing poverty consistent with OECD DAC and UN Millennium Development Goals.
- The new approach will focus on:
  - An economic policy based on maintaining macroeconomic balance, promoting the private sector, developing exports, and maximizing employment opportunities.
  - An agricultural policy focused on enhancing productivity and reducing the pressure on land.
  - An industrial policy to constitute a diversified fabric of small and medium-scale enterprises to meet domestic demand and promote exports of agricultural, mining and manufactured products.
  - An economic and financial cooperation policy aimed at reducing dependency on foreign aid and reviving regional and international economic and scientific exchanges.
  - Social policies for substantially improving human capital and ensuring equitable access to basic services.

### Principal constraints to growth and poverty reduction
- Nation-wide participatory consultations identified six broad categories of constraints:
  - (i) Problems of governance and the domestic and subregional political crisis.
  - (ii) People have limited access to the factors of production.
  - (iii) Basic social services are of inadequate quality and accessibility.
  - (iv) The number of people at risk has increased as a result of the negative impact of the conflict.
  - (v) There is a heavy prevalence of HIV/AIDS.
  - (vi) Problems of gender equality persist.

### Main strategic themes of the I-PRSP
- The Government intends to undertake credible and targeted reforms, use debt relief savings for priority social sectors, and mobilize additional resources to pursue six principal poverty reduction themes:
  - (1) Re-establishing and reinforcing the quality of essential social services, i.e. health and education.
  - (2) Stabilizing the macroeconomic framework and promoting faster, high-quality growth that will help to reduce poverty.
  - (3) Reintegrating the victims of the conflict and other disadvantaged groups into the economy.
  - (4) Stepping up the campaign against HIV/AIDS/STDs.
  - (5) Advancing the role of women in development.
  - (6) Promoting peace, security and good governance.
- Governance priorities include transparency, accountability, decentralization, and institutional reforms such as creation of an Inspector General's Office and an independent Audit Office.

### Participatory preparation process
- The I-PRSP was prepared on the basis of consensus-based conclusions and recommendations from nation-wide participatory consultations (January 2000 to January 2002) involving grassroots communities, civil society, the private sector, and technical services.
- Consultations and feedback:
  - Sectoral and community level meetings were held in Ngozi, Bururi, Gitega and Bujumbura covering all provinces and regions.
  - More than 3,400 people delegated by their communities in the country’s 17 provinces participated in the consultations, and 30 percent of them were women.
- The I-PRSP reflects the thrusts of the Government's overall program and provisions of the Arusha Accords, including governance and Protocol IV on reconstruction and revival of social and economic development.

### Financing mechanisms and resource mobilization
- Implementing the interim strategy will require mobilizing significant resources through:
  - Increasing revenues and controlling public spending.
  - Mobilizing external assistance, in particular funds announced during the Geneva roundtables in December 2001 and November 2002.
  - Encouraging grassroots community initiatives.
  - Judicious allocation and rational management of public funds and foreign aid, including conducting public expenditure reviews and preparing medium-term budgetary frameworks.
  - Allocating savings from debt relief initiatives to priority social sectors.
- The PRSP provides an operational framework for harmonizing growth and poverty reduction activities of all partners.

### Monitoring, evaluation and capacity building
- The I-PRSP places particular emphasis on monitoring and evaluating poverty reduction activities using a participatory approach.
- Short-term emphasis:
  - Reinforcing capacities of different players for preparing and monitoring implementation of priority actions, programs and projects.
- The monitoring and evaluation system will have three essential components:
  - monitoring poverty;
  - monitoring execution of the strategy;
  - evaluating the impact of policies under the strategy.

### Indicative action plan for preparing the full PRSP
- The participatory process will be expanded and strengthened in preparing the full PRSP:
  - Participatory consultations will be broadened to cover every commune and province and involve more grassroots community representatives selected from poor and vulnerable groups in each commune.
  - Formulation and implementation of an appropriate decentralization policy will contribute to PRSP success.
  - Databases will be updated to provide better statistical support, including poverty profiles and other economic and social statistics.
  - A survey based on a standard questionnaire on statistical indicators for evaluating socio-economic development or CWIQ was conducted in 2002.
- The I-PRSP is supplemented with a matrix of policies and priority measures, and an indicative timetable for preparing the full Growth Recovery and Poverty Reduction Strategy Paper.

*Source: Executive summary i-v of the Interim PRSP (I-PRSP) content unit _cr0414*

### 2. While the country remained largely self-sufficient in food during this period, the

### _cr0414 - 2. While the country remained largely self-sufficient in food during this period, the

### Overview and strategic objectives
- Burundi remained largely self-sufficient in food during the period reviewed, but the hoped-for transformation of productive structures did not take place and structural reforms were not brought to completion.
- The economy is largely non-monetized and dominated by low-yield, subsistence agriculture; industry is embryonic and the services sector has seen little development.
- Government objective with the interim strategy: reduce poverty and improve living conditions through strong, sustainable, diversified and equitable economic growth.
- Interim PRSP preparation was launched on July 14, 2000, and the strategy aligns with the United Nations Millennium Development Goals.

### Socio-economic context and constraints
- Burundi covers an area of 27,834 square kilometers and is one of the most densely populated countries, with an average of nearly 250 people per square kilometer.
- Structural issues noted:
  - Excessive subdivision of farms.
  - Use of low-productivity techniques.
  - Lack of diversified production sources.
  - Inadequate employment creation in both the structured and informal sectors.
- More than 90 percent of the people are still dependent on subsistence farming.

### Impact of conflict and external shocks
- Nearly nine years of war and a three-year embargo (July 1996 to January 1999) have:
  - Drained the Burundian economy.
  - Weakened institutional capacity.
  - Destroyed basic infrastructure.
  - Caused major loss of life and displacement.
- Three principal exogenous factors worsening socio-economic conditions over the last 10 years:
  - Domestic social-political crisis and a two and a half year embargo (1996-1999), compounded by civil war in bordering countries (Rwanda and the Democratic Republic of Congo).
  - Climatic disruptions undermining food security and economic growth.
  - Freeze in international cooperation: official development assistance transfers declined from nearly US$300 million in 1992 to less thanUS$100 million in 2001.

### Peace process, political developments, and institutional steps
- Peace and National Reconciliation Accord signed on August 28, 2000, following negotiations in Arusha, Tanzania.
- Cease-fire accords reached in October and December 2002 between the Government and armed rebel groups; a three-party commission for monitoring was established in February 2003.
- African Union military observers and mission deployed from March 2003 to supervise cantonment, disarmament, demobilisation, and reintegration (DDR).
- Key transitional political milestones:
  - National Unity Government inaugurated on November 1, 2001, to lead an 18-month transition period.
  - President Buyoya handed over power on April 30, 2003 to Vice-President Domitien NDAYIZEYE for the second 18-month transition period until October 2004.
- Peace Accord implementation framework during a 36-month transition leading to elections:
  - Popular elections to commune councils.
  - Legislative elections for deputies and senators.
  - Presidential elections marking the end of the transition.
- Commissions established or operational:
  - Committee to Monitor Application of the Peace Accord (CSA) — operational since September 2000.
  - National Commission for Truth and Reconciliation and the National Commission for the Rehabilitation of War Victims (CNRS) — operational since February 2003.
  - Commission for International Judiciary Investigation on crimes during the conflict.

### Security outlook
- Security has improved since the peace and cease-fire accords, but one of four rebel movements continued armed hostilities.
- Pockets of insecurity persist, especially in frontier provinces with Tanzania (southeast) and in Bujumbura Rural.
- Negotiations for a permanent cease-fire continue; armed groups party to the Cease-fire Agreement pledged to transform into political parties.

### Findings on economic performance and policy, 1986–1992
- Annual economic growth averaged 3.7 percent between 1986 and 1992.
- Sectoral shares and developments:
  - Primary sector value added varied between 40 percent and 45 percent of GDP.
  - Secondary sector share of GDP rose from 8.2 percent to 12.4 percent.
- Government finances and external accounts:
  - Budgetary deficit (on a commitment basis) rose from 8.4 percent of GDP in 1986 to 14.2 percent in 1992.
  - Investment increased from 11.6 percent of GDP in 1986 to 17.9 percent in 1992.
  - Stock of debt (dollars) doubled: $1.1 billion in 1992 versusUS$0.6 billion in 1986.
  - Ratio of debt service to exports: 45 percent in 1992 versus 20 percent in 1986.
  - Current account deficit deteriorated from 10.2 percent of GDP in 1986 to 20.2 percent in 1992.
  - Import-export cover rate declined from 44 percent in 1986 to 30 percent in 1992.
  - Net foreign exchange reserves remained at more than four months of imports, on average.
- Inflation averaged 6.9 percent.
- Monetary and exchange rate developments:
  - Monetary expansion was lower than nominal GDP growth due to prudent monetary policy.
  - Burundian franc effective exchange rate declined by nearly 50 percent between 1986 and 1992, following several devaluations.

### Implementation of reforms, 1986–1992 (Box 1)
- Positive reform achievements:
  1. Customs reform reduced the number of tariff rates from 57 to 5; rate spread narrowed to a range of 15-40 percent (luxury goods rate still 100 percent).
  2. Flexible exchange rate system introduced, linking the Burundian franc to currencies of major trading partners.
  3. Monetary policy reforms introduced indirect instruments (compulsory reserves, selective refinancing, auctioning of treasury bills); new banking law (1993) improved banking supervision.
  4. Trade and import liberalization: gradual reduction of quantitative restrictions and implementation of an open system of general licenses; price deregulation adopted but inadequately applied; controls maintained for export prices of traditional agricultural products.
  5. Business climate improvements with World Bank and USAID support: reforms to investment code, commercial code, corporations’ code, labor code; liberalization of certain professions; leasing law and third party holdings reforms; streamlined administrative procedures; support institutions for private sector; export incentives (drawback system in 1990; "free zone law" in 1992); more flexible hiring procedures.
- Areas of disappointing or incomplete reform:
  1. Public financial management: tax reforms (creation of a broad-based VAT, reform of the tax code) were not implemented.
  2. Downsizing of the public service began in 1990 but broader restructuring of current expenditures was not implemented.
  3. New multi-year programming tools (three-year PIP and PDP) were introduced but had limited impact on budgetary rationalization.
  4. Planned reforms of public enterprises and agricultural policies were not carried to completion.

*Source: Interim Poverty Reduction Strategy Paper (I-PRSP) for Burundi, participatory consultations and analyses conducted between July 2000 and April 2002.*

### 2. The public enterprise reform was implemented only in part. The State disposed of only 15 percent of its

### _cr0414 - 2. The public enterprise reform was implemented only in part. The State disposed of only 15 percent of its

### Public enterprise reform and agricultural reforms
- The State disposed of only 15 percent of its holdings (compared to a target of 59 percent).
- Improvements to the management of public enterprises produced no tangible results.
- The financial cost of public enterprises (capital subsidies, operating subsidies, tax exemptions, non-payment of dividends and debt forgiveness) became even heavier.
- Agricultural sector reforms (the producer price system, privatization of the seed sector, quality improvement policy) were applied in a very piecemeal fashion and did not produce the structural changes expected.

### Economic and financial performance 1993-2002
- The social and political crisis that erupted in 1993 produced a significant decline in domestic output and an unprecedented imbalance in government accounts.
- Progress was made in 2002 following implementation of the Peace Accord and the economic and financial program supported by disbursements under the IMF’s Post-Conflict Emergency Assistance policy and the Economic Rehabilitation Credit from the World Bank, but the 1993–2001 period was beset by many difficulties.
- Key economic indicators and impacts (1993–2002):
  - GDP fell cumulatively by 20 percent over the period 1993-2002.
  - Income (GDP) per capita eroded steadily to less than US$110 in 2002, compared to US$210 in 1990.
  - The investment rate declined from nearly 18 percent of GDP in 1992 to less than 9 percent in 2002.
  - Exports: US$79.3 million in 1992; US$113 million in 1995; US$31.2 million in 2002.
  - Coffee accounts on average for 75 percent of export earnings; world market price for coffee fell to around 50 cents per pound in 2002.
  - Exchange rate decline: 346.8 percent in 10 years, from 208.3/U.S. dollar in 1992 to 930.7/U.S. dollar in 2002.
  - Development assistance transfers declined from nearly US$300 million in 1992 to less than US$100 million in 2002 (more than 70 percent of which was in humanitarian assistance).
  - Foreign exchange reserves declined from 4.1 months of imports of non-factor goods and services in 1992 to less than two months in 2002.
  - Debt and arrears: debt service amounted in 2002 to 157 percent of exports; payment arrears estimated at US$148.5 million; total outstanding debt exceeded 180 percent of GDP.
  - Urgent social reintegration needs: internally displaced more than 600,000 people; fled abroad more than 400,000 people.
  - Enormous financial needs for rebuilding and rehabilitating essential infrastructure.
  - Growing financial needs for improving accessibility and quality of basic social services (health, education, hygiene).
  - HIV/AIDS: national average of more than 13 percent sero-positive in 2002.

### Overview of poverty in Burundi
- Political instability and the war since October 1993, and subregional civil war, compounded structural poverty factors.
- Farming employs more than 90 percent of the workforce and accounts for about 40 percent of gross domestic product.
- Farmland scarcity and degradation:
  - Average farm in most regions is less than 1/2 hectare.
  - Soil contamination with very high levels of iron- (ferralsols, ferrisols) and aluminum-based toxins.
- Cash crops (coffee, cotton, tea, rice, sugar) accounted for more than 80 percent of export receipts in 2002 and remain vulnerable to international market fluctuations.
- Poverty trend:
  - Percentage of poor people nearly doubled from 34.84 percent in 1992 to 58.72 percent in 1997.
  - Percentage exceeded 60 percent in 2002.

### Monetary poverty: levels and trends
- Definitions:
  - Relative poverty line: "two-thirds of total annual per capita expenditure".
  - Absolute poverty line: "estimated minimum cost of basic food needs and non-food essentials, for an individual for one year".
- Poverty lines (from surveys):
  - Relative poverty line (1990 poverty profile): BF 17,980 in rural areas and BF 46,180 for the city of Bujumbura.
  - Updated (1998-2000 poverty profile): BF 53,650 (rural) and BF 251,580 (urban).
- Table 1 highlights (Population living below the relative poverty line, 1990–2002 provisional):
  - Rural: 35.1 (1990); 35.5 (1991); 34.8 (1992); 39.6 (1993); 48.5 (1994); 53.3 (1995); 57.5 (1996); 61.0 (1997); 64.6 (1998); 68.8 (1999); 68.7 (2000); 68.7 (2001 Prov.); 68.7 (2002 Prov.).
  - Urban: 32.4 (1990); 32.0 (1991); 32.9 (1992); 40.9 (1993); 47.2 (1994); 51.2 (1995); 64.0 (1996); 66.0 (1997); 66.5 (1998); 66.0 (1999); 68.2 (2000); 66.0 (2001 Prov.); 66.0 (2002 Prov.).
  - National: 34.9 (1992); 33.8 (1993); 33.5 (1994); 35.3 (1995); 47.8 (1996); 52.2 (1997); 60.7 (1998); 63.5 (1999); 65.6 (2000); 67.7 (2001); 68.7 (2001 Prov.); 68.0 (2002 Prov.); 68.0 (2002 Prov.).
  - Source: Household budget and consumption survey 1986-90; and Priority survey 1998-2002.
- Additional monetary-poverty facts:
  - Rural poverty rose from 35 percent in 1992 to more than 58 percent in 2000-2002.
  - Urban (Bujumbura) poverty rose from 33.9 percent in 1992 to more than 68 percent in 2000-2002.
  - Inflation of consumer prices nearly tripled from 9.7 percent in 1993 to 31.7 percent in 1997.
  - Public servant wages are not indexed to cost of living; standard of living for public servants fell sharply.

### Regional disparities in poverty
- Provinces most affected (those that suffered most from the conflict): Bubanza, Cibitoke, Karuzi.
- In provinces where pre-crisis poverty was already high (Rutana and Karuzi), poverty incidence exceeded 70 percent; in 1999 they ranked 13 and 15 out of 16 provinces, with poverty incidence varying between 70 percent and 86 percent.
- Provinces that deteriorated since 1990: Bubanza, Cibitoke, Bujumbura Rural moved from ranks 5, 1, 4 in 1990 to 14, 12, 8 in 1998 with poverty levels between 50 and 75 percent.
- By natural region (2001-2002 provisional, Table 2):
  - Bujumbura city: Absolute poverty line BIF 410,499; Incidence of poverty 67.0.
  - Plains: Absolute poverty line BIF 91,947; Incidence of poverty 75.0.
  - Mountains and transition: Absolute poverty line BIF 91,947; Incidence of poverty 66.0.
  - Western Plateaus: Absolute poverty line BIF 91,947; Incidence of poverty 65.0.
  - Eastern Plateaus: Absolute poverty line BIF 91,947; Incidence of poverty 72.0.
  - Total: Absolute poverty line BIF 107.994; Incidence of poverty 68.7.
  - Source: Burundi, priority survey 1998-2002.

### Poverty distribution by socio-economic group
- Household characteristics associated with poverty:
  - Larger household size increases poverty likelihood: households with one or two individuals have a 57 percent poverty rate; households of six or seven people have a 67 percent poverty rate.
- Occupational status (Table 3, incidence of poverty by occupational status of household head, 2000-2002 provisional; poverty line in BF Urban 410,499 / Rural 91,947):
  - Farmer, export sector: Urban 100.0; Rural 70.2.
  - Farmer, other: Urban 94.2; Rural 70.8.
  - Public and para-public: Urban 51.6; Rural 57.3.
  - Informal private: Urban 58.3; Rural 56.7.
  - Informal: Urban 83.4; Rural 57.7.
  - Unemployed: Urban 81.0; Rural 62.4.
  - Other: Urban 83.1; Rural 50.4.
  - Source: Burundi, priority survey 1998-2002.
- Education and poverty:
  - Literacy and schooling correlate with poverty: households where the head is "employed in the public or para-public sector" have literacy rate 87.4 percent; households where the heads are "unemployed" or "farmers" have literacy rates 46.7 percent and 44 percent, respectively.
  - Table 4 (poverty incidence by educational level of household head, 2000-2002; poverty line in BF Urban 410.499 / Rural 91.947):
    - No schooling: Urban 410.499 / Rural 91.947 — Incidence of poverty Urban 93 / Rural 72.
    - Primary: Urban 410.499 / Rural 91.947 — Incidence of poverty Urban 87 / Rural 65.
    - Secondary 1st Cycle: Urban 410.499 / Rural 91.947 — Incidence of poverty Urban 71 / Rural 39.
    - Secondary 2nd Cycle: Urban 410.499 / Rural 91.947 — Incidence of poverty Urban 51 / Rural 56.
    - Higher education: Urban 410.499 / Rural 91.947 — Incidence of poverty Urban 27 / Rural 0,0.
    - Source: Priority survey 1998-2002.
  - Among the small proportion (4.4 percent) of households where the head has completed secondary school, 56 percent are poor, compared to 72 percent in the uneducated category.
- Vulnerable groups:
  - Households headed by widows, divorcees or single women became more vulnerable.
  - Excluded groups requiring special attention: war refugees, abandoned children and "street kids", the disabled, and the Batwa social group.

### Human dimension of poverty
- Poverty is multidimensional and includes lack of opportunities in education, health, and potable water.
- Human poverty indicators:
  - Nearly half of Burundians are affected by the human dimension of poverty: percentage close to 47 percent in the last six years.
  - Human Development Index (HDI) stood at around 0.3 between 1995 and 2002.
  - Prior to the conflict (1992): HDI 0.341; ranked 165 out of 174; life expectancy 54 years; literacy 38 percent; school enrollment 64 percent.
  - Between 2000 and 2002, income per capita stood at around US$110 (declined by about one-third since pre-conflict estimate of about US$200).
- Education, training and information:
  - Adult literacy rate remains below 40 percent; more than half of adults are illiterate.
  - Gross primary school enrollment ratio: 67.3 percent in 1992; 42.9 percent in 1995; 60 percent in 1998; 67 percent in 2000; 73 percent in 2001-2002.
  - Graduation rate from primary to secondary school rose from 6.0 percent in 1992 to 8.0 percent in 1998 and 11 percent in 2001-2002.
  - Gross enrollment rate in higher education remained around 1 percent from 1992 to 2000.
  - Education suffers from lack of qualified teaching personnel, infrastructure, and teaching materials; problem acute in community colleges.

*Source: _cr0414 - 2. The public enterprise reform was implemented only in part. The State disposed of only 15 percent of its*

### 60. The health situation has deteriorated. Life expectancy at birth is one of the lowest in

### _cr0414 - 60. The health situation has deteriorated. Life expectancy at birth is one of the lowest in

### Health outcomes and disease burden
- Life expectancy at birth: 50 years in 2002.
- Infant mortality rate: 116 per thousand live births in 2001-2002.
- Hunger and malnutrition affected 68 percent of the total population over the period 1996-2002.
- Access to essential drugs and vaccinations in 2002: 20 percent of the population.
- HIV/AIDS prevalence: more than 13 percent of the adult population is now infected.
- Vaccination coverage:
  - Tuberculosis: 91 percent in 1992 → 64 percent in 1996 → 100 percent in 2002.
  - Measles: 75 percent in 1992 → 49 percent in 1996 → 67 percent in 2002.
- Antenatal care coverage:
  - Nearly 90 percent of pregnant women received care during their pregnancy in 1992.
  - This fell to 66 percent in 1997, with a consequent increase in maternal mortality.
- In 1998, an estimated 37 percent of children under five years of age were underweight.
- Deaths from infections and parasitic diseases: the number has more than tripled in five years (period not explicitly re-stated in source).
- Resurgence of: malaria, bacillary dysentery, respiratory infections, and skin diseases.

### Water, sanitation, and housing
- Rural accessibility rate for drinking water: 55 percent in 1992.
- Rural water supply rate declined to 43 percent in 2000-2002 (a drop of 12 percent in 8-10 years).
- Urban water supply ratio: 93 percent in 1992 → 95 percent in 2000-2002.
- Housing:
  - Some 39,460 households were able to purchase a dwelling and use rehabilitated social facilities (post-crisis efforts).
  - Approximately 540,000 families are still displaced internally or likely to return from abroad.
  - Nationwide housing stock described as generally of poor quality; housing shortage acute after crisis and destruction of thousands of homes.

### Key constraints to growth and poverty reduction
- Participatory consultations and empirical studies identify primary causes of poverty:
  - (i) problems of governance and insecurity, as well as economic management (an unstable macroeconomic framework);
  - (ii) inadequate access for people to the factors of production;
  - (iii) generalized inadequacy and disparities in access to basic social services;
  - (iv) war victims, rising numbers of the disadvantaged, and increased vulnerability to poverty, fallout from the conflict and inadequate social protection nets;
  - (v) the high prevalence of HIV/AIDS and other endemic or epidemic diseases;
  - (vi) persistent obstacles to gender equality.
- Multiple disparities (regional, gender) supplement national-level constraints.

### Governance, security, and institutional capacity
- Governance issues:
  - Historical centralization of political, economic and social power; planning system did not adequately involve beneficiaries, producing inappropriate policies.
  - Rising corruption, sub-optimal allocation and inefficient management of scarce resources, and an inappropriate public expenditure profile.
  - Consequences: social exclusion, marginalization, collapse of the rule of law.
- Security and political crisis impacts (post-October 1993):
  - Persistent insecurity reduced chances of reconciliation and hindered return and reintegration of refugees.
  - Output decline across all sectors, particularly agriculture.
  - Increase in war orphans, street children, children in prison, households headed by a single person, and people with physical or mental disabilities; many internally displaced or abroad.
  - Lack of a social safety net compounds vulnerability and extreme poverty.
- Institutional collapse for economic management:
  - Economic management tools are rudimentary or obsolete; urgent need to modernize and train officials.
  - Persistent crisis disrupted systems for collecting and updating statistics; reconstituting economic and social databases is essential.

### Macroeconomic framework: fiscal, monetary, debt, and external sector
- Tax system and fiscal position:
  - Tax system characterized by a narrow tax base and high tax rates; tax revenues have failed to cover current expenditure since 1993 and the primary balance has been chronically negative.
  - Tax exemptions on imports from humanitarian agencies and NGOs: between 18 and 25 percent of imports entered duty free from 1995 to 2002.
- Inflationary financing and arrears:
  - Advances from the Central Bank more than doubled between 1997 and 2002.
  - External payment arrears: US$6.5 million in 1995 → US$69.6 million in 1999 → US$148.5 million in 2002.
  - Inflation: 4.5 percent in 1992 → 31 percent in 1997 → decreased by 9.1 percent in 2001 → less than 1 percent in 2002 (attributed to restrictive monetary policy in a post-conflict program).
- Public expenditure profile:
  - Current spending composition in 2002: 51.1 percent to paying off the external debt and 38.3 percent to salaries.
  - Investment fell from nearly 18 percent of GDP in 1992 to about than 9 percent in 2002.
- Debt burden:
  - External public debt estimated at nearly 180 percent of GDP for 2002.
  - Debt service estimated at 157 percent of exports of non-factor goods and services for 2002.
  - Burundi's external debt amounted to US$1.132 billion in 2002, or nearly 180 percent of GDP.
  - Composition of external debt: multilateral (86 percent), direct (81 percent of loans contracted by the Government for its own account), concessional (82 percent soft loans).
  - Domestic debt accounts for no more than 7.8 percent of the total outstanding.
  - Stock of debt in domestic currency rose by more than 320 percent over the period 1992-2000 (when translated from U.S. dollars into depreciating domestic currency).
- Balance of payments and external position:
  - Current account deficit in 2002: 6 percent of GDP.
  - Import cover ratio: around 30 percent for the last 10 years, about 6 percent in 2002.
  - Coffee production: 15,000 tons in 2001 and 7,000 tons in 2003 compared to an average of 30,000 tons in normal years.
  - Coffee price: more than 100 cents per pound in 1995-1996 → 48 cents per pound in 2001-2003.
  - Terms of trade deteriorated by more than 40.0 percent between 1997 and 2002.
  - Foreign exchange urgently needed to cover rising import levels since lifting of the embargo and to clear external payment arrears.
- Monetary and exchange policy:
  - Sharp contraction in foreign assets while money supply rose, producing unprecedented inflation and erosion of real incomes.
  - Expansion of domestic credit despite banking reluctance to finance medium and long-term investments.
  - Reforms in monetary and exchange rate policies implemented since 2002 produced progressive desired outcomes.

### Structural rigidities limiting sustained growth
- Productive structure and agriculture:
  - Dominance of traditional subsistence farming; land is the determining factor of production.
  - Access to land increasingly restricted; average size of family farms shrinking under demographic pressure, leading to over-exploitation and degradation.
  - Livestock rearing is largely extensive and not well integrated into farming.
  - Forced displacement created a new category of landless people.
  - Limited availability and affordability of high-performance inputs and technologies.
  - Low degree of monetization in the rural economy and limited markets for agricultural output; agriculture remains subsistence-based and not integrated into other sectors.
- Industry and private sector:
  - Secondary sector underdeveloped and represents only about 15 percent of GDP.
  - State dominant in many sectors; private sector marginal and composed mainly of small and medium-scale enterprises oriented to the local market.
  - Exports are rare and account for a minimal proportion of output.
  - SMEs face constraints from landlocked status, high costs of raw materials, narrowness of local market, high tax burdens, and lack of access to financing.
- Demographics and environment:
  - Sharp demographic growth has negatively impacted the environment: deterioration of farmland, pastures and woodlands, acute deforestation, and disruption of ecosystems such as wetlands.
- Competitiveness and regional integration:
  - Exports are mainly raw materials vulnerable to international market fluctuations; small output leaves no surplus for export.
  - Landlocked status, weak support infrastructure, and lack of warehousing make exporting difficult.
  - Regional integration efforts have been limited and mostly unsuccessful, with heavy expenditure on institutions that did not address core problems.
- Financial sector:
  - Financial sector underdeveloped and poorly adapted to providing rural credit.
  - Monetization of the rural economy has been low, and even existing Savings and Loan Cooperatives (“Coopecs”) fall short of covering all provinces.

*Source: _cr0414 - 60. The health situation has deteriorated. Life expectancy at birth is one of the lowest in (IMF PDF).*

### 99. The problem of access to capital is felt in other sectors of the economy as well,

### _cr0414 - 99. The problem of access to capital is felt in other sectors of the economy as well,

### Access to capital, investment, and savings
- The heightened political risk from the long conflict has lowered the country's ability to attract foreign investors; direct investment is at a very low level and bilateral and multilateral capital flows have declined substantially.  
- Domestic savings rate is structurally very weak:
  - The domestic savings rate (as a proportion of GDP) was frequently negative during the 1990s, by as much as -2 percent in 1998 and 9.9 percent in 2002.
- Gross fixed capital formation (at constant 1980 prices) fell sharply:
  - Shrank by 38.2 percent between 1992 and 2002.
  - Reached its lowest level in 1998, when it was no more than 28 percent of its 1990 level.
- Drivers of low investment:
  - Conflict-induced private-sector reluctance to invest.
  - Lack of public-sector resources and declining revenues.
  - Rising share of irreducible private and public consumption needs in GDP.

### Labor market, employment, and the informal sector
- Structural labor-market pressures and characteristics:
  - Heavy demographic pressure; collapse of the agricultural sector; imbalances in the modern sector.
  - Unskilled labor force and mismatch between skills and jobs.
  - Proliferation of an uncontrolled and poorly integrated informal sector.
- Employment outcomes:
  - Shortage of skilled jobs in the formal sector; widespread rural underemployment.
  - Public service employment at maximum capacity; private sector small and forced to downsize.
  - Rural unemployment and underemployment prevent income generation needed to modernize productive systems; low purchasing power of wages prevents workers meeting essential needs.

### Production support infrastructure constraints
- Conservation/processing (industrial packaging and processing) sector is very underdeveloped, limiting marketing and value addition.
- Major infrastructure challenges to increase and diversify output:
  - Water, energy, transportation, and communications capacity expansion.
- Geographic specifics:
  - Acute water problems in Kirundo, Muyinga, Ruyigi, Cankuzo.
  - Severe road transport problems in central provinces (Gitega-Daruzi, Muyinga, Mwaro, Bururi, Cankuzo, Ruyigi).
  - Rural electrification is an issue throughout the country.
- Consequences for agriculture and private investment:
  - Surplus harvests often spoil due to lack of preservation and processing facilities (examples given: tomato output in Cibitoke, manioc in rural Bujumbura and Makamba).
  - Private sector reluctance to invest in agriculture because perceived risks are higher than in other sectors.

### Inadequate access to basic social services (IV.3)
- Participatory consultations and technical studies show sharp reduction in availability of health, education, decent housing and drinking water; some provinces more affected than others.
- Accessibility problems stem from insufficient supply, poor distribution of infrastructure/facilities, and low purchasing power of potential beneficiaries.
- Even when facilities exist, costs (medical services, school tuition, transport) are often unaffordable given household purchasing power.
- Household incomes remain too low to access basic services; service pricing is based on minimum cost levels, placing services beyond reach for many rural families and urban workers of modest means.

### Education sector constraints (IV.3.1)
- Four main constraint categories: availability and affordability, equity, financing problems, social and political instability.
- Access and enrollment:
  - Gross enrollment rate in 2001-2002: 73 percent at the primary level, 11.6 percent at the secondary level, and 1.7 percent for higher education.
  - Historical note: number of primary teachers tripled in the 1980s; gross enrollment rose from 29 percent in 1980 to 72 percent in 1992.
- Equity and accessibility:
  - Disadvantaged groups (displaced families, the poor, the handicapped, and girls) are at a disadvantage in absence of a social safety net.
  - Regional disparities and gender imbalances; disparities aggravated by destruction and insecurity.
- Teacher supply and quality:
  - Shortage of teachers in rural areas; employment of underqualified teachers; severe lack of school textbooks and teaching supports.
- Financing structure and problems:
  - Four major financiers: central government, external assistance, communities, and families.
  - External assistance is inadequate and limited to primary level; secondary and higher education underfunded.
  - Government generally pays staff salaries; other costs (construction, equipment, tuition fees) covered by partners.
  - External assistance has dropped sharply; many teachers have abandoned the profession because of low pay.
- Vocational and technical training:
  - Lack of technical and vocational instruction constrains external effectiveness; development requires resources beyond Government capacity.
- Prevailing insecurity and political instability have severely impacted growth and especially quality of the education system.

### Health sector constraints (IV.3.2)
- Crisis-related destruction and pillaging have undermined the national health system’s capacity to provide basic care; many facilities obsolete, damaged, or stripped of equipment.
- Key shortages and capacity constraints:
  - Materials (drugs and medical equipment), qualified human resources, logistical support (transportation, emergency equipment such as ambulances), and financing (inadequate management capacity and standards).
- Infrastructure deficiencies:
  - Lack of water and electricity at intermediary and peripheral health facilities impedes medication conservation, equipment maintenance, and proper hygiene.
- Major systemic problems:
  - Poor coordination and planning.
  - Inadequate and outdated facilities; improper distribution (qualitatively and quantitatively) of personnel.
  - Poor management of health facilities due to lack of competent personnel; concentration of medical facilities and staff in Bujumbura with weak linkage to interior.
- Compounding factors:
  - Heavily centralized management of the health sector.
  - Inadequate funding devoted to the sector.
  - Weaknesses in epidemiological surveillance and health information systems.
  - Lack of hygiene and sanitation.

### Drinking water, hygiene, and sanitation (IV.3.3)
- Nationwide low and unequal availability of drinking water.
- Hygiene and sanitation programs fall far short of needs; some residential schools, health centers, and prisons have no running water, leading to contamination and epidemic spread.
- Many families must travel long distances to reach drinking water sources, hindering basic hygiene practices.

### Displaced, vulnerable, and disadvantaged populations (IV.4)
- Displaced people live in total deprivation, surviving on national and international charity; malnutrition, poor health conditions, and promiscuity increase vulnerability to diseases (cholera, bacillary dysentery, typhus, skin rashes, cerebral-spiral meningitis, malaria, etc).
- Crisis persistence has increased indigent numbers; economic recession and freeze on development assistance have reduced government capacity to help.
- Resulting behavioral and social problems include alcohol and drug consumption, banditry, begging, and prostitution; these contribute to growing prevalence of HIV/AIDS in refugee camps.
- New phenomena of exclusion: street children, abandoned children, children orphaned by war and AIDS.
  - Orphans and street kids estimated to number more than 20,000 people or 0.3 percent of the population.
- Female-headed households:
  - Female heads of households now account for 22 percent of all households and show high incidences of poverty.
- Social protection:
  - Existing social protection devices are inadequate; virtually no specific social safety net in place at the present time.

### HIV/AIDS prevalence and impacts (IV.5)
- HIV/AIDS aggravates family poverty; shortcomings in preventive measures, information systems, and lack of current data hinder effective strategies.
- Prevalence estimates:
  - Rate of HIV/AIDS prevalence is more than 18 percent in urban areas, and more than 7 percent in the countryside.
- Consequences:
  - AIDS constrains growth and poverty reduction through the cost of caring for AIDS victims and reduction in the workforce.
  - Care facilities are in short supply and public awareness remains very low.

### Gender and equity constraints (IV.6)
- Gender equity progress remains inadequate; traditional culture poses a significant constraint and women are insufficiently integrated into decision-making bodies and the economy.
- Cultural resistance:
  - Many Burundian males view gender equality as an imported threat to culture, creating misunderstanding and resistance that hinder adoption of effective approaches.
- Political participation:
  - Wide gap remains between men and women; women are underrepresented in decision-making and power-exercising bodies.
- Access to and control of resources:
  - Section ends with heading "Women's access to and control of resources" (no further quantitative detail provided in source text).

*Source: _cr0414 - 99. The problem of access to capital is felt in other sectors of the economy as well,*

### 136.     The  conflict  prevailing  in  Burundian  society  has  disrupted  families  and  created

### V. THE PRINCIPAL THEMES OF BOOSTING THE INTERIM GROWTH AND POVERTY REDUCTION STRATEGY

### Participatory consultation conclusions and long-term vision
- The participatory consultations concluded that, apart from fostering national reconciliation and restoring the rule of law, strengthening the foundations of good governance and addressing the root causes of poverty are essential to ending repeated cycles of violence.
- Long-term vision premise: poverty is a determining factor in the persistence of conflict and governance problems.

Box 2. A long-term development vision for Burundi
- A Burundi that is at peace.  
- A peaceful sub-regional climate that is favorable to economic integration.  
- Poverty that is gradually being eradicated.  
- People who have access to essential services (education, health, hygiene).  
- Young people who benefit from a high level of education.  
- A diversified and modernized agricultural sector.  
- An industrialized economy that is competitive and fully integrated into the regional and global trading systems.  
- Demographic growth under control.  
- Institutions based on transparent management and decentralization of power and resources.

### Development objectives (targets and timelines)
- (i) To achieve economic growth averaging at least 5 percent over the period 2003-2006, and at least 6 percent over the period 2005-2010.  
- (ii) To resolve the major problems created by the crisis, by 2003-2006, in particular: social and economic reintegration of displaced people, rehabilitation and reconstruction of the economy.  
- (iii) To take the incidence of poverty back to where it was before the crisis, by 2010, and to reduce the proportion of Burundians living below the poverty line to 35 percent in 2010 and to 25 percent in 2015.  
- (iv) To achieve universal enrollment for children of primary school age by 2015, and to make a significant reduction in disparities between genders and between regions.  
- (v) To reduce the illiteracy rate to 50 percent by 2006, to 25 percent by 2010, and to 10 percent by 2015.  
- (vi) To make basic health care access universal by 2010.  
- (vii) To reduce the infant mortality rate to 105/thosand in 2006 and to 50/thousand in 2015.  
- (viii) To ensure that 70 percent of the population is supplied with drinking water by 2006, and 100 percent by 2015.

### Six principal strategic themes
- Theme 1. Promoting peace and good governance.  
- Theme 2. Promoting sound economic growth that will reduce poverty.  
- Theme 3. Expanding access to basic social services.  
- Theme 4. Reintegrating victims of conflict and other disadvantaged groups into the economy.  
- Theme 5. Combating HIV/AIDS/STDs.  
- Theme 6. Advancing the role of women in development.

### THEME 1. PROMOTING PEACE AND DEMOCRATIC GOVERNANCE — Key activities
- (i) Strengthening the process of national reconciliation and good governance.  
- (ii) Promoting good governance at all levels and combating corruption and economic fraud.  
- (iii) Reinforcing institutional capacities to manage public affairs.

V.1.1. Strengthening the process of national reconciliation and democratic governance
- The Peace and National Reconciliation Accord negotiated at Arusha (mediated by President Nelson Mandela) offers a significant basis for a definitive end to the Burundian conflict by October 2000.
- Changeover of the presidency took place on April 30, 2003 in conformity with conventions of the peace accord.
- The National Unity Government was sworn in on November 1, 2001.
- A Commission to Monitor the Implementation of the Accord (CSA) has been operational in Bujumbura since September 2000; it is chaired by the Special Representative of the United Nations Secretary General.
- Mixed commission of cease-fire, external observers and an international military mission have been set up in Bujumbura.
- International and subregional diplomatic support is emphasized to restore and maintain peace and to boost regional economic integration.

Governance areas of attention
- (i) Establishment of democratic public institutions.  
- (ii) Establishment of a legal framework that protects human rights.  
- (iii) Establishment of a neutral, competent and effective administrative apparatus.  
- (iv) Establishment of transparent public management.  
- (v) Establishment of an efficient and independent judiciary.  
- (vi) Establishment of a decentralization framework that will support local governance and grassroots development.

- The transitional Government has set up a ministry responsible for good governance and privatization to reinforce democratization, reconstitute State capacities, improve economic and social management, and strengthen institutional and human capacities.

Democratic governance program objectives (with donor support)
- (i) Strengthening the capacities of parliamentary institutions.  
- (ii) Establishing a legal and institutional environment that will protect human rights.  
- (iii) Reinforcing the capacities of the judicial and penitentiary systems.  
- (iv) Strengthening the role of civil society in the process of democratizing Burundian society.  
- (v) Preparing for a referendum and elections at all levels of government, in a manner appropriate to the situation prevailing in Burundi.

V.1.1. Strengthening economic governance — Four guiding principles
- (i) Strengthening transparency in government management and combating corruption and economic fraud.  
- (ii) Decentralization and community participation.  
- (iii) Strengthening capacities to manage public affairs.

a. Strengthening transparency and combating corruption
- Measures to increase transparency include institutional mechanisms to ensure access to information and faster, more transparent government services.
- Strategy elements:
  - An open and honest determination by highest government authorities to combat corruption.  
  - Reform of legislation and regulations governing tax and customs privileges or incentives to simplify and make them more transparent.  
  - Introduction of incentive mechanisms to reward integrity and improve working conditions of public officials while subjecting them to effective supervision and sanctions.
- Structural reforms undertaken:
  - Modernizing the legal and regulatory framework for the conduct of business.  
  - Reform of budgetary procedures as part of the public expenditure review.  
  - Adoption of a functional classification of expenditures to link public expenditure commitments with their impact on reducing poverty.
- Planned reforms:
  - Definition of a policy for development of the private sector and promotion of a favorable business environment.  
  - Tax reforms that will foster growth and equity, including mechanisms for informing and advising taxpayers of their rights and duties.  
  - Strengthening mechanisms for the audit and supervision of government revenues and expenditures.  
  - The reform of public procurement.  
  - Regular review of public spending (PER), etc.
- Institutional mechanisms to be introduced:
  - An independent Audit Office, which will report to Parliament on the Government's budgetary performance.  
  - An independent anticorruption oversight entity, involving the private sector, civil society, the press and all other interested players.

b. Promoting decentralization and participation
- Decentralization will capitalize on participatory consultation mechanisms to make communes into hubs of development and make government services more accessible locally.
- Government will transfer revenues to the communes to adopt their own development policies in education, health, basic infrastructure, water and sanitation.
- Introduction of planning mechanisms controlled by communities, promotion of local leadership, and empowerment through training and information.
- Private sector participation will be strengthened through dialogue, reviving "dialogue committees" on taxes, procurement, customs and fraud, and creating a permanent coordination body for private-sector development.
- Development projects will be identified and prepared with participation from beneficiary populations, local governments, associations and NGOs; installation of "community development committees" (CDCs) will be encouraged.

c. Strengthening human and institutional capacities
- Need to strengthen public affairs management capacity at macroeconomic, sectoral and decentralized levels, and the capacities of grassroots communities and civil society.
- Training and upgrading human resources, motivating and retaining skilled personnel, and raising salaries where possible to encourage return of skilled workers.
- Foster a "cult of excellence" with promotions based on competence and personal merit.
- Strengthen institutions for economic management, coordination bodies, analytical tools, planning models and management methods.
- Update planning and management tools and databases regularly; explore use of new communication and information technologies.
- Modernize statistical collection methods and strengthen institutions producing and analyzing statistics: Office of Planning and Finance, the Central Bank, the ISTEEBU, the Permanent Secretariat for Monitoring Economic and Social Reforms by providing software and models.

- Strengthen capacities of civil society organizations, particularly at the grassroots community level and among organizations supporting the modern and informal private sector; train local leaders in literacy, basic management skills and legal knowledge.

### Summary of priority activities 2003-2006 for strategic theme 1: Promoting peace and good governance
Objectives — Priority actions — Indicative schedule
- a. Strengthening efforts to restore peace and security
  - Eradicating any remaining pockets of insecurity. — Ongoing process  
  - Completing the installation of transitional political institutions. — 2003  
  - Establishing and enforcing a permanent cease-fire. — As soon as possible  
  - Socio-economic reintegration of war victims and demobilized combatants. — As soon as possible  
  - Establishing a legal framework supportive of individual rights and freedoms. — 2003-2004  
  - Institutionalizing a promotion system based on objective criteria of competence and personal merit. — Ongoing process
- b. Promoting sound economic governance
  - Reinforcing the transparency of Government management and combating corruption and fraud. — Ongoing process  
  - Introducing mechanisms for informing and advising taxpayers of their rights and duties. — Ongoing process  
  - Finalising the reform of public procurement. — 2003-2004  
  - Creating an Audit Court Account independent of the executive. — 2003-2004  
  - Fostering an independent watchdog against corruption and fraud. — 2003-2004  
  - Reforming laws and regulations governing tax and customs privileges and incentives to eliminate economic distortions and encourage production. — During the program  
  - Completing reforms for promotion of the private sector, in particular those initiated before the crisis with support from the World Bank and USAID. — 2003-2004  
  - Establishing a permanent coordination body between the Government and the private sector as well as consumers. — 2004-2006
- c. Promoting decentralization and participation
  - Introducing viable mechanisms of planning and control by and for the community, in order to improve the management of public affairs. — 2004-2006  
  - Promoting local leadership and empowering grassroots communities. — Ongoing process  
  - Strengthening the institutional capacities of the Community Development Committees (CDCs). — Ongoing process  
  - Preparing a national decentralization policy. — 2003-2005  
  - Decentralizing tax administration to the communes, and preparing "communal development" plans. — 2002-2006  
  - Establishing the Community Development Committees (CDCs) as decentralized development hubs. — 2003-2004

*Source: IMF I-PRSP chapter text.*

### 165.     A prerequisite for any antipoverty strategy is a stable macroeconomic environment

### 165.     A prerequisite for any antipoverty strategy is a stable macroeconomic environment

### Macroeconomic reform objectives
- Four areas of action:
  - (i) consolidate budgetary policy;
  - (ii) prudent monetary policy that will limit inflation;
  - (iii) redefine the role of the State and its relations with the private sector and civil society;
  - (iv) reduce the burden of the public debt through debt relief mechanisms and allocate benefits of that relief to poverty reduction.

### Interim phase targets
- Objectives during the interim phase:
  - achieve an average annual growth rate of about 5 percent by 2006;
  - keep inflation to 5 percent in 2006, and to 5 percent by 2004;
  - achieve a primary budget surplus of 4 percent of GDP by 2006;
  - keep the growth of the money supply within limits compatible with the inflation objective while making available resources to revive private sector activity;
  - maintain foreign exchange reserves at a level higher than three months of imports of non-factor goods and services.

### a. Improving government financial management
- Budgetary policy aims:
  - control and rationalize allocation of public funds;
  - increase government revenues to eliminate a chronic budgetary deficit;
  - achieve and maintain a primary budget surplus of 4 percent of GDP within three years.
- Expanding domestic public revenues — specific measures:
  - extend taxation to currently exempt activities (particularly informal sector);
  - reduce tax and customs exemptions;
  - make tax and customs administration more efficient (step up tax collection, strengthen monitoring and supervision of major corporate taxpayers);
  - establish a single taxpayer identification system;
  - prepare and introduce a value added tax (VAT);
  - IMF technical assistance provided in 2003 and to be reinforced.
- Public expenditure priorities and controls:
  - allocate public funds to priority expenditures including: making public administration more dynamic and effective; reviving agriculture and other rural activities; targeting social services at vulnerable groups in health, education, essential infrastructure, combating HIV/AIDS, and employment creation; directing donor support toward socio-economic reintegration of war victims and returning refugees, including demobilized armed groups;
  - stabilize operating expenses through: reducing direct and indirect subsidies to State-controlled enterprises (SPP); controlling the government payroll by freezing recruitment except in priority social sectors (health, education); capping consumption of certain goods and services; establishing clear sectoral priorities and giving preference to the private sector.
- Enhancing public spending efficiency:
  - undertake Public Expenditure Reviews (PERs) systematically at macro and sectoral levels (agriculture, education, health, energy and mining, roads and transport);
  - computerize the expenditure cycle and identify recurrent project charges for integration into Program-Budgets or Public Expenditure Programs (PDP);
  - allocate investment funding through the Public Investment Program (PIP) in accordance with rationality and efficiency and Interim PRSP priorities.

### b. A prudent monetary policy
- Context and challenges:
  - indirect monetary instruments failed during the socio-economic crisis characterized by sluggish activity and rising public deficits;
  - effectiveness of monetary policy contingent on revival of economic activity.
- Primary objective and measures:
  - ensure price stability so real interest rates become positive;
  - restore sound budgetary practices;
  - Central Bank and Government to set quantitative targets for lending to Government and the public sector;
  - central bank to rely on indirect monetary instruments for lending to the economy.
- Money market, interbank market, and technical assistance:
  - create a money market so the BRB becomes a true lender of last resort;
  - formalize an interbank market for exchange of cash surpluses;
  - BRB to adopt new techniques for monetary programming with technical assistance from the IMF and other central banks.
- Financial sector supervision:
  - BRB to improve number and quality of bank and financial institution inspectors and seek technical assistance and training.

### c. External sector policy
- Crisis impact and exchange rate management:
  - collapse of export receipts, freeze on public development assistance, and economic blockade depleted foreign exchange holdings;
  - provisional exchange control measures in place from November 1997 to June 2000 for current transactions;
  - since July 2000, the Central Bank has conducted weekly auctions of foreign exchange, improved under the program agreed with the IMF and World Bank since 2002;
  - gap between parallel market rate and official auction rate shrunk from nearly 100 percent before auctions to less than 20 percent under the new system.
- Strategies and liberalization:
  - assume exports and international cooperation will be restored;
  - strengthen external financial position and reduce vulnerability to external shocks;
  - gradually remove foreign trade restrictions, reform exchange rate policy, liberalize trade and payments system, and promote exports.
- Exports and competitiveness:
  - promote and diversify exports via tax incentives, streamlined administrative procedures, and support infrastructure;
  - pursue flexible exchange rate policy to balance foreign exchange supply and demand;
  - continue liberalization to reinforce incentives for non-traditional exports;
  - maintain inflation below trading partners’ rates to stabilize the real effective exchange rate.
- Regional integration and investment climate:
  - participate actively in regional integration initiatives and liberalize trade and payments;
  - undertake customs, business legislation, regulation, and investment reforms;
  - Technical Working Group of the Regional Integration Facilitation Forum for Africa (TWG/RIFF) to consider facilitating integration and encouraging foreign direct investment and joint ventures via subregional markets including ZEP and COMESA.

### d. Resolving the external debt burden
- Current debt situation and goals:
  - external payment arrears were US$148.5 million in 2002;
  - debt service payments were more than 157 percent of exports in 2002;
  - Government to negotiate with donors appropriate debt relief mechanisms and restore creditor confidence.
- Two-front strategy:
  - (i) adopt a more responsible strategy for managing indebtedness and government finances;
  - (ii) discuss with bilateral partners suitable solutions to the debt burden problem.
- Debt forgiveness appeals and allocation of savings:
  - Burundi is appealing to bilateral creditors to forgive or cancel debts amounting to approximately 14 percent of total indebtedness;
  - Government will establish a program for allocation and use of savings from debt relief, particularly regarding debt and public finance strategy and social sectors pursuant to the interim PRSP.
- Borrowing constraints and PIP linkage:
  - external borrowing limited to highly concessional loans financing projects included in the Public Investment Program (PIP) and the public deficit;
  - only projects meeting general and sectoral priorities of the I-PRSP included in the PIP.
- Specific allocation priorities for debt relief savings:
  - augment resources for socio-economic reintegration of conflict victims (currently estimated at 15 percent of the population);
  - support social sectors (health care and education), housing, water and sanitation, agriculture, basic infrastructure and economic reconstruction;
  - address street children (estimated at more than 20,000) and combat HIV/AIDS/STDs.

### V.2.2. Promoting steady, high-quality economic growth to reduce poverty: pillar of Burundian economic growth
- Growth potential and required enablers:
  - potential sources of growth across nearly all sectors but require adequate technologies, human capital, efficient financial systems, equipment, and basic infrastructure;
  - reforms needed to transform the rural economy, promote the private sector, restructure public enterprises, and redefine government’s economic role.
- Short- to medium-term priorities:
  - agricultural sector and other rural activities to remain main sources of growth;
  - major challenge: increase agricultural yields to expand marketable goods and exports and raise rural incomes.
- Target crops and other sectors:
  - focus crops: coffee, tea, cotton (high quality but low quantity); non-traditional products including fruits, vegetables, and flowers; crafts, fishing and fish farming;
  - short-term income-generating activities in mines, services, and tourism.
- Intermediate/long-term actions:
  - modernize rural production systems and strengthen research to increase output and productivity;
  - mining sector potential identified with deposits including:
    - lateritic nickel mines in the east (Musongati) with an estimated deposit of 300 million of tons;
    - vanadium in the centre (Gitega) with an estimated deposit of 9.7 million of tons to a content of 0.63 percent;
    - other resources: gold (Mabayi and Muyinga), colombo-tantalite (Kabarore and Murehe), kaolin, limestone for fertilisers and cement production (Moso and Rugombo);
    - additional minerals: precious stones, cassiterite, wolfranite, rare earths, and peat.

### V.2.2.1. Promoting rural development and protecting the environment
- Role of the rural economy:
  - rural economy contributes nearly 50 percent of GDP and supports more than 90 percent of the population;
  - rural sector central to reviving the economy and reducing poverty.
- Strategic targets:
  - recovery of farming and livestock; promotion of cottage industries and microcredit; further decentralization of development; protection of the environment;
  - update landowning legislation, especially management of State lands and those belonging to war victims.

a. Rural development — 1. Reviving the agricultural sector and livestock activities
- Crisis impact and recovery plan:
  - crisis severely impacted farming and livestock; recovery plan aims to restore and surpass pre-crisis output levels;
  - low primary sector output due to food insecurity, malnutrition, lack of good quality seed, high fertilizer prices, underdeveloped agri-food processing and preservation, rural exodus, and dependence on food aid;
  - annual growth in value added for this sector is expected to average 6.0 percent until 2006.
- Short-term actions:
  - (i) revive seed nurseries;
  - (ii) extension work and training to foster modern farming methods;
  - (iii) revitalize livestock by reconstituting decimated herds;
  - (iv) restore soil fertility through lime addition and integrating livestock, farming and agroforestry;
  - (v) revive and diversify cash crops (coffee, tea, cotton, rice and non-traditional crops);
  - (vi) strengthen producer support services through dissemination of innovations and applied research information.
- Medium-term focus:
  - support non-government initiatives by private sector and NGOs (extension, supply and marketing);
  - support agricultural initiatives by CDCs and cooperatives to adopt a more businesslike approach and gradual change in traditional farming methods.
- Expected outcomes:
  - diversify output, improve yields, re-establish food self-sufficiency, produce a marketable surplus, increase monetization of the rural economy, and generate resources for other income-generating activities and nonagricultural employment.
- Budgeting and performance:
  - additional funds required and will necessitate improving budget-programming and assessing performance (cost-effectiveness ratio) by comparing allocations and socio-economic results.

a. Rural development — 2. Improving access to the factors of production in the rural economy
- Conserving soil quality and land use:
  - land degraded by demographic pressure and fragmentation;
  - short-term priority to resettle war victims and returning refugees and draw on State-owned lands to increase cultivable area;
  - wetlands and dry areas (Imbo, the Bugesera and the Moso) identified as suitable for irrigation.
- Farming inputs and affordability:
  - increase use of inputs: fertilizers, varietal seeds, phytosanitary products, and high-performing animal breeds;
  - efforts to use local natural inputs (phosphates, dolomitic limestone) to enhance soil fertility and counter soil acidity;
  - improve marketing facilities for inputs, encourage private investment in rural economy, revive agricultural research, and monetize the rural economy to increase purchasing power.

*Source: _cr0414 - 165.     A prerequisite for any antipoverty strategy is a stable macroeconomic environment*

### 197. Providing quality inputs. The upgrading of inputs is the responsibility of research

### 197. Providing quality inputs. The upgrading of inputs is the responsibility of research

### Quality inputs and research institutions
- Research institutions responsible: ISABU (Institute of Agronomic Sciences of Burundi), FACAGRO (Faculty of Agricultural Sciences), IRAZ (Institute of Agronomic and Animal Research of the CEPGL), and new private universities.
- Resource needs: human, material and financial resources are required for these institutions to play expected roles.
- Priority research targets:
  - Create high-yield seed varieties for main subsistence crops: corn, beans, roots and tubers, bananas.
  - Develop varieties for crops amenable to processing: peanuts and soy.
- Food security imperative: provide research institutions resources to investigate crops in similar agro-ecological regions and test for local adaptation and use.

### National coordination and biotechnology program
- Given required human resource quality and efficiency:
  - Improve cooperation and partnership among research institutions.
  - Government will establish a national plant and biotechnology program to develop improved varieties, with priority to the crops mentioned above.
  - Avoid independent research programs for each crop; favor coordinated national program.

### Seed production and community involvement
- Seed production strategy:
  - Involve farmers' associations and cooperatives in producing marketable seeds.
  - Rely initially on existing extension workers; expect associations to acquire capacity through on-the-job training.
  - Anticipated outcomes: reduced seed production costs and increased affordability for rural families.

### Crop protection measures
- Problem: a significant portion of output is regularly lost to diseases and pests.
- Short-term response: develop and distribute phytosanitary products to protect against principal diseases.

### Short-term rural income measures (cash crops)
- Short-term focus for increasing monetary incomes: cash crops such as coffee, tea, cotton, rice and potatoes.
- Implementation: a well designed and integrated reform for each sector will be implemented in 2004.
- Coffee sector specifics:
  - Low prices and progressive disinvestment have led to continuous decline in yields.
  - Yield increases possible by offering attractive producer price and reducing number of intermediaries.
  - Need to develop a system of producer credit to avoid "standing” sales.
  - Medium-term: integrate coffee growers' associations into the industry, primarily through Coffee Pulping Stations (SOGESTALs).
- Tea and cotton:
  - Research needed to find high-yielding clones resistant to principal diseases.
  - Currently no research focused on cotton.
  - Producers and harvesters need remunerative prices as with coffee.

### Use and management of wetlands
- Approach: extend crops into wetlands, recognizing them as important resource for Burundi.
- Requirements:
  - Collective exploitation and specific legislation governing wetlands.
  - Collective approach for crop selection, agricultural calendar, water management, and facilities operation and maintenance—essential for irrigated crops such as rice.
- Actions:
  - Update wetlands master plan (2001) and water legislation (1992) to account for community constraints and lack of upland farmers' experience with irrigated rice.

### Diversifying agricultural exports
- Strategy:
  - Develop non-traditional export products of high commercial value: garden produce and fruits.
  - Short-term requirements: program for producing and distributing vegetable seeds and fruit and flower seedlings; training extension workers; organizing and coaching horticulture associations.
- ISABU role: has a horticulture program experimenting with new varieties of vegetables and fruits.
- Nurseries: prioritize producing market gardening and fruit seeds.

### Livestock production and reconstitution
- Goals: cover lipid and protein deficiency in diet, reduce malnutrition and related diseases.
- Priorities:
  - Reconstitute livestock herds.
  - Genetic improvement of animal breeds.
- Integrated herd reconstitution program:
  - Include highly prolific, short-cycle small livestock for quick income improvement and suitability to agro-sylvo-pastoral integration.
  - Promote cottage industries and handicrafts to create non-farm employment and reduce imports.
  - Actions: organize handicrafts associations, provide credits, rehabilitate productive units destroyed during crisis, establish a handicrafts support fund.

### Heavy livestock and herd management
- Improvement methods:
  - Crossbreeding cattle with highly productive stock via semen imports and artificial insemination program (preferred over importing non-adapted animals).
  - Veterinarians from extension services to train communities to install and manage insemination centers.
- Herd management techniques:
  - Promote permanent stabling for heavy livestock, swine and poultry to better use harvest residues and increase productivity and organic fertilizer production.
- Feeding and forage:
  - Intensification requires proper feeding: forage and concentrates.
  - Encourage forage crops, especially herbaceous and woody legumes for high-quality forage and soil fertility enhancement.
  - Short-term: import seeds for species already tested by ISABU.
  - Seed industry: emerging industry to produce forage seeds for later multiplication by farmers’ associations and cooperatives.
  - Associations to grow legumes and cereals for producing concentrates.
- Disease prevention and treatment:
  - Sustained effort required to prevent and treat frequent and serious diseases.
  - Short-run purchase of inputs depends on government agencies and donors, with gradual transfer of responsibility to communities and private operators as training is provided.

### Fisheries and aquaculture
- Potential: Lake Tanganyika proximity offers great potential; fishing has been neglected.
- Initial steps: train fishermen, modernize fishing equipment, facilitate access to credit.
- Longer-term focus: processing and preserving fish to reduce losses during transport and overproduction periods.
- Inland regions: rehabilitate abandoned fish ponds and create new facilities.
- Guidance: Development of Aquaculture and Subsistence Fishing Project (DAPA) as guide for creating microenterprises in fish farming.

### Marketing, preservation and processing
- Obstacles: lack of markets for harvest surpluses in good years—need to improve road infrastructure and rehabilitate existing marketing centers and build new ones to reduce transport costs to urban markets.
- Processing and preservation:
  - Develop food processing and preservation techniques and facilities to encourage intensification and add value.
  - Establish small processing units for foodstuffs, livestock and fisheries products.
  - Equip CNTA and ISABU with means to develop appropriate technologies.

### Microcredit, microenterprises and crafts
- Problem: low level of monetization in Burundi, particularly rural areas where potential demand exists but is ineffective.
- Strategy: diversify modes of production by supporting microcredit systems and encouraging small individual and collective microenterprises.
- Rural credit constraints:
  - Financing instruments weak; mobilization of rural savings very weak.
  - Few rural credit institutions; overly centralized and unevenly distributed; lack means to manage credit risk.
  - Need credit mechanisms operating through associations to compensate for lack of collateral.
- Proposed rural credit system:
  - Establish workable system that reduces transaction costs via collective lending to cooperatives and farmers' organizations.
  - Encourage decentralization of private credit institutions and establish savings and loan cooperatives with predominantly rural membership.
  - Donor support: provide technical, financial and institutional assistance.
  - Implement a program for coaching communities in preparing and monitoring micro-undertakings.
- Crafts promotion:
  - Build on initiatives to revive traditional crafts: pottery, metalworking, basket weaving.
  - Encourage micro-entrepreneurs into unexploited areas: food processing, hides and leather, carpentry, masonry.
  - Formulate and implement coordinated handicrafts development policy:
    - Identify promising niches regionally.
    - Establish common work spaces for craftsmen and producers.
    - Provide technical assistance and appropriate financing and credit.
    - Create mutual surety system, management training and marketing assistance.

### Natural resource management and environmental protection
- Necessity: rationalize natural resource management and environmental protection for sustainable economic development.
- Identified damaging practices: repeated land clearing, cultivation of marginal lands, forest clearing, haphazard land use; compounded by arson and spread of refugee camps.
- Government strategy components:
  - (i) ongoing environmental awareness and education program;
  - (ii) biodiversity preservation: protection and restoration of vegetation cover, creation of natural forest reserves, expansion of artificial reforestation;
  - (iii) action program to combat land degradation and desertification;
  - (iv) strategy for implementing United Nations Framework Convention on Climate Change, protection and conservation of water and aquatic resources, maintenance of healthy environment, prevention of natural disasters through integrated program including resource assessment, preparation of regional maps and operational plans, databases;
  - (v) preparation and implementation of a master plan for water covering rural and urban areas.
- Water resources: program for water collection and management to offset climatic fluctuations and seasonal droughts.
- Forestry sector: introduce institutional mechanisms and incentives to encourage private sector and NGOs involvement; identify natural sites for protection and adopt legislation to delimit protected areas.

### Reviving private sector and state disengagement
- Objective: expand production, transform agriculture and marketing, and promote microcredit and microenterprises by enabling private sector to play full role; State to focus on regulation.
- Key thrusts: revive private sector, disengage State from productive system, industrialize country, promote tourism and services, pursue regional integration.
- Study: a study on sources of growth will be conducted with World Bank support during PRSP preparation to guide productive investment.

### Measures to revive private sector
- Background: reforms during Structural Adjustment Program (1986-1992) produced a liberal legal framework with progress in (i) deregulating prices; (ii) introducing export incentives; (iii) liberalizing foreign trade; (iv) making exchange control system more flexible; (v) simplifying enterprise creation procedures; (vi) creating an institutional and regulatory framework conducive to business development.
- Shortfall: implementation results modest—limited enterprise creation and private investment growth.
- Government conviction: sustainable growth requires dynamic, diversified private sector with export orientation.
- Policy focus on four areas:
  - (i) short-term emergency actions;
  - (ii) further reforms to legal and regulatory framework;
  - (iii) reinforcing incentives for private investment;
  - (iv) disengaging State from productive sector and privatizing public enterprises.
- Emergency actions include:
  - (i) clearing Government's domestic arrears;
  - (ii) introducing support mechanisms for economic operators disadvantaged by reconstruction;
  - (iii) rehabilitating business centers, productive infrastructure and marketing channels disrupted during crisis, and creating a private sector recovery fund.
- Legal and regulatory reforms will include:
  - (i) application of already adopted laws and regulations: the notaries law, the corporations code, the commercial code, the labor code, and others;
  - (ii) completing and adopting reforms prepared at technical level (legal framework for guarantees and third party holdings, bankruptcy and reorganization law);
  - (iii) modernizing commercial court to improve functioning and reduce time to settle commercial disputes and execute judgments;
  - (iv) restructuring public institutions that provide private sector support and helping private advisory organizations become more effective;
  - (v) improving services to economic operators and reducing red tape by moving toward a "one-stop system."
- Incentives for private investment:
  - Target creating environment favorable to non-traditional exports, foreign direct investment and joint ventures.
  - Risk mitigation: Government participates in African Trade Insurance Agency’s (ATIA) regional scheme against political risks; concluded and applied peace accord among political forces; eradicating pockets of insecurity.
  - Government to launch investor awareness campaign highlighting progress in reducing political risk.
- Wide-ranging structural reforms to be initiated, covering:
  - (i) tax incentives;
  - (ii) support for services sector;
  - (iii) revival of free zone regime;
  - (iv) reform and dissemination of investment code;
  - (v) efforts to make transport and communications more efficient;
  - (vi) promotion of mining sector;
  - (vii) revival of agroindustry sector.

*Source: _cr0414 - 197. Providing quality inputs. The upgrading of inputs is the responsibility of research*

### 234. Tax incentives. A reform of the taxation code (covering both taxes and customs

### 234. Tax incentives. A reform of the taxation code (covering both taxes and customs duties)

### Tax policy reform
- A reform of the taxation code (covering both taxes and customs duties) will be undertaken to:
  - make it more equitable to taxpayers,
  - eliminate existing distortions,
  - harmonize it with other existing legislation, in particular the investment code.

- Pertinent legislation will be further improved to encourage activity in the free zone with the objective to:
  - increase investment and the number of firms operating under the free zone regime,
  - encourage employment and the transfer of technology in favor of Burundi.

- Tax advantages will be offered as an incentive to industry, drawing upon sub-regional experience.

### Customs and investment-related preferences
- Support measures to improve performance include:
  - extending customs preferences to all investment-related equipment and spare parts,
  - developing infrastructure of interest to investors, such as industrial zones, industrial buildings and warehousing facilities.

### Privatization of public enterprises
- The privatization of public enterprises will be stepped up to:
  - stimulate the national production system,
  - reduce the burden they place on the Government's finances.

- The process and pace of privatization will be guided by the principles of transparency and equity and will include:
  - close association with management and labor,
  - an Information, Education and Communication (IEC) strategy,
  - mechanisms for compensation and professional reclassification of employees in cases of restructuring and liquidations,
  - solicitation of financial partners to contribute to preparation and implementation.

### Constraints identified for privatization
- Major constraints encountered to date:
  - widespread hostility on the part of management and labor;
  - hesitation and a wait-and-see attitude on the part of policymakers;
  - inadequate capacities for appraising and transferring assets;
  - insufficient level of private domestic savings;
  - the social and political crisis that began in 1993 and the economic blockade of 1996-1999, which stymied partners and halted efforts.

---

### b. Stimulating private investment and industrialization

### Strategic focus and priority fields
- Objective: industrialize the country through the private sector to revive growth and reduce poverty.
- Priority fields for private activity:
  - agroindustry;
  - manufacture of basic products such as fertilizers, pesticides, pharmaceutical goods;
  - traditional cash crops (coffee, cotton, tea);
  - non-traditional crops such as fruits and vegetables, and flowers.

### Export promotion and logistics
- Particular attention to encouraging exports of non-traditional products (for example, fruits, vegetables, and ready-made clothing) where Burundi has comparative advantages.
- Steps to improve efficiency of transit, warehousing and air transport services to:
  - reduce the cost of air freight for exporters,
  - improve handling of perishable goods awaiting shipment.

### Investor support measures
- Support measures include:
  - extending customs preferences to investment-related equipment and spare parts (as above),
  - developing investor-relevant infrastructure: industrial zones, industrial buildings, warehousing facilities,
  - offering tax advantages to industry.

---

### Promoting the mining sector

### Strategic actions
- Launch a national mining promotion program targeted at funding agencies.
- Improve the legal and regulatory framework to attract private local and foreign investors with required capital and skills.

### Mineral endowment and potential contributions
- Proven deposits include: nickel, gold, cassiterite, vanadium, phosphates, carbonatites, platinum, peat and some industrial minerals.
- Exploitation is at an early stage but could contribute significantly to increasing production and foreign currency.

### Short-term exploitable potential
- Short-term mining exploitable potential concerns:
  - production of limestone used as component of soil fertilisers and in the production of cement;
  - exploitation of gold;
  - exploitation of colombo-tentalite mineral;
  - production of natural stones and installation of a ceramics plant.

### Medium- to long-term exploitable potential (explicit estimates)
- lateritic nickel:
  - an estimate of 300 million tons,
  - planned annual production of 45 million tons as extended to 20 years for a total of US$1.6 billion ;
- colombo tentalite:
  - planned annual production of 24 million tons as extended to 25 years for a total of US$57 million;
- vanadium:
  - an estimate of 9.7 million tons at a content of 0.63 percent.

---

### Infrastructure and production support services
- Energy, roads and business centers will be rehabilitated and expanded to serve all of the country's secondary urban centers.
- Greater access to new information and communication technologies will be sought to reduce production costs and support increase and diversification of production.

---

### c. Promoting tourism and the services sector

### Services sector objectives
- Strengthen transportation, posts, and telecommunications to:
  - (i) reduce the risk of supply disruptions by diversifying communication channels;
  - (ii) provide domestic and international operators with facilities and services that meet international standards recognized by the International Civil Aviation Organization (ICAO);
  - (iii) reduce the impact of transportation costs on the price of imported and exported goods;
  - (iv) make rural telephone service universal;
  - (v) develop new postal services such as e-mail and improve the management of telecommunications by making the Telecommunications Regulatory and Supervisory Agency (ARCT) operational.

### Regional crossroads potential
- Given its geographic position, Burundi could serve as a regional crossroads, which would require:
  - construction of efficient transportation infrastructure,
  - building a free port on Lake Tanganyika,
  - constructing rail links to Southern, Central and East Africa as part of a sub-regional investment plan.

### Tourism development
- Burundi has assets for tourism assuming consolidation of peace and security:
  - sites of historic interest and landscape beauty could become popular tourist destinations,
  - development needs include construction of hotels, access roads and development of tourism know-how.

---

### d. Privatization and disengagement of the State from the production system

### Objectives of State withdrawal
- Main objectives:
  - restructuring the productive base;
  - fostering competition and greater efficiency in all productive sectors;
  - reducing the burden of public enterprises on the Government's finances.

### Policy actions
- Pursue a policy of liberalization, including privatization of production, processing and marketing activities.
- Approach privatization with measures to surmount past obstacles, including:
  - transparency and equity principles;
  - involvement of management and labor;
  - IEC strategy and mechanisms for compensation and reclassification;
  - engagement of financial partners.

---

### Summary of priority activities 2002-2006 for strategic theme 2: Reforming the macroeconomic framework and promoting high-quality economic growth

- a. Strengthening macroeconomic stability
  - Strengthening the government's finances through a policy of rationalizing public spending allocations and increasing government revenues.
  - A rigorous and efficient monetary policy appealing to indirect instruments.
  - Strengthening the central bank’s capacities for banking supervision and control.
  - Adopting a realistic exchange rate policy and liberalizing the trade and payments system.
  - Indicative schedule:
    - Ongoing process
    - Since 2003
    - Ongoing process
    - Since 2003

- b. Developing the rural economy by reviving farming and livestock activities
  - An active rural development policy that will provide access to factors of production.
  - Encouragement and support for modern farming methods.
  - Enhancing productivity and promoting active research.
  - Promoting irrigated farming through the exploitation of wetlands.
  - Organizing marketing channels and food preservation and processing techniques.
  - Reconstituting cattle and sheep stocks that were decimated during the crisis, by disseminating artificial insemination techniques.
  - Encouraging rural microcredit and microenterprises.
  - Fostering the development of fisheries and fish farming.
  - Indicative schedule:
    - Since 2003
    - Ongoing process
    - 2003-2006
    - 2003-2006
    - 2004-2006
    - 2002-2006
    - 2002-2006
    - 2002-2006

- c. Rationalizing the management of natural resources and protecting the environment
  - A continuous awareness and education campaign for environmental protection (IEC strategy).
  - Preparing environmental protection legislation.
  - Indicative schedule:
    - 2002-2006
    - 2003-2004

- d. Reviving the private sector and gradually disengaging the State from the productive system
  - Support for economic operators disadvantaged through reconstruction efforts.
  - Rehabilitating business centers, productive infrastructure and communications damaged during the crisis.
  - Preparing legislation and reforms for modernizing business law.
  - Reinforcing incentives for private investment.
  - Indicative schedule:
    - 2003-2006
    - 2003-2004
    - 2003-2005
    - 2004-2006

---

### THEME 3. DEVELOPING HUMAN CAPITAL

### Overall objective and approach
- Government objective: restore and exceed pre-crisis performance levels by the year 2005.
- Priority social fields: health, water and sanitation, education, advancing the role of women in development, promoting employment, enhancing national culture, providing educational opportunities for youth.
- Two-pronged approach to improve access to basic services:
  - offer high-quality services and bring them close to beneficiaries;
  - make services affordable given financial realities and purchasing power of beneficiaries.
- Commitment to progressively increase expenditures linked to poverty reduction:
  - increase social expenditures (education, health, reinsertion conflict affected victims and other social sectors);
  - increase expenditures in the rural development sector (agriculture and communal development).

---

### V.3.1. Education

### Problems identified
- Education system deficits:
  - (i) shortage of teaching personnel and heavy pressure on infrastructure;
  - (ii) inappropriate teaching programs;
  - (iii) geographic, regional and social disparities;
  - (iv) inadequate attention to technical and vocational training;
  - (v) poor organization and weak institutional capacities for monitoring the sector, in particular private education.

### Short-term actions
- Rehabilitate facilities damaged during the crisis and build new facilities.
- Redeploy personnel to areas where there are shortages.
- Ensure availability of minimum supplies and teaching materials.
- Organize teacher training courses and examine in-depth reforms to the system.

### Medium- to long-term strategies
- Launch strategies to revive sector development including:
  - training of trainers at all levels in sufficient quantity and quality;
  - providing suitable teaching materials for both public and private institutions;
  - updating technical education and university programs;
  - upgrading the status and career prospects of teachers;
  - better school planning and improved distribution of schools (the "school map");
  - maximizing schools' role in restoring confidence among different population segments and promoting national reconciliation;
  - developing a national policy for vocational training targeted at young people who have no schooling.

### Teacher training and private initiatives
- Improve teacher training in cooperation with agencies; recognize and upgrade teaching career status.
- Encourage private educational initiatives by making available infrastructure, teaching materials and teacher training with international cooperation support.

### Specific objectives by level
- Primary level:
  - specific objective: universal enrollment;
  - primary schooling to be gradually made compulsory for all and free for indigent families.
- Secondary level:
  - encourage establishment of community colleges;
  - require substantial Government and donor support for materials, qualified staff and minimal facilities;
  - colleges to move gradually to a full cycle to eliminate bottlenecks in transition to advanced cycle.
- Higher education:
  - ensure large numbers of secondary graduates can access acceptable quality higher education;
  - ensure qualified teachers are motivated for instruction and research;
  - diversify teaching courses to balance training with market needs;
  - encourage private schools to provide quality education;
  - encourage schools to offer the third cycle where possible.

### Planning
- Update and supplement studies to produce a National Education and Training Plan defining and coordinating roles of local communities, parents, NGOs, the private sector and donors.

---

### V.3.2. Health

### a. Improving availability and quality of health services
- Overall aim: improve the state of health of the population so every citizen can lead a socially and economically productive life.

### Major challenges
- Persistent challenges:
  - AIDS pandemic;
  - resurgence of endemoepidemic diseases (bacillary dysentery, measles, malaria, cholera, typhus and meningitis) thriving in a setting of widespread malnutrition and food insecurity;
  - low level of health care coverage indicators;
  - inadequate human resources and inadequate distribution of medical personnel;
  - dysfunctional health system with organizational problems and inadequate financing and equipment.

### Short-term objectives and actions
- Restore pre-crisis performance levels focusing on:
  - (i) improving health care coverage by rehabilitating and strengthening existing basic health services, establishing new facilities consistent with health map standards, and reequipping health centers;
  - (ii) strengthening preventive and curative medicine by reinforcing programs for prevention and control of major endemoepidemic diseases, vaccination, reproductive health, and health education;
  - (iii) improving availability of medical services and drugs by enhancing local production capacities and improving distribution channels;
  - (iv) redeploying available human resources to areas of shortage while continuing ongoing training of medical personnel.

### Medium-term sectoral reforms
- Pursue reforms including:
  - (i) defining a new drugs policy and new financing strategies involving beneficiaries through mutual and health insurance schemes appropriate to the non-structured sector and affordable for poor rural families;
  - (ii) making health establishments more independent;
  - (iii) ensuring health care for the most vulnerable groups.

### Role of private sector
- Encourage private initiative while maintaining government control over costs of health services provided in private establishments by expanding scope of mutual insurance schemes.

### b. Drinking water, hygiene and sanitation
- Special attention to improving access to drinking water and sanitation through:
  - (i) rehabilitating and upgrading water sources and supply systems;
  - (ii) strengthening water production units;
  - (iii) strengthening existing sanitation programs and expanding them nationally;
  - (iv) public education and awareness campaigns about proper hygiene and sanitation practices.

*Source: Excerpt from the IMF staff report chapter "_cr0414 - 234. Tax incentives. A reform of the taxation code (covering both taxes and customs duties)".*

### 264. Health problems linked to poor nutrition must also be addressed. Nutritional

### _cr0414 - 264. Health problems linked to poor nutrition must also be addressed. Nutritional

### Nutritional and communicable disease interventions
- Strengthen the program to combat communicable and nutrition-related diseases (LMTC) to:
  - address vitamin, iodine and iron deficiencies among certain population groups;
  - treat severe cases of malnutrition.
- Implement nutritional education programs throughout the country.

### V.3.3. Improving basic social services
- Government commitments:
  - (i) allocate more funding to social services to provide adequate means and infrastructure, drinking water and electricity, suitable materials and equipment, and sufficient numbers of trained personnel;
  - (ii) foster community management of social infrastructure;
  - (iii) sponsor partnership with other social players, including the private sector and civil society, to coordinate efforts.

### V.3.4. Employment and social security
- Objective: develop a clearer understanding of the labor market as the basis for an appropriate national employment policy to enhance employment opportunities.
- Strategies to achieve the objective:
  - (i) preparation of the national employment policy;
  - (ii) making employment services more effective;
  - (iii) encouraging private investment;
  - (iv) identifying promising employment niches;
  - (v) promoting self-employment and labor-intensive projects;
  - (vi) collecting statistical data on employment, underemployment and unemployment, through studies and surveys;
  - (vii) integrating the employment variable into macroeconomic planning;
  - (viii) making greater use of the land as a resource and providing help to farmers and agronomists seeking to establish their own farming or livestock operations;
  - (ix) supporting the handicrafts sector and the informal rural and urban sector;
  - (x) instituting a program for professional reclassification and reintegration;
  - (xi) introducing a social security system covering all sectors: Government, the structured private sector, handicrafts and agriculture.

### V.3.5. Housing
- Goals and measures:
  - ensure people have decent dwellings;
  - make building sites available to the average Burundian;
  - support craft associations producing local construction materials;
  - expand housing credit facilities to a larger number of households in both rural and urban areas.

### V.3.6. Reaffirming the national culture and youth guidance
- Context:
  - traditional values of Ubushingantahe were severely undermined by the social and political crisis.
- Government actions:
  - reaffirm and reinforce values represented by Ubushingantahe (respect for the truth and for equity, sense of honor and humanism, recognition of merit, devotion to efficiency, originality and respect for one's word);
  - enrich school and academic programs with components to cultivate positive values;
  - provide training and integration into the labor force for youth outside the school system;
  - rehabilitate and expand vocational training centers;
  - promote youth associations to pursue income-generating activities.
- Note on Ubushingantahe:
  - traditional values embodied by persons known for integrity, tolerance, equity, honesty; contributed to settling domestic disputes; held respectable positions without salary.

### Summary of priority actions 2002-2006 for strategic theme 3: Making basic social services available for the development of human capital
- a. Improving the availability and quality of education services
  - Rehabilitation and construction of new school facilities. — 2002-2006
  - Applying the draft statute for the teaching profession in order to upgrade this sector. — 2003
  - Providing suitable teaching materials to public and private education establishments. — Ongoing process
  - Expanding the enrollment capacity of the University of Burundi. — Since 2003
  - Encouraging private initiatives in the education field. — Ongoing process
- b. Improving the availability and quality of health services
  - Rehabilitation and construction of health facilities in order to improve nationwide coverage. — Since 2003
  - Implementing an aggressive drugs supply policy. — Since 2003
  - Redeploying health personnel to areas most in need. — Since 2003
- c. Improving the availability of drinking water and hygiene and sanitation services
  - Rehabilitation and upgrading of water sources and supply systems. — Since 2002
  - Public education and awareness about hygiene and sanitation standards. — Since 2002
  - Promoting community management of standpipes and wells. — Since 2002
- d. Promoting employment and social security
  - Preparation of a national employment policy. — 2004-2006
  - Encouragement of employment-generating private investments. — Since 2002
  - Promotion of labor-intensive activities. — Since 2002
  - Integrating the employment variable into macroeconomic planning. — 2004-2006
  - Preparation of a social security policy covering hitherto excluded categories (such as the informal sector and farmers). — 2004-2006
- e. Providing decent housing for all
  - Encouraging the production of local construction materials. — Since 2002
  - Improving access to housing loans. — Since 2002
- f. Reaffirming the national culture and improving educational opportunities for youth
  - Reaffirmation of the institution of Ubushingantahe. — Since 2003
  - Expanding vocational training centers and the teaching of trades to young people. — Since 2002
  - Promoting youth associations for the pursuit of income-generating activities. — Since 2002

### THEME 4. Reintegrating conflict victims and disadvantaged groups into the economy
- V.4.1. Social rehabilitation and economic reconstruction
  - Crisis impacts:
    - internal refugees and those who have fled abroad totally estimated at about 15 percent;
    - street children and orphans: 20,000.
  - Priorities:
    - follow Protocol IV of the Arusha Peace and National Reconciliation Accord and conclusions from participatory consultations;
    - pay attention to socio-economic reintegration of demobilized armed groups;
    - reintegrate war victims and rebuild destroyed facilities to revive medium- and long-term growth and reduce poverty.
  - Measures:
    - restore victims to former properties where possible or arrange new properties where return is impossible;
    - establish a National Commission for the Rehabilitation of War Victims (CNRS);
    - focus reconstruction and rehabilitation on:
      - (i) implementing the priority action program of the Interim PRSP submitted to the Geneva donors conference in November 2002 (emergency social program (PSU));
      - (ii) combining reconstruction activities with socio-economic reintegration of victims;
      - (iii) prioritizing rehabilitation of community facilities such as urban centers, business centers, health establishments, schools, water supply systems, communication links;
      - (iv) improving coordination and partnership among the private sector, NGOs, donors and grassroots communities.
  - Short-term focus:
    - food assistance;
    - construction of housing, including land issues;
    - distribution of essential agricultural inputs;
    - establishment of a minimum social fund.

- V.4.2. Assistance for disadvantaged and vulnerable groups
  - Target groups: victims of war, disabled, orphans, street children, widows, the Batwa.
  - Short-term measures:
    - provide basic services free of charge to these groups;
    - provide special housing for groups with disabilities and orphans.
  - Medium-term measures:
    - use a special socio-economic reintegration fund to promote income-generating activities;
    - give hiring preference in labor-intensive public works and construction projects;
    - provide vocational training;
    - encourage placement of orphans in foster homes, school enrollment, and support for widowed heads of households.
  - Additional measures:
    - introduce socio-professional reintegration and retraining mechanisms;
    - provide an information service on job opportunities for out-of-school youth and demobilized combatants;
    - implement special social and cultural integration measures for the Batwa focused on education and literacy campaigns.

### Summary of priority actions 2002-2006 for strategic theme 4: Reintegrating war victims and disadvantaged groups into the economy
- a. Rehabilitating war victims
  - Humanitarian assistance for displaced persons and returning refugees. — As long as necessary
  - Strengthening socio-economic reintegration of displaced persons and returning refugees. — Since 2002
  - Strengthening access to land and farming inputs to war victims. — Since 2002
  - Establishing a minimum social fund for the socio-economic reintegration of refugees. — Since 2002
  - Helping war victims to organize for self-development. — Since2002
  - Assistance for people disabled by the war. — Ongoing process
  - Establishment of the CNRS. — Since February 2003
- b. Assisting and reintegrating disadvantaged and vulnerable groups into the economy
  - A program for the reintegration and education of orphans and disabled persons. — Since 2003
  - Social and cultural integration of the Batwa. — Ongoing process

### THEME 5. Combating HIV/AIDS and sexually transmitted diseases (STDs)
- Strategic focus: prevention; care for persons infected; alleviating impact on other sectors; strengthening capacities among players.
- V.5.1. Strengthening prevention programs
  - Objectives and actions:
    - prevent transmission from mother to child by expanding appropriate facilities throughout the country;
    - awareness-building, education, and dissemination of information related to prevention;
    - identify and train community leaders to inform and educate peers about HIV infection and transmission;
    - reinforce mass education and information campaigns through national media and involve political and social leaders;
    - popularize the syndrome approach endorsed by the WHO and adapt it based on evaluation of STD prevalence and germ sensitivity to drugs;
    - produce and distribute educational materials and guides for medical and psychological care of HIV victims;
    - train health-care workers in the use of these guides.
- V.5.2. Providing care and supporting self-help initiatives for persons infected by AIDS and HIV
  - Support measures:
    - improve quality of care for opportunistic infections;
    - expand and strengthen psychological care and social assistance for persons living with HIV/AIDS in health facilities, community and family;
    - improve availability of antiretroviral drugs and monitoring of patients receiving those drugs;
    - reinforce care for AIDS orphans;
    - help patient support associations and affected families mobilize funds for income-generating activities.
- V.5.3. Reinforcing facilities for combating HIV/AIDS
  - Capacity-building measures:
    - strengthen support for NGOs active against AIDS;
    - strengthen system for collecting and managing information on HIV/AIDS/STD infections;
    - establish a workable institutional framework for coordinating national efforts against AIDS;
    - strengthen capacities of players at all levels.
- V.5.4. Establishing a legal framework for the protection of persons living with HIV/AIDS (PLHA)
  - Legal actions:
    - introduce a framework of legal protection for PLHA;
    - adopt a law regarding legal protection of PLHA;
    - ensure legal assistance for PLHA;
    - establish a system and structure for the legal protection of orphans;
    - support the work of the Committee on Legal Ethics and HIV and the information system;
    - support operational research into HIV/AIDS, including traditional medicine.

### Summary of priority actions for 2002-2003 for strategic theme 5: Combating HIV/AIDS
- a. Strengthening prevention programs
  - Extending mother-child prevention centers to all parts of the country. — Since 2003
  - Prevention awareness and education campaigns. — Since 2003
  - Popularizing the WHO-endorsed syndrome approach. — Since 2003
  - Involving political and social duties in awareness activities. — Since 2002
  - Producing and distributing medical and psychological care guidance and teaching materials about HIV infection. — Since 2003
- b. Promoting care and supporting self-help initiatives for HIV and AIDS patients
  - Making antiretroviral drugs more accessible and monitoring patients taking those drugs. — Since 2002
  - Reinforcing care for AIDS orphans. — Since 2003
  - Distributing condoms and publicizing their use. — Ongoing process
  - Putting out a consistent message about condoms. — Ongoing process
  - Stressing targeted information campaigns rather than mass campaigns. — Since 2003
  - Supporting the "stop AIDS" clubs in the schools. — Since 2003
  - Encouraging homecare for AIDS patients to relieve the burden on hospitals (with the help of international community). — Since 2003
- c. Strengthening institutional capacities for combating HIV/AIDS
  - Reinforcing cooperation with NGOs in combating AIDS. — Since 2003
  - Reinforcing the system for collecting and managing information on HIV/AIDS/STDs infections. — Since 2003
  - Strengthening the capacities of players at all levels. — Since 2003

### THEME 6. Advancing the role of women in development
- Demographic and economic context:
  - women account for nearly 52 percent of the total population;
  - women account for more than 52 percent of the economically active population;
  - women are 55.2 percent of the agricultural workforce;
  - agriculture is 56 percent of GDP.
- Implications:
  - the potential role of women in national development is decisive for promoting development and reducing poverty.
- Challenges and objectives:
  - despite legal and institutional reforms, women remain underrepresented in decision-making bodies;
  - address women's participation at all levels with specific objectives on access to education and training, factors of production, basic services, and decision-making power.

*IMF country report content unit _cr0414 - extracted text.*

### 291. Education. The strategy is to raise education levels for women in order to reduce

### _cr0414 - 291. Education. The strategy is to raise education levels for women in order to reduce

### Education and women's skills
- Strategy: raise education levels for women to reduce gender disparities noted.
- Measures: promote education for girls at the different levels of schooling.
- Technical training centers will be created for women to provide skills in areas such as credit management and business organization, and to help diversify activities (crafts, commercial activities).
- Women will be offered vocational training and specialization courses, including work-study programs, to seize employment opportunities in national and international labor markets.

### Decision-making, awareness, and household status
- A gender equity awareness campaign will be conducted to encourage society to give women the same chances as men.
- Women must have control and decision-making power over management of family assets; society must be sensitized to gender equity to improve women's status within the household.
- Disseminate and enforce laws promoting gender equity (CPF, CDF, etc.).

### Maternal-child health (V.6.2)
- Objective: enhance the state of health of mothers and children.
- Actions:
  - Continuous training in new family planning techniques will be provided.
  - Education campaigns on nutrition, hygiene and reproductive health will be reinforced.
  - Maternal and child health will be promoted at all levels.
  - Action will be taken against HIV/AIDS and STDs.

### Promoting women's access to factors of production (V.6.3)
- Goal: advance women's ability to participate actively in development by giving greater access to factors of production.
- Access to land:
  - Prepare and enforce egalitarian legislation in general, and succession rights in particular.
  - Once a woman has access to land, she can use it as a guarantee to secure financing.
- Access to financing:
  - Foster employment and income-generating initiatives through community organizations.
  - Create mutual associations allowing members to pool collateral when seeking credit.
- Develop a credit system appropriate to women's needs.

### Strengthening community organizations (V.6.4)
- Many newly created associations face organizational problems.
- Launch strategies for strengthening women's organizational capacities so associations become viable and attain objectives.

### Alleviating women's chores (V.6.5)
- Observation: household chores largely fall to women, limiting time for income-enhancing activities.
- Action: disseminate appropriate technologies to reduce household work and enhance productivity, e.g., introduction of milling equipment, husking machines in rice-growing areas, and small-scale farm machinery and draught animals.

### Summary of priority actions 2002-2003 for strategic theme 6: Advancing the role of women in development
- Objectives and priority actions (indicative schedule):
  - a. Promoting women's access to education and decision-making
    - Improve women's access to formal education.
    - Disseminate and enforce laws promoting gender equity (CPF, CDF, etc.).
    - Indicative schedule: Ongoing process; Ongoing process.
  - b. Promoting maternal-child health
    - Promote family planning.
    - Organize education campaigns in nutrition, hygiene and reproductive health.
    - Promote maternal and child health.
    - Indicative schedule: Ongoing process; Ongoing process; Ongoing process.
  - c. Promoting women's access to the factors of production
    - Develop a credit system appropriate to women's needs.
    - Indicative schedule: Ongoing process.

### Participatory process for the I-PRSP (VI)
- The I-PRSP was prepared based on participatory consultations at sectoral and community levels, highlighting characteristics and determinants of poverty and provincial disparities, leading to selection of strategic themes and priority actions.
- Institutional organization: Organizing and Coordinating Team (EOCPP), Permanent Secretariat for Monitoring Economic and Social Reforms, technical ministries (Planning, Finance, Statistics Institute, social sectors, rural sector, advancement of women), civil society associations, and grassroots communities; structure headed by a ministerial committee reporting to the Government; Economic and Social Council involved.

### Participatory consultations and outreach
- Consultations occurred at sectoral and community levels between July 2000 and January 2002 in Bujumbura and four geographic regions (Ngozi, Bururi, Gitega, Bujumbura).
- Participation: more than 3,400 people delegated by their communities from the country’s 17 provinces; 30 percent of them were women.
- Participants included civil society, the Bashingantahe, NGOs, religious denominations, women's and youth associations, sectoral ministries, the private sector, Parliament, community development organizations, communes, political leaders, and decentralized technical agencies.
- Methods: facilitators, moderators and rapporteurs with PRA expertise led consultations; results produced regional and sectoral reports and summary reports.
- Feedback workshops held in January and February 2002.

### Communication and information dissemination
- Publicizing information:
  - Initial draft and available poverty data distributed to groups and partners for comment.
  - Radio and television broadcasts on the PRSP.
  - Articles in public and private press and various magazines.
- Seminars and workshops:
  - Thematic workshops on agriculture, rural development and the environment; health, nutrition, water and sanitation; HIV/AIDS; education, vocational training, literacy training; integration of war victims; gender and social action.
  - Seminars/workshops with civil society organizations and grassroots communities.

### Financing mechanisms for the I-PRSP (VII)
- Implementation requires mobilization of domestic funds, external assistance, and rational allocation and management of resources.
- Mobilizing revenues:
  - Specific actions to increase public revenues: expanding the tax base, reforming exemptions, improving efficiency of tax and customs administration, stepping up revenue collection including arrears, introducing a value-added tax (VAT).
  - Technical assistance requested from the IMF on VAT.
- Public spending profile:
  - Improve targeting of funds to priority actions identified through participatory consultations.
  - Pursue improvements via a Public Expenditure Review (PER) with World Bank support.
  - Other reforms: automating the expenditure cycle; preparing medium-term budgetary frameworks; program budgets; Public Investment Programs (PIPs) on a three-year sliding basis.
  - Sectoral policies and action plans being prepared based on I-PRSP priorities.
- Other financing:
  - Savings from debt relief mechanisms will be earmarked for priority poverty-reduction actions.
  - Increase domestic savings via strategies for increasing per capita incomes to revive economic growth.
  - Seek additional resources through international assistance, specifically assistance announced at the last Donors Roundtable in Geneva in December 2001.
  - Encourage private capital via foreign direct investment or joint ventures through planned reforms promoting private sector and exports.

### Coordination mechanisms (VII.2)
- PRSP serves as an operational frame for coordinating activities of different partners.
- Partners asked to harmonize recommendations, reforms, methods, procedures, and practical project execution provisions to speed disbursement and enhance absorption capacity while preserving transparency and sound financial management.
- Partners asked to strengthen national capacities for policy preparation and budgetary forecasting, and to reinforce project absorption capacity.

### Monitoring and evaluation system for the I-PRSP (VIII)
- Participatory monitoring (VIII.1):
  - Permanent Secretariat for Monitoring Economic and Social Reforms will establish a national network for the PRSP as a participatory framework for exchanging experience and information among individuals, civil society associations, community development committees (CDCs), religious denominations, international NGOs, and provincial and communal governments.
  - Focus areas: effectiveness of public spending on social sectors and basic infrastructure, campaign against HIV/AIDS, agricultural output, good governance, and proposals to improve I-PRSP implementation.
- Capacity building (VIII.2):
  - Implementation of participatory monitoring and evaluation will be accompanied by capacity building for government players and civil society organizations and NGOs; assistance from fund donors requested.
  - Statistical monitoring: seek additional external resources and technical assistance for regular production of key indicators; improve coordination between ISTEEBU and sectoral statistical offices for social sectors.
  - Prepare a short- and medium-term action plan and a three-year operational program prioritizing indicators for monitoring the poverty reduction strategy, including achievement of the Millennium Development Goals (MDG).
- Monitoring and evaluation components (VIII.3):
  - Three grassroots components:
    - The "poverty monitoring" component.
    - The "poverty reduction strategy execution monitoring" component.
    - The "poverty reduction strategy and policy impact evaluation" component.
  - Burundi has conducted general censuses in 1979 and 1990 and plans to conduct a third general census as soon as possible.
  - Quantitative indicators for 2000-2002 prepared on the basis of DHD data, the CWIQ survey, and conclusions from economic consultations with the Bretton Woods institutions.
- Monitoring poverty (VIII.3.1):
  - Permanent poverty information system requirements:
    - Inexpensive and readily usable while preserving rigor in data collection and analysis.
    - Target most important indicators for measuring and characterizing poverty, vulnerability and inequalities.
  - Primary objectives of the permanent information system:
    - Provide an up-to-date, consistent and reliable overview of household living conditions.
    - Allow living conditions to be monitored periodically over time.
    - Take account of perceptions of households.
    - Allow monitoring of impacts of strategic framework activities on living conditions.

*IMF staff report: I-PRSP excerpts on advancing the role of women, participatory process, financing, and monitoring and evaluation (selected paragraphs).*

### 326.     This system will characterize the welfare of the general population, and the

### _cr0414 - 326.     This system will characterize the welfare of the general population, and the

### Indicators to characterize welfare and poverty
- Income and production indicators (para. 327)
  - Per capita GNP.
  - Growth rates of GDP and the principal economic sectors, including growth rates for the cash crops and subsistence foodstuffs that are the principal source of employment and income for the poor.
  - Information sources: national accounts, census data, and agricultural surveys.
- Macroeconomic monitoring indicators (para. 328)
  - Broad macroeconomic balances: government finances, inflation, external accounts, the real exchange rate, and the structure and allocation of investment.
- Physical capital indicators (para. 329)
  - Access to productive resources: land, drinking water, energy, roads, markets, farming inputs.
- Human capital indicators (para. 330)
  - Health and nutritional status and education levels.
  - Distinctions by urban/rural and by gender in calculations.
- Institutional capital indicators (para. 331)
  - Degree of institutional development, particularly community institutions.
  - Coverage: number of cooperatives, associations and production- and socially-oriented NGOs in urban and rural areas, by province and per capita.
- Financial capital indicators (para. 332)
  - Number of Decentralized Financial Services (DFS) institutions.
  - Volume of savings collected and credits granted per capita by banks and DFS.
  - Average interest rates charged by the banks and DFS.
- Vulnerability indicators (para. 333)
  - Factors negatively impacting principal sources of income.
  - For Burundi: vulnerability to the vagaries of the weather and to fluctuations in world prices for the major cash crops.

### Household-level monitoring (paras. 334–336)
- Combined system of household surveys is required for monitoring living conditions of the general population and poor families.
- Suggested survey frequencies (para. 334):
  - Comprehensive poverty assessment surveys: once every five or ten years.
  - Short surveys (less costly): every two years.
- Specific action taken: Burundi will conduct a household survey based on the Core Welfare Indicators Questionnaire (CWIQ) in 2002 (para. 334).
- Key questions household surveys should answer (para. 335):
  - (i) How many people are living below the poverty line?
  - (ii) Where do poor people live?
  - (iii) What is the intensity and inequality of poverty?
  - (iv) What are the principal characteristics of the poor?
  - (v) What are the causes of this poverty?
  - (vi) What have been the poverty trends over time?
  - (vii) How is poverty perceived at the grassroots level? What strategies do households adopt to improve their situation? How do households view poverty reduction efforts?
- Expected output (para. 336):
  - ISTEEBU should publish regular information bulletins on poverty trends and an up-to-date profile of national poverty on the basis of selected indicators.

### Monitoring implementation of the strategy (paras. 337–339)
- Purpose: estimate degree of success in achieving PRSP objectives and monitor budgetary allocations for priority actions (para. 337).
- Three monitoring approaches (para. 337):
  - (i) Measure discrepancies between specific measurable targets (SMTs) of strategic themes/priority actions and the results of antipoverty measures implemented under the PRSP. Sectoral policies and action plans will define SMTs.
  - (ii) Analyze budgetary allocations to specific actions to assess consistency with the I-PRSP's objectives.
  - (iii) Suggest improvements in activities or in budgetary allocations (expenditure linked to the reduction of poverty as specified in this I-PRSP, paragraph 249) to move closer to achieving I-PRSP objectives.
- Impact evaluation focus (para. 338):
  - (i) Are anti-poverty policies and activities under the PRSP addressing the priority needs of poor families?
  - (ii) How are policies and activities helping poor families to escape from poverty?
  - (iii) Are more effective policies or activities required to help poor families escape from poverty?
- Implementation of evaluations (para. 339):
  - ISTEEBU and other technical sector services will conduct quick, targeted surveys to provide data for cost-benefit analyses of poverty-reduction policies and activities and identify the most effective ones.
  - Government has undertaken, with World Bank support, a survey to monitor public spending to improve efficiency of resource flows; this exercise will be continued.

### Action plans for preparation of the full PRSP — participatory consultations (paras. 340–352)
- Broadening and deepening participatory consultations across communes and provinces, involving beneficiaries and players primarily among the poor (para. 340).
- Participants to include (para. 340):
  - Representatives of grassroots communities selected from among the poor and vulnerable groups.
  - Representatives of the private sector, NGOs and various associations of civil society (such as religious denominations).
  - Representatives of women's and youth associations.
  - Communal and provincial administrative and technical officials.
  - Representatives of the decentralized offices of the technical ministries.
- Institutional organization — EOCPP (Participatory Process Organizing and Coordinating Team) (paras. 341–343):
  - EOCPP reports to the Vice President of the Republic through the Permanent Secretariat for Monitoring Economic and Social Reforms (SP/REFES) (para. 341).
  - EOCPP composition: representatives of sectoral ministries, the private sector, local and international NGOs, religious denominations, civil society organizations, community associations and groups from provinces and communes.
  - EOCPP responsibilities (para. 342) include:
    - Supervising preparation and adoption of the participatory methodology.
    - Coordinating and executing daily activities for preparing, organizing and conducting consultations at all levels.
    - Designing the participatory consultations process and developing strategies/themes for consultations at community, government, private sector, civil society, NGO levels.
    - Scheduling and conducting consultations at communal, provincial and national levels with decentralized support.
    - Coordinating preparation of summaries and conclusions, and organizing feedback and comprehensive reports.
    - Coordinating drafting of the Poverty Reduction Strategy Paper.
  - Each EOCPP team member will serve as a focal point for their entity and must (para. 343):
    - Prepare, organize and conduct thematic consultations among their sectors.
    - Ensure all partners participate actively and that consensus emerges.
    - Ensure feedback reports are prepared and participate in summarizing consultation reports.
- Decentralized structures (paras. 344–347):
  - Provincial and Communal committees will be formed: Poverty Reduction and PRSP Drafting Provincial Committee and Poverty Reduction and PRSP Drafting Communal Council (para. 344).
  - Provincial PRSP committee duties (para. 344):
    - Sensitize province about involvement and expected benefits.
    - Prepare and organize provincial consultations with EOCPP support.
    - Identify and enlist participants on inclusive/multisectoral basis.
    - Ensure optimal participation, prepare feedback reports, develop provincial monitoring/evaluation mechanisms for priority actions, and foster decentralization policy that takes the poor into account.
  - Communal Council duties (para. 346):
    - Support EOCPP, enlist participation by remote rural communities and CDCs; chaired by communal government and assisted by a bureau selected by community organizations.
  - Community Development Committees (CDCs) role (para. 347):
    - CDCs oversee sustainable development efforts nationwide and contribute to analysis of root causes of poverty and formulation of strategic themes and actions.
- Participatory consultations preparation and conduct (paras. 348–351):
  - Timeline extension for participatory consultations and investigations: July 2003 to December 2004 (para. 348).
  - Ongoing communal-level consultations since July 2000 (para. 348).
  - Process will be comprehensive, multidisciplinary, coherent, and include all players: grassroots communities, private sector, NGOs, civil society, producers’ associations, religious denominations, cooperatives, and nonprofit organizations (para. 348).
  - Preparatory process will be participatory and decentralized involving provinces, communes, decentralized sectoral ministries, NGOs, development partners, and civil society (para. 349).
  - Methodology: Accelerated Participatory Research Method (APRM) used at national, provincial, communal, and local levels (para. 350).
  - Consultations divided into six components (para. 350):
    - Macroeconomic consultations.
    - Sectoral consultations.
    - Consultations with civil society.
    - Consultations with the private sector.
    - Community consultations.
    - Consultations with Parliament.
  - Participants: economic and social sectors, NGOs, sectoral ministries, civil society, religious denominations, community organizations, and parliamentarians (para. 351).
  - Multilateral and bilateral development agencies invited to national consultations for discussions on financing and support needs.
  - Identified capacity and technical needs include strengthening human capacity at all levels, capacity in priority economic fields with focus on exchange and monetary policy, statistics and monitoring public funds, macroeconomic estimates and statistics, monitoring statistics and debt issues (para. 351).

### Drafting, approval and dissemination of the PRSP (para. 352)
- Drafting team: five members of the technical thematic group responsible for drafting the PRSP based on participatory consultation conclusions and recommendations.
- A framework plan will ensure consistency across chapters.
- First draft will be discussed at national, provincial and communal levels; comments incorporated to produce a document based on national consensus.
- Final document, once approved by the Government, will be submitted to the Board of Executive Directors of the World Bank and International Monetary Fund for approval; once approved by the Boards it will be published and forwarded to development partners.

### Indicative action plan and timetable (paras. IX.2 and continuation)
- Overall preparatory period: July 2003 to December 2004.
- Selected timeline items preserved verbatim from the action plan (partial list as presented):
  - Preparation, organization and formulation of the Interim PRSP — April 2000 to April 2002 (with specific dated events including July 14, 2000; March 12, 2002; April 2002; May-June 2002; Sept. 2002; June & Oct. 2003; November 2003) (action plan table).
  - Preparation, organization and conduct of participatory consultations for preparing the full PRSP — May 2003 – December 2004; preparatory activities include May-June 2003 (budget preparation), Sept. 03–Jan. 04 (installation of provincial and communal committees), Nov. 2003–Jan. 04 (establishment of focal points and methodology committees), January–October 04 (national thematic participatory consultations, community participatory consultations at provincial, communal and CDC levels, consultations with civil society/NGOs/unions/religious denominations/associations/producers/cooperatives/private sector), and August–October 04 (feedback on conclusions and recommendations).
  - Participatory evaluation and data collection on poverty — activities listed (impact of poverty programs; perceptions of poverty among the poor; monitoring mechanisms and qualitative and quantitative indicators of poverty; governance and local access to basic social services; the dynamics of peace and security; Public Expenditure Review; community participation; access to micro-credit and agricultural inputs; women's participation in development; education; health, AIDS; public expenditure review) with responsible entities SP/REFES (EOCPP), Sectoral Ministries, Civil Society, NGOs, Private Sector, Provinces, Communes (CDC), Consultants; Ministry of Finance and technical ministries; start: Since September 2003.

*Italic: Source — _cr0414 - 326. This system will characterize the welfare of the general population, and the (IMF PDF content provided).*

### 4. Poverty diagnosis -- sector analysis and studies

### 4. Poverty diagnosis -- sector analysis and studies

### Poverty profile and sector analysis
- Poverty profile (updated), including incidence and causes.
- Development of multi-sectoral, poverty-oriented strategies for reviving economic growth.
- Analysis of sectoral policies and reforms that will foster economic revival.
- Developing the micro-credit sector.
- Developing and strengthening community development structures.
- Preparing and implementing a coherent decentralization policy.
- Analyzing the impact of HIV/AIDS/STDs on the economy and developing strategies for reducing the impact.
- Principal institutional participants: SP/REFES (EOCPP), Sectoral Ministries, ISTEEBU, Civil Society, NGOs, Private Sector, Provinces, Communes (CDC), Consultants.
- Responsibility for HIV/AIDS analysis and strategy: Ministry responsible for the AIDS campaign, Ministry of Health and ISTEEBU.
- Timing note: Since January 2004 (for AIDS-related work).

### Monitoring and evaluation strategy
- Review and develop evaluation indicators.
- Establish a system for monitoring poverty and social services.
- Develop and strengthening mechanisms for participatory monitoring and evaluation.
- Develop and disseminate the participatory method for monitoring and evaluating poverty.
- Principal institutional participants: SP/REFES (EOCPP), Sectoral Ministries, ISTEEBU, Civil Society, NGOs, Private Sector, Provinces, Communes, Consultants.
- Timing note: Since September 2003.

### Drafting of the PRSP — tasks, responsibilities, and schedule
- Establish the framework and timetable for drafting the PRSP. — SP/REFES (+draft committee) — Sept.-Nov. 2004.
- Establish a committee to draft the PRSP and distribute the work among committee members. — SP/REFES (and EOCPP) — May 2004.
- Submit the I-PRSP draft to the EOCPP. — SP/REFES (and EOCPP) — June 2004.
- Submit the draft PRSP to the Government. — SP/REFES + EOCPP — October 2004.
- Dissemination of the PRSP draft. — Government (SP/REFES + EOCPP) — November 2004.
- Forward the PRSP to the World Bank and the IMF. — Government — November 2004.
- Shared study of the PRSP by the IMF/World Bank. — IMF/World Bank mission — December 2004.
- Transmit the PRSP to the Board of Executive Directors of the World Bank and the IMF. — IMF/World Bank staff — For memory.

### Policy and institutional recommendations (implied by tasks)
- Strengthen participatory monitoring and evaluation mechanisms for poverty and social services.
- Consolidate a multi-sectoral approach linking poverty diagnosis to sectoral policy reform and micro-finance development.
- Formalize and resource decentralization and community development structures (communes, provinces, CDC).
- Coordinate HIV/AIDS/STDs economic impact analysis with health ministries and ISTEEBU and integrate strategies into the PRSP process.
- Ensure independent public governance institutions (audit/inspectorate, anti-corruption watchdog) and completion of key structural reforms (public procurement, Investment Code).

### Key social and macro indicators (selected figures from Annexes)
- Populations living below the poverty line (selected years): 34,9; 33,8; 33,5; 47,8; 52,2; 60,7; 63,5; 65,6; 67,7; 68,7; 68,0.
- Real GDP (annual growth rate) (selected series): 2,7; -5,7; -3,8; -7,3; -8,3; 0,4; 4,8; -1,0; -0,9; 2,1; 4,5.
- Nominal GDP (in billions of BIF) (selected years): 225,6; 227,9; 233,7; 249,9; 263,1; 342,8; 400,2; 455,5; 511,1; 550,0; 584,6.
- CPI/Inflation (period average) (selected series): 4,5; 9,7; 14,9; 19,4; 26,4; 31,1; 12,5; 3,4; 24,3; 9,3; -1,3.
- Agriculture value added (percent of GDP, selected): 53,4; 52,6; 46,8; 48,2; 57,2; 49,2; 46,3; 43,7; 40,4; 39,5; 40,5.
- Exportations of nfG&S (in millions of US$) (selected): 94,8; 88,1; 95,1; 129,2; 50,6; 95,7; 71,5; 61,9; 55,1; 46,1; 33,6.
- Importations of nfG&S (in millions of US$) (selected): 319,2; 255,0; 263,5; 272,8; 136,9; 140,4; 173,8; 129,0; 150,6; 146,3; 149,2.
- Exchange average (BIF per US$) (selected): 208,3; 242,8; 252,7; 249,8; 302,8; 352,4; 447,8; 563,6; 720,5; 830,4; 930,7.
- Net reserves (months imports of nfG&S) (selected): 4,1; 4,4; 6,6; 6,8; 6,8; 7,1; 3,0; 2,9; 1,9; 1,2; 3,5.
- External debt outstanding in millions of US$: 1 054,8; 1 066,6; 1 049,2; 1 225,6; 1 166,1; 1 203,9; 1 241,1; 1 199,2; 1 183,2; 1 060,3; 1 132,5.
- External debt as a percent of GDP (selected): 103,8; 120,6; 118,3; 118,3; 130,3; 120,6; 136,4; 149,0; 169,3; 160,1; 180,3.
- Revenue (excluding grants) in billions of BIF (selected): 38,2; 39,8; 42,2; 44,1; 42,5; 46,5; 68,5; 74,0; 98,3; 110,2; 118,4.
- Total expenditure and net lending (in billions of BIF) (selected): 64,2; 68,9; 56,7; 64,7; 74,8; 74,9; 115,4; 123,5; 149,8; 151,6.
- Social expenditures (in billions of BIF) (selected): 9,4; 12,9; 11,3; 11,3; 12,9; 13,3; 17,4; 18,2; 19,0; 23,7; 26,2.
- Expenditure linked to poverty reduction (in percent of GDP) (midterm framework projections): 7,5; 11,1; 11,2; 13,5; 14,3.
- Populations with access to improved water source (as a percent) (selected): 51,9; 54,9; 57,8; 53,9; 55,6; 55,2; 51,4; 52,4; 56,3; 47,2; 47,3; 47,4; 60,3.
- Populations living below the poverty line (Table 4 series, selected): National 34,9; 33,8; 33,5; 47,8; 52,2; 60,7; 63,5; 65,6; 67,7; 67,4; 68,0; 68,0.

### Indicative monitoring framework — governance and peace (selection)
- Peace and security action points:
  - Continuous dialogue and consensus building among Burundians.
  - Putting an end to the war.
  - Dismantling refugee camps and settling returning refugees.
  - Free circulation for people and goods throughout the country.
  - Transitional institutions functioning well.
- Governance action points:
  - Transparent and independent institutions for monitoring the management of public affairs, including:
    - An Audit Office that is independent of the Executive;
    - Office of the Inspector General;
  - Independent watchdog for combating corruption and fraud.
  - Finalization of structural reforms already under way, in particular public procurement and the Investment Code.
- Decentralization and participation action points:
  - A decentralization policy formulated.
  - Recognition of the community development committees already implemented under the decentralization policy.
  - Financial decentralization to the communes and provinces, as part of strengthening their independence.
- Strengthening human and individual capacities:
  - Training and specialization courses organized for officials of central and decentralized agencies.
  - A solid base of socio-economic statistics.

*Source: _cr0414 - 4. Poverty diagnosis -- sector analysis and studies (PDF chapter), data collected by the Permanent Secretariat for Monitoring Economic and Social Reforms (SP/REFES) and ISTEEBU as presented in the document.*

### 2. Reforming the macroeconomic framework and promoting high-quality economic growth

### 2. Reforming the macroeconomic framework and promoting high-quality economic growth

### Macroeconomic stability
- Area of action: a.Macroeconomic stability
- Indicators:
  - GDP growth exceeds population growth.
  - Balance of resources and uses.
  - Inflation under control.
  - Foreign exchange available.
  - Increase in savings and investment

### Rural development
- Area of action: b.Rural development
- Indicators:
  - Increase in agricultural productivity.
  - Improved access to rural microcredit.
  - Livestock development.
  - A national irrigation program in place.

### Natural resources and the environment
- Area of action: c.Natural resources and the environment
- Indicators:
  - Environmental protection legislation in place.
  - IEC programs for environmental protection in place.

### Private sector and gradual disengagement of the State from productive system
- Area of action: d.Private sector and gradual disengagement of the State from productive system
- Indicators:
  - Number of rehabilitated production support facilities.
  - Number and value of State holdings privatized.
  - An IEC strategy to promote the privatization policy.
  - Increased investment by the private sector.

### Making basic social services available for the development of human capital
- Area of action: 3. Making basic social services available for the development of human capital

- Education (a. Education)
  - Indicators:
    - Enrollment rate for children aged 7 to 15.
    - Enrollment rate for boys.
    - Enrollment rate for girls.
    - Education share of the government budget.
    - Education costs:   -primary school;                  -secondary school;                  -higher education.
    - Number of students per classroom and per teacher at the primary and secondary levels.
    - Success rate in examinations for promotion from primary to secondary and secondary to higher education.
    - Number of primary schools built.
    - Number of teachers trained.
    - Number of technical and vocational training establishments created.

- Health (b. Health)
  - Indicators:
    - Vaccination rate for children aged 7 and under.
    - Malnutrition rate.
    - Assisted births rate (health centers, hospitals, maternity clinics)
    - Infant mortality rate.
    - Maternal mortality rate.
    - Health share of the national budget.
    - Number of people per doctor, per nurse.
    - Number and utilization rate of health facilities.

- Water and sanitation (c. Water and sanitation)
  - Indicators:
    - Number of households served by the national water company.
    - Number of standpipes constructed.
    - Drinking water supply rate.
    - Water consumption/person and /day by city, province and commune.
    - Latrine utilization rate.
    - Rates for malaria, communicable diseases and nutritional ailments.
    - Morbidity rate

- Employment and Social Security (d. Employment and Social Security)
  - Indicators:
    - Unemployment rate.
    - Number of jobs created in the formal sector.
    - Implementation of the national employment policy.
    - Extension of the Social Security system to all workers.

- Housing (e. Housing)
  - Indicators:
    - Number of units producing local construction materials.
    - Number and amount of home improvement loans provided.
    - Number of people with decent housing.
    - Number of households with electricity and water connections

- Reaffirming the national culture and providing training opportunities for youth (f.)
  - Indicators:
    - Efforts to rehabilitate the institution of Ubushingantahe.
    - Number of youth training centers rehabilitated and created.
    - Number of associations sponsoring income-generating activities for youth.
    - Number of vocational education and trades training centers created.

### Promoting the economic reintegration of war victims and disadvantaged groups
- Area of action: 4. Promoting the economic reintegration of war victims and disadvantaged groups

- Social reintegration and economically construction (a.)
  - Indicators:
    - Number of war victims restored to their own or other land.
    - Number of community facilities rehabilitated.
    - A  special  fund  established  for  reintegrating  war  victims  socially  and  economically.
    - Number of combatants demobilized and reintegrated.

- Special care for vulnerable and disadvantaged groups (b.)
  - Indicators:
    - Social safety nets in place.
    - Number of orphans, war-wounded and AIDS victims receiving care.
    - Number of projects for providing care to vulnerable and disadvantaged groups.

### Combating HIV/AIDS
- Area of action: 5. Combating HIV/AIDS

- Strengthening prevention programs (a.)
  - Indicators:
    - AIDS prevalence rate.
    - Number of persons living with HIV/AIDS.
    - Testing rate.
    - The rate of condom use.
    - Quality of information, education and communication programs (IEC).

- Promoting care and support for HIV and AIDS patients and helping them care for themselves (b.)
  - Indicators:
    - Economic cost of AIDS to families affected by the pandemic.
    - Number of people with access to antiretroviral drugs.
    - Number  of  persons  living  with  HIV/AIDS  who  are  receiving  medical  and psychological care.
    - Number of AIDS orphans receiving care.
    - Budget   of   associations   sponsoring   income-generating   activities   for   PLHA.

- Capacity-building for institutions in HIV/AIDS campaign (c.)
  - Indicators:
    - An institutional framework in place for coordinating the national AIDS campaign.
    - Availability of statistics on HIV/AIDS.

- Establishing a legal framework for the protection of persons living with HIV/AIDS (PLHA) (d.)
  - Indicators:
    - Legal framework for PLHA in place.
    - Promulgation  of  the  law  providing  legal  protection  for  PLHA,  and  preparation of implementing regulations.
    - Legal mechanisms and structures in place for protecting AIDS orphans.

### Advancing the role of women in development
- Area of action: 6. Advancing the role of women in development

- Women's access to education (a.)
  - Indicators:
    - Enrollment rate for girls at the different levels of education.
    - Dissemination of legislation promoting gender equality.

- The role of women in economic recovery (b.)
  - Indicators:
    - Number of women holding senior positions in Government.
    - Number of women holding senior positions in private enterprise.
    - Number   of   women's   associations   and   enterprises   created   in   the   productive sector.
    - Number of financial institutions specializing in support for women.

### Monitoring poverty
- Area of action: 7. Monitoring poverty

- Monitoring poverty trends (a.)
  - Indicators:
    - Statistical database on poverty in place.
    - Poverty profile showing the following:
      - national trends
      - regional disparities
      - socio-economic groups
    - Inflation
    - Sources of income

- Instituting a participatory process for poverty reduction programs and projects (b.)
  - Indicators:
    - Level of appropriation and participation:
      - of organized communities;
      - of communes;
      - of provinces.

*November, 2003*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr0414.pdf_