Page 1 THE GAMBIA: COUNTRY ASSISTANCE STRATEGY CHAIRMAN’S CONCLUDING REMARKS Meeting of Executive Directors March 6,2003 The Executive Directors welcomed the discussion of the Country Assistance Strategy for The Gambia and appreciated the consultative approach followed in its preparation. Directors welcomed The Gambia’s progress on economic reforms and its progress toward the HIPC Completion Point. They welcomed the measures taken by the government to address macroeconomic policy slippages and urged the Government to continue improving macroeconomic and fiscal management in order to conclude the poverty reduction and growth facility (PRGF) review and to recover as quickly as possible from last year’s drought. Directors expressed concern about the latest fiscal slippage and inquired about the measures undertaken to improve the deficit. They were also encouraged by the country’s decision to obtain a sovereign credit rating. Directors appreciated the quality of the CAS and its close alignment with the PRSP. They noted their concerns about the importance of improving public expenditure management, particularly to improve the composition of expenditures, addressing domestic debt levels, and guarding against any potential negative impact on health and education expenditures. Directors asked the Bank to ensure that the public expenditure review (PER), country financial accountability assessment (CFAA), and country procurement assessment report (CPAR) were completed and had started to be implemented prior to the presentation of adjustment lending. Directors noted that poor infrastructure was a major impediment to growth and urged the Government to continue progress on infrastructure reform and its development, particularly with respect to water and energy and telecommunications. Some Directors inquired whether privatization of these basic functions was now opportune. They asked the Bank to be of continued support to the development of the private sector and the establishment of regulatory frameworks. In this regard, they also drew attention to the need of agricultural/rural development and the need for trade and regional integration. Directors were broadly supportive of the proposed level and composition of the Bank’s interim assistance and the planned mix of lending and non-lending services. However, they indicated that further allocation of grants could help better further education and health objectives. Some, however, believed the growth projections in the CAS were overoptimistic and asked that the sources of growth be more clearly identified and the country’s debt level and its sustainability be kept under close monitoring. They broadly endorsed the triggers and the lending scenarios, but urged staff to include monitorable indicators in the use of The Gambia’s IDA grant allocation, in particular when an operation consists of both IDA grant and credit. They also suggested that ways be explored to incorporate the implementation of key policy recommendations of core diagnostic reviews into the proposed triggers for the base case. Directors noted that inclusion of a Community Driven Development operation in the lending program and encouraged staff to use this, among others, to address the issue of increasing access to credit, in particular to women. Finally, Directors encouraged the Government to continue progress toward the MDGs and to focus on achieving the growth sought in the PRSP and called on donors to support this effort through greater coordination.