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Madagascar - Structural Adjustment Program Project (English)

The Structural Adjustment Credit (SAC) Project aims to break Madagascar out of a poverty trap by helping to restore investor confidence. The main macroeconomic objectives are to achieve low inflation and to regularize the external debt situation within a viable balance of payments (debt rescheduling at the Paris club and mobilizing exceptional donor financing). The structural adjustment credit will also support structural reforms to open the economy to tourists and investors by clarifying the rules of the game around the principle that all economic activity is allowed except what is specifically prohibited. The credit is an integral part of the World Bank s Country Assistance Strategy (CAS), which details the central role of the SAC in restoring investor confidence and in taking the country to a high growth/poverty reduction scenario. The Bank'seeks to minimize risk and to offer investors concrete evidence of economic opening by making the credit a single tranche operation. Policy reform is directed at certain outcomes rather than at government actions. Future balance of payments support will be predicated on actual performance in areas such as budget implementation, private investment, and export growth (including tourism). The precise indicators to be monitored are defined in the CAS presented in early 1997. The need for additional balance of payments support for the program's remainder will be assessed when the macroeconomic framework is updated in 1997.


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    Madagascar - Structural Adjustment Program Project

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Madagascar - Structural Adjustment Program Project (English). Washington, D.C. : World Bank Group.