The Interim Poverty Reduction Strategy Paper provides a sound basis for the development of a full PRSP by end-2001, for Fund concessional assistance, and for reaching the decision point under the enhanced Heavily Indebted Poor Countries Initiative. They are encouraged to expand the involvement of civil society in the monitoring and evaluation of public policy, and to enhance their own institutional capacity to monitor public expenditures, so as to ensure the successful implementation of the poverty reduction strategy. While the macroeconomic slippages in the first half of 2000 are regrettable, the Guinean authorities are to be commended for the remedial actions taken, especially in view of the tense security situation in the region and the difficult external environment. The challenge in the period ahead is to demonstrate the ability to consistently maintain the adjustment effort in implementing the strong economic and financial program for 2001.
Several areas are key to establishing a sound basis for sustainable growth.
Revenue mobilization efforts need to be enhanced, particularly through the close monitoring of customs procedures, improved taxation of public enterprises, and the reduction of exemptions. Firm control over expenditures should also be maintained, in view of the additional outlays for security needed in 2000 and 2001, and the pressing need to increase spending in the priority sectors. In this context, the extension of the medium-term expenditure framework to all budgetary expenditures will be a critical step toward ensuring that the level and composition of public expenditures are appropriate. The authorities are encouraged to track closely the use of interim debt relief resources. The recent acceleration of structural reforms is encouraging.