AID economic policy reform program in Mali

The program has decontrolled prices, lowered a number of business taxes, introduced a new commercial code, and loosened restrictions on import-export trade. Despite the country"s inhospitable economic environment, these reforms have produced impressive benefits for the private sector. The most notable achievement is price decontrol, which has lowered consumer prices across the board. Business tax reductions have enabled some firms to raise production, investment, and employment (although these gains may be offset by a recent increase in business license taxes), and the new commercial code has simplified business registration requirements. Changes in import-export regulations are too recent to be assessed, but their effects are expected to be minimal. Although the reform program has made progress in improving the private sector climate, its impact on public sector efficiency has been marginal at best. An examination of government expenditures indicates that no improvement has been made in the delivery of social services. Finally, while a voluntary early departure program for civil servants has led to real budgetary savings, there is concern that many of the departees will not be able to successfully establish private sector businesses.