Union of the Comoros
Action Plan for Implementation of the 2010-2014: Poverty Reduction and Growth Strategy

Five priority programs were identified to help stabilize the economy and lay the groundwork for equitable growth. The government's priority with this core strategy is to enhance macroeconomic management, government operations, and effective fiscal management to promote domestic and international trade, make the Comorian economy more competitive, guarantee a low-cost energy supply, improve basic economic infrastructures and communication services, and finally to make investments to improve access to drinking water and a more healthy environment. The PEFA report prepared in 2008 entailed a comprehensive fiscal analysis.

Abstract

Five priority programs were identified to help stabilize the economy and lay the groundwork for equitable growth. The government's priority with this core strategy is to enhance macroeconomic management, government operations, and effective fiscal management to promote domestic and international trade, make the Comorian economy more competitive, guarantee a low-cost energy supply, improve basic economic infrastructures and communication services, and finally to make investments to improve access to drinking water and a more healthy environment. The PEFA report prepared in 2008 entailed a comprehensive fiscal analysis.

CONTEXT

The Union of the Comoros has adopted a poverty reduction and growth strategy (PRGS) for the period 2010-2014. The paper is the culmination of a lengthy participatory process that began in 2003 with the preparation of the interim version of the strategy. This approach made it possible to involve all government institutions, civil society, and economic players.

The interim poverty reduction strategy paper was very well received by the development partners, particularly the Bretton Woods institutions and the European union. Several partners commented on the PRGS with a view to its improvement. It was reviewed and updated to reflect new information that became available. The 2010-2014 PRGS now serves as the reference document for the Union of the Comoros in the area of socioeconomic development.

The 2010-2014 action plan is part of the follow-up efforts in the PRGS preparation process. Its purpose is to propose a coherent set of medium-term priority programs for PRGS implementation.

The 2010-2014 action plan presented in this paper was prepared using the same participative approach as applied in preparing the PRGS. The Sectoral Technical Groups (GTS), which included sectoral experts and representatives from the three islands, prepared sectoral action plans encompassing the priority programs and operations to be implemented to set the stage for restored economic growth and sustainable poverty reduction. These priorities were covered in several technical validation and discussion workshops.

Targets (results to be achieved) were specified for each priority program and operation. A budget indicating the financial resources required for implementation of the action plan was estimated, indicating contributions in the form of national and external resources.

The government intends to contribute available national resources, external resources, and any resources generated through debt reduction in connection with the Heavily-Indebted Poor Countries (HIPC) Initiative to implement the priority programs under the action plan.

The 2010-2014 action plan comprises thirty-two (32) priority programs devised under the six core strategies of the plan. Average annual financial requirements are estimated at CF 94 billion, equivalent to €200,000,000 per annum over a five-year period. Commitments from donors and lenders now amount to an average of CF 10 billion per annum for the period 2010-2014, equivalent to approximately €20,000,000 per year. Additional financial requirements amount to approximately CF 420 billion for the period, equivalent to an average of approximately CF 84 billion per year.

Although the required level of financial resources may seem substantial, it is important to consider these figures in light of the country’s specific sociopolitical and economic situation, particularly the substantial requirements the government faces to consolidate the national reconciliation effort, to meet its domestic and external commitments, and above all, to restore growth and the process of development with the aim or reducing poverty and achieving the Millennium Development Goals (MDG) by 2015.

We must bear in mind that, during the latter half of the 1990s and for most of the 2000s, the Comoros has sustained repeated political, social, and economic crises. Not only have these instabilities threatened the country’s integrity—they have also led to substantial reductions in official development assistance from the international community during this period. Development assistance has dropped from US$65,000,000 per annum (equivalent to US$165 per capita) during the early 1990s to less than US$14,000,000 at the end of the 1990s (equivalent to approximately US$28 per capita), and has not regained any ground since the early 2000s, despite the 2005 Mauritius Conference. This decline in aid, combined with the drop in export revenue, have exacerbated the country’s economic and social crisis. Today, this context reflects substantial deterioration in the basic social and economic infrastructures, growing apathy among civil servants and workers in the private sector, an accelerated emigration of the most competent human resources and potential investors, and deteriorated living conditions for the population, particularly in rural areas.

Real per-capita income dropped substantially between 1993 and 2003, and continues to deteriorate. Estimated average annual GDP growth in real terms was less than 1 percent during the past two years. This situation represents and annual decline in per-capita GDP of more than 1 percent, taking into account demographic growth. The socioeconomic situation has reached a critical limit, potentially ushering the Comoros into a period of instability and social agitation.

Although the sociopolitical situation is still unstable, the context is now more conducive to the resumption of the development process, as attested by the Comorian people through their active participation in the preparation of the PRGS and in the development of its action plan. If targeted at the identified priorities, the financial resources the government intends to mobilize will give the necessary impetus to restore the development process. We should point out that the financing of the action plan will enable the Union of the Comoros to join the developing nations now on the road to achieving the Millennium Development Goals by 2015.

This paper is divided into three sections. Section One reviews the major focuses of the PRGS. Section Two includes a detailed presentation of the priority programs adopted for each PRGS core strategy, indicating results in terms of the targets to be achieved and the financial resources required to implement the programs. The last section of the paper presents the budget summary for all programs adopted for the period 2010-2014. Annex 1 provides a survey of programs and projects in progress supporting the attainment of objectives under the six PRGS core strategies.

SECTION I. POVERTY REDUCTION AND GROWTH STRATEGY ORIENTATIONS

1.0. Introduction

The poverty reduction and growth strategy (PRGS) for 2010-2014 was subject to a broad consensus among the development players in the Comoros on the core strategies and priority programs to be implemented during the coming years to give new impetus to the development process. Living conditions for Comorians stand to improve substantially if the country is to succeed to (i) consolidate political stability and effectively establish institutions and strengthen the government at the central and decentralized levels; (ii) restore economic growth by focusing on promoting the private sector and trade; (iii) develop and develop institutional and human capacities; and (iv) engage all public players, civil society organizations, economic transactors, and international organizations in the implementation of the strategy.

1.1. Poverty reduction and growth strategy objectives and core strategies

The poverty reduction and growth strategy has two major objectives: robust economic growth and a sustainable reduction in poverty and inequalities. Six (6) core strategies have been adopted in accordance with these major objectives:

Core strategy I. Stabilize the economy and lay the groundwork for strong and equitable growth

This strategy involves conducting major fiscal reforms, reorganizing the administration, adopting incentive trade policies to promote the integration of the Comoros into the regional and world economies; implementing measures to make the Comorian economy more competitive, particularly in the key sectors of agrofood and tourism; executing reforms and investments to guarantee a regular energy supply at a reasonable cost; and building and improving basic economic infrastructures (roads, ports, airports, and telecommunications) to support foreign trade as well as to enable Comorian economic players and producers to optimize the opportunities available to them on the domestic market.

Core strategy 2. Strengthen key sectors by focusing on institution building and ensuring a broader role for the private sector

This core strategy involves implementation of priority programs aiming to develop and increase productivity in key economic growth sectors and to help achieve a sustainable reduction in poverty. This strategy primarily involves agriculture, stockbreeding, fishing, and tourism. While the traditional components of the agrofood sector are better known, and their contribution to economic development and food security no longer remains to be proven, the tourism sector offers great potential that has never truly been tapped.

The measures under this strategy aim at building institutions and strengthening the regulatory framework governing growth sectors; supporting intensified, improved productivity; strengthening competitiveness, and capacity building for commercial activities and marketing circuits. This core strategy also covers accompanying measures to strengthen the financial intermediation system and access to microcredit facilities, support for nonfinancial services to promote private sector development, and an improved business climate. These activities constitute essential measures for the country to enable the underprivileged sectors to become integrated into the modern economy and to consolidate the development of micro and small-scale enterprises, which are often highly vulnerable to economic shocks.

Core strategy 3. Strengthen governance and social cohesion

This strategy aims to consolidate good governance and social cohesion by constructing the democratic and administrative institutions of the Union and the islands. It aims primarily to strengthen the regulatory framework by clarifying the responsibilities, roles, and scope of authority of the national institutions with a view to a renewed, constructive social dialog.

Through implementation of the adopted priority programs, this strategy will make it possible to improve governance and the efficacy of public institutions; to implement a true decentralization policy at the rural community and municipality levels; to renew a constructive social dialog to provide citizens with greater peace and security; to give all citizens access to transparent, equitable justice; and to fight transnational crime.

Core strategy 4. Improve the health status of the general public

Core strategy 4 aims to give the public better access to quality health service, targeting the most vulnerable groups and rural populations, and to give priority to the measures to reduce anemic diseases and to improve all areas of the health system.

In this connection, the government will focus its efforts on implementation of programs aimed at reducing malaria and priority diseases, improving mother and child health, preventing HIV/AIDS, improving health system management with a view to more efficient, effective health services, and improving the hospital environment.

Core strategy 5. Promote education and vocational training with the aim of developing human capital

The education sector in the Comoros should produce a socially-responsible, educated population capable of taking advantage of economic opportunities. It is a powerful vehicle for change in behaviors that must also help citizens reach goals and give them better governance and improved health. The government intends to focus its efforts and to direct those of its partners to meet these major challenges.

Core strategy 5 emphasizes better access to quality education at all levels, a shift of the ministry’s efforts to technical and vocational training, and further support for informal training through literacy activities targeting young people and adults.

Core strategy 6. Promote environmental sustainability and civil security

We note that most of the environmental constraints the Comoros faces are similar to those found in Small Island Developing States (SIDS) under Agenda 21 and the Barbados Plan of Action: ecological and economic instability; substantial vulnerability to climate change and natural disasters; insufficient response and management capacity; and a narrow base of energy resources at high costs.

In the Comoros, perhaps more than anywhere else, the environment is the focal point of the key economic sectors that produce commercial goods and services. Recent studies have shown that growth in the Comoros is still highly contingent on development in the agrofood and tourism sectors, both of which are highly dependent on the natural surroundings, the quality of the environment, and its conservation. The government therefore chose to make the environment a central issue in the PRGS. Several ambitious priority programs will be implemented to protect the environment and ensure its regeneration, conservation and rational, sustainable exploitation, while being mindful of the well-being of current and future generations.

The Union of the Comoros is a poor, vulnerable country that faces many risks, including cyclones, droughts, epidemics, tornadoes, brush fires, tidal waves, floods, major accidents, landslides, volcanic eruptions, and risks related to the presence of an active volcano (earthquakes). This vulnerability might be aggravated by an insufficient capacity to prepare, prevent, and respond appropriately to risks and disasters. The government takes this issue very seriously as it intends to establish mechanisms to prevent and manage risks and disasters in connection with global warming.

During the next five (5) years, the government intends to focus its human and financial efforts and to direct those of its development partners toward implementation of the priority programs adopted in this action plan.

1.2. Poverty reduction and growth strategy preparation process

Based on the lessons learned from the past in the area of national development planning, and on the experiences of other countries, the government adopted the foundations and reference framework that guided the preparation of the interim poverty reduction and growth strategy. The adopted approach was based on the following four principles:

  • A strategy devised with a participative approach designed to involve the public, key players in civil society, and the private sector in defining poverty reduction strategies;

  • A gradually developed strategy, relying on existing information and dialog and exchange through regional and national workshops and roundtable discussions. The strategy was improved and updated to reflect the recent data on household living conditions;

  • A strategy targeting potential growth areas, and particularly the economic sectors comprising the vulnerable and poor groups, to achieve sustainable poverty reduction while being mindful of the essential social dimensions identified;

  • A cross-cutting strategy to ensure that the macroeconomic environment and sectoral programs and policies are effectively integrated, to reflect more effectively the dimensions characterizing poverty, and to propose innovative operations to address the multiple factors impeding growth and poverty reduction.

The action plan for the period 2010-2014 used the same participative approach. The Sectoral Technical Groups (GTS) and island sectoral experts from various areas helped determine the priorities and prepare this paper.

1.3. Operating strategy

The experience of the Comoros and many developing countries shows that economic growth is a necessary condition for sustainable poverty reduction. To improve the population’s living conditions, national production must be increased, jobs created, and revenue generated. The scope of the impact depends on sector performance, the political and institutional environment, macroeconomic and sectoral policies, and the level of inequality prevailing between the socioeconomic categories and environments. Numerous studies also show that economic growth can be accompanied with an increase or reduction in inequalities depending on the sector in which the growth is concentrated. When we observe a substantial concentration of poor households in a given sector, we can expect substantial growth in the sector to have a more substantial impact on poverty reduction than if growth were induced in a sector encompassing fewer poor households. By contrast, growth deriving from a sector where few poor people are concentrated can also contribute indirectly to reduce poverty and inequalities, provided that the government establishes effective redistribution policies.

There are two major options in terms of sectoral priorities to reduce poverty through growth: promote GDP growth in the country’s leading growth sectors where the country has greater comparative advantages, and ensure that some benefits of this growth are redistributed through redistribution policies; or adopt a “pro-poor policy” aiming to boost the income of the poor in the sectors where they are concentrated, which will also lead to an increase in GDP.

The government of the Comoros chose to use a combined approach, by targeting the sectors where the poor are concentrated, to achieve a rapid and direct increase in their income, and by stimulating medium-term development of new growth sectors, the benefits of which can be redistributed through taxation and through equitable, incentive-based public expenditure policies. The short-term approach involved a special focus on the agrofood sector the private sector in general, as these sectors typically register a significant proportion of households, a poverty incidence exceeding the national average, and therefore individuals likely to respond quickly to incentives. The authorities are convinced that promoting growth in these sectors will directly contribute to revenue generation for households and revenue for the government.

Tourism development was deemed an area with great potential as it stands to create substantial multiplier effects in a number of economic sectors. The preliminary data indicate that the Comoros has substantial potential in the medium term to become a major source of economic activity, jobs, revenue for households and the state, and foreign exchange. Tourism is a particularly interesting sector in poverty reduction as it is job-intensive, and most of the skilled jobs the sector requires call for short-term training (ranging from a few months to a few years). If effectively managed, this sector represents a sustainable source of income and can contribute to environmental conservation.

Tourism development in the Comoros clearly requires recourse to Comorian and foreign private investors to provide capital and know-how. In the context of market globalization, these players will only provide such support if the county presents advantageous market opportunities, offers comparative advantages over other destinations, and ensures greater political and macroeconomic stability. The same applies to issues involving security of assets and persons, the foreign investment code, the availability of transportation and energy infrastructures, and proper tourist accommodations.

In addition to questions related to the type of sector to be given priority in poverty reduction and growth, the type of growth will also affect poverty reduction. Unskilled labor-intensive growth will be the focus in all sectors whenever possible as it will be much more effective in poverty reduction than capital-intensive growth. To that end, the government intends to give priority systematically to labor-intensive technologies, particularly those requiring unskilled labor, such as public construction works and road maintenance, in the construction sector, agrofood sector, etc.

Poverty is not only the result of insufficient income. It is also the result of insufficient access to different forms of capital, and specifically human capital. The government intends for all Comorians to be healthy, well educated, and able to reach their personal and professional potential. To that end, individuals must be able to take the economic opportunities made available to them to earn their living and ensure the well-being of their families. The education sector plays a strategic role in this connection as it is the best mechanism to transmit social values and to develop skills to enable individuals to find the means and motivation to build a country that offers a good quality of life.

Against this backdrop, the PRGS places special emphasis on vocational training activities in addition to those directly targeting the formal education sector. It is a priority, in fact, to allocate limited public resources to training for young people and adults in growth sectors where they will have the greatest chances of finding jobs, rather than being unemployed new graduates and thereby becoming candidates for forced emigration. The aim will be to promote sectors requiring short-term training, such as agrofood technology institutes and hotel and tourism schools, to provide specialized and skilled labor required for the development of identified growth niches.

The government is aware that substantial demographic growth is a major constraint for the country’s development. The current demographic growth threatens the natural environment, increases tensions between communities in terms of access to limited productive resources, and too often breaks up families as a result of emigration. Demographic growth in fact accentuates demand for basic social services, while available financial and human resources are quite limited. The government intends to attack this problem directly through strengthened family planning programs in connection with the PRGS. The introduction of the relevant training modules into the training curriculum, in the public and private sectors, is a priority under the PRGS. We know that reducing the demographic growth rate also requires broad education, with a focus on education for girls and adult literacy. Activities in these two areas will receive special attention.

Good governance is a necessary condition for poverty reduction in the Comoros. The government of the Union of the Comoros intends to continue the process of national reconciliation, democratization, and decentralization so that the islands can be more autonomous and to enable civil society organizations gain increasing responsibility and involvement in the development management process.

Insufficient governance and political instability have been factors in increasing poverty and impeding the economic and social development process. The danger of secessionism will be present as long as the constitutional institutions have not been effectively established in the Union and the islands. Accordingly, good governance is the focus of concerns for the new Comorian group and the PRGS. The government will continue to establish these institutions in partnership with the island authorities, for a unified approach to the challenge of growth and poverty reduction in the Comoros.

The world has changed substantially since September 1l, 2001. Social and economic development is more dependent on a country’s ability to ensure the security of property and persons. Against this backdrop, the fight against terrorism and criminal activity has become a major global issue that must be addressed by all countries. The government is determined to guarantee security on its territory to promote social peace and development. The 2010-2014 action plan is part of this context of change and proposes programs reflecting the priorities identified.

SECTION II. ACTION PLAN FOR THE PERIOD 2010-2014

2.0. Introduction

The action plan presents the multiannual plan for the priority programs the government intends to implement during the period 2010-2014. These programs are presented according to the six (6) core strategies of the PRGS.

A total of thirty-two (32) programs were adopted, involving thirteen (13) sectors. They are presented in terms of objectives and results to be achieved for each major operation. Estimated costs and financing requirements to implement these operations are presented in Section III of this paper.

2.1. Core Strategy I. Stabilize the economy and lay the groundwork for strong and equitable growth

Five priority programs were identified to help stabilize the economy and lay the groundwork for equitable growth. The government’s priority with this core strategy is to enhance macroeconomic management, government operations, and effective fiscal management, to promote domestic and international trade, make the Comorian economy more competitive, guarantee a low-cost energy supply, improve basic economic infrastructures and communication services, and finally to make investments to improve access to drinking water and a more healthy environment. The following programs were adopted:

Program 1.1. Enhance government and fiscal operations;

Program 1.2. Integrate and facilitate domestic and international trade;

Program 1.3. Improve the energy supply at a low cost;

Program 1.4. Improve basic economic infrastructures and communication services;

Program 1.5. Increase access to drinking water, sanitation, and sustainable resource management.

2.1.1. Priority program 1.1. Enhance government and fiscal operations

The period 2006-2008 has been particularly difficult time for the government, as it faced a threefold challenge: (1) an unprecedented economic crisis at the world and national levels; (2) alarming fiscal and public sector deterioration; and (3) persistent political and institutional crises.

The Public Expenditure and Financial Accountability (PEFA) report prepared in 2008 entailed a comprehensive fiscal analysis. The report brought to light a number of weaknesses, insufficiencies, and dysfunctions in fiscal management. During recent years, the fiscal deterioration has accelerated and the distortions in good governance and public management have multiplied. As a result, the government now faces a major fiscal crisis and a disorganized, unmotivated administration. The time has therefore come for reconstruction and return to budget orthodoxy.

New instruments will be adopted to improve financial and budget management. The government intends to promote a results-based public management approach and to introduce tools under the medium-term expenditure framework (MTEF) and program budgets. Along with the adoption of these reforms and new instruments, it will be essential to strengthen the capacities of the government and to review the national system for planning, management, and monitoring and evaluation of public programs. It will also be essential to strengthen information flows between the Union and the islands, the quality and regularity of statistics, and the system used to manage the expenditure process.

Fiscal recovery goes hand in hand with institutional improvement. The deterioration in government operating conditions, as its size far exceeds the country’s financing capacities, is not only a source of negative motivation for the existing civil servants, it also leads to a flight of the best trained and most dynamic personnel. Moreover, the financial crisis has led to the outright disappearance of operating resources and to deterioration in equipment. The absence of any ongoing management system for equipment is a source of substantial waste. The shortage of operating resources and equipment leads to further lethargy and dependency on development partners.

In addition to the government’s efficacy and sound fiscal management, the issue of privatization of state enterprises and companies is a focus for the government’s concern and must be pursued. The state’s gradual divestiture from the productive sectors and commercial activities to benefit the private sector is vital. This divestiture will be pursued through a voluntary policy based on comprehensive structural reform measures. These reforms are even more necessary with the establishment of the Comoros in the Common Market for Eastern and Southern Africa (COMESA), which requires customs and fiscal reforms to ensure that administrative practices and regulations are more broadly harmonized.

While the government is aware of structural and recurrent problems, it is also mindful of the difficult decisions that must be made to correct the fiscal and overall administrative situation. The specific objectives of this program during the period 2010-2014 are presented in Table 2.1.1.

Table 2.1.1.

Specific objectives and targets of the program to enhance government and fiscal operations

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The operations adopted and expected performance targets under this program are listed by objective in Table 2.1.2. A total of 27 operations will be carried out in connection with the program in progress for the period 2010-2014.

Table 2.1.2:

Operations and expected results for each objective of the program to enhance government and fiscal operations

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2.1.2. Program 1.2. Integrate and facilitate domestic and international trade

Commercial policy based on the multilateral trade framework and the regional economic integration process adopted by the government will help stimulate the economy while reducing rent-seeking behaviors, lowering factor costs, facilitating trade, and improving the business and investment climate. The multilateral trade system and agreements with COMESA will help stabilize trade policy through a firm anchoring in a market economy. One of the objectives in this area is to increase the export growth rate.

The government also intends to implement accompanying measures (training, strengthened professional organizations and associations, and access to information and financing) to enable the most disadvantaged to profit from this growth and to enjoy its benefits. The government concurrently plans to stimulate domestic trade in local goods to provide a better supply for the general public. Reforms will be undertaken to remove barriers to the circulation of goods. These measures should promote inter-island trade flows and guarantee more regular supplies and prices.

The specific objectives of this program during the period 2010-2014 are presented in Table 2.1.3. They aim primarily to promote development of national, regional, and international trade.

Table 2.1.3.

Specific objectives and targets of the program to integrate and facilitate domestic and international trade

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The operations adopted and expected performance targets under this program are listed by objective in Table 2.1.4. A total of 16 operations will be carried out in connection with the program in progress for the period 2010-2014.

Table 2.1.4.

Operations and expected results for each objective in the program to enhance government and fiscal operations

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2.1.3. Program 1.3. Improve the energy supply at a low cost

Energy is a key sector in economic recovery, and more importantly, in recovery of the private sector, and is therefore is a focus of the 2010-2014 PRGS action plan. The energy problems the Union of the Comoros has faced for a decade require a medium and long-term strategic approach. The actions now in progress are designed to stabilize energy production and to provide consumers with a regular energy supply. The Poverty Reduction and Growth Strategy aims to increase the energy supply at competitive prices so that the sector can operate sustainably and to allow growth sectors to develop.

The energy sector diagnostics brought to light the need for rational biomass management, greater autonomy in terms of imported petroleum products, more effective production systems and network, and diversification of the energy supply with new energy sources such as solar, hydraulic, wind, and geothermal energy. Owing to the narrowness of the market, high electricity production costs explained by high petroleum prices are leading to major problems in the long-term development of the energy sector. These problems are accentuated by the absence of a sectoral strategy paper, an unclear institutional framework, and insufficient human resources for effective management of the sector.

To address these challenges, the action plan has adopted a priority program designed to clarify and strengthen the institutional and organizational framework, and to give the country a national strategy for effective energy management. Second, it aims to strengthen the energy infrastructures for storage, production, and distribution, and to reduce technical and nontechnical losses related to energy production, distribution, and marketing through a national energy management and efficiency program. This program will also aim to promote the substitution of firewood by introducing new cooking technologies, and particularly, improved heating facilities and the use of modern fuels. Last, diversification of energy sources is emphasized in support of the country’s energy autonomy, along with the promotion of clean energy sources to preserve the environment. The specific objectives of this program and target results for the period 2010-2014 are presented in Table 2.1.5.

Table 2.1.5.

Specific objectives and targets of the program to improve the energy supply at a low cost

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The operations adopted and expected performance targets under this program are listed by objective in Table 2.1.6. A total of fifteen (15) operations will be carried out during the period 2010-2014.

Table 2.1.6.

Operations and expected results for each objective in the program to improve the energy supply at a low cost

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2.1.4 Priority program 1.4. Improve basic economic infrastructure and communication services

The economic infrastructure and communication service sector involves roads, ports, airports, telecommunication, and information and communication technologies. These subsectors are necessary and strategic factors in the country’s economic development.

Development of the road system will intensify economic activity and increase the circulation of goods and persons. However, the absence of a policy adapted to the road context in the Comoros, insufficient financing to cover road maintenance, the insufficiency of the national roads, and training requirements to manage and oversee the works are handicaps in the country’s economic development.

The government’s adoption of a new concession management approach and the development of existing infrastructures constitute an advantage for the port and airport sectors. The port sector faces tremendous difficulties owing to excessive costs of transshipment and anchorage operations as a result of substantial offloading lags and congested docking areas. Where airports are concerned, development and fitting out projects are under way, although the problem of security is still present.

Development of economic activity and social services sectors will be strengthened when the players grasp and internalize information and communication technologies (ICT), as development in this area is essential for the Comoros to become integrated into the world economy. Despite the progress that has been made in telecommunication development in recent years, service prices are still high. At the national level, the country still lacks a sufficiently accessible, effective, and reliable service network.

The specific objectives of this program and targets for the period 2010-2014 are presented in Table 2.1.7.

Table 2.1.7.

Specific objectives and target results for the program to develop and rehabilitate economic infrastructures and basic communication services

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The operations adopted and expected results in connection with the program to develop and rehabilitate economic infrastructures and basic communication services are presented by objective in Table 2.1.8. A total of 11 operations will be carried out in connection with the program in progress for the period 2010-2014.

Table 2.1.8.

Operations and expected results for each objective of the program to develop and rehabilitate economic infrastructures and basic communication services

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2.1.5. Program 1.2. Increase access to drinking water, sanitation, and sustainable resource management

Access to high-quality drinking water is a fundamental requirement that must be met as a priority. This factor of well-being is identified in the MDGs and is included in the PRGS priorities. The relationship between drinking water and public health is well known. Studies have shown that the use of poor quality water for consumption is a source of infectious and parasitic diseases that are still the number one cause of mortality and morbidity in the Comoros today. In general, the least favored groups are more vulnerable to diseases related to poor water quality.

The risks of waterborne diseases and pollution are quite high in the Comoros, owing primarily to the absence of protection for wells or pumping facilities, and water quality monitoring and control mechanisms. Only a few salinity analyses are performed on an ad hoc, partial basis. Health hazards are observed primarily through the prevalence of waterborne diseases such as diarrhea and typhoid.

The quality of life and health of individuals is also determined by the environment in which they live. A healthy, improved environment is a determinant factor in the health of individuals, and particularly children, who are much more vulnerable to diseases related to an unhealthy environment. With accelerating demographic growth and urban development, we observe a significant increase in production of household waste and wastewater, untreated hospital waste, and waste related to transportation activities (motor oil drainage, automobile bodies, etc.). The absence of a system to manage household waste, wastewater, and sanitation is a major public health problem. Wastewater and rainwater management are major concerns in both urban and rural areas.

In the Comoros, access to high-quality water is still a luxury for the majority of the population. Less than 15 percent of the population reportedly has access to drinking water meeting the accepted standards. Moreover, the country has virtually no sanitation system. Wastewater and solid waste are discharged into the sea in the population’s immediate living environment.

The country has no national water strategy or master plan. Activities in the water and sanitation sector are conducted essentially in the absence of any institutional or regulatory framework, which reduces their efficacy and performance.

This program aims, as a priority, according to the national challenges and Millennium Development Goals, to increase access rates to drinking water and sanitation, to improve the quality of the public water supply, and to ensure effective resource management.

The program also focuses on redefining the institutional and regulatory framework for the water sector and on improving the management system, to reflect public operators and players in the public, private, association, and community sectors. The stakes underlying this program also include capacity building and scientific and technological surveillance to ensure sustainable development in the water sector.

Where sanitation is concerned, the stakes consist of developing technical, material, and organizational capacities required to establish an adequate system for collection and disposal of liquid and solid waste in population centers and households, for sustainable habitat development, to protect resources, and to limit environmental pollution (contamination, household waste, health hazards, neighborhood conflicts, etc.).

The specific objectives of this program during the period 2010-2014 are presented in Table 2.1.9.

Tableau 2.1.9.

Specific objectives and target results for the program to increase access to drinking water, sanitation, and sustainable resource management

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The operations adopted and expected results in connection with the program to increase access to drinking water and sanitation, and sustainable resource management are presented by objective in Table 2.1.10. A total of 11 operations will be carried out in connection with the program in progress for the period 2010-2014.

Table 2.1.10.

Specific objectives and expected results for each objective of the program to increase access to drinking water, sanitation, and sustainable resource management

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2.2. CORE STRATEGY II. STRENGTHEN KEY SECTORS BY FOCUSING ON INSTITUTION BUILDING AND ENSURING A BROADER ROLE FOR THE PRIVATE SECTOR

This core strategy involves implementation of priority programs aiming to develop and increase productivity and performance in key economic growth sectors. This strategy primarily involves agriculture, stockbreeding, fishing, and tourism. While the traditional components of the agrofood sector are better known, and their contribution to economic development and food security no longer remains to be proven, the tourism sector offers great potential that has never truly been tapped.

The measures under this strategy aim at institutional support and redefinition of the regulatory framework governing growth sectors; support for the intensification, improved productivity, strengthened competitiveness, and capacity building for commercial activities and marketing circuits. This core strategy also includes accompanying measures aiming to strengthen the financial intermediation system and access to microcredit, support for nonfinancial services to promote private sector development, and an improved business environment. These activities constitute essential measures for the country and the underprivileged sectors to become integrated into the modern economy and to consolidate the development of micro and small-scale enterprises, which are often highly vulnerable to economic shocks.

A total of nine (9) priority programs were identified under Core strategy II. They are included in two major subgroups: (i) strengthen the private sector (two programs); and (ii) restore growth through key sectors (seven programs), which in turn are divided into three subsectors (agriculture and stockbreeding, fishing, and tourism).

Strengthen the private sector

Program 2.1. Support private sector organization;

Program 2.2. Financial intermediation and microcredit.

Restore growth through key sectors

- Agriculture and stockbreeding subsector

Program 2.3. Strengthen security for property resources;

Program 2.4. Support the creation of a favorable environment for agriculture sector development;

Program 2.5. Restore agricultural and agrofood production;

Program 2.6. Protect livestock from exotic infectious diseases and intensify animal production sector activity.

- Fishing subsector

Program 2.7. Create an environment conducive to harmonious development of the sector;

Program 2.8. Develop a conservation, processing, and marketing system for fish products.

- Tourism subsector

Program 2.9. Support tourism development.

Strengthen the private sector

The private sector in the Comoros is poorly organized. The Chambers of Commerce, Industry, and Agriculture have recently emerged from a lengthy institutional crisis. Elections were held and a new leadership team for the Union of Chambers of Commerce was elected by the members. This institution now requires new impetus. Further, professional organizations provide few services to their members. The more structured formal sector, comprised essentially of small and medium-scale enterprises, coexists with a substantial informal sector that requires support and formal organization.

While reforms are necessary at the legislative and regulatory levels, Comorian enterprises also urgently need to develop their professional status. To that end, expertise and skills must be developed in areas essential for their progress. Such services include legal counsel, accounting, management, quality control, information technology, market research, marketing, selection of production technologies, processing, marketing, packaging, storage, information management, after-sale services, etc.. The consulting sector is undeveloped and is based on a few projects involving assistance in enterprise creation, and a handful of new enterprises with limited resources that sell their services to existing firms. To establish a sustainable, competitive supply of enterprise services, it is an important matter to strengthen the consulting service sector so that a professional entrepreneurial fabric can be gradually established within the private sector.

The Comorian private sector also includes the financial service sector. Until last year, there was only one general private bank (BIC), along with two decentralized financial institution networks: Meck and Sanduck. Two new foreign banks (Eximbank of Tanzania and a Kuwaiti bank) were approved by the central bank to open branches in the Comoros. Banque de Développement des Comores was also recapitalized and has recently returned to the market, having opened a microfinance window and emerged as a competitor for Meck and Sanduck. Although the system registers excess liquidity, credit is still costly and the limited services available do not meet the requirements of a developing country. We can, however, expect new banks to introduce more competition, leading to the introduction of new financial instruments (such as venture capital companies), and a gradual decline in interest rates.

In this framework, the action plan for 2010-2014 focuses on operations designed to support private sector organization and to develop and strengthen financial intermediation and microcredit. It is based on the following two priority programs that will be implemented during the period 2010-2014:

Program 2.1. Support private sector organization;

Program 2.2. Financial intermediation and microcredit.

2.2.1 Priority program 2.1. Support private sector organization

Targeted actions will be taken to strengthen the human and institutional capacities of the Chambers of Commerce and professional associations so that they can provide useful services to their members. These actions will be included in a program of operations designed to improve the investment climate; make enterprises more competitive; reduce rent-seeking economies and taxes, primarily for large enterprises; strengthen the judiciary institutions with judges specialized in financial and commercial matters; establish the Supreme Court; and implement the Organization for the Harmonization of Business Law in Africa (OHADA) Chart of Accounts, which the Comoros adopted several years ago. There are also plans to develop an arbitration authority for disputes filed with the Chamber of Commerce. The adoption of implementing decrees for the new investment code and the establishment of a national agency for investment promotion in the Comoros (ANPI) completed this scheme. The overall objective of the program is to increase the growth rate in private investment from 12 percent en 2006 to 25 percent by 2014. The specific objectives of this program are presented in Table 2.2.1.

Table 2.2.1.

Specific objectives and targets for the program to support private sector organization

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The operations adopted and expected performance targets under this program are listed by objective in Table 2.2.2. The program includes a total of twenty-six (26) operations.

Table 2.2.2.

Operations and expected results from the program to support private sector organization

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