89558
                                     São Tomé and Príncipe

                          Country Partnership Strategy FY2014-2018

                                           Chair Summary ∗

                                            July 17, 2014

      Executive Directors discussed the Democratic Republic of São Tomé and Príncipe
Country Partnership Strategy (CPS) for FY2014-2018.

        Directors recognized the achievements made by São Tomé and Príncipe in recent years,
particularly in macroeconomic management, transparency in the use of public resources, the
business climate, and strengthening human development outcomes. They noted the important
development challenges that remain, with a large proportion of the population below the poverty
level, weak linkage between growth and poverty reduction, vulnerability to climate change, and
other challenges.

        Directors supported the overall thrust of the CPS and the proposed main areas of
engagement to help the country unblock the critical constraints to poverty-reducing growth.
They appreciated the alignment of the CPS with the government’s priorities and the World Bank
Group (WBG) strategic goals of poverty reduction and shared prosperity. Directors took
particular note of São Tomé and Príncipe’s continued high risk of debt distress and underscored
the importance of strengthening fiscal and external sustainability, backed up by continued
concessional support from development partners. Directors encouraged the WBG to consider
São Tomé and Príncipe’s unique development challenges as a Small Island Developing State
during CPS implementation. They strongly emphasized approaches that maximize development
impact in small economies like São Tomé and Príncipe.

        Directors noted that the CPS aims to advance the groundwork to increase non-oil
earnings and build upon its strengths and recent gains to harness opportunities for the
transformation of the economy. They supported the focus on job creation through enhancing the
private sector, and support for the social sectors, social protection and vulnerability,
complemented by non-lending activities and trust funds. Directors emphasized the importance
of coherence, coordination, and leverage in the use of WBG and donor resources. They noted
the need to improve coordination among donors, harmonization of donor programs, and the
strengthening of systems that deliver on pro-poor projects. Directors underscored the importance
of an expanded role for IFC and MIGA, including in improving the investment climate,
developing the potential of tourism, value chains in agriculture, and development of the
information communications technology sector for economic growth and employment.

       Directors supported efforts for regional and South-South learning, including with other
Small Island Developing States, and the deepening of development dialogue among these
countries. They welcomed the results matrix included in the CPS and encouraged close
monitoring of development results to ensure alignment with strategic objectives.

*This summary is not an approved record.