Fin

dings

225April 2003

Findings reports on ongoing operational, economic, and sector work carried out by the WorldBank and its member governments in the Africa Region. It is published periodically by theKnowledge and Learning Center on behalf of the Region. The views expressed in Findings arethose of the author/s and should not be attributed to the World Bank Group.

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auritania’s 1998–2001 tele-communications reforms re-semble many World Bank-

supported reform programs whereovercoming capacity constraintscan determine success in achiev-ing development outcomes. Over-coming capacity constraints en-abled this desert nation of over 2million largely nomadic inhabitantsto attain unanticipated levels ofoutcomes in three years of telecom-munications reforms. New privateinvestment of US$ 100 million intelecommunications was attractedover two years, equivalent to 10percent of GDP; telephone line ac-cess multiplied twenty-fold; 6,000new telecommunications-relatedjobs were created in the informalsector in the capital city(Noukachott) alone; and a multi-sector regulatory agency was estab-lished which is now regarded as amodel in Africa. From lacking criti-cal skills at the outset of these re-forms, Mauritania became a sourceof lessons for neighboring countrieson how to competitively tender util-ity licenses, effectively regulateutilities in a competitive setting,and privatize a telecommunicationsoperator. Support for this capacityenhancement came from relativelymodest external assistance with anestimated cost of slightly over onemillion dollars (World Bank Groupstaff time as well as consultancysupport).1

MauritaniaEnhanced National Capacity inTelecommunications Sector Reforms

These outcomes raise three ques-tions of broader interest to capac-ity enhancement efforts. First, howdid capacity enhancement amplifypolicy commitment, leading to tar-get outcomes? Second, how wereglobal and local knowledge com-bined, making the crucial differ-ence in achieving results? Third, towhat extent was the capacity en-hancement process itself results-based and continually linked tooutputs and outcomes?

The complex interplay of successfactors can be viewed by relating itto (i) the country environment; (ii)the client/Bank interface in thecontext of this specific reform; and(iii) Bank processes and the Bankteam which supported the reformas a source of global knowledge andoutside facilitation.

Country-specific success factorsin capacity enhancement

Mauritanian policy-makers recog-nized their own strong initial com-mitment — the essential conditionfor the subsequent success — asitself insufficient to realize ambi-tions for change amidst the insti-tutionally constrained environmentin 1998. National capacities, notfinancial resources, were seen asthe binding constraint to imple-ment a new telecommunicationspolicy statement that represented

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a break with past traditions of statemonopoly. Moreover, prevailing in-vestment surveys ranked the coun-try in the bottom half of countryrisks in Africa. Mauritanian aware-ness of urgent capacity needs wentbeyond telecommunications policyand regulation and utilityprivatization, and extended to in-vestor promotion and strategic useof media.

With the Bank as the key part-ner, capacity enhancement, whichunfolded as an integral part of thereforms, was not only enabled bythis initial commitment but alsoreshaped commitment in unfore-seen ways. Parallel awareness-rais-ing and action learning processestransformed the early vision of asmall number of reform championsin the telecommunications sector,and inter-ministerial buy-in wasachieved for a framework of broaderutility sector reforms. Meanwhile,Mauritanians internalized a visionof success hinging on the joint ca-pacities of a network of ministriesand agencies (mainly the inter-min-isterial committee, the project man-agement unit, and the multi-sec-tor regulatory agency, all of whichwere created under the reform, aswell as the existing state-owned

telecommunications operator,which had initially been the sole lo-cus of reform planning). Eventu-ally, the capacity enhancement en-compassed a transformation pro-cess linked to the country’s povertyreduction strategy and went be-yond being just a series of, albeitimportant, regulatory changes andtransactions for restructuring thetelecommunications sector.

A simple yet highly effective in-strument for awareness-raisingwas the iterative fine-tuning of aproject management planning tooljointly developed with the Bankteam. This mapped a 280-action36-month detailed reform packageand implementation plan validatedby worldwide experience and alsocustomized for Mauritania’s cir-cumstances. This detailed plan alsoenabled Mauritanians to diagnoseand better understand their owngaps between what capacities wererequired for reform design andimplementation and what actuallyexisted. It sharpened the focus forlearning at individual and organi-zation levels, once a clear mappingof specific roles, responsibilities,and accountabilities for successemerged.

With early ownership of the ca-pacity enhancement process,Mauritanians avoided equatingnational capacity with technical as-sistance. They judiciously usedoutside consultants mainly to fillshort-term skills gaps, such as inlegal, audit, and technical areas.Rapidly translating learning intoaction, Mauritanians boosted theirown confidence through flawlessexecution of intermediate steps —such as adopting best practice ba-sic telecommunications legislation,and separating and corporatizingtelecommunications entities — inrecord time. Outside consultantswho had advised on similar reformsin neighboring countries were sur-prised not only at the speed atwhich the Mauritanians wanted toimplement their reforms, and tolearn as they went along, but alsotheir readiness to consider specificdetailed reform options which hadnot been tried elsewhere in Africa.Having assimilated what the de-tailed content of a best practicetelecommunications reform pro-gram could look like, it was left tothe Mauritanians to take respon-sibility for difficult and innovativedecisions as their capacities forevidence-based policy design grew

along with confidence in rule-baseddecision-making.

Bank/client interface successfactors in capacity enhancement

From the outset, Mauritaniancounterparts and the Bank teamaccepted mutual responsibilities inwhich success would depend on ahigh level of trust and on jointlearning. Neither side dwelled onpreconceptions of what the coun-try might or might not be able toachieve, given limited capacitiesand a tight time-frame. Instead,both focused on analysis which re-vealed to decision makers the sub-stantive and process issues of spe-cific reform alternatives. The Bankteam continually mobilized globalknowledge — in which the Bankhas a comparative advantage — butthe Mauritanian counterparts ac-tively adapted and combined thisknowledge with local understand-ing of institutions and processes.While focusing on the capacities ofa core group of about ten individu-als at various ministerial levels andbelow, the Bank team avoided fa-voring a particular agency or min-istry. This helped the Bank teamto directly or indirectly nurture awidening circle of dialogue with theindividuals and institutions taskedwith designing and eventually ex-ecuting the reform program.

Mauritanian decision-makersthus acquired an informed view ofthe trade-offs between speed andquality, also taking into accountthe need for building consensuswithin government as well as pri-vate sector and civil society. Thisalso placed squarely in their handsthe decision whether to adjust thescope and speed of reform. Ulti-mately, as confidence in decision-making grew, Mauritanians be-came less risk-averse to bold deci-sions. The cumulative learning pro-cess re-shaped the initial policycommitment, enabling theMauritanians to adopt policychanges and achieve successful

outcomes not only in record time,in comparison to similar reformselsewhere, but well beyond thescope of what had been originallyenvisaged in the March 1998 policystatement.

“ What to learn when “ was guidedby a pragmatic, single-minded fo-cus on a key outcome: accelerat-ing private investment under a newtelecommunications regulatoryframework. With ideas continuallydrawn from among Mauritanians orelsewhere, the Bank team ensuredthat all members of the core groupwere candidly presented a completeand independent view of where thedecision priorities lay. Initially, theBank team focused awareness rais-ing on the risks of not addressingadverse investor perceptions ofcountry risk and commercial poten-tial. What could enhance interestamong investors shopping globallyfor competitive telecommunicationsinvestment opportunities, amidstthe backdrop of the East Asian fi-nancial crisis followed by the grow-ing indebtedness of major telecom-munications operators worldwide?Acting on the results of continualjoint brainstorming on this ques-tion, the Mauritanians crafted astrategy which would come to dif-ferentiate their offering to privateinvestors through unique policycontent and optimal execution.

This practical capacity enhance-ment process also benefited an in-creasingly evidence-based ap-proach to policy design and regu-lation. As capacity enhancementshifted to technical areas — tariffs,interconnection, and frequencymanagement — Mauritanians cameto critically scrutinize, compare,and contrast success factors inother country settings. The Bank/client team jointly sifted global goodpractices to ask what was relevantfor a specific set of problems inMauritania. During a study tour toLatin America, Mauritanian coun-terparts quizzed counterparts inPeru and Bolivia not only on theirtelecommunications reform experi-

ences some three to four years ear-lier, but also on how they wouldhave modified their approach in thecontemporary market contextwhich Mauritania was facing in theyear 2000.

Joint learning processes evolvedthrough Bank missions, but alsothrough frequent videoconferences,e-mail exchanges, and a study tour.These were always linked to spe-cific outputs and outcomes in thereform program (e.g., framinglearning needs prior to the studytour and applying learning imme-diately, or preparing for the first in-vestors’ conference with a focus onthe unique selling points of theMauritanian tender offering).Mauritanian officials became in-creasingly adept at articulating thespecific choices shaping their pro-competitive reform strategy (e.g.,privatizing the national operatorthrough capitalization rather thansale of government shares). Eigh-teen months of this capacity en-hancement process readied theMauritanians in April 2000 to facetheir first investor forum duringthis reform with an offering en-hanced by well-informed designand requisite institutional capabili-ties.

Four weeks later, every privatebidder for the first license recog-nized that real capacity had beenbuilt, as each vigorously congratu-lated the government for a profes-sionally and transparently con-ducted tender process concluded inMay 2000. The same capacity thathelped generate a new world recordfor proceeds (adjusted on a percapita income basis), forMauritania’s first mobile telecom-munications license, was then ap-plied to the even more difficulttransaction of privatizing the na-tional operator. Evidence-basedpolicy thinking led the governmentto boldly open all telecommunica-tions services to competition priorto privatizing its own telecommu-nications operator, thus going wellbeyond the original policy. The stra-

tegic sale was successfully con-cluded only a few months later, set-ting another record on the conti-nent for privatization proceeds intelecommunications (on a per linebasis). More tangible impact of ca-pacity enhancement process mate-rialized as a record pace of infra-structure investment and serviceroll-out followed within a year.

Bank-specific factors insuccessful capacity enhancement

Fundamental to the Bank’s knowl-edge broker and facilitator role wasa strong Bank team value whichconsidered counterpart abilities tounderstand and solve their ownproblems as paramount. For this,possessing or mobilizing technicalexpertise was imperative, but theBank team also invested in rela-tionship-building. Very candid ex-changes with the client werecoupled with what Mauritaniancounterparts saw as a seamlessworking relationship between theBank’s Country Department man-agement, Country Office, and thetelecommunications team. An “in-tegrated” Bank team with effectivecommunication channels enabledthe client to request and receive,formally and informally, “just-in-time” knowledge and advice oncritical-path issues in the reform,often against very tight deadlines.Mauritanian counterparts came totrust the Bank’s ability to provideclear, unambiguous, and timelyguidance for a continuous problem-solving process for which theMauritanians always felt a strongsense of ownership.

The Bank telecommunicationsteam tackled Mauritanian needs forcustomized solutions with a will-ingness to depart from the moretraditional approaches to telecom-munications reforms within theBank. They resisted frequent skep-ticism that rapid results could beachieved in such a difficult envi-ronment. Avoiding narrowly cast-ing the capacity enhancement pro-cess as telecommunications reformenabled the Bank team and coun-terparts to strategically ally withchange processes and teams else-where. The ambit of the new regu-latory agency extended to all util-ity sectors as a means of efficientlyusing scarce Mauritanian capacity,and telecommunications reformsjoined the ongoing PRSP processthrough a working group on infor-mation and communication tech-nologies. Both sides incorporatedcapacity enhancement as an inte-gral part of project preparation andimplementation. Bank costs re-mained below-average as part ofpreparing and supervising a Bank-financed telecommunications re-form technical assistance project,less than 10 percent of which wasactually used to achieve the resultsdescribed here.

Finally, the Bank team under-scored the value of capacity en-hancement by encouraging the cli-ent to capture their early and laterlessons, including through video-taped key events, such as investors’conference and web site documen-tation of all stages of license ten-ders and regulations. Thus,Mauritanians shared their experi-ence with other countries. At leastone subsequent telecommunicationreform success (in Mali) can bepartly attributed to this cross-country learning experience.2

1 For more details, see also World BankAfrica Region Good Practice InfobriefNo.71, December 2001,www.worldbank.org/afr/findings/default.htm; “Développement et concur-rence: l’exemple de la Mauritanie” ENAMensuel, Paris, February 2002; WorldBank Africa Region joint staff/clientvideo debriefing March 5,2002 accessibleto Bank staff on afr/aftqk/debriefing;“Making Competition Work in Infrastruc-ture: Telecommunications Reform inMauritania” in Building A Consensus ForDevelopment Assistance: A Case For Aid,p. 103 (World Bank, June 2002).

2 See separate forthcoming companionFindings paper “How Malians learned tosucceed in telecommunications reformand enhance national capacity”.

This article was written byGovindan G. Nair, Lead FinancialEconomist, the World Bank Institute.For more information, e-mailGnair@worldbank.org