am} gr Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2206-AL REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOR A FOURTH EDUCATION PROJECT May 26, 1978 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Currency Equivalents (December, 1977) US $ 1.00 Algerian Dinar (DA) 4.05 DA 1.00 US $ 0.25 Measures 1im 3.28 feet 1 m 10.76 square feet 1 km 0.38 square mile 1 hectare 2.47 acres Fiscal Year January 1 to December 31 Glossary of Abbreviations EISEP: Ecole Normale Sup8rieure de l'Enseignement Polytechnique (Technical Teacher Training College) IVIT: Institute for Vocational Instructor Training NIME: National Institute of Mechanical Engineering (Engineers) NIMET: National Institute of Mechanical Engineering (Higher Technicians) Lyce*: First and second cycle secondary school (grades 7-13) offering after grade 10 courses in Arabic, Humanities, Mathematics and Sciences (General Lyc8es) or in Industrial Arts, Mathematics, Commerce and Economics (Technical Lycees). Upon completing courses and passing the required examinations, students are awarded the "Baccalaureat" (various specializations) which qualifies for entry into university. Technicum: A new type of technical secondary school (grades 10-12) with strong vocational bias, designed to produce middle-level technicians. FOR OFFICIAL USE ONLY DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH EDUCATION PROJECT LOAN AND PROJECT SUMMARY Borrower: Democratic and Popular Republic of Algeria Beneficiaries: The Ministries of Heavy Industry, Labor and Vocational Training, Higher Education and Scientific Research, Education, and Light Industry. Amount: US$90.0 million equivalent. Terms: Seventeen years with a four year grace period, and interest at 7.5 percent per annum. Project The project would help to alleviate acute manpower short- Description: ages of high and middle-level technicians and skilled craftsmen, contribute to reducing regional inequalities by decentralizing related training facilities, and support local industrial development. Specifically, the project would supply engineers and higher technicians in mechanical engineering, workshop instructors for an expanded network of vocational training centers, and technical/workshop teachers for the civil engineering technology sections of a new network of technicums. The loan would finance the foreign exchange cost of: (a) architectural design, con- struction, furniture and equipment for (i) two new National Institutes of Mechanical Engineering (NIME and NIMET) for engineers and higher technicians, respectively, (ii) a new Institute for Vocational Instructor Training (IVIT), and (iii) conversion and expansion for the Technical Teacher Training College (ENSEP) in Oran; (b) 62 man-years of technical assistance for key expatriate staff for the start up of the project institutes; (c) 128 man-years of fellowships to train Algerian staff abroad to replace the expatriate staff; and (d) 7.5 man-years of short-term con- sultants to prepare studies on the development of (i) a network of training centers and a national institute of rural maintenance trades; (ii) a system of educational radio and television for vocational training; and (iii) a national institute for pedagogical research on vocational training. Costs per man-month for experts and fellow- ships are estimated at about $5,000 and $1,250, respec- tively. Incremental annual output due to the project would be about 225 mechanical engineers, 550 higher tech- nicians in mechanical engineering, 450 vocational train- ing nstructors, and 220 technical/workshop teachers. The risks that can be identified are of three types: first, the combination of French and English language study programs at NIME and NIMET, as well as the size of the This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii - technical assistance component envisaged for all proj- ect institutes, could pose difficulties in coordination, and will require close supervision. Second, the costly and sophisticated equipment for NIME and NIMET will require careful maintenance and maximum utilization if full benefits are to be derived. Third, administrative shortcomings in Algeria combined with constraints on the national construction industry, could delay civil works implementation. Estimated Cost: -----US$ Million ------ Percent Local Foreign Total of Total National Institute of Mechanical Engineering (Engineers, NIME) 13.6 23.4 37.0 25 National Institute of Mechanical Engineering (Higher Technicians, NIMET) 15.0 26.5 41.5 27 Institute for Vocational Instructor Training (IVIT) 9.3 8.0 17.3 11 Technical Teacher Training College (ENSEP) 1.9 2.0 3.9 3 Technical Assistance, Fellowships and Studies 1.2 4.7 5.9 4 Total Base Cost 41.0 64.6 105.6 70 Physical Contingencies 4.1 6.2 10.3 7 Price Contingencies 15.4 19.2 34.6 23 Subtotal 19.5 25.4 44.9 30 Total 60.5 90.0 150.5 100 Financing Plan: Bank Loan 90.0 Government Contribution (expected to be partially financed by French Caisse Centrale de Cooperation Economique) 60.5 150.5 Estimated Disbursements: ------------- US$ Million ------------- FY 1979 1980 1981 1982 1983 1984 Annual 3.7 11.4 33.5 32.0 7.7 1.7 Cumulative 3.7 15.1 48.6 80.6 88.3 90.0 Staff Appraisal Report: No. 1831-AL of May 26, 1978. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOR A FOURTH EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed loan to the Democratic and Popular Republic of Algeria, for the equivalent of US$90.0 million to help finance a fourth education project. The loan would have a term of 17 years, including 4 years of grace, with interest at 7.5 percent per annum. Some of the local costs are expected to be financed by the French Caisse Centrale de Cooperation Economique. PART I - THE ECONOMY 1/ 2. A report entitled "Memorandum of the Current Economic Position and Prospects of Algeria" (1315-AL) was distributed to the Executive Directors on February 10, 1977. An economic mission visited Algeria in May/June 1977 and December 1977 and its report has been issued. The main conclusions of the mission are given in the following paragraphs. Country Data Sheets are attached as Annex I. 3. In 1966, Algeria's Revolutionary Council defined the fundamental objectives which the country intended to pursue during the period ending 1980. These were reaffirmed in detail in the National Charter approved by referendum in June 1976. In brief, these objectives are (i) to expand and organize the production base, enabling the economy to reach, by about 1980, a stage of self-sustained growth with full employment; (ii) to achieve economic independence, which implies that the country would rely first on its own resources for development, although international economic relations would be expanded and diversified; and (iii) to improve income distribution, particularly among regions. These objectives, and the strategy which has evolved towards their implementation, take into account the country's physical and socio-economic potential; the country's leadership is deeply committed to them. 4. The rapid establishment of a diversified and highly integrated industrial base, the education and training of all Algerians for the require- ments of modern tasks, and austerity in consumption are the main elements of Algeria's long-term development strategy. The National Charter, introduced in 1976, places emphasis more particularly, however, on the following aspects of the strategy. Whereas priority goes to hydrocarbon development as a means of accumulating financial resources, investments in other industries must henceforth be tailored more closely to the national capacity to prepare and implement projects, to the availability of financial resources, and to the 1/ Substantially unchanged from the President's Report for the First Sewer- age Project (No. P-2191-AL), approved April 4, 1978. rates of development in non-industrial sectors. The National Charter specif- ically underscores the importance of agriculture for creating jobs, for increasing incomes and improving their distribution, and for substituting agricultural imports. Decentralization is to be implemented in all areas of economic and social life so as to achieve the country's development objectives with maximum efficiency, while the principle of central planning f the economy will be maintained. Workers' participation in the new management structures, introduced in 1971, is to be progressively expanded. The control of people's assemblies over economic planning and management, which was already effective at local government level, has been introduced at t'e national level by the new constitution approved in November 1976. Small agricultural, industrial and retail trade enterprises will be encouraged to contribute to national economic development. 5. During the past four years, Algeria has been executing its second four-year Plan, 1974-77. With the improved financial prospects resulting from increased hydrocarbon prices at the end of 1973, the Government decided to accelerate considerably the country's long term strategy. The objectives of the Plan were to increase investment rapidly, to broaden the productive base and the economic and social infrastructure of the country, to shift the dis- tribution of investment in favor of non-industrial sectors and interior regions, and to improve substantially the employment of unskilled labor and the living standards of disfavored social groups. The Plan strategy empha- sized implementation of the decentralization policy. 6. Several strong elements emerged from Algeria's economic performance during the first three years of the Plan. Investment rose sharply in current prices from DA 13.3 billion in 1973 to DA 34.0 billion (US$8.2 billion) in 1976. Employment creation was substantial; the unemployment rate in non- agricultural sectors fell to an estimated 10 percent in 1976 from 17 percent in 1973. GDP growth accelerated in the non-hydrocarbon sectors where it averaged 10 percent per annum. A high rate of national savings, averaging 44 percent of GDP, was achieved. During the first two years of the Plan, however, total investment became very high in relation to Algeria's financial and human resources. In addition, an excessive share of investment continued to be devoted to industry with consequent increased development lags in other sectors. In 1976, the Government introduced a program to correct these imbalances. In real terms, non-hydrocarbon industrial investment was reduced from its 1975 level, while public investment in other sectors increased by 34 percent, indicating a new trend towards a more balanced sectoral distribution of investment which has been accentuated in 1977. The stabilization of investment in industry, combined with better management of stocks and imports and substantially increased hydrocarbon exports, reduced the pressures on the balance of payments that had developed in 1975. Net foreign reserves rose in 1976 by $0.6 billion to three months of imports at year's end. 7. Developments were not as positive in other areas. Although external financing requirements were reduced in 1976, Algeria continued to borrow heavily, especially from commercial banks, in order to secure the financing of new projects, particularly for gas development. This will cause a steep increase in service obligations in the years immediately ahead, and limit - 3 - correspondingly Algeria's capacity for further borrowing. Following a marked improvement in 1974 resulting from higher oil revenues, the domestic financial situation also deteriorated in 1975 and 1976. The overall Government budget showed large deficits. Credit to the economy and money supply increased sharply. These developments reflected the considerable investment effort of the country, the large current financing needs of public enterprises, and the high degree of subsidization of the economy. 8. The economic and financial situation in 1977, the last year of the current Plan, has been, on the whole, favorable. GDP growth continued at a high rate (about 10 percent), although agricultural output was adversely affected by weather conditions and hydrocarbon output growth somewhat decel- erated. Crude oil export prices increased by 10 percent at the beginning of 1977 and provided Algeria with the resources to further increase investment. In line with the policy to shift investment in favor of lagging sectors, some 57 percent of fixed investment was budgeted for non-industrial sectors, such as transportation, education, training, housing, urban services, regional development and agriculture. The growth of imports resumed following their stabilization in 1976 and the balance of payments current account deficit widened, amounting to an estimated $2 billion. Net external assets, however, remained stable over the year thanks to disbursements on external loans con- tracted in previous years. A substantial reduction in the recourse to new commercial loans, suppliers credits and bank credits was achieved in 1977. Government savings increased by about 50 percent due to large increases in hydrocarbon receipts, continued austerity in current budgetary expenditures and an appreciable reduction in price subsidies. The overall Treasury deficit, however, widened because the Government increased its investments and capital transfers to public and collective enterprises. 9. Decentralization of economic management has been pursued with vigor, especially in agriculture and industry. All agricultural units of the Socialist Sector and Agrarian Revolution are now responsible for their produc- tioni and investment plans, under the supervision of the local authorities and the agricultural credit bank (BNA). These decentralization measures have begun to have a beneficial impact on the output and financial results of these units. In industry, most of the public enterprises are now under the "socialist management" system, which should have a beneficial effect on efficiency since it encourages decentralization of financial and technical management from the enterprise level to the more manageable production unit. Decentralization of the financial system, as well as decentralization in other sectors in general, requires, however, revision of credit policy and financial management procedures for which initial measures were taken under the 1976 and 1977 Finance Laws. It also requires increased financial and accounting discipline in the enterprises, and enough experienced staff to strengthen the banks, which will be a difficult and slow process. Decentralization and strengthening of the distribution (marketing) system, especially for agricul- tural products, still call for important measures to be fully efficient. 10. Social development during the Plan continued rapidly, in favor espe- cially of the most disadvantaged groups. Policy measures which contribute to raising the living standards of those groups have included increases in the - 4 - guaranteed minimum wages, tax relief measures, increases in producer prices for agricultural products and subsidization of basic commodities. The dis- advantaged groups have also benefited from the creation of non-agricultural employment, implementation of the Agrarian Revolution, creation of small- and medium-scale enterprises at the regional and local levels, construction of public housing xespecially in rural areas) and rapid development of free health care, education, training and other social services. Overall, Govern- ment current and capital expenditure having a direct impact on social develop- ment increased to 57 percent of total direct Government expenditure in 1976, from 45 percent in 1973. 11. Algeria has been pursuing an active regional development policy which aims at providing equal opportunity in education, employment and living standards in all regions and thus limiting internal migration. Regional decentralization of administrative, economic and financial responsibilities is very advanced at the wilaya (province) and commune (municipality) levels and is a major determinant of the country's regional development. In addition to the location of heavy industrial investments in the interior of the country under the national Plan, special programs for the least favored wilayate, special urban development (PMU) and commune development (PCD) programs have been implemented since 1974. The establishment of local enterprises in various parts of the country in construction materials and other small-scale industries has been successful in creating employment, using local resources, and satisfying local demand. The regional and local plans and programs have generally achieved their objectives, with the exception of the "PMU" and the small- and medium-scale enterprise programs which suffered delays due to insufficient capacity at the local level for identification, preparation and execution of projects. These latter programs were accelerated in 1976 and 1977 in most of the wilayate. New investment locations for several large- scale projects bear little relation to market and factor availabilities and may be expected to result in high investment and operating costs. The Govern- ment is aware of this, and considers these additional costs as the price of developing outlying regions. 12. Algeria's economic and financial prospects beyond 1977 will be reflected in the next Plan, which is being prepared. The Plan is expected to start in 1979, and 1978 would be a transitional year. The investment strategy which is likely to be adopted should be consonant with the country's long- term objectives and strategy. It is likely to increase the relative emphasis on social sectors, especially housing, agriculture and water development. Priority will continue to be given to hydrocarbon development as a means of accumulating financial resources. In contrast, investment in other industrial sectors is likely to be moderated and more strictly allocated, in order to complete on-going projects, to achieve forward and backward linkages with existing industries, and to relieve constraints on the optimum use of existing capacities. It will, in addition, be adjusted more closely to the rates of development in non-industrial sectors and to the availability of financial and human resources. The authorities have recently underscored forcefully in pub- lic declarations the need for increased efficiency, for reduction of wastage and for better financial management of the national companies. The next Plan is therefore expected to give special attention to measures and programs - 5 - aimed at improving economic management, eliminating sectoral deficiencies and bottlenecks and, generally, making the economic system more efficient. 13. Algeria's-prospects will depend on four main factors: the growth of hydrocarbon exports, the level and composition of the country's investment, its capacity for future borrowing, and the pace of improvement in the effi- ciency of the economic system. Bank projections show that the country should maintain a relatively rapid economic growth in all sectors (about 9 percent yearly) during 1978-81. During 1982-1986, GDP growth would remain high in non-hydrocarbon sectors, while it would decelerate in the hydrocarbon sector because of the projected decline in crude oil output. The decline in crude oil output after 1982 would, however, be offset to a large extent by expected increases in condensate and natural gas output. The resource gap of the economy would remain high until 1980, with consequent large external capital requirements, especially to finance gas and condensate development for export. The financial constraint, however, appears somewhat more binding than had been projected in the years immediately ahead because of Algeria's heavy borrowings in 1975 and 1976, the consequent rapid increase in its debt service obliga- tions, and the expected decrease in the real price of crude oil in 1978 fol- lowing the recent OPEC decision. Thus, the need to modulate strictly the level of the country's investment in relation to the availability of financial resources is expected to dominate the strategy of the next Plan. 14. Production forecasts for the non-hydrocarbon sectors depend not only on investment but on the efficiency of the economic system. This factor, which is a determinant of Algeria's economic prospects, lends itself only to a largely qualitative evaluation. Progress in the area of economic planning and management began in 1976 and 1977, with emphasis on the entry of projects into full production, utilization of capacities, intersectoral project coordina- tion, interindustrial linkages and, to a lesser extent, financial management of the enterprises. Much remains to be done, however. As indicated above, the strategy of the next Plan is expected to be centered mainly on investments and measures designed gradually to eliminate constraints on economic effi- ciency. Two factors may work in favor of improving economic efficiency in the years ahead: (i) the industrial experience that Algeria has acquired after more than ten years of accelerated development; and (ii) the effect of the redistribution of investment aimed at helping the lagging sectors to catch up and improving the use of existing capacities. The decentralization policy should also help greatly to improve the economic system--provided it is sup- ported by strengthening of planning and supervision at the central level, revision of price and credit policies and development of the financial system. Algeria counts on external services to assist in relieving existing constraints on efficiency. 15. Algeria will have to pursue an active, although prudent, external borrowing policy. During 1978-81, external borrowing requirements are pro- jected to average about US$3.6 billion annually in terms of commitments, while a temporary decrease in external reserves is expected. The projected commit- ments are considerable in view of Algeria's debt-carrying capacity. In terms of access to external sources of financing, these amounts appear manageable since the gas contracts into which Algeria has entered generally provide for - 6 - partial financing of gas treatment and liquefaction plants. The amounts which should be mobilized for gas and condensate development are expected to con- stitute more than 70 percent of the projected financing requirements from commercial sources during 1978-81. Suppliers' credits should be available to finance other industrial investments, most of which will probably be implemented by foreign contractors. Borrowing from official soui.es should be relatively small. These include OECD and centrally planned countries, the African Development Bank, the World Bank, and the EEC, the latter of which signed a financial and trade agreement with Algeria in April 1976. 16. Although the resource gap is pro;ccted to disappear in the early 1980's, the balance of payments would continue to show current account defi- cits because of interest payments on external loans. In addition, commercial loans and credits with short maturities in relation to the gestation periods of investments will ._nduce rapidly increasing debt repayment obligations. The country thus faces borrowing requirements well into the 1980's, but in decreas- ing amounts in relative terms. These could be met by new suppliers' and buyers' credits linked to future projects. The experience Algeria has acquired on the international financial markets should enable it to manage its external borrowing requirements, and possibly also to improve the conditions of future external commercial loans. At the end of 1976, aware that liquidity problems could be caused by the heavy recourse of public enterprises to external borrow- ing, the Government set up an External Financing Committee. The Committee is chaired by the Governor of the Central Bank; it examines all external-credit requests by the enterprises and the terms of borrowing, and monitors external indebtedness. Algeria has not used IMF resources. Its IMF quota is SDR 130 million. As of the end of 1977, Algeria's holdings of SDRs amounted to SDR 46.2 million, equivalent to 114.5 percent of its cumulative position. 17. At the end of 1977, Algeria's total external debt outstanding and disbursed was estimated at $7.6 billion ($12.3 billion including undisbursed), equivalent to about 40 percent of GDP. Debt service increased from 13.7 per- cent of goods and non-factor services exports in 1975 to 16 percent in 1976 and an estimated 17 percent in 1977. With the projected new borrowings, debt service may rise to a level between 22 and 23 percent of exports by the early 1980's. It should decline subsequently, as the large condensate and gas projects, presently underway or planned, begin to generate increasing export revenues. Bank lending, past and projected, represents only a small fraction of the country's external financing requirpments. At the end of 1976, the portion of Algeria's total debt outstanding and disbursed owed to the Bank was estimated at 1.5 percent; this share will rise somewhat over the next years, but is projected to remain below 6 percent at the end of the decade. By 1984, the likely receipts from gas exports alone would exceed projected total debt service payments. Algeria's external borrowing needs will be large in the next few years, but can be accommodated in view of the considerably enhanced capacity to carry debt which the country has acquired in 1974 as a result of the new relationship between the prices of hydrocarbons and other commodities in world markets, the long-term prospects for gas exports, and general eco- nomic performance. Algeria is creditworthy for continued Bank lending. - 7 - PART II - BANK GROUP OPERATIONS IN ALGERIA 18. After an interval of about nine years, lending to Algeria resumed in FY73. Since then, fourteen loans have been approved totalling $632.5 million for roads, power, education, industry, rural development, urban sewerage and ports. Annex II contains a summary statement of Bank loans as of March 31, 1978 and notes on the execution of ongoing projects. While the physical execution of most projects is progressing well, disbursements for some loans have been slow. This is particularly the case for the first education project and the loan to the Algerian Development Bank (BAD). Because of administrative difficulties, implementation of the first education project, and therefore disbursements, are about two years behind schedule. Disbursements have also been slow for the project with BAD due to limited progress in improving institutional arrangements, which was an important objective of the project. The Bank and the Government are now engaged in a discussion on how to best solve the problems of the above two projects (see also para. 26). 19. The provision of technical assistance and institution-building sup- port is a major objective in the Bank's strategy in Algeria, to which the Government attaches special importance. The aim is to assist the Government in improving economic and sector management, project preparation, implementa- tion and financial control, Economic efficiency and financial management have been prominent in our economic dialogue with the Government, and technical assistance has been extended in nrev1niis nrojects to foster the financial system's appraisal capability and improve auditing of national companies. Most projects contemplated for the coming years are expected to have one or more technical assistance components. The project proposed in this report, as well as the three previous education loans, have included technical assistance to improve the planning and management of education and training in Algeria. In another vein, and on the recommendation of a joint Bank-IMF mission visit- ing Algeria in late 1974 to study the financial planning system, the Economic Development Institute (EDI) held a course in 1975 dealing with various aspects of financial planning at the central government, banking and project levels, followed by two industrial projects courses. A rural development course is now in progress in Algeria. 20. Another important objective of Bank strategy is to assist Algeria in relieving developmental bottlenecks in lagging sectors, more generally to reduce imbalances associated with Algeria's chosen path of development. The first three education projects address themselves to the present shortage of technical skills needed to carry out Algeria's transformation into an indus- trial society. Five transportation projects for highways, railways and ports are aimed at fostering the country's economic integration, in line with the Government's regional development objectives. 21. In this fiscal year, an $82 million loan for a first sewerage proj- ect was negotiated in February and approved by the Executive Directors on April 4, 1978. The project comprises major institution-building features and is the first concrete result of the recently initiated dialogue with the - 8 - Ministry of Hydraulics. In response to the Government's request for Bank assistance in industry, a technical assistance loan to the national company for metal construction, SN Metal, is expected to be submitted to the Board by early next fiscal year. Other projects planned for next fiscal year include roads, telecommunications and.agriculture. In subsequent years, projects are contemplated in industry, rural development, education, power, railways and urban public services; these projects will continue to stress objectives going beyond the simple transfer of resources. An improving mutual understanding between the Bank and Algeria should lead to a lending program increasingly responsive to Algeria's socio-economic transformation. PART III - THE EDUCATION SECTOR 22. The education and training system in Algeria is expected to fulfill social, economic and cultural objectives that are crucial to the country's development strategy. The essential social objectives are to provide a common educational base for all through nine years of basic education, which could lead to directly productive employment or further education and training, while increasingly employing Algerian teachers and using Arabic as the prin- cipal language. The main economic objective is to provide sufficient tech- nical and vocational training at all levels to satisfy the growing needs for trained manpower, from skilled workers to higher technicians and engineers who can assume managerial responsibility. Finally, fostering Arab-Algerian cultural values remains a basic goal. 23. A major structural and qualitative reform was initiated under the Second Plan (1974-77) to make the education system more responsive to the country's social and cultural objectives and more relevant to the needs of the economy. Education at all levels will be increasingly oriented toward a more practical scientific and technical approach designed to meet the demand for trained manpower required by industrialization and the rapid growth of the economy. Average annual demand during the period 1977-90 is expected to be close to 70,000 skilled craftsmen, 36,000 middle-level technicians, 5,600 higher level technicians and 2,400 engineers, compared with present outputs of only 20,000, 11,500, 1,660 and 370 respectively. Primary and secondary education would henceforth be based on nine years of a universal basic educa- tion, followed at secondary level by either 3-year courses in lycees and technicums (upper-secondary schools with a strong vocational bias) or teacher training courses. Post-secondary courses are offered in universities, where expanded enrollments are being reoriented toward science and engineering, and institutes of technology, designed to satisfy the needs for specialized personnel in various technical and engineering fields. Outside the framework of the formal education system, skilled and semi-skilled workers and craftsmen for industry and commerce are trained through a network of vocational training centers. The structural reform, which is still in the early stages of imple- mentation, would probably be completed by 1990. 24. The administration of education in Algeria is in a period of tran- sition. The Ministry of Education supervises pre-school education and is responsible for primary and secondary education; substantial administrative - 9 - authority has, however, been delegated to the country's 31 provinces. The Ministry of Higher Education and Scientific Research, which at present admin- isters only the university system, will gradually assume responsibility for all post-secondary education, which includes the institutes of technology established after 1970 under the various relevant ministries. This should facilitate the rational planning and coordination of post-secondary education, which is projected to nearly double by 1985. The technical ministries, such as Labor and Vocational Training, Heavy Industry, Light Industries, and Energy and Petrochemicals, would retain responsibility for vocational training for their own sectors. 25. Education has expanded rapidly since independence and particularly in recent years. Since 1972, primary and secondary enrollments have increased at an average annual rate of over 7 percent and 17 percent respectively, and now represent 78 percent and 26 percent respectively of the relevant age groups. Annual enrollments at universities have increased at about 24 percent over the same period. Public expenditures on education represented about 9 percent of GDP in 1977, while capital expenditures absorbed over 22 percent of total public capital expenditures. Total enrollments are estimated to increase at 4 percent yearly, from 3.5 million in 1976/77 to 5.7 million in 1989/90. To finance this expansion, an average annual increase of over 6 percent (real terms) in total public expenditure on education, amounting to about 8.1 percent of projected GDP in 1990, will be required. Barring any unforeseen events, the Algerian economy seems capable of meeting this rela- tively high level of expenditure. However, administrative shortcomings and lack of capacity in the construction industry could pose obstacles to the rapid development of the education and training system. The Government is aware of these problems and is making serious efforts to redress them. Bank Strategy and Lending for Education 26. The main purpose of Bank lending for education in Algeria is to assist in meeting the demand for manpower to fill key management and high- level technical posts, and to supply urgently needed middle level technicians and skilled workers. The first two Bank-financed projects focused on the expansion and construction of facilities for institutes of technology for training in the fields of plastics, gas, mining, metallurgy, agriculture, electricity and electronics. The major component of the third loan is the construction of fifteen out of a planned network of 30 technicums, a new type of upper-secondary school to train middle-level technicians. The loan also finances the construction of two vocational training centers. Studies under the three education loans include procurement/accounting, location planning, institutional administration and systems building in education. Technical assistance has been provided for planning and implementation of sector-wide reforms. A study on the demand for teachers for vocational training under the second project forms the basis for the Institute of Vocational Instructor Training to be financed under the proposed project. There have been substan- tial delays in the implementation of the first project, due in large part to changes in the administration of the education sector (see para. 24), and - 10 - particularly to the complexity of the component for the Institute of Agri- cultural Technology. Corrective measures have now been agreed and it is expected that the loan can be closed at the end of this year. Implementation of the second and third projects is proceeding satisfactorily. 27. The shortage of skilled manpower remains one of the major constraints to the development and efficiency of most sectors of the Algerian economy. Annual requirements of engineers and higher technicians in mechanical engineer- ing during 1977-90 are estimated at about 400 and 950 respectively, while present yearly output is only 26 mechanical engineers and 42 mechanical higher technicians. Expatriates account for over 40 percent of professionals and higher technicians in industry, as well as for 55 percent of post-secondary teachers and over 30 percent of secondary teachers. The proposed project would thus continue to reinforce technical education, including the training of teachers and instructors in technical fields. As a result of the construc- tive dialogue that has been established with the Government in the education sector, it is expected that the Bank's continued involvement would increas- ingly emphasize rural, adult and agricultural education and training. PART IV - THE PROJECT 28. The investments foreseen under the proposed project would comple- ment and supplement the Bank's previous lending in the sector by providing training for urgently needed engineers and higher technicians in mechanical engineering and for teachers for technicums and for vocational training centers. The project was identified by a Bank mission in November/December, 1976. It has been prepared by the Government, assisted by consultants, and a Bank mission in March/April, 1977, and appraised in October, 1977. Nego- tiations were held in Washington in May, 1978. The Algerian delegation was headed by Mr. Hassam, Director General of the Ministry of Finance. A report entitled "Staff Appraisal Report, Fourth Education Project, Democratic and Popular Republic of Algeria" (No. 1831-AL), dated May 26, 1978 is being circulated separately to the Executive Directors. A Loan and Project Summary is provided in the beginning of this report; a Supplementary Project Data Sheet, Annex III, and a map showing the location of project institutes are also attached. Objectives and Description 29. The proposed project would help alleviate the manpower shortages which prevent the optimum efficiency and productivity of investments in most sectors of the economy. It would also reduce regional inequalities by dis- persing technical training opportunities and support local industrial develop- ment. Specifically, the project would supply engineers and higher technicians in mechanical engineering, workshop instructors for the national network of vocational training centers, and technical/workshop teachers for the civil engineering technology sections of the technicums. The loan would finance the foreign exchange cost of: (a) architectural design, construction, furniture and equipment for (i) two National Institutes of Mechanical Engineering (for engineers and higher technicians, respectively), including dormitories for all - II - students, (ii) an Institute for Vocational Instructor Training, and (iii) con- version and expansion of a Technical Teacher Training College; (b) 62 man-years of technical assistance for key expatriate staff for the start up of the the project institutes; (c) 128 man-years of fellowships to train Algerian staff abroad to replace expatriate staff; and (d) 7.5 man-years of consultants to prepare studies on the development of: (i) a network of training centers and a national institute of maintenance trades in rural areas (50 man-months); (ii) a system of educational radio and television for vocational training (25 man-months); and (iii) a national institute for pedagogical research on vocational training (15 man-months). Training of Engineers 30. A five-year training course would be offered in the National Insti- tute of Mechanical Engineering for engineers (NIME) to be constructed under the project in Setif, an agricultural and industrial center of growing importance located about 100 miles southeast of Algiers. The site of the Institute would be close to that selected for the University of Setif. The course would be based on a study prepared for the Government by a French consulting consortium, complemented by some programs selected by the Government from another study prepared by an American consulting consortium. Programs would be offered in workshop technology, metal construction, power, maintenance, industrial metal- lurgy, industrial engineering, industrial management and plant engineering. Admission would be granted to students with a baccalaureate degree on the basis of an entrance examinatior.. The institute would have an annual intake of 240 students, with a total enrollment of 1,200 and an annual output of 225 which, together with anticipated university output, would meet Algeria's estimated manpower requirements for mechanical engineers through 1990. Training of Higher Technicians 31. The National Institute of Mechanical Engineering for higher techni- cians (NIMET) would be constructed under the project in Tiaret, an important industrial and regional center located about 150 miles southwest of Algiers on the High Plateaux. The site is close to that selected for the University of Tiaret, whose students would use the Institute's facilities. A two-year training course for baccalaureate-level students would replace the existing four-year course that recruits grade 10 students. The course of study would include a similar combination of the proposals made in the French and U.S. studies, and would include classes in workshop technology, industrial design, metal construction, automation, foundry, forge work and metallurgy, plant technology and manufacturing technology. The Institute would have an annual intake of about 600 students, with a total enrollment of 1,200 and an annual output of 550 which, together with anticipated university output, would meet the country's requirements for higher technicians in mechanical engineering through 1990. 32. French would initially constitute the main language of instruction for both Institutes, with a number of courses offered in English; eventually, Arabic is expected to predominate. Curricula and syllabi for both Institutes - 12 - would be of high standard, strongly oriented towards industry and emphasizing problem-solving with an adequate balance between theory and practice. The Institutes would act as centers of applied research and re-training appropri- ate to the solution of actual development problems of Algerian industry. A nucleus of these Institutes, which exists temporarily outside Algiers at Boumerdes, would be phased out and incorporated into the two new Institutes. Training of Vocational Instructors 33. The Government's plan to expand the network of vocational training centers by 96 centers over the next four years will increase substantially the demand for vocational instructors. An Institute for Vocational Instructor Training (IVIT) would thus be constructed at Annaba, a commercial port and industrial center experiencing rapid growth. A two-year course would be offered to trainees having ten years schooling, followed by a one year course in a vocational training center, and two further years' practical experience either in industry or in a vocational training center. Training would be provided in construction and civil engineering, heating and air-conditioning, electricity, manufacturing technology, metal construction, motor engineering, industrial chemistry, and printing. The Institute would have an annual intake of about 500 students, with an enrollment of 1,000 and an annual output of 450. Curricula and syllabi have been prepared in a preinvestment study by a consulting firm from the Federal Republic of Germany, in cooperation with the various government agencies concerned. Periodic training visits would be made to relevant industries and vocational training centers. The program would have a strong practical bias with a proposed distribution between technical/ practical and pedagogical training of about 83 percent and 17 percent, respec- tively. Training of Technical Teachers 34. The third Bank-financed education project included the construction of a tranche of 15 technicums from a proposed network of 30 technicums. These schools, which are being implemented at a rate of 5 per year, would require annually an additional 450 teachers, including about 280 technical workshop instructors. To adequately staff these schools, the existing Technical Teacher Training College (Ecole Normale Superieure de l'Enseignement Poly- technique, ENSEP) in Oran would be expanded under the project. ENSEP presently has a capacity of about 1,100 places and provides training for post-secondary students in mechanics, electricity and electronics. With some conversion and supplementary equipment and an additional 100 places in civil engineering, this college, together with the university system, could supply sufficient teachers in these fields. A large workshop area would be converted into individual workshops and laboratories and additional workshop/classrooms and social facilities would be built. A three-year course would be offered to selected baccalaureate-level students from technicums and technical lycees. A fourth probationary year would be spent on teaching assignment under super- vision from ENSEP with periodic returns (about six weeks annually) to ENSEP. After the expansion by 100 places, enrollment of trainees for technical/ workshop courses would be 800; the remaining 400 places would be mainly for science teacher trainees. An understanding was reached with the Government - 13 - that the pedagogical training program submitted for ENSEP would be further amended, as agreed with the Bank, to meet the needs of technicums, and assur- ances were obtained that all necessary measures would be taken to ensure the collaboration of the Ministries of Education and Higher Education in the implementation of this program at ENSEP (draft Loan Agreement, Section 3.10(ii) and relating Supplemental Letter). The Government has also provided assurances that the Bank would be informed regularly of all measures taken affecting the employment conditions of trainees and graduates of ENSEP (draft Loan Agreement, Section 3.08). 35. The Government would provide housing for almost all students at IVIT and ENSEP; housing for students of NIME and NIMET would be financed under the loan. Women are expected to comprise about 5 percent of total enrollments in NIME and NIMET and about 10 percent in IVIT and ENSEP, with future increases foreseen. To ensure that all the institutes maintain close contact with the economic sectors concerned in order to remain abreast of current developments and problems, the Government has provided assurances that views would be exchanged annually with the Bank on the recommendations of the advisory councils established at the project institutes, the members of which would represent the needs of the economic sectors benefitting from the training provided at each institute (draft Loan Agreement, Section 3.07). A system of continuous evaluation would be introduced aiming at improving educational guidance, vocational orientation and career evaluation, and should prove particularly important for realistic curriculum development. The Government has provided assurances that information on this system would be exchanged with the Bank sufficiently in advance of the opening of the new institutes and the ENSEP extension, to permit Bank comments. Results of tracer studies would, for five years following first outputs from the project institutes, be sent periodically to the Bank as required for project evaluation (draft Loan Agreement, Section 3.09). Technical Assistance 36. An important technical assistance component is included in the proj- ect to ensure sufficient and qualified staffing for all the institutes. A program of 62 man/years of technical assistance would be provided under the project, principally to enable the project institutes to begin operations with key expatriate staff while Algerians would be completing their training abroad to replace them. Also included are two man/years to be allocated to the Ministry of Education for recruitment of one or more specialists in planning and administration as improved planning procedures are necessary to effec- tively control the rapid expansion of the education system. The project would also provide for a program of 128 man/years of fellowships, including two man/years for the Ministry of Education, to train Algerian staff to gradually take over from the expatriate staff. Selected fellows would complete their training abroad sufficiently in advance of the opening of their respective institutes so that their return would coincide with the arrival of the expa- triate specialists. This would enable them to acquire further experience as counterparts to expatriates during the installation of equipment and in the preparation and execution of teaching programs. - 14 - 37. In addition, the project would finance studies, mostly on the devel- opment and expansion of rural education and training. A total of 90 man/ months of technical assistance would be provided for the preparation of studies on: (i) the development of a national institute and network of train- ing centers for maintenance trades in rural areas (50 man/months); (ii) the development of a system of educational radio and television courses for voca- tional training (25 man/months); and (iii) the development of a national institute for pedagogical research on vocational training, with particular emphasis on curriculum development and on an evaluation system (including tracer studies) for IVIT and vocational training centers, as well as links between these institutes and the workplace (15 man/months). For the implemen- tation and monitoring of the study on educational radio and television, the Government has provided an assurance that all necessary measures would be taken to ensure collaboration of the Ministries of Labor, Education and Light Industries, all of whom share an interest in the subject (draft Loan Agree- ment, Section 3.10(i) and relating Supplemental Letter). The Government has also provided an assurance that the terms of reference for the studies would be forwarded to the Bank in sufficient time to permit recruitment of experts according to schedule (draft Loan Agreement, Section 3.03). The findings of the first two studies above could form the basis for components of a sub- sequent Bank-financed education project. Project Implementation 38. Implementation of the project is expected to take five years follow- ing the signing of the Loan Agreement. The normal guarantee period for civil works, final disbursements and closing of accounts would require an additional year. Bank involvement in the project at this stage would ensure early imple- mentation of the technical assistance program and equipment procurement for the engineering institutes, currently operating outside Algiers, and for ENSEP; Bank commitment to the project would also facilitate the recruitment of the necessary foreign architectural consultants. Technical assistance programs under the project are expected to continue until October 31, 1984, or about two years following completion of physical aspects. Different Govern- ment organisms would be responsible for implementing the various project components. The Directorate of Training of the Ministry of Heavy Industry, through the Director General of the Institutes of Mechanical Engineering, would be responsible for NIME and NIMET. The Directorate of Vocational Training in the Ministry of Labor would be responsible for IVIT and for the studies on educational radio and television and pedagogical research on vocational training. The Directorate of Planning in the Ministry of Higher Education would be responsible for the conversion and extension of ENSEP, in close collaboration with the Ministry of Education and the Director of ENSEP. The Directorate for the Artisanat in the Ministry of Light Industries would assume responsibility for the study on rural maintenance trades. The Project Liaison Officer in the Ministry of Finance for the three previous education projects would also provide liaison for the proposed project. All these authorities are considered sufficiently experienced to ensure effective project implementation. - 15 - Cost Estimates and Financing Plan 39. The total cost of the project is estimated at $150.5 million, of which about $100 million for investment in the four project institutes, $6 million for technical assistance and about $45 million for physical and price contingencies. Physical contingencies are calculated at ten percent of the estimated cost of civil works, furniture, equipment and consultant fees and five percent of the estimated cost of technical assistance. Price contingen- cies are based on current and projected price escalation rates over the period of project implementation, estimated at about 33 percent of the baseline cost. Instructional equipment costs per student for the Institutes of Mechanical Engineering are high (about $7,500, c.i.f.) but are justified due to the specialized nature of the Institutes and their equipment, and because the Government's policy of training job-ready graduates requires additional sophisticated and expensive production-type equipment. The cost of experts' services and for fellowships are estimated at $5,000 and $1,250 per man-month, respectively. The proposed Bank loan of $90 million, representing 60 percent of total project costs, would finance the full foreign exchange cost of the project. The balance, amounting to $60.5 million or 40 percent of project costs, would be financed by the Government, with some likely assistance from the French Caisse Centrale de Cooperation Economique, which has also been involved in the preparatory work for NIME and NIMET. Procurement and Disbursements 40. The bulk of civil works contracts, amounting to $88.3 million including contingencies, would be awarded on the basis of international com- petitive bidding in accordance with Bank procurement guidelines. Contracts for ENSEP for extension and conversion (about $2.2 and $0.8 million, respec- tively) would be awarded on the basis of normal Government procedures which are satisfactory to the Bank. Foreign firms are expected to be awarded up to two-thirds of the project civil works contracts. Contracts for equipment and furniture, estimated at $47.5 million, would be grouped to the extent possible in large packages to permit bulk procurement. Such contracts in excess of $50,000 would be awarded on the basis of international competitive bidding. Small items or groups of items costing less than $50,000, or items of specialized nature for which international competitive bidding would not be practicable, would be procured under normal Government procedures which are satisfactory to the Bank. These items, which would not exceed an aggregate total of $5 million, would include when possible price quotations from at least three manufacturers or suppliers. Bank approval of tender evaluation documents would be required before award of all contracts for furniture and equipment under international competitive bidding, and for civil works con- tracts exceeding $1.0 million equivalent. Bank reimbursement for all other contracts would be contingent on Bank approval of tender evaluation documents subsequent to contract award. The bidding documents would specify that equip- ment suppliers would be required to provide the necessary training of key personnel in the use and maintenance of sophisticated equipment (draft Loan Agreement, Schedule 4, A.3.(b)). An appropriate equipment maintenance plan would be prepared for the four project institutes and forwarded for Bank - 16 - review within one year of their opening (draft Loan Agreement, Section 4.03 (b)). In the evaluation of bids, local manufacturers of equipment and furni- ture would be allowed a margin of preference equal to the existing rate of customs duties applicable to competing imports or 15 percent of c.i.f. price, whichever is lower. While about 50 percent of furniture contracts is likely to be awarded *u local manufacturers or suppliers, almost all equipment is expected to be procured from foreign manufacturers. 41. The proposed loan would be disbursed against 44 percent of total expenditures for civil works. Furniture and equipment would be covered at 100 percent of foreign cost for directly imported items, 85 percent of total cost for locally procured imported items, and 45 percent of total cost for locally manufactured items. Disbursements for professional services would be made against 100 percent of the foreign exchange cost of services provided by non- Algerian firms and 30 percent of the total cost of local professional services; and for technical assistance against 100 percent of the foreign exchange cost. Benefits and Risks 42. The project would help to alleviate acute manpower shortages of high and middle-level technicians and skilled craftsmen by increasing the annual output of the education system by about 225 mechanical engineers, 550 higher technicians in mechanical engineering, 450 vocational training instructors, and 220 technical/workshop teachers. The project would also contribute to reducing regional inequalities through systematic decentralization of skilled training opportunities and supporting local industrial development. Further- more, the project would make an important contribution to improved educational planning and administration by providing a program of technical assistance to undertake a feasibility study on development of rural maintenance trades, and studies on educational broadcasting and pedagogical research in vocational training. 43. In addition to the difficulties inherent in ensuring effective administrative coordination of the various ministries and regional authori- ties, three main risks can be identified at this stage. First, the combina- tion of French and English language study programs proposed for the two Institutes of Mechanical Engineering (NIME and NIMET) could pose some coordi- nation and communication difficulties. In addition, the size of the technical assistance component envisaged for all the project institutes would indicate the need for close supervision of both of these aspects. Second, to ensure that maximum benefit is derived from the costly and sophisticated equipment to be installed in NIME and NIMET, these will require careful maintenance and a high rate of utilization. Finally, administrative shortcomings in Algeria, combined with the expected heavy demand on the national construction industry, could delay civil works implementation. These risks have been discussed with the Government authorities concerned, who have indicated that they would take whatever measures may be necessary to minimize them to the extent possible. - 17 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 44. The draft-Loan Agreement between the Democratic and Popular Republic of Algeria and the Bank and the Report of the Committee provided for in Arti- cle III, Section 4 (iii) of the Articles of Agreement are being distributed separately to the Executive Directors. 45. The draft Loan Agreement conforms to the normal pattern for educa- tion projects. In addition to the features of the draft Agreement which are referred to in the text and listed in Section III of Annex III, the following conditions of effectiveness have been added: (i) evidence has been furnished to the Bank that surveys of existing facilities have been made and needs for additional works on and around the construction sites have been identified (Section 5.01(a)); and (ii) preliminary site plans and schematic architectural designs for the Project institutes have been furnished to the Bank (Section 5.01(b)). 46. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 47. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachment May 26, 1978 Washington, D.C. ANNEX I ALGERIA - SOCIAL INDICATORS OATA SHEET Page 1 of 4 pages LAND AREA (THOU KM2) --------------- ALGERIA REFERENCE COUNTRIES (1970) TOTAL 2381.7 MOST RECENT AGRIC. 454.5 1960 1970 ESTIMATE TURKEY YUGOSLAVIA RUMANIA ** GNP PER CAPITA (US) 470.0* 530.0 * 990-o 1* SO0.0* 830.0* ,.a POPULATION ANO VITAL STATISTICS ______________________________ POPULATION (MIO-YR. MILLION) 10.1 13.4 16.2 a 35.6 20.4 20.3 POPULATION DENSITY PER SQUARE KM. 4.0 6.0 7.011 46.0 80.0 85.0 PER SO. KM. AGRICULTURAL LAND 23.0 30.0 36.0 -a 65.0 139.0 136.0 VITAL STATISTICS CRUDE BIRTH RATE (/THOU, AV) 50.9 50.0 48.7 40.6 21.0 19.0 CRUDE DEATH RATE (/THOU,AV) 22.6 18.4 15.4 14.4 9.1 E.9 INFANT MORTALITY RATE (/THOU) 96.0 /a . . 153.0/a 55.5 49.4 LIFE EXPECTANCY AT BIRTH (YRS) 45.6 50.7 53.6 54.4 67.7 67.7 GROSS REPRODUCTION RATE .. 3.5 3.5 2.6/b.c 1.3 1.3 POPULATION GROWTH RATE (X) TOTAL 2.1 2.9 3.2 2.5 1.0 1.0 URBAN 7.2 /b 4.4 5.6 4.9 /d 4.6 3.4 URBAN POPULATION (X OF TOTAL) 3O.7 35.6 39.9 38.7 38.7 40.8 AGE STRUCTURE (PERCENT) 0 TO 14 YEARS 44.0 47.2 a 48.0 41.7 28.3 25.9 15 TO 64 YEARS 52.0 48.4 a 48.8 54.0 64.3 65.5 65 YEARS AND OVER 4.0 4.4 3.2 4.3 7.4 8.6 AGE DEPENDENCY RATIO 0.9 1.1 /a 1.0 o.g 0.6 0.5 ECONOMIC DEPENDENCY RATIO 1. /C 2.67T 2.4 L 1.1/C . 0.7/b FAMILY PLANNING ACCEPTORS (CUMULATIVE, THDU) ,. .. .. USERS (% OF MARRIED WOMEN) .. .. ,. 8.2 EMPLOYMENT TOTAL LABOR FORCE (THOUSAND) 2700.0 2600.0 /ab 3590.0/a 14500.0/f 9900.0 LABOR FORCE IN AGRICULTURE (X) 67.0 50 0 42.8 7 67.0 .. 49.0 UNEMPLOYED (% OF LABOR FORCE) .. 15.07t l0.07T INCOME DISTRIBUTION % OF PRIVATE INCOME REC'O BY- HIGHEST 5% OF HOUSEHOLDS .. .. ., 32. /h 15.1 HIGHEST 20% OF HOUSEHOLDS ,. .. ,. 60.67k 41.4 LOWEST 20% OF HOUSEHOLDS .. .. . 2.9Th 6.6 LOWEST 40% OF HOUSEHOLDS .. .. , 9.4; 18.4 DISTRIBUTION OF LAND OWNERSHIP ____________-_______________-- % OWNED BY TOP 10% OF OWNERS .. .. ., 53.0 is.1/a % OWNED BY SMALLEST 10% OWNERS .. .. . 0.9 84.9T* HEALTH AND NUTRITION POPULATION PER PHYSICIAN 7930.0 Id 7860.0 7400.0 2250.0 870.0 IX 659.0 POPULATION PER NURSING PERSON :.- 2730.0 .. 1770.0/1 280.0 _ 200.0 POPULATION PER HOSPITAL BED 280.0 e 340.0 So SOO.O 170.0 140.0/C PER CAPITA SUPPLY OF - CALORIES (% OF REQUIREMENTS) 73.0 78.0 88.0 110.0 124.0 119.0 PROTEIN (GRAMS PER DAY) 47.0 45.0 46.0 7820 92.0 92.0 -OF WHICH ANIMAL AND PULSE 14.0 /e 9.0 /C *- 22.:0 Li 29.0 28.0 DEATH RATE (/THOU) AGES 1-4 .. 12.0/a . 14.7 /k 2.6 2.4 EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 46.0 75.0 86.0 109.0 94.0 112.0 SECONDARY SCHOOL 8.0 11.0 16.0 28.0 45.0 46.0 YEARS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 15.0 15.0 15.0 11.0 12.0 12-13 VOCATIONAL ENROLLMENT (% OF SECONDARY) 29.0/f 20.0 19.0 14.0 72 0 58 0 ADULT LITERACY RATE (X) .. 26.0 3.0:/c Ss.0/1 85 0 HOUSING PERSONS PER ROOM (URBAN) .. 2.8 /a,d .. 1.9 .. 1.3 /d OCCUPIED DWELLINGS WITHOUT PIPED WATER (%) . 77.0 /a .. 64.0 .. 88.0 /d.e ACCESS TO ELECTRICITY (% OF ALL DWELLINGS) .. 34.0 /a .. 41.0 .. 49.0 /d RURAL DWELLINGS CONNECTED TO ELECTRICITY (%) .. 12.0 /a 18.0 27.0 /d CONSUMPTION RADID RECEIVERS (PER THOU POP) 54.0 52.0 46.0 99.0 185.0 152.0 PASSENGER CARS (PER THOU POP) 17.0 11.0 12.0 4.0 35.0 ELECTRICITY (KWH/YR PER CAPI 123.0 138.0 211.0 1 247.0 1268.0 1615.0 NEWSPRINT (KG/YR PER CAP) 0.6 .. 0.5 0.7 4.3 2.6 …---------------------------------------------__ ____ ___--- _ __ ___ __ __ ___ __ ___ __ __ __ -__ __ -__ __ SEE NOTES AND DEFINITIONS ON REVERSE Page 2 of 4 pago. un1ess otharwi.a n.otd, dota for 1960 ref.r to any year between 1959 and 1961, for 1970 between 1969 and 1970, and for Otoat Rec-t c ftieate b.r-oee 197 andt 1975. GNIP par capit. data are b-sad on tha World Bank Atlas methodology (1974-76 baain). R-.1.nt ha. b..n selected se -n b,jeoti*a c0tmt Pfr Algeria because both cocetrLea ha-cntal plann-e-d ec-ei.a and developnent etraregien giving high priority to indoatri.lixatiolt, particularly heavy industry, while Romanihe h.. had a larger enperleoce of d".v.elo~nt than Algeria. alIlEIA 1960 I 1965, Algerian pop.lation only; lb 1954-60; /n Ratin of popul.tion ondr 15 and 65 and over to total labor force; /d 1963; I. 1962, If Ex.luding pri-ete -octiLona ho1 a 1970 Iat960; lb Uoclding aiLitary parsonnel in barranka and 274,663 nationala abrond of h-0 229,020 are -cononIc y -tiv-, .1-0 -nlZdins 1,200.000 fanaslee inaly onn-pied in agri-olt.ne; It 1964-66; /d Total, orbn and rural. MOlT RECETP ESTIMgATE: /a 1976; lb Ratio of pop.lation under 15 and 65 and ove to total lobor for-; Ic 1977; 7T 1970 I. 1967; lb Enclud.. 17 easanern proinnea; in 1965-67; /d L365-70; Ie Ratio of population vnder 15 and 65 gnd over to labor forte 15 years and over; If 15 years and over, etlodee unasoploy.d; [g R.giot.red only; lb Disposable intone; /i I.cloding ... i.tat ou -.ad nidui-a; LI 1964-66; _I 1967-68- /_1 P.,-cc cit year. and -oer who tall the .nana takers that thay ten read and write.. 'tOQOLAVIA 1970 Ia Agrinottore lend bald by Aotial aector - 'Tobbluate"; /b Aari..lture land held by private ul-odrn'0hcon roa nnaan" ; /t Innlodiog dantiats; /d Intloding nidivaa, assiatant idwives and .e. etantnua. lowflL 1A970 1. 'Tho calcolation of theme fignrea is under diatuaaion; /b Rotin of populatiot onder 15 and 65 and over to total labor forte; It Fu1l-ti.ad .d..otiom only; /d 1966; Is Ir-id. only. R9, oNr-be- 22, 1977 lEpIlltrOR. OF SOCIAL INDIICATORS land Ate. (than ~~~~~~~~~~~~ Pop.l.tion mr .-rina person - P.pIcl.tion dIvided by tn-b- t pr-clicing T.t.1 - T-ta aurfat araa -oprieti lend ar.a md itland etar.. -alt sod feamle graduate nor.., Itrained' or 'nerttfLed"T turons. and Agric. -Mo.t r ....t -steoate of gfri-t-ltc1 are a oaad touposraily or Paoin- tmi iary persoa with training or eplne nently for cr ps, patur, arket kitchen gardana or to ILe tallow. PoueinPn oo lbd - Popoetion diy1d.d by masher of hoepft,l hod, eveILable in poblic and private gene.ral and epeciali..d hosPital and G"lar e .anita (0001) - GNP pet tapita -etn e t onn aket- to rehabilitation nenitr; ...Iud.e mueing bofa. and eatabiiuheaetn ftr net1-1-ed by ame t-onvrain method aa World Boaok Atl.s (1973-75 boaste); uatdie1 and prevetive ta re. 1960; 1970 .od 1975 data. Pnr ..Pit. snpply ofcaoisIofrnrm t) - tnpoted fttm energy etIvaet of net food .oppliea ayeileble In countr per capito per day; ponutat"on and vital.ax n9gaoial SnPplia. nmepriaa d-oatic prod-cion Import, teI ......rt., and Ponc.latio (mid-year milli"n) A. of July firat: if not available, average changes in totk; net -upplies .etlude anIon1 feed, ecade, quantltiee -od of t'tedya n ae;1960, 1970 .en 1971 date. in fond prnr-seing and Iane in ditrtib-tion -turntao -eela-d by FAO baaad on phyeinngite1 n.. da for n-rma acivity end health ra-.id- Ponul.tioo denaityf-tncr noa re k - Mid-y-a population par sqnr. kiloetar ering enviro-tcal aeperatur., body eight., ago and ..o di.trihotiua of (100h btrse.) aftot area. pplto,adabsig11 o at nbncodlv pon.jtlationdewaty - par aouaf le of earlc. land - CPtntd ase above for er p netiasonel ofd .11-ng m feam eatr day) h- Protei 1onatofpa2art .grinuItorel land only. net supply of fond parday; net -upply of fond is deftiad as eboye; req.ito- etot for ni ontisstala1 by u00A iEnunic FL a..rch Srie Vital atatiect-o provIde fot a sinian Ionsoe.. of 60 gretas of total prutein per day,ao Crude birth race perthib ..ad. av-rX. - Annual live birth. per ihou-a.d of 20 gret Of .nIma Inod pulampren of ehi.h 10 Sr-m abould be .olo.I ni d-yoar popolation; tt..year artftiMtin averages ending is 1960 and 1970, protein; thear atandards are I-et than thoaa of 75 frt Of total protolt ad fin-ye-e -vrago ending in 1975 for meet recant atimasts. end 23 gret nf an1Ima protein O an. overage for the _nrld, Pr.poerd by FAQ, C-nds death rote per thousand. evar.aa - Annual deatha par thaneand of mid-y.ar in the Third World Fond lurep. population; ten-year aritbaeettc vaverge anding ian 1960 &ad 1970 and fiEL- P'e canta -L-'!i soeyfe nmlndel Prot.ei aupply of food year averg. ending in 1975 for -ot raeent estImate. dnived fron anaaaedpls.i rn a day. efoot taortality rete (/th..) - Adon-I death. of intnts under M. yea of ge D-stb rate (ith.u) aas 1-4 u Aenoal d-ethe pot thousand it ago grop I--. pa Lh'ao liebrh.Yeaers to children in thie 9 age r-p; ugg-ened us an indict.t. of life ente=t lty atbirrt1halre) - Av-rage otabar of yenta of life retsaining atmantion birth; usually ftv-peora.ra.O ending in 1960, 1970 and 1915 for develop- tog countries Education Inns. renroduntion rats - ove..g. n,eber ef ILv daughtner a -sIa. will hear gdl-ft:d enrltlment ratio nria achou, ' trol l-eto i a 0pr In her normal reproductive pAriod if abe emperiannes preseont age-spancnostg f piat noo-g pplti on itld- chtldn ogoed b-l yno fertlltty co -a-e oly five-year avnragm sodLsa In 1960, 1970 and 1975 but edjuard fop differen lengths of prfmery ed_rolo r nvtiuo for deveopig coors.uiversal td...ti.., enrollment may ce-cd 100' ni-c tn 7e :1-lsace below Pon..LattoP.thoodorat lo -Itel - Coepo,od annua groth nate of eid-year or above the officil achool age. poplaion, for 1950-60, 1961-70 and 970-75. Id."aatei erollmet ratIo - eodr nol - Csut as ab..oe; eao od.ry Potulaton otmeh rate ll - nbaen Cepnted like aroth rate of totala.1to requirea at Ia..tEPou yesre of approved prImryueoucin popolotion; different defini tioos of urban areasma affect nonprorbility of provld- ganeral, yountinnal or t .achar training Itattu-tions fot puptin da ta amon coutries, of 12 to 17 y-ara of age; ..rr-spand-oc cor reae aeterally e-clded. Onhan population ft of total) - Ratio nf urban to total population; differant Ssra of -cholin- - -vie (firo and enon leea)-'rtl er.o definitions~ of urban arma may affect aparabtility of data sog' noncrise. anoln;a eodeylvl uabnlIAtrugni- moay bepr-al or omplenely ...luded. Affenstructure (preonnt) - Chsildrs (0-14 years), eorklmg-age (15-64 peere), VoatonlenolmntIto eiodr)-taaiwliatctaalcl.dn en _rtird (65 y-er end aver) as perenaga. of mId-ya oplnen!bital,d in tialo rarpo t which opaate idepend-ntly ora Anna deredeey ratio - Retie op poinsltmo tader 13 and 65 and evr ta tbe.. deparvnt. of secondary n-tit.tutioa of agee 15 th-tgh 66 Odult literacy rate (%) - Literate adults (.bleyo read and -It) ase pe- E-InEt dseedency rcati - gtio of populatime tdasd 15 and 65 and ovr to cantgs of total adult populetion ag.d 15 ynan. sd avnr. the labor fine in ag groe of 15-664 peate. etlelmIna - acceptors in,anslat v.thmsl - Cteltlve -ber of acneptor Hosn of brth-conrol dvicas under a.aaicea of natIonal Caily planning pregre P.eaun pet insu iutb.. - Average nebor cf re-n per coo inttrn eimc. inception. t-eertional dwliloga Lm urban or...; d-Ielin,ga -et ld. n-pe-e-- F-tilr j!1a""I" - ome Ml of mantlerd Mae - tPeoettegee of aaarriad en ot at,narsed -nonptsd parts. child-hearIong an. (15-44 year.) ehe see birtb-cettr1 dentea ts ell earrled ftcopied dcell nswthu ed eater i)-Otnupled --netIonal dvnlliope L. e n ew age grop. inuban andrura ersa wIthut Linsid nr Outsid. piped w--e l-tjities ae ettntaa o al onnpied d-eslinga. teeloneent Oceeae~~~~~~~~~~~~~~~~~~~~~~~~~1:% inesorni ( or al deeslllnga) - Convetional dacellogs with tueao erre itho,sead) - ftmneseti-ly artlme parea. intlodiog raend elctricilty in livitng quarters as Petnn of tots1 deeIlinge In rhan sod fortes and unemployed hut aeantudig hoceawmmi, atdwdts, ate.; deitition. rualeras Int -ariooa -otria. are mot ctmprahsbIura Id.aIIIt I connected to elsotrfic l) - Capted aso above for rura abor forre in ajgrtoulWtar Cl) - Agri..tultral lehor Peone (60 fanniug, inerntry, d_sin oly. b-;iLog od fishingl as P.--,"t"g ef n.n.I labor Pree. IlSnptlope ( ef labo Earce - ldetploysd ar uanally defined ae persn who Conanowetmon re able and "illi.mg to tao aJsh, sot oi a Job an a given day, reaaised ant lRadio enivraimr tchin n -All ryrs of re-i-ore icr radio broadcaeto of a Job, end seeking serk for a specified einiess period mat eneding one to genralpuli prthosand of population; ennludes o1n-loend recrlver meek; mey met he apoarble beto-mo coutr1a due to 4iff.r t defiaOtiateontrl. .d in Years when regIst-aion of radi -set wa 00 effete; atueplydad . -anre. af data, e.g.f., etp yt office statistics, ample date for recen.t ynam may not be tpaprable lot- moon -nnrtrr ob.1ish.d e ..epa .cepotor uOeasplornese Insurance. licesing. poeemernae er touno)- ...egr ar a...moo tr seting mLnn distributilon - Permentag. of prtote iacoets (both in tcabh and kimd) Ntan than sight paceun; naclude enbuteon heer..s -nd elt reevdby ritheet n, riceset 201. poorest 211X, sod poons-t 401 of hbassa-vbil bolds. glai:brinitY (k'a'ubrr P) te - Aonua consption If tede-trial, tsaiotial, pulcand private .lentrictry io bilawatt beore par capita, ganerally Diatribotmn of land men,nahip - Percentage. of tend onsed by eaelthieat 1ux haaed onpredutian dat, cilbh-t ailmseenn for laneso in gride but elm- and poet10 of land are. inS for leperte and spot, of electricity. %-eein=(eprS a np - Per rpita ._.naJ conamesptin, in ltilo2r. B-th ob ad totdmnettmated fre deet produ-tlos pLus net mports of newprint. P"ensltien par physlicia - Population divided by n,b.r of practicing phyatisna qualified fret a send-In aebool an meivrsity leve. ECONOMIC DEV8LOPMENT DATA ANNEX I (amopunt in million, of US dollar) Page 3 of 4 pag.e Aco-al E.t. ftojaotad 1970- 1974- 1978- 1982- 1969 1973 1975 1976 1977 1981 1986 1973 1977 1981 1986 1969 1976 198 NATIONAL ACCOUNTS Amounts in 1975 prio.. And .oohaxne rat, 5' Ano1nt toning, growth rat A. pasc-nt of GDY Crone Domestic Produot 9,965 12,611 13,601 15,016 16,556 23,143 31,674 6.1 7.1 8.8 6.5 132.8 98.3 97.0 Gains fron Tetm 09 Trado(+3 -2 462 -1.577 - 259 272 728 2 353 . . . . -32.8 1.7 3.0 Gross Dooeutic Tocono 11,034 13,601 15,275 16,828 23,871 34,027 10.1 11.1 9.1 7.3 190.0 100.0 100.0 Imports (Itol, ufs) 2,971 4,896 6,828 6,245 7,512 9,353 10,780 13.3 11.3 5.7 2.9 39.6 40.9 39.2 E..t_ (in-1. --t ity 2420 3.161 4,959 5.488 5.850 8.7d3 11.243 6.9 16.7 10.7 5.1 32.3 35.9 36.8 Resoucc Cap 531 1,733 1,959 737 1,662 370 -462 . . . . 7.3 3.0 2.4 Co.sumptiom Ecpe-dit-ras 1/ 5,558 6,533 7,757 8,237 9,056 12,329 18,953 4.1 8.5 8.1 8.9 74.0 54.0 51.7 Invoat-est (i-lo. otookh) 2,441 5,127 7,803 7.795 9,434 12,112 14,612 20.5 16.5 6.5 3.8 32.5 51.0 50.7 (Fid Isossm_oot) (2,235) (4,787) (6,917) (7,795) (8,779) (11,385) (13.662) (21.0) (16.4) (6.7) (3.7) (29.8) (48.8) (47.7) lomostic S ocoge 1,907 3,589 5,914 7,038 7,772 11,543 15,074 17.1 21.0 10.4 5.5 25.4 46.0 48.4 Notional S-visgs 1,890 3,392 5,844 6,931 7,692 11,016 14,533 15.7 22.9 9.4 5.7 25.2 45.4 46.1 MERChANOISE TRADE Aanoal Data at CurrePt Prio.a As Peromot of total Imports CapItal Goods 307 800 2,404 2,352 3,180 5,234 7,236 27.0 41.0 13.3 6.7 30.4 43.8 46.3 Itn-rmodiate Good. 355 769 1,771 1,535 1,962 3,531 6,936 21.3 26.0 15.8 14.5 35.1 28.6 30.6 Con.o-er Goode 216 366 379 408 762 771 1,377 14.1 6.5 12.9 12.6 21.4 7.6 6.6 Food 132 306 1,391 1.079 1,275 2.019 3.616 23.5 43.0 12.2 12.4 13.1 20.0 17.5 Tota1 Imports (cif) 1,010 2,241 5,945 5,374 6,887 11,546 19,165 22.0 32.0 13.8 10.6 100.0 100.0 100.0 Lop or 5 Hydrocarbons 666 1,594 4,172 4,944 5,755 11,840 20,632 24.5 37.9 19.7 14.9 71.3 93.8 94.5 Agricultorsl -rodoota 189 230 159 175 220 211 286 5.0 -1.1 -1.0 7.9 20.2 3.3 1.3 Other Goods 79 92 152 154 180 342 920 3,9 18.3 17.4 28.0 8.5 2.9 4.2 Totni Doporta (foh) 934 1,916 4,483 5,273 6,155 12,393 21,838 19.7 33.9 19.1 15.2 100.0 100.0 000.0 M-rch-ndi-o Tr-do Iedioss (i. US0) EOports (itol. NYS) Poito Imd- 21.4 43.3 100.0 108.5 119.0 165.2 268,8 Imports (I1cl. NF5) Price Indn 43.2 64.9 100.0 103.4 113.5 151.5 212.5 Torts of Trade Indeo 49.5 66.7 100.0 103.0 104.9 109.0 126.5 Euports Volume Iden 100.2 97.3 100.0 107.4 112.3 165.5 175.6 VALUE ADDED BY SECTOR Apnual Dato nt 1975 Prione and Enohange Rate Annual Averam- Growth Ra.e A. nero-nt of total Agricult-ro 1,037 884 936 1,054 1,054 1,227 1,457 -3.9 4.5 3.9 3.5 10.5 7.2 5.5 Hydro-arbons 3,671 4,441 3,972 4,332 4,615 6,680 7,140 4.8 1.0 9.7 1.3 37.6 29.7 29.7 Son-hyd-ocarlot lodustry 1,113 1,584 1,786 2,024 2,267 3,259 5,107 9.2 9.4 9.5 9.4 11.4 13.9 14.5 Coontruc-ton 565 1,252 1,746 2,009 2,318 3,206 4,622 22.0 16.7 6.5 7.6 -5.8 13.8 14.3 Otb- lectoos 3.338 4.166 4A.706 5.157 5.772 8.112 12.340 53 8.5 8. 9. 34.7 35.4 36.0 ctol actor ct) 9,764 12,327 13,146 14.571 16,026 22,484 30,866 6.0 6.0 8.8 6.5 100.0 106.0 100.0 Total (eocludiog hydroc--bo.s) 6.093 7,886 9,174 10,244 11,411 15,804 23.726 6.7 9.7 8.5 8.5 62.4 70.3 70.3 PUBLIC FINANCE As P-r-int of GDP at Current Prince (Cento1 GCo-rnonrt) eurret Rr ..ipts 28.8 34.3 47.0 40.7 42.5 Curront Elp.nditu-re 18.5 20.0 23.9 21.6 19.0 DETAIL ON PUBLIC SECTOR As peren-t of total Bodgotary S-vitos 10.3 14.3 23.1 19.1 23.5 INV0E0TSRNT TROGRA'd Actual Ent. Coveroreot onvetmant 9.1 11.6 10.5 11.6 13.3 1974-73 1976-77 Loans and Adoontas (net) 6.0 4.7 24.3 16.6 23.4 Agricolt-re (inol. irrigation and 8.6 7.1 &oernll T...sury Boln.c. -4.8 -10.6 -10.2 -6.6 -12.7 satar worha) Edn..ation 5.1 6.0 CURRENT EXPENDMTCPE An P-ercnt of Total Current .Ho_ndituca R°drnoaro31° 20.1 19.2 Bo-hydr--rbn Doduniry 31.2 28.1 Educo..on 24.4 26.5 19.4 23.7 22.9 (intl. miming, energy) (lthor Sociol Serocces 2/ 22.1 18.0 35.8 30.8 20.6 Economic InfrastrOcture 13.9 18.0 EDonomic S-rcicos 11.5 11.1 6.4 8.1 7.3 Social Iofrasr-octur- 10.2 19.1 Adnioietr-tio nod Deinfso 31.5 24.4 19.1 25.6 20.3 other SIntor. 10.8 2.5 U-clat..fLid 10.5 18.0 19.3 11.8 28.0 Total Enpenditore 10.0 D100.0 Total 100.0 100.0 100.0 100.0 100.0 FINANCING SELECTED IcDICATORS 1970- 1974- 1970- 1982- Currant Badget Sorplus 61.1 45.3 1973 1977 1981 1986 other Dofatio s-oro. 15.5 33.0 A--rogo ICOR 5.6 6.9 6.0 7.1 Pornion Borrowisa (nat) 18.4 21.7 Acoroge ICOR (mom hydrocarbon ,, 5.8 6.5 6.3 Total Finanring 100.0 100.0 -con-y) Import Elasticliy 2.31 1.59 0.65 0.45 M Arginnl ONiuo-l Saoiogt ROto 51.8 70.8 47.2 34.6 OUTPOT, Lt0000 700ff AND PRODUCTIV7TY DN 1976 Valn Added _anloonsent Value Addnd Par Worker (US $ ala.) 7 Thonesad C US 0 2 Agi-cultcce 1,152 7.5 1,535 3/ 42.8 750 17.5 Ind.otry 8,875 57.7 564 15.7 15,736 367.3 -Sydrocarbon- 4,680 30.4 38 1.1 123.157 2,874.8 -Oth-ra 4,195 Z7.0 526 14.6 7.975 186.1 Onrvi..n 5,355 34.8 1,276 35.5 4,196 97.9 n loynd . . 215 6.0 Tocal 15,382 100.0 3,590 100.0 4,284 100.0 Not applicohlo Not nal1labln - Nil or negligible e! Stoff eatimtat It E-clodas statistical djositot of 055 million in 1969, 51,109 millioa in 1973. 2t Tncildnn cossn-an price .obhidias. 3/ Labor foron EMENA CPIIB Pabr-"ry, 1978 ANNE 1 BALANCE OF PAYMENTS, EXTEMNAL ASSISTANCE AND DEBT Page 4 of 4 pages (amounts in millions -of US dollars at current prices) e/ Actual Est. projected 1972 1973 1974 1975 1976 1977 1978 1981 1986 SUMKARY BALANCE OF PAYMENTS Exports (incl. NFS) 1,440 2,016 4,935 4,869 5,569 6,635 7,491 13,307 23,899 Imports (incl. NFS) -1,836 -2,712 -4,477 -6,598 -6,432 8,520 -9,686 - . Resource Balance -396 -696 458 -1,729 -863 -1,885 -2,195 -864 984 Net factor services 149 112 87 38 -107 -92 -161 -724 -997 Interest (net) -29 -63 -70 -163 -298 -272 -347 -929 -1,279 Workers' remittances 224 226 202 265 254 274 295 363 509 Other factor services (net) -46 -51 -45 -64 -63 -94 -109 -158 -227 Current Transfers (net) 22 89 43 31 41 50 50 50 50 Balance on Current Account -225 -495 588 -1,659 -929 -1,927 -2,306 -1,537 37 Private Direct Investment 18 51 360 97 179 200 200 200 200 Official Capital Grants 16 -39 -427 - - - 6 8 8 Public M< Loan Disbursements 413 1,597 -631 1,705 2,157 2,493 2,551 3,667 3,515 - Repayments -137 -234 -467 -433 -517 -712 -860 -1,938 -3,402 Net Disbursements 276 1,363 164 1,272 1,640 1,781 1,691 1,729 113 Capital transactions n.e.i. 88 -367 -525 72 -262 -54 - - - Change in reserves (increase -) -173 -603 -160 218 -628 - 409 -400 -358 Net reserves (end year) 482 1,096 1,315 1,066 1,608 1,608 1,200 2,100 3,826 (in months of import equivalent) 3.2 4.8 3.5 1.9 3.0 2.3 1.5 1.8 2.0 GRANT AND LOAN COMMITMENTS Official Grants and Grant-like 16 3 - - - - Public M< Loans IBRD - 25 158 48 151 120 Other multilateral 3 - - - - Governments 155 375 168 244 214 80 Suppliers 119 340 666 2,116 911 700 Financial institutions 303 1,494 399 1,640 1,279 800 Bonds and other ML&T 25 71 61 77 - - Total Public M< Loans 605 2,305 1,452 4,125 2,555 1,700 Actual Est. DEBT AND DEBT SERVICE 1973 1974 1975 1976 1977 Public Debt Outstanding Disbursed 2,931 3,305 4,474 5,853 7,634 Interest on Public Debt 83 218 234 381 423 Repayments on Public Debt 234 467 433 517 712 Total Public Debt Service 317 685 667 898 1,135 Burden on Export Earnings (X) Debt Service Ratio 15.7 13.9 13.7 16.1 17.1 Average Terms of Public Debt Interest as % of Prior Year DOD 5.6 7.4 7.1 8.5 7.2 Repayments as % of Prior Year DOD 15.7 15.9 13.1 11.6 12.2 IBRD Debt Out and Disbursed 7.5 6.4 36.3 85.3 184.0 IBRD as 1 of Public DOD 0.3 0.2 0.8 1.5 2.4 IBRD, as % Public Debt Service 1.1 0.5 0.9 0.7 0.8 EXTERNAL DEBT Actual Debt Outstanding on December 31, 1976 Disbursed only % IBRD 85 1.5 other multilateral 4 Governments 1,074 18.3 Suppliers 1,664 28.4 Financial Institutions 2,892 49.5 Bonds 134 2.3 Total Public M< Debt 5,853 100.0 e/ Staff Estimate EMENA CPIIB February 1978 . Not applicable - Nil or negligible ANNEX II Page 1 of 5 THE STATUS OF BANK GROUP OPERATIONS IN ALGERIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of March 31, 1978) Loan or US $ million Credit Amount (less cancellations) Number Year Borrower Purpose Bank IDA Undisbursed Three loans fully disbursed 80.5 912 AL 1973 The Democratic and Highways 18.5 4.6 Popular Republic of Algeria 913 AL 1973 The Democratic and Education 6.0 5.1 Popular Republic of Algeria 995 AL 1974 The Democratic and Ports 70.0 28.4 Popular Republic of Algeria 996 AL 1974 Railways-SNTF Railways 49.0 7.7 997 AL 1974 Power-SONELGAZ Power 38.5 12.4 1158 AL 1975 Banque Algerienne Industrial 40.0 36.1 de Developpement Credit 1159 AL 1975 The Democratic and Tech. Asst. 8.0 7.6 Popular Republic of Rural Dev. Algeria 1185 AL 1976 Societe Nationale des SNMC 46.0 34.7 Materiaux de Expansion Construction 1209 AL 1976 The Democratic and Education 47.0 45.6 Popular Republic of Algeria 1293 AL 1976 Power-SONELGAZ Power 57.5 45.3 1378 AL 1977 The Democratic and Education 48.5 48.5 Popular Republic of Algeria 1407 AL 1977 The Democratic and Highways 41.5 41.5 Popular Republic of Algeria 1427 AL 1977 The Democratic and Ports 80.0 80.0 Popular Republic of Algeria TOTAL 631.0 397.5 of which has been repaid 81.1 Total now outstanding 549,9 Amount sold 34.8 of which has been repaid 34.8 549.9 Total now held by Bank Total undisbursed 397.5 397.5 Note: A US$ 82 million loan for a First Sewerage Project was approved on April 4, 1978, but has not yet been signed. B. STATEMENT OF IFC INVESTMENTS - None (not a member) ANNEX II Page 2 of 5 pages C. PROJECTS IN EXECUTION Loan 912-AL First-Highway Project; US$18.5 million Loan of June 19, 1973; Effective Date: October 26, 1973; Closing Date: (Original) r :ember 31, 1976, (Current) June 30, 1978. The overall progress of the project has been satisfactory. A Comptetion Report is currently being prepared. Loan funds are now almost entirely committed; a further extension or the Closing Date to December 31, 1978, may be requested, however, to permit full disbursement. It is proposed that the outstanding non-committed funds, which amount to about $1.3 million, be used to finance extensions of consultant contracts for feasibility and engineering studies for the proposed Third Highway Project (FY79). Loan 913-AL First Education Project; US$6.0 million Loan of June 19, 1973; Effective Date: October 26, 1973; Closing Date: (Original) December 31, 1976, (Current) December 31, 1978. Implementation of this project is over two years behind schedule due mainly to managerial shortcomings, a change of responsibility for the Institute of Mining and Metallurgy (IMMA) in 1975 from the Ministry of Industry to the Ministry of Higher Education, and especially the diffuse nature of the Institute of Agricultural Technology (IAT) element. Agreement has now been reached that: the amount allocated to the IAT would be cancelled; equipment purchases for IMMA would be approved up to about $1.65 million, an amount which has now been committed. The implementation of the remaining component, equipment for two training centers of the Algerian Petroleum Institute, is proceeding satis- factorily. It is thus expected that the loan can be closed as presently scheduled. Loan 995-AL Port Project: US$70.0 million Loan of June 10, 1974; Effective Date: February 10, 1975; Closing Date: December 31, 1978. Work is progressing satisfactorily. Disbursements are somewhat behind schedule but are expected to catch up soon. The project cost, based on contracts already received, may be slightly below the appraisal estimates of May 1974. Loan 996-AL Railway Project; US$49.0 million Loan of June 10, 1974; Effective Date: November 11, 1974; Closing Date: December 31, 1978. The physical execution of the project, which supports the railway's rehabilitation program, is nearing satisfactory completion and procurement has proceeded on schedule. Several important studies, however, will not be completed by December 31, 1978 and the Closing Date may have to be extended. Freight traffic has fully recovered from its 1976 decline, and passenger traffic continues to exceed forecasts. A possible second project, to be based on the next Four Year Development Plan (1979-1983), is under discussion. ANNEX II Page 3 of 5 pages Loan 997-AL First Power Project; US$38.5 milion Loan of June 10, 1974; Effec- tive Date: December 20, 1974; Closing Date: June 30, 1979. The project comprises high voltage substations, gas turbine plants, dispatch facilities, and consulting services for management and engineering services. Physical progress of the project is satisfactory. All main con- tracts have been awarded. Delays have been encountered in the provision of financial information due to SONELGAZ's lack of experienced staff and inter- departmental changes of personnel. There have been some delays in construc- tion which may require an extension of the Closing Date. Loan 1158-AL Development Finance Company Project; US$40 million Loan to Banque Algerienne de Developpement of September 4, 1975; Effective Date: January 5, 1976; Closing Date: December 31, 1981. Progress in committing funds under this project has been slower than anticipated, although the rate has been accelerating recently. As of April 15, 1978, $25.6 million had been committed, compared to the appraisal estimate of the full loan amount. This is due mainly to a substantial delay in setting up the appraisal unit in BAD. Performance remains disappointing as regards institutional arrangements for BAD to participate as a decision-maker in the investment decision process, the improvement of which was an important project objective. The Bank and the Government are now discussing the situation and ways to improve it. Loan 1159-AL Technical Assistance (Rural Development) Project; US$8.0 million Loan of September 4, 1975; Effective Date: January 5, 1976; Closing Date: December 31, 1981. The credit sub-project is now proceeding satisfactorily. The con- tract with the consulting firm (IRAM) for the extension subproject has been signed and all nine expatriate technicians are in the field. Negotiations for the mountain subproject have been concluded, resulting in contract signature with Agrar und Hydrotechnik; mobilization of the team is underway. After rejecting all consulting firm submissions for the steppe subproject, Govern- ment solicited a single-source bid from a consortium headed by the South Australian Government. Signature of the contract is imminent. The concract for the expatriate advisor to the project was signed in August 1977 and the advisor has been in Algiers since October 1977. Loan 1185-AL SNMC Expansion Project: US$46 million Loan of January 7, 1976; Effective Date: April 7, 1976; Closing Date: June 30, 1982. Construction of the cement plant is approximately six months behind schedule but now proceeding satisfactorily. Training of Algerian personnel is also somewhat delayed due to lack of qualified candidates but arrangements for necessary technical assistance are underway. Appropriate measures are being taken by SNMC and the Government to ensure respect of the agreed finan- cial performance targets. The contract for the technical assistance program ANNEX II Page 4 of 5 pages for the Societe Nationale de Comptabilite (SNC) has been signed after some delay due to managerial problems in SNC. SNC is now recruiting the necessary Algerian personnel, and the program should be operational soon. Loan 1209-AL Second Education Project: US$47 million Loan of Ma :h 9, 1976; Effective Date: June 4, 1976; Closing Date: December 31, 1981. Implementation of this project is progressing satisfactorily. Fol- lowing initial delays in preparing construction documents for Phase I due to administrative problems, construction is now scheduled to start in September 1978; similar delays in preparing ICB bid documents for equipment procurement are now being offset. Implementation of the technical assistance program for the Institute of Electricity and Electronics is progressing satisfactorily; the remaining technical assistance program is well underway, though somewhat behind schedule. Loan 1293-AL Second Power Project: US$57.5 million Loan of July 8, 1976; Effective Date: December 2, 1976; Closing Date: December 30, 1980. The Project consists of the transmission/substation component of SONELGAZ's 1976-1980 program comprising about 3,300 km of transmission lines and 4,000 MVA of substation capacity, and studies of SONELGAZ's organization and management methods. Overall progress is satisfactory. Procurement for substations to be financed from the loan has been approved by the Bank, but some delays have occurred in construction. SONELGAZ has not yet submitted to the Bank a financial plan indicating how the financial covenants agreed upon will be achieved. This plan and appropriate decisions are now expected by the middle of this year. Loan 1378-AL Third Education Project: US$48.5 million, Loan of May 15, 1977; Effective Date: October 5, 1977; Closing Date: March 31, 1980. This project got off to a good start, although about three months delay has lately been experienced due to changes in personnel at the Ministry of Education at the end of 1977. Draft bidding documents have now been prepared for equipment procurement for the 15 technicums; start of their construction has been scheduled for November 1978. Implementation of equip- ment procurement and civil works for the two vocational training centers is now over one year behind schedule. Loan 1407-AL Second Highways Project: US$41.5 million, Loan of May 15, 1977; Effective Date: October 5, 1977; Closing Date: December 31, 1981. The project comprises the construction of the Boudouaou-Lakhdaria section of the Algiers-Constantine road, consultant services for construction supervision and technical assistance. Bids for construction were opened on April 30, 1978. Although numerous foreign and local firms were prequalified, ANNEX II Page 5 of 5 pages only very few submitted final bids. The lack of competition resulted in bidding substantially in excess of original estimates. The Government is currently evaluating the responsiveness of the bids submitted, and is expected to submit a detailed evaluation report by mid-June which should include specific proposals for further action. Loan 1427-AL Jijel Port Project: US$80.0 million, Loan of September 30, 1977; Effective Date: January 24, 1978; Closing Date: December 31, 1982. The project comprises the construction of a new port to serve a steel complex to be constructed adjacent to the port; assistance to the port construction company, SONATRAM; and consultant services for project design and supervision and for technical assistance. Prequalification of bidders for port construction has been completed. Tender documents have been prepared and are being reviewed. ANNEX III Page 1 DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH EDUCATION PROJECT Supplementary Project Data Sheet Section I: Timetable of Key Events (a) Time taken by Government to prepare the project: Nine months (January to September 1977) (b) Agency which prepared the project: Government, Consultants (c) Project first identified: December, 1976 (d) Date of Bank Appraisal Mission: October, 1977 (e) Date of completion of negotiations: May 12, 1978 (f) Planned Date of effectiveness: September 30, 1978 Section II: Special Bank Implementation Actions Bank staff, through frequent missions, will review progress in technical assistance arrangements essential to project objectives, procure- ment, construction and planning activities. A start-up mission following Loan signing would discuss detailed implementation schedules as well as procedures for procurement. Section III: Special Conditions During negotiations, assurances were obtained that: (i) the submitted training program for the Technical Teacher Train- ing College (ENSEP) would be implemented to the extent possible and the Bank would be informed regularly of all measures taken affecting the employment conditions of traineee and graduate teachers of ENSEP (para. 34); (ii) advisory councils at the project institutes would have representatives from the economic sectors benefitting from the training provided, and views would be exchanged annually with the Bank on the recommendations of these councils (para. 35); (iii) an evaluation system, including a tracer system for analysis of job placement and performance, would be developed for the ANNEX III Page 2 project institutes and forwarded for Bank review sufficiently in advance of their inauguration to permit Bank comments; the results of the tracer studies would be transmitted to the Bank periodically over five years following first outputs from the project institutions (para. 35); (iv) terms of reference for the three studies included in the project, that is development of maintenance trades, devel- opment of educational broadcasting and pedagogical research on vocational training, would be forwarded sufficiently in advance of their commencement to permit Bank comments there- on (para. 37); and (v) bid documents would specify that equipment suppliers would be required to provide the necessary training of key personnel in the use and maintenance of sophisticated equipment; an appropriate equipment maintenance plan would be prepared for the project institutes and forwarded for Bank review within one year of opening of these institutes (para. 40). Additional conditions of effectiveness include the following: (i) evidence has been furnished to the Bank that surveys of exist- ing facilities have been made and needs for additional works on and around the construction sites have been identified (para. 45); and (ii) preliminary site plans and schematic architectural designs for the project institutes have been furnished to the Bank (para. 45). ALGIERS B. loN' z4e - <~~~~~~~~~~ ,-edea 4< = /~~~~~~~~~~~~~~~~~~~~~~~~ <;~~NATIOALNSTTTEOMCHNALNGNEERIN VIHIGHEFITECHNICIASI ( NIMEA M` I ATV AI/ CeAL TeaCH I C V S t: 0 0 f W 0 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ f X / Lf~~~~~~~~~C S' A. 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