Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized 9600Z 9861 iLOdAŽI TVFINNV NNVH EIHOM AHI i> THE WORLD BANK ANNUAL REPORT 1986 1 TheWorld Bank 0 Washington, D.C 20433 2 Photo Credits Cover: Lawrence Manning/Black Star Page 67: CLWIMYT Page 81: Kay Chernush/lWforld Bank Page 87: United Nations Page 95: Tomas Sennettl/World Bank Page 101: J.K, Isaac/United Nations Page 107: J.K. Isaac/United Nations Page 113: Yosef Hadar/IW4orld Bank Cover Rice drying on a cement courtvard in a Nigerian village. The countries of sub-Saharan Africa face a year of opportunity in 1986. Rainfall has been ample, coffee exporters are benefiting frotn large price increases, and oil importers are saving valuable foreign exchange through the sharp decline in oil prices. Just as governments must seize on this window of opportunity by continuing the process of economic reform, so, too, donor governments must continue their support of those reforms with much-needed assistance. ISSN 0252-2942 3 The World Bank and IFC The expression, "The World Bank," as used in Membership in IDA is open to all members of this Annual Report, means both the Interna- the IBRD, and 134 of them have joined to date. tional Bank for Reconstruction and Develop- The funds used by IDA, called credits to distin- ment (IBRD) and its affiliate, the International guish them from IBRD loans, come mostly in Development Association (IDA). The IBRD has the form of subscriptions, general replenish- a second affiliate, the International Finance ments from IDA's more industrialized and de- Corporation (IFC). veloped members, and transfers from the net The common objective of these institutions is earnings of the IBRD. The terms of IDA credits, to help raise standards of living in developing which are made to governments only, are ten- countries by channeling financial resources from year grace periods, fifty-year maturities, and no developed countries to the developing world. interest. The IBRD, established in 1945, is owned by The IFC was established in 1956. Its function the governments of 150 countries. The IBRD, is to assist the economic development of less-de- whose capital is subscribed by its member coun- veloped countries by promoting growth in the tries, finances its lending operations primarily private sector of their economies and helping to from its own borrowings in the world capital mobilize domestic and foreign capital for this markets. A substantial contribution to the purpose. Membership in the IBRD is a prerequi- IBRD's resources also comes from its retained site for membership in the IFC, which totals 128 earnings and the flow of repayments on its countries. Legally and financially, the IFC and loans. IBRD loans generally have a grace period the IBRD are separate entities. The IFC has its of five years and are repayable over twenty years own operating and legal staff, but draws upon or less. They are directed toward developing the Bank for administrative and other services. countries at more-advanced stages of economic While the World Bank has traditionally fi- and social growth. The interest rate the IBRD nanced all kinds of capital infrastructure such as charges on its loans is calculated in accordance roads and railways, telecommunications, and with a guideline related to its cost of borrowing. port and power facilities, its development strat- The IBRD's charter spells out certain basic egy also places an emphasis on investments that rules that govern its operations. It must, lend can directly affect the well-being of the masses only for productive purposes and must stimulate of poor people of developing countries by mak- economic growth in the developing countries ing them more productive and by integrating where it lends. It must pay due regard to the them as active partners in the development pro- prospects of repayment. Each loan is made to a cess. government or must be guaranteed by the gov- In 1980, the Bank, in response to the deterio- ernment concerned. The use of loans cannot be rated prospects for the developing countries dur- restricted to purchases in any particular member ing the 1980s, inaugurated a program of lending country. And the IBRD's decisions to lend must in support of adjustment and policy reform. be based on economic considerations alone. This lending supports programs of specific pol- The International Development Association icy changes and institutional and sectoral re- was established in 1960 to provide assistance for forms in developing countries designed to the same purposes as the IBRD, but primarily in achieve a more efficient use of resources and the poorer developing countries and on terms thereby: (a) contribute to a more sustainable bal- that would bear less heavily on their balance of ance of payments in the medium and long term payments than would IBRD loans. IDA's assis- and to the maintenance of growth in the face of tance, therefore, is concentrated on the very severe constraints; (b) lay the basis for regaining poor countries-those with an annual per capita momentum for future growth. gross national product of less than $791 (in 1984 dollars). More than fifty countries are eligible under this criterion. 4 Contents Contents The World Bank and IFC 3 The Record for Ten Years, 1977-86 8 Letter of Transmittal 9 The Executive Board 10 Budget of the World Bank 11 Chapter One: The World Bank: Fiscal Year 1986, in Brief 15 Fiscal Year 1986-Some Highlights 18 Special Facility for sub-Saharan Africa 22 IDA 22 The Bank and the Environment 25 Increasing Operational Efficiency 27 Cofinancing 27 Disbursements for Procurement 32 Bank Management and Staff 32 Membership 32 ICSID 33 IFC 33 Chapter Two: The Economic Scene: A Global Perspective 36 The Industrial Countries: Recovery Less Vigorous 36 The Performance of Developing Countries 39 Official Development Assistance 46 Chapter Three: Bank Policies, Activities, and Finances 47 Bank Policies Sector-adjustment Lending 47 Food Security in the Developing World 49 Financial Intermediation 50 The Multilateral Guarantee Investment Agency (MIGA) 52 Bank- Activities Economic Development Institute 54 Operations Evaluation 58 Internal Auditing 59 Economic Research and Studies 60 Interagency Cooperation 61 Technical Assistance 67 Bank Finances Income, Expenditures, and Reserves 70 Loans: IBRD 72 Borrowings: IBRD 72 Swap Transactions 76 Sources of Funds 76 Cost of Borrowings 76 Contents 5 Capitalization 77 Finances: IDA 78 Chapter Four: 1986 Regional Perspectives 79 Eastern and Southern Africa 79 Western Africa 85 East Asia and Pacific 92 South Asia 99 Europe, Middle East, and North Africa 105 Latin America and the Caribbean 111 Chapter Five: Summaries of Projects Approved for IBRD, IDA, and African Facility Assistance in Fiscal Year 1986 117 International Bank for Reconstruction and Development Financial Statements 163 A Balance Sheets 164 B Statements of Income 166 Statements of Accumulated Net Income-Unallocated 166 Statements of Changes in General Reserve 166 C Statements of Changes in Financial Position 167 D Summary Statement of Loans 168 E Summary Statements of Borrowings 172 F Statement of Subscriptions to Capital Stock and Voting Power 174 G Notes to Financial Statements 178 Report of Independent Accountants 181 International Development Association Financial Statements 183 A Statements of Condition 184 B Statements of Income 186 Statements of Changes in Accumulated Deficit 186 C Statements of Changes in Resources Available for Commitment 187 D Summary Statement of Development Credits 189 E Statement of Voting Power, and Subscriptions and Supplementary Resources 192 F Notes to Financial Statements 196 Report of Independent Accountants 199 Special Fund Administered by the International Development Association Financial Statements 201 A Statements of Condition 202 B Statements of Changes in Resources Available for Commitment 203 C Summary Statement of Special Fund Credits 204 D Statements of Contributions 204 E Notes to Financial Statements 205 Report of Independent Accountants 206 Special Facility for Sub-Saharan Africa Administered by the International Development Association 207 A Statement of Condition 207 B Statement of Changes in Resources Available for Commitment 208 C Summary Statement of Sub-Saharan African Facility Credits 209 D Statement of Contributions 209 E Notes to Financial Statements 210 Report of Independent Accountants 211 6 Contents IBRD/IDA Appendices 213 1 Governors and Alternates of the World Bank 214 2 Executive Directors and Alternates of the World Bank and Their Voting Power 217 3 Officers and Department Directors of the World Bank 219 4 Offices of the World Bank 221 Text Tables 1-1 Aid Coordination Group Meetings Chaired by the World Bank, Fiscal 1986 16 1-2 Eastern and Southern Africa: Net Transfers to Current Borrowers 20 1-3 Western Africa: Net Transfers to Current Borrowers 20 1-4 East Asia and Pacific: Net Transfers to Current Borrowers 20 1-5 South Asia: Net Transfers to Current Borrowers 21 1-6 Europe, Middle East, and North Africa: Net Transfers to Current Borrowers 21 1-7 Latin America and the Caribbean: Net Transfers to Current Borrowers 21 1-8 Special Facility for sub-Saharan Africa Operations Approved, Fiscal 1986 23 1-9 Proposed Contributions to the Special Facility for sub-Saharan Africa 24 1-10 World Bank Cofinancing Operations, Fiscal Years 1985-86 28 1-11 IBRD and IDA Disbursements for Foreign and Local Procurement 29 1-12 IBRD and IDA Disbursements for Goods, Works, and Services Procured from Borrowing Countries, Fiscal Year 1986 30 1-13 IBRD and IDA Foreign Procurement Disbursements, by Source of Supply 31 2-1 Growth and Inflation in the Industrial Countries, 1965-85 37 2-2 Growth of Gross Domestic Product, by Region, 1965-85 40 2-3 Export Growth in Developing Countries, 1965-85 41 2-4 Current-account Financing of Developing Countries, 1970-85 43 2-5 Medium-term and Long-term Debt of Developing Countries, 1970-85 44 3-1 Sector-adjustment Lending, Fiscal Years 1979-86 47 3-2 Sector-adjustment Lending, by Region, Fiscal Years 1979-86 48 3-3 EDI Indirect and Direct Training Activities in Fiscal Year 1986 55 3-4 Number of CGIAR-related Crop Varieties Released in Developing-country Regions through Mid 1984 66 3-5 IBRD Average Costs, Profitability, and Returns 70 3-6 IBRD Borrowings, Fiscal Year 1986 73 3-7 IBRD Fiscal Year 1986 Borrowings, by Currency 75 3-8 Average Cost of the IBRD's Total Borrowings Outstanding, Fiscal Years 1981-86 77 3-9 Capital Subscriptions, Fiscal Year 1986 77 4-1 Eastern and Southern Africa: 1984 Population and Per Capita GNP of Country Borrowers, Fiscal Years 1984-86 79 4-2 Lending to Borrowers in Eastern and Southern Africa, by Sector, Fiscal Years 1977-86 80 4-3 Western Africa: 1984 Population and Per Capita GNP of Country Borrowers, Fiscal Years 1984-86 85 4-4 Lending to Borrowers in Western Africa, by Sector, Fiscal Years 1977-86 86 Contents 7 4-5 East Asia and Pacific: 1984 Population and Per Capita GNP of Country Borrowers, Fiscal Years 1984-86 92 4-6 Lending to Borrowers in East Asia and Pacific, by Sector, Fiscal Years 1977-86 94 4-7 South Asia: 1984 Population and Per Capita GNP of Country Borrowers, Fiscal Years 1984-86 99 4-8 Lending to Borrowers in South Asia, by Sector, Fiscal Years 1977-86 100 4-9 Europe, Middle East, and North Africa: 1984 Population and Per Capita GNP of Country Borrowers, Fiscal Years 1984-86 105 4-10 Lending to Borrowers in Europe, Middle East, and North Africa, by Sector, Fiscal Years 1977-86 106 4-11 Latin America and the Caribbean: 1984 Population and Per Capita GNP of Country Borrowers, Fiscal Years 1984-86 1II 4-12 Lending to Borrowers in Latin America and the Caribbean, by Sector, Fiscal Years 1977-86 112 5-1 Projects Approved for IBRD and IDA Assistance in Fiscal 1986, by Region 137 5-2 Projects Approved for IBRD and IDA Assistance in Fiscal 1986, by Sector 139 5-3 Statement of IBRD Loans Approved during Fiscal Year 1986 145 5-4 Statement of IDA Credits Approved during Fiscal Year 1986 151 5-5 IBRD and IDA Cumulative Lending Operations, by Major Purpose and Region, June 30, 1986 156 5-6 IBRD and IDA Cumulative Lending Operations, by Borrower or Guarantor, June 30, 1986 158 5-7 Trends in Lending, IBRD and IDA, Fiscal Years 1984-86 162 5-8 Trends in Lending, IBRD and IDA, Fiscal Years 1984-86 162 Figures 1-1 IBRD and IDA Lending to the Poorest Countries, Fiscal Years 1977-86 19 2-1 Interest Rates and Inflation, 1970-85 38 2-2 Commodity Price Indices, 1970-85 42 3-1 IBRD Total Borrowings, Fiscal Years 1977-86 72 4-1 Trends in Lending, Fiscal Years 1977-86 (Eastern and Southern Africa) 82 4-2 Trends in Lending, Fiscal Years 1977-86 (Western Africa) 90 4-3 Trends in Lending, Fiscal Years 1977-86 (East Asia and Pacific) 96 4-4 Trends in Lending, Fiscal Years 1977-86 (South Asia) 102 4-5 Trends in Lending, Fiscal Years 1977-86 (Europe, Middle East, and North Africa) 108 4-6 Trends in Lending, Fiscal Years 1977-86 (Latin America and the Caribbean) 114 8 The Record for Ten Years The Record for Ten Years, 1977-86 F-icsl ca, 1977 197S 1979 195 .91 19h2 19h3 19S4 1455 1986 IBRD US$ millions Loans approveda 5,759 6,098 6,989 7,644 8.809 10,330 11,138 11,947 11,356 13,179 Disbursements' 2,636 2,787 3,602 4,363 5,063 6.326 6,817 8,580 8,645 8,263 Total income 1,617 1,947 2,425 2,800 2,999 3.372 4,232 4,655 5,529 6,815 Net income 209 238 407 588 610 598 752 600 1,137 1,243 General reserve 1,733 1,953 2,205 2,600 2,567 2,831 3,134 3,450 3,727 4,918 New borrowings: total 4,721 3,636 5,085 5,173 5,069 8,521 10,292 9,831 11,086 10,609 Borrowings: net 3,258 2,171 3,235 2,382 2,347 5,692 7,349 7,175 7,138 5,758 Subscribed capital 30,869 33,045 37,429 39,959 36,614 43,165 52,089 56,011 58,846 77,526 number Operations approved 161 137 142 144 140 150 136 129 131 131 Borrowing countries 54 46 44 48 50 43 43 43 44 41 Member countries 129 132 134 135 139 142 144 146 148 150 Higher-level staff' (number) 2,187 2,282 2,361 2,463 2,552 2,689 2,703 2.735 2.805 3,617" IDA USS millions Credit amounts 1,308 2,313 3,022 3,838 3,482 2,686 3,341 3,575 3,028 3.140 Disbursements 1,298 1,062 1,222 1,411 1,878 2,067 2, 596 2,524 2,491 3,155 Usable resources, cumulative 11,789 18,062 19,661 20,773 22,331 25,280 27,967 30,910 33,295 39,177 number Operations approve& 67 99 105 103 106 97 107 106 105 97 Borrowing countries 36 42 43 40 40 42 44 43 45 37 Membercountries 117 120 121 121 125 130 131 131 133 134 Excludes loans to IFC of S20 million in FY1977, $100 million in FY1981, S390 million in FY1982, $145 million in FY1983,$100 million in FY1984, $400 million in FY1985, and S150 million in FY1986. Includes amounts in FY1977 lent oni Third Window terms. Excludes disbursements on loans to IFC. Higher-level staff on regular and fixed-term appointments held against authorized budget positions. - In FY1986, as a result of an institutionwide job-grading exercise, the Bank's grade struicture changed, and thc definition of hat constituted higher-level staff expanded considerablv. Joint IBRD/IDA operations are counted only once as IBRD operations. Letterof Transmitta 9 Letter of Transmittal The details of events covering the period July 1, The Directors express their appreciation to the 1985, to June 30, 1986, are found in this Annual staff members of the Bank for their dedication Report, which has been prepared by the Execu- to the institution's ideals. They note that the tive Directors of both the International Bank for continued professionalism of the staff has made Reconstruction and Development (IBRD) and it possible for the Bank to respond to the needs the International Development Association of developing countries with both flexibility and (IDA) in accordance with the by-laws of the two imagination. organizations. Barber B. Conable, President of The Annual Reports of the International Fi- the IBRD and IDA and Chairman of the Boards nance Corporation and the International Centre of Executive Directors, has submitted this Re- for Settlement of Investment Disputes are pub- port, together with accompanying administra- lished separately. tive budgets and audited financial statements, to the Boards of Governors. Executive Directors Alternates Fawzi Hamad Al-Sultan Mohammad Al-Shawi Mourad Benachenhou Salem Mohamed Omeish Gerhard Boehmer Michael von Harpe Kenneth Coates Felix Alberto Camarasa Ferdinand van Dam Riza Sapunxhiu Ronald H. Dean You Kwang Park Mario Draghi Rodrigo M. Guimaraes Hugh W. Foster (acting) Hugh W. Foster Astere Girukwigomba Mitiku Jembere Leonor Filardo de Gonzalez Maria Antonieta Dominguez Jacques de Groote Oral Akman Edgar Gutierrez-Castro Patricio Rubianes C. Ulrik Haxthausen Veikko Kantola Tim Lankester Richard Manning Xu Naijiong Yang Guanghui Helne Ploix Olivier Debains Frank Potter Horace Barber C.R. Krishnaswamy Rao Sahib Gholam Kibria Nicephore Soglo Andre Milongo Vibul Aunsnunta Sashi N. Shah Kenji Yamaguchi Zenbei Mizoguchi August 5, 1986 10 The ExecufiveBoard The ExecutiveBoard Under the Articles of Agreement of the Bank, ects and of the Bank's experience in individual all its powers are vested in a Board of Gover- sectors and with particular policies, and by con- nors, consisting of one governor for each mem- sidering proposals for future evaluation activi- ber country. With the exception of certain ties, the Board ensures that the Bank and metn- powers specifically reserved to them by the Arti- ber countries are able to benefit from the lessons cles of Agreement, the Governors of the Bank of experience. have delegated their powers to a Board of Exec- utive Directors that performs its duties on a full- * * * time basis at the Bank's headquarters. There are twenty-one Executive Directors; each Director The major policy decisions of fiscal 1986' re- selects an alternate. As providedfor in the Arti- flect this pattern. The Executive Directors con- cles of Agreement, fi),e Directors are appointed ducted the mid-year review of the 1986 fiscal by the five members having the largest number year financial and operating programs and ad- of shares of capital stock, andthe rest are elected ministrative budgets and, in the process, ap- by the Governors representing the other mem- proved an increase in the fiscal 1986 borrowing bers. program from $9.6 billion to $10.6 billion. Be- The Executive Directors meet under the chair- fore the end of the fiscal year, the Directors set manship of the President of the Bank. Formal IBRD lending for fiscal 1987 at between $13.5 votes are rare as, in practice, most decisions are billion and S17 billion, with an IDA program of reached by consensus. The Executive Directors SDR2.7 billion. With the increasing and pro- are responsible for the conduct of the general spective demand on the Bank's financial and operations of the Bank. They decide on Bank staff resources, the Executive Directors are giv- policy in theframework of the Articles of Agree- ing increasing attention to the budget processes ment. They also decide on all loan and credit and procedures determining the allocation of proposals. those resources. The Executive Directors are also responsible Policy discussions largely reflected the out- for presentation to the Board of Governors at its come of the World Bank/International Mone- Annual Meetings of an audit of accounts, an ad- tary Fund (IMF) Annual Meetings of the Boards ininistrative budget, the Annual Report on the of Governors and the Development Committee operations and policies of the World Bank, and meeting in Seoul, Republic of Korea, in October any other matter that, in their judgment, re- 1985, and the Development Committee meeting quires submission to the Board of Governors. in Washington, D.C. in April 1986, in which the Matters may be submitted to the Governors at Executive Directors participated as in past years. the Annual Meetings or at any time between An- The Directors held a number of informal meet- nual Meetings. ings with the management of the Bank to discuss The Executive Board exercises its authority, the Bank's response to the proposals for an ex- under the Articles of Agreement, in three gen- panded role in the adjustment efforts of its heav- eral areas: (a) By its annual oversight of the fi- ily indebted middle-income and low-income nancial and operating programs, and adminis- member countries. In formal session as the Ex- trative budgets (see table), it determines the ecutive Board, they gave broad endorsement to allocation of financial and staff resources for the U.S. proposal (the "Trust Fund Proposal") the coming year; (b) by reviewing specific policy for the Bank's participation in a program of ex- proposals, either annually (for example, the al- panded collaboration with the IMF's structural- location of net income, staff compensation, the adjustment facility (SAF)-provided that the research program) or periodically (for example, the Bank's capital requirements, financial poli- cies, lending terms, sectoral priorities), it deter- The fiscal year of the IBRD, as \sell as of its two affiliates, mninesthe direction of Bank policies; and (c) by 0 N I to June 30. All references to fiscal years in runs from Ju reviewing evaluations of completed Bank proj- this Report, unless otherwise statecl, refer to this time period. The Executive Boara 11 Ridget nt 1b, WorldBanJ Jor'theViscalYearEndingJirne3( 11987 (F F it St eli s) Art tal ital Bit t tist Bit ri 19 1987 Uy Ortrtszatioua1Unit B pense tegnry 0ar ers 3', 3 364 Sa at 450462 $'473,$76 E w'e Usi'eet r 1 5 4 1 683 Ope an nal ned 70,366 7. 492 E tc eo i. s3 145 Repesen it 1835 '2,032 0 rt StI 42 982 458106 Canultat ee 50307< 51,39 ''div Tog am Ca' r te erac 7322608 FAO, UNES (3 0 e heade ease UNIIXI 34 9061 Oftceo upany 3 425 4221 Epa 4 Depei in 6,506. 9,232 Resear Ii 31 14 32 89 ommurnea to 17,616 37 979. 1an'tV"lal 54654< *',479 Othere pease 31 189 24 59 (T28Peati it Lv , biotal 6 4438 $ 721 1>93 Sn 7,20 367 Less t a1 IL$1D Reimb asemen *,* $- 9,660 , -24,35 Sect tary 16,532 17 865 ..1FCserxiee- Lv rsatR esons 18,853 ' 1< an upp rt ______ ______ e -3,130 -3340 15 r flda 'Set 1' 661,348 693,495 Adin tre ,044 84604 Admtm iTanrc ib nat 7 1 54 Add R r ettC ical $ 47, 25 $ 5b005 <. . 7 096 096 1 tal' 1ERD/IDA . $704,073 $744500 SiAn II 68413 721,193 Ptoryta,e e c lcss ad siinents *' '. $ 3,957 ________ R sm ursensdns8 $ 1 ,660 2 ,3$ dit led Intel IBR'D/IDA ,. . . $ 708,030' $ 744,500 a dsupp r f 3,1 0 3340 Subt tat ' $ 66 348 693, 5 mIlD $ 427,28 456,500 Aald' IDA' ' ,50 $28,000 ect8lPo8r m 42 25 1 I tal 1BRD/t12)A $ 7{4 73 $ 744A Eras year xpeese detiness 3 7 di I ba $78 0 $7445 Tb il tot fel ea ci isse 198 w apr ed' Lv nut Diect in 'ordncsvithV by- fIt tlfltt) tESAForpa CeaprISMI, Xt it 'e d ri 'di II 'alyr r it i,.l ne3O,l 8, also nv T '0 121 ' ' a o' I r ''a.19 eattaibo g of$243 lion Thisromp r twit a r t b et utoriziso o 26 ill hi I' val9'86. ael Dr pmitCtit itt lpclud s B ion Op tic Fob y odEnerpy and I d trysia Feonossne tie', 10 ment it inte dt e cot I the Ci lee a t Senior Preside t 0 raticits xl eseoperatir rog itt r imbiirsa Ici meal isis it rpm r its pi has I asia a ee lit Is is al y r 19 7 it g * 4-0 millino f ens for nit trans support to Sp rial Pro e a ifie a', riot ?or s(s ole eiss} 0 dude Ottibud ci "1 s-caty r 1987 on I i c ad red yt r 33RD o.t IF will b paid for by a service and sepport tee that has lb at ass 3 Ii II e ty 1981 dg lit e otiS rsz ri6n or' eci IF o rams lint ( nipar F fical 'ear I aiitliori' a- r at 3 teal I edt it i- 33Aitsiltits ( Ltmilljon)1 ls>ocreiai\ cntr0l 'dire ic I e r iS S esrbia $5 mill o I tIs s p oJ ci re list Ia ill for's b-S it AI'ric -$ '. million ( 3.5 sit Ii 3 tIs lISA a y no It titeal is neepit,,r itr-S48( iSmilo l;-tt th bihofa retithir iF siit orttoS' - o r 4 Omlbp ($2 mAli it3 12 The ExecutiveBoard eighth replenishment of IDA (IDA-8) is large tries (see page 51) and endorsed a strategy to enough to allow IDA to play the role expected of adopt a broader approach in the financial sector it in the whole range of IDA-eligible countries, to make financial systems more efficient and to and not just in those that might avail themselves mobilize domestic savings through encourage- of SAF resources. It is expected that the ways in ment of a movement towards real interest rates. which IDA-8 resources are used in conjunction Implementation of this strategy will involve in- with the IMF's structural-adjustment facility creased financial sector work by the Bank, use will be established in fiscal 1987. The Executive of an array of lending instruments that supports Directors also continued to focus much of their the overall sectoral development and a wide attention on actions to restore growth and devel- range of institutions and markets, and a greater opment in sub-Saharan Africa. coordination of Bank and IFC operations in the Consistent with these special initiatives and financial sector, as well as close cooperation the Bank's global commitment to development, with the IMF. growth, and poverty alleviation, the Executive In relation to other aspects of the Bank's in- Directors gave particular attention to the World creasing emphasis on assistance to, and coopera- Bank's overall lending program and resource re- tion with, the private sector in developing mem- quirements. Following the deliberations of the ber countries, the Executive Directors, in their Executive Directors and the management of the role as the IFC Board of Directors, continued to Bank, projections of Bank lending in fiscal years give greatly increased attention to IFC policy 1986-88 have been increased to a range of from and operational matters. Details of the IFC's ac- $40 billion to $50 billion, and a Bank lending tivities are contained in the IFC Annual Report level of up to $21.5 billion in fiscal year 1990 is for fiscal year 1986. now contemplated. It is estimated that S2.5 bil- With regard to major financial policy issues, lion in additional concessional flows from all the Executive Board reviewed the Bank's net in- sources will be needed annually, over the next come risks and targets and agreed that while the five years, to help meet low-income sub-Saharan overall level of loan charges at present appears Africa's financial needs. to be in line with the general objectives on loan The Executive Directors have been following charges and reserves, net income prospects and the progress of the current negotiations for the loan charges should continue to be kept under IDA-8 replenishment in view of the special im- close review. The management of the Bank will portance of IDA to the success of development present to the Executive Board a detailed review programs in poor countries throughout the of these subjects in fiscal 1987. world. The Executive Directors considered the nomi- Early in fiscal 1986, and continuing the initia- nation of Barber B. Conable as President of the tives begun in fiscal 1985, the Executive Direc- IBRD, IDA, and the IFC and unanimously se- tors reviewed, and consulted with their govern- lected him to be the institutions' seventh presi- ments on, the establishment of a Multilateral dent. He succeeded A.W. Clausen as President Investment Guarantee Agency (MIGA), which of the Bank and IFC on July 1, 1986. On June would seek to improve the investment environ- 30, 1986, the Directors, through the dean of the ment in developing countries by issuing guaran- Executive Board, took note of Mr. Clausen's tees against noncommercial risks and providing tenure as Bank President. "Mr. Clausen," Kenji promotional services. The Directors approved Yamaguchi, Executive Director for Japan, said, their draft report and draft resolution to the "has performed a very difficult job in a laudable Board of Governors proposing the establish- manner. . . . In these very difficult five years, he ment of MIGA. The Board of Governors has striven and devoted himself to giving new adopted the resolution in October 1985 in Seoul. stimuli to the Bank." Following their decision in fiscal 1985, the Ex- The Executive Directors also review evalua- ecutive Directors conducted a review of the tions of completed projects and consider pro- Bank's new cofinancing instruments and con- posals for future evaluation activities by giving cluded that, except for the untried option of pre- particular attention to the work of the Opera- arranged sales of participations, these would be- tions Evaluation Department (OED). The Direc- come a regular part of the Bank's means for tor-General, Operations Evaluation, is directly assisting its borrowers to mobilize finance from responsible to the Executive Directors and is commercial sources. Periodic reports on the pro- outside the regular staff structure of the Bank, gram will be continued in the context of the an- but is administratively linked to the President of nual review of the Bank's budget and operating the Bank. In February 1986, the Executive programs. Board approved the appointment of a new Di- The Executive Directors also considered a pol- rector-General, Operations Evaluation. icy paper on how the Bank might best help The Executive Directors as a Board consider strengthen financial systems in developing coun- from time to time a representative sampling of The ExecutiveBoard 13 OED reports. The Executive Directors annually programs of the two departments, the work in consider the report of the Director-General, the progress, desirable standards, and procedures of work program and manpower budget of the Op- reporting. Through a subcommittee, it gave spe- erations Evaluation Department, and the OED cial attention to project performance audit re- review of project performance audit results. ports to determine how well the Operations They have extended valuable support to the Evaluation Department carries out its assess- OED in its efforts to enlarge borrower involve- ment of individual projects. The Committee it- ment in the evaluation process. The Operations self reviewed and identified reports giving rise to Evaluation Department is scheduled to submit a policy issues that may be considered by the Exec- special overview of the evaluation of structural- utive Directors. Through another subcommit- adjustment loans to the Executive Board early in tee, the Committee examined a number of inter- fiscal year 1987. nal audit reports to determine the adequacy and In addition to formal, regular Board meet- efficiency of the Bank's internal audit. ings, the Executive Directors also meet as the Of continuing concern to the Committee is the Committee of the Whole to discuss certain mat- adequacy of the flow of financial information to ters prior to their submission to the Board for the Executive Directors in order for the Board to formal action. They also meet informally as fre- discharge its responsibilities properly with re- quently as required. Periodically, the Executive spect to the financial policies of the Bank. Ac- Directors hold seminars with Bank management cordingly, the system for providing financial in- that permit more informal discussion than can formation to the Board is reviewed periodically take place at regular Board meetings. by the Committee. Topics covered in this manner during the past The Committee provides a continuous chan- fiscal year included: agriculture in Africa; the nel-it usually meets once a month-through Multilateral Investment Guarantee Agency which the internal and external auditors can (MIGA) (see page 52); the outline, and subse- communicate with the Executive Directors quently the text, of the 1986 World Develop- should the need arise. The Committee consists ment Report; the Bank's response to the debt of eight Executive Directors, who are appointed initiative proposed by the U.S. Secretary of the by the Board for a term of two years after each Treasury, James A. Baker, III; management of regular election of Executive Directors. Since the Bank's liquidity portfolio; ensuring food se- November 1985, Fawzi Hamad Al-Sultan has curity in the developing world: issues and op- served as chairman of the Committee. tions (see page 49); the debt problem and The Committee on Directors' Administrative growth; achievement of sustained growth in Matters (CODAM). The CODAM was estab- middle-income countries encountering debt- lished in 1968. It considers, makes recommenda- servicing difficulties and its effect on the World tions, and reports its findings to the Executive Bank's overall lending program and resource re- Directors for their decision on matters of admin- quirements; financing adjustment with growth istrative policies relating to Executive Directors, in sub-Saharan Africa, 1986-90; IFC's opera- alternates, advisers, and their staff. Its terms of tions, methods, and practices; and a progress re- reference involve it in a wide spectrum of admin- port on Bank/IMF collaboration. istrative matters and charge it with the responsi- Joint Audit Committee. The Joint Audit bility of assisting Executive Directors in the for- Committee was established in 1970, essentially mulation of policies, changes in the existing to represent the shareholders of the Bank in policies, and implementing such policies. The maintaining vigilance over the soundness of the Committee coordinates many of its recommen- Bank's financial practices and procedures. In dations with a similar committee established by pursuing its responsibilities during fiscal 1986, the Executive Directors of the International the Committee nominated a firm of private, in- Monetary Fund. In its recommendations, the dependent, internationally established account- Committee tries to maintain a balance between ants to conduct the annual audits of the IBRD, the organizational and administrative objectives IDA, and the IFC, discussed with them the of the institution and the unique circumstances scope of their examination, and reviewed with faced by the Directors in discharging their re- them the annual audited financial statements sponsibilities. and the opinions thereon. In addition, through This Committee also meets about once a meetings with the Bank's senior financial offi- month. The membership consists of six Execu- cers, the Committee helps to provide assurance tive Directors, appointed for a term of two years to the Bank's Executive Directors that the after each regular election of the Executive Di- Bank's financial affairs are properly conducted. rectors. Since November 1985, Ferdinand van The Committee also oversees the work of the Dam has served as its chairman. Operations Evaluation and Internal Auditing The Committee on Staff Compensation Is- Departments. It, therefore, reviewed the work sues. The Committee on Staff Compensation Is- 14 The Executive Board sues was established in July 1980. Its terms of The Joint Bank/Fund Committee of Exe a- reference mandate it to keep under continuing live Directors on Staff Comtipensation consists of review and, where appropriate, to advise the Ex- four Executive Directors of the Bank, including ecutive Directors on questions of staff-compen- three members of the Committee on Staff Com- sation policy and to maintain close liaison on all pensation Issues, and four Executive Directors such matters with the Executive Directors of the of the IMF. The Committee was established in IMF, bearing in mind the need for general paral- November 1984 to review those aspects of the lelism between the two institutions. compensation systems of the Bank and Fund Since its inception, the Committee has ad- that uere called into question during the discus- dressed a wide range of topics. These include: is- sions on staff compensation in the Boards of the sues arising from a review of expatriate benefits; two institutions in June and July of 1984. Since modifications in the financial-assistance pro- February 1986, Guenter Grosche (IMF) has gram; principles of staff employment (subse- served as chairman of the Committee. quently adopted by the Executive Directors), as The Ad Hoc Committee on the Valuation of well as draft rules implementing them on sensi- Bank Capital. This Committee was established tive issues such as separation and demotion; op- in September 1983 to analyze the implications of tions for "intervening-year" salary reviews; the alternative solutions to the valuation of the findings, implications, and options resulting Bank's capital with a view to facilitating an from the 1984 major compensation review con- agreed solution. The Committee consists of ducted by an outside consulting firm; issues aris- seven Executive Directors, who are appointed by ing from a joint Bank-IMF review of their pen- the Executive Directors for a term of two years sion plans; terms of reference for a joint after each regular election of Executive Direc- Bank/IMF committee of Executive Directors to tors. Under its terms of reference, the Commit- review certain elements of the staff compensa- tee's mandate will terminate when a solution to tion system; and issues arising from the Bank's the issue of valuation has been agreed by the Ex- job-grading program. ecutive Board. The Committee consists of eight Executive Di- The Committee agreed on June 30, 1986, to rectors, who are appointed by the Executive Di- send forward its recommendations on the valua- rectors for a term of two years after each regular tion issue to the Executive Board. Those recom- election of the Executive Directors. Since March mendations will be taken up by the Board in the 1986. C.R. Krishnaswamy Rao Sahib has served near future. Since October 1983, Ronald H. as chairman of the Committee. Dean has served as chairman of the Committee. 15 Chapter One TheWorld Bank:FiscalYear1986, in Brief It may later be said that the past year was a those aid-coordination meetings chaired by the pivotal one in the recent history of economic re- Bank in fiscal 1986.) lationships between developed and developing The major venues that gave voice to the countries. emerging international consensus were the An- It would not do the year justice to have it re- nual Meetings of the World Bank and Interna- membered mainly through a series of snapshot- tional Monetary Fund (IMF) (Seoul, Korea: Oc- like events-all discussed elsewhere in this An- tober 1985) and the meetings of the Develop- nual Report: the slowdown of growth from 1984 ment Committee' (Seoul, Korea: October 1985 levels in both developed and developing coun- and Washington, D.C.: April l986). Other inter- tries; the prolongation and deepening of the national meetings, as well, including the Eco- problems faced by the heavily indebted coun- nomic Summit in Tokyo (May 1986)and the spe- tries; the sharp decline in the price of oil and the cial week-long session of the UN General ramifications of that decline on exporters and Assembly on the economic problems of Africa importers of petroleum; the fall in interest rates; (May 1986), also reflected this new spirit of co- the opening of a window of economic opportu- operation. nity for the countries of sub-Saharan Africa; in- By the time of the Seoul Annual Meetings, it creasing protectionist pressures; and a flattening had become apparent that the debt-servicing in levels of official development assistance. problems of many heavily indebted middle-in- Rather, the year may best be remembered as come countries were likely to be protracted and one in which rhetoric was transformed into that their long-term solution depended critically action on a number of critical issues. To be sure, on the restoration of sustained growth. In too divisive issues remain unresolved. For others, many instances, these countries had pursued ad- only the outlines of possible solutions are dis- justment policies that led to a compression of cernible. Yet, the convergence of opinion among imports rather than increases in exports and sav- industrial and developing countries on the na- ings; budget deficits were being pared not ture of current economic problems and on the through increases in output, but by reducing ex- paths that might be taken to ameliorate them, or penditures on health, education, and other so- even reverse their chronic, adverse trends, is cial services, thus endangering both long-term what distinguishes the year from those that pre- economic growth and social harmony. ceded it. The consensus that emerged was that con- Two key issues, in particular, stand out upon certed, not sequential, action by all the major which a vital convergence took place: the need to parties to the problem-indebted countries, in- stimulate economic growth in those heavily in- dustrialized countries, commercial banks, and debted countries that have been undertaking, at international financial institutions-had to be some social pain, far-reaching programs of eco- taken. nomic adjustment and the need for concerted The scenario saw the indebted countries con- action, by all parties concerned, to reverse the tinuing their focus on measures to attain several decades of economic decline in the nations of major policy objectives: a stable macroeco- sub-Saharan Africa. nomic environment, an increase in total invest- As the international community voiced its re- solve to address these paramount issues, yet an- other growing consensus began to emerge: that during the remaining years of the current decade The DevelopmentCommittee-formally known as the Joint \4inisterial Committee of the Boards of Governors of the and into the 1990s, the World Bank must play a World Bank and the International Monetary Fund on the major role in stimulating growth in the heavily Transfer of Real Resources to DevelopingCountries-was indebted countries, in helping reverse economic established in 1974. The Committee's membership consists decline in Africa, and in promoting and coordi- of ministers designated by each member government of the and in decline in Africa, promoting World Bank or the Fund that appoints an ExecutiveDirec- nating capital flows to the world's developing tor, or by a group of members that elects an Executive countries. (See Table 1-1, which reports on Director. 16 The World Bank Fiscal Year 1986, in Brief Table 1-1. Aid Coordination Group Meetings Chaired by the World Bank, Fiscal 1986 (Consortia, Consultative and Aid Groups) Date Country Location 1985 July 18-19 Philippines: Ad hoc Subcommittee Meeting Tokyo, Japan September 25-26 The Gambia: Donors' Meeting on Emergency Assistance London, England November 5-6 Somalia Paris, France November 19-20 Ghana Paris, France November 26-27 Mauritania Paris, France December 17 Zambia: Interim Meeting Paris, France 1986 January 14 Burma Tokyo, Japan January 16 Nepal Tokyo, Japan January 21-22 Malawi Paris, France March 13 Caribbean Group: Ad hoc Advisory Committee St. Lucia April 11 Guinea: Donors' Meeting Paris, France April 14-15 Bangladesh Paris, France April 17-18 Pakistan Paris, France April 21-22 Zaire Paris, France April 24-25 Madagascar Paris, France April 29-30 Kenya Paris, France May 29-30 Philippines: Second Subcommittee Meeting Tokyo, Japan June 10-11 Tanzania Paris, France June 16-17 India Paris, France June 19 Sri Lanka Paris, France ment, improvements in productivity, rapid ex- programs; and through its catalytic role in mobi- port growth, expansion of domestic savings, and lizing and coordinating private and official rationalization of incentives for the private sec- flows. tor. The World Bank, in association with the Disbursements to fourteen highly indebted IMF, would help governments establish and im- middle-income countries have risen from S2.4 plement the domestic-policy reforms needed to billion in fiscal 1982 to about S4.1 billion at the increase lender and investor confidence in the end of fiscal 1986-mostly, but not exclusively, ability of these countries to resume growth. in support of adjustment programs in Latin At the same time, indttstrial countries would American countries. act together to ensure satisfactory rates of non- Lending in support of programs of adjust- inflationary growth and join with commercial ment now totals approximately a third of all banks and multilateral development banks to Bank commitments to these countries. Whether boost investment in countries whose domestic through structural-adjustment or sector-adjust- policies would permit additional resources to be ment loans, the funds provided in support of used efficiently. policy changes are disbursed quickly and thus Progress in realizing that scenario has been make a swift contribution to a country's exter- made. The indebted countries have continued to nal-capital needs. implement programs of adjustment; enhanced Commensurate increases in private lending, coordination of economic policies by the Group however, have not occurred. 'It is appar- of Five has taken place; and the World Bank has ent . . . that the recent weakness of private bank expanded its lending in support of adjustment lending to developing countries is hard to turn efforts. around," World Bank President A.W. Clausen Expanded Bank support to these countries- reported to the Development Committee at its made possible through strengthened interna- April 1986 meeting. tional consensus-has come mainly in three The Development Committee, in turn, re- areas: through assistance, in close association sponded by urging creditor governments to en- with the IMF, in the formulation, implementa- sure that regulations and guidelines imposed by tion, and monitoring of medium-term adjust- their bank supervisors do not impede financing ment programs: in its lending in support of those arrangements that can provide prudent but in- The World Bank: FiscalYear 1986, in Brief 17 creased commercial bank flows to countries im- income Africa remains poorer today than it was plementing significant programs of adjustment a quarter of a century ago. and growth. In late fiscal year 1985, following the publica- In a related action, support was also given tion by the Bank of Toward Sustained Develop- during the year to a World Bank initiative to se- ment in Sub-Saharan Africa: A Joint Program cure greater flows of private foreign investment of Action, consensus built for the Bank to ex- to developing countries, when a draft Conven- plore ways to mobilize additional resources to tion for the Multilateral Investment Guarantee implement a program of action that could lead Agency (MIGA) was approved by the Bank's to the region's realization of its potential. Board of Governors. MIGA, which has as its The Bank's efforts led to the creation of the goal the stimulation of just such flows, is en- Special Facility for sub-Saharan Africa, whose dowed with authority to issue guarantees against mandate was to support financially, over a noncommercial risk through a wide range of three-year period, reform programs undertaken technical-assistance and consultative activities.2 by African governments. That facility began op- Throughout the year, the Bank sought to en- erations on July 1, 1985.4 courage commercial banks to increase their lend- In fiscal 1986, the Bank reported on recent de- ing-disbursements by commercial banks to the velopments in the sub-Saharan region. Its study 5 highly indebted middle-income countries in- drew several conclusions: that African govern- creased by less than I percent in 1985-to these ments were making significant progress in the countries. Over the longer term, commercial formulation and implementation of structural- bank confidence in the ability of these countries adjustment programs, but that much remains to to resume growth may well be bolstered if the be done; that Africa's declining level of im- Bank has the resources needed to help the highly ports-not only of investment goods but of es- indebted countries design and implement crucial sential consumer goods and raw materials, as policy reforms in coming years. well-threatens to undermine the reforms now A program of expanded Bank lending to its under way; and that known and expected aid developing member countries during the period commitments to the region in the period 1986-90 fiscal 1986-88-of between $40 billion and $45 of S32.8 billion leave a resource gap of $2.5 bil- billion-was endorsed early in the fiscal year by lion to be filled. The report's principal theme ministers from both developed and developing was stark: that without additional resources, in countries. Later in the year, the Bank recognized the form of new aid and debt relief, to those the potential for additional lending-not only to countries that continue their efforts at structural the heavily indebted countries, but also to other adjustment, their attempts to help themselves countries, including "blend" countries, whose must fail. access to IDA's concessional flows may be lim- Consensus on a number of Bank recommen- ited-and so raised its lending range for these dations to assist the nations of this region has years to as much as $50 billion, while also pro- emerged, as industrial nations have agreed to ex- jecting a lending volume in an amount of up to ert their best efforts to close the $2.5 billion gap $21.5 billion in fiscal 1990. by providing additional official development as- Because such expanded lending demands an sistance, through both multilateral and bilateral expansion of the IBRD's capital, the question of channels, to countries that are undertaking sig- the timing of a general capital increase (GCI) has nificant reform programs. Furthermore, wide- become increasingly crucial. There is no ques- spread agreement exists on the principle that do- tion, noted the April 1986 communique of the nor countries should not be net recipients of Development Committee, that the Bank should official capital flows from those very African not be constrained by a lack of capital or bor- governments they are trying to assist. To the rec- rowing authority in meeting future demands by ommendation of the Bank that donors act in its borrowing member countries. The President greater concert with respect to their assistance of the Bank noted, 3 however, that it will be im- programs in the region came the suggestion that portant for shareholders to agree in principle on the Bank take the leadership in this endeavor. a capital increase in fiscal year 1987 so as to en- Movement on securing the funds needed by sure that the IBRD can fully meet the needs of its the Bank to fulfill its role in helping finance ad- members. The second major area in which there was a noticeable convergence of opinion concerned 2 Details of the Multilateral Investment Guarantee Agency are the nations of sub-Saharan Africa. In 1986, sub- found beginning on page 52. Saharan Africa began to emerge from one of the A.W. Clausen to the Development Committee, April 1986. worst famines in recent history, and per capita For a report on Facility activities in fiscal 1986, see page 22. incomes are expected to rise for the first time Financing Adjustment with Growth in Sub-Saharan Africa, since 1980. This good news was relative: Low- 1986-90. 18 The World Bank: FiscalYear 1986, in Brief _ and the enhancement of its catalytic role with Note on Dollar Amounts commercial banks and in aid coordination. The strengthening of that role is now under way in Dollar amounts used in the text of the An- two key areas: nual Report refer to current United States dol- * Stepped-up assistance to those heavily in- lars. Where special drawing right (SDR) debted middle-income countries that wish the amounts are used for the capital of the Bank, Bank's help in pursuing medium-term policies one SDR equals 1.17757current United States that are consistent with growth and adjustment dollars at June 30, 1986 (one SDR equaled * Enhanced assistance under the joint pro- 0.998281current United States dollars at June gram of action to the countries of sub-Saharan 28, 1985). Africa. This assistance will take the form of For a detailed discussion and the basis for lending (whose amounts in fiscal 1987 continue SDR amounts used for IDA subscriptions and to be limited by the results of past agreements), contributions, see IDA Financial Statements, as well as through the elaboration of medium- Appendix F-Notes for Financial Statements. term "frameworks" in collaboration with the IMF and the use of those frameworks as a basis for a growing catalytic role.6 justment with growth in sub-Saharan Africa Fiscal Year 1986-Some Highlights continued throughout the year. During negotia- In fiscal year 1986, lending commitments by tions on an eighth replenishment of IDA re- the International Bank for Reconstruction and sources for the period fiscal 1988-90, deputies, Development (IBRD), the International Devel- representing thirty-four donor nations, agreed opment Association (IDA), and the Interna- to exert every effort to achieve a replenishment tional Finance Corporation (IFC) totaled of $12 billion. $17,475 million. The need for an IDA replenishment of a suffi- That amount was $2,153 million higher (14 ciently high level goes well beyond the borders of percent) than the previous year's record of sub-Saharan Africa, however. Poor countries in $15,322 million.' Commitments by the IBRD other parts of the globe also have a legitimate were $13,179 million, up $1,823 million (16 per- claim to be continuous and substantial IDA ben- cent) from fiscal year 1985 amounts. IDA com- eficiaries. mitments, of $3,140 million, were $112 million The Bank also welcomed during the year the higher (3.7 percent) than in fiscal year 1985. decision of the IMF Board of Executive Direc- Commitments from the IFC, some $1,156 mil- tors to establish a structural-adjustment facility lion, were $219 million higher (23 percent) than that will make available SDR2.7 billion for bal- in the year before. ance-of-pavments assistance to low-income In addition to IBRD and IDA lending, Special countries that have developed medium-term ad- Facility for sub-Saharan Africa operations justment programs. The Bank is currently ex- ploring ways in which it might collaborate with the Fund to enhance the facility's effectiveness. responsibil- Theabilityof the Bankto handleits increased Increased collaboration with the Fund contin- tieseffectixelydependson a multitude of factors. The global ued in fiscal 1986, as both institutions stepped economic environment, adequate resources, and the contin- up their efforts to help member countries resume ued ability of the Bank to attract and retain professional and dedicated staff are factors of paramount importance. sustainable growth. During the year, the Bank Among the others is the Bank,s ability to ensure that its staff and Fund worked particularly closely in heavily work in an environment that encourages efficiency. Page 27 indebted countries to help support adjustment reports on says being developed to enhance Bank efficiency programs with the aim-unfulfilled at the end of in its operational work. the fiscal year-of securing additional commer- 7 Since the real value of loan commitments by the IBRD and cial-bank financing. IDA is eroded to the extent that cost inflation occurs ouer the Fiscal 1986 may have set the stage for events period of disbursements, the Banik plans and monitors its commitments in real,' as well as 'nominal' terms. The de- to come: for a continuation of progress through flator now used to express commitments in real terms is a concerted international action to secure nonin- weighted average of the price levels assumed to be prevailing flationarv, sustained economic growth and in- over the period of disbursement of these commitments, where the weights are the proportion of a typical loan that creased responsibility by the World Bank in that swouldbe disbursed each year. The price levels are U.S. dol- process. lar-denominated indexes of the unit salue of manufactured It is a responsibility for which the Bank is exports from developed countries to developing countries, ready, as it has now assumed a principal role in which take account of both inflation in the former and the endeavor through the expansion of its ser- changes in their currencies (for example, Deutsche mark, Japanese yen, and so forth) v'is-i-vis the U.S. dollar. If fiscal vices in several areas, including lending, provi- 1986 IBRD and IDA commitments were to be expressed in sion of policy advice and technical assistance, terms of fiscal 1985 dollars, they would be $15,389 million. Lending to the Poorest Countries 19 Figure1-1. IBRDand IDA Lending to PoorestCountries,FiscalYears1977-86 (1984 USSmillions) IBRDamount ED IDAamount 1977-81 1982 1983 annual averag2 Total 4.387.6 Total 5,142.2 Note: The poorest countries are defined as those with per capita income less than $400 in 1984 USdollars. 20 The World Bank: Fiscal Year 1986, in Brief Table 1-2. Eastern and Southern Africa: Net Transfers to Current Borrowers (millions of US dollars) Sudan Zimbabwe Kenya Ethiopia Total region Item 1986 1982-86 1986 1982-86 1986 1982-86 1986 1982-86 1986 1982-86 tBRD and IDA commitments 62.6 377.5 - 347.0 75.0 647.2 67.5 395.5 915.9 4,732.9 Gross disbursements 52.7 342.2 35.8 226.5 92.3 639.0 50.4 191.1 821.8 3,645.8 Repayments 8.0 31.0 - - 40.0 118.6 7.8 30.0 151.5 551.3 Net disbursements 44.7 311.2 35.8 226.5 52.3 520.4 42.6 161.1 670.3 3,094.5 Interest and charges 7.6 29.4 21.3 54.7 67.2 226.5 7.8 32.9 212.6 809.5 Net transfer 37.1 281.8 14.5 171.8 (14.9) 293.9 34.7 128.2 457.7 2,285.0 NOTE: Current borrowers are countries having a lending program in fiscal 1986-89. Transactions relating to Part 11countries guaranteed by Part I countries are included. Disbursements from the IDA Special Fund are excluded. The countries shown in the table are those with the largest GNP, listed in descending order. Details may not add to totals because of rounding. Table 1-3. Western Africa: Net Transfers to Current Borrowers (millions of US dollars) Nigeria Cameroon Cote d'lvoire Ghana Total region Item 1986 1982-86 1986 1982-86 1986 1982-86 1986 1982-86 1986 1982-86 IBRD and IDA commitments 312.9 1,303.9 30.1 398.2 340.1 1,138.8 96.0 416.3 1,130.6 4,868.1 Gross disbursements 284.3 1,034.6 73.9 283.9 102.7 790.0 96.9 238.0 873.9 3,519.6 Repayments 58.0 198.4 18.5 51.6 45.6 136.0 9.8 42.0 168.5 544.6 Net disbursements 226.3 836.2 55.4 232.3 57.2 654.0 87.1 196.0 705.4 2,975.0 Interest and charges 115.1 359.8 26.1 93.2 88.4 275.5 11.5 49.7 284.0 948.0 Net transfer 111.2 476.4 29.3 139.1 (31.2) 378.5 75.6 146.3 421.4 2,027.0 NOTE: Current borrowers are countries having a lending program in fiscal 1986-89. Transactions relating to Part It countries guaranteed by Part I countries are included. Disbursements from the IDA Special Fund are excluded. The countries shown in the table are those with the largest GNP, listed in descending order. Details may not add to totals because of rounding. Table 1-4. East Asia and Pacific: Net Transfers to Current Borrowers (millions of US dollars) China Indonesia Korea Thailand Total region Item 1986 1982-86 1986 1982-86 1986 1982-86 1986 1982-86 1986 1982-86 IBRD and IDA commitments 1,137.0 3,951.9 1,132.0 5,394.1 626.0 3,092.5 93.0 1,358.3 3,565.2 16,399.7 Gross disbursements 593.6 1,139.3 818.1 3,395.2 322.6 2,565.0 246.9 1,678.2 2,336.1 11,169.5 Repayments - - 179.2 520.8 293.8 936.0 102.7 295.2 825.7 2,514.4 Net disbursements 593.6 1,139.3 638.9 2,874.4 28.8 1,629.0 144.2 1,383.0 1,510.4 8,655.1 Interest and charges 52.6 80.0 331.6 1,030.1 319.9 1,151.9 194.5 654.0 1,183.1 3,993.1 Net transfer 541.0 1,059.3 307.3 1,844.3 (291.1) 477.1 (50.3) 729.0 327.3 4,662.0 NOTE: Current borrowers are countries having a lending program in fiscal 1986-89. Transactions relating to Part 11countries guaranteed by Part I countries are included. Disbursements from the IDA Special Fund are excluded. The countries shown in the table are those with the largest GNP, listed in descending order. Details may not add to totals because of rounding. Net Transfersto Currenf Borrowers 21 Table 1-5. SoulthuA~sia:NtTasest urn orwr Pakistan India Bangladesh Burm~~a Totalregioni Item 1986 1982-86 1986 1982-86 ~198 12-6 1986 18-86 198 1982-8 11,75. commitments2,368.3 602 463.1 2,248.0, ,8. 00 309.0 363. 6,9. 1,35.7 disbursements 6,336.0 214.5 865.2 343.4 1188 5. 6. ,1. ,0. disburements1,204. 5,7469 1678 670.7 336.7 1,1841.6 49.7 265.3 1,894.41 8,388.6 charges 287.7 974.6 52.2 ~~202.4, 21.90 719.3 3.9 12.7 377. 1,305.4 Nettransfer 16.37 4,7. 1. 6.3314.8~ 1,610.3 4. 32152.6 7,03. 1,56. nrntbroesar NoE onre hvn enigoorm nfsa 98-9 rnscin eatn oPr 1 onre Item 1986 1986 1~~~982-86 139826 19869 10982-6 1986 1928 1986. 1982-86 commitments 1,057.03,867.0 70-3 3680.0 121.5 1,6241.6 32. ,0.81,7. 590.8 ,817.9 310.6 3:68.2 240. disbursemets 23.0 31,551. ,900208. 0,1. Repayments 184.8 613.56 470.0 156.7~ 185.7 738.0 126.95 8. 934 3,7. 406.0 2,2504.3261.6 2118.5 disbursements 54.3 8134.1 (103.) 77. 1,183.0 47,242.4 Nettransfer 119.51,264 225 712.7 (1366 0. 20.) 111 18. ,5. urnt borrowersare countries havinig NOE a lending Transactions'relatinig Program in fiscal 198,6-89. to Part II counitries y Pat I countriesiiare incldeid. Disbursements foromthe IDA SPecial Fund are excluded.The countriesshoni guarateed the 22 The World Bank: Fiscal Year 1986,in Brief amounted to $782 million to fifteen countries Special Facility for sub-Saharan Africa during fiscal 1986. A total of 131 IBRD loans were distributed The Special Facility for sub-Saharan Africa among forty-one countries. Ninety-seven IDA began operations on July 1, 1985, with expected credits were distributed among thirty-seven available resources-from direct contributions, countries; IFC's eighty-five investments were in as well as resources from special joint financ- thirty-nine countries. ing-totaling more than $1.2 billion. For those projects for which total costs can be The facility was designed to provide quick-dis- calculated, IBRD and IDA assistance provided bursing assistance to IDA-eligible countries in about 30 percent of the total funds required. sub-Saharan Africa that had undertaken, or The most active borrowers from the IBRD were committed to undertake, appropriate me- were India ($1,743 million for six projects), Bra- dium-term programs of policy reform. Eligibil- zil (S1,620 million for eleven projects), and In- ity under this formula is determined in a flexible donesia ($1,132 million for eleven projects). manner, taking into account the specific circum- IDA was most active in India ($625 million for stances of countries. Although there has been no six projects), Bangladesh ($463 million for six attempt to predetermine the allocation of re- projects), and China ($450 million for four proj- sources among eligible countries, as a general ects). rule, Special Facility credits will not exceed 60 During fiscal 1986, disbursements by the percent to 70 percent of a country's planned al- IBRD to countries totaled $8,263 million, down location under the seventh replenishment of $382 million from fiscal 1985. IDA disburse- IDA resources. ments, at $3,155 million, rose by $664 million During the year, Special Facility operations, over their fiscal 1985 amounts. The decline in totaling $782 million, were approved in fifteen IBRD disbursements reflected the continuing countries. Table 1-8 details the breakdown of higher-than-average rate of loan cancellations Special Facility credits by country and amount. and a very slow project-implementation pace in Structural-adjustment credits, together with re- certain borrowing countries. construction-imports credits, accounted for ap- The net transfer of resources to current bor- proximately 45 percent of Special Facility com- rower countries by the IBRD and IDA combined mitments. Sector-adjustment credits accounted was $3,184 million, as compared with the fiscal for 40 percent of commitments; the remainder 1985 total of $4,936 million. went to help finance rehabilitation projects with In fiscal 1986, 113 IBRD-assisted and IDA-as- a major policy content. sisted projects involved cofinancing funds, Disbursements under the Special Facility, in- amounting to $3.5 billion (see Table I -10). That cluding $ 17.4 million in disbursements from spe- amount was $1.5 billion less than in the previous cial joint financing, amounted to $119.1 million year. The 113 cofinanced projects represented during the year. As the majority of the projects almost half of the total number of projects ap- approved for Special Facility financing became proved by the two institutions. effective during the second half of the fiscal Net income of the IBRD for fiscal 1986, at year, Special Facility disbursements are expected S1,243 million, increased by 9 percent ($106 mil- to accelerate in fiscal 1987. lion) over the fiscal 1985 level of $1,137 million. The Special Facility's resources were aug- The increase resulted primarilv from high re- mented during the year by the addition of three turns on the IBRD's liquidity and from lower direct contributors-Belgium, Ireland, and the borrowing costs. United States-and by the addition of Belgium Total borrowings of the IBRD were $10,609 as a special joint financer. Table 1-9 shows the million, as opposed to $11,086 million in fiscal amounts pledged to the Special Facility as of 1985. The IBRD was most active in borrowing June 3, 1986. (before swaps) U.S. dollars (31 percent), Swiss francs (18 percent), Japanese yen (17 percent), IDA Deutsche mark (16 percent), and Dutch guilders (7 percent). After swaps, the IBRD was most ac- An initial discussion of the eighth replenish- tive in borrowing Swiss francs (29 percent), ment of resources of the International Develop- Deutsche mark (20 percent), United States dol- ment Association (IDA-8) took place at the lars (19 percent), Japanese yen (18 percent), and World Bank-IMF Annual Meetings in Seoul, Dutch guilders (9 percent). Korea, in October 1985. Negotiations of the re- The subscribed capital of the IBRD increased plenishment were formally launched, however, by SDR6,889 million during fiscal 1986. Of that with a meeting of IDA deputies on January 27 amount, SDR4,865 million was the result of sub- and 28, 1986, in Paris. A further meeting took scriptions authorized by the general capital in- place in Washington, D.C. on April 7 and 8, crease approved in January 1980. 1986. Resources contributed under the eighth re- Special Facilifyfor sub-Saharan Africa 23 Tabl US. ~SpeiaFaclit for u-aaa Africa Opertions Approved, Fiscal 1986 Special Facility amouttt~~~~~~ Date of Country and proect (USmlin)approval Burundi Structural-adjustment creit 36.0 May ~1986 Eqluatorial Guinea R-econstruction-import credit 4.0 May 19,86 Road-rehabilitationadmitnnecei 14.0 August 1985' Reconstruction-impr reiI41. etme l985b' Industrial sector-adutet rdt25.0~ April 1986 Guinea Strucuraladjusmentcredit 59.0 February 1986 G'uinea-Bissau Reconsructin-imprtcrdit 5.0 April 19 86b, ~Kenya Agricultural-sector credit 40.0 June 1986 Madagascar 'Industrial-assistance credit 20.0 December l9851 Agricultural-adjustment~ credt 41,0My18 Malawi 'Structural-adjustmnent credit LiI 79.0 December 1985 Niger Structural-adjustmrent credit 400February 1986 Transportation-sector credit 38.0 May 1986 Rwanda Highw*ay IV ~project 15.0 December 1985 Struictural-adjustment credit 510Februar 19,86 Somalia Agricultural-inputs, program 1 22. Decemnber1 98 5b Agricultural sector-adjustment crdt 40.0 June 1986 Togo Structuraladjustmnent credit It 40.10 August 19851 I projet Highway 34.0 November 19851 industrial credit sector-adjustment 60.0 ~~~~~~~~~June 1,986 Zambia~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~br18 Industrial-reorienaincei 40Spebr18 a. The amountsshown includeapproved SeilFacilit ceits plus specificamontsof pca on iacn SFniae by~SJF contributors,. b. For these projects. IDA credits wereaprvdificl95.TeapoadaeidaesprolofteScalFiiy sup~plemental financing c. Figre runddi ilonfdlas 24 The World Bank: FiscalYear 1986, in Brief Table 1-9. Proposed Contributions to the Special Facility for sub-Saharan Africa (millions) Special drawing Donor Nationalcurrency rights' US dollars' Direct contributions Austria S 222.8 12.1 13.9 Belgium BF 300.0 5.6 6.4 Canada Can$ 100.0 62.5 71.8 Denmark Dkrl 170.0 17.1 19.7 Finland Fmk 78.0 12.9 14.8 France F 1,500.0 179.2 206.0 Ireland £lr 1.5 1.7 2.0 Italy Lit 300,000.0 164.7 t89.3 Netherlands f. 350.0 118.3 136.0 Norway" NKr 265.0 29.8 34.2 Spain Ptas 1,665.9 9.9 11.4 Sweden SKr 440.0 52.3 60.2 United States $ 71.8 62.4 71.8 IBRD, - 130.5 150.0 Special joint financing Belgium BF 300.0 5.6 6.4 Germany, Federal Republic ofd DM 300.0 114.1 131.2 Japan, y 33,200.0 166.0 190.9 Saudi Arabia SRIs 360.0 85.9 98.8 Switzerland SwF 80.4 36.9 42.5 United Kingdomr £ 75.0 97.1 111.6 Total 1,364.9 1,568.8 NoTm: Amounts are indicative as of June 3, 1986. a. The US-dollarand SDR equivalentsare based on exchangerates prevailingon June 3, 1986. b. Includesinvestmentincomeof NKr4 million. c. On October 1I, 1985,the Board of Governorsapprovedthe transfer of FY1985IBRDnet incometo the SpecialFacility for sub-Saharan Africa. d. DMI00 milliona year. first two yearsallotted, third year to be requested. e. t 17,500millionprovidedfor the first yearand Y 15,700 millionprovided in the secondyear; amount for the third year to be determined. f. £75 million to be disbursed over a five-yearperiod. plenishment of IDA will provide the Association by IDA deputies to complete the negotiations by with funds for credit commitments in the period the time of the 1986 Annual Meetings. fiscal 1988-90. The deputies also reaffirmed at the Seoul In Seoul, where IDA-7 (the seventh replenish- meeting their strong support for IDA as an insti- ment) was reviewed at the midpoint of the re- tution and emphasized its important role as a plenishment period, IDA deputies discussed the multilateral institution in providing basic invest- marked deterioration in the economies of the ment for long-term growth and for helping de- poorest countries, especially those in Africa. At sign and support needed economic reforms and the same time, the planned lending by the Asso- structural changes. They also stressed that IDA ciation to the poorest countries had been sharply was an effective institution and that, therefore, curtailed because of the lower volume of re- it should play a pivotal role in alleviating pov- sources made available under IDA-7 as com- erty and enhancing development in the poorest pared with IDA-6 (the sixth replenishment). As a nations. result, investments in these countries in infra- Considerable progress was made during the structure, social sectors, and productive activity first two formal meetings. At the Paris meeting, were deferred, with a resulting adverse impact the IDA deputies discussed a negotiating range on long-term growth and the living standards of for the replenishment, the terms of IDA lending, the poor. These concerns added urgency to the and allocations among country groups. It was negotiations for IDA-8 and led to a commitment decided that, as these three issues were closely The Bank and the Environment 25 linked, they should be negotiated as a package. vance releases were made by Austria, Denmark, In this context, the key issue was the size of Iceland, Korea, Norway, Spain, and Yugo- IDA-8, with a final agreement on the package of slavia. issues depending ultimately on the resolution of the question of size. The Bank and the Fnvironment At the Washington meeting, progress was Several initiatives designed to improve envi- made on this issue. Most deputies focused on a ronmental aspects of Bank assistance to devel- figure around $12 billion, which would represent oping countries were launched in fiscal 1986. the value, in real terms, of IDA-7 and the Special The developments, which represent an exten- Facility for sub-Saharan Africa combined. The sion of the Bank's past policies and procedures meeting also addressed the question of burden that aim at ensuring that economic development sharing among donors. The focal point of dis- takes place without undue ecological damage, cussion was on donors' existing shares in IDA-7. include: Most deputies stressed that IDA-8 shares should * A program of natural-resource manage- not be reduced if the goal of seeking a reduction ment, designed to explore ways in which the in the 2.6 percent unallocated portion of IDA-7 Bank's country economic and sector work can were to be secured. be improved to give greater weight to environ- Fiscal commitment authority. In fiscal 1986, mental considerations IDA received additional notification of partici- * Establishment of a natural-resources infor- pation in the seventh replenishment from five mation system using satellite sensing and other Part i donors (Belgium, Ireland, Italy, the Neth- technology to create a global data base on envi- erlands, and New Zealand) and two Part 11do- ronmental conditions in developing countries nors (Spain and Yugoslavia). New Zealand sub- * A stepped-up program of in-house training mitted its notification of participation in IDA-7 to make nontechnical operational staff better for an amount 36 percent higher than the able to assess environmental aspects of develop- amount agreed to during the IDA-7 negotia- ment projects. Special training for developing- tions. Cumulative notifications of participation country officials will also be offered through the in IDA-7 now represent about 98.8 percent of Bank's Economic Development Institute the total replenishment volume. * Development of a hazard-analysis com- The Association requested advance release in puter program, which will be made available to fiscal 1986 of the second tranche of IDA-7 to developing countries, as well as to industrial- mitigate a hiatus in commitment authority. Aus- plant designers and contractors worldwide. The tralia, Canada, Denmark, Greece, Japan, Nor- program software will help developers identify way, South Africa, Spain, Sweden, and the and determine the consequences of potential ma- United Kingdom made such advance releases. jor accidents and learn how they can be reduced Scheduled releases of the second tranche have or eliminated by appropriate process changes, now been made by Austria, Belgium, Brazil, reductions of inventories, layout or siting Finland, France, Hungary, Iceland, Italy, the changes, and so forth Republic of Korea, Kuwait, Luxembourg, Mex- * New policies and guidelines for the preser- ico, Saudi Arabia, and Yugoslavia. Together, vation and management of wildlands. The goals these releases increased commitment authority are to provide greater protection for tropical by about SDR1,630 million. The United States' forests and rare and endangered species, pre- and the Federal Republic of Germany's portion serve biological diversity, and promote the eco- of the second tranche have not been released nomically beneficial services that wildlands of- fully because the United States was unable to ap- fer. (See accompanying box.) propriate the full amount of its second tranche These initiatives, announced late in the fiscal of $750 million. The United States' payment was year, are the most recent in a series of actions reduced by 11 percent to $669.9 million, and taken by the Bank over the past year or so and Germany exercised its right to reduce its second which include: tranche pro-rata with the United States. As a * Participation in an international program result, the United States' and Germany's portion to arrest the destruction of tropical forests. An of the second tranche released for commitment international task force convened by the Bank, amounted to about SDR880 million. the United Nations Development Programme, Additional commitment authority for fiscal and the World Resources Institute has developed 1986 was also provided by Australia's decision an extensive program to manage the world's re- to contribute an additional A$60 million; by the maining tropical forests transfer from the IBRD of $150 million out of its * A review of Bank policy to provide safe- fiscal 1985 net income; and by advance releases guards for tribal peoples affected by develop- of the third tranche of IDA-7 subscriptions and ment projects. The policy, formulated in 1983, contributions aggregating SDR104 million. Ad- has been implemented in some projects, and an 26 The World Bank: Fiscal Year 1986, in Brief Bank Assistance for Wildiand Management The maintenance of specific natural land and A number of important lessons have emerged water areas in a state virtually unmodified by hu- from the Bank's experience with wildland manage- man activity-wildland management-is an impor- ment. The most important is that wildland-man- tant subset of the World Bank's broad environ- agement components should be routinely and sys- mental concerns. The conversion of wildlands to tematically incorporated into certain types of Bank more intensive land and water uses (through land projects. In this manner, the short-term and long- clearing, inundation, plantations, or other means) term benefits accruing from wildland management continues to meet important developmental objec- can be more fully realized. tives and is an element of certain Bank-supported Another lesson is that wildland components projects. should be incorporated as early as possible within At the same time, wildlands are rapidly dimin- the project cycle to minimize costs and facilitate ishing in many Bank member countries. The re- implementation. maining wildiands can often contribute signifi- The Bank has also found that meeting wildiand- cantly to economic development, particularly in management goals requires effective management the longer term, when maintained in their natural "on the ground," not simply on paper. The mere state. The Bank's policy is to seek to achieve a bal- declaration of intent to protect wildlands or wild- ance between preserving the environmental values life, or even the designation of WMAs on a map, of the world's more important remaining wildlands does not ensure effective management unless spe- and converting some to more intensive human cific supporting measures are implemented. These uses. measures include hiring and training of personnel, During the past fifteen years, the World Bank provision of necessary infrastructure and equip- has assisted with the financing or execution of as ment, development of a scientifically sound man- many as forty projects with significant wildland- agement plan for each particular wildland, and a management components. policy environment-legal, economic, and institu- Most of these wildland components have in- tional-that supports the wildland-preservation volved the establishment or strengthening of objective. wildland-management areas (WMAs), which pro- Another lesson has been that the multiple objec- tect about 60,000 square kilometers in national tives of wildland management are most success- parks, wildlife sanctuaries, and forest reserves fully attained if the WMA is carefully designed. managed primarily for their watershed or biologi- For example, a WMA cannot serve its intended cal values, rather than for wood harvest. Other functions properly if it is too small. Besides size, wildland-management components of Bank proj- the specific location and shape of a WMA can also ects have involved management of wildlife and the be important factors in determining its success. humans that utilize it, including antipoaching mea- The Bank has learned, also, that the success of a sures, management of water flows from reservoirs WMA is contingent on government commitment, to maintain wildlife habitat, and relocation of cer- which, in turn, often depends on the degree of sup- tain species. In still other cases, the location of port provided by the Bank. Most of the compo- projects has been changed to avoid important nents in Bank projects that have either established wildland areas. Other Bank projects have sup- or strengthened WMAs have received direct finan- ported wildland management by more indirect cial support from the Bank. However, in some means and have complemented direct wildland cases, the costs of WMA establishment have been management in important ways. borne entirely by the government. By taking mea- Direct wildland-management components have sures to ensure counterpart financing, or by pro- been incorporated within Bank projects to achieve viding the financing itself, the Bank can help guar- either or both of two major objectives: to prevent, antee the availability of the modest sums necessary minimize, or partially compensate for wildland for successful WMA establishment and continua- elimination, thereby preserving biological diver- tion. Financial support, however, must be com- sity, and to preserve and improve the environmen- bined with regular discussions with governments tal services provided by wildlands, thus enhancing on the importance of conservation and on the ben- the project's social or economic benefits. efits of WMAs and with project supervision to en- Wildland-management components in Bank sure that implementation is proceeding as agreed projects have been characterized by low costs, and upon. hence, a high degree of replicability. They have Finally, residents in the vicinity of WMAs normally accounted for less than 3 percent of total should be consulted as a WMA component is being project costs, and, in half the cases, for less than I planned, and steps should be taken to ensure that percent. Despite their generally low and, some- benefits from the component accrue to them. Simi- times, absence of costs, Bank-supported wildland- larly, complementary and parallel rural-develop- management components have achieved significant ment investments that provide nearby farmers and benefits. In all cases, these components have con- villagers an alternative to WMA encroachment tributed to the preservation of biological diversity, should be encouraged. an important Bank objective. Cofinancing 27 evaluation of the results of project experience is task, estimated and actual costs, and schedules expected to be completed in fiscal 1987 for completion, when combined with the CAM * The establishment of pesticide evaluation process, enables managers to delegate responsi- and testing centers in locations in East and West bility more effectively and increases the speed Africa, in addition to the center previously set and flexibility with which work programs can be up in the Caribbean. The centers provide train- adjusted. ing in the analysis of pesticide residues on agri- Loan-processing procedures are being revised cultural commodities and the correct handling to permit the resolution of policy and technical of pesticides issues early in the lending cycle, to clarify re- * Development of new guidelines for han- sponsibility for the analysis and recommenda- dling archaeological sites. To be issued early in tions on each loan proposal, to eliminate dupli- fiscal 1987, the guidelines will draw on the cation in the review process, and to delegate results of Bank assistance to developing coun- responsibility to the lowest feasible level. tries in protecting and managing valuable ar- The CAM process and the MIS, now under chaeological sites and artifacts in thirty projects way, are expected to become fully operational in * Publication of a book' that reviews the fiscal 1987. The changes in loan-processing pro- problems that arise in various sectors and shows cedures are to become fully effective by the end how advance planning can prevent expensive of calendar year 1986. and perhaps irrreparable damage to the environ- By providing a management framework that ment and to people. places responsibility clearly on specific persons and that permits progress on a diverse set of Increasing Operational Efficiency tasks under rapidly changing conditions to be It is hard to measure just how efficient the monitored and evaluated, substantial benefits to Bank's operating procedures are. The diversity borrowers and to Bank staff and managers-in and complexity of Bank activities, the effect on the form of faster decision making, increased those activities of factors beyond the Bank's delegation, greater clarity in objectives and ac- control, and the circumstances that are unique countability, and simplification of documenta- to each borrowing country all play a part in tion and procedures-are expected. making measurement difficult. As a result, em- phasis is placed less on the use of traditional Cofinancing measurements of efficiency than on the manage- Almost one half of the World Bank projects ment processes and tools that have been devel- approved in fiscal 1986 attracted cofinancing. oped to enhance efficiency. The financing plans for the 113 cofinanced proj- Three processes and tools, now being devel- ects provide for total cofinancing of $3.5 billion. oped or implemented, are reported on here. Recent trends in two-year averages show that the They share common objectives: clearer account- volume of cofinancing continues to be main- ability, a clearer definition of priorities and the tained in the range of $4.0 billion to $4.6 billion adoption of the most cost-effective choices, and (from $4.0 billion in fiscal 1981-82, to $4.6 bil- the creation of an environment that encourages lion in fiscal 1983-84, and to $4.3 billion in fiscal speedy responses to changing circumstances. 1985-86), despite difficult market conditions The three are the country-assistance manage- that affect private and export-credit flows. Con- ment (CAM) process, the management-informa- ditions that contribute to annual fluctuations in tion system (MIS), and changes in the Bank's cofinancing totals were especially pronounced loan-processing procedures. this past year in planned export-credit flows, Under the CAM process, one person is now which are directly linked to capital-goods im- assigned overall responsibility for the design and ports by borrowers, and in private cofinancing implementation of the Bank's country-assis- envisaged, which remains affected by difficult tance strategy, the coordination of whatever re- market conditions. Both factors affected the sources are needed to execute the strategy, and outcome of fiscal 1986 cofinancing. (See Table the monitoring of progress and costs. This pro- 1-10.) cess links country objectives and costs more ex- The largest source of cofinancing continues to plicity than ever before. It also helps clarify pri- be the official bilateral aid agencies and multila- orities and trade-offs and increases cost teral development institutions, which contrib- consciousness, thereby providing for more ef- uted $2.5 billion in fiscal 1986. These funds were fective and efficient services to borrowers. Under the MIS, information is generated that enhances the efficient execution of the CAM process. This information, pinpointing each dis- -James A. Lee. The Environment, Public Health, and Human crete task that forms a part of an operation, the Considerationsfor Economic Ecology: Development. Balti- person responsible for the execution of each more: The Johns Hopkins University Press, 1986. 28 The World Bank:Fiscal Year 1986, in Brief Table 1-J0. World Bank Cofinancing Operations, Fiscal Years 1985-86 (amountsin US$ millions) Source of cofinancing Project Bank cofinancing Official Exportcredit Private contribution Total project Regionand year No. Amount No. Amount No. Arnount No. Amount' IBRD IDA costs Eastern and Southern Africa 1985 23 410.4 23 393.7 1 16.7 - 47.4 384.0 1,073.4 1986 29 801.2 29 801.2 - - 117.8 545.3 2,155.7 Western Africa 1985 22 438.9 20 331.4 - - 3 107.5 282.6 293.6 1,258.1 1986 28 771.2 27 759.6 1 11.6 - - 319.1 361.2 2,087.9 East Asia and Pacific 1985 12 450.7 10 306.5 3 131.2 1 13.0 881.8 84.0 2,209.3 1986 19 400.5 16 176.5 2 171.0 1 53.0 882.2 13.4 3,954.4 South Asia 1985 22 1,901.7 19 1,221.8 7 539.9 1 140.0 1,590.0 842.2 10,458.5 1986 15 645.2 14 463.2 2 22.0 1 160.0 1,092.2 448.7 9,806.7 Europe, Middle East, and North Africa 1985 17 786.7 11 178.3 4 238.4 3 370.0 916.1 10.0 3,009.0 1986 13 726.2 11 302.0 2 110.2 1 314.0 656.0 46.4 4,065.3 Latin America and the Caribbean 1985 11 1,035.8 6 203.3 5 395.0 4 437.5 1,129.4 45.9 5,924.8 1986 9 181.5 5 39.0 4 90.0 1 52.5 562.1 15.0 1,377.4 Total 1985 107 5,024.2 89 2,635.0 20 1,321.2 12 1,068.0 4,847.3 1,659.7 23,933.1 1986 113 3,525.8 102 2,541.5 11 404.8 4 579.5 3,629.4 1,430.0 23,447.4 NOTE: These figuresare based on data availableat the time of Board presentation,as subsequentlymodifiedby year-endrevi- sions. The number of cofinancingsby source is greater than the number of projects cofinancedbecause many projectsare co- financed from more than one source. a. These amounts representprivatecofinancingsas reflectedin the financingplans at the timeof Board approvalof the A-loans. They do not represent privatecofinancingloans actually signedin the fiscal year. made available for 102 projects, a substantial in- projects approved in fiscal 1986. Additional crease from the average of eighty-three projects funds, totaling $190 million, were provided for cofinanced by official sources in the previous eight projects approved in fiscal 1985 ($112 mil- four-year period. As in previous years, the Bank lion from Special Facility credits and $78 million continued its efforts to conclude framework from special joint financing). agreements with these official co-donors. These In several highly indebted countries, it is im- agreements establish a framework for annual portant that adequate export-credit cover be consultations between the Bank and its co-do- maintained to support adjustment programs nors and for a more systematic coordination of aimed at restoring creditworthiness. The success individual cofinancing transactions. During fis- of such adjustment will depend not only on the cal 1986, agreements were renewed with Austra- actions of the debtors themselves but also on the lia and Italy, and new agreements were signed availability of external capital and an adequate with Austria and Denmark. flow of trade. The role of export credits in the Cofinancing opportunities were expanded in adjustment process was reviewed in a conference fiscal year 1986 with the implementation of the convened by the Bank in May 1986. The meet- Special Facility for sub-Saharan Africa. In addi- ing, attended by export-credit agencies from sev- tion to the S424 million provided through four- enteen member countries of the Organisation for teen Special Facility credits, Belgium, the Fed- Economic Co-operation and Development and, eral Republic of Germany, Japan, Switzerland, in most cases, their guardian authorities, elicited and the United Kingdom contributed special a consensus on the need for export-credit agen- joint financing totaling $168 million for eight cies, where appropriate, to support adjustment Cofinancing 29 programs undertaken with the assistance of the This included an IBRD share of $60 million. Bank and the IMF. There was substantial sup- These cofinancing funds went to C8te d'lvoire, port among the participants for wider exchanges Chile, and Turkey. The cofinancing for C6te of views among export-credit agencies, the d'lvoire in fiscal 1986, which will help finance a Bank, and the IMF, using existing fora. three-and-a-half year national-expenditure pro- Since January 1983, the Bank has attempted gram for the public interurban road network, to increase the flows of commercial capital to had several "firsts." It was the first such opera- developing countries by linking part of these tion in Africa, the first syndicated voluntary new flows to IBRD operations. The new instruments, commercial bank lending to C6te d'lvoire since approved by the Bank's Executive Directors on a 1983, and the first such loan denominated in Eu- trial basis, include three options: direct Bank ropean Currency Units and French francs. The participation in the late maturities of a syndi- Bank's participation in this loan helped realize cated loan, Bank guarantee of the late maturi- the several objectives that characterize the pro- ties, and Bank acceptance of a contingent partic- gram: to facilitate the country's re-entry in the ipation in the final maturity of a commercial private financial markets; to improve the loan loan designed with fixed repayment installments terms with regard to interest rates, maturity, and that combine floating-interest and variable-prin- fees; and to promote wide interest among the in- cipal components. Since September 1983, the ternational banking community. Bank has used all three options in arranging The ways in which the Bank has assisted its commercial cofinancing of almost $2.2 billion, highly indebted borrowers in their recovery ef- including an IBRD share of $242 million. In forts are described elsewhere in this report. In February 1986, the Bank's Executive Board ap- one exceptional case, in Chile, the Bank guaran- proved the new instuments as one of the regular teed $150 million of a commercial cofinancing means by which the Bank can assist its borrow- of $300 million for a highways project in order ers in mobilizing commercial finance. to help the borrower bring together a much Commercial cofinancing involving the new in- larger overall package of almost $6 billion in re- struments reached $706 million in fiscal 1986. schedulings and over $1 billion in new money. _ t f= s~~~~~~~~~~~~~ti Pat I upy miln in eq iv e (amo S ass Xm) ic 30 The World Bank: Fiscal Year 1986, in Brief Table 1-12. IBRD and IDA Disbursements for Goods, Works, and Services Procured from Borrowing Countries, Fiscal Year 1986 (amounts in US$ millionsequivalent) Percentage Local Foreign Total of total Borrowingcountries procurement procurement amount disbursements' India 804.5 42.4 846.9 7.4 Brazil 618.7 85.4 704.1 6.1 Indonesia 480.6 3.8 484.4 4.2 Mexico 470.9 11.2 482.1 4.2 Korea, Republic of 190.0 98.9 288.9 2.5 Colombia 245.7 21.8 267.5 2.3 Thailand 169.8 25.6 195.4 1.7 Yugoslavia 96.2 88.4 184.6 1.6 Philippines 163.7 20.0 183.7 1.6 Morocco 149.8 1.7 151.5 1.3 China 53.1 83.4 136.5 1.2 Argentina 87.2 44.1 131.3 1.1 Turkey 115.0 10.6 125.6 1.1 Peru 83.2 13.9 97.1 0.8 Bangladesh 81.3 5.4 86.7 0.8 Cote d'lvoire 63.4 23.1 86.5 0.8 Portugal 61.2 18.3 79.5 0.7 Pakistan 67.7 5.8 73.5 0.6 Tunisia 68.9 3.2 72.1 0.6 Chile 67.6 2.0 69.6 0.6 Kenya 43.6 20.1 63.7 0.6 Nigeria 27.9 25.4 53.3 0.5 Malaysia 45.9 5.9 51.8 0.5 Ecuador 37.8 11.7 49.5 0.4 Sri Lanka 38.8 1.9 40.7 0.4 Jordan 38.6 2.0 40.6 0.4 Romania 9.8 26.9 36.7 0.3 Senegal 26.1 7.6 33.7 0.3 Cameroon 27.0 0.2 27.2 0.2 Panama 10.9 12.8 23.7 0.2 Egypt, Arab Republic of 13.4 9.3 22.7 0.2 Ethiopia 21.5 0.1 21.6 0.2 Honduras 20.3 0.2 20.5 0.2 Malawi 16.7 0.2 16.9 0.1 Zimbabwe 11.8 5.0 16.8 0.1 Nepal 15.7 0.2 15.9 0.1 Hungary 8.1 7.4 15.5 0.1 Papua New Guinea 15.0 0.0 15.0 0.1 Mali 13.7 0.6 14.3 0.1 Greece 8.8 2.8 11.6 0.1 Burundi 10.1 1.3 11.4 0.1 Benin 9.4 1.9 11.3 0.1 Rwanda 10.1 0.4 10.5 0.1 Liberia 8.8 1.5 10.3 0.1 Costa Rica 9.0 0.8 9.8 0.1 Central African Republic 9.1 0.4 9.5 0.1 Yemen Arab Republic 8.4 0.4 8.8 0.1 Burma 8.6 0.0 8.6 0.1 Madagascar 8.0 0.6 8.6 0.1 Burkina Faso 8.0 0.2 8.2 0.1 Total 4,679.6 756.8 5,436.2 47.3 shares of total disbursements. a. Refersto developing-country Disbursementsfor Procurement 31 Table 1-13. IBRD and IDA Foreign Procurement Disbursements, by Source of Supply (amounts iniUS$millionsequivalent) IBRD IDA cumultatilve to IBRD cuimulativeto IDA Jqune30,195 fiscal 196un 30, 198 fisca 198 Source Aon a Amount %i AmiounT Wa Amunto Wa Part 1 uplyn countries Australia 395.1 0.9 15.3 0.3 201.7 1.5 7.8 04 Austria 455.4 1.0 50.3 1.1 92.0 0.7 7.6 0.4 Belgium 737.7 1.6 59.0 1.3 333.9 2.4 53.4 2.5 Canada 951.8 2.1 114.9 2.5 1257.6 1.~9 54.1 2.6 Dernmark 243.1 0.5 33.0 0.7 105.4 0.8 14.2 0.7 Finland 11.t. 2. 0.3 37.8 0.3 50 0.2 France 3,289.5 7.2 369.5 8.1 1,257.0 9.1 227.2 10.8 Germany, Federal Republic of 5,728.3 12.5 587.8 13.0 1,572.11 11.3 174.5 8.3; Iceland 1.5 * 02 -- -- - Ireland 37.6 0.1 3.4 0.1 118 01 22 0.1 Italy 3,092.3 6.8 263.4 5.8 738.8, 5.3 5. 4.1 Japan 7,249.1 15.9 '792.4 17.5 2,064.2 14.9 360 16. Kuwait 1005 0.2 7.0 0.2 22.7 0'2 - - Luxembourg 30.5 0.1 0.9 * 12.4 0.1 55 0.3 Netherlands 850.2 1.9 65.2 1.4 305.3 2.2 605 2.9 New Zealand 77.6 0.2 7.1 0.2 14.4 0.1 0.3 * Norway 127.4 0.3 13.8 0.3 23.4 0.2 1. . South Africa 186.8 0.4 18.6 0.4 71.0 0.5 2. . Sweden 911.7 2.0 66.1 1.5 240.4 1.7 1. . Switzerland 1,853.3 4.1 182.0 4.0 386.4 2.8 6. . United Arab Emirates 218.4 0.5 7.0 0.2 .7 0.1 5. . United Kingdom 3,909.5 8.6 297.0 6.5 1,943.9 14.0 377 1. United States 10,310.3 22.6, 852.8 18.8 1,948.8' 14.0 17. 81 Total 40,876.2 89.4 3,819.4 84.2 111,650.6 84. ,171 8.5 Part HIsupplying countries Argenitina 179. 0.4 42.5 0.9 98 01 1. 0.1 Brazil 252.7 0.6 57.6 1.3 5. . 27.8 1.3 Chile 80.6 0.2 1.9 * 64*I. Colombia 130.8 0.3 21.7 0.5 27 * 0.1 Greece 96.8 0.2 2.1 * 86 0. . India 163.3 0.4 12.9 0.3 251.3 1.8 29.5 1.4 Israel 1[52.5 0.3 10.9 0.2 34.8 0.3 5.8 0.3 Jordan 31.8 0.1 0.2 * 60.0 0.4 1.8 0.1 Kenya 29.2 0.1 1.6 * 53.5 0.4 18.5 0.9 Korea, Republic of 273.6 0.6 36.3 0.8 314.1 2.3, 62.6 3.0 Malaysi'a 90.0 0.2 4.3 0.1 91.1 0.7 1.6 0.1 Mexico 182.9 0.4 10.5 0.2 54.3 0.4 0.7 Pakistan 48.1 0.1 1.2 * 43.5 0.3 4.6 0'.2 Panama 181.8 0.4 12.1 0.3 8.6 0.1 0.7 * Philippines 47.2 0.1 4.5 0.1 31.2 0.2 15.5 0.7 Romania 92.8 0.2 24.1 0.5 37.4 ~0.3 2.8 0.1 Saudi Arabia 164.3 0.4 16.8 0.4 65.5 0.5 - - Singapore 207.0 0.5 30.2 0.7 152.3 1.1 46.0 2.2 Spain 445.8 1.0 68.2 1.5 95.2 0.7 6.5 0.3 Venezuela 139.9 0.3 50.4 1.1 5.6 * - 7 Yugoslavia 38. . 68 19 123.3 0.9 1.6 0.1 Zambia 14.2 * 5.2 0.1 70.2 0.5 0.4A Others 1,443.2 3.2 213.6 4.7 616.3 4.4 159.8 7.6 Total 4,833.2 10.6 715.7 15.8 2,223.0 16.0 388.7 1. Total foreign procuremnent 45,709.5 100.0 4,535.1 100.0 I13,873.6 10.0 210. 100.o NOTE: a ~ negligible; - - nil. 32 The World Bank: Fiscal Year 1986, in Brief Disbursements for Procurement * A third attitude survey was conducted and had a high participation rate. The latest survey Projects financed by the World Bank involve underscored a trend in the Bank and IFC toward foreign and local expenditures necessary to more effective management in five areas, includ- achieve project goals. Disbursements are made ing managers' overall leadership, performance to cover specific foreign costs and, in addition, feedback, and recognition. The survey revealed, are often made to finance some local expendi- also, that managers need to take greater care in tures. addressing staff concerns that come to light as a Through the end of fiscal year 1986, more result of the survey. than 64 percent of IBRD and IDA disburse- * The job-grading program, which reviewed ments covered goods and services provided di- grades of all Bank positions, was completed and rectly by suppliers located outside the borrowing implemented. country. While most foreign procurement comes * Staff rules, codifying the Bank's personnel from suppliers in developed-member countries and compensation policies, neared completion. and Switzerland, developing-country suppliers * A medium-term human-resource strategy have become increasingly effective in winning was developed to enable the institution to meet contract awards. Through the end of fiscal 1982, its business objectives and, at the same time, to disbursements for procurement from these adapt to a changing and increasingly complex countries amounted to about 10 percent. During lending environment. This more active and sys- fiscal 1986, the amount was about 17. tematic approach to human-resource manage- Table I-I l shows consolidated foreign and lo- ment is intended to ensure the cost-effective use cal procurement to the end of fiscal year 1982, of human resources, continued effectiveness in for each of the next four fiscal years, and to the traditional lending, and flexibility in entering end of fiscal 1986. new business areas or withdrawing where appro- Locally produced goods and services usually priate. include a significant foreign-exchange compo- * A career-information center was estab- nent. Cumulative local procurement disburse- lished to assist staff in assessing their profes- ments increased from 28 percent at the end of sional capabilities and to provide the informa- fiscal 1982 to more than 35 percent at the end of tion they need to plan their careers realistically. fiscal 1986. Table 1-12 shows disbursements Other significant activities undertaken during made in fiscal 1986 by the IBRD and IDA for the year included: local procurement from the top fifty borrowing * As part of its long-term information re- countrics and disbursements made in respect of source-management strategy, the initiation of goods, works, and services procured from them three pilot installations of the standard technol- by other borrowers. ogy selected in 1985. The long-term goal is to Table 1-13 shows IBRD and IDA foreign pro- create an information network functionally curement disbursements by supplying country. analogous to a telephone system, enabling staff Details for all developed countries and those de- to share information and thus carry out the veloping countries with at least a 0.1 percent Bank's work more efficiently and cost effec- share of total foreign procttrement are shown. tively. At the same time, the effect of the tech- nology on managers and staff is being analyzed Bank Management and Staff and taken into account to aid in future planning. * Construction of a new Bank building on At the end of fiscal 1986, total staff on regular property adjacent to the main complex pro- and fixed-term appointment numbered 6,002, gressed on schedule, with occupancy scheduled compared with 5,867 the year before. Of this to begin in the fourth quarter of 1986. number, 3,806 were higher-level staff, represent- ing 113 nationalities. The Young Professionals Membership Program continued to be successful in recruit- ing both under-represented nationalities and Tonga joined the IBRD on September 13, women: Of the twenty-seven who reported for 1985, and Poland joined on June 27, 1986, duty during the year, fifteen, or 56 percent, were bringing the total membership of the IBRD to nationals of developing countries; six, or 23 per- 150. At the end of the fiscal year, action was cent, were women. pending on membership in the IBRD for Kiri- During fiscal 1986, the Bank concentrated on bati. realizing the full benefits of past initiatives in the Tonga became a member of IDA on October field of human-resource management. A num- 23, 1985, bringing the total membership of IDA ber of activities begun in previous years were im- to 134. At the end of the fiscal year, action was plemented, and some new ones introduced. pending on membership in IDA for Kiribati, Among the most important were: Portugal, and St. Christopher and Nevis. IFC 33 ICSID targets for an increased volume of loans and equity investments and gives new emphasis The International Centre for Settlement of In- to those activities that are most needed to help vestment Disputes (ICSID) is an autonomous in- support the efforts of the private sector in its ternational institution created in 1965 by the developing-member countries. The year also Convention of the Settlement of Investment Dis- marked the thirtieth anniversary of the founding putes between States and Nationals of Other of the Corporation. States (the Convention). ICSID's purpose is to A total of eighty-five projects were approved provide facilities for conciliation and arbitration by the Board of Directors, compared with sev- of investment disputes between contracting enty-five in fiscal year 1985; the $710 million of states and nationals of other contracting states net investments approved by the Board was up in accordance with the provisions of the Con- 17percent from the previous year, while total in- vention, and to promote a climate of mutual vestments, including participations, were $1,156 confidence between investors and states favor- million, compared with $937 million in fiscal able to increasing the flow of resources to devel- year 1985. oping countries on reasonable conditions. The IFC, for some considerable time, has pro- Contracting states are state members of the vided investment counsel to member govern- Bank and any other state that is a party to the ments, and, as an expansion and formalization Statute of the International Court of Justice that of this counsel, fiscal 1986 saw the Corporation have signed and ratified the Convention. organize the Foreign Investment Advisory Ser- The Convention was signed by Thailand on vice, which will help developing-country govern- December 6, 1985, by Ecuador on January 15, ments create the framework of policies and insti- 1986, and by Honduras on May 28, 1986, bring- tutions necessary to attract and regulate direct ing the total number of signatory states to foreign investment. ninety-four. The number of contracting states Responding to the particular needs of sub-Sa- reached eighty-eight with the deposit by Ecuador haran Africa, the IFC, in cooperation with the of its instrument of ratification on January 15, United Nations Development Programme 1986. (UNDP) and the African Development Bank Also during the period, ICSID expanded its (AfDB), launched the Africa Project Develop- program of publications and promotional activi- ment Facility (APDF) in May 1986. The APDF ties with the launching of a new semiannual pub- has the specific mandate to help African busi- lication, "ICSID Review-Foreign Investment nessmen and companies develop sound invest- Law Journal." ment projects and find financing for these proj- ICSID's Annual Report provides further de- ects. The IFC-managed facility will operate out tails of its activities. of offices in Nairobi and Abidjan. Funding for IFC the APDF has been provided by the three spon- sors and twelve donor countries. In addition, discussions are under way with Brazil and India, The IFC IS a multilateral development institu- whc hav iniae awillingnes topovd tion established to promote the growth of pro- support to the FacilitY in the form of technical ductive private investment and to assist enter- prises that will contribute to economic develop- assistance. ment in their countries. The Corporation was established in 1956 as an The Year's Operations affiliate of the World Bank. Its capital resources are provided by its 128 member countries, 107 of Investment approvals. During fiscal 1986, which are developing, and which collectively de- the Board of Directors approved eighty-five in- termine its policies and activities. vestments in thirty-nine developing countries. In The ultimate objective of the Corporation is these investments, it is expected that $710 mil- to improve the well-being of the people in its de- lion will be invested for the IFC's own account, ve]oping-member countries. Its principal tasks and $446 million will be syndicated or sold to are to provide and bring together financing, other investors. technical assistance, and management needed to Of the total, $1,070 million was for loans and develop productive investment opportunities. S121 million for equity or equity-like invest- The IFC makes both equity investments and ments. Of the equity, $4 million was approved loans without government guarantees. for the exercise of rights issued by firms in which the IFC already had equity investments. Of the The Year in Review loans, thirteen, totaling $139 million, involved restructuring of existing obligations. Fiscal 1986 was the second year in the IFC's The Corporation estimates that the total capi- current five-year program, which sets ambitious tal costs of approved projects it will help finance 34 The Worla Bank: Fiscal Year 1986, in Brief will be more than $3,588 million. Thus, for Financial Results every dollar invested by the IFC for its own ac- Net income amounted to $25 million, com- count, others will invest more than four dollars. pared with $28.3 million reported in fiscal year Syndications. Some $434 million in loans by 1985. All of the net income was added to accu- the IFC were syndicated with commercial banks mulated earnings. and other financial institutions. Income and expenses. The IFC enjoyed a Disbursements. During the year, an equiva- significant increase in income from deposits and lent of $325 million was disbursed against com- securities. This increase was the result of profit- mitted loans and equity investments. Of this able investment of the proceeds of its borrow- amount, $293 million was for loans and $32 mil- ings from private capital markets, as wetl as lion for equity. In addition, $140 million was drawdowns of its variable-rate loan from the disbursed for participants in IFC financings that World Bank. The short-term investments of the the Corporation manages. IFC's funds were managed by the World Bank. Regional distribution. The eighty-five proj- Consistent with its policy of revolving the ects approved by the Board of Directors were lo- equity portfolio, the IFC sold twelve equity in- cated in thirty-nine countries. One project was vestments made at a cost of $34 million, realiz- international in scope. In the previous year, ing a capital gain of S14 million. Gains realized seventy-five investments were made in ventures result from the sale of some mature equity in- in thirty-eight countries and in one region. vestments at attractive prices. The IFC invested for the first time in three Operating expenses rose S40 million over the countries: Grenada, Mozambique, and the Sey- previous year to $185 million. About S20 million chelles. The Corporation also approved projects of the increase was the result of higher financial in two countries where it had not made invest- charges on borrowings, which, in fiscal 1986, ments for the past three years. Of the total ap- amounted to $84 million. proved investments of $1,156 million, thirty- Charges against operating income for reserves three projects, with a total value of $295 million, against losses increased. About $39 million was w-ere located in countries with a per capita in- added to the reserve against losses, as compared come of less than $800. These projects ac- with $30 million in fiscal 1985. counted for 39 percent of the projects that the Borrowings. While the IFC continues to rely IFC approved and 25 percent of the amount ap- on the World Bank as the principal source of proved. borrowed funds, the Corporation borrowed The continued diversification of investment $350 million from the international capital mar- activity is, in part, the result of the IFC's more kets during the year, meeting a portion of its intensive promotional efforts in both developed needs by raising funds through seven private and developing worlds. In the latter, project placements. This was possible because of sharp promotion has been concentrated on some of the interest-rate declines, particularly during the smaller and poorer member countries. About 16 second half of the fiscal year, and the favorable percent of the IFC's administrative expenses reception and pricing accorded to the IFC's bor- vere dedicated to promotional efforts during rowing transactions. fiscal year 1986. During the year, the Corporation also bor- Sectoral distribution. The Corporation con- rowed S150 million in various currencies from tinued to seek out and invest in a wide variety of the World Bank. Repayments during the year business and financial institutions. amounted to $49 million, and drawings on Food and agribusiness, which has been the World Bank loans totaled $94 million. Total largest sector of the IFC's investments, contin- borrowings from all sources, including undrawn ued to expand, with approvals amounting to $65 balances, increased from $1,300 million at the million for fourteen ventures. This compares end of fiscal 1985 to $1,918 million. ~s ith thirteen food and agribusiness investments, Capital and accumulated earnings. The amounting to $54 million, approved in fiscal year Board of Directors' resolution to increase the 1985. capital stock of the Corporation to $1.3 billion Capital-markets projects also accounted for a with the authorization of $650 million in new significant part of the IFC's activities-eleven shares was approved by the Board of Governors investments totaling S90 million. These encom- on December 26, 1985. Subscriptions to the ad- passed a variety of operations, including, for the ditional shares and payments of one fifth of the first time, a mutual fund to invest in shares and total (S130 million) are to be received by the Cor- other securities of companies in a number of de- poration by August 1, 1986. As of the end of the veloping countries. Previously, the IFC had as- fiscal year, subscriptions totaling S350 million of sisted a mutual fund investing in enterprises in a the capital increase and payments of $60 million single country. had been received. IFC 35 The capital increase will provide the IFC with was for loans and 518 million for equity. Loan re- the capital foundation to implement its second payments amounted to $174 million, and S172 five-year program, which began in fiscal 1985. million of investments were sold. Taking these The program includes a yearly 7 percent real and other adjustments into account, the net in- growth in operations and net investment over crease in the portfolio was $271 million. Forty the five-year period, with special emphasis on new companies were added to the portfolio; in sub-Saharan Africa, financial markets and insti- twenty-nine cases, loans were repaid, equities tutions, corporate restructuring, and energy ex- sold, or investments written off. ploration. During fiscal 1987, the five-year pro- Arrears and write-offs. The Corporation gram will be reviewed with the Board of has paid particularly close attention to the per- Directors to determine whether any shifts in di- formance of its portfolio. rection or emphasis may be warranted by recent The IFC supervises its portfolio regularly. All or foreseeable changes in the economic environ- companies in which the IFC invests are required ment and the needs of the private sector in the to submit quarterly financial statements to the IFC's member countries. Corporation. Almost one quarter of the Corpo- The entire $25 million of net income was ration's administrative expenses goes to portfo- added to accumulated earnings, bringing the to- lio supervision. This includes providing work- tal to $284 million. With paid-in capital of $602 out assistance to companies facing unusual million, the Corporation's net worth equaled difficulties, as well as efforts of a special unit es- $886 million, up from $804 million at the end of tablished within the Corporation to resolve par- the previous fiscal year. ticularly difficult jeopardy cases. Portfolio. At the end of the year, the IFC's Reserve against losses. The Corporation fol- portfolio contained loans and equity invest- lows a conservative policy of building an ade- ments in 378 companies, located in seventy-four quate reserve against losses by charging income developing countries. The total value of the with a provision for losses following an exten- portfolio was $2,387 million. sive semiannual review of the portfolio. Reflect- During fiscal 1986, $123 million in new invest- ing both the recent growth in the portfolio and ments was added to the portfolio, about $271 the difficult business climate in many developing million for the IFC's own account and a reduc- countries, $39 million was added to the reserve, tion of $148 million for participants. Of the new compared with $29.4 million added during the investments for the IFC's account, $253 million previous year. 36 Chapter Two TheEconomicScene:A Global Perspective The worldwide economic recovery lost some plications for consumption, investment, and for of its momentum in calendar year 1985, and the trade. growth rate of world output declined to 2.9 per- Despite these difficulties, there are, nonethe- cent, down from 4.3 percent in 1984. The slow- less, a number of hopeful signs: the trend of down stemmed largely from a deceleration of lower interest rates and low inflation, which growth in the United States, which had led the continued through the first half of 1986; for im- recovery in 1983 and 1984, and from the fact porters of oil, dramatic declines in oil prices; that this deceleration was not compensated for and adequate rainfall in Africa, which has sig- elsewhere in the industrial world, which contin- nificantly improved the agricultural outlook in ued to grow at unchanged, and, except for Ja- some African countries. pan, mostly low rates. The rate of increase in world trade dropped to just above 3 percent. The Industrial Countries: At the same time, the year also saw a number Recovery Less Vigorous of important changes in the international econ- Although economic recovery continued for omy that affected the performance and pros- the third consecutive year in the industrial coun- pects of the developing countries. On the one tries,' it was characterized by less vigor than in hand, the decline in interest rates and low rates the previous year. The gross domestic product of inflation were positive developments to all. (GDP) of industrial countries increased by 2.8 On the other hand, the fall in oil prices had both percent, down from 4.6 percent (a ten-year high) benign and adverse effects, depending on the in 1984 (see Table 2-1). The United States, the composition of country imports and exports. main agent of the recovery, was also the main The effect of these forces were, however, only contributor to this slowdown, as its growth rate partially realized by the developing countries, fell to 2.5 percent from 1984's twenty-year high and, overall, the developing countries experi- of 7.2 percent. Slower growth resulted both enced a marked slowdown in export growth and from a reduction in fiscal stimulus (as the in- declines in their terms of trade. Thus, their ef crease in the budget deficit slowed down mark- forts to reestablish creditworthiness were set edly) and a sharp deterioration in the external back, and the increase of their imports slowed balance, caused, in part, by the high level of down relative to 1984. Growth of output in de- the dollar. The current-account balance of the veloping countries also slowed with respect to United States, which had gone from a surplus of 1984 and remained highly uneven among both $1.9 billion in 1980 to a deficit of $102 billion in regions and countries. Per capita incomes in 1984, went to a deficit of $128 billion in 1985. sub-Saharan Africa deteriorated further, and Towards the end of the year, however, fears that the highly indebted countries faced increasing growing budget and external-payments im- difficulties in adjusting their economies to the balances of the United States would lead to a cri- available finance. sis were somewhat allayed. Significant steps Developing economies continued their policy were taken to reduce the budget imbalance of reforms to reduce macroeconomic-in particu- the United States in the years to come. Helped lar, budget-disequilibria and to increase eco- by a reduction in the demand for credit and nomic efficiency and the role of incentives in eased monetary conditions, interest rates de- economic management. Meanwhile, industrial clined relative to most other industrial countries. countries moved closer to reaching a consensus The value of the dollar peaked in March 1985 that continued adjustments in the developing world had to be accompanied by measures that could permit economic growth to resume. Still, the situation of many indebted countries re- Australia, Austria, Belgium, Canada, Denmark, Finland, mained difficult at the year's end, as debtors and France. the Federal Republic of Germany. Iceland, treland, ItaNv, Japan, Luxembourg. the Netherlands, New Zealand, creditors struggled with the problems of debt Norway. Spain, Swseden, Switzerland, the United Kingdom, service and limited new financing and their im- and the United States. The Industrial Countries 37 Table 2-1. Growthand Inflationin the IndustrialCountries,1965-85 (averageannual percentagechange) Indicator 1965-73 1973-80 1981 1982 1983 1984 1985a Real GDP Canada 5.2 3.1 4.0 -4.4 2.8 5.4 4.0 France 5.5 3.1 0.5 1.9 0.7 1.3 1.0 Germany, Federal Republic of 4.7 2.7 0.1 -0.9 1.0 2.6 2.3 Italy 5.2 2.7 0.2 -0.5 -0.4 2.6 2.3 Japan 9.9 4.2 4.2 3.1 3.3 5.8 5.0 United Kingdom 2.8 1.2 -1.4: 1.5 3.4 1.8 3.3 United States 3.2 3.0 3.4 -3.0 2.9 7.2 2.5 Industrial countries' 4.7 2.8 1.9 -- 10.6 2.3 4.6 2.8 GDP Deflator Canada 4.4 9.5 10.6 10.4 5.1 2.9 3.5 France 5.3 10.5 11.8 12.7 9.8 7.0 6.0 Germany, Federal Republic of 4.7 4.4 3.7 4.6 3.3 1.9 2.3 Italy 5.1 17.3 18.3 17.8 15.0 10.7 9.0 Japan 6.0 6.6 2.8 1.6 0.6 0.6 1.0 United Kingdom 6.2 16.2 11.9 7.4 5.0 4.4 5.0 United States 4.7 7.5 8.9 6.9 4.5 3.6 3.8 Industrial countries' 5.1 8.3 8.6 7.5 5.5 3.9 3.9 a. Preliminary. b. The weightsare the US-dollarGODP for each country, dividedby the total US-dollarGDP for the industrial countries. For country coverages,see text footnote 1. SoURcEs: The World Bank and the OECM. and declined significantly in the last quarter af- it continued below 3 percent. There was little ter the major industrial countries announced a movement in the United States in reducing the policy of coordinated market interventions (the unemployment rate after its sharp fall in 1984, "Plaza agreement"). and in the larger European countries, unemploy- The GDP of Japan increased by 5 percent, ment averaged over 10 percent of the work down from 5.8 percent in the previous year. Fis- force. Disturbingly, the proportion of people cal policy continued to aim at a reduction in unemployed for more than a year increased in budget deficits, and monetary ease was limited Europe from levels already higher than in the by exchange-rate objectives. Japan's external United States. Such long-term unemployment, sector provided a strong stimulus-exports in- which falls particularly heavily on the relatively creased by 8 percent, while imports rose by only young and the relatively old, signals serious 1.5 percent in volume. Private nonresidential in- structural economic problems and constitutes a vestment increased by more than 10 percent, growing social problem. contributing to the strong performance of the The continued slowdown in inflation was one Japanese economy. of the more encouraging developments in the in- Growth remained generally slow in Europe. dustrial countries. Their average GDP deflator At the upper end, the United Kingdom achieved increased by only 3.9 percent, the same level as a GDP growth rate of 3.3 percent, which was ac- in 1984. Inflation remained below 4 percent (as companied by a rapid growth in exports and in- measured by the GDP) in the United States and creased private investment, while, by contrast, was at about 2 percent and 1 percent, respec- France grew by only 1 percent. With GDP tively, in Germany and Japan. Most encourag- growth of 2.3 percent each, Germany's and ing, inflation rates continued to drop in such re- Italy's performance represented the European cently high-inflation countries as France and norm. For both France and Germany, fiscal re- Italy (see Figure 2-1). straint was a prominent policy objective. The depreciation of the dollar has been or- Industrial countries continued to be burdened derly. At the same time, the widespread gains by high unemployment rates; for the major in- against inflation permitted a general reduction dustrial countries-Canada, France, Germany, of nominal interest rates. The enhanced credibil- Italy, Japan, the United Kingdom, and the ity of the United States' commitment to reduce United States-the average rate of unemploy- future budget deficits (imparted by the Balanced ment remained at 7.5 percent, although in Japan Budget Act of 1985) helped create a climate in 38 The Economic Scene: A Global Perspective Figure 2-1. tnterestRatesand Inflaion,1970-85 Percert 20 ' NorninalEurodollarrate /< < 10 _ ~ - _ 0 %~~~~~~~~~~~~~~~~~~~~~~~~ Real rate,USGDPdeflator -10 _ s -20 - E-Real rate,developi:g-country export price deflator -30 - { -40 1970 1973 i976 1979 1982 1985 Source: The World8ank which the dollar and dollar interest rates could erbated trade tensions among industrial coun- both decline without reducing foreign willing- tries. However, one may hope that these will ness to finance the deficits of the United States. ease, thanks, in part, to the recent decline of the The will of the major countries to cooperate, an- dollar. nounced in the so-called Plaza agreement, The effect of a declining dollar, as expected, greatly contributed to an orderly transition. was delayed, as the dollar price of imports rose Imbalances still remain large, however. The and that of exports dropped before the corre- record current-account deficit of the United sponding volumes had time to respond (the States was counterbalanced by a record Japa- "J-curve" effect). However, the United States' nese surplus of $50 billion and a European sur- trade deficit is now expected to decrease. Al- plus of $21 billion. Because of differences in ac- though, with present exchange rates and ex- counting procedures, errors, and omissions, one pected growth relationships, the deficit will not cannot exactly "balance" global current ac- disappear, industrial-countries' prospects never- counts, but it seems quite certain that the collec- theless appear more stable than they did last tive payments surplus of the industrial countries year. Part of the adjustment viewed as necessary has greatly diminished in recent years and that a year ago has been completed, and financial au- there is now a collective trade deficit. This thorities have achieved an impressive degree of largely corresponds to the trade surpluses in coordination in managing it. many developing countries, confronted with In 1986, the industrial countries should con- dried-up voluntary new capital inflows and ris- tinue to experience moderate growth. There is a ing debt-service obligations. growing consensus that such prospects have The contradiction between the capital mar- been significantly improved by the decline in the kets' demand that debtor countries generate dollar price of oil by 30 percent to 40 percent trade surpluses and the frictions the surpluses since December 1985. Assuming that the current have created with trade partners remains a po- price is sustained and taxes on oil are not in- tentially explosive issue. The large trade deficit creased, the fall in the price of oil should sub- of the United States has fueled calls for protec- stantially increase real incomes and reduce infla- tionist measures in that country and it has exac- tion in the industrial countries-in the short run. Performance of Developing Countries 39 The direct positive effect of this price reduction income; some of the more advanced Mediterra- on the real incomes of oil users is roughly equal nean countries experienced declines in their rates to its negative effect on oil producers, although of GDP growth, as they applied restrictive poli- the world economy would still benefit from allo- cies to reduce inflation and contain current-ac- cating fewer resources to produce expensive en- count deficits; and developing countries, gener- ergy. However, the main global benefit of ally, had cause to be concerned by the threat cheaper oil is expected to come through the sud- posed by increased protectionist pressures in in- den easing of inflationary pressures, which al- dustrial countries. lows monetary policies to become less restrictive The six-month, U.S.-dollar London Inter- in real terms. Growth is expected to be some- bank Offered Rate (LIBOR), which is used as a what faster than last year in both the United base rate for much of the floating-rate private- States and in Europe. It may well slow down, source debt owed by developing countries, fell however, in Japan, since, with the appreciation from an average of 11.2 percent in 1984 to 8.7 of the yen, increased domestic demand may not percent in 1985. However, if real interest rates compensate fully for reduced export growth. are deflated by developing-country export prices (which dropped by 2.2 percent), the rate aver- The Performance of Developing Countries aged above 10 percent. Total interest payments Developing countries had hoped that their re- on long-term debt rose because of the increased covery from the recession years of the early amount of outstanding debt, largely the result of 1980s would continue to gain in momentum. concerted lending through the mechanism of re- Those hopes foundered, however, in the wake of scheduling agreements. Stagnant export reve- the slowdown in the industrial countries: GDP nues, low levels of borrowing, and higher inter- growth in the developing countries slowed from est payments resulted in import-volume growth 5.4 percent in 1984 to 4.3 percent in 1985, slowing to 3.4 percent from about 6 percent in growth in export volume fell by more than 8 per- 1984. centage points to 2.3 percent, and developing- GDP growth. Growth performance varied country terms of trade were reduced by 1.1 per- substantially among regions (see Table 2-2). cent, as commodity prices generally remained Asia's GDP rose by 6.1 percent, down from 8.7 depressed. Only late in 1985-and early in percent in 1984. China reported continued 1986-was some relief felt by different groups of growth at a rate above 10 percent in response to developing countries: first, by a number of the the continued success of internal reforms. In heavily indebted countries, which benefited middle-income Asian countries, by contrast, from the decline in interest rates (and, in some growth slowed as the increase in manufactured cases, perhaps also from the fall in the value of exports moderated. The Republic of Korea, the U.S. dollar), and second, by the oil-import- which achieved an average GDP growth rate of 9 ing countries, which benefited from the break in percent between 1960 and 1970, grew by 5 per- the price of oil in the first quarter of 1986. cent, while Singapore's GDP actually fell by 1.8 The 4.3 percent growth in GDP was well be- percent, the first such decline registered by that low the average rate of growth that had occurred country in twenty years. Indonesia and Malaysia before 1980. More significantly, if data for also experienced slow growth, the result of stag- China, India, and Brazil, which loom large in nant oil and weak commodity prices. The con- the statistical average for all developing coun- tinuing political and economic crisis in the Phil- tries, were excluded, GDP growth in 1984 ippines produced another year of decline in slowed to 2.4 percent. With deteriorating terms GDP. of trade, per capita incomes fell in most of the Sub-Saharan Africa's GDP increased by only developing world. 1.2 percent, and its terms of trade also deterio- All groups of countries were affected by the rated. Thus, the erosion of per capita incomes in events of 1985: Countries that traditionally have that region continued. Since 1980, this region's achieved a strong export performance saw their per capita GDP has fallen by 16.6 percent. economies constrained by stagnation or declines The sources of Africa's economic problems in export revenues; Asian countries, which rely are many and varied. Past natural disasters have heavily on manufactured exports, experienced devastated livestock and agricultural crops and, reductions in the rate of export growth; despite in some areas, have led to widespread starva- continued policy efforts to encourage exports, tion. Economic growth in several countries has many heavily indebted countries were unable to also been constrained by political turmoil. In continue the export boom of 1984 in the face of many countries, difficulties in servicing debt, al- weak demand growth, and, as a result, the rate though much of it is on concessional terms, have of growth of their imports had to be con- preoccupied policymakers and reduced the strained; African economies suffered through a availability of necessary imports. Commodity fifth consecutive year of declines in per capita prices have fallen precipitously from their high 40 The Economic Scene: A Global Perspective Table 2-2. Growth of Gross Domestic Product, by Region, 1965-85 1980GDP 1980 1980GDP Averageannual percentagechange in GDP (USS population per capita Group billions) (millions) (US$) 1965-73 1973-80 1982 1983 1984 19851 Analytic group Developing countries 2,094 3,124 670 6.6 5.4 2.0 2.0 5.4 4.3 Low-income countries 549 2,102 260 5.6 4.7 5.3 7.8 9.4 7.8 Asia 495 1,900 260 5.9 5.0 5.7 8.6 10.2 8.3 Africa 53 202 260 3.9 2.7 0.8 0.3 0.7 2.1 Middle-income oil importers 979 580 1,690 7.0 5.5 0.8 0.8 4.1 3.0 Middle-income oil exporters 566 441 1,280 7.1 5.8 1.0 -1.9 3.1 2.5 High-income oil exporters 225 17 13,240 9.2 7.7 -1.7 -7.1 1.3 -5.0 Industrial market economies 7,440 716 10,390 4.7 2.8 -0.6 2.3 4.6 2.8 Regional group Asia and Pacific 806 2,222 360 6.7 6.0 4.9 7.5 8.7 6.1 Middle East and North Africa 110 106 1,040 5.8 7.8 5.2 4.8 3.6 4.6 Sub-Saharan Africab 184 331 560 6.4 3.4 -0.7 -2.6 0.5 1.2 Southern Europe, 212 91 2,330 7.0 4.8 2.1 0.9 2.7 2.5 Latin America and the Caribbearn 705 344 2,050 6.9 5.4 -0.9 -3.4 3.1 3.5 NOTE: Developingcountries aggregateis based on a sample of ninetycountries. a. Preliminary. b. Does not include South Africa. .. Does not include Hungary and Romania. SOURCE: The World Bank. levels of 1978-80, and a number of countries re- eralization measures continued, and although main dependent on a few cash crops for most of GDP growth slowed down somewhat, it re- their foreign-exchange receipts. Despite a rise in mained close to 5 percent. Middle Eastern and coffee prices, the price of nonoil primary com- North African oil exporters suffered from a de- modities as a group fell by 11 percent in 1985. cline in oil prices and, towards the end of the Finally, a further decline in oil prices reduced year, from the depreciation of the dollar, which national income in Nigeria, whose weight figures further reduced the purchasing power of their large in the region. Since 1980, Nigeria's GDP exports in markets outside the United States. has fallen by almost 18 percent, and its real na- Exports. The volume of developing coun- tional income by much more. tries' exports increased by only 2.3 percent in Nevertheless, there is now widespread agree- 1985, down from an increase of 10.7 percent in ment within Africa that distorted exchange rates 1984 and less than half the 1965-80 average rate and other prices, often wasteful public-sector in- of growth (see Table 2-3), mostly the result of vestments, and counterproductive government the slowdown in the aggregate growth of indus- interventions have also greatly contributed to tTial countries, which also contributed to a dete- the continent's plight. Indeed, the growing con- rioration in developing countries' terms of sensus and the increasing number of countries trade. Exports of manufactures from developing translating that consensus into new adjustment countries rose by only 3.3 percent, compared policies constitute the year's most promising de- with 16.6 percent in 1984. The slowdown af- velopment. However, it is also agreed that, to be fected most major exporters of manufactures, fully effective, these adjustment policies need to including Korea, Hong Kong, Singapore, Brazil, be supported by greatly increased aid, which is and Portugal. Countries that rely heavily on the not yet forthcoming. United States' market, particularly in Latin Gross domestic product increased by only 2.5 America and East Asia, were most affected. percent in Southern Europe and by 4.6 percent This was partly the result of a sharp slowdown in in the countries of North Africa and the Middle growth in the United States and, for the major- East (many of which, particularly the oil ex- ity whose currencies more or less follow the U.S. porters, had to contend with a sharp deteriora- dollar (until the dollar started to decline in ear- tion in their terms of trade). Many countries nest late in the year), to a loss of competitiveness faced the necessity of continuing long-standing vis-4-vis Europe and Japan. austerity programs that had been adopted to re- Efforts to improve incentives for exports, re- duce inflation and contain current-account defi- duce overvaluation of currencies, and lower ef- cits in the face of excessive debt. In Turkey, lib- fective protection rates continued in many coun- Performance of Developing Countries 41 tries. Countries that had followed generally Food prices in dollar terms declined by an av- nondistortional pricing policies and avoided an erage of 12 percent, after a 6 percent increase in anti-export bias continued to be generally more 1984. The price of beverages, however, picked successful than those that discriminated against up substantially during the fourth quarter of exports through overvalued exchange rates and 1985, influenced strongly by the coffee boom, high rates of protection; even appropriate pol- the result of a severe drought that is expected to icies, however, were unable to maintain high reduce Brazil's 1986/87 coffee crop by between rates of export growth in the face of stagnant 30 percent and 50 percent. The price of tea, how- demand. ever, declined to about half its 1984 level by the Most adversely affected by stagnant demand end of 1985, following large increases in produc- were primary-commodity exporting countries. tion in tea-producing countries. The prices of ce- The decline in the prices of primary commodities reals and fats and oils dropped by 6 percent and other than oil led to a 5.6 percent deterioration 24 percent, respectively. in 1985 in the terms of trade of the poorer Afri- World cotton acreage increased by 11 percent can countries, the purchasing power of whose in 1984/85 in response to favorable prices the exports actually fell despite a 2 percent increase year before; world prices for cotton then fell 21 in volume. Continued weakness in the oil mar- percent in the 1984/85 season. Since then, how- ket, with increased production by higher-income ever, the United States and China, both major countries, reduced the export revenues of oil-ex- cotton producers, have taken measures to reduce porting developing nations by almost 5 percent. cotton production. Nonoil commodity prices. The dollar price Petroleum prices. Slow growth in industrial of nonoil commodity exports from the develop- countries, combined with continued oil-conser- ing countries declined by about 10 percent in vation measures, caused demand for oil to re- 1985 (see Figure 2-2). This drop was caused both main weak in 1985, and the average dollar price by slow demand growth since early 1985 in in- of crude oil dropped 4 percent to $27.80 a barrel, dustrial countries and, in the case of grains, cot- the official price quotation of the Organization ton, and oilseeds, by excess supply resulting of Petroleum-Exporting Countries (OPEC). Oil from exceptionally bountiful crops or shifts in prices have been declining ever since their peak the price-support and export policies of major in 1981; the $27.80 level was almost 20 percent suppliers. Producing countries, in need of ex- below the peak price of $34.30. port earnings to finance imports and debt ser- During the early part of the year, as the ma- vice, have given few signs of restraining produc- jority of OPEC members met their previously tion in the face of falling prices. The average agreed production and export quotas, supply dollar price of metals and minerals fell by 5 per- and demand remained in rough balance. Low cent and has declined by about 30 percent since levels of inventories and unusually cold weather 1980. Tin prices fell dramatically, and trading in in Europe and the United States helped to main- tin was suspended at the London Metal Ex- tain demand. However, spring weather again re- change in late October when the International duced the demand for oil, and in mid 1985, the Tin Council ran into financial difficulties and Soviet Union and Egypt lowered their official could no longer support the price of tin. selling prices, as did Mexico. OPEC members Table 2-3. Export Growth in Developing Countries, 1965-85 (averageannual percentagechange) Country group 1965-73 1973-80 1981 1982 1983 1984 1985a All developing countries 5.0 4.6 2.1 -0.5 4.7 10.7 2.3 Low-income countries 1.9 5.4 5.9 3.1 5.8 6.3 3.5 Asia 0.6 6.8 9.1 6.3 7.2 6.6 3.8 Africa 4.6 1.3 -4.5 -9.3 -0.2 4.9 2.0 Middle-income oil importers 7.1 9.0 7.4 -0.4 5.0 12.8 3.7 Major manufacturing exporters 9.2 10.6 8.1 -1.2 6.6 13.1 3.2 Other middle-income oil importers 2.4 3.5 4.3 3.7 -2.1 11.5 6.0 Middle-income oil exporters 4.3 0.0 -7.2 -1.9 3.6 &.6 -0.8 High-income oil exporters 12.7 0.0 -10.6 -25.0 -16.6 -0.5 -4.3 NoTE: Growth rates are at constant 1980prices of merchandiseexports. a. Preriminary. SOURCE: The World Bank. 42 The Economic Scene: A Global Perspective Figure 2-2. Commodity PriceIndices, 1970-85 Index 140 120) Fooa Metals and m nera s 80 '-Z /3,2 Nonfood agriculture 40 1970 1973 1976 1979 1982 1985 tridox0' 80 120 / \ O Aeepcefidustialun omannu export facrreS od n c e orl nNoccommd Source t 1970 1973 1976 1979 1982 t985 a) Averageprice of InternatronaitVtraded oit Averagepnce of thirty-thregprlmoarycornmrodifies,weighfed by eatchcommoditys snairein developing countrles'exports c Average pn'ce of industrbl countrief~ exportstcf manuf zctures to developing countfies. TheWlorld Souroqe Bank Performance of Developing Countries 43 began to grant discounts to retain or increase in 1981 to $15 billion in 1985. Much of the latter their market shares. figure consists of concerted lending within the By the end of 1985, several OPEC members framework of rescheduling agreements, not declared that they would alter their policy of "spontaneous" lending. Net private direct for- limiting supplies to uphold prices in favor of one eign investment has also fallen by about 28 per- that sought a "fair share of the market." At that cent since 1981, no doubt a reflection of de- point, the spot price of crude oil started to fall, pressed domestic demand in developing averaging about $18 a barrel during the first countries and unfavorable commodity markets. quarter of 1986 and falling below $11 in June. Net financial flows to developing countries Balance of payments, debt, and financing. (including errors and omissions) declined from The current-account deficit of developing coun- about $55 billion in 1984 to $42 billion. This tries (excluding official transfers) amounted to change largely reflected a fall in loans by private $41 billion in 1985 (Table 2-4), up slightly over sources to oil-exporting developing countries the year before, but more than $60 billion less and a decline in net short-term liabilities of oil- than the peak deficit of $105 billion in 1981. This importing countries. Even so, the current-ac- deficit amount is also considerably smaller than count deficit of developing countries rose by $5 interest payments by developing countries on billion in 1985, and reserves rose by less than $2 their long-term debt alone. Overall, developing billion. countries' exports of goods and non-factor ser- One should note that estimates of the current- vices (GNFs) almost equalled (and, excluding account deficit may contain considerable error, China, exceeded) their imports of GNFs. Collec- partly because of the overall error in the global tively, for all developing countries other than current-account balance, but also, because com- China, and particularly for the highly indebted plete reports on actual (rather than contractual) countries, national savings exceeded gross do- debt-service payments in 1985 are not yet avail- mestic investment and went, in part, to pay for able for all countries. The current-account defi- the net cash flow owed to debtors. cit of developing countries may well turn out to The reduction in the current-account deficit have been larger than now estimated, reflecting has been the result of actions taken in the wake accumulation of arrears. of a substantial fall, since 1981, in external fi- Declines in lending, small increases in export nancing. Developing countries received $35.5 revenues, and declines in terms of trade resulted billion in net long-term loans in 1985, as against in an increase in developing countries' merchan- $74.6 billion in 1981. Of this amount, capital dise imports of only 3.6 percent in volume, flows from private sources fell from $52 billion down from 5.8 percent in 1984. This modest in- TablCuren-accuntFiinaning,of 2-. DevelobpingCoutis 908 biloo es Sdla (ecudn official jg W ; investet e . . . . . . . . . . Private directifo 44 The Economic Scene: A Global Perspective crease was accounted for by only a few coun- in 1984, signed with Mexico. Reschedulings were tries: China's import volumes, for example, rose also concluded with Argentina, Chile, Ecuador, by 27 percent, to the point where controls were and the Philippines. imposed to contain the overheating economy in Funds obtained under these agreements fell the second half of the year. By contrast, imports short of the amounts necessary to cover interest of middle-income countries increased by less payments. Long-term net disbursements to all than 0.5 percent. Adjustment in middle-income developing countries totaled about $36 billion in developing countries continued to reflect restric- 1985, while interest payments on long-term debt tive policies and constraints on imports rather reached almost $58 billion (see Table 2-5). than successful export promotion. There was no visible progress in 1985 toward Private lenders remained extremely cautious strengthening the creditvorthiness of the devel- in their lending to developing countries. Some oping countries. Overall, the ratio of their ser- countries enjoyed continued access to bank vice payments on long-term debt to exports in- loans at low spreads, and a few East Asian coun- creased from 20 percent in 1984 to 22 percent, tries-China. Korea, and Malaysia-were able while the ratio of the value of long-term debt to to tap the bond markets. Most developing coun- exports rose from 130 percent to 136 percent. tries, however, were unable to obtain new net The estimate of debt-service payments may be lending from private sources, except under re- high, since, for some countries, it reflects pay- scheduling agreements. Negotiations for the re- ments due in 1985, rather than payments made. scheduling of existing debt were active in 1985 However, this is the relevant figure for evaluat- and covered nineteen World Bank members, in- ing creditworthiness, all the more so as any cluding ten from sub-Saharan Africa and seven shortfall in 1985 debt-service payments due to from Latin America. Altogether, twelve agree- arrears would be reflected in an increase in debt ments wvere signed during 1985, representing $87 and in future payment obligations. billion worth of negotiated debt relief, among Major obstacles continue to confront the suc- them a $49 billion agreement, initially agreed to cessful management of debt problems. Many Table 2-5. Medium-term and Long-term Debt of Developing Countries, 1970-85 (billionsof US dollars) Oil-importingcountrieSa Oil-exporting countries. Item 1970 1982 1983 1984 19851 1970 1982 1983 t984 1985C Net disbursements 6.5 45.1 36.2 33.0 33.8 1.6 21.2 17.1 7.7 1.8 Concessionalloans 2.0 8.1 6.7 6.6 6.4 0.6 1.7 1.2 1.7 0.7 Nonconcessionalloans 4.5 37.0 29.5 26.3 27.4 1.1 19.4 15.9 6.0 1.0 Official 0.9 9.0 10.2 10.3 10.1 0.2 3.5 2.2 3.2 3.6 Private 3.6 28.0 19.3 16.0 17.3 0.9 15.9 13.7 2.8 -2.6 Debt outstanding and disbursed (DOD) 50.9 378.2 421.7 450.9 484.7 17.7 173.8 209.9 224.7 226.5 Official 26.0 145.2 162.4 176.2 192.7 7.5 48.6 51.6 55.2 59.5 Private 24.9 233.0 259.3 274.7 292.0 10.2 125.2 158.3 169.5 166.9 Total service payments 6.5 63.1 57.2 62.1 70.4 2.8 35.0 34.1 40.3 44.5 Interest 1.9 31.9 30.0 33.7 36.5 0.7 16.9 17.2 20.5 21.1 Official 0.7 5.6 6.4 7.5 9.7 0.2 2.1 2.3 2.6 3.2 Private 1.2 26.3 23.7 26.2 27.1 0.5 14.8 14.8 17.9 17.5 Amortization 4.6 31.2 27.2 28.4 33.7 2.1 18.1 16.9 19.8 23.7 Official 1.1 6.2 6.6 7.5 11.4 0.4 2.8 3.7 3.5 5.2 Private 3.4 25.0 20.6 20.9 22.4 1.7 15.4 13.2 16.3 18.4 Service payments as a percentageof exports of goods and services 13.7 19.0 17.1 16.7 18.4 8.1 25.5 25.5 27.8 31.8 DOD as a percentage of GDP 12.9 24.2 27.9 29.7 29.9 18.1 30.2 39.3 39.3 37.9 NOTE: Details may not add to totals becauseof rounding. Data are based on a sampleof ninety developingcountries. a. Includesall low-incomecountries. b. Does not include high-incomeoil exporters. c. Preliminary. SOURCE: The World Bank. Performance of DeveJopingCountries 45 countries have suffered continuous declines in in efforts to reverse the economic decline that per capita output and even steeper declines in has gripped much of the region over the last dec- per capita domestic expenditures as a result of ade through the development and implementa- the need to maintain trade surpluses to meet in- tion of critical policy reforms. During 1985, the terest payments. In some countries, political in- Bank continued this effort, not only through its stitutions have been strained by the restrictive normal lending program, but also through the policies that parts of the public view as being Special Facility for sub-Saharan Africa, which needed only to generate repayments for foreign was specifically set up to support adjustment ef- banks. forts in the region. The banks have made efforts to increase their At its October 1985 meeting, the Interim capital position, thus cushioning the impact on Committee of the IMF agreed in principle to a their solvency of problem loans in developing proposal that the IMF use the reflows it will re- countries. This improved ability to withstand ceive from its Trust Fund loans to make highly potential losses may well have stiffened the op- concessional loans to low-income countries im- position of some banks (notably the smaller plementing economic programs designed to pro- ones) to participation in concerted lending, thus mote structural adjustment in a medium-term increasing the burden on larger banks, which framework. A new IMF facility, called the struc- have a greater proportion of their assets tied up tural-adjustment facility (SAF), was formally in developing countries. The duration of the cri- established by the Executive Board of the IMF in sis has also increased the dilemma facing regula- March of 1986. One feature of this program is tory agencies. Increased bank exposure to prob- the close coordination envisioned between the lem countries is clearly necessary to prevent a Bank (through its policy-based IDA lending) major disruption to the financial system and to and the IMF (through its SAF lending) in pro- safeguard banks' assets. Yet, traditional rules moting structural adjustment in the low-income (and equal treatment with domestic loans) re- countries. The size and nature of an eighth re- quire increased provisioning against banks' as- plenishment of IDA resources will have impor- sets in developing countries. That, in turn, dis- tant implications for the Bank's ability to sup- courages increased exposure. port these adjustment efforts. Thus, despite continuing recovery in indus- The support by the international donor com- trial countries and falls in interest rates, the de- munity has occurred alongside heightened rec- veloping countries continue to face difficult ognition on the part of the developing countries challenges in restoring growth and creditworthi- of the role of their own past policies in their ness. The need to address the problems of the present plight and the nature of the policies poorest countries, especially those in sub-Sa- needed for a better future-a recognition that is haran Africa, and the major debtors has been a key component in the successful implementa- widely recognized by governments in industrial tion over the medium term of these often very countries. Initiatives put forth at the World difficult policy actions. Bank-International Monetary Fund (IMF) An- In the area of international trade policy, 1985 nual Meetings in Seoul, Korea, in October 1985, and early 1986 saw the initiation of a prepara- clearly focused on the need to achieve renewed tory process within the General Agreement on growth in major debtor countries, as govern- Tariffs and Trade (GATT) aimed at the early ments increasingly came to recognize that the commencement of a new multilateral trade- debt problem requires long-term solutions and negotiations round. Such a round is seen as a increased assistance. The "Baker initiative" (in crucial mechanism to avoid a further increase in recognition of its proposer, James A. Baker, 111, protectionist measures and as a means to reduce the United States Secretary of the Treasury) significantly barriers to trade in both developed called for concerted action by multilateral and and developing countries-a reduction that is private lenders to increase capital flows to those important to the promotion of long-term growth indebted countries that are implementing far- and efficiency in all countries. A ministerial reaching programs of economic reform. meeting of the GATT is currently scheduled for There has been widespread support for this mid September 1986. It is expected that this initiative as reflected, for example, in the April meeting will mark the official start of these im- 1986 Development Committee communique, portant trade negotiations. which urged all major parties to redouble their While progress in 1985 was limited and disap- efforts so that medium-term, growth-oriented pointing, the consensus noted earlier, coupled adjustment programs could be designed and im- with the initiation of action over a broad range plemented as soon as possible. of developing countries, point to the potential Similarly, for the low-income countries, par- for improved performance in the future. ticularly those in sub-Saharan Africa, the World The essential elements of a successful strategy Bank and the IMF are working together to assist are now generally recognized: continued growth 46 The Economic Scene: A Global Perspective in industrial countries and continued pursuit of the needs for ODA without pushing appropri- reforms supported by increased financial flows ated ODA over the growth path now predicted in developing countries, in an open international for it. Thus, in the report, a variety of "coping trade environment. The actors, too, have been options" were carefully examined: The conclu- identified: governments in developing countries, sion reached, however, was that although some which must pursue and accentuate their policy had considerable potential, the potential was in- reforms; commercial creditors, for whose funds sufficient. The Task Force, therefore, asked for there is simply no substitute in sight, at least for increased, as well as more imaginative, efforts to the major indebted countries; and industrial- raise traditional appropriated ODA (including country governments, which not only must im- that channeled through some multilateral insti- plement policies collectively conducive to more tutions) during the years ahead. vigorous, noninflationary growth, but also take The Task Force report was reviewed by the action, directly through the provision of conces- Development Committee at its October 1985 sional assistance and indirectly through support meeting. The Committee urged that the report for international financial institutions, to help and its suggestions be taken into account by all ensure that capital flows in adequate volume and governments concerned and called on the World on appropriate terms help bolster the debtors' Bank to take a leadership role in following up on adjustment efforts. Success is important, not the Task Force's conclusions. just for the developing countries, but for the * * * whole international economy. The task for 1986 Net disbursements of official development as- and beyond is to get on with the effort. sistance from member countries of the Develop- ment Assistance Committee (DAC)2 of the Or- Official Development Assistance ganisation for Economic Co-operation and De- In 1985, the eighteen-member Task Force on velopment to the developing countries in 1985 Concessional Flows, established by the Develop- amounted to an estimated $29.6 billion, up $900 ment Committee in May 1982, published its re- million over the level in 1984. The allocation of port. It covered three broad subjects: the effec- disbursements to individual countries varied, de- tiveness of aid, public support for aid, and aid pending on the source of assistance. Net dis- volumes. bursements of ODA from DAC countries repre- In the most searching review yet made of the sented 0.35 percent of these countries' GNP. Only effectiveness issue by a joint recipient-donor five countries (Denmark, France, the Nether- body, the Task Force concluded that aid had lands, Norway, and Sweden) provided more contributed effectively to development. Yet, the than 0.7 percent of their GNP in development report continued, there had been some aid fail- assistance, which is the target set by the United ures as well as successes. Because the number of Nations for the Second and Third Development failures can be reduced, donors and recipients Decades. Several other DAC members increased alike were urged to emphasize the need to in- their contributions substantially during the past crease the effectiveness of offical development year. assistance (ODA). Provisional data for 1985 indicate that OPEC In the area of public support, the Task Force countries provided $3 billion in net disburse- noted that although public support for aid is rel- ments of ODA to developing countries, a de- atively diffuse and quiescent, there is-as re- crease-related to the decline in income from pe- sponse to the recent emergency in Africa sug- troleum-of $1.5 billion from the year before. gests-a potential for more enthusiastic sup- Still, these countries provided 0.6 percent of port. That potential could be exploited, the their GNP in net disbursements of ODA, most report went on, by political leadership and more of which is in the form of "untied" assistance. effective communication through development- In particular, Saudi Arabia and Kuwait contin- education programs and by nongovernmental ued to provide a substantial share of GNP as organizations. ODA-2.3 percent and 2.7 percent, respectively. Finally, the Task Force turned to the question of aid volume. It found a probable mismatch be- tween the needs for ODA, especially of the low- income countries, during the remainder of the 1980s and the supplies that now seem likely from 2 Australia Austria, Belgium, Canada. Denmark, Finland, donors. In this period of budgetary constraints France. Federal Republic of Gerinany, Ireland, Italy, Japart. the Netherlands, New Zealand, Norway, Sweden, Sssitzer- and ODA scarcity, most members of the Task land, the United Kingdom, the tUnited States, and the Com- Force were concerned to find other ways to meet mission of the Euiropean Communities. 47 Chapter Three Bank Policies,Activities,and Finances Bank Policies Sector-adjustment Lending In the past four fiscal years, sector-adjustment Tale -. etoj sme Lending, lending has become an increasingly important in- FiYe1 979-86 strument in the array of Bank lending initiatives. Pretag Put in place at the beginning of the decade in re- Number of t total sponse to the hostile economic environment that Yea o fUSSt;lins Banr lndin slowed and, in many cases, reversed, growth in 1979 31.5 0.3 the developing countries, sector-adjustment lend- 190 1 65.0 0.6 ing amounted to 14 percent of total IBRD and IDA commitments during fiscal 1986, up from 11 3 13 .0 1.1 1.1Ipercent only five years ago. 18 Like the more comprehensive structural-ad- 8 8 640.9 4. justment operations,' sector-adjustment lending 1984 8 t,317.9 8.5 was designed to support, within an acceptable 3 1,475.1 102 macroeconomic framework, sectoral programs of 196 18 2,2833 14.0 policy and institutional change, including restruc- 1979-6 52 5,9509 5.5 turing of capacity, and to increase resource mobi- lization and the efficiency in the ways in which re- sources are allocated. The objective of sector-adjustment lending is to the effectiveness of any particular Bank-sup- promote the introduction and effective imple- ported operation. mentation of sector policies necessary for sus- Nonetheless, the report concluded, the record tained, rapid growth. Depending on the objec- of implementation of agreed adjustment pro- tives of the operation and country circumstances, grams had been good for the most part, and this type of lending covers a continuum that countries in which a first sector-adjustment loan ranges from major changes in macroeconomic had been followed by subsequent operations in policies to the establishment of an appropriate the same or associated sectors-Ghana, Jamaica, framework for sector investments. Generally dis- Morocco, Sudan, Uganda, and Zambia-had bursed in between two and six years, sector-ad- particularly successful records of implementing justment operations are normally tranched, with their agreed-upon adjustment goals. release of the second tranche being linked to the The report also noted the effects of sector-ad- progress of the sector-adjustment program. justment operations on the poor and cautioned (For details of trends in sector-adjustment lend- that they, too, were not easily traced: There may ing and operations by region for the period, fiscal be short-term costs for some, mostly urban, low- years 1979-86, see Tables 3-1 and 3-2). income groups, but those very policies that re- In fiscal 1986, the Executive Directors, con- quired adjustment had continuous costs for as tinuing their review of Bank adjustment lending, long as they remained in place-high rates of in- assessed this particular instrument in their dis- flation, low agricultural producer prices, slow in- cussion of a management-prepared paper, "Sec- dustrial growth (and thus fewer employment op- tor-Adjustment Lending: Progress Report." portunities), and inadequate services in the social The stuidy noted that, because the vast majority sectors resulting from funds spent on subsidies to of sector-adjustment operations had been ap- higher-income groups. proved only since the beginning of fiscal 1983, any judgment as to their success in meeting pro- gram objectives (increases in agricultural produc- A report on the progress of structural-adjustment lending ap- tion and nontraditional exports, for instance) peared in the WorldBank Annual Report for 1985, pages 52- could only be tentative; so many other forces 54 In fiscal 1986, IDA credits, African Facility credits, and tat atwork were it as virtallv ipossibe to tIRD loans in sujpport of structural adjustment totalecd$777.2 were at work that it was virtually impossible to million and were in support of programs in Burundi, Chile, isolate, and therefore gauge in quantifiable terms, C6te d'lvoire, Guinea, Malawi, Niger, Senegal, and Togo. 48 Bank Policies, Activities,and Finances Table 3-2. Sector-adjustment Lending, by Region, Fiscal Years 1979-86 Numberof Numberof Commitments Commitments Region recipients loans (US$millions) (to) Eastern and Southern Africa 10 15 610.6 8.6 Western Africa 6 10 536.1 7.5 East Asia and Pacific 2 2 372.0 1.6 South Asia 1 3 298.0 1.2 Europe, Middle East, and North Africa 4 8 1,390.4 7.0 Latin America and the Caribbean 9 14 2,743.8 10.5 Total 32 52 5,950.9 5.5 Assisting Reform in Morocco The World Bank has provided support to Mo- uation: With foreign-exchange reserves virtually ex- rocco in the form of three sector-adjustment loans hausted and with a worsening fiscal deficit, the need that are assisting that country's bold and wide-rang- for adjustment and restructuring was evident. Under ing strategy of economic adjustment and restruc- a 1983Stand-by Arrangement with the International turing. Monetary Fund, the government sharply curtailed The need for action by Morocco arose from ambi- public expenditures. At the same time, the govern- tious investment policies pursued by the government ment began discussions with the Bank on a strategy during the 1970s. These expansive policies were ini- for structural adjustment in key sectors of the econ- tially encouraged and financed by the sharp increase omy to increase the productive capacity and reduce in phosphate revenues that resulted from the tripling distortions that slowed growth. of phosphate prices in 1973. They were maintained Bank assistance for that strategy has included sup- by foreign borrowing later in the decade when phos- port for trade-policy reform and industrial restruc- phate prices and revenues declined and as expendi- turing to promote export production and encourage tures for petroleum imports steadily increased. The greater reliance on private-sector industries; agricul- economy used the foreign resources to continue poli- tural reform, to overcome prevailing constraints to cies of the past rather than to support domestic ad- rational land use, to improve farming techniques, justment to a changed external environment. and to provide the modern inputs and support ser- To control the rising fiscal and balance-of-pay- vices necessary to bring about these changes; and ed- ments disequilibria, the government, in 1978, ucation reform, to reorient the education and train- adopted a three-year stabilization program that fo- ing system to respond better to the country's cused on reducing public-sector outlays and impos- medium-term development needs and improve the ing stricter import controls. Despite initial improve- efficiency of resources use in the sector that con- ments, the program was not sustained, and the early sumes the largest share of public resources. In addi- 1980s witnessed a further deterioration of the fiscal tion, a public-enterprise rehabilitation loan is cur- and balance-of-payments situation. In 1983, the rently being prepared to improve the efficiency of government acknowledged the seriousness of the sit- public enterprises in a number of sectors. Several of the Executive Directors gave their * ensuring that the adjustment program is seen particular approval to the importance that the re- in its entirety so that individual operations port placed on assisting member-country govern- ments to identify ways and means to mitigate ad- justment costs and, if necessary, to modify the The formulationot sector-adjustment loans relies heasilv on design of the policy and institutional measures conomicand sector eountry Aork (CESWj: This work ican under consideration. help estabtish whether the macroeconomic environment is con- In sum, sectoral-adjustment lending was held duciveto successful oectoral adjustmentand whethera govern- to be a flexible instrument for supporting adjust- mentcan sustaina medium-term adjustmentprogram.CESW poli,iesin developing countries, and the re- analvsis of sector policy and institutional capacit) is the basis ment polcies m developig countries, and the re- for the formulation of sector-restructuring programs; CESW is port added that its importance would not dimin- an importanitvehiclein the Bank's dialoguewith goserrment ish in the foreseeable future. Its effectiveness officials, and especially for convincing them of the rationale could be improved, the study continued, by: anidneed for reform: CESW allosvs the progress n2ade in the imnplementation of a sector-adjustmnent loan to he monitored strengthening the Bank's country economic additionalissuesthat need to be examined;and and identifies and sector work to ensure that it generates finally, CESW is. itself, improved by the experience gained in actionable proposals for adjustment 2 the design and implementation of the adjustment program. Bank Policies 49 are part of a comprehensive and in-depth re- The study's central message was that among form program the forces that conspire to leave underfed almost * focusing increasingly on detailed and specific one person in five in today's world, one stands measures that raise the supply responsiveness out above all others: poverty. Not the spectre of of individual producers and enterprises to insufficient food, for indeed, the world, and even policy-reform and sectoral-reform measures. most nations, have an ample supply of food. The sector-adjustment and structural-adjust- Since poverty is the main cause of malnourish- ment lending instruments were designed to ment, food security can therefore be achieved achieve a specific purpose: to help countries only by raising the real incomes of households so through the process of economic reform and re- that they can afford to buy enough food or by im- structuring made necessary as a result of the hos- proving the ability of farmers to produce enough tile economic environment of the late 1970s and food to meet their own needs. early 1980s. As reported in last year's Annual Re- Income growth can best be achieved through port, consensus has been reached that the Bank, economic growth. There are two difficulties, in the future, should preserve and build on its tra- however: Economic growth takes time; in addi- ditional strengths, particularly in project design. tion, given the current distribution of individual Thus, although the share of sector-adjustment assets and opportunities, even with economic loans in total Bank lending during the next three growth, many poor people will be able to increase years is likely to be between 10 percent and 15per- their purchasing power only slowly, and some in- cent, it is expected that, eventually, the role of evitably will remain locked in poverty. How to such lending will diminish as sustained reforms overcome this latter problem at the national level, bring about progress in a country's domestic eco- and how the international community can help nomic environment. Recovery to that point is not nations plan and implement food-security strate- anticipated to be rapid, however-especially in gies formed the core of the Bank study. sub-Saharan Africa and in the heavily indebted The policy paper suggested that the problem of countries of Latin America. chronic food insecurity can be tackled in three But as recovery moves forward, the Bank an- different ways in national intervention programs: ticipates that more loans in sectors such as public by increasing the food supply, by subsidizing con- enterprises and energy, and for financial reform, sumer foods, and through transfers of income in will be prepared; that there will be an increased cash and in kind. focus on loans supporting in-depth structuring of Transfer payments in cash or kind, the third sectoral incentive and investment programs, poli- option, tend to be the most efficient way of in- cies, and institutions; and that disbursement pe- creasing the real incomes of the poor and giving riods will lengthen as sector-adjustment loans in- them the means to increase their consumption of creasingly finance investment components. food. Although ways can be found to target both urban and rural households, care should be taken Food Security in the Developing World to avoid "leakages" of transfer payments to unin- Food security-defined as access by all people tended beneficiaries. Unfortunately, efforts at at all times to enough food for an active, healthy avoiding leakages, though they can be effective, life-is a central policy issue in many developing increase, often steeply, the administrative costs countries.3 This is not surprising, as food security of, and the administrative skills necessary to run, is nonexistent for as many as one third of the pop- a transfer-payment program. ulation in the developing world, excluding the The choice among these three policy interven- People's Republic of China. And, of these 730 tions must be based on a balanced concern for million people, almost half-340 million-are budgetary and economic costs, the administrative acutely undernourished. and political feasibility of different interventions, Many countries have strategies for helping their and the expected benefits. Since most countries people achieve food security. Those strategies, have a variety of target groups, a mix of interven- however, often are neither cost effective nor do tions to improve food security will likely be neces- they reach their intended targets. Some countries sary. The appropriateness of the package of mea- have no strategy, despite the fact that a supply of sures chosen will depend, therefore, on who is ample food for all is man's most fundamental facing food insecurity within a country. need. In an effort to contribute to the effectiveness of 3 There are two types of food insecurity: chronic and transitory. food-security policies in a resource-constrained Chronic food insecurity is a continuously inadequate diet environment, the World Bank published a policy caused by the inability to acquire food. It affects households study, Poverty and Hunger: Issues and Options for that persistently lack the ability either to buy enough food or to Food Security in Developing Countries, that be- produce their own. Transitory food insecurity is a temporary decline in a household's access to enough food. It results came the subject of far-reaching discussion by the through instability in food prices, food production, or house- Executive Board. hold income. Its worst form is famine. 50 Bank Policies,Activities, and Finances The Bank'sExperiencewithFood-subsidy Programsin Brazil,Colombia,and India makes it possible for low-incomefamiliesto make frequent purchasesin smallquantities. Food-subsidyprograms assistedby the Bank in In Colombia,areas of poverty were identifiedas Brazil, Colombia,and India have all promoted the part of the national developmentplan. Targets of ideaof selectiveparticipation.A coupon program in food subsidies were then narrowed to households Recife, Brazil,which distributedfood throughgov- that had children under five years of age or a preg- ernment-run supermarkets, used income to decide nant or lactatingwoman. This reduced the number who couldparticipate. The program showedseveral of possiblebeneficiaries and thus loweredadminis- things: trativeand fiscal costs. Little leakageor fraudulent * how difficultit is to target incomewhen income use of coupons was apparent. reportingis arbitrary In a feedingprogram in India's TamilNadu state, * that food coupons are more effectiveat reduc- the criterion for targeting was the growth of chil- ing child malnutrition if the subsidies are high dren. Children were admitted to the program when enough to sustain participation their growth faltered and were removed when their * that a coupon program requires heavy book- weight increasedsatisfactorily.Such selectivity low- keepingand administrativecosts ered the food cost well belowthat of most feeding * that down paymentsfor couponspose a barrier programs for preschool children.Mothers did not to the lowest-income group use the supplements as an excuseto reducetheir chil- * that the systemmust adapt to the frequentsmall dren's intake at home because of a sense of shame purchasesthat low-income familieshave to make. that would have been induced had the child not Buildingon lessonsfrom the evaluation,the Bra- gainedweight.(The same sort of shame, alongwith zilianprogram was modified,with apparentsuccess, inconvenience,keeps the affluent from buying at to reach very low-incomeneighborhoods without subsidizedshops in poor neighborhoods.)The proj- coupons or down payments. Common basic foods ect, covering 9,600 villages-about a third of the are now subsidizedfor all customersof manyregis- state-has avertedan estimated 107,000 casesof se- tered small neighborhoodstores in selectedpoverty vere malnutrition and 12,000deaths. And children areas. Any leakageof benefitsto peoplenot in need who have been through the program are 1.75kilo- is much less expensivethan administeringthe cum- gramsheavierat age fivethan children from control bersomecoupon program. The revisedsystemalso villages. International assistance for food security, to * The Bank will seek to strengthen its country date, has achieved little success. Due to the widely economic and sector work to help countries for- held misperception that food shortages are at the mulate cost-effective food-security policies. root of the problem, assistance has largely been * The Bank will work to ensure that economic- limited to attempts to increase food production. adjustment programs that promote long-run The study called on the international commu- growth are complemented by policies and strate- nity to take into account its four major conclu- gies to address detrimental short-run effects of sions when strategies to achieve food security are those programs on the food security of the poor. being devised: that (a) the lack of food security is * The Bank's lending program will continue to the lack of purchasing power of people and na- give high priority to projects that raise the income tions; (b) food security neither necessarily nor levels of the poor. This emphasis might include, only comes from achieving food self-sufficiency where appropriate, financing of investments that in a country, or from a rapid increase in food pro- increase the supply and reduce the price of basic duction; (c) long-term food security can be staple foods. achieved through economic growth and the allevi- * The Bank will increase its use of consultative ation of poverty, but, in the short term, it results groups and consortia as fora to improve food-aid from a redistribution of purchasing power and re- coordination. sources; and (d) that transitory food insecurity * The Bank will continue its vigorous support can be reduced through measures that facilitate of international agricultural research, especially trade and provide income relief to target groups. through the Consultative Group for International International donors, the study concluded, can Agricultural Research (CGIAR), and for the help nations apply these conclusions to their strengthening of national research capabilities, food-security strategies in three ways: through particularly in sub-Saharan Africa. policy advice, financial assistance, and improve- ments to the external trading environment. Financial Intermediation Several implications for the Bank's operational If well-developed and efficient, a country's fi- work and research programs were posed by the nancial system can be an important contributor to study's conclusions. Among the major ones: economic growth. It can facilitate capital accu- Bank Policies 51 mulation; by acting as an intermediary between ogenous shocks, saddled many countries with borrowers and lenders, it can transform the size, onerous debt burdens and, eventually, recession. maturity, and risk characteristics of assets, thus At the corporate level, the effects of inappro- enhancing the willingness of savers with short- priate country policies were devastating, produc- term perspectives to buy long-term assets; and it ing illiquidity and, in some countries, extensive can effect the allocation of resources by channel- corporate insolvency. ing funds to projects with high yields. Finance 2. Many of the recent problems relating to the thus enhances growth, both in increasing the sav- financial sector reflect a neglect of domestic-re- ings ratio and by reducing the capital-to-output source mobilization and an over-reliance on for- ratio. eign borrowings, which are likely to be both less Since fiscal 1974, the World Bank has lent more available and more costly, at least in the medium than $21 billion to financial intermediaries. Of term. that amount, slightly more than half has been in 3. Excessive reliance by governments on direct- the form of industrial credit, designed to support ing commercial banks and DFIs to lend to priority small and medium-scale beneficiaries, primarily sectors has often led to inefficient allocation of re- in the private sector.4 These loans have had two sources. purposes: the obvious one of providing funds for 4. The task of building a sound and robust insti- investments in the productive sectors, and one not tutional base for finance is made up of far more so obvious, that of enhancing the effectiveness of than the creation and nurturing of individual DFIs; a country's financial system in mobilizing re- it involves a broad range of institutional issues. sources and allocating funds efficiently to invest- These issues, and a proposed path for future ments and activities providing high returns. Bank involvement in the financial sector, were Until the mid 1970s, investments in the finan- elaborated in a report, "Financial Intermediation cial sector had been almost exclusively to individ- Policy," that formed the basis of discussion in the ual, specialized development financial institutions Executive Board early in the fiscal year. (DFIs). Through its assistance to individual DFIs, The suggested Bank policy involved no sharp the Bank sought (a) to develop institutions that departure from current practice; rather, it sought could efficiently take on the responsibility for ap- to increase the relative emphasis on the develop- praisal, selection, and supervision of investments ment and performance of the whole financial sys- that were too small to be funded directly by the tem. Thus, with this emphasis, Bank support to Bank and (b) to become, over time, promoters of the financial sector has been designed to assist in industrial development through the identification the development of strategies, policies, and insti- of investment opportunities, generation of proj- tutions that would: ect ideas, and the selection of potential investors. * increase domestic-resource mobilization by In practice, however, it turned out to be diffi- providing a variety of depository and nonde- cult to create financial intermediaries that could pository instruments that pay competitive re- finance risky projects with debt instruments; lend turns to projects with high economic, but often mar- * encourage the development of more resilient ginal financial, rates of return; finance public en- and robust financial structures, both at the terprises and other projects at the request of gov- level of the enterprise and of the financial ernments, and yet be financially healthy and able system through measures that, for instance, to mobilize funds on commercial terms. would increase the availability of long-term The Bank, therefore, began to increase its anal- capital and improve the balance between ysis of the economic environment and to sponsor debt and equity detailed country studies of investment-incentive * improve resource allocation by reducing systems, effective protection, tariffs, and finan- fragmentation of financial intermediation cial structure and policy. Recommendations for through increasing competition and enhanc- action were increasingly incorporated as compo- ing market discipline nents in policy-based lending operations. Thus, * improve the auditing framework and the in- by the 1980s, the Bank began to utilize a variety stitutional infrastructure for financial infor- of lending instruments for industrial finance. mation so as to make financial transactions From its recent experience, the Bank has drawn more transparent and increase trust in the several major lessons, and, from those lessons, a system new direction in Bank lending in support of DFIs * strengthen the legal, supervisory, and regula- has evolved. tory environment of the financial system to 1. It has been demonstrated clearly that the role and performance of a country s financial system are intertwined both with the state of its ma- 4 This report discusses the development of the Bank's activities in the financial system in the context of its support of industrial croeconomy and with corporate financial health. finance. Many of the general conclusions hold, as well, for Inappropriate policy, adopted in the wake of ex- lending in support of agricultural credit and housing finance. 52 Bank Policies,Activities, and Finances foster financial prudence and discipline and tablishing the Multilateral Guarantee Investment competitive arms-length relations among fi- Agency (MIGA) for signature by member govern- nancial institutions, borrowers, and savers. ments of the Bank and by Switzerland. The report noted, however, that in developing a The recommendation of the Executive Direc- country-assistance strategy to promote financial tors came four years after Bank President A.W. development, while also considering the complex- Clausen revived the idea of forming such an ity and political sensitivity of financial-sector re- agency while addressing the Bank's Board of forms, the issues to be addressed in any particular Governors at the 1981 Annual Meetings. country at any given time would have to be selec- MIGA, designed to promote the flow of inter- tive and depend on differences in country size, national investments to developing countries, will stage of development, and economic system, just begin operations once five capital-exporting and as solutions, also, must be tailor-made to each fifteen capital-importing countries have ratified country's situation. the Convention and provided that the ratifying The report envisaged four types of lending in- countries account for a total subscription of at struments to be necessary for the implementation least one third-$360 million-of its proposed of Bank objectives on a country basis: financial- initial authorized capital of $1.082 billion. A Pre- sector adjustment loans; multiple-institution paratory Committee will be convened by the Pres- loans; support (in conjunction with the IFC) for ident of the Bank in September 1986, as the same the development of financial markets; and, as in minimum number of countries subscribing at the past, loans to individual DFIs, particularly to least one third the initial authorized capital had those in countries with less-developed financial signed the Convention by June 30, 1986. The systems, or in cases in which the DFI could effi- Committee will prepare draft by-laws, rules, and ciently deliver finance in support of subsector ob- regulations for approval by MIGA's governing jectives. bodies. In their discussion, most of the Executive Di- As of June 30, 1986, thirty-one countries (five rectors supported the overall thrust of the policy capital-exporting and twenty-six capital-import- paper and the outlined strategy to adopt a ing) had signed the Convention, providing for broader approach in the financial sector. subscriptions totaling over $457 million. Two A number of Directors supported, in particu- countries had ratified the Convention. lar, measures that (a) would encourage the mobili- The MIGA initiative is seen as particularly zation of equity financing, whether domestic or timely for two major reasons: On the one hand, foreign, rather than debt; (b) would pay greater governments of developing countries increasingly attention to the issues of institutional reforms and realize the advantage to them of direct invest- corporate restructuring; and (c) would encourage ments over commercial borrowing. On the other, the decentralization of decision making and eco- the flow of private foreign investment into devel- nomic power. oping countries has declined in recent years. In- The Executive Board supported the Bank's de- vestors have been increasingly concerned about cision to implement its strategy carefully, and noncommercial risks surrounding investments in with sensitivity to each country's particular politi- these countries, including, in particular, the risks cal and economic environment. Board members regarding the convertibility and transfer of earn- also noted, and the management agreed, that ings abroad. there was a need for close coordination between The reduction of obstacles to the flow of inter- the Bank and staff of the International Monetary national investments, at a time when the readiness Fund (IMF) in this area to ensure complementar- of developing-country governments to accept ity between technical recommendations of the them has risen, is therefore essential. MIGA will two staffs on issues covered by both institutions. have as its objective the encouragement of those It was also agreed that selective support for in- flows to developing countries by issuing guaran- dividual DFIs would continue, with the key ob- tees, including coinsurance with, and reinsurance jective of that support being the improvement of of, existing political-risk insurers, against non- their financial health so that they might become commercial risks. In addition, MIGA will carry sustainable institutions capable of mobilizing re- out promotional and technical-assistance opera- sources in both foreign and domestic markets and tions, including technical assistance and policy allocating them efficiently. advice to interested members. MIGA is thus ex- pected to provide an important forum for policy The Multilateral Guarantee Investment cooperation between capital-importing and capi- Agency (MIGA) tal-exporting countries. At the World Bank-IMF Annual Meetings in Some of MIGA's main characteristics include Seoul, Korea, the Bank's Board of Governors, on the following: the recommendation of the Bank's Executive Di- * It will be an autonomous organization with rectors, decided to open the draft Convention es- full juridical personality. In its operations, MIGA Bank Policies 53 will cooperate with, and complement, national in- veloping countries in their efforts to reverse the vestment-guarantee schemes, regional entities, trend of capital flight. and the private insurance market. Arrangements * MIGA will not conclude any contract or for coinsurance and reinsurance are expected to guarantee before approval by the host govern- be among the cooperative endeavors with these ment. MIGA will thus be a multilateral agency entities. clearly reflecting the needs, requirements, and * Four categories of noncommercial risk will conditions of its member nations in ways that be covered in particular: the transfer risk resulting most directly support their perceived interests. from host-government restrictions on conversion * MIGA will operate on a sound financial and and transfer; the risk of loss resulting from legis- business basis, meeting its liabilities primarily lative or administrative action or omission of the from premium income and other revenues, such host government, which has the effect of depriv- as the return on its investments. ing the investor of ownership, control, or sub- * MIGA's solvency is also ensured by its share stantial benefit from his investment; the risk re- capital, which its member countries provide in sulting from the repudiation of a contract by the line with their relative allocation of shares in the host government when the investor has no access World Bank's capital. Ten percent of the author- to a competent forum, faces unreasonable delays ized capital will be paid in cash and a further 10 in such a forum, or is unable to enforce a final percent will be paid in non-negotiable, non-inter- judgment; and the risk of war and civil distur- est bearing promissory notes to be cashed in only bance. if necessary to meet MIGA's financial obligations. * The scope of MIGA's activities will be broad. The remaining 80 percent of capital subscriptions It is expected initially to focus on equity interests, will be subject to call. including equity-types of loans, and various * The guaranteed amount MIGA will initially forms of direct investment, such as certain types issue will not exceed 1 1/2 times the amount of the of management and service contracts, licensing subscribed capital plus reserves plus a portion of and franchise agreements, turnkey contracts, and MIGA's reinsurance coverage. In other words, arrangements involving the transfer of technol- there will be a conservative 1.5:1 risk-to-asset ra- ogy and know-how. It may also cover medium- tio. As MIGA builds a balanced risk portfolio term and long-term loans that are related to a spe- and gains experience, this ratio could rise to a cific investment. maximum of five to one. * In addition to its guarantee operations, * MIGA will also be able to underwrite invest- MIGA will carry out a variety of technical-assis- ments sponsored by members acting as adminis- tance and consultative functions, such as per- trator on behalf of sponsoring countries. Reve- forming research, providing information and pol- nues built up from sponsorship ventures will be icy advice to governments, and other activities accumulated in a "Sponsorship Trust Fund" kept that can encourage and increase the flow of direct separate from MIGA's own assets and used to investment to and among developing countries. cover claims and expenses directly resulting from * MIGA will be legally and financially sepa- sponsorship operations that have no predeter- rate from the World Bank. It will have an organi- mined ceilings. zational link with the Bank in that the Bank's * MIGA, consistent with the basic principles President will be ex officio chairman of the of multilateral institutions, will be prohibited MIGA Board of Directors, and, in that capacity, from interfering in the political affairs of its will nominate MIGA's president. MIGA will have members. a Council of Governors, representing each of its * MIGA's voting structure will be based on the member states, and a Board of Directors. Mem- principle of equal voting power of capital-export- bership in the Agency will be open to all nations ing and capital-importing countries once all mem- that are members of the Bank and to Switzerland. bers of the Bank have joined the Agency. In the * In order to qualify for coverage under the Agency's formative years, special arrangements MIGA scheme, investors must be nationals of a provided for in the Convention will ensure that MIGA-member country, be incorporated and neither group of countries can dominate the vot- have their principal place of business in a member ing process. country, or have the majority of their capital The joint financial responsibility for, and polit- owned by nationals of a member country or coun- ical oversight of, the Agency by both developed tries. Upon the joint application of the investor and developing countries and the recognition that and the country in which the investment is to be MIGA will be in business to serve its membership located, nationals of a host country can be cov- and stimulate investment for developmental pur- ered if they bring assets from abroad for their do- poses should enable the organization to reduce mestic investments. This provision will assist de- the potential for investment disputes. 54 Bank Policies, Activities, and Finances BankActivities Economic Development Institute In fiscal year 1986, the second year of the Eco- as joint ventures with regional and national nomic Development Institute's (EDI) five-year training institutions, the EDI provided support plan, the institute gave special emphasis to to some forty-two institutions in the planning organizing policy-oriented training to upper and delivery of their own courses or advice on working-level staff from developing member the development of their training programs, cur- countries, producing policy-oriented training riculum design, financial ptanning and manage- materials, broadening support to training insti- ment, and the preparation of training materials tutions in developing countries, and increasing based on local experience. collaboration with sources of financial assis- The program of senior policy seminars is be- tance for training. ing implemented along the lines envisaged in the EDI sponsored or cosponsored 105 courses EDI's five-year plan. Of the fifteen seminars and seminars during the year, of which fifteen given in fiscal 1986, ten were addressed to sub- were senior policy seminars for decision makers Saharan Africa, three to Latin America, one to and twenty-one were seminars for senior staff of Asia, and one primarily to countries of the Mid- training institutions in developing countries. dle East and North Africa. Most of the seminars The number of training activities substantially have focused on sectoral issues, such as agricul- exceeded the eighty-three that were projected in tural pricing, financing of education, popula- the five-year plan and the eighty-two that were tion policy, and the efficient utilization of trans- given in fiscal 1985. The growth reflected ex- port facilities. National economic ministries panded cooperation with overseas partner insti- have usually been represented in these seminars tutions and with other sources of financing for and have been heavily represented in seminars training. (See Table 3-3.) dealing with macroeconomic issues. The partici- Nearly half the sixty-nine direct training activ- pants are mostly at the ministerial, permanent ities undertaken during the year dealt with man- secretary, or deputy permanent secretary levels. agement of the overall economy or of particular These seminars, which have been well received sectors and subsectors. The remainder were con- by the participants and involved Bank staff, are cerned mostly with project analysis and manage- considered an effective technique for exchang- ment. Under the EDI's five-year plan, the poor- ing views and experience on important issues of est or smallest countries (many of which are in development policy among senior government sub-Saharan Africa) were selected for special at- officials, representatives of the private sector, tention. In line with this objective, the EDI has and senior Bank staff. concentrated its efforts on sub-Saharan Africa During fiscal 1986, the geographic coverage of and other institutionally weak countries. Of the EDI's program of seminars for trainers was 3,300 participants attending EDI courses and broadened considerably. Although it is still ori- seminars during the year, about 1,600 came ented mainly to Asia and Latin America, several from these countries. seminars were organized for trainers in Africa More than 85 percent of the EDI's training ac- and in the Middle East. New seminars were tivities in fiscal 1986 were held outside Washing- given on the preparation and use of case studies ton, reflecting the institute's contacts with a and on the assessment of training needs. wide range of training institutions throughout Another important thrust of EDI's five-year the world. (The EDI is actively associated with plan is a considerable expansion in the produc- some eighty training institutions in developing tion of training materials. EDI's project-related countries.) Special efforts during the past year materials have been well known and widely used have yielded appropriate partners for urban- throughout the world for some time. But in line management training in francophone Africa and with the greatly increased emphasis on policy- for transport-management and education-man- oriented training, about half of current expendi- agement training in Latin America. In addition ture on materials is devoted to the development to the courses and seminars that were carried out of policy-related materials. Work on training- Bank Aclivities 55 Table3-3. EDI Indirect and Direct Training Activities in Fiscal Year 1986 Activity Location Cooperating agency Trainers' Seminars Seminar for trainers in development World Bank Associations of Development Finance banking (W) Institutions in Africa, Asia and the Pacific, and in Latin America Training needs workshop (R) Ethiopia institute of International Education of the University of Stockholm Round table for directors of regional Kenya - training institutions (R) AMTA 2; Seminar for trainers-l and 11(R) Senegal African Development Bank (AfDB)/ International Fund for Agricultural Development (IFAD> Case study workshop-Phase I and LI (R) C&e d'lvoire AfBD/Centre Africain et Mauricien de Perfectionnement des Cadres/Agence de Cooperation Culturelle et Technique Apptied technology for West Africa (R) World Bank African Regional Centre for Technology Workshop on public expenditure World Bank Nigerian institute for Social and programming for Nigeria (N) Economic Research Public administration training in Africa (R) Federal Republic German Foundation for International of Germany Development/United Nations Institute for Training and Research (UNITAR) Project planning and appraisal for Kuwait Arab Planning Institute trainers (R) Agricultural investment analysis and Citing Shanghai lnstirure for International finance (N) Economic Management (SIIEM) Trainers' seminar (energy/power Thailand Asian Institute of Technology sector) 11(R) Urban training workshop for Indonesia (N) World Bank - Training materials workshop 1(N) China SIIEM/Central Institute of Finance and Banking (CIFAB) Rural finance for trainers (R) india College of Agricultural Banking Case methods-phase 11(N) Pakistan Pakistan Administrative Staff College Case methods-phase 11(N) Bangladesh Public Administration Training Center/Society for Training and Development Seminar for trainers (N) Pakistan Water and Power Development Authority Tratning of trainers (R) Brazil Association of Development Finance Institutions in Latin America Agrkultural development projects for Costa Rica Instituto Interatnericano de Cooperacidn trainers (R) para Ia Agricultura (ILCA) Training materials Pakistan Centre on Integrated Rural Development workshop (R) for Asia and the Pacific Direct Training Microcomputers for agricultural projects World Bank University of Guelpit preparation and analysis (W) Agriculture policy analysis (W) World Bank - International development issues (W} United States! UNITAR World Bank (continued) 56 Bank Policies,Activities, and Finances Table 3-3 (continued) Activity Location Cooperatingagency Direct Training (continued) Preinvestmnent projects for UNDP resident World Bank United Nations Development Programme representatives-IX (W) (UNDP) Economics of textbook production (W) World Bank - Management of the project cycle for World Bank Africa (R) Structural adjustment for Africa (R) World Bank - Management of technical assistance for World Bank - Africa (R) Provincial education sector management World Bank CIFAB for China (N) Adjustment policies and external finance for World Bank - EMENA and LAC (R) Agricultural marketing (R) Tanzania Eastern and Southern African Management Institute Workshop on project analysis for ECA Ethiopia Economic Commission for Africa (ECA) staff (R) Education sector management (R) Botswana Institute of Development Management Telecommunications seminar (R) Zimbabwe Commonwealth Telecommunications Organization/Zimbabwe Posts and Telecommunications Corporation AMTA 1: seminar for project managers (R) Botswana AfDB/IFAD AMTA 1: seminar for senior staff-Ila (R) Botswana AfDB/IFAD AMTA 1: seminar for senior staff-Ilb (R) Malawi AfDB/IFAD AMTA 1: concluding seminars (six) (R) Anglophone AfDB/IFAD Africa AMTA 1: management policy seminar (R) Italy AfDB/IFAD Retreat for ECA program managers (R) Ethiopia ECA External debt management (R) Kenya Transport planning and management Nigeria Nigerian Institute of Transport I and 11(N) Technology Urban and finance management for Africa (R) Canada Institut d'Urbanisme de l'Universite de Montreal National economic management (R) Senegal Centre Ouest-Africain de Formation et d'Etudes Bancaires Energy/power projects (R) C6te d'lvoire Ecole Fd&rale Polytechnique de Lausanne/Ecole Superieure Interafricaine de I'Electricite (EFPL/ESIE) Energy/power projects (R) C6te d'lvoire EFPL/ESIE AMTA 2: seminar for project managers (R) C8te d'Ivoire AfDB/IFAD AMTA 2: seminar for senior staff (R) Senegal AfDB/IFAD AMTA 2: seminar on procurement (R) C6te d'lvoire AfDB/IFAD Education policy analysis-phase 11(R) Togo University of Lome Financial management and tariffs (R) C6te d'lvoire ESIE/Electricity Supply Board of Ireland (ESB) Power system planning and project C6te d'lvoire ESIE/ESB management (R) Health care management (R) Cameroon Pan African Institute for Development Entrepreneurship development workshop (R) C6te d' Ivoire AfDB Seminar on export promotion (N) Hungary National Bank of Hungary/National Institute of Management Bank Activities 57 ctit =oato ooetoganc Pubicenerrie anaemnt(W Ygolavia Intrnaionl Cntr orPuli S~~~~~~~~~gepie in De4n Contie Eductionsecor fnanc an maaemn (R} Portugal Intiut Naioa de Adminisftracao 0 ff;>00 -- 0~~~~~~~~~~~~~~~Prua Nationa ecnoi maaeet()Eyttsiueo ainlPan Fod n mretn policyI (R) Tunisia; nization;fo0 Arab Orga1 Agriultra ;00;i0@;0X;0a 009f000:i02:0 ;;0tVr; l$0j;0000tj0:60f 00Development/Centrer 6 d'Etudes0;X0;02;;i50;m National 65iit-t60 ~~~~~~~~~~~~~~~~~~Ar '£incole as (tzSSSC,S0SVXrAS Enrpenusi deeomn o ni nrpeera eeaet inttueo Afr; i ca and;0f0 Asia0(R ) 000006 |iy00;SS000;000i;00i000;0000SSS0900 india/tadustr00ial ev lo me t an o tt000000;000 $000Xi$X$0 5 0f 000000090i;Xa;;;;;00f ;r;0Vjfi jS;;f;0;J6 SffS6g;tIndia ;BAl (11)131) g;(::S 58 Bank Policies,Activities, and Finances Table 3-3 (continued) Activity Location Cooperatingagency DirectTraining(continued) Water supply/sanitation (R) Barbados CDB/PAHO Senior seminar on water supply/sanitation (N) Mexico Secretariade DesarrolloUrbano y Ecologia/PAHO Agribusinessdevelopmentprojects (R) Jamaica IICA/University of the West Indies Public expendituresprogramming (R) Costa Rica Instituto Centroainericanode AdministracionPublica Resources for education and their Trinidad CommonwealthSecretariat cost-effectiveuse (R) Note: Activitieslisted exctudeassistancegivenby EDI staff to activitiesorganizedby other institutions. There were seventeen such activitiesin fiscal year 1986. N = national activities;R = regionalactivities;IR = interregionalactivities;W = worldwideactivities. materials production has accounted for 14 per- projects after a loan has been fully disbursed. cent of total EDI expenditures during the past Comparing actual experience with what had two years. The output of completed materials been expected before the project was launched was above the five-year plan target in fiscal has become an essential part of the Bank's pro- 1985, and about the same level of production cess of learning how to make development assis- was maintained in fiscal 1986. The materials tance more effective. The evaluation function in completed during the past year place greater em- the Bank is the responsibility of the Operations phasis on macroeconomic and sectoral-manage- Evaluation Department (OED), which, although ment issues, including such broader topics as the administratively linked to the President of the private provision of public services, entrepre- Bank, is directly responsible to the Executive neurial development, and public-enterprise Directors. management. A large proportion of these mate- Since July 1981, a selective system of project- rials has been produced under contract with uni- performance auditing has been in operation. versities and other institutions, as well as with Under this system, member governments and individual consultants, throughout the world. Executive Directors receive staff reports on the Cofinancing of EDI activities amounted to $4 outcome of all completed projects. These re- million in fiscal 1986, about 25 percent of EDt's ports are read by staff of the OED, who subse- total expenditures and an amount far larger than quently prepare audits for approximately half in fiscal 1985 ($2.3 million). The bulk of the in- the completed projects. The criteria for selecting crease was accounted for by the United Nations projects for audit as applied by OED have been Development Programme (UNDP), the Cana- approved by the Joint Audit Committee of the dian International Development Agency Executive Directors, which also carries out an (CIDA), and the International Fund for Agricul- in-depth review of a sample of the reports and tural Development (IFAD). audits issued during the year. In mid 1985, the EDI created an Evaluation The system of selective auditing does not jeop- Committee that sets evaluation policies and pro- ardize the integrity of the Bank's post-evalua- cedures for the EDI's work and monitors their tion function. Under the two-tiered evaluation implementation. The Committee has reviewed system, the self-evaluation function by opera- the EDI's evaluation techniques and has broad- tional staff is now firmly established in the ened and strengthened their application. It is ini- Bank, and, in addition to undertaking separate tiating an experimental evaluation of the effect evaluations of about half the projects, OED's of EDI training in one sector in three countries. evaluation officers scrutinize all reports before It also is preparing a plan for the mid-term eval- they are issued. uation of the EDI's five-year plan that will be Borrowers' comments are sought on all evalu- carried out in fiscal 1987 in collaboration with ation reports, and, in a growing number of the Bank's Operations Evaluation Department. cases, borrowers participate directly in the prep- This work will include a special evaluation of aration of reports on completed projects. In ad- EDI's program in China. dition, OED and Bank operational staff often visit project sites and hold extensive discussions Operations Evaluation with borrower representatives and beneficiaries A notable feature of the Bank's work is its sys- when evaluating completed projects. The com- tem of independently evaluating the results of bined borrower input by written comment, prep- Bank Activities 59 aration of reports, or through country visits, ex- In addition to its project evaluation, OED ceeded 90 percent of all reports and audits issued completed three impact evaluations and ten spe- in fiscal 1986. One hundred twenty-four projects cial studies during the year, most of which were were subjected to performance audits in fiscal reviewed by the Joint Audit Committee; some 1986; in addition, reports covering ninety-four were also discussed by the Executive Board. completed projects were passed on to the Execu- The Joint Audit Committee maintains contin- tive Directors after scrutiny by OED, but with- uing oversight of the OED work program and of out OED audit. The cumulative total of projects its effectiveness. The conclusions of the Joint covered by reports or audits reached 1,545 by Audit Committee, the Annual Report of the Di- the end of fiscal 1986. Reflecting the expansion rector-General, Operations Evaluation, on the of Bank operations in the mid and late 1970s, the status of the Bank's evaluation system, and number of completed projects coming up for re- OED's 1985 Annual Review of Project Perfor- view and evaluation is likely to rise to 250 in fis- mance Results were all reviewed by the Execu- cal 1987. tive Directors. The ultimate objective of Bank evaluation continues to be to identify and disseminate les- Internal Auditing sons that can contribute to improvements in the Internal auditing is an independent appraisal design and implementation of future Bank-sup- function within the World Bank that reviews ported projects. By bringing together experience and evaluates Bank operations and activities as a with similar projects, lessons can be more read- service to the Bank. This appraisal function is ily drawn and more efficiently confirmed and accomplished through operational audits of the disseminated. The Annual Review of Project financial and operating systems and procedures Performance Results continues, as in the past, to used in the conduct and management of the be a valuable mechanism for summarizing expe- Bank's operations. The overall objective of the rience by sector, and, through a process of re- Internal Auditing Department (IAD) is to assist view with operating staff, bringing that experi- vice presidents, department directors, and other ence to bear on the design of future projects. managers in the effective discharge of their re- OED's Annual Review of Project Perfor- sponsibilities by providing them with periodic mance Results, covering calendar year 1984, was reports and appraisals carried out on activities published in February 1986. The review looked within their respective areas of responsibility. at the performance of 174 projects evaluated in IAD places particular emphasis on examining, 1984 against the background of the previous five reporting on, and, where necessary, recom- years. The review presented the preliminary mending improvements in the adequacy and ef- findings of two ongoing studies on conditional- fectiveness of the Bank's system of internal con- ity and gave further attention to the subject of trol and the identification of possible means of sustainability that had been addressed in the pre- improving the efficiency and economy of opera- vious annual review. tions and the use of resources. In terms of overall results, all but fifteen of lAD's examination and evaluation of the ade- the 804 projects reviewed over the past six years quacy and effectiveness of policies, systems, and were taken to completion. On the basis of infor- internal controls used in the management and mation available at the time of evaluation, some conduct of activities include, as appropriate, an 81 percent of completed projects, representing assessment of the reliability and integrity of fi- about 87 percent (S16.5 billion) of IBRD/IDA nancial and operating information and the lending, appeared likely to achieve their major means used to identify, measure, classify, and objectives or prove worthwhile. Given the vari- report such information. The department also ety of negative factors surrounding the imple- reviews systems established to ensure adherence mentation of these projects in recent years, the with those governing agreements, instruments, overall outcome is satisfactory. However, the re- and related decisions, regulations, policies, view found the continuing downward trend in plans, and procedures that could have a material the major indicators of performance to be a effect on operations and reports and determines clear cause for concern and examined the main the extent of such compliance. In addition, reasons for the trend. To some degree, the de- where appropriate, each audit includes an evalu- cline in performance reflects the shifts in World ation of the means utilized to safeguard the Bank lending during the decade of the 1970s- Bank's assets from various types of losses, an particularly into new and more difficult areas of appraisal of the efficiency and economy with operations, which were known to carry a higher which resources are used, and the accomplish- risk of failure. To some degree, also, it reflected ment of established goals and objectives of spe- the difficult economic, financial, and policy en- cific programs or operations. vironment facing these projects during their im- The department has established work pro- plementation. grams designed to achieve its objectives. These 60 Bank Policies,Activities, and Finances cover a broad range of activities, including fi- among other things, the responsibility of satisfy- nancial, accounting, administrative, personnel, ing itself that the Bank's internal-auditing func- project and program lending, and supervision tion is adequate and efficient. The JAC reviews operations of IBRD loans and IDA credits under the IAD's work programs, receives periodic disbursement, as well as computerized informa- briefings on its activities, and, through a sub- tion-resource management (IRM) functions. committee, reviews selected reports of the IAD. Certain of these activities are reviewed annually, others biennially or less frequently, depending Economic Research and Studies on the materiality or risk aspect of the activity. The Bank's work in support of projects and The audits of project and program lending, programs nourishes, and, in turn, is nourished supervision operations, and computerized IRM by, a sizable program of economic and social re- systems form an important part of the depart- search. This constant interaction between the ment's work program. Lending and supervision operational and intellectual strengthens the operations are selected for audit on a sectoral or quality of knowledge, analysis, and advice the regional basis and are reviewed in the light of Bank offers in its dialogue with individual coun- policies and guidelines established by the Bank. tries and the international community. The IRM-systems audits include the review of For its economic and social research in fiscal controls, security, and the efficiency of com- 1986, the World Bank expended approximately puter facilities and information-processing sys- $24 million, of which $4.4 million was used to tems in operation and those under development. fund consultants, travel, data processing, and The department's involvement in the develop- research assistance. The remainder represented ment of new systems before they become opera- the cost of staff time. The Bank's research pro- tional provides a timely and cost-effective op- gram consists of (a) special comparative studies, portunity for an independent assessment of the which are under the aegis of the Research Policy operational and control aspects of such systems. Council (RPC); (b) research projects that have Effectiveness reviews of major electronic data- been centrally approved by the Research Proj- processing systems to determine whether they ects Approval Committee (REPAC); and (c) are functioning as intended are also carried out studies undertaken at the initiative of Bank de- by IAD. partments using their own resources. Research Progress in implementing recommendations accounts for about one fifth of the analytical arising from its review work is monitored by the work the Bank does to support its lending activi- department to ensure that recommendations are ties. The two other major types of analytical acted upon and that Bank management is kept work are policy analysis and country economic informed of their status. IAD's review work also and sector work. includes various special assignments from man- The Bank's research program continues to be agement, including requests to visit selected guided by four basic objectives: to support all countries to review the auditing standards ap- aspects of the Bank's operations, to broaden un- plied by borrowers' external auditors, to review derstanding of the development process, to im- financial reporting and internal auditing stan- prove the Bank's capacity to provide advice to dards of selected borrowers, as well as the extent member countries, and to assist in developing in- to which national auditing and accounting edu- digenous research capacity in member countries. cation and practices in countries might be up- lt also continues to evolve along the new direc- graded where needed. tions recommended by the Research Policy The director and staff of the department have Council in 1984, which has placed great empha- unrestricted access to all Bank records, docu- sis on policy-oriented research. ments, and personnel relevant to the activity un- In line with these recommendations, the re- der review in carrying out each assignment. search program has been shifted toward five Where relevant, IAD coordinates its work with broad priority areas: the costs and benefits of the Bank's external auditors to assist them in government interventions, the interplay of in- planning and coordinating their examinations of centives and institutions, the international eco- the annual financial statements of the Bank. nomic environment, the relationship of short- The IAD reports administratively to the senior term policies to long-term development, and the vice president, finance, but, in order to enhance role of economic planning and institutional de- its independence, the director also has direct ac- velopment. These research areas have emerged cess to the president and to the Joint Audit Com- as the most important ones for supporting the mittee (JAC) of the Executive Directors. The Bank's operations and for keeping the Bank at results of each audit undertaken are reported to the forefront of the economics of developing the vice presidents, department directors, and countries. others concerned, as considered appropriate. Li- Comparative studies have been undertaken aison is maintained with the JAC, which has, for a few key policy issues in these priority areas. Bank Activities 61 Each study will attempt to develop a common experience from Korea, a country that has ad- analytical framework for the study of a particu- justed successfully to the shocks of the 1970s. lar policy question in a large number of coun- In the area of international economic environ- tries. The comparative-studies program coin- ment, two topics highly relevant to developing cides with the Bank's comparative advantage in countries will be studied: the magnitude of non- research and will reinforce, and be reinforced tariff barriers to international trade and their ef- by, the Bank's policy dialogue with its member fects on the level and composition of imports in countries. Launched in February 1984 with the the industrial countries and the question of how study on "The Timing and Sequencing of a developing countries can use international trade Trade Liberalization Policy," the program now in services to enhance their development. includes studies on "Agricultural Pricing Poli- A last group of research projects is concerned cies" and "Poverty, Equity, and Growth." A with sectoral developments in agriculture, indus- fourth comparative study, "Macroeconomic try, and energy. One project deals with crop- Adjustment and Long-run Growth," is being livestock systems in sub-Saharan Africa. The prepared to deal with the central issues of the objective of another is to understand how Chi- effects of macroeconomic management during nese collectives and private enterprises are or- periods of crises on long-term growth. ganized and how they function in China's eco- The shift to the new priorities is also evident in nomic system. A third will address the issues of research starts in fiscal 1986. In the area of the efficient pricing of natural gas and of the opti- effects of government intervention, one new mal development of sources of natural gas. project will study the costs and benefits of rent The maximum duration for research projects control in a number of developing countries, funded by the REPAC is three years; most, how- with a view to formulating alternate ways of de- ever, are completed in one or two years. control, taking into consideration their eco- The REPAC regularly evaluates completed re- nomic and political implications. Another proj- search projects, as such evaluation provides the ect will examine public-enterprise deficits in basis for drawing lessons to improve the design sub-Saharan Africa, calculating the effects of and conduct of future research projects. Nine- price distortions, technical and managerial inef- teen projects were evaluated in fiscal 1986. ficiencies, and the role of noneconomic objec- During the past year, the RPC recommended tives in generating these deficits. The effect of publication of two new professional journals, government interventions in Senegalese labor The World Bank Research Observer and The markets is the subject of the research project on World Bank Economic Review, to strengthen "Employment and Earnings in Senegalese In- the dissemination of research results both within dustry." And another will explore the effects of and outside the Bank. The first issue of The government policies on the nutritional and World Bank Research Observer was published in health status of children, with a case study of January 1986 and the first issue of The World C6te d'lvoire. At the macroeconomic level, pub- Bank Economic Review is to appear early in fis- lic policy regarding value-added taxation will cal 1987. A restyled Research News, more jour- also be studied, as will the pattern of public-sec- nalistic in style and format, provides highlights tor expenditure and fiscal behavior in the most of research results and information on new re- highly indebted countries in Latin America. search starts. The Bank's wide-ranging research A second group of research starts is concerned portfolio is updated annually in Abstracts of with the issues of adjustment and related policies Current Studies. in response to external shocks. The objective is to develop an analytical framework useful to the Interagency Cooperation Bank in designing structural-adjustment pro- In the 1985 annual report on the work of the grams. One study will focus on second-best ad- United Nations, Secretary General Javier Perez justment policies, including exchange-rate and de Cuellar emphasized that "the promotion of fiscal policies, when nominal wages cannot ad- better understanding of world economic and so- just as a response to shocks. A second study fo- cial problems is an essential task of the United cuses on the questions of how labor markets Nations and other international agencies." He have adjusted to shocks and how the effective- pointed out further that "current international ness of policy measures such as trade liberaliza- efforts to come to grips with the problems of Af- tion, devaluation, and fiscal-deficit reduction is rica also show a willingness to apply the skill and influenced by the structure and performance of resources of the international community to a the labor markets. A third is concerned with the particular series of problems." financial and macroeconomic aspects of the debt At its Fortieth Session, the UN General As- problem, the analysis of which could be useful sembly called for a "Special Session on the Criti- for devising foreign-borrowing strategies. A cal Economic Crisis in Africa." The Bank con- fourth study will attempt to draw the lessons of tributed actively to the preparatory work for the 62 Bank Policies,Activities, and Finances session-convened in New York on May 27- haran Africa." The two agencies will expand through high-level consultations and the prepa- their collaboration and joint efforts to imple- ration of conference documents. Used as an in- ment and make both consultative groups and put in the course of the preparatory work and round tables more effective. A significant ele- quoted widely by delegates was the Bank's re- ment of the agreement is that, at consultative port, Financing Adjustment with Growth in group meetings, the UNDP will normally make Sub-Saharan Africa, 1986-90. a presentation on behalf of all UN agencies, In response to the deepening crisis in sub-Sa- whether or not they are in attendance. haran Africa, the Bank had put forward in 1985 Discussions between UNDP and Bank staff a joint program of action to help arrest the re- are continuing on several important issues, in- gion's declining economic situation. By bringing cluding the UNDP's preinvestment support to together, in a broad program, a number of im- World Bank activities, the future of their joint portant objectives upon which African govern- sectoral programs in such fields as energy, wa- ments and the international community could ter, and agriculture; the role of natural-resource agree, the Bank was able to strengthen interna- analysis and management in country-develop- tional cooperation in sub-Saharan Africa. The ment strategies; and in joint planning of com- Bank's Special Facility for sub-Saharan Africa, prehensive technical-cooperation programs. an integral part of this program, became effec- The Bank continued its active role in the Inter- tive on July 1, 1985. With resources of over $1.5 national Drinking Water Supply and Sanitation billion, the Facility is now providing additional Decade (IDWSSD). Through its Water Decade funding to countries undertaking major policy Program, a joint effort of the UNDP, the reforms. (For more on the Special Facility, see United Nations Children's Fund (UNICEF), page 22.) and bilateral donors, the Bank is seeking to re- In fiscal year 1986, the Bank published several duce costs of water-supply and sanitation ser- studies dealing with the African crisis. In the vices through the use of lower-cost technologies. foreword of the study, Financing Adjustment Now in its seventh year, the program has had a with Growth in Sub-Saharan Africa, 1986-90, substantial impact in making low-cost solutions Bank President A.W. Clausen reaffirmed his in- acceptable to the international donor commu- stitution's readiness to assist countries further in nity and recipient countries. Two new initiatives, financing and designing programs of growth- both with multilateral and bilateral funding, oriented adjustment and in establishing mecha- continue the emphasis on institutionalizing the nisms to enhance aid effectiveness through im- lessons learned through the program. First, the proved coordination and monitoring. The Bank is sponsoring a joint effort to develop an Bank's policy study, Poverty and Hunger: Issues international training network for water and and Options for Food Security in Developing wastes management. The network is establishing Countries, published in March 1986, concludes centers in existing developing-country institu- that food security cannot be achieved unless tions; management and technical support is pro- progress is made in alleviating the poverty of vided by a coordination unit in the Bank's Water countries and people. The study goes on to sug- Supply and Urban Development Department. gest that an effective policy package in sub- Second, to strengthen operations in the field, the Saharan Africa should focus on raising producer Bank is establishing sector-development teams prices to stimulate production and increase in- in C6te d'lvoire and Kenya to assist govern- come. (Details of the policy study can be found ments in improving sector management and in beginning on page 49.) accelerating the implementation of services Again, focusing on specific measures to re- throughout the IDWSSD. verse the current crisis, the Bank launched an On urban-development issues, the Bank is col- action program to help combat deforestation in laborating with the United Nations Centre for sub-Saharan Africa by intensifying the produc- Human Settlements (Habitat) and other multila- tion of fuelwood and protecting forest re- teral and bilateral agencies to develop long- sources. The program is a follow-up to the re- range strategies and programs. The Bank is con- port, Tropical Forests: A Callfor Action, which tinuing its involvement in planning for the was published in October 1985 by an interna- International Year of Shelter for the Homeless, tional task force set up by the World Bank, the which will take place in 1987. With funding World Resources Institute, and the United Na- from the UNDP, the Bank, Habitat, and several tions Development Programme (UNDP). bilateral agencies and host institutions, a pro- Within the framework of the joint program of gram of research and technical cooperation has action for sub-Saharan Africa, the UNDP and been launched to assist countries to develop im- the Bank recently reached an agreement on proved strategies to strengthen urban policies. "Guiding Principles for Aid Coordination be- The program will focus on several aspects of tween the World Bank and UNDP in sub-Sa- urban management, including land issues, local BankActivities 63 finance, and infrastructure investment and mittee on Coordination (ACC). Through the maintenance. Subcommittee on Nutrition (SCN), which serves Fiscal year 1986 also showed a sharp increase as the focal point for international nutrition, the in the UNDP's cofinancing activities with the Bank has promoted a joint nutrition-research Bank's Economic Development Institute (EDI) program; in particular, it has encouraged efforts for regional training programs. Assistance by to bring nutrition to the forefront of planning in the UNDP is expected to be especially important agricultural research. Bank staff participated ac- for broadening relations with many of the over- tively in meetings of the "Task Force on Long- seas training institutes with which the EDI is Term Development Objectives," which pro- associated. motes a wide exchange of information and views The past year has also been an active one for on long-term development issues. As a member the joint UNDP/World Bank energy-sector pro- of the "Task Force on Rural Development," the grams. The Energy Assessment Program, which Bank continued to emphasize lending for agri- targeted assessments for seventy countries, be- culture and for poverty-oriented rural-develop- ginning in 1980, is now entering its final phase, ment programs. The Bank also continued its in- with fifty-three reports completed and twelve ternal research on methodology for assessing the under way. The year also saw a further growth effect of projects on the poor. In this context, an of the Energy Sector Management Assistance enhanced program is currently being devised Program (ESMAP), which, by June 30, 1986, within the Bank to identify and measure more completed fifty-six assignments in thirty-one fully the role of women in development, particu- countries on a range of activities that included larly those living in rural areas. project-preparation work in power-system effi- In view of the importance that the Bank at- ciency, energy conservation, fuel energy, institu- taches to environmental issues, the Bank and the tional support for energy planning, petroleum UNDP initiated a joint effort to establish several procurement, and distribution. pesticide chemical-analysis training centers. Pat- The Bank's relations with the World Health terned after a similar World Bank/United States Organization (WHO) were further strengthened Agency for International Development program through its participation in a number of WHO serving the Caribbean region, the current effort activities. The Bank, WHO, and the UNDP are will locate regional centers in Asia and Africa to cosponsors of the Special Programme for Re- train participating-country scientists. Training search and Training in Tropical Diseases (TDR). will include techniques for determining trace Apart from its active involvement in TDR activi- amounts of pesticides on crops, in the environ- ties, the Bank is also a cosponsor and trust-fund ment, and the agricultural workforce and the manager for the Onchocerciasis-riverblind- quality of pesticide materials imported and pre- ness-Control Programme (OCP), which now pared locally. The African center will also in- covers eleven West African countries. A third clude technical-support capabilities for inte- phase of the OCP was officially launched in grated pest-management research. In February February 1986 at a signing ceremony hosted by 1986, the Bank also organized a meeting in President Clausen and attended by representa- Washington with the UN Sudano-Sahelian Of- tives of some thirty nations and international or- fice (UNSO) to consider priority areas and the ganizations. The Bank continues to play an ac- scope for expanding collaboration between the tive role in the Special Programme of Research, two organizations. The Bank continued to main- Training, and Development in Human Repro- tain close working relations with the United Na- duction (HRP) and in the Program for the Con- tions Environment Programme (UNEP). trol of Diarrheal Diseases (CDD). Relations with the World Food Programme With the objective of strengthening collabora- (WFP) are becoming increasingly active. Over tion with WHO's Africa Regional Office twenty Bank projects have significant compo- (WHO/AFRO), Bank and WHO/AFRO staff nents of WFP cofinancing. Currently, in Ghana met in Brazzaville, the Congo, to discuss collab- and Madagascar, the Bank and the WFP are re- oration on a country-specific basis in popula- fining ways to work together on adjustment- tion, health, and nutrition activities in sub-Sa- types of financing. haran Africa. Recently, the Bank cosponsored The Office of the United Nations High Com- with the United Nations Fund for Population missioner for Refugees (UNHCR) and the Bank Activities (UNFPA) a donors' meeting in Ge- have agreed, in principle, to work closely with neva to support population projects in Africa. Pakistan in preparing a second income-generat- Over the years, the Bank has continued to ex- ing project for refugees from Afghanistan. As plore opportunities for coordination within the with the first project, which is scheduled to be UN interagency system. Bank staff continue to completed in 1986, the second project will be participate actively in the work of the coordinat- funded through the UNHCR and implemented ing mechanisms of the UN Administrative Com- by the Bank. 64 Bank Policies,Activities, and Finances Through high-level consultations, interagency cialized agencies under contract to borrowers. In seminars, and exchanges of visits, the Bank con- calendar year 1985, disbursements by the Bank tinued to strengthen its traditional relationships to UN agencies for this purpose reached a record within the UN system. As in previous years, $28.6 million. Bank staff participated in a number of UN meet- The Bank continued to work closely with the ings. These included the General Assembly, the United Nations Information Center (UNIC) Economic and Social Council (ECOSOC), the in Washington and hosted the celebration in United Nations Conference on Trade and Devel- honor of the fortieth anniversary of the United opment's (UNCTAD) "Mid-Term Review of Nations. the Substantial New Program of Action for the Relations with governmental and nongovern- Least Developed Countries," the World Confer- mental groups. The Bank maintained close co- ence to Review the Achievements of the UN operation with the European Communities (EC) Decade for Women, the General Assembly Spe- through senior-level consultations on develop- cial Session on the Critical Economic Situation ment issues: Africa, aid coordination, and im- in Africa, and the Conference of the Food and plementation of the Third Lome Convention Agriculture Organization of the UN (FAO). (Lome III). Bank and EC staff engaged in useful Bank staff also attended ministerial and other policy and operational discussions on joint oper- meetings of the UN Regional Commission for ations and sector work for a number of coun- Africa (ECA), the Economic and Social Com- tries. Exchanges were particularly substantive mission for Asia and the Pacific (ESCAP), and and intense this year, as the EC worked to imple- the Economic Commission for Latin America ment agreements reached under Lome III for the and the Caribbean (ECLAC). sixty-six developing countries in Africa, the Cooperative programs (CPs) are an extension Caribbean, and the Pacific (ACP states). EC of Bank operational relationships with UN agen- staff continue to take full advantage of Bank cies. The primary objective of CPs is to collabo- economic work regularly completed for all rate with other agencies whose expertise comple- ACP states. ments that of the Bank. The CPs continue to be Relations with the Organisation for Economic reviewed and modified in light of experience and Co-operation and Development (OECD) and its the changing requirements of developing coun- Development Assistance Committee (DAC) re- tries. The Bank has ongoing CPs with the FAO, main strong. Senior Bank staff participated reg- the United Nations Educational, Scientific, and ularly in OECD and DAC meetings at both the Cultural Organization (UNESCO), and the ministerial and working-party levels. Issues con- United Nations Industrial Development Organi- sidered included the effectiveness of aid-coordi- zation (UNIDO). nation mechanisms, development cooperation The Bank maintained and, in some cases, ex- with middle-income countries, and aid to agri- panded its collaboration with a variety of orga- culture in low-income countries. The Bank wel- nizations within the interagency system. Effec- comed the comprehensive review of develop- tive working relations were maintained with the ment-cooperation experience undertaken by the regional development banks at the policy, sec- DAC on the occasion of its twenty-fifth anniver- toral, and operational levels. In collaboration sary. During fiscal 1986, Bank staff prepared with the International Labour Organisation working papers for a number of DAC seminars, (ILO), a two-day workshop was held in the Bank including one on the role of nongovernmental on cooperation in employment-creating technol- organizations in agricultural and rural develop- ogy. A UNDP-financed and ILO-coordinated ment in sub-Saharan Africa and another on expert is resident at Bank headquarters to assist technical assistance for public-sector manage- staff on this subject. ment. Regular consultations were also held be- In an effort to reduce costs to borrowers in the tween staff of the Bank and the OECD on such design of technical-assistance programs, the ongoing issues as concessional flows, trade, debt Bank arranged briefings for senior Bank staff by reporting and analyses, and global economic the executive coordinator of the UN Volunteers prospects. (UNV) program. That program aims at enabling There are many nongovernmental organiza- borrowers to consider as an alternative to "tra- tions (NGOs), which include a variety of self- ditional" suppliers of technical assistance, other help, philanthropic, and religious groups that cost-effective, unconventional sources of exper- are involved in grassroots development in tise such as those available through the UNV. By health, education, rural and urban develop- June 30, 1986, eighteen UNVs were assigned to ment, population, and social forestry. NGOs Bank-executed projects, while three were as- also help to shape public opinion on economic signed to Bank-financed projects. issues in both industrial and developing coun- Another alternative source of technical assis- tries. Some have distinctive, useful perspectives tance for some projects is work done by UN spe- on broad issues of development policy. Bank Activities 65 Bank-NGO relations continued to develop financed by the Bank, as well as by others. They through operational collaboration, particularly also collaborate with the Bank directly on the in sub-Saharan Africa. New contacts were made environmental dimension of development. in Latin America, notably in Brazil. The ex- During the past year, the Bank kept its rela- change of views with NGOs expanded and con- tions with NGOs in the industrial countries un- cerned global economic issues, poverty allevia- der review, surveyed Bank-NGO cooperation in tion, and the environment. Africa in agriculture, and cosponsored NGO The Bank-NGO Committee, the forum for seminars in the United States and Europe. One Bank relations with some major NGOs world- such seminar in Washington, D.C., brought wide, held its fifth annual meeting in Manila, the NGO leaders from the United States and Bank Philippines, in July 1985. Discussion focused on staff together to discuss the effect of adjustment the development situation, with emphasis on Af- policies on poverty in Africa, while the other, rica; food security; the environment; develop- held in Geneva, Switzerland, focused on possi- ment education; a Committee membership-rota- ble concerted efforts by the international com- tion system among NGOs; and progress in munity to assist Africa. Bank-NGO operational cooperation, including Cooperation in agricultural research. The two new tools to stimulate cooperation between Consultative Group on International Agricul- borrowing governments and NGOs: the Bank-fi- tural Research (CGIAR) is an association of nanced government-NGO project committee public and private-sector donors that funds a currently in place in Togo and the trilateral (gov- worldwide network of thirteen international ag- ernment-NGO-agency) workshops sponsored by ricultural research centers. Its cosponsors-the the Bank. UNDP, the FAO, and the World Bank-estab- The Togo committee, operational since lished the Group with the aim of coordinating March 1986, reviews financing proposals for and strengthening research that developing NGO projects and seeks to foster collaboration countries could use to help increase food pro- between the government and NGOs in practical duction. Since its establishment fifteen years ways to bring development down to the village ago, the CGIAR has grown to include donors level. If successful, the model could be repli- representing twenty-five countries and more cated in other countries. The Bank cosponsored than a dozen foundations and international or- two trilateral meetings-one on population and ganizations. In 1985, the CGIAR system pro- health in Eastern and Central African countries vided $171 million to the centers, including $28 (Mombasa, Kenya) and the other on financing million contributed by the World Bank. education in Eastern and Southern Africa (Nai- To assess the effect of center research, an in- robi, Kenya). Single-country follow-ups are en- dependent team of experts recently completed a visaged to bring about action at the national study of how the CGIAR has influenced food- level. crop production and national research capabili- These meetings exemplify the objectives of ties in developing countries. The study showed Bank-NGO operational cooperation. Self-help that the first generation of CGIAR crops- organizations and philanthropic organizations namely semidwarf wheat and rice varieties-is can contribute their experience in people-ori- now being grown on an estimated 115 million ented development to the realistic design of in- hectares, or approximately half of the wheat- vestments in the social sector. NGO members producing and rice-producing land in develop- and their friends can be most helpful-in fact, ing countries. Between 1965 and 1980, combined necessary-in mobilizing the proposed benefi- wheat and rice output in the developing world ciary population of projects in both the planning increased 74 percent, or 220 million tons a year. and execution phases of projects. NGOs them- The use of semidwarf materials during this pe- selves can act as project contractors and co- riod resulted in mean yield increases of almost financers and can develop symbiotic programs 50 percent. Furthermore, the use of new vari- of their own choosing, parallel to the large-scale eties is still expanding. Data from the Philip- projects financed by the Bank. pines, a CGIAR donor country, show that 85 A number of NGOs are strongly concerned percent of the land that farmers devote to about environmental aspects of development. In rainfed rice is planted with improved varieties- the United States, for instance, NGO testimony an increase of almost 20 percent in less than a before the United States Congress contributed to decade. the passage of legislation requiring the United For the average farmer, the adoption of mod- States to encourage attention to the environmen- ern cultivars, coupled with the application of tal quality of projects financed by multilateral other inputs such as extra fertilizer, machinery, development agencies. NGOs have given timely and labor, translates into production increases grassroots warnings about potential environ- of almost half a ton a hectare. Globally, this mental problems of certain large-scale projects adds up to about 50 million tons of incremental 66 Bank Policies,Activities, and Finances Table 3-4. Number of CGIAR-related Crop Varieties Released in Developing-country Regions through Mid 1984 Region Sub-Saharan Latin North Africa/ Crop Africa Asia America MiddleEast Total Barley - 2 - 8 10 Bean, field (Phaseolus) 4 2 90 - 96 Cassava 26 5 32 - 63 Chickpea - I - 2 3 Cowpea 14 2 12 1 29 Maize 61 49 126 2 238 Pasture species - - 12 - 12 Pearl millet 5 3 - - 8 Pigeonpea 5 2 - - 7 Potato 31 16 12 2 61 Rice 31 140 129 2 302 Sorghum 8 18 5 - 31 Sweet potato 6 - - - 6 Triticale 2 2 7 - 11 Wheat, bread 40 44 114 66 264 Wheat, durum 5 3 13 20 41 Total 238 289 552 103 1,182 NOTE: Data do not include semidwarf varieties developed by national programs from sourcessimilarto those used by the centers. SOURCE: CGIAR impact study, 1985. production annually, or enough food to feed 500 For example, the CGIAR center that works million people. Moreover, a recent study based with potatoes has identified an environmentally on data from India indicates that improved agri- neutral fungus that parasitizes nematode eggs cultural technologies have substantially bene- under field conditions and is as effective as the fited the low-income developing countries, as best chemical nematicide at a fraction of the well as the poorest people living in them. The cost. Tests in over fifty countries show that the study found that in times when food production fungus is active against a wide range of nema- is rising, the number of people in absolute pov- todes, including species that affect crops other erty greatly decreases because of declining food than the potato. prices and greater availability of food. It also es- The centers are also helping to increase agri- tablished a direct link between improvement in cultural productivity by serving as a bridge be- agricultural technology in India-principally tween national programs in developing nations those associated with improved rice cultivars- and research organizations in more industrial- and a general decline in poverty. This work con- ized countries. In Latin America, this includes firms the general conclusion of the CGIAR im- using a form of biotechnology-anther cul- pact study: that high-yielding varieties have ture-to increase the productivity of national generally benefited the poor. plant-breeding programs. CGIAR researchers Progress, however, has not been limited sim- believe that anther culture can reduce the time ply to the major cereal crops. CGIAR research required to develop improved breeding lines, currently covers more than a dozen food crops, cutting the process in some locations from as well as tropical pasture species and livestock- twelve years to four. The objective is to develop production systems. To date, more than 500 im- a pool of stable, disease-resistant materials and proved varieties (not including wheat and rice) move them through the research pipeline quickly have been released through national programs, for site-specific testing by national programs. either in their original form or as locally adapted Moreover, with training, local researchers varieties (see Table 3-4). In addition, the centers should eventually be able to use the technique have developed a series of improved production themselves, bypassing international centers practices to help farmers take advantage of the altogether. new varieties, maintain environmental stability, The centers also help national programs ac- and cut costs. quire advanced research capabilities so that they Bank Activities 67 ;~~~~~~~~~~~~~~~~~ More than 25,000 agricukural scientists and technicians have been trained at CGIAR centers. In this photo, discus- sion centers around wheat at the International Maize and Wheat Improvement Center (CIMMYT) in Mexico. themselves provide the scientific base needed to in calendar year 1985. Bank lending for techni- sustain long-term agricultural development. To cal assistance rose by 30 percent between 1984 that end, the centers have trained more than and 1985. 25,000 agricultural scientists and technicians in a The largest elements of Bank-financed techni- variety of disciplines. A recent survey showed cal assistance continued to be that financed as that CGIAR training leads to increased knowl- components of loans or credits extended for edge, skills, motivation, and a greater sense of other purposes. During the year, these compo- purpose. Furthermore, continuing contact with nents totaled $1,345.2 million in 229 operations, a sponsoring center helps to offset the profes- compared with $960.8 million in 179 operations sional isolation that many trainees experience during 1984. Sectors showing the greatest per- when they return home. This contact is likely to centage increase in amounts financed in 1985 include collaborative research conducted under were agriculture/rural development and educa- the auspices of one of the centers' outreach proj- tion, while energy and transportation declined. ects, contractual research supported through the Technical-assistance lending increased in the re- centers' core budgets, participation in germ- gions of Western Africa; East Asia and Pacific; plasm-testing programs, or simple access to the Europe, Middle East, and North Africa; and centers' publications and specialized crop data Latin America and the Caribbean. Lending vol- bases. Whatever the form, contact between cen- umes decreased in Eastern and Southern Africa ter scientists and their colleagues in national pro- and in South Asia. grams is a crucial part of the CGIAR's strategy A total of ten free-standing, technical-assis- for strengthening national programs and ulti- tance loans and credits were approved in 1985 for mately providing a higher level of food security $69.7 million. The comparable 1984 figures were in developing countries. thirteen loans and credits for a total of $123.4 Details of the CGIAR's activities in calendar million. The 1985 free-standing, technical-assis- year 1985 are contained in the CGIAR Annual tance operations were approved for the Central Report. African Republic ($8 million), Chile ($11 mil- lion), Costa Rica ($3.5 million), Ecuador ($8 Technical Assistance million), Guinea ($9.5 million), Jamaica ($9 mil- Technical assistance, long an integral part of lion), Nigeria ($5 million), Rwanda ($4.8 mil- Bank operations, grew in both volume and scope lion), Togo ($6.2 million), and Yemen Arab Re- 68 Bank Policies,Acfivities, and Finances public ($4.7 million). Three were in support of The Bank continued to serve as executing structural-adjustment lending; the other seven agency for projects financed by the UNDP. Dur- were primarily to address other institutional and ing 1985, forty new Bank-executed UNDP proj- policy issues. ects were approved, with a total allocation of Since 1975, the Bank has had a Project Prepa- $15.5 million. At the end of 1985, the number of ration Facility (PPF), created to help overcome projects in progress stood at 117, for a total allo- weaknesses in borrowers' capacity to complete cation of $170.6 million. project preparation and to support the entities Among the new UNDP-financed projects for responsible for preparing or carrying out proj- which the Bank has been designated executing ects. Under the Facility, the Bank advances agency are preparatory assistance for establish- funds to meet gaps in project preparation and to ing an African Project Development Facility; help begin project implementation before the UNDP/EDI programs for strengthening re- loan or credit becomes effective. During the gional training in Africa and in the Arab states; year, forty-five advances from the PPF an organization and management study of the amounted to $26.8 million, compared with Lagos State Water Corporation; engineering, forty-eight advances for $28.6 million in 1984. feasibility, and sector studies in Bangladesh; During 1985, the Special Project Preparation technical and institutional support to an agri- Facility (SPPF) was established to help IDA-eli- cultural credit in Burma; technical support for gible member countries in sub-Saharan Africa processing of the Kalabagh dam project in finance preparation activities (including prepa- Pakistan; preparatory activities for a technical- ration of project proposals for financing by cooperation loan to Argentina; and preparatory other donors) that could not be financed from assistance for a global project to strengthen other resources. Advances under this facility are training and research for increased food produc- made on a grant basis. Reimbursement is re- tion. Others include country projects related to quired only when a Bank-financed project the ongoing water decade and energy-sector results within five years from the date the SPPF management programs. advance is approved. In 1985, thirteen advances were approved for a total of $3.1 million. Bank Finances 69 Bank Finances In fiscal 1986, the International Bank for Re- chasing zero-coupon United States Treasury ob- construction and Development (IBRD) initiated ligations maturing on the same date as the Euro- a series of financial measures in the management dollar issue. The structure enabled the Bank to of its assets and liabilities. Net income of $1,243 extend the maturity structure of its United million was achieved largely as a result of sub- States-dollar debt at a significant saving as com- stantial capital gains realized on its liquid-assets pared with the available alternatives. portfolio and of low borrowing costs. Market * A "tap issue" was used in the European support for its multicurrency borrowing pro- Currency Units (ECU) market. A tap issue is gram augured well for future growth of the characterized by an announcement at the time of IBRD's lending program. the initial offering that one or more additional The IBRD responded to a credit money-mar- tranches may be offered on terms identical, ex- ket rally, particularly in United States dollars, cept for the issue price, to those of the initial by adjusting its liquid-assets portfolio position tranche. to realize $367 million in capital gains. However, * The IBRD initiated its first transferable yen such large capital gains are unlikely to recur in loan in Japan and its first private placement in future years since they would require further eight years with Japanese financial institutions major declines in interest rates. On the liability in the yen domestic market. side, the IBRD focused on diversifying its * Banking relationships were expanded by us- sources of borrowing and lengthening the matu- ing new lender groups in Japan and use of an in- rity of its debt in response to heightened investor ternational syndicate of cooperative banks in demand for long-term fixed-rate instruments, connection with broadening the IBRD's multi- utilizing opportunities afforded by the continu- currency borrowings. ing deregulation of world capital markets. * The IBRD further diversified its liability Innovations in the borrowing program further portfolio through its first Australian-dollar bor- diversified the IBRD's sources of funding, low- rowing, a targeted issue in the Euro-Australian ered its borrowing costs, and lengthened the ma- market. In addition, the IBRD tapped the turity structure of its liabilities. These are sum- French-franc domestic market for the first time marized below: and re-entered the Euro-French franc market af- * The IBRD executed its first zero-coupon is- ter an absence of almost fourteen years. sues in Deutsche mark and Swiss francs, each * A swap-insurance program was developed for thirty-year maturities, at substantial cost and implemented. It substantially broadens the savings as compared with conventional issues. IBRD's range of eligible prospective swap coun- * The maturities of traditional IBRD fixed- terparties while creating a credit structure supe- rate issues were lengthened to twenty years in rior to that of a typical AAA-rated credit. Previ- Dutch guilders and Japanese yen, to thirty years ously, swap counterparties had to be AAA-rated in Deutsche mark, and to forty years in the do- or the equivalent thereof. The program permits mestic United States-dollar market. The IBRD the IBRD to swap with AA-rated or A-rated cor- also developed further the long-end of the Swiss- porations if they are approved by the AAA- franc market with its thirty-year bullet fixed-rate rated Aetna Casualty Insurance Company borrowing, followed by a Swiss-franc perpetual (Aetna). For a premium, Aetna insures the issue (no maturity date), and of the Eurodollar IBRD against the possibility of loss if the ap- market, with the first-ever thirty-year Eurodol- proved swap counterparty defaults on its obliga- lar bullet issue. tion to the IBRD. For the IBRD to be at risk, * The IBRD took advantage of anomalies in both the AA-rated or A-rated counterparty and the yield curve to "synthesize" a conventional Aetna would have to default at the same time. thirty-year bond issue by executing a fifteen-year The program is cost effective because the insur- Eurodollar issue, a series of zero-coupon bonds ance cost relates to the magnitude of financial maturing in years sixteen to thirty, and smooth- exposure in a swap at a given time; it also en- ing the resulting debt-service cash flows by pur- ables the IBRD to separate the evaluation and 70 Bank Policies, Activities,and Finances pricing of the credit from other financial aspects Table 3-5. IBRD Average Costs, of the swap transaction. Profitability, and Returns * A $500 million program of continuously of- (percentages,based on averagebalancesduring fiscal year) fered longer-term securities (COLTS) was Fiscalyear launched in the United States-dollar medium- term note market, sold through agents and tai- 1986 1985 lored to fit buyers' maturity and cash-flow re- Fiscal year costs quirements, of from three to over thirty years. Average cost of: * The IBRD instituted in September 1985 an Fiscal year borrowings 6.91 7.98 eighteen to twenty-four month $300 million Total borrowingsoutstanding 8.25 8.67 loan-sales pilot program to determine whether Total funds available (debt the IBRD should reactivate its sales of participa- and equitya 7.15 7.44 tions in IBRD loans made to, or guaranteed by, member countries. The pilot program's purpose Fiscal year returns is to evaluate the feasibility of a substantial pro- Total returns on average gram for introducing banks and other institu- disbursed and outstanding loansb 8.96 9.04 tional investors to investments in loans to se- Realized return on average lected member countries, increasing the flow of investmentsc 10.67 12.63 funds to developing-member countries, and pro- Return on average earning assets 9.44 10.10 viding an alternative source of funding for the Profitability measures IBRD. Until the old program was halted in 1980 Spreads (differencebetween) because of sharply rising interest rates, the Loans: IBRD had sold $3 billion of loan participations Total return on average over a twenty-five year period. Under the pilot disbursed and outstanding program, the IBRD retains a portion of each of loans and average cost of the maturities of the loans in which participa- total borrowings outstanding 0.71 0.37 tions are sold, thus keeping a direct financial in- Total return on average terest in the loans until final maturity. All the disbursed and outstanding transactions involve fixed-rate, currency-spe- loans and averagecost of cific loans extended by the IBRD before June total funds available 1.81 1.60 1980. The IBRD remains as lender of record for Liquidity: the entire loan and remits to participants pay- Realizedreturn on average ments of principal and interest it receives on investmentsand averagecost their behalf. The maturities on the participations of total borrowings range from six months to twelve years. By the outstanding 2.42 3.96 end of June 1986, sales of loan participations Realizedreturnonaverage had reached the pilot program's $300 million investmentsuand averagecost target. Fifty-eight sales were made to forty-three of total funds available 3.52 5.19 participants in sixteen countries in Europe, the Earning assets: Far East, and North America. They involved Return on average earning loans, denominated in United States dollars, assets and averagecost of Swiss francs, Japanese yen, Deutsche mark, and total funds available 2.29 2.66 Dutch guilders, to twenty IBRD borrowers that have been included in the pilot program. Net income Return on average equitya 13.47 14.90 Income, Expenditures, and Reserves Return on average liquid assets The IBRD's gross revenues reached a total of and loans 1.78 2.09 $6,815 million in fiscal 1986, up $1,286 million, or 23 percent, from last year. Gross revenues Leverage and returns on capital have risen steadily during the last decade as loan Ratio of outstanding loans to 4.51 4.0:1 and investment balances have continued to ex- Ratio of outstanding debt to pand. RaUtioof otstndin det t The outstanding loan portfolio, after ex- equityd 5.2:1 4.9:1 change translation adjustments on nondollar as- a. Equity defined as usable paid-in capital, reserves, and sets, totaled $61,064 million equivalent in forty- accumulated net income. five currencies at the end of fiscal 1986. The b. Interest on loans, commitment charges, and front-end fees as a percentage of average disbursed and outstanding average interest rate on disbursed and outstand- loans. ing loans during the year was 8.5 percent, pro- c. Includes realizedcapital gains (losses). ducing interest income of $4,417 million. In ad- d. Equity defined as total paid-in capital, reserves, and dition, commitment charges of 0.75 percent on accumulated net income. Bank Finances 71 undisbursed loan balances and other fees pro- turn on average investments and the average cost duced $252 million. Altogether, the income on of total fiscal 1986 borrowings was 3.76 percent. loans was $4,669 million, for a total return on The IBRD's security-loan program continued average disbursed and outstanding loans of to grow during the past fiscal year. This pro- 9 percent. (See Table 3-5.) gram produced $34 million in additional income Since July 1982, IBRD loans have been made in fiscal 1986 and a total of $101 million since its at variable rates. The lending rate on all loans inception in January 1982. Legal agreements made under the variable-rate system is adjusted covering these transactions with a select group semiannually, on January 1 and July 1, by add- of primary dealers further assure the safety of ing a spread of 0.50 percent to the IBRD's these security loans. weighted average cost during the prior six An additional $23 million of revenues was de- months of a "pool" of borrowings representing rived from other income, including $11 million outstanding borrowings drawn down after June of net gains from the sale of loans. 30, 1982. The variable lending rate has declined The IBRD's expenditures, which include in- steadily from 11.43 percent when it was intro- terest and issuance costs on borrowings, admin- duced in July 1982. On January 1, 1986, the istrative expenses, a provision for loan losses, lending rate was reduced from 8.82 percent to and contributions to special programs, totaled 8.50 percent. On July 1, 1986, the lending rate $5,571 million, up 26.9 percent from the pre- was reset at 8.23 percent. Before July 1982, loans vious year. Costs associated with the IBRD's were made at fixed rates, and, accordingly, the borrowings-interest of $5,018 million and semiannual interest-rate adjustments do not ap- bond-issuance charges and other financial ex- ply to payments made on these older loans. penses of $89 million-were by far the IBRD's At June 30, 1986, liquid assets aggregated major expenditures. Administrative costs to- $20,061 million net of commitments for settle- taled $427 million, up $33 million, after deduct- ments and cash collateral received on loaned se- ing $281 million for the management fee charged curities, an increase of $2,701 million over June to IDA and $3.1 million for the service-and-sup- 30, 1985. The IBRD seeks to maintain cash and port fee charged to the International Finance liquid investments in a range of 40 percent to 45 Corporation. percent of its projected net cash requirements Net income for fiscal 1986 was $1,243 million, for the next three years; if liquidity falls beyond up $106 million from the previous record high of this range, as on June 30, 1986, when it reached $1,137 million the year before. This sustained 56 percent, the IBRD adjusts its future borrow- high net income, as noted earlier, was largely a ing program. The IBRD's liquidity is designed to result of high returns on the IBRD's liquidity assure flexibility in its borrowing decisions and and low borrowing costs. to permit it to meet adequately its cash require- The IBRD's principal financial statements are ments in case borrowings are temporarily af- expressed in United States dollars. In general, fected by adverse conditions in the capital mar- translation adjustments at market rates of ex- kets. change affect the IBRD's stated income and ex- The IBRD invests its liquid assets and actively penses, as well as its assets and liabilities, includ- manages these investments through the year. In ing charges or credits to the General Reserve. In fiscal 1986, these investments yielded a realized periods when there has been substantial appreci- rate of return on average investments of 10.67 ation of nondollar currencies against the United percent and generated $2,121 million of invest- States dollar (as in fiscal 1986) or a substantial ment income. The "financial return," which depreciation, the translation adjustments should measures the return on the United States-dollar be taken into account in comparing one year's portion of the portfolio, including unrealized fiscal results with those of the previous year. gains and losses, was 10.05 percent for fiscal During fiscal 1986, the IBRD's General Re- 1986. serve was increased by $1,190 million, after The IBRD's investment portfolio continued translation adjustments, bringing the total to to provide positive spreads on the IBRD's li- $4,918 million. Of the $1,137 million in net in- quidity at rates higher than both the average cost come earned in fiscal 1985, the Board of Gover- of total outstanding borrowings and borrowing nors allocated $150 million as a grant to IDA costs during the fiscal year. Thus, the spread be- and $150 million as a contribution to the Special tween the IBRD's realized return on average in- Facility for sub-Saharan Africa; the remaining vestments and the average cost of its total out- $837 million was allocated to the General Re- standing borrowings during fiscal 1986 was 2.42 serve. percent; the spread between the realized return The IBRD does not trade in any currencies for on average investment and the average cost of its own account. Adjustments arising from total funds available (debt plus equity) was 3.52 translation of currencies to United States-dollar percent; and the spread between the realized re- equivalents do not result in realized gains or 72 Bank Policies,Activities, and Finances losses as would occur with actual conversions Figure3-1. IBRDTotalBorrowings, into United States dollars. Because of this, the FiscalYears1977-86 General Reserve, rather than net income, in- (US$ f scQyears) millions; creases or decreases annually by the amount of adjustment resulting from currency deprecia- tions or appreciations. In fiscal 1986, the trans- lation of currencies into United States-dollar equivalents resulted in a $474 million increase of annua annuage 1983 1984 1985 1986 the General Reserve, compared with a $250 mil- aver17e 1983 1934 lion reduction in fiscal 1985. 12,000 _- ---- When gold was formally abolished in 1978 as a common denominator of the monetary system, the IBRD began expressing its capital, for pur- poses of its financial statements, on the basis of the special drawing right (SDR). As a result, the i portion paid in United States dollars and the na- 0o tional-currency portion of the capital subscrip- o tion released by certain member countries for 10,000 * lending in United States dollars are revalued at the rate of exchange of the United States dollar to the SDR. The adjustment resulting from this ol s>revaluation is also deducted from, or added to, the General Reserve. In fiscal 1986, these adjust- ments resulted in a decrease to the General Re- serve of $121 million, compared with an increase of $28 million in fiscal 1985. 8,000 Loans: IBRD As of June 30, 1986, the IBRD held $104,942 million of loans. This amount included $11,357 million of loans that had been approved but had not yet become effective and loans to the Inter- national Finance Corporation of $1,422 million. Disbursed and outstanding loans, including 6,000 $838 million to the IFC, totaled $61,064 million, an increase of $19,682 million since June 30, 1985. Of this increase, $4,226 million was due to net disbursements, while $15,456 million re- sulted from translation adjustments. Disbursements on loans to countries totaled $8,263 million in fiscal 1986, compared with $8,645 million in fiscal 1985. Since the IBRD be- gan operations, it has disbursed $76,693million to its borrowing member countries. Repayments of principal on the IBRD's loans, based on the exchange rates at the time of dis- bursement, amounted to $3,824 million in fiscal 1986. This included $14 million to purchasers of participations in IBRD loans. Cumulative loan 2,000 repayments as of June 30, 1986, were $26,180 million: $23,202 million to the IBRD and $2,978 million to purchasers of loan participations. Borrowings: IBRD Borrowings in international capital markets provide the major portion of the funds for the 0 IBRD's lending operations and are supple- rmented by the other principal financial resources of the IBRD, which are its usable paid-in capi- tal, accumulated earnings, and loan repayments. Bank Finances 73 Table 3-6. IBRD Borrowings, Fiscal Year 1986 (millions) Currency US-dollar Type Issue of issue equivalentsa Medium- and long-term public offerings Belgium 10.25°o ten-year bonds, due 1995 BF 5,000.0 86.9 Canada 11°o twenty-four year bonds, due 2009 Can$ 100.0 73.8 10.75°o twenty-four year bonds, due 2009 Can$ 100.0 73.2 France 10.90°o twelve-year bonds, due 1997 F 1,000.0 107.1 Germany, Federal Republic of 7% ten-year bonds, due 1995 DM 600.0 196.0 6.50°o ten-year bonds, due 1995 DM 600.0 204.2 Zero-coupon bonds, due 2015 DM 130.0 51.0O Zero-coupon bonds, due 2015 DM 166.0 69.5b 5.75°o ten-year bonds, due 1996 DM 300.0 133.5 6.25% thirty-year bonds, due 2016 DM 300.0 133.5 Japan 6.60°o ten-year bonds, due 1995 X 50,000.0 200.9 6.40°o ten-year bonds, due 1995 Y 100,000.0 422.2 6°o fifteen-year bonds, due 2001 Y 30,000.0 174.6 Luxembourg 8°o ten-year bonds, due 1996 Lux F 1,000.0 21.6 Netherlands 7.50''7 bonds, due 1991/97 f. 400.0 123.8 6.50°o bonds, due 1993 f. 500.0 174.4 6.75°70bonds, due 2006 f. 200.0 76.2 Switzerland 5.625°0oten-year bonds, due 1995 (Tranche 1) SwF 100.0 42.4 6°o twenty-year bonds, due 2005 (Tranche 11) SwF 200.0 84.7 Zero-coupon bonds, due 2015 SwF 112.0 46.7b 5.50% thirty-year bonds, due 2016 SwF 250.0 119.7 Undated 5.50°0% bonds SwF 250.0 128.9 United Kingdom 9.50°o loan stock of 1985, due 2010 £ 100.0 130.5 United States Zero-coupon bonds, due 2002-2016 S 40.3 40.3b 8.875% forty-year bonds, due 2026 $ 200.0 200.0 Eurobond market 10.125°70ten-year notes, due 1995 $ 300.0 300.0 10.62507o fifteen-year notes, due 2000 $ 200.0 200.0 10'70fifteen-year notes, due 2001 $ 156.1 156.1 9.75% thirty-year bonds, due 2016 $ 300.0 300.0 9.75% thirty-year bonds, due 2016 $ 200.0 200.0 9.25%7o thirty-year bonds, due 2016 $ 300.0 300.0 8.50% thirty-year bonds, due 2016 $ 150.0 150.0 6.5007oten-year bonds, due 1996 Y 25,000.0 127.6 6.5%o five-year notes, due 1990 f. 100.0 31.0 9.50%o ten-year notes, due 1995 NKr 250.0 29.5 8.50%7o ten-year bonds, due 1995 ECU 250.0 191.4 Tokyo-dollar market 10.50% ten-year notes, due 1995 $ 300.0 300.0 Total medium- and long-term public offerings 5,401.2 Medium- and long-term placements with central banks and governments Germany, Federal Republic of 6.35%70 note, due 1990 DM 151.8 51.8 6.10°o note, due 1991 DM 250.0 101.8 Japan 6.12% yen obligations, due 1992 y 15,000.0 69.3 5.29°o yen obligations, due 1992 Y 15,000.0 85.4 Other 8.875% notes, due 1990 ECU 60.0 50.4 4.75%70 notes, due 1988 SwF 50.0 24.6 6.375%o bonds, due 1991 f. 200.0 77.8 5.875°o bonds, due 1993 DM 300.0 131.9 International, 9.23%otwo-year bonds, due 1987 $ 300.0 300.0 8.31°o two-year bonds, due 1988 $ 271.1 271.1 5.25% two-year notes, due 1987 SwF 82.0 35.0 5.3125% two-year notes, due 1987 SwF 300.0 128.2 4.375°7otwo-year notes, due 1988 SwF 300.0 158.9 4.75%0 two-year notes, due 1988 SwF 119.0 63.4 Total medium- and long-term placements with central banks and governments 1,549.6 74 Bank Policies, Activities, and Finances Table 3-6 (continued) (millions) Currency US-dollar Type Issue of issue equivalentsa .Medium- and long-term other placemnents Austria 7.5% notes, due 1992 AS 500.0 25.6 7.25%7o notes, due 1992 AS 500.0 26.5 Belgium 10.5°70loan, due 1992 BF 1,500.0 26.6 Germany, Federal Republic of 7% notes, due 1990 DM 200.0 65.8 7.0507o loan, due 1992 DM 60.0 19.8 6.50% loan, due 1990 DM 100.0 34.7 6.3750%o notes, due 1992 DM 200.0 71.9 6.875% loan, due 1995 DM 100.0 36.3 6.75%7o notes, due 1992 DM 350.0 130.5 6.375°o notes, due 1992 DM 200.0 81.1 6% notes, due 1991 DM 250.0 105.7 5.75% notes, due 1993 DM 250.0 112.3 Italy 12.50%obonds, due 1990 Lit 50,000.0 27.7 Japan 7.30% loan, due 2000 Y 45,000.0 189.9 7.3007% loan, due 2000 ?t 30,000.0 126.6 7°o loan, due 2005 yg 30,000.0 145.8 7% loan, due 2005 Y 20,000.0 98.1 6.50%o bonds, due 2006 X 30,000.0 165.7 Luxembourg 9% bonds, due 1990 Lux F 300.0 5.5 Netherlands 8.125%7o loan, due 1993/2000 f. 100.0 29.3 7.75% loan, due 1990 f. 50.0 14.6 7.25% notes, due 1991/2000 f. 200.0 64.1 7.40%'oloan, due 1988/95 f. 75.0 24.8 7.375%/o loan, due 1992/96 f. 100.0 34.0 Switzerland 5.50%7o notes, due 1990 (Tranche 1) SwF 200.0 77.1 5.625%70 notes, due 1991 (Tranche 11) SwF 200.0 77.t 5.75°o notes, due 1992 (Tranche 111) SwF 250.0 96.4 5.50% notes, due 1990 SwF 150.0 57.9 6.16% loan, due 1995 SwF 100.0 42.7 5.75% loan, due 1990 SwF 400.0 173.1 5.875°.70loan, due 1991 SwF 50.0 22.0 6.0625%¢o loan, due 1995 SwF 100.0 44.1 5.125% notes, due 1990 SwF 250.0 113.2 5.25% notes, due 1991 SwF 250.0 113.2 5.375%o notes, due 1992 SwF 250.0 113.2 5.25% loan, due 1993 SwF 200.0 108.9 United States Continuously offered longer-term securities program (COLTS) S 32.6 32.6 International 140%0 notes, due 1991 $A 75.0 51.1 10%o notes, due 1992 DKr 225.0 22.3 9.75°o bonds, due 1992 DKr 300.0 30.9 9.75%lo bonds, due 1996 F 200.0 27.6 6.75% bonds, due 1992 v 5,000.0 21.1 6.30%Co bonds, due 1993 Y 5,000.0 26.9 6.50%o notes, due 1990 f. 100.0 31.9 6.25% notes, due 1991 f. 100.0 37.5 8.625%o bonds, due 1993 ECU 125.0 100.0 6.875% bonds, due 2001 ECU 60.0 57.8 Total medium- and long-term other placements 3,141.5 Short-termn borroWingsd Discount-note program $ 291.9 291.9e Central Bank Facility $ 224.3 224.3' Total borrowings, fiscal year 1986 10,608.5 a. Basedon officialrates at the time of Board approval. b. Net proceeds. c. Theseissueswere placed with central banks, governmentagencies,and internationalorganizations. d. Niaturingwithin one year. e. Increase in amounts outstanding at June 30, 1986.overamounts outstanding at June 30. 1985,at face amounts. Bank Finances 75 Table 3-7. IBRD Fiscal Year 1986 Borrowings, by Currency (amounts in US dollar millionsequivalent) Before After Maturity Cost after swaps Percent Swapsa swaps Percent (years) swaps(percent) Medium- and long-term fixed-rate borrowings US dollars 2,750.1 26 1-,380.2 1,369.9 13 27.9 8.39 Swiss francs 1,871.4 18 1,224.4 3,095.8 29 13.2 5.80 Deutsche mark 1,731.3 16 349.0 2,080.3 20 11.0 6.68 Japanese yen 1,854.1 17 92.1 1,946.2 18 12.9 6.75 Dutch guilders 719.4 7 260.6 980.0 9 8.9 7.50 European currency units 399.6 4 -162.4 237.2 2 7.4 7.82 Pounds sterling 130.5 1 0.0 130.5 1 25.2 11.05 Canadian dollars 147.0 1 -87.1 59.9 1 39.1 10.44 French francs 134.7 1 -141.1 -6.4 .. 0.0 0.00 Italian lire 27.7 .. 00 27.7 5.0 k 13.44 Danish kroner 53.2 1 -53.6 -0.4 .. 0.0 0.00 Belgian francs 113.5 1 -104.5 9.0 .. 7.0 10.44 Austrian schilling 52.1 .. -52.7 -0.6 . 0.0 0.00 Norwegiankroner 29.5 .. 0.0 29.5 .. 8.0 9.67 Luxembourgfrancs 27.1 .. 0.0 27.1 .. 9.0 8.36 Australian dollars 51.1 .. -53.0 -1.9 .. 0.0 0.00 Subtotal 10,092.3 95 9,983.8 94 14.4 6.88 Medium- and long-term variable rate swaps" US dollars - - 108.5 108.5 1 5.0 7.45 Short-term borrowings US dollars Central Bank Facility 224.3 2 - 224.3 2 1.0 7.78 US dollars discount notes 291.9 3 - 291.9 3 0.1 7.50 Subtotal 516.2 5 516.2 5 7.62 Total 10,608.5 100 10,608.5 100 13.7 6.93 Note: Details may not add to totals because of rounding. Also, minus amounts after swas may representa swap out of the entire amount of a borrowingand/or a change in exchangerates between the date of the borrowing anddthe date of the swap transaction. . . represents lessthan I percent. a. Swapstransactions totaled $2,034.6million. b. Representsinterest-rate swaps from fixed rate to variablerate. Total borrowings by the IBRD in fiscal 1986, Direct short-term, medium-term, and long- consisting of new medium-term and long-term term borrowings in United States dollars con- borrowings plus incremental short-term dis- tributed the largest share (31 percent) of the total count note and Central Bank Facility borrow- borrowing program for fiscal 1986. Direct bor- ings outstanding on June 30, 1986, amounted to rowings of Swiss francs (18 percent), Japanese the equivalent of $10,609 million, $477 million, yen (17 percent), Deutsche mark (16 percent), or 4.5 percent, below the S11,086 million of bor- and Dutch guilders (7 percent), contributed 58 rowings in fiscal 1985. The fiscal 1986 total does percent of the program, and other currencies ac- not include refinancings of short-term borrow- counted for 11 percent. After taking into ac- ings that were outstanding at the end of fiscal count currency-hedged swap transactions- 1985-some $2,186 million in discount notes commonly referred to as currency swaps-which and S 1,250 million in the Central Bank Facility. changed the "effective" liability structure of the Those refinancings brought the IBRD's "gross program, the "effective" borrowed currencies borrowings" for fiscal 1986 to $14,045 million, in fiscal 1986 were Swiss francs (29 percent), some $210 million over fiscal year 1985 totals. Deutsche mark (20 percent), the United States (See Table 3-6.) dollar (19 percent), Japanese yen (18 percent), 76 Bank Policies,Activities, and Finances Dutch guilders (9 percent), and other currencies ings, loans and private placements by invest- (5 percent). ment-banking firms, merchant banks, commer- During the fiscal year, the IBRD's Swiss-franc cial banks, and savings institutions). Of the operations reached a record level of $3,096 mil- ninety-eight medium-term and long-term bor- lion equivalent, consisting of $1,871 million in rowing operations that the IBRD conducted dur- borrowings and $1,225 million in swap transac- ing fiscal 1986, eighty-four were in the private tions. sector throughout the world and accounted for $8,543 million, or 80 percent, of the total Swap Transactions amount of funds borrowed. The other fourteen Fifty-one currency-swap transactions were ex- medium-term and long-term issues, totaling ecuted in fiscal 1986 and aggregated $1,927 mil- $1,550 million, or 15percent of the funds raised, lion, including $410 million as an advance on the were placed with official sources. fiscal 1987 swaps program. The total includes Short-term borrowings outstanding on June $1,225 million swapped into Swiss francs, $349 30, 1986, net of unamortized discounts, totaled million into Deutsche mark, $261 million into $3,948 million: $2,474 million in market bor- Dutch guilders, and $92 million into Japanese rowings of discount notes (an increase of $287 yen. All the currency swaps were for medium- million over the amount outstanding at the end term to long-term maturities, with an average of fiscal 1985) and $1,474 million in official bor- maturity of 10.4 years, compared with 6.4 years rowings through the Central Bank Facility (an in fiscal 1985. In addition, there were two increase of $224 million over the amount out- United States-dollar medium-term and long- standing at the end of fiscal 1985). These in- term swaps, totaling $109 million, out of fixed- creases accounted for 5 percent of the fiscal rate and into variable-rate borrowings. These year's total borrowing program. transactions transformed borrowings in various The IBRD's securities have been placed with high nominal-cost currencies to funding in lower investors in more than 100 countries throughout nominal-cost currencies, resulting in a reduction the world. This diversity allows the IBRD flexi- in the average nominal cost of medium-term and bility in selecting the markets that will allow op- long-term borrowings in the fiscal 1986 borrow- timum borrowing conditions; the same diversity ing program of seventy-seven basis points. In the lessens its dependence on any specific market. five fiscal years, 1982 through 1986, the IBRD The $10,609million of total IBRD borrowings has engaged in swap transactions aggregating in fiscal 1986, including $516 million of incre- $7,074 million. mental short-term obligations outstanding on Currency swaps have been employed to lower June 30, 1986, consisted of the currencies listed the costs of funds available for the IBRD's lend- in the table on page 75. Of these borrowings, ing operations in three ways. First, they have en- $1,811 million represented refinancing of out- abled the IBRD to increase its access to nominal standing medium-term and long-term borrow- low-cost currencies beyond that which would ings. In addition, there was $3,436 million of have been cost effective through direct borrow- short-term borrowings outstanding at June 30, ing operations. Second, they have allowed the 1986, that had been outstanding at the end of fis- IBRD to obtain currencies at costs lower than cal 1985 and refinanced during fiscal 1986. the lowest cost alternative available through di- A total of $4,768 million equivalent of debt, rect market borrowings. Third, swaps have en- not including short-term notes, matured during abled the IBRD to broaden the base of its direct the year. Additional debt, not including short- borrowing operations by permitting it to tap a term notes, aggregating $83 million, was retired wider range of capital markets and currencies by means of sinking-fund and purchase-fund than it would otherwise have done on cost con- operations. siderations alone. For example, the availability The principal amount of the IBRD's out- of currency-swap opportunities was an impor- standing obligations increased $19,593 million tant consideration in the decision to borrow in to $69,897 million as of June 30, 1986. These ob- the European Currency Unit market and in the ligations were denominated in twenty different markets for Australian dollars, Austrian schil- currencies and currency units. A summary clas- ling, Belgian francs, Canadian dollars, Danish sification of outstanding borrowings, by cur- kroner, French francs, and Italian lire. rency at June 30, 1986, is set forth in Appendix E of the IBRD Financial Statements. Sources of Funds The IBRD sells its securities through direct Cost of Borrowings placement with official sources (governments, The cost, after currency swaps and interest- government institutions, and central banks) and rate swaps, of total borrowings by the IBRD in in the private sector (markets where securities the fiscal year, weighted by amount, was 6.93 are offered to investors through public offer- percent. This compares with 7.98 percent for fis- Bank Finances 77 Table 3-8. Average Cost of the IBRD's Table 3-9. Capital Subscriptions, Total Borrowings Outstanding, Fiscal Year 1986 Fiscal Years 1981-86 Type and Amount Average country (SDR millions) D :0 principal :Xt;II0:if General capital increase outstanding Cost Year (USSmillions) (percentage) Argentina 264.0 Bangladesh 141.3 1981 28,810 7.41 Burma 80.3 1982 30,201 8.15 Chile 112.0 1983 35,228 8.90 Colombia 135.0 1984 42,116 8.75 Congo, People's Republicof the 36.7 1985 46,066 8.67 Ecuador 59.4 1986 61,815 8.25 Fiji E 2.8 Finland 66.7 Iran 528.4 Malta 40.3 New Zealand 29.5 cal 1985 and was the IBRD's lowest cost of new Norway 225.6 borrowings in the last seven years. The equiva- Oman 43.O lent figure for the $14,045 million of gross bor- Pakistan 260.8 rowings (including the refinancing of $3,436 mil- Portugal 107.6 lion of short-term debt) was 7.09 percent. The Saudi Arabia 540.1 average cost of total funds to the IBRD (debt South Africa 124.1 plus equity, that is, paid-in capital, reserves, and Tonga 26.3 retained earnings), was 7.15 percent, compared United Arab Emirates 128.2 with 7.44 percent for the prior year. The average United Kingdom 304.2 cost, after swaps, of total borrowings in fiscal United States 1,492.1 1986 breaks down as follows: fixed-rate, me- Uruguay 73.5 dium-term, and long-term borrowings of WesternSamoa 1.5 $10,092 million cost 6.88 percent; incremental Total 4,864.7 short-term borrowings of $516 million cost 7.62 Subscriptions from new members percent. In addition, refinancing of short-term Poland 24.9 borrowings outstanding at the end of fiscal 1985 Tonga 1.4 cost 7.60 percent. Total 26.3 The use in recent years of interest-sensitive in- Other increases in subscriptions- struments (variable-rate and short-term borrow- Belgium 94.5 ings) has allowed the IBRD to take advantage of Chile 1.5 lower interest rates at the short end of the yield Colombia 97.4 curve in United States and Canadian dollars. Congo, People's Republic of the 219 The low costs were particularly evident in the Finland 41.1 discount-note program, In fiscal 1986, however, Finland 234.4 the IBRD barely increased its short-term bor- India 83.3 rowings and engaged in no new variable-rate Iran, Islamic Republic of 406.5 borrowings. Instead, it chose to focus on oppor- Ireland 25.7 tunities for longer-term borrowings at increas- Korea, Republic of 21.6 ingly lower fixed rates. Malawi 3.2 The cost of the IBRD's average outstanding Malaysia 37.7 borrowings was 8.25 percent, compared with Norway 68.6 8.67 percent for fiscal 1985. The cost, after Saudi Arabia 577.0 both currency and interest-rate swaps, of the Spain 115.9 IBRD's average outstanding borrowings for Turkey 27.1 each of the past six fiscal years is summarized in United Arab Emirates 12.3 Table 3-8. United Kingdom 52.9 Uruguay 32.5 Capitalization Total 1,997.8 The capital stock of the IBRD and the sub- a. As of June 30, 1986, Austria, Bangladesh, Egypt, and Sri scriptions thereto of its members are expressed, Lanka had deposited all required payments for increasesin under the Articles of Agreement, in terms of the their subscriptions of SDR74.O million, SDR4.0 million, SDR17.5 million, and SDR22.0 million, respectively. These United States dollar of the weight and fineness completion subscriptionsbecameeffectivein July 19%6after in effect on July 1, 1944 (1944 dollars). of certain administrative formalities. 78 Bank Policies, Activities, and Finances Since the effectiveness on April 1, 1978, of the for subscription by certain members. The clos- Second Amendment to the Articles of Agree- ing date for the subscription period is December ment of the International Monetary Fund 31, 1986. Through June 30, 1986, fifteen coun- (IMF), currencies no longer have par values, and tries had subscribed to this increase. the basis for translating the 1944 dollar into cur- Capital subscribed during fiscal 1986 is shown rent United States dollars no longer exists. The in Table 3-9. IBRD is examining the implication of this On June 30, 1986, the authorized capital stock change on the valuation of its capital stock and of the IBRD stood at SDR78,650 million; its the impact it will have on its financial state- subscribed capital was SDR65,836 million. ments. For the time being, payments on account of subscriptions, however, are accepted at the Finances: IDA equivalent of $120,635 per share of capital The International Development Association stock. (IDA) held a total of $39,592 million in credits For purposes of its primary financial state- on June 30, 1986, including $2,142 million ap- ments, the IBRD has expressed the value of its proved but not yet effective. Of the $37,450 mil- capital stock on the basis of the SDR in terms of lion of effective credits, $11,605 million was un- United States dollars as computed by the IMF disbursed at the end of the year. on June 30, 1986 (S1.17757 per SDR). Disbursements totaled $3,155 million (includ- On January 4, 1980, the IBRD's Board of ing disbursements from the IDA Special Fund) Governors adopted a resolution that increased in fiscal 1986, compared with $2,491 million in the authorized capital stock of the IBRD by fiscal 1985. As of June 30, 1986, IDA had dis- 331,500 shares; this provided for a paid-in por- bursed a total of $25,910 million since the start tion of 7.5 percent, compared with the 10 per- of its operations. cent paid-in portion of previously existing capi- The resources provided to IDA were $6,076 tal stock. The Governors also adopted a million during the period, including amounts resolution that increased the authorized capital provided by members of $5,585 million, which stock by an additional 33,500 shares and that au- consisted primarily of contributions to the sixth thorized each member to subscribe to 250 shares and seventh replenishments and the FY84 Ac- of this additional capital, none of which had to count, which aggregated $3,954 million, ad- be paid in. Increases in subscribed capital under justed for the effects of currency appreciations these resolutions amounted to SDR29,414.2 mil- of $1,631 million on resources provided by lion (about $34,637.3 million) as of June 30, members in past fiscal years. The IBRD granted 1986. $150 million to IDA from its fiscal 1985 net in- In August 1984, there was a selective capital come. Other resources that became available to increase in the IBRD's authorized capital of IDA during the fiscal year totaled $491 million 70,000 shares (about $8,400 million on the basis and were derived primarily from grant participa- of the current subscription price). Selective in- tions in, cancellations of, and repayments on creases, totaling 69,074 shares, were authorized credits. 79 Chapter Four 1986RegionalPerspectives and Southern Eastern Africa The World Bank's Annual Report for fiscal several economies; the servicing of external debt 1985 traced the economic hardship, caused has become a heavy, sometimes unmanageable, mainly by prolonged drought and sustained de- burden for some; and the long-term prospects clines in the prices of most regional exports, in for most primary exports remain gloomy. More- countries of the Eastern and Southern Africa re- over, the additional resources needed to support gion since 1980. During fiscal 1986, the region's the stabilization and structural-adjustment mea- economic situation improved, primarily because sures undertaken by many countries have not the weather was more benign, but also because been forthcoming. policy reforms in some countries began to yield benefits. Nevertheless, the reversal of the pro- Special Features of 1985 cess of secular decline has encountered many In part because of ample rainfall, agricultural difficulties: Prolonged cuts in consumption and production increased in every country in the re- investment have damaged the productive base in gion. Five countries showed gains of over 5 per- cent, three increased production by over 12 per- cent, and Kenya, Malawi, and Zimbabwe had Table 41. Eastern and Southern Africa: exportable food surpluses. Some of the coun- 1984Population and Per Capita GNP of tries worst affected by the drought, such as So- Country Borrowers, Fiscal Years 1984-86 malia and Sudan, recorded substantial produc- tion increases in their major staple crops, though borrowers, Populationa GNP 1984b they still faced deficits in specific food grains fiscal 1984-86 (thousands) (US$) and regional shortages. Although only Bot- Botswana 1,034 960 swana, Ethiopia, and Mozambique are expected Burundi 4,573 220 to require further emergency food aid in 1986, Comoros 382 n.a. several other countries will need complementary Djibouti n.a. n.a. nonfood assistance. Ethiopia 42,169 110 Led by the agricultural recovery, gross domes- Kenya 19,540 310 tic product (GDP) performance improved in Lesotho 1,478 530 1985; of the twelve countries in the region that Madagascar 9,893 260 account for nearly 90 percent of the region's Malawi 6,832 180 population,' ten recorded positive real growth, Mauritius 1,011 1,090 while seven had higher growth in 1985 than in Mozambique 13,436 n.a. 1984. However, continuing high rates of popula- Rwanda 5,837 280 tion growth meant that only four countries- Seychelles 65 n.a. Mauritius, Somalia, Sudan, and Zimbabwe- Somalia 5,234 260 experienced increases in per capita income in Sudan 21,345 360 1985. Over the longer term, the protracted eco- Swaziland 731 790 nomic stagnation in Ethiopia, Madagascar, Tanzaniac 21,345 210 Tanzania, Uganda, Zaire, and Zambia has Uganda 14,971 230 caused per capita incomes to fall below levels Zaire 29,671 140 reached in 1970. Zambia 6,429 470 The international environment continued to Zimbabwe 8,099 760 be unfavorable for the region during the past year. Even though the average prices for imports NOTE: The 1984 estimates of GNP per capita presented fell slightly, the region's terms of trade deterio- above arefrom the "World DevelopmentIndicators" in the r WorldDevelopmentReport 1986. rated by 6 percent during 1985, and were some n.a. Not available. a. Estimatesfor mid 1984. These are Ethiopia, Kenya, Madagascar, Malawi, Maur- b. World BankAtlas methodology, 1982-84 base period. tius, Somalia, Sudan, Tanzania, Uganda, Zaire, Zambia, c. The GNP per capita refers to mainland Tanzania only. and Zimbabwe. 80 1986 Regional Perspectives 30 percent below the level of 1978-80.2 Export stagnation in developmental aid flows persisted prices of cotton fell from the previous year's despite the increase in emergency food aid to level by 26 percent, of sugar by 22 percent, and countries severely affected by the drought. of tea by 43 percent. The combined price index Finally, the problem of servicing foreign debt of seven agricultural and mineral-export com- intensified for several countries and hampered modities that constitute the region's major ex- their efforts at economic stabilization and ad- ports declined by 7 percent in 1985 and was 35 justment. Madagascar, Somalia, Sudan, Tanza- percent lower than in 1980. Export earnings fell nia, Zaire, and Zambia accumulated substantial for all countries in the region except Somalia arrears; each country (except for Tanzania) has and Zimbabwe, and total export receipts of the had to renegotiate its debt at the Paris and/or twelve countries declined by 7 percent during London Club at least once in the past six years, 1985, more than offsetting gains realized during with the total number of renegotiations reaching 1983 and 1984. twenty-four for the group. Their actual debt-ser- The inflow of foreign resources into the re- vice payments (after arrears and reschedulings) gion in 1985 also declined. Disbursements of range between 22 percent to 41 percent of export concessional and nonconcessional medium-term earnings. However, their estimated scheduled and long-term loans (net of amortization) 1985 debt-service ratios (service payments due dropped for the fifth year in succession, reach- before reschedulings or arrears, as a percentage ing 40 percent of the peak volume achieved in of export earnings) are much higher and many 1980. Although the flow of grants has increased lie between a low of 47 percent for Zaire and a over this same period, it has not been sufficient high of 158 percent for Sudan. These estimates to compensate for the decline in loans. Net offi- understate the true debt-servicing burden of the cial development assistance (ODA), comprising six countries, since they exclude interest on grants and concessional loans, fell by 2 percent in current prices in 1984, continuing the decline of the previous year. This drop represents a 2 The period 1978-80, before the impact of the second oil striking change from the 1970s, when ODA grew tradesdchnedprecipitonusly ino 98forthe regionrIfs erns of by nearly 13 percent a year. Data for ODA are cent in one year. By 1985, they were 4.6 percent below the not yet available for 1985, but it is likely that the averagefor 1982-84. Table 4-2. Lending to Borrowers in Eastern and Southern Africa, by Sector, Fiscal Years 1977-86 (millionsof US dollars) Annual average Sector 1977-81 1982 1983 1984 1985 1986 Agriculture and Rural Development 219.4 177.6 315.6 166.8 255.6 190.7 Development Finance Companies 39.0 92.5 79.9 48.3 50.0 56.8 Education 63.6 61.0 81.8 15.4 85.0 79.1 Energy Oil, Gas, and Coal 9.7 35.7 26.0 53.0 25.1 3.1 Power 47.4 19.0 149.5 189.6 41.1 169.0 Industry 26.4 4.0 29.3 75.0 6.4 170.0 Nonproject 90.9 70.0 130.9 145.0 45.0 95.0 Population, Health, and Nutrition - 23.0 6.8 13.8 3.5 10.8 Small-scaleEnterprises 2.0 5.2 - - - - Technical Assistance 11.1 30.7 6.0 26.6 27.8 53.4 Telecommunications 7.0 71.7 22.0 - 72.6 - Tourism 6.2 - - - - - Transportation 126.0 83.2 169.3 375.3 134.9 78.5 Urban Development 21.2 - 49.0 55.8 20.0 - Water Supply and Sewerage 23.6 41.0 63.7 22.0 49.0 9.5 Total 693.5 714.6 1,129.8 1,186.6 786.0 915.9 Of which: IBRD 238.9 107.9 326.6 445.2 74.5 198.1 IDA 454.6 606.7 803.2 741.4 711.5 717.8 Details may not add to totals because of rounding. NOTE: Easternand SouthernAfrica 81 At work at the Lurambi Modern Furniture Company (Kakamega, Kenya). Bank assistance for the development of small-scale enterprises in the region has amounted to more than $150 million. short-term debt, arrears, and private non- had larger current-account deficits in 1985 than guaranteed debt. in the previous year, in many cases the result of falling export prices. Inflationary pressures also Progress toward Stabilization increased, although the pace of international in- By 1980, seven governments in the region had flation slowed. Eleven countries experienced a resorted to borrowing from domestic banks in rise in their consumer-price index of 10 percent excess of 5 percent of GDP; current-account or more and five of over 20 percent; in nine deficits had exceeded 10 percent of GDP in countries, inflation was higher than in 1984. To seven countries; and nine countries had experi- some extent, however, the acceleration in the enced double-digit inflation. Several govern- rate of price increases reflected the emergence of ments responded to these financial disequilibria previously repressed inflationary pressures. by attempts at stabilization. For example, in the Unfortunately, not all the measures designed period 1983-85, fifteen International Monetary to stabilize an economy are conducive to long- Fund (IMF) Stand-by Arrangements were term structural adjustment. Some policy re- reached with nine countries, involving cutbacks forms, such as the liberalization of producer in public-sector deficits; ceilings on credit expan- prices and adjustments in exchange rates, are sion; reforms of the exchange and trade system; beneficial to growth. But others may contribute, liberalization of, and increases in, producer by contracting an already much-reduced import prices; and greater flexibility in exchange rates. capacity, to a growing underutilization of exist- The experience in 1985 of countries that had ing investments, a slowdown in the implementa- adopted stabilization measures was mixed. Only tion of desirable ongoing projects, a postpone- three countries had budget deficits higher than 5 ment of critical new investments, and damaging percent of GDP and balance-of-payments defi- cutbacks in social expenditures. Some of these cits over 10 percent of GDP, as compared with adverse effects could have been avoided had sta- seven countries in 1980. However, ten countries bilization been accompanied, in tandem, by ap- 82 1986Regional Perspectives Many countries have adopted measures to re- Figure 4-1. Trends in Lending, duce or eliminate the growing overvaluation of FiscalYears 1977-86 their exchange rates. In 1985, eight countries brought their real effective exchange rates (ad- annugl 1984 1985 1986 justed for relative rates of inflation, domesti- 1977 91 1983 1 cally and among major trading partners) to lev- 1,200 7- els lower than in 1978, and seven improved their relative competitiveness in 1985 over the pre- co r 4\vious year. Zambia launched a market-deter- mined exchange-rate system, and Somalia moved towards such a system (though the gap - .> between the official and free-market exchange 900 ., v e rates remained high). While Uganda abandoned its auction-based exchange system3 following monetary and political instability, Zaire contin- ued with its policy (begun in 1983)of allowing its exchange rate to be freely determined by the to) ormarket. Kenya, Madagascar, Malawi, Mauri- 600 . ss tius, and Zimbabwe continued to manage their exchange rates flexibly. In particular, Mauritius deployed flexible exchange rates as part of a co C larger export-promotion strategy to achieve an CN t °rexpansionof its manufactured exports. Ex- 300 ; v change-rate adjustments led to a significant di- version of exports from parallel to official mar- kets: This was the case with diamonds in Zaire, coffee in Uganda, and other goods elsewhere. Partly in concert with exchange-rate deprecia- tion, the internal terms of trade for the agricul- tural sector were improved in many countries. Nine countries offered higher relative prices to millions AmountinUSs agricultural producers during 1985, in many cases continuing policies initiated earlier. These Numberof operatioro improvements sometimes took place in the con- text of broader reforms in procurement and marketing systems that had tended to be domi- nated by inefficient parastatals. During the pe- propriate measures and additional aid to stimu- riod 1983-85, for instance, Madagascar lifted a late production and maintain high-priority government monopoly on the marketing of imports. paddy and rice, while abolishing fixed paddy and rice prices, as well as a consumer-price sub- Progress toward Structural Adjustment sidy; Tanzania licensed private traders to enter Many structural-adjustment efforts by gov- the maize market, removed price controls on ernments in recent years have been made in the maize meal, and partially liberalized interregion- context of World Bank-supported structural-ad- al trade in maize. Somalia reduced the public justment and sector-adjustment lending. Alto- sector's role in grain purchases and in the distri- gether, nineteen such operations-in Burundi, bution of several agricultural inputs, and Zam- Kenya, Madagascar, Malawi, Mauritius, Sudan, bia abolished an official monopoly on the mar- Tanzania, Uganda, Zaire, Zambia, and Zim- keting of maize and on the supply of all babwe-have been approved since 1980. The agricultural inputs except fertilizers. progress of these structural-adjustment mea- While the significant role of exogenous fac- sures has been encouraging on several fronts, tors makes it difficult to evaluate the impact of though the implementation of some difficult re- improved incentives, several instances of posi- forms has been interrupted by the continuing tive supply response in agriculture can be found. fall in export prices, political uncertainties, and declining net inflows of aid and loans. The bene- fits of successfully implemented measures are fits o succesfullyimpleented easure are This is a system of determining exchange rates by holding now visible, although continuing adverse, exog- periodic public auctions of available foreign exchange; the enous shocks have tended, in several instances, highest bid at whtch the market is cleared becomes the ex- to offset the favorable effects of policy reforms. change rate until the next auction. Eastern and Southern Africa 83 In Zambia, real agricultural producer prices tions in Mozambique), and stagnating aid dis- have been increased by more than 30 percent in bursements have taken their toll on the availabil- the past four years, and tax rates on agricultural ity of resources. For several countries, the income have been lowered. As a consequence, overhang of external debt has augmented these and despite drought conditions, marketed out- pressures on resources available for imports. put increased by about 9 percent a year in both The combined medium-term and long-term 1983 and 1984. The most recent Zambian har- outstanding debt of the region's twelve selected vest recorded the highest production levels in the countries rose from $3 billion in 1970 to $19 bil- last decade for wheat, soybeans, sunflower seed, lion in 1980, and to $28 billion in 1985. The pay- sugar, and coffee. In Uganda, before the auc- ment of interest and amortization on this debt tion-based exchange-rate experiment was aban- rose much faster than gross loan disbursements doned, substantial real depreciation and pro- to, or the exports of, debtor countries. This situ- ducer-price increases led to growth in monetized ation resulted in a sharp fall in net resource agricultural production of 14 percent in 1982, 11 transfers (disbursements less debt service) from percent in 1983, and 5 percent in 1984. In Soma- loans, from a combined $2.5 billion in 1980 to lia, improved incentives had a sizable effect dur- about $500 million in 1985. Correspondingly, ing 1981-85 on the production of maize and sor- actual debt-service payments in 1985 absorbed ghum, and on exports of bananas. Livestock about a quarter of export earnings, compared exports have also recovered sharply, despite a with 6 percent in 1970 and 14 percent in 1980, continued ban by traditional importers on So- and scheduled debt-service payments could not mali cattle. Similarly, in Malawi, there has been be met by several countries. an upsurge in the output of maize in 1982-83 fol- Debt has affected the countries of the region lowing a large rise in its relative price, while in in significantly different ways. Some countries, 1983-84, the production of cotton (and, to a such as Kenya and Mauritius, have managed lesser extent, of groundnuts) has reversed a de- their debt well and continue to have access to clining trend in response to price incentives. new credit on conventional terms. A second By the early 1980s, price controls on manufac- group, comprising countries such as Malawi and tured production had begun to proliferate in the Zimbabwe, has encountered serious debt-servic- region. In recent years, controls have been sig- ing pressures in recent years, but has succeeded nificantly reduced, if not eliminated, in Mada- in restoring a measure of creditworthiness by un- gascar, Malawi, Somalia, Tanzania, Uganda, dertaking economic reforms. Finally, a third Zaire, and Zambia. The industrial sectors of group of countries (Madagascar, Somalia, Su- most countries, however, remain starved of im- dan, Tanzania, Zaire, and Zambia) has not been ported inputs, greatly curtailing their ability to able to meet its scheduled debt-servicing obliga- respond to price incentives. In addition, specific tions. Over the next five years, 30 percent of this factors have intervened: Uncertainty over the group's scheduled debt-service payments is ownership of previously nationalized facilities owed to multilateral institutions, with the IMF has held back the private sector in Uganda, for accounting for 61 percent of such payments. instance. Structural deficiencies also persist in Since multilateral debt-sevice payments cannot most industrial sectors, arising from uncompeti- be rescheduled, these high ratios will increase the tive, often uneconomically sized facilities set up difficulties to be faced by this group of countries behind high levels of protection and operated in coping with its debt burdens. without adequate managerial or technological The debt problems of the most seriously af- capabilities. There are signs, nevertheless, that fected countries stem from several causes. Ex- some governments are beginning to restructure cept for Zambia, loans were not raised on partic- their industries: Export incentives have been in- ularly hard terms (though a large part of IMF creased along with the shift to flexible exchange resources was drawn upon on relatively hard rates, and Mauritius, Somalia, Zaire, and Zam- terms in the 1980s). Several countries (Zaire and bia have started to move from quantitative Zambia, and, to a smaller extent, Somalia and import restrictions to tariff-based protection Tanzania) delayed reducing their consumption structures. expenditures by borrowing abroad when con- fronted with a deterioration in their terms of Stabilization, Adjustment, and Debt trade or other adverse events. Some countries, While improved incentives summoned some such as Somalia and Sudan, tried to sustain un- supply responses, the dominant pattern of ad- warranted levels of consumption in periods justment in the region has been the containment when external circumstances were not in their fa- of public expenditures and overall demand. vor. Madagascar and Sudan tried to carry out Continuing adverse shocks, in the form of de- overly ambitious investment plans. In general, clining export prices, transport disruption in there was a tendency on the part of governments Southern Africa (because of disturbed condi- to use borrowed resources unproductively be- 84 1986 Regional Perspectives cause of policy distortions, poor project design, 1986: A Year of Opportunity or deficiencies in technical and organizational The countries of Eastern and Southern Africa skills. Thus, many projects did not generate or face a year of opportunity in calendar year 1986. save the foreign exchange required to service the The sharp decline in the price of oil will save foreign debt that financed them. Creditors often nearly $600 million in foreign exchange for the exacerbated matters by "pushing" uneconomic countries of the region. Coffee exporters (Bu- projects that were of commercial interest to sup- rundi, Ethiopia, Kenya, Madagascar, Rwanda, pliers of equipment in creditor countries. Tanzania, Uganda, and Zaire) will benefit from The debt overhang is a legacy of past mis- a large increase in price; this windfall gain is ex- takes. Unless handled skillfully by all parties to pected to yield almost $1 billion over normal the debt difficulties, however, it can undermine earnings from coffee. Copper and sugar prices, efforts to stabilize and restructure debtor econo- though still at low levels, are expected to rise mies and restore growth to them. Recent efforts slightly during 1986. Hence, the combined by debtors, such as Madagascar, Zaire, and terms-of-trade index for the region is likely to Zambia, to carry out intensive reforms have en- improve by almost 20 percent. countered considerable difficulty: Foreign sup- These favorable price relationships may not pliers have charged price premia because the last, and a substantial deterioration could take overhang makes payments uncertain; trade place in 1987. It is of the utmost importance, credit has dried up, reducing debtor capacity to therefore, that economic policies of the govern- buy in the most competitive markets; commer- ments in the region capitalize on the opportuni- cial banks and export-credit agencies have re- ties immediately at hand, rather than use the duced their exposure, without offsetting re- 1986 breathing space to postpone difficult re- sources being made available on concesssional forms. It is essential, also, that the donor and terms; and key officials of debtor governments creditor communities alike not view the favor- have had to spend considerable time negotiating able prospects of 1986 as a reason to slacken with creditors. Consequently, debtor economies support for appropriate amounts of assistance that try to emerge from their difficulties have en- and debt relief. countered chronic shortages of critically needed imports, weakening the incentive and abilities of governments to persist with economic reforms. WesternAfrica 85 WesternAfrica During the past twelve months, several West- The environment in which the countries of the ern African countries undertook difficult policy region are pursuing adjustment saw some wel- reforms to cope with their structural imbalances, come signs of relief in fiscal 1986. The return of and while the extent of adjustment has varied, good rainfall generated a high level of food pro- progress is clearly under way. C6te d'lvoire, duction in calendar 1985; the increase in cereal Ghana, and Togo have reinforced their ongoing output was most noteworthy in the Sahelian stabilization and structural-adjustment pro- countries (Burkina Faso, Chad, Mali, Niger, grams; in addition, Guinea, Niger, and Senegal and Senegal) where, according to the Food and adopted IDA-assisted structural-adjustment Agriculture Organization of the UN (FAO), pro- programs that aim at reforming public-resources duction exceeded the poor 1984 supply by some management and improving performance in the 50 percent. Benin and Togo also had food sur- agricultural and industrial sectors; The Gambia pluses. The combination of favorable weather and Mauritania have launched impressive recov- and response to policy reforms, such as ex- ery programs. change-rate adjustments and higher producer prices, has resulted in some improvement in overall output: Total real gross domestic prod- Table 4-3. Western Africa: 1984 Popu- uct (GDP) of countries in the Western Africa lation and Per Capita GNP of Country region grew 0.8 percent in 1985 (2.5 percent Borrowers, Fiscal Years 1984-86 without Nigeria) following four consecutive years of declines. Cameroon, Cote d'lvoire, Country Capita Per Ghana, Niger, and Togo were among the best borrowers, Population' GNP 19 84 b fiscal 1984-86 (thousands) (USS) performers. Prospects for Western Africa are Benin 3,920 270 for further growth in 1986 (assuming continued Burkina Faso 6,559 160 good weather), as many countries will benefit Cameroon 9,874 800 from lower oil prices and higher coffee prices, as Cape Verde 320 320 well as from the continuing momentum of the Central African Republic 2,521 260 reform process. Chad 4,877 n.a. At the same time, certain critical constraints C6te d'lvoire 9,878 610 to adjustment and longer-term development Equatorial Guinea 366 n.a. have not yet been overcome. Among the most Gambia, The 718 260 important constraints are the following: Ghana 12,309 350 * Explosive population growth rates continue Guinea 5,932 330 to contribute to declining per capita incomes; Guinea-Bissau 870 190 per capita GDP for Western Africa as a whole Liberia 2,127 470 has declined by approximately 25 percent since Mali 7,341 140 1980 (a disproportionate share of this drop is the Mauritania 1,659 450 result of the sharp fall in per capita incomes in Niger 6,205 190 Nigeria). Rapid population growth, coupled Nigeria 96,485 730 with budget austerity, has hampered govern- Sao Tome and Principe 105 330 ments' ability to sustain programs in human-re- Senegal 6,376 380 source development, which are essential to Sierra Leone 3,664 310 loosen the long-run constraints to economic and Togo 2,940 250 social development. * In the near term, depressed prices of cotton, NOTE: The 1984 estimates of GNP per capita presented iron ore, uranium, and groundnuts are adversely aboveare from the "World DevelopmentIndicators" in the a t c World Developmernt Report 1986. affectmg the current-account and fiscal deficits n.a. Not available. of Benin, Burkina Faso, Central African Repub- a. Estimates for mid 1984. tic, Chad, The Gambia, Liberia, Mali, Niger, b. World Bank Atlas methodology, 1982-84 baseperiod. Mauritania, and Senegal; at the same time, oil- 86 1986 Regional Perspectives exporting countries such as Cameroon, the Peo- Economic Developments: ple's Republic of the Congo, Gabon, and Nige- The Major Oil Exporters ria are suffering from the sharp slump and continuing instability in world oil prices. Nigeria has continued to rely on restrictive de- * Debt remains a critical factor in the adjust- mand-management policies and administrative ment process, as mounting debt-servicing diffi- controls to cope with the financial problems in- culties threaten the implementation of reform duced by weak oil markets and rapidly increas- programs; debt relief and rescheduling are essen- ing debt-service obligations. Although higher oil tial elements of the financial restructuring production raised 1985 export revenues over needed in support of effective adjustment plans. 1984 levels, the sharp increase in debt-service C6te d'lvoire, Guinea, and Mauritania are payments forced the government to reduce im- among the countries pursuing such restructuring ports dramatically. The federal budget deficit efforts, while the government of Niger is prepar- was reduced to about 4.5 percent of GDP, and ing plans for a round-table meeting of donors to recurrent expenditures were cut by more than examine a medium-term financial plan designed one third through stricter limitations on trans- to deal with its debt situation in the context of its fers to public enterprises and state governments, overall aid requirements. and control on wages and salaries. As a result of While progress is under way in the adjustment these austerity measures, inflation was slowed process, the momentum of the reform efforts considerably. cannot be sustained unless additional conces- The 1986 budget proposes further measures to sional resources are provided by the donor com- address Nigeria's economic problems: They in- munity. Donor round tables and consultative clude exchange-rate initiatives, parastatal re- groups have been instrumental in improving aid form, substantial increases in petroleum-prod- coordination, but implementation of reform uct prices, and additional spending cuts, which programs has suffered from lagging disburse- could reduce the federal budget deficit to 2 per- ments of official development assistance. In this cent of GDP. However, the further weakening regard, the Development Committee's endorse- of the oil market will require the government to ment in April 1986 of increased external funds combine even greater austerity with further re- for sub-Saharan Africa is an encouraging devel- structuring measures, particularly the adoption opment. of a more realistic exchange rate. Table 4-4. Lending to Borrowers in Western Africa, by Sector, Fiscal Years 1977-86 (millionsof US dollars) Annual average Sector 1977-81 1982 1983 1984 1985 1986 Agriculture and Rural Development 235.9 288.9 104.6 503.5 124.4 244.0 Development Finance Companies 21.0 19.0 140.1 - 9.3 28.5 Education 28.0 19.7 55.5 9.5 34.0 35.6 Energy Oil, Gas, and Coal 4.1 114.0 36.0 51.0 2.6 - Power 48.2 10.8 24.0 30.0 15.5 48.0 Industry 13.1 20.0 19.7 21.9 - 23.9 Nonproject 12.0 150.0 80.0 326.7 119.2 321.0 Population, Health, and Nutrition - - 15.0 16.7 60.6 70.3 Small-scale Enterprises 12.7 16.0 15.0 41.0 - 30.0 Technical Assistance 18.5 26.0 26.0 53.9 47.7 5.0 Telecommunications - 38.0 - - - 46.5 Tourism 5.6 - - - - - Transportation 171.9 115.5 96.8 88.4 275.0 114.8 Urban Development 16.4 61.0 20.0 28.2 22.0 153.0 Water Supply and Sewerage 38.0 110.0 31.5 10.9 101.0 10.0 Total 625.5 1,086.9 664.2 1,181.7 811.3 1,130.6 Of which: IBRD 374.7 853.8 236.5 710.2 419.1 703.1 IDA 250.8 233.1 427.7 471.5 392.2 427.5 Details may not add to totals becauseof rounding. NoTE: Western Africa 87 Studentsstudying under a street light in Independence Square (Lomd, Togo). Nigeria's medium-term and long-term exter- its absolute size (which, in 1985, amounted to nal public debt outstanding at the end of 1985 only 25 percent of GDP, compared with the 49 amounted to $11.5 billion (excluding converted percent average of all middle-income heavily in- trade arrears of $1.7 billion). Substantial addi- debted countries), but to its unfavorable pay- tional trade arrears have been estimated to range ments profile and to the poor outlook of the between $3.5 billion and $6 billion. The severity world oil market. These negative aspects have of Nigeria's current debt relates not so much to prompted Nigeria to discuss possible debt-re- 88 1986Regional Perspectives scheduling arrangements with its creditors. The in oil prices in early 1986 further deepened the government is also working on a broader pro- country's severe financial crisis. To restore its gram of economic reforms. creditworthiness in the medium term, the coun- Cameroon's economy continued to perform try will have to undertake far-reaching structural well, with growth estimated at 8.6 percent in reforms. 1985. Oil production, about 17 percent of GDP, was responsible for nearly half of this growth. Economic Developments: The country posted a positive current-account The More Traditional Economies balance of 7.2 percent of GDP, public savings Ghana's economic-recovery program gained amounted to nearly 12 percent of GDP, and the further strength, as the economy began to re- overall budget remained in surplus. Cameroon's spond strongly to policy reforms and to the con- external-debt situation is currently quite man- tinuation of favorable weather. Real GDP ageable: Total outstanding public and publicly growth in 1985 exceeded 5 percent; agriculture guaranteed medium-term and long-term exter- and manufacturing rebounded as utilization of nal debt amounted to about $1.8 billion, or 23 capacity increased as a result of improved incen- percent of GDP, in 1985, and the country's tives and an increased availability of foreign ex- debt-service ratio is slightly below 10 percent. change. Inflation continued to decelerate There are, however, problems on Cameroon's sharply: From an annual average rate of 123 per- horizon. While oil exports have performed well cent in 1983, it dropped to 40 percent in 1984 and now account for nearly two thirds of total and to 11 percent in 1985. merchandise exports, traditional agricultural ex- Notable progress has also been achieved in ex- ports, mainly coffee and cocoa, have virtually change-rate policy: The cedi, which in early 1986 stagnated since 1980. Oil production is expected stood at ninety to the U.S. dollar, has been de- to decline steadily from its current peak, and the preciated by 3,200 percent since the reform pro- lower world price appears to have substantially gram was launched in April 1983. Other incen- reduced exploitable-reserves profitability. Cam- tive measures adopted in 1985 included a 90 eroon, therefore, faces a sharp drop in export percent increase in the price paid to producers earnings, as well as a diminution of national in- for their 1985-86 cocoa crop and a further 50 come, over the next few years. Stabilization of percent increase for the 1986-87 crop. Producer domestic demand and strong measures to in- prices for cotton and tobacco were raised by 100 crease the output of exports other than oil, percent and 50 percent, respectively. therefore, will be required. At the December 1985 meeting of the consul- Unlike other West African oil exporters, Con- tative group for Ghana, the government pre- go's economic and financial situation deterio- sented donors with the framework for a pro- rated dramatically in 1985. Gross domestic gram of further progress on exchange-rate product fell by 3.6 percent, the first decline since adjustment and trade liberalization, public-sec- 1977, reflecting a drop in oil production. Activ- tor reforms, and increased domestic-resource ity in most other sectors stagnated or declined as mobilization to finance a higher level of invest- a result of depressed investment demand. Al- ment. though the share of public investment in GDP After experiencing three consecutive years of was reduced from 28 percent in 1982 to 17 per- recession, the economy of Cote d'lvoire re- cent in 1984, heavy external borrowing contin- bounded sharply in 1985 in response to im- ued to the point at which public debt service proved producer incentives and better weather. amounted to 43 percent of fiscal revenues in Driven by the recovery in agricultural output, 1985. Arrears on both external and domestic GDP grew by 5.3 percent in real terms. This per- debt have accumulated rapidly; 25 percent of the formance was accompanied by a significant im- overall 1985 budget deficit (equivalent to 7 per- provement of the current-account balance, cent of GDP) was financed through net accum- which turned from a deficit of 2.3 percent of mulation of arrears. GDP in 1984 to a surplus of 3.6 percent in 1985, In June 1985, the government announced an largely the result of increased coffee and cocoa adjustment program to stem the deteriorating export receipts. At the same time, continued fiscal situation. Although its basic elements were public-finance discipline led to a public-sector the containment of budgetary growth and a re- surplus of 1.5 percent of GDP in 1985, com- duction in public investment, total public invest- pared with a deficit of 3.6 percent in the previous ment substantially exceeded the initial plan for year. The outlook is somewhat clouded by de- 1985, civil-service employment continued its clining cocoa and cotton prices, which may be rapid increase, and the salary bill exceeded ini- offset by higher coffee prices. tial allocations. The current-account, which was After several years of declines, Togo's real in surplus in 1984, registered a deficit equivalent GDP grew by 3 percent in 1985. The current-ac- to 8 percent of GDP in 1985, and the sharp fall count deficit has been brought down from a Western Africa 89 peak of 17 percent of GDP in 1979 to 12 percent exchange rate through a large initial devaluation in 1982, and to 7.5 percent in 1985. Togo has (1,400 percent) and subsequent weekly auctions; also succeeded in clearing its domestic-payment reform of the banking sector, involving closure arrears, while rescheduling its external debt. The of all state-owned banks and the establishment government took significant steps in 1985 to im- of three private banks (joint ventures) in their plement the second phase of its structural-ad- place; liberalization of prices and the abolition justment program by raising producer prices for of marketing controls or public monopolies; ra- coffee, cocoa, and cotton by 8.8 percent, 9.1 tionalization of the public-enterprise sector; and percent, and 20 percent, respectively, and by reform of the tariff regime and liberalization of adopting a new rural-development strategy that import-export procedures. emphasizes upgraded agricultural-extension Other countries with growing economies in programs directly linked to research. 1985 included: The economy of Benin posted a 3.5 percent * Niger, which after three years of negative growth rate in 1985, a welcome break in the stag- real GDP growth, realized a rate of growth of nation that set in after 1982. Performance in 7.1 percent, the result mainly of a strong recov- 1985 was led largely by the continuing strong re- ery in the rural sector, which benefited from fa- sponse of agricultural output, particularly cot- vorable weather. The government has under- ton, to a combination of improved weather con- taken an IDA-assisted structural-adjustment ditions, remunerative producer pricing, and program complementing stabilization efforts prompt delivery of inputs. initiated under three consecutive IMF Stand-by The government's financial situation re- Arrangements; those efforts have led to a signif- mained unsatisfactory, however. In spite of a icant reduction in the budget and current-ac- modest recovery in revenues and the availability count deficits, both of which stood at about 5 of extra budgetary resources from petroleum percent of GDP in 1985. (The reduction in the sales, public finances registered a deficit equal to budget deficit reflected, for the most part, a sub- 8 percent of GDP, compared with 10 percent in stantial cutback in investment, while the drop in 1984. Lower world-market cotton prices in the the current-account deficit was caused largely by last half of 1985 and a rising burden of interest a sharp reduction in imports.) payments on external debt contributed to a wid- * Mali, where real GDP growth of 1.1 percent ened current-account deficit (8 percent com- was fueled, in large measure, by a sharp rise in pared with about 5 percent in 1984). Progress the output of cotton and cereals, reflecting in- has been slow on developing a reform program creased incentives to producers and abundant to confront these imbalances. The government is rainfall. The country's current-account deficit currently discussing with the International Mon- declined (to 5.9 percent of GDP), and fiscal im- etary Fund (IMF) a possible stabilization pro- balances continued on their correction course, as gram and with the Bank on ways in which the the consolidated budget deficit dipped below 1 public-enterprise sector might be reformed. percent of GDP. Preliminary estimates indicate that Guinea's * Mauritania, where real GDP grew by 2.1 agricultural output increased by 3 percent in real percent. Aided by an exchange-rate devaluation terms in 1985, while real growth in GDP was 2.4 of 20 percent, fish exports soared by 30 percent, percent. Depressed conditions in the world alu- and iron-ore exports were maintained at the rela- minum market adversely affected mining out- tively high level of $150 million. Strict budgetary put, and industrial output grew by less than 2 discipline was also maintained in 1985: Revenues percent. The overall balance-of-payments defi- increased by 15 percent, while outlays expanded cit, which amounted to $73 million (basically un- by only 4.5 percent, thus bringing about a bal- changed from the 1984 level), was financed anced current budget for the year. These mea- largely through accumulation of arrears. Guin- sures are included in an economic and financial ea's arrears on medium-term and long-term pub- recovery program (1985-88) prepared with the lic external debt are estimated to have reached Bank's assistance by the Mauritanian govern- $298 million at the end of 1985, while medium- ment. They also include the rehabilitation of the term and long-term external debt stands at ap- public-enterprise sector. proximately $1.36 billion. The government defi- * Burkina Faso, whose real GDP, after three cit deteriorated sharply in 1985 as a result of a years of decline, bounced back to the level of decline in revenues and a sharp increase in ex- 1981-the result primarily of the first good har- penditures. vest in three years. Due to the implementation, A comprehensive reform program (assisted by in 1985, of an austerity budget, the country's Bank structural-adjustment lending and a budget deficit declined to less than 1 percent of Stand-by Arrangement with the International GDP. The government, however, continued to Monetary Fund), which was launched in Decem- add to its payments arrears in 1985, and follow- ber 1985, includes the establishment of a realistic ing several years of improvement, the current- 90 1986 Regional Perspectives ment on critical policy-reform areas, including Figure 4-2. Trends in Lending, the need for improved public-expenditure man- Fiscal Years 1977-86 agement, rationalization and reform of the pub- lic-enterprise sector, and improved policies in annua 1986 the agricultural and manufacturing sectors. In average 1983 1984 198 9 Sierra Leone, the government is negotiating with 1977-81 1982 the IMF on a stabilization program and is work- 120C ing with the Bank on the framework of a structural-adjustment program that would pro- vide stronger incentives in agriculture and indus- try and reform in public expenditures and public enterprises. And in Senegal, the government has 900 \ X 0 implementation begun v of a medium-term struc- tural-adjustment program whose basic objec- tives are to maximize the exploitation of the country's potential in agriculture and industry and to optimize public-resource allocations. By 600 4? the end of 1985, major subsidies had been elimi- nated, the consumer rice price had been substan- tially increased, the groundnut subsector had been restructured, overstaffing reduced in key rural-development agencies, and the reorganiza- tion of the Ministry of Planning begun as a prel- 300 i ude r7 the n to n introduction of a three-year rolling public-investment program. Debt and Financial Restructuring Recent developments in Western African o economies point to a worsening of the external- debt situation that could impede efforts at ad- justment. At the end of 1984, the debt of the Amountin JS$mnions countries in the region (long-term public and 1Numberofoperations publicly guaranteed debt, disbursed and out- standing) stood at about $32 billion, an amount equivalent to about 30 percent of GDP. Al- though scheduled debt service was equivalent to more than 30 percent of export earnings, re- account deficit widened again to 5 percent of scheduling and accumulation of arrears have GDP. An improvement of the situation in public held down the actual debt-service ratio consider- finances depends on the commitment of the gov- ably. Because of the severity of the debt problem ernment to address policy issues in the areas of in sub-Saharan Africa, the Bank has stepped up public-finance management, investment priori- its analytical and resource-mobilization efforts ties, and state enterprises. in the field of financial restructuring: The objec- A few countries, however, did not join the re- tive of these efforts is to design and bring into covery: They included Liberia, Sierra Leone, effect feasible scenarios for arresting further de- and Senegal. Growth in these countries was con- clines in per capita income and consumption and strained-in the case of Liberia-by a continu- for restoring growth with a manageable balance- ing drop in export earnings and inappropriate of-payments gap. In that context, a few coun- economic policies; in Sierra Leone, by worsen- tries in the region have already put in place, with ing mineral prices and declining production of the Bank's assistance, multiyear financing plans the country's main export commodity, alluvial that incorporate the mobilization of additional diamonds, as well as by poor policies that in- external resources and debt restructuring, in- clude an overvalued currency, uncontrolled cluding, in some cases, multiyear rescheduting budget deficits, and excessive borrowings; and and retroactive adjustments to the terms of ex- in Senegal, by the severe burden of its external isting borrowings. debt, which, in 1985, reached $1.8 billion, an Thus, the government of C6te d'lvoire, after amount equivalent to 80 percent of GDP. four years of austerity under the stabilization These three countries, however, are not ignor- phase of its structural-adjustment program, has ing their difficulties. The Bank continues to embarked on the second phase of the program maintain a dialogue with the Liberian govern- with the objective of achieving self-sustained WesternAfrica 91 growth of income over the medium-term while program, supported in fiscal 1986 by $60 million restoring creditworthiness. This strategy entails in IDA and Special African Facility funds, will a further strengthening of macroeconomic and serve as the basis for mobilizing donor support financial management and the implementation for the multiyear plan. The plan will stress the of a comprehensive reform of agricultural incen- need for significantly higher, long-term commit- tives and the generalization of the industrial-in- ments of grant or highly concessional financing, centive reforms launched in 1985. In parallel, as well as retroactive adjustment of terms and the government is pursuing a medium-term fi- further rescheduling of part of Niger's outstand- nancial-restructuring strategy aimed at mobiliz- ing debt. ing the external financial resources to support A special donors' meeting, held in Paris in growth within the context of a structural-adjust- March 1985, considered the financing needs of ment program. These resources would come Mauritania for 1985 and agreed on an integrated from the IMF, the Bank, other donors, and package of aid and debt relief: A sizable exter- commercial banks; through the instrument of a nal-resource gap of about $220 million was suc- World Bank "B" loan, C6te d'lvoire has been cessfully financed through rescheduling, direct able to regain access to voluntary lending. Mul- balance-of-payments support, and clearance of tiyear rescheduling arrangements with both the all arrears. A consultative group meeting held in London and the Paris Clubs have also supported November 1985 lent support to Mauritania's C6te d'lvoire's restructuring efforts. 1985-88 recovery program through a combina- Niger is faced with a heavy foreign-debt bur- tion of additional concessional money and debt den ($1 billion at the end of 1985, or 65 percent relief. This support should allow the country to of GDP), and a debt-service ratio that reached sustain and reinforce the policy measures al- 47 percent in 1985 (33 percent after reschedul- ready taken to restructure the economy. ing). To cope with this unsustainable situation, While the problem of external debt will con- the government has embarked, with the Bank's tinue to constrain the efforts of most West Afri- technical assistance, on the preparation of a can governments to restructure their economies multiyear financial plan to be considered at a and restore the momentum of economic and so- donors' meeting that the Bank and the UNDP cial development, the Bank is working with gov- (United Nations Development Programme) will ernments to mobilize additional resources to sponsor in late 1986. A structural-adjustment make adjustment with growth a reality. 92 1986 Regional Perspectives EastAsia and Pacific After a significant recovery in 1984, economic factured goods, were particularly affected by growth in the East Asia and Pacific region this development. Even Malaysia, the Philip- slowed considerably during 1985 and remained pines, and Thailand, which, in the recent past, sluggish through the first half of 1986. A combi- had benefited from significant increases in ex- nation of factors contributed to this develop- ports of selected manufactured goods, saw pro- ment. First, with few exceptions, commodity duction, as well as investment, in their industrial prices slumped after their brief improvement in sector slump as a result of a substantial drop in 1984, damaging, in particular, the growth per- demand. Protectionist tendencies in the indus- formance and prospects of those countries still trial countries, while not worsening as dramati- heavily dependent on primary commodity ex- cally as had seemed possible in early 1985, also ports (Indonesia, Malaysia, the Philippines, contributed to the slowdown in manufactured Thailand, Papua New Guinea, and the smaller exports from the region-not just because of ac- islands of the Pacific). tual restrictions imposed, but probably more be- Second, growth rates in the industrial coun- cause of the uncertainties they cast over the busi- tries declined, resulting in a lessened demand by ness climate. While the recent drop in oil prices them for manufactured imports. This was the is likely to provide a stimulus for economic case especially in the United States, the major growth in industrial countries, the effect on ex- importer of manufactured goods from the re- port demand from East Asia is likely to make it- gion. The Republic of Korea and Singapore, self felt only with some delay and will be moder- countries heavily dependent on exports of manu- ated by continued weak commodity prices. Finally, unanimous concern in the countries of the region about imbalances in their external and fiscal accounts, particularly in the face of continued high international indebtedness and Table 4-5. East Asia and Pacific: 1984 real interest rates, led to a continuation of mone- Population and Per Capita GNP of tary and fiscal restraint, thus further limiting the Country Borrowers, Fiscal Years 1984-86 scope for economic expansion. brrpa G Special factors also were at work in some Country Per capita countries. borrowers, Population' GNP 1984b cutls fiscal 1984-86 (thousands) (US$) China, after a year of exceptionally high China 1,029,156 310 growth in 1984, had to consolidate its gains and Fiji 686 1,810 deal with some of the macroeconomic im- Indonesia 158,915 540 balances generated by rapid expansion, particu- Korea, Republicof 40,127 2,110 larly a dramatic surge in imports and the related Lao People's Democratic deterioration in its current-account balance. Republic 3,542 n.a. The two major oil-exporting countries, Indo- Malaysia 15,270 1,980 nesia and Malaysia, had to adapt to the precipi- Papua New Guinea 3,422 710 tous drop in international oil prices and the re- Philippines 53,380 660 sulting pressures on their balance of payments Solomon Islands 259 n.a. and fiscal revenues. These pressures required Thailand 50,023 860 significant cutbacks in domestic public and pri- Vanuatu 130 n.a. vate spending at a time when their rates of Western Samoa 161 n.a. growth were already low by historical standards. The oil-importing countries, especially Korea, NOTE:The 1984 estimates of GNP per capita presented benefited from the oil-price reductions and saw above are from the "World Development Indicators" in the World Development Report 1986. their adjustment pyoblems ease. In the Philip- n.a. Not available. pines, the only country in the region where prob- a. Estimates for mid 1984. lems of adjustment and debt restructuring have b. World Bank Atlas methodology, 1982-84 base period. taken on crisis proportions in recent years, eco- EastAsia and Pacific 93 nomic and political upheavals continued to take Some steps were taken in fiscal 1986 to ad- their toll, with negative economic growth pre- dress the country's fundamental structural prob- vailing in 1985 for a second consecutive year. lems. These included a simplification of manu- In this environment of tightening interna- facturer excise taxes and the introduction of a tional and domestic economic conditions, the turnover tax at the wholesale and retail levels; World Bank continued to provide assistance reductions in the public-investment program to a for structural-adjustment efforts-aimed at more appropriate and manageable level; and strengthening the capacity and incentives for ag- substantial reforms in the institutional arrange- ricultural, industrial, and trade development- ments governing the sugar and coconut subsec- that were combined with measures designed to tors to eliminate unnecessary public-sector con- increase domestic-resource mobilization and im- trols, improve incentives for production and prove the efficiency of resource allocation, espe- reinvestment, and provide greater accountability cially in the public sector. In addition, support in financial management. A comprehensive re- continued for longer-term development of hu- view of the public-corporate sector and govern- man resources and of infrastructure. However, ment financial intermediaries was also begun as in the preceding year, Bank lending to many with a view to identifying an appropriate policy of the countries in the region remained con- program. strained by fiscal austerity measures made neces- During the past year, the Bank increased its sary by the difficult economic environment. activities in aid coordination and continued its China was an exception, as efforts by the Bank support of the country's stabilization and recov- to assist the government in the design and imple- ery program by shifting the focus of its lending mentation of its extensive economic reforms re- program towards essential macroeconomic and sulted in an expansion of Bank commitments. A sectoral-policy reforms, rehabilitation and major economic report by the Bank, which as- maintenance of existing infrastructure, and in- sessed the developmental needs and opportuni- creased local-cost financing for high-priority ties of the Chinese economy for the remainder of projects. the century and explored options for further im- Thailand's rate of economic growth slowed plementation of the government's broad agenda from 6 percent in 1984 to about 4 percent in of policy reform, was published early in fiscal 1985, as its terms of trade worsened - the result 1986.4 of low international commodity prices and re- duced incomes, especially in agriculture. The Slowdown in Market Economies country's current-account deficit improved The Philippines continued to focus on the im- slightly, from 5 percent of gross domestic prod- plementation of a stabilization program de- uct (GDP) in 1984 to 3.8 percent in 1985. At the signed to adjust the balance of payments and re- same time, the public-sector deficit widened to duce inflation. Some success was achieved: The about 6.5 percent of GDP, despite a reduction in current-account deficit was reduced from 8 per- public investments and a slowing down in the cent of gross national product (GNP) in 1983 to growth rate of consumption. The widening gap 1 percent in 1985, and the domestic inflation rate between savings and investment was filled was reduced from 50 percent in 1984 to 6 per- largely with external borrowings by the private cent. Major policy measures taken related to the sector. control of monetary expansion and a reduction Thailand's terms of trade are expected to im- in government expenditures. At the same time, prove in fiscal 1987 if oil prices remain low while the exchange rate was allowed to float, restric- other commodity prices remain at least stable. tions of foreign-exchange allocations and limits An improvement in the country's trade account on foreign-exchange holdings by private banks is likely to be offset somewhat, however, by the were eliminated, price controls on a number of expected reduction in remittances from Thai basic commodities, including rice, were lifted, workers employed in the Middle East. Because and the restrictions on some of the regulated im- persistence of fiscal constraints will require con- ports were lifted as part of a program of trade tinued restraint in public investment over the liberalization. coming years, private investments, financed by While the stabilization effort was a success, domestic savings, will have to be the primary economic activity was set back by a combination source of revived growth. In view of the modest of high real interest rates, restricted availability outlook for domestic demand in the coming of credit, and continuing uncertainty. The coun- years, the government has given high priority to try's GNP declined by about 6 percent in 1984 promoting exports, especially of manufactures. and by 4 percent in 1985, implying a reduction by more than 15 percent in real per capita terms The World Bank. China: Long-Term Development Issues over the two-year span, while unemployment and Options. Baltimore: The Johns Hopkins University rose. Press, 1985. 94 1986 Regional Perspectives After posting impressive growth rates in both kets, and scope for increasing some relatively 1983 and 1984, Korea was particularly affected new Korean exports, such as automobiles and in 1985 by the slowdown in the economies of the electronic appliances, is large. Declining oil industrial countries, mainly the United States. prices and interest rates will help the current ac- The result was a sharp reduction in the growth of count in Korea's balance of payments, both Korea's exports, from 13.5 percent in 1984 to through their effects of stimulating world eco- 2.3 percent in 1985, and of GNP, from 8.4 per- nomic growth (and thus Korea's exports) and cent to 5.0 percent. Korea was able to moderate through a reduction of Korea's import and debt- the effects of these external events and maintain service bill. However, if longer-term economic progress through flexible macroeconomic poli- growth in the industrial countries proves at any cies: The exchange rate was depreciated substan- time to be less than is currently expected, or if tially and the money supply was permitted to protectionism against Korean exports increases, grow above target, special tax and depreciation the slower growth of 1985 could be repeated. incentives were offered for fixed investment in export-related industries, and a supplementary Oil Exporters Deal with Price Declines budget was adopted. Indonesia's economy continued to be buf- As a result of these measures, both the rate of feted by adverse external developments, most growth of exports and fixed investment turned notably the softening, since 1983, of world oil up in the second half of 1985. Other indicators markets. lndeed, net earnings from oil exports also showed improvement. The current-account in 1985 were about one third lower than four deficit was further cut to around I percent of years earlier; in addition, commodity prices for GNP, inflation was kept to under 3 percent, and Indonesia's exports other than oil have fallen the national savings rate rose to nearly 30 per- significantly over the past two years. Yet, the cent. government has been able to achieve a viable The principal uncertainty concerning Korea's balance-of-payments position, as its current-ac- macroeconomic performance in 1986 continues count deficit was reduced sharply-from 8.5 to be external. The recent appreciation of the in- percent of GNP in 1982-83 to less than 3 percent dustrial-country currencies against the U.S. dol- of GNP in 1985-86. This reduction was achieved lar should boost Korea's exports to those mar- by encouraging the development of exports Table 4-6. Lending to Borrowers in East Asia and Pacific, by Sector, Fiscal Years 1977-86 (millionsof US dollars) Annual average Sector 1977-81 1982 1983 19S4 1985 1986 Agriculture and Rural Development 663.5 614.0 563.6 504.4 1,028.4 539.9 Development Finance Companies 238.8 30.0 534.5 175.0 224.0 106.5 Education 157.6 225.6 237.2 409.4 370.0 476.4 Energy Oil, Gas, and Coal 36.8 317.0 339.7 159.4 236.0 97.0 Power 329.7 271.3 609.6 425.4 167.0 535.5 Industry 25.6 207.4 5.5 - 147.0 - Nonproject 43.6 400.0 477.8 300.0 - - Population, Health, and Nutrition 38.5 - 27.0 85.0 85.0 113.4 Small-scale Enterprises 35.2 132.0 70.0 204.6 163.1 64.5 Technical Assistance 2.0 - - 10.0 - 20.0 Telecommunications 18.0 142.1 - 8.5 4.0 3.9 Transportation 247.4 286.0 588.2 792.0 420.6 970.8 Urban Development 92.4 8.0 167.0 149.8 80.5 425.0 Water Supply and Sewerage 82.6 90.0 88.5 78.5 175.0 212.3 Total 2,011.7 2,723.4 3,708.6 3,302.0 3,100.6 3,565.2 Of which: IBRD 1,843.8 2,641.4 3,549.0 2,873.0 2,654.3 3,101.8 IDA 167.9 82.0 159.6 429.0 446.3 463.4 NOTE: Details may not add to totals becauseof rounding. EastAsia and Pacific 95 Rehabilitating irrigation canals in West Java (Indonesia). More than a half million farm families will benefit from a project, approved in fiscal 1986, that seeks to strengthen irrigation services in CentralJava and West Java provinces. other than oil, primarily through the mainte- months of imports. Although the public sector's nance of a realistic exchange rate, and by reduc- use of export credits is now strictly controlled, ing the level of imports through restrictive de- the total debt-service ratio has risen in recent mand-management policies, included among years, reaching 25 percent in 1985. The govern- which was a major rephasing, in mid 1983, of ment is also legitimately concerned about the ef- the government's public-investment program. fects that a prolonged shortfall in oil revenues The government has also been successful in re- might have. Accordingly, an austere budget that ducing the domestic inflation rate to less than 5 cuts back total expenditures by 7 percent (and percent a year. development expenditures by 22 percent) has Success in managing the balance of payments been announced for fiscal year 1987. Expendi- and domestic inflation has inevitably been ture priorities identified by the government in- achieved at some cost to investment and growth: clude ongoing and externally funded projects, The investment rate has steadily fallen over the projects that serve objectives of equity and em- past three years, and GDP growth, which aver- ployment, and operations and maintenance ex- aged 8 percent a year during the 1970s, has fallen penditures. On the revenue side, recent tax re- to less than 3 percent over the past four years. forms, including a new value-added tax The recent sharp decline in oil prices and un- introduced in Indonesia's 1986 fiscal year, are certainty over their future course have under- expected to have a positive impact on domestic- scored the appropriateness of the cautious man- resource mobilization. agement strategy adopted by the government. The economic performance of Malaysia fell That strategy has permitted Indonesia now to be below expectations, as GDP growth dropped to better positioned to undertake further stabiliza- 2.8 percent in 1985, compared with 7.6 percent tion and adjustment measures. External reserves in the previous year and 6.7 percent for the four- (including those held by commercial banks) have year period, 1980-83. Reduced growth was risen to more than $10 billion, equivalent to nine mainly the result of slower growth in the indus- 96 1986 Regional Perspectives Singapore's construction sector have resulted in Figure 4-3. Trends in Lending, increased unemployment. Toward the end of Fiscal Years 1977-86 1985, the government announced a major, new low-cost housing scheme to increase emplov- overge 19 1985 '986 ment opportunities over the next several years. 1977-81 1982 1983 14 Policies to diversify further the economic base 4,00C away from mining and tree crops and encourage new sources of future growth, particularly in manufacturing, are being pressed forward. The ,>. > fifth five-year plan, introduced in April 1986, in- o n an emphasis on resource-based industrial v Xcludes development and export promotion. In prepar- 3,000 . ing the ground for greater private-sector invest- ment in the fifth plan period, the government CO te . .partially liberalized the country's investment li- censing laws and continued its policy of privatiz- ... Smv ing some sectors of the economy. 2,000 Continued Reforms in Nonmarket Economies Chinese economic growth continued to be im- pressive. Real GDP rose by 12.5 percent in 1985; 1,000 c personal incomes also increased sharply, reflect- ing higher urban wages and rural incomes; the gross value of industrial output rose by about 18 percent, led by a major surge in industrial activ- ity; and gross agricultural output value (includ- o . ing rural industries) increased by about 13 per- cent, slightly below the increase in 1984, but well above previous medium-term trends. Planted Amount in USS mil ons acreage and output of grain and cotton were re- duced in 1985, mainly the result of lower pro- Numberof operat ons curement prices and a smaller volume of guaran- teed procurement, measures instituted by the government in response to overproduction in the previous year. Energy production also rose, as bottlenecks and constraints eased. Coal output increased by trial countries and a worsening of the interna- about 7.7 percent, while electricity supplies and tional economic environment. Exports fell by crude-oil production rose by 8 percent and 8.9 0.8 percent, the result, in part, of a sharp fall in percent, respectively. Although cargo-freight the international price of palm oil, depressed tonnage by rail increased by some 12.1 percent, rubber and petroleum prices, and the suspension this rise, to some extent, was offset by a more of international tin trading toward the end of the rapid growth of road and waterway transport. year. Malaysia's export earnings were more than However, considerable deterioration took offset by a 7.2 percent decline in imports, as do- place in the balance of payments. Stagnant ex- mestic demand was sluggish. As a consequence, ports and an increase in imports by more than the current-account deficit as a share of GNP half resulted in a current-account deficit of over fell from 5 percent in 1984 to about 3 percent in $11 billion, a negative swing of $12 million as 1985, and Malaysia's borrowing requirements compared with 1984. The stagnation in exports from abroad were, in turn, reduced signifi- may reflect a combination of weakening incen- cantly. tives for exporters, sluggish world demand for Prudent management of the domestic econ- some products, and strong domestic demand. omy and the relatively slack pace of domestic Tighter controls over imports were imposed in economic activity contributed to low inflation early 1985, but were not immediately effective. and a stable exchange rate against the dollar. China's domestic currency also depreciated However, closures of, or cutbacks in, electronics against the U.S. dollar, by about 14 percent in and textile firms, the effect of declining tin ex- 1985. ports on the prospects of hundreds of small tin Inflation increased notably in 1985, reflecting mines, and the sharp slowdown in neighboring a governmental decision to free prices of certain EastAsia and Pacific 97 goods such as meat and vegetables, as well as in- cluded an almost fourfold increase in official creased domestic demand resulting from urban retail prices (so as to eliminate consumer subsi- wage increases, the continuing rise in rural in- dies and improve the financial position of public comes, and substantial credit expansion in late enterprises) and greater autonomy to public en- 1984. The index of retail prices rose by about 8.8 terprises in determining levels of investment, percent, compared with 3 percent in previous production, and employment. years. Tighter controls over credit and project A significant increase in inflation occurred approvals contained investment demand in the during the year, however, and the current-ac- second half of 1985, and government revenues count deficit rose by $10 million to $95 million. grew faster than expenditures, eliminating the The rate of inflation jumped to more than 50 small budget deficit of previous years. percent, the result of monetary expansion and China's economic reforms continued to make adjustments to official prices and wages in the considerable progress. Rural reforms emphasize state sector. As in previous years, the trade defi- the growth and diversification of activities, both cit remained large, with export earnings amount- agricultural and nonagricultural, and the alloca- ing to only 29 percent of imports. tion of resources in agriculture now occurs largely through market mechanisms, with the Exports Increase in Papua New Guinea government influencing supply and demand The economy of Papua New Guinea grew by through procurement and pricing policies rather over 6 percent during 1985, aided by a healthy than physical quotas. Under the farm-procure- export performance. Despite declining world ment system introduced in 1985, procurement prices for the country's mineral exports, higher targets are set for grains, cotton, and a number prices for agricultural commodities, coupled of other products, and the government offers to with higher levels of production, increased the contract for deliveries at a price expected to value of total merchandise exports by 20 per- achieve the target. Individual farm households cent. As a result, the current-account deficit as a are free, in principle, to accept or reject the of- percentage of GDP was narrowed somewhat to fer, which therefore, in effect, becomes a mini- 13 percent, and foreign-exchange reserves stood mum price guarantee. Similarly, in urban re- at an equivalent of about six months of imports forms, an increasing proportion of industrial at the end of the year. output is being allocated through market mecha- Prospects for world prices of Papua New nisms, at flexible prices. Profit incentives have Guinea's primary export commodities are less been strengthened and regularized for many bouyant for the future, and the economy is pro- state enterprises, and a large and growing collec- jected to grow by only 3 percent in 1986. While tive sector in industry and services now fosters little pressure on domestic prices or the coun- competition, as well as contributes to growth of try's international reserve position is expected, output. the budgetary and the current-account deficits Progress has also been made in strengthening are likely to remain substantial, and, for the the central bank's role of regulating the banking longer term, unsustainable. The government is system and implementing monetary policy, in currently preparing a medium-term develop- substantially raising interest rates on loans and ment plan that embodies a set of policies and deposits, in shifting from grant to loan financing strategies designed to restore budgetary and ex- of investment projects, and in gradually liberal- ternal balance and sustain positive future per izing flows of capital and labor in the economy. capita GDP growth. The most important short-term problems in China relate to demand management: Wages in Islands Dependent on World Trade state enterprises appear to be difficult to hold Fiji experienced a decline in GDP of about 3 down; investment demand, also, is hard to re- percent in 1985, the result of low sugar prices, strain. For the longer term, reforms are needed declining tourist arrivals, and several severe cy- in the areas of the social-security system, the al- clones that struck during early 1985. While this location of labor and capital in the urban econ- downturn in economic activity and the associ- omy, and the remaining price distortions. ated decline in imports reduced the current-ac- The economy of the Lao People's Democratic count deficit to below I percent of GNP, it com- Republic grew by about 7 percent in 1985, pounded the economic effects of several years of largely the result of increased rice production, slow growth in the early 1980s, which had led to which, at about 1.4 million tons, was the self- stagnant per capita incomes and a rising rate of sufficiency target that had been set for the 1981- unemployment. The economy's growth pros- 85 five-year plan. Growth was also registered in pects for 1986 are brighter, as sugar production the mining, manufacturing, and forestry sec- is likely to be higher than in 1985, sugar prices tors. A new system of public-enterprises man- may recover slightly, and tourist arrivals are ex- agement was introduced in 1985. This system in- pected to increase moderately. In continuation 98 1986 Regional Perspectives of its external adjustment, Fiji is concentrating pra, suffered a reversal of the rapid growth ex- on expanding sugar production and tourism, perienced in 1984, as copra prices declined to while continuing efforts to diversify its export one third of their peak level. The medium-term base, both in agriculture and in export-oriented outlook for these economies is uncertain, since industries. The smaller Pacific island coun- vegetable-oil prices are not expected to recover tries-Solomon Islands, Tonga, Vanuatu, and until the late 1980s, and efforts at diversification Western Samoa-with their economic fortunes have been slow to gain momentum. tied closely to the export of one commodity, co- South Asia 99 SouthAsia Although there were signs of a slowdown of and balance-of-payments strains have affected economic growth in 1986, most South Asian Bangladesh, Burma, Nepal, Pakistan, and Sri countries have enjoyed annual growth rates in Lanka. gross domestic product (GDP) of over 4 percent Along with the current problems of short- during the 1980s. During much of the past dec- term stabilization, South Asian countries are ade, in fact, the economic performance of South also preoccupied with the need to promote rap- Asia has been notable, given the generally diffi- idly the process of structural adjustment to cult world economic environment. achieve a more viable balance of payments. At- Among the more impressive accomplishments tention is being directed, therefore, toward of South Asian countries has been their success bringing about a sustained expansion of exports, in achieving sustained growth in agriculture, in and, in particular, exports of manufactures. The particular, the production of basic foodstuffs. objective is being sought through trade-liberali- Countries such as India, Pakistan, and Sri zation policies, policies to increase economic ef- Lanka have achieved virtual self-sufficiency in ficiency and competitiveness, and provision of food grains, while Bangladesh has made such incentives to the private sector. Governments progress that the need for food-grain imports also expect that these measures will provide in- may no longer exist by the end of the decade. In creased employment opportunities in the indus- Burma, also, major advances have been made in trial sector and help enhance their creditworthi- expanding production of paddy. ness for external commercial borrowing (an The slowdown in growth rates, which oc- important consideration at a time when conces- curred in 1985 and continued into 1986, is partly sional assistance from industrial countries has the result of the slower growth in economic ac- declined). tivity in the industrial countries and Middle An additional focus of medium-term policy is Eastern oil exporters, and, in part, is also a re- to expand domestic-resource mobilization to fi- flection of difficulties in demand management nance the capital formation required to sustain by South Asian countries. Thus, serious fiscal development. This focus has led to an emphasis on raising public savings and has encompassed action both to increase revenues and restrain the growth of current expenditure. More attention has also been directed to improving the perfor- Table 4-7. South Asia: 1984 Population mance of state enterprises. This sector, which and Per Capita GNP of Country bulks large in South Asian economies, is char- Borrowers ;Fiscal Years 1984-86 acterized by widespread inefficiency and oper- Borrowers, ating losses, with a resulting burden on central Country Per capita borrowers, Populationa GNP 1984b budgets. fiscal i984-86 (thousands) (US$) The effects of these policy actions across a Bangladesh 98,057 130 broad front should position the countries of Bhutan 1,213 n.a. South Asia to take advantage of the potential Burma 36,126 180 for a resumption in world economic growth that India 749,184 260 is associated with a declining inflationary envi- Nepal 16,112 160 ronment and a reduced level of interest rates. Pakistan 92,361 380 Higher growth in the industrial countries is also Sri Lanka 15,851 360 likely to result in an easing of protectionist pres- sures and an expansion of imports from the de- NOTE:The 1984 estimates of GNP per capita presented veloping countries. above are from the "World Development indicators" in the Although the more pressing near-term prob- World Development Report 1986. n.a. Not available. lems of stabilization and structural adjustment a. Estimates for mid 1984. have been emphasized, longer-term social issues b. World Bank Atlas methodology, 1982-84 base period. are not being ignored. Most of the countries of 100 1986Regional Perspectives the region have high population growth rates, growth overall during the past year is estimated which frustrate efforts to raise living standards to be around the seventh plan target of 2.5 per- and aggravate problems of urban congestion cent. It is likely that growth in manufacturing and unemployment. The lack of educated and and the electricity, gas, and water sectors also skilled people retards development across all sec- reached the seventh plan targets of 5.5 percent tors, reducing the capacity to absorb investment and 8 percent, respectively. Inflation during the and causing major bottlenecks in the develop- year, as measured by the wholesale price index, ment process. In addition to shortages of techni- was 3.7 percent, in contrast with more than 7 cal skills at all levels, weak managerial capacity percent in each of the preceding three years. affects development administration. Countries, Early estimates, suggesting that the growth in therefore, are encouraging population planning, the dollar value of exports during fiscal 1986 was along with programs of maternal and child considerably less than the rate of growth of im- health care and nutrition. Increasing attention is ports, are disappointing, as the seventh plan being paid to the problem of widespread illiter- calls for distinctly faster rates of export growth acy and the need to expand and improve techni- than in previous years. This export performance cal training at all levels for craftsmen, techni- reflects both increased competition in export cians, and engineers. markets, as well as the fact that it takes time for policies to affect noticeably the profitability of India: The Seventh Plan Begins exports relative to domestic sales. The first year In light of the targets of India's seventh five- in the seventh plan also saw central government year plan (1986-90), which calls for average an- tax revenues increase by an estimated 22 percent nual real growth of 5 percent, the pace of eco- over actual collections during the preceding nomic activity in fiscal 1985 was below the plan year. target: Growth in GDP was around 3.6 percent; Last year's Annual Report noted that prelimi- early estimates for fiscal 1986,5 however, indi- nary reviews of India's economic performance cate a likely growth rate of about 5 percent. under the sixth five-year plan suggested that Food-grain production in fiscal 1986, estimated at 150 million tons (an increase of around 2.5 percent over the previous year) was close to the References in these paragraphs are to the Indian fiscal year: record reached in fiscal 1984. Agricultural April I-March 31. Table 4-8. Lending to Borrowers in South Asia, by Sector, Fiscal Years 1977-86 (millionsof US dollars) Annual average Sector 1977-81 1982 1983 1984 1985 1986 Agriculture and Rural Development 781.8 813.3 944.9 967.2 1,107.4 1,311.6 FinanceCompanies Development 66.4 180.0 - 100.0 - 490.0 Education 24.1 14.3 19.8 48.8 138.9 55.2 Energy Oil, Gas, and Coal 133.0 209.2 478.3 498.0 591.0 - Power 307.5 1,295.2 577.1 854.6 926.0 710.0 Industry 166.8 183.5 - 278.3 309.0 502.2 Nonproject 83.0 240.0 110.0 170.0 30.0 200.0 Population, Health, and Nutrition 22.0 - 18.0 70.0 - 129.0 Small-scaleEnterprises 21.6 36.5 - 75.0 7.5 10.0 Technical Assistance 6.4 7.0 6.0 35.0 - - Telecommunications 118.7 40.0 35.0 - 22.0 Transportation 97.0 80.0 506.0 530.7 289.3 - Urban Development 46.8 25.0 187.1 - 138.0 145.0 Water Supply and Sewerage 96.4 - 97.0 73.0 - 78.0 Total 1,971.6 3,124.0 2,979.2 3,700.6 3,559.1 3,631.0 Of which: IBRD 315.8 1,446.0 1,163.1 1,865.0 2,169.0 2,216.2 IDA 1,655.8 1,678.0 1,816.1 1,835.6 1,390.1 1,414.8 NOTE: Details may not add to totals because of rounding. South Asia 101 l~~~~~~~~~A Gathering waterfrom a tap in Kathmandu, Nepal. most plan targets had been achieved. The sug- port growth. However, this approach, which gestion has been confirmed, and India's perfor- aims to provide the government with an oppor- mance is a tribute to the quality of its economic tunity to deal more effectively with the twin management in adjusting to a variety of chal- challenges of alleviating pervasive poverty and lenges while keeping external borrowing and in- creating employment for a labor force expected flationary pressures in check. to grow at 2.3 percent a year, depends critically Nevertheless, there were several less satisfac- on a continued and substantial net transfer of tory aspects to economic performance under the capital. sixth plan. In particular, the national savings In pursuance of the objectives of the seventh rate fell during the period, resulting in a slower plan, a number of policy initiatives and reforms rate of investment growth than had been have been set in motion to modernize industry, planned; the savings shortfall was especially evi- upgrade technology, and replace monopoly dent in the public sector. A second major disap- markets with competitive ones in order to gener- pointment was a far lower-than-expected rate of ate higher rates of growth and employment. A growth of real manufacturing value added. significant development has been the announce- Building on the experience of the previous ment of a long-term fiscal policy that aims at plan, the seventh plan targets annual GDP providing a stable economic environment under growth at 5 percent, places more emphasis on which uncertainties can be reduced and the the efficient use of capital and other resources foundations of economic growth can be set than on accelerated growth of investment, and firmly into place. A relatively liberal import re- underscores the importance of a high rate of ex- gime has been continued (despite a large trade 102 1986Regional Perspectives faster than population, industrial output re- Figure4-4. Trendsin Lending, bounding strongly after stagnating in the early Fiscal Years 1977-86 1980s, and growth in nontraditional exports amounting to an average 20 percent a year in real average 1984 1985 1986 terms during fiscal 1981-85, and accelerating to- 1977-81 1982 1983 ward the end of the period. In addition, supplies 4,000 of domestic commercial energy, and especially 4,000 2 ,r natural gas, have increased steadily, permitting sustained growth in power and fertilizer produc- ° e ~ E tion, along with significant progress in import Cl) <, e substitution of petroleum products. Policy initiatives place increasing emphasis on 3.000 the role of the private sector and on improve- ment in the efficiency of the public sector. In ag- l X riculture, for instance, increasing incentives have been provided to the private sector through increased producer prices and outlays for agri- 2.000 | t cultural development; heightened efficiency is being sought, in part, through elimination or re- duction in subsidies. Policy changes in industry, too, seek an enhanced role for the private sector through a substantial disinvestment of public en- 00 S g r- xN terprises and liberalization of imports and of in- 1 000 vestment controls. Export development has been encouraged by the adoption of more effective exchange-rate policies and a variety of export in- centives. The government's third five-year plan objec- O g tive-a :.B rate of economic growth of 5.4 percent annually over the period fiscal 1986-90-is es- sential for a gradual improvement in the popula- Amount in USS millions tion's low standard of living; at the same time, Numberof operations the realization of that objective is a difficult challenge. Its achievement will depend on ade- quate growth in imports, the sustenance of a high rate of agricultural growth, continued ex- pansion of investment, increased mobilization deficit), and consideration is being given to a of domestic financial resources, and substantial shift away from quantitative controls on imports improvement in the ability of the government to towards a greater reliance on tariffs. Measures implement development projects. to provide greater incentives to exports are also The steady improvement in economic perfor- being studied. mance that has marked the Pakistan economy since the late 1970s was interrupted in fiscal Bangladesh and Pakistan: 1984,7 as agricultural production and workers' Improving over 1985 remittances declined and inflationary pressures Notwithstanding its severe structural con- continued. Though economic performance did straints and disruptions caused by natural disas- improve in fiscal 1985, the year was marked by ters, the Bangladesh economy continued its rela- serious budgetary and balance-of-payments dif- tively good pace of economic performance ficulties. The former, which included expendi- achieved during the second five-year plan pe- tures for subsidies, Afghan refugees, and de- riod, fiscal 1981-85.1 A major factor in this sus- fense, was compounded by problems associated tained economic expansion-GDP in fiscal 1986 with an inelastic tax structure. The balance-of- may have increased by about 5 percent-has payments position, however, was weakened as a been the government's steadily improving ability result of declines in both merchandise exports to deal with short-term economic financial prob- lems, as well as with the basic development chal- lenges in the agricultural, industrial, and export Referencesin these paragraphs are to the Bangladeshfiscal sectors. vear: July I-June 30. Recent expansion in output has been broadly 7 Reference to fiscal years in these paragraphs are to the Paki- based, with food-grain production growing stani fiscal year: July I-June 30. SouthAsia 103 and in remittances. These problems have per- long-term growth. An important, temporary sisted into fiscal 1986, and the mobilization of stimulus to the liberalization process and its as- additional resources and expenditure restraint sociated expansion of output, employment, and constitute major challenges for the government. investment was the dramatic rise in the world Following the recovery of GDP in fiscal 1985 price of tea that began in 1983 and persisted into from the depressed levels of the previous year, 1984 before declining sharply in 1985. The hike overall economic growth in fiscal 1986 is likely in tea prices enabled the country to sustain the to approach 7 percent. high level of economic activity of previous In order to effect needed structural adjust- years-despite the emergence of a number of ment of its economy and correct supply weak- economic strains. With the recent downturn in nesses, the government has recently modified tea prices, the effect of these strains has become several important policies in the major sectors. increasingly evident in major sectors of the econ- In agriculture, for instance, a number of support omy, in particular, the export sector. These services, including those for extension, have problems have been aggravated by continuing been strengthened; provision of agricultural in- ethnic tensions that have negatively affected puts has been emphasized, and coordination earnings from tourism. among federal and provincial authorities has In the medium and longer run, there is hope been improved. Better industrial performance for a resumption of the strong economic growth reflects the effect of recent government policies, enjoyed in the 1977-84 period. A number of im- although protection for the domestic market portant policy reforms have been initiated. continues to be considerable, thus impeding the These include progress towards providing neces- export of manufactures. The government recog- sary incentives to the manufacturing and export nizes that the private sector needs adequate in- sectors; some reduction in protection; and the centives and that the public sector must become adoption of measures aimed at reviving the more productive. To enhance public-sector pro- country's all-important tree-crop sector. Mea- ductivity, a variety of actions, aiming at reduc- sures adopted include changes in tree-crop taxa- ing protection in highly protected industries, de- tion, provision of stabilization funds for tea and regulation, and improved efficiency, are being rubber, and the introduction of a multiyear pro- implemented. gram of investment and management improve- The government is conscious of the need to in- ments designed to increase the productivity and crease investment in long-neglected physical and efficiency of the tree-crop sector. The govern- social infrastructure. Neglect has led to power ment, concerned also with the inadequacy of in- shortages, deterioration in the irrigation net- dustrial incentives, has begun to take action to work, and widespread failures in the road sys- reform the country's industrial-policy frame- tem. Lack of investment in social sectors is re- work and to initiate reforms in the large and gen- flected in social indicators that lag behind those erally inefficient public-enterprise sector. of other countries at comparable levels of devel- Sustained economic growth remains elusive to opment. The sixth plan places special emphasis Nepal, one of the poorest countries in the world. on these problems and on the need for progress In the three-year period, fiscal 1983-85,8 growth in domestic-resource mobilization to finance was barely 3 percent a year, and, in the last year needed higher public-investment levels. of that period, agricultural growth, and thus overall GDP growth, slowed to less than 3 Sri Lanka and Nepal: percent. In large measure, this flat economic Trying to Boost Exports performance reflects continued stagnation in The past two years appear to have been the agricultural sector, which dominates the marked by a gradual slowing in the impressive economy. performance of the Sri Lankan economy. Be- Nepal's development difficulties rest, in part, tween 1977 and 1984, real GDP grew at an an- on its unfavorable natural endowment, which nual rate of close to 6 percent. This rapid includes a poor terrain, landlocked position, and growth, stimulated by major policy changes that weak resource base. These physical and natural were part of the broad program launched in difficulties have been compounded by weak- 1977-78 to decontrol the economy, liberalize nesses in both public administration and eco- trade, and place greater reliance on market nomic management. Increased attention is now forces, was accompanied by an expansion in being paid to the need to correct the system of paddy output that brought the country close to production incentives and increase the country's food-grain self-sufficiency. An ambitious pub- capacity for economic management. Several lic-investment program, highlighted by the ma- jor works associated with the Mahaweli irriga- tion and power-development scheme, helped to References to fiscal years in these paragraphs are to the Nep- create the basis for sustaining the country's alese fiscal year, July 16-July 15. 104 1986 Regional Perspectives policy measures, designed to stabilize the econ- government continues to apply the experience omy in the short term, have been adopted re- gained from intensification of the high-yielding cently: These include a broad range of fiscal, variety programs in paddy to other crops with a monetary, and balance-of-payments policies, view to increasing nonrice export earnings, as along with reforms aimed at rationalizing and the world market price of rice has not improved liberalizing the trade and exchange system. At- since its decline in 1982. tention is also being devoted to defining issues Notwithstanding Burma's strong economic and appropriate policies in agriculture, industry, performance, serious financial imbalances, transport, and population planning, as well as in which were somewhat masked in the early 1980s the export sector. as a result of strong rice prices, have become evi- dent. They include large public-sector deficits, Reducing Expenditures in Burma rapid increases in domestic credit and the rate of The high rate of economic growth experienced inflation, and a major increase in the external by Burma during the early 1980s was maintained current-account deficit along with a large debt- during fiscal 1985,9as the economy grew by over service ratio. To redress this situation, economic 6 percent. A major factor in this sustained ex- policy has concentrated on reducing capital ex- pansion has been the Whole Township Program penditures and imports, which will have an im- (WTP), launched in fiscal 1978 with the aim of pact on the near-term and medium-term rate of increasing paddy production. This highly suc- economic growth. The government will also cessful Burmese version of the green revolution have to exert special caution in its management resulted in a 50 percent expansion of paddy out- of the balance of payments to avoid adding to put between fiscal years 1978 and 1985. Success the burden of its external debt. of the WTP has necessitated the expansion of modern storage and milling facilities in order to __ _ upgrade the quality of milled rice so as to be References to fiscal years in these paragraphs are to the Bur- competitive with other exporting countries. The mese fiscal year, April I-March 31. Europe, Middle East,and North Africa 105 and NorthAfrica Europe,Middle East, For most countries in the Europe, Middle mand. Hungary and Yugoslavia, however, expe- East, and North Africa region, 1985was a disap- rienced sharp declines in growth rates. pointing year. Adjustment efforts continued The oil-price declines of late 1985 and early apace, and some progress was achieved in reduc- 1986 have had, and are expected to have, major ing balance-of-payments deficits; nevertheless, effects on the economies in the region. ln three the hopes ushered in by the beginnings of eco- countries-Algeria, the Arab Republic of nomic recovery in the United States in 1984 were Egypt, and Tunisia-oil exports account for be- not completely fulfilled, as a slowdown in indus- tween 40 percent and 95 percent of merchandise trial-country growth as a whole in 1985 reduced exports. With prices declining by more than the external stimulus that could have benefited half, direct losses in export earnings have been, the economies of the region. For the major bor- and are anticipated to be, high. On the other rowers of the region as a group, 10 growth in out- hand, in the oil-importing countries-Hungary, put averaged 3.2 percent, the same as in 1984. Jordan, Morocco, Portugal, Turkey, the Yemen Algeria, Morocco, and Portugal experienced Arab Republic, the People's Democratic Repub- higher growth in gross domestic product (GDP) lic of Yemen, and Yugoslavia-oil imports ac- than in 1984. For the first two, growth was count for between 20 percent to 40 percent of largely the result of favorable weather and re- merchandise imports; price declines, therefore, covery in their agricultural sectors; Portugal's ease balance-of-payments pressures. The net im- growth was fueled by increased external de- pact on oil importers is mixed, however, because of their close links with the high-income oil ex- Table 4-9. SE;uro;pe, and: S : Middle Eli;ast,: porters: The latter group supplies oil and mar- NoTrthabtl na.E19e4 PMilatison and kets for products of the former, is host to mi- NoerthAfrica: 1984Population and grant workers, and, in the past decade, has Per CapitAGNP of Country Borwr, provided considerable amounts of concessional Fiscal Years 1984-86 assistance. Already in 1985, with a considerable Countryowc PuercaptN a scaling down of public-investment activity tak- fiscal 1984-46 (thousands) (VS$) ing place in these countries, several oil-import- ing countries have experienced reductions both Algeria 21,187 2,410 in workers' remittances and in the volume of bi- Cypruts 654 3,650 laelgrns EFgypt, of Arab Repulblic 45,9t33 SS7:20: lateral grants. Hungaryi RJpubfiC 10,668i 72,100 The recent decline in oil prices has intensified Jordant 3,385 1,5700 pressures on oil exporters to adopt adjustment loroco 3213905 670 programs; Tunisia made the most progress in Oman 1,138 0 6490 this regard during the past year. The oil im- Portugam 10,164 1,0 porters, which had already adopted adjustment Syrian Arab1Republic 10,094 1,620 programs (notably Hungary, Morocco, Turkey, Tunisian Ara Republic 6,9814 1,270 and Yugoslavia) continued their adjustment ef- Turkey 48,371 1,160 forts. As in previous years, the focus of their ex- YemenArab Republic m: 7,7z648371 5501160 penditure restraint continued to be on invest- Yemen, PeopleA's Demoratc 7 4 ment, which fell, on the average, for the third e YRepublic sof c 035 t550 year in a row. For the first time since 1979, in- Repubslavic o ;:; S (::: :i 0t2,06350 : 0 : 56 20120 vestment in the oil-exporting countries also fell, YugoslaCia 22,963 2,120 by 2.1 percent. The cumulative effects of these NoTE:The 1,984 estimates of GNP per capita presented cuts in investment programs have meant that the above are froM the '"World DevelopmentIndicators"in the Worl DevelopmentReport 1986. n.a. Not4available. a. Estimatesfor mid i954. b. World Bank Atlas methodology, 19884 base period. i Algeria, the Arab Repubic of Egypt, Hungary, Morocco, c. East Banik only. Portugal, Tunisia, Turkey, and Yugoslavia. 106 1986 Regional Perspectives region's major borrowers, as a group, have not Debt burdens, however, did not ease. All increased investment levels since 1980. countries increased their total external indebted- The restraint on investment expenditures also ness (except Romania and Yugoslavia), and contributed to a substantial deceleration in the debt-service ratios increased for all except Mo- growth of imports; imports by major borrowers rocco, where debt-service payments were con- increased by less than 1 percent in 1985, com- tained through debt rescheduling. For the major pared with nearly 5 percent the previous year. borrowers, debt-service ratios now range from Exports of goods and nonfactor services, by 35 percent to 45 percent for Algeria, Egypt, and contrast, grew rapidly in volume terms-by al- Hungary to about 20 percent for Tunisia. The most 7 percent, despite the slowdown in world tenacity of the debt problem is to be traced to trade. This performance, which came on the severaL factors, many of them external. First, ex- heels of export growth of 11 percent in volume port prices in dollar terms for countries of the terms in 1984, indicates that adjustment pro- region, as for developing countries elsewhere, grams are taking hold and are having an effect. have been falling in the past four years, partly as Since 1980, for instance, as a result of efforts of a result of falling real commodity prices, but the major borrowers to reduce their external-fi- also, the result of an appreciation, through nance requirements, exports have increased by 1985, of the United States dollar. As a result, about 60 percent in volume, while imports have debt-service ratios have tended to worsen, and increased by much less, by about 10 percent in servicing of dollar-denominated debt (about 75 volume. As a result of this underlying real per- percent of all debt) has become more difficult. formance, balance-of-payments deficits, on the Second, with variable-interest debt accounting average, have been cut in half; in 1984-85, cur- for over half of total debt, interest charges on rent-account deficits averaged 1.9 percent of debt have been high. Although nominal interest GDP for the region's major borrowers, com- rates eased somewhat in 1985, they remained pared with 3.9 percent in 1979-82. In this re- high by historical standards. More important, gard, calendar year 1985 witnessed a modest de- however, the general disinflation in export prices cline in balance-of-payments deficits from 1984 has meant a continuation of extraordinarily high levels. real interest rates. Table 4-10. Lending to Borrowers in Europe, Middle East, and North Africa, by Sector, Fiscal Years 1977-86 (millions of US dollars) Annual average Sector 1977-81 1982 1983 1984 1985 1986 Agriculture and Rural Development 583.8 490.1 740.0 474.1 821.0 536.2 Development Finance Companies 225.2 356.0 56.3 575.0 87.1 515.0 Education 137.2 93.0 93.8 142.7 104.1 172.9 Energy Oil, Gas, and Coal 71.1 193.5 130.4 103.0 166.7 - Power 200.6 42.5 318.6 308.7 267.0 505.2 Industry 209.3 134.1 291.1 206.1 177.6 125.0 Nonproject 169.0 304.5 575.8 376.0 - - Population, Health, and Nutrition 8.5 - 18.1 - 41.9 - Small-scale Enterprises 24.0 70.0 - - 50.0 100.0 Technical Assistance 1.7 - 4.5 - 4.7 12.0 Telecommunications 15.0 64.0 - 128.0 23.0 - Tourism 11.7 - - - - - Transportation 327.3 397.8 116.0 309.4 356.9 193.5 Urban Development 21.6 74.0 85.0 75.0 37.2 25.0 Water Supply and Sewerage 122.8 159.6 106.0 427.8 292.0 120.0 Total 2,128.8 2,379.1 2,535.6 3,125.8 2,429.2 2,304.8 Of which: IBRD 1,912.7 2,317.6 2,464.5 3,052.4 2,387.1 2,258.4 IDA 216.1 61.5 71.1 73.4 42.1 46.4 NOTE:Details may not add to totals because of rounding. Europe, Middle East,and NorthAfrica 107 A scenefrom an adult literacy class in the Yemen Arab Republic. Some of these factors are now being reversed. dens are so onerous that the pressure for contin- In 1985, the dollar began to depreciate, and in- uing adjustment is unlikely to ease. terest rates fell; these factors, in combination, should act to reduce debt-service burdens. If de- For Middle-income Oil Importers, clining oil prices provide a substantial boost to a Mixed Year industrial-country growth, especially in Europe, Turkey was one of the first countries to under- the level of exports from countries of the region take a serious adjustment program in response may be enhanced. At the same time, debt bur- to a deep economic crisis. Painful as the adjust- 108 1986 Regional Perspectives Turkey, although the country will need to ex- Figure4-5. Trendsin Lending, pand its export markets outside the high-in- FiscalYears1977-86 come, oil-producing economies. annual Turkey remains the region's largest borrower avernge 184 1985 1986 from the World Bank, with $1,057 million in 1977-81 1982 3 loan commitments from the IBRD in fiscal 1986; 4,000 the Bank continued its support of Turkey's eco- nomic-reform process through lending for pol- icy adjustment, including a $300 million loan to support restructuring of the financial sector. Hungary, by contrast, experienced a particu- larly difficult year in 1985, primarily the result 3,000 - of an unusually cold winter, which disrupted in- dustrial and agricultural production, and GDP ~ v by 0.5 percent. In addition, the country - vdeclined X15 co gt sadopted a more cautious pace of implementa- ,- t ga< >> , > >A tion of domestic economic reforms. Partly as a 2,000 | X t c4 result of weak demand for certain Hungarian ex- e6 C4 ports in West European markets, and also be- cause of a diversion of exports to "ruble" areas, export volumes to convertible-currency areas ac- tually fell. A substantial "convertible-currency" 1...,..~, C .OO.. C current-account deficit (-2.3 percent of GDP), 1,00 '°r sr 4 (+7 K however, was more than adequately covered by o borrowing, as the country added to its foreign- exchange reserves. In doing so, however, a sub- stantial increase in total external indebtedness took place. 0 Hungary's prospects for economic growth re- main constrained by the need to devote a sub- stantial proportion of convertible-currency Amount in USSmili ons earnings to service debt. Moreover, the economy Number of operations is likely to gain only modestly from the decline in oil prices, as it is tied to long-term price con- tracts under the Bucharest formula. II Thus, even moderate growth in GDP is contingent upon a sustained revival in convertible-currency ex- ments contained in the 1980 program were, they ports, which, in turn, presupposes that Hunga- have begun to pay handsome dividends, as the ry's effort to accelerate its reform program and economy now appears to be more resilient to related adjustment policies will succeed. fluctuations in external conditions. Although Yugoslavia adopted an adjustment program the pace of activity slowed down modestly in in 1983; since then, its focus, aimed at improv- 1985 (from about 6 percent growth in 1984 to a ing external balance and, internally, at making rate of about 5 percent in 1985), it was still far the economy more responsive to market forces, higher than the regional average. Turkey's ex- has not changed. On the first count, the pro- port performance continued to be excellent, as gram has been successful. Export volumes to exports grew by 12 percent in volume in 1985. convertible-currency areas have increased signif- Export growth-mainly to Middle Eastern and icantly, and the economy has run current-ac- some EEC markets-was accompanied by re- count surpluses for three vears. The adjustment straint in import growth, and the economy expe- effort has meant, however, that GDP growth rienced a dramatic halving of its current-account and investment have had to be lowered substan- deficit, to 1.5 percent of GDP. The growth in ex- tially. GDP growth in 1985 was only 0.5 percent, ports also lightened Turkey's growing debt-ser- while fixed investment declined by 5.5 percent. vice burden, notwithstanding large payments on The second aspect of adjustment, reform of the rescheduled debt that became due. Some prog- ress was also made on inflation, which deceler- ated to 43 percent for the year; even so, inflation remains the economy's most serious problem. llThe viet Bucharest oil isan formula Union supplies andagreement under countries shictsthe So- gas to signatory at a The softening of international oil prices is likely price that is an average of international prices in the pre- to have an important and favorable effect on vious five years. Europe, Middle East,and North Africa 109 incentive structure of the economy, has proved creased during fiscal 1986 over the previous more elusive and difficult to accomplish. None- year's total. An increasing proportion of IBRD theless, important legislation, reforming, in par- lending to Morocco has been in support of pol- ticular, the banking system, the foreign-ex- icy reforms; in the past two years, support has change allocation system, and foreign-credit been given for sectoral reform in agriculture, in- regulations, was adopted in late 1985 and is now dustry, and education. being implemented. Reflecting the continuing Jordan has been particularly affected by the impact of stabilization efforts on new invest- slowdown in economic activity in neighboring ment and the initial effects of new laws imposing high-income, petroleum-exporting countries. financial discipline and strict controls on foreign Economic performance remained weak in 1985; borrowing, Bank lending to the country declined growth was about 3.5 percent (compared with considerably in fiscal 1986. The outlook for fis- over 6 percent a year in the 1980-84 period), the cal 1987, however, is for further improvement in current-account deficit remained a high 6 per- the external account as a result of a reduced en- cent of GDP, and public-sector finances wors- ergy-import bill and increased exports to con- ened. This performance can be attributed, first, vertible-currency areas; lending, as a result, to a 50 percent decline in foreign aid from neigh- could return to more normal levels. boring oil-producing countries, which triggered Viewed over the long term, Portugal's adjust- a reduction in public investment; second, to a ment efforts have met with some success, partic- stagnation in workers' remittances; and, finally, ularly in the area of exports; these have in- to a sharp decline in the export of manufactured creased by almost 15 percent a year in real terms goods to neighboring countries. The reduced over the last three years. In 1985, led by continu- foreign-exchange inflow was absorbed, in part, ing good export performance, Portugal's econ- by reduced imports, which fell in tune with cuts omy recovered from two years of declines; GDP in investment. The country's low external in- grew by 3.5 percent, compared with an average debtedness, however, allows it latitude to make -0.9 percent in 1983 and 1984. The country's economic adjustments without seriously disrupt- entry into the European Communities on Janu- ing growth. ary 1, 1986, as well as the establishment of a more stable political environment, afford new Middle-income Oil Exporters: opportunities for the country to meet its domes- Beginning to Adjust tic economic challenges, including large public- Since the early 1980s, the Syrian Arab Repub- sector deficits. lic has experienced a difficult balance-of-pay- Since 1983, Morocco has undertaken a pro- ments situation as a result of declining net oil ex- gram of economic reform, one supported by two ports (oil imports now balance oil exports in successive Stand-by Arrangements with the In- value) and difficulties in controlling its budget ternational Monetary Fund (IMF) and by IBRD deficit. In addition, more recently, declines have sectoral-adjustment lending. Progress has been taken place in workers' remittances and in the mixed; the country continues to experience diffi- volume of concessional assistance Syria receives. culties in servicing its debt and, in both 1985 and Estimates for 1985 show no GDP growth, as in- 1986, it had to reach a number of rescheduling vestment and industrial production stagnated agreements with creditors. Public finance re- and production of oil remained flat. As noted in mains the most troublesome area of economic last year's Annual Report, the country needs to policy, as expenditure reduction has been formulate and adopt a program for dealing with marked by rigidities. Growth in GDP acceler- its structural difficulties. ated slightly in 1985 (to 4.2 percent), the result of Algeria is taking measures to move toward a a recovery in agriculture following ample rain- more diversified export base and decrease the fall in the 1985 crop year. The country's export percentage of its total foreign-exchange reve- performance continues to be dominated by the nues originating from hydrocarbon exports. Af- fortunes of phosphates (prices, in current dol- ter a period of highly expansionary investment lars, are half the level of 1975), but the more ac- policies in the 1970s, restrictive demand policies tive export-promotion and exchange-rate poli- have been followed in the past few years. As a cies adopted under the adjustment program result, the country has been able to negotiate already show a trend towards export diversifica- successfully the tightening in the external envi- tion and strong growth in nontraditional exports ronment, in particular, in the oil markets, since and receipts from tourism. As a result, export 1982. Performance in 1985 was good; the coun- growth quickened to over 5 percent in 1985, and try achieved the highest rate of growth in the re- the balance-of-payments deficit was reduced gion (6.7 percent). Despite the fall in oil prices, it from 12 percent (before debt relief) of GDP in was able to contain its current-account deficit to 1984 to 8 percent. The IBRD continued to sup- less than 0.5 percent in GDP, in part, because it port Morocco's adjustment efforts as lending in- continued the import compression of the past 110 1986 Regional Perspectives few years. Algeria is one of the few countries in the economy will witness steady growth with the region that has been able to reduce its out- manageable deficits. standing external liabilities (by over $3 billion between 1982-84). Its debt-service performance High-income, Oil-exporting Countries: has not improved, however, as its export earn- Cutting Back ings have stagnated since 1980 and grace periods The continuing weakening in the oil markets on existing debt have begun to expire. The coun- during 1985 and the dramatic decline in early try is now better positioned than in the recent 1986 further affected the development efforts of past to weather the decline in oil prices; it is al- the high-income, oil-exporting countries (Bah- ready undertaking a set of adjustment measures. rain, Kuwait, Oman, Qatar, Saudi Arabia, and The Egyptian economy passed through a diffi- the United Arab Emirates) by forcing them into cult period in both 1985 and the first half of significantly retrenching their public expendi- 1986. The external environment for the country tures. This retrenchment, in turn, seriously af- deteriorated sharply with the fall in oil prices fected the level of economic activities in the pri- and declines in workers' remittances, Suez Canal vate sector-notably in construction and receipts, and tourism earnings. As a result, the services. The retrenchment in public expendi- balance-of-payments deteriorated further, and tures, which forced many foreign workers to the rate of growth of output slowed to less than 5 leave, was not solely the result of declining oil percent. Scheduled debt-service payments rose revenues; the completion, by the early 1980s, of to about 35 percent of current-account receipts. most of these countries' ambitious infrastruc- The government has adopted measures to con- ture programs was also a factor. A reduced front these difficulties by raising energy prices spending capacity has also helped to delay or and realigning the exchange rate. The World cancel major projects of questionable value. Bank, through its economic work, is supporting Declining oil revenues are likely, also, to af- the government's efforts to devise an adjustment fect levels of Arab/OPEC assistance. If donor program. While this dialogue is continuing, im- countries continue to be adversely affected by pending macroeconomic and sector-policy re- stagnant or declining oil revenues, total aid, es- forms, as well as the government's review of its pecially bilateral aid, may decline further from investment priorities and external borrowing current levels. The aid flows managed by Arab/ program, have slowed down Bank lending. OPEC development funds, by contrast, are not Although economic recovery slowed in Tuni- expected to decline markedly, as these funds are sia in 1985, the economy still grew by over 4 per- well capitalized. cent, largely the result of an exceptionally good The economic downturn resulting from the agricultural crop. With falling oil revenues, fall in oil revenues has had some positive effects however, the balance-of-payments deficit and on the economies of these high-income coun- the debt-service ratio remained at high levels. tries. First, because of reduced overall demand, The government, seriously committed to an ad- project execution costs and operational costs justment program, undertook several measures have declined substantially. Second, labor costs in 1985 to deal with the country's economic dif- have also declined, and, in particular, the gap ficulties; these included restrictive wage policies, between the wages of nationals and expatriates a deceleration in the growth of public expendi- has narrowed, thus contributing to a more rapid tures, and improvements in export performance. absorption of nationals into the productive sec- In order to tackle further its immediate balance- tors. Third, the depressed market conditions of-payments problems, as well as the longer- have forced governments and the private sector term issues of growth and employment (as Tuni- to rationalize investment programs and to intro- sia moves towards becoming a net oil importer), duce greater efficiency in various operations. the government is undertaking further measures Both private and public entities are far more cost to restructure the economy. It is expected that as conscious today than in years past. the set of programmed reforms is implemented, Latin America and the Caribbean 111 LatinAmerica and the Caribbean During the past year, the economies of Latin 2.1 percent. Since 1980, in fact, per capita GDP American and Caribbean countries continued to levels for the region as a whole have fallen by 9 be constrained by the adverse global economic percent (or over 12 percent, excluding Brazil). situation. For the region as a whole, gross do- mestic product (GDP) grew by 2.7 percent in External Adjustment 1985, as compared with 3.2 percent in 1984. This growth performance reflects the interna- Only in Brazil, which registered an increase in tional economic environment and the adjust- GDP estimated at 8 percent, was growth signifi- ment policies pursued by countries primarily to cant. In all other countries, GDP either grew meet debt-service obligations. Sustained adjust- modestly or declined. Excluding Brazil, GDP ment performance and dramatic results were grew by less than I percent overall, thus continu- achieved in the past year: The larger countries ing the erosion of per capita GDP, which fell by continued to generate the trade surpluses neces- sary to service debt, and, for the region as a whole, a trade surplus of $34 billion was at- Tablei4-11.i; Lat1iin America;and t the, tained (as compared with $39 billion in 1984 and Caribbean:L C;198i4 iaznidii $;;i 0 ; > i Populatioin a trade deficit of $1.7 billion in 1981). In con- PeriCapitai G;NiP of CouintryBorrovers,r trast with 1984, however, the 1985 trade surplus Fiscal Yeas 1984-86 was neither achieved nor facilitated through ex- tr0;yi0iL0900y0g; itS Counf 0000yt Per0Xi00 capitap tport growth. The region's exports in 1985 fell by itborrioCiwers, ?'S;Sf(iS iPopu1jatiton, 0i 84 bl 5.7 percent (in nominal U.S. dollars), as com- 6fisca ul94-86 (Ihousands) (t5S$; pared with growth of nearly 12 percent in 1984. Argentina 30,097 2,230 The region's disappointing export perfor- Barbados 253 4370 mance in 1985, shared by most countries, made soliviaS S1l B E tthe 6,2g11igkgiS00;; 540::g$$ containment of imports essential in order to B4srazil;; WiSi;if s > 1f V32,5800 l S1;,72D40; generate the trade surpluses necessary to meet Chile 11,807 1,700 debt-service obligations. Total imports for the Colombia 28,418 1,390 region were further reduced to $58 billion in Costa Rica 2,527 1,190 1985, contributing to a 41 percent decline since Dominican Republic 6,114 970 1981. In general, reductions in imports have Ecuador 9,115 1,150 been realized through policies that reduce aggre- Grenada 94 860 gate domestic demand, by both exchange-rate Gu;iaatemala 7,744 1,160 adjustments and the continued use of quantita- G0auyana210 ;00:f :gi \|liM XC;; if l7850 it 590 ; tive import restrictions Haiti 5,361 320 In the aggregate, the region's trade surplus for Hlonduras;; 0 :0; il :;itd 00; 0ii4,222 tiy t ;700 t 1985 was roughly equivalent to the amount of its Jamaica i2,196 i 150 net interest payments ($35 billion). Interest pay- Mexico 76,837 2,040 ments abroad were equal to about 38 percent of Panama 2,133 1,980 the region's exports of goods; such percentages Paraguay4 04 : ft ;y(; 0,30200it if35 I,240 10 t were especially high for Argentina (66 percent), Peru 18,228 1000 Chile (45 percent), and Bolivia (34 percent). St. Vincentand These payments continue to constitute a heavy the Grenadines 117 84 0 burden both in terms of effecting resource trans- Uruguay; 2,985 ,980 fers abroad (through the generation of trade sur- pluses) and of marshalling the domestic re- NoraT e 198 resimates fGN ert prd ne sources for those transfers. The region's aboreromtE "World Developmet mdiatrs in the external-interest payments now equal about 6 Not available.;)t<;5)t; C07 ii n.a:.S tt:: ;percent of its combined GDP. For some coun- 0a.Estimaics for00 14 midgA00003000j 30ji 000tti;t tries, such as Chile and Argentina, this percent- b. Wold Banik Atls methodology, 198;2-54base seriod. age approaches-or exceeds-the 10 percent 112 1986Regional Perspectives range. In the continuing absence of offsetting Recession and Continuing Crisis external-capital inflows, the marshalling of such amounts for transfer abroad, in addition to pre- The impressive accomplishments of most of venting inflationary pressures, serves to reduce the countries of the region in achieving external the resources available for domestic investment, adjustment have been accompanied by unparal- and, therefore, for restored growth. leled economic recession and crisis for those During the past year, the trend of reduced ex- same countries. Internal adjustment, including ternal-capital inflows to the region continued. In the reduction of inflation, has proven difficult 1985, net capital inflows (including private di- and costly, in both economic and political terms. rect investment) amounted to only $4.7 billion During the past year, Argentina, Bolivia, and (or about 0.7 percent of the region's GDP), Brazil undertook ambitious stabilization pro- down from $10.3 billion in 1984. By compari- grams, involving sweeping monetary reform and son, net capital inflows in 1981, the last year be- attempts to restore confidence and build a sound fore commercial-bank retrenchment, were $37 basis for future growth. The current situation in billion, equal to about 6 percent of regional most Latin American countries is one of negligi- GDP. Commercial-bank exposure in the region ble per capita income growth, depressed per cap- remained largely unchanged in 1985. Thus, the ita consumption levels, low investment, a high net capital inflow was derived primarily from of- savings drain for external-interest payments, net ficial lending institutions and some private direct resource transfers from the private to the public investment. Reflecting the curtailed capital in- sector to help finance debt-service payments (for flows, total external debt increased only moder- most of which the public sector is responsible) ately (2.1 percent), continuing the sharply re- and, in many countries, high inflation. This situ- duced growth in indebtedness that has taken ation has existed since 1982, and, as yet, there place since 1982. The region's total external debt are no signs (with the major, but partial, excep- at the end of 1985 is estimated at $368 billion, tion of Brazil) of resumed sustainable growth. and the ratio of debt to exports continues to be The economic and social costs of the crisis high for a number of countries, especially Nica- have been, and are, high. The output forgone ragua (l1.8), Argentina (6.0), Bolivia (5.5), and during the recession is lost forever, and most Chile (5.4). countries are substantially worse off economi- Table 4-12. Lending to Borrowers in Latin America and the Caribbean, by Sector, Fiscal Years 1977-86 (mitlionsof US dollars) Annual average Sector 1977-8t 1982 t983 1984 1985 1986 Agriculture and Rural Development 579.7 694.5 1,029.6 856.9 442.5 1,955.0 Development Finance Companies 222.2 415.8 427.4 20.0 195.0 252.4 Education 51.8 112.8 59.8 68.0 195.8 10.0 Energy Oil, Gas, and Coal 21.1 307.3 81.2 - 310.0 131.0 Power 500.2 394.4 89.4 841.1 833.7 819.2 Industry 170.8 - 304.5 9.5 4.0 - Nonproject 64.0 76.2 60.2 60.2 435.0 705.0 Population, Health, and Nutrition 6.0 13.0 33.5 57.5 - 96.0 Small-scale Enterprises 54.2 26.0 446.1 352.0 340.0 70.0 Technical Assistance 2.5 8.8 10.2 9.5 29.5 47.5 Telecommunications 27.5 40.0 - 30.0 - - Tourism 28.9 - - - - - Transportation 344.6 651.7 447.3 501.1 662.0 140.6 Urban Development 138.8 206.8 46.2 191.2 86.9 369.5 Water Supply and Sewerage 208.7 40.6 424.2 28.6 163.8 175.0 Total 2,421.1 2,987.9 3,459.6 3,025.6 3,698.2 4,771.2 Of which: IBRD 2,373.9 2,962.9 3,396.6 3,001.5 3,652.3 4,701.2 IDA 47.2 25.0 63.0 24.1 45.9 70.0 NOTE: Details may not add to totals becauseof rounding. Latin America and the Caribbean 113 M~~~~~~... ..EN -- NIM NNE IE- A $400 million IBRD loan was approved in fiscal 1986 to help rehabilitate anid reconstruct facilities damaged by the September 1985 eurthquake in Mexico City. cally now than they were in 1980 In essence, a most cases. Indeed, the larger Caribbean econo- decade's worth of development-at least-will mies contracted in 1985, as demand for regional have been lost in the region. exports such as oil, bauxite, sugar, and manu- The story of Mexico exemplifies some of the factures declined. Unemployment has grown, economic and social effects of the crisis. While and foreign-exchange shortages have increased. the cumulative decline of Mexican per capita The weakening bauxite market contributed to GDP between 1980 and 1985 has been a rela- economic decline in Guyana, Jamaica, and Sur- tively modest 3.6 percent (much less than in ainae, and high-cost Caribbean producers are many other countries of the region), the devas- facing the prospect of having to close their pro- tating extent of the recession can be amply seen duction facilities. While the output of crude oil elsewhere. Between 1981 and 1985, for instance, increased in Trinidad and Tobago by 8.5 per- manufacturing employment declined by 7 per- cent, oil revenues fell sharply and contributed to cent, and average real wages fell by 28 percent. the slide in the economy. In Barbados, real out- For those individuals who lost their jobs, the du- put declined marginally as demand for electronic ration of their unemployment has increased; the components decreased and conditions remained percentage of the unemployed looking for work depressed in the Caribbean Community and in Mexico City for more than nine weeks tripled Common Market (CARICOM). On the other between the end of 1982 and mid 1985. Reflect- hand, the smaller economies of the Eastern Car- ing such circumstances, social discontent and ribean continued their recovery in 1985, largely emigration have increased. At the same time, the result of increases in banana exports and Mexico's ability to grow has been undermined tourism revenues. (Total tourist arrivals in the by successive reductions in investment; gross Caribbean in 1985 were some 4 percent higher capital formation for plant and equipment in than in 1984.) Tourism continues to be the ma- 1984 was less than half that of 1981. And these jor growth industry in the Caribbean, and pros- adverse developments preceded this year's sharp pects appear reasonably promising for several drop in oil prices, tourism-based economies-especially those that are geographically closest to the United States. The Caribbean Countries The decline or slowdown in economic growth In the Caribbean (taken here to consist of the in those economies where tourism is not the English-speaking countries), the economic re- leading sector have compelled Caribbean coun- covery registered in 1984 was not sustained, in tries to confront the problems of economic ad- 114 1986 Regional Perspectives twenty Caribbean countries and chaired by the Figure4-6. Trendsin Lending, World Bank, continued its aid-coordination ac- FiscalYears1977-86 tivities in 1985. The work program and proce- dures of the CGCED have been streamlined to oonua average 1984 1985 1986 increase its effectiveness. Regional issues have 1977-81 1982 983 been dealt with more systematically, and a re- 5~2C 000newed effort made to widen the donor base. Fol- 5,030 lowing the seventh meeting of the CGCED in June 1985, the dialogue on economic policies be- tween donors and recipients has been intensi- fied, and a closer link between aid mobilization 4,200 and policy performance has been established. As with the rest of the region, part of the Bank's All K strategy toward the Caribbean is to use its re- sources to promote and sustain policy changes 3.000 . designed to bring about structural adjustment ,6 F and renewed growth. In the islands of the East- ern Caribbean, the Bank aims at moving these countries towards creditworthiness by the end of 2,000 the decade through a program of policy-based concessional lending. The Need for Restored Growth The past year marks the fourth consecutive 1,COO0.0F- r year of economic crisis in the region. Substantial sacrifices have been made in order to adjust to the negative international economic environ- ment. Among the region's member-country gov- o ernments, impatience with recession, declining incomes, and austere economic policies appears to be growing. Economic recovery has become I - Amount in OSSm lions an imperative, both for maintaining social and Numberof operations political stability in the region and for providing the economic conditions that can permit coun- tries to meet their international obligations, thereby strengthening the international financial system. Resumed economic growth for the re- justment; investment priorities are being rede- gion depends upon an improved global eco- fined and appropriate balance-of-payments nomic environment, the pursuit of sound do- policies, including reductions in imports, are be- mestic economic policies, and the availability of ing adopted. Recent years have brought a series adequate external-capital flows. Only with re- of external shocks, each requiring further ad- sumed growth can any improvement in cre- justment. Nonetheless, supply responses to sig- ditworthiness be expected. Yet, without ade- nificant market incentives, as well as a variety of quate external financing for the region, growth initiatives to develop extraregional export mar- is not possible. Dealing with this dilemma will kets, have been limited, highlighting some of the continue to present a challenge for leadership, difficulties of promoting structural adjustment both for the World Bank and the international in small economies. Intraregional trade fell in financial community in general, as well as for 1985, offsetting increased exports to extrare- the individual member-country governments. gional markets. While several countries recog- For a resumption of regional growth, an im- nize that a reduction in public-sector deficits is proved international economic environment essential, achievement has been difficult so long continues to be of critical importance. as growth in revenues remains sluggish and an First, continuing growth in countries that are unwillingness to curb expenditures, particularly members of the Organisation for Economic Co- in public-sector wage bills, continues. In several operation and Development (OECD)-in partic- countries, however, tangible efforts have been ular, in the United States, which is the region's made to encourage private investment and to re- largest trading partner-is an essential part of duce the role of the public sector. the solution to the debt problem. The slowing of The Caribbean Group for Cooperation in OECD growth from 4.6 percent in 1984 to 2.8 Economic Development (CGCED), serving percent in 1985 has hindered the economic re- Latin America and the Caribbean 115 covery of Latin America, and, unless that of external trade to GDP and a heavy depen- growth can, at a minimum, be sustained, pros- dence on commodity exports. Today, by con- pects are not encouraging. trast, most countries have competitive exchange Second, international interest rates, while de- rates, while policies that can boost exports, par- cdining significantly during the past eighteen ticularly of manufactured products, are under months, remain high in real terms, especially in review. relation to depressed commodity prices. Contin- A second major theme is the need to increase ued reduction of real international interest rates domestic savings. The 1960s and, perhaps even would have a major beneficial effect on the re- more, the 1970s were characterized by high fiscal gion. In terms of immediate balance-of-pay- deficits, heavy losses by state enterprises, and in- ments relief alone, a decline of one percentage terest rates and policies that discouraged private point in the interest rate results in a reduction of savings. Again, changes are taking place, al- the region's debt by about $3 billion. though not in all countries. Substantial efforts Third, an improvement in international com- have been made to reduce budget deficits; in sev- modity prices would bolster Latin America's eral countries (Mexico and Argentina, for in- prospects for economic recovery. Despite some stance), they have declined by a dramatic 3 per- export diversification, most notably in Brazil, cent of GDP in a single year. During 1985, as has commodities still account for about 80 percent been the case in the past several years, growing of the region's exports. Real commodity prices attention was also paid to improving the effi- are currently at their lowest levels since the Great ciency of state enterprises, and, in an increasing Depression, with the decline continuing through number of countries, selling some of them to the 1985. Despite the recent rise in coffee prices and private sector. Similarly, efforts are being made the declining value of the United States dollar, in a number of countries to court foreign direct substantial improvements in commodity prices investment more actively, thus contributing to as a whole are not expected. In fact, with the re- the pool of investible resources. In addition, in- cent erosion of petroleum prices, the prospects terest-rate policies in most countries are no for growth in Ecuador, Mexico, and Venezuela longer so hostile to private savings, and plans are not encouraging. are being made to strengthen financial systems. Fourth, since export diversification and ex- A related theme is an increased recognition pansion for the region are essential, holding the that the efficiency with which available savings line against (or preferably, a rollback of) protec- are invested must be improved. For private-sec- tionism in the OECD countries is imperative if tor investment, appropriate market-price signals Latin American countries are to continue to be and a minimum of government-induced distor- able to service their debts. tions and interventions are essential. For invest- Beyond a hospitable international economic ment by the public sector itself, a number of environment, the second necessary condition for governments (Brazil, Chile, and Colombia, for economic recovery and restored growth is the instance) have made some progress toward in- pursuit of sound economic policies in the region. creasing efficiency through a better assessment In general terms, there is now a consensus of resource availability, improved examination among most governments that a sound macro- of investment alternatives, and more exacting economic framework should consist of realistic project analysis. exchange-rate and interest-rate policies, the Even with a reasonably favorable interna- elimination of excessive public-sector deficits, tional economic environment and sound re- and the adoption of stable rules of the game that gional economic policies, substantial and sus- could bolster the confidence of the private sec- tained economic recovery and growth cannot tor. While appropriate policies, focusing on take place without a resumption of adequate structural adjustment, vary from country to capital flows. Latin America has become a net country, several common themes can be dis- exporter of real resources-some $100 billion cerned in the thinking of the region's member- over the past three years-at a time when capital country governments. flows to the region are urgently needed. It is im- First, there is increasing recognition that poli- portant also that private flows be reestablished cies affecting external trade must be revised. For at a sufficient level. Commercial banks must rec- a generation or more, the dominant thinking in ognize that the restoration of creditworthiness Latin America on foreign trade has been the must be a product of their continued lending and need to promote import substitution. Protection not a precondition for it. Recovery could also be of industrial activities through tariffs and quan- accelerated to the extent that official capital titative restrictions has been high, while policies flows can be increased. In addition, a restruc- frequently penalized agriculture. Exchange turing of the existing external debt on appropri- rates, more often than not, were overvalued. ate terms is essential for providing the breathing The results of such policies have been low ratios space required for structural adjustment and re- 116 1986 Regional Perspectives sumed growth. While several multiyear resched- structural adjustment, have been designed to ulings were negotiated in 1984, less progress in support basic policy changes initiated by govern- this regard was apparent during 1985. ments and to provide funds that are disbursed rapidly, thus making an immediate contribution The Activities and Role of the Bank to a country's external-capital needs. The Bank's response to the ongoing economic Several examples of policy loans approved crisis in Latin America and the Caribbean has during fiscal 1986 illustrate the range of policy undergone a substantial evolution over the past reforms supported through Bank operations: A several years, in both the magnitude and nature $250 million loan to Colombia provides support of its lending involvement. By fiscal 1985, new for extensive reforms in that country's commer- Bank commitments to the region were 24 percent cial and agricultural policies that aim at diversi- higher than in fiscal 1982, the last year before fying and expanding exports and increasing agri- the current crisis. During the past year, Bank cultural production; a structural-adjustment lending continued at these higher levels, with loan to Chile of $250 million, in addition to sup- new commitments totaling $4,771 million. Con- porting trade-policy liberalization, also supports tinued efforts were also made during the year to government measures to rationalize public in- increase disbursements, not only through new vestment, protect the economy from severe cop- lending but through accelerated project execu- per-price fluctuations, and increase domestic tion, increased Bank cost sharing, and improved savings; for Ecuador, a loan of $100 million sup- disbursement procedures for existing loans, as ported a series of policy measures for the agri- well. (Procedures instituted under the Bank's cultural sector, including a liberalization of agri- Special Action Program in 1984-85, for exam- cultural-pricing policies, a reduction in trade ple, have now become routine. For details, see restrictions, and a curtailment of the govern- page 54 of the World Bank Annual Report for ment's participation in selected public enter- 1985.) As a result of these efforts, disbursements prises. Other recent policy-based operations in fiscal 1986 increased to $3.1 billion, an in- include loans to Brazil for public-sector manage- crease of 50 percent over fiscal 1983 amounts. ment reforms and for improvements in agricul- The nature and structure of Bank lending to tural policies, and to Argentina for agricultural- the region have also undergone significant taxation reforms. change. In fiscal 1986, about one third of new In undertaking policy-based loans, a center loan commitments involved either policy-based stage is provided for the Bank's economic-policy operations or had a strong policy content. Al- dialogue with the region's member governments though the core of the Bank's lending activities and to its supporting economic and sector work. in the region will continue to finance specific During the past year, such work has been inten- projects, Bank support is needed for fundamen- sified. The Bank, for example, has assisted a tal changes in economic policies. The process of number of countries in reviewing their public- policy reform is a difficult and painstaking one sector investment programs and in formulating that can be orchestrated only by the govern- medium-term policy programs for restoring ments themselves. The Bank has increasingly growth. As a result, the Bank is now better posi- sought to help these governments, when re- tioned to meet the challenges ahead in coping quested, both in its technical work and with fi- with the debt crisis. Also, as a part of its assis- nancial assistance. Accordingly, the Bank has tance to the region's member-country govern- expanded its policy-based lending to support the ments, the Bank has sought, and will continue to policy reforms essential for structural adjust- seek, to play a wider role in restoring private- ment and renewed growth. Most operations dur- capital flows to the region. In the case of Colom- ing the past two years have been sectoral loans, bia, for example, the Bank has successfully designed to support policy changes in a particu- served as an intermediary, representing the gov- lar sector. Structural-adjustment loans (to Chile ernment, to attract additional commercial bank, and Costa Rica, for example) have been used to as well as official bilateral, lending to the coun- support simultaneously a range of policy try. Ample scope also appears to exist to expand changes in several parts of the economy. All of the use of the Bank's cofinancing instruments in these loans, however, whether for sectoral or its operations in the region. Prjets Approveddl SummaiesPf 1 7 AcoysadAbrvain Usddn hi Caper nfs dl o 9 "ADAB-Australbian Devcipent sB-Ihaic Deeopet Bn 'Assstance Bureau KAD aiFndfor Arab ADF Alfria DevlomntFndEonomc DeVelpmn AfDR1-African DevlpmnI an f-Keiantat fu Wiederaufbau AFESD-Arah Fund fo Econoi ad MRE/CD-LMintry ofEtenlRatos Devlopen t Soia Cooperatio and Development, Face~ AsDB Asnian Development BakODAOverse as Develpmet in Africa Development CooerationM G~~~~~~ECF-QverseasEconomic CCECaisse Cetaed oprto Exporting Counre Econoinique ~~SDC-SwsDeeomnCoprtn -Cmmneat CDGc DvlpetSIDA-Swdih Initerniational DeeoMen CoTrpoaton A ty Authori CEAO-,West African Economic SYMNEEC~s iMinrl !SysemFacility~ Community f ACP (Afican, Carbben ad Pacfic) Intrnatona CIDA Candia Minral rodcers a a Development Agenc NPUie ain eeomn a DANIDA -Dans Initernatbioal rgam DeeomnwtAgnc UND- ntd Nations hindstrial ED-E uropeanDevelopmenRtFud ~ Development Oranztion EE-uoenEconomc omunt UNSO- UnitedNtin Sudano-SAhelian EIB-European Investment Bank ~~~~~~Offi ce FAC-Fon~dsdAid&bfet deCoeanUADUnited State Agnyfo GTZ- Germand Techinical AssisaceItrntoal Delomn 1DB-Inter-Amer~~~~icnDevlpetBn H-ol Healt Orgaiziation Developmet AgricultreadndRura Devlopentcrase th upyo od for industialan IARGENTINA: BR-35 millMion The irst commrciftal Users. Cofinancing ($4.3Wmllon) a government phase ofprogram to encourage is an iciae fromt the NDP. total ost: ~Hincreass inlaricultra producIonade- $mlin potstroghrductonofepoti tae3o ANGLAIDESH: IDA-$22 miion.h Pro-i i Agrcultural pRoducts, adoptionobisclma duction of shrimph in coatal areas of the surs te oeral fsca deici at t mantan country wHil be intensfied through fth initro- a edrl of ad tax), And ai rationlzainogy consisting manl of imrPovedwtr oimotitaiffs and rgltion ongrcu-ianageetadrelated srm-utr R tural inputs-wll be suported. prcie.Thnalsisneadtanng BANGLADESH; IDA-28 miion.Ai sond ae nlded., Cofincing(45milo)i foetr proJectseeks to exad and ad-atcpate frmteUD.oa ot quately maintain foreta areas anthrb in- $37.7milin. th suply f fuelJWoodfodmetc creae _____ poviepoetowgis consumption; y aaue ftrom ini thissection have been compiled cl fs ida boes ad oil eoin; an i- dcmnaonpodeatheieofpjctapprovaL. 1i8 Summariesof ProjectsApproved BENIN: IDA-$1.9 million. Supplementary forestry project that will help meet the rapid- funds will be provided to help finance the ly growing demand for wood, reduce the Borgou Province Rural Development Project, need for timber imports, help protect the na- approved in April 1981. tural environment, and promote greater inte- BRAZIL: IBRD-$500 million. The process of gration of cropping, forestry, and livestock making the agricultural-credit system more activities at the farm level. Cofinancing ($2.6 market oriented and of reducing rural-credit million) is anticipated from the FAC. Total subsidies, as well as reforming trade and cost: $17 million. pricing policy for key agricultural commodi- CENTRAL AFRICAN REPUBLIC: IDA- ties, will be supported. SI 1.9 million. The standard of living of BRAZIL: IBRD-$155 million. Some 700,000 about 10,800 cattle-raising families and live- small-scale farmers are expected to benefit stock production are to increase from a proj- directly from a second agricultural-extension ect that seeks to develop a viable institutional project that seeks to increase the scope, ef- framework for the country's livestock subsec- ficiency, and effectiveness of the National tor to ensure the efficient delivery of neces- System for Technical Assistance and Rural sary inputs and extension to livestock pro- Extension. In addition, about 150,000 rural ducers. thus reducing diseases and pasture families are to benefit from first-time social degradation and increasing exports. Cofi- extension and community-development ser- nancing is anticipated from the EDF ($5.4 vices. Total cost: $340.1 million. million), IFAD ($3.8 million), and the FAC BRAZIL: IBRD-$92 million. Some 73,000 ($1.1 million). Total cost: $37.3 million. low-income farm families will benefit from CHAD: IDA-$15 million. Support will be the fifth in a series of projects within the provided for the first emergency phase of a Northeast Rural Development Program de- program aimed at reestablishing Coton- signed to increase the efficiency and impact chad-the government's main instrument in of rural-development efforts. Agricultural the cotton sector-on a sound financial basis production and productivity in the state of and avoiding the collapse of Chad's domi- Pernambuco will be increased, employment nant cotton sector as a result of exceptionally opportunities generated, and water-resource low world prices. Cofinancing is anticipated development promoted. Institutional assis- from the CCCE ($15.6 million), the EDF tance is included. Total cost: $188.4 million. ($13.7 million), the Netherlands ($2.3 mil- BRAZIL: IBRD-$57 million. More than lion), and the FAC ($800,000). Total cost: 9,000 low-income rural families will benefit $47.4 million. from a project that forms part of the Federal CHINA: IDA-590 million. Funds will be on- Irrigation Program, designed to increase the lent by the Agricultural Bank of China to income of smallholder farmers living in one individual farmers, households, collective un- of the driest areas of the northeast region its, and enterprises owned by local govern- through, in this case, rehabilitation of irrigat- ment entities and collectives in Fujian and ed lands and the irrigation of new land. Hunan provinces for the development of Institution-building assistance is included. aquaculture. orchards, agroprocessing, and Total cost: $123.6 million. livestock enterprises. Total cost: $256.9 BRAZIL: IBRD-$48 million. Through the million. commissioning of sector studies, basic sur- CHINA: IDA-$60 million. Intensive pond veys, feasibility studies, and preliminary engi- culture in the vicinity of eight major urban neering, an adequate stock of thoroughly areas will be expanded and developed in sup- studied and well-designed irrigation projects port of the government's program to triple in the northeast of the country will be creat- production of freshwater fish by the year ed. In addition, technical assistance and 2000. Total cost: $197.7 million. training will be provided to irrigation agen- COLOMBIA: IBRD-$250 million. Further cies in the region. Total cost: $107.7 million. support will be given to the country's BURMA: IDA-$30 million. Foreign-exchange medium-term, growth-oriented structural-ad- earnings will increase through a project de- justment program through deepening reforms signed to improve rice quality and rice ex- in the macroeconomic, trade, and public-in- ports, reduce storage losses, and initiate a vestment areas and, in addition, through a program for the rehabilitation of private rice reduction of trade and sectoral distortions in mills. Cofinancing has been arranged with agriculture. Switzerland ($5 million) and the UNDP ($2.1 COLOMBIA: IBRD-SI 14 million. Some million). Total cost: $79.9 million. 10,800 farmers, more than half of whom BURUNDI: IDA-$12.8 million. About 60,000 have incomes below the poverty line, are to rural families are to benefit from a second benefit from a project that forms part of the and RuralDevelopmendt 119 Agriculture government's efforts to reitalize the agricul- mand Areasof Andhra Pradesh state will be tura sector-t the subsectoral level, by re-incrasd through the modernizaio And habilitating existiingirrigationfacilitiesand completion of exIiIstinirrigation networks~in smll-sale consructng nw rrigtionone commnand area anidthe6 development of schemefsanid immprv the effiiency of adiinlirgheareas i h eod oa Totalicost: $2575 public-sector finstitutions.~ cost: $475.8 mnillion. mnillion. INDIA: 1DA-$160 million. Thruhtecn COTE D'IVOIRE: JBRD-$134 mhillioni. A struction and/r ~omnpletion obfirgaons- fifth IBRDsupported operation in the couni- temns~InIMtwoomand areas in Maharashitra jAndnew plnting adjcn ing, denisificationi, devlopen,And techinical suporot to farm-11 agroindustriAlcopexs tlo existinig hus in-r ers), agricultural productioniAndfarmeri6s' in- creasing processingcapaCIty.Technicalassis- comes9 be'increased.About 66,000 farmi wvill" tance is included. ColinAncingis being pro- famfiflies r Ato benefitdirectly, and 95,000 vided by the CCCE, the CDC, and the E1IB full-time jobs wvillbe generated, moreithan ($13.4fmi1lioneach), whileEDF piarticipationl half of which will go to landlessfaminiliesand is being considere~d.Total cost: $184.9 fmigrantJlaborersTobtal cost: $322.7million. million. ~~~~~~~INDIA: IDA-4$99 mfillion. Finance will be ECUADOR: IBRD-$1004fmillion. Thegvr- poidtohl supporta fiveyaprgm meait's programf to rformin poicies in"the ffor upgrading anhdconistruct#ingpublic agriculture sector, which emphasizes thedlib- i ~tubewell-irigation systms opendduwlls eralizationi of comhmoditypricin and interest adriverlift installations~ in West Bengtal rates And the reduction of pufblic-sector inter- state Total clost: $141. miillion. venitions, will beisupported. IDAID-2.Imlin. second nation- EGYPT ARAB REPUBLIC OF: lBRD-$70 Alagricultural-resarh project will help' produtivityis to ein- millio. Agriultura trengtheni the, caaiity of state agricultral creased through more effiienht funcioing of universities~to odc location-specific re- the irrigation and drainage network, relevan search ini the' main agroeoogcal zonets of andcotefcie medthods ofcaAnnel the country The first project' soeWill, also mInatenance6 will be initroduced, and the cap be extended ~to incbludethepiorit reseac abilities of project-related&institutions needs of these zones' under rainfed and irri- Total cost: $I9126. strenigth6ened milo.gated farmingconditions. Total cost: $110.9 UIE:IDA=-$7.5 mnillion. ~The capabiltie mnillion. of the Ministry of Rural Development inf INDONESIA: IBRD)-$166 mnillion.As miany agrjicutual planining, strateg and policy as 530,000 rural famtilies are to benefit from a formult ad project anialysis wVill"be ion im- projet ftht seeks1 Mto trntheni bth irrigation proved thr6ough the establishment of a Stra- services of central And West Java, provinces, tegy anid Developmen&tOffice int the miinity particularly iniproject preparation,; impe- to be staffed with quaifid Guineandi and in- mentation, anid opertioni and maintenne ternationall recrutedpersonneL. Cofianc- Asiwel as~ impoeotrecovery and ing ($900,000) is anticipated fromi the FAC. prto-n-aneac udn hog Tota cost: $10. million, Increased lanid taxes Cofinancinig is tci GUINEA: IDA-$6.6 million. The produictiv- pated from the ~EEC ($18 maillion) Total cos9t: ity of smfalholders in food and cash-crop $302.1mnillion. proidution will be increased through thebin-~ INDONESIA: IBRD-4$33 mifllion. The fiirst troduction of techhnic alpackae for coffee, stage of a longerrne giulua-dvlp peanuts, "an cassava, anid by strengtheninig meat programh in two of'the country's theGuieckedou Prefctoral Directorate of Poorest profinces-Nusa Tenggaa Bariat Rural Developmenft. Cofiniancing is anticipat- and Nuisa TenggAra Timur-wil be financed. ed fro the ADF ($6.5 Million) and IFAD Funids Will be provided to sectoral ag enIcies ($5 mnillion).Tota c~ost:~$25.2imillion, fo arigsytm research,pilt cotton de- INDIA. IBRD-$375 mnillion.Increased agri- veopment~ ~cafttldevelopmnt, and ntoa cultural productionywill be sought thrdoug and provncAl road improvement in Timur.i partjicipatio in the National Banik for Agri- anticipated ~from Cofinancing ~is the UNDP culture anld Ruralt Development'sb ongofing ADAB ($2.8mi'llion),Andthe ($3.4 mnillion), loan-refiniancing programforfinvestmenbits in AsDB ($600,000), Total cost: ~$598~ million. agriculture anid through a~ strengthening of INDONESIA: IBRD-$32 mfillion. C~attleanid the agricultural-credit system.i their femaile ofspin will be proIvided to INDIA: MBRD$13 million; 'IDA--$140 mil- about t131,000small farmer, mosly transmil- lion Agricultural production in two corn- grnts, during a fv-erimplementain pe- 120 Summariesof ProjectsApproved riod. In addition, cattle-holding and quaran- tices will also be strengthened. Total cost: tine facilities will be constructed or upgraded, $97.4 million. and veterinary services will be improved. Co- MALI: IDA-$6.3 million. The threat of de- financing ($12 million) is anticipated from forestation will be addressed through a set of IFAD. Total cost: $66.4 mnillion. initiatives in both urban areas (through tax- KENYA: IDA-$20 million; African Facility- policy changes and development of semi-in- $40 million. The first phase of the govern- dustrial tree plantations) and rural areas ment's program of adjustments in the agri- (through financing two pilot schemes aimed cultural sector-designed to stimulate growth at developing guidelines for managing na- by promoting intensification of production tional forests). Technical assistance and sec- and better use of the country's limited land, toral studies are included. Cofinancing is an- improving producer incentives, and expand- ticipated from the CCCE ($5.4 million) and ing the flow of investment resources into the the MRE/CD/FAC ($2.9 million). Total cost: sector-will be supported. $16.7 million. MADAGASCAR: IDA-$20 million; African MAURITANIA: IDA-$7.6 million. A second Facility-$33 million. The 1986-87 phase of livestock project seeks to slow the deteriora- the government's program to increase pro- tion of grazing areas and to boost productiv- duction and incomes by making its agricul- ity by making groups of pastoralists respon- tural economy more market oriented will be sible for allocated grazing areas, by provid- supported. In addition, foreign exchange will ing better services and production inputs, be provided to finance imports needed to and by increasing the knowledge of livestock- realize fully benefits associated with the re- production systems essential to the formula- form program. Special joint financing is tion of a development policy and to the plan- being arranged with the Federal Republic of ning of future interventions. Cofinancing is Gerinany's KfW ($4 million) and Japan ($3 anticipated from the ADF ($6.3 million) and million). the OPEC Special Fund ($2 million). Total MALAWI: IBRD-$16.7 million. A second cost: $18.1 million. wood-energy project will help reduce the gap MAURITIUS: IBRD-$30 million. By rehabil- between sustainable fuelwood supply and de- itating, modernizing, and strengthening the mand by developing policy instruments and financial performance of sugar mills; improv- incentives to encourage tree planting on a ing productivity in the use of land, labor, national basis, increasing fuelwood produc- fertilizer, machinery, and equipment in sugar tion through tree planting by small farmers production; and supporting efforts to develop and through the establishment of a limited irrigation and the use of bagasse for power number of government plantations in ecolog- generation, the government's strategy to ically fragile areas, and introducing more ef- broaden the productive base of the economy ficient charcoal kilns and household stoves. will be supported. Total cost: $44.9 million. Institutional-development, wood-production, MEXICO: IBRD-$180 million. About 62,000 wood-conservation, research, and training farm families will benefit from the implemen- components are included. Total cost: $19.6 tation of a credit program (administered by million. the Agricultural Trust Funds in the Bank of MALAWI: IDA-$11.6 million. Support will Mexico (FIRA)) that seeks to raise agricul- be given an institutional-development process tural productivity with a view to increasing aimed at improving the Ministry of Agricul- food production, agricultural exports, and ture's analytical and long-term planning cap- real farm income. Total cost: $473 million. ability, strengthening the national extension MEXICO: IBRD-$109 million. About 40,000 system, and upgrading the skills of staff in farm families will directly benefit from a sec- the Department of Agriculture and in the ond tropical agricultural-development project Planning Division. Cofinancing ($6.2 million) that will bring about 143,000 hectares of new is being arranged with USAID. Total cost: land into rainfed crop production and inten- $20.2 million. sify crop and livestock production and pro- MALAYSIA: IBRD-$50 million. The living ductivity on existing areas that now suffer standards and incomes of some 26,000 settler drainage problems. Total cost: $217.5 families will be raised through a project that million. assists the Federal Land Development Au- MOROCCO: IBRD-$120 million. A sixth thority and the Public Works Department agricultural-credit project will pursue the (PWD) in the provision of roads and water- government's sectoral objectives being sup- supply works for existing land-settlement ported by the Bank through the Agricultural- schemes. The PWD's construction and wa- sector Adjustment Loan. Institutional assis- terworks operations-and-maintenance prac- tance for the Caisse Nationale de Credit an Rurl Deelopent Agriultue 121 Agricole is included.Coianci g4is anticipat-mellon)i beng provi by the CDC. Ttal ed from ith AIDBB($6 mllion) and the Fd- cost: $68.3milliol. eral Republi'c f Germany (KfW)n($35 mu- PAPUA NEW GUINEA: IBR$18.8 mil- l.:S\StSutititlon). Total cost: $720SW.3 mikSllion, llienAgricultural exPorts will be increased MO OCCO IR 4miio.Truhr- ad iomsfsallholders improved 00000twiono habilitalt0 upgrading ofseUxifsting irr 000iga thrug m provsio of0} fundto the Agrdiculture R0:::f:;6:0\0 tion infrastruc00k;0tur; povsinsof equimet, Bank of Paputr'\DgaNew Gunea;0AB PNG fory Se ;C SStSS\5t f20j;)t'!i ienEt management-infoErmation systemand 0000$throughtehirocalasistnaenEs;;nCa0 to th ABPNGt deE SE-tCSSQ|\.Nasitance; t0land oa:n1-farm dSevelopment,greateESt?;;;er Aismalhokler fariimfamilies are to beneft frtom t } E S i l:S;S f-.B-S argiclradeeo efficiency gdS i'n theluse of e en agnis eores exsig ehia lin WNA Ethe0S li 00fg A$1. of ailo.abouy5000 X0implmenation pilot phase of: a ina-(S S)f large-scaleat igt >khk lands wi k pe ] V ta l io an Total cost: NPL ID-2,$5 m0llion,0 milon h thidphs 0 servict organization and gra fZor-promotin of a pr0ivat000iSz'<' annational will pro-tahco0 ''e coprtiv:0: ;0f0 fe 040DD.000AS00n gio4 seeks to ignces dryeaso agiulua 00 s iXD0i s Stancis inclugded to improveagricultural-;2f t;;f f000;0 ;)f and#S reuc th rik to moso production~t00 seto plnigadmngeet S, byt $ oia overSHin c'1fffH about predictable, and3,00 hcares.S reliable Cofinancingt irrigation scheme SENEGAL:IA$4.9 million. UNDP. Total cost: $22.6 Assistance milon. F wil (75mlion is being arrnge wit thle 3 be proided. to the \ goenet and the ;;0f W N7IGi ERIA: BRD-$162 illion.00 Imleea ofS pExg th Senga Delt an Seegl ndFem tion oyams, sava, the4firs phs corn, P3AD) and of statewide rice) and incomesof River ($410,000) UNDP tohelptSAEDlditsengage ;000C)f0fff smal frmes.Cofinacn ($2mlinsTtlcst: $5.1mlin 0i anticipatedt ggill t0 w00be0 supported. e firs The fro IFAD. phaise Total agimsXl cost: ati0$X V $256.4 | SOMALIA: pises Cofin0:ancling A is big arrang 0hillbion; m1) Africaned with g0 0t Facili- 0;0t millionE increasin fod-ro prodctin (mainlycsU-00\ ithe ^ CCCEt:f ty-$ 6 '.m l ^Dl i- vinaily4i an , D " FAC ' ($3. Recurrent D' ^ import - milin) -ion equire the fitl PAKISTAN:IBRD-$165 mIlin;JIDA-$55 mnso teSml econmy in supporftof Fnane illbeprovided to th Agi milion infcn oiyreom ilb iacd cultrlDvlpet BnofaksaTehclasitceorStreghnn ke foronleding o famersfor (ADBP goenetisiuin,mil inagricuil- of unds for vestments. conult- Povision nancin ($7.4 millin) is to beprovided by ADBP, ants, and to equipment the training the United Kingdom. Total cost: $70 million.0 Ilion for ADBP saff cost: Totl is incuded. SOALIA: IDA.$4.3 millon.tA cmprhn PAKISTN: illio. The ilot ID-S10 isease-control progrmfrtenrhr phiasecvrn§615 etrsad23pairt And~the of the countrywill be defined,' ~ipublic tubeel fapormt rnfrpormwl eteste on an operaional Authority's opment program ra ofshiycn n maHelhDprmnofteMisy tro andilan relaa iotopivaefres o Liesoc, oretry n ageind willbe sppoted.Totl cot: $1.8millon. ed. Coiacn $. ilo)hs been ar- GUINEA: PAPUA NEW IBRD-$27.6 mil-rane wihlA.Ttlcs:$16 million lin hog tedvlpen folpl SuDA:IA$2mlin Some300,000farm- the onr' xoterig rmslso ha,advgtbenoe 4 MIllionUfd- kenel, palm il, nd cooa wil in-dan plm r obnftfo a proec tht eks to crese,andthedevlopentof ilne Bay, imrv rppoutinmteirgtd sub- las-dvelpe oneofth povncs n he etrtruimrvmnsi eerh x county, ssistd, Cinaning ($1t be wil teso,adtann.Ttlcs:$8mlin 122 Summariesof Projects Approved SUDAN: IDA-$10.6 million. The standard of drainage and on-farm development project. living of the population in the western part Approximately 97,000 farmers are to benefit of the country will be maintained and grad- initially, plus additional farmers operating ually raised by increasing the availability and land which, without the investments. would security of food and water supplies without a eventually become waterlogged. In addition, concomitant increase in environmental de- annual on-farm employment could increase gradation. Cofinancing has been arranged by 7 million mandays. Total cost: $480.5 with the ODA ($10.7 million) and IFAD million. ($9.9 million). Total cost: $43.8 million. WESTERN SAMOA: IDA-$2.5 million. SYRIAN ARAB REPUBLIC: IBRD-$7.5 High-priority public-sector investment sub- million. About 380,000 farm families, or projects-providing direct and indirect sup- about 80 percent of the country's farm com- port for production, strengthening and diver- munity, are to benefit from a project that sifiying the country's economic base, enhanc- supports the government's objective of in- ing the generation of new economic activi- creasing agricultural productivity through ties, and creating new employment opportu- strengthening the organizational and mana- nities-will be funded. Cofinancing is being gerial structure of the agricultural-extension provided by the AsDB ($4.7 million) and the system and by improving farm-management UNDP ($250,000). Total cost: $9.8 million. practices, as well. Cofinancing ($7.5 million) YEMEN ARAB REPUBLIC: IDA-$ 10 mil- has been agreed with IFAD. Total cost: $36.3 lion. About 44,000 farm families are to bene- million. fit from a project that seeks to improve agri- THAILAND: IBRD-$60 million. A four-year cultural productivity and farm incomes in the time slice of the Office of the Rubber Re- Tihama region by propagating suitable tech- planting Aid Fund's (ORRAF) agricultural- nical packages and improving irrigation-wa- development program, including rubber re- ter management and to strengthen develop- planting; related field-administration, man- ment institutions to ensure sustainability of agement. and training costs; upgrading of the benefits envisaged under various agricultural Rubber Research Institute of Thailand's re- projects in the area. Cofinancing is being ar- search centers; extension, marketing, and ranged with the KFAED ($15 million) and processing improvements for the Department the Netherlands ($9.4 million). Total cost: of Agricultural Extension; and replanter $47 million. training will be financed. Technical assistance ZAMBIA: African Facility-$10 million. Sup- is included. Cofinancing is anticipated from plemental finance will be forthcoming to help the CDC ($14.5 million). Total cost: $263.5 finance the Agricultural Rehabilitation Proj- million. ect, approved originally on January 29, 1985. TOGO: IDA-S6.9 million. Supplementary funds will be provided to help finance a gin- Development Finance Companies nery and additional transport and storage fa- CHILE: IBRD-$100 million. By establishing cilities attached to the Second Rural Devel- and financing the institutional framework opment Project in Cotton Areas, approved in through which corporate restructurings December 1982 in the amount of $23.5 would be devised, negotiated, and imple- million. mented and by financing the purchase of cap- TUNISIA: IBRD-$27.7 million. About 7,700 ital goods and working capital necessary to farm families, among the poorest in the maintain and increase production, the gov- country, will benefit directly from a project ernment will be helped to undertake a that aims to rehabilitate forty-two oases in financial-restructuring program of selected the Gabes governorate, expand three existing industrial corporations. Total cost: $300 oases, and create a new one. Project com- million. ponents include replacement of wells and CHINA: IBRD-$75 million; IDA-$25 mil- construction of piped-water distribution sys- lion. The China Investment Bank (CIB) will tems, orchard and crop reconversion and in- be further strengthened through continuing tensification, technical assistance, and credit Bank support for improved investment ef- to farmers. Total cost: $58.3 million. ficiency through imports of technology and TURKEY: IBRD-$255 million. Waterlogging the introduction of improved project-design on about 220,000 hectares of irrigated land and selection methodology. CIB sub- and salinity on about 40,000 hectares will be borrowers would be eighty state and collec- eliminated, existing irrigated areas will be tive enterprises, primarily in nineteen eastern restored to full production, and further de- provinces and municipalities. terioration of soils and reduction in crop ECUADOR: IBRD-$ 115 million. Funds will production prevented as a result of this be provided to finance essential imports in Development Fiinane Companies 123 suppor-t of a series of mesrst ieaieersiiain fisroei roductive sectors, policies in the trade, indutil,adfiacal aacivtesi adexadi teagiulua sectors. In addition, finac wilb rvdd sectr Tendfotrmiacngby agri to fncial intermediarie o nedn oclua sae oices rdciiywl wokingcapitl. and prmannt Aproga MOOC:rR-20mlin he second viddtthFiievlpetBntohl tecinplce,rtoaiigtepbi-n finneamaya1,0supoetintevsmnprga,ipoigivsmn arculua,idsra,adsriescos lnigadbdeig n nrdcn CoG acnHsatcptdfo h sBfiaca-etrrfr,wl espotd HONDUmllonRhefistphs th gov-Pksa olifi akn oni,adt h aa pe aciydilb upre.nnilmres ehia sitnei n gindsra ntrrssrecnclasstancto mn'rermpgamithidurale- vteh yteUDP oaot $67. prvddtoteRaneeDveomn million. Bank-thmcountry'sAmain6nstrumentifor do ~~to govern given the ents policy r inhfor gefrs welfl-ocive evlpmnroetssm theindstral ectr t inCrease texprtbysup phasizing thsoml-clnepise goenen o fnnigTrdtstnineer-e inclvedth oiyrmwrkfreEsadt a welasforsupotrt ing ncilaryfirs, tohlA tegvrnetiDisrfrmoBh for the financing of llforin-excAng com-tia SRaAK:IA$ milo.Tefrin- crost: $1 sek cengitnee arinprjcuts.Toal-cei o0 menctsof priate-etr imtil oefiacd muilliuon, adfite teghnieisiu Fundst forete sam ups waias et po- wilnab cproviddto h iiessndVilaes thirneffciencystehia asitnerto parti- DevelometBanik (CDB,dhrey u- cptn eeomn-iacntttosi 124 Summaries of Projects Approved ZAIRE: IDA-$20 million; African Facility- of study in science and technical fields, effec- $60 million. Important policy reforms, de- tive policies and procedures for the imple- signed to increase the efficiency and produc- mentation and monitoring of overseas fel- tivity of the industrial sector and to reorient lowship programs will be developed, and col- the sector towards exports and a greater use laborative relationships between Indonesian of domestic inputs, will be supported. and foreign universities and research institu- ZAMBIA: IDA-$20 million; African Facili- tions will be developed and strengthened. ty-$42 million. Through imports of spare Total cost: 5153.7 million. parts, raw materials, intermediate goods, and INDONESIA: IBRD-$58.1 million. By fi- other inputs and by providing technical assis- nancing consultant services, staff training, tance, equipment, and training, the capacity civil works, equipment, furniture, and utilization and production levels of efficient project-related operating costs, support will industrial enterprises will be raised, thus in- be provided for the first phase of a long-term creasing the supply of manufactured goods development program that would focus on for domestic and export markets alike. institutional development, the formulation and implementation of new policies for man- Education agement development and training by the BARBADOS: IBRD-1I0 million. A project, Ministry of Manpower (MOM), and the up- covering 90 percent of the government's five- grading of MOM's management and training year investment plan in the education and system. Total cost: $91.1 million. training sector, seeks to improve the quality JORDAN: IBRD-$10.2 million. Though a and cost effectiveness of primary and secon- program of construction and equipping of dary education; improve the efficiency, quali- trade training centers and health institutes, as ty, and industrial relevance of technical and well as provision of fellowships for various vocational training; and strengthen the insti- training functions, current and projected tutional capacity to manage and plan the ed- shortages of skilled and semiskilled workers ucation and training system. Cofinancing in the industrial and health sectors may be ($19 million) is being provided by the IDB. alleviated. Total cost: $18.3 million. Total cost: $37.7 million. KENYA: IDA-$37.5 million. The equity and BOTSWANA: IBRD-$26 million. As many as quality of Kenya's educational system are to 20,000 primary-school places, 11,100junior be improved and institutional development secondary-school places, and about 900 promoted through provision of new primary places in new vocational-training centers and teacher-training colleges; primary schools; a trade-testing center will be provided equipment, specialist services, and training through a fourth education project that sup- for the devclopment of educational materials ports the government's education-reform for delivery by mass media; provision of program. equipment; and technical assistance. Total CAMEROON: IBRD-$30.1 million. The cost: $56.1 million. quality of primary and technical secondary MALAYSIA: IBRD-$127 million. The gov- education will be improved through increas- ernment will be assisted in accelerating the ing the number of qualified primary-school implementation of policy reforms and insti- teachers, upgrading the practical skills of tutional changes aimed at improving the lower and upper secondary technical-school quality of education and the efficiency of ed- graduates, and improving the management of ucational management, as well as at increas- education. In addition, the relevance of the ing access to better education. Total cost: vocational-training system to the labor mar- 5312.8 million. ket will be increased through support for the MALAYSIA: IBRD-$73.3 million. Assistance development of a National Center for Adult will be provided to help complete the long- Vocational Training and improvements to the term investment program in technician and management of vocational training. Total skilled-worker training begun under the first cost: $61.2 million. Industrial Training Project. The supply of CHINA: IDA-$120 million. Sixty provincial technicians and skilled workers will be in- universities and the State Education Com- creased, the quality and management of mission will be helped in their efforts to ex- training improved and strengthened, and pand enrollment and improve the quality and manpower-development planning improved. management of higher-education programs. Cofinancing ($3.1 million) is anticipated from Total cost: $477 million. CIDA. Total cost: $121 million. INDONESIA: IBRD-$93 million. A nucleus MOROCCO: IBRD-$150 million. Part of a of well-trained scientific and technical man- two-year phase of implementation of the power will be developed through programs government's education-sector reform pro- Energy 125 gram the project includes a rga&fcn cians and skilled wrers' by addingksomne450 strution and equipping of schools, teacher trafined workers to the annual supply. The training, foreign fellowships, and studies~in government will also be provided, for the spOrt of new euainlatvts.Tal firs time, With the capabiliyoh tann millWion cost: $S,82 technical vocational insntrutos Cofinancinig PAISAN: jDA-40. million. The quality li($7.2 milliton is anticipatedft rofhe Federal of he vocaIoa-training and capaity sys- Repblic of Germanys GTZ. Total Cost: be imroved tem wil ad expadedan heP $28.1 millioni. w bepoiddi kill meigth euieet forskiledan seisklld mnpoerinj the i Eergy~ industrial! andrrl, sechtos. Cofinancin is ARGENTINA: IBRD-$1 16 million."Supple- beinugarranged with the EEC ($13.3 mhillion), men ta finanfce will be provided to hel fi- CIDA(6. milon), and the UNDP ($29 nance a refinery-conversion prjct, ap- million). Totalcost: $93.3 mifilion prvdinJl 198 and for whih a$200 RWANDA: IDA--1516' million. The qualtyV million IBRD loan wsmae and efficiency of the country' piaynd BANGLADESH: IDA7-$ million. Funds POS tprimnary educeation systm Will be hlp~led Will be relent to the Rural Electrifiction troughth supply anid distibution of, txt Board to help exand the sutpply OP1tf eetici boksad other tecigmteral,etab ty in rural areas and finacethe inistallato lishmenitlof a self-sustafiningl textbook/teach- feetiiydsrbto ewrsi six new scheme, and ing materials-replenishment Rural Electrificationi Cooperatives ara Iand strntheningthe managemenit and planning expansin o6fnetworks ~in fiiveexisting~areas. of the iistry oPrimfary and Se- capacity Totalcos t: $1106 million. cndary Education andthe Minitryoh BANGLADESH: IDA-56 The imilin Public Service and ProfessionalTraining. As- tranismiission and distribution system of the sitnein aleitn shotags of crtcall Bagades Power Development Board needed manpower will be provided throuigh' (BPDB wil be expanded adreinf ord conistruction f 0aW tehial secodaryd school sytmvlaewl esaiie,systemi reli- and a national vocational-traininig center. abilityl increasd, poeIose educed, anid is o beprovded by the "UNDP Coilnncin the BPDB's finania operationq tegh ($1.3 milin). Total cost: $19 mi'llion. ened. Cofinancing ~($3 mIlo)i en r SLMON ~ISLANDS: 1DA-5 mill~ion.The ragd With the UNDP. Total Cost: $29 governmenit will he assiste in its efforts to million. improve access~ to, and quality~of, lower se- BOLIVIA: IDA-4$l5 ~million. The' Bolivian condary eduication anid strengthe educto- ainl iopay(PF) Will be aided al maaemn. ehnclsistanice and in its effrts tol increase liquid hydrocarbon ttraining of Ministr of Education AnidTrain- piroadution. Cofinaninig is antcpedfo ingstaff are incoluded Cofinancin~g is ntici- Argentina. Total cost: $47.9 mifllion.~ pated from ADAB (about $4.3 mU1ilio). BRAZIL: IBRD-4$500 miillion.~ Loa resources Total Cost: ~$10 million, w Il help finance the country's~ 1986-89 SRI LANKA:. IDA-4$15 ~million. A 'second power-setor rehabilitation. 1itwillassist the L Tvocational-raiing project seeks~ to ipoe government to provide ~to the Sector, as eqi- the efficiency of the conistrutiondiindustry ty Captl tersucs requrdb tesc through nstitutinal-deveopment,tor to carry ouit its inivetmen1t Program for mranpowr-uply ad ult-mprovemecnt 1986 measures. Colfinancing ($1 million)4is anitici- CHINA: lBRD-;4225 mnillion.Inidustrial ptdfrom theUNDP.Total cost:$24.5 growth ini east China 'Will be suipported m'llion throuigh the establishment of ai base-load 4 ~WESTERN AFRICA: IDA-4$5.5 mrillion, themal power planit along the Coast of Zhe- Hepwl be provided ini estabNlhng a re- jiang province, using cOafrmShniCo- ginalinmstitutionfo4r training adugaig nnig ntefr ihro omril high-evel nd mddle-evelmanagerial staff bank loans anid/Ior export credits ($156 mJI- ~ofpriv*atan parapublic-sector enterrises lion), is being sought. Tota Cost: $1,044.9 in the six,CEA0O-memfberCountries anid of million. other neighboringj West African Countries, as CHINA: 1BRD--$521 million. By initroducing Well.Cotfinan'cin ($1 million) is to beprovid- state-of-the-aIrt dami-conlstructotehius ed by hei CEAO. Total cost: $6.~5 mnillion, providing~at link between the Yanta power YEMEN ARAB REPUBLIC: IDA-$412.7 miil- station and south Chinat using 500-ky~ tranis- A tchnial-training lion project will asist in mlissionllines and 'helping strengthen anid up- allviain act shraes of trained techi- datethGugxElcrcPwrBea' 126 Summaries of Projects Approved financial-planning and management prac- HUNGARY: IBRD-$64 million. Funds will tices, economic growth in south China by be provided to increase the country's utiliza- means of the cascade development of the tion of domestic coal, thus saving imported Hongshui river will be supported. Total cost: energy. In addition, institution-building assis- $1.033.1 million. tance will be given to the Hungarian Electric CHINA: IBRD-$30 million. Assistance will Power Trust, and assistance in the transfer of be provided in the appraisal of the Bohai Oil modern technology will be made available. Corporation's oil and gas condensate discov- Total cost: $620 million. ery in Liadong bay in northeast China and in INDIA: IBRD-$485 million. Assistance in the planning and financing of an optimum meeting the electricity demand in the north- program for its development. In addition, ern and western regions of the country will local capabilities in all aspects of offshore be provided through the installation of about petroleum operations will be supported, and 1,500 mW of thermal power-generating ca- China's position as a joint-venture partner in pacity, as well as associated transmission these activities will be strengthened. Total lines for connection to the transmission grid. cost: $83.8 million. Technical assistance to the National Thermal COLOMBIA: IBRD-$171 million. Consisting Power Corporation is included, as the instal- mainly of the 1985-90 time slice of Empresa lation involves the introduction of new tech- de Energia Electrica de Bogota's (EEEB) dis- nology-combined cycle operations-as well tribution and subtransmission program, this as the use of power generation. Total cost: project seeks to achieve greater efficiency in $1,286 million. EEEB's operations and to extend electricity INDONESIA: IBRD-$34 million. The utiliza- service to a larger segment of Bogota's popu- tion of natural gas in high-value uses in the lation. Total cost: $389.6 million. domestic market will be accelerated by devel- ECUADOR: IBRD-$8.5 million. Through a oping the infrastructure needed to distribute program of institutional development, eval- gas to industrial and commercial consumers uation studies of the current tariff structure currently using liquid fuels as a source of and of ways to optimize power-system opera- energy, and by building up the institutional tions, training, and provision of equipment capability of the National Gas Company to and vehicles, the overall performance of the market and distribute gas actively. Bilateral Ecuadorian Electrification Institute will be aid for technical assistance (S3.8 million) and improved. Total cost: $11.8 million. commercial bank loans ($10.4 million) are ETHIOPIA: IDA-$62 million. The govern- being sought. Total cost: $86 million. ment will be helped to establish a least-cost JORDAN: IBRD-$27.5 million. A sixth pow- expansion program for the power subsector er project consists of the supply and installa- and implement its highest-priority projects. tion of equipment and material and associat- Institution-building assistance to the Ethio- ed engineering services for the implementa- pian Electric Light and Power Authority is tion of high-priority parts of the 1986-90 na- included. In addition, integrated least-cost tional least-cost program for the power sub- plans to expand the supply of household sector. Total cost: $71.7 mnillion. energy products (crop-residue briquettes and KOREA, REPUBLIC OF: IBRD-$230 mil- charcoal) and correct imbalances in their lion. Through assistance in financing the prices will be developed and implemented. transmission and distribution component of Cofinancing is anticipated from DANIDA the Korea Electric Power Corporation ($5.8 million). Total cost: $106.8 million. (KEPCO)'s 1986-89 investment program, GHANA: IDA-$28 million. Through rehabili- technical assistance, engineering services, and tation works on the Electricity Corporation a program for strengthening KEPCO's re- of Ghana's distribution network and the Vol- search activities, the estimated growth of de- ta River Authority's principal substations, mand can be met reliably and efficiently. more reliable electricity service will be re- Total cost: $3,070.6 million. stored. Technical assistance and training are PAKISTAN: IBRD-$90 million. The Water included. Cofinancing ($10 million) is being and Power Development Authority will be arranged with the government of Italy. Total assisted in meeting electricity demand in the cost: $48.8 million. country by the addition of 200 mW of ther- GUATEMALA: IBRD-$81 million. A power- mal capacity through improvements in the distribution project has been designed to help fuel efficiency of the combustion turbines improve the power sector's efficiency and being installed at Kot Addu. Total cost: complete studies necessary to ensure sound $187.8 million. decisions on expansion of power generation. PAPUA NEW GUINEA: IBRD-S28.5 mil- Total cost: $133.2 million. lion. A major hydroelectric-power develop- Energy 127 ment on the Ramu rivr, which will reduce oped through the financing of the 420-mW the Electricity Commissioni's dependence on Kayraktepe hydropower station on the Gok- imported oil anid replace it with indigenous su river. Technical assistance to the State Hy- hydro, resourceos,will be supported. Teclhnical drauicii Authority and the Ministry of Energy assistanc, engineering and onsulting sr and Natural Resour6cesis included. B-loan vices, And training are included. Cofiaidncing cofinancing, in the iaount of $350 million is being arranged with the OECF ($38 tmil- (inludeing IBRD participation totaling $52 lion), the EIB ($16 million6) and ADAB ($1 mi.llion), is being arranged. Total cost: $716.4 tfmillion).Total cost. $117.4 million, million. PERU: IBRD-$ 3.5 million. The process of TURKEY: IBRD4-$140 million. Through the regionalization, by Which nSine regional utili- supply of equipment, instruments, and ma- ties have been established to be in charge of terials such as capacitor banks, tools, and all local electricity services, w-illbe supported spare parts; training; and technical assis- through a series of studies, consultancy ser- tance, the efficiency and availability of the vices, and provision of maintenance, com- Turkish ElectricityAuthority's electric-power munications, and contpting equipment. facilities will be upgraded and improved. Total cost: $24.8 million. Total cost: $162 million. SENEGAL.:I DA-0 miillion. Through con- TURKEY: IBRD-$1O milion. Two units at struction of a diesel plant, transmission lines, the Elbistan power station, a key thermal- and associated substations; rehabiliftation of power project in the country, will be fi- a steamnplant, transmission lines, ssubsta- nanced, thus ensuring the station's adequate tions, and the distribution system (mainly in operating availability and efficient operation. Dakar); technical assistance; itmplementation Cofinancinig is being arranged withi the Fed- of an energy-conservatiion program; and eral Republic of Germany'sKfW (S30.7 mil- provision of energy-related studies, the use of lion), the EIB ($14.5 million), and the: energy resources will be optimiized. Cofinanc- Export-Import Bank (U.S.)/Mainufacturers ing is anticipated from the CCCE ($28 mil- Hanover Trust ($30 million). Total cost: lion), the AfDB ($8 million),and BOAD ($5 $247.8 million. million). Total cost: $84.1 million. URUGUAY: IBRD-$45.2 million. A power- SUDAN: IDA-$30 million. Though rehabili- rehabilitation project, which includes exten- tation, the supply of spare parts and addi- sions to various transmiission systems and the tional facilities, and consultanc services, the provision of Gconsulting services, is designed utilization of existing power ilities will be to help meet Uruguay's power needs with made more efficient and power-supply reli- lower fuel consumption, improved system re- ability improved. Total cost:. $40.2 million,. liability, and a higher degree of operational TANZANIA: IDA-$40 million. Through a efficiency of installed capacity. Total cost: program of rehabilitation, supply of eqip- $138.1 million. ment, and technical assistance, the country's YEMEN ARAB ;REPUBLIC: IDA-$11.7 mil- power system will be restored to reasonable lion. A fourth power project will extend elec- levels of reliabilityand service. In addition, tricity serviceto about 23,000new consum- funds willbe provided to help improve the ers, ensure twenty-four hour supply, and im- availability andi production of household prove the quality of service to more than energy supplies by pilot activities in more ef- 15,000 existing consumers. Technical assis- ficient conmercial charcoal and charcoal- tance and traininIg services will be provided stove production. Cofinancing is anticipated to the Yemen General Electric Corporation. from Canada ($10.2 million), Norway ($8.3 Cofinancing is anticipated from the AFESD million), the EIB ($6nmillion), Finland ($2.3 ($14.5 million), the BITS ($11.1 million), and imillion), and others ($10.6 million). Total the IsDB ($10.5 million). Total cost: $58.9 cost: $102.6 million. million. THAILAND.: IBRD-33 million. A joint ven- ZAIRE: IDA-$37 million. A second power ture between the Petroleum Authority of project seeks to ensure reliability of supply to Thailand (PTT)'s wholly owned subsidiary, the main interconnected networks, make op- PTT Exploration and Production Comnpany timal use of the electric energy within the Limited, and Thai Shll Exploration and Zaire-Rwanda-Burundi interconnected sys- Production Company Limited will be estab- tem, and strengthen the institutional capacity lished, and its tinvestment program; up to of the Soci&t6Nationale d'Electricite. Cofi- 1988 financed. In;stitutional assistance to the nancing ($600,000) is being provided by the PTT is included.Total ;cost: $432 million. UNDP. Total cost: $48.4 million. TURKEY:, BRDL$200 million. The country's ZAMBIA: IDA-$3.1 }million. A magnetic sur- indigenous energy resources will be devel- vey of the 1,700-kilometer Tazama pipeline 128 Summaries of Projects Approved between Dar es Salaam in Tanzania and to help finance an industrial-assistance proj- Ndola in Zambia will be carried out to deter- ect originally approved on January 15, 1985. mine the extent of damage caused by corro- MAURITANIA: IBRD-$20 million. Help will sion. Initial measures to meet urgent opera- be provided to the Soci&e Nationale Indus- tional and maintenance needs will be recom- trielle et Miniere (SNIM) in implementing its mended, and a program prepared for the rehabilitation program. The purchase of crit- pipeline's rehabilitation. Cofinancing is being ical equipment and provision of technical as- provided by the EIB ($370,000). Total cost: sistance and training are included. Cofinanc- $4.1 million. ing is anticipated from the KFAED ($18.2 million), the OECF ($3.1 million), and the Industry CCCE ($3 million). Total cost: $92.2 million. GUINEA: IDA-$3.9 million. Technical assis- ZAIRE: IBRD-$l 10 million. Part of the tance will be provided to help the govern- foreign-exchange costs of Gecamines's five- ment manage its mining shareholdings, un- year rehabilitation program (1986-90), which dertake geological work and exploration pro- aims at maintaining production capacity at motion, improve the mining sector's regula- its present level while raising productivity tory framework, and strengthen institutional and reducing production costs, will be fi- efficiency through administrative reform. nanced. Cofinancing is anticipated from the Total cost: $4.3 million. AfDB ($65 million), the EIB ($48 million), HUNGARY: IBRD-$100 million. The re- the CCCE ($28.6 million), and the EEC/ structuring of Hungarian industry will be SYSMIN ($27 million). Total cost: $702.7 supported to enable it to achieve internation- million. al competitiveness. Support will be given to a ZAIRE: IDA-$50 million. An eighth project program of industrial-policy and institutional in support of SOFIDE (Societe Financiere de reforms covering the entire sector, as well as Developpement) represents a continuation of to a program covering the plastics-processing IDA support to this financial intermediary in subsector. Total cost: $317.1 million. its ongoing assistance to the productive sec- HUNGARY: IBRD-$25 million. Support will tors in the country, particularly private in- be given the National Bank of Hungary's vestments in manufacturing and agroindus- energy-rationalization facility through provi- tries. Total cost: $140.3 million. sion of funds to finance about forty or fifty ZAMBIA: IDA-$10 million. The domestic energy-saving subprojects and to purchase supply of fertilizers will be improved through equipment to improve the monitoring of support for a package of policy, managerial, energy use and to carry out energy audits. organizational, technical, and financial mea- Total cost: $74 million. sures necessary to rehabilitate Nitrogen INDIA: IBRD-$302.2 million. A greenfield Chemicals of Zambia Ltd. to enable it to fertilizer-manufacturing plant, owned and operate its facilities efficiently and more eco- operated by the Indian Farmers Fertiliser nomically and provide the country with do- Cooperative Limited (IFFCO), will be built mestically produced fertilizer at internation- and commissioned; investments will be made ally competitive prices. Cofinancing is being at three existing IFFCO fertilizer plants; a arranged with the Republic of Germany's study to develop an improved performance- KfW ($27.2 million) and the OECF ($26.7 evaluation and control system for use by the million). Total cost: $83.8 million. government for all publicly owned fertilizer plants will be undertaken; and fertilizer ma- Nonproject terials will be imported. Cofinancing is antici- BANGLADESH: IDA-$200 million. Foreign pated by the OECF, Italy, and Denmark. exchange will be provided to help finance Total cost: $917.9 million, general imports. INDIA: IBRD-$200 million. The cement in- BOLIVIA: IDA-$55 million. In support of the dustry will be helped to achieve a higher op- economic-stabilization and structural-reform erating efficiency through modernization of programs initiated by the government in Au- its facilities (including conversion of six gust 1985, quick-disbursing financing will be private-sector cement plants and one public- made available for priority equipment, spare sector plant from wet to dry process) and parts, and other inputs needed in the mining, small-scale rehabilitation and modernization agriculture, industry, energy, power, and investments at other cement plants. Training transport sectors. and technical assistance are included. Total BURUNDI: IDA-$15 million; African Facili- cost: $469.8 million. ty-$16.2 million. Structural-adjustment fi- MADAGASCAR: African Facility-$20 mil- nancing will be provided in support of a gov- lion. Supplemental funds are being provided ernment program to redirect the economy Health, PopUlation, and Nutrition 129 towadsd ahta ilrdc the present sonniel admin'istraticon for the civil service, dependence on coffe and lay the bais for and improved budgeting, policy formulation, sustained growth in, the me dium term, With planning, anid public-investmient pirogram- greater reliance on mnarket forces And a mor mng Cofinancinig (speial joint financing) i outward orientation.~ Special joinit finawncin being arrange wihteFdrlRpuiblic of isbigpovided by Japan ($111 Milin German ( )And J4apa (OECF). Biater- and Switzerlanhd($7.7 mio) Al aissistanlce($15 millin isbigpoide CHILE I3RD-$50 milflin Theoen by USAID ments's tuctlural-adjutment poram,l de- MEXICO: IR-400 mIllion. The goven to aceelerat exorsanidmstc sigyned et wvillbe Assise interhblitation and savings sostoaprmtarecovery of eco- reconstruction of those urfban centers dam- nomic grwt w anad C yenaged1by the emlometwhile the earthuaeof Septemfber 1985. cutrY serices its wexteraldebt, will be sup- In Addition, the projct Will assist int improv- pored.ing construction sanrdards And planning COTE D'IVOIRE: HIRD4$250 mhillion.Es- throughi regulatoy instruments at the muni sential impportswill be6 financed under this cipal, state, and national levels to protect ur- 1thirdloa inspprf thegvrmn' ban: infrastructure' anid superstructure from coMprehensive~programt of strutuAl adut- future earthquake tremors. Total cost: $571.4 ment~that aifims at"policy chianges to mrv mlin ~resource allocation, generate exports 'reduce NIGER: 1IDA-$20 mtillion Africani Facility- the rral-uban icome ap,ad reestablish $40 mfillion, The first Phase of the govern- financial equilibria. ment's structural-adjustmntpormwhc EQUATRIL GUINEA: IDA4$6 million; aims at increasinig the effiiency of resource Afr"ia Facility-4 million The coutr use anid strengtheningthecutysrsuc n is atemptto willbe aded ncrese pod- base for fufture economic developimet, as uctive capacityi and exots durfing a Critical] well As improving the public-finiance position ~phase of the government's ec6onoic-rehabili-~ and the balanice ~of payments, will esp tation iprogram, which is amimed at restorinigi ported. balance-ofpayidmet and budgetary equili- SENEGAL: IDA--$20 million;I African Facili- bria while alowing servic of itsiikexteral ty-+$44 million. The first phase of the gov- debt. ~~~~~~~~~~erninent's medium-term adjustment program GHANA: African Faiit- il llo. u- will be supported; this phase, covering_the piementl finnc wibepovdd to the SeC& period 1985-87, consists of a cnomr~ehensive iT ond Recostucion Imortsi Credit, ap-~ Action program of policies and measures iIproved on Marcfh 28, 1985.~ Special join fi aimed at aceelerating growth in production nancin ianticptdfo h nted King- anid emfployentand at strenigthening public- domJ($7 millio) and the Federal Republic of sector Managemet. Special j'oint financing Germany~ ($6 mfilionbf). ($6 miillion) will be furnished, on a grant GUINEA: IDA--$25 million; ~African Facili- basis, by Switzerland. ty-$ 17 million. tutrladutetsp TOGO. Africani Facility-40 miioin. Supple- port will be given the goverinment's mental funds 'Willbe provided to help finance economic-recovery program-fcsintg on a second structural-adJustment credit, ap- iI economic-liberalization measuresanid reformn proved ]on May 30, 1985. of public administration anid public eniterpris- ZAMBIA: IDA-4$50 miillioni.The minimum es-thereby aloigeconomic activity ~to ex- level of imports needed to sustain the coun- panid while current And futurte refotrm inca- try's recovery rga will be financed, sures Are befingimplemented. thereby keeping up the momientumiof policy GUINEA-ISSAU fricanFacitiy--$5 mail- anid institutional reformfs. Technical assis- lioni. A~$10 million Reconistruction lmport tance is included. Program, approved oni December 1I3,1984, will 'be suplmnted by this African Facility andNutrition Poptlation,Heailth, credit, to be disbursd in two tranches. BANGLADESH: IDA-78 million. A third MALAWI:~IDA-$30 millon African Facili- population project seeks to reduce fertility ty-$40 mifllion.~ A tirid structural-adjust- anid infanit And m-aternal mortality by provid- ment ceit aims at the esaAblishmfenit of An in upotto the govenmnent's family-plan- estate-maaeettrainiing and extensioni ning and maternial-child health programa. Ef- service, provision of term credit for estates, forts to stimulate additional demandAfor measures aimed at export promotion and famnily planning Willbe assisted, And essential provision of export crdit aretructuringk of and affordable health care to the rural popu- the tax system, impovdincentives Anidper- lationi extended, Cofinancing is anticipated 130 Summariesof ProjectsApproved from the Federal Republic of Germany objective a reduction of fertility and infant, ($28.7 million), Norway ($23.6 million), Can- child, and maternal mortality in West Bengal ada ($23.5 million), the United Kingdom state. Project components include service de- ($10.3 million), Australia ($7.2 million), and livery, demand generation, training, monitor- the Netherlands ($6.1 million). Total cost: ing and evaluation, and project management. $199.2 million. Total cost: $89.9 million. BRAZIL: IBRD-$59.5 million. The health of INDONESIA: IBRD-$33.4 million. A second the rural poor in four states of the northeast nutrition and community-health project seeks will be improved, and the efficiency of pro- to strengthen the coordination and manage- viding basic health services in those same ment of five community-health programs states enhanced. Institution-building and aimed at significantly reducing infant, child, training components are included. Total cost: and maternal mortality in eleven priority $129.7 million. provinces; further develop the country's CHINA: IBRD-$15 million; IDA-$65 mil- nutrition-surveillance capability; and improve lion. A rural-health and preventive-medicine nutrition-manpower development at the project seeks to strengthen the Ministry of paramedical and graduate levels. Total cost: Public Health's efforts to improve rural $57.7 million. health care in the poorer counties in five NIGER: IDA-$27.8 million. By supporting provinces; improve efficiency, coverage, and the government's reform program in the quality of the national immunization pro- health sector, this first IDA-assisted project gram against the main childhood diseases; in- in the health sector will help correct imbal- itiate improved drug quality control; and de- ances in the allocation of resources, ease fi- velop new preventive strategies for commun- nancing constraints, increase the availability icable and chronic diseases and health-care of essential drugs, reinforce planning and financing systems in rural areas. Total cost: program execution in the Ministry of Public $177.4 million. Health and Social Affairs, and improve don- COLOMBIA: IBRD-$36.5 million. Access to or coordination. Priority health services and basic health services. including family plan- programs will also be strengthened. Total ning, will be improved for 3.7 million people cost: $29.3 million. living in the poorest areas (primarily along RWANDA: IDA-$10.8 million. Family-plan- the Pacific coast), and 250 communities will ning services will be made available in all be provided access to piped water supply and health facilities as part of the country's ma- waste-disposal facilities. In addition, the rur- ternal and child-health (MCH) program, the al water-supply subsector will be provided coverage and quality of MCH services will technical assistance, and systemic changes in be increased and improved, and institutional- the organization and provision of health ser- strengthening assistance furnished to the vices through decentralization of service de- Ministry of Health and Social Affairs. Train- livery and integration of health activities at ing of MCH staff is included. Cofinancing is the lowest level will be introduced. Suppliers' being arranged with WHO ($725,000). Total credits, totaling $9 million, are being sought. cost: $14.5 million. Total cost: $75.8 million. SIERRA LEONE: IDA-$5.3 million. A COTE D'IVOIRE: IBRD-$22.2 million. Im- health and population project is designed to provements will be made in the country's strengthen the Ministry of Health's capacity health system through manpower develop- for planning, management, coordination, and ment (nursing schools and field-training pro- monitoring; improve basic health and family- grams) and management-assistance measures planning services; improve resource mobiliza- that support the strengthening of various Di- tion and use in the health sector; and help rectorates in the Ministry of Public Health develop population policy and programs for and Population. Cofinancing is to be provid- activities that will generate demand for fami- ed by USAID/US Bureau of the Census ly planning. Total cost: $5.7 million. ($200,000). Total cost: $29.7 million. GHANA: IDA-$15 million. Through the sup- Small-scale Enterprises ply of essential equipment and supplies, in- CHILE: IBRD-$40 million. Funds will be structional materials, civil works, studies, provided to the Production Development technical assistance, and training, the first Corporation (CORFO). which will then on- steps will be taken in the long-term rehabili- lend the proceeds, either directly or through tation of the country's health and education financial intermediaries, to small and sectors. Total cost: $16 million. medium-scale industrial enterprises and par- INDIA: IDA-$51 million. A fourth popula- ticipate in equity investments under a risk- tion project in the country has as its major capital fund. Total cost: $75 million. Technical Assistance 131 COTE D'IVOIRE: IBRD-$30 million. In sup- training, and urban-sector management, has port of a program of major industrial-policy been designed to help promote the economic reform, a line of credit and a package of diversification of the town of Selebi-Phikwe technical assistance will be provided that and its environs so as to lessen gradually aims at facilitating the adjustment of poten- their dependence on the nearby copper/nickel tially viable existing enterprises to the re- mine operated by BCL Ltd. Total cost: $12 formed policy environment. Total cost: $49.3 million. million. BRAZIL: IBRD-$29 million. A public-sector ECUADOR: IBRD-$30 million. In support of management project is designed to strength- employment-intensive and efficient industrial en public-sector planning and management development, funds will be onlent by the Na- capabilities at the federal government level in tional Finance Corporation (CFN) to small- the areas of information, research, invest- scale enterprises involved in manufacturing, ment planning, budgeting, program imple- agroindustry, fisheries, tourism, and mentation, and operational control, includ- industry-related and marketing activities. ing the supervision of state enterprises. Total Total cost: $94 million. cost: $58.5 million. INDONESIA: IBRD-$64.5 million. The CHINA: IDA-$20 million. A second country's effort to increase nonoil exports by technical-cooperation project will assist the making available more long-term credit for government to prepare projects that are ex- export-oriented investments will be assisted. pected to be financed by the IBRD or IDA In addition, the policy and institutional and to help develop capacity for preparing framework needed for export development and implementing investment projects and will be strengthened, and individual export- administering technical assistance. Total cost: ing firms will be provided technical assistance $27 million. and training. Total cost: $111.6 million. KENYA: IDA-$11.5 million. Public-sector in- NEPAL: IDA-$10 million. Cottage and small stitutions will be strengthened in their ability industries will be aided through provision of to deliver key services and formulate agricul- term finance, and the public and private tural policy through a project designed to agencies that provide marketing, raw-materi- build their capacity to manage resources, im- al supply, and training to these industries will plement programs and projects, and analyze be strengthened, thus supporting the govern- agricultural-policy issues. Cofinancing is ment's objectives of developing efficient in- being arranged with CIDA ($2.2 million), the dustries and export growth and increasing UNDP ($1.6 million), SIDA ($400,000), and output, export earnings, and employment in USAID ($300,000). Total cost: $20.7 million. small and cottage industries. Cofinancing KENYA: IDA-$6 million. Petroleum explora- ($1.8 million) is anticipated from the UNDP. tion will be accelerated by helping the gov- Total cost: $17.3 million. ernment to strengthen its technical capability TURKEY: IBRD-$100 million. Funds will be to negotiate production-sharing agreements channeled through Sinai Yatirim ve Kredi and supervise petroleum exploration, estab- Bankasi and Halk Bankasi for relending to lish the information necessary to identify and eligible subborrowers in the small and open up new prospective areas for explora- medium-scale industrial sector. Technical tion, and promote and offer prospective assistance is included. acreage to interested oil companies and sub- sequently negotiate contracts and monitor Technical Assistance the companies' activities. Total cost: $9.6 ARGENTINA: IBRD-$18.5 million. A million. public-sector management technical-assis- MADAGASCAR: IDA-$10.3 million. The tance loan seeks to assist government efforts management and operation of public and to develop and strengthen the tools needed private enterprises will be modernized and for coherent economic policies and decision the implementation of policies geared to the making, reduce the public-sector deficit, in- revitalization of the economy supported crease domestic-resource mobilization, im- through the training of highly qualified ac- prove the efficiency of public-sector invest- countants, auditors, and managers, and ment, strengthen the performance of, and re- through technical assistance to, and training structure, public-sector enterprises, and im- of, those responsible for procurement. Total prove export and industrial policies and pro- cost: $13.1 million. cedures. Total cost: $31.1 million. MADAGASCAR: IDA-$IO million. By BOTSWANA: IBRD-$7.6 million. A program strengthening programs for major institu- of technical assistance, covering the fields of tions responsible for agricultural policy and regional development, local-government services, the process of institutional reform 32 Summaries of Projects Approved and development in the agricultural sector, ($12.6 million), and BOAD ($4.2 million). started under an earlier credit, will be contin- Total cost: $156.9 million. ued. Cofinancing ($500,000) is anticipated from USAID. Total cost: $12.8 million. Transportation NIGERIA: IBRD-S5 million. Technical assis- CHINA: IBRD-S 160 million; IDA-$70 mil- tance will be provided to strengthen the insti- lion. The government's objectives of increas- tutional framework for industrial policy and ing railway capacity and improving railway to undertake studies aimed at assisting in re- operations and efficiency will be supported structuring the country's industrial sector. through the upgrading and electrification of Cofinancing, in the amount of $1.6 million, is track, increasing the capacity of the Xi'an being sought from the EEC and UNDP/ Railway Signalling Factory, introducing me- UNIDO. Total cost: S8.6 million. chanized track maintenance on a pilot basis, YEMEN ARAB REPUBLIC: IDA-$12 mil- and supporting the continuation of a traffic- lion. Technical assistance and consultancy costing study. Total cost: S577.5 million. services will be provided to help strengthen CHINA: IBRD-$130 million. Capacity at the the newly created Ministry of Oil and Miner- Tianjin port will be increased, technical assis- al Resources and develop its institutional ca- tance and training will be provided for port pacity to manage the country's recently dis- personnel, and a Tianjin Port Development covered oil and gas resources. Cofinancing is Center for training, research, and develop- being arranged with USAID ($2.1 million) ment studies will be established and and the Netherlands (S1.1 million). Total equipped. Total cost: $282 million. cost: $17 million. COLOMBIA: IBRD-$62 million. This subsec- ZAMBIA: IDA-S8 million. Assistance will be tor operation supporting the National Rural provided to help increase the government's Roads Fund's 1986-92 investment and capacity to carry out macroeconomic analy- maintenance program comprises construc- sis, implement improvements in planning and tion. maintenance of rural roads, improve- budgeting systems, make resource allocation ments to minor waterways, purchases of more responsive to policies and objectives, equipment, technical assistance for institu- and improve management and accounting tional upgrading, and the preparation of a skills and the ability, speed, and accuracy of study on departmental road maintenance. essential management information. Cofinanc- Total cost: $181.8 million. ing is being provided by Ireland ($1 million). COLOMBIA: IBRD-$42.8 million. This first Total cost: $9.4 million. Bank operation in the port subsector of the country seeks to strengthen the managerial, Telecommunications financial, administrative, and operational COTE D'IVOIRE: IBRD-$24.5 million. capabilities of the Empresa Puertos de Col- Through physical, institutional, and financial ombia S.A. and to upgrade port capacity by rehabilitation, the Office National des Tele- restoring port installations and increasing communications will be strengthened to en- port productivity. Total cost: $60 million. able it to manage the telecommunications CYPRUS: IBRD-$20 million. Through provi- sector effectively. Cofinancing is being ar- sion of funds for road rehabilitation and ranged with the CCCE ($17.2 million) and strengthening, periodic maintenance, pro- the EIB ($8.7 million). Total cost: $116.7 curement of equipment, and consultancy ser- million. vices, a transport planning and policy frame- LAO PEOPLE'S DEMOCRATIC REPUB- work will be established, a sustainable and LIC: IDA-S3.9 million. Part of the invest- cost-effective highway-maintenance system ment program-emphasizing system rehabili- implemented, priority highways upgraded, tation and management improvement-for and highway safety further improved. Cofi- the posts and telecommunications sector dur- nancing is anticipated from the KFAED ing the five-year period, 1986-90, will be fi- ($10.6 million). Total cost: $73.3 million. nanced. Cofinancing ($1.2 million) has been DOMINICAN REPUBLIC: IBRD-$35.8 mil- arranged with the UNDP. Total cost: $7.8 lion. A third road-reconstruction project in- million. cludes completion of road-reconstruction SENEGAL: IDA-$22 million. A second tele- works initiated under the second project, communications project aims at improving technical assistance and training, construc- operational efficiency and maintenance, as tion and improvement of about 100 kilome- well as increasing system utilization through ters of rural roads, and acquisition of equip- rehabilitation of existing equipment and net- ment and material. Total cost: $44.7 million. work expansion. Cofinancing is anticipated ETHIOPIA: IDA-$5.5 million. Part of the from the CCCE ($20.8 million), the AfDB original Phase I of the Assab port develop- Transportation 133 ment,desiged toprovide for a modest in- will be repaired and rehabilitated. Total cost: pot capcity, will be finan6ed.Pre creasein $16. maillion. wok fr amao port expansion partor MALAYSIA:IBRD-$18.8 million. The Ke- Phae Iwillalsob carried ouit.Total unde lang Port Authority (LPK)'s objectivesof in- cost: $8.5 million, ng port capacity anidimproving its op- creas~i6 THE GAMBA A$. ilin ffotsitof e1rations efficiency antdl will be supported, and ofWork andCommnicationis the Mnisty LPK's technicaland managerial capabilities carying in it ut fourand-oe-hal-yearwill be fuirtherdeveloped. Technicalassis- progam willbe suport- road-mantenane tnce is included, as is~a pilot railwaycorni- Cfinancing isatcpedfothA ed ppnonet deigne to assist the Malayan Rail- (45 mion),teEC(2mlin,teway in the handling of containiers.Total cost: (700,00), andUNSO ($0,0)$49mlin. UNDP Total cot $1. ilo.MALI: IDA-$48.6 million. A fifth highway GHANA: mlin The -D-2.prsopojct will provide fuindinig for spare parts, akoadi illbe rehabiliate ad Temaand fuel, construction materials anidlabor, as well modenize, an insitutonalassistance pro- as for new equtipment,consultanits'services, vide Gana ortsand Hairbouirs heto Aui- and civl wrs to carry ouit a~ road-maiinte- thoriy.Coinancng isbeingarranged with n1ance, and rehabilitto rga,an OECFmilion,te 'SD ($13.2 the ($29.2 institutionbuidigprgam,iad reconstruc- millon),andthe EC (8.6mill6io). TotAl tion ofteBmaoBu ouirad Cofi- cost: $958mlin nancing is ben arnewihthe ADF Arican Faility-$0 millioin. GHANA: Sup- ($110.8 mnillio) thinC($ illion), and the plemenayfns ilb rvided to hel FAC ($500,00) Ttlcs:$73.4 million. finac ara-eaiitonand mrainte- MOROCCO:.IBRD-S22 milio.The opera- proectapprvedin June 1985in ithe nanc tional"perforimanc of the ports at Casablan- amount million. of $40 ~~~~Ca anidMohmei wl eimproved, and INDONEsIA IR $30 mi'llioni. A throg a tehia-sitnecomponenit, highway-maneaneadbetterment piroject port activite wilb nerted initothe seeks toipoehgwymaintenance, re- country's efrtopmteexports and im- storean upgadepa ts fth existing na- prove the maaeetadfinancial viability tiona ndpoinil od network anidits of the major pulcetrrse in the port biridges Imrvhihaplnignda- sector. Total cost: $41mnillion. agement, patcualya tepovincial level, NIGER: IDA-$,15 million; AfricaniFacility- revis roas androadtransort egultions $1 illion. The governmentwill be assisted and,prepar an mlmniha-afety in implemnenting its tasport-sector strategy cost: $20 measures. million,that Ttal aim atrdrcigpublic expenditures REPUBLIC OF: IR-141 KOREA, , mi- to~ highes-roiyatvte,increasing user at he prt f Pusan will in- lion Capcit cost reoey an osldating the institu- te contrucion of additional creas throgh tilonbuilin bgnudrearlier IDA proj- cotainr beths wvhile specalizd congestion ects. Cofnnig sbigprovided by the in te b redcedby providn an wllciy EDF ($94mlin;Jpn($20 millioni);the ondc0 traeae orelace toeinithe ADF ($68mlin;teCCCE ($7.8mil- city. TehiaUsitnet th Koe a- lo) n h NP(5000.Frther co- time anidPor diisrto is included, financin ($09mlIons beingsogt KOREA, REULCO:IBRD---$67 million. NIGERIA IBD$09million. Through Tranisporefiinyadcpit of rail ser- technicialassistneadtraining to the vices in th Seu-usncridrwl be in- Nigerian Port Atotyand~ the Nigerian creased thruhassace(od n qip- Railway Corprto;rvionfcmue, ment as ellastchnial sosistne to the woirkshop, and training equipmnent, as well as KoranNational Raiwas.Toa cost: spare Partsi; Anidtechnical assistance and con- $178. miillion. sulting services to the Federal Miniistry of MADAGASCAR: iDA-$12 million. By fi- Tranisportand Aviation, the pedrforancoeof n ancing prioritly itm of the 1987-89 inet key transpot parastatals wxillbe imhproved menitpilanf of the Madalgascar National Rail anid thebgoverniment ~assiste ini its efforts to ways'(RNCFM), the railwayswill be able to reform them.tTotal cost: $30.3 million. continue to roidesnta to lthe services: OMAN: IBRD-$30 millioni. A third highway- econiomyiAt urn rfiees In addition, maintenance project, wvhichcovers threee facillitis of teRCMadth Toamasima years of the current'five-year mfainitenance Port Authoity aae yA recent cyclone, program of the Ministry of Comimunications, 134 Summaries of Projects Approved aims to assist institution-building efforts in ity at the regional, state, and municipal levels highway maintenance, project evaluation, for flood protection and control strength- highway safety, and pavement-management ened. Cofinancing is being arranged with the systems. Training is included. Total cost: UNDP ($500,000). Total cost: $208.6 million. $192.5 million. BRAZIL: IBRD-$55 million. A line of credit PHILIPPINES: IBRD-$82 million. A second will be provided to the municipalities of the rural-roads project will continue the Bank's Salvador Metropolitan Region (SMR) to fi- efforts to alleviate poverty in rural areas by nance priority investments in its development providing farmers with access roads; provid- plan-upgrading of low-income communi- ing the infrastructure needed to support ties, infrastructure, municipal services, and land-settlement efforts; facilitating provision productive activities. Total cost: $151 million. of health care and other services to the rural BRAZIL: IBRD-$24.5 million. A line of cre- population; and strengthening institution- dit will be provided to participating munici- building efforts. Total cost: $122.2 million. palities in the state of Santa Catarina for RWANDA: IDA-$ 11 million; African Facili- financing investments in urban infrastructure, ty-$15 million. A sixth highway project, community facilities, equipment, and techni- which is a part of the government's current cal assistance. Total cost: $70 million. four-year road-maintenance and construction INDIA: IDA-$62 million. Fundamental im- program, seeks to lower road transport-sys- provements will be sought in the planning, tem costs through a reduction of vehicle- management, and financing of urban growth operating costs, deferred costly road recon- in Gujarat state, and serious deficits in urban struction, and improved road safety. Cof- shelter, infrastructure, and services in the inancing is anticipated from BADEA ($7.6 participating cities will be reduced. Total million), the WFP ($1.9 million), the UNDP cost: $130.5 million. ($1 million), and France ($400,000). Total INDONESIA: IBRD-$275 million. A credit cost: $59.1 million. line to the Bank Tabungan Negara (BTN), to TANZANIA: IDA-$50 million. A program to be used to finance mortgage-lending commit- help reduce transport constraints facing the ments for almost 200,000 housing units, will Tanzanian economy will be initiated by pro- be established. Total cost: $1,208.7 million. viding for road and equipment rehabilitation, KOREA, REPUBLIC OF: IBRD-$150 mil- assistance to the trucking industry, technical lion. Funds will be provided to finance the assistance, and training. Cofinancing is being foreign-exchange cost of a four-year time arranged with the AfDB ($19.4 million), slice of the Korea Land Development Cor- Norway ($6.9 million), and Denmark ($2 poration's (KLDC) programs to develop ur- million). Total cost: $107.7 million. ban land that could provide housing for VANUATU: IDA-$2 million. A group of about I million people, more than half of high-priority public-sector investment sub- whom would be in the lower half of the projects in the transport and education sec- income-distribution scale. Institutional sup- tors will be financed. Cofinancing ($3 mil- port for the KLDC is included. Total cost: lion) is being provided by the AsDB. Total $1,849 million. cost: $6.4 million. MALI: IDA-$28 million. A second urban YUGOSLAVIA: IBRD-$121.5 million. Imple- project will help remove some of the major mentation of balanced road-investment and citywide infrastructure constraints to the ef- maintenance programs will be assisted, and ficient functioning of Bamako and facilitate institution-building efforts will be extended private-sector housing and construction ac- through financing a four-year time slice of tivities. Institutional assistance to the District the investment plans of the Road Organiza- of Bamako and the Ministry of Interior is tions of Slovenia, Croatia, Serbia, and included. Cofinancing ($750,000) is being ar- Bosnia-Herzegovina. Total cost: $1,659.5 ranged with the FAC. Total cost: $34.5 million. million. ZAIRE: African Facility-$30 million. Supple- MEXICO: IBRD-$150 million. Subprojects mental funds will be supplied to help finance for the construction of serviced sites and pro- the Sixth Highway Project, approved by the gressive construction units in rapidly growing Executive Directors on June 13, 1985. medium-sized cities will be financed. As many as 142,300 families will be settled in Urban Development serviced lots, of which about 15,200 would BRAZIL: IBRD-$100 million. The physical include starter-dwelling units. Total cost: and economic rehabilitation of flood-dam- $300 million. aged urban municipalities in the northeast re- MEXICO: IBRD-S40 million. Federal and gion will be assisted, and the planning capac- state municipal-development agencies will be Water Supply and Sewerage 135 strengthenedthrough provisionof financial WaterSupply andSewerage resources and effective training programs. ARGENTINA: IBRD-$60 million. The gov- Municipalities' organizational, administra- ernment will be assisted in rehabilitating old, tive, and financial-management systems and poorly maintained water and sewerage instal- performance will be strengthened, and muni- lations, extending water service to new urban cipalities will be helped in expanding and up- areas, and strengthening sector planning, grading urban infrastructure. Total cost: $80 management, and finances. Total cost: $120.4 million. million. NIGERIA: IBRD-$72 million. The primary BENIN: IDA-$10 million. A second water- stormdrainage network and solid-waste dis- supply project seeks to support the govern- posal services of the Lagos metropolitan area ment's objective of enhancing the economic will be expanded and strengthened to ame- performance of the sector through improved liorate wasteful and costly flooding problems. investment planning and the institution of Technical assistance and training will also be sound commercial and cost-recovery policies. provided to strengthen the industrial capacity Cofinancing is being arranged with the for solid-waste management and to improve CCCE ($10 mnillion),the IsDB ($4.5 million), local and state government resource mobili- and the OPEC Special Fund ($2.7 million). zation. Cofinancing ($11.6 million) in the Total cost: $33 million. form of suppliers' credits is being sought. BURUNDI: IDA-$9.5 million. Safe water will Total cost: $164.3 million. be made available to about 160,000 people NIGERIA: IBRD-$53 million. Some 87,000 living in scattered rural settlements, and im- people in Imo state, 80 percent of whom provements in health will be made through a have incomes below the relative urban pover- rural water-supply project that includes the ty threshold, will directly benefit from an rehabilitation and extension of rural aque- urban-development project that aims at pro- ducts, strengthening the organization of the viding affordable shelter, infrastructure, and Department of Rural Water Resources and related urban services. Total cost: $85 Electrification (DHER), and training for million. DHER staff. Total cost: $10.9 million. PAKISTAN: IDA-$70 million. Through a ser- CHILE: IBRD-$60 million. About 830,000 ies of subsectoral interventions, the feasibility people in Santiago, 80 percent of whom are of new approaches to provide services to the poor, will benefit from a water-supply and urban poor will be demonstrated, and basic sewerage project (which includes a pollution- urban services will be improved. The project abatement component). Total cost: $121 includes institutional and financial strength- million. ening and improvement in resource mobiliza- CHILE: IBRD-$6 million. Facilities in Val- tion and cost-recovery techniques. Cofinanc- paraiso, damaged in the March 3, 1985, ing is being arranged with the AsDB. Total earthquake, will be reconstructed. Total cost: cost: $148.6 million. $10.8 million. PORTUGAL: IBRD-$25 million. Low-cost, COLOMBIA: IBRD-$24 million. Programs to affordable serviced plots will be provided, rehabilitate and extend water supply, sewer- new housing units constructed, and existing age, and solid waste-management facilities in dwellings upgraded through the National Barranquilla, the country's fourth largest Housing Institute (INH), thus increasing the city, will be supported. Institution-building housing stock serving the low-income seg- assistance to the Barranquilla Municipal ment of the urban population. Technical as- Companies is included. Total cost: $41.6 sistance to the INH is included. Total cost: million. $56.6 million. INDIA: IDA-$41 million. Piped water will be SRI LANKA: IDA-$13 million. Through provided to seven rural areas in Kerala state provision of technical assistance, training, that currently depend on distant or unsafe and studies; demonstration municipal civil sources of supply. An improved supply of works; aerial surveys and mapping; and water will also be provided to one municipal equipment, vehicles, and supplies, the gov- area (Quilon). In addition, technical assis- ernment's sector-policy adjustment process tance for personnel management of water will be supported, and the capacity of the supply will be furnished, and pilot low-cost Ministry of Local Government, Housing, sanitation programs introduced for both ur- and Construction for improving the, manage- ban and rural areas. Total cost: $85.2 million. rial, financial, and service-delivery perfor- INDONESIA: IBRD-$43.3 million. About mance of local urban authorities, including 1.2 million people living throughout East those in Colombo, strengthened. Total cost: Java province may benefit from a second $20.4 million. water-supply project that includes provision 136 Summariesof ProjectsApproved of low-cost water production and distribu- one metropolitan area. In addition, a nation- tion to about seventy-five small and medium- al component aims at helping define subsec- sized towns and the expansion and rehabili- tor policies and options for effective delivery tation of the water-supply system in Sura- of services, developing plans to address sub- baya. Technical assistance, as well as sector constraints, strengthening institutions, institution-building assistance, is included. undertaking plan preparation and prefeasibil- Cofinancing is anticipated from ADAB ($1.5 ity studies in twenty-six selected cities, and million) and the Netherlands ($1 million). preparing follow-up solid-waste management Total cost: $80.4 million. projects. Total cost: $50 million. JORDAN: IBRD-$50 million. Water mains PHILIPPINES: IBRD-S69 million. Through will be extended and rehabilitated; trunk and project components designed to help improve collection sewers, as well as sewage-treatment and expand the water supply in the Metro- works, constructed and extended; a service politan Waterworks and Sewerage System reservoir and two pumping stations con- (MWSS) service area, the MWSS will be aid- structed; equipment furnished; and consul- ed in optimizing the utilization of existing tancy services furnished to the Water Au- infrastructure and production capacity. The thority of Jordan. Total cost: $96.4 million. level of internal cash generation and financial KOREA, REPUBLIC OF: IBRD-$38 million. performance will thus be significantly im- Funds will be provided to help finance two proved. Total cost: $96.3 million. water-supply components: the Namgang re- SRI LANKA: IDA-$37 million. By rehabili- gional system (for thirteen municipalities in tating and augmenting water supply, sewer- Kyeongnam province) and the Taegu water age, sanitation, and drainage systems in the system. Through the project, water services Amparai, Anuradhapura, and Colombo will be improved for about 2 million people, areas, public health will be improved and and water will be provided to more than sector management upgraded. Technical as- 500,000 additional people by 1991. Cofinanc- sistance to the National Water Supply and ing is being arranged with the AsDB ($4 mil- Drainage Board is included. Total cost: $64.8 lion). Total cost: $122.3 million. million. MALAYSIA: IBRD-$62 million. Water-sup- SYRIAN ARAB REPUBLIC: IBRD-$70 ply infrastructure in three of Johor state's million. As many as 1.7 million people are eight districts will be expanded, thus improv- expected to benefit directly from a project ing service for I million people and expand- that supports the government's objectives of ing service for 370,000 additional people by providing adequate sewage-treatment facili- 1990. Total cost: $124.7 million. ties in major urban areas in order to improve MEXICO: IBRD-$25 million. A solid waste- health and environmental conditions. Techni- management pilot project will finance the de- cal assistance and training are included. Cofi- velopment, testing, and evaluation of replic- nancing ($12 million) is being provided by able techniques for the delivery of services in the EIB. Total cost: $211.6 million. about eight medium-sized municipalities and ProjectsApproved by Region 137 S-I Proects Approvd4d Tabl for IBRD an IDA AssiAistneinFsca 1986, by Region MiRDloanLD cedt Total countr"y Reionnd ~Number Amon Nube Amout Number Amount Botswana 2 33.6 - - ~~ ~~~~~~~~~~~2 33.6 Ethiopia - - 2 67.5 2 ~~~~~~~~~~~~~~~67.5 Kenya - - 4 75.0 ~~ ~~~~~~~~~~~~~4 75.0 Madagascar - - 4 52.3 4 ~~~~~~~~52.3 Malawi 2 24.5 2 ~~~~ ~ ~ 4 ~ ~~~~~~41.6 66.1 Mauririus 1 30.0 - ~~6 - 1 30.0~ Tanzania - - 2 90.0 2 ~ ~~~~~~~~~~~ 90.0 Zaire 1 110.0 3 107.0 4 ~~~~~~~~~~~ 26.0 Zambia - - 5 91.1 5 ~ ~~~~~~~~~~~~ 91.1 Total 6 198.1 35 717.8 915.9 41~~~~~~~~~A WesternAfrica~~~~~~~~~~~~~~~~ Benin - - 1 11.9 1 11.9~~~~~~~~~~~~~~~~~~~ Cameroon 1 30.1 - - 1 30~~~~~~~~~~~~~2.1 Chad - - 1 15.0 1 1~~~~~~~~~~~~~~~~~5.0 Guinea, - 4. 436.0 Mali - - 3 82.9~ ~3 ~ ~~ 82.9 Mauritania 1 20.0 1 7.6 2 ~ ~~~~~~~~~ 27.6 Nige - 3 6.8 62.8 Total 12 703.1 26 427.56 384 1,130.6 EatAi nXaii 138 Summariesof ProjectsApproved Table 5-1 (continued) IBRD loans IDA credits Total Region and country Number Amount Number Amount Number Amount South Asia Bangladesh - - 6 463.0 6 463.0 Burma - - 1 30.0 1 30.0 India 6 1,743.2 6 625.1 12 2,368.3 Nepal - - 2 34.5 2 34.5 Pakistan 4 473.0 3 177.2 7 650.2 Sri Lanka - - 4 85.0 4 85.0 Total 10 2,216.2 22 1,414.8 32 3,631.0 Europe, Middle East, and North Africa Cyprus 1 20.0 - - 1 20.0 Egypt, Arab Republic of 1 70.0 - - 1 70.0 Hungary 3 189.0 - - 3 189.0 Jordan 4 102.7 - - 4 102.7 Morocco 5 538.0 - - 5 538.0 Oman 1 30.0 - - 1 30.0 Portugal 1 25.0 - - 1 25.0 Syrian Arab Republic 2 77.5 - - 2 77.5 Tunisia 1 27.7 - - 1 27.7 Turkey 6 1,057.0 - - 6 1,057.0 Yemen Arab Republic - - 4 46.4 4 46.4 Yugoslavia 1 121.5 - - 1 121.5 Total 26 2,258.4 4 46.4 30 2,304.8 Latin America and the Caribbean Argentina 3 544.5 - - 3 544.5 Barbados 1 10.0 - - I 10.0 Bolivia - - 2 70.0 2 70.0 Brazil 11 1,620.0 - - 1 1,620.0 Chile 4 456.0 - - 4 456.0 Colombia 7 700.3 - - 7 700.3 Dominican Republic 1 35.8 - - 1 35.8 Ecuador 4 253.5 - - 4 253.5 Guatemala 1 81.0 - - 1 81.0 Honduras 1 37.4 - - 1 37.4 Mexico 6 904.0 - - 6 904.0 Peru 1 13.5 - - 1 13.5 Uruguay 1 45.2 - - 1 45.2 Total 41 4,701.2 2 70.0 43 4,771.2 Grand total 131 13,178.8 97 3,139.9 228 16,318.7 NOTE: Supplements, as well as B-loans, are included in the amounts, but are not counted as separate lending operations. Joint IBRD/IDA operations are counted only once, as IBRD operations. ProjectsApproved by Sector 139 Table 5-2. Projects Approved for IBRD and IDA Assistance in Fiscal 1986, by Sector (millionsof US dollars) Sectora IBRD IDA Total Agriculture and Rural Development Argentina-Agriculture sector loan. . 350.0 - 350.0 Bangladesh-Fishing ....... ....... ,...,.. - 22.0 22.0 Bangladesh-Forestry ......-........ .................. 28.0 28.0 Benin-Area developmentb ....................... . 1.9 1.9 Brazil-Agriculture sector loan .................. - swti 500.0 - 500.0 Brazil-Area development .............................. 92.0 - 92.0 Brazil-Irrigation and drainage ................. 57.0 - 57.0 Brazil-Irrigation and drainage .... ............. .... 48.0 - 48.0 Brazil-Research and extension . ...................... 155.0 - 155.0 Burma-Agroindustry ....... I................I........ 30.0 30.0 Burundi-Forestry .. ..- . 12.8 12.8 Central African Republic-Livestock . . - 11.9 11.9 Chad-Area development ............................. - 15.0 15.0 China-Agriculture credit ..... .............. - 90,0 90.0 China-Fishing ................... i . - 60.0 60.0 Colombia-Agriculture sector loan .250.0 - 250.0 Colombia-Irrigation and drainage ....................... 114.0 - 114.0 COte d'lvoire-Perennial crops .......... . ..... 13.4 - 13.4 Ecuador-Agriculture sector loan .100.0 - 100.0 Egypt, Arab Republic of-Irrigation and drainage .70.0 - 70.0 Guinea-Agriculture credit .- 7.5 7.5 Guinea-Area development .- 6.6 6.6 India-Agriculture credit .375.0 - 375.0 India-Irrigation and drainage .131.0 140.0 271.0 India-Irrigation and drainage . - 99.0 99.0 India-Irrigation and drainage ................. ............ - 160.0 160.0 India-Research and extension ........................ ,.- 72.1 72.1 Indonesia-Agriculture credit ....... ................. .... 33.0 - 33.0 Indonesia-Irrigation and drainage .......... 166.0 1............. - 166.0 Indonesia-Livestock ............ ........................ 32.0 - 32.0 Kenya-Agriculture sector loan ..... I ..................... 20.0 20.0 Madagascar-Irrigation and drainage .............. 0....... 20.0 20.0 Malawi-Area development ............ .................. - 11.6 11.6 Malawi-Forestry ............ - - ...... 16.7 - 16.7 Malaysia-Agriculture credit .50.0 - 50.0 Mali-Forestry. .- 6.3 6.3 Mauritania-Livestock . . . - 7.6 7.6 Mauritius-Agroindustry ........ .......... ...... .... 30.0 - 30.0 Mexico-Agriculture credit ............ .......-....... ... tio 1.0 180.0 Mexico-Area development.1 I9..........0 4. 0. A 0 - 109.0 Morocco-Agriculture credit .1.20.0.......... - -............. 0 120.0 Morocco-Irrigation and drainage .46.0 - 46.0 Nepal-Irrigation and drainage ........................ - 24.5 24.5 Nigeria-Area development ............................ 162.0 - 162.0 Pakistan-Agriculture credit .165.0 55.0 220.0 Pakistan-Irrigation and drainage .- 10.0 10.0 Papua New Guinea-Agriculture credit .18.8 - 18.8 Papua New Guinea-Perennial crops .27.6 - 27.6 Rwanda-Area development .- 12.7 12.7 Senegal-Irrigation and drainage .- 4.9 4.9 (continued) 140 Summariesof ProjectsApproved Table 5-2 (continued) Sectora IBRD IDA Total Agriculture and Rural Development (continued) Somalia-Area development ................................ - 30.0 30.0 Somalia-Livestock .......................- ............. .. 4.3 4.3 Sudan-Area development .................. I ............ - 10.6 10.6 Sudan-Irrigation and drainage ...... ......... - ......... - 22.0 22.0 Syrian Arab Republic-Research and extension ..... .......... 7.5 - 7.5 Thailand-Perennial crops ............... ................ 60.0 - 60.0 Togo-Area developmentb .............. .. .. ..... . - 6.9 6.9 Tunisia-Irrigation and drainage ............................ 27.7 - 27.7 Turkey-Irrigation and drainage ............................ . - 255.0 Western Samoa-Agriculture credit ....... .................. - 2.5 2.5 Yemen Arab Republic-Irrigation and drainage ..... ........ - 10.0 10.0 Total ........................... ................... 3,761.7 1,015.7 4,777.4 Development Finance Companies Chile ................................................... 100.0 - 100.0 China ................................................. 75.0 25.0 100.0 Ecuador . .............................................. 115.0 - 115.0 Fiji .............................. .................... 6.5 - 6.5 Ghana .....- ....... .............................. 28.5 28.5 Honduras ............................ ................... 37.4 - 37.4 India ................................ ................. 250.0 - 250.0 Jordan ................................................. 15.0 - 15.0 Malawi ................................................. 7.8 - 7.8 Morocco ................................................ 200.0 - 200.0 Pakistan ........................ ........................ 148.0 2.0 150.0 Pakistan .... 70.0 - 70.0 Rwanda ................................................ - 9.0 9.0 Sri Lanka ................................... ............ - 20.0 20.0 Turkey ................................................. 300.0 - 300.0 Zaire ................................................. - 20.0 20.0 Zambia ..................................... .......... - 20.0 20.0 Total ...... _._ 1,324.7 124.5 1,449.2 Education Barbados ...... , 10.0 - 10.0 Botswana ........................ ....................... 26.0 - 26.0 Cameroon .................... ......................... 30.1 - 30.1 China ................................................. - 120.0 120.0 Indonesia ....................................... 58.1 - 58.1 Indonesia ..... , 93.0 - 93.0 Jordan ..... ................ 10.2 - 10.2 Kenya. ............................-........ 37.5 37.5 Malaysia .................................... 73.3 - 73.3 Malaysia ........................................ 127.0 - 127.0 Morocco ............................. ___ ....... 150.0 - 150.0 Pakistan ...................... .................... - 40.2 40.2 Rwanda ........ ........... ....................... - 15.6 15.6 Solomon Islands ........ ___ ...................... - 5.0 5.0 Sri Lanka ..... ................................ ......... - 15.0 15.0 Western Africa region ............... .................... - 5.5 5.5 Yemen Arab Republic ......... ..................... - 12.7 12.7 Total ................... ........................... 577.7 251.5 829.2 ProjectsApproved by Sector 141 Table 5-2 (continued) SrlrorO IBRD IDA Total Energy Oil, Gas, and Coal Argentina' ....... ....... l6.0 1__1........ - 116.0 Bolivia...................... ........ ............. - 15.0 15.0 China ...................... ................ 30.0 - 30.0 Indonesia ......... . . .. 34.0 - 34.0 Thailand .... _ 33.0 - 33.0 Zambia .......... __ ........... ........ - 3.1 3.1 Total. ........ .............. .................. 213.0 _8.1 231.1 Power Bangladesh ............................... ....... - 79.0 79.0 Bangladesh ........... _ _................... ....... - 56.0 56.0 Brazil ........................... S 00.0 5_............. - 500.0 China .. , 225.0 - 225.0 China .... .......... ............ .......... S 5. 2.0 - 52.0 Colombia ........................ .................. 171.0 - 171.0 Ecuador ................................ ........... 5 - 8.5 Ethiopia .......... ........................ 62.0 62.0 Ghana........... _. ........-...... 28.0 28.0 Guatemala .......... S l.0 8.......1............... - 81.0 Hungary., ......... ,.,.,.............. 64.0 - 64.0 India . ... ......... ,. 485.0 - 485.0 Jordan .... ......................... ........ 27.5 - 27.5 Korea, RepublicQ ......... ..... .......... ......... 230.0 - 230.0 Pakistan .... . ., . 90.0 - 90.0 Papua New Guinea..., ............... 28.5 - 28.5 Peru . ,....... . ,.. 13.5 - 13.5 Senegal .20.0 20.0 Sudan .............................. ............... 30.0 30.0 Tanzania ................ ........... ......... - 40.0 40.0 Turkey .................. ....... ................ 200.0 - 200.0 Turkey' ............................. ....... ..... 52.0 - 52.0 Turkey ............. ........ _................. 10.0 - 10.0 Turkey .... ,.,., .................. 140.0 - 140.0 Uruguay .......................... ____ ............. 45.2 - 45.2 Yemen Arab Republic ............. .......... ......... - 11.7 11.7 Zaire ................................ ........... 37.0 37.0 Total........................ ....................2,423.2 363.7 2,786.9 Industry Guinea-Engineering ......... .......... ....... - 3.9 3.9 Hungary-Industry sector loan ......... iO0.0 1........... - 100.0 Hungary-Industry sector loan ................ 25.0 - 25.0 India-Fertilizer and other chemicals . 302.2 - 302.2 India-industry sector loan ........... _ _ ................ 200.0 - 200.0 Mauritania-Mining, other extractive .... _ ............. 20.0 - 20.0 Zaire-Industry sector loan .... .......... _ ............ - 50.0 50.0 Zaire-Mining, other extractive .... _ ................... 110.0 - 110.0 Zambia-Fertilizer and other chemicals ... ........ 1 ]0.0 10.0 Total ...... . ____ ..................... 757.2 63.9 821.1 (continued) 142 Summariesof Projects Approved Table 5-2 (continued) Sector, IBRD IDA Total Nonproject Bangladesh ........................................... - 200.0 200.0 Bolivia .................................................. - 55.0 55.0 Burundi ................................................. - 15.0 15.0 Chile ............................... .................... 250.0 - 250.0 C6te d'Ivoire ............................................. 250.0 - 250.0 Equatorial Guinea .............. .......................... - 6.0 6.0 Guinea .................................................. - 25.0 25.0 Malawi .................................................. - 30.0 30.0 Mexico ..... , 400.0 - 400.0 Nieer . ,..,......... - 20.0 20.0 Senegal ............ .....................................- 20.0 20.0 Zambia ................................................. - 50.0 50.0 Total .... . . . . . . 900.0 421.0 1,321.0 Population, Health, and Nutrition Bangladesh . . ............................................ - 78.0 78.0 Brazil ..... . 59.5 - 59.5 China .... ............................................. 15.0 65.0 80.0 Colombia ...... . . . . ....... 36.5 - 36.5 C6te d'lvoire ......... ................................... 22.2 - 22.2 Ghana .. - 15.0 15.0 India .. , - 51.0 51.0 Indonesia .............................................. 33.4 - 33.4 Niger . ,,, - 27.8 27.8 Rwanda ................................- _ .............. 10.8 10.8 Sierra Leone .................... ........................ - 5.3 5.3 Total ..... .. 166.6 252.9 419.5 Small-scale Enterprises Chile .................................................... 40.0 - 40.0 C6te d'lvoire ... ......................................... 30.0 - 30.0 Ecuador ..... 30.0 - 30.0 Indonesia ..... ,. , ..... 64.5 - 64.5 Nepal ... ........................ ,- 10.0 10.0 Turkey ... . , , ... 100.0 - 100.0 Total ...... _........ 264.5 10.0 274.5 Technical Assistance Argentina.......... ...... , ......... 18.5 - 18.5 Botswana ..................... , ........ 7.6 - 7.6 Brazil ................................................... 29.0 - 29.0 China .... .. ........................... - 20.0 20.0 Kenya . .......................... - 11.5 11.5 Kenya . .......................... - 6.0 6.0 Madagascar .............................................. - 10.0 10.0 Madagascar ............................................... - 10.3 10.3 Nigeria ................... ............................. 5.0 - 5.0 Yemen Arab Republic ............ ......................... - 12.0 12.0 Zambia .................................................. - 8.0 8.0 Total ........... ................................... 60.1 77.8 137.9 Projects Approved by Sector 143 Table 5-2 (continued) Sector' IBRD IDA Total Telecommunications CMe d'lvoire.................24.5 -- 24.5 Lao People's Dem. Rep...................- 3.9 3.9 Senegal ....................- 22.0 22.0 Total. ....................... 24.5 25.9 50.4 Transportation Chile-Highways......................- - China-Ports and waterways .. .............. 130.0 - 130.0 China-Railways ..... ........ I....... 160.0 70.0 230.0 Colombia-Highways ................... 62.0 - 62.0 Colombia-Ports and waterways ............... 42.8 -42.8 Cyprus-Highways ..... ........... 20.0 20.0 Dominican Republic-Highways .3.....5.8 35.8 Ethiopia-Ports and waterways ..-....... I....5.5 5.5 Gambia, The-Highways ..-................ 5.8 5.8 Ghana-Ports and waterways ................. v24.5 24.5 Indonesia-Highways ................ I... 300.0 - 300.0 Korea, Republic of-Ports and waterways ........... 141.0 -141.0 Korea, Republic of-Railways.....67.0 -- 67,0 Madagascar-Railways ..-. ..... ....... 12.0 12.0 Malaysia-Ports and waterways ............... 18.8 -18.8 Mali-Highways ....................... 48.6 48.6 Morocco-Ports and waterWays................22.0 -- 22.0 Niger-Highways ......................- 15.0 15.0 Nigeria-Railways .......... I........... 20.9 - 20.9 Oman-Highways........I............. 30.0 -30.0 Philippines-Highways...................82.0 -82.0 Rwanda-Highways .........-............ 11.0 11.0 Tanzania-Highways ..........-.......... 50.0 50.0 Vanuatu-Multipurpose credit ..-.............. 2.0 2.0 Yugoslavia-Highways .1................. 21.5 -- 121.5 Total .......................... 1,253.8 244.4 1,498.2 Urban Development Brazil........................... 55.0 - 55.0 Brazil........................... 24.5 -24.5 Brazil .1..............0..... ....... 100.0 India ............................ 62.0 62.0 Indonesia ......................... 275.0 -275.0 Korea, Republic of ..................... 150.0 - 150.0 Mali ...........................- 28.0 28.0 Mexico..........................40.0 - 40.0 Mexico ........................ I.. 150.0 -150.0 Nigeria .......................... 53. -O 53.0 Nigeria ................. t......... 72.0 - 72.0 Pakistan ................ i.....- 70.0 70.0 Portugal .......................... 25.0 - 25.0 Sri Lanka .........................- 13.0 13.0 Total .......................... 944.5 173.0 1,117.5 (continued) 144 of ProjectsApproved Summarries Table 5-2 (continued) Sector' IBRD IDA Total Water Supply and Sewerage Argentina ......................... ............... 60.0 - 60.0 Benin ................................. - 10.0 10.0 Burundi ............................... ............... - 9.5 9.5 Chile ................................................. 60.0 - 60.0 Chile ................................................... 6.0 - 6.0 Colombia.............. . .............................. 24.0 - 24.0 India ................................ ................... - 41.0 41.0 Indonesia......... ................. ............. 43.3 - 43.3 Jordan ................................................. 50.0 - 50.0 Korea, Republic of ................................. ..... 38.0 - 38.0 Malaysia .... . ........................................... 62.0 - 62.0 Mexico .......................... ...... ............. 25.0 - 25.0 Philippines ................ ....................... ...... 69.0 - 69.0 Sri Lanka ..... . ,. - 37.0 37.0 Syrian Arab Republic ......................... ..... - .... 70.0 - 70.0 Total .................................................. 507.3 97.5 604.8 Grand Total ................... .................... 13,178.8 3,139.9 16,318.7 For additional details, see Tables 5-3 and 5-4. 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Mar. 4, 1986 1991/2005 75.0 Transportation: Third Railway Project ...... ............... Apr. 15, 1986 1992/2006 160.0 Transportation: Tianjin Port Project ....................... May 6, 1986 1991/2006 130.0 Energy: Technical Assistance Project ..... . ................ May 29, 1986 1992/2006 30.0 Energy: Yantan Hydroelectric Project ................. I .... May 29, 1986 1992/2006 52.0 Energy: Beilungang Thermal Power Project ..... ............ May 29, 1986 1992/2006 225.0 Population, Health, and Nutrition: Rural Health and Preventive Medicine Project ........ .................... Jun. 19, 1986 1991/2006 15.0 Colombia Population, Health, and Nutrition: Health Services Integration Project ............................. Jul. 30, 1985 J............... 1990/2002 36.5 Agriculture and Rural Development: Trade and Agricultural Policy Project ..... .................................. Apr. 15, 1986 1990/2003 250.0 Colombia (Guarantor) Water Supply and Sewerage: Barranquilla Water Supply Project-Empresas Pablicas Municipales de Barranquilla ... Nov. 26, 1985 1990/2002 24.0 Transportation: Ports Rehabilitation Project-Empresa Puertos de Colombia, S.A ................ ........ Nov. 26, 1985 1990/2003 42.8 Energy: Bogota Power Distribution 11Project-Empresa de Energia Electrica de Bogota .................... _ Nov. 26, 1985 1990/2002 171.0 Transportation: Rural Transport Sector Project-Fondo Nacional de Caminos Vecinales .......................... Mar. 25, 1986 1990/2003 62.0 Agriculture and Rural Development: Irrigation Rehabilitation ll Project-Instituto Colombiano de Hidrologia, Meteorologia y Adecuacion de Tierras .................... Mar. 25, 1986 1990/2003 114.0 C6te d'lvoire Small-scale Enterprises: Industrial Finance and Development Project ........................... ................. Sep. 10, 1985 1991/2005 30.0 Population, Health, and Nutrition: Health and Demographic Project ............................................... Sep. 19, 1985 1991/2005 22.2 Agriculture and Rural Development: Fifth Oil Palm Development Project ....... .......................... Oct. 22, 1985 1991/2005 13.4 Telecommunications: Second Telecommunications Project .... May 15, 1986 1991/2006 24.5 Nonproject: Third Structural Adjustment Loan .............. Jun. 3, 1986 1992/2006 250.0 Cyprus Transportation: Fourth Highway Project ...... ............. Apr. 29, 1986 1989/2001 20.0 Dominican Republic Transportation: Third Road Reconstruction Project .......... Jul. 23, 1985 1989/2002 35.8 Ecuador Agriculture and Rural Development: Agricultural Sector Loan. Oct. 22, 1985 1990/2003 100.0 Small-scale Enterprises: Third Small-scale Enterprise Credit Project .... . . . . . . ........... Mar. 27, 1986 1990/2003 30.0 Development Finance Companies: Industrial Finance Project. . Mar. 27, 1986 1990/2003 115.0 Ecuador (Guarantor) Energy: Power Sector Improvement Project-Instituto Ecuatoriano de Electrificaci6n .... ..................... Jun. 3, 1986 1991/2003 8.5 Egypt, Arab Republic of Agriculture and Rural Development: Channel Maintenance Project ........................ ...................... Jun. 26, 1986 1992/2006 70.0 Fiji Development Finance Companies: Fiji Development Bank Project ... Jul. 2, 1985 1988/2000 6.5 Slatlementof IBRDLoans 147 Table 5-3 kiontinu Principal Borrower or guArantor batecof amount Purpose ~~~~~~~~~approval ~~~~~~~~~ Maturities (US$miillions) Guatemala (Guarantor) Energy: Power Distributior) Proj~ect-nstituto Nacionial de Electrifieaci6n.~~~~~~~~~~~~~~Jun. 23, 1986 1992/2001 81.0 Development~ Finance Companies: Third ndustriail Credit . May 29, ~1986I99/2006 37.4 Hungary Energy: PoerPojecdt.May 20, 1986 1990/2001 64.0 Indsr:InutilRestructurn PoetNional Banko Hungary.~~~~~~~~~~~~~~~~~~May 27 1986 1990/2001 100.0 India Products.~~~~~~~~~~~~~~~~Oct 29, 195 1920o9. AgriculueadRrlDvlomn:Scn nhaPradesh IrrigainPoetMar. 20, 1986 19120 131.0 Energy CobndCcePwrPoetApr,~ 1, 1986 19912 4850 fIndusry Coprtv etlzrdsr Prjc .un. ~26,1986 199/00 50.2 DevlpetFinanct opne:Epoto niern PrdutsThCIdstiadCedtan Ivetmn Corpoation Investmet of IdaMar. 20, 198 11/06 35.0 Fetlzr Cope6ratiesJnr. 26, 1986 1992/2006 152.0 Indonesia Education: Scivene and Technology Trann PoetJul. 2, 195 t991/200 93.0 Agriculture and Rurial Development:,SalodrCtl DevelopmentlProject.Oct. 22, 1985 1991/2005 32.0 Water Supply and Sewerage: Second EatJv ae uply Project. INov. 12, 1985 1991/2006 43.3 Population, Health, and Nutrition: Scn urto n Communit Helh PrjctNv 26i985 1991/2006 334 Agriculture n& ua eeomn:Ns 4Tengr Agricultura SpotPjetDec. 3, 1985 1991/2006 33.0 Agricuture an Rrl eelpent: Ceta n etrn Java Provincil Iriaio rjetJn. 23, 1986 1991/006 166.0 Eniergy: Ga DIstiuinPoetMayk 6,186 1,992/2006 34.0 Small-scale Export Enterrises: Deelopment ProjectMaiy 27, 1986 ~1991/20,06 645 Eduain MnoeDeeomnanTriigPjc . May 29, 1986 19912006 58. Trasotto:Hiha aneaceadBtrmn Poec Jun. 12, 1986 1992/206 300.0 Urban Devlpen:Husn ecto LonJun. 23, 1986 1992/2006 275. Developmen Fiac omais Secon Citie anid Villages Development Project.~~~~~~~~~~~~Aug. 27, 195 18/0015.0O Edction: M(pwr e ProjectNov. Momenv~t 12, 1985 1989/000 1. 148 Summariesof Projects Approved Table 5-3 (continued) Principal Borrower or guarantor Date of amount Purpose approval Maturities (USS millions) Jordan (continued) Water Supply and Sewerage: Water Supply and Sewerage Project ...................................... May 15, 1986 1990/2001 50.0 Energy: Sixth Power Project ... May 29, 1986 M..........................1990/2001 27.5 Korea, Republic of Transportation: Seoul-Busan Corridor Project .... . _ ....... Jul. 2, 1985 1989/2000 67.0 Water Supply and Sewerage: Namgang and Taegu Water Supply Project .............. .......................... Aug. 27, 1985 1989/2000 38.0 Transportation: Pusan Port Project . . ........ _ ..... Jun. 23, 1986 1989/2001 141.0 Korea, Republic of (Guarantor) Energy: Second Power Project-Korea Electric Power Corporation ............... __ ...................... Mar. 27, 1986 1989/2000 230.0 Urban Development: Urban Land Development Project- Korea Land Development Corporation ......... ......... May 29, 1986 1989/2001 150.0 Malawi Development Finance Companies: Industrial and Agricultural Credit ... .......................................... Dec. 19, 1985 1990/2001 7.8 Agriculture and Rural Development: Second Wood-Energy Project ............ .................................. Mar. 25, 1986 1991/2006 16.7 Malaysia Education: Second Industrial Training Project ...... Jul. 2, 1985 1989/2000 73.3 Agriculture and Rural Development: Land-Settlement Infrastructure Project ..... ___ ........ ....... Dec. 10. 1985 1989/2000 50.0 Water Supply and Sewerage: Johor Water Supply Project .... Feb. 25, 1986 1989/2001 62.0 Transportation: Port Kelang Project ....... ............... Apr. 29, 1986 1989/2001 2.1 Education: Primary and Secondary Education Sector Project. . Apr. 29, 1986 1989/2001 127.0 Malaysia (Guarantor) Transportation: Port Kelang Project-Kelang Port Authority . Apr. 29, 1986 1989/2001 16.7 Mauritania (Guarantor) Industry: SNIM Rehabilitation Project-Soci&e Nationale Industrielle et Miniere .................. .............. Dec. 17, 1985 1989/2000 20.0 Mauritius Agriculture and Rural Development: Sugar Industry Project ... Jun. 26, 1986 1991/2003 30.0 Mexico (Guarantor) Agriculture and Rural Development: Agricultural Credit- Nacional Financiera S.A .Jul. 23, 1985 1989/2000 180.0 Urban Development: Low-Income Housing Project-Banco Nacional de Obras y Servicios Publicos .Aug. 27, 1985 1989/2000 150.0 Agriculture and Rural Development: Second Tropical Agricultural Project (Proderith fl)-Nacional Financiera, S.N.C. (NAFINSA).M ............................... a r. 4, 1986 Mar..416 1989/2001 109.0 Water Supply and Sewerage: Solid Waste Management Pilot Project-Banco Nacional de Obras y Servicios POblicos 25, 1986 Mar.Mar. 1989/2001 25.0 Urban Development: Municipal Strengthening Project-Banco Nacional de Obras y Servicios Publicos .Mar. 25, 1986 1989/2001 40.0 Nonproject: Earthquake Rehabilitation and Reconstruction Project-Banco Nacional de Obras y Servicios Publicos Mar. 25, 1986 1989/2001 400.0 Morocco Development Finance Companies: Second Industry and Trade Adjustment Loan .Jul. 16, 1985 1990/2005 200.0 Agriculture and Rural Development: Large-scale Irrigation Improvement Project .Feb. 25, 1986 1991/2006 46.0 Education: Education Sector Reform Program .Mar. 20, 1986 1991/2006 150.0 Statmentof BRDLboans 149 Purpose ~~~ ~ approval ~~~~~~~~~~~~~~~Maturities fUSMillions Morocco~ ~~~~~~~~~~~aprv (Gi usa$r Projet-Offce d'xploiationde PotFeb.25, 198 1991/200 22. AgrculureandRurl Dvelpme t: St Agicultural Urban Development:SecondUrba Development Proect (Imo State).Jul. ~~~~~~~~~~~i1985 23, 1990/2005 1 53.0 Sml-cl nepie:idsryTcnclAssac rjc Sep.A10,1985 191/20055. UrbanDevelpmen:Laos Solid Waste and Stom-draintage ProetSp 19985 19912005 ~ 72. Developmet Projec.Jun. 26,1986 199/2006 16. PAkmistataegn DeVelpen ianeCmpanties: Second Industial Inesmn t CrdtJan 7, 1986 1991/2006 148.0 Agiutur anid Rua eeopment: Sxh Agricuturalti Deelpent iank Project.May 15,18 1991/12006 165.0 DevelpetFnnc opne:xotDvlpment Project.M~~~~~~~~~ay 7 1986 19912006 70. E vnergy: Kot Addui Combbined Cycet Power Project-Water .n Powe Devlopen.AuhortyMay 22, 1986 199/0690. Ppa New nuines Agiculur andtRural Deeomn:NcesEttean Sabolder PoetW.Ju. 3 18 1992/2002 27.6 AgICutr an ua eeomn:Tird Agiclural Ceit Sep 19, 198 1993/2001 1. Enery: onkiHydoelctri Poer Dvelpmet PrjecAJu. 19, 1986 I1991/2006 28. del Persi.Jul.~~~~~~~~~~~~~~ i 2, 1985 19089/2002 13.5 Distribution Project.~~~~~~~~~Apr. 3,19086T19,91/2006 69. Deeomn:HuigFnnePoetDec. Ura 3, 1985 4198/2000 25.0 150 Summariesof ProjectsApproved Table 5-3 (continued) Principal Borroweror guarantor Date of amount Purpose approval Maturities (US$millions) Tunisia Agriculture and Rural Development: Gabes Irrigation Project . Jul. 16, 1985 1989/2002 27.7 Turkey Small-scale Enterprises: Small and Medium-scale Industries Project ........ ........... ................. Jan. 7, 1986 1989/2001 100.0 Energy: Kayraktepe Hydropower Project ......... --....... Feb. 25, 1986 1990/2003 200.0 Agriculture and Rural Development: Drainage and On-farm Development Project ....... Mar. 20, 1986 M.......................... 1990/2003 255.0 Energy: Kayraktepe Hydropower Project ....... I..... M..... 28, 1986 Mar. 1996/1998 19.0 Energy: Kayraktepe Hydropower Project .. . ............... Apr. 3, 1986 1997/1998 33.0 Development Finance Companies: Financial Sector Adjustment Loan ............ ....................... Jun. 10, 1986 1990/2003 300.0 Turkey (Guarantor) Energy: Power System Operation Assistance Project-Turkiye Elektrik Kurumu . .................................... Jul. 2, 1985 1990/2002 140.0 Energy: Elbistan Operations Maintenance Assistance Project- Turkiye Elektrik Kurumu ..... ......................... Feb. 4, 1986 1990/2003 10.0 Uruguay (Guarantor) Energy: Power Sector Rehabilitation Project-Administracion Nacional de Usinas y Tras ........ ................... Sep. 19, 1985 1989/2000 45.2 Yugoslavia (Guarantor) Transportation: Highway Sector Project-The Road Organizations of Slovenia, Croatia, Serbia, and Bosnia- Herzegovina ....... ,,.,.,...... Jun. 10, 1986 1989/2001 121.5 Zaire (Guarantor) Industry: Gecamines Rehabilitation Project-G&camines/ Exploitation . ...................................... Apr. 29, 1986 1989/2001 110.0 Total of loans to or guaranteed by members 13,178.8 International Finance Corporation International Finance Corporation (IFC) .............. ... Aug. 29, 1985 1991/2001 150.0 Total of loans to IFC 150.0 Grand total .. 13,328.8 NOTE: All loans approved in fiscal year 1986 are at variable interest rates. Statemeint of IDACredit 151 Table 5-4. Statement of IDA Credits Approved dur0in Fiscl Year 1986 Principalamfount Country Date ofUS Purpose approval Maturities SDR equivalents Bangladesh Agriculture and Rural Development: Second Forestry Project.Nov. 12, 198,5 ~1996/2035 27. 28.0 Energy: Second Rural Electrification Project Nov. 12, 1985~ 1996/2035 76.4 790 Agriculture and Rural Development: Shrimpi Culture ....... Jan. 14,11986 1996/2035 20.6 2. Population, Health, and Nutrition: Tfhird Population and Family Health Project. jan. 14, 1986 19,96/2035 75.4 8.1 Energy: Power Transportationi a~ndDistribution. i jan. 14,1986 1996/203 52.3 56.0 Nonproject: Thirteenth Imports Program . Feb.~4, 1986 1996/2036 1867 20. Benin Agriculture and Rural Development: Borgou Province Rural Developmient Project . Ap. 1, 1986 1991/2030 1.18 1.9 Water Supply and Sewerage: Second Water Supply Project ............... Jun. 30, 1986 1996/20361 8.6 100 Bolivia Nonproject: Reconstruction Import Credit ... May 20, 1986 ~1996/2036 48.4 55.0 Energy: Vuelta Grande Gas Recycling Project. Jun. 23, 1986 1996/206 12.8 15.0 Burma Agriculture and Rural Development: Grain Storage and Processing Project ...... May 29, 1986 1996/2036, 26.4 30.0 Burundi Agriculture and Rural Development: Second Forestry Project ............... Jul. 16, 1985 1995/2035 13. 12.87 Water Supply and Sewerage: Rural Water Supply Project ..... ....... Sep. 10, 1985 19962035 9. 95 Nonproject: Structural Adjustment Credit . May 22, 1986 1996/2036 13. 15,0 Central African Republic Agriculture and Rural Development: National Livestock Project . Apr. 15, 1986 1996/2036 10.3 11.9 Chad Agriculture and Rural Development: Emergency Cotton Program ............... Jun. 23, 1986 1996/2036 12.8 15.0 China Agriculture and Rural Development: Second Rural Credit Project ................ Dec. 17, 1985 1996/2035 84. 90.0 Development Finance Companies: Third Industrial Credit Project~...... ......... Mar. 4, 1986 1996/2035 22.8 25.0 Technical Assistance: Second Technical Cooperation Proj'ect. ....... i Mar. 13, 19,86 1996/2036 18.0 20. Education: Provincial Universities Project . Mar. 25, 1986 1996/2036 108.0 120.0 Transportation: Third Railway Project . Apr. 15, 1986 1996/2036 63.0 70.0 Agriculture and Rural Development: Freshwater Fisheries Project .......... .. May 6, 1986 1996/2036 52.0 60.0 Population, Health, and Nutrition: Rural Health and Preventive Medicine Project . .... Jun. 19,1986 1996/2036 57.2 65.0 EquatorialGuinea Nonproject: Rehabilitation Import Project. ... May 8, 1986 1996/2036 5.4 6,0 152 Summaries of Projects Approved Table 5-4 (continued) Principal amount (millions) Country Date of US$ Purpose approval Maturities SDR equivalents Ethiopia Transportation: Port Engineering and Construction Project .Apr. 1, 1986 1996/2036 5.0 5.5 Energy: Energy Project. Nay 20, 1986 1996/2036 53.7 62.0 Gambia, The Transportation: Second Highway Maintenance Project ....................... ..... Apr. 15, 1986 1996/2036 5.3 5.8 Ghana Energy: Power System Rehabilitation Project Sep. 19, 1985 1996/2035 27.0 28.0 Population, Health, and Nutrition: Health and Education Rehabilitation Project. Jan. 23. 1986 1996/2035 13.8 15.0 Development Finance Companies: Industrial Sector Adjustment Credit .Mar. 27, 1986 1996/2036 25.7 28.5 Transportation: Ports Rehabilitation Project Mar. 27, 1986 1996/2036 22.4 24.5 Guinea Agriculture and Rural Development: Agricultural Services Project. Nov. 26, 1985 1996/2035 7.6 7.5 Agriculture and Rural Development: Gueckedou Agricultural Development Project ............. Nov. 26, 1985 1996/2035 6.7 6.6 Industry: Mineral Sector Management Project ... Nov. 26, 1985 1996/2035 3.7 3.9 Nonproject: Structural Adjustment Program ..... Feb. 11, 1986 1996/2035 22.9 25.0 India Agriculture and Rural Development: West Bengal Minor Irrigation Project .Jul. 2, 1985 1995/2035 101.0 99.0 Water Supply and Sewerage: Kerala Water Supply and Sanitation Project .Jul. 16, 1985 1996/2035 42.7 41.0 Agriculture and Rural Development: Maharashtra Composite Irrigation Ill Project .Jul. 16, 1985 1995/2035 164.2 160.0 Population, Health, and Nutrition: Fourth Population Project. Jul. 23, 1985 1995/2035 51.5 51.0 Agriculture and Rural Development: Second National Agricultural Research Project .Oct. 22, 1985 1996/2035 69.6 72.1 Urban Development: Gujarat Urban Development Project .Dec. 17, 1985 1996/2035 58.5 62.0 Agriculture and Rural Development: Second Andhra Pradesh Irrigation Project .Mar. 20, 1986 1996/2035 127.5 140.0 Kenya Education: Sixth Education Project Mar. 27, 1986 1996/2036 35.0 37.5 Technical Assistance: Petroleum Exploration Technical Assistance Project. Mar. 27, 1986 1996/2036 5.5 6.0 Technical Assistance: Agricultural Sector -Management Project . .............. Jun. 23, 1986 1996/2036 10.2 11.5 Agriculture and Rural Development: Agricultural Sector Adjustment Program .Jun. 23, 1986 1996/2036 17.6 20.0 Lao People's Democratic Republic Telecommunications: Telecommunications Rehabilitation and Technical Assistance Project. Apr. 22, 1986 1996/2036 3.5 3.9 Madagascar Technical Assistance: Accounting and Management Training Project .Feb. 25, 1986 1996/2035 9.5 10.3 Agriculture and Rural Development: Agricultural Sector Adjustment .May 8, 1986 1996/2036 19.0 20.0 Statemet of IDACredits 153 Principalamount (millions) Purpose approval ~~~Maturities~ ~~~~~~~~~~~ SDR eq~uivalents Trasprttio: hid . ailayPrjec My , 986 196/035 104 M2O Assistance: Agricultural Technical Second ~ ~ ~ ~ ~ ~ ~ 7~ Project lnstttulion . Developmen Ju. 10, 1986 996/2036 8. 10. Malawi~~~~~~~~~~~~~~~~~~~~~~~~~6 2~ andRural Agriculture Development: Agricultural183 2(. Suppot ProjectSep. Extensionand Plannng 19,1985 19952035 11. 11.6 Nonprojct: Thrd Proram De. 19, 985 StrcturalAdjustent 196/2035 28.0 3.0 ~ ~ Mali~ ~~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~. Prject FifthHighway Transportaion: . Sep. 9, 1985 195/2035 50. 48.6 andRural Agricullure Development: Second~~~366 40. Forestry Project.Jan. 23, 1986 1996/2035 5,9~~K 6.3 Livestock Project.Feb. 1986~ 4,~0~029 4962057.9. Industries Project.May 13, 1986 ~~~~1996/2036 8.7 10.0 Irrigation Project.Jun. 19, 198~~6 1996/236 21.6 24. Niger~~~~~~~~~~~~~~~~~~~~~~~~~~~cniud 154 of Projects Summaries Approved Table 5-4 (continued) Principal amount (millions) Country Date of US$ Purpose approval Maturities SDR equivalents Senegal (continued) Energy: First Energy Sector Rehabilitation Project Jun. 10, 1986 1996/2035 18.3 20.0 Telecommunications: Second Telecommunications Project .................................... Jun. 19, 1986 1996/2036 19.4 22.0 Sierra Leone Population, Health, and Nutrition: Health and Population Project ............... I .......... May 13, 1986 1996/2036 4.6 5.3 SolomonIslands Education: Secondary Education Project ..... .... Apr. 29, 1986 1996/2036 4.5 5.0 Somalia Agriculture and Rural Development: Livestock Health Services Project ....... ............... Jan. 14, 1986 1996/2035 4.1 4.3 Agriculture and Rural Development: Agriculture Sector Adjustment Program ...... ............ Jun. 19, 1986 1996/2036 26.4 30.0 Sri Lanka Development Finance Companies: Second Industrial Development Project ...... ......... May 8, 1986 1996/2036 17.4 20.0 Education: Second Vocational Training Project May 13. 1986 1996/2036 13.0 15.0 Urban Development: Municipal Management Project ............ ....................... May 13, 1986 1996/2036 11.3 13.0 Water Supply and Sewerage: Water Supply and Sanitation Rehabilitation Project ............ May 15, 1986 1996/2036 32.1 37.0 Sudan Energy: Power Rehabilitation Project ... ........ Aug. 27, 1985 1996/2035 30.3 30.0 Agriculture and Rural Development: Western Savannah Project (Phase 11)................ Dec. 3, 1985 1996/2035 10.2 10.6 Agriculture and Rural Development: Agricultural Extension and Training Project ...... ......... Dec. 3, 1985 1996/2035 20.8 22.0 Tanzania Transportation: Sixth Highway Rehabilitation PTOjeCt. .................................. May 6, 1986 1996/2036 43.3 50.0 Energy: Power Rehabilitation Project ............ May 6, 1986 1996/2036 34.7 40.0 Togo Agriculture and Rural Development: Second Rural Development Project .Apr. 1, 1986 1993/2032 6.3 6.9 Vanuatu Transportation: Multiproject Credit ..... ........ Mar. 20, 1986 1996/2036 1.9 2.0 Western Samoa Agriculture and Rural Development: Multiproject Credit ................. ................... Feb. 4, 1986 1996/2035 2.3 2.5 Yemen Arab Republic Education: Technical-training Project .......... . Dec. 19, 1985 1996/2035 12.0 12.7 Agriculture and Rural Development: Fifth Tibama Regional Agricultural Development Project ..... Mar. 20, 1986 1996/2036 9.0 10.0 Technical Assistance: Technical Assistance to the Petroleum Sector Project ....... ............. May 15, 1986 1996/2036 10.6 12.0 Energy: Fourth Power Project ...... ............ May 15, 1986 1996/2036 10.9 11.7 Zaire Industrv: Eighth Development Finance Company. . Apr. 29, 1986 1996/2036 43.3 50.0 -Statement of-IDACredits 155 Table 5-4 (continued) Principal amount (millions) Country Dare of US$ Purpose approival Miaturities SDR equivalents Industry: Industrial Sector Adjustment . jun. 10, 1986 1996/2036 17.6 20. Eniergy: Second Power Proect. jun. 19, 1986 1990/2036 109 11.7 Zamibia Energy: Tazama Pipeline RehAbilitationl Project Sep. 19, 1985 1996/2035 3. 3.1 Developmeint Finance Companies: industrial Sector Reorientation.Project.Oct. 22, 1985 1995/2035 20.1 20. Iindustry:Fertilizer industryRestructuring Project Feb. 25, 1986 1996/2036 9.7 10.0 Technical Assistance: Second Technical Assistanice Project . ........... Apr. 1, 1986 1996/2035 7.3 8.0 Non~project Recovery Program.Jun. 26, 1986 1996/2036 42.6 50.0 Total........ ......... 2,890.3 3,139.9 NoTE: Starting with she sixth replenishment of IDA, credits are expressed in special drawing rights (SDR). The US-dollar equiva- lent of the originalprincipal amount of crdits denominatedin SDRs is showvn ~by at the rate appro6ved the Executive Board. All creditsapprov~ed of .75 percen~tanid inifiscal1986havea servicecharge acommitmentiargebof 0.5percent on the unwithdrawvn balance. 156 Summaries of Projects Approved Table 5-5. IBRD and IDA Cumulative Lending Operations, by Major Purpose and Region, June 30, 1986 imillions of US dollars) IBRD loans to borrowers, by Tegionb Europe, Eastern Middle Latin and East Asia East, and America Southern Western and South North and the Purpose' Africa Africa Pacific Asia Africa Caribbean Total Agriculture and Rural Development Agriculture credit ...... ......... 30.0 253.5 553.3 740.0 1,732.3 1,487.9 4,797.0 Agriculture sector loan ..... ...... 5.6 9.0 204.3 26.3 499.7 1,585.7 2,330.6 Agroindustry ................... 30.0 - 177.0 - 828.3 822.9 1,858.2 Area development .. ............... 155.5 1,095.9 1,245.4 197.0 914.5 2,281.6 5,889.9 Fisheries .........-............. - 68.2 14.0 48.0 16.2 146.4 Forestry ......... .............. 86.7 97.3 15.0 - 213.5 22.0 434.5 Irrigation and drainage ..... ...... 78.2 32.0 2,805.4 621.5 2,249.6 1,624.3 7,411.0 Livestock ..... 22.5 32.6 80.0 48.0 226.0 991.0 1,400.1 Perennial crops .... ............... 57.4 459.2 1,218.0 - 108.0 89.0 1,931.6 Research and extension ........... 1 3.1 - 318.1 25.0 99.4 518.0 973.6 Total .. ...................... 479.0 1,979.5 6,684.7 1,671.8 6,919.3 9,438,6 27,172.9 Development Finance Companies .... 332.7 239.3 2,729.0 1,594.2 3,998.4 2,863.1 11,756.7 Education ........................ 183.1 185.7 2,094.9 - 1,412.4 905.5 4,781.6 Energy Oil, Gas, and Coal ............... 35.7 131.5 1,330.0 2,282.5 1,015.5 923.8 5,719.0 Power ................. ...... 997.1 571.0 4,978.3 3,671.6 3,904.5 8,793.2 22,915.7 Total ........... ........... 1,032.8 702.5 6,308.3 5,954.1 4,920.0 9,717.0 28,634.7 Industry Engineering ......... - - 10.0 - 11.0 9.5 30.5 Fertilizer and other chemicals ..... - - 290.9 1,325.3 603.9 583.5 2,803.6 Industry sector loan .............. - 0.6 372.4 200.0 1,026.7 101.5 1,701.2 Iron and steel ......... . ...... 20.0 - 189.0 512.8 667.0 1,388.8 Mining, other extractive ... __.. 322.5 211.0 - - 181.2 532.5 1,247.2 Paper and pulp ......... ........ 36.4 12.0 5.5 104.2 259.1 20.0 437.2 Textiles ........... ........ ... 63.0 - 157.4 - 307.3 - 527.7 Total .............. ........ 421.9 243.6 836.2 1,818.5 2,902.0 1,914.0 8,136.2 Nonproject ....................... 412.9 760.7 1,879.3 60.0 3,075.9' 1,643.6 7,832.4 Population, Health, and Nutrition ........... ............ 11.0 56.2 309.9 - 70.9 260.8 708.8 Small-scale Enterprises ..... ........ - 170.7 800.0 - 426.0 1,595.6 2,992.3 Technical Assistance ... , ........ 13.6 92.0 13.0 - 8.8 131.3 258.7 Telecommunications ........ ...... 198.9 86.3 385.9 267.5 450.8 463.3 1,852.7 Tourism .............. ........... 17.0 37.5 25.0 - 96.6 187.5 363.6 Transportation Airlines and airports ......... ... 49.0 10.0 9.2 5.6 7.0 218.5 299.3 Highways .................... 455.3 939.4 3,183.7 263.9 2,403.3 4,224.5 11,470.1 Pipelines .......... ............. - - - 37.0 57.5 23.3 117.8 Ports and waterways ........ .... 91.1 194.8 1,116.1 359.8 1,397.8 398.1 3,557.7 Railways .. ............ ...... 490.2 204.7 1,430.4 1,035.8 852.5 1,838.5 5,852.1 Transportation sector loan ........ 36.6 25.0 261.2 - 167.0 47.8 537.6 Total ............ ........... 1,122.2 1,373.9 6,000.6 1,702.1 4,885.1 6,750.7 21,834.6 Urban Development ....... ........ 126.0 257.8 1,406.4 49.1 416.2 1,590.1 3,845.6 Water Supply and Sewerage ..... ... 161.2 367.5 1,133.4 - 1,960.8 2,304.9 5,927.8 Total .. ,.,., . 4,512.3 6,553.2 30,606.6 13,177.3 31,543.2 39,766.0 126,098.6 a. Operations have been classified bh the major purpose they finance. Many projects include activity in more than one sector or subsector. b. Except for the total amount shown in footnote d, no account is taken of cancellations and refundings subsequent to original commitment. Amounts of cancellations and refundings are shown by country and purpose in the Statement of Loans and Development Credits. IBRD loans of $1,817.7 million to IFC are excluded. Oerations, y PurposeandRegion CumulativeLending 157 IDA creditstoiborroers by rein Europe, Easrter Middle Latin and East Asia 'East, and America S E $outhern Weser and South North and she Total IBRD Africa ~~AMrCa Pcfic Asia Africai iCaribbean Total and IDA 219.5 63.6 ~ 211.2 i1,772.9 104.2 23.5 ij2,394.9 7,193.9 107.9 4.5 117.7 150.0- 380.1 2,710. 293.5 - - ~~~~~~434.963.A 1. 8064 2,664.6 917 534.~9 192.3 707.0 157 51.1 2,282.7 8,1726 456 1. 70.07 7 54.1I 248.7 395.1 132.6 60.6 ~~~47.3 556.0 - 28 809.3 1,243.8 48. 172.1 i 346.2 4,5899.5 4057 18.5 6,015.2 13,426.2 210.5~ 119. 10.6 90. 49.5 67.5 548.2 1,948.3 1 -5 I50.6 156.5 266. 18. 15. 32 773.1 2,704.7 71,%3 195 005 ~ 584. 6.0 782.1 1,755.7 2,064 1,132.5~ I,362.6 9,1144.4 ~i803.2 191.6 15,040. 42,215.6 334. 104. 153. 308.5 101. 27.2 1,029.9o~ 12,786. R751. 329.1A03 457 240 6. 2,638.2 7,419.8 175.7 92.6 30 292.7 74.0 33. 671.0 6,30. 469. 135 126.0 3,0723 273.1 155.9 41,290.7 27,2061.4 645.6 I286.1 I 129.0 365.0 347.1 188.9 4,961.7 33,596.4 4.3 3.9 -- -8.2 38.7 140 21.0 3-5.0 940 2. 995.4 3,799.0 50.0 ~~~6.9 l 8i.7 -75.6 1,776.8 . .. .3.5..4.-.16.0 7.5 ~ i44.4 1,291.6 50.0 m-SW- 50. 487.2 20.0 -f- 104.7 7.0 - 31.7 659.4 151.8 ~~39.2 i 35.0 1047 47,1I 7.5 1,~305.3 9,441.5 65.5 36.Z 2,986.6 35. 77.~0 4,132.3 11,964.7 58.9 106~.4 L236.31 363.~2 57. 822.5 1,531.3 19.263.5 56.5 ~~~~~246.52.3 388.0 3,380.3 197.8 159.3 55.0 93.5 ~~~~ ~ ~~~~23.6529.2 - 787.9 141.6 66.6 1~~~6.7 826.2 83. I-1134.1 2,986. 14.04.0 16.0 ~~~~ ~~~~4.2 48.5 .-- 86.~7 450.3 90A 5. -25 -16.5 315.8 1,188. 810.7~ 1524 315.4 169.5 147.3 2,83.7 14,253.8 175.7 135.0 19.9 ~~~~~293.39.2 16. 649.1 4,2068 170, 129.6 110.0i 1,~034.2 38.5 8.0 1,490.3 7,342.4 150O . 103.8 - - 120.89 6564 1,558.1 1,080.3 284.3~ 1,746.7 219.7 171.3 5,060.4 26,893.0 H152.3 g 116.4A 715.0 50.3 75.0 1,109.0 4,954.~6 235.1 123. 106.4 91.4 199.1 18.6 1,583.9 7,511.7 7,314.73,987.7 3,201.~6 22,191.6 2,301.~6i 824.7 39,822. 1 6 5 , 9 010 6 d Icluds e.$47 milionin Eropen reonstructionloans issadebelore 1952. d. ancellations, irninafion, and reudig amut to$6,170.0 mitlioinforthe B,RD anid$1,088.2 miillionfor IDA, milion Ths aount ncudes $46.1mtlib of lans and $15.8 milo f creditsmaideto Pakistaniin totaing$7,58. yarsfoe evelpmet projecsin earler ts formkfereasten nowBanhgladesh. Waing, anid The lobans creditswere reactivated, inrevisdform, as~ coanmmitmnSito BaiagladesIt 158 Summariesof ProjectsApproved Table 5-6. IBRD and IDA Cumulative Lending Operations, by Borrower or Guarantor, June 30, 1986 (amountsin millionsof US dollars) IBRDloans IDA credits Total Borroweror guarantor Number Amount Number Amount Number Amount Afghanistan ................ .... - - 20 230.1 20 230.1 Algeria .................. ......... 28 1,881.0 - - 28 1,881.0 Argentina .......................... 27 2,642.8 - - 27 2,642.8 Australia . .......................... 7 417.7 - - 7 417.7 Austria ........................ .... 9 106.4 - - 9 106.4 Bahamas . .......................... 3 22.8 - - 3 22.8 Bangladesh ......................... 1 46.1 107 3,668.6 108 3,714.7 Barbados ..... .... 8 70.2 - - 8 70.2 Belgium ............................ 4 76.0 - - 4 76.0 Belize ........ ..................... 1 5.3 - - 1 5.3 Benin ............................. - - 22 225.5 22 225.5 Bhutan ............................. - - 3 17.5 3 17.5 Bolivia ............................. 14 299.3 16 174.8 30 474.1 Botswana ........................... 19 265.8 6 15.8 25 281.6 Brazil .............................. 149 13,084.6 - - 149 13,084.6 Burkina Faso' ................. . - 1.9 28 315.5 28 317.4 Burma .--- .................. 3 33.4 28 727.0 31 760.4 Burundi .......................... 1 4.8 27 251.0 28 255.8 Cameroon .......................... 35 748.5 15 253.0 50 1,001.5 Cape Verde ......................... - - 2 11.2 2 11.2 Caribbean regiond.................... 2 43.0 1 14.0 3 57.0 Central African Republic ............. - - 11 99.1 11 99.1 Chadb .............................. - - 14 93.5 14 93.5 Chile ............................... 35 1,348.2 - 19.0 35 1,367.2 China .............................. 25 2,525.7 16 1,626.2 41 4,151.9 Colombia ........................... 116 5,551.1 - 19.5 116 5,570.6 Comoros .......... ................ - - 7 32.6 7 32.6 Congo, People's Republic of the ... ... 6 111.7 8 74.6 14 186.3 Costa Rica .......................... 30 490.9 - 5.5 30 496.4 Cote d'lvoire- ........... .......... 49 1,820.4 1 7.5 50 1,827.9 Cyprus ........................... 25 266.8 - - 25 266.8 Denmark . .......................... 3 85.0 - - 3 85.0 Djibouti ........................... - - 5 25.4 5 25.4 Dominica ........................... . 1 .- 5.0 1 5.0 Dominican Republic .................. 17 337.9 3 22.0 20 359.9 East African Community ....... ....... 10 244.8 - - 10 244.8 Eastern and Southern Africa region, .... - - 1 45.0 1 45.0 Ecuador ............................ 38 953.9 5 36.9 43 990.8 Egypt, Arab Republic of ...... ........ 45 2,820.3 26 981.2 71 3,801.5 El Salvador .......... .............. 18 216.1 2 25.6 20 241.7 Equatorial Guinea ................... - - 5 25.7 5 25.7 Ethiopia ............................ 12 108.6 38 838.6 50 947.2 Fiji ...............................9 90.2 - - 9 90.2 Finland ......................... ... 18 316.8 - - 18 316.8 France ............................ 1 250.0 - - 1 250.0 Cumulative Lending Operations, by Borrower 159 1I3RD loans IDA credits Total Borrowser or guarantor Number Amount Number Amounit Number Amount Gabon~'!.............6 69.3 -- - 6 69.3 Gambia, The...........- - 13 62.1 13 62.1 Ghana' ~......9 207.0 29 624.3 38 831.3 Greece ..... I..I.. .... 17 490.8 - - 17 490.8 GTenada-......... -- 1 5.0 1 5.0 Guatemala...........17 471.6 - - 17 471.6 Guinea...........-3 75.2 21 262.2 24 337.4 Guinea-Bissau. ~... ..... - - 7 68.9 7 68.9 Guiyana........12 80. 4 47.3 16 127.3 Haiti.-........... 1 2.6 21 256.4 22 259.0 Honduras. ......... 29 547.9 5 83.2 34 631.1 Hungary wi....l ~.10. 99L.9 - - 10 991.9 Iceland. .... 10 47.1 - - 10 47.1 india.... 97 10,691.9 170 13,828.2 267 24,520.1 Indonesia.1....II 9,123.4 46 931.8 157 10,055.2 Iran,Islamiic Republic of .. .. 33 1,210.7 - - 33 1,210.7 Iraq.~~~~~~~..... 6 156.2 - - 6 156.2 Ireland .......... 8 152.5 8 152.5 Israel. .~ ..... 11 284.5 11 284.5 .......... Italy 8 399.6 - - 8 399.6 Jamaica . ..... 40 706.1 -- 40 706.1 . .. ............. Japan 31 862.9 -- 31 862.9 Jordan........... 22 555.0 15 85.3 37 640.3 Kenya...... ......... 46 1,200.0 35 777.8 81 1,977.8 Korea, Republic of.....82 6,431.0 6 110.8 88 6,541.8 Lao PeoPle's Dem. Rep...- - 6 57.1 6 57.1 Lebanon.~. ....... 4 116.6 -- - 4 116.6 Lesotho. ~.~............ - -- 15 98.9 15 98.9 . .........-..- Liberia 21 156.0 14 114.5 35 270.5 Luxembourg,. -...... 4-.. 1 12.0 -- - 1 12.0 Madagascari ........ 5 32,9 34 545.6 39 578.5 ........ Malawi 9 124. 1 34 489.3 43 613.4 Malaysia ............- 66 2,100.9 -- 66 2,1009 Maldives.. ........... - - 2 8.2 2 8.2 MaIib,. ... __.....I.1 - 1.9 33 421.3 33 423.3 Maltai.. ..- 1......... 1 7.5 - - 1 7.5 Mauritania' ..... 3 146.0 20 123.7 23 269.7 Mauritius~.............. 18 218.7 4 20.2 22 238.9 Mexico ........ ....... 94 8,818.1 - - 94 8,818.1 Morocco. . ......... 70 3,255.9 3 50.8 73 3,306.7 Mozambique.- .........- 1 45.0 1 45.0 Nepal.-...............43 631.8 43 631.8 Nethlerlands ...... -.... 8 244.0 -- 8 244.0 New Zealand........ 6 126.8 - - 6 126.8 Nicaragua.............. 27 233.6 4 60.0 31 293.6 (continued) 160 Summariesof ProjectsApproved Table 5-6 (continued) IBRD loans IDA credits Totai Borrower or guarantor Number Amount Number Amount Number Amount Nigert ..... ,, - - 26 305.9 26 305.9 Nigeria .... ...... ............ 60 3,005.6 2 35.5 62 3,041.1 Norway ............ ................ 6 145.0 - - 6 145.0 Oman .............................. 9 130.0 - - 9 130.0 t Pakistan .............. ............. 55 2,135.2 72 2,443.7 127 4,578.9 Panama ........ ................... 30 596.3 - - 30 596.3 Papua New Guinea ............. ..... 17 279.0 9 113.2 26 392.2 Paraguay ........................... 27 458.1 6 45.5 33 503.6 Peru ............................... 60 1,711.9 - - 60 1,711.9 Philippines ............. ....... 96 4,466.7 3 122.2 99 4,588.9 Portugal ................ _... 28 1,106.0 - - 28 1,106.0 Romania ........... ................ 33 2,184.3 - - 33 2,184.3 Rwanda ...... ........ , - 29 293.8 29 293.8 Sao Tome and Principe ..... .......... - - 1 5.0 1 5.0 SenegalP'. .......................... 19 164.9 37 439.5 56 604.4 Seychelles .............. ....... __ 1 6.2 - - 1 6.2 Sierra Leone ............ ........... 4 18.7 12 116.1 16 134.8 Singapore ........................... 14 181.3 - - 14 181.3 Solomon Islands ..................... - - 5 17.0 5 17.0 Somalia ............................ - - 30 281.8 30 281.8 South Africa ............. .......... 11 241.8 - - 11 241.8 Spain .......... ................. 12 478.7 - - 12 478.7 Sri Lanka ...................... 12 210.7 39 866.6 51 1,077.3 St. Vincent and the Grenadines .- - 1 5.0 1 5.0 Sudan .......................... 8 166.0 39 973.0 47 1,139.0 NoLt: Joint iBRD,IDA operations are counted onIv once, as IBRD operations. When more than one loan is made for a single project, the operation is counted only once. Details may not add to totals because of rounding. a. Includes $46.1 million in IBRD amount and one IBRD loan, as well as $175.8 million in IDA credits, which replace commit- ments originally made to Pakistan. b. One IDA project, in fiscal year 1974, for drought relief, is shared by the following countries: Burkina Faso-$2 million; Chad-$2 million: Mali-$2.5 million; Mauritania-S2.5 million; Niger-$2 million; Senegal-$3 million. The amounts are in- cluded in each country's total, but the operation is counted only once, against Senegal. c. One IBRD loan of $7.5 million, in fiscal year 1954, is shared in amounts of $1875 million each by Burkina Faso, Cote d'Ioire. Nlali, and Senegal, but iscounted as one operation, against C6te d'lvoire. One fBRD loan, of$23 million, in fiscal year 1978. is guaranteed by Burkina Faso and Cote d'lvoire, but is counted as one operation, against Cote d'Ivoire. d. One IBRD loan of $20 million in fiscal year 1976 and one 1BRD loan of $23 million and one IDA credit of S7 million in fiscal year 1980 were made for the benefit of the following IBRD/IDA members-Bahamas, Barbados, Grenada, Guvana, and Ja- maica-and for the benefit of the territories of the United Kingdom's Associated States and Dependencies in the Caribbean Region. The niembers are severally liable as guarantors to the extent of subloans made in their territories. One IDA credit of $7 million in fiscal year 1983 was made for the benefit of the following IDA members-Dominica, Grenada, St. Lucia, and St. Vincent and the Grenadines-and for the benefit of the United Kingdom's then Associated State St. Christopher-Nevis and the United Kingdom Dependency, Nfontserrat; Antigua and Barbuda swould become eligible after admission to IDA membership. The members are severally liable for the credit to the extent of subloans made in their territories. while Montserrat is eligible to borrow as a Dependency of the United Kingdom. c. Of the one iBRD project, of $60 million, in fiscal year 1976, S49.5 million has been lent to Ciments de i'Afrique de l'Ouest (CINIAO) and is jointly guaranteed by Cote d'lvoire, Ghana, and Togo. The remaining amount of $10.5 million has been as- signed in equal shares to each of the three countries. The operation is counted only once, against Togo. Two IDA credits in fiscal year 1983-one of $9.3 million to Ghana and one of $5.7 million to Togo-for the restructuring of CIMAO are counted as one operation, against Togo. I. Jointly, guaranteed by Kenya, Tanzania, and Uganda. g. The credit is shared equally, in amounts of $15 million each, by Burundi, Rwanda, and Zaire. Cumulative Lending Operations, by Borrower 161 IBRD loans IDA credits Total Borrower or guarantor Number Amount Number Amount Number Amount Swaziland ........................... 11 75.8 2 7.8 13 83.6 Syrian Arab Republic .... . ........... 17 613.2 3 47.3 20 660.5 Tanzania ...... ....... ...... 18 318.2 57 923.3 75 1,241.5 Thailand ............................ 85 3,671.6 6 125.1 91 3,796.7 Togo ....... .......... 20.0 20. 0 21 250.6 22 270.6 Trinidad and Tobago ................. 13 124.8 - - 13 124.8 Tunisia .... 67 1,515.5 5 74.6 72 1,590.1 Turkey .......... .............. 838... 6,996.4 10 178.5 93 7,174.9 Uganda ............................. 1 8.4 23 561.7 24 570.1 Uruguay ............... ............ 24 565.6 - - 24 565.6 Vanuatu ....... , .- ......... - 2 4.0 2 4.0 Venezuela ...... 13 383.3 - - 13 383.3 Viet Nam ............. .............. - - 1 60.0 1 60.0 Western Africa region' ................ 1 6.1 3 52.5 4 58.6 Western Samoa ...................... - - 5 18.9 5 18.9 Yemen Arab Republic ...... .......... - - 46 463.9 46 463.9 Yemen, People's Democratic Rep. of ... - - 27 189.9 27 189.9 Yugoslavia ..... .................... 82 4,646.7 - - 82 4,646.7 Zaire ...................... ........ 7 330.0 42 760.5 49 1,090.5 Zambia0' ............................ 28 679.1 16 273.7 44 952.8 Zimbabwe',' ......... 14 487.1 3 53.9 17 541.0 Othef ............. ................ 14 329.4 4 15.3 18 344.7 Total . ......................... 2,691 126,098.6 1,591 39,822.0 4,282 165,920.6 h. One IBRD loan of $35 million, in fiscal year 1959, is jointly guaranteed by People's Republic of the Congo, France, and Giabon. i. The IDA credits include an amount of $45 million for the Sixth Highway Project approved in fiscal year 1983. In fiscal year 1984, $20 million of this amount was transferred to the Special Fund administered by the International Development Association. j. IBRD loan made to Malta with the guarantee of the United Kingdom before Malta's independence from the United Kingdom. The loan has been repaid. k. Excludes $46.1 million in IBRD amount and one IBRD loan, as well as $175.8 million in IDA amount and nineteen IDA credits, which were replaced by commitments made to Bangladesh. k. One loan of $6.1 million and one credit of $14 million in fiscal year 1983, counted as one operation, and one credit of $3 million in fiscal year 1980 are to the Banque Ouest Africaine de Developpement (BOAD), the regional development bank of the Union Monetaire Ouest Africaine (UMOA), which is a monetary union of six francophone states-Burkina Faso, Benin, C6te d'lvoire, Niger, Senegal, and Togo. One credit of $30 million in fiscal year 1984is shared in equal parts by Benin and Togo, and is counted as one operation. One credit of $5.5 million in fiscal year 1986 helped establish an institution to train middle-level and high-level managerial staff of private and parapublic-sector enterprises in the six member states of the West African Economic Community (CEAO) and other neighboring countries, as well. The borrower was Senegal, which passed the proceeds of the credit on to the CEAO. m. Includes one IBRD loan of $80 million, made in fiscal year 1956 to Northern Rhodesia (now Zambia) and Southern Rhodesia (now Zimbabwe), at the time of the Central African Federation and before independence, and one IBRD loan of $7.7 million, made in 1965 to (Southern) Rhodesia and newly independent Zambia. Both loans were assigned in equal shares to Zambia and (Southern) Rhodesia, but are now counted only once, against Zimbabwe. The loans are guaranteed by the United Kingdom, Zambia, and Zimbabwe. n. Includes three IBRD loans, made in 1952, 1958, and 1960 and totaling $43.1 million, to (Southern) Rhodesia (now Zim- babwe). The loans were guaranteed by the United Kingdom and have been repaid. o. Represents IBRD loans and IDA credits made at a time when the authorities on Taiwan represented China in the World Bank (prior to May 15, 1980). 162 Summariesof ProjectsApproved Table 5-7. Trends in Lending, IBRD and IDA, Fiscal Years 1984-86 (millions of US dollars) 1984 1985 1986 Sector IBRD IDA Total IBRD IDA Total IBRD IDA Total Agriculture and Rural Development 2,071.5 1,401.4 3,472.9 2,389.6 1,359.7 3,749.3 3,761.7 1,015.7 4,777.4 Development Finance Companies 762.3 156.0 918.3 506.1 59.3 565.3 1,324.7 124.5 1,449.2 Education 491.2 202.6 693.8 514.9 412.9 927.8 577.7 251.5 829.2 Energy Oil, Gas, and Coal 749.4 115.0 864.4 1,193.7 137.7 1,331.4 213.0 18.1 231.1 Power 2,264.4 385.0 2,649.4 2,171.6 78.7 2,250.3 2,423.2 363.7 2,786.9 Industry 494.2 96.6 590.8 635.0 9.0 644.0 757.2 63.9 821.1 Nonproject 1,026.9 351.0 1,377.9 435.0 194.2 629.2 900.0 421.0 1,321.0 Population, Health, and Nutrition 68.5 174.5 243.0 160.9 30.1 191.0 166.6 252.9 419.5 Small-scale Enterprises 597.6 75.0 672.6 553.1 7.5 560.6 264.5 10.0 274.5 Technical Assistance 14.5 120.5 135.0 42.5 67.2 109.7 60.1 77.8 137.9 Telecommunications 166.5 - 166.5 59.6 62.0 121.6 24.5 25.9 50.4 Transportation 2,243.4 353.5 2,596.9 1,866.9 271.8 2,138.7 1,253.8 244.4 1,498.2 Urban Development 447.0 53.0 500.0 204.6 180.0 384.6 944.5 173.0 1,117.5 Water Supply and Sewerage 549.9 90.9 640.8 622.8 158.0 780.8 507.3 97.5 604.8 Total 11,947.3 3,575.0 15,522.3 11,356.3 3,028.1 14,384.3 13,178.8 3,139.9 16,318.7 Table 5-8. Trends in Lending, IBRD and IDA, Fiscal Years 1984-86 (percentages) 1984 1985 1986 Sector IBRD IDA Total IBRD IDA Total IBRD IDA Total Agriculture and Rural Development 17.3 39.2 22.4 21.0 44.9 26.1 28.5 32.3 29.3 Development Finance Companies 6.4 4.4 5.9 4.5 2.0 3.9 10.1 4.0 8.9 Education 4.1 5.7 4.5 4.5 13.6 6.5 4.4 8.0 5.1 Energy Oil, Gas, and Coal 6.3 3.2 5.6 10.5 4.5 9.3 1.6 0.6 1.4 Power 19.0 10.8 17.1 19.1 2.6 15.6 18.4 11.6 17.1 Industry 4.1 2.7 3.8 5.6 0.3 4.5 5.7 2.0 5.0 Nonproject 8.6 9.8 8.9 3.8 6.4 4.4 6.8 13.4 8.1 Population, Health, and Nutrition 0.6 4.9 1.6 1.4 1.0 1.3 1.3 8.1 2.6 Small-scale Enterprises 5.0 2.1 4.3 4.9 0.2 3.9 2.0 0.3 1.7 Technical Assistance 0.1 3.4 0.9 0.4 2.2 0.8 0.5 2.5 0.8 Telecommunications 1.4 - 1.1 0.5 2.0 0.8 0.2 0.8 0.3 Transportation 18.8 9.9 16.7 16.4 9.0 14.9 9.5 7.8 9.2 Urban Development 3.7 1.5 3.2 1.8 5.9 2.7 7.2 5.5 6.8 Water Supply and Sewerage 4.6 2.5 4.1 5.5 5.2 5.4 3.8 3.1 3.7 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 No,iL: Details may not add to totals because of rounding. BRDFinancial Statements 163 FinancialStatements of the InternationalBank for Reconstructionand Development A Balance Sheets 164 B Statements of Income 166 Statements of Accumulated Net Income-Unallocated 166 Statements of Changes in General Reserve 166 C Statements of Changes in Financial Position 167 D Summary Statement of Loans 168 E Summary Statements of Borrowings 172 F Statement of Subscriptions to Capital Stock and Voting Power 174 G Notes to Financial Statements 178 Report of Independent Accountants 181 164 IBRDFinancial Statements Balance Sheets Appendix A June 30, 1986 and June 30, 1985 Expressedin thousands of US dollars-see Notes to Financial Statements, Appendix G Assets 1986 1985* DUE FROMBANKS Unrestrictedcurrencies( nluding interest-bearing demand deposits$56.855-1986, $39,299-1985) ..... . . ...... S 80.831 $ 66,900 subjectto restrctions-Note A . . . Currencies 404.426 289.425 $ 485,257 356,325 INVESTMENTS-Note B Obiigations of governments and their instrumentalities .17412.766 16,714.853 T me deposits of banksand financia institutions. .. and otherobligations 3,486 679 3,061 942 20.899,445 19.776.795 CASHCOLLATERAL B. . INVESTED-Note ............... 995,512 5,608,017 RECEIVABLES ONACCOUNT OFSUBSCRIBED CAPITAL (Subjectto restrictions-NoteA) Nonnegotiable, non-.nterest-bearing demandobi gatons . . 1,491,867 1,174,326 Amountsrequiredto ma tainvalueof currencyholdings 85 205 1,491,952 1,174,531 RECEIVABLES-OTHER Receivablefor investment securitiessod ...... .... . 414,625 4,053,816 Accruedincome on loans......... . . . . . . ...... 1 675,466 1.054.958 Accruedintereston investments ............ . ... 252,356 239.777 Net recevablefromGurrency swaps-Note D ..... .-. 695,219 2,342,447 6.043,770 LOANS OUTSTANDING (seeAppendixDand AppendixG-Note C) Totalloans ..... ..... ....................... ... 104.942,299 81.583,042 Lessloansapprovedbut not yet effective.... ......... . 11.357,300 10.939,600 Lessundisbursed balance of effectiveoans. .............. . . 32.521 462 29.261 364 61,063,537 41,382,078 OTHERASSETS Landand bui d ngs (lessaccumulateddepreciation ot $27,320-1986. $24,932-1985) ............. . 224.430 200,279 Unamortizedissuancecostsof borrowings .. . ...... 490.388 318,050 Notonalamountsrequiredto maintainva ue of currencyholdings-NoteA 1,049,151 798,806 Miscellaneous. ............ 943,463 314.823 2,707,432 1,631,958 $89,985,582 $75,973,474 IBRDFinancial Statements 165 Liabilities, Capital and Reserves 1986 1985* LIABILITIES Accruedchargeson borrowings.... ......................... $ 2,165,860 $ 1,478,751 Notional amounts requiredto maintain valueof currencyholdngs-Note A . 335,612 325,095 Accountspayable and otherliabilities......................... .... 341,599 293.615 Payable for investment securitiespurchased ....... .................. 1,333,915 6,537,171 Payable for cashcollateralreceived ................. ............ 995,512 5,608,017 Net payable fromcurrencyswaps-Note D ............... . . ..... 1,130,839 - Due to InternationalDevelopment Associat on and SpecialFacilty for Sub- Saharan Africa-Note G...................... 674,920 1,142,339 Short-term borrowings(seeAppendixE)............................ 3,948,102 3,436.457 Medium-and long-term borrowings(seeAppendixE).............. 65,846,654 46,791,482 ACCUMULATED PROVISIONS FORLOANLOSSES-Note F................ 37,200 - CAPITALANDRESERVES (SDRs n thousands) Capita stock (seeAppendixF andAppendixG-Note A) Authorized capital(SDR78,650,000-1986 and 1985) Subscribed capital(SDR65,836,400-1986. SDR58,947,600-1985). ................ ........... ..... $77,526,969 58,846,269 Lessuncalled portionof subscriptions (SDR60,157.884-1986, SDR53,795,776-1985).70,840,119 53.703,301 6,686,850 5,142,968 on account Payments of pendingsubscriptions (seeAppendixF)........................................... 34.954 60,712 Specialreserve-NoteE...................... .................. 292.538 292,538 General reserve (see Appendix B) Accumulated net income....................................... 5.720,414 4,883.287 Cumulativetranslationadjustments (802,844) (1,156.085) 4,917,570 3,727,202 Accumulated net income-unallocated (see AppendixB) .... .. .. 1,243,457 1,137,127 $89,985,582 $75,973,474 asstiedtor comparative Rec purposes. 166 IBRDFinancial Statements Statementsof Income Appendix B For the fiscal years ended June 30, 1986 and June 30, 1985 Expressed n thousands of USdollars-see Notesto Financia Statements.Appendix G ,986 1985 Income ncome from oans: interest . $4.416.750 $3238.737 Comm tment charges . . . ... ..... .. 251.597 239.144 Front-endfees 1.353 10,062 Income from nvestments-NoteB .. . . . . . .. 2.121.129 2.019.138 Other ocome-Note F 24,035 21 67' Totancome . . ... . ......... 58814,864 5 528.752 6...... Expenses Borrowing expenses. nterestcn borrowngs-Note D . . .. 5,018.178 3 932.867 Amortzationof ssuance costs . . . 81.537 59.903 Administratve expenses-NoteF . . . . . . . . 384.555 354.820 Provsion for loanlosses-Note F . . . ..... . ... . 37,200 Otherexpenses . . . . 7,212 4.970 Totalexpenses .. . 5.528.682 4.352.560 Operating Income .. 286.182 1.176.192 Contrbutionsto sDeciaprograms-Note F . ... , . . . 42,725 39 065 Net Income . ....... . S1.243,457 $1.137.:27 Statementsof Accumulated Net Income- Unallocated For the fiscal years ended June 30. 1986 and June 30, 1985 Expressedin thousands of US dollars-see Notes to Financial Statements. AppenoixG 1986 . 985 Accumu ated net ncome-unalocatedat beginning o' f scal year . . . $1,137.127 $ 600,039 A locationto General Reserve-NoteE . .... . . . .. ... . 1837.127) (500,039) Transfer to InternationalDevelopment on-Notes E and G . . Associat (150,000) (100.000) Transfer to Spec Afr ca-No,es Eand G al Facilityfor Sub-Saharan .. (150,000) - Net ncome for f scal year . . . . . . 1,243,457 1.137,127 Accumu ated net ncome-unalocatedat enc of f scal year-Note E 1,243.457 $1,137.127 Statementsof Changes in General Reserve For the fiscal years ended June 30, 1986 and June 30, 1985 Expressedin thousands of US dollars-see Notes to Einancial Statements, Appendix G 1986 1985 Accumulated Net Income Baanceat oegnning of * sea year . . . .. . 84.883.287 $4.383.248 Al ocationof portionof accumuated net ncome. 837 127 500.039 85.720,414 4,883, 287 Cumulative Translation Adjustments Baanceat beginnng o' fiscal year. . . (1.156.085) (933.724) onadjustments Translat for fisca year . . 353 24' (222 36. 1 (802,844) (1.156.085) Balance at End of Fiscal Year . .. . . . . . . 4,917,570 $3.727 202 Firancial Statements IBIRD 167 Statementsof Changes in Appendix C Financial Position For the fiscal years ended June 30, 1986and June 30, 1985 Expressed AppendixG in thousandsof US doclars-see Notesto FinancialStatements, 1986 1985* Lendingactivities: Disbursements ...... $ 8,346.701 5 8,868.687 Repayments.... . .. .. ............. (3,869.804) (2.975,014) Sales . ............. . ... (251,123) (329) o loans Adjustments asa result outstanding of netcurrency appreciations 1. (depreciations) ... ............. 15,455.685 (2,351.654) Total financial resourcesused in lendingactivities ....... $19.681,459 3,541,690 Financialresourcesfor lending activitieswere providedby (appliedto): Operations: Netncore. . ..... .......... . ..... 1,243,457 1.137,127 Noncasn items(accruedinconeonloansandinvestments, accruedcharges on borrow for oanlosses, provision expenses, ngsandadministrative deprecation. amerliation premiums, ot ciscounts. andissuance costs'). . .... 379.622 317,993 Fnanciaresourcesprovided by operations...................... 1,623.079 1,455.120 to rternational Transfers Development Association andSpecia Fac lityfor Sub-Saharan . Africa ........ ......... .................... (300,000) (100,000) 1,323.079 1,355,120 es: Fnancingac:ivit Medum-and ong-term borrow ngs: Newissues ......................... .. .. ...... 9,947.374 10,309.613 Ret.rements.. ... .. .. . . . . .......... (4.851,153) (3,947,680 Adjustments of med um-annlong-term borrowings of net as a result currency appreciations (depreciatons) . . 13.683,435 (1.883,604) Adjustment of currency swaps asa resultof netcurrency appreciations (depreciatons). ..... .... ............. .841,419 (299,240) 20.621,075 4,179,089 r short-term Increase ngs. borrow ... .... ... ..... ...... 511.645 714,990 Capita: New sibscriptions i65,836shares-1986 and46.322 shares- 1985). ... 635.375 402,645 Adjustmentsas a resujt of aopreciation of theSDR (depreciation) in terms of the UScoiar ...... ,. . ..... ,,, ,908,507 (228,101) in amounts Increase requredto mantain of currency thevalue holdings . .... (239.708) (55,036) in restricted Increase currencesandrecevables. ..... (432.542) (20,192) 871,632 99,316 act Other vties: Changein nonearning assets andliabilities: (Decrease) increasein payable to international Association Development and Specia fotSub-Saharan Facility ................ Africa .......... (467,419) 95,000 Other,net .. . ................. . . .......... . (831,148) (188,141) (1.298,567) (93,141) adjustments Translation .. ................. . ....... 353,241 (222,361) Total financialresourcesprovided.............................. ....... 22,382,105 6,033,013 Increase in cash and liquidinvestments .. . ........... . . 2,700,646 2,491,323 Cash and liquidinvestments, beginningof year .17,360,340 14.869,017 Cash and liquidinvestments, end of year ...... .. . ... ...... $20,060,986 $17,360,340 Composedof: ............ Investments ............................... . ......... $20,899,445 $19.776,795 currencies Unrestricted .................. ......... ............. ............ 80,831 66,900 Netpayableforinvestment securities purchased . .. . . . (919,290) (2,483,355) $20,060.986 $17,360,340 nuLrpoesen tiesforcomeparative Reciass 168 IBRDFinancial Snatemnenfs Summary Statement of Loans AppendixD June 30,1986 and June 30,1985 Expressedin thousands ofUS dollars-see Notes al toFinanc Statements. G Appendix june 30 t9SS Loans 2 approved ementage of Tota bxi not~'et Undisjursec Loans lotalloans orquarante', Borrower loans effeclveh oans; outs-ondingoutstard ng Algera ..... ..... . ... $ 1,245.861 $ 252,000 $ 410.768 $ 573.093 094 Argentnal .. 2.124.572 608.500 684 287 831.785 '36 Austraias.... .. ..... 39,038 - 399038 C06 Banamas.1 8.822 - .932 12.890 0 02 Bahamas, Barbados.Grenada, Guyana,Jamaica, Trinidadandr sod UnitedK ngdome Tobago, 40,381 3.578 36.803 0a06 Bangladesh . . ... . 5977 - 59 077 0 tO Barbados . ... 65,002 10.000 19.103 35.899 0 06 Bel ze . .. . 6,734 - 208 6.526 001 Bolvia.. .... 239.277 - 11.306 227.97' 0.37 Botswana. . ... 23' .526 7.600 84.577 139349 0 23 Brsazl.......... 11.398.927 1 636.300 3 626.479 6.136.148 10 05 Cameroon. . . ..... . . .. 684.940 30.100 293.340 361.500 0.59 Chile . .... ... 1.184 414 66.000 399,813 718.601 1.18 Chna . . 2.606.854 687.000 1:164.844 755.010 1.24 Colomoia . . ....... 4,710 030 347.000 1.394.199 2.968.831 4.86 Congo.People's Republicof -,he .. . 82.459 10.479 7' .980 0 12 CostaRca 415,643 24.655 390.988 0.64 Cotedlso re'. . 1,710.646 317.900 254.368 1:'38.380 I86 COte d'lvoire. Ghana, ann Togo~ 25,246 25.246 0.04 C6te d'lvocre 000 SenegaH, 6.202 5,554 648 - Cyprus...... 193,577 20.000 80.190 93.387 0.15 DominicanRepubolc .. 293,302 41.600 81.444 170.258 0 28 Ecuador . ... . . 709.282 159.500 191.874 357 908 0.59 Egypt. ArabRepubl'c of, .525.6539 728.300 569.376 1.227.963 201l El Salvador .'44.102 - 11.657 132.445 0 22 Ftriopia . 52.586 - 52.586 0.09 Fj ~~~~~~~~~~~72 003 6.500 65.503 0.1' e F n and, .. 5:'1 8 - 5 118 0.0' Galboe 11.697 - 111.697 0 02 Ghana. .. . . 129.052 - 129.052 0.2' Greece . ...... 155.449 - 155.449 0 25 Guatemala 408.047 81 000 70,902 256.145 0 42 Cuenesa 60609 - 60.609 0 'C Guyana..... 72.983 329 72 654 0.12 Hondu.ras. .. 524734 37.400 59.295 428.039 0 70 Hungary .. . . . ... 1071.929 189.000 382805 500.120 0 82 and... Ice e .. . 17.981 - 17.981 0.0 a Ind . . . 9,044.652 1.493 200 0.932 687 26518.765 429 Indonesia . . .. 8.915.522 897.600 3.588.124 4.429.798 7 25 IranIsambc Repub ic of . .... 343,550 - 343.550 0a56 raq 60.078 - 60 078 010 reland.50.313 50.313 0 08 I Israel 59,254 59.254 010 Jamaica 625 950 - 91 909 534.041 0 87 Japan. . .. ... . 12'~052 - 121.052 020 Jordan ....... 563.293 77,500 257.444 228.349 0 37 Kenya .1.112.888 32.600 22857.843 2.445 1.40 Kenya. Tanzania andUgandan 7 539 7.539 0.01, Korea. Republc of .... 5.684.481 632.000 1 000.982 4.351.039 5 63 Lebanon . .40.486 - 1 586 38900 3.06 IBRDFinancial Statements 169 June 30. 1986 Loans approvec, Percentage ci Total notyet bout Undisbursee Loans totalIcass orgiuaransrs, Borrower lears effectivelr lcoans oulslandn9 outstancir9 Lberia .~.........................$ 129,513 $ $ 13.333 S 116,177 0 19 Madagascar ,. 29,780 -- 29,780 0 05 Malaw .. .. ... . 124,522 24,500 21.,785 78,237 0. 3 Malaysia 606,283 ................ 207.800 586.390 812,093 1 33 Mauritania... ............ 76.721 - 14,97r 6>.750 0.10a Mauritius. . ....... ... 202.696 30.000 37.278 135,418 0.22 Mexico..... ........ .. 7,211.538 574,000 1.963.672 4.673.866 7.65 Morocco ... ........ .... 2.731,512 366.400 803.710 1.561.402 2.56 NewZeaan .............. 152 - 152 - Nicaragua ... ... ... , 187.395 - 1.384 186,01' 0,30 Nigera. . , ....... ..... ... 2.784.441 212,900 924.605 1.646.936 70 2. Norway .. ........ .... 5.4 27 - - 5.427 0.01 Oman . . . . .. ........ 112.523 30,000 42.035 40.488 3.07 Pakistan ..... ..... 53.148 1.5... 325,000 721.970 78 506.1 0.83 Panamao ...... ...... 512.433 - 154,792 357.641 59 0. Papua New Guinea ........ .. . 224.043 47.300 121,207 536 55. 0.09 Paraguay . .......... .. ,. 423.535 - 135.534 288.00i 0.47 Peru . . ,.. ..... . .... 1 .411.247 17.500 546.307 847.440 1 39 Philippines .. . ..... .. ... 3.804.4 26 151.000 883.178 2.770,248 4,54 Portugal ... ....... . .... 763.333 91.000 256.405 415,928 0 68 Romania............ .... 1,845.392 - 5,106 1,840.286 3.01 Senega. . ... ....... 116.328 - 14.695 101.633 0.117 Seycneles. ..... . . .. 6,620 2.960 3.660 0.01 Sierra Leone ... ...... . ,. 9.089 - - 9.089 0.01 . ..... Singapore ........ 63.801 - 63.801 0 110 Spain. . . ... ... ...... 85,978 - 85,978 0 14 Lanka Sri ...... 140.193 50.100 23.089 67.004 0.11 Sudan _. ....... .... 44.735 - 44.735 0.07 Swoaziad......o.. ..... 61.923 - 12,793 49,130 0.08 Syr00 Arab Repabli c. ., ... . 504,989 77.500 67.667 359.822 0.59 Tanzania.... ....... ... 295.096 - 10.570 284,526 0.47 Thailande. ~..... . .. . .. 3.273.676 60.000 23.009 590,667 2,5 4.13 Togs..~. ...... ... . 2.026 2.026 - Tr nodadeond Tobcago ... .. ,... 36,861 36.861 0.06 Tunisa.. .... .,... 1.289.004 22.000 609.948 657.056 1 08 Turkey.6.........5622.619 255.000 2.244.598 4,123,021 6.75 Uganda.41.033 - 41.033 0.07 UnitesK ngdom...... . ... 564 - 564 - Uruguay.. . . ....... 374,95' 49.200 125.566 200.185 0.33 Venezuela .. ...... . .. 34.988 - 34,988 0.05 Yugoslavia ..... ... .. 3.603,927 284.000 2.594.770 725.157 4.25 Zaire .... .... ..... . 157.359 11 0,000 47.359 - 0.08 Zambia.. ..... .. .... ... 464.199 - 43.630 420.569 0.69 Zimbabwe ......... 445.150 10.000 189.229 245.921 0,40 Subtotalmembers,... ........ 103.387.965 11.357,300 31.937,268 60,093.397 Finance International Corporatissl.... .. 1,421.739 - 584,194 837.545 1.37 Other. ... ......... 132.595 -- 132,595 0.22 Total-June 30. 1986.........$104,942,299 $11,357,300 $32,521,462 $61,063,537 100.00 30.1985.. Total-JEne ......... $ 81.583.042 $110,939,600$29,261,364 $41,382,076 100ontttOcO!) 170 BRDFinanc al Statemenos Summary Statementof Loans(cont'nedW Appendix D June 30 1986 and June 30 1985 See Notes to F nancialStatements. Append x G NOTES c T-ese amountsnclLcegrart part cipaticfs cf S3 059000 a n sore rstances loanswere macemth The gnararteeof a mem- 55.5C30-1 P985;re ranrt partic patiorsrepresent ons partanipat Derir territarieswhich at thetimewereinicr,edin hatmermber s ana grartsasis taken c- oarsinnerthete-rs of ar a d ir a nurb'er Tembership cut cwhichsucsequent y cecame iscenendert andmem- aragreemen- ccnperat between a mmaeoe3notry and theIBRC Cthe betsDt she 80D anrderteao ddoaiecaOnsing. Iran ties torthese udislirsed caance.rse RDnas a enerednl3 rrevocablecamt oansaresbaocw undertnerame meaember ot toeorigiral iahosegua-- ments te disnuse5557301 020 532452OK- 985 ,ntee cortinues anaafecredr These oarsaresh3anseow trgethe- d One loan 55676.00 2667-n OOC- eci vaen-.tc 9852 s srowr withanird]ca!cnaf atre TemTer unne, wh3se ramse hey arelistec urde 30vie a (Guarantorcut s asa maranrees CY Argentia GLIR^NTSUSS tthoasends e oans mace to -heCarcbean cpment Ceve Bank at fo theberefit oJrATPs 1985 1985 - ctlte members the erritries s-edrmtoecase theUr of r edK anen' Borrcwe's 1936 85 ra9 lie -ernt3resame af rs Assaciaea thacse annDeperdenc States es n AUSTRALIA theCar cbean -egon) Tne memce sw Lesevera n ace asguaran- PaouaNewGuDmea . . . 25,594 25 908 torsto theertent c sual3ncs made n Their te- tn es K NGDOM UNITED f Oneloanecuioaler-tc5t4l 299 0C0Ci 1 9Q3.CO-t13850isshaan Swanteasnd . . . 187 473 0ncer Core c vcire n6uarartrr bt is asso partiay cuaranteed by Za d Z babwe nr atn 372 473 Uld ss Birtna CaVsinetrs areIont 2and ian e seve-ally T 'Loans madeor oint benefit Ofaterrtnets I sed n Lc a mace tote nestAfricrman Densocimert 8aoh 'orrbheeneftaf toeher,r esc *re members listec. 1he mernbers a beseveralIy Loans maceto heI rterrat.c-ianarce Coracra2ionarenotguaranteec hIab e asqgarante's rc tneextent ct sub cans crade n te territories Darenn'era . Incrlues nsrtons of cans made to ncrporatiars of theEastAtrcan u Loan agreements tca ng 86 229200OOC (4.897 800000- Commn ty tm 985rhaee DEsE sinnednutthelcans co notbecome e ara ettecsln Reareseirsparrians at earsmacetc ne -ao c Ine2asArirna thereincer sourseinnts dD nststartunril thebora3wers n g2ar2i- oRemnarmy 'oro if anytake certainactons andfurnish ner-ainnocumentsIn e 1 BRD an n sans t3tang55 -28 1 .00CCO 5604189000-C2198 h Represents Icas namae am a t mewhen theau-t nt esonTa war hanebeen anproven by toe BRD bntthereated agreements havenot represenoec China mnmb-e iRD(priar to May 15t 9Pr beensogned IBRDFinancial Statemerns 171 Summary of Currencies Repayable on Loans Outstanding Currencies 1986 1985 Currencies 1986 1385 Australiandollars .......... $ 61,789 $ 52,983 Mexcan pesos........ $ 1.748 4.286 Austrianschillings ...... . 368,601 259,977 Netherlandsguilders .. . 4,814,310 2.845,149 Belgianfrancs. .......... . 144,273 96,969 NewZealand dol ars ... . 3 Braziian cruzados . ....... 1,805 2.212 Nicaraguancordobas ....... 7 71 Burmese kyats .......... . 1,064 1.020 Norwegiankroner ......... 22,983 20 024 Canadiandollars ........... 158.628 161,348 Portugueseescudos ... . 5,911 4 820 Danishkroner............. 36,717 24,836 Pounds ...... sterling 435,091 384.080 Deutschemark....... . 13.831,218 9,109,702 Rials .. ............. Omani 765 852 Europeancurrencyunts. ... 53,743 40,481 SaudiAraban riyas .. .... 135.982 147.514 Finnishmarkkaa ......... . 34,905 23.386 Singaporedollars........ . 9,327 8,813 Frenchtrancs............ 136,603 92.909 SouthAfricanrand ...... . 52,931 20,878 Ghanaian cedis . ......... 34 66 Spanishpesetas . . ....... 21,512 17.3'6 Greekdrachmas ..... 1024 1...... 1,088 Sri Lankarupees ... 29 29 Icelandickronur .......... 863 567 Sudanese pounds .......... 215 266 Indianrupees...... 66,053 67,327 SwedishKronor .44.540 36.430 Iranianrials.............. 42,696 36,607 Swissfrancs ... .... 17,485,550 10.742.375 Iraq dinars ...... .... . 4,967 4,970 Tunisiand nars. ...... 715 695 Irish pounds ..... .... ... 13,552 8.213 UnitedArab Emirates dirhams 25.437 19.806 Italianlire . ............ .. 94,844 62.171 UnitedStatesdolars.586,.9 5.886,199 6.735.808 Japanese yen ....... ... 16,507,597 9.759,189 UnitedStatesdollars/Swiss Kuwaitidinars . ........ 262,451 273.684 franclinked......... ... 10700 100.000 Lebanese pounds.... .... 442 1.034 Venezuelanbolivares....... 7,234 10.189 L byandinars.... ........ 88,716 121,930 Luxembourg francs. . 31,831 23,375 Malaysian r ngg,t ...... 58,932 56,633 Loansoutstanding . $61,063,537 8411,382.078 Maturity Structure of Loans* Periods 30, 1986 June July1.1986to June 30. 1987.. . . .... . $ 4,641,699 July1, 1987to June30, 1988.... . ........ .......... . . . ... ....... ....... . . ..... 5,393.996 July 1, 1988to June 30, 1989.. .................. ................. ............ . ... ... 6,133,380 July 1, 1989to June30.1990 .. . .. ... . 6,625,265 July 1.1990to June30, 1991......... . ..... ........ ... . . ... ........ . ..... .. 6,912,059 July 1, 1991 to June30. 1996..... ............... . ... . 31,913,856 July 1. 1996to June30, 2001.. . . . 18,222.713 July 1 2001to June30. 2006.................... . ...... .... -3,790.430 July 1, 2006 to June30, 2010 .... ................ . ....... ... 3,025 Undetermined. . . . 9,948,576 Total ...... . .......... . ... .......... . .... . $93.584.999 lnciudes undisbursedbalance noans. ofeftective prepayments. -Represenrscancelations adjustments andexchange rot beerallocateo thathave maturities. to specific 172 13RDFinancial Statements Summary Statementsof Borrowings Appendix E June 30, 1986 and June 30, 1985 Expressed AppendixG inthousandsof USdoliars-see Notesto FinancialStatements, Medium- and Long-term Borrowings and Currency Swaps 0-r,bor MedLjin 0ndorg oiroqvrs Cuorency 00063.sgwepinrt \Ooenrged 'ileeoOted ovradqe areraee iPa P0'r ng oU1t1d 0a) Due PayjDe'ncevaoleo Qre-u'n ,' Due Neic..r'ency origa3-'0 Juoe30 'Lre 30 uire30. June3Q June30. lire OsO me80 Jilt 30 JuneX, 30 J'rne CFu"ervo, Mo6b '9g5o io8o '9&e6 1986 g6 r985 '9g6 19h 19q85 dnolarS LSormmIn S 509,790 S 1r3 83 1991 $ (50,246) - it14 52, 1987-91$ 5425 sonllings Ausorier 304.57 172719 5D5 19379-9 85 652 6' 672 7 72 1986588 (43 203) '57143) 8 37 1986-94 247,020 177248 Belgoofrancs 336.022 151.842 1104 1486-95 (237.733) ri7.536i 5 11 04) 1386-35 98.299 4306 Oeradan noro 757741 8 543 10 92 667 986-2C83 369,204I 1298.8'E 6 11t52i198b-2000 388537 368728 Danmsh -o0er 88,353 t8.272 1946 092 86,877) i37.095 .I3 401 1093-92 1 376 318 n1,847,470 Deuischenae k 7 8o7.467 784 '9E8-2C716 514,395 923 352 7r 196o 2030D13,3E1,865 8 790.819 European currencyunits 934,203 338077 9 42 1989-2301 (330,0992 ) OT297) t9 p7i 1986-95 604 104 230.780 Foench lr1ncs 175.426 4 330 10 60 1987-4, 1168 725) - 11 75r 1986-97 6.700 4 830 Ire laien 107992 81.001 12 64 1986-92 (64.175) i49.743 i'3 60 1987-92 43,8'7 11256 Japanese Den 16.355576 00055009 791 1986-20Q6 268.039 90.922 891 '086-05 16.623,615 9663 931 K,O 0102 dM31 "E' 873 235.893 45 19E69-2 - - - 181 873 285 093 LiDvaocri orn 78 139 131 333 12 00 199C - - - 78,139 C1333 Luxenbourg francs 73.435 32.495 946 '089-96 21,830) (15 93981 I57) 1987-g0 51.605 16,556 Netherlands gilders 4229,984 2635 942 8 82 '08E-270E 613, 06 228433 7M54 198t9g 4 843 090 2864 375 Nor.veguan krorer 79,777 39 777 1681 1936-95 - - - 79.777 39.777 Pounds siering 1.466,027 1252362 '' 94 1986-2010 1r3 028 '29 508 1O00 1987-88 (72 4361 153400) "6 2', 1096-93 1.546.6'9 1.318470 Swedon r 6 dFw sq crawtr. c :srrelll dsisenn; cnII(muflensu -rt) erce'a,e c- rI 1-rinbts I 3nts JC ric[ts IJS L D ,'ei 0eT, So ares e t R BSDRi dcl slOr' (1sD1 CsM0 o0 05 30,Don .3 000 Ž35533 27 3ro 5 31 7- q t ^o .i 3D7, o 7 ; 3)037,; 39 605 46 63,f .3 8 297 0(5 'nnleuesnc Ban.rc 20 COGJ200, 62 35 1800 120 7 2M 4 :7l '-a; & 3gi 1029 8e, iC - .7 r 3690 911 074 r 71 12 a ,7 i 33 1 27 r 109 727 1 0 1 lOs 92.i 1 3796 c 87 t 17 >.lrs -69 b 3 33 69 f 4002 4 329 33)018 >89904 719 08 82 '71 ilnrl> 0 03 '7.130 1.7t0 2014 1 33o 8. 73 421 r 09 31) 2.777 3 27,i 3 23 333 i30 IS r2 5/tI ,rL iee . 6r 5 0 _ 2r 030 2 1i 3 2 897' 2 3r07 2r7 /7 2 9025 4 2 008 1.900 2365 ' 7 r3 atl 769 3 11 1 le ur 266 2.22 1 526 600 131 97 15,5 13- 29 1 6' 2273 1 5'r 223 5e .> 0 39 C1 3900 390 459 3) 10 4 13 i 203 0CC' FCF/n 100 2.''2 1000n36 13^ 102 '78 9 000 10 90 303 005 inLsar 9 90i2 92 106 SiC 954 209 004 26 4 20 06 402 2. 642 3. 109 23 766 2279 7 ,1' 007 scs soi5 t 231 005 23.130 715 842 32 26 38 '36 5861 2 (: ' 3724 0 1 64 0379.430 22 032 109 022 986.68 1 192 247 1044 62 A27so C 9 002 12200 1300 1 178 9060 2 93 350 2.5 tu-l .329 0 21 '39 400 10057 11843 120 343 152.310 t144 224 ;03 n br 002 l,.C00 1 500 1260 I33 13523 '397 2.06 Carerocr . 200 036 20 0056 00 2.355 1 6000 21196 403 006 CJlach 31 782 331 2 76206 189.296 222.2368 .988 905 23-2075 ^2 32 3'? 'cce Xierr4P16 1 6t02 162 19 100 1696 206 00' Cei'O lsoC.il 307(0 C 100 232 10.062 1. 02 1 173 9000 10A59 303 005 106 3 2 13 002 .02 1176 9000 103 96 30 00 l .2>0 2e 036 237 i00 19 237 22 417 2184 63 207200 2 625 638 3r rG 3.432 3~7 2.248 200 224.20 2-0 COc7 143 96r 2524 905 223 733 34 2.)< 3429 u 0 53 300 26031 33 597 32 378 t34 3 79 0 54 Mn os 70 16 1.600 160 198 .443 . 96 266 004 ,:I' es e ir tre6 229 r 2 ER 2.9653 47 432 5i 8i 5 74i 0°1 '.0 2.22 131 06 1 543 11 g90 13 884 631 005 c /ore 834 3 93402 5.842 77 7560 91 32 1084 016 788 2 78 83 C r.. 429 70 3 4 70 37 223 1 03 01 Deal/rn e 5703 3087 575.3 49 300 56 940 526 94 620 5 arCO3 0 086 --'! DC,½' 31' t 3 '20 310 365 2792 3.290 281 6 04 1H30 '60 188 144 4 .6 269 6 04 resvc o,) -63 009 23.900 2,930 3509 55 922 60 902 339 612 E,,"cc0- 3 E , i e½ :c cc 362 2'4 2 252 96 200 3-- i -'00 6 260 28 080 7372 33.00 89.940 35.3220 160.211 279.499 1 212 3.694 7 0,33 E Se .@cer 1'1 2C2 14 100 16 ' 603 2 '2060 14 903 391 036 CD 5020200 00000 00 000 -CC-T-lmmm C 0CCC'C CC 02(0000 C Cr00 C CD COO 00C0 00CC 005531 55 Ba C -000 00-C 02 0 0-0 Cry 5 0 C0CC a a CC) 0' -CO C 0)0310 CD - : : CC C 7: 02 C 0 o ma 0(00 02. - B o 5 CO CO 00 (IC 0-0 0 C 0 - CCCO C Co CC CC) CO CC -CC CC CC CC --. 0 CCC CC) 0 CC 02 CCC CC CC CC .0 NC CCI -C 0 0 CC Cl 02 CCCCCICCC-I CO02CC-02 C 0-0 (0CC 0002002 C -OCCO--'CC 020C0CC- -o (3CI-o0- -0 0 [C C) Cl CC CC C CC 0 CO 0 CCC 02 0 0 - CC (31 CC -C (0 0 C -0 CO CO 02 0 - 0 CC 0 0 (0 CC 0- 0 0(0 CD o 0 0 0 CC 0 CC 0 CC 0CC (CC CC CC CL) 02 0 02 -0 C a CC 0 02 0 CC 0 CC CC) Ci CC CC 0 CC 02 CO 0 0 CC - - C-C 0 COCD C OOCCCCCCCCO OCCCCOO -0 CC.--CCC--- CCCCCCC00 02 -- CC ---- CC 00 CCC-CXCOO 7--s 0 CC0(O00 7 OCO0000CC -- CC02--0 00Ž0CC-' -CC31CCCCZC(C CCOCC(C 02 0--CO 0 -CC-OFC -CC 02CO02020 t -0 - - CC 0 CO 0 -0 C. CUCO- CC CC 02O 0 CC --- CC O 02 0202CC - CC (IC -2 -' 02CC CO - 0)020-0 5C7-C [CCC 02CC CO -0 f-COO [CCC 02-C 02 - 020202--- 000(002 0CC COCCC -I CO02CI--02 -CC--CC--- O (31CC -NCC31----CC 0200CC---- -- CCC0 - 02 0 0. CO CC 0CC CC 02 02 CC 02 CC CCC0 CO 0 CC 02 -j OCCCC CCCCCO Coo CC C 02 0 0. CC 7 5 o 02 0 - -- 0 CC CC 0 0 0 CC CO CO 0 0 0 0 0 0 0 CC CO 02 0 0 0 0 CCC 0 - CC CO CC CC 0 0 0 02 0 CC 0 CC CC 02 0 00 0 0 0 0 0 0 CC 0 (CC C CC CC CC 0 000 000 CC 0 CC CI 0 Cm 0 0 0 0 0 CC o CO o 0 0200 0 0 0 0 CC CO C- C (3) --C [C 0 CO 02 - - C 7C7o 02 (0CC CC C -CC 0202 CC 0200 CC o¶505C C -O--C(0 CCCCCCC-CCC -C-102-002 CCCO0CCCCC ((CCC CCCCC02CC CCC CC (CC 02 CC 0 CC - -(Co CCC -. CCC CC COC 0 CC -Co CC -C C C o C -- CC (IC -0 02 02 0 CO C CO -0 0 -0 CC CC CC CC CC - CC 02CC--CCCC CC C31C31 00 0--- 02-0 o-- CD (0000002 00- (001 CoO-jCC-C- 020202CC-C 02020CCJ C a 0 CC 0 CCC 0 -0 CC 0 -. -J CO CC 0 CC (CC 0 CC - 0 0 CCC 02 0 02 CC CC CCC 0 0 CC 0 0003000 02 0 0 0 020 (31 a CC C CCC Cr -0CC - o C C C 0 020- 00CC-I IC SC 0 0 CC CC-C -02---0 CCCCCCCCC--------0CC---CCCC 020CC 00) CC-C [COO -'0 CC 0 - 0CC -- CCCCCCO 7 COSCCC C C C 9 C310202C0 0-0-000 CCCC-CCC02 OOC-CCCCCCC C- CC (CC 0 CC 02-C 02CCCIC 02 CCC CC 02 02 -00oCCCCC CC CO CCC CC -'0CC CC0202 CC-C CC C CC-CCCC0C CO [CCC 0 CCC -0 CC I -C CO CC 0 02 02 C 02 -1 CC CC C C CO CC (C102(I--0 0200CC 0-0 -CCC00 CC- C- I 020-0020CC 02CCC-0CC 0CC.02CC-CCCC C002OO -O-0CC02 0 0 7 5 CC CCI O --0 CC CC- -0 0 --0 00- C3 -0 C31C0-0 -C 02 CC -- CCO(CCOC CCCC -0CCCCCCO.… C-C02(C- -0202 CCC (31 02-0 02---O COo-Co 0-CC C7C0020CC Cfl 5 C (02 CCCŽCIC02CIC C31CCO--jCiC 02-CC31COCCC 020200CC 02002CC [C 0CCC-002-CCCCCCC 02CC02020 CCC CC (C CC 0202 CC -Cr0 CC CC 0 0 CC -C CC 02 0 CCC 02 Soo 0 0 C CC S 57 CC -C. (31 - CC -- CC CCC 0 -0 -CCC 020202-02 (CC CCCC02---'CO CC-CCOO-(0 CCCC-C-02CC OCCC00CO 00000 0-CoO- 02 -. C02--C-0 CC 0 0 0 0 0CC CC CO CC 0 -C - 0 CC 0 00 0 CCC CCC CC CC CC 0 CC 0 -C 0 0 CC CC CC CC -C 0 0 CC 02 CC C CO 0 0 CO -0 C -C- CC -0 CC CC (CCCCC Co 0 CC IC CC CCCO--' [C -- o----oo CC -0 0 0202-Co CCCC02-0O -- [CO-CO 02-CO---02 CC 00202 0-0CC CCC CCC CC020CC-0 -0020)0202 C0PC{ -- C 0-- 02CC- 000(3-COO CC02CCCO CCCO'CCCC 00-(O 020200202 ACOC02---,---0 oCCCCC02 00- -0-ICC CCCC (1CC) -0CCCC02CC 7 C 0 CCCC310 CCCCC-(CCC02 CCCCCCOCCI 000002 02 CC CO 02 CC 0 CC 02 CC IC (CC - CC 0 0 CC 0 CC 01 CCC CC CC 02 02 0…C-C -0 02 oC -1 CC oC 0 0 02 02 02 CC 0 0 0 -0 -- 02 0 CC -C- 02 C-C 0 -- 0 0 -Co CC --- CC CC 02 02 CC CC 0CC CCC CC 02 0 02 02 (31 0 C J -- CC CO 0 -0 CC -- 0- 020 CCCCCC -0CC C-CC 000020 020---- 0000020 --. 0 -0- 0CCCC0 -02 0- CCCCCC-00 -Co 0 2 02CC02OCCCC ----- CC 00-C CCOo,C0 Co 0 (1) 3 CC 020CC CCC-) CC oCC --- CCC 02CC-C 0-I CC 0CC 02 -0 IC CYCO CC -0 -0-0CC CC CCC (31CC 020202 00001 CCCC. (3CC) -C-COO-C C 0CC -. 02CC 0-0002CC 02000C02-C CCOOOCCC 02oOC- 02C-COCCC (CC 0 C CC 0 0 -0 CC 0 (3C 0 0 0 0 CC (0 CC 0 0 0 0 0 CCCCC CC 0 0 0 - --0 0 0 CC 0 0 CC CC CC 0 0 CCC CC 0 CC C) OCO CC - - ------ 0002-02 CCC-0020 UC--0CC0 -00--CCO --- '02 CCCC)(O----------0 0(3C0CCI (3CCC02OCC [-3 CCCCCCoC02 COCCCCC[C CCCCCC02 CCCCCC--CC 020-0CCCC CCCCOCC+C. CCOC -0(31 CCO-'C [(IC 176 IBRDFinancia( Statements to Statementof Subscriptions Appendix F Capital Stockand VotingPower (continued) June 30, 1986 and June 30, 1985 Expressed inthousands AppendixG of unitsof currency-see Notesto FirancialStatements. June30. '986 AToLris pad n AmountssubLject Suoscrstires (NoteA) to cal 1NsleAi Vot ng power Expressed Expressee Expressed im r Expressel n Enp-essec specia specal n specal ,n Percerts3e draw ng drawing curren. drasvsng currert Nxm>er Percentage ci rights rights US rights US cf o Members Shares toa (SDRr (SR) drolla-s (SDO) dollars votes tota 7alasil . . . 182 0 03 1&.20C '.820 S 2,143 16380 19289 432 006 Malaysa 4 627 0 70 462.7^0 33.464 45294 424236 -99563 4.87, 0 70 Malres 262 0 04 2c 2C0 105 124 26095 30.729 512 007 s.;I '73 0 03 730 1.730 2037 15.57C O 185 '23 £ 8006 M1'30u 596 0 09 '6 0c0 2777 3273 5 823 63.3c0 816 012 Majrtapa 10. 3.i 2 tO0 00 108^ 1173 9 000 10 598 35C 005 Iur I . . 678 0 10 67.380 3763 4.431 6- 037 75£09 926 013 Mexicr, 6 360 047 636OC '3 715 93253 562265 65 68' 19 005 1coMoccO 2 612 0 £0 26'280 28795 23£532 0 435 28912. 2962 041 Mcz x>mcIcue 272 0 04 27 2ro] 2.720 3203 24 498 ?2827 522 0 80 tSep. 533 080 53300 2486 2.930 58812 59835 783 011 Nelherlaids 15117 2.38 1 511700 130700 153.9C3 '.31.000 1.626 224 15367 221 Zea `,ev, asn 3 608 3'5 360800 29903 35213 330897 369 654 3.853 055 I'jICa acuC 9' l 091 9.108 9' 1.872 8 190 9644 341 005 ger 1.) . 108 002 10 805 '.088 1 178 9000 10596 353 005, i6gca. a 2.941 045 94100 29410 34 632 264.690 3'1 691 3 191 849 5.352 86- 535200 42022 55,372 498'76 574866 5 602 81 Cman 627 080 62200 3.270 3651 589.30 c9 39- 87' 3 13 P4'<5a-41 . 5127 876 512700 -2 875 50 488 4-9 825 553 252 5.37 077 Pnanma -16 CC3 21608 2168 354- 2 1940 22892 4x 08C7 >47443 ee'vGuinea 249 0 04 24900 2.460 2.397 22148 26 071 496 002 -4'aru,y' . 386 006 36.900 1.195 1 407 3740' 44.047 636 809 oh'> 633 014 .3.800 9380 11049 84423 99.410 1 188 017 Phillnmnes 3 59 8 55 35.800 29398 34.6' 6 330.4C2 369 871 3946 055 PCdnd 249 0Ot4 900 2490 2 932 22.410 26384 499 8 07 Portuq - . 2 400 036 240 388 19.435 22.886 220.565 259 731 2.6'0 038 a" . 1 096 0.17 109.68iC 7.431 8750 102169 12031' 1.346 019 Rcrn> 2700' 030 2098'80 28.810 23563 180090 212069 2.251 032 RKansa . 5&7 0 09 5670O 2 963 3498 55737 65.634 637 0 12 m.1,7aid Ues s s1o0her s 25 2500 230 294 2.258 2658 275 Ci04 S wui a29 . 2900 29C 341 2.910 3073 279 8.84 Si.Vmncent,nd ihe ies S're'nchr Ins53 ID nes Grenad . 13 1.300 138 153 1 170 1379 253 0 34 S,ioTomeanc Pnr-ipe 14 t408 140 165 1 260 1 484 264 304 Arauih S:id. 22383 3 48 2 236 788 194.577 229128 2843723 2.406627 22633 325 Senecai . 362 005 36200) 3 620 4263 32.580 38365 612 009 Seycneles 11 1.100 110 1C 390 1.'66 *61 804 Saeir Leone . 150 002 15 000 1500 1.76D '3500 '5.897 8 400 .ir Sn0aco16 320 885 32000 3 808 3 793 2. 300 8391i 7 C i8 ScimonIslands 283 028 2830' 290 3M1 20010 32984 533 0308 Sonj a 199 003 1698 i .390 2226 17 010 20 030 439 006 IBRDFinancial Statements 177 June30.1986 Amounts paid in) Amountssuo)ect Subscriptions - A) (Note A) tncall(Note power Voting ExpreosedExpressed Expresnec, in in Eapreused .n Expresses specia~ speciaI in specia ini Percentagedrawing drawing c6rrent crowing cnrrent NLumberPercentage of rignts rights us r gn:o US of of Members Snares total (SOP) (SOR) dollaro (SOP) dollars votes total SoutnAirox..... 6.954 1.06 695,400 58,9380 69,404 636,462 $749.479 7.204 1.04 Spain..... ... 10,294 1.56 1,029.400 156 103.81 88. 0 941244 1.108,38' 0.544 152 SriLanka~.Otto 11 0.3 2 211.000 53 186.3 19,257 194,647 229.21 2.360 0,34 Sudan... ... 600 0.09 60000 6.000 7,0685 54000 63.589 850 012 Surname .. ... 162 0.02 16200 1,620 '908 14.580 1 7.169 4 12 0.06 Swazyannu. .. 440 0.07 44,000 1.870 1. 987 42,330 4 9.8417 690 0.10 Sweden. .... . 7,367 2 '1.1 736.700 62568 73.78 32 674,1 7 793.838 7.61 1.09 Sy'rianArab Republic . 1,233 0.19 '23.300 8,6z2 tO 177 114.658 135018 14'83 0.21 Tanzania'. ... 350 0.05 35,000 3.500 4 121 31500 37.093 600 0.09 Tha land...... 3.12 0 47 31I>100 25. 52 29,6t8 285.948 336724 3.361 0 48 Togoa ..... . 150 0 02 15E.000 1.500 1.766 13.600 15897 400 0.06 Torga . . . .. 277 0.04 27.700 238 280 27462 32.338 527 0 08 Trininad assTobago.. 667 0.10 66,700 6 670 7,854 60.030 70690 9' 7 013 Ten sa ... .. 373 0.0 37.300 3.730 4.392 33.570 39.531 623 0.09 Turkey . . 3.879 0.58 367.900 30.134 35485 337.766 397,743 3.929 0.58 Uganda........ 333 0.05 33.300 3,330 3.921 29.970 2 35.29 583 0.08 UnitedAtabEm rates... 2.385 0 36 500 238. 18.770 22.1 03 219.730 258.747 2635 0.38 LlnredKngdnm ... 7 38.94 592 3.894.700 355,869 419084 3.538811 4,167.169839.197 5.63 UnriedSta:es.... 138.098 20.98 13809.800 1228:'97 1.446.28812.581,6031481 8 '38.348 5 71 1988 Urusuay.. ... 1.578 0.24 157800 11.675 13.748 146 125 172.072 '.828 0 26 Vanuatu... .. 323 0.05 32.300 643 757 31657 37.278 573 0 08 .... . Venezuela 7560 1.15 756,000 64.265 75,577 591.735 814566 7.81C 1.12 Vet '4am... . 543 0.08 54.300 5,430 6.394 48,670 57.548 793 0.11 WesternSamoa .. 262 0.04 28.200 282 332 27.918 32.875 532 3.08 Yemen AtabRepublic. . 455 0.07 45,500 1.802 2,122 43.698 51.457 705 0:0c Yemen, Peno e s Dem, Pep.nfi'.... 336 0.05 33.800 3.360 3.957 30.240 35.6'3 586 0.08 Yugosavou ...... 1.509 0.23 150.900 15.090 17.770 135.810 159926 1.759 0 25 . ..... Zaire 2.643 0.40 264300 2' .037 24.773 243,263 286.459 2.893 0.42 ZambIa. . 1151 0.17 115,tOO 11510 13.554 103.590 121984 1.401 0.20 Zimbabwe . ... 817 0.12 81.700 8.170 9,621 73.530 86.587 1.067 0 15 Total-Jane 30, 1986 658,364, 100.0 65,836,400 5.678.516306686.850 60.157.884 $70.840,119 695.864 100.00 30. 1985 Total-June 589A476 58,947.600 5.151,8245 142.968 53795.776 53.703.301626.476 a Dones nro, aggregat Incluearomuents ngtheegeivalant of334.941.009race vndtrammembers onaccontn ofincreases onswhicn n subncript arein processat competon AusIrr.3781 .000.Bang adesn $403.000.Bnutan $9,000DOn via 440.000. BurenaFuse $t40.000. Cameroen $t47.000. Cuanad $12,092,000Chile $274.000.COrte o'lvuire $432,000.Dibhunt$4,000. Dominica $2,000Lacunad $520,000 Arac Ecrypt. Reaporn eto$165.000.Grenaca56.000. Gnuyna $224,000. Hungary 0333.000 nuxemoxug $54,000. Mulaw 063.000 Niger081.~000Ngeria 53.350 000 PakistanSt 037.000, Paraugaun $243,000.Portuagl 5374.000,Senegal $t1t4.000,Sri Lanka023.000.Tanzania01.400 000 Togo 5130.000, Yemen, s Democratic Pecple Repuc,a of,$294,000. Yugesiaxa 03.020.000. Zamb a 0' .2900.000andZimbabwe $5.582.000 $13000nascaee trontKicrbt ani receivec accuant of ts capital peed oubscriptone tnrrmal ngcorper onol mreirncerolilp t~en. Lesslean 0.005 percent. 178 IBRDFinancial Statements Notesto Financial Statements Appendix G June 30, 1986 and June 30, 1985 Summary of Significant Accounting thecapital stock wereexpressecinterms thesubscribed ot$1 20635, and Related Policies wouldnavebeen$79421741.000 capital ($71,111,437 000- 1985),the uncalled portor of suhscriptions$72,571.463.00 Translation of Currencies ($64,996534,000-1985: the pa c-in capita 000 , $6o850v278e 0S0-1985). ($6,214,903 andtnenetmanterarce at vajie oaliga- The IBRDOs financial principal statementsareexpressed .nterms of US to toe BRP. tions $1404.378.000-1985) $855.861,000 dollarssolelyforthepurpose theIBRD's of summarizing pos tinancial - tionand theresu tsof itsoperations ofitsmembers fortheconvenience Loans and other irterestedparties The IBRDisaninternational organizaion which itsoperat conducts ons All ofthe Roloans are s orguaranteed macerta. members by, tec wtho in thecurrencies of allof itsmembers The resources IBRD's arede- ot loans palamounts toe currencies arerepayablea ler. Far anrs arious vroru is rsesm rren ers t members ofpits ebrn andSwtoerland currencies.o awtzerlatoanare mandcre heldn a ah itsd nra- regotiated roe s.nce reocayment Juy 1980 at(and ohligations for portions borrowers of certa avarious a earlier esare currenc lana). deter- vested, are curreacywithassets n thesame as currency mined onthebasis pooling ota currency system, is desirned which to ir,any obigations Ing on urnywt sesi,iesm urny s equalize ecag aerssaogbroesIt,eto on , orescribed byItsArticles ofAgreement. oy holding primarily orlending crued air echaage risksamong rate Iterestor loans borrowers sac- theproceeds ofIasoorrowings Inthesame currenciesinwhich they are borrowed. Borrowed funds aresometimes convertediotoother curren- TheIBRD hasa policyof notparticiparina n cebtrescheduing agree- cies.and,aothesame time,forwarc exchange contractsareentered ments. It isthepo!.cy oftheIBPD to place ir nonaccrual statusal loars intoanorder thecurrency to recover converted Withrespect to tsother made to.orguaranteed cy.amember ofthe BRP. mterest, if orincipal. resources, theIBRD does notconvert one currencyntoanother exceot orother charges withrespect to anysuchoar areoverdue by more torsmaamounts required to meet certainooigatons andoperationa thansiXmonths. unless BRD management determines thattheover- needs of theIBRD. due amount willbeco ected intheimmed ate furure nterestandother Assets aretransiated andliabilities at marketratesof exchange at the charges onnonaccruing loarsareinlauded inincome onlytotheextent end of theperiod. Income andexpenses aregeneraliytranslatedat an thatpayments have actuacy been received bytheIBRD. TheBRD eval- average of themarket rates of exchange ineffectduring each month uatestheneed forspec fic provisons for losses onloans made to.or Translationadjustments, withtheexception ofthoserelatingto capitai guaranteec by.a member of the BRD nolatertharwhen arrears on subscriptions descrbedinNote A, arecharged orcredet to tneSea- prncipal, nterest.orother charges or any such loan reachtwoyears eral Reserve. t te en F~~cedte ach decision anprovisioning s mate on toeoasIs at arevievwoftne eralReserve. particular circumstances thenprevai ing Any such provisionsarere- cordedasareduction ofnetincome Totheextent thatactual losseson Valuation of Capital Stock loansshould occurn amounts inexcess of accumulated provasons on anysuch loans andtheamount provided bytheSpecial Reserve.the IntheArticlesofAgreement, thecapital stock ofthe(BRP isexaressec excess would bencluded inthe determnation ofnetincome interms of "UntedStates dollarsot theweight and fineness on inetfect July1. t944" (1944 dollars).OnAprilt, 1978. theSecond Amend- ment of theArticies ofAgreement of theInternational Monetary Func Investments (theFund) entered intoforce ancSection 2 ofthePar Value Modaiica- tionActofrheUS(31U.S.C449) wasrepealed. Asa result, curren- investmert securitiesarerecordecat cost oramortizedcost. Gairs or ciesnolonger have oarvalues, gold isabolshed asa common denomi- lossesonsaesof investmenrs, measured bythedifference between natorof themonetary system, andtheprovision of theUnited States averagecostandproceeds arerecorded ofsales, asaneement of in- awdefinigtheparvalue of theUS dollarn terms ofgold disappeared come frominvestments. From timeto time,thelBRD entersintofor- and,withit. the pre-existing bas s for trans at ngtheterm United wardcontractstorthesaleor purchase ofInvestment securties:these Statesdollarsoltheweight and fireressan etlect onJuly1 1944" into transactions arerecordedat thetimeot settlement currentdolars or intoanyother currency The General Counsel of the BRD has rendered a legal opinionconc ud- Disposition of Income and General Reserve inginsuastance exero that,athe seat4 their statutory under power te Tee IBRDhas declared not atpaid any dends din toitsmembers Coin Articles ~BRDs to the1944 Dfecofsmaymlerprl Atices,theExeulie dollarto mean rfernce lnthe eitherreterencesto thelastofic a) mencing beeR in t950. allocate oralloftoe a portion accumu ated ret ncome has to Peserve. ctheGenera value of the 1944dol ar a termsof current USdolars (thatis, $1.20635) orreferencestotheSDR asdetermined from timetotime by Since t 964.t has been tueIBRD to transfer s policy tothe nternational theFund. withtheefectthao the BRD'scapitaland themutual obliga- Development Assoc ationpartoftheyear s income wasnorneeded ,hat tans oa each memoer anr the BPD withrespectto capitoasuasot p- to reserves for allocation or otherwiserequired to beretairedir the tionswould oe measured onthebasis ot either $1 20635 ortheSDR, IBPD sbusness and accordinglycoud have oeenprudenrlydistributeo according to thedecisionoftheExecutive Directorsonthestandard of asdividends. n 985.theIBRD made a simartransfer totheSpecia valuePending such decision,theIBRD has valued ts capitastock on FacilityforSub-Saharan Africawh:ch Isadm n steredbythe nterna- the basis oathe SDR as computed by theFund andexpressed such t ona Development Assoc ation These transters are recordec as a value n terms ot USdollars,at 51.17757 perSDR onJune 30,1986 charae to Accumulatec NetIncome-Urallocated. ($0.998281 perSDR or June 30. 1985). Forthetime being. however, payments on accountofsubscr ptonsareaccepted at theequivalentof Note A-Capital Stock, Restricted Currencies, per $120,635 atcapital shore stack, of Value and Maintenance Expressngthevalue of theIBRD's stock capital in terms of theSDR thaninterms rather of S1.20635 does nothave a materialetfectonthe AtJune CaprnacStock: 30,1986,theIBRD comprised s captal 786.500 position financial orresultsoftheoperations of theIBRD. f thevalueof authonrzed (786.500-1985) shares of theparvalueof SDR100.000 IBRDFinancial Statements 179 each,ot which658.364 shares had been subscribed (589,476- traded in the marketwhich were valuedat their cost of 1985). Ofthesubscribed capital, $6,686,850,000 ($5,142,968,000- $3,527,052,000 ($9,323,764,000-1985), was $21,982,542,000 1985) has been called and paid in, and the remaining ($25,491,552,000-1985), compared witha cost oramortizedcostof $70,840,119,000 ($53,703,301,000-1985) is subject to callonly $21,894,957,000 ($25,384,812,000-1985). Obligationsof the when required to meet theobligations of theIBRD created byborrowing UnitedStates government anditsinstrumentalities a cost having oram- or guaranteeing loans. Asto $62,021,576,000 ($47,077,015,000- ortizedcostof $292,538,000 ($292,538,000-1985) anda market 1985), therestriction oncalls isimposed bytheArticlesof Agreement valueof$293,125,000($294,120,000-1985), setasidein respectof and asto$8,818,543,000 ($6,626,286,000-1985), byresolutions of theSpecial Reserve,as described in NoteE. areincluded underthis theBoard of Governors. heading. On January 4, 1980, theIBRDs Board of Governors adopted theGen- Income trom investments includes net gainsof $367,430,000 eralCapital Increase Resolution (GCI) which increased theauthorized ($338,721,000-1985) from resulting of investments. sales Theannu- capital stock oftheIBRD by331,500 shares, representing anincrease alizedrateof returnontheaverage investments heldduring theyear of approximately $40,000,000,000. The resolution provided fora re- ended June 30,1986, including netgainstrom salesof investments duction ofthenumberso shares authorized byit if,asa result of a deci- was10.66% (12.63%-1985). sion onthevaluation of theIBRDOs capital stock, the331,500 shares authorized represent anincrease in authorized capital in excess Of NOTE C-Cofinancing and Guarantees $40,000,000,000, calculated atthetimeof such decision. Inthiscase, thenumber ofshares would bereduced sothatthe aggregate parvalue TheIBRD hasentered intoagreements for loanssyndicated byother would beequivalent to $40,000,000,000. financialinstitutionseitherbyadirect participation guar- in,ora partial Restricted Currencies: The portion ofcapital subscriptions paid intothe antee of,loans forthebenefit of member countries. TheIBRD's direct IBRD is divided intotwo parts: (1)$668,685,000 ($514,297,000- participations in syndicated loans areincluded in reportedloan bal- 1985), initially paidin goldor USdollars and(2)$6,018,165,000 ances. Guarantees of $459,262,000 asot June30,1986 arenotin- ($4,628,671,000-1985), paidin cashor non-interest-bearing de- ciludedin reported loan balances. Noneof theseguarantees wassub- mand obligations inthecurrencies of therespective members. Ofthis ectto callat June 30, 1986. latterportion an amount of$131,015,000 ($111,068,000-1985) was The IBRD has partiallyguaranteed interestpayments oncertain loans subsequently converted by members intoUSdollars, subject to the thathavebeen sold.At June30. 1986 guarantees approximating rightof the IBRD or themembers to reverse thetransactions. The $7.535.000 were subject to call. amounts paid in gold orUSdollars orsubsequently converted bymem- bers intoUSdollars arefreely usable by theIBRD inanyof itsopera- Note D-Borrowings and Currency Swaps tions;however, theremaining amounts paid in thecurrencies of the members, hereinafter called restricted currencies, are usable by the At June 30, 1986, the IBRDhad no contractsto borrow IBRD in its lending operations only withtheconsent oatherespective ($14,037,000-1985). Contractstoborrow represent commitmentstor members. Theequivalent of $3,209,894,000 ($2,526,525,000- which theIBRD has a signed borrowing agreement, buthasnotyet 1985) hasbeen used withsuch consent. receivedthecash proceeds. Maintenance of Value: Article II, Section 9 of theArticles of Agreement The IBRD has entered intocurrency swaps inwhich proceeds of a bor- provides formaintenance of value, as of thetimeof subscription, of rowing areconverted intoa differentcurrency and.simultaneously, a suchrestricted currencies, requiring (1)themember to make addi- forwardexchange agreement is executed providing fora schedule of tional payments to theIBRD in theevent thattheparvalue of its cur- futureexchanges ofthetwocurrencies in order to recover thecurrency rency isreduced ortheforeign exchange value ositscurrency has,in converted. Netpayables of $1,130,839,000 resulting primarily from theopinion ostheIBRO, depreciated toa significant extent in itsterrito- exchange ratemovements occurringsubsequent to thedates of the ries,and(2) theIBRD toreimburse themember inthe eventthatthe par swaps are shown under theheading (AtJune Liabilities. 30,1985. net valueso itscurrency isincreased. With respect to restricted currencies receivablesof $695,219,000 areincluded under theheading Receiv- outonloan, these maintenance of value obligations become effective ables-Other). The effect of currencyswaps isto transform thecost os only asandwhen such currencies arerecovered bytheIBRD. theoriginalborrowing to a costwhich reflectsthemarket yield of the Where there aredifferences between market rates ofexchange and the currency obtainedin theconversion. The average cost of borrowings rates at which capital subscriptions of members have been paid, such outstanding,including short-termborrowings, during thefiscal year differences are shown in Other Assets andLiabilities as Notional was 8.25% (8.67%-1985),reflecting a reduction of cost of Amounts Required to Maintain Value of Currency Holdings. Pending a $325,911,000 ($322,479,000-1985) asa result of currency swaps. decision bytheExecutive Directors onthestandard of value forcapital stock, these notional maintenance ofvalue obligations arebeing deter- Note E-Reserves and Net Income mined provisionally onthe basis of the SDR, andaretreated in the financial statements on thisbasis. These amounts would become main- TheManaging Committeeof theIBRD hasproposed to theExecutive tenance of value obligations if andwhen theprovisions of Article II, Directors thatthey approvetheallocation of$962,800,000 to theGen- Section 9 of theArticles ol Agreement described above could beap- eralReserveoutofthe$1,243,457,000 netincomeearned inthefiscal plied. Therefore, thetimingof anyestablishment andsettlement of yearended June 30, 1986andthattheyrecommend to theBoard of these notional maintenance of value receivables andpayables isuncer- Governorsthat$280,657,000 by wayof grant betransferred to the tain. Development International Association. In August1985,theIBRD $837,127,000 allocated to theGeneral Re- Note B-Investments and Cash Collateral serveoutof the$1,137,127,000 netincome earnedinthefiscal year Invested endedJune 30,1985 andin October,1985,authorizedthetransfer of $t50,000,000 byway ofgranttotheInternational Development Associ- securities The marketvalueof investment and investedcash received collateral securities, on loaned including not investments (continued) 180 IBRDFnnncncal Statements Notesto FinancialStatements (conttre.d AppendixG June 30 1986 and June 30, 1985 ationanc$15C.000.000 asa contr butonbytheIBRD to theSpecial Deveopment totang52219000.000 Association 'romnetncome for Facty for Sub-Saharan Africa whch s adm nstered oythe noerna- tne scal yearsended June 30. '964through Jure30 985 Ofth s rionalDeveoomentAssociation (seeNote Si amnunt 5524920000 was payableat Jane 30 1986 Reserveconsisrsci Tie Special loancomrnmissons setosade pursuartlo S81t42.339or a oe 30 198t) Artice VSection6. oftheArticles of Agreement which are to behe d in Tne BRC autnorzeca grant of S 50000000fror inenet ncome liu d assets tobeused and or yforthepurpose n'meeting iabilit es0o earnednthefscalyea-erded une 30. t985totheSpecia Facry for the BRD onitsborrow ngs and guarantees. The Specia Reserve assets Afijca Sub-Saharan whchIsadministered onaDevelop- bvthe nternat comprise of theUrted Stares oobigations government andits nstru- moenAssccan[on Thesefuncswillbhpaidasneeded dis- to finance andareincuded mentalitfes unde, toe hean ng rvestments As a oncredit oursements comm trents oftneSoec a Facry resuit mace ofadecision n 1964. theallocation of such comm ssonsto theSpecialReserve wasdiscontnued ir respect of subsequert loans Note H-Staff Retirement Plan andnofurthef additons arebengmade ti it TneIRD hasa contribatorv retirement Panfor itsstaff whichaso Note F-Income and Expenses covers thestaffoftne onrernationa Fnance 7hestaff Corporation. non- tr butea fixed percentageof pensicnabie remuneraton,andtne BRD Other income ircludesnegains on $7599000 ($16 485.003-1985). conriabutes the -emairder c' thecostof 'unding thePan.The IBRD resultngfrom repurchases ofoblbgatonso rhoe IBD prior to marurity. uses anaggregate funding method fordetermin ngirscOsISuch cost ancnetgansfromoansales of$11.738 000(Sn. -19851 s fundedasaccrued. The cost ofthePantD theIB6D carngtheperiod Administrative expenses are net of the management fee of wasS66.904090 966415000-1985;A conrribuiions to thePlan 3280.750.000 $273.180.000-198) chaaged totnenternational De- andallother assetsandinccme heldforthepu coses of thePar are velopment Associa-ion ard of the service ard support fee of hed bythe BRD separatey from theotne'assets anc ncome of the S3130.000 i$2975,000-1985) charged totoeInternational Fnance IBRD andlnterrationa Finance Corporatonandcan ce used onv for Corporat on.ContribLtions tos0ec alprograms represent grarts forag- Ihebenef r of thecaincoants inthePan andthoer bereficanes a urtil ricultfraresearch thecontrol of onchocerc asisannother cevelop- liab tiesrnthem nhave been d schargec. Thecompar son of accumu- menta activities. atedberefits ard netassets of thePlan is presentedbelow. At June 30. 1966principal instamoers of S16,322000 and nterest Actuarial present value of ancother cnarges of $7.787 000payab e to the BRD or oans other accumulated Plan benefits tnanthose referredto n thefcllow ng paragraphs wereoverdue by thoulsands iaUSS more thar three months Theaggregate princ pa amount d sbursed andoutsrancng onthese loans was$225.410.000 31 December AtJune 30.t986,theloans made to orguaranteec by Loerawlh an 1985 t98t aggregate prncipal balance outstand ng of $116.177.000. of whcn $5 194 030 was overdue. weren nonaccria status. l-theseoans had Vested S 791t52 5 672.006 notbeen in nonaccrua statas. income from loans forthef scalyear Nonvested . 48873 35.230 enced June 30. t986would have been $9025000h gher ODO.25 707236 For thefiscayear ended June 30 1986. thei9RD made a provision for available 'et assets losses onloans mace to orguaranrteed bny Nicaragua wth anaggregate ts . fo- enef . 5 727.597 St.247837 princica Oaance oLtstanc ngof $186.01 1 00 ofwhicn$20.543.000 wasoverdue. These oarshave been in nonaccrual status s nceDe- TheassLued rare used of retuOn nmng .0 deterrr theactuariapresent cember 1984Net income fcrthefiscayear ended June 30 1989 was vaueof theaccumulatec rs wast0. for 1965 t1 Plarbenef 0%for $13.730.000 $15.'10.000-1985) lower asa resu t of these loans 1984) oengin ronaccrual status ard $37.200 000ower as a result of toe prov siorforlosses onthese loans. Note G-Transfers to the International Development Association and to the Special Facility for Sub-Saharan Africa IBRD The has zed author transfers bhwoo tc of ranrsrhe n ernariona BRDFinancial Statements 181 Reportof IndependentAccountants 1801K Street.N.W Teephone202 296 0800 Washington,DC20006 PricefJjaterhouse 0 July 30, 1986 President and Board of Governors, International Bank for Reconstruction and Development In our opinion, the financial statements appearing in Appendices A through G present fairly, in terms of United States dollars, the financial position of the International Bank for Reconstruction and Development at June 30, 1986 and 1985, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting princi- ples consistently applied. Our examinations of these statements were made in accordance with gener- ally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. .o~ ! Financial Statements Covered by the Foregoing Report Balance Sheets ................................................... Appendix A Statements of Income ................................................... Appendix B Statements of Accumulated Net Incomiie-Unallocated ............................. Appendix B Statements of Changes in General Reserve ........................................ Appendix B Statements of Changes in Financial Position ...................................... Appendix C Summary Statement of Loans ................................................... Appendix D Summary Statements of Borrowings ............................................. Appendix E Statement of Subscriptions to Capital Stock and Voting Power ...................... Appendix F Notes to Financial Statements ................................................... Appendix G IDA Financial Statements 183 Statements Financial oftheInternational Development Association A Statements of Condition 184 B Statements of Income 186 Statementsof Changesin AccumulatedSurplus(Deficit) 186 C Statements of Changes in Resources Available for Commitment 187 D Summary Statement of Development Credits 189 E Statement of Voting Power,and Subscriptions and Supplementary Resources 192 F Notes to Financial Statements 196 Report of Independent Accountants 199 184 IDA Financial Statements Statementsof Condition Appendix A June 30, 1986 and June 30, 1985 Expressed Statements, in thousands of US dollars-see Notesto Financial Appendix F Assets 1986 1985 DUEFROMBANKS currencies Unrestricted availablefor disbursements (including interest-bearing demanddeposits $27,268-1986. $1.574-1985) ..... $ 187,367 S 314,285 currenciesnot immediately Unrestricted available for disbursements-Note A ........... .............. ..... .... 210.286 96.490 Currenciessubjectto restrictions-NoteA .41.082 41.891 438.735 452,666 INVESTMENTS-Note C Obligations of governments andtheir instrumentalities .648.364 106,172 Timedeposits of banksand financialinstitutions.... and otherobligations 85,461 126,990 733.825 233,162 RECEIVABLES ONACCOUNT OFSUBSCRIPTIONS ANDSUPPLEMENTARY RESOURCES-Note A Nonnegotiable, demand non-interest-bearing obligations Unrestricted.10,632,774 8,539,258 Subjectto restrictions, .59,873 59,720 Amountsdueon additionalsubscriptions resources and supplementary .. 189,619 204,571 Amountsrequiredto maintainvalueof currencyholdings-Note B 1,369 58 10.883.635 8,803.607 RECEIVABLES-OTHER Bankfor Reconstruction International F . and Development-Note . 524,920 1t142,339 Accruedchargeson development credits . 79,428 63,141 Accruedintereston investments . 7.017 2,581 611,365 1,208,061 DEVELOPMENT CREDITSOUTSTANDING (seeAppendixD) Totaldevelopment credits.39.592,134 33.997,301 .2,141.647 creditsapprovedbut not yet effective Lessdevelopmnent 2,697,742 Lessundisbursedbalance of effectivedevelopmentcredits.11,604,958 9,304,162 25,845,529 21,995,397 OTHERASSETS Notionalamountsrequiredto maintainvalueof currency holdings-NotesA and B . . 135.545 104,583 Miscellaneous .. 20,012 19,665 155,557 124,248 $38,668,646 $32,817,141 IDAFiancalSt8emnts48 Liabilities, Resource2s,3 Subscdptions, Supplementary and (Defici3) Accumulated Surplus Transfers) 19856 18 LIABILITIES~~~~~~~~~~~~~~~~~~~~~~~5 labiliDes Accountspayable andoUter .............. 2 85,409$ 364 to maintain amounts Notional requited of currency value holdings-NotesAandB..2231 5,310~~~~$38, 186 IDA Financial Statements Statements of Income Appendix B For the fiscal years ended June 30, 1986 and June 30,1985 Expressedin thousands of US dollars-see Notes to Financial Statements, Appendix F 1986 1985 Income Incomefromdevelopment credits-Note G Servicech arges..... ....... ......... ...... $$.......... 181.237 $ 157,944 Commitment charges ............................................. ......... 44.609 28,750 Incom1efrom investments ..... ...................................... ... 60.249 22.595 Totalincome........... ......................... ..... 286.095 209,289 Expenses Management Bankfor Reconstruction fee to International ..... and Development ......... 280,750 273.180 Operating Income (Loss) ..... ..................... ...... ....... 5.345 (63,891) adjustments Translation for fiscal year .9.......1............... ...... .......... 9,135 1692) Net income (Loss)-NoteG 6....... ..................................... $ 14,480 $ (64,583) Statementsof Changes In Accumulated Surplus (Deflicit) For the fiscal years ended June 30, 1986 and June 30, 1985 Expressedin thousandsof USdollars-see Notes to FinancialStatements, Appendix F 1986 1985 Accumulated Net Loss Balance at beginningof fiscal year ............ .................... .... ....... $(355,396) $(290,813) Net income(loss)tor fiscal year-Note G......... ........................... 14.480 (64,583) Accumulated Net Loss at End of Fiscal Year ...... .... (340.916) (355,396) Cumulative Translation Adjustments on Development Credits Balanceat beginningof tiscal year......... .................................. (181,925) 1110.606) Translation adjustments for fiscalyear ....... ....... .......................... 874,980 (71,319) Cumulative Translation Adjustments on Development Credits at End of Fiscal Year ............ ... .... ........................ 693,055 (181,925) Total Accumulated Surplus (Deficit) . ................. ............ $ 352,139 $(537.321) IDA inacia Staemets 87 108,76 1485 6 ~ ~~~~~~~~~~1167 Provided~ Resources PO lturingperiod.$1,014,195 $7,322,33~~~~~~5066 19514 00 FromMember'0n'SSug;200 3s1:655 begtnin of; v~~~omimn atDl period . t;000StfiS000500 5,754.224 00000t0000000 u020 150,000Eld;(ffffffut 0:J000 :f:f :p t00: :;f:ffiS l :o ff; :0:W:X: 150,00 ~~t'oaaiae comtmn 0:for atedo eid(8474 48524 188 IDA Financial Statements Statements of Changesin AppendixC Resources Availablefor Commitment (continued) For the fiscal years ended June 30, 1986 and June 30, 1985 Expressed in thousandsof US dollars-see Notesto Financial Appendix Statements. F Composition of Resources Available for Commitment 1986 1985* Unrestricted currencies.............. .............................. $... 397,653 $ 410.775 Investments ... ................ ... 733.825 233,162 Unrestricted receivables onaccountof subscriptions and supplementary resources ... 10.823.412 8,743.582 Receivables-Other ... ................... . ........ ...................... 611 .365 1,208.061 Otherassets........... ................. ............................. 33,172 32,848 Unrestricted subscriptions and supplementary resources not yet due .......... I....... 3,673.337 4,841,481 Subscriptions and supplementary resources not yet availablefor commitment ..... ...... (2.814,714) (4.835,264) Add net loss available for commitment, ........... .......... .................. 339.335 353,815 Lessundisbursed development credits(includingdevelopment creditsnot yet effective) and other liablilties. ................... ................... 1........ 13.831.995) (12,038.136) Total ................................ ...................... ...... $ (34.610)b $(1.049,676) *Recassoiied for comparative purposes a. In accordance withthedecisior of theExecutive DirectorsInat theAssociation's commitment authority notbereduced bytneamount ot deficilsduring rhesixthreplenishment period,the Association's resources availablefor commitment wereincreased bythe amount of the accumulated deficitsfortheperiod from July1. 1979 to Decemoer 31.1984. reflectingtheexpectation thatfuturencome wouldbeavailable to reduce theselossesLosses incurred subsequent to December 31, 1984 have reduced theAssociation's commitment Pending authority. a review of theAssociation's financial policies.income earned sytheAssociation afterthesixthreplenishment is notbeingused to increase commitment authority. Accordingly, theitem' . r.net lossavailable tor commitment' totalingS353.815,000 as ot December 31. 1984, has t been reduced o S339,335.000 bysubsequent income earned through June30,1986 x. Thenetbalance of resources oi $(34,610d000) shown asove represents Ui)$308,877.000 ol resources nha;have become asailable lor commitment andareincluded hereinbuthave notbeen allocatedto specificdevelooment credits and(I!)a shortfallof $343,487,000 which IS prmarilyattributableto exchange ratefluctuations ir thevalue, interms of current US dollars,of resourcesexoressec in othermemnber curren- ciesaroc provided in priorfiscalyearsThevaiue of theseresources at anygiven timemaybegreater or lessthanthedevelopment credits committed againstthem, since these development credits aredenomrnated in USdollars or SoRs IDA Financial Statements 189 Summary of Statement AppendixD Credits Development June 30. 1986 and June 30, 1985 Expressedin thousands of US dollars-see Notes to Financial Statements, Appendix F 30, 1986 June Development Percentage credits ot total TotaI approved tUndisbursedDevelopment development develooment butnotyet development credits credits orguarantor Borrower credits eftectivea creditsb outstanding outstanding Afghanistan .. . ........................ $ 81,821 $ - $ - $ 81,821 0.32 Bangladesh ........................... 3,727,152 174,633 1,252,537 2,299,982 8.90 Benin.................... .......... 224,273 12,247 72,475 139,551 0.54 Bhutan . ............................. 20.725 - 19,284 1,441 0.01 Bolivia. ............... ............. 176,544 72,067 8,462 96,015 0.37 Botswana. ........................... 14,769 - - 14,769 0.06 BurkinaFaso .......... ................ 319,737 - 150.871 168,866 0.65 Burma.. .................. 743,468 31,088 281,827 430,553 1.67 Burundi. .. .................. 272,266 30,735 84,858 156,673 0.61 Cameroon ........... ................ 242,019 - 12,884 229,135 0.89 CapeVerde............................ 12,718 - 8,964 3,754 0.01 Central AfricanRepublic..... ............ 103,649 12,129 18,580 72,940 0.28 Chad............ . 70,011 15,073 12,227 42,711 0.17 Chile ....... 1 7 , 3 2 1 17...321..... 17,321 - - 17,321 0.07 China .............. ...... 1,730,321 378,000 795,230 557,091 2.16 Colombia ...... _........... 17,659 - - 17.659 0.07 Comoros.......................... ... 34,458 - 11,716 22,742 0.09 Congo, People's Republicof the ...... ..... 73,450 - 4,795 68,655 0.27 CostaRica....... ....... .............. 4,203 - - 4,203 0.02 Coted'lvoire......................... 7.275 - - 7,275 0.03 ........ Djibouti ................ 28,262 - 19,101 9,161 0.04 Dominica ........................ 5,181 - 184 4,997 0.02 Dominican Republic ..... ..... ... 21,192 - - 21,192 0.08 Ecuador .......................... .... 34,547 - - 34,547 0. 3 Egypt, ArabRepublic of ........ ....... 940,197 - 113,462 826,735 3.20 El Salvador ..... ..... .... ... 25.436 - - 25,436 0.10 EquatorialGuinea... ....... 26,495 6,359 15,499 4.637 0.02 Ethiopia .. .............. .......... 836,686 69,123 306,182 461,381 1.78 Gambia, The ....... ............. ..... 65,324 6,241 21,137 37,946 0.15 Ghana.......................... .... 633,395 26.378 295,847 311,170 1.20 Grenada . ................... ....... 5,888 - 4,527 1,361 - Guinea-Bissau ....... .................. 70.469 - 20,083 50,386 0,19 Guinea ............ .......... 260,135 21,196 100,077 138,862 0.54 Guyana... ........... ............... 38,041 - 8,403 29,638 0.11 Haiti......... ...... 252,498 - 55,932 196,566 0.76 Honduras ............................ 81,106 - - 81,106 0.31 India .......................... ,. 13,896,623 219.028 3,743,192 9,934,403 38.44 Indonesia . .. 883.034 - 28,736 854,298 3.31 Jordan .............................. 81,730 - - 81,730 0.32 Kenya ........ . .. .............. 674,006 80,428 165,889 427,689 1.65 Korea,Republic of...... ...... 106,482 - - 106,482 0.41 LaoPeople's Democratic Republic ....... 58,338 4,122 19,266 34,950 0.13 Lesotho ... . 99,193 - 32,943 66,250 0.26 Liberia... ............................ 119,540 6,006 29,497 84,037 0.32 Madagascar . ....................... 518,628 56,052 123,377 339,199 1.31 Malawi . ...... ....... .. ........ 489,679 - 135,413 354,266 1.37 Maldives....... ........ 8,134 - 3,964 4,170 0.02 (continued) 190 IDA Financial Statements Summary Statementof Appendix D Development Credits (contned) June 30, 1986 and June 30, 1985 Expressedin thousands of US dollars-see Notes to Financial Statements, Appendix F June 30, 1986 Development Percentage credits of total Total approved Undisbursed Development development development butnotyet development credits credits Borrower or guarantor credits effectivea creditse outstanding outstanding Mali .... ........................... $ 432,456 $ 36,622 $ 146,377 $ 249,457 0.96 Mauritania..... ...... 128,869 8,479 47,638 72,752 0.28 Mauritius .... ........ 19,698 - - 19,698 0.08 Morocco ............................ 42,367 - - 42,367 0.16 Mozambique .......... ............ 53,580 - 40,054 13,526 0.05 Nepal .......... .................... 651,767 60,056 328,602 263,109 1.02 Nicaragua. ............... ....... 59,429 - 2 59,427 0,23 Niger......... ................. . 295,964 44,865 99,454 151,645 0.59 Nigeria .............................. 34,073 - - 34,073 0.13 Pakistan ....... .................... 2,452,472 109,396 851,955 1,491,121 5.77 PapuaNewGuinea........... .... 111,134 - 444 110,690 0.43 Paraguay ......................... ... 45,461 - 45,461 0.18 Philippines ............................ 121,181 - 32,921 88,260 0.34 Rwanda ... ........ ......... ..... 314,673 63,824 76,889 173,960 0.67 St. Vincentand the Grenadines ...... 24 8...... - 704 120 SAo Tome and Principe........ .......... 6,241 - 5,964 277 - Senegal . .. , 430,369 44,394 128,461 257,514 1.00 SierraLeone. . . . ........... 117,487 5,417 45,897 66,173 0.26 SolomonIslands............. 18,135 5,299 6,635 6,201 0.02 Somalia........ ........ ......... 283,985 35,916 44,523 203,546 0.79 Sri Lanka ......... ............. 850,558 120,230 274,504 455,824 1.76 Sudan...... ....... 932,655 36,505 340,185 555,965 2.15 Swaziland............... ............ 7,477 - - 7,477 0.03 SyrianArabRepublic ... ................ 45,758 - - 45,758 0.18 Tanzania .... ............. .... 887,913 91.851 190,722 605,340 2.34 Thailand... ............. 114,517 - 7,861 106,656 0.41 Togo... ....... .... ......... 258,926 7,419 94,090 157,417 0.61 Tunisia ... .............. 64,977 - - 64,977 0.25 Turkey .. , 175,508 - - 175,508 0.68 Uganda. 586,352 - 251,707 334,645 1.29 Vanuatu, ........................... 4,475 2.238 1,994 243 - Viet Nam........... ...... 60,000 - 2,586 57,414 0.22 WesternSamoa ................. ..... . 19,421 - 8,932 10,489 0.04 Yemen ArabRepublic.... ....... 445,027 62,411 133,261 249,355 0.96 Yemen,People's Democratic Republic of 183,952 - 56,545 127,407 0.49 Zaire ........................... 794,718 115,637 255,511 423,570 1.64 Zambia ............................. 284,186 70,183 113,505 100,498 0.39 Zimbabwe .............. .......... 56,406 - 16,987 39,419 0.15 Subtotalmembers .................. 39,547,069 2,141,647 11,582,331 25,823,091 99.91 ff 0kpWaA S StS S St W = ,~~~~~~~ID Fiaca S :ttens 19120:X;0\S000000 W: ;SXt 2 0i0000at00SDgat0050iSStXgaSSiS ;0000000000fSS0XiteifV00000X0020000iSt00000Xj00000Xt;0i000 0June30, 1986 0A:AS fi ; : ;t0;04;;i;i;t0200;0i0000;020 5;4450\0 ti0002022000;020 t00;00200;;;;;;0Development t;;;d9 j0;;;f;;t;000X; Percentagen o'S0l(SS;)0000000000 fi;$0 ff0 t00000;fta00000000 fitC;g0000V0000000;0fi00000 t0-0000000icredits. 01tcAaltStSee0fff045500f 000004 ;g$00g000000j 00 ?000;00;000 0;t00400000 j$t0t0000Total : : approved gg$0f isbersed Development Urid 00000;0;00;000l0 developmenttt00000000 ;df0000tA;;;tt#0gEg;Edd 4 00EdLEt;;;i Xit;t00 7Etiti $ftideveloipment bid notyet tb; development t\t 90 g0:i; w credits t00 -0: t00 cr:dott:s0 5 Borrower gSf uor000tarant0 or0f\kS0ffX0S0;00XtffSXAf(0t0tdXTttV0t0fTff crdts0 ' etlecfti0000vecrediSfAuSfffffffts ff03-'ff'$otstndn notain R'E0S eS dSA:gional' E00Ht00SS lopm Adeve0:t40S; ba t;S 0;40nk ;S 0400en t0t0uSkE;40S44Ag;f iysSyi^ t7 eAg0SSN:t AAX0' 004T;40i;0g e W:,lg0000 0's S Atr00000 tS Devlopen icanfV00 00 8an EDii k 40S;fS y 00ig 0 g 18,080i at'0 Su0 agS000000S -f ;SuE 14,20Sla00) 4,10 04D 0.0 Caibea $00000000ti00 Bano.1,65 Developmen000000000 t0t00 -ii00000i 28,400ti00000000000000 3 623 002 Sboa reinld_lpetbns3292- 2,2 03600 0the r0000 ti00t0j.12,103 - - 12,103 0.05000000tdv00000m0000000?tagehy0;0 30, 1986 tE0000g0;Total-June ...... $39,592,134 ..... $2.141,647 $11,604,958 $25,845,529 00.000f0;00|:0:00:4005i} 1............. agee nt totaling a, Deeopet creit0X;ieo $t2o,02,D (s7,1466,OD1 tess beesigned, bu hedvlomn creits d no0t beom eteteaddsusmnsteene ont tr ni h orwr aecranatin n onslcrandcmnst h b.0 inld ThesamountsX ,?63,000-1986 31604 000($21$iee ret 01 nt parilflCrtgQicipaions., grea preen Th eXeganpaMftiiairge ion onai 0 t pati cipatW grn ai.tke C uorotdvlpetcrdt ne :wo h tems01ol cooeraio agemet betwee mebe cou tries andthe: : Asoito.0 Ie nibre 0 3< 0, aac atJun irrevocabl 96 h Asocato ha ee00 0tered 010 191,216,0000 com iStnienttodsbne$ \fff00000 0 eCt$2,520Sk0D| j 000! V 000t00CSt;SStC000iSS0S00ff Ci;Sft00-'-1985). SS;:X 0$:V:02000l)ffUtsA00S00XS0t0g;ft0SAdAS : Th40fff0feseV0000: d evelopent:jj0; oASE00:40:f for creiVut00s thSe 0are benefitoSEVf; BurkSu} Bein,EE P aso 0( :f:t0SinaCOts dIvo02ire, tNigr d Togo. an0:D 20Senegal.0 daThesv de0tt000ti >$000 ; fare0 elopment0;0; j credit or0 thet bene0t$;gGrenad 42fit of;t ; and i l es: ;territor( l e Jte 4 tci4 ( Asotae State sodDependencies)in Kingdom;; toe Caribea09egmn<0 $$X 00g;; 0 ;0 a;S)g00 0A;;t09000i0Sti 0 iSSaiV;0 0 00;};i;2;04..j0-i;s;-0i;jfL At 192 IDAFinancial Statements ofVotingPower, Statement Appendix E and Subscriptions and Supplementary Resources June 30, 1986 and June 30, 1985 Expressedin thousands of units of currency-see Notes to Financial Statements, Appendix F June 30, 1986 Amounts of Amounts of subsequent subscriptions subscriptions andsupplementary and Total subscriptions resourcesthrough the suoplementary ard supptementary thirdreplenishment resourcesa resources Expressec Expressed Expressed Expressed power Voting in in in in Nurnoer Percentage special current current current Percentage of of drawing US US US of Membersb votes totalw rights dollars do.tars collars total Part I Members Australia ....... 74.233 1.42 111.980 $ 135,362 S 586.126 S 721.488 1.82 Austria ... II ... 33.635 0.64 34.560 41,797 245,051 286,848 0.72 Belgium.............. 62.791 1.20 77700 93,865 481,292 575.157 1.45 Canada ..... . ... 173.676 3.31 304,530 368,219 1.437,125 1,805,344 4.55 Denmark ......... r. 49,478 0.94 70.840 85,790 325,524 411,314 1.03 Finland.. ... 29.006 0.55 22,448 27,156 191,485 218.641 0.55 France . . 196,605 3.75 362,032 437.404 1,580.936 2,018.340 5.08 Germany, Federal Republic of. ....... 367,560 7.01 476,560 575,775 4.042.302 4,618.077 11.63 Iceland.. ........ 11.931 0.23 550 664 3,476 4,140 0.01 ireland............... 15,068 0.29 7,030 8,489 36.350 44,839 0.11 Italy 34,820 1......... 2.57 193,240 234,465 955.340 1.189.805 3.00 Japan .. .. 437,435 8.35 285,320 344.757 6,703.629 7,048.386 17.75 Kuwait ...... .... 57,762 1.10 22,920 27.724 543,112 570.836 1.44 Luxembourg ...... .... 12.695 0,24 2,550 3,078 15,864 18,942 0.05 ........... Netherlands 103.559 1.98 141,080 170,238 1.029,564 1,199,802 3.02 NewZealand .. ... .. 14,673 0.28 5,634 6,797 29.728 36,525 0.09 Norway ............. 46,972 0.90 49,320 59,572 325,414 384.986 0.97 SouthAfrica ... 1..... 16,494 0.31 20.080 24.250 25,038 49,288 0.12 Sweden... ........ 118,063 2.25 206,225 249,117 819,375 1,068,492 2.69 UnitedArabEmirates . . 15.942 0.30 - - 136,464 136,464 0.34 UnitedKingdom. 338.259 6.45 694,300 839,507 2,776,670 3,616,177 9.11 UnitedStates.. . 975,481 18.61 2,072,290 2.504,542 9.390,000 11.894,542 29.95 Total... .......... 3,286,138 .62.70 5,161,189 $6.238,568 $31.679,865 $37,918,433 95.48 Part 11Members Afghanistan... . . 13,557 0.26 1.049 1,238 76 1.314 0.01 Algeria. ...... ..... 18,481 0.35 4,186 4,941 174 5,115 0.01, Argentina ....... .... 81,053 1.55 19,720 23,283 25,303 48,586 0.12 Bangladesh .... ... . 32,025 0.61 5,589 6,597 196 6,793 0.02 Belize ....... . 1,788 1.... 0.03 200 234 2 236 Benin .. ......... 1,800 0.03 500 590 6 596 Bhutan. . 510 0.01 50 59 - 59 Bolivia . 13,748 0.26 1,101 1,300 - 1,300 0.01 Botswana ....... ... . 11,726 0.22 166 196 5 201 Brazil .... ...... . 90.221 1.72 19.720 23,276 40,685 63,961 0 16 BurkinaFaso ......... 9,720 0.19 519 613 18 631 Burma ... ...... . 18,974 0.36 2,099 2,477 142 2.619 0.01 Burundi ........ ... 12,667 0.24 790 932 53 985 Cameroon..... .... 9,214 0.18 1,049 1,238 34 1.272 CapeVerde. 516 0.01 80 95 95 Financial Statemets IDA~ 193 Amontso Exrse xrExpresxprsse Epressed Voting ~ ~ psn~ inii Number Percentage special cret crfrent currenit Percentage of of crawing SUSus o Mamnbarst votes utots iints, Oolls idlanlrs deiars Iotal Part 1IMembers(continued) African Central Repuiblic 9.20 0.19 519s$ 1 3 3 C h a d~~~~.. 3,293 0.06 519 613 6 619 Chile.~~~~~24,844 0 47 3,667 4,328 ~ 36 4,364 0.01 Chtina.99.836 1 91 3143 37,105E 902 38,007i 0.10 Coombia .23.78 0.45 3,717 4,387 3,896 8,83 0.02 Comoros .5.74 0.11 83 98 2i 100 Congo,Peoples Rep.of the...6,685 0.13 519 ~613 11 624 * CostaRica .7,844 0.15 208 246 3249 dilvoire Cote 7,771 0.15 1,049 1,238 22 1,260* Cyprus.14,051 0.27 790 932 48 980 * Ditbouti..... 532 0.01 160 191 * 191 Dominica .... 3,186 0.06 80 95- 2 97 DominicanRepublic . .. 12,677 0.2 435 514 60 574~ * Ecuador .13.473 0.2 676 87M485 ArabRepublic Egypt,~ of 28,424 0.54 5.277 6,229 258 6,47 0.062 El Salvador . 6,244 0.12 331 39 639 EquatorialGuinea . 1,967 0.04 332 39239 Ethiopia .13,048 0.25 539 636 4267 Fiji2,130 0~04 581 686 68 Gabor. 2,093 0.04 519 ~61461 The. Gamnbia, 10,644 0.20 277 327532 Ghana. .. 15,362 0.2 2,452 2,894 3 2,897 0.01 Greece...21.272 0.41 2.618 3,143 5.365 858 00 Grenada .10,16 0.19 94 110616 GuatemTala . 12,567 0.24 415 490 30 50 Guinea.13,557 0.6 1,049 1.~23870 138 .1 Guinea-Bissau ... 528 0.0 140 16516 Guyana. 12.859 0.25 842 994 3 .2 Haiti.14.051 0.27 790 932 6 9 Honduras . 12 254 0.23 i 311 367 2 9 Hungary. ..... 31 .039 59 0. -- 997 997 00 rindia. 168079 3.21 41.919 48,830 ~ 2,487 5137 03 IndoneSia . ~54,280 1.04 11.531 13,611 435 1406 .4 Islamic Iran, Republicof 15,455 0.2 4,717 5.690 15 585 00 Iraq 9,407 0.18 790 9323k7 Israel..... 9,386 0.18 1,745 2,~104 26 240 00 jordan.12.218 0.23 311 375 2 9 Democratic Kamrpuchea. 7,826 0.15 1,060 1,2516 1,5 Kenya....16,021 0.31 1,745 2,062 6 218 00 Republiis Korea, of.17,054 0.3 1.309 1.55 10,939 1244 00 (cnZud 194 IDA Financical Statements Statementof Voting Power, Appendix E and Subscriptions and Supplementary Resources (conpuad) June 30, 1986 and June 30, 1985 Expressedin thousands of units of currency-see Notes to Financial Statements. Appendix F 30. 1986 June Amounts of Amounts of subsequen: subscriptlons suoscriptions andsuppiementary ard subsc,fpt.ors Total resourcesth-roughthe suoplemertary arc supolementarv thid replenishm,rert resources. resources VotTqpower ErEssed Exp essed Expressed Expressed V___ng___ __ __ _er _ in in Ir,i Number De-centage special cu rent curreoit aurrert Percentage of of dcaming US US US of Members votes total rights dollars dollars collars total Part It Members (Confttnued) LaoPeople's Democratic Republic ....... 1',.723 0.22 519 $ 613 S 7 $ 620 Lebanon....... 8,562 0.16 467 552 2 554 Lesotho---- - 10,487 0.20 ' 66 196 4 200 Liberia - - - . 13,867 0.26 790 932 63 995 Libya - - . .. 7777,2 0.15 1 049 1.238 29 1.267 Madagascar ...... ... 702 C01 I,010 1,192 - 1,192 Malawi. .... - 14,051 0.27 790 932 31 963 Malaysia . -20.888 -. -.-. 0 40 2,618 3.090 184 3.274 0 01 Maldives ...-.... 11,215 0.21 31 37 2 39 Mali 13,507 0.26 904 1.067 60 1.127 Mauritania ... 6,685 0.13 519 614 11 625 Mauritius - 14.464 0.28 924 1,091 36 1.127 Mexico 25.867 0.49 8,740 10,400 17.222 27.622 0.07 Morocco 24 844 0.47 3,667 4.328 148 4.476 0.01 Mozambique. - 774 0 01 1,370 1.588 - 1.588 0.01, Nepal. .... 12,923 0.25 519 613 24 637 Nicaragua 10,896 0.21 311 397 13 410 Ntger . . 12,899 0.25 519 613 29 642 Nigeria ....-.-... 4,057 0.08 3.491 4,133 -" 4.133 0.01 Oman . . .. 12,257 0.23 331 391 24 415 Pakistan 50,396 0.96 10.582 12.490 515 13.005 0.03 Panama 5.657 0.,11 21 25 1 26 Papua New Guinea . 13,050 0.25 894 1,055 47 1.102 Paraguay .... .... 8.124 0.16 311 368 13 381 Peru . ..... . 854 0.02 1.770 2.090 - 2,090 0.01 Philippines ....... ... 16.583 0.32 5.296 6,251 98 6.349 0.02 Rwanda. ... -.-.-. 12.667 0.24 790 932 56 988 St. Lucia ... .... 10.445 0.20 156 183 11 194 St. Vincentand the Grenadines .. . 514 0.01 70 82 - 82 Sao Tome and Principe . 514 0.01 70 83 - 83 Saudi Arabia.143.973 2.75 3.700 4.368 1,215.000 1,219.368 3.07 Senegal ... 17,221 0.33 1,745 2.060 96 2,156 0 01 Sierra Leone .... ... 12,667 0.24 790 933 10 943 Solomon Islands ... 518 0.01 90 108 ** 108 Somalia 10.506 0.20 790 932 4 936 * Spain.65,530 1.25 12.590 15,196 96.864 112,060 0.28 Sri Lanka .. . .. ... 22,873 0.44 3.148 3,715 100 3.815 0.01 Sudan . _..... .. . 13,884 0.26 1,049 1.239 30 1.269 Swaziland.. .......... 1.073 0.21 332 392 9 401 Syrian Arab Republic . 7.651 0.15 987 1,165 34 1,199 IDAFinancial Statemnents 195 30 1986 June nshscriptions subscriptions nduplmntary anda Total subsCfiptions hrnEthe i spplementary Oeocn andsopplomentary repenrshmex third resburons~ resources~ Voting Expressed Expressed power Expressed Expressed n _______________________ n~~i i in special Piomoer Percentage curret current current Percenttage of Of oan USU'S us of Mer'onrs~~~ sates tots 596's ticdotfars dolars do1are total i Mebers (corttunued) Part Tunisia. . .2,793 0.05 1,569 1,~~~ ~~~ 42 ~~~~~852 1,852 0.0 Vanuatra . . . 1,784 003 ~~~~ i ~~~~~19 223 2 2510 O Yemen Republic Arab 11,468 0.22 448 527 20 5~~~~~~~22479 O Zambia . .1,3 .82,9 ,9 9 3,317 0.01 GrandTotal- Juno30,1986 7 100.00 5,240,71 $6,586,486 $33,1 25,675 $39,712,161 SDR 5,455,634 100.00 Total- Grand Juhne 30,1985 .5213S 5.5,6 $657,7 29,567,633 $36,114,911 I a, n oe sbcptin andsoppementar resources underthef'ourth replenishments, throughse,Venth A~ccount. andtheFY84 b. Se pedxFNt .fr nepaa fteto categories of members tn c. otama su ofindvidal ercntaesbecause diferfro of rounding LessthI 0.0 percet 196 IDA Financial Statements Notesto Financial Statements AppendixF June 30. 1986 and June 30, 1985 Summary of Significant Accounting ket rates onthe dates ot exchange in respect of disbursement of and Related Policies those amountswhichhave been disbursed intoanother or converted currency. Translation of Currencies TheAssociation is aninternational organization whichconducts itso- Development Credits inthecurrencies erations ofaflot itsmembers andSwitzerland. Assets Allof theAssociation's development creditsaremade to membergov- aretranslated andliabilities at market rates of exchangeattheendof ernments orto thegovernment of a territory of a member (exceptfor theperiod, Income isgenerally translated at anaverageof themarket fourdevelopment creditswhichhave been made develop- to regional ratesofexchange during in elfhect each month. Subscriptionsandsup- ment banks of members forthebenefit orterritories of membersof the plementary resources aretranslated in themanner describedbelow. Association). The hasnotsuffered Association anylosses ondevelop- Translationadjustments relating to the revaluationof development ment credit receivables and nolosses areanticipated. should However, denominated credrts in specialdrawing rights (SDRs)arecharged or such arise losses theywouid beincluded of net in thedetermination credited to Cumulative Translation Adjustments on Development income. Other Credits. translation adjustments areincluded inthedetermination Therepayment of theAssociation's obligations developmentcredits fundediTom through resources the filth replenishment in areexpressed thedevelopment credit agreements interms of 1960 dollars.Nodeci- Valuation of Subscriptions and sionhas been made asto thestandard of value to besubstituted for Supplementary Resources 1960 dollarsin these agreements. Pending a decision onthismatter, thefinancialstatements havebeen presented using $1.20635 asthe The subscriptions andsupplementary resources provided throughthe standardof value in measuring thesedevelopment creditrepayment thirdreplenishment areexpressed interms of ffSdollarsof theweight obligations andpayments arebeing accepted onthatbasis. If a deci- and tineness onJanuary in eftect 1. 1960" (1960 dollars). On April1, sionwere made to substitutea standard ofvalue other than$1.20635 1978. theSecond Amendment oftheArticles ofAoreement oftheInter- adjustments would be requiredto Development Credits Outstanding nationalMonetary Fund (theFund) entered intoforce andSection 2of and correspondingly to Cumulative Translation Adjustments. The theParlValue Modification ActottheUnited States (31U.S.C. 449) was amountsof such adjustment would be dependent ontheextent towhich repealed.Asa result, currencies nolonger have parvalues, goldis thenecessary changes could bemade in individual creditagreements abolishedasacommon denominator, andtheprovision ofUnitedStates andthetiming of thedecision. Development credits funded fromre- lawdefining theparvalue oftheUSdollar interms of golddisappeared sources provided under thesixthreplenishment andthereafter arede- and,withit, the preexisting basis fortranslating theterm"United nominated in SDRs: the principal amounts disbursed undersuch States dollarsoftheweight andfineness ineffect onjanuary 1, 1960" areto bereDaid credits inamounts equivalent to thevalue ofthedis- intocurrent dollarsorintoany other currency bursements in terms of SORs. The General Counsel of theAssociation hasrendered a legalopinion concluding in substance thatin theexercise of theirstatutorypower Investments under ArticleX o0theAssociation's Articles, the Executive Directors mayinterpret references in the Articlestothe 1960dollar to mean either Investment are recorded securities atcostor amortized cost. Gains or references tothe lastofficial valueofthe 1960dollarin termsofcurrent losseson salesof investments,measured by the difference between US dollars (thatis, $1.20635) or references to the SDR as determined averagecostand proceeds of sales,arerecorded as an element of in- fromtimeto time by the Fund.with the effectthat the mutualobliga- comefrominvestments. tionsofeachmember andthe Association with respect to maintenance of valueof certaincurrencyholdingswill either be measured on the basisof $1.20635 or on the basisofthe SDR. according to the decision Note A-Unrestricted Currencies Not ofthe Executive Directors on the standard of value.Pending suchdeci- Immediately Available for Disbursement sion.the Association hasvalued the subscriptions and supplementary and Restricted Currencies resources throughthe third replenishment on the basisofthe SDR as computed by the Fund,and expressed such valuein termsof USdol- Underthe ArticlesofAgreement and the arrangements governing re- larsat $1 17757 per SDRon June30, 1986jSO.998281 perSDRon plenishments. the Associationmusttake appropriate stepsto ensure June30, 1985) for amounts undisbursed atthe end ofthe period.Such that, overa reasonable periodof fime, the resources provided by do- subscriptions and supplementary resources disbursed priortothe end norsfor fendingby the Association are usedon an approximately pro ofthe period arevalued at the marketrates of exchange in effecton the rata basis.Donors sometimes contributecashsubstantially ahead of dates ofdisbursement. Expressing thevalueofthesesubscriptions and pro rata.Unlessotherwise agreed,the Association doesnot disburse supplementary resources in terms ofthe SOR ratherthan in termsof thesefunds ahead ofpro rata.Unrestricted Currencies NotImmediately $1.20635 doesnot have a materialeffect on the financialposition Availablefor Disoursements represents thedifference between the cash or resultsof operations of the Association. If the valueof thesesub- contributedand the amount available for disbursements on a prorata scriptions and supplementary resources were expressed in oasis. terms of $1.20635.the amountof Subscriptions and Supplementary Themembership of the Association is dividedinto twocategories(1) shown Resources rn the Statement would o1 Condition have Part I members. who payallsubscriptions andsuppleMentary Te- Increasedby $56 2110000 to-1360493,7799950 would to sources provided to the Association in convertible currencies which $31,306,950,000-1985). maybe freelyusedor exchanged by the Association in its operations; The subscriptions and supplementary resources providedunderthe (21Partfl members, whopay10 percentoftheir initialsubscriptions in fourthreplenishment areexpressed andthereafter in members' curren- freelyconvertible currenciesand the remaining 90 percent of their ini- ciesor SDRs andarepayable in members' currencies.These resources tial subscriptionsand all additional subscriptions andany supplemen- aretranslated(1) at marketratesol exchangefor amounts receivable tary resources in their own currencies or in freelyconvertible curren- and for amountsreceivedand not yet disbursed,and (2) at mar- cies. The Articlesof Agreement of the Association and subsequent IDAF Statments0 197 dinan seda tiotn. amuts ft$41082,000 jf;jThe;00 ($489 ;000-1985une vlue0 amontar0000Te dgetermnred an the thebat ofe difeec between 000thet0;0;: 0A frothgf hLfeadtingof ue Banks $80223000f ($6002,00- 98snt0frs5S) in- markeSt ra¢tdeso ecangs f o curnies edin we telrms ofSOsand the r at000| gte 0:000;00 PartmeberpainbyitmanteuedyteAsiatonfor ue, a provisiona settement ofmaintenane o ue ismeot SupeenayReoresad$2014 000l8,8,O-95 ;200timingDof es ;talishmntan stlemen t of 9thee otiona t0f0l d Re-00ts Amoun 0 ~ ~~ ~~ -~ ~ ~ ~ ~ ~~~~~~~~~~~h make valu ofinvestment seurtis inldn invstmnt not Aril IV Secio 2 ofth soitinsAtcesofArentpvis taddn th make whc wer vaue at:thei cos ofE $891 00 wre mintenacef the00 for00000000 tosc restricti value,s fthetieof subsrN.ip1tion,0 of cu- ; jthe 00 ($2,90: 000 -18) was$770200(252300t rec amut representing ; aitSeach 00pe;reniti member's0 iniiasu- comparedt; wt h aS00 2 cos or0amrtze cost of $733,325,000 scipin,s ln as, andtoth exen tht suchcurec ha no t 0 l$331200 0-t5(.50 t0ES ' ; ATj4X been disbursed initially orexchangedforthe of currency mem-'Sl:00 another 000C 6,585,486 : S ber.fhis)ection reducedor0 . requires thefoeg : W1): that inthe ments0iotheAsociation the;member ;00;00:;:0the event exchange value 000000004000000 of make toS parvalue of curren has,in its0currency addoal pay- d Not is0 cy0; it0s 002 the pin ;iSuAV00;ssocia00 ;tion Th;002000e ha;dsX-~~~~~~~~~~ ef-ContribtionbyS wterlad2 1 251 grantScontrutio in the amount received 0160 iono sc n f t i00 ha c t 198 IDA Financial Statements Notesto Financial Statements (continued) Appendix F June 30, 1986and June 30, 1985 The amounts aggregate notyetduewillbedueasfollows: itstotalsubscriptionand contribution andtopay theremainder suoject toenactrnent ofthenecessaryappropriations The legislation. resolution provided of unqualified thatif notifications commitments bytheUnited years Fiscal 1986 1985 States ior in theaggregate, 66 cercent or 100percent of thetotal amount of itssubscriptionandcontribution have notbeen received by 1986. S - $1,532,720 October 31, 1985 andOctober 31, 1986,respectively, theother con- 1987.2. 603,861 1,809,450 tributorswould havetherighttoreouirethattheamount of thesecond 1988. ....... 225.468 - orthirotranche (whichevermay beapplicable) oftheirsuoscriptionand Undetermined .844.264 1,500,000 contribution available forcommitment bereduced In proportionto the Total.$3,673,593 $4,842,170 shorttallinunqualified commitmentsbytheUnited States. On January °__________ -__________ 31, 1986,theUnitedStatesprovidedan unqualifiedcommitment of $669,900,000 in respectofthe second tranche.bringing its aggregate Includesthe portionof the unitedStates whichis qual- contribution unqualifiedcommitment to 63.1 percent of the totalamountof its sub- lted as describedbelow. scriptionand contribution. A numberof countrieshavewaived their right toreducetheircontributions andhaveagreed to release their sec- TheFY84Account o1special consists contributions by certainmembers ondand third tranches. Asof June30, 1986.the amounto1 subscrip- ofthe Association made pursuant toarrangements approved by the As- tions and contributionsavailable for commitment on the basisof the Executive soctation's Directorsin October1982 pendinga further re- resolutionor such waiverstotaled the equivalent of $6,804,229,000 plenishment ofthe Association's resources. and the remaining balance in the equivalent o0 $2,814,714,000 was OnAugust 6, 1984, the Board of Govemors adopted a resolutionautho- subect to the above-mentioned restrictions. rizing a seventh replenishment of the Association's resources, in an amount equivalent to approximately $9 billion(atexchange ratesdeter- Note F-Transfers from International Bank minedpursuant to a tormulaagreed amongthe contributing countries) for Reconstruction and Development to provide fundsforcommitment oncredhsovertheperiod July 1. 1984 through June30, 1987.Thereplenishment became eftectiveon March TheInternational BankforReconstructionand Development (1BRD) has 31, 1985.Atthatdate,notificationshadbeenreceivedtroml7contrib- authorizedtransfers by way of grants to the Association totaling utingmembers (including 14 PartI members) thattheywouldcontrib- S2,219,000.000 ($2,069,000,000-1985) from net income of the ute the equivalent o1$7,343.696,000 to the seventh replenishment. IBRD forthe fiscalyearsended June30, 1964 thfoughJune30, 1985. Subsequent to March31, 1985 but prior to June 30, 1986, further Of this amount,$79,905.000t$79.905,000-1985j has been dis- notificationsof contributions in the equivalent of$1,316,413,000 were bursedforgrantsfor agricultural research and forthe controlofoncho- received increasing the totalnotifications ofcontributions tothe equiva- cerciasis.Ofthe balance of$2,139,095,000 ($1,989,095,000-1985) lentof $8,660,103,000. Payment of seventh replenishment subscrip- availablefor generalpurposes of the Association, $1,614.175,000 tions and contributions is due in threeequalannualinstallments, un- ($846.756,000-1985) has been received and $524,920,000 lessthe Association agreesto a differentschedule. ($1,142.339,000-1985)is retlected as a receivablefromthe IBRD. For purposes of creditcommitments by the Association, all subscrip- Note G-Income and Expenses lions and contributions to the seventh replenishment aredividedinto threeequalannualtranches.The first tranchebecame available for TheAssociation paysa management fee to the IBRD representingits commitment asof the effective date of the replenishment (except tothe shareofthe administrative expenses incurred by the IBRO. At June30, extentalready available in the formofadvance contributions);the sec- 1986, principalinstallments of $722,000 and service and commitment ondtranchebecame avainabte for commitment asof November 1, 1985 charges of $1,561,000payable to the Association on development except as noted below.andthethird tranche will becomeavailable asof creditswereoverdue by morethan threemonths.Theprincipaldis- November 1,1986. bursedand outstanding on these development credits amounted to in its notiticationof participation in the seventhreplenishment, the 8243,923,000. It is not anticipatedthat thesedelaysin payments will UnitedStates committed itseltwithoutqualification to pay one-third of resultin any lossto the Association. IDA Financial Statements 199 of Indepedn Reot conat 1801K treet,NW. Teephone 202296 0800 ~ Oev~ ~ ~~~~asntn D 00 and Bo Presiden rdoGoernrs acpeadiigsta ndrsadacrigyicue uhtsso h accontin reodDn sc te audi toing prcdrsaFecniee eesr ntecrusacs Special Fund Financial Statements 201 Finacia Special Sttemnts ofthem Fund Admiistred y IA ad theSpecialFacility forSubSahranAfrca dmiistredby IDA SpeialFun Adiniterd by IDA A SaeetofCodtn20 B Sttemets f Chnge in esorces Available for Comnmitment 203 Staement C Summry f SpeIal Fund Cred'its 204 D ttmnso otiuin 204 Afrca dmiistredby tDA B Statemen ofCane eorces 6n Available for Commitment 208 C SumaryStatmentof Sb-Sharan African Facility Credits 209 D ttmn f otiuin 209 to Fianca E Note Statements 210 Repr o nendnt Acco'untanrts 211 202 Special Fund Finainciat Statements of Condition Statements Appendix A June 30. 1986 and June 30, 1985 Expressedin thousands of US dollars-see Notes to Financial Statements, Appendix E Assets 1986 1985 DUEFROM BANKS currencies . .... Unrestricted ......- -.-- -.- . . . . .. . ....... $ 20 4110 S 33,351 INVESTMENTS ........ ................. 43.387 44.775 RECEIVABLESONACCOUNT OFCONTRIBUTIONS non-interest-bearing Nonnegotiable, demandobligations. ......... 372.394 325,537 RECEIVABLES-OTHER Accruedintereston investments. ... .. . .. . . 55 262 $436.246 $403.925 Liabilities, Undisbursed Contributions, and Accumulated Income LIABILITIES Accountspayable $ $ 12 UNDISBURSED CONTRIBUTIONS (see AopendixD) Contributions .. . . . ........ ..... ... 526,611 453.698 LessSpecialFundcreditsdisbursed(seeAppendixC) 105.850 57,002 420.761 396,696 ACCUMULATED INCOME FROMiNVESTMENTS Beginning of tiscal year ... ... ... .. ......... ...... ... .. ........... 7.217 2,051 Income for fiscal year . . ... ... 8,268 5,166 End of fiscal year . ... ....... ... . ..... ... ... . 5... 15.485 7.217 $436.246 $403,925 SpecialFund Fnancil Statem~ents 203 Statements ofChanges in Appendi0x B Resou~,Yercs : :r:the Aviabefr ForfffT;; fiscalyeasened xJune30,12986an J0une 30,19850 i00:00000 Xai00000fF\ omimn f000 fXCfft: Expresosednthofusands ofUS6eas-e Ne t a eix -1986 1985 Adjustmen offf s re00 Contributions ourcviesgl $~~~~~~~~~~~~~s $ 64,478 provided pr0000ior in000000 years fEiscal as0000 air;iesultji; offfdV4i ;;t00 i00 )jS0ifC0$f Incomefrominvestments.~~~~~~ ~~~~~8,268 5,166 net(eprecitions)72.913 curency apreciaions (384 aporved Reduction in oriorfiscal ofSpecial year(12,379) Fundcredit o0theappecition00; X00dQX0f (depreciation)tggt o000X0;S; interm of th USdollar 0;f 69,621 (16,135) Totalresourcesused (provided).69,621 (28,514) Incr~~~~~~~~~~~~~~enase; Reouce Avial for Cmien.11.55.> in I-0 ; ;074,314 Beginningof fiscal year (2,187)(7,501) End of fiscal year $~~~~~~~~~ 9,373$(287 Unrestricted .. currencies ~~~~~~~~~$ 20,410 33,351 Investments..43,387 44,77 5 Receivable on account of contributions.37~~~~2,394 325,53 Receivables-Other.~~ ~ ~~~~~~~~~~~55 262 Lesndisbursed8 Spca Fun crdt an acout paal.4683 X ed (405112)00 Total . .. $ ~~~~~~~~~~~~~~~~~9,373S(217 \ tf X Ss SE S E S SX \: U e 0 A f S A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 204 Sp6ecial Fund Financial Statements SummaryStatement of Appendix C Special FundCredits June 30, 1986 and June 30, 1985 Expressed of US dollars-see Notesto FinancialStatements, in thousands Appendix E June30, 1986 Percentage Special of total Total Fund Special Special Undisbursed credits Fund Fund SpecialFund dis- credits Borrower credits credits bursed& disbursed Bangladesh............ .... ....... .... $ 24,376 $ 24,376 $ - - Benin . . . . .9,328 5,406 3,922 3.71 China ha. . 61,925 31,619 30,306 28.63 Ghana ha. . 38,963 24,771 14,192 13.41 Guinea-Bissau ............................. . 4,418 2.352 2,066 1.95 Haiti 13,876 . ... 11,466 2,410 2.28 India . 204,751 . .. 204,303 448 0.43 Kenya . .. . . ................................. 44,511 44,503 8 0.01 Madagascar ........ .................. .... 30,850 15,754 15,096 14.26 Malawi ....... .. ... ......... ... . . .... . 15,141 12,602 2,539 2.40 Mali .. . 12,145 8,185 3,960 3.74 St. Vincentand the Grenadines . .4,506 3,029 1,477 1.40 Senegal . .20.280 14,496 5,784 5.43 Sudan. 11,195 10,511 684 0.65 logo.18,711 - 18,711 17.68 Yemen,People's Republic Democratic of . .11,485 9,468 2,017 1.91 Zambia . 6,262 4,032 2.230 2.11 Total-June 30. 1986 $532.723 $426,873 $105,850 100.00 Total-June30, 1985 $463,102 $406,100 $ 57,002 rates a. At market in etfect of exchange dates at therespective of disbursements. Statements of Contributions Appendix D June 30, 1986 and June 30, 1985 Expressed of US dollars-see Notesto Financial in thousands Appendix Statements, E Contributors 1986 1985 Belgium .$.4.............. ........... ............. ........... .. ..... 40,396 $ 30.936 Canada .. ............... ........... 145,498 147,993 Denmark ..................................... ........... ...... 28,794 22,561 France. . ................. ...... ........... ......... .................. 122.959 96,830 Italy............................ .............. .. ........ 80,535 64,386 Norway... ................... ............. ...... .. 39,150 34,088 Sweden. .................................... ............ 69,279 56,904 Total.... ............. ............................... ... ....... $526,611 $453,698 ial Fund Fi Staemets 205 to Statements Financal Notes E ppendix credits Fund Special in specialdrawing aredenominated rights(SDRs); and Organization Operations amounts princpal the disbursed creits such under aretoberepaid in amounts equivalent value 0the 0to0 in term so of Gurrencies dis- OnXOctober the_nternalional 26,1982, Development (IDA) Association OnJune Oursed. 30, 1986,theexchangerateof oneUSdollar was a Special established Fund Fund) (theSpecial byfundsto constitutedi $117757per508(onJune 30,1985, $D.998281perSDR). becotribued an byIDA, bymembrsot admnisteed DA or spple- Fudcredsaremade Specil nthasameter usasrrgularIDAecedit mentXng resources theregular tar 0lending available that byIDA.Thear- except of Special theproceeds Fund maybeused credits onlyto Fundmay forgoodsor eamenedortrminted tnanceexpeniturs rangeentsgverni~thepecra srvice from ar taimembmembrsoo ofthe (ority totheSpecial contributors The Fund. theSpe- 01 resources contributing membersa regular resources tothe ugh ASpe of DAthrow - nyfuure purposs of ajustmntatthe members ofcthe soigihtsl X_ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~nk 9forff itt ser- its:f asAdministrator vices oftheiSpecialeFund X ranslation ;l ;;are I0000 of Currencies janerlemrent as A recorded trrn oafincome tinvestents. A:ailDXs tiramf; Incomrre Of IDAo ;Directrs Executive administration 10 ;termrinaite ofthe;Special inesmet patoXh eore becomes fteSeilFn. Fn yIA 206 Speciat FuncdFinancialt Statements of IndependentAccountants Report 1801 K Street, N.W 202 296 0800 Telephone DC20006 Washington. Price Waiiterhouse 0 July 30, 1986 President and Board of Governors, Special Fund Administered by the International Development Association In our opinion, the financial statements appearing in Appendices A through E present fairly, in terms of United States dollars, the financial position of the Special Fund Administered by the International Development Association at June 30, 1986 and 1985, and the results of its operations and the changes in its resources available for commitment for the years then ended, in conformity with generally ac- cepted accounting principles consistently applied. Our examinations of these statements were made in accordance with generally accepted auditing standards and accordingly included such tests of the ac- counting records and such other auditing procedures as we considered necessary in the circumstances. Financial Statements Covered by the Foregoing Report Statements of Condition .......................... ............ ......... Appendix A Statements of Changes in Resources Available for Commitment ..... ............... Appendix B Summary Statement of Special Fund Credits .............. ............. ......... Appendix C Statements of Contributions .................. ......................... Appendix D Notes to Financial Statements .................................................. Appendix E Sopecial Facilit Fnancial Statements 207 forSubSaharanAfriaca Fa0cilty Speci3al oi00Cf Statement :0 9 Cond0fit0 0W0000;-ion A Appendix 0i Exrese t0 ;in dolar-se tNots to FinancalStatements, 0thouansogfUS ;E$00 Appendiix \ X 0 < :00000 Assets:: 0i00000 000000j00000g000000000;00eSC;00R0tT; 1958 Unz S tS000 June gc:ur:renles 30, f09j00:restrited 1986~~~~~~~~~~~~~~~~~~~3 i..$ ... ~8 12,998 RECEIVABLS ONACONT OFNSCONTRIBUTIONS0 0obligationsi..: .. ..f.S .t:.. > . f..f.. ;.. 0..i. .. 0. 235,086: dGemand nonintersbarineg X0;00;;00000000;0S0NonnegotiabIe,$ ~ no ~ ~~~ reeval yetdue.;00;if318,6130 Contributions~~~~~ INVESTMENTS.44,1~~~~~~~~~~~~~~~~$ 553,699 60;8 t THEIN;TERNATIONAL i000 0 jt t0;0 RECEIVABLEEFROM BANK FOR RECONSTRUCT;ION ANDDVEOPNT.;0. < . . 0A.150,000 $760,983 Contrbti:ionis 0 fiu:; 9Si05:: 0 inoe)n;f;C S:X0; and ;AcicumuClate:d UnS;SAt00S;00SS>disbu;rseid Accrued interest ~ ~ on investments. ~ ~ ~~~705126 FRtttOPMMTEITRAINLBN ORREOSTRCINAND0DEEOMETNt TRANSFER A.:.$150,000 CONTRIBUTIONSSt0 dC);f ff i \:00 : fS00 Apeni 0).7s9 (see ; 00 ' 00 ;0 0517S49 COTIUIN LESS0: DISBURSED;0? t i:00f f:S.: 44::00 ffff (seefVa0 C).101,638i0400;fS40;it#0;i) Appendix ff740SE;(fX;05j)iSLiS;f (0;0St;i;S(g;t SiCiSS753AB9flffE SS;fSS0S020SS00f 0 ;0; 0SfftS02 wHEEdAC55Ed;;S;Xa0\X00f(;fff;000000000000000i000000 :fAT00:CffEV:t : ( 0 ACCUMUL2:INCOM f:D IV :f0::0 ; (FROM TS 00 STMENfff:; S: ::0fV0 :0 0 :a : ;:: the pff;f0ff Inom tori f0 ; 0000eriod.7,494 0S03000 ;f W f:aiSf; :SSi: t0:ffffS0k0kS;tiC00 f:i tt::::: :;20kSSt23jafFf:S:d SUt(2200f:g;Xi:|; : : S:iC t f:90$760,983NWi t 208 Special Facility Financial Statements of Changes in Statement Appendix B Available for Commitment Resources For fiscal year ended June 30, 1986 Expressedin thousands of USdollars-see Notes to Financial Statements,Appendix E 1986 ResourcesProvided Transfersfromthe International Bankfor Reconstruction and Development .......................... $150,000 Contributions.............................................. .......... .......... 705,127 Incomefrom investments . .................... ................................. .. 7.494 Totalresources provided ..... .................................... ............... 862.621 Used Resources AfricanFacilitycreditsapproved ...................... 580,186 ResourcesAvailablefor Commitment Endof period .... .............................. $282.435 of Resources Composition Availablefor Commitment Unrestricted currencies .............. S.................... 12,998 Investments ...... .............................................. 44,160 Receivables on accountof contributions ........................... ........... 553,699 Receivable from International Bankfor Reconstruction and Development ............................... 150,000 Receivables-Other.1.26 ...................................... .............................. 126 LessUndisbursed Credits....... .............. ................................ (478,548) Total ...... ................. ......... ........ $..............2........... ..$ 282,435 Summary Statementof Sub-Saharan 2 3297 Appni Facilily African Credits~~41A50 1~4 30,1986~~~~~~~~~~~~8 June 8 6 96 4ake 0,18 0 74~~~~~~~~~~~~~~un Burundi.$ 16839 $ 16,839 E $~~~~~~~~~~d't Guinea-Bissau.5,299 5,299 -2,29i 41~13 Malawi.43,085 22,894 20,1912Unfte 19.8 Rwanda.17,075 17,076 -~,06$76J 2 Senegal.4~~~~~kk O ~salm6,8096hmWftb 23692,40 22.77aevld~t twte~rw Somalia.33,796 6r 33,79~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~h r - Togo.11,893 11,893~~~~~~~~~~~~~~d a-d~ Zaire 96,913~~~~~~~~~~~~~U 96,56 57 .7 Zambia vev 58,349 15,476 42,873 42.18O $68,16 47858 $0,68 100 210 Special Facility Financial Statements Notes Statements to Financial AppendixE June 30, 1986 Summary of Significant Accounting repa;d inamounts equivalenttothevalue JntermsofSDRs of currencies and Related Policies disbursed. On June 30,1986, theexchange rateofoneUS was dollar S1.17757 per SDR. Organization and Operations African are Facilitycredits madetomembercountries oftheAssociation insub-Saharan Africawhich areeligibletordevelopmentcredits ofthe On May 21.1985, Development theInternational Association (IDA) es- Association andhave undertaken orarecommitted to undertake me- a Special tablished torSub-Saharan Facility Africa African (the Facility} dium-term programs of policyreform andstabiJzation measures ac- by funds constituted to becontriouted Bank bythe International for ceptable to theAssociation. Proceeds ofAfrican cred Facility ts equiva- andDevelopment Reconstruction (IBRD)andother donorsto Drovide lent to theamount contributedbytheIBRD shallbeused inthesame forcountries tinancing ofthesub-Saharan region.TheAfricanFacility manner astheregular resources of IDA. Theremaining proceeds may became onJuly1. 1985, effective by !DA. andis administered The beused only to finance expenditures for goodsproduced orservices oftheAfrican resources are Facility separate kept fromtheresourcesof supplied irom(a)Part Ni members ofIDA:(b)Part I members contribut- IDA. ingto theAfrican and(c) countries Facility; whichmaintain Special JointFinancing arrangements withtheAssociation. Translation of Currencies Service Charges and Commitment Assetsandundisbursed aretranslated contributions atmarKet rates of exchange Disbursed attheendof theperiod. aretrans- contributions The service andcommitment charges payable uncer byborrowers Afri- at market lated of exchange rates onthedates effective of disourse- canFacility credits arepaid lo IDA directly itfor itsser- to compensate ment. vices of theFacility asAdministrator Investments Principal Repayments securities Investment arerecorded atcostoramortized costwhich ap- Theprincipal repayment Facility onAfrican shall credits part become of marker. proximates Gainsandlosses on sales of investments,mea- resources thegeneral of IDA suredbythediftefencebetween averagecostandproceeds of sates asanelement arerecorded of incomefrominvestments. Income from Note A-Transfers from the International becomes Investments part of theAfrican of theresources Facility. Bank for Reconstruction and Development African Facility Credits The Bank international forReconstructionandDevelopmentauthorized totheAfrican atransfer Facilityof$1 from 50.000.000 netincomeofthe AfricanFaci are denominated ity credits in special drawingrights IBRDfortheyearendedJune30. 1985.Thesefundswillbepaictothe tSDRs); amounts theprincipal under disbursed suchcredits areto be African asneeced Facility to tinance Facility African credits. Specia[ Facility Financial Statements 211 Accountants Rep) ofTIndepen~dent 1801 N.W. K Street, 2022960800 TelepOone WasWinton,DC 2006 filyi ern Waterh0use~~~~~~~~~~~~~een Price July~ ~~ 30, 1986 ~ ~ ~ ~ ~ ~ ~ ~~-de un 3,196 PresidentwanBoasdaofmovernors Special anciltforSucShaanAfrcaAdinstre by thIntrnatonaDeelpmntAuocato Iniourcopinion,ethenfinncialestatementsFappeaing ineppedcsAtrugrtrsn ail,i em ofatemnite StteCoditollrs the.financial position.of th.Seia.acltyfo .u..ha A Apedmin-A Afric. ofChanges inisResources Available for Commitment for.he.yar.hen. Stiosandmeth nde Jupned30196 the SucShan ar Saccutimngtreordfn othr . as wecosdee.ncssr audtin proceduyredis inptenirCum Statement of Condribtions.... ... ...... Appendix A Nlotes to Financial Statemhents. ......... Appendix E IBRD/IDA Appendices 213 Appendices IBRDIIDA 1 Governors and Alternates of the World Bank 214 2 Executive Directors and Alternates of the World Bank and Their Voting Power 217 3 Officers and Department Directors of the World Bank 219 4 Offices of the World Bank 221 214 IBRD/IDAAppendices Governorsand Alternates AppendixI of the World Bank June 30,1986 Member Governor Alternate Afghanstan . ..... ..... Mohamao Kabir. . . .. Jousran Abdul Ghafoor ......... Algeria .. .......... . Abdelaziz Khellef ........ . .. ... Mohamed Terbeche Antiguaand Barbuda. ............ John E St. Luce .............. Ludcopr B,owne Argentina . . .......... Juan Vital Sourroul le ........ AlfredoConcepcion Australia P J Keating .. .B. R. B. Dun Austria. .... .... .... . .......... FranzVrantzky................. OthmarHaushofer Bahamas, The. .. .... II.... S r Lynden0. Pindlng ... . . ..EthelynC. saacs Bahraina, .. . ... i....... Abdul Karim. ........... . ibranim Isa Abcular Borshad Bangladesh ..... . ............. .M. Syeduz-Zaman . M. K. Arwar Barbados . ........ RichardC. Haynes ......... . Stephen E. Emtage Belgium M Eyskens ........... . Jear Godeaux Belize..... .. ..... . ... Dean Barrow.Henry E. C. Can Bemn. . . . ........ . . .Zul-Kfl Saami.. . . Dd er Dassi Bhutan. ... ...... . . . DawaTserng r. Tshering C.j Boivia . . . .. . J.. Cariaga Juan Osor!o JavierNoga es turr Botswana .... . . ... . . P S Mmus . .II...... . . . . Baedz Gaolathe Brazii.. ..... .JoaoSayad ..... .. ... . . FernaoC. B Bracher .. BurkinaFaso Justin DamoBaro..... YoussoufOuedraogo Burma . . .............. Tin.Nyurt Tun Maung Burundi. . .P. . . ....... PierreNgenzi ArselmeHabonimana Cameroon ...... . S adou Hayatou. S mon NgannYonn Canada ......... . MichaelH Wi son .Margaret Catley-Carlson CapeVerde . ...... OsvaidoLbpes da S Iva.Antonio HilarioCruz AfricanRepubic . Central .. Guy Darlan .Cyriaque Samba-Panza Chad. .. .. . ......... . Soumaia Mahamat .Koumrog Laouteg-Guelnodji Chle . . ... . HernanBuchi. JorgeSeume Zaror Chna ... . WangB ngqan . .i.P.... . .Li Peng Colombia . . . . HugoPalacios-Mejia ...... FanciscoJ Ortega Comoros . . ...... ..... AhmedAbdou. . . ... MikidacheAbdourah m ic of the Congo.People'sRepub ... PierreMoussa. . ........... Andre Batanga CostaRica ....... . .... ... FernancoE. Naranwo ... Ecuado L zanoFait Coted'lvoire AbdoulayeKone .o. ... Leon Naka Cyprus....... . ........ . .Chrnstos .George Mavreliis ou V. Hadlianastass Denmark ............... UffeEllemarn-Jensen.Bjorn Olsen Djibouti.. ............. brahimMohamed . o.. Sultan. AhmedSamireh Omar Domnca ... ... . ... MaryEugen . a Charies . . . . ...... . AI ck B Lazare Dominican Repubic . .Hugo Guiian Cury .D... . Opin o AlvarezBetancourt Ecuador... .. .... ........... . AlbertoDahikGarzozi .......... . Marco F oresT Egypt,Arab Republ c of ............ Kamal E . l-Ganzoury .Erfan A Shafey El Savador. . RicardoGonzalez Camacho . . . . Fidel Chavez Mena Equatorial Gunea . . MarcosMba Ondo .Efua EfuaAsangono Ethiopia........ .. TesfaTesfaye Dnka . .Bekele Tamirat Fil . ... . Mosesea onibarav . . JoneY Kubuabola F n and............ .. . ...... PekkaVennamo OsmoSarmavuor France............ ............. Balladur . . Edouard Lebegue Daniei Gabon. ..... ... .. PascalNze ............... .. . J Felx Mamalepot Gambia, The . . . .... . ..... ... .. SheriffS Sisay . .Mousa GibrI BalaGaye Germany, Fecera Republic of .... JuergenWarnke . . . Hans Tietmeyer Ghana . . ...... . Kwesi K............i.n. Botchwey . . .Theresa Owusu Greece .. . . Constantine Simitis . .. I I Yarn s Paoantanico Grenada . . . . ... . . . HerbertAugustusBlaze . .. . . . . Laurston F. Wilson,Jr. Guatemala . . ... ..Rodolfo PalzAndrade. Lizardo ArturoSosaLopez Guinea. . .. .Edouard Benjamin . .. . Kerfala Yansane Guinea-Bissau .. .. ..... .. ..... . Pedro A Godinho Gbmes JoseLimaBarber Guyana. . . . ....... Carl Greendge .. . . ..... . W Hasyn Parrs IBRD/IDAAppendices 215 Member Governor Alternate Haiti ...... .......... .......... MarcelLeger ........................ Onill Millet Honduras ..................... J.Efrain Bu Giron J...... ...... .............. Gonzalo CariasPineda Hungary...... ........ ............... Mikls Pulai......... Tibor Melega Iceland ...... . ......... .............. MatthiasBiarnason ......... Thorsteinn Palsson India............... ............. Vishwanath PratapS ngh............ S. Venkitaramanan Indonesia ............................. Arifin M. Siregar ............ SoegitoSastromidjojo Iran, Islamc Republic of ................ Mohammad JavadIravani.... ........... SeyedAli AkbarAfjei Iraq................. ............... HishamHassan Tawfik............. SubhiFrankool Ireland ......... ... ..... John Bruton ....... MauriceF. Doyle Israel .... . ...................... M chaelBruno .......... Emanuel Sharon Italy ........... ................... CarloAzegio Ciampi .......... MarioSarcinelli Jamaica,.. ......... . ........ .Edward Seaga ......... . HeadleyBrown Japan . ......................... NoboruTakeshita........ Sumita .Satoshi Jordan ......................... .. TaherH. Kanaan .Mohammad Saqqat Kampuchea, Democratic .... ............. (vacant)i (vacant) Kenya ............. ......... ...... GeorgeSaitot... H. M. Mule Korea.Reoublic of ..... . ....... ...... In YongChung ... Sung SangPark Kuwait.............. ................ JassimMohamed Al-Kharafi ............. FaisalAbdul RazzakAl-Khaled LaoPeople'sDemocratic Repub ic....... Oudone D. Pholsena ...................... KikhamVongsay Lebanon ... KhattarChebl................. RajaHmadeh Lesotho. .. R. Sekhonyana BE. ............ A M. Monyake A......... Liberia... .... ............... .. PaulR. Jeffy........... ..... ..... JohnnyN. Gaye Libya....... Kasem M. Sherlala ............ Abdul A rahmanR. Shalgham Luxembourg . ...... ............ Jacques Santer......... .Raymond Kirsch Madagascar ........... PascalRakotomavo ......... I. .I ...... Jean Robiarivony M alawi. ................. ..... S. C. Hara............... J. C. Malewezi Maaysia . . ........ .. ...... . Daim Zainuddin .Z............ Zain Azraai Maldives .................. .... FathullaJameel ............. . B.. IbrahimSaeem Mali ..................... .... Ousmane M. Diallo............. lorahima BocarBa Malha. . .. ....... ..... Wist n Abela. RobertJ. Stivala Maurtania ..................... Mohamed Salem OuldLekhal........... Mohamedou OuldMiche Mauritius...... ....... ... .DwarkanathGungah ................... MadhukarlallBaguant Mexico..... Gustavo ..... ....... Petricioli (vacant) Morocco ..... ......... ..... .Mohamed Berrada ..................... Mustapha Faris Mozambique ........ .Abdul Magd Osman ................... Eneasda ConceicaoCom che Nepal... . BharatBahadurPradhan ................ Lok BahadurShrestha Nether ands ...... .................. H. C. Ruding.................... E. M. Schoo NewZealand........................ .................... B. V. Galvin Graham C. Scott Nicaragua .......... JoaquinCuadra Chamorro ........... ... PedroAntonioBlanddnLanzas Niger .... ..... ............. Almoustapha Soumaila ................. AmadouNouhou Nigeria... . ... .... ......... Chu S. P. Okongwu ............... ... Alhaji U. K. Bello Norway. .... Rolf Presthus...... OddJosteinSaeter Oman ..... Dais Bin Abdul MunimZawaw ...... SherifLotfy Pakistan .... Ghulam Ishaq Khan ...... M. A. G. M. Akhtar Panama .... ...... .Ricaurte B.... Vasquez M.................... HectorAlexander Papua NewGuinea ........... Sir Julius Chan......... JohnVulupindi Paraguay ... ........................ CesarRomeo Acosta ................... CarlosAlbertoKnapps Peru............. ................... Luis A va Castro...................... Gustavo Saberben Chevalier Philippnes ..... .... Ja meV. Ongpin ...................... SolitaC. Monsod Poland, . . ............ Wladyslaw Baka.............. Grzegorz Wojtowicz ......... PortugaI ..... ......... .Miguel Cadilhe ................... .(vacant) Qatar.Abdu Aziz KhalifaAl-Thani ............. MadhatAbdul Latif Masoud Romania,... .PetreGigea..................... Gheorghe Popescu Rwanda... ....... ............. JeanDamascene Hategekimana .......... Cleophas Mugaragu Christopher St. and Nevis . ........... Kennedy A. Simmonds ......... ... WilliamV. Herbert (continued) 216 IBRD/IDAAppendices Governors and Alternates Appendix1 of the World Bank June 30,1986 (continued) Member Governor Alternate St Lucia .. . ..... John G. M Compton Dw.ghtVenner St Vincentand the Grenad nes ... . JamesF M tchell . MarcusDefreitas SaoTomeand Principe ............... ... AgostinhoS IveiraRita. Aonio Jesus Lete SaudiArabia. . ... Mohammed Abakhail. . . . . ...... Hamad SaudA -Sayar Senegal . .... . .. . CheikhHamidou Kane. . . YoussouDiop Seychelles, C.ceSt. Jorre . E. Faure SierraLeone . . S H Kanu . PeterJ. Kuyembeh S ngapore . . . . RichardHu Tsu Tau.............. Lee EkTieng . SoomonIslands . ..................... George ...... Kejoa . . . . . . . . BarryClarke Somalia .... Mohamed Shekh Osman .... . Mohamud Mohamed Nur SouthAfrica. .G. . . G. P C de Kock .. . J A. Lombard Spain . . . . ....... CarlosSochacaCatalanr Mariamo RubioJimenez Sri Lanka .. .. .Ronniede Mel . . . W. M. Tilakaratna Sudan . Bashr OmerFadlalla . . El SayidAl Zak Suriname- . . . . Wilem A fred Udenhout . . . . . . AndreE. L sse Swaziland .... . Kenneth Mbuli .V E. Sikhondze Sweden . . . Kjell-OlofFedt. . . . . . ... ...... LenaHjelm-Wallen SyrianArab Republic Kahan K a A-SuMarwan Su.. .......... ........ Kods Tanzania. . . .CleoaD. Msuya.... ...... . . GilmanRutininda . Thailand . . . SommaiH oontrakool Panas en Simasath Togo . ........ . YaoviAdeeo . Comlanv;TarmataAddra Tonga . . . JamesCecilCocker.. . . Selwyr.PercyJones Trindad and Tobago . . . George Chambers . Thomas A. Harewood Tunisia . . . Ismail Khei . . ............ ..... Zein Mestri Turkey...... . . EkremPakdem ri . YenerDircmen Uganda o...... .Pnsiano Serumaga Mulema..... J. Karoza UnitedArabEmirates . . . .. Hamdan Bin RashidAl Maktoum..... AhmedHumaidA -Tayer Unted Kingdom . ...... RobertLeigh-Pemberton S r PeterMiddleton UnitedStates JamesA Baker.II . ...... W AllenWaliS Uruguay. .... . RicardoZerbno Cavalani . .Arie Davriesx ............ Vanuatu KalpokorKalsakau. .. MartinTama,a Venezuela,.. ....... .LeopoldoCarneval,. . . . . HectorHurtado .... VietNam .... .. . NguyenDuyGia . ... LeHoang WesternSamoa . ... .. S P. Sail Faasootauloa . KoloneVaai YemenArabRepublic ........ ... Mohammed SaeedA -Attar A -H rwi . Ka d Mohammed Yemen,People'sDemocratic Republic of . FaragBin Ghanem . ....... . Abdula SaeedAbaddan Yugoslavia . .. . . .............. .............. .SvetozarRikanovic ... CvitanDujmovic Zaire...... . DjambolekaLomaOkitongono.. Bazuncama Luzumbulu Mbandanu Zambia . ...... Basi Kabwe .. E. S. S. Nebwe Zimbabwe . . . . . .BernardThomasChidzero.. K. J Moyana a. of the BRD Member only IBRD/IDAAppendices 217 ExecutiveDirectorsand Alternates Appendix 2 of the World Bank and Their Voting Power June 30,1986 IERD IDA Tota % Of Total % of Director Executive Aternate Votes Casting of votes total votes tota Appointed Hugh .......... W Foster UnitedStates ....... . ......... 138,34820.13 975,481 18.74 Yamaguchi . Kenji Mizoguchi .. Zenbei . ........ ............... Japan 41.080 5.98 437,4358.40 Tim Lankester ............ Richard Mann ng .C.o. United ... Kingdom ........... 39,197 5.70 338,2596.50 Helene ..... ..... Ploix Debains Olivier ....... France. ....................... 36,854 5.36 196,6053.78 Gerhard Boehmer .. . vonHarpe Michael ........ Federal Republic . of Germany 34,597 5.03 367,5607.06 Elected FawziHamad . Al-Sultan MohammadAl-Shawi ....... Bahrainb,Egypt (Arab of), Republic (Kuwait) Arabia) (Saudi Jordan, Iraq, Kuwait, Lebanon, Maldives, Oman. Pakistan, Qatar,. Saudi Arabia, Syrian ArabRepublic, UnitedArabEmirates, Yemen Arab Republic............... . 48,803 7.10 369,2757.09 Jacques .... deGroote OralAkman.. ....... Belgium, Austria, Hungary, (Belgium) (Turkey) Luxembourg, Turkey .30.692 4.47 173,8813.34 FrankPotter . . . Horace Barber .Antigua andBarbudab, TheBahamasl, (Canada) (Jamaica) Barbados,, Belize, Canada, Dominica, Grenada, Guyana, Ireland, Jamaica'. St. Christopher andNevisb, St.Lucia, St.Vincent andtoe Grenadines ...................... 29,864 4.35 227,7224.38 C R.Krishnaswamy Rao .Gholam Sahib Kibria. .... .. Bangladesh. .... Bhutan, India, (India) (Bangladesh) SriLanka ..... ...... . 29,609 4.31 223,4874.29 Leonor FilardodeGonzalez. Maria Antonieta Dominguez . . Costa Rica. ElSalvador, Guatemala, (Venezuela) (Honduras) Honduras, Mexico, Nicaragua, Panama, Spain, Suriname', Venezueal ...................... 27,732 4.04 146,8592.83 ........ C. UlrikHaxtnausen PerTaxellc ............. Denmark, Finland, Iceland, Norway, (Denmark) (Sweden) Sweden ........................ 25,206 3.67 255,4504.91 Mario Draghi.... M. Guimaraes .Rodrigo ...... Greece, ItalyMaltab, Portugalk .... . 24,753 3.60 156,0923.00 (Italy) (Portugal) Mourad Benachenhou....... SalemMohamed Omeish ... .Afghanistan, Algeria, Ghana, (Algeria) (Libya) Iran(Islamic Republic of), Libya,Morocco, Tunisia, Yemen (People's Democratic Republic of) ....... 24,112 3.51 108,8542.09 ........ Xu Naijiong .... YangGuanghui .......... .......... .China ........... 23,732 3.45 99.836 1.92 (China) (China) H. Dean Ronald . YouKwang Park.... Korea .Australia, of), New (Republic (Austral a) (Republic of Korea) Zealand,Papua New Guinea,Solomon Vanuatu, Islands, WesternSamoa . 22.608 3.29 130.0702.50 Ferdinand vanDam..... ... Riza ........ Sapunxhiu Cyprus,Israel, Netherlands, (Netherlands) (Yugoslava) Romanab, ... Yugoslavia ....... 21.773 3.17 160.0693.08 Gutierrez-Castro Ecgar . .Patricio Rubianes . Colombia, Brazil. Dominican (Colombia) (Ecuador) Republic,Ecuador, Haiti, Philippines ....... 21,21.531 3.13 170.7893.28 Aunsnunta Vibul ........... Sashi N.Shah ....... Burma. Fiji,Indonesia,LaoPeople's (Thailand) (Nepal) Democratic Republic, Malaysia, Nepal,Singaporeb, Thailand, VietNam....................... 21,164 3.08 152.6802.94 (continued) 218 Appendices 1BRD/IDA ExecutiveDirectorsand Alternates Appendix2 of the World Bank and TheirVoting Power June 30,1986 BBfl1ued) BBD BA Total TBat Total , ot -xecrtveB roco- Alteroate cf castirTVotes voles tota vcres slta G:rnKwigomba . Asthre Jembere M iiMku . Botwara.B13unid Ethopa (Burundi) (Ethiopia) TheGamba. Guinea. Kerya. .esotro. Lberia.Maavvw. Mozambqge. Nigeria,Seychelles. SierraLeone. Sudan. Swaz:iand. Tanzania. TrnndacandTobago. Uganda Zam a, Zimbabwe. 16584 2 41 212389 4 38 KennethCoales Felx A beroCamarasa Argentina, Chile. Bolivia. Pa-aauay (Lruauay) (Argentna) Peru, JTuguayl . .. ... . .. .. 15.5'2 226 128.6232.47 Soglo Nicephore . . AndreM orsgo .en n. Burkina Feso. Camercon. (Bencn) (Congo) Cape Verde. Centra Atrcan RepuDbic. Chad. Comoros. Conco (Peoae's Repu oic of the). ote d lvore. Djnouti.EquatorialGu nea. Gabon G nea-Bssau. MadagascaT, Ma. Maurtania. Maunt ius, Niger.Rwanda. Sao ohme andPrincipe, Seneca . Somalia. Toga. Zaire 13.49 1 95 173.5093 34 to the Executive In acdition andAlternates Directors ng list.'he fo cwrg alsoserved snownin the orego afterJune30. 1985 Director Executive Endof oercc of servce Director Alternate Endof perod afservce James B Burnham. . . . July 12. 1985 Fancis Mayer...... October14. 1985 (U, ted States) ( France) Bruno de Maul)e . .January 24. 1986 Georce L. Red..... . . . . . ... October31, 1985 (France) (Barbados) Pekka Korpinen . . . ly 31. 1985 Gui ermoRivera ...... December 30, 1985 (Flnands (Doar niBcan Repubc) Reinhard Munzberg .. . . . August31. 1985 ToshniroYarnakawa .July 5. 1985 (Germany) (Jaoanj PhaichitrUathaviku . . ..... November 7. 1985 IThailands! NigelWicks . .August 31. 1985 jUnted Kingdom) i7.2 0 4 N- F Dermocrvnu Kampuconea 1464 niBoD vo-es aoc7 826 sotes n IDA)ard SoutsAfrca votes and16.494 ir BRID votes oad in IDA) not In tIe 1984 parlinopate Regu a- Electior Drectors o' Execi-ive Pclard(499votesn IBRD) ardTonga in IBPD (527votes and11.372 in IDA votes becare merbers toatBle-tier after a 3esgred Juy9 1986 to cesucceeded byJ A . Faint (UnitedKigdor b Membeo ovrle BRD r. or gnedJu y 3t . t98. to be sjcceedac c Fies by VelricKarrola7Frand) BRD/IDAApperndices 219 Officersand DepartmentDirectors Appendix 3 of the World Bank June 30,1986 President.......... ............... ... ........... A. W. Clausen*a SeniorVice President, Finance ... ............ ........... . ................. MoeenA. Oureshi* Senor Vice President, Operations....... ...... ...... ....................... ErnestStern' Vice President ............... ................. W.................. ... ... Warren C.Baum Vice President,External Relations . ..... ......... . Jose Botafogo G.* V ce President,Pension Fund. ............. . GeorgGabriel V ce President and Contro ler . ...... ........ ................ HansC.Httmair RegionalVice President, SouthAsia ................ . ... W Davd Hopper Vice President, Operations Policy.................... . ............ S. ShahidHusa n Vice President, Co' nancing.... ................... ..................... . Kunh ko lnakage RegionalV ce President.Eastern and SouthernAfrica ................. . . ..... EdwardV. K. Jaycox RegionalV ce President.EastAs a and Pacific . .......................... Att la Karaosmanoglu RegionaVicePresident,LatinAmerica and the Caribbean A. DavidKnox Vice President, Economics and Research . ..................... Anne 0. Krueger' Vice President, Personnel and Administration ............ ....................... Martjn J W. M. Pajmans V ce President and Treasurer .............. ........ . ............... ... ... Eugene H. Rotberg Drector-General. Operations Evaluation .... ................................ ... YvesRovan Vice President and General Counse.. ................................... . . . brahm F. I. Shhata* Vice Presdent, Energy and Incustry ....................... ..... ............. ErnestSterno Vice Presidentand Secretary .. ....................................... ....... T mothyT. Thahane* Regional VicePresicent.Western Atrica......................................... Wiltried P. Thalwitz RegionaVice President. Europe.M ddle East,and North Africa .............. Wlli A. Wapenhans Vice President,FinanciaPolicy,Planning,and Budgeting.D.............. . D.JosephWood Director,CountryPrograms Department I, Western Africa............... . ..... Bisel Alisbah Director.Plannng and Buogeting Department ................ ..... ....... II ..... Shinji Asanuma Director,Economic Analysisand Projections Department .................... Jean Baneth Director,European Office.. ........ ........ ............................... MauriceP. Bart Director,Financal Polcy and Analysis Department . ............................... DavidR. Bock Director.InternationalRelations Department ..................................... ShahidJavedBurk, Director,CountryPrograms Department, SouthAsa.... . ........... ... . . .. Russe I J. Cheetham Director,WaterSupplyand UrbanDevelopment Department ....... ...... Ping-Cheung Loh' Director.EnergyDepartment . ........................ ................. AnthonyChurch II Director,Comoensation Department ............... ........................... R. A. Clarke Director,Personnel Management Department . ..................... Wil iamJ. Cosgrove Director,Cashier'sDepartment . ............ ......... .................. HywelM. Davies Director,SpecialOfficefor AfricanAffars .... .................... ... ... ... Xavier de la Renaudiere Director.CountryPolicyDepartment ........................ .... ....... Vinod Dubey .... Director,Organization PlanningDepartment ......................... ......... John P. Evans' Executve Secretary,Consultative Groupon Internat onalAgriculturalResearch .... ...... Curtis Farrar Director.PublicationsDepartment ................................. .......... JamesK. Feather Director.Investment Department ................ . ............ ............. Han K. F ndaky Director.ProjectsDepartment, Western Africa . ....... Hans Fuchs' Director,AccountingDepartment ............................... M chae J Gillette Director,IndustryDepartment . .............. . .............. AmnonGolan Director,CountryPrograms Department I, LatinAmericaand the Caribbean ..... ....... Andre Gue Director,Education andTrainingDeDartment. . ................................. Aklilu Habte Director.Staff Retirement Pan Department ..................... . ..... . .... BernardJ. Holand Director,Development Researcn Department ............. .I..... ...... I .... . Gregory K. Ingram Director,CountryPrograms Department, EastAsia andPacific...... ........ . GautamS. Kaji Director,Tokyo ...... Office ....... .................... ....... .......... Koji Kashwaya Director.ProjectsDepartment, EastAsia and Pacific . . .......................... SyedSaiarKirmanir Director.Informaton, Technology, and Faclities Department. . ................ . Harinder S. Kohl Director,CountryPrograms Department I, Eastern and SouthernAfrica ......... ....... JochenKraske Director,CountryPrograms Department I. Eurone,MiddleEast,and NorthAfrica .. . Eugenio F. Lari Director,Medica Department ............................. . .. Andre J. Lebrun Director,LoanDepartment ........... ...... I. .... I........... . . . Ducksoo .. Lee Environmental Adviser.Officeof Environmental and Scientifc Affairs........ . .. JamesA. Lee Director,ProjectsDepartment. SouthAsia .... ................................... EnriqueLerdau (cnntirnueo} 220 IBRD/IDAAppendices Officersand DepartmentDirectors 3 Appendix of the World Bank June 30,1986 (continoed) Director,General Servces Department . ...... .. chard B. Lynn Drector, Operations Evaluation Department ..... ....... ...... OttoMaiss' Drector, Economic Polcy Analysisand Coordination ................. . Constantine Michalopoulos Director,Poou ation, Health,and Nutriton Department . . . . . . . . . . . .... John D North Director,ProjectsDepartment, Europe,MiddleEast,and North Africa . . .......... RobertPicciotto Director,TransportationDepartment ............... Lous Y. Pouliquen Director,ProjectsPolicyDepartment. . ................... V svanathan Rajagopalan Drector, InternalAuditingDepartment . . ....................... . .... . Lawrence N. Rapley Director,Agr cultureand RuralDevelopment Deoartment.. . G. Edward Scnuh Associate General Counsel......... ............ .... ........ ugh N. Scott Director,CountryPrograms Department 11, Western Atrica ... M. IsmailSerageldin Dlrector,CountryPrograms Department 1, Lat n Amerca and the Caribbean ............. RainerB. Steckhan Director,CountryPrograms Department 11, Europe,Middle East,and NorthAfrica ........ Everardus J. Stoutlesoijk Director,FinancialOperations Department P Uhrig . ...Joseph Joseph........ Director,ProjectsDepartment, LatinAmericaand the Carbbean ...... ........ . SuitbertusM. L. van der Meer Director,Operations CY. PolO....... . . . ........ .. HermanG. vander Tak Deputy Treasurer and Director,TreasuryOperat ons ... ............. . . . HeinzVergin Director,Information andPublicAffairs Department . . .Frank R. Vogl Drector, CountryPrograms Department I, Eastern and Southern Atr ca. . . . . . . .. MichaelH. Wiehen Director,Economic Development Institute . . ... ChristopherR. Wiloughby Director,ProlectsDepartment. Eastern and Southern Africa . . ........ . HansWyss ' Member, Managing CoDrmittee June a Retired 30. 1986 b Acting c. RetiredAugust1 198t. d Ettect ve Ju y 1, 1986 Appendices IBRD/IDA 221 Officesof the WorldBank 4 Appendix June 30,1986 1818 Headquarters: H Street. D.C. N.W.,Washington, 20433, U.S.A. New Office York G. David Loos TheWorld Bank Missionto the Representative Special to the United UnitedNations/New YorkOtfice Nations 747ThirdAvenue (26thfloor) New York,N.Y.10017, U.S.A. Office European MauriceP. Bart TheWordBank Director 66, avenued'lena 75116 Pars,France Oftice Geneva E.Siebeck Woltgang TheWorld Bank WorldBankRepresentative to ITCBuilding United Organizations- Nations 54. ruede Montbrillant Geneva Geneva, Switzerland address: (mailing P.O. Box104, 1211 Geneva 20CIC,Switzerland) Tokyo Ottice KojiKashiwaya The WorldBank Director KokusaiBuilding(Room 916) 1-1 Marunouchi 3-chome Chiyoda-ku,Tokyo 100,Japan Mission Regional JamesW.Adams TheWorld Bank and inEastern Director ReinsurancePlaza(5thand6thfloors) Atrica Southern TaifaRoad Kenya Nairobi, address: (mailing P.O.Box30577) Mission Regional Jean-David Roulet TheWorld Bank Africa inWestern Chief Cornerol BookerWashington & Jacques AKA Streets Cocody Abidjan01, Coted'lvoire address: (mailing B.P.1850) Mission Regional Christopher (Cuill)Hermans The WorldBank inThailand Chief Udom VidhyaBuilding(5thFloor) 956Rama IV Road,Sala Daeng Bangkok 10500, Thailand Bangladesh S. V. L. vanGigch, Francis ResidentMission Chief The WorldBank 222New Eskaton Road Dhaka, Bangladesh address: (mailing G.P.O. Box 97) Benin Katsu Shigeo TheWorld Bank Representative Resident Zone dela Radio Rbsidentielle Cotonou,Ben n address: (mailing B.P.03-2112) Bolivia Resident Representative Banco Mundial EdificioBISA(4° Piso) 16deJulio1628 LaPaz, Bolivia address: (mailing 8692) Casilla Burkina Faso Tobedesgnated TheWorld Bank ResdentRepresentative Immeuble BICIA(3emeetage) Ouagadougou, Faso Burkina (malingaddress: B.P.622) Burundi Bernard Chatelin TheWorld Bank Representative Resident 45, avenuedelaPoste Bujumbura,Burundi (mailing address:B.P.2637) (continued) 222 IBRD/IDAAppendices Officesof the World Bank(continuec) Appendix4 June 30.1986 Cameroon PeterS Gsle TheWorldBank ResidentReoresentative Immeub e Kennedv AvenueKennedv Yaounde. Carmeroon (nraihngadd,ess B P I'28) China EdwinLim TheWorldBank Chef Xiyuar Hotel BuIding No. 3 (3rd f oor) ERLICOU Xi Jiao. Bej ng. Ch na (maimg address F 0. Box9539) Colombia LaurensHoppenbrouwer Banco Murd al ResidentRepresentative Ecifcio ' Aseguradora del Val e Car-era10. No. 24-55 (Pso 17) BogotaD.E.. Cormb a (maling address:Aparraco Aereo13229) Ethiopia MichaeH. Payson '"e Wcrd Bark ResidentRepresentative .B T.E NewTelecommumcat ons Bulidig i1st floori ChurchiI Road AddisAbaba.Ethiop a (maI ng adcress:P C Box5515) Ghana SeungHongChoi TheWord Bank ResidentRepresentative 69 EighthAvenue Extensior Noronrr.dgeResidential Area Accra. Ghana (maI ng address:P C BoxM27) Guinea Ba,cet Jean-Claude TheWorldBank ResidentRepresentative C0tedes Nations,Vi la 39 Conakry.Cunea (maI ng address.B P 1420) India E. BevanWade Resdent M ssion Chef TheWorldBank P..0 Bcx 416 NewCeh ndia i Indonesia D C Rao Res det S'a'f n )ncones a Director ThheWodc Bank Ja an Rasuna Said. Kav. B-10 (Surte301) Kuningan. Jakarta12940. Indonesia (maiiingaddress.P 0 Box324JKTd Liberia Johr C KendaI TneWorldBank ResidentRepresentative Provicence Bui d ng Grouno Floor AshmunStree: Morrova. Loberna Ima I ng adoress D C Box1504) Madagascar P Pau BlayF TheWord Banr ve ResidentRepresentat 1. rue PatriceLumumca Antananarvo101. Madaaascar (maI ng address Banquemendale B.F 4140} Mali Mlioael Furst TheWord Bana ResidentRepresentative mmeuale CNAR rue Squa e Lumumba Bamako.Mal (ma)lnc address:B.P 1864) BRD/IDAAppendices 223 Malawi PeterHaI TheWorldBank Representat Residemn ve RecCrossHouse Caoital Cty Lilonowe3, Malawl (mailingaddress:P.O. Box30557) Mauritania Et enneBaransramaje TheWorldBank ResidentRepresentative V ha No. 30. ILOT A Quartier Socofim Nouakchott. Mauritania (mai ing address:B.P. 667) Nepal RichardN. Woodford TheWorldBank ResidentRepresentative Jyoti Bhawan, Kantipath Kathmandu, Nepal (mail ngaddress:P.O.Box798) Niger Hemu"Sanger TheWorldBank ResidentRepresentative Immeuble El Nasr(12eme A) etage-escalier Niamey,Niger (maiing address:Banquemondiale B.P. 12402. c/o Postmaster General) Nigeria n IshratHrusa TheWorldBank Resdent Reoresentative Plot1309A KarimKotunStreet VictoriaIsland Lagos.Nigeria (mailingaddress: P.O. Box127) Pakistan Lu s de Azcarate TheWord BanK Resident Representative P.O.Box1025 islamabad. Pakistan Peru Ulrch R. W. Thumm BancoMundial ResidentRepresentative Avenda Central 643 (11 Piso) Lima.Peru (mailingaddress:Apartado 44801 Rwanda JeanH. R. G. Doyen TheWorldBank ResidentRepresentative P.O.Box609 Kigali, Rwanda Saudi Arabia DavidA. Coon, ResidentMission Director TheWorldBank Riyadh.SaudiArabia (mailingaddress:P.O.Box5900) Senegal Franz H. Kaps TheWorldBank ResidentRepresentative Immeub e S.D.I.H. 3 Place de l'independance Dakar. Senegal (mailingaddress. B.P.3296) Somalia Brian H. Falconer TheWorldBank ResidentRepresentative c/o Somal Commercial & SavingsBank Building(4th floor) Mogadishu. Somalia (mai ing address:P.O.Box1825) Sri Lanka RdwardK. Hawkins TheWorldBank Resdent Representative People'sBank, HeadOffice(lOth floer) Sir C. A. GardinerMawatha Colombo 2. Sri Lanka (mailingaddress:P.O.Box1761) (continued) 224 IBRDIIDAAppendices Officesof the World Bank(continued) 4 Appendix June 30,1986 Sudan JasdipS ngh TheWorld Bank ResidentRepresentative SudanKuwait Centre TowerNo. 1 (7th floor) NileAvenue Khartoum, Sucan (mailng address P 0 Box221 Tanzania RonaldH. S. Fennel TheWorld Bank RepresenTat Resident ve N. .C Bulding (7thfloor. B) Dares Salaam. Tanzania (maiing address P C. Box2054) Togo EmmanueMb TheWorlcBank Representative Resident 169 BoulevardCirculare Immeub e BTCI(8eme etage) Lome Togo (mailng address:B P 3915) Uganda GrantS ade TheWord Bank ResidentRepresentative P.O.Box4463 KampalaUganca Zaire GuyLan Bui TheWord Bank Representative Resident BuIding UZB Avenueces Av ateurs Kinshasa c of Zaire 1. Reoubl (maiing acdress P.O Box148156 Zambia Uche Mbanefo TheWorldBank ResidentRepresentative CMAZBuilding BenBe la Road Lusaka.Zamba (makmgaddress P C Box35410) Zimbabwe MahmudA Burney TheWoridBank ResidentRepresentative CABS Cenler(12th floori Stanley Avenue Harare.Zimbabwe (mai irg address P 0 Box2960) a EtfeciveJuly 1 1986 b Succeeced byJ A Bronfman. u y 1 1986 c Succeeded by RogerRowe. .u y 1 1986 The World Bank Headquarters: 1818H Street, NW. Washington, D.C. 20433, U.S.A. Telephone: (202) 477-1234 Telex:RCA 248423 WORLDBK WUI 64145 WORLDBANK Cable address: INTBAFRAD WASHINGTONDC European Office: 66, avenue d'lena 75116Paris,France Telephone: (1)4723-54.21 Telex:842-620628 Tokyo Office: KokusaiBuilding 1-1,Marunouchi 3-chome Chiyoda-ku, Tokyo100, Japan Telephone: (03) 214-5001 Telex: 781-26838 ISSN0252-2942