FILE COPY D The World Bank FOR OMOAL USE ONLY Rejpt No. P-1861-BA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE UNION OF BURMA FOR A PADDYLAND DEVELOPMENT PROJECT June 3, 1976 T lm dmt 1 2 Id ibudm d -y be _ed by reciplents only In the perfornmace of ffiely oldebl dud0. Its ot ots May mt oterwsbe be dicloed without World Bank authoriaton. | Currency Unit - Kyat (K) US$1 - K 6.50 - K I - US$0.15 K 1,000 - US$153.80 K 1,000,000 - US$153,800 Fiscal Year - April 1 - March 31 Since January 1975, the Burmese Kyat has been officially valued at 7.743 to the IMF Special Drawing Right (SDR) and conse- quently its value floats relative to other currencies. PRINCIPAL ACRONYMS USED AC - Agricultural Corporation AMD - Agricultural Mechanization Department BAB - Burma (Myanma) Agricultural Bank CLC - Central Land Committee - GOB = Government of the Socialist Republic of the Union of Burma ICB - International Competitive Bidding ID - Irrigation Department MAF - Ministry of Agriculture and Forests MPF - Ministry of Plannng & Finance O&M - Operation & Maintenance PEM - Project Extension Manager PIC - Project Implementation Committee PU = Project Unit SD - Survey Department SLRD = Settlement and Land Records Department SMS = Subject Matter Specialist TC-1 - Trade Corporation No. 1 TEM - Township Extension Manager TPC - Township Project Committee VEM - Village Extension Manager WPSD - Working People's Settlement Department FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE UNION OF BURMA FOR A PADDYLAND DEVELOPMENT PROJECT I submit the following report and recommendation on a proposed development credit to the Union of Burma for the equivalent of US$30 million on standard IDA terms to help finance a project for land reclamation, water control, and bolstering agricultural input supply and supportive services. PART I - THE ECONOMY 2. The latest economic report entitled "Current Situation and Pros- pects of the Socialist Republic of Burma" (565a-BA) was distributed to the Executive Directors on January 15, 1975. Another economic report is under preparation and will be circulated shortly. Country data are provided in Annex I. 3. Burma, the largest country in the southeast Asian mainland, is rich in natural resources, much of which have yet to be developed. Even though the population is relatively small at about 30 million, per capita income of Burma is still well below US$100. Burma came out of the Second World War and the struggle for independence in 1948 economically devastated and poli- tically divided. The fifties were a period of turbulence, both political and economic. When the present Government came to power in 1962, its major objectives were to unify the country and complete the social transformation of the economy which had begun in the forties. 4. After 11 years of government by the Revolutionary Council, a Con- stitution was adopted in a nationwide referendum in December 1973. Parliament is vested with supreme executive, legislative and judicial authority. The People's Councils, which extend down to village tracts, are the primary means of governing the nation. During the recess of Parliament, the Council of State exercises power on its behalf. On the whole, there has been little change in government personnel. The Burma Socialist Program Party is the only authorized political, party. 5. By and large, the Government has made notable progress in the attain- ment of its social and political objectives. Insurgency is still a problem, particularly in the hills and border areas, but there is probably greater stability now than at any time since independence. Nationalization of all major sectors, with the exception of agriculture, has been accomplished. Agrarian reform nationalized land ownership, gave peasants cultivation rights to land, and eliminated major inequalities in land holdings. Efforts were also made to reduce inequalities in the distribution of income and widen the scope of education and health services. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - 2 - 6. However, efforts in social fields have been constrained by slow economic growth. Over the last ten years, real GDP grew at an average annual rate of 2.3%, i.e., hardly above population growth which was 2.2%. Output of productive sectors increased even more slowly. Quasi-stagnation of agri- cultural production, combined with the growth of population, led to steady dwindling of the export surplus. Specifically, rice, the dominant crop, displayed zero growth between 1963-75 which in turn resulted in a steady decline in rice exports from 1.6 million in 1963 to less than 0.2 million tons in 1975, an average annual decline of 19%. Terms of trade however improved considerably after 1972, and in terms of purchasing power, export earnings in 1975 were only slightly less than half those of 1965. The stagnation of agricultural output directly affected the industrial sector which is largely agro-based. Similarly, due to the decline in exports, this sector was de- prived of much of its basic import requirements. Over the last decade, industrial production increased by only 1.4% a year. 7. Slow economic growth has been largely due to the neglect of agricul- ture, forestry, mining, and transport. Agriculture, which accounts for 36% of GDP, received on average only 7% of public investment during the last five years, equivalent to 2% of its value added. Inadequate public investments in agriculture were not offset by private investments. As a means of ensuring the desired pattern of income distribution, prices for compulsory delivery to the Government of many agricultural commodities were set at a low level. Farmers, especially paddy farmers, were left with few incentives to produce marketable surpluses and with inadequate savings for maintenance and invest- ments. 8. Traditionally, the government budget derived a large part of its revenues from its rice exports. The diminishing rice export surplus had an adverse impact on government income. The related scarcity of foreign exchange necessitated a marked contraction of imports (reducing custom revenues) and led to very slow growth of industrial production (and related revenues from commercial taxes). Nationalization of large-scale private firms drastically reduced direct taxation of private income. This was not replaced by a commen- surate increase in government revenue from taxes and surpluses transferred by government enterprises. 9. The current revenue/GDP ratio declined from 16.5% in 1963, to 14% in 1973 and below 10% in 1975. The index of current revenue (in real terms) fell from 100 in 1970 to 68 in 1975. Despite substantial cuts in maintenance and capital expenditures (in real terms), the budget deficit, almost entirely financed through bank borrowing, increased so much that the money supply doubled between 1972 and 1975. The deterioration of the budget was primarily responsible for the sharp inflation which has been running at a yearly rate of 30% but which is now declining. 10. Pricing, resource mobilization and resource allocation are the three basic economic policy issues facing the Government. It has already introduced some meaningful changes in its pricing policy. Procurement prices for agri- cultural commodities were raised very substantially. For instance, the pro- curement price for paddy was raised by 150% between 1972 and 1975. At present, -3- procurement prices for several farm products seem adequate and this saould help revitalize private investment ip agriculture. A major reorganization of the State Economic Enterprises is now underway. If successfully implemented and accompanied by adequate costing practices, this should improve their overall financial and production performance, thus increasing their surpluses for transfer to the Government. With the 1977 budget, the Government has embarked on a meaningful change in indirect taxation. As a result, the Gov- ernment expects to increase its revenue by as much as 50%. If this increase materializes, it would help control inflation because of lesser recourse to deficit financing as well as raise public investments. As far as resource allocation is concerned, it is Government's declared policy to give agricul- ture, forestry, mining, and transport greater priority, and a growing share of public investment is now allocated to these sectors. 11. Substantial foreign transfers of resources into Burma are required in order to accelerate economic development. Given Burma's low income level and the scarcity of foreign exchange, these transfers should be on conces- sionary terms and should in addition help finance part of local cost require- ments, which cannot at present be covered adequately by domestic savings alone; local cost financing is particularly-needed for the development of the agricul- tural sector where most investments have a relatively low foreign exchange component. During the last five years, aid commitments averaged US$60 million a year mostly on soft terms. Total external debt as of March 1975 was US$537 million, including an undisbursed balance of about US$217 million. Despite this low indebtedness (equivalent to 1% of Burma's GDP), the debt service ratio is about 20% as a result of the low level of exports, and is expected to remain below 20% in the next five years. Burma's gross foreign exchange reserves were estimated at US$144 million in September 1975, equivalent to twelve months' imports, based on the exceptionally low level of 1974/75 imports. 12. Burma's development potential is considerable. The Burmese popula- tion is well educated. Production potential in agriculture is excellent, especially for paddy. Exploitation of forest wealth is under way and could be expanded further. Mineral resources are not yet identified sufficiently, but they are likely to be substantial. Off-shore crude oil exploration has recently been stepped up with bilateral assistance. The Bank Group, in close cooperation with the IMF, is pursuing discussions with the Government regarding further improvement in economic policies which would help develop Burma's promising potential for economic development. The Burmese Government is now preparing an investment project document providing a list of pros- pective projects suitable for external financing. PART II - BANK GROUP OPERATIONS 13. Burma became a member of the Bank in 1952, of IFC in 1956, and of IDA in 1962. Between 1956 and 1961 the Bank made three loans totalling US$33.1 million, all for transportation projects. A loan for the Port of Rangoon helped finance the reconstruction of cargo berths and storage facil- ities, and the purchase of cargo handling and port equipment. Two loans - 4 - helped finance the postwar reconstruction and dieselization of the railways. All three projects were satisfactorily completed and the loans fully dis- bursed by FY68. No lending was requested or made between 1962 and 1973. Since 1973 IDA has made six credits totalling US$102.5 million. IFC has made no investments in Burma, nor are any planned. Annex II contains a summary statement of Bank loans and IDA credits as of April 30, 1976, and notes on the execution of on-going projects; implementation of these projects is proceeding without major difficulties. In addition, the Bank is Executing Agency for a UNDP-financed multisectoral preinvestment and technical assist- ance project aimed at the development of a pipeline of priority projects suitable for external assistance. 14. The proposed Bank Group strategy is aimed at easing the most imme- diate constraints to growth and particularly at increasing and diversifying production for export in order to alleviate the shortage of foreign exchange. To achieve this, the Bank Group is placing primary emphasis on the develop- ment of the agriculture, forestry and mining. The Bank Group is also finan- cing infrastructure improvements such as transportation and telecommunications, mainly to rehabilitate facilities whose inadequacy has been increasingly impeding economic development. 15. A mining project was appraised in March 1976. This project would comprise rehabilitation and expansion of small scale tin mining. Other prospective projects that are under active preparation include an irrig- ation project in Upper Burma, a port channel rehabilitation project, a cereal seeds project, and a fertilizer project. 16. The Bank Group presently accounts for about 15% of Burma's total external debt outstanding and about 5% of debt service. In five years, the Bank Group's share in the total external debt is projected to rise to about 20% and its share in the debt service to fall to about 2-3%. PART III - THE AGRICULTURAL SECTOR 17. The agricultural sector dominates the economy of Burma. Agricul- ture, including livestock, fisheries, and forestry, provides about 36% of GDP (1975), 69% of employment (1974), and 80% of total export earnings (1975). In addition, much of manufacturing, transportation, and trade involves the processing, handling, and distribution of agricultural commodities. In seeking to shift the economy to an industrial base, Government policy in the past has tended to relegate agriculture to a subsidiary role as a supplier of cheap basic foodstuffs and raw materials. Agriculture's share of total public in- vestment diminished from 16% in 1963 to an average of 7% during the 1971-75 period; correspondingly, the portion going to the industrial sector rose from 3% in 1963 to an average of 30% in 1971-75. The growth of agricultural produc- tion was limited to an average of 1.7% over the last decade, which was lower than the rate of population growth. The stagnation within the agricultural sector led to a reorientation of priorities in 1972; long- and short-term goals were redesigned to give first priority to the expansion of production in the agricultural, livestock, and forestry sectors in an effort to stimulate exports - 5 - and substitute domestic production for imports. Although the incremental change seems modest, the allocation of public investment to the agricultural sector was revised to 10% in 1976. Specific objectives for agriculture include increased production of rice and jute for export, cotton to supply raw materials for the domestic textile industry, and other cash crops both for domestic consumption and export. 18. Once the largest rice exporter in the world, Burma suffered consider- able devastation to embankment structures during World War II and subsequently from recurrent social disturbances. Land abandonment and deterioration was further aggravated by the stoppage of rice exports during the war period, changes in land tenancy, erosion of protective embankments, and general lack of maintenance. A special reclamation program of the Government managed to boost sown area by 1963-64 to its pre-war level of 12.4 million acres primarily through the restoration of approximately 71% of the 1.7 million abandoned acres in Lower Burma. However, due to insecurity, inadequate embankment maintenance, and a generally low level of commercial and economic activity over the last decade, the total abandoned area of Lower Burma increased once again to about 1.0 million acres by 1973-74. Over the last ten years, there has been no significant increase in the total sown area nationwide as increases in acreage in Upper Burma merely compensated for the losses in Lower Burma. At the same time there has been no growth in per acre yields, and annual production of paddy has fluctuated around its pre-war level of about 8 million tons. 19. About 70% of the area under paddy is concentrated in Lower Burma, mainly in the Irrawaddy Delta. Mostly local varieties are sown. Adoption of high-yielding varieties has been constrained in the past mainly by inadequate water control but also by the lack of material inputs, especially fertilizers, and by draft power shortages during peak demand periods. In Upper Burma lack of water is the major constraint to increased production and adoption of HYV. 20. Government control of rice marketing and pricing policy has had a substantial constraining effect upon productivity. The Government maintained low procurement prices for paddy during the 1960s and early 1970s in an effort to keep food costs for urban residents low and to make sizable profits from export sales. The results of such a policy were to (a) stimulate domestic consumption through artificially low retail prices, (b) generate an active black market for food commodities to satisfy excess demand at Govern- ment-established prices, (c) eliminate incentives for private investment in agriculture, (d) reduce procured volumes and induce covert diversion of paddy into free market channels, and (e) limit exportable volumes. The impact of low procurement prices was particularly severe on paddy farmers in Lower Burma who have virtually no alternative to paddy production in the wet season. Farmers, therefore, attempted to circumvent the compulsory quotas and to sell as large a portion as possible of marketable surpluses onto the free market. 21. The low procurement price policy was eventually reversed in 1972 and over the subsequent three-year period, procurement prices of paddy in- creased by 150%. Although private paddy transactions are still strictly regulated, state controls on the sale, purchase, and transport of rice within townships were abolished in May 1973 thereby legitimatizing limited local - 6 - free market transactions of milled rice. Preliminary analysis of the cur- rent paddy situation suggests that (a) prices paid by farmers for most inputs, tractor and other farm machinery services have not increased as much as crop prices in recent years; (b) adjustments in procurement prices for paddy have provided sufficient incentive to farmers to increase the area devoted to paddy cultivation and to invest in yield-augmenting material inputs, e.g., fertil- izers, pesticides, improved seeds; (c) because of acreage expansion, more intensive cultivation, and favorable monsoonal conditions, paddy production is expected to reach a record high of 9 million tons in 1976, an increase of 6.5% over 1975; (d) procurement should total at least 3.1 million tons of paddy during the 1976 season; (e) because of expanded production, free market farmgate prices for paddy have fallen but remain approximately 50% above Government procurement prices. 22. Other important crops include jute, cotton, oilseeds (groundnuts and sesamum), pulses, and sugarcane. Jute acreage and production declined over the 1974-75 period by 43 and 50% respectively, predominantly in response to shortages of seeds and relative profitability of paddy over jute; a 23% increase in procurement pricei announced for 1976 could stimulate production of this important export commodity. Production of cotton rose 18% while area sown increased by only 3% between 1974 and 1975. Groundnut production and area increased during 1974-75 by 13 and 15% respectively. Adopted in recent years as a follow-up crop to paddy, production of groundnuts has been constrained by drought and shortage of viable seed. Pulse area and production rose over the 1974-75 period by 6 and 18% respectively. Pulses are grown on dryland areas of Upper Burma and on paddyland as a follow-up crop in the Middle Delta of Lower Burma; further boosts in production will require water control measures and extension efforts to popularize improved varieties. 23. Burma has considerable potential for increases in agricultural productivity in the future, especially in paddy development. In Lower Burma the key factor for development would be the protection of paddyland from flooding (Middle Delta) and salt water intrusion (Lower Delta). Although the price of paddy has been increased substantially over the last several years in an effort to re-establish significant exportable surpluses, periodic review of pricing and market policies for paddy as well as for other crops will be required to induce greater intensity of land use and greater crop diversi- fication. Producers appear quite price responsive. Other important comple- mentary measures for increased productivity within the sector include (a) the adoption of known high yielding varieties, (b) increased supply, distributional efficiency and use of material inputs, particularly of fertilizers, (c) addi- tional investment in irrigation, (d) reclamation of abandoned arable land, (e) adequate provision of suitable extension services, (f) appropriate supply of equipment and equipment services to overcome draft power shortages in peak demand periods, (g) development of an agricultural credit system to provide not only short-term crop loans but also medium- and long-term financing of draft animal, water pump, power tiller, or tractor acquisition as well as for land rehabilitation, and (h) provision of a satisfactory supply of consumer goods for the agricultural producer market. - 7 - PART IV - THE PROJECT 24. The project was identified and prepared with the assistance of Bcnr missions in February and July 1975 respectively. It was appraised in October/ November 1975. A report entitled "Burma-Appraisal of the Lower Burma Paddy Land Development Project" (No. 1129-BA) dated May 25, 1976, is being circu- lated separately to the Executive Directors. A credit and project summary is attached in Annex III. 25. At negotiations held in Washington in May 1976, the Government was represented by a delegation led by Dr. Bo Lay, Deputy Minister of Agriculture and Forests. Project Description 26. The proposed project, the fourth Bank agricultural project in Burma, would be the first in a proposed series to protect existing cultivated area and reclaim abandoned paddyland in Lower Burma. The project would raise agricultural production by increasing acreage under cultivation, enabling higher land-use intensity, and boosting yields through protection of 120,000 ac of existing farm land from flood inundation and salt water intrusion; reclamation of 65,000 ac of abandoned paddyland; provision of efficient agri- cultural extension services; and improvement in farm equipment supply and services. The design of the project is simple. With necessary hydrological analyses, the project could easily be replicated in other Lower Burma delta areas. Incremental production at full development (1988) is estimated to total 159,000 tons of paddy, 5,900 tons of jute, and 23,000 tons of miscel- laneous crops. At full development, the project is projected to yield foreign exchange earnings of US$28 million per annum from increased agri- cultural exports. The project would in addition provide for two project preparatory studies: (i) a hydrological investigation and formulation of future projects for the entire delta region, and (ii) a feasibility study of a paddy storage and handling improvement project aimed at increasing efficiency and curbing losses in Government as well as on-farm stocks. Investments under the project would be made with the objectives of recovering abandoned land, protecting reclaimed and presently cultivated land from flooding and salt water intrusion facilitating dry season cultivation, strengthening of ex- tension services to area farmers, alleviating periodic shortages of animal dVaft power, planning for extending land development to other delta areas, and improvement in grain storage and handling at all stages of the marketing process. The specific components include: (a) Construction of approximately 410 miles of earth embankments involving 11.4 M cu yards of earthwork; (b) Enlargement and new excavation of 770 miles of drainage channels totalling 11.6 M cu yards of earthwork, complete with drainage culverts, sluice structures, channel regulators in Shwelaung Island, and supporting staff and storage buildings; - 8 - (c) Reclamation of 65,000 acres of abandoned land on 11 polders through grass and mangrove clearance and mechanical plowing and harrowing; (d) Cadastral survey and mapping of reclaimed area and eventual allocation of 10 ac plots to each of about 6,500 displaced farmers and landless area residents; (e) Strengthening of agricultural extension service in the five project townships covering 900,000 ac of cultivated land; (f) Fellowships for short-term extension training courses; (g) Procurement of 1,000 low lift pumps, 500 power tillers, 33 farm tractors, 33 disc plows, 16 disc harrows and 17 rotary cultivators to be sold to farmers' groups; (h) Construction of fertilizer godowns and field workshops, and provision of workshop equipment and tools for servicing the farming and land reclamation equipment; (i) About 60 man-months of consultant service to assist GOB in hydrological investigation and formulation of a program of phased development of the delta, as well as four man-years of training of Burmese engineers overseas in hydrology and hydrometrics; (j) About 35 man-months of consultant service to assist GOB in determining specific measures in which paddy storage and handling might be improved by Government as well as by farmers. Project Execution 27. The Ministry of Agriculture and Forests (MAF) would be responsible for the implementation of the project. A total of eleven agencies, seven under MAE and four in other ministries, would be involved in project implementation (paras. 28-29). Suitable coordination mechanisms were agreed upon during negotiations (paras. 30-32). 28. The seven agencies under the MAF and their respective responsibili- ties under the project are: (a) Irrigation Department (ID) would be responsible for the planning, design, construction, operation and maintenance (O&M) of all flood control and drainage facilities, and the procurement of construction and 0 & M equipment. It would also be responsible for conducting the delta-wide hydrological investigations for planning future projects with assistance from consultants. (b) Survey Department (SD) would survey farms to be displaced by embankments and drains, survey and demarcate land to be reclaimed. - 9 - (c) Settlement and Land Records Department (SLRD) would adjust land records and revise maps in accordance with SD data. (d) Central Land Committee (CLC), through Village Land Committees would allot land to displaced farmers and landless farmers in each of the five project townships. (e) Working People's Settlement Department (WPSD) would organize force account land clearing to supplement the family labor of land allottees, and settle families in Dauntgyi polder where the local population is presently sparse. (f) Agriculture Corporation (AC) would (i) provide research support, (ii) implement the intensified extension program, (iii) supply seeds, fertilizers and other input to project farmers, as well as (iv) construct four additional fertilizer godowns in the project area. (g) Agricultural Mechanization Department (AMD) would (i) procure and sell through the Agricultural Bank to farmer groups or cooperatives pumps, power tillers, tractors, and implements covered under project, (ii) provide tractor service to farmers, (iii) rent,power chain saws to land allottees for mangrove clearing, (iv) provide maintenance service for farm machinery and pumps and (v) construct, equip,, and staff seven field workshops in the project area. 29. The four non-MAF and their respective project-related responsibili- ties are: (a) Burma (Myanma) Agricultural Bank (BAB), under the Ministrwy for Planning and Finance (MPF) would provide long-term, medium-term and short-term credit to farmers, including financing for the purchase of farm machinery procured through the project (para. (g) above). (b) The Cooperative Department (CD) under the Ministry of Cooperatives would stock and sell hand or animal drawn tools to land allottees for land reclamation activities. (c) Ministry of Planning and Finance (MFP) would make annual budgetary appropriation for ID to cover 0 & M costs of the project flood control and drainage facilities. (d) Trade Corporation No. 1 (TC-1) which handles paddy procurement and domestic supply under the Ministry of Trade, would conduct the feasibility study for the paddy storage and handling study in cooperation with AC. 30. To coordinate the work of the eleven agencies, a Project Implement- ation Committee (PIC) would be formed within MAF. The Committee would be chaired by the Deputy Minister of MAF and would comprise the head or a senior - 10 - representative of each of the eleven participating agencies. The Committee would be responsible for inter-ministerial and inter-agency coordination of policy and important administrative matters. Under the Committee, a Project Unit (PU) comprising senior technical officers of the seven participating MAF agencies would be established. A senior ID officer would be appointed Project Director of PU who would serve concurrently as a member secretary of PIC. With adequate supporting staff, he would be responsible for coordinating technical planning and field execution of project components. Each PU member would be responsible for implementing the project work related to his respec- tive agency (Section 3.03 of the Credit Agreement). It is estimated that the project would be implemented in six years. 31. In each of the Project Townships, a Township Project Committee (TPC) would be formed to coordinate the project works. The Committee membership would include the Township level officers of each agency participating in project implementation. The TPC would be chaired by the ID engineer during the construction phase of irrigation works and by the AC Township Manager after completion of construction. Establishment of PIC and PU would be a condition for credit effectiveness (Section 5.01 of the Credit Agreement). TPCs would be established when construction and land reclamation operations are ready to begin in the respective townships. 32. Extension work under the project would be coordinated by a Project Extension Manager (PEM) who would report to the AC Irrawaddy Division Manager. The PEM would be assisted by three Subject Matter Specialists (SMS) for plant protection, mechanization, and extension training; these would be stationed in the Pyapon Township. At the township level, there would be three SMSs, two for paddy cultivation stationed at Pyapon and Laputta, and one for both paddy and jute cultivation in Shwelaung Township. Each township would have an Extension Manager and a Deputy Manager who would supervise the work of two to six Village Tract Extension Managers each in charge of six Village Extension Managers (VEM). Each VEM would in turn be responsible for about 800 farm families. 33. For operating and maintaining the flood control and drainage facilities constructed under the project, ID would establish six 0 & M units. In addition to engineering staff, each unit would have a labor crew organized into groups of five workmen during the dry season and eight workmen in the wet season. Each group would be responsible for the continuous maintenance of five miles of embankment. 34. Close synchronization of field operations and coordination among agencies would be crucial to achieving project targets and keeping work pro- gress on schedule. Day-to-day monitoring of the execution and coordination of the various subcomponents of the project would be performed by the re- sponsible members of the TPC. Evaluation of implementation progress would form the content of the regular periodic reports prepared by the Township Project Committees and sent to the Project Unit, as well as those by township- level officers to their respective headquarters in Rangoon. The Project Unit - 11 - would collate the township reports into a monthly project progress summary to be reviewed by the Project Implementation Committee. PIC would consolidate the monthly summaries into quarterly reports for submission to IDA. 35. Consultants would be recruited to assist the Government in the conduct of delta-wide hydrological investigation and establishment of a phased delta development: plan, as well as in preparation of a paddy storage and handling improvement: project (Section 3.02 of the Credit Agreement). Costs and Financing 36. Total project cost is estimated at US$54.0 million (exclusive of customs duties and taxes) of which US$25.0 million or 46% would be foreign exchange. The proposed IDA credit of US$30.0 million (covering 56% of the total project cost exclusive of taxes and duties) would finance the full foreign exchange cost component and about US$5.0 million equivalent of the local costs. GOB would finance the balance of the project cost, or US$24.0 million equivalent (K 156 million equivalent) through annual budget appro- priations. The need for some IDA financing of local costs is noted in para. 11. 37. IDA funds would be channeled to participating ministries through a project account within the Ministry of Planning and Finance (MPF). The AMD would procure and sell to farmer groups or cooperatives project-related pumps, power tillers, and tractors for which the Burma (Myanma) Agricultural Bank (BAB) would provide appropriate financing through the Village Banks. Because the institutional credit system in Burma is presently being restruc-tured and since BAB only began operations on April 1, 1976, details concerning terms and conditions within the new rural credit scheme have yet to be finalized. Prior to procurement of farm equipment (total of $3 million) for sale to farmer groups on credit GOB and IDA will agree on the final terms, conditions and procedures for providing medium-term and long-term credit to farmers, parti- cularly those for the purchase of tractors, power tillers, implements, low lift pumps and spare parts supplied under the project (Section 3.12 and Schedule 3, B.2 of the Credit Agreement). Moreover, a special account would be set up by BAB for credit to farmer groups covering the purchase of project- provided farm machinery and pumps. Repayment to this account would be used for activities directly related to agricultural development (Section 3.13 of the Credit Agreement). Recovery of Costs 38. Under the project, the O&M costs of flood control and drainage facilities would require an annual expenditure of about K 17 per ac. Similar- ly annual charges to recover the capital costs-of the project investment would amount to K 40 per ac without interest or K 125 per ac at 10% interest (30 year project life). Under the existing system of compulsory paddy procure- ment, GOB would automatically capture from the project farmers a large portion of incremental production at prices that are below those in the free and export markets, representing an implicit tax on farmers. Procurement quotas - 12 - are assessed on the basis of sown acreage as well as yields obtained and are structured to be progressive in nature. At present procurement prices and estimated international prices, GOB profits from exportation of the incremental paddy procured in the project area would exceed the full costs for O&M and the annual provisions for capital recovery (at 10% interest) as set out above. At the same time farm income levels of project farmers would increase substantial- ly and provide sufficient incentives for producer investments, increased seasonal outlays for crop inputs, and improvement in productive efficiency. Procurement prices and amounts allocated by GOB for O&M project costs would be periodically reviewed and, if necessary, revised. If at a future date the compulsory paddy procurement system were modified or abolished, an alternative system of cost recovery, providing for recovery of O&M costs and investment, would be formulated and agreed upon with IDA. (Sections 4.04 and 4.05 of the Credit Agreement). Procurement and Disbursement 39. All equipment, spares, and materials, estimated at US$18 million including contingencies, would be procured under international competitive bidding in accordance with Bank Group Guidelines. A preference of 15% of cif price or the prevailing custom duty, whichever is lower, would be extended to local manufacturers in the evaluation of bids. Small off-the-shelf items not suitable for international tendering, costing less than US$20,000 each, would be purchased through normal Government procurement procedures, on the basis of price comparisons among no less than three suppliers. Such pur- chases would be limited to a total of US$200,000. The civil works would be scattered over 11 islands spanning a distance of 1,200 miles and would com- prise mainly earthworks (embankments, drains and drainage sluices) subject to seasonal weather interruption (with 80 inches of rain during the rainy season). These would have to be phased so as to cause the least disruption of cultivation. Under these circumstances they would not be suitable for international competitive bidding. The ID would, therefore, carry them out by force account. The ID has had extensive experience in designing and constructing such works. 40. Disbursement from the proposed credit would be made at the rate of (a) 100% against the cif cost of directly imported equipment, spare parts and materials, and the ex-factory price of equipment, spares, and accesso- ries manufactured locally and procured under international competitive bid- ding, (b) 70% of expenditures for other equipment, spare parts and construc- tion materials procured locally, and (c) 50% of expenditures for civil works excluding construction material, equipment, and spare parts. For consultant's services and training of local staff abroad, disbursement would cover the actual foreign exchange costs. Benefits and Justification 41. The primary benefit from the project would be the increase in crop production within the project area. Not only would crop damage be reduced because of greater protection from flooding and salt water intrusion but - 13 - increased land-use intensity would become feasible with provision of low-lift pumps and reduced risks of crops loss. Annual production in the project area would increase from the present 68,000 tons of paddy, 2,000 tons of jute, and 4,300 tons of miscellaneous crops to 227,000 tons of paddy, 8,000 tons of jute, and 27,000 tons of miscellaneous crops at full production in 1988. Without the project, the corresponding production is estimated to rise to 76,000, 2,500, and 4,400 tons respectively. 42. About 18,300 farm families would benefit directly from the project-- 12,800 existing farm families benefiting from protection against flood and salt water damage on presently cultivated land and 5,500 presently landless resident families receiving plot allotments from the 65,000 acres of reclaimed paddyland. The project would substantially improve the earning capacity for low income farmers in the project polders. The project would increase farm income two to three times from present average net income of about K 200 and K 300 per ac to K 650 and K 750 in the Lower and Middle Deltas respectively. 43. The incremental rice and jute production would generate about US$28 million per year in foreign exchange earnings. By way of comparison, annual incremental rice production derived from the project areas would represent approximately 51% of total 1975 rice export volume from Burma and about 48% of foreign exchange earnings from rice exportation in 1975. Total incremental export earnings per annum from paddy and jute resulting from the project would represent roughly 20% of total 1975 earnings from major export commodities. Taking into account the local value of production of pulses, groundnuts and other crops, the total value added to the Burmese economy from incremental agricultural output would amount to about K 295 million (US$44 million) per annum. 44. The economy is expected to realize an estimated 30% rate of return from total project investments, inclusive of physical contingencies. Capital investment costs per ac in the Lower Delta polders would be approximately half those incurred in the Middle Delta while incremental net benefits would be about 70% of those in the Middle Delta. As a result, Lower Delta polders would yield a 33% rate of return versus 24% for the Middle Delta polder. Sen- sitivity analyses involving increases in construction costs by 25% over original estimates, per ac yields 15% less than projected, net benefits lowered by 25%, and implementation delays and slippage of benefits two years, each generated rates of return 20% or higher for each delta project area. 45. The total project cost (US$51.5 million), including physical and price contingencies but excluding costs of future developmental studies, averages only about US$280 per ac of land developed. Such low-cost develop- ment could successfully be replicated over a large part of the estimated total three million ac in Lower Burma, including about one million ac of abandoned paddyland. - 14 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 46. The draft Development Credit Agreement between the Union of Burma and the Association, the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement and the text of a re- solution approving the proposed credit are being distributed to the Executive Directors separately. 47. Special features of this credit are referred to in paras. 30, 31, 35, 37 and 38 of this Report. 48. A special condition of effectiveness would be the establishment of the Project Implementation Committee and the Project Unit. 49. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 50. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President Attachments June 3, 1976 TABLE 3A Pageol of LPaM" SURMA- SOCIAL INDICATORS DATA SHEET LAND AREA (THOU XM2)......................... ------------ SURMA RFFERFNCE COUNTRIFS (1970) TOTAL 676.6 MOS5T RECENT AGRTC. ..1960 1 97 0 ESTrMATE INDONESIA INDIA MALAYSIA~ GNP PER CAPITA (UIJS) 50.0 10.0 R0*0 I10 0.0 110.0 4000.0 POPULATION AND VITAL STATISTTCS POPULATION~ (MID-YA. MILLION) 22.0 ?7.6 29. 5 1 15s.6 538. 1 lo.4 POPUILATION DENSITY PER SQUARE KM. 3 3* 0 *40 0. 0 6 1.0 th8.0 32.0 PER S0. KM. AGRICULTURAL LAND . VITAL STATISTICS CRUnE MIRTH RATE PER THrIUSANn 413.6 Ii1.3 36.0 415.9 112.7 412.2 CRUDE DFATH RATE PER THrOUSANn 241.l 19.3 141.2 20.6 18.8 12.9 tNFANT MORTALITY RATF r/THOU) I 9.0 *. RM0 1 30 .0 110.8 /a LIFE EXPECTANCY AT BIRTH (YR51 16. 50.0 52.5 417.5? 49.5 59.4A GROSS REPRI1DUCTION RATE *. .7 2. 7 3. .9 2.6 /a POPULATION GROWTH RATE (%) TOTAL l.A 2.1 a2. 2.0 2.3 2.7 UWBAW 5.7 3.7 5.7 3. 6 3.5 3.6 ORBAN POPIILATION IX OF TOIAL) 17.1 19.9 22.3 LL 17.5 20.2 27.8 AGE STRUCTURE (PERCENTT 0 To IA YFARS 37. a 000 A04fs 441 42. 0 WA.7 6S YEARS ADOVER Ai * S/ab .n3.52. 32 8 AGF DEPENDENCY RATIO 0 .7 0 .8 0 . 0 .9 0 .8 0 Q /a ECONOMIC DEPENDENCY RATIO 0. / I /a 1.L .. 2/a 1.: el FAMILY PLANNING ACCFPTONS (CUI4ULATIVF, THOII) . ... 5.3 11308.0 222.2 USERS IX OIF MAPATED ~OPEN) A a...._ EM5LOY MFNT TOTAL LABOR FORCE (THOUISAND) 10600.0 10920.0 11750.0 . 221000.01b ONOO.0 /a LABOR FORCE IN AGRICULTURE (Xl 68.0 7 0 .0 6 7 .0 .. 71 43.0 7& UNEMPLIYEn (I OF LABOR FORCE) .. 13.0/b .0/ A.0/c 6. b TN!rlHE rIISTRTHUTTIN X IF PRIVATE INCOME REC'D MY. HIGHEST SI nF HOUSEHOLDS I0.6/d 25..Ž.oLd ?p.3 HIGHEST P0X lIF HlUSEHOLDS oo*o77Z .. . . i./d 56 .0 LOWEST P0X OF HD.JSEHOLDS 6.57T .. .. .7 7d 3 . LOOERT 401 nlr HOUSEHOLDS I 6. s7d- .... 1 3. 7d 11.2 DIRTRIM(1l1nN OF LAND OWNFRSHIP O IpNFD MY TOP 10X OF OWNERS ... * O IWNED MY SMALLFST 101 ONNERS . .. I4FALT4.AND NUITRITION POPUILATION PER PHYsICIAN 12270.0 8970.0 7900.0 27650.0 0800.0 POPOLATION PER NUIRSING PERSON 11310.0 15A0.0/b 688o.0/c 8010.0 5110.0 1080.0/ac POPUILATION'PFR HOSPITAL MEn 19B0.0 1000.0 120 00.0 1 7 00.0 1000.0 20:0. PER CAPITA SUPPLY OF - CALORIFS (I flF REQUIREMENTS) 88.0 103.0 102.0 89.0 91.0 Q3.0/a d PPOTEIN (GRAMS PER DAY) (03 .0 AR90 5I.0 43.0 5S*0n of.07IT .OF WHICH ANIMAL AND PUILSE . 13.0/ . 0. 16. 0 2 . DEAtH RATF 1/THOO) AGES 1-4 S.. .... .5 ED )CATION ADJUSTED ENROLLMENT PATI3 PIOTMARY SCHOOL 70.0/ 108.0 109.0 d4 69.0 68.0 ~ 8./ SECONDARY SCHOnlL 12.0 : 10 22.0 ~d I2.0 28. 0 3 4. o7o YEARS OF SCHnOLING PRovIDED (FIRST AND SECOND LEVEL) I11. 0 1 1. 0 10.0 1 2.0 1 2.0 S3. o/. VOCATIONAL ENROLLmENT IIX 09 SECONDARY) 0.5 0.7 0.7 28. 0 6.0 If. 3./ &DULT LITERACY AATE (0) 58.0 /a.f 7)0~0..... 77. : 3 FRNSPER ROOM (AVERAGE) 2.. . .. .3 OCCUIPIED D)WELLINGS WTTH4OUT PIPEAY WATIR (% . . ... 65 .0 /A ACCESS Ifl ELECTRICITY (% OF ALL DwELLINGS) 11S . .. 0.0 RUIRAL DWEJLLINGS CONN4ECTFrD TO ELECTRICTTY (1) ........ 30.0 COEJSLImPT TON RAODI 4ErEIVERS (PER THOuI POP) 6.0 15.0 01.0 114.0 01.0 01.0 PASSFNGER CAPS (PER THOU POP) I. / .0n 1.0 20.0 1.0n 23.0 /a ELECTRICITY (KWH/YR PER CAP) 19.0 22. 0 25.0 /e 20 .0 1T14.0 382.0 k NEWSPRINT (KG/YR PER CAPT 0.5 0.6 0.0 0.0 0.0I4. SEE NnTFS AND DFFTNITTrINS (IN REVERSF ANNil I Page 2 of L ges iiOTISS Unless otherise noted, data for 1960 refer to any yer betwen 1959 nd 1961, for 1970 between 1968 ed 1970, nd for Most Recent lEatite betwsen 1971 and 1973. Th selection of Mlaysia - an objective country is baed on its ability to cobine high rate of scoos.ic growth with n adquate level of welfare. bURNM 1960 jg 1954; /b 15-59 end 60 yearn and over reepeotively; /L Ratio of population under 15 and 60 end over to total labor force; /d 1956, Rangnon, urban; a. 6-9 nid 10-14 years of age respectivaly; /f 16 yers end ver; a 1962. 1970 Ratio of population under 15 and 65 end over to totsl labor force; A Personnel in government services only; /c 1964-66; /d 6-9 end 10-15 years of age rspectively. WMT RELC2N' STINATE, Ratio of popslation under 15 and 65 and ovr tn total labor forc; ab Urban only; Personnel in g-ovrnment services only; /d 6-9 sand i0-15 years of age respectively; 1974,; a 1975. IN1ESI.A 1970 / Registered applicente for work. INDIA 1970 / Ratio of population under 15 ed 60 end over to labor force age 15-59 yreo; ib AID eatisate of labor force in age group 15-59. IbL report give a figure of 180.L silliun based on 1971 population censu. The difference is due to changes in the dafinitin- of a worker. In the 1971 cenaiis, persons were classified only on the bais of their mia. activities. This led to thb excluion of several categories such as housewives; ac Registered applicant,, for work; d 1967-68; /- 5-10 yearn of age; a 1967. MALIASIA 1970 / West Malaysia; a Registered Applicants for cork; a D vernamnt only; /d 196%-66; e 12-18 yearn of age; a 1967; a Piped weter inside. M6, May 19, 1976 DF FIN ITI0NS OF SiLCAL INDICATORS Land Arcs (them bo ) Populotion per oars ti peroon - Popolitioc divided by comber of practti-ng Total - Total -ucfsce area c.mpri-tg land o-es sad ;mlood wooro. cole and fenale gcrdot ic reers, "tiaind" or "c-rtified" -050.sod Agcri - Moot recent o-tinste of agrocuiturot srea used ceo;sororily or -axiliory pccsonoei with trotoing or eoporicce. ponsacootly for crops, poacort.- market & kitchon gardens or to lie Peopletion par ho-pital bed - popusltito divided by -nhber of hospital beds follow. ovilablh ino pblic aid prteate goe-ral ond spoicalited hospitai acd rehabilitation cteoro, eciodno coc-tg s-as aid catahltshmcoto tor fNP per capita (US$) - GNP per capita esacostes at =arket prices, ca-c1- cootodisl end prevonti- care. b.ted by sane convereio t methbd as W-1cd Bonk btio- (1972-74 sboi). Per_ capita orpply of caoric-e (% of ceqoirc ents) - Coputed from enrgy sq.ivolot of net food -pprlicc ov .Ia a contry par -apit- Pcr dsp, Poopsltion and -stal statistics avitlable sopplit -coopri-c d-csticL pirdoctoco imrt p-rcos -esrt. Popsltion (nid-yr. illion) - Ad of July first: it -st a-ailo. ad changes in tock, net s-pplios -clode schol feed eds. q-t- averago of two ned-year entoates ier sued in fond prace-cing ond ic. s ito distrsbutio, roqi-renento onto e-tisoatod by FAO booed on physiologicl needs for o-ns activity Fpoelais- deeiciy -Par square b - Mid-poor population Per oqusre kiln- and health considering ctioano enperatore, body ecighto. age snd neter (100 hectarce) of -oceL ores tn diatribstio in f popoltiot. aid olivacog lit for -site at ho.sa Poculatisi deosity - per squate Ito of a-rc. la,d - C-apnted s ove far hold lo_se ag-cccltural .Ind only. Per -spits soppty of po-ctie (grens opr day) - ar.tsoncct---t of per capita net -spply of food per day. met supply of food is defined as Vstil otatiotien ah.s, -nqoir-mento far al .on.trie. coteblifhed by hSDA Economic Crude birth rote ocr thoonond - Ann-al ieee birth.s pzr th-ossnd of mid- Reseorch Servi-ei provide for a amis allow-ance af 60 grasS of toinl yr-r copulation, t-y-ear ritbsoetic overogin codieg sD 1960 end 1970, protein per day. and 20 grams of oninsl and pslse protco.i of which Fnd five-year averagn ending in 1975 lor neat rmnent estlOSate. 10 grams should be a-ical protein these --dlordu ore lowe tha- chose Crudea death rtr hsun - Ancoal dssscho per thousand of mid-year of 752 gr enlo total protein and 23 gran of animal p-teic as as popolation, r yser riebnqt- g dgoc in 1960 p1 e9(0, en arage for the wourd. popomd by FAO in the Thtrd World eod irvy. fcvn-ycar average coding in 1975 for sent recent esinate. Per Egoita yK.t.i.s-pplyf antoal ad ps - Prorein os pply af fmrd Ilafant mortality coe (/thu - A--il d-coht of snfsts under one year of derived from snimals and pnlses so gras- per da. age per th-osand live birtho. Death ratc (/thou) saes 1-4 - Aennal deaths per tho-usad In age gr-cp life expectancy at birth (yr-) - Average ossber of years of lile r-main.ig 1-4 yeac-, to .hildrcn is this use group, suggested ao a indicator f at birth, -sully fise-yeac aserago endiog Sn 1960, 1970 and 1975 for malnetritio. doeinlpieg coomtcion. Cross roprodsiian rat- AAerege nosbhr of lice daughtera saan will idecation bear in her noo.al reprrduc-eme persod if nhe coperien.en prnse.t age- Adiumted enrollment rates - prunarv school - Firsilm,-nt of ad sgc- as pec-if fertility rare, usually fim--ypsr a-erages ending in 1960. pperent-le of primacy ochool-age popultian, in-lodes children aged 1970 and 1975 for deceloping coucicits. 6-11 yeses but adjusted for diffec-ta ion-the of pcs.aary oducaties Popglati,9 groIth rate (%) - total - Cp.po..d annual growth -rec of nid- for couotrieo with aniveroal education, occolimeot may exceod IO7O year population for 1950-60, 1960-70, a-d 1970 to moot recent year. cicce none pspils are bolos. o- above the officiol school age. Population grooth rate (3) - urba - Computed like growth rate of cotal Adjusted enrolment ratio -nsecondsry,, e o.I - Cmputed as above, populstion, dgfferest definitions of urban ares s.ay affect c:apara- secondary edne.tion requir-s et least fear years of opp sced press ry bility of dais anong countries. ins-ructin, pro-idos general, vocational or tcacher trsiniog Urban ppslatin (7 of teotl) - Ritio of urban to total populstion, instrctione for popil of 12 to 17 Y.." of ago. corr-speeio-c- different definitions of orber -reas may affect -inpa.rboliiy of dnto co--cuc are generally eocluded. ansasg canntrres. Yearn of chociiog, provided (first ecd oeco-d levels) - Total years of Acegatrucisro forcoont) - Cheldrcn (0-14 ora . wsrlimg-aoe (15-64 Joan), schooling; at se-ond.ry level, moosriocal icstroc-ioo may be pac- and retired (65 ye-rs and one.) as peece.togss of nid-ye-r popslat-o. tially -r cnmpletely .ncolded. Age depeodency ratio - Ratio of populati-m und-r 15 and 65 and over to Vocetional enrollnno %t of secondary) - Voca.is-1s inititstions those of ages 15 tbr.s-gh 64. ifclude technieil. industrial or ether prugrars which operate iconnoic depeodency ratio - Ratio of populetioo cndrr 15 and 65 and over ondependently or as depart-swta of secondary inscitsrtoos. in the labor force ia age group of 15-64 y-ars. Adult literacy rate, (hj) - Literate adolts (able ti read and -rite) as _acily piannlno - acceptors (cumulative. chos) - C nnmlatime simmbe nf per--tsage of total adult popolarion aged 15 years and over. acceptoes of birth-control devecos vodor asupecco of national fanily ploensog progran oince inception. Hossena Family PcIesioc - users (. of married wosec) - Perscttagea of married Pcroons per coon (average) - Averege nocber of persons per con in women of child-bearing age (15-44 years) who nse birth-control dvevcen onrsspicd convectional dwellings l orbhan areas, dwellings eoclude iohmrsdwmnio aoage group. nom-pernaent sttr-rse asd un ccupied p-ttu. tOccuoed dwellings without piped water f7) - D-eopiod convenrianal EmicsEcL dwellings en rbeo and rural areas werthoc ins-de or outside piped Total labnr forte (thousand) - Erconmiatly ctiro perso-s, including water facilities as percentsge of all ocospied dwellings. arced forics and snseploysd bht ecluding hou-e-i-ea studocts, etc Acceas to eletcicity (7of _ll dweLlingsJ -Conventional dweliings deftostisos so vacsons countries are ent comparabl. with electricity in living quarters as per.n.t of total dcellcogs on Labor f(eo so agreonitore (2) - Agriculcorel laboc forso (sn f-siog, irbon asd rwraI areas. focutry, hoottog and fishing) -s perceatagi af cotai tabor force, Rcral dwellinRs concerted to eiectatqjtyj) - Computed as shone for onemrtyed (7. of labor force) - Unemployed are s-saLly doi-ood as persoos rural dwellings only. who are able and willing to r.ke a Job, cut f a ;nh on a g-ven day, re-aincd out of a job, sod soeking sork for a spe-fis-d cc-m period Consumption not exceeding one wek, may not be comparuble beate-s -oautes duc to Rodio receivers (per thou pop) - All tvpes of r---tvers for r-d-o broad- difffercn definitions of unonpioped and source of data. e.g. employ- cests to general public per thoosood of populatin, exnlud-s vest of siesta Listies - sample u_rvcys coups- os yncoploysoct insuran-e1. anlcensed receivers un countries and in years whem regicatlr n of radio uetn 0-3 tn eff-t, d.sta f- r.ecs.t yearu may not bh conpr..ble Income distrihution - Perentage of prieat -ocomo (both in c-uh and kind) since nest -o-mtr-eo abolished licensing. received by rinhe3t 5%, rich-st 20%, poorest 71%.. a-si pa-rect 40-. of e - ,g or_car(per chou pop) - Passenger cars ompres emotor cars hoaseholds. seet ing leos than eight persona, ecidos as-sd- - se- . hesc-n3 and Dislrsbuteko of bnd swnersnhp - Per.antagea tf tan- ts.ad bh o.ulthi-ct ile'tricitv (koch/yr per oa - Annsal coaaocptos of und-utrie, con- 107I and poorest 10% of land o-iners. meril, publit and pfiu-t ecleot d rioctyt kiiat -rt heora per tpit., g-nocaly basedion prd.sdtiondata, withoutallowanc for losse in Heal1th and_Nutrition grids bht ilossing for _mpcrtu sad _aparts of I iectrlcity. Populatio" per physiosan - Popolteon divided by nuber af p-cmsing Newsprint (kh/yr per cap) - Per capita annual consomption in kilsgra-s pbyiinins qualified from a medical school at smivers ty loan, estimated fr-m donessti productian plus net imports nf newsprint. ANNEX I PFlgr 2 4 e COUNTRY DATA - BURMA AREA 2/ POPULATION DENSITY 678.528 knV 30.2million (mid-1975) 2pk/ Rate of Growth: 2.2 (from 1965to 1975) 148 per l2/of arable land POPULATION CHARACTERISTICS 1974 HEALTH 1974 Crude Birth Rate (per 1,000) 33.7 Population per physician 8,976 Crude Death Rate (per 1,000) 11.3 Population per hospital bed 1,190 Infant Mortality (per 1,000 live births) 55.8 INCOME DISTRIBUTION 1972 DISTRIBUTION OF LAND OWNERSHIP % of national income, highest quintile 40% % owned by top 10% of owners lowest quintile 8% % owned by smallest 10% of owners ACCESS TO PIPED WATER ACCESS TO ELECTRICITY % of population - urban . . % of population - urban - rural . . - rural NUTRITION 1972 EDUCATION 1974 Calorie intake as % of requirements 102.2% Adult literacy rate % 67% Per capita protein intake 71.2 Primary school enrollment % 83% 1/ GNP PER CAPITA in 1975 : US $ 80 GROSS NATIONAL PRODUCT IN 1975 ANNUAL RATE OF GROWTH (%, constant prices) US $ Mln. % 1962-68 1968-72 1972-75 GNP at Market Prices 3463 100.0 2.7 3.6 2.0 Gross Domestic Investment 351 10.1 7.9 -3.0 -2.7 Gross National Saving 278 8.0 5.7 1.0 -2.6 Current Account Balance -73 -2.1 - - - Exports of Goods, NFS 209 6.0 -21 15.6 -11.4 Imports of Goods, NFS 282 8.1 -11 4.5 -8.5 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1975 2/ Value Added Labor Force7 V. A. Per Worker US$Mln. 7 % Mln. % US $ % Agriculture 1260.5 36.4 8.1 68.9 155.6 12.2 Industry 467.5 13.5 1.1 9.3 425.0 33.3 Services 1735.0 50.1 2.5 21.8 694.0 54.5 Unallocated - - *- - Total/Average 766D 100.0 11.7 100.0 296.0 100.0 GOVERNMENT FINANCE General Government Union Government (I4uLj~.~t~Mln.) of GD 3/ (Kyats, Mln.) % of GDP 3/ 1975 1975 1973-75 1975 1975 1973-75 Current Receipts4/ 9,570 53.0 57.0 1,744 9.6 10.4 Current Expenditure -/ 10,614 58.8 60.8 2,187 12.1 13.5 Current Surplus --1,044 5.8 3.7 -443 2.5 3.1 Capital Expenditures 881 4.9 5.4 284 1.6 1.7 External Assistance (net) 273 1.5 1.5 - - - 1/ The Per Capita GNP estimate is at 1973 market prices, calculated by the same conversion technique as the 1975 World Atlas. All other conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 2/ Total labor force: unemployed are allocated to sector of their normal occupation. 3/ Since fiscal data relate only to a six-month period in 1974, an average for 1973 and 1975 is used. 4/ Revised budget estimates. not available not applicable ANNEX I Page 4 of 4 COUNTRY DATA - BURMA MONEY, CREDIT and PRICES 1970 1971 1972 1973 1974 1975 (Million kyats outstanding end period) lune) Money and Quasi Money 2422 2399 2793 3581 4334 5168 Bank Credit to Public Sector 2616 3043 3676 4342 4864 5479 Bank Credit to Private Sector 537 557 668 1000 775 994 (Percentages or Index Numbers) Money and Quasi Money as % of GDP 23.6 23.0 25.9 30.5 29.2 28.6 General Price Index(1972 = 100) 91.0 92.9 100.0 123.5 156.6 212.4 Annual percentage changes in: ConsumeF Price Index at Rangoon -4.0 2.1 7.6 23.5 27.0 35.6 Bank credit to Public Sector 9.1 16.3 20.8 18.1 12.0 12.6 Bank credit to Private Sector 3.9 3.7 19.9 49.7 -22.5 28.3 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1973-75) 1973 1974 1975-1 US $ Mln % Rice and rice products 39.4 29.9 Merchandise Trade -33,3 -18.7 -86.3 Teak 36.1 27.4 Exports, mainly f.o.b. 142.5 73.4 175.6 Pulses and beans 9.2 7.0 Imports, mainly f.o.b. -175.8 -92.1 -261.9 Animal feedstuff 9.1 6.9 Services and private trans- -15., -11.3 6.9 Base metals and ores 8.8 6.7 er_ Official grants (net) 19.2 9.7 17.1 All other commodities 29.2 22.1 Current account -29.9 -20.4 -62.3 Total 131.8 100.0 Long-term capital 51-7 42.n 6aD.. EXTERNAL DEBT. March 31, 1975 Foreign loans 68.3 39.3 76.1 Debt repayment -24.2 -13.0 -23.3 US $ Mln Other capital (net) 7.5 15.6 7.7 Short-term bank credit -0.2 5.8 32.7 Public Debt, incl. guaranteed Capital account 51.5 47.7 93.2 Non-Guaranteed Private Debt 319.9 Total outstanding & Disbursed Errors and omissions - 0.6 3.3 9.4 1/ DEBT SERVICE RATIO for 1974- Overall balance 21.0 30.6 40.3 7. Public Debt, incl. guaranteed Non-Guaranteed Private Debt 17.8 Gross Reserves (end year) 93.9 125.0 172.5 Total outstanding & Disbursed Net Reserves (end year) 23.2 36.1 38.9 RATE OF EXCHANGE IBRD/IDA LENDING. ( April 30, 1976 ) (Million US $): Through December 1971 From Feb. 1973 to Jan. 1975 IBRD IDA US $ 1.00 = K. 4.76 US $ 1.00 = K. 4.81 K. 1.00 = US$ 0.21 K. 1.00 = US $ 0.21 Outstanding & Disbursed 24.2 Undisbursed 78.3 From Dec. 1971 to Feb. 1973 From Jan. 25, 1975 Outstanding incl. Undisbursed 102.5 US $ 1.00 = K. 5.35 SDR 1.00 = K. 7.74 K. 1.00 = US$ 0.19 K. 1.00 = SDR 0.13 1/ Ratio of Debt Service to Merchandise Exports. 2/ Partly estimated. South -ksia Departm(-nt not available June 3, 1976 not applicable ANNEX II Page 1 STATUS OF BANK/IDA OPERATIONS IN BURMA A. Statement of Bank Loans and IDA Credits as of April 30, 1976 US$ Million Amount (less cancellations) Loan or Credit No. Year Borrower Purpose Bank IDA Undisbursed Three loans fully disbursed 33.1 413 1973 Burma Inland Water Transport - 16.3 12.0 414 1973 Burma Third Railways - 16.7 4.1 483 1974 Burma Lift Irrigation - 17.0 10.1 493 1974 Burma Forestry - 24.0 23.6 551 1975 Burma Telecommunications - 21.0 21.0 557 1975 Burma Livestock - 7.5 7.5 Total 33.1 102.5 of which has been repaid 31.7 - Total now outstanding 1.4 102.5 Amount sold 2.7 of which has been repaid 2.7 - Total now held by Bank & IDA /a 1.4 102.5 Total Undisbursed 78.3 78.3 B. Statement of IFC I]nvestments None /a Prior to exchange adjustments. ANNEX II Page 2 C. Projects in Execution I/ Cr. No. 413 Inland Water Transport Project, US$16.3 Million Credit of July 2, 1973; Effective Date: September 17, 1973; Closing Date: June 30, 1977 Procurement was slow in the beginning because the Inland Water Transport Corporation's management was not familiar with IDA procedures. However, procurement has picked up in recent months. The implementation of the project is being affected by increases in unit prices of commodities procured under the project, particularly relating to engines and spare parts. As a result, the number of equipment items financed under the project has been reduced. About $6.0 million was committed as of January 1976. Cr. No. 414 Third Railways Project; US$16.7 Million Credit of July 2, 1973; Effective Date: September 17, 1973; Closing Date: Decem- ber 31, 1976 Despite problems, such as theft of spare parts, which is adversely affecting the Railways' operations, procurement and implementation of the project are proceeding at a reasonable speed. The Government recently took steps to reduce the security problem as regards the theft of parts and allowed substantial increases in freight and passenger tariffs. The total commitment made as of March 1976 was about $14.7 million. Cr. No. 483 Lift Irrigation Project, US$17.0 Million Credit of June 21, 1974; Effective Date: August 6, 1974; Closing Date: Dec- ember 31, 1978 The project has made a very good start. Within three months of the signing of the Credit Agreement, the Project Committee was established and functioning effectively; procurement actions were initiated for $12.6 million of equipment and spare parts. The contract for procurement of 10,000 pumps was awarded in January 1975. About 1,500 pumps had been dis- tributed to farmers by January 1976. 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution and in particular to report any prob- lems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution. ANNEX II Page 3 Cr. No. 493 Forestry Project; US$24.0 Million Credit of July 10, 1974; Effective Date: February 27, 1975; Closing Date: March 31, 1981 The four spec:ialists appointed to assist in project implementation assumed their posts in March 1976. Bid invitations for most of the equipment were issued last June/July and the first awards were made last November. There have been some delays in procurement procedures. Orders for the first batch of extraction equipment on nine ICB tenders valued at about US$5 mil- lion were placed in February 1976. However, recruitment of executive and high level technical staff still remains to be completed. Cr. No. 551 Telecommunications Project; US$21.0 Million Credit of May 30, 1975; Effective Date: July 23, 1975; Closing Date: June 30, 1980 The Project has had a good start. The Post and Telecommunication Corporation has prepared the specifications for all equipment to be procured under the credit. Most bid invitations were issued by January 1976. Cr. No. 597 Livestock Project; US$7.5 Million Credit of December 30, 1975; Effective Date: March 26, 1976; Closing Date: March 31, 1981 The Project Policy Committee has been established, and the Project Coordinator appointed. The project has just become effective (March 26, 1976). ANNEX III Page 1 BURMA - LOWER BURMA PADDYLAND DEVELOPMENT PROJECT Borrower: The Socialist Republic of the Union of Burma Beneficiary: Ministry of Agriculture and Forests (US$30 million equivalent) Amount: US$30.0 million equivalent Terms: Standard Project Description: The project is designed to protect 185,000 ac of paddyland in the Lower Burma delta region from flood and tidal intru- sions, strengthen extension and other agricultural supporting services, and investigate possible future measures for flood control and land reclamation as well as potential steps that could be taken to improve paddy storage and handling. The specific project components are: (a) Construction or rehabilitation of about 400 miles of earth embankments, excavation and enlargement of approx- imately 770 miles of interior drainage channels, instal- lation of about 90 concrete drainage culverts and 45 reinforced concrete sluice structures, and construction of about 10 masonry and reinforced concrete regulators. (b) Provision of land clearing equipment including 24 tractors and accessories as well as 400 chain saws for the reclam- ation of 65,000 ac of abandoned and cultivable waste land. (c) Establishment of an intensified agricultural service to cover about 900,000 ac of cultivated land within the five project townships. (d) Allocation of funds for fellowships for short-term agricultural extension training courses ir neighboring countries. (e) Provision of 1,000 low-lift pumps, 500 power tillers, 33 farm tractors, 33 disc plows, 16 disc harrows, and 17 rotary cultivators to be sold to farmers' groups on medium-term credit. (f) Construction of fertilizer godowns in the project area. (g) Erection and equipment of Agricultural Mechanization Department field workshops. ANNEX III Page 2 (h) Provision for about 60 man-months of consultant service to assist in hydrological investigation and formulation of a program of staged development of the delta. (i) Provision for about 35 man-months of consultant service to assist in the preparation of a project for improving paddy storage and handling by the Government as well as at the farm level. Estimated Costs: US$ million Local Foreign Total Major Categories Drainage and Flood Protection Works 16.01 14.56 30.57 Land Reclamation and Equipment .84 .50 1.34 Farm Machinery .21 2.58 2.79 Extension Service and Equipment .75 .07 .82 Agricultural Extension Training .10 .10 Fertilizer Godowns .14 - .14 Tractor Workshops .20 .19 .39 Sub-Total 18.15 18.00 36.15 Engineering Consultants for Hydrological Investigations, Equipment, and Vehicles .73 1.27 2.00 Engineering Consultants for Grain Storage and Handling Study - .30 .30 Sub-Total .73 1.57 2.30 Project Cost 18.88 19.57 38.45 Contingencies Physical 2.04 .77 2.81 Price 8.08 4.66 12.74 Total Project Cost 29.00 25.00 54.00 Financing Plan: US$ million Local Foreign Total IDA 5.0 25.0 30.0 GOB 24.0 - 24.0 ANNEX III Page 3 Estimated US$ Million Disbursements: FY77 FY78 FY79 FY80 FY81 FY82 Annual 20.0 1.6 1.6 1.6 1.6 3.6 Cumulative 20.0 21.6 23.2 24.8 26.4 30.0 Procurement Arrangement: (a) All equipment, spare parts, and materials totalling an estimated US$18 million including contingencies would be procured under international competitive bidding procedures (ICB) in accordance with Bank Group Guide- lines. A preference of 15% of cif price or the pre- vailing customs duty, whichever is lower, would be ex- tended to local manufacturers, in the evaluation of bids. (b) Small off-the-shelf items not suitable for ICB costing less than US$20,000 each would be purchased through normal GOB procurement procedures on the basis of a comparison of prices from not less than three suppliers. Such purchases would be limited to a total of US$200,000. (c) The drainage services and project buildings would be small, simple structures the construction of which would be subject to seasonal weather interruption and to phasing for compatibility with cultivation patterns. Such construction, unsuitable for ICB, would be carried out under force account by the Irri- gation Department. Technical Assistance: A total of 95 man-months of foreign consultant staff would be engaged to assist the Government in (i) the conduct of delta- wide hydrological investigation and establishment of a phased delta development plan (60 man-months); and (ii) the development of a paddy storage and handling improvement program (35 man-months). Economic Rate of Return: 30% Appraisal Report: No. 1129-BA, dated May 25, 1976 IBRD 11836R B U R tAA A FEBRUARY 1976 \;UTWAN- ( CHINA LOWER BURMA PADDY LAND DEVELOPMENT PROJECT '. INDIA o LOCATION OF PROJECT BAINGLA- : d dita PROJECT AREAS TOWNSHIP CULTURABLE LAND AREA (1,000acres) DESH-~I,"L project area No Name Name Cultivated Abondonedl Waste Total VI 2) BU RMA r-\'~ NORTH v Lower delta LOWER DELTA \j BURMA e. \NTH< Lower delta I Zinbaung Pyapon 4.5 3.1 - 76 >'K\ .1yIETNAM project areas 2 Letpanbin 4.5 4.5 - 9.0 c-* s<3 { -- Roads 3 Kyetpamwezaung 16.9 8.1 - 25 0 v1LAOSl { i_' -4 Railways 4 Myogon 1.9 5.1 - 70 k l~~~~.~~~' ~ Ralwys 5 Dawnyein 1 3 1 7 - 3 0 Ai eoo THAILAND __ Embankments 6 Dedolu 1 5 3 8 - 5 3 F, Wr THAILAND 7 B - : Swa 7Banbwezu 80 68 - 148 S map \ - .-2n' po 8 Betut Laputta 34.0 8 8 0 5 43 3 °~ jtA,,c1cmSw, S-a )// -_-TowRivers 9 Alegyun Ngaputaw 13.1 3 1 - 162 S~~a *~~ Gulf Township ~~~~10 Dounggyi Bogale 9.6 15 7 - 20 4 2/ D ftt Gt./S iQJ_ boundaries Subtotal 95.3 60.7 05 1565 Tlic~laid SOUTH Existing tractor MIDDLE DELTA VSIETNAM * Existations 11 Shweloung Wakema 32,5 4 7 10 9 48 1 *A Existing AC TOTAL 127.8 65 4 11 4 204.6 The boundaries shown on thts nap do not fertilizer godowns inply enidorsemnent or acceptance by the * Proposed service station for maintenance and JVorld Bank and its affiliates repairs of power tillers and chain saws O Proposed medium workshop for major repairing of tractors, power tillers and water puwnps >. " r , A Proposed new fertilizer godowns awga 170 , /Hawga I- Einme0 (. Bassein, EINME RANGOON - ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~ ~~~~~MaLubi S\ MYAlJNGMA Taungbogyi' N ~ ~ ~ X G c' s; t, TG r1 5- ' * Kya la OETR NGAPUTAW ~ ~ ~ ~~~~ 1~MOU? EING YUNJKakato- @0 ~ 10 0 0 4 5 Dedavey 4k, Mou~~~1einWun HN~~~~'~ P apon Tamata.kaw/ ~- Bgale L V E rOS~~~~~~~U~~~5 YA~~~~~P O ~O~ O~O 7 . bl/ 3~~~~~~~~~~~~~~~~~i p 3p 4 1 9 5° MILES . t I~~~~~4