International Bank for Reconstruction and Development International Development Association FOR OFFICIAL USE ONLY FOR EXECUTIVE For consideration on DIRECTORS' Tuesday, January 11, 1994 MEETING M93-72 IDA/M93-72 FROM: Vice President and Secretary December 28, 1993 Minutes of Meeting of the Executive Directors of the Bank and IDA held in the Board Room on December 14. 1993 at 10:00 a.m. 1. There were present: CHAIRMAN: L.T. Preston, President EXECUTIVE DIRECTORS AND ALTERNATES ACTING AS EXECUTIVE DIRECTORS I. Al-Assaf F.A. Al-Khaled Aris Otbman M-A. Autheman M. Benhocine A. Bourhane (Alternate) A. Bugrov H. Cordeiro (Alternate) J. Cosgrove R.R. de Cotret M.D. de Paiva J.B. Eichenberger (Temp. Alternate) A.M. Elmanan (Temp. Alternate) S. Galindez (Temp. Alternate) F. Fischer J-D. Gerber E. Herfkens H. Jonsdottir (Alternate) ~Y. Kawahara B. Snoy D. Stanton (Alternate) M.A. Syed (Alternate) A. Torres Wang Liansheng ALTERNATES NOT ACTING AS EXECUTIVE DIRECTORS N. Akturk M. Cartagena H. Dean A. Farooq J. Haas J. Hutagalung H. Rehm OFFICERS AND STAFF PARTICIPATING E. Stern, Managing Director I.F.I. Shihata, Vice President W. Thalwitz, Vice President, & General Counsel Europe & Central Asia D.M. Goldberg, Deputy A. Clift, Deputy Secretary General Counsel M.T. El-Ashry, Director, F. Aguirre-Sacasa, Director, Environment Africa 3 J. Chevallier, Africa 3 A. Ng'weno, Africa 3 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. D.T. Mattheisen, Secretary's FOR MODIFICATION OF IBRD'S NEGATIVE PLEDGE POLICY WITH RESPECT TO LENDING INVESTMENT PROJECTS 2. The Executive Directors of the Bank considered the President's for Memorandum entitled "IBRD's Negative Pledge Policy with Respect to Lending paragraph 6 Investment Projects" (R93-199, R93-199/1) together with a revised of the Memorandum circulated at the meeting, which read as follows: "6. Specifically, we would first limit the country eligibility decision to our judgement that the country is making progress in privatization, is moving toward a market economy, is experiencing improvement in its macroeconomic situation and that the waiver of negative pledge would further contribute to the accomplishment of these goals. We would also replace the SPE..." 3. The Executive Directors approved, with the revisions to paragraph 6 namely, above, the recommendations in paragraphs 10 and 11 of the Memorandum, "(a) given the continuing special circumstances of countries in transition, that the Bank grant a general waiver of the negative pledge clause on a country-by-country basis for all transactions which fall within the parameters described in the Memorandum; and (b) that the Bank carry out the waiver for eligible countries through an exchange of letters reflecting the policy in (a) above." (The Chairman's Summing-Up was subsequently distributed as SecM93-1279, and is attached as Annex I to these minutes.) (The draft letters between the Bank and a government through which a waiver would be carried out were subsequently distributed as SecM93-1271.) CREDIT TO THE COMOROS 2. The Executive Directors considered the President's Memorandum and credit Recommendation (IDA/R93-148 dated November 22, 1993) and approved the and Human to the Federal Islamic Republic of Comoros for a Population equivalent) Resources Project in the amount of SDR 9.2 million (US$13 million set out in the President's on the payment terms and other terms and conditions Memorandum (CREDIT APPROVAL NO. 93-37). -3 - M93-72 IDA/M93-72 CREDIT TO THE GAMBIA to the Republic of the 3. The Executive Directors approved the credit Project in the amount of Gambia for a Public Works and Capacity Building on the payment terms and other SDR 7.9 million (US$11.0 million equivalent) Memorandum (IDA/R93-149 dated terms and conditions set out in the President's APPROVAL NO. 93-66). November 23, 1993) (STREAMLINED PROCEDURE CREDIT CREDIT TO GHANA to the Republic of 4. The Executive Directors approved the credit Project in the amount of Ghana for an Agricultural Sector Investment on the payment terms and other SDR 15.3 million (US$21.5 million equivalent Memorandum (IDA/R93-150 dated terms and conditions set out in the President's APPROVAL NO. 93-67). November 23, 1993) (STREAMLINED PROCEDURE CREDIT LOAN TO CHINA abstaining, the loan 5. The Executive Directors approved, with Mr. Kline Provincial Highway Project to the People's Republic of China for a Fujian on the payment terms and other in the amount of US$140 million equivalent (R93-197 dated Memorandum terms and conditions set out in the President's NO. 93-44). LOAN APPROVAL November 23, 1993) (STREAMLINED PROCEDURE LOAN TO MALAYSIA Malaysia for a Health 6. The Executive Directors approved the loan to million equivalent on the payment Development Project in the amount of US$50.0 in the President's Memorandum terms and other terms and conditions set out PROCEDURE LOAN APPROVAL (R93-196 dated November 23, 1993) (STREAMLINED NO. 93-45). REPORT ON THE GEF PARTICIPANTS MEETING meeting held in 7. Mr. El-Ashry reported on the GEF Participants (Mr. El-Ashry's statement Cartagena, Colombia, on December 6-10, 1993. was subsequently distributed as SecM93-1276). -4- M93-72 IDA/M93-72 EXECUTIVE DIRECTORS' ASSISTANTS - RECORD OF APPROVED TRAVEL 8. The Executive Directors recorded their approval, on the dates shown, of the following proposals for travel by Executive Directors' Assistants: December 1, 1993 - SecM93-1202 December 9, 1993 - SecM93-1222 December 9, 1993 - SecM93-1221 December 9, 1993 - SecM93-1223 DATE OF NEXT MEETING 9. It was agreed to hold a meeting of the Executive Directors of the Bank and IDA on December 16, 1993. ADJOURNMENT 10. The meeting recessed at 12:40 p.m., reconvened at 2:30 p.m. and adjourned at 3:30 p.m. Distribution: Executive Directors and Alternates Office of the President Executive Vice Presidents, IFC and MIGA Vice Presidents, Bank, IFC and MIGA Directors and Department Heads, Bank, IFC and MIGA M93-72 5- IDA/M93-72 ANNEX I Pledge Policy Modification of IBRD's Negative Lending for Investment Projects with Respect to Chairman's Summing-Up in support of the recommendations I think there is a broad consensus paragraph 6. with the proposed amendment to the the governments, we will say that In our exchange of letters with date of approval, within two years of the waiver will cover liens established to the for an additional two years, subject and that waiver may be extended at the end of the following their review approval of the Executive Directors first year. proposals for country waivers to We also agreed that we will circulate the Board for consideration. discuss recommending a country waiver, Finally, we will, in the papers stance of the government and the policy both the macro-economic situation requesting the waiver. the current situation in both Let me also note that we have discussed I of the waiver proposed for them. Russia and Uzbekistan in the context will be recorded to these waivers by would, therefore, hope that no objections will not lead to hope that future papers tomorrow's due date. -. I would also in the where there have been CAS discussions lengthy discussions of countries we will, of course, fiscal year. If there are major new developments, identify them in the paper.