Document of The World Bank FOR OFFICLL USE ONLY Report No. P-4321-YU REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US $121.5 MILLION TO FOUR YUGOSLAV ROAD ORGANIZATIONS WITH THE GUARANTEE OF THE SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA FOR A HIGHWAY SECTOR PROJECT May 12, 1986 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit - Dinar (Din) Currency Unit 1/ Calendar Year 1985 2/ January 1986 2/ US$1 Dinar 270.777 Dinar 312.81 Dinar 1 US$0.0037 US$0.0032 Dinar 1,000,000 US$3,693 US$3,197 Exchange rate used in the Staff Appraisal Report: July 1985 US$1 Dinar 280 Dinar 1 US$0.0036 Dinar 1,000,000 US$3,571 YUGOSLAVIA'S FISCAL YEAR January 1 - December 31 GLOSSARY OF ABBREVIATIONS BOAL = Basic Organization of Associated Labor COI = Self-Management Community of Interest CRO = Council of Republican and Provincial Road Organizations CYR = Community of Yugoslav Railways EIB = European Investment Bank ERR = Economic Rate of Return FARP = Federal Association of Republican and Provincial Road Organizati1ns FCTC = Federal Committee for Transport and Communications LDR = Less Developed Republics LTPES = Long-Term Program of Economic Stabilization MDR = More Developed Republics RO = Road Organization RTO = Railway Transport Organization SDK = Social Accounting Service TYH = Trans-Yugoslav Highway 1/ The dinar has not been maintained within announced margins since July 12, 1982. Its parity is reviewed frequently to ensure maintenance of external competitiveness. 2/ Period average. FOR OMICI4L USE ONLY YUGOSLAVIA A HIGHWAY SECTOR PROJECT Loan and Proiect Summary Borrowers: Four Road Organizations (ROs) in the Socialist Republics of Slovenia, Croatia, Serbia, and Bosnia-Herzegovina. The Federal Association of Republican and Provincial Road Organizations (FARP) would also be a party to the Loan Agreement as coordinator for the administration of the loan, and as the executing agency for the technical assistance component. The loan would be apportioned among the four borrowers according to an agreed allocation as follows: Slovenia $25.5 million; Croatia $33.4 million; Serbia $36.5 million; and Bosnia- Herzegovina $26.1 million. Guarantor: Socialist Federal Republic of Yugoslavia Amount: $121.5 million equivalent Terms: Repayable in 15 years, including three years of grace, at the standard variable interest rate. Project Objectives and Description: The proposed project comprises a four-year time slice (1986-1989) of the investment plans of the four participating ROs. The project is aimed at assisting the implementation of highway development programs initiated under previous Bank projects and to extend institution-building efforts throughout the country. The project's main emphasis will be on upgrading sections of the Trans-Yugoslav Highway (TYH) which carry heavy international traffic as well as Yugoslavia's inter-regional traffic, rehabilitating existing infrastructure, and improving maintenance. It will consolidate institution-building efforts with particular reference to investment and maintenance planning, road user charges, and inter-Republican coordination. The loan will also finance the preparation of nationwide programs for road and bridge rehabilitation and maintenance, as well as staff training programs and equipment for road organizations. L This document ha a resntied distribution and may be used by recipients only in the perfomance of their official dutiea Its contents may not otherwise be disclosed without World Bank authorization. - {i - Benefits and Risks: As the major transport route between Western Earope, the Balkan area and the Middle East, improvements to the TYR will have a far-reaching impact beyond the borders of Yugoslavia. The main quantifiable benefits will be in the form of savings in transport costs accruing to road users. Transport costs savings on international traffic will ultimately accrue to Yugoslavia in various forms, including revenue collected through transit agreements. Improved maintenance operations will provide savings to the Republican Governments, through more cost-effective procedures and by avoiding roads reconstruction. In addition, the ROs will benefit from better investment planning, improved financial discipline, and stronger inter-Republican coordination. Although shortcomings in providing local funds in a timely manner could delay project implementation, the investment programs have been tailored to available financial resources and annual reviews of the investment programs and financing arrangements would allow determination of measures to remedy any problems in local funding. Moreover, the agreement of the Federal Government to index road user charges for inflation, and of the Republican Governments to the investment programs and financing plans, including the allocation of road user charges to road expenditures, should minimize the risk of shortfalls in local funds. - iii - Estimated Total Road Expenditures (1986-1989) 11 US$ Million Local ForeiRn Total Ongoing Investments 37.9 25.3 63.2 New Investments 246.4 219.4 465.8 Maintenance 417.3 - 417.3 Equipment - 1.6 1.6 Technical Assistance/Training 0.6 0.5 1.1 Administration 30.8 - 30.8 Debt Servicing 63.5 339.2 402.7 Subtotal 796.5 586.0 1,382.5 Contingencies Physical 28.5 24.5 53.0 Price 129.7 94.3 224.0 TOTAL 2/ 954.7 704.8 1,659.5 Financing Plan: USS million Percent Sources of Funds Road User Charges (Fuel tax) 859.5 51.8 Communities 258.9 15.6 Bank Loan 121.5 7.3 Tolls 134.0 8.1 Tax on Foreign Vehicles 122.9 7.4 Vehicle Registration Fees 95.4 5.7 Local Bank Credits 30.5 1.8 Foreign Credits 29.3 1.8 FF LDR 3/ 7.5 0.5 Total Financing Plan 1,659.5 100.0 1/ Total planned expenditures for four participating republics; base costs at July 1985 prices. 21 Including duties and taxes, estimated at $300 million. 3/ Federal Fund for Less-Developed Republics. - iv - Bank Participation The Bank loan would be disbursed against the following items: US$ Million Total Cost Bank Loan TYR Sections (including the Maribor By-pass) 118.5 47.4 Rehabilitation and Betterment Program 129.0 64.5 By-passes (Pirot and Bela Palanka) 17.8 7.3 Technical Assistance 1.1 0.7 Equipment 1.6 1.6 268.0 121.5 Estimated Disbursements: Bank's Fiscal Year FY87 FY88 FY89 FY90 FY91 Annual 14.0 37.0 37.9 28.7 3.9 Cumulative 14.0 51.0 88.9 117.6 121.5 Economic Rate of Return: Average 20 percent for the Bank financed items. Staff Appraisal Report: Yugoslavia: A Highway Sector Project (Report No. 4917-YU), dated April 24, 1986. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO FOUR YUGOSLAV ROAD ORGANIZATIONS WIT7 THE GUARANTEE OF THE SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA FOR A HIGHWAY SECTOR PROJECT 1. I submit the following report and recommendation on a proposed loan to four Yugoslav Road Organizations in the Socialist Republics of Slovenia, Croatia, Serbia, and Bosnia-Herzegovina (the Borrowers), with the guarantee of the Socialist Federal Republic of Yugoslavia, for the equivalent of US$121.5 million; to help finance a highway sector project. The Federal Association of Republican and Provincial Road Organizations would also be a party to the Loan Agreement as coordinator for the administration of the loan and as executing agency for the technical assistance component. The loan would have a term of 15 years, including three years of grace, at the standard variable interest rate. PART I - THE ECONOMY 2. A Report entitled "Yugoslavia: Adjustment Policies and Development Perspective (No. 3954-YU) was distributed to the Executive Directors on November 2, 1982. A report of an economic mission which visited Yugoslavia in November 1985 is under preparation. This section reflects its principal findings. Basic data on the economy are given in Annex I. The Stabilization Effort 3. During the 1960s and 1970s Yugoslavia's economy grew rapidly, averaging about 6Z per year. However, the economy's ability to adjust to external shocks was reduced by rigidities and distortions induced by imnobility of capital and labor, negative real interest rates, an increasingly overvalued Dinar, highly protected domestic industries and loose credit policies. Yl!goslavia initially absorbed the second oil price shock through additional borrowing and managed thereby to cushion its effects in the short run. This resulted in a rapidly increasing foreign debt. External debt doubled between 1978-81, reaching almost $20 billion. With the subsequent increases in world interest rates and the recession in OECD countries, the servicing of the debt became a substantially heavier burden. In turn, the events in Latin America and in Poland created a reluctance in international capital markets to provide additional funds. As a result, the balance of payments constraint became critical. 4. Following the balance of payments crisis of the early 1980s, Yugoslavia adopted a stabilization program supported by IMF standbys, and - 2 - later by a Bank SAL and by. debt restructuring agreements with Governments and commercial banks. Restrictive demand management policies were used to bring the economy's external accounts into balance. The real effective exchange rate was depreciated by 352 between September 1982 and June 1984 and since then the nominal exchange rate has been adjusted regularly to keep the real effective exchange rate nearly constant. These policies and a more centralized foreign exchange allocation mechanism were successful in bringing the current account of the balance of payments from a deficit of $3.7 billion in 1979 to a surplus of $0.8 billion in 1985 ($370 million with the convertible currency area). 5. Economic growth decelerated sharply. The economy stagnated between 1980-83, grew by 2S in 1984 and slowed again to about a 0.5% growth rate in 1985. Despite this slowdown, social sector employment increased on average by 2.4Z per year at the cost of declines in labor productivity. Investment and imports were severely cut through the restriction of aggregate demand and through the administrative allocation of foreign exchange. Gross capital formation in 1985 was 63Z lower than in 1980. Import levels in 1985 were about 201 below their 1980 level. To some extent the declines in investment and imports were adjustments to unsustainably high levels in the 1970s but the continuation of these trends will have long term effects on the economy's potential to grow and compete in world markets. Export trends have been erratic with some improvement following the devaluation in 1983. 6. Inflationary pressures have accelerated and remain intense. Inflation was 53Z in 1984 and about 801 in 1985. Prices rose faster than nominal wages after 1980, resulting in a decline in real wages per worker in the social sector of about one-third (the social sector accounts for approximately 851 of Gross Social Product). Real incomes per household have, however, more than kept pace with inflation because of increases in employment, interest income and windfall foreign exchange gains (para. 7). 7. Inflation has been caused by a combination of cost push and demand pull factors. On the cost side, the efforts of the authorities to permit prices to reflect market forces (para. 9) have put upward pressure on the price level. So have the cumulative effects of the increases in nominal interest rates and the substantial depreciation of the Dinar. On the demand side, monetary policy has been less restrictive than intended. In addition, devaluations have generated windfall gains to holders of foreign currency deposits (enterprises and households), allowing them to cushion the effects of other controls on demand. Ultimately, the persistence of inflation must be ascribed to inadequate financial discipline at the enterprise and bank level, which allows enterprises to hold and finance high levels of inventories in the face of flagging consumer demand. Moreover, severe restrictions on imports have contributed to maintain inflationary pressures through reduced competition. Structural Adjustment 8. In addition to stabilization measures, steps towards longer-term structural reform have been initiated, in line with the Government's 1983 Long-Term Program of Economic Stabilization (LTPES). The thrust of the LTPES - 3 - is to increase efficiency in resource allocation within the context of Yugoslavia's system of worker self-management. 9. Prices of most goods and services were freed from administrative control in early 1985 and horizontal price collusion was proscribed. Prices of energy, transport and postal and telecommunication services remain controlled, but the objective is to adjust them gradually to reflect opportunity costs. Interest rates on term deposits have increased substantially and reached 73 percent on April 1, 1986. Average lending rates remain negative in real terms. 10. Legislation was passed restricting income payments by loss-making enterprises, limiting their access to subsidies and requiring that such enterprises either undertake rehabilitation programs or close down. 11. Other measures require investors and creditors to undertake feasibility studies based on common criteria before funding new investment projects. A new planning law tries to improve coordination of investments by requiring that nationwide sectoral investment programs be drawn up for power, railways and telecommunications. 12. Recent reforms to the banking system increase minimum capital requirements, define the limited liability of the shareholder enterprises, require the build-up of reserves and encourage banks to operate across Republic boundaries. 13. A new foreign exchange allocation system, introduced in January 1986, eliminated the right of enterprises to retain foreign exchange and hold foreign exchange accounts. Foreign exchange earnings are fully surrendered to the banking system and are used to finance, in order of priority, debt service obligations and imports. The ultimate objective is the establishment of a free foreign exchange market and a convertible Dinar. 14. A new foreign exchange credit law established strict conditions 'or Yugoslav enterprises to borrow foreign exchange, including the requirement that all borrowers must henceforth assume the full foreign exchange risk. 15. Most of these measures are recent and are still in the early stages of implementation. None of the sectoral investment programs (joint development programs) have been finalized. While a new foreign trade law calls for the progressive liberalization of trade, the pertinent transitional measures subject most import categories to a tight system of administrative allocations. 16. At this stage, the evidence suggests the structural transformation experienced by the Yugoslav economy in the 1980s has been limited. Export trends have been erratic. Higher domestic interest rates, the passing of the foreign exchange risk to borrowers, and the general shortage of local resources have led to a more selective approach to investment. However, there is no clear evidence that the structure of investment better reflects the needs of the economy. Indeed the very high level of inventories points - 4 - to a large share of savings being tied to stock accumulation and raises questions on the efficiency of overall resource use. 17. The resolution of these issues is critical to the success of Yugoslavia's new five-year plan (1986-90). The Government and the Bank are actively discussing measures to deal with these problems in the context of the preparation of a possible second SAL. Medium-Term Prospects 18. The plan assumes that the reforms adopted in 1984 and 1985, which cover the main areas of activity identified by the LTPES (para. 8), will be successfully implemented. The macroeconomic framework of the 1986-90 plan is based on 41 annual growth of output, with the industrial and agricultural sectors growing by 4.61 and 5.41, respectively. Exports would grow by 6% per annum while imports would grow at 5% per year. The plan projections suggest these trends would allow a cumulative current account surplus of $6 billion and a ZZ annual growth in social sector employment, mainly in labor intensive activities. 19. The overall macroeconomic targets of the plan, particularly the current account surpluses, are ambitious. Achieving these growth targets would require quick and determined implementation of measures that will promote the efficient restructuring of the economy. It also requires effective implementation of measures to control inflation so that growth is maintained on a sound basis. However, under the assumption of decline in oil prices and interest rates and increased exports of about 4.51 per year, a cumulative current account surplus of close to $3 billion is possible. With a factor productivity growth of 1.5%, the economy should be able to grow annually at a rate of about 3Z up to 1990, somewhat lower than the plan's targets. External Debt and Creditworthiness 20. At the end of 1985, Yugoslavia's external debt was estimated to be $20.2 billion, of which $18.8 billion was in convertible currencies. Of the total convertible currency debt, medium- and long-term debt was about $17.8 billion, and short-term debt amounted to about $990 million. In 1985, the total debt service ratio was about 34 Z. Before rescheduling, debt service payments payable in convertible currencies were about 43 % of convertible currency export earnings. The convertible debt service burden drops to 27% when the rescheduled maturities are excluded (para. 21). 21. Yugoslavia has negotiated debt restructuring packages with its creditors since 1983. The debt relief exercises up to May 15, 1986 have been under the umbrella of IMF standby programs. In December 1985, Yugoslavia and the commercial banks reached an agreement for a multi-year rescheduling arrangement to cover the original maturities of loans contracted before January 1983 falling due between 1985 and 1988. The agreement with coumercial banks is also linked to enhanced monitoring by the IMF. In April 1986, Government creditors initialled an agreement to reschedule 85% of the original maturities of loans contracted prior to December 1982 falling due - 5 - between May 16, 1986 and May 15, 1987 and agreed to zonsider further rescheduling of this debt up to the end of March 1988. 22. While there is recognition of Yugoslavia's efforts to maintain its external liquidity, the international commercial banks have been cautious abouiS substantially increasing their exposure. However, clear progress in implementing appropriate policy reforms would lead international commercial banks to renew lending to Yugoslavia, including, possibly, cofinancing with the Bank. 23. While Yugoslavia's liquidity situation may remain difficult in the near-term, the aggregate and the convertible currency debt service ratios are expected to be in the 251 to 301 range by the end of this decade and then gradually decline. Given the country's strengthened balance of payments position, the improved external debt repayment profile and the Government's stated willingness to implement stabilization policies, Yugoslavia should be able to manage this debt service payment while returning to a sustainable growth path. Consequently, Yugoslavia is considered creditworthy for additional Bank lending. PART II - BANK GROUP OPERATIONS IN YUGOSLAVIA 24. The proposed loan would be the ninety-first loan made to Yugoslavia by the Bank, bringing the total to about $4,429.5 million, net of cancellations. Approximately 28S ($1,227.6 million) of the total has been for 22 loans for the transport sector: 12 for highways, 8 for railways, and 2 for ports (paras. 39-40). The proposed loan would represent the 23rd loan to the sector and the 13th for the highway subsector. In view of the important potential contribution of agriculture to exports and import substitution and in view of the considerable scope for imprnved yields in primary production, Bank lending also focused on the agriculture sector for which 21 loans totalling about $1,177.7 million (272 of the total) have been made. Thirteen loans, totalling about $786.8 million (181), were made for the energy sector, of which eight were for power projects, and one loan each for a natural gas and an oil pipeline; in June 1985, the Executive Directors approved three loans totalling $92.5 million for the First Petroleum Sector Project. Twenty-one loans, amounting to about $532.0 million (12% of the total) have also been made for industry. Other loans made to Yugoslavia include six for water supply and sewerage; two multipurpose loans; two for tourism and one each for air pollution control, telecommunications, and structural adjustment. 25. Due to a shortage of local funds, Yugoslavia's disbursement performance deteriorated somewhat in 1921. Following subsequent implementation reviews of the whole loan portfolio with borrowers, project execution accelerated. To further expedite the utilization of Bank loan proceeds as well as to-allow for increased Bank financial participation, disbursement percentages were increased under the Bank's Special Action Program (SAP), for the following projects: Metohija I Multipurpose (Loan 1.360-YU), Tenth and Eleventh Highway (Loans 1678-YU and 1819-YU respectively), Montenegro Earthquake Rehabilitation-Port of Bar (Loan 1768-YU), Morava II (Loan 1951-YU), and Serbia Regional development (Loan 2307-YU). In the case of the latter two projects and under the Middle Neretva Hydropower Supplemental Loan (Loan 1561-1-YU), revolving funds were also established. In addition to SAL, other SAP lending to Yugoslavia includes a supplemental loan for the Middle Neretva Project (Loan 1561-1-YU) and the Fm84 Fertilizer Sector Loan. Yugoslavia's disbursement performance now compares favorably with Bank-wide averages. Annex II contains a summary statement of Bank loans and IFC investments as of March 31, 1986. 26. Bank lending since 1983 has sought to support the Government's structural adjustment program (LTPES) and its efforts to promote exports and improve the efficiency of investment. The Bank has concentrated its lending operations in areas where its institutional and policy coordination impact is expected to be greatest. Accordingly, a shift to more program and sector operations, including the FY83 Structural Adjustment Loan (SAL) (Loan 2326-YU), has occurred to help consolidate and strengthen policy and institutional changes critical to Yugoslavia's long-term structural development, wbile at the same time assisting the Government to overcome its immediate foreign exchange needs. Sector operations included the FY84 Third Power Transmission Project (Loan 2338-YU) and Fertilizer Sector Loan (Loan 2410-YU), and the FY85 Petroleum Sector Project (Loans 2595-YU to 2597-YU). The proposed Highway Sector Project is another such operation. Although multi-republic sector operations are consistent with Yugoslavia's priorities, their implementation has faced serious delays resulting from the need to ensure inter-regional consensus. 27. Future Bank lending would continue to support Yugoslavia in its macroeconomic objectives of increased economic growth, improved debt management, and reduced inflation. The Bank, through the SAL process in particular, is emphasizing the continuing need for a reform program in the areas of trade liberalization and foreign exchange allocation, efficiency of investment allocation, and financial discipline. Bank support envisaged for industry would focus on export development, industrial restructuring in selected sub-sectors, energy conservation, and technology development. In energy, Bank lending strategy would focus on the development of indigenous resources, promotion of joint development programs on least-cost basis among the republics and provinces, economic pricing, and increasing the efficiency of energy use and supply. Lending for transport, mainly roads and railways, would be through sector projects geared to promote better coordination among the republics and provinces, investment planning, to provide for improved resource allocation including pricing policy, and to strengthen inter-regional and inter-modal integration. In agriculture, lending would focus on primary production and the rehabilitation of agroindustries. 28. A persistent foreign resource gap looms as the major impediment to Yugoslavia's ability to maintain its growth momentum and to address the critical issues of unemployment and regional disparities. The Bank will continue to explore cofinancing possibilities in order to attract additional sources of credit, recognizing, however, the commercial market constraints that Yugoslavia faces. Until this problem is overcome, the Bank is likely to remain one of the principal sources of long-term external capital. 29. Yugoslavia's debt to the Bank in 1985 amounted to about 10.7% of its total debt outstanding. In light of the planned reduction in Yugoslavia's total debt outstanding and the limited access to international capital markets Yugoslavia is expected to have during the 1980s, the share of debt owed to the Bank will most likely rise up to 181. The extent of the increase will depend on the speed with which Yugoslavia is able to implement reforms and regain normal access to the international capital markets. Service on Bank loans as a proportion of total debt service (includes debt service on short-term debt) was 7.51 in 1985 and is projected to rise gradually by the end of the decade to about 12.71. 30. IFC started its involvement in Yugoslavia in 1970. Since then, it has made 20 investments in the country and, as of March 31, 1986, its portfolio amounted to $534.0 million gross and $273.3 million net of participation and repayments. The basic objectives of IFC in Yugoslavia are to: (a) assist priority subsectors in industry and natural resources development; (b) encourage foreign investment on a joint venture basis; (c) foster technological transfers; and (d) mobilize other financial resources in addition to IFC's own funds. PART III - THE TRANSPORT SECTOR The Transport System 31. Yugoslavia's distinctive geographical features have determined the shape of its transport infrastructure, with the principal road and rail links following the fertile Sava and Danube flood plains on a northwest to southeast alignment. In contrast, the southern mountains and the coastal Karst plateau present a major barrier to overland transport, and improvements to transport infrastructure in these areas have been difficult and costly. The main northwest-southeast road - the Trans-Yugoslav Highway (TYR) - and rail links also serve major volumes of international traffic, including transit traffic between Europe and the Middle East. Rapid increases in transit traffic through Yugoslavia are now expected following the accession of Greece to the European Economic Community. Other key routes serve traffic between Northern and Central Europe and the Mediterranean coastal areas (Map IBRD No. 17933R). A major objective of Yugoslavia's transport sector development in recent years has been the opening up of the LDRs to strengthen their integration with the rest of the country and accelerate their economic development. 32. Yugoslavia has an extensive and diversified transport system of which roads and railways are the backbone. The transport network comprises about 130,000 km of roads, including 48,000 km of primary and main regional roads, 9,400 km of rail lines, 7 main ports, 15 airports (of which 10 handle international flights) and a sizeable network of inland waterways, the main one being the Danube. The road and rail network is administered by independent transport authorities in each of the eight republics and provinces which make up the Yugoslav Federation. In recent years, oil and gas pipelines have been added to the transport system. In line with the rapid growth of the economy, both freight and passenger traffic increased at an average annual rate of about 5.5% during the 1970s. In this period, road transport's share of total traffic increased steadily to about 90S of passenger traffic and 65S of freight traffic. However, since 1980 Yugoslavia has experienced a considerable slow-down in the economy and total freight and passenger traffic has recently been increasing by only about 2S per year. For road transport during the period 1980-1983, freight traffic stagnated while passenger traffic increased by about 22 per year. This stagnation in road traffic reflects the shortages and rationing of fuel for road transport which have been experienced during that period. However, data for 1984 indicate that road traffic increased by as much as 101 over 1983. With the lifting of fuel rationing at the end of 1984, road traffic is expected to continue to show modest increases. 33. A gradual growth recovery is likely during the 1986-90 plan. According to the Plan, growth for the plan period is estimated at about 4S. While in general, road traffic volumes in 1983/84 on the primary routes were about 101 below 1980 levels, it is now anticipated that road traffic volumes will return to their former level over the next two years. In line with the expected improvement in the economy, it is anticipated that road traffic would increase at about 41 per year up to 1990. Transport Policy. Planning and Coordination 34. Since the mid-1960s, the gradual transfer of authority to the republican/provincial transport agencies, which increased the number of policy-making bodies, has tended to hamper the coordinated development of the sector as well as the provision of rational and cost effective transport services. Because of these limitations, the Bank has encouraged and supported the establishment or strengthening of planning and coordinating institutions in the transport sector. Notable among these are the Federal Committee for Transport and Connmnications (FCTC), the Council of Republican and Provincial Roads Organizations (CR0), and the Community of Yugoslav Railways (CYR). The Bank also encouraged the preparation of a long-term master plan study for TYR which provided a basis for overall coordination and for several Bank-financed highway projects. To further improve coordination in the highway subsector, in 1983 the Road Organizations (ROs) established the Federal Association of Republican and Provincial Road Organizations (FARF), which has responsibilities for overall planning and monitoring of developments related to road infrastructure. 35. In late 1976, with a view to creating the necessary conditions for integrated development of transport, the Federation, the Republics and the Autonomous Provinces mutually agreed to establish a long-term transport policy for the country. Considerable progress has been made and a number of Social Agreements on the various aspects of future transport policy have been concluded. A basic policy in the sector provides for a free choice among the users of transport facilities according to cost-based tariffs, using appropriate input prices. While the policy objectives are sound and are supported by the Bank, the recent economic difficulties brought a tendency to over-emphasize the development of the railways, primarily on the grounds of savings in energy costs, which could lead to uneconomic distortions in the allocation of traffic. These issues are currently being discussed with the Federal Government and the Railway Transport Organizations (RTOs) as part of two ongoing railway projects and the preparation of a possible seventh railways project. 36. Despite lower growth forecasts, continued investments are required in the transport sector to alleviate bottlenecks in the main road and rail networks and there is now an increasing need to strengthen the existing infrastructure. Emphasis is being given to improvements of key links in the primary road network, with the highest priority allocated to continued improvements along the TYH, where traffic volumes range from 12,000 to 20,000 vehicles per day. Modernization and rehabilitation of trunk railway routes is also of high priority, particularly the Trans-Yugoslav trunk line. Attention is also paid to completing the primary road network in the less-developed regions and to establishing routine rehabilitation programs for the existing network. Such investments are providing the necessary support for the development of the domestic market and help further the country's own integration and its links with the rest of Europe. Bank Role in the Sector 37. Over the past 20 vsars, the Bank has had an active role in developing the transport system through loans for expansion of capacity in highways, railways, and ports. This assistance has provided support for growth in industry and agriculture, for regional development and for export expansion. In addition to improving overall coordination (para. 35), Bank-assisted transport projects have also done much to institutionalize the basic administrative functions of planning, project preparation and implementation. Bank highway projects have helped introduce complex planning and design capabilities for multi-lane, controlled access highways, as well as strengthen the institutional framework in terms of vehicle weight control, maintenance practices, and improved road safety. Bank assistance has been particularly effective in highways where an overall investment planning approach was introduced in five ROs through the Tenth Highway Project. The proposed project would extend this approach to other areas of the country and would consolidate past institution-building efforts. A similar approach was introduced in railway planning and is currently being brought to full development in the four RTOs under the Sixth Railway Project (Sarajevo, Belgrade, Novi Sad, Skopje). Except for the Port of Bar project and an associated Earthquake Rehabilitation loan, the Bank has only a limited presence in the ports sector. An ongoing ports master plan study is intended to improve coordination in port development and utilization at the national level. 38. Since the mid-1970s, Bank-financed projects have paid increasing attention to pricing and fiscal aspects in the transport sector, such as road user charges, railway costing and tariffs and port charges. The Bank has sponsored two major studies-a Rail Cost Study and a Road User Charges Study--with the aim of fostering intermodal efficiency as well as a more economic utilization of transport facilities. The recommendations of the Rail Cost Study are now being implemented on a trial basis in one RTO, while the ongoing Sixth Railway Project provides for a detailed program of rail tariff increases designed to eliminate compensation payments to the railways - 10 - in the next seven years. In the highway subsector, the findings of the Road User Charges Study are currently being used by the Federal Government in establishing appropriate levels of road user charges and allocations of revenue. A third study, covering the operation of toll systems on TYH, was financed under the Eleventh Highway Project and provides guidelines for the establishment of toll facilities and for the setting of rates which are now being used by all ROs operating toll road facilities. In the ports subsector, a tariff study, financed under the Port of Bar project, has been undertaken. 39. The Bank has made 22 loans for the Yugoslav transport sector, totalling $1,227.6 million equivalent net of cancellations. These include 11 loans to the highway subsector totalling $628.9 million; an additional loan of $21 million was made for rehabilitation following the 1979 earthquake in Montenegro. The Project Completion Reports for the Sixth, Seventh, Eighth and Ninth Highway Projects indicated that the projects were relatively problem-free and completed according to schedule. They also highlighted the fact that Bank lending has enabled the Yugoslav authorities to develop sound planning and project preparation capabilities in the road subsector. 40. Seven loans totalling $491.2 million have been made for the railway subsector. Five of the projects have been completed successfully, while the Kosovo Railway Project is due to be completed by end-1986. The Sixth Railway Project is being implemented on schedule. An additional loan for $14 million was made for reconstruction following the 1979 earthquake in Montenegro and this project has now been completed. In the ports subsector, a loan of $42.4 million was made for the expansion and operational improvement of the Port of Bar in Montenegro. This project was nearing completion when the port was severely damaged by the 1979 earthquake. Rehabilitation has now been completed with a Bank loan of $30.1 million. The Highway Subsector 41. General. From the mid-1950s, road transport began to expand rapidly. The passenger car fleet increased at over 201 annually through 1980, while the number of heavy vehicles increased at about 9Z annually in the same period. The total vehicle fleet is now estimated at 3.1 million vehicles of which 801 are passenger cars. 42. During the period from 1970 to 1980, the length of the paved network doubled. The TYH system provides the backbone to Yugoslavia's highway network and is a vital link between Western Europe, the Balkans and the Middle East (Maps IBRD Nos. 17933R and 17934R). Although some 500 km of the 1,170 km of TYR have been improved over the past decade or are currently under construction, it is estimated that a further 360 km would be justified for upgrading to four-lane standards during the coming decade. Of these sections, about 120 km will be improved during the period through 1989 with financial assistance provided by two European Investment Bank (EIB) loans and by the Bank under the proposed sector project. Beyond this program, a further 240 km of critical TYH sections in Slovenia, Croatia and Vojvodina would remain for improvement in the medium-term. - 11 - 43. Modernization of the network continues- to be a major priority for the republics and provinces. In the more developed areas of the country, the primary focus is on eliminating the major bottlenecks, particularly on TYR, wbile in the less-developed areas the main focus is on upgrading and modernization of the basic primary network. Maintenance has been generally satisfactory, but has suffered recently because of budgetary constraints. As mch of the paved network is still relatively recent, routine rehabilitation programs have not been a major part of the road investment programs. However, increasing attention is being paid to establishing rehabilitation schemes in order to strengthen and preserve road infrastructure. 44. Administration and Organization. The Federal Committee for Transport and Communications is responsible for common policy and regulatory atters such as vehicle regulations and road user taxation, as well as for the international aspects of highway administration and road transport. In addition, overall coordination is provided by FARP which was established in 1983 to replace CR0 (para. 34), and whose responsibilities were broadened to cover overall planning and monitoring of developments in the highway sector, particularly investment and fInancial aspects. 45. The eight Republican and Provincial ROs are responsible for maintaining about 40,000 km of roads, representing all primary routes and about 70S of regional roads. The remainder of the network is administered by local committees which have special departments for this purpose. The ROs are established as Self-Management Communities of Interest (COI) and are governed by representatives of various groups with an interest in roads, such as transport companies, industrial enterprises, agricultural cooperatives, professional and road user associations. Executive boards comprising about 40 people are responsible for day-to-day operations and also for the preparation of highway investment and maintenance programs. Over the years, the ROs have developed adequate capabilities for the preparation and implementation of projects. 46. Investments and Financing. During the 1976-80 Plan, investments in road infrastructure represented about one-half of total investments in the transport sector. During this period, total expenditures on road infrastructure, including debt servicing, averaged just under $1 billion annually in 1985 prices, of which about 602 were allocated to new investments. During the 1981-85 Plan, the ability of the road organizations to fund a reasonable level of investments has declined; presently road expenditures, including debt servicing, average about $600 million annually. this situation has resulted from the fact that the highway authorities now depend heavily on revenue from earmarked contributions, mainly a specific road user charge which represents about one-third of the total taxes on fuel. However, in recent years, the road user charge has not increased in line with the price of fuel nor with the other taxes on fuel. Revenue from the road user charge has therefore failed to keep pace with inflation at a time when the road organizations have had to devote a larger part of available funds to cover the higher debt service burden from foreign credits following the depreciation of the dinar. Allowing, therefore, for higher debt servicing, which has increased from about 15S of total expenditures - 12 - during the late-1970s to over 30Z in 1985, current allocations to investments and maintenance on roads are at about half the level achieved during the 1976-80 Plan. 47. In order to ensure adequate revenue for a minimum program of expenditures on road infrastructure, a policy undertaking was given by the Federal Government under SAL I for the periodic adjustment of the road user charge for inflation as well as for the specific earmarking of the charge for road expenditures alone. By the end of 1983, significant improvements in the allocation of road user revenues occurred in most of the Republics/Provinces; in early 1985, all revenue was being allocated to roads. In addition, the level of road user charges was adjusted in May 1984 in accordance with the SAL I undertaking, thus providing sufficient funds for the 1984 road program. Further adjustments were made in August 1985 and January 1986 with an additional adjustment to take place before the proposed loan becomes effective. Periodic increases in road user charges and the allocation of revenue will be examined during each annual review of the road programs (para. 52). PART IV - THE PROJECT 48. The proposed project, identified in October 1981, was prepared by the ROs with the assistance of Bank preparation missions in December 1982 and in March 1983 and was appraised in October 1983 with post-appraisal taking place in February 1985. Negotiations were held in Washington in November 1985. The Yugoslav Delegation was led by Mr. Petar Radenovic, Assistant President of the Federal Committee for Transport and Communications. A Staff Appraisal Report, "Yugoslavia: A Highway Sector Project No. "(4917-YU), dated April 24, 1986, is being circulated separately to the Executive Directors. The main features of the loan and project are given in the Loan and Project Summary and the key events and special conditions in Annex III. Maps showing the main European arterial routes passing through Yugoslavia (IBRD Map No. 17933R) and the main Yugoslav road network and the roads included under the Bank financed project (IBRD Map No. 17934R1) are also attached. Project Obiectives and Rationale for Bank Involvement 49. The main objectives of the project are to continue the Bank's long term strategy to assist and foster sound, planned development of the highway network to meet the needs of the economy, and to consolidate institution-building and policy efforts in the sector with particular reference to investment and maintenance planning, road user charges, and inter-Republican coordination. The project will support a minimum investment program in roads in four Republics: Slovenia, Croatia, Serbia and Bosnia-Herzegovina. Specific objectives include the elimination of some of the major bottlenecks in the primary highway network, particularly in the Trans-Yugoslav Highway, as well as establishing road rehabilitation programs in all of the participating Republics with a view to preserving the existing infrastructure. In addition, and most importantly, the project will further - 13 - strengthen and consolidate investment and maintenance planning in highways at a time when there is a severe shortage of funds and a need for improved overall coordination of resource uses. Project Description 50. General. The proposed project comprises a time-slice (1986-1989) of the investment and maintenance programs in the four participating Republics. In consultation with the Republican Government authorities, each RO has prepared an investment and maintenance program for the period 1986-89 listing individual project items, as well as financing plans supporting the proposed expenditures. The four Republics would account for about 70% of the total expenditures for roads in Yugoslavia during the 1986-89 period. Although there are differences from one Republic to another in the content of the programs, reflecting the varying needs throughout the country, the first priority in all Republics is to provide adequate funds for road maintenance activities. It is proposed to gradually improve the levels of both maintenance and rehabilitation under the project, reaching acceptable targets by 1988 or 1989, depending on the Republic considered. Current annual maintenance levels, about $2,000 per km on average, should increase under the project to about $3,500 per km (1985 prices). The estimated needs for rehabilitation and maintenance of roads and bridges over the medium-term period will be refined and updated during implementation of the project, based on the findings of a nationwide rehabilitation and maintenance study which will be financed under the project (para. 53). 51. Description and Status of Preparation. The investment programs are well balanced and the individual components are justified. Bank-financed items of the programs include improvement of 47 km of TYH sections including a start on the TYH route between Ljubljana and Zagreb, and the continuation of the TYH program in Croatia eastwards from Zagreb towards Belgrade (Map IBRD No. 17934R1). The Bank-financed program in Slovenia also includes the construction of the Maribor By-pass, located on the most important international access route into Yugoslavia. In Serbia, the main focus will be on rehabilitation of existing primary roads and on the construction of two bypasses on the Nis-Sofia Highway, a branch of the TYH leading to Bulgaria, Turkey and the Middle East. In the less-developed Republic of Bosnia-Herzegovina, the main focus is on the rehabilitation of existing primary routes as well as on the upgrading of gravel roads in the primary network. A first-year program has been identified for all items under the rehabilitation programs and will be ready for early tendering. Feasibility studies on the sections to be improved during subsequent years will be prepared ox a continuing basis according to a methodology and criteria which were agreed during negotiations, and submitted to the Bank for approval. The broad approach to be used for subproject preparation and economic evaluation has already been agreed in the context of our past highway projects. The detailed criteria are included as part of the action plan (para. 52). The project will also finance high priority maintenance equipment for use on the TYR and some items of office equipment for strengthening the administrative and planning capacity of the ROs. - 14 - 52. Action Plan. The investment programs and financing plans have been defined for the period 1986-89 and an action plan has been established for the project. The proposed investment and financing plans, including targets for road maintenance and rehabilitation, were discussed and confirmed at negotiations. The respective Republican Governments have approved these plans, including confirming the availability of adequate funds from road user revenue. Detailed annual programs will be prepared taking into account the experience and progress of subproject execution during the previous year and incorporating improvements in operations and planning. Assurances were obtained during negotiations that the action plan will be implemented as agreed, including updating the investment and financing plans on an annual basis. FABP will have a major role in implementing the action plan, in coordinating the preparation of the nationwide study on road rehabilitation and maintenance, and in liaising with relevant Federal Government authorities on the need to adjust road user charges on an annual basis. As agreed during negotiations, FARP will be adequately staffed for this purpose prior to loan effectiveness. 53. Technical Assistance and Training. Consulting services would be financed under the loan to assist the ROs in further developing and strengthening road and bridge rehabilitation and maintenance activities throughout the country. The preparation of a nationwide study would be coordinated by FARP and would aim at strengthening appropriate information, accounting, planning and programming systems for routine maintenance and rehabilitation activities and emphasizing the continued economic importance of such activities. Terms of reference for the study were discussed and confirmed at negotiations. Foreign training and local seminars, with a special emphasis on highway maintenance and rehabilitation, would also be financed under the project. Cost Estimates and Financing 54. The total cost of road investment and maintenance programs of the four republics during the period 1986-89 is estimated at $1,659.5 million, with a foreign exchange component of $704.8 million. The total investment cost includes taxes and duties estimated at $300 million. Proposed investments under the programs are estimated at $676.2 million with a foreign exchange cost of $314.0 million. Ongoing investments amount to $74.8 million and are financed in part by the ongoing European Investment Bank-financed Projects, while new investments are estimated at $601.4 million. Road maintenance costs and other planned expenditures, including administration and debt servicing, are estimated at $983.3 million. The foreign exchange component of civil works was calculated on the assumption that local contractors, as has been the trend, would be awarded the construction contracts after international competitive bidding. A 10X physical contingency allowance has been included on all investment items. Price contingencies, also included, have been estimated assuming internAtional inflation rates of 71 in 1986 and 1987, 7.5S in 1988, and 7.7S in 1989; and local inflation rates of 30S in 1986, and 252 for each year from 1987 to 1989. In addition to local consulting services, manpower requirements for technical assistance involve about 20 man-months of short-term, high level - 15 - foreign expertise. The total cost of technical assistance is estimated at $0.6 million, with a foreign exchange cost of $0.3 million. The training program comprises about 65 man-months of overseas training and a number of local seminars for a total cost of $0.5 million. Equipment included in the program amounts to $1.6 million. 55. The total cost of Bank-financed items in the road programs for 1986-89 is estimated at $268.0 million, of which about $121.5 million is the foreign exchange component to be financed by the proposed Bank loan. The loan would be allocated in agreed proportions between the four Borrowers (Republican Road Organizations) as follows: Slovenia $25.5 million; Croatia $33.4 million; Serbia $36.5 million; and Bosnia-Herzegovina $26.1 million. The Borrowers would bear the foreign exchange risk. The remainder of the required financing, covering total planned expenditures on roads in the four republics, will be met largely from earmarked revenue from road user charges, as well as from contributions from communities, road tolls, taxes on foreign vehicles, vehicle registration fees, the Federal Fund for Less-Developed Republics, local bank credits and foreign credits. The cost estimates and financing plans were discussed and confirmed during negotiations. In order to provide adequate financing for the programs, the Federal Government has agreed to adjust road user charges periodically but not less than once every twelve months in the light of the undertakings given in the Letter of Development Policy of May 1983 under SAL I. In addition, the investment programs and financing plans have been approved by the Republican Government authorities who also have agreed to allocate road user revenue to road expenditures. Since these programs and plans were approved, actual inflation as well as projected inflation have increased compared to that used in the costs estimates. However, as the major sources of financing are in effect linked to inflation (e.g. road user charge, tolls and vehicle registration fees), variable inflation could at most have only a minor impact on financing of the road programs. In any event, the Republican Governments would provide additional resources as necessary to complete the programs (para. 52). Accounting and Audit 56. In Yugoslavia, a Community of Interest (COI), such as a Road Organization (RO), must follow the accounting procedures prescribed by the law. Major investments must be registered with and be audited by the Social Accounting Service (SDK) and with sources of funds identified and earmarked prior to starting any work. The form and timing of financial reports to be submitted to the Bank, including audit reports by SDK of the RO's accounts with financial statements, have been discussed and were confirmed during negotiations. Implementation 57. The four ROs would be the borrowers under the proposed project and would be responsible for the implementation of the civil works components. The latter would be executed by contractors under the supervision of Yugoslav consulting engineers and technical institutes which provided the detailed engineering services for the project roads. To dates si-milar arrangements - 16 - under previous Bank-financed projects have worked out well and to the Bank's satisfaction. FARP would act as fiscal representative, liaise between the borrowers and the Bank, and coordinate withdrawal requests to the Bank. FARP would also be responsible for coordinating procurement and implementing the road maintenance and rehabilitation study. The project would be completed by Deceuber 31, 1989, with the loan closing on December 31, 1990. 58. The proposed project will be implemented in line with an overall action plan involving annual updating of the investment programs and financing plans and the preparation and submission of subprojects according to agreed procedures and criteria (para. 52). Specific subprojects will be prepared on a continuous basis to allow for timely executioa within the proposed implementation schedule. Assurances were obtained during negotiations that the technical and economic evaluations of subprojects will be submitted to the Bank in summary form according to the agreed methodology. It was also agreed during negotiations that road works will be carried out according to agreed design standards. Procurement and Disbursements 59. Civil works and equipment contracts would be awarded after international competitive bidding in accordance with Bank procurement guidelines. Prequalification for civil works began in November 1985. The first round of bidding will follow invitations which would be issued in May 1986, leading to contract awards to successful bidders expected in August 1986. Technical assistance would be provided by qualified and experienced local firms assisted by short-term high-level foreign consultant expertise. During negotiations it was agreed that all procurement of Bank-financed items will be made according to Bank guidelines. All bidding and contract documents will be subject to prior review by the Bank, as has been the case under previous highway projects in Yugoslavia. Consultants will be employed by FARP according to Bank guidelines. 60. Disbursements for the Bank-financed links will cover 40Z of total costs of major new construction and 50% of the total cost for rehabilitation and betterment works, equivalent to the foreign exchange component of construction costs. The Bank would finance 1002 of the foreign costs of technical assistance and training and 801 of the cost of local seminars. The foreign cost of equipment would be financed 1002 by the Bank. To facilitate disbursements against the loan accounts, the Borrowers will establish special accounts, based on estimated expenditures for four months, which will be financed by the Bank. For contracts valued at less than $20,000 equivalent, disbursements will be made on the basis of statements of expenditures. The average disbursement profile for 21 transport projects in Yugoslavia is 6-1/2 years. However, the last six highway loans in Yugoslavia have been disbursed over 4-5 years. Given the time slice nature of the proposed sector project, including close monitoring by means of updating and submission of annual programs, disbursements should closely follow the planned implementation schedule. On this basis, disbursements for the proposed project have been forecast over a 4-1/2 year period. The project would provide retroactive financing for up to $100,000 for foreign consultants under the highway maintenance study. - 17 - Environmental Impact 61. The net effect of the proposed project on the environment is a positive one. The roads sections are located mainly in areas of low population density, while for those sections where bypasses are proposed, reduction in noise and air pollution will result as long distance traffic will be diverted from the urban areas. Benefits and Risks 62. Benefits. One of the main benefits of the project will be to relieve the mounting traffic congestion on several heavily-trafficked sections of the TYH. In view of the inter-regional character of the TYH, road improvement will benefit primarily long-distance traffic linking Yugoslavia's main centers of population and economic activity. As such, the main benefits of the TYH program will be in savings in transport costs which will accrue to a wide variety of road users from all sectors of the economy and from a wide range of income groups throughout the country. In addition, as the major land transport route between Western Europe, the Balkan area and the Middle East, improvements to the TYH will have a far-reaching impact beyond the borders of Yugoslavia. However, the major part of international commercial traffic on the TYH consists of Yugoslav exports and imports with only about 5S accounted for by purely transit traffic. Hence, the inclusion of transport cost savings of all traffic in the benefit calculation is justified, as the cost savings of this transit traffic can be considered a surrogate for other forms of benefits (transit fees, services, etc.) accruing to Yugoslavia. Substantial benefits to road users on many important primary and regional roads will also follow from the road rehabilitation and betterment programs financed under the proposed loan. Many of these roads link important urban centers as well as industrial and agricultu-ral areas and some carry heavy volumes of foreign tourist traffic during the staawr months. Recent variations in fuel prices do not materially influence the economics of the project. 63. In contributing in a significant manner to strengthening planning for the whole highway sector in the participating republics, substantial savings will accrue to the Republican authorities through improved investment decisions and more cost effective road maintenance procedures. Through the provision of technical assistance for the planning and programming of rehabilitation and maintenance of the road network, the requirements for costly reconstruction of the network in the longer term would be substantially reduced. Foremost, attention under the project to such matters of national importance as the level and allocation of road user charges to provide adequate funding in the highway sector, as well as improved inter-republican coordination, will benefit the country as a whole. 64. Economic Rate of Return. Individual ERRs for subprojects proposed for Bank-financing under the sector project range from 14Z to 29% with an overall average of 20Z. All components show acceptable first-year benefits and are therefore justified on the basis of existing traffic levels. Even under pessimistic assumptions such as a 0l increase in costs combined with a 10 decrease in benefits, almost all sections would continue to show acceptable ERRs, above 12%. - 18 - 65. A conservative estimate of the overall ERR of the total road investments and rehabilitation in the four republics planned during 1986-89 would be around 20S. In addition, the improved maintenance programs planned by the ROs under the project will yield ERRs of at least 501. As maintenance programs account for about one-third of total expenditures on roads, a conservative estimate of the ERR for the investment and maintenance programs as a whole would be in the range of 30S. 66. Risks. Availability of local funds could be a risk. However, the agreement of the Federal Government to index road user charges for inflation and of the Republican Governments to the investment programs and financing plans and the allocation of road user revenue to road expenditures, together with the general scaling down of expenditures as a whole, should mitigate any problems in local funding. PART V - RECOMMENDATION 67. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and recommend that the Executive Directors approve the proposed loan. A. W. Clausen President Attachments May 12, 1986 Washington, D.C. -19- A.NN1X I Page 1 of 6 lUOetLVU ~ _- IOCL DDSO DZ imi (mm us. un )ntS ^) A DtS (NDIT UC t) ^). CUIT ~~~IlDlLt =1111 I L^L low& 197dL llSI 1 WUIR NISKT Noma a TOTAL 235.4 25.3 a5s.3. AIOIUELIU3L 149.2 146.3 142.2 CU MR cMrtu CUS) .. .. 2970.0 2146.3 1106L9 EIT COTEUE US CWIYA P0PuUT0.EDTaf. COU UE i03) 13402.0 20371.0 22600.0 Dam P0PULAtIO (3 or 1OT;) 27.9 34.6 44.7 47.5 70.7 POPULATO PROISCTEON3 "UUOIN to *1 20 (IULL) 23.1 3ATIEIAU POPULATION CHILL) 30.0 POFMLTION WUII 1.3 POPUATION DUENSITY PEE EQ. i. 71.9 79.4 69.1 ".7 140.3 P IEQ. M. AG1. LWm 123.3 139.3 159.3 148.9 322.2 POPULTICI ASI STROCTUMS CE) 0-14 1T 30.5 27.4 24.1 31.2 21.3 15-4 TM 33.1 30.7 67.0 1.3 66a. 35 AND AMOV 6.3 7.7 *.S 7.2 12.0 FOPUA cTECE miTm (C) TOTAL 1.2 1.0 0.9 1.4 0.3 URBNl 3.6 3.2 2.6 3.7 1.3 cmUD I1 KATZ CPER T13US) 23.3 17.3 16.6 23.4 13.5 CO03DEAOTh RATEt CPER 111003) 9.9 8.9 9.6 3.9 6.9 aross E KODUCTION IATE 1.4 1.1 1.0 1.5 0.9 FAULT PUNNIN ACCWToUs ANNUL (tINus) .. DUElS (Er OFKAMM VOEN) *3.0 33.0. 71.1 IN5 or F1000 PEOD. PE CAPITA (1969-71-100) 35.0 93.0 122.0 109.1 Iu7.2 PM CATA SUPPLY OF CALOUI Es or C O uF U sS) 116.0 131.0 14.o 13t.3 132.9 NmOUs (c06 PRt 35) 39.0 93.0 105.0 2f.4 11.0 or 1510 AIIL AND PUE 29.0 32.0 39.0f 34.5 * 41.0 CiED CA 1-4) DEATN mATE 3.4 5.4 2.0 4.7 0.1 LIn SPEC?. AT SSIRT (TEW) 62.9 67.5 ".9 7.2 75.5 INFANT NUT. EATE Cnt TROUS) 37.7 55.5 32.0 33.3 9.; ACCESS TO SAYE UATE (CPOF) TrtaL .. 33.6 la 33.0 Ic 70.2 WEl 42. 6 1 62A07 75.0 7 39.4 a M .. 12.3 Z 45.0 3 7.0 .. ACCESS TO EEA DISPOSAL CE 1W POPOLATION) TUTAL .. .. 59.0 - 39.3 UAN .. .. 77.0 7 35.9.. RUEAL . 47.0 c 47.3 POPOLATIOC PE PSICA 1620.0 1OCO.0 550.0 IU70A 333.2 POP. E USING P3R3 630.0 Jf 410.0 230.0 la 769.3 15.8 POP. PEE OFSITAL 35 TOTAL 200.0 330O 10C.U 323.3 12.9 UnaUII 90.0 4 100.0 100.0 Le 201.9 143.2 anu. oo040.0 if 1300.0 1340.0 J 4519.7 77*.. AONSSIONS PER KoSfTAL 11 .17.3 13.2 /c 20.0 17.1 AVERSE SIZE or W:ISENOLD TOTAL *.0 3.8 3.3 0U31 3.3 3.2 3.3. tURAL 0.4 4.3 4.1 7. AVERAGE NO. oF PERSONS/ROlr TotA 1.6 1.4 Ultnm 31.7 1.1 RUL 1.5 1.5 PERCENTAE OF U 5ELLIGS 11rTH ACT. TOTAL 54.5 67.9 o35 92.7 98.4 RUREL 36.3 30.1 -20- ANNEX I Page Zof 6 T AN* LK Z Y UGOULAVIA l SOCIAL tINtCSOAltg DATA SHEET TUCOSLAVIA REPEARNCV GROUPS (WIE0TEO AVERAG S) "DST (MOST RECVIT ESTDIATE) lb 19b HUCET HiDuLt INCtI. inDUSTRIAL 19U1t 197A!t STZNATI. zURO. : r 6DWIS ADJUStD ZNROLUKNT PATIOS PRIKIE. TOTAL 111.0 106.0 101.0 101.9 101.2 KALE 113.0 101.0 101.0 104.2 1U2.6 ivuLT 104.0 104.0 100.0 97.5 102.4 SECONlWY: TOTAL 58.0 63.0 s2.0 57.5 87.1 HALE 63.u 6b.0 85.0 64.9 80.3 FINAL& 53.0 511.0 79.0 50.0 84.1 VOCATIONAL CU OF S NMI) .. 26.4 24.4 21.u 18.4 PUPIL-'!3ACNER RATIO PRDuW 33.0 27.0 24.0 25.1 16.7 SECONDILD 13.0 22.0 18.0 19.1 1 1.6 PASSNGER CAASITHOWSIAD POP 3.0 35.4 84.5 lb 54.2 366.3 RADIO lSCIIVERS/TOUSAID POP 84.9 165.9 218.6 170.7 1093.2 TV RRCKMIRITRoUSAMD FM 1.4 88.3 209.8 149.3 492.3 NEUSAPU ("DAILY CONUA INTEREST ) CtIRCLATXON 'PR TEOUSAND POPUIATION 70.3 85.3 103.0 In 97.0 320.4 CXUtA ASAL ATTENDAJCJ/CITA 7.1 4.2 3.5 2.7 3.3 LARORM TOTAL LAtR FORCE (TNOM) 8302.0 8838.0 1 9670.0/ ,JIALZ (PERCNT) 35.0 35.9 36.3 36.3 36.2 OaICULTEM (PERCENT) 63.0 51.0 29.0 4y 40.8 6.2 ItEUSTR (PncCrN) 18.0 23.0 35.0 j 23.3 37.7 PARTICIPATION RATE (PERCENT) TOTAL 45.1 43.4 42.4 43.1 46.0 NALZ bO.0 56.6 54.3 55.1 59.5 TRIALS 30.9 30.6 30.0 31.4 32.7 ECONIMC DEP lEC RATIO 0.8 0.8 0.8 0.9 0.7 31IIS iRtaETIOu PECEST or FRnVATE INCM RECEIVEnD n! RIONIT 5S o0r UOutEIALDS 16.4 /k 15.1 13.1 NICST 20S 0F uD DU4xm 41.5 7ig 41 .4 3. .. 43.1 LCUIST z20 or HUS'IOLUS 6.9 7ki 6.6 7F 6.6 7W .. 5.4 LOVES 401 or UOuSEIoLDS 19.0W 18.4 7! 18.7 7ii .. 16.4 ESTIVATED A CSOLT POVERT' IlCOM LEVEL CUSS PER CAPIA 'ul ........ ESTIMA RELATVE PtVZ VMCS LEL CUSS PMt CAPTrA) RUR .. .. 530.0 I ESTIMATED POP. BELW ABSOLUTE POVEm lNCO LEVEL CZ) UUI .. .. - . RURAL .. .UT AVAILABLE 1r APPUCALE N o T e s T The gramp *vares for sea iudcector are popuUtioo-weighted arithmetic ma&. Cbera of couantries g tbE indicator depends on aYaillity of date and 1s not uniform. lb Unles otbeiwnse noted. 'Data for 1960r refer to any year botg.en 1959 and 1961; 'Data for 1970" b-ctuan 1969 and 1971; and datc for "Host Reat etlmte" betwme 1981 ad 1983. /c 1976; Id 1977; A Parenrtag of ocospled dualinge vith pSped vater; /f 19b2; Ig 1980; A 1978; 1i 1979; M3Iscludlg dwrant wc ter. abroad; /k 1963; /I 1968. JUNE, 1913 -21= - 21 - ~~~~~ANNEX I Page 3 of 6 DumMONU oC SOCIAL INDWCATO dc.bom do tim o staedmi dti anC WU id ditt t_ t l lt dtW Tiw d jg tfia.u t dasimgie of ummme _im stufda th_ygd .ba' aaaJIntl*ces' mqrdkins b 1_ums. mbema_ w,upatimintin far b-H4ll lle_uau Oi UmpIspop miu2e -Mldie 1mm No h Asi and ?dlj jd oftimguui map mItartimtiadct. Sie ti mpofwewy.aastmmm.dapub_ ez tiaatlattp dat ad'uet iunaut TM I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ dim mm, ad ,dammpinup AM (doamd sq.kn. CmsANAvAWa (pr AsneeaJ-Number oflive births the year r_rod-Touul madhos amwmpurnng land mu and miami wam per tasandd of mid-year populain 190.1970. ad 1963 dtaL 1960.1970 ad 1913 dam. Cmh D_ Am f(p rhintn-Nueber of deaths in th year --u f quliwtal are ue d temporrily or Per thoud of mdl.w popm 190. 1970. and 1913 dat p._u fareopk d kitchen ard.. or to Graw epreA hu-Axemp umber of daughtrs t wman lie filow. 1960.970 ad 1962 data wil bWui her mosnla rprdctv peod if sh exei present ap-4peCib frtiltyraw suDy fve-yar aveagmes edi GNP E CAIA (I--GtNP pr capfetimams at current in 1960. 197, and 1963. muart pom. calculted by name cownerion method - Wmed ___- ne a Aek di 1994 mb 198 da Ar S _d m ~ All. (£9143 betis)1963 data.barraccpenatw ol Zdavicus underauspinsaof nationzl ENRGY M1W CAMTA-A appo fitily planmg program co_mptn of commial phlm enm (co and _ylg A F -L SM (WA'wd inI'-The peru_n- petr_-. nna Vs ad hydro-. ulew and geothermal els. MP ofmairied wames orchildbeasif ag wh an practicing or tricity) in kiloems of oil equvalt per capta 1960. 1970. ad whohfatctn f ontmp 1962 d of dtchidbearing ag are useemly wans aged 15.49. atoh for some cou1_P e _a"P t Pi mrOp i mesurd ror oter ap POWLAIOpN AND YflAL SIrAT S groupMP T. lmMW M-Ihuiftm)-As of July l: 1960 1970. FOOOANDMUTAI n and 1963 drAm U,hin (- --- _atofj-Ratio of _ _ _ fhzqfFWdhWd &'erCp(1MJ1- lND-Indezofper Mar g,' 1 (pcaw f sed)--tati, ofurba to otot capita moda production at aDrood commodities. Production populanoedizfnt ddimons of urban are as a~ ffIa omitper- encludes mada feed and seed for ericulture Food commoditie ablty ordar among oonia1960.1970. md 1963 du cd primay coeoditim (e.g sugecmw imened of suari AWWb Aksd wh ahe edible And contm wariun (eg cofe ad te am -p_for m yew 2M-Th projeco or popuation rr 00 excudsd) they comptras came L. root crop. puse od seeds. made for ac_ econmy s a Snrins wkth information on ve0tablee. fus. m-mL eN an been veock. and toel p_puam by aP ad m ferlity nas. morstaty raeL and ivetck pm Agpm_ pndouof Onch counr ts baud intwrma l msrmn a th bar yea 1960 thear prmmas oa ntiolo av erge prodan prie wseigh. 196165. 1970. and was o Pi at five-es inetal on the bi t of riud 1982 datl ampr til hde popuato b sionay. Pi.ca,ems4efcdmew( 'vw 190fhrmmJ-Compmz. Sidon7pop llo.-b4o in whiha- and sx il wt mor. ad frmt calorie oqtiv tn tfoodsupi avallabicoustry afty m bas not changd aow a log period. whil spscift per apit per dady. Availae i comp e domesdic produc- *frt iity ban -smulsaneously remained at rla e tion. im km export.and Chk stack. Net supple (ne rep_oducio a-I). In such a populatin t birth nusets exde amLfd see mds for m a acuri. quesm mod in comnt and pds to the dudea rm th ap stucre is alo rood _Prceng. and los in diributo Requime w constant, ad the growth ra is zn The stationay populat esated by FAO basd on physiola neds forenoral actity sia was estimated on the basis of th proctd e of and helt g nviomena temperoatu body weht d popublaon in th year 2000. uad t ran of dedlin fetilit e andsdibutinofpopulatoLandalowing 10; ror gnm to rlannsatn lyaLd at at household klav 16. 1970 and 1962 dati. Ryedaslmu Mavmru-h tdo tendency for populaidon sow to A Ctpws S f h farm pm dp1-Potca_ of coma beyond the as tht rephacementleved fiity has b percapta et supply of food per day. Net supply offood is define acbiee tha is. eve aftr the mA reproductton rw has read as above Requirements tor All coue esabl by USDA uft. The n ofa popuation in the year t is mesurd a provide for iinimum aowancesat 60 grai of total protn per a ratio atte oima statny popultion to the popuat;i in day ad 2 grams af tami aN pulsepro_e. Of wbiec 10 - the yer t. Sie do amumpun that fet ty remains at replac shoudheani p - in Thesestandard lower ththorof meat lvlfomyertr o 1965dat 75 gras of tot protei and, 23 puam or animal prei a an k D averg for the ward. propoaed by FAO in the Thib Wd Food Per sq.ka.-Mdyear popuaion per squa kilometr (100 bsc- StPPy. 1961.1970 ad 1962 dat ut) of toalam 196Q 1970. ad 1963 data. Am CaIta hAeefo SW* hAms A ami -Ploke in supply hrjqJ.r aprcofrwd lAs-Computed as above for agricutural of fooddeid frmamabdpulin gmsprdar 1961.6. Ind ony. 1960 1970. and 1962 dam 1970 an 1977dea. - Age S e- (puww_k-Children (0-14 years). wark- CM/(Mm 14) Dhd Am rhs)-Number of deaths oa ingap (15Myta).and retired (6S years and ve) as permtp childre ad 1-4 years pw thousand duk c in dt se ap of md-er poplado 1961Q 1970. and 1983 data. group in a Om yea Far mos devloi counrie dt derived Apf~euu*R.w (pura)-ami- al growth ratus of from iabs 1960. 1970 and 19U3 dat. toa mi r p l for 19504 1960-70. ad 1970413. HEALTH AV Gumt Ra w - Atl growth mat L* £zprcry a h fjampE_.-Number oa yoera na mbt f urban popuaton fa 195064. 196070 and 197063 daua inmt wud fiv if prvailg pa os o otlity for al people -21 a- t dt _timodofi wth winto ly Wthbohi Uk AU.mi Rolo . pi rwy. adswv-Total s_ud. M. I. 1970 a 1U du9 fold in s uw divhde by nbrsw nw of - MuMW&m dim-Numbr oflu t odW h dieo befotereadig -year ofpp b~maud be blithe la plvu yar. 1 0 6A M eo Amo a S* wimw (pm r'I.Ud wM&^ Md Amq Cot 4pw uhnm pq -ftueuur cam comn. "Wel-.NuIH opuk ( USed fal nmuhle p M ts CM atg tIai eight pe_m esludem mbu& acom to & wow Whomesud meend _uuy heh mameatod hal - _ b _ - - u.k 5 thaI hE piUind a a r,w Iumm of e_vq due pauu Mn - bn wsu pa ll lb-ala upmpm e ~ ~ ~ acuni n nyaswa wleomemMb - u k ame.I In e-,~~ emaie eblhd iseaYong.h hauihaMdS Nko bm ---rauist y tb- dn fr or no_ad.m a l w m * __ puof_d hllbe per tm m m Um md T_ mussumbi*d0dis wimembWIaomluan I yrn wm feduiO Tn-wa lha-- bf- de _ nof to 1! PRt _w m d TV __ N-d Imsm P____ suer. s-Wm a -ml o p pern or -* tt aw diepumi may lui_ th_erl*^ couiu umig " _ d wothmir _ _ - _ .~~~~WMUNA WN A WINCI slalo uume or brn an weamssamiby sur. pdOiIIIPMm dK -p aihmi * mloiig paIm U.. ft ON_Moodi ml d_ui g- t___ldu_g =_W a -me Ibyam dmbe Of dilt nd _a and _ib li -:mie an b-h p1"a19Um .du uis p ~ ~ ~ ~ u-ftpuietiu lbnd Ldw (E I smimnm ubi aldu PEUiU I cmi. y! gbmb Ammbb tpli mni o bm a I mIud hof mm h hoUPItu1beb5~b~ni Pal_~med made. m cing pem. 11a rD. finsm b * _ - -... ubey a*m e am iu l 0d1913 and_ _ ll 1963 dam. Aug pihip* wh- am a Mrda i hoepcr a. ^ e ors _ . . . _o,. m,_ _ g _ amtu mea- - pn-L abo _~p d mk _ _ A mider or buiur my or puin nf_ndpo mwlar my no be ikmimplm dowie bymo the number pwped t 13.9 anddm96 M a mm.dW aotoeldilb_lUlbrlW_ __11_ivit rnmupbanm md.n bl.tue e __ mb). wf *w _ _uu of mini. mh anio tom paopuaiu. or_ 1 Auqe Am Ef Aroma w Emw.uomI wbu. md m- AmNM D 1d Bl-Raft of papu"a imier I. and Aemup amber Of "HIGIN perr - In all rban, and iwa 65 and owm to the washin up popultio (thou apd 1SW). 0cupied sy. Dudlaemii umpNM i mmm an inWph p F.mM. MA- o=wWdfu mnu unmr4hm("6 m gA CsvauualdEupluhlemDiyli Ivnqeausu upeel Amusting pmui w,pe orhoueali takedby iniorbwA tap ofwni S mUL , andw vu dudllp impapetvey bold Imme A1mulwirilo 1W The felIosliudmume an, vuuyappoumaze umamwue of povety pmwy SA - M mob ..f .. ..i. .taim M.. hsh, and eheud ha IN,ud withamuderahie mauda. m a orseal apis bdm biy hal pudotap of u I utybe,Ln afppn-wm -upedw pbay 1.W Pupioiom yWhie nmny gam .lu IN d ee.i-Abolum povurny knowm leve is titbmwlsm kWve ouuie piba ube Wp he 6.11 yvwL othes do nuo. The bmiow whh a mu1 ami wtndouiy adequat dial plu emuMta dI~u I mumy uaeau n psh o ad duraton of mbodl no4bfod iqnqrmuuu is nmot ulordbe am re~ n te isue wu.for -o countrms iwd uniwual ,6 ue e. ee Me 1wm ehEh.. mpam inafui p e 100 pun SiSmm some ' - w huWvpovwaiy Inoe leelis oi.dbrd of puh am bios or abew *A cimiys mmmdwi pammy-chod mrap pwr copiea pnomal incmm or the cousy Uban leve as 'P derved rm_ the ma lv wit adpmmmt for higher coKn of S ,da ad" m A ad d abaw lvns in ubn muL inaaiu? edumba Sb- yer m. approvd paris bxm'F &i - absw Ahe.. Jbust ho Lev (pw. mazy b-cAm peaim wu nd.momi. or mache tranug co uu.umu"N-P ~e -ofpopuldamiseCubnanmirural *mnia. for yalla 0,orn ml? ymnuofam oNma . wbo am -*.ook pooe b (prom4 qmwiy)-oaaa imum.c CoupIme Aualb* aPd Dat ODivn. i_d orh_yu wh ods co Mu* and PniuDemm indepuimly iuormdspui- on - 22 - u 4 of 6 VUAWA - DC Pialmu 23.0 ullinm (mig-1u4) 0 A r,Lts iUb.M1 (1934) AMUOL ~~~~~~~Aummal kmt Batas CC) ,uL11im~ 13* at Cat cmucin pda) Tmiaa cmt pdma) k__ _ _ _ _ lwac. 1984 1981 1982 1!93 194 1985bl/ 16 19B7 1U88 M119 1990 ams. domtic praIct a/ 45,633 1.4 0.5 -1.3 2.0 0.5 2.5 2.4 2.9 3.4 3.5 *iuletmins 7,1% 2.8 7. -1.0 2.2 4.5 5.3 1.5 1.5 1.4 1.3 bamettw 22,5M 2.2 -1.1 -1.9 4.1 1.9 1.7 2.7 3.5 4.1 4.7 Savlw 15,881 0.0 0.7 -0.3 -0.9 1.7 2.5 2.4 2.6 3.4 2.7 (xuudtlm 2B,073 -1.7 0.5 -0.4 -0.6 1.0 3.8 4.1 2.0 2.4 3.0 Gkasu i _vjsm 17,255 -0.5 -1.3 -5.9 -4.5 -3.2 2.9 3.9 5.0 4.7 4.4 RI -of GUs 13,458 0.5 -11.5 -0.7 10.1 8.2 1.7 3.4 3.2 4.2 4.9 Iqu of an 13.153 -10.8 -15.3 -5.6 -0.4 1.2 5.9 9.8 3.2 3.0 4.5 tow mdan.1 mvia 17,6% -6.0 -0.6 -1.8 6.5 2.1 2.1 2.0 3.6 4.2 3.3 Gmdsflatw (1984 W9M) 1M.0 35.3 46.5 65.1 100.0 175.0 fthma raws 152.8 35.0 50.3 92.8 152.8 270.2 gum of (MP at I prim (z) 1 mr w h l 1'rme (C) (at .w..t (tat const i) 1960 l970 1975 19B 985 1990 1960-70 9-75 9o 1980-85 1985-0 Das rtic Pdwt c/ 1D0.0 1D0.0 100.0 lO0.0 100.0 100.0 5.9 6.5 4.1 0.5 2.9 A1cu1tu 22.5 16.1 13.8 11.1 13.9 i:.L 3.3 2.9 2.0 1.3 2.0 Mubty 42.2 37.4 44.3 40.5 40.7 35.1 6.3 8.3 7.5 0.8 3.4 servic_ 29.0 38.1 33.1 35.8 30.0 34.6 6.9 4.7 4.9 0.1 2.7 osutmi 67.2 72.8 74.3 t6.7 68.6 67.5 6.5 6.9 6.3 -0.2 3.0 i_:nu.at 36.5 32.3 33.5 31.1 30.1 3D.9 4.7 5.5 5.4 -3.4 4.3 SG 13.9 18.5 20.2 29.7 25.7 23.7 10.2 6.7 5.2 0. 3.5 gS 17.5 23.5 28.0 29.5 24.4 22.1 9.8 6.7 5.0 -6.6 5.2 ntus al aaizp 32.6 29.6 25.6 28.5 31A 31.5 5.3 6.2 3.2 0.3 3.1 AS Z of Or 90 1970 1975 L90 1395 KC 7ZmU 7IsEff 2ou-sa_ 27.9 33.1 36.8 34.0 32.5 Tsai _.0itus 24.1 33.2 37.2 34.6 32.2 Sz~p1us (*) ar deficit ) 3.8 -0.1 -0.4 -0.6 40.3 1960-70 1970-75 1975-8D 1980D5 1985490 Gnwift rate CZ) 6.1 6.7 6.0 0.8 2.8 ow p cqiia ate 5.0 5.8 5.1 0.0 2.0 ian 5.4 4.6 5.6 37.3 6.3 dasI elasticity 1.7 1.0 1.2 -.3.2 1.8 a/ At i a prica. DdJ figuw is mc cucable with dim GP pw capita prem. xwse tuig te Wold Umk Atlk _.odo1o. c At 2pri; cpts we -Wmmmd at ft t ai will Mt add up to taa du. to 1aiuh of tit imlirec tim. 166911 mm rA - 23 - ARM I PEp 5 of 6 nm;uA - UIWL llWE Edutw L Mm: 23.0 -s94) OW Per Cqda: t8*2,120 1(94) -' Gn Aumal OMd Iate (I) uifon Mt at C(at otant Wi)m) ut indiamto smuvt prices) -p_ta (1984) 1981 1982 V83 1984 1985 bI 1986 1987 I988 1989 1990 10,557 4.5 -9.4 2.5 11.4 8.7 1.7 3.6 3.8 5.0 5.8 Primy c/ 1,90D -17.5 -2.3 11.3 11.6 -3.0 -0.3 -3.3 8.3 6.0 3.0 N.uafactju.a d. 8,657 U.4 -9.8 0.2 11.3 11.3 2.0 4.9 2.9 4.8 6.3 1Kdi.,dia. UqiortU 12,108 -12.3 -14.0 -4.7 -1.6 2.5 6.2 8.6 4.1 2.4 4.0 lmd 670 -15.0 -14.9 -7.1 -25.7 -3.5 -7.9 -6.6 5.3 1.4 U.1 patrola el 3,645 -9.4 0.3 5.8 7.5 -12.0 9.9 14.2 5.5 -0.3 4.1 lbddniy aid aqe it 2,615 -22.5 -19.2 -24.0 -n.7 16.0 5.8 7.3 3.3 4.2 3.5 Othem 5,178 -7.3 -18.6 2.4 -0.1 6.7 6.2 8.2 3.6 3.4 3.3 PMs (1984 - 1m) qi price i;ue 1OD 1D 107 105 100 96 99 106 113 121 130 'IIt price ; 100 95 95 97 100 99 95 95 103 113 122 T1 of tdae ii 1OD 105.3 112.6 108.3 10 97 105 112 110 107 107 (kt oitim Of erduuiime 1uk CZ) Jmrge Amin em ) Cat ent prices) (at c Dutait prices) 1960 1970 1975 1980 1985 1990 1960-70 1970-75 1975-8D 19-85 198540 aODt. 100.0 100.0 I0.0 18.0 100.0 100.0 8.1 5.7 2.9 2.7 4.0 Pria c/ 49.6 29.4 19.5 21.5 16.4 16.3 - -1.3 4.2 1.6 3.0 _inmfacea d/ 50.4 70.6 80.5 78.5 £3.6 83.7 - 8.1 2.3 3.3 4.1 Iq-ta IOD1. 10.0 ID.0 1W.O 1OD.0 10D.0 9.0 7.4 4.0 64 5.0 Fbod 9.1 7.2 5.5 7.0 4.9 6.1 - 5.0 8.7 -14.1 -0.2 Petrel e/ 5.4 4.8 12.3 23.6 28.3 24.7 - 8.2 8.7 -0.1 6.5 Mrdviy ii aqd pti 36.8 33.2 33.9 28.1 23.8 27.5 - 9.4 1.8 -15.0 4.8 Odium 48.7 54.8 48.3 41.3 43.0 41.7 - 6.0 2.6 -4.2 4.9 aume of de wih Sue of Tzrde with Sue of nude wdi Cap Sure of Trae with TIzieaia1 C mariea C) Devapivim Ccmatim (2) iplna Oil bqioter. (Z) Cmtrafly Plmei ftwV Cl) 1965 1970 1980 1985 e/ 1965 1970 1980 1985 e. 1965 1970 1980 1985 e/ 1965 1970 1980 1985 e/ DRmw mcru TM 40.1 53.3 37.4 35.5 17.4 13.6 8.2 8.3 0.4 0.7 8.1 5.9 42.1 32.4 46.3 5.3 Priu" 61.0 70.2 - - 9.1 8.2 - - 0.2 0.2 - - 29.7 214 24.C - lNMifm=±um j.0 41.9 25.0 - 23.8 17.2 18.0 - 0.6 1.0 4.0 - 51.6 39.9 53.0 - 1wrts 55.3 66.1 52.8 45.4 16.0 12.7 6.9 6.0 0.1 0.1 10.2 16.1 28.6 21.1 30.1 32.5 of Proyeted ymm at c-mt- 1S94 pre; for itr ye. boe year pices are tae of die preeding yw. b/ Pseiiay. 4 S=: 5-8 4 SnlC 3; ie-1udk ihbricata, c. id elomrici*y. April 30, 1986 hwm I -24- P 6of 6 nMA - wAUZ OF PABM, E1AL aM AND Mr (U3 mlll,u) Pap1uIati 23.0 uLnim (uig94) cm Per Cqpit: 15*2,120 (18) bi;umtw ktAc ul Pjtd 1981 982 1983 l9K4 1985 a/ l986 1987 1988 1989 1990 MAK OF PANE= zm of au andeica 17,157 15,2b4 14,715 15,217 15,781 16,464 1,792 19,323 21,421 23,664 oE *id- Midhudime fo.b. 10,205 9,923 9,693 10,139 10,557 11,977 13,193 14,655 16,462 18,631 laortm of amdo ad 18,103 15,868 14,50 14,778 14,984 15,664 16,979 18,723 2),821 23,064 of : 1ch: Medmdia c.i.f. 14,528 12,751 U,825 11,909 12,108 13,675 14,847 15,458 15,827 16,458 oAret acamt bdaare -96 -62 211 439 797 am 813 600 600 (O0 r4it1 if Iwt) 1,184 -38B -266 95 -5'8 -400 -40D -40D -4a -400 auSt in reseves -238 1,012 55 -534 -209 -400 -413 -20D 20D -20D0 Tztar'utimA eer'M bhi 2,689 1,677 1,622 2,156 2,3(5 2,765 3,178 3,378 3,578 3,778 Of hiCh: G(ld (offal vaution) 78 78 78 78 78 78 78 78 78 78 Fhgerwa -_ a2u iqmrtI 1.8 1.3 1.3 1.8 1.9 2.1 2.2 2.2 2.1 2.0 - L DCAPIL AIND Mr Goa.ndjuna lIZ 3,107 2,314 3,710 2,947 3,236 offici;a credits 712 4n 493 429 775 Itilatmol1 218 364 292 406 295 Iu 218 33D 292 406 295 Bilateml 494 128 201 24 48D Private creditors and .ma-wteed 2,395 1,813 3,217 2,518 2,461 3dzm1 debt Debt totallaing a1d disbuse ci 19,868 2D,016 20,516 20,232 2D,775 Debt svice df inerie p qy,e 4OD8 4,0o6 4,529 5,065 5,251 Lumnt 1,987 2,049 1,688 1,837 1,834 :rtLzati 2,021 1,957 2,841 3,228 3,417 Payaa t Z eparto 23.4 26.3 3D.8 33.3 33.3 AheCag ierest rate m mm loms (2) e/ 12.5 14.0 10.6 9.5 9.5 Ah ge- muitY of am lans (yeas) 11.7 9.4 10.5 6.3 8.5 a Fkelimy. bI Ibclde. Vros fQii "mu of camarcial baru. c/ Inludes showt-n debts. / Dbt svie e-luxs amrdiaimr and diteet an sort-tm debt wd cxadit extmm by Yugoe1Aa. 1ublic aid pilicly 1gtmtd debts ilry. 1669H EDU4 1 April 30, 1986 - 25 - ANNEX II Page 1 of 3 THE STATUS OF BANK GROUP OPERATIONS IN YUGOSLAVIA As of March 31. 1986 A. STATEMENT OF BANK LOANS 1/ US$ Million Amount (Less Loan Fiscal Cancellations No. Year Borrower(s) Purpose Bank Undisbursed Fifty-six loans fully disbursed 2,249.4 - 916 1973 NAFTAGAS Gas Pipeline 59.4 1.1 1561 1978 Elektroprivreda Bosnia Hydropower 73.0 2.5 1561-1 1984 Elektroprivreda Bosnia Mostar Suppl. Loan 61.0 36.1 1621 1979 Privredna Banka Bosanska Krajina Sarajevo Agric/Agroind. 55.0 2.7 1678 1979 Five Road Org. Highways X 148.0 0.5 1756 1980 Zagrebacka Banka Croatia Sava Drainage 51.0 6.3 1801 1980 Vojvodjanska Banka Agric. Credit III 82.3 15.7 1819 1980 Four Road Org. Highways XI 125.0 0.1 1909 1981 Kosovska Banka Pristina Industrial Credit V 50.0 8.1 1910 1981 Privredna Banka Sarajevo Industrial Credit V 30.0 0.5 1911 1981 Investiciona Banka Titograd Industrial Credit V 20.0 1.2 1912 1981 Stopanska Banka Skopje Industrial Credit V 10.0 0.03 1951 1981 Investbanka Agr/Agroindustries 87.0 38.3 1977 1981 Pristina Railway Org. Railways 31.1 10.9 1993 1981 Kosovska Banka Pristina Agric/Agroindustries 90.0 59.7 2039 1982 Stopanska Banka Skopje Agriculture 55.0 25.4 2055 1982 Radna Org. Vodovod Kosovo Water Supply 23.0 0.4 2132 1982 Privredna Banka Sarajevo Industrial Credit VI 33.0 9.8 2133 1982 Stovanska Banka Skopje Industrial Credit VI 33.0 10.9 2136 1982 Privredna Banka Sarajevo Agriculture Dev. 23.3 6.7 2161 1982 Privredna Banka Drainage 19.5 6.3 Sarajevo 2233 1983 Reg. Work Org. KOMPRED Tuzla Water Supply 6.5 1.4 I/ The status of the projects listed in Part A is described in a separate report on all Bank/IDA financed projects in execution, which is updated twice yearly and circulated to the Executive Directors on April 30 and October 31. - 26 - ANNEX II Page 2 of 3 US$ Million Amount (Less Loan Fiscal Cancellations) No. Year Borrower(s) Purpose Bank Undisbursed 2306 1983 Kosovska Banka Pristina Kosovo Regional Devt. 79.0 67.7 2307 1983 Udruzena Beogradaka Banka Serbia Regional Devt. 136.0 99.7 2336 1984 Four Railway Org. Railways VI 110.0 64.4 2338 1984 Eight Power Org. Power Transmission III 115.0 112.5 2339 1984 Kosovska Banka Pristina Industrial Credit VII 45.0 41.9 2340 1984 Investiciona Banka Titograd Industrial Credit VII 25.0 13.9 2410 /1 1984 Vojvodjanska Banka Fertilizer Sector 90.0 90.0 2467 /2 1985 Investiciona Banka Montenegro Reg'l Devt. 40.0 40.0 2527 1985 Elek. Boone I Hercegovine Visegrad Hydropower 12.5.0 109.1 2568 /1 1985 Privredna Banka Sarajevo Bosnia Forestry 35.0 35.0 2595 /3 1985 INA-NAFTAPLIN First Petroleum Sector 55.0 55.0 2596 /3 1985 NAFTAGAS First Petroleum Sector 35.0 35.0 2597 /3 1985 Privredna Banka Sarajevo First Petroleum Sector 2.5 2.5 Total (less cancellations) 4,308.0 Of which: Repaid 1,096.9 Total Outstanding 3,211.1 Amount Sold 9.2 Of Which: Repaid 9.2 _ Total now held by the Bank 3,211.1 Total undisbursed 1.011.2 /1 Not yet signed. ;2 The $40 million loan for the Montenegro Regional Development Project subsequently became effective as of April 15, 1986. /3 Not yet effective. - 27 - ANNEX II Page 3 of 3 B. STATEDOT OF IFC INVESTMENTS (as of March 31, 1986) Fiscal Type of Amount in US$ million Year Oblipor Business Loan Equity Totai 1970 International Investment Investment Corporation for Yugoslavia Corporation - 2.0 2.u 1970/ Zavodi Crvena Zastava Fiat Automotive 1980 S.p.A. Industry 12.4 0.6 13.0 1971/ Tovarna Automobilov in Automotive 1980 Motoriev Maribor (TAM) Industry Klockner-Humboldt 9.2 0.9 10.1 Deutz A.G. (KED) 1972/ FAP-FAMOS Belgrade/Daimler Automotive 1980 Benz A.G. Industry 16.3 0.8 17.1 1972/78 Sava Semperit Tires 12.5 2.5 15.0 /80 1973 Belisce-Bel Tvornica Papira Pulp and Paper 70.9 - 70.9 1974 Zelezarna Jesenica/ARMCO Special Steel 10.0 - 10.0 1974 Salonit Anhovo Cement Plant 10.0 - 10.0 1975 RMK Zenica Steel 50.0 - 50.0 1977 Frikom RO Industrija Smrnzute Food and Food Irane/Unilever Processing 4.0 2.4 6.4 1977 Tvornica Kartona i Ambalaze Pulp and Paper Cazin Products 15.6 2.6 18.2 19.3 Soko-Mostar Hermetic Compressors 7.0 - 7.0 1980 Investiciona Banka Titograd- Udruzena Banka Tourism 21.0 - 21.0 1980 Radoje Dakic Machinery 18.7 - 18.7 1980 Eight Republican/Provincial Small-Scale Banks Enterprises 30.2 - 30.2 1982 Igalo Physical Medicine Center 14.1 - 14.1 1982 Industrija za automobilski Motor Vehicles Delovi I Traktori (Ruen Auto Accessories 10.6 - 10.6 1983 LBZB Development Finance 31.4 - 31.4 1985 INA-Naftaplin Chemicals & Petrochem. 37.8 - 37.8 1985 Sour Energoinvest Power Trans. Line 14.3 - 14.3 1985 Iskra Telecommun. 24.1 - 24.1 1986 Ljubljanska Banka (LB) Export Oriented Projects 67.4 - 67.4 1986 Jugobanka Gen. Manufac. 34.7 34.7 Total Gross Commitments 522.2 11.8 534.0 less cancellations, terminations, exchange adjustment, repayment and sales 255.5 5.2 260.7 Total commitments held by IFC 266.7 6.6 273.3 Total undisbursed held by IFC 54.0 0.8 54.8 - 28 - Annex III Page 1 of 2 YUGOSLAVIA A HIGHWAY SECTOR PROJECT Supplemental Proiect Data Sheet Section I: Timetable of Key Events (a) Time taken by country to prepare the project. 41 months (October 1981-February 1985) (b) Project preparation agencies: Road Organizations of Bosnia- Herzegovina, Croatia, Serbia and Slovenia. Cc) First Bank mission to consider project October 1981 Cd) Appraisal mission departure: October 1983 (e) Negotiations completed November 1985 (f) Loan Effectiveness Planned November 1986 Section II: Special Bank Implementation Action None Section III: Special Conditions (a) Effectiveness Adjustment of the road user charges in line with inflation during the period from January 10, 1986 to the time of loan effectiveness (para. 47). - 29 - Annex III Page 2 of 2 (b) Other (i) Agreement on the methodology for evaluating road sections to be submitted to the Bank for inclusion in later years of the program (para. 51). (ii) The Federal Association of Republican and Provincial Road Organizations (FARP) will be responsible for project coordination and the implementation of the road rehabilitation and maintenance study and training program (para. 52). (iii) Agreement by the Federal Government to periodically adjust road user charges (para. 55). 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