THE WORLD BA\IK ANAL'AL RE-PORT 1990 J -Fy w s -4,tj t THE WORLD BANK ANNUAL REPORT 1990 The. World Bank I Washington, D.C. 20433 Photo Credits Cover: H. C: . . .: Page 14: Yosef HadarlWorld Bank Page 104: Yosef HadarlWorld Bank Page 107: Yosef HadarlWorld Bank Page 115: John Cleave Page 121: Khaled Abou SeiflWorld Bank Page 129: World Bank Page 136: Ray WitlinlWorld Bank Cover: Learning the alphabet in a primary school in Chad. This child may be considered fortunate: There are more than 100 million school-age children in the developing world who do not go to school. Page 59 details the conclusions of a World Bank study on ways to enrich primary education in developing countries. Cover design by Joyce C. Petruzzelli ISSN 0252-2942 ISBN 0-8213-1561-7 3 The World Bank, the IFC, and MIGA "The World Bank," as used in this Annual balance of payments than would IBRD loans. Report, includes the International Bank for IDA's assistance, therefore, is concentrated on Reconstruction and Development (IBRD) and the very poor countries-those with an annual its affiliate, the International Development As- per capita gross national product of $650 or sociation (IDA). The IBRD has two other less (in 1988 dollars). More than forty countries affiliates, the International Finance Corpora- are eligible under this criterion. tion (IFC) and the Multilateral Investment Membership in IDA is open to all members Guarantee Agency (MIGA). The Bank, the of the IBRD, and 138 of them have joined to IFC, and MIGA are sometimes referred to as date. The funds used by IDA, called credits to the "World Bank Group." distinguish them from IBRD loans, come The common objective of these institutions mostly in the form of subscriptions, general is to help raise standards of living in developing replenishments from IDA's more industrial- countries by channeling financial resources ized and developed members, and transfers from developed countries to the developing from the net earnings of the IBRD. The terms world. of IDA credits, which are made only to gov- The IBRD, established in 1945, is owned by ernments, are ten-year grace periods, thirty- the governments of 152 countries. The IBRD, five- or forty-year maturities, and no interest. whose capital is subscribed by its member The IFC was established in 1956. Its func- countries, finances its lending operations pri- tion is to assist the economic development of marily from its own borrowings in the world less-developed countries by promoting growth capital markets. A substantial contribution to in the private sector of their economies and the IBRD's resources also comes from its helping to mobilize domestic and foreign capi- retained earnings and the flow of repayments tal for this purpose. Membership in the IBRD on its loans. IBRD loans generally have a grace is a prerequisite for membership in the IFC, period of five years and are repayable over which totals 135 countries. Legally and finan- fifteen years or fewer. They are directed cially, the IFC and the IBRD are separate toward developing countries at more-advanced entities. The IFC has its own operating and stages of economic and social growth. The legal staff, but draws upon the Bank for admin- interest rate the IBRD charges on its loans is istrative and other services. calculated in accordance with a guideline re- MIGA, established in 1988, has a specialized lated to its cost of borrowing. mandate: to encourage equity investment and The IBRD's charter spells out certain basic other direct investment flows to developing rules that govern its operations. It must lend countries through the mitigation of noncom- only for productive purposes and must stimu- mercial investment barriers. To carry out this late economic growth in the developing coun- mandate, MIGA offers investors guarantees tries in which it lends. It must pay due regard against noncommercial risks; advises develop- to the prospects of repayment. Each loan is ing member governments on the design and made to a government or must be guaranteed implementation of policies, programs, and pro- by the government concerned. The use of cedures related to foreign investments; and loans cannot be restricted to purchases in any sponsors a dialogue between the international particular member country. And the IBRD's business community and host governments on decisions to lend must be based on economic investment issues. By June 30, 1990, the con- considerations alone. vention establishing MIGA had been signed by The International Development Association eighty-five countries, of which fifty-eight had was established in 1960 to provide assistance also ratified. for the same purposes as the IBRD, but pri- While the World Bank has traditionally fi- marily in the poorer developing countries and nanced all kinds of capital infrastructure, such on terms that would bear less heavily on their as roads and railways, telecommunications, 4 The World Bank. the IFC, and MIGA and port and power facilities, its development support of adjustment and policy reform. This strategy also places an emphasis on invest- lending supports programs of specific policy ments that can directly affect the well-being of changes and institutional and sectoral reforms the masses of poor people of developing coun- in developing countries designed to achieve a tries by making them more productive and by more efficient use of resources and thereby (a) integrating them as active partners in the de- contribute to a more sustainable balance of velopment process. payments in the medium and long term and to In response to the deteriorated prospects for the maintenance of growth in the face of severe the developing countries during the 1980s, the constraints, and (b) lay the basis for regaining Bank inaugurated a program of lending in momentum for future growth. 5 Contents Letter of Transmittal 10 Overview of World Bank Activities in Fiscal 1990 11 Section One. The Executive Board 15 Financial Policy Actions 15 Operations Evaluation; Project Implementation and Supervision 17 Operational Policy Actions 17 Administration 18 Development Committee 19 Committees of the Executive Board 19 The Joint Audit Committee 19 Committee on Personnel Policy Issues 20 Ad Hoc Committee on the Valuation of Bank Capital 20 Ad Hoc Committee on Criteria for Allocation of Shares of Bank Capital 20 Ad Hoc Committee on Voting Power of Smaller Members 21 Committee on Cost Effectiveness and Budget Practices 21 Committee on Directors' Administrative Matters 21 Executive Directors' Steering Committee 22 Section Two. The Economic Scene: A Global Perspective 23 Summary 23 Industrial Countries 24 Eastern and Central Europe 26 High-income Oil Exporters 27 Low-income and Middle-income Countries 27 Severely Indebted, Middle-income Countries 28 Debt and Financial Flows 29 Commodity Prices 34 Trends in World Trade 35 Environment 37 Section Three. The World Bank-Fiscal Year 1990 39 Ninth Replenishment of IDA 39 Initiatives for Sub-Saharan Africa 42 Initiatives in a Reforming Europe 48 Special Operational Emphases: Debt and Adjustment 50 Debt-reduction facility for IDA-only countries 52 Adjustment lending 53 Special Operational Emphases: Poverty Alleviation; Food Security 57 Core poverty program 57 6 Contents Economic and sector work and other analytical output 57 Widening operational approaches 58 Food security 58 Special Operational Emphases: Human Resources (including Women in Development) 59 Education 59 Population, health, and nutrition 60 Women in development 61 Special Operational Emphases: Environment 63 Integration of environmental concerns 63 The project pipeline 64 Policy and research activities 66 International concern and the Bank's involvement 66 Special Operational Emphases: Private-sector Development and Public-sector Management 68 Section Four. World Bank Finances 73 Loans: IBRD 74 Disbursements on loans 74 Currency-pool loans 74 Pre-pool fixed currency loans 74 Lending rate 74 Declining interest-rate risk from the loan portfolio 75 Loans in nonaccrual status 75 Liquid-assets Investments: IBRD 76 Resources: IBRD 76 Borrowings 76 Capital 77 Reserves and net income 77 IDA Finances 77 Use of IDA reflows 77 IDA's commitment fee 77 IDA commitment authority 79 Disbursements by Source of Supply 79 Cofinancing 80 Section Five. World Bank Activities, IFC, MIGA, and ICSID Research at the World Bank 87 The environment 87 Private-sector development 88 Reform in socialist economies 88 Poverty reduction and food security 88 Debt, financial intermediation, and adjustment 88 Public-sector management 89 Human-resource development 89 Economic Development Institute 90 Interagency Cooperation 92 Cooperation with the International Monetary Fund 93 Cooperation with the Organisation for Economic Co-operation and Development 94 Relations with nongovernmental organizations 95 Cooperation on agricultural research 96 Technical Assistance 98 Operations Evaluation 99 Internal Auditing 100 Contents 7 International Finance Corporation 101 Multilateral Investment Guarantee Agency 102 Policy and advisory services 102 Guarantees program 102 Member relations 103 International Centre for Settlement of Investment Disputes 103 Section Six. 1990 Regional Perspectives Africa 105 Subregional Trends 106 West Africa 106 Eastern and central Africa 108 Southern Africa 109 Long-term Development Issues 109 Population 109 Environment 110 Agriculture 111 The social-dimensions-of-adjustment program 111 Food security 111 Education 112 Women in development 112 Asia 113 Policies for Medium-term Growth 113 Issues of Public and Social Policy 117 Bank Operations and Strategy 118 Europe, Middle East, and North Africa 120 Developments in the Maghreb Countries 122 Developments in Four Middle East Countries 123 Economic Developments in High-income, Oil-exporting Countries 124 Economic Transformation in Eastern and Central Europe 124 Yugoslavia Embarks on Reform 126 World Bank Operations. Fiscal Year 1990 126 Latin America and the Caribbean 128 Policy Reform: Restoring Fiscal Discipline 131 Activities of the Bank, Fiscal 1990 131 Cooperation and Cofinancing 134 Section Seven. Summaries of Projects Approved for IBRD, IDA, and African Facility Assistance in Fiscal 1990 137 Financial Statements of the International Bank for Reconstruction and Development 183 Balance Sheets 184 Statements of Income 186 Statements of Accumulated Net Income-Unallocated 186 Statements of Changes in General Reserve 186 Statements of Cash Flows 187 Summary Statement of Loans 188 Summary Statements of Borrowings 192 Statement of Subscriptions to Capital Stock and Voting Power 194 Notes to Financial Statements 198 Report of Independent Accountants 202 Financial Statements of the International Development Association, the Special Fund Administered by IDA, the Special Facility for Sub-Saharan Africa Administered by IDA, and the Debt Reduction Facility for IDA-Only Countries Administered by IDA 203 Statements of Commitment Resources 204 8 Contents Statements of Changes in Liquid Funds 207 Statements of Condition 208 Summary Statement of Development Credits 210 Statement of Voting Power, and Subscriptions and Contributions 213 Notes to Financial Statements 216 Report of Independent Accountants 220 IBRD/IDA Appendices 221 1 Governors and Alternates of the World Bank 222 2 Executive Directors and Alternates of the World Bank and Their Voting Power 225 3 Officers and Department Directors of the World Bank 227 4 Offices of the World Bank 230 Text Tables Operational and Financial Overview, Fiscal 1986-90 13 1-1 Budget of the World Bank for the Fiscal Year Ending June 30, 1991 16 2-1 G-7 Countries: Output, Inflation, Investment, and Unemployment, 1980-89 24 2-2 Current-account Balances of the G-7 Countries, 1982-89 25 2-3 Low- and Middle-income Economies: Growth of GDP and GDP per Capita, 1981-89 28 2-4 Low- and Middle-income Economies: Gross Domestic Investment and Gross Domestic Savings as a Percentage of GDP, 1980-89 30 2-5 Low- and Middle-income Economies: Balance of Payments on Goods, Services, and Private Transfers, 1981-89 32 2-6 Public and Private Long-term Debt and Financial Flows, 1980-89 32 2-7 Low- and Middle-income Economies: Medium- and Long-term Debt, Debt Service, and Gross Disbursements, 1982-89 34 2-8 Commodity Prices, 1982-89 35 2-9 Leading Exporting Countries in World Merchandise Trade, 1989 36 3-1 Contributions to the Ninth Replenishment of IDA Resources 40 3-2 ODA Requirements for Sub-Saharan Africa, 1981-2000 45 3-3 Allocations of IDA Reflows, Fiscal Years 1989-90 46 3-4 IBRD Commitments for Debt and Debt-service Reduction, Fiscal 1988-90 52 3-5 World Bank Adjustment Operations, Fiscal Year 1990 55 3-6 Net Transfers by the World Bank to the Severely Indebted, Middle-income Countries 56 4-1 IBRD Borrowings, Fiscal Year 1990 78 4-2 IBRD and IDA Foreign and Local Disbursements, by Source of Supply 81 4-3 IBRD and IDA Disbursements for Goods, Works, and Services Procured from Selected Non-Part I Countries, Fiscal Year 1990 82 4-4 IBRD and IDA Foreign Disbursements, by Source of Supply 83 4-5 IBRD and IDA Foreign Disbursements, by Source of Supply and Description of Goods, Fiscal Year 1990 84 4-6 World Bank Cofinancing Operations, by Region, Fiscal Years 1989-90 85 5-1 EDI's Teaching and Institutional-assistance Activities, Fiscal 1987-90 90 5-2 Aid Coordination Group Meetings Chaired by the World Bank in Fiscal Year 1990 94 6-1 Africa: 1988 Population and Per Capita GNP of Countries That Borrowed during Fiscal Years 1988-90 6-2 Lending to Borrowers in Africa, by Sector, Fiscal Years 1981-90 106 6-3 Net Transfers to Africa 112 Contents 9 6-4 Asia: 1988 Population and Per Capita GNP of Countries That Borrowed during Fiscal Years 1988-90 113 6-5 Lending to Borrowers in Asia, by Sector, Fiscal Years 1981-90 114 6-6 Net Transfers to Asia 118 6-7 Europe, Middle East, and North Africa: 1988 Population and Per Capita GNP of Countries That Borrowed during Fiscal Years 1998-90 120 6-8 Lending to Borrowers in Europe, Middle East, and North Africa, by Sector, Fiscal Years 1981-90 122 6-9 Net Transfers to Europe, Middle East, and North Africa 125 6-10 Latin America and the Caribbean: 1988 Population and Per Capita GNP of Countries That Borrowed during Fiscal Years 1988-90 128 6-11 Lending to Borrowers in Latin America and the Caribbean, by Sector, Fiscal Years 1981-90 130 6-12 Net Transfers to Latin America and the Caribbean 134 7-1 Projects Approved for IBRD and IDA Assistance in Fiscal Year 1990, by Region 156 7-2 Projects Approved for IBRD and IDA Assistance in Fiscal Year 1990, by Sector 158 7-3 Statement of IBRD Loans Approved during Fiscal Year 1990 164 7-4 Statement of IDA Credits Approved during Fiscal Year 1990 170 7-5 Trends in Lending, IBRD and IDA, Fiscal Years 1988-90 175 7-6 Trends in Lending, IBRD and IDA, Fiscal Years 1988-90 175 7-7 IBRD and IDA Cumulative Lending Operations, by Major Purpose and Region, June 30, 1990 176 7-8 IBRD and IDA Cumulative Lending Operations, by Borrower or Guarantor, June 30, 1990 178 Boxes 3-1 Capacity Building in Africa 44 3-2 Biological Diversity in Madagascar 64 3-3 The Bank's Financial-sector Policies under Review 71 6-1 Family Planning in Zimbabwe and Botswana 110 6-2 The Environmental Program for the Mediterranean 127 6-3 Mexico Renegotiates Its Debt 132 Box Tables 6-3 Creditor Choices and Resulting Debt Relief 133 Text Figures IBRD and IDA Lending, by Lending Instrument, Fiscal Year 1990 12 2-1 Real Six-month LIBOR Rates 26 2-2 Investment-to-GDP Ratios 31 2-3 Disbursements, Debt Service 33 3-1 IBRD and IDA Lending to the Poorest Countries, Fiscal 1981-90 42 4-1 IBRD Reserves-to-Loan Ratio, Fiscal 1986-90 73 4-2 IBRD Gross and Net Disbursements to Countries, Fiscal 1986-90 74 4-3 Currency Composition of the IBRD's Loan Pool 75 4-4 After-swap Cost and Average Life of IBRD Borrowing Program, Fiscal 1986-90 80 5-1 Bank-NGO Operational Collaboration, by Region, Fiscal 1973-90 95 5-2 Bank-NGO Operational Collaboration, by Type of NGO, Fiscal 1973-90 96 10 Letter of Transmittal The details of events covering the period The directors express their appreciation to July 1, 1989, to June 30, 1990, are found in this the staff members of the Bank for their dedi- Annual Report, which has been prepared by cation to the institution's ideals. They note that the executive directors of both the Interna- the continued professionalism of the staff made tional Bank for Reconstruction and Develop- it possible for the Bank to respond to the needs ment (IBRD) and the International Develop- of developing countries with both flexibility ment Association (IDA) in accordance with the and imagination. by-laws of the two organizations. Barber B. The Annual Reports of the International Conable, president of the IBRD and IDA and Finance Corporation, the Multilateral Invest- chairman of the boards of executive directors, ment Guarantee Agency, and the International has submitted this Report, together with ac- Centre for Settlement of Investment Disputes companying administrative budgets and au- are published separately. dited financial statements, to the boards of governors. Executive Directors Alternates Ibrahim A. Al-Assaf Abdulaziz Al-Sehail Fawzi Hamad Al-Sultan Mohamed W. Hosny Paul Arlman Cvitan Dujmovic J. S. Baijal M. Mustafizur Rahman Mourad Benachenhou Salem Mohamed Omeish Gerhard Boehmer Bernd Esdar Cesare Caranza Fernando S. Carneiro E. Patrick Coady Mark T. Cox, IV Jacques de Groote Bahar Sahin J. S. A. Funna Jabez A. Langley Jonas H. Haralz Jorunn Maehlum Jean-Pierre Landau Stdphane Pallez Chang-Yuel Lim Robert G. Carling Andre Milongo Jean-Pierre Le Bouder Raymundo Morales Felix Alberto Camarasa David Peretz Robert Graham-Harrison Jorge Pinto Silvia Charpentier Frank Potter Clarence Ellis Masaki Shiratori Yukio Yoshimura Vibul Aunsnunta Le Van Chau Eduardo Wiesner Pedro Sampaio Malan Zhang Junyi Jin Liqun August 7, 1990 Overview of World Bank Activities in Fiscal 1990 The first year of the decade of the 1990s was million loan to the Philippines to help it buy back an auspicious one for the World Bank and its a portion of its debt. In the case of Costa Rica, affiliates. the IBRD granted a waiver of its negative pledge Agreement was reached during the fiscal year for interest collateral. The IBRD has set aside on a $15.5 billion replenishment of IDA re- $350 million in commitments from four adjust- sources for the three-year period fiscal 1991-93. ment operations to help finance Venezuela's Because that amount represents an increase over debt-reduction program. eighth replenishment (IDA-8) totals, the real A total of $3,969 million in Bank commitments value of IDA-8 donor contributions was main- was approved in support of adjustment opera- tained. Three program areas will have high pri- tions. Eleven adjustment operations in the se- ority during the fiscal 1991-93 period: poverty verely indebted, middle-income countries were reduction, support for sound macroeconomic approved; twenty operations supported adjust- and sectoral policies, and the environment. ment programs in the low-income, debt-dis- Agreement in principle was also reached with tressed countries of sub-Saharan Africa. prospective donors on the outline of a second In fiscal 1990, the Bank launched a program to phase of the special program of assistance (SPA) integrate its poverty-reduction activities into its for low-income, debt-distressed sub-Saharan Af- country-assistance strategies. A set of tasks has rican countries. That program, launched in De- been identified within each country work pro- cember 1987 for a three-year period, provides gram as having as its main objective the direct quick-disbursing aid and concessional debt relief reduction of poverty among specified groups. to support adjustment efforts in these countries. Over 200 operations in the Bank's lending pro- Assistance through the SPA framework seeks to gram for fiscal 1990-93 are expected to be in the bridge projected balance-of-payments gaps in "core poverty program," as it is called. Many of low-income, debt-distressed sub-Saharan coun- these operations will focus on such standard tries in 1991-93, thus helping to place them on productive activities as rural credit, small-scale the path toward accelerated growth. enterprises, rural roads, fisheries, irrigation, and During fiscal 1990, Bulgaria and Czechoslo- agricultural extension. The social sectors are vakia applied for membership in the IBRD, and also heavily represented, especially health and fact-finding missions were sent to both coun- nutrition, education, drinking water, sewerage, tries. Relations were reactivated with Roma- and urban housing. Projects and programs to nia; an exploratory mission visited Bucharest, reduce population growth, promote the opportu- and requests for technical assistance have been nities of women, protect the environment, and received from the Romanian authorities. In promote food security are also included. addition, the Bank began its lending program Lending for education topped the $1 billion to Poland during the year. Five projects, with mark for the first time in fiscal 1990. Twenty- commitments totaling $781 million, were ap- one projects, involving Bank assistance of proved to help support Poland's reform efforts. $1,487 million, were approved. The Bank po- The Bank's operational work in Hungary con- sitioned itself to meet the president's pledge, tinued, as three loans, totaling $366 million in made in March 1990, to increase education commitments, were approved. lending over the next three years to an annual The Bank was active in facilitating debt and figure of more than $1.5 billion. debt-service reduction agreements between The Bank met another goal, announced in Mexico, the Philippines, Costa Rica, and Vene- November 1989-to increase lending for pop- zuela and their respective commercial creditors. ulation, health, and nutrition to $800 million A loan of $1.26 billion was made to Mexico for annually for the three-year period 1990-92. In interest support, and the IBRD set aside $750 fiscal 1990, lending to the sector amounted to million in commitments for the purpose of prin- $933 million. cipal reduction. The IBRD also approved a $200 Efforts were further intensified during the 12 Overview of World Bank Activities in Fiscal 1990 IBRD and IDA Lending, by Lending Instrument, Fiscal Year 1990 US$ millions 0 2.000 4.000 6,000 8,000 10,000 12,000 Specrtic 1.1 investrment loans Seclor- 3.957.2 investment loans Financial. 879.0 intermediary loans Sector- 2.5436 adjusiment loans Program lending and Ta strucrural-adjustment 1,434.0 loans Tota Debt- 1 460.0 reduction loans Technicalf 203 0 as s,iance loans Emergency 54.0 reconstruction loans year to integrate environmental concerns into was begun in January 1988; staff input in ana- the Bank's operations, policy, and research lytical work in this area has increased substan- work. Systematic environmental screening of tially; and IFC approvals have grown by 12 all new projects was introduced in fiscal 1990, percent. In addition, an expanded cofinancing- leading to full environmental impact assess- operations program was established to help ments in every project that could have a sub- improve financial flows to developing countries stantial effect on the environment. Of the 222 by providing guarantees for private commercial loans and credits approved during the year, loans and bond issues, as well as government 107, or 48 percent, contained environmental obligations in the case of limited recourse fi- elements. Projects focusing solely on environ- nancing-all in the context of Bank-supported mental issues were approved in Bolivia, Brazil, projects. In this regard, the executive directors and Madagascar. Work also proceeded on de- authorized the Bank to negotiate a guarantee for veloping proposals for a pilot mechanism that a $100 million private placement for India's would permit the Bank to assist developing Housing Development Finance Corporation countries in taking action to protect the ozone (related to a $250 million IBRD loan extended in layer, reduce emissions of greenhouse gases March 1988 to the corporation). and emissions that result in transboundary Lending commitments by the Bank during pollution, protect against degradation of inter- fiscal year 1990 amounted to $20,702 million: national water resources, preserve biological $15,180 million from the IBRD and $5,522 diversity, and otherwise contribute to the re- million from IDA. The level of IBRD commit- duction of global environmental problems. ments declined by $1,254 million from the The year also saw the Bank and its affiliates previous year's total, while IDA commitments further integrate the private-sector develop- rose by $588 million to register a record high. ment action program into their everyday oper- This level of lending allowed the Bank to ations. The number of operations with private- support major policy changes and development sector development components has increased efforts in a great number of countries. Con- by more than a third since the action program versely, where performance and policy change Overview of World Bank Activities in Fiscal 1990 13 Operational and Financial O%erview. Fiscal 1986-90 i rn,I Iion% .l 1 S . olljr. Li rile oiher%% ie noil.d . fl, I.I -, [BRO (ommIlments l3 1' 41 1.lS 14t,-' In 4; 15. ItI Dishur%emeniS' 2'3h 11.383 I l.f'3. 11.3111 I3.x i59 Nei d%hburbmrntnr 4.43 2 ij.h 3.42 1.921 M -17 Neu borro ving; III.h1r1 9.31' Ii'.b,2 9.286 1 1.'20 Net inconie 1 '4 1.1 13 1 ..114 1.944 1.1.346 Subhcribed capItal - hih.1 55,1 91.41h- I15.hNs 1 2>.2n Staiutor lending limii Si . x9.8' I u ill.4'4 1i.4`q 13.-)46 Loan, out.>anding hl .164 -4.792 - 1,9 ''.94' :;UllS2 Loawns oult.dndIng ai a perceniage u.t lending limit ~I S-,2 Intie-et owerage ratio 1.'4 1 Is I I I I Liquidl% !-r.tlO IperLenti 'h -ll i' 47 Reser%eI.o)-lo.Ian% raijto 7S. i; 3 111.2 10.8 [DA r Cu.mmitmenrs 3.14l1 4SN6 4,45; 4 934 i.5,2 Disbur.ementh 1.154 . l. u S.9,' 184S Nei diburSemenlt 3(121 2 941.' ','41 S4114 1,5'S ME%dulde, loan, to rhe tr-- b IDA ex.lude, the Sr.e.al Facl-,. I;r Sulb S:ah,ran Airc, inriuje. 1- .. I ur. i- r, .nrl, were not adequate in the Bank's judgment, billion in fiscal 1989, when net disbursements lending was held back. This was the case with were severely constrained as a result of large respect to a number of large operations in fiscal prepayments by some member countries. IDA 1990; as a result, total IBRD lending was not as net disbursements were up $224 million, to high as originally envisaged. $3.6 billion. Investments by the International Finance The IBRD borrowed the equivalent of $11.7 Corporation continued to grow. The Corpora- billion in the world's financial markets. The tion approved investments for its own account borrowing program included the introduction totaling $1.5 billion for 122 projects, with total of innovative U.S. dollar global bonds. Net costs of $9.4 billion. income was $1,046 million, of which $750 The Multilateral Guarantee Agency (MIGA), million was allocated to the general reserve. the Bank's newest affiliate, issued its first Guyana and Honduras cleared their arrears to guarantees during the year, with a maximum the Bank in June 1990 after payments of $55.3 contingent liability totaling $132.3 million. million and $152.6 million, respectively. Four projects, representing a total of $1.04 Angola joined the IBRD on September 19, billion in direct foreign investment, were guar- 1989, bringing the total membership of the anteed. IBRD to 152. At the end of the fiscal year, In fiscal 1990, the IBRD continued to action was pending on membership in the strengthen its financial structure: Subscrip- IBRD for Bulgaria, Czechoslovakia, Namibia, tions to the IBRD's recent $74.8 billion general and Switzerland. capital increase were on target, the new cur- Angola became a member of IDA on Sep- rency-management policies introduced in fiscal tember 19, 1989, bringing total membership in 1989 were successfully implemented, and the the Association to 138. At the end of the fiscal reserves-to-loan ratio continued to increase. year, action was pending on membership in Net disbursements from the IBRD to mem- IDA for Czechoslovakia, Namibia, Portugal, ber countries jumped to $5.7 billion from $1.9 and Switzerland. 14 t~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ e~~~ I4¶ II> 9.11 l..h O'@S. N @- 1'S I -'9' Bith,otr or i'S do../flho Canada '3 2 . '.I -lI; --; > I - 3, Fran,c -1'.1 -4.- Ib -11.4 -44 4 1-1h Germanx. Federal Republic of ' I ' 1 3 j.4 .4._ 45.2 4-N. . tluB -f., ' 1 -2E --7 2, .h -I S -6h11 -116 L.iptan e, 14 IlI. 3., II 414. 2 s 9 S' II -9 h L'nired Kindom on ti S 2 f 4.1 -1. - 6 - '6.6 - 34 tl L'ni.ed Sd ie-. - ' - t h -t 4 - 1 .4 - I il,(' - il 5.I' - 12 I, - m13. Tyoal -1 .8 4 -4t - . _ l 1.i -46h -L I - 1 Other indutrulI countlrie - h. I -4 2 l l 111 --'. -hi -' _ -,2. All indLstriirl CiUntric. - ' -12 h -1 --5. 3 - .4 53 I -49.1 -S' 2 tanflda Id Mi. tiS 1l - 1.4 -I - I 3-.17 -3.11 France -2 2 -i1.9 -01., -11.1 11 A -II 5 -(1.4 -11.4 (jermanm. Fcderal Republic otf 11,9' I 6 2 h 4.4 4 11 4 '.' 4 Itak -1. 1.4 -11.n -11.9 11.4 -t-l 2 -11. - 1.3 Japan II f, .' ' : B. I4 3.6 2 t 2.t' United Kin idonm I I I Ix e I 9 11 -I . -- 2 -.J I LilnLeCd SIte' . -12 I -2' -6 t --3 -3A, -2h -- .11 loLtal 11.1 -11.1 -tl - -15 -11.3 -1) 4 -I .1 -11 5 Other ,ndu'tn;al counDiCi - I 6 11.4 II 1 111 -11 2 -1.1 4 -11 4 - 1 .1 All indutrnil coUntries -11.' -1 I.' -I).' --Il.1. -I I -11.3 -11.4 -.1.t, Nol- . Detl i. mn.. n-i add 1Io . be .,. i r' ounding a. Prehn ni,lI\. b. JECDU Jel,nmio.r c-elude, re:;,-cL.lan 01 Ioiemi. direo r.l .CTMe,[ c .Nu -ral i.. A u e lr 1jumeI ru Dern.mar k FIr.i ,,d . I. I ,Jd Ir I.I nJ. L i e IT- h.ra Ik N.- h rI nd m . N.- Z .L..Ind. No r %k Spain ',hcder .,nd Sm iize,-I:mni SO URC:E I IF -D. year for the industrial countries. The rate of deflator rose more slowly, however, as busi- unemployment fell in 1989 to 5.7 percent from nesses absorbed part of the increased cost of 6.2 percent in 1988, and some progress was production by allowing profits to weaken. made towards adjustment of the imbalance This potentially inflationary environment between the current accounts of the United persuaded the central banks of the United States and Japan (Table 2-2). States, the Federal Republic of Germany, and However, the appreciation of the effective Japan to slow the growth of broad money. In exchange rate of the U.S. dollar by 4.4 percent the United States, however, monetary policy in 1989 could slow the rate of contraction of the shifted towards a modest expansion by mid U.S. current-account deficit. Further expan- 1989. This coincided with virtually no change sion of U.S. exports was constrained by the in the general U.S. fiscal balance as a share of slowdown in growth of world demand for mer- GNP, which represented a break from the chandise exports-from 9 percent in 1988 to 7 downward trend that characterized the second percent in volume terms. half of the 1980s. Judging by this ratio, fiscal The growth of trade and GNP extended the policy was also cautious in Germany, Japan, global business expansion into its seventh and the United Kingdom. However, the Italian year. This added to existing demands on re- fiscal deficit remained high, at 10.5 percent of sources, especially on capacity utilization and GNP, while the Canadian ratio deteriorated to skilled labor, which resulted in a general in- about 4 percent of GNP. crease in production costs. As a result, the rate As monetary policy tightened, interest rates of increase in consumer prices in the G-7 rose in most industrial countries. The average countries rose to 4.3 percent from 3.1 percent short-term domestic interest rate in Germany in 1988. Inflation of the national product price rose by 2.9 percentage points in 1989 from its 26 The Economic Scene: A Global Perspective previous low level. Part of this increase then and medium run. These countries, excluding the spread to Germany's partners in the exchange- Soviet Union, constitute a small share of the rate mechanism of the European Monetary global economy, with a total GDP that is roughly System.2 In the United States, the domestic equivalent to about 6 percent of world GDP. short-term interest rate rose by 1.4 percent, Their share in world trade is approximately 3.7 while in Japan it inched up by 0.8 percent. percent, over half of which is within the frame- Figure 2-1 shows the evolution of the six- work of the Council for Mutual Economic Assis- month London interbank offered rate (LIBOR) tance (CMEA). This is likely to change in the on U.S. dollars. While the rate reached a peak years to come, as these economies develop in March of 1989, it generally trended down- greater access to world markets. ward for the remainder of the year. The economic-reform packages being adopted include various combinations of price Eastern and Central Europe decontrol, trade liberalization, fiscal reform, The past year has seen the initiation of funda- and institutional changes such as those relating mental political and economic reforms in almost to property rights. The proper sequence and all the countries of Eastern and Central Europe the pacing of reform strategies are critical, -reforms aimed at reversing the recent trends of given the need for both stabilization and fun- deteriorating economic performance. These damental adjustments in several of these econ- economies have been characterized by severe omies. Poland's extensive program is moti- inefficiencies and shortages. It is expected that vated by the view that no structural reforms economic restructuring and greater reliance on can be effective in an unstable macroeconomic market forces will lead to improvements in pro- environment. and the reform process, there- ductivity and incomes, as well as greater sustain- fore, began with a major stabilization program, ability of external and internal balances. The implications of these transformations for 2 They are Belgium, Denmark. France, the Netherlands, the global economy remain unclear in the short Ireland. Italy, Luxembourg, and Spain. Figure 2-1. Real Six-month LIBOR Rates (annual percentages) 8 7 A-=~ x U.S dollar 6 5 *, - _ - Yen 4 * ,. . . . 2 - Deutsche mark .. 1981 1982 1983 1984 1985 1986 198, 1988 1989 Low-income and Middle-income Countries 27 which also includes a major structural compo- over 19 percent to $16 per barrel. As a result, nent of trade reform. Rapid reform has been the group, as a whole, recorded a balanced facilitated by the popular support that the position on its aggregate current account for government enjoys. In contrast, the reform the first time since 1982. The growth rate in process in Hungary has been a more gradual real GDP in the high-income oil exporters one that has evolved over a number of years. rose to 6.6 percent, while real incomes, which Obviously, the central challenge for the gov- include adjustments for gains in terms of ernments of Eastern and Central Europe will trade, rose by over 8 percent. This contrasts be to find a way to restructure their economies with 1988, when real GDP grew by only 2.7 to achieve sustained economic growth while percent, reflecting continuing instability in oil minimizing the transitional social costs of un- earnings. employment, inflation, and uncertainty. The debate about the pace of adjustment in Low-income and Middle-income Countries Eastern and Central Europe has been paral- Despite the fact that 1989 was a fairly buoy- leled by one on the scale and nature of the ant year for the industrial economies, growth external assistance that may be required. One of GDP slowed considerably for the low-in- source of such assistance is expected to be the come and middle-income developing coun- newly established European Bank for Recon- tries-from 5.4 percent in 1988 to 3.3 percent struction and Development, which, with an (Table 2-3). initial total lending authority of about $12 bil- There was a sharp decline in Asian GDP lion, is expected to invest in both private- growth from 9.7 percent in 1988 to 5.1 percent, sector and public-sector projects in the reform- accounted for largely by India and China, ing countries of the region. which returned to more normal growth rates A central concern of the developing econo- after experiencing exceptionally rapid expan- mies has been the degree to which their needs sion in 1988. The fast-growing East Asian for external financing, investment, and trade economies also slowed down, partly the result will be "crowded out" by Eastern and Central of reduced demand for their exports and rising European demand. While the World Bank has domestic cost pressures in some economies. emphasized that its assistance to Eastern and The decline in output growth in the developing Central Europe will not be provided at the countries of the Europe, Middle East, and expense of other developing countries, it is North Africa region was mainly a reflection of likely that some private capital flows will be the significant dislocations occurring in East- diverted to Eastern and Central Europe. Given ern and Central Europe. These dislocations the commercial banks' experience with sover- resulted in stagnation of per capita incomes in eign lending in the recent past, it seems likely the region in 1989, despite better performance that the bulk of private flows to Eastern and in countries such as Algeria, Portugal, and Central Europe will be in the form of project Yugoslavia. and trade financing. Sub-Saharan Africa performed better in terms of GDP growth, greatly reducing the High-income Oil Exporters traditional differential against Asian econo- mies. But since population growth in these Like all other exporters of petroleum, the economies is as rapid as it is, the region high-income oil exporters3 benefited from both continued to experience low growth rates in higher prices and greater demand in 1989 as the per capita terms. Growth of per capita GDP value of oil exports rose by over 35 percent. was about 0.3 percent in sub-Saharan Africa in This was the first time in recent history that a 1989. To a large extent, better performance in rise in the price of oil was not associated with sub-Saharan Africa reflected rises in certain a reduction in production by member countries commodity prices, favorable weather condi- of the Organization of Petroleum Exporting tions, and improved policies. This was the first Countries (OPEC). Greater demand and higher positive rate of per capita growth in sub- prices were caused by a small increase in Saharan Africa in recent years. In Latin Amer- consumption in the developing countries and ica, the rate of GDP growth was 1.5 percent, erratic performance by non-OPEC suppliers, while output per capita declined by 0.6 per- as production in the Soviet Union and the cent, despite some recovery in Brazil and North Sea and refining in the United States Mexico. The combination of inflation, indebt- were disrupted. edness, fiscal problems, and political instabil- The volume of crude-oil production for the ity continued to plague many Latin American OPEC group rose by 14.5 percent in 1989, and economies. the weighted average oil-export price re- bounded from losses suffered in 1988 by rising 3 See footnote f in Table 2-3 for country composition. 28 The Economic Scene: A Global Perspective Table 2-3. Low- and NlZiddle-income Economies: Growth of GDP and GDP per Capita, 1981-89 sasJeannu,l r.,rcenite,h jn1,eP 14S- GDP 15S7 CDP population -ClAnir, gr.up LSv 1,1iion-, 4ru,li-r.n 19s 1-Ste 1|148 19.sb 19;19 Lon - ind risrddle-inct'nic eCLncrnic, 3..lil.4 9.73.X 4.1 4.5 5.4 1 3 Be , ,.,,, 'iii/1 Sub-Sarharan Africa; l5 1.4 444.45 l I.h _ - I 1 3 East Ai Xa. 146. .3 1 S 9j h1'(. i I South ASIa 3 .I l.0"Ql. l 5 3.2 1 2 4 S Europe. Middle E:,sr and North Af'rica' 796 tl 38' h 3 4 1 .4 I.5 i Latin Americia ond the Caribbean ;1. 405.1 1 1 3.0 1.' 1 i Bv ilioIun t.'o Lo%k-incomne odnirnes 819.2 2.5'.n 6h 6.1 8.9 4 2 Nliddle-inconme counirie; 2 .OiJ.n0 o 1.046. 2 '- 3 5 3.1 2.7 Se%erel% indehied. middle-inCLirre counirie' >22.i 4A5.7 I ; 2.6 1.6 1 4 High-inconie oil e\porter,' 154r ''.1 -4.i -.2 2.7 6h6 ,, Prchl,mjnr, t,. E;cludl. i,o.ih !, i . Crhn-. Fii r-done4,.i. D.n,o, r3nl; KKmpLkhe.ir,l Kin . Republic ol Korea. L -.. People v Demoer-llc RepubIIc. Ma;-o. N1.l^,. - P.Jpu:a Re. Cuine.. Philippint-. Solorn.r d Ta.:.d r (:hinj. lh.iland. T.fnlu. Nnu. NJdm -nd We,tern Si.rno3 d .kl-.ihnrnitsln Aler-. C.prii,. Ar3b Republ, o1 Espi. C5reeie. HUDtaj klrmrl Reprbhlh Or Irdn. Ira.q. Jordan. Ldb\,n. n. L[.. l Nforoc-s m.r(in. Pisland PoniLg.i. R-m.rj So. i-irn .r.,b Repuhlc Ta,ni,.- Turlkc . Yermen .rab Rcpubli,. People Derno.-rIuc RepLiHlic *i YEremn. .-nd ' UL.OsI.,%ra Investment ratios declined in the aggregate slowdown in these economies and a decline in for the low-income and middle-income econo- exports. In general, the low-income countries mies as a group in 1989, continuing a decade- and the severely indebted, middle-income long trend. This was true also for most of the economies experienced the largest increases in countries of Europe, the Middle East, and their current-account deficits. North Africa, where the ratio of investment to GDP has declined from the high levels of the Severely Indebted, Middle-income beginning of the 1980s. The investment ratio Countries fell to even lower levels in sub-Saharan Africa Most of the severely indebted, middle-in- and Latin America, with the exception of Ni- come countries stagnated in 1989.4 As a group, geria and Brazil. where there was some recov- these economies again did not achieve real ery in capital formation (Table 2-4). In con- GDP growth rates that were above their pop- trast, the investment ratio in East Asia ulation growth rates.5 Some of these countries, remained high. This regional pattern of invest- such as Mexico, the Philippines, and Venezu- ment performance cannot but help to perpetu- ela, have undergone economic adjustment, ate the divergence in the growth rates of Africa while the process has been delayed by political and Latin America, on the one hand, and Asia, transitions in such countries as Argentina, Bra- on the other, well into the 1990s (Figure 2-2). zil, Hungary, and Poland. Aggregate growth of Compared with previous years, the current- 1.4 percent for this group of countries partly account balances of the low-income and mid- dle-income countries displayed a slightly dif- 4 The severely indebted, middle-income countries are Ar- ferent pattern in 1989 (Table 2-5). There was a gentina, Bolivia, Brazil, Chile, People's Republic of the marginal improvement in Africa's, as well as Congo. Costa Rica. C6te d'lvoire, Ecuador. Honduras, Latin America's, current account as a share of Hungary. Mexico. Morocco, Nicaragua, Peru, Philippines. Poland, Senegal, Uruguay. and Venezuela. Egypt was GDP. However, this was also accompanied by added to the group in 1990. an increase in arrears in some countries. In I An extreme case was Peru, where real incomes declined contrast, the balance-of-payments position of by about 15 percent in 1989 after a drop of 9 percent in the Asian countries deteriorated, reflecting the 1988. Debt and Financial Flows 29 ;DI' psr p.Int I 9 zs I -Af- I'J 1 '4' v.-ir.r. noo.- r ' ii ' 4 3..3l I I * \ .,Fo nd rniddle-in.cone economie, -2' .5' - 4.2 ' - _ 13 ii . uh S2ha r.in .frlica' .. 1 11 ' h ' ' ~~~~~~~~S-ILIth X>,ia 1.3 -ii. ti 4 -11. FAiIre.l Nlr--ddle I-i. and Noiih Af(r,ct' 119 i :i -II S - Ii. , l,nn \n-Ieri,, *nd she C.iihhealn 44 4 6 L.0 ol)V IflCsnlie :',Uflhunii 1 4 I 1 1 l.h Nllddle-nLvnler COiunmr --ti. 7i 6 -11 4 -11 e.licrel indebteo. niiddle.,rtcomc coiunnil'e -. > - 'Il is 3l ,1: High-income oil e%rrer;' c Aniacni inw..i Bo1r-.11r- . t tide, ileo........pl,, s R,. htpli h, ot r,ti \c. R,- .....li,..J 1 l.-0,iC F,t U......o..i.|. H.-ndwa-. lunrtr. %L ow. o Ni.,.F.c, \Fi-,r.JLOJ,. , r. PhI1i1flpr.- F.lu nd. ,en;,L. llr,uo.u-. and .neluel.' i Hihi, in. HKun.i Kia .Ii I .b. . ,1,1 S..idi \1.n.* ,.ld ihn I 'n,iei- \r. t nr.Fe' h: . I S-'. FIIh.ugh n .lr.lun '. nel J1 peirilcur pi''.JiI..yr. ii i^ "In;ddei hk.c au'e I 'c.uii ' ri 'ccciii t.1 ,1 * '.cri C t u c * . .- ie r de,, . J I --n p.eF'lC[ifl,nl .2 Br p h I .,Jr, ,ir 19 '1 dolK. r..! in,ljic L h, a . hib ti. II- hin KI '.I.ifi .,, 2.* n,ddle-n-.rr.e O..AI.rr. reflects the effects of higher world interest as imports rose without a concomitant increase rates and the contractional effect of adjustment in exports. The aggregate current-account def- policies. The performance of the severely in- icit for these countries worsened, from $12.4 debted countries as a group masks some differ- billion in 1988 to $20.0 billion in 1989. Although ences in individual country performance. the oil exporters benefited from the rise in oil The adjustment process for many of these prices, this was partially offset by the effect of economies was accompanied by price instabil- increases in interest rates on their debt-servic- ity and sluggish investment performance. The ing costs. Aggregate net flows to the severely rate of inflation for the group as a whole was indebted, middle-income countries declined high, especially in Argentina, Brazil, Peru, and dramatically in 1989, as a slight increase in Yugoslavia, where there was hyperinflation; official flows was more than offset by a sharp there were sizeable inflationary pressures in fall in private lending. Ecuador, Uruguay, and Venezuela, as well. In contrast, tight fiscal and monetary policies in Debt and Financial Flows Bolivia, Mexico, Morocco. Nigeria, and the The developing countries as a group increased Philippines contributed to a slowing of inflation their net transfers to the rest of the world in 1989 in these countries in 1989. to $42.9 billion from $37.6 billion in 1988 (see Investment performance among the severely Table 2-6). Disbursements, which have declined indebted economies varied considerably, with $36.5 billion from the unusually high level of the poorest response often coming from those 1981, eased by $8.8 billion in comparison with economies experiencing financial and political the year before: net flows declined correspond- instability. In the aggregate, investment as a ingly, but were still positive at $16.6 billion. share of GDP rose slightly, from 17.4 percent Total developing-country long-term debt to 17.9 percent in constant 1980 prices. This outstanding and disbursed was $988.5 billion in expansion of investment occurred in Chile, 1989, which represents a slight nominal in- Mexico, Morocco, and the Philippines. How- crease from 1988. The factors contributing to ever, countries such as Argentina. Brazil, Po- this increase were (a) a temporary slowdown in land, and Uruguay were unable to restore debt-conversion operations, especially debt- capital formation and growth. equity swaps, partly in anticipation of devel- The current account deteriorated for the opments in the Brady initiative; and (b) an severely indebted, middle-income countries, increase in lending from official bilateral and 30 The Economic Scene: A Global Perspective Table 24. Lo%%- and Nliddle-income Economies: Gross Domestic Investment and Gross Domestic Sa%ings as a Percentaoe of GDP. 1980"89 R i.n ,. In .... , r . 1u.1 I.:1x t!> V I 14r z- F4.> '84 Sul'Sjh.or,rn AI'rica In%estmeni 2tl 2Ill 'N. 14.2 11.3 1.5. 14 h i J 1 4 15. ,atine 1 - I1. H .2 il 1 11.4 1! v ' 12. 1'.1! 144) E.,^ X i: lntesimrnrn SI' - 2" E 2'i.' 2!1.' 25. S 311.5 299 2544 UlS RtJ,)7 Sa% jniznr: li9 '14 2.5. > s 3L 1 311 - 32 3 3. 341 32.3 %souh t'J Intecq.nCrn' ''1I 24 2. 2 'I.S 21 7 23)4 2. 'I 3 22 I '1.4 Sd% inI, II.- 19 | h 19I I l - IX . | S I .I 18.t Europe ,liddl Fla-l. nd Nt.rlh Ntric., Inmeiment1 '1A e 111 2" i : ,1 2 1 25. 2h 2 Y 24 1 24.2 S.I % ins 14 '4 2h ' >. - r} > I 2. 2 2 22 - . 2 1.S Latin .Anern-. Ind [he In;e;irnr, - 4 - 1. 2.h 21.4 1h.8 I ,. l' 1.4 I 4 2 I 1 5 N21 h S Pun,l 2 > "21 '1.; 211 1 ' 22II.2 ''2 2.2 24.11 2 4.8 I.-" airi 4 26 1'.7 2 Siu% inE2. 2; 214 i 1u h . 21 V 26 'I.4 '4. ' '2 4 .9 Mliddle income Ifl'.e\(rcn~lI -~ S Y 2 2 4 24.11 23.1 22 - 22 I 11 24 9 23.4 S-i% . I np i ;2 4 24 5 _4 '.…2-. 2S _ Lo, .tnd mliddle Incom. In,e. i nienl I, L h 4 . 2 j 2411 2 1 24 II ' 1 24 11 2.t, 24.6 S.,i ln 24.y 24 _ 23. _411 24 6 5. 1 24 7 2.'2, h. 9 5.6, I I'Il A multilateral sources. Debt service fell slightly Japanese government were important ingredi- in 1989 to $129.8 billion. Total disbursements ents in the debt and debt-service reduction declined to $86.9 billion from $95.7 billion, agreements. while those from private sources dropped even The Mexico package involved a comprehen- more sharply to $44.4 billion from $54.8 billion sive restructuring of $48.9 billion of medium- (Figure 2-3 and Table 2-7). term and long-term debt to ease the burden of In a speech to the Bretton Woods Commit- servicing the stock of debt. Commercial banks tee in March 1989, U.S. Secretary of the Trea- were offered three financing options: a thirty- sury Nicholas F. Brady underscored the need year discount bond at 65 percent of the face for official support for a voluntary, market- value of the claim carrying a market interest based, and case-by-case approach to debt and rate; a thirty-year bond with a below-market debt-service reduction. The agreements by interest rate; or new money, equivalent to 25 Mexico, the Philippines, Costa Rica, and Ven- percent of base exposure, repayable over fif- ezuela with their commercial bank creditors, teen years with a seven-year grace period. In as well as an agreement in principle with addition to the direct external debt and debt- Morocco, represented the first debt and debt- service relief for Mexico, there have been service reduction operations under the aus- indications of considerable indirect macroeco- pices of the Brady Plan. These cases involved nomic benefits in the form of reduced domestic some combination of principal reduction, inter- interest rates, a substantial rise in capital in- est reduction, and/or commitments of new flows, and higher levels of private investment. money. Official funds from the Bank, the In- The agreement on the Philippines' external ternational Monetary Fund (IMF), and the debt emphasized commitments of new money, Debt and Financial Flows 31 Figure 2-2. Investment-to-GDP Ratios (percent) 31 _^ - !e, E~~~~~~~~asl Asia 27 Europe. Middle EasI. and NorTh Africa 23 ,, , ...... \ ~~~South Asiade0 0 1 9 ' Ovt 19 - - LaTin America * 00_ _ and rhe Caribbean 15 Sub-Saharan Africa 1 1 1 1 1 . , . I' I I 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 as well as principal reduction. Banks that did countries have income levels that preclude not want to make new loans were given the them from being qualified for concessional opportunity to tender their outstanding debt terms as agreed to by creditor governments in for cash in a buyback scheme. In contrast, the Toronto in 1988. The Development Committee Costa Rica package was designed to reduce the has asked that the Bank and the IMF continue stock of existing debt without any attempt to to analyze the debt problems of these coun- secure commitments of new money. The tries. agreement also included a plan for repaying a A positive development for the low-income portion of past arrears and trading the remain- countries was the establishment of a debt- der for credit-enhanced fifteen-year bonds. By reduction facility for IDA-only countries by buying back approximately 60 percent of its the Bank. Funds for the venture were derived $1.5 billion of commercial bank debt, Costa from the transfer of $100 million of fiscal 1989 Rica will obtain $1 billion in debt relief. IBRD net income to the facility.6 These agreements, as well as others reached The prospects for any increases in sources of subsequently or being discussed, demonstrate external financing for the developing countries the potential of an officially supported, volun- are not promising except for those involved in tary, market-based approach to debt and debt- debt-workout exercises and for countries im- service reduction envisioned under the Brady plementing economic reforms (reforming coun- Plan. Such debt-service reduction operations tries are better able to attract direct foreign can facilitate the transition to sustainable investment and repatriated capital). Net flows growth. Concern has been expressed, how- to developing countries fell to $16.6 billion in ever, in the Development Committee and else- 1989. the lowest level of the decade. This was where, that the development needs of the largely a reflection of the collapse of concerted severely indebted, lower-middle-income coun- lending by private commercial banks, partly in tries whose debts are mainly to official credi- tors should be given special attention. These 6 For details. see page 52. 32 The Economic Scene: A Global Perspective Table 2-5. Low- and Mliddle-income Economies: Balance of Payments on Goods, Services, and P'rivate Transfers, 1981-89 (billions of US dollarsi lPast three vears as % of GDP Country group 1981-8V 1984 1985 1986 1987 198X 19S9b 1987 1988 1989b Low- and middle-income economies -76.9 -14.8 -20.1 -26 6 7.7 -3.1 1.7 0.3 -0.1 0.0 Bs geog, tip/iuc at ei:on Sub-Saharan Atiica- -16.7 -5.0 -3.4 -9.1 -10.4 -12.3 -11.0 -6.9 -7.6 -7.0 East Asia -11.7 -2.0 -10.2 8.1 24.5 14.8 -3.3 3.3 1.7 -0.3 South Asia -7.1 -6.2 -10 2 -9.7 -9.2 - 11.5 -13 7 -2.8 -3 3 -3.8 Europe, Middle East, and North Afrncad -8 6 -2.9 0., -7.5 -4.8 -4.9 - 12.3 -0.7 -2.3 -2.5 Latin Amenca and the Caribbean -31.9 -1.7 -3.7 -174 -11.3 -11.0 -11 9 -1.5 -1.3 -1.1 By tnconte giouip Low-inconie counlties - 22.2 -1 2.7 -29 0 - 2' 4 -22 2 -29 7 - 32.7 -2.7 -3.2 -3.2 Middle-income countries -54.8 - 2.0 9.0 2.8 29.9 26 6 34.4 1.5 1.2 -0.6 Severely indebted, middle- income countiies' -3506 -1.5 -3.(t -19.i) -12.2 -12.4 -20.41 -1.5 -1.3 -1.8 Mecmo ite in High-mcome oil exportersC 24 5 -11 2 6.6 4 3 4 6 -7.4 0.0 3.0 -4.8 0.0 NOTL Total for geographical I is less tli. n totil or . clpg countn. bc.,usc iil'-S.ih.u,t. Au ica ex..iudc, Suth Africa a Annual b. Prelinlinars c Excludes South Africa d Includes Hungary. Poland and Romania c Argentina. Bolivia. Biazil Chile. People's Repuil5, of th. Cone., Cos;.i ki,a., CC'te d'Ivoiie. Ecuador. Ilo:iluias, Hungarv. Mexico, Morocco, Nicaragua Pleru. Philippines. Poland. Senegal. Uiuguay. and Venezuela. f Bahrarit Brunei. Kuwait Libxa, Q.itar. Saudi Ar.niia ted the Unted ArJ1 I tuirates tor 1 A81-SX Although Bihiain is [lot a petroleiiiii producer. it is included because about 80 percent of its export revenies are derived from petroleum exports. The figare for 1989 does not include Libya, which has been reclassified as a middle-income country Table 2-6. Public and Private Long-term Debt and Financial Flows, 1989-89 (billiors of lS dollars) Item 1980 1981 198S 1)93 1984 1985 19S6 1987 1988 19891 Debt titsbursed and outstanding 427 9 496.1 560.8 643 8 685.6 781.3 884.4 1.001 3 979 6 988.5 Disbursements 106.4 123 4 116.4 ifS 3 90 8 87.o 88.4 R83 9R.7 86.9 From private creditors 78.7 92.2 83.0 62.7 57.9 55.8 51 8 49 4 54.8 44.4 Debt service 75 8 86.9 96 2 90 8 100.7 107 3 112 1 122.5 133.3 129.8 Principal 43 7 46 2 48 3 4: 0 47.8 53.1 5') 7 68 9 72.9 70.3 Interest 32 1 40.7 47.9 46.8 52.9 54.2 52 4 53 6 60(.4 59.5 Net flows 62 7 77 2 681 5 1 3 43.0 34 5 28 7 19.4 22.8 16 6 Net transters 3(16 36.5 20.2 4.5 -'9.9 -19.7 -23 7 -34 2 -3:.6 -42.9 NOTI Table shows data for the It1 countries in the World Bank's Debtor Reporting Ss stem (DRS) Data for Poland are incilided only from 198S onward Nce flo"s disbursements ,iinus rna-.ni ofpriiicip.d. net transfers disbursements minus total debt sers icc a Preliminarx Debt and Financial Flows 33 Figure 2-3. Disbursements. Debt Service (net flows and nei transters: all developing countries) 150 Disbursemenis Debi service _ 120 90 ._....... 60 Disbursements. net of amorlization 30 _ , - a Disbursements. net of debt service -30 -50 I I I l I 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 response to the sharp increase in interest ar- nominal global military expenditures, which rears from approximately $10 billion in 1988 to remain at record levels. about $16.4 billion in 1989. What little new While high levels of military expenditure may lending there was went to developing econo- be considered an unproductive use of resources mies in Asia and Europe. Although the share of in general, the opportunity costs of defense foreign direct investment in total flows to de- spending are sometimes higher in poor countries. veloping countries has doubled since the be- Many countries with very low per capita in- ginning of the decade, absolute amounts have comes devote a sizeable share of their govern- decreased during the same period; they contin- ment budget to defense-despite the fact that ued their decline in 1989. Despite a downward there are many pressing needs in other sectors of trend in export-credit financing, there has been the economy. Military expenditure has increased some recovery in recent years in a number of more than twice as fast as per capita income in Asian countries. the developing world since 1960. The decline in private lending has contrib- Ultimately, the appropriate level of military uted to the "officialization' of the debt prob- expenditure is an issue for sovereign govern- lem. whereby the composition of debt holdings ments to decide. However, with changes in the has continued to shift from commercial banks global political situation, governments will to official creditors. By the end of 1989, about need to reevaluate their public-expenditure 48 percent of total developing-country long- programs to maximize the welfare of their term debt was held by official creditors, in citizens. Important elements of this process contrast with 38 percent in 1982 at the start of will be the transparency of military spending in the "debt crisis." the budget and analysis of the cost-effective- One promising source of potential funding ness of defense expenditures, especially rela- could come from a reduction in military spend- tive to alternatives such as investments in ing. Diminishing political tensions have not education and health. In addition, countries yet, however, had an appreciable effect on that choose to demilitarize will have to con- 34 The Economic Scene: A Global Perspective Table 2-7. Low- and Nliddle-income Economies: Miedium- and Long-lerm Debt. Debt Service, and Gross Diisbursements, 1982-89 kblll-no .5 1 11h d.^ll.r,i All k.-m - .,nd ;e-. nl 111 '2% 12 H St.eden X' s2 4 13 14 S,i[er[lnd 1. 52 ' 94 'S 1 i Sing.iporlc I 4 45 13 214 19 Ini ,pifn 1.4 J. 6 136 Inl I _ .-\44r.,Il.i I .. I 111 1 ~ li; le"Ic." 1- 1 ' 12 192 24 IN BrHLzil 1.1 34 2 1 'h ? 2'' Au-.lrla I li 32 4 IS ( jerni,in D)enio ralic 2I Repubic l3.' >- 1 74 9 22 SiLldi .r:,bil iJ 2N 'Sd'1A -5 26} 23 Denmarl , 9 IS I 91 I l al ol j,t-i e - x ' 2.41I - - - - rJg.6 1- .2 Wo\rld LotI::l 1IIII.I 1. 9t A, erac- AI- - - N.l. iD ["1.1. in.l r i jd..l r,. n a..l hc, . r l r:undrJnu. D .i Ir-.rn r.....,,,. C hin, ..nd Hong Koiu: re e%.lIJ . , . Zl,>e h ,l ,nt.,1 'rc-c,-'o |-r * e.umted e c .r tumrr I.--t proce -ng zc.nc S--,l {* A T I national trade. Under Section 301 of the Om- June 1989, the United States extended volun- nibus Trade and Competitiveness Act of 1988, tary export restraints limiting steel imports the U.S. trade representative (USTR) can cite until March 1992, while the EC also concluded countries for unfair trade practices and initiate new agreements limiting iron and steel im- procedures to negotiate for their removal or to ports. In contrast, several important nontariff secure compensation. In the event of unsatis- barriers were eliminated. Japan continued to factory results, the USTR is empowered to implement various market-opening measures, conduct an investigation into alleged unfair- and Sweden abolished quantitative restrictions trade practices that may result in retaliatory on imports of some temperate-zone fruits. In action against these countries' imports. Three addition, barriers facing certain tropical prod- countries were so cited in 1989; early in 1990, ucts were reduced through concessions nego- however, as a result of progress in negotiations tiated in the context of the Uruguay Round. and changes in economic policy, two of the Several EC members eliminated quantitative three were dropped from the list. restrictions on imports from Japan, while the Some industrial countries' nontariff mea- European Community as a whole decided to sures were renewed during 1989, although abolish most of the quantitative restrictions on other barriers were removed or liberalized. In imports from Hungary and Poland, effective Environment 37 January 1, 1990. Finally, trade was liberalized individual countries or even by groups of coun- on a bilateral basis, with tariffs and some tries. They must be addressed on a much nontariff measures reduced under the terms of broader basis. The challenge to global environ- the U.S.-Canadian Free Trade Agreement. mental management is made more complex by Developments in Eastern and Central Eu- the need for countries with very different in- rope during 1989 have wide-ranging implica- comes. natural resources, technology, popula- tions for future trade relations. Czechoslova- tions, and interests to agree on a common kia, Hungary, and Poland, in particular. began strategy. either to implement or to prepare broad, free- The question of who bears the burden of market economic reforms that promise to alter protecting the environment continued to be the direction and composition of these nations' important in international discussions. For ex- trade. ample, in the case of chlorofluorocarbons Negotiations in the Uruguay Round. sched- (CFCs), which have been cited as harmful to uled for completion in December 1990, contin- the ozone layer, approximately 90 percent of ued during 1989. Progress was made in some the CFCs in the atmosphere have come from areas, such as the agreement in the mid-term the industrial countries. However, it is antici- negotiations to establish a mechanism to re- pated that the share of developing countries view the trade policies of individual countries, will rise dramatically if the issue is not ad- including Australia, Morocco, and the United dressed quickly. Because of disparities in States. In other areas, important differences world incomes and the possible slowing of were not resolved. Agriculture was one such economic growth, developing countries have area, with the debate revolving on how fast to asserted that they would be hard pressed to liberalize trade and eliminate domestic support incur some of the additional costs of address- programs. In spite of intense negotiations, ing environmental problems. In late June 1990, countries remain undecided on the best way to environment ministers from ninety-three coun- measure agricultural protection and on the tries agreed at a landmark meeting in London mechanics of the liberalization process. to phase out the production and use of chloro- In the negotiations on textiles and clothing, fluorocarbons and several other chlorine-based pressure increased during 1989 for the removal and bromine-based chemicals by the end of the of the Multifibre Arrangement, which system- century, thus strengthening greatly the 1987 atically discriminates against the exports of Montreal Protocol on Substances That Deplete developing countries. Major unresolved prob- the Ozone Layer. A new fund was also created lems clearly remain, since many of the propos- to help developing countries change their tech- als on liberalization are linked to difficult dis- nology to one based on chlorine-free com- cussions on the selective application of pounds. The fund will total $240 million for the safeguards to counter surges of imports. Intel- first three years and will be administered by a lectual property is another area where divi- fourteen-nation committee consisting of seven sions persisted in 1989. Developed countries, developing nations and a like number of indus- for example, want reinforced patent protection trialized countries. An innovative fund, pro- and new initiatives to combat trademark viola- posed by the French government and further tions, while developing countries want freer explored by the Bank, would provide conces- access to new technology and less costly phar- sional funds for technical assistance and invest- maceuticals. ment programs in developing countries to ad- During 1989, developing countries, individu- dress four key areas of concern: the protection of ally and in coalitions with other developed and the ozone layer, reduction of emissions of developing countries, for the first time emerged ''greenhouse" gases and of emissions that result as active players in global trade negotiations, in transboundary pollution. protection against making proposals in many areas of the negotia- tions. How their concerns are accommodated in the final negotiating process will have a major 7At its May 1990 meeting in Washington, D.C. the Devel- the final negotiatin process will he r opment Committee called on both developed and develop- influence on the evolving nature of the General ing countries to reach an early agreement on these issues Agreement on Tariffs and Trade (GATT).7 and to agree on a strengthened multilateral trading system based on predictable and uniform rules to promote trade Environment liberalization by all countries. The committee stressed that a successful conclusion of the negotiations was essential to Awareness of the global nature of environ- prevent the drift toward protectionism. Members also mental issues and international concern about emphasized that improved access to markets and greater the quality of air, soil, and water and about the participation by developing countries in GATT benefits consequences of pollution for the quality of life were essential and in many cases more important than official development assistance flows or debt relief in continued to grow during the past year. Some facilitating the adjustment and growth efforts of developing of these issues clearly cannot be addressed by countries. 38 The Economic Scene~ A Global Perspective degradation of international water resources, of such efforts will depend on technological and protection of biological diversity. Various developments and policies that provide incen- proposals for a pilot mechanism to address these tives for such conservation. The nature of these issues that would take into account the Bank's policies will have to await the research results on existing programs are currently being consid- the magnitude and nature of the greenhouse ered. effect. In the interim, the need for an interna- The concept of 'sustainable development" is tional institutional authority for addressing also beginning to influence current thinking global warming was recognized in the Declara- about the long-run economic viability of alterna- tion of the Hague. which was signed by twenty- tive development strategies. Agricultural prac- four national leaders on March 11, 1989. tices, energy policies, and industrial technology There was also a new international environ- all have important implications for the environ- mental agreement, signed in Basel in March ment. However, considerable progress still 1989, on the movement of transboundary haz- needs to be made in quantifying the sustainabil- ardous wastes. This agreement was in response ity of various economic actions and translating to fears that hazardous wastes would be ex- that analysis into policy. In particular, the scope ported from industrial economies for disposal in for market-based incentives to induce environ- developing countries. The World Bank has ex- mental protection, as compared with regulatory pressed its intention not to finance projects in- approaches, needs to be better understood. volving toxic-waste disposal in other countries The difficult issue of global warming continues and has published guidelines to help poor coun- to be debated. Some scientists believe that the tries manage hazardous waste. This includes the burning of fossil fuels, some agricultural prac- establishment of guidelines for waste-manage- tices. deforestation, and other human activities ment programs and support for borrowing coun- will raise global temperatures through a "green- tries that set out to strengthen their domestic house effect." Others have argued that, despite capacity to recycle, reprocess, and dispose of an increase in greenhouse emissions, there is no toxic wastes. These initiatives represent impor- evidence that global warming has occurred. Al- tant steps toward implementing actions that were though the research results are ambiguous and recommended in the Brundtland Commission sometimes conflicting, there is some consensus Report, which will be reviewed at the United on the importance of conservation efforts to Nations Conference on Environment and Devel- reduce dependence on fossil fuels, The success opment in Brazil in 1992. 39 Section Three The World Bank-Fiscal Year 1990 Ninth Replenishment of IDA (IDA-9) tors examine ways in which IDA could facili- tate debt-for-nature transactions: develop ap- Agreement was reached during the fiscal propriate procedures for regular review and year on an SDR11.68 billion replenishment of approval of tranche releases of adjustment IDA resources for the three-year period fiscal operations: review the policy framework for 1991-93. Based on the rate of exchange pre- each IDA borrower annually (or as necessary vailing at the time of the agreement, SDR1 1.68 in the case of small borrowers); and strengthen billion is equivalent to $15.5 billion. collaboration between the Bank and the Inter- Because the amount represents an increase national Monetary Fund. of 12 percent over eighth replenishment The report identified three program areas for (IDA-8) SDR totals, the real value of IDA-8 higher priority during the ninth replenishment donor contributions is maintained. period-poverty reduction, support for sound Thirty-one IDA members plus Switzerland macroeconomic and sectoral policies, and the (not a member of the Association) are contrib- environment. uting to the IDA-9 replenishment (see Table Donors stressed that the IDA lending pro- 3-1). Seven of the contributing IDA members gram should retain a focus on the poorest sec- are current borrowers from the IBRD: Brazil, tions of the population. Donors asked for assur- Hungary, the Republic of Korea, Mexico, Po- ances. therefore, that poverty reduction would land, Turkey, and Yugoslavia. be central to the Association's policy dialogue The agreement, reached on December 14, with recipient countries: that these countries 1989, in Washington, D.C., was the culmina- would be encouraged to adopt measures to tion of formal negotiations begun in February protect the poor during the adjustment process; 1989, also in Washington. Meetings of represen- and that, in defining the performance criteria for tatives of donor governments (IDA deputies) the allocation of IDA resources, increased were also held in London (May 1989), Copen- weight be given to an effective governmental hagen (July 1989), Washington again (Septem- commitment to the reduction of poverty. ber 1989), and Kyoto (November 1989). Donors underscored the importance of During the negotiations, the deputies re- sound macroeconomic and sectoral policies as viewed the evolution of IDA's role in the mid a basis for effective use of IDA funds and 1980s, a period of economic crisis and shrink- urged that IDA's regular assessments of coun- ing availability of resources in many IDA- try performance specifically include a determi- recipient countries. In response to the eco- nation of the adequacy of these policies with a nomic environment prevailing at that time, view to identifying where improved perfor- IDA supported policy change, institutional de- mance is necessary to build sustainable and velopment, and investments needed to achieve increasing self-supporting development. long-term growth, the reduction of poverty, Donor representatives also considered it im- and the more efficient use of resources. Ad- portant that IDA continue to play a central role justment lending, especially in sub-Saharan in developing and supporting adjustment pro- Africa, was sharply expanded. Donors indi- grams by providing quick-disbursing adjust- cated substantial support for the evolution that ment credits, as well as investment lending. had taken place in IDA programs during the Deputies agreed and recommended that the period. share of quick-disbursing adjustment lending In their report detailing the provisions of the during the IDA-9 period remain-as it was in agreement, the deputies recommended to their IDA-8-at around 25 percent and that it not governments the commitment of resources, exceed 30 percent of the total. addressed a number of policy matters, and Deputies welcomed efforts currently under asked that the Association's executive direc- way in borrowing countries to support environ- 40 The World Bank-Fiscal Year 1990 Table 3-1. Contributions to the Ninth Replenishment ol ID.A Resources 'r.,niini' in mii i(l, 5iIpplreneni ,r% TI.ll Hi r>t: c.;nzrilrb,u.n t.rirlhuI.,rl L: ntrihu.tn SDR RSh.,r DR lUIiIIII3tjIiflt m!r.,1hcr nhirriTn IpCrc,lni SOR aOLc.urnl JmrUnil Xu%Iril-l., 3241 1. 4 9 _ 23241 '43 41 II NI - Ul 43 I3Igruri7 INtl t4%'II 1.55 [ .,I) 911 Br- ll ~~~~~~~~~~~~~~~~~~~~~~~~~11.1 O1l. |II - 10.11 t:.,nad, 454 4 5 ii-I4 _s DenmIrk 1 N I 311 - 1.8 3 Finland I Ih 95 I Il31 23 39 14 1. 4 France Nil til 311 3t lll XSS7.Ntl (iermarni Federil Republic 1 1 I 14 ' III IU .110 5, Iiii I 342 IN) Greie%:c Itt iI tli - 6 lN) Hun:i Ill nJ2 1.119 - It-l 92 Iceland 41111 143 - 4J (1 Ireland 1'1111 1i III Il 1 4.0.11t 11.111 r h 19 i ti l h.Al 6ul filim lar.an 2.".,)- I N 1 239 I1j 2.423 Kore- Reput-i,:l I ,I 4 I II li 1i 29.11ii Ixu'xari 94 If1i- _t .4 Lu'rnhourp \y Nu 'is i.584 N1ei,u2 'li " to. I - - 201.1 Nerhcrl.inda 34t! 7 31 Vh ..13- 3h>.4 1 Ne"z /ca.knd 1 - 115 II II - 1V IIS No8t t,a\ I Ih 8 4 1 Ihi N4- PIoland 4 tHIl Ii 13 - 4 liII Saudi .\rahiu 2.1" II I91 9 2311 It, SoLirt Arrtca 9. I. US -1. 9_ 13 Spain fi.l " -l 25 s5 (t'l S%k den' 3 15 29 6' _ Tur ke% Ii) lIlI 14 ilni 15.111] L niled Kin vdori '2 44r r 'ti _ '8i2 .1 L'niied 'tate, 2.s23 Xl 'I hI - 2.N2J a 5k> (Hi I), ,u 1) J4 _ >.111 SuI-.ro.l III S4-19 4 42 N4 41S.4S I1 2652 Sv iazerland lid 46 I tSi - 1.i4 4-i Supplcmenl.trN cormrjhutio.n, 4 19b 43 sy _ \ceIcr.aedlj en-l,hmf,elf' it, i5l iI 4' - 56 'il Reduction lint of c,lt-grton' 9 9 670 -9' L n IlocaI ed NY 54 I - I 84 i4 Grand tota.tlI A iN Ii.i101) Itt1 41SN 9, II t.'9 .II NMir Detail.- r.. ml add loi ton'l- I:au,e 'I ,I -ridind a .rgcnniIn. I mI .et Ir . po; IIto rt- 1.' nirnI ,i cInI[l lt'I n to ID D hI re-n t-unlrie hi., ..greed lo mrni, a p.lu. .n Of Iheir c'.;nrthuli,m in he torm Lli InCcIa,hle r-,,er-:, . [ich hi' ihe .l vn hr,hnce iheir j cLc i. L he 11- ,4..irnhn Sr. i;eriand, n..n, i'emhe,n *i l D1 -%. hul l;' I cXC *rul it-nl -i in IDI 4 h pio. Ming re[oil -e* nor piirps>e, anti o-n term- to bo ..greed -pjr.iel, N,ts,een iDX .rrd S tinzerland Li Repie-nrt - ill reducr,s,rs de. I--l chang. Isc dnl iih r' .-kl otli,Il tlt: ILl A1 1..' 11) \D S or dornrt "ith hich dime-tie inlit-1 n alie Ninth Replenishment of IDA (IDA-9] 41 mentally sustainable development and urged ner, approval of the report did not prejudge the the Association to accelerate these efforts at outcome of their deliberations. three levels-in lending operations, in country The issues involved in debt-for-nature trans- programs and dialogue, and in global or re- actions were reviewed by the executive direc- gional initiatives. Deputies called for a tors, who encouraged Bank management to strengthening of the dialogue between IDA and make use, where appropriate, of the mecha- governments, as well as nongovernmental or- nisms described in a report on the subject as ganizations, on environmental concerns. It part of the Bank's ongoing work in debt reduc- was agreed that the preparation of environ- tion, the environment, or other areas where mental-assessment reports would be part of an they may apply. It was agreed that no Bank ongoing process of consultation with affected funds were proposed to be used directly for groups and relevant local nongovernmental debt-for-nature transactions and that the mate- organizations. riality criteria would continue to be fully ap- Under the terms of IDA-9, the deputies plied for debt-reduction operations. recommended that the existing criteria govern- The directors discussed and subsequently ing the allocation of the Association's re- approved a paper on proposed procedures for sources-need (relative poverty, country size, tranche releases under adjustment loans and and lack of creditworthiness) and ability to make credits. Those procedures: effective use of resources (performance)-be * oblige Bank management to (a) release a continued. The definition of performance would tranche after a staff review has concluded that contain three elements: sound economic man- conditions for such release have been satisfac- agement, efforts to achieve growth that fosters torily met and (b) explain promptly to the equity and a reduction of poverty, and efforts directors the basis upon which the conclusion toward sustainable, long-term development. In was reached; view of the scarcity of IDA resources, donors * permit Bank management either to sus- stressed that IDA's programs should not be pend the tranche release or submit the matter regarded as entitlements. for board consideration when the staff review The focus on the poorest countries was has concluded that compliance with loan- endorsed,' as was the practice of the previous agreement conditions has not been fully ade- replenishment to limit to 30 percent the alloca- quate; and require that the board be informed tion of IDA funds to the two largest active IDA quarterly of pending tranche releases and that borrowers (India and China). (See Figure 3-1 operations with delayed tranche release be for IBRD and IDA lending to the poorest identified: countries.) The deputies also recommended * call on Bank management to (a) recom- that, assuming performance continues to war- mend possible action (and provide justification rant it, the level of support to sub-Saharan for its recommendation) in those cases in African countries-currently between 45 per- which circumstances justify a tranche release cent and 50 percent-not be reduced. despite less than fully adequate compliance Nonetheless, the deputies noted that support and (b) take necessary action in light of board for low-income countries elsewhere was views: and needed and that, during IDA-8, some non- * call for the scheduling of a general board African IDA-only countries had received lower review of compliance with conditions of adjust- per capita allocations of IDA resources than ment operations and of the status of tranche African countries of similar size and perfor- releases pertaining to them as part of the Bank's mance characteristics. Recognizing that the periodic reporting on adjustment lending. potential funding requirements of these coun- tries could be significant during the fiscal 1991-93 period, donors agreed that the Asso- ciation should have increased flexibility in al- iIn endorsing IDA's focus on the poorest countries, the locating its resources among countries and IDA deputies supported maintenance of the Association's that. ithevtnwd admeligibility criteria. There are two relating to per capita that, in the event new demands materialize on income: an operational cutoff of S580 per capita GNP (1987 a significant scale, resources could be reallo- dollars) and an "historical" eligibility ceiling of $940, also cated from all regions. in 1987 dollars. In general, countries with per capita GNPs The executive directors of the Association of more than $580 would not be eligible for IDA credits. However. IDA would have flexibility in exceptional cases approved the IDA-9 report and resolution for to extend eligibility temporarily to countries above the transmission to the board of governors. The cutoff that are undertaking major adjustment efforts, and resolution was subsequently adopted on IDA could provide assistance to small island economies. May 8, 1990. The directors indicated. that al- which, because of their limited creditworthiness, have little or no access to IBRD funds. The historical eligibility though the issues raised in the report of the ceiling is used by the United Nations and other organiza- deputies would be addressed in a timely man- tions to determine eligibility for concessional assistance. 42 The World Bank-Fiscal Year 1990 Figure 3-1. IBRD and IDA Lending to the Poorest Countries, Fiscal 1981-90 US$ millions: fiscal years) 0 IDA anouni IBRD amounT 1981-85 1986 1987 annual average Total 8165.4 Total 8.7 13.7 ToTal 7.916 2 -i _ 1988 1989 1990 Toaal 9a481.5 Total 10838.6 Total 8.479.6 Noie The pooresi counirec are defined as irose w,ih per c3piia incorre oi t5443 or leGs ir 1q88 US .9ll3rs In considering a report on approaches to members whose aggregate shares represent 80 country-strategy reviews of IDA countries, the percent of the replenishment total. directors approved the recommendation that., ntaie o SbShrnArc to facilitate discussion by the board of country- IiitvsfrSbShrnArc policy frameworks, Bank management would Africa's continuing economic crisis presents provide the information required for a discus- an extraordinary challenge to Africans and the sion of each country's strategy and perfor- development community alike. The difficulties mance. This would be done on the occasion of facing sub-Saharan Africa are formidable, and the first structural-adjustment or sector-adjust- the costs of failure to reverse current trends ment credit to be presented each fiscal year, in would be devastating in human terms. In some those active IDA countries without adjustment countries, low or declining per capita incomes operations, the assessment would be provided are already resulting in a deterioration in the in the fir st relevant investment credit pre- quality of human life. sented to the board in the fiscal year. A major World Bank report, published in IDA-9 will become effective when instru- October 1989, laid out a strategic agenda for ments of notification are received from IDA African governments and the donor commu- Initiatives for Sub-Saharan Africa 43 nity for the 1990s and beyond-an agenda that, fewer births, can reduce infant, child, and if followed, could reverse the economic and maternal mortality and sickness. Most African social decline of the 1980s.2 governments now officially support family The report was based on several years of planning, but there is an urgent need to match extensive study and consultation by Bank staff expressions of commitment with adequate with African officials, researchers, and intel- technical, financial, and managerial support. lectuals, as well as with the international donor The report also calls for increased regional community. The Bank's most comprehensive cooperation and integration-to be pursued assessment to date of sub-Saharan Africa, the through a series of pragmatic, incremental study calls for a doubling of expenditure for the steps to facilitate trade across borders-and development of human resources as part of a faster removal of the many obstacles to the new effort to strengthen African skills and movement of capital, labor, and goods and institutions and reverse the continent's eco- services within the framework of global trade nomic decline. liberalization. The goals of improved and better-financed The study also emphasizes the need to strike programs for developing human resources are a better balance between the roles of the public food security, primary education, and ade- and private sectors in African economies. Pri- quate health care for all Africans within the vate-sector initiatives and market mechanisms next generation. are important, but they must go hand-in-hand To achieve these objectives, sub-Saharan with good governance-a public service that is economies must grow by at least 4 percent to 5 efficient, a reliable legal framework to enforce percent annually, a target that the report says contracts, and an administration that is ac- is ambitious but achievable. Continued eco- countable to the public (see Box 3-1). nomic reforms and structural adjustment are a Emphasizing that "Africa's future can only necessary condition for growth. Reviewing the be decided by Africans," the report under- experience of the 1980s, the' report calls for scores the need for increased external assis- continuing evolution of adjustment programs, tance to support African efforts. Sub-Saharan including better phasing and implementation of Africa's external-resource requirements could adjustment measures, more adequately funded be met, the report concludes, if the donor adjustment programs, and an adjustment strat- community were to increase its official devel- egy more strongly focused on protecting the opment assistance (ODA) during the 1990s by poor and vulnerable among Africans.: about 4 percent a year in real terms and put The report argues that agriculture is the into place concessional debt-relief mechanisms primary source of future growth and that food that would limit Africa's debt-service pay- production will have to expand by 4 percent a ments to current levels-about $9 billion a year (as compared with the current 2 percent) year. if sub-Saharan Africa is to feed its rapidly These assumptions would lead to a gross growing population. African countries need to ODA requirement of more than $20 billion in create an enabling environment (allowing 1990 dollars annually by the year 2000, roughly prices to move flexibly, increasing the role of double the level in 1986 (see Table 3-2). If this the private sector, reforming credit and land- volume of assistance could be mobilized and tenure systems, constructing rural roads); har- used effectively, sub-Saharan Africa would be ness technology (requiring an emphasis on better able to reverse its economic decline and agricultural research); build capacities (a need eventually reduce its need for aid. As an im- that runs through all levels to produce better- portant step in building support for the recom- trained researchers, extension agents, and mendations in the Bank's report, the govern- farmers and strengthen rural institutions); and ment of the Netherlands scheduled for early safeguard natural resources (by reducing soil July 1990 an international conference on Africa erosion, deforestation, and desertification). for which the report is to be a key document. The report also targets growth for industry The conference was expected to bring together initially at 5 percent a year, rising to 7 or 8 senior representatives of African governments, percent-higher than for agriculture, as is con- bilateral donors, and multilateral institutions to sistent with experience elsewhere. To meet the discuss the main issues identified in the Bank targets for agriculture and industry, an en- report, as well as the idea of establishing a abling environment of infrastructure services and incentives to foster efficient production and private initiative is required. 2 World Bank. Saib-Shl alala Africa: Fr onm Crisis to Siustain- In order for population growth rates to be able Growth (Washington, D.C.: 1989). trimmed, families must be persuaded that bet- 3For details of the multidonor "social-dimensions-of-ad- ter spacing and timing of births, as well as justment" (SDA) program, see page I I. 44 The World Bank-Fiscal Year 1990 Bov .V1I. Capaciz Buildinr in Africa The Bank tu d' of long-term deeloprment :ooidinute nith compleme ntrx de elopment prospect, or sub*Saharan .rica emphasize. iniiati'e, in higher edu,Ition. public-sector re thait mund poli ,e ;re a nece-'ar% but toten not form.n nd o,her important ector'. sulficien,. condinton or economtni de%elopnient The A%CBI %muld nork through three propoed To he elfecti%e. policiei Mu,t be ,Al,tainable hanncl-jfn .CBI fund. cofinjncine. and a,o Pol,:; uilitnahiltt. in turn reqfiire! a strong cia'ed program, ren e t'A Ntrican o nershtp. There is no heltcr The .\CBI l'und aould use re,ource, pro ided 1a L to ter [hi, wene ot o. ner hip than to hb d-nors to finance nev capacit% huilding pro produ,Le ihese pliciees h! build!ng up the cap.c urarn and to tuppIrent and *trengthcn ongoing it% to produce l,r,t-rate tndigenou~ re'earch and programnt that ha;e proxen eftecti e The lund's de:ton effecti' e policles. coflparralie *d-aniage -%ould be in addressing I ;s the lunc*term per pecli%e ,tud' docti critkul gap' or uealkn&ses in current programs miert-. hoa.% er. thi, cjpLjcii~ t in cmrill:li :and funding ellt'rt- Contribution, to the lund short suppl in almost e er% 'ector ot mo't "ould he held t trust. in;ested. and disbursed b \frtcan .n;ritrie'. Pro idinm ihe nerded polic - ihe W%orld Bank research and managertal capa;cit in the near Some donor, mighL i-i:h to channel orme 01 term a.nd ihe capacit to produce the,e .kill, in their capa,nt-building resource' through cofi the longer Icrm requre, a larie-,cile. conceild. naneinc %k'ih the ACBI tund o o; t'for e%jmple and isordinrlaed efftOrt h% both donors and \fri- io strenethen iheir ongoing program' coordinatc can g *.ernment, "tith other donor, or reath a talSet conaiitutenc; To thi' end an Atrl a-n CapaCI I h'ditding inii:i- that the; di d not [eel capahle of approaching on t,e i iAC BlI ha' been propi.ied A itwnt initiati e theuit.,'L n ot the Afrcicn Decli'piFent BHra, the United Ii i e'pecied that d.'n r uOUld ".it n; con Nations De elopmeni Programme. and the tinue to pur,uc ,ome cl heir :, n effort, in the \% orld BHnk. the A.CB Blill seelk o: field of capacit hbuding "%here the; feel the; * create a c:n'uli1a,tc torunm in %%htch xtricari' ha'e !I p.articular pretererice :r orraratl e ad can prticipate a' full partners in the 'etting of v.itn ae Through the .,asoci.tedprogranms mec h pnioritte .ind ithe de:el'pnimni m policle . .rinirn. donor' ii oulJ iniorm the ACBI ecretarial Promute CaPaciti building goak. of Ihe detail, of their progra-mrn. * e'iuiblish proc,se' eIr coordinalimn capac-it In a meeting held in Parni in June 19Y1i to building inittatte ihat . ,-uld lead to crleator hi'cu'' ihe AC BI. the malor donor cLunnires to efficienc; and ellecii;enc's of oncoing donor *uh-Saharan Africa emphasized the priorit, of ellorl: impro in; local 'ill in and institution s for * rncrea-e th, level of funding and resource, polic% Inalr i' and eLtinomic manaemnent in the .a aIlahle to enhance ongoinc capaLcLit-huildin reuton miren enton, a. ill a. to fin.ance prc'mi,,ir Man, donor represeniates %aid that the ne" action' and xCBI hould be de'eloped and implemented as *e,ibhli,h *Niematc link' het"een re,earch ,oon a' po,,lble A numbr of donori-ticluding arid rrunni in'ttUTtons and go-ernmenm t I o . \lo...USIrIJ. Camnda. Japan. Saeden and the Linited ter greater under'tandng and corrnmuniculion Siate,-ntade financial pledge. it ,pccial A(-BI bet%ieen the t'o croup' tund ihat i ould uppoIit pio anir' to iinpro'e To,; accpl,h the ,e :,btecti es. the XCII ;iilt Fpolic .rnal i- and economic mna,gemrent in * reh.ibilir.ite ind upgrade ,elecied em nting poh- V .ric.M. Man; other donorN ind, aied their i%ill c% -anal' 'i and codvnontic-nnanem,enn in,itulionn ingne' to ma.ke pledgei in the near future .,nd .here that i1 n..t p r,ible. ere ue nee. onr.e. The pilot phdise of ihe -XBI % ould he rigor- * insullte the'e intitutions Iromn politi,al inter- oust monitored and e. aluated. and il re,ulti and ferene .,nd help them de%elop coherent research ptowge,s "cre deemed to he un;satistor% . it- and ir.tine programs operations could be redu,ed in 'cale or dt'con- * idcnt,f . de'ign. and prnt-ote the tenati tliriued building ol ntlional and regtinal networkl of The \% orhd Bank hda igreed ito contribute an re earcher, ma.ngers. and prole-ioinal .;ci.i- amo:,unt not to e\ eed 1 percem !tof [tal tundine tion- in -Ari:: a.md IA' the program continuing coalition that would support Af- and coordinate quick-disbursing aid and con- rica's long-term development. cessional debt relief to support adjustment in A primary source of support for Africa's the low-income, debt-distressed sub-Saharan long-term development has been the special countries in 1988-90. The SPA has also devel- program of assistance (SPA), which was oped an active partnership of donors to coor- launched in December 1987 to help mobilize dinate adjustment financing and to facilitate Initiatives for Sub-Saharan Africa 45 Table 3-2. ODA Requiremenis for Sub-Saharan Africa. 1981-2000 blIion- f curreni LIS doll,ri unle, .olher%%i5 noteri Nc ir,.n-ler. Or,.-. DcfIh er. .: A A. perccnt:e - i 'tear ')DA * n- ; 1, rv.,-r. = I\ml,sro 61-P lf19s-8'i fi ti 9 .4. 1 I ;i.Yh 11 h 9 . Projecled I 9r1 dslltirsv I'o9lJ 16 1.2jI 20tIU 22 r, 9 19 9 a Gro- non.,nv,..onai31 horro.ings.i ncihr-ru torvin pr, .ne ,rimeni niet pri. %e ir.nr.er,. ch,ngr. s rc .ir.c-. jnd drvoT, and om.;ionis. b .Annual Aiera.ce far-reaching discussions of key issues in imple- replenishment period was $900 million higher menting and supporting adjustment programs.4 than that provided during the years of the The SPA framework has provided for five seventh replenishment (fiscal 1985-87). Based sources of financing: increased adjustment on current projections, IDA lending will have lending from resources provided under the accounted for almost a fifth of the gross aid eighth replenishment of IDA; increased cofi- flows to the twenty-two countries during nancing and coordinated financing from bilat- 1988-90. About 45 percent of IDA commit- eral and other multilateral donors to support ments are quickly disbursed in support of adjustment programs;5 supplemental IDA ad- adjustment. This level of adjustment lending, justment credits from resources provided by a which averages approximately $900 million a share of the investment income of, and repay- year, is about double that in the seventh re- ments to, IDA; additional resources from the plenishment period, when adjustment commit- International Monetary Fund's enhanced struc- ments made up 37 percent of the total. tural-adjustment facility (ESAF); and greater At the end of 1989, revised pledges by SPA debt relief, including more forgiveness of con- donors for cofinancing and coordinated financ- cessional loans and more rescheduling of non- ing of adjustment operations in eligible coun- concessional debt on softer terms. tries amounted to $5.8 billion, of which $4.8 Overall aid flows to sub-Saharan Africa have been steadily increasing both in volume and as a share of worldwide aid. An increasingly large percentage of this aid has taken the form of quick-disbursing assistance to support adjust- Sixteen countries were considered eligible for the SPA at ment programs in African countries. For the the initial pledging meeting held in December 1987: Bu- rundi, The Gambia, Ghana, Guinea. Guinea-Bissau, Mad- twenty-two countries eligible for SPA assis- agascar, Malawi, Mauritania, Mozambique, Niger, Sado tance as of December 1989, gross ODA is Tome and Principe, Senegal, Tanzania, Togo, Uganda, expected to grow at about 10 percent a year in and Zaire. The Central African Republic was included at current prices, on the average, in calendar the first multidonor meeting-in March 1988. Chad, Kenya, and Mali were declared eligible at the second 1988-90, faster than the 6.7 percent annual multidonor meeting in October 1988. Benin and Somalia growth for the region as a whole during the became eligible after the third multidonor meeting, which preceding seven years. Three fourths of that was held in March 1989. The twenty-third country, Zam- increase is coming in the form of commitments bia, became eligible in March 1990. Country eligibility is determined on the basis of poverty of quick-disbursing assistance, which is ex- (countries cannot be eligible for IBRD loans), indebted- pected to comprise between 35 percent and 40 ness (countries in which projected debt-service ratios are percent of the aid disbursed to these countries 30 percent or more), and efforts to adjust (countries had to during the three years of the SPA. The SPA be currently implementing a policy-reform program, en- dorsed and normally supported by the Bank and the framework has been, and is, a primary channel International Monetary Fund, and agreement had to be for much of this increased assistance to sup- reached on a policy-framework paper). port adjustment. 5 Eighteen donors made pledges totaling $6.4 billion in IDA has increased both its total aid flows support of the program: Austria, Belgium, Canada. Den- and the share of quick-disbursing assistance in mark. Finland, France, the Federal Republic of Germany, support of adjustment in the SPA-eligible Italy. Japan, the Netherlands, Norway. Spain, Sweden, Switzerland, the United Kingdom, the United States, the countries. The average annual level of commit- African Development Bank, and the European Community ments to the twenty-two countries in the eighth (including the European Investment Bank). 46 The World Bank-Fiscal Year 1990 billion had been officially allocated and $1.0 adjustment facility (ESAF), financed by spe- billion had been unofficially allocated. The cial contributions in the form of both loans and projected rate of disbursement from the re- grants, was put into place in 1987. The same vised pledges is 75 percent, only slightly lower sixty-two members eligible for SAF loans are than that initially programmed; over two thirds eligible for the ESAF. Together, these two of the disbursements are in the form of grants facilities can provide about $12 billion in ten- and come on an untied-procurement basis. year credits, with five and one half years of Disbursements by donors in the first two years grace, at an interest rate of 0.5 percent. of the SPA (January 1988-end December 1989) IMF assistance under the SAF and ESAF has totaled $2.7 billion. been an important complement to the Bank's To reduce the burden of IBRD debt owed by SPA effort. Bank-IMF collaboration in this area IDA-only countries, the Bank began a program has been close and systematic. An integral of supplemental adjustment credits in fiscal element of the SAF and ESAF is the policy- 1989. As of June 30, 1990, eight eligible African framework paper, which is developed by coun- countries, all in the SPA, had received supple- try authorities with the assistance of the staffs mental credits worth $159 million, or about 80 of the Bank and the IMF and sets out medium- percent of the worldwide allocation in the term economic objectives and planned policy program's two-year existence (see Table 3-3). measures. Cofinancers have supplemented these funds by Countries eligible for SPA support have about a fifth. been beneficiaries of the SAF and ESAF. As of The International Monetary Fund (IMF) es- the end of 1989, twenty-one SAF arrangements tablished its structural-adjustment facility and eleven ESAF arrangements had been ap- (SAF) in March 1986 to provide concessional proved for twenty-two SPA-eligible countries. financial assistance to low-income members IMF gross disbursements under the SAF and facing protracted balance-of-payments prob- ESAF averaged $650 million a year during the lems and undertaking programs of structural period 1987-89 and are expected to be the adjustment. The funds are drawn from reflows equivalent of about a tenth of total gross aid of trust-fund loans financed by IMF gold sales flows under the SPA. in the 1970s. The IMF's enhanced structural- The SPA has also spurred advances in the effort to deal with the debt problems of low- income African countries by helping to build a consensus that concessional debt relief, to- gether with aid, should be a part of a coordi- Table 3-3. Allocations or IDA Rello%%s, nated strategy to ensure an adequate flow of Fiscal Years 1989-90 resources to the debt-distressed countries of :.,T,-unli In milIiinsi sub-Saharan Africa. .til,1 a'n. F;dI O Many major donors have announced their Rl.-.n sIr.i .llI.e lnon. i;,on 19h4 intention to convert most existing or outstand- ,-un LSDR! L[S dli.Lr.i ing official development assistance loans to ,,.t, , grants for selected low-income countries. In Ghari.i 4j -,,, addition, beginning in 1988, official reschedul- KsenNi 44.11 IS I 51 ing agreements became more concessional, I I E lQ 1 4 and they now generally cover a larger share of Ntalav, 4 - 3. obligations. In 1988-89, Paris Club creditors Senegal 4.4 3 ' ' rescheduled over $3 billion owed by fifteen T.inz.r ia HO 8. 81 15 SPA countries, almost all on terms agreed to at Theo 1.2 0.2 l: l the Toronto economic summit in June 1988.6 L panda I I I . On the average, rescheduling provided a grant Sublolal ' --'X < ,,7 element of about 20 percent. Debt owed or guaranteed by African govern- (i)iI&i 'ments to commercial banks poses a significant BangIadeNh 3 LI. problem, both now and into the 1990s, for 13l.dl.a 9 I - I 11 about half of the SPA countries. Debt reduc- t.'u. anfa 3.4 2.t. - tion through direct buybacks, swaps, and other Sri Lnlki 4 .4 A - exchanges offers scope for reducing future Sulioual 19 ' 1 .2 1 I debt-service payments inanumberofthem. As T91 '31 lt 101 a step in facilitating these buybacks, the Bank hOUR II,F.lr h.d hein r.,rsded .. rfo notreor hpgnd5i I I.'Ii . fld ~~~~~~~~~~6 For details, see footnote on page 52. Initiatives for Sub-Saharan Africa 47 agreed in fiscal 1990 to establish a worldwide of issues related to adjustment, in line with the debt-reduction facility for IDA-only countries, themes of Stub-Saharan Africa: From Crisis to funded in part by a grant of $100 million from Sustainable Growth. IBRD income, that could be used by recipient In May 1990, the Development Committee governments to buy back uncollateralized ex- welcomed the agreement in principle of donors ternal debt owed to private commercial lend- for an extension of the SPA and urged them to ers. Arrangements for Mozambique and Bo- indicate their levels of adjustment assistance livia are currently under preparation.7 for 1991-93 at the SPA donors' meeting sched- In May 1990, the Development Committee uled for the fall of 1990. Committee members welcomed the various measures to alleviate the also suggested that donors take that occasion debt burden of the severely indebted, low- to continue to consider steps to untie procure- income countries. Members noted that even ment arising from their commitments under the with these arrangements, a number of coun- SPA and to further harmonize procurement tries have uncertain prospects for an early and disbursement procedures. At a meeting in return to external viability. The committee Paris in June 1990. SPA donors not only con- requested the Bank and the IMF to undertake firmed their earlier agreement in principle but an evaluation of the benefits of the debt relief also gave their unqualified endorsement to a and other measures taken so far. In view of the continuation of the program. They agreed that low debt-service capacity of these countries, the estimated requirements for adjustment fi- members also considered that their new com- nancing in countries that may be eligible during mitments of assistance to the severely in- 1991-93 provided a reasonable, initial basis for debted, low-income countries should only be a second SPA. They also committed them- provided on highly concessional terms. selves to a closer collaboration through the The SPA has shown that effective coordina- SPA partnership, including stronger actions to tion between donors and creditors can help improve the quality of aid and new efforts to ensure an adequate level of concessional re- broaden discussion of development issues sources to support reforms and that a better linked to adjustment. exchange of information among donors can To cover the financing requirements of a improve the quality, timeliness, and effective- second SPA, the Bank has estimated that do- ness of the assistance provided. On balance, nors will need to pledge some $8 billion in new the experience in the 1980s of the SPA coun- commitments of adjustment support. In real tries tends to confirm that strong policy re- terms, $8 billion would represent an increase of forms, coupled with adequate donor support, 10 percent above original SPA pledges. A can lead to better economic performance and formal pledging session by donors is scheduled help ease some of the social problems caused for November 1990. by economic and financial crisis. The recent Under the agreement reached on the ninth economic record of the SPA countries is better replenishment of IDA resources (IDA-9). com- than that of other sub-Saharan countries (in- cluding some IBRD borrowers with good pol- icies). Gross domestic product, exports, in- 7For details, see page 52. vestment, income, and consumption have 8 Assessing the economic performance of SPA countries, grown faster in recent years in SPA countries, especially in light of their reform efforts, is a complicated on the average, than in other African coun- task, subject to many caveats. Aggregating performance tries. Many factors help explain this superior across the diverse countries eligible for the SPA masks superior wide differences in experiences. Economies are often performance, but reforms have contributed.8 influenced by many factors unrelated to the strength of The Development Committee, at its spring reform programs, including the severity of initial distor- 1989 meeting, asked that the SPA framework tions, weather, commodity prices, and the level and time- be extended beyond 1990. And, at a meeting liness of donor financing. Reform programs can cover a vast array of policies, and the scope and sequence of held in Paris in October 1989, participating measures are tailored for each country. The strength of donors agreed on the outline of a second SPA managerial institutions and personnel and the quality of to cover the three-year period 1991-93. Essen- governance also determine how well reform policies are tially the same eligibility criteria that prevailed actuallY put into practice. Most reforms take time to affect economic performance appreciably. Finally, the question during the program's first phase will be carried of what would have happened in the absence of reform over into the second phase.9 The second SPA efforts can never be fully answered. would continue to help maintain an adequate 9 The level-of-poverty criterion remains the same: the level level of resources to support adjustment in of debt distress is defined more flexibly than under the eligible countries; improve the quality of donor original SPA to take into account the varying conditions of and creditor adjustment support; and broaden countries that can affect the extent to which debt creates a burden: evidence of efforts to adjust is defined as before. the exchange of information among donors to but special emphasis may be given to the appropriate help achieve concerted action on a wider array composition of public-expenditure programs. 48 The World Bank-Fiscal Year 1990 mitments for adjustment support in sub-Sa- Both Bulgaria and Czechoslovakia applied for haran Africa are programmed to total about $3 membership in the International Monetary billion, including supplemental credits, for fis- Fund and the World Bank, and Romania be- cal years 1991-93. Together with earlier com- came once again an active member of the mitments, these new commitments could give Bank. Exploratory missions to each of these rise to about $3.2 billion in disbursements countries were carried out, and economic mis- from IDA over the period." sions were dispatched to Bulgaria and Czech- Efforts to reduce commercial debt and debt- oslovakia. service burdens will be brought under the SPA The agenda of economic reform is complex, umbrella during the 1991-93 phase, as well. It and the degree of economic distress, especially is hoped that, as a result, debt workouts can be in the more indebted countries, makes urgent made more comprehensive and effective and the need for policy and institutional changes on that, through a resumption of normal relations many fronts simultaneously. with commercial creditors, spreads of trade In the short term, the most pressing priority credits can be lowered and impediments to in most countries is to restore macroeconomic foreign investment reduced. The extinguishing stability. This requires not only traditional of commercial debt through cash buybacks in measures of fiscal, monetary, and exchange- the initial twenty-two SPA countries could rate adjustment but also institutional and struc- require between $200 million and $300 million, tural changes to make enterprises responsive depending on discounts. Financing for this to market-based price signals. component would include a portion of the $100 A major issue is how to implement the million facility administered by IDA for com- necessary combination of structural reforms, mercial debt and debt-service reduction, plus which can generate a supply response to stabi- associated cofinancing. lization, without unleashing intolerable levels Other financing components of the second of inflation and unemployment. The adjustment phase would include, as in the past, supple- policies being pursued include measures to mental IDA adjustment credits, concessional tighten financial discipline of firms, foster pri- assistance from the IMF, and official debt vate enterprise, introduce competition through relief on concessional terms. import liberalization and action against monop- Assistance through the SPA framework can olies, and promote to the greatest extent possi- help ensure adequate financing for projected ble mobility of labor and capital. Such struc- balance-of-payments gaps to low-income, tural changes require adequate measures of debt-distressed countries during 1991-93, social protection to ensure that the declines in thereby placing them on the path toward accel- real wages and the increased unemployment erated growth. The donor community will also that inevitably accompany the initial stages of need to ensure that financing for investment reform do not affect too negatively the standard projects in these countries continues to in- of living of the population and undermine public crease, especially in areas such as human- confidence in the new leadership. resource development. In addition to macroeconomic management during the difficult transition period, the re- Initiatives in a Reforming Europe form agenda in Eastern and Central Europe During the past year, extraordinary changes includes (a) the herculean task of systemic have swept through Eastern and Central Eu- transformation to establish the essential ele- rope, transforming the political map of Bul- ments of a market economy; (b) the creation of garia, Czechoslovakia, the German Democratic social safety nets outside the enterprise sector Republic, Hungary, Poland. and Romania. Eco- (with its guarantees of full employment) and nomic reform accelerated and became more other social support; (c) improvements in en- extensive as well, not only in terms of the vironmental management; and (d) the more number of countries in the region embracing reform but also in the depth of changes under way in the countries where reform had already begun. Other significant events in the Eastern and "The number of countries that will benefit from the second Central European region during the year in- phase of the SPA is likely to change. Among the twenty- three countries that are currently eligible, adjustment cluded initiatives to develop alternatives to the support would be deferred to those unable to maintain an existing trade regime of countries that belong acceptable reform program. Although no SPA country is to the Council for Mutual Economic Assis- likely to graduate during the three-year period, the re- tance (CMEA). The direction of reform under which expects to see its deceivnie (as, forexample Ghana, consideration would place trade on a convert- Additional countries will become eligible as they ible-currency basis and reflect world prices. strengthen their reform programs. Initiatives in a Reforming Europe 49 traditional rehabilitation and improvement of Viet Nam, and a number of African countries. economic and social infrastructure. The Although their structural features are different achievement of these objectives requires: in some important respects, the lessons of the * reform of the state-enterprise system Eastern and Central European experience are through promotion of competition, transforma- important for reform in countries outside Eu- tion to corporate forms with clear ownership rope. rights, privatization, and the introduction of In February 1990, the Polish government modern managerial practices; received support for its stabilization efforts * the development of market institutions and through an IMF standby arrangement and a mechanisms, ranging from a competitive com- rescheduling of debt with Paris Club creditors. mercial banking system and an independent These agreements made possible the initiation central bank to a properly diversified fiscal of World Bank lending and led to commitments system, statistical and accounting practices, totaling $781 million during the year in the areas and an appropriate legal and regulatory frame- of agroprocessing, export industries, transport, work; energy, and the reduction of pollution. In addi- * the revamping of the systems of social tion, the Bank established a resident mission in policy, including social security, unemploy- Warsaw to serve as a channel for dialogue on ment compensation, health care, housing, and the country's development strategy. education so as to produce a more satisfactory In Hungary, agreement was reached in level of provision of services while reducing March 1990 with the IMF on a standby ar- the role of the state in the economy and foster- rangement that focuses on exchange-rate, in- ing greater participation and self-reliance by terest-rate, and budgetary measures. The Bank individuals and local communities; approved a structural-adjustment loan in June * rehabilitation of the environment, which is that supports government efforts to introduce critical to a restoration of economic efficiency further significant structural reforms-notably and an enhanced quality of life; and privatization of some state enterprises, liquida- * substantial rehabilitation and moderniza- tion of loss-making activities, and the initiation tion of the physical infrastructure, especially of some reforms in social policy. This adjust- communications facilities, so that adequate ment operation was complemented by a proj- support can be provided for economic devel- ect to modernize financial systems (thereby opment and integration into the international strengthening the banking system and capital economy. market) and an integrated agricultural-exports While the reform agenda in these countries project to support private small-scale farmers will broadly follow this pattern, countries dif- and the restructuring of agricultural coopera- fer significantly in their economic structure tives. and level of development and in the extent of Yugoslavia stands apart from these coun- their external indebtedness and dependence on tries in terms of both geographic location and CMEA trade. Important differences are also duration of its reforms. Bank assistance in imbedded in the education and training sys- financing reform efforts dates back to July tems that determine a country's adaptability to 1983, when a first structural-adjustment loan the requirements of a market economy. was approved. Fiscal 1990 saw Yugoslavia's To help address the problems involved in reform efforts increase sharply. transforming socialist economies into market- The government's stabilization program, based systems, in addition to increased eco- launched in March 1990, was supported by an nomic and sector work in the Europe, Middle IMF standby arrangement and by a second East, and North Africa region of the Bank. a structural-adjustment loan from the Bank. The socialist-economies reform unit has been estab- reform measures supported by the loan seek to lished in the Bank. The unit seeks to strengthen liberalize further the price and trade regime and and encourage research by others-inside and ensure the continued operation of a competitive outside the Bank-on socialist reform programs, foreign-exchange system. More significant, the and it acts as a clearinghouse of information on loan supports the government's bold initiative who is studying what and where. It also carries to restructure the financial and social-enterprise out analytical work of its own. Through its systems and to strengthen their overall disci- overview and coordination of the work in pline in the economy, while also supporting progress at the Bank and elsewhere, duplica- improvements in the country's social safety-net tion of effort is reduced and gaps in knowledge system. A financial-sector adjustment loan, can be identified. now in an advanced stage of preparation, seeks The country coverage of the unit is wider to assist further the significant deepening of the than Eastern and Central Europe. and includes country's supply-response measures, with a fo- China, the Lao People's Democratic Republic, cus on the implementation of financial-sector 50 The World Bank-Fiscal Year 1990 restructuring and the restructuring or liquida- money and debt conversion: Banks were of- tion of some of the largest loss-makers in the fered the option of providing new money or social-enterprise sector. Preparatory work has converting their rescheduled debt into thirty- also been launched to support the government's year bonds with either a reduced face value drive to promote the development of small and and market-based interest rates or with princi- medium-scale enterprises, especially those in pal intact but with a lowered and fixed interest the private sector. rate. The principal of these instruments was defeased against zero-coupon U.S. Treasury Special Operational Emphases: securities (or their equivalent in other curren- Debt and Adjustment cies), and collateral was provided for eighteen Fiscal 1990 was the first full year during months of interest. Provisions were also made which World Bank support of the program of for some interest recapture by the banks (if oil debt and debt-service reduction (known as the revenues were to rise beyond an agreed level). Brady Plan) was put to the test. Forged in the Buybacks or further debt exchanges by Mex- spring of 1989, the program seeks to strengthen ico were also allowed (if it were current in its the debt strategy for severely indebted. middle- debt-service obligations), as were secured income countries by providing official support new-money borrowings. The enhancements for voluntary debt and debt-service reduction by were funded by resources drawn from Mexi- commercial banks as a complement to adjust- co's own reserves, from the International ment measures, new lending by them, invest- Monetary Fund and the IBRD, and indirectly ment. and the repatriation of flight capital. from the Export-Import Bank of Japan. The Overall, there is good reason to take satis- IBRD set aside $750 million of commitments in faction in the results achieved thus far. The several operations for the purpose of principal new program represents a major innovation in reduction. The IBRD also made a loan of $1.26 the debt strategy and should be viewed as an billion, which included $300 million set aside important step toward an eventual resolution from future operations, for interest support. of the external-financing problems that have The debt-reduction agreement reached with plagued the severely indebted, middle-income the Philippines in October 1989 was less com- countries throughout most of the 1980s. plex. It offered banks the choice of selling their Significant reductions in debt and debt ser- claims to the government of the Philippines at vice have taken place in participating coun- a 50 percent discount or providing new money. tries, and entirely new financial instruments In support of this operation, the IBRD ap- have been created. Most severely indebted, proved a $200 million loan to help the Philip- middle-income countries have expressed pines buy back a portion of its debt; the loan strong interest in participating in the program, was the first to be earmarked exclusively by and they have had discussions with the Bank the IBRD for debt reduction. This agreement on the level and conditions of support. This is offered a way for smaller creditors having little true even for those countries that have yet to long-term interest in the Philippines to exit begin their negotiations with their commercial with a one-time loss and for the remaining core creditors. The program has thus strengthened group of creditors with long-term interests to the incentives for member governments to provide new money and maintain the face embark on, or sustain, growth-oriented struc- value of their assets. tural-adjustment programs. Consistent with After protracted negotiations, made diffi- the May 1989 guidelines for Bank involvement cult by the existence of arrears, a comprehen- in the revised debt-strategy program. transac- sive and concerted agreement between Costa tions under the new program should yield Rica and its commercial creditors was adequate and appropriate financing packages reached in November 1989 and signed in May for the countries concerned and reasonable 1990. Under the agreement, the country's assurance should be forthcoming that the ad- contractual debt service was reduced by al- justment program and debt-servicing require- most 75 percent. The debt-reduction package ments are viable in the medium run. included provisions for banks to sell a large Four debt-service agreements-with Mexico, portion of their Costa Rica assets (including the Philippines, Costa Rica, and Venezuela- arrears) to that country at a deep discount and have been concluded: in all four cases, the Bank exchange the rest for long-term, low-coupon has helped facilitate agreement. In addition, bonds with some interest collateral (twelve to Morocco has concluded an agreement in prin- eighteen months). No request for new money ciple with its commercial creditors. was made, and the agreement was designed to The agreement with Mexico, reached in Sep- offer an exit vehicle for commercial banks. tember 1989, covered about half of that coun- For its part, the IBRD consented to grant a try's total debt and provided relief through new waiver of its negative-pledge clause for the Debt and Adjustment 51 interest collateral, as it did for the Mexico conjunction with the debt-reduction operations. enhancements. Other countries are also strengthening their pro- Venezuela and its creditor banks reached an grams and are looking forward to reaching debt agreement in June 1990 on a comprehensive and debt-service reduction agreements. While financing agreement. The agreement, which adjustment in itself is of paramount importance provides the most extensive menu to date, for a return to sustainable prospects of growth, it includes a new-money option, cash buybacks, also increases the confidence of potential inves- principal-reduction bonds, interest-reduction tors in the viability of the economy. This rein- bonds similar to those in the Mexican package, forced commitment to adjustment appears to and temporary interest reduction. It is too have significantly affected the return of flight early to assess the specific benefits of this capital and to have led to an increase in direct package because of the difficulty of predicting foreign investment. This has been particularly bank responses. The Bank has set aside $350 true in Mexico and, to a lesser extent, in the million of commitments from four adjustment Philippines. operations, two each in fiscal years 1989 and The Bank's support for debt and debt-service 1990, to help finance the debt-reduction pro- reduction operations is a logical extension of its gram. The funds will be made available once efforts to assist its severely indebted member agreement is reached between the Bank and countries sustain medium-term development the government on a debt-reduction program programs (see Table 3-4). In this context, debt that is satisfactory to the Bank. reduction is a means and not an end in itself. On the basis of these four distinctively dif- Support for debt and debt-service reduction has ferent agreements, it appears that the case-by- thus been justified when it has been needed as case approach is an indispensable condition in part of a viable medium-term financing plan that tailoring the debt and debt-service reduction can help the member country restore growth, operations to the particular circumstances of facilitate the debtor's return to normal access to the debtor and the commercial banks. In each external credit markets, and reduce the need for case, the parties reached agreements that re- further debt restructuring or other exceptional flected the particular initial conditions, con- forms of financing. straints, and objectives of the country in ques- Because the Bank's support is predicated on tion and its creditor banks. a country's having a sound and viable medium- None of the agreements constituted a pre- term adjustment program, debt-reduction pro- ferred model. Each had features that can be grams must be tenable over a three-year to adapted elsewhere, as negotiators learn from, five-year horizon, or longer, to contribute to and improve on, past experience. In the cases the country's medium-term external financing of Mexico and the Philippines, the banking requirements. The overall objective is to en- community showed a diversity of interests sure that countries that undertake debt-reduc- large enough to include creditors who wanted tion programs will not have to resort to appeals to exit through a buyback or exchange of for supplementary financing from either offi- assets into lower-yielding bond instruments cial or private sources beyond what is planned with enhancements, as well as those who were in the program-so long as the evolution of the still willing to provide new money. The agree- external environment remains within a reason- ment with Costa Rica was particularly note- able range of variation. worthy in that it was reached after a prolonged The agreements reached thus far have been accumulation of arrears, although Costa Rica sufficiently strong to justify the Bank's sup- had continued partial payments throughout the port, and the executive directors of the Bank period at a rate that was consistent with its have expressed their strong backing for the payment capacity. This, along with the govern- program. In their review of progress made to ment's continued performance on its adjust- date, they also expressed general satisfaction ment program, greatly facilitated reaching an with the guidelines that govern the Bank's role agreement. The results showed that, notwith- in debt and debt-service reduction operations standing the difficulties involved, successful and agreed that the basic policy framework for debt and debt-service reduction agreements the program should remain unchanged. can be reached. At its meeting in Washington, D.C., in May The results also confirmed the expectation 1990, the Development Committee com- that countries would be encouraged to mended the Bank. the International Monetary strengthen adjustment policies as a result of debt Fund, and the government of Japan for their and debt-service reduction operations and that early and substantial support for debt and this, in turn, could substantially affect investor debt-service reduction packages negotiated by confidence. Mexico and the Philippines, for in- debtors and their creditor banks. The commit- stance, reinforced their adjustment efforts in tee called on the Bank and the IMF to continue 52 The World Bank-Fiscal Year 1990 Table 3-4. IBRD Commitments for Debt and Debt-ser%ice Reduction, Fiscal 1988-90 rr,liion4 . L'S .' .IUrs Pr,icipil reducii''n Sdl .,-,d. Irmr idiu.rrenm Fre. 'indlir' Inlre,l Cour.ur! .rPer.o-n,-n . , r,tin,r To[al sljp-r! F-;,::al Near 191%:5 -lem", 17i 375 . \ene zucla l - I - Fi;J XeJr 14911 NIC\,LO - - - I .1 Phjiippiune iph.,ive Ii - i 211 20' - \ enemuel- 1h3 - 163 ti,l I; ir fi c.al I S8-'Ii I 1.11ii 2t1ill 1 . 3111? I .2tO ,., JeiT-r.- 1r . ro.ndw,neni rpfo. el in FN 1, I. ,.n r.gre.?rnra'l 1'i 'E oper,uon~ to provide support for debt and debt-service bers, noting that a return to external viability and reduction programs, with the necessary flexi- sustained growth remained uncertain for a num- bility under their established guidelines, which ber of these countries, asked the Bank and the committee members reaffirmed, and to keep IMF to continue to analyze the debt problems of the strengthened debt strategy under review. It these countries, as well as those of the severely also called on the Bank and the IMF to empha- indebted, middle-income countries with signifi- size measures to promote investment and cap- cant official debt. ital repatriation in country-reform programs. Debt-reduction facility for IDA-only coun- The Bank's guidelines state that support will tries. In fiscal 1990, operational guidelines and be decided on a case-by-case basis and will procedures for the use of resources of the hinge upon the strength of a country's medium- debt-reduction facility for IDA-only countries term adjustment program, the severity of its were approved, and preparations were begun debt burden, the scope for voluntary market- for operations that would reduce the debt owed based operations, the medium-term financing to commercial creditors by Bolivia and plan, and the potential benefits from Bank sup- Mozambique. port, particularly for investment and growth. Funds for the new venture are derived from The guidelines also set the parameters of the the transfer of $100 million of fiscal 1989 IBRD Bank's financial support, which comprises net income to the facility. Facility resources both "set-aside" funds (to be used to support will initially be available for a three-year pe- operations resulting in principal reduction) and riod; any funds not disbursed within that pe- "additional" lending (to be used for interest riod will be returned to IDA for use in its support in connection with debt or debt-ser- general operations. vice reduction). In addition, Bank involvement Commercial debt in IDA-only countries- is contingent on there being sufficient financial defined as those countries with gross domestic support available to achieve the objectives of product per capita under $580 for which no the country's adjustment program. IBRD lending is projected over the next few These recent initiatives to address the debt years-constitutes a relatively small portion of problems of middle-income countries have fo- cused on private debt. There are, however, Toronto terms represented a significant breakthrough in several severely indebted, lower-middle-in- reducing the official debt in low-income, debt-distressed come countries undertaking adjustment pro- countries. The agreement, reached in September 1988 grams whose debt is owed largely to official (following agreement in principle at the economic summit sources and which are neither eligible for con- held in Toronto three months earlier), permits a range of options to be drawn up on rescheduling debt-service cessional debt relief under Toronto terms nor obligations on nonconcessional debt with reduced interest able to obtain significant relief under arrange- (but with somewhat shorter maturities). longer grace and ments for voluntary reduction of private debt repayment periods (at commercial rates), partial write- that the Bank and the IMF are supporting." offs of debt-service obligations during the consolidation period (with the rest rescheduled at commercial rates and Concern in this area has been expressed by the shorter maturities), or with a combination of these op- Development Committee, and committee mem- tions. Debt and Adjustment 53 total external debt. However, due to the non- sources from other donors for debt-reduction concessional nature of the terms of this debt purposes. It is also likely that there would be compared with the more concessional official only one debt-reduction operation in any par- debt, the contractual service burden for com- ticular country. mercial debt is often relatively large. Facility funds are to be made available on a Moreover, few mechanisms exist for easing grant basis so as to achieve the maximum the burden of this commercial debt. in contrast effect in reducing debt. It is expected that most with Paris Club arrangements for bilateral of- operations would consist of cash buybacks of ficial debt. In general, the reschedulings ob- commercial debt at substantial discounts. tained by low-income countries from commer- As in the case of support for IBRD debt cial banks have been less favorable than those reduction in the severely indebted, middle- obtained by middle-income debtors. This is income countries, IDA will seek to maintain a caused partly by the weaker bargaining posi- carefully balanced approach in negotiations tion of these countries and partly by their between creditors and the debtor country. In greater dependence on commercial banks for view, however, of the inexperience of many trade credits and other financial services. De- low-income countries in addressing the com- spite efforts by these countries to service their plex technical issues that arise in debt-reduc- commercial debt, or to reach agreement with tion operations, it is likely that technical assis- their commercial creditors, not all countries tance will be required to help countries have been able to make contractual payments improve and analyze their debt data and iden- regularly, and arrears have accumulated. tify options in developing their debt strategies. All IDA-only countries with heavy debt bur- In all instances, IDA will provide information dens are eligible for support from the facility. to the parties to the negotiations about its Support, however, will be decided on a case- perception of the status of the country's adjust- by-case basis and will be contingent upon the ment program. the country's financing require- following criteria: ments and prospects, and the amount of sup- * the existence of a medium-term adjust- port that may be available. ment program acceptable to IDA. as demon- The $10 million debt-reduction operation un- strated, for example, by the existence of an der preparation for Bolivia would support that operational policy-framework paper (PFP),'2 a country's ongoing commercial bank debt-re- structural-adjustment program, or a country's tirement program. At the end of the fiscal year, inclusion in the IMF's enhanced structural- $272 million of commercial bank debt remained adjustment facility and; outstanding. Discussions between the govern- * the existence of a strategy for debt man- ment and the commercial banks will determine agement satisfactory to IDA that (a) includes a the precise amount of debt to be retired. Sub- program for resolving the commercial debt stantial elimination of the commercial bank problem through funds provided by the facility debt is a condition of release of facility funds. and other sources; (b) provides for substantial In the case of Mozambique, discussions with debt relief from official bilateral creditors commercial bank creditors are at an advanced through an agreement with the Paris Club. stage on a proposed debt-reduction operation preferably on Toronto terms, where applica- in respect of outstanding nonguaranteed com- ble; and (c) materially enhances the country's mercial claims amounting to about $280 mil- prospects for growth and development. lion. Once the proposed terms of the debt- As in the case of IBRD support for debt reduction offer by the government to its reduction in the middle-income countries, the commercial creditors have been defined and extent of support provided by the facility will are considered reasonable by the Bank, a for- be determined on a case-by-case basis, with mal request will be presented to the executive particular weight given to two factors in as- directors for a specific commitment of the sessing potential benefits that may follow from resources needed to undertake the proposed a given operation: the effect that commercial operation. debt has on a country's ability to achieve Adjuistment lending. Commitments by the economic growth and the degree of confidence Bank in support of adjustment operations dur- that can be placed in the accuracy and com- pleteness of the data concerning the debt tar- geted by the proposed operation. Because funds are limited, facility resources 12 A PFP is a three-year comprehensive report prepared by available to any one country will not exceed the national authorities with the assistance of the staffs of $10 million unless exceptional circumstances the Bank and the IMF. It identifies the sources of a $10 milion nless xceptonal crcumsances country's problems, describes the proposed remedies, argue otherwise. Countries are therefore ex- and provides estimates of the associated financing re- pected to make every effort to mobilize re- quirements and the role of the major aid agencies. 54 The World Bank-Fiscal Year 1990 ing the year amounted to $3,969 million (see quick-disbursing adjustment loans should be Table 3-5). Eleven adjustment operations (in- made only under three basic conditions: cluding supplements) in the severely indebted, * that the Bank and the government reach an middle-income countries were approved;"3 understanding on the diagnosis of the main twenty operations (including supplements) impediments to restoring growth and on the supported adjustment programs in the low- overall structural-adjustment program; the par- income, debt-distressed countries of sub- ties should also agree on the objectives sought Saharan Africa. Two freestanding operations, from both short-term stabilization and longer- one for $1,260 million to Mexico for interest term development and on what macroeco- support and one for $200 million to the Philip- nomic and microeconomic policies, as well as pines for principal reduction, were approved. institutional changes, were needed to reach The Bank also supported reform programs in those objectives; other indebted countries that confront many of * that the government own the adjustment the same economic challenges as the severely program, understand it, and fully accept it; and indebted, middle-income countries: Algeria, * that the adjustment program be realis- Jordan, Trinidad and Tobago, Tunisia, and tic-thus, restrictive enough to be consistent Yugoslavia, for example. with the financing available, but not so restric- Adjustment lending totaled 19 percent of the tive that it would likely be socially and politically Bank's fiscal 1990 commitments. In fiscal unacceptable and, therefore, unsustainable. 1989, commitments in support of adjustment The second evaluation, discussed with the comprised 30 percent of the total. executive directors in May 1990, extended the Net disbursements during the year to the recommendations of the earlier report. It points group of twenty severely indebted, middle-in- to five major ways in which the effectiveness of come countries were $4,037 million, an increase adjustment programs-and Bank support for of almost 250 percent over fiscal 1989 disburse- them-could be increased: by (1) removing dis- ments of $1,650 million (see Table 3-6). tortions that impede the efficient allocation of Much of the Bank's efforts in support of the resources and limit growth of output; (2) increas- debt-distressed countries of sub-Saharan Af- ing the priority given to public-sector reforms; rica were expended in preparing the frame- (3) giving special attention to inducing a recovery work for an extension of the special program of of investment; (4) matching the pace of disburse- assistance (SPA) beyond 1990. At two meet- ments to the speed with which reforms are ings of prospective donors, both held in Paris introduced; and (5) carefully monitoring the de- (October 1989 and June 1990), agreement was terminants of macroeconomic stability. reached on the outline of a second SPA to There was general agreement among the cover the three-year period, 1991-93.'4 executive directors that structural-adjustment Net disbursements during the year to the programs, typically supported by several twenty-three sub-Saharan countries eligible for loans, should focus first on achieving large assistance under the SPA totaled $1,306 mil- reductions in the largest distortions. In coun- lion. tries that start with high rates of inflation or a Structural-adjustment and sectoral-adjust- large current-account deficit, structural re- ment lending were important activities of the forms aimed at restoring macroeconomic im- Bank during the decade of the 1980s. Notwith- balances should be emphasized first. The se- standing the fact that the Bank continues to quence of sectoral reforms should take account rely on investment projects for the majority of of the linkages among sectors. A country its development lending, adjustment opera- should not receive adjustment lending unless it tions will likely remain important in the near is willing to undertake measures to remove the term. For this reason, the Bank actively seeks largest distortions. ways to increase their effectiveness. During the past year, a second evaluation of adjust- ment operations reached conclusions that were consistent with those of the first evaluation: that adjustment lending has been moderately '3 These countries are Argentina. Bolivia, Brazil, Chile, successful in improving aggregate economic Congo, Costa Rica, Cote d'lvoire, Ecuador, Egypt, Hon- and tha, on th averag, coun- duras, Hungary, Mexico, Morocco, Nicaragua. Peru, the performance and that, on the average, coun- Philippines, Poland, Senega, Uruguay. and Venezuela. tries receiving adjustment loans performed bet- ter than those that did not. " "4 For details, see page 47. The first report, discussed with the Bank's '5 Conclusions in the first report were based on an analysis executive board in September 1988, also focused 1985o The more recent sg adjustmentuloans before fiscal on ways to make adjustment lending more effec- expanded sample of loans approved during the period tive. At that time, it was generally agreed that fiscal 1979-88. Debt and Adjustment 55 Table 3-5. \%orld Bankl Adjustment Operationts. Fiscal N ear 1990 Irnilii'..iilo UI S dell .r Counir, Pr.--ic I BFr) IDX - 'x. LotIril. .r-'cc ,, I)i Dx ,,i ., B.,ngld 1-h ELCig . '-ic r .,,; i -mc-a .i.ii .urr-.Itnoc, - -. B.lnul~~~~~1- .sIro d F,-,...jI r jJn,-in-,,:r.l- ........ '1- Btli.1 tifn.ilci,l -tl,-' .w.lti.In,.:i, IiplCftn - ' I " I. Okr dIcil.t-.e Ni ,itr *rril ,,rd ~C. r ;,gc * xr.rikrIid.I.Icrel :- , i,, _ I ,, CotIe d Noni. ri'iluhri - .tlm iujiu'rniiinf Sut C.le d I'vlie Lrcrt';'r. -llf l'i 1 111 - I Ch,n.. Fdiuc:aii.n . di.r ,dru.rri,,ni - H' 'I I i i. hilmc I EduIC4rr'r. 'c II.' /dlu,Imc Al - 11 2111, Jm.I LrTI.ilrulc .cr.'r ,J-,.iw.:rri '- I - I ,, Jord,rr TrTlde idj irinir SI llI - 1 J.mI Ken.. Fhnr-nr:Id !i r diu Ticl *upalrTerl ....crilnr -4.11 44 J4 M.d g II P41, ,lt cr'...idIui rrnicl i.PIt,ifl -- i,- II NIJlt.' IritndJer,rld 141J mJdr-Tiliri tJr.r.Ii-T.ri - 4 J Mll[., _ulu I-[%, A.,.IUIU,.li.,1c,l - -| I s -' Niti 4\.rcwirlhir. -ccc,.r *JIU-1iu..l. Ii. ,,,i.i'ml .lvlci*ii, jt i Nic'eli.i I iNtl'I. cij2iIl .c.I'rrc'. --| 12' ii 1:1- !9lverl.l 1l,1li,ullf~~Ill iI I If.......J Lll:.: I -OilrfEn & ......... - 1'1 1 0r'M Seriecz.l Fi.,rikin,n in u-il id -io' iLrncri - J9L 41 4i T.InLrn:I Irt-jLIII i in' i lnrd irrrI -urri,n cni - in' I'' Tin: .n'a A:ici;,llri|c .|-r..1llr .i..fmi.c.i.Tr.I... _-........ :111111 3m ,, tuntim Fwilblic unIcrr.i' -: id%luiIi.1i'.l I........'1.......... ' - I1iii % cnrtiel., I'Ih. r,l,rri e' rcl .., r n 11 - ;sII I k ,n. zucl.I Firi.n- ,,^il.I ,i-t,incni vI'li II I,,, I N I "'Y%IC . ' l I xlhri,- E;ciniinill roo'(i tr i l , Ienrl,l \ii-nr kcr-hli, SirCt.lt . r.l JIi.nci 111 _ J' i, 4'. ,, (mlfJr,ld Srytitlii.tl idiuIci.... r,.il l p,II,l. ....... - ; ( Pu.n.I '%ri-tl, IuIJ,,l mil Id uI c-ril 2L.1IC - 2i'ri 'I HUnI,_uf"J (rilA, n ritlil .II.llJiIicPT I'll _ : ': 'o S.r.mon: nd Prrinrpc SIrNUrJi ..dl rnII k:hrri-l i'l In- Senc.r.ml NIrtlIl ,l I J.ll,Ti,'-I 1. I Nill I I I Scne-2.0l SIro;l1lr:i aj I iOiT lf I -r'riIcrnnl - 4 I 4 4 Sn L nk., E `,n,ni1ii. r.'Iru.IL,rlr,_ in r. - il i till r srr L jn.i I 0 C'i , T IL..... I 'JlC] e-Ji I LIer r il-I4r'4 44 1 Og' . si,l ur.i i,il.ill:r Ill flplif'l - - Frinid.id lAd 1o.iloi, 51I.IU II IiC.i .I ri.riri i 11 ti LIe'.ld, E,on.rmi, rv,.'- i. pr lam- I1 - 1'; 'I '7 L'tc!.ind., .rut it'? C. . el 'rirhr T -i I - I r - - Nn'l it"ii l Shul,l il miitrirri II 4mii ii -ill ii.......... Ich U 1- II -1-14 41 P1 4; Directors also generally agreed that more of public expenditures should have high priority the reform effort should focus on the manage- in most adjustment programs. This is clear in ment of the public sector itself. Reforms aimed countries with large macroeconomic imbal- at reducing fiscal deficits in a permanent way ances. Public-sector reforms are also impor- and increasing the efficiency of taxation and tant in countries with inefficient regulatory 56 The World Bank-Fiscal Year 1990 Table 3-6. Net Transrers b) the WVorld Bank to the Severelk Indebted, Nliddle-income Countries nurolilon; o1 LI" do!lljr5- fi-i.l v jr l T.oTal IBRD and IDA conirLanients b.ltSl 1 S 5.t -,1j9.Ii S .4 2&IJ56.9 tjro~s do,^urcemen[t 5.2941.X iI 7.7 4.485 1 - ' Repa% men, 2. 2 4 9. 2.70t4.2 1.835.I .3.187!' 111.97h.4 Nei di;biirsements 31)455 2.353.5 l.h0 0 -1.1. 16 .(!04 I Iniere.i .,nd Chargee 2.19'.1 2.'54 'J .5-6lr) 2.6Y.t 9.950.6 Neti ranil'r .1(X 4 - 181.4 -911.' I.180.1 1 135.6 N:r-y ie hooinoic I; on pJre 54 tf.r counir, -,%erjt frameworks and tax systems and in which the As to the report's fifth major point, the need efficiency of public expenditures leaves much for careful monitoring of the determinants of room for improvement. Public-sector reforms macroeconomic stability, although there was should also be a part of the structural-adjustment general agreement on the importance of a programs in countries that need to spend more supportive macroeconomic framework for the on education, health, and basic infrastructure. success of adjustment lending, directors Consensus was also reached that some re- voiced varied opinions on how to ensure that covery of investment in infrastructure and the this framework is maintained. Most members social sectors is usually required for efficient of the board agreed, however, that the Bank growth even though reform programs initially should retain the competence to assess for often need to reduce public investment be- itself the macroeconomic situation in countries cause it is either inefficient or unsustainable. In receiving adjustment lending. countries that have already removed signifi- In addition, general support was given to cant policy distortions, adjustment programs other conclusions of the report, including that: should give special attention to inducing a (a) adjustment-lending operations should be recovery of private investment. This should be designed with the poverty consequences of stimulated not through special subsidies, but policies firmly in mind; (b) the Bank should rather through improvements in the overall support adjustment programs only if there is macro and microeconomic climate for busi- already a broad measure of macroeconomic ness. Hybrid operations-involving a combi- stability and assurance that it will continue or if nation of adjustment and investment funds- the program itself focuses on measures to and sector-adjustment operations that address promptly restore macroeconomic stability on a the main obstacles to private investment can sustainable basis; (c) a country should receive be particularly useful in this regard. quickly disbursing adjustment lending only if it The directors also expressed general agree- has a balance-of-payments gap or if a gap is ment with the conclusion that in countries that expected to emerge as a result of reform mea- need structural reforms with a long gestation sures adopted; (d) adjustment lending primar- period (tax reform, public-sector restructuring ily in support of prior actions should be re- and privatization, and financial-sector reform, garded as exceptional and normally be for instance), the Bank should try to match the confined to countries with good policies and a timing of its disbursements to the speed at strong track record of sustaining policy reform; which the reforms can be introduced. Adjust- and (e) to ensure financing over a multiyear ment loans should have multiple tranches horizon, adjustment loans should be supported when the program requires extensive institu- by an appropriate combination of cofinancing, tional development or when a step-by-step contingency-financing arrangements, and debt- introduction of reforms, such as trade liberal- reduction packages. ization, would reduce adjustment costs. In Current guidelines that limit overall adjust- these cases, the assurance of a continued flow ment lending to 25 percent and 30 percent of of financial support would enhance the credi- total IBRD and IDA commitments, respec- bility of the program. The appropriate choice tively, will be maintained. It is expected, how- from the menu of currently available options- ever, that in the course of the early 1990s, the one large multitranche loan; a sequence of total share of adjustment lending will decline smaller, two-tranche loans; or policy-based and that most current recipients of adjustment sector-investment loans-should depend on lending will phase down their use of it, the the particular circumstances of the country. exceptions being primarily in sub-Saharan Af- Poverty Alleviation; Food Security 57 rica. To smooth the transition to investment is considerable scope for targeting interven- lending, it is expected that an increasing num- tions to assist the poor directly. Included ber of hybrid loans and sector-investment among these interventions are those that pro- loans will be prepared. vide productive physical assets for the poor (rural roads and irrigation, for example) and Special Operational Emphases: Poverty improve their human capital endowment Alleviation; Food Security (through education and training). The World Bank's basic mission throughout Interventions designed to improve the stan- its history has been to reduce poverty and dard of living and life expectancy of the poor- accelerate growth. In recent years, the Bank nutrition, primary health care, water and sew- has sought to sharpen the focus of its efforts to erage, and provision of food to those below a alleviate poverty. These efforts cut across all threshold consumption level-are important sectors-from agriculture and rural develop- not only in their own right; they also promote ment to water and sewerage-and across the growth in incomes, including the incomes of array of the Bank's lending instruments-from the poor. traditional investment lending to quick-disburs- In the wake of an analysis of poverty issues ing structural-adjustment operations. by two recent task forces, each region in the Poverty alleviation is what economic develop- Bank has developed a set of activities that aims ment is all about. Practically everything that the at directly reducing poverty, and steps to mon- Bank does, either in its lending or in its policy itor their effectiveness have been taken. Thus, work, bears directly or indirectly on poverty poverty-reducing efforts have become an inte- reduction. gral part of country-assistance strategies. A distinction is often made between programs Those strategies, responding to a country's and projects that primarily promote economic particular economic and social objectives and growth and those that primarily aim at poverty situation, are designed to support viable eco- alleviation. In fact, however, because the goal of nomic and social development, as well as re- both is the same, the distinction refers to means, duce poverty. Country strategies are given not ends. And as means for achieving the same concrete shape in the form of specific tasks- fundamental objective, the alleviation of pov- economic and sector work (ESW), project erty, they are essentially complementary. It is by lending, technical assistance, and the mobili- now well recognized that no attempts to elimi- zation and coordination of external assistance. nate poverty can succeed without robust rates of Within each country work program, a set of economic growth brought about by efficient tasks is identified as having the direct reduc- overall policies. This is readily seen from the tion of poverty among specified groups as its experience of developing countries during the main objective. The aggregation of these tasks past two or three decades: Those countries that across countries and regions makes up the have been most successful in reducing the inci- World Bank's poverty-alleviation program, or, dence of poverty are also those that have grown as it is called, the "core poverty program." By the fastest; those countries that placed relatively identifying a subgroup of tasks in this way, the little importance on efficiency and growth are Bank can more effectively monitor the imple- today far worse off and face a much bigger task mentation of the country work program most than otherwise would have been the case. Con- directly oriented towards poverty reduction. versely, the pursuit of growth without provision Core poverty program. The core poverty of an adequate amount of basic social services program includes projects and ESW whose leaves the poor ill-equipped to take advantage of primary purpose is the reduction of poverty in economic opportunities that come into existence identifiable groups. It also includes all projects through growth. that aim to reduce population growth rates. Reducing the poverty of the most deprived Activities related to poverty alleviation, which individuals and households requires increasing contain significant elements of targeted poverty their income-earning assets and opportunities. reduction even though they have other, or more Increasing the prices of the products they pro- general, objectives, form part of a core poverty duce or increasing their productivity, wages, and program, as well. A recently approved fisheries employment are of central importance; yet, project in Bangladesh, which aims at increasing many development policies-those that have a the production of fish and shrimp for domestic strong bias against agriculture have been partic- consumption and export, is an example of an ularly pervasive-have had precisely the oppo- activity that is poverty "related." site effect. Economic and sector work and other analyt- The key to poverty alleviation lies in effi- ical output. The entire range of economic and cient economywide policies that promote sta- sector studies that the regions of the Bank bility and growth; nonetheless, typically there undertake bears, directly or indirectly, on pov- 58 The World Bank-Fiscal Year 1990 erty-reduction issues. At the most general level, more effective social-expenditure programs. country economic memoranda, public-expendi- While reform policies in Venezuela dictated ture reviews, and other macroeconomic docu- that indirect food subsidies be cut, direct trans- ments provide the framework for devising strat- fer programs were introduced or expanded, egies for poverty alleviation. Although most of and total social expenditures were increased. these studies do not focus directly on poverty Increasingly, special poverty-reducing oper- issues, they are vital for designing sectoral ations are being designed that utilize multisec- strategies in a consistent manner. toral approaches and innovative project com- A large part of the economic and sector work ponents. These operations typically aim at programs is devoted to sector studies in areas helping well-identified target groups in various such as agriculture and rural development, ways. In Uganda. for example, a $28 million education, population. health, and nutrition. stand-alone project includes the rehabilitation While such studies have somewhat expanded of more than 4,000 classrooms in twelve of the their coverage of poverty-related issues, the country's more disadvantaged districts, the main effect of the Bank's increased emphasis upgrading of community health services, and on poverty alleviation has been to spawn re- development of assistance programs for chil- ports-specialized cross-sectoral studies, for dren orphaned and women widowed by war or instance-that deal exclusively with poverty. AIDS. These studies have an advantage over the Food security. A 1989 task force on food- traditional sector studies because their scope is security issues in Africa concluded that food not confined to a single sector. Moreover, they security could be ensured only if two condi- have been found to be as effective as tradi- tions were met: Food must be available, and tional studies in identifying prospective proj- households must have the ability to acquire it. ects. Other reports generated as a result of the While much attention had been paid to the first Bank's focus on poverty include "country condition, the task force argued that the focus poverty profiles" (which analyze ways to real- should be on the root cause of food insecuri- locate public subsidies to poorer groups and to ty-the fact that households lack sufficient realign the role of the public and private sec- income to grow or buy food. The task force tors in the provision of social services) and called on the Bank to build the foundations for country assessments and action plans (which long-term food security in Africa through a assist in the formulation of poverty-reduction more vigorous application of ongoing ap- policies and projects). proaches to growth and adjustment. It also Closely related to these special studies is the urged that a new set of country-specific actions work that is being carried out by the multidonor be pursued that would form a more intensive, social-dimensions-of-adjustment (SDA) pro- organized, and systematic approach to the gram. The SDA initiative, launched in Decem- problem of hunger in Africa. A robust start was ber 1987, helps participating African govern- made in fiscal 1990 in implementing the task ments to design country-specific policies and force's recommendations.17 action programs to protect vulnerable groups The great variety of operational activities and strengthen community development."6 now under way in the Bank to alleviate poverty Widening operational approaches. Most reflects the wide differences among countries projects in the core poverty program are made and among sectors and regions within a coun- up of traditional types of operations in physical try. Priority is now being given to consolidat- infrastructure or in the social sectors. But the ing the progress that has been made. The focus on poverty reduction has spread to other increased emphasis on poverty-reduction oper- types of lending, as well. ations has not lessened the Bank's commit- Efforts are being made to ensure that adjust- ment to seek and maintain efficient market- ment programs supported by the Bank reflect oriented economic policies, for these policies the interests of the poor. Poverty-alleviation form the predominant part of any viable pov- activities have been included as components of erty-reduction strategy. As emphasized in some adjustment operations, and projects that World Development Report 1990, ensuring that are parallel and complementary to adjustment particular poverty-reduction operations are operations have been designed to deal directly consistent with economic stability and growth with poverty-reduction objectives. These oper- will continue to be an important objective. ations form an important part of the core poverty program in those regions in which most of the Bank's adjustment lending takes place. Thus, a key component in the Bank's 1 For details on the SDA program. see page 111. structural-adjustment loan to Venezuela is sup- i' See page I It for details of food-security initiatives begun port for the government's action to introduce in fiscal 1990. Human Resources (including Women in Development) 59 Special Operational Emphases: United Nations Children's Fund-a global ini- Human Resources (including tiative to set a new agenda for basic education. Women in Development) The initiative was discussed by international heads of state and government ministers and The importance of human capital in stimu- representatives of nongovernmental organiza- lating economic progress and improving family tions and the private sector at a conference welfare is becoming ever more apparent-not held in Jomtien, Thailand. in March 1990. just for long-term development but also for The World Conference on Education for All short-term adjustment. Education and training, focused on improving the quality of primary health and nutritional status, and the means to education and increasing educational opportu- plan pregnancy all promote productive capac- nities throughout the developing world. It also ity and adaptability. They also improve family provided a forum to discuss issues that affect welfare and slow population growth. Countries education, formulate follow-up action, and that give such services short shrift not only help broaden public awareness of the need to impair family well-being but also prejudice expand children's access to education. their longer-term prospects. The president of the Bank, speaking to del- Education. The World Bank currently pro- egates at the conference, pledged to increase vides 15 percent of all external official assis- education lending by the Bank over the next tance for education to the developing world. three years to more than $1.5 billion a year. Since 1963, the Bank has lent more than $10 Support for basic primary education, he added, billion for almost 400 education projects in would be the dominant priority in Bank lending about 100 countries. to the sector. Fiscal 1990 marked the first year in which The need for such a focus is clear. particu- Bank lending for education topped the $1 bil- larly in the low-income countries, where the lion mark. Some twenty-one projects, involv- average educational attainment of the 25-year- ing Bank assistance of $1,487 million, were old to 35-year-old age group is less than three approved. Commitments in fiscal year 1989 years. where half the children of school age amounted to $964 million. (China and India excepted) are not enrolled in More than one third of the projects approved school, and where fewer than 60 percent of the were in support of measures designed to in- students who enroll in primary school com- crease the quality of higher education or of plete the six-year cycle. technical skills. Nine projects were designed to Great progress has been made in many mid- address educational issues at both the primary die-income countries, but even among this and secondary levels, while three projects sup- group, the average adult has less than four ported national reform efforts in the sector. years of education, almost 20 percent of the Two projects incorporated innovative fea- school-age population remains out of school, tures designed to increase the participation of and differences persist in the educational op- girls in schooling. In Bangladesh, measures are portunities for boys and girls. being taken, through the vehicle of a general The basis for a framework for additional education project, to step up recruitment of support to primary education was provided women teachers: a pilot program that brings shortly after the Jomtien conference, when a schools closer to underserved rural villages is dialogue began with the Bank's executive di- being launched (girls are less likely to travel far rectors on the conclusions reached in a study to attend school); and a scholarship program prepared by the Bank to help governments for female secondary schoolchildren is being make difficult choices among investment op- expanded. A critical impediment to the devel- portunities in order to improve the effective- opment of rural primary education in Pakistan ness of primary education. is the shortage of female teachers. The lack has The study concluded that improvements discouraged parents from sending their daugh- should be made in three areas-enhancement ters to school. In a primary education project of the learning environment, the preparation that is being implemented in Sindh province, and motivation of teachers, and strengthened administrative regulation and practices that institutional capacity of the education system. work against women's participation in teaching The need to increase equitable access to edu- are not only being eliminated, they are being cation and to strengthen the financial base for changed to provide positive incentives for the primary education was also stressed, and in- recruitment of women teachers. creased assistance from bilateral donors and Fiscal 1990 also saw the Bank cosponsor- international finance institutions, including the with the United Nations Development Pro- Bank. was called for. gramme, the United Nations Educational, Sci- The learning environment can be enhanced, entific, and Cultural Organization, and the the study declared, through emphasis on pro- 60 The World Bank-Fiscal Year 1990 viding students with a quality education-de- A first source for these needed additional fined as one that permits students to acquire resources is the primary education subsector the core knowledge and skills as specified in itself, through reallocation within the sector. the national curriculum. Thus, learning mate- Funding for improved primary education will rials should be provided in sufficient quantity also require efforts from donors. Increases in to ensure that every child has access to text- effectively targeted financial assistance are re- books and other reading materials, and a min- quired, as is support to primary education in imum of 880 hours of class time a year should the context of broad, subsectoral development be devoted to core subjects. programs. And, because priorities will differ The ability of children to learn has been among countries, donors will have to be flexi- shown to be strongly affected by the skills and ble in their support of educational development motivation of their teachers. The next genera- programs. tion of teachers can be improved, the study Population, health, and nutrition. In Febru- suggests, through a requirement that prospec- ary 1987. the president of the World Bank told tive teachers be secondary school graduates. delegates attending the Safe Motherhood Con- thus eliminating the need for expensive aca- ference in Nairobi that the Bank would double demic remediation in teacher-training colleges. its lending in the population, health, and nutri- Pedagogical skills, today largely neglected, can tion (PHN) sector by fiscal 1990. be acquired through short teacher-training pro- Two years later-in fiscal 1989-that target grams following teachers' completion of sec- was reached, as Bank lending for PHN ondary-level general education. Teachers projects amounted to $550 million. In Novem- should be paid more (with salary increases ber 1989, the president announced that the linked to opportunities for career enhance- Bank intended to further increase lending to ment); they should also be provided with better the sector to $800 million annually for the working conditions. three-year period 1990-92. In fiscal 1990, lend- The third requirement for improving the ing totaled $933 million. Recent increases in education system is a more effective adminis- lending to the sector are all the more remark- trative and management structure. Strategies able if one considers that cumulative lending to strengthen the institutional capacity of edu- through fiscal 1989 totaled slightly less than cation systems can include a restructuring that $2.5 billion. gives managers at all levels authority and re- The dramatic increase in the Bank's lending sources to do their jobs effectively and devel- to the sector reflects, in part, its judgment that opment of managerial capacity through sys- excessive population growth places a heavy, tematic staff-development programs, increased sometimes intolerable strain on the pressure professional opportunities, and clearly defined points of urban and rural environments that are career paths. least able to bear it. The consequence is to Equitable access to education, particularly undermine further the ability of millions of in the low-income countries, must also be people to escape from poverty. improved, the study concluded. Of the more Although health projects continue to domi- than 100 million school-age children not in nate PHN lending (about two thirds of fiscal school, the vast majority come from one or 1990 totals), the momentum of increase in more of the traditionally disadvantaged groups population and nutrition projects approved and in society: rural, female, and the poor. One in the pipeline is continuing. This is especially way to provide access to out-of-school chil- true in Africa. where, without a solution to the dren is to increase the supply of school facili- problems associated with rapid population ties (by, for example, organizing the school growth, success in tackling the continent's day into multiple shifts, building more schools other problems would be limited, at best."' or expanding existing ones, and lifting limits on Complementing PHN lending are the special the provision of private schooling). grant programs, to which the Bank contributed The study recognizes that improvements in over $11 million in fiscal 1990 for programs that primary education will not come without finan- focus on PHN activities. These special grant cial cost. Yet, it argues that since primary programs include the Special Program of Re- education is the single most powerful accepted search and Training in Tropical Diseases, the tool for economic and social mobility, a genu- Onchocerciasis Control Program, the Human ine concern for the welfare of the poor de- Reproduction Program, the Safe Motherhood mands that education be financed in such a Initiative, the Task Force for Child Survival, way that access is not rationed on the ability to the Global Programme on AIDS, and the pay. The challenge, therefore, is to find the resources to begin the process and sustain the IB See page 109 for details of population activities carried commitment. out in the Africa region during fiscal 1990. Human Resources (including Women in Development) 61 United Nations Administrative Committee on it has begun to have an effect. One in five Coordination's subcommittee on nutrition. Bank-approved operations in fiscal 1989 in- The special grant programs have several ad- cluded specific WID recommendations as op- vantages: They generally involve more re- posed to one in ten during the previous fiscal sources and a longer-term commitment than year and far fewer in earlier years. Fifteen the typical Bank project, and they benefit a percent of fiscal 1989 operations-as con- number of countries at one time. trasted with 6 percent in fiscal 1988-were Analytical output in the PHN sector has judged to have potential to affect women sub- increased, as well. The Bank's policy and stantially. Preliminary observation indicates research work in the PHN sector focuses es- that this trend accelerated in fiscal 1990. sentially on population and health and on some The WID initiative focuses on increasing critical areas in nutrition. It attempts to sup- women's productivity and income, because port the overall dialogue on population and to this is considered the best way to help women provide a conceptual basis for population-lend- help themselves and contribute to economic ing operations. It also provides demographic performance, poverty reduction, slower popu- analyses and projections. lation growth, and environmental sustainabil- Sector work on population has been critical ity. Progress in Bank lending has been most in drawing government attention to important apparent in the sectors that affect women's problems and in generating plans and projects productivity the most: education; population, to remedy them. Among regions, the largest health, and nutrition; and agriculture. In edu- amount of sector work is being done in Africa, cation and agriculture, about two fifths of Bank where interest in family planning has grown operations in fiscal 1989 included WID recom- and where data, once scarce, are becoming mendations, as did almost all PHN projects. increasingly available. The study also attempted to evaluate prog- The Bank's policy dialogue on population ress over a longer period in those sectors grows partly out of sector work but also in- targeted in the initiative and that are key to volves contacts with governments in other WID progress. Seventy-three operations ap- contexts: through economic missions, at inter- proved in fiscal 1988 and fiscal 1989 were national conferences, and in other such set- compared with a set of seventy-three similar tings. The possibility of injecting discussions of projects that had been approved in the period population issues into dialogue at the highest fiscal 1980 through fiscal 1987 in the same levels of government is an option the World countries (forty-seven project pairs in agricul- Bank has that other donors to the sector often ture, eighteen in education, and eight in PHN). do not have. Within the three subsets of this sample, the The research agenda on health is varied. It share of operations with project-specific WID addresses the response to health problems in actions in agriculture increased from 9 percent Africa in the context of a comprehensive in 1980-87 to 30 percent, and from 22 percent health policy paper on Africa (a three-year to 33 percent in education. In PHN, the per- project that is scheduled to be completed in centage remained constant at 75. fiscal 1991) and the setting of PHN priorities in It is too early, of course, to assess how WID order to promote internal efficiency. Research initiatives are faring in those projects approved on tropical diseases, adult health, and AIDS in fiscal 1989. Details of initiatives, which are supports emerging areas of importance in the found in project-appraisal reports, reflect in- operations complex of the Bank. Health-care tentions, and efforts are required to ensure costs and financing are critical policy areas for effective implementation. But a review of many of the Bank's borrowers. Key issues some projects approved in the early 1980s vary substantially by region and level of devel- highlighted the need for more effective plan- opment, and much policy and research work is ning of WID actions during project preparation therefore being undertaken as part of sector and more effective supervision once project reviews in the regions. Some underlying is- implementation had begun. The analysis of sues, which merit increased attention, cut earlier projects concluded that a project's ulti- across most of the Bank's lending and sector mate effect and the sustainability of its benefits work (for example, cost recovery, health insur- may depend considerably on how effectively ance, and cost containment); in this context, the role of women has been reflected. the Bank is now embarking on an expanded The study did point to several earlier work program on the economic management of projects that had been modified to give greater the sector. attention to women's concerns, and it noted Women in development. A progress report that they now offer lessons for current efforts. on the Bank's initiative for women in develop- Thus, for example, a national agricultural- ment (WID), now in its third year. shows that extension project in Kenya, approved in fiscal 62 The World Bank-Fiscal Year 1990 1983, was extended and refocused in ways to have yet to be discussed with the governments deliver extension services to women farmers. concerned; in those cases in which discussions Today, more than half of all Kenyan farmers have occurred, however-notably Bangladesh, regularly contacted by extension workers are India, Kenya, Nigeria, and Pakistan-govern- women, and women's groups are proving to be ments have expressed considerable support. '9 particularly effective as contact points for ex- The Bangladesh, India, Kenya, and Pakistan tension messages. assessments focus on the need to increase The study also reported on how WID issues women's productivity and income, whether were treated in Bank economic and sector from self-employment or through labor-force work reports, which provide the analytical participation. They identify ways to improve base for an informed dialogue with borrowers women's access to education and training, and for the Bank's future lending and technical basic health and family-planning services, and assistance. programs (such as agricultural extension and WID issues were discussed in more ESW credit) that can help women, particularly the reports from the fiscal 1988 and 1989 period poor, produce and earn more. These reports- than in the preceding eight years, and a number the first to be completed-have begun to influ- included WID concerns in discussions of pov- ence ongoing and planned operations and sec- erty and employment. But there remains room tor work, as well as the Bank's broader for improvement-especially since ESW af- thinking on WID issues. fects the Bank's ability to confront WID issues Although the remaining nineteen assess- through future lending operations. And, as the ments treat WID issues in less detail (each of study underscored, no country can afford to the four major reports represented one to two underutilize and underequip more than half its years' work in several sectors), many lay out human resources. Poverty alleviation, food plans for more intensive analysis over the next security, reduced population growth, the qual- year or two. Most of the assessments focus on ity of a country's future labor force, and the women's productivity and recommend imple- proper use of the natural-resource base all mentation of a combination of activities-re- depend substantially on women. search, as well as economic and sector work, Integrating WID initiatives fully into the policy dialogue, and integration of WID con- mainstream of Bank activities will take time. cerns in ongoing and future lending operations. but the process is accelerating. Even in sectors Most identify particular issues to be addressed where WID concerns are obviously important in specific lending operations under way or in and knowledge is available for designing appro- the pipeline. The majority suggest including priate policies and actions, many operations do women more systematically in regular devel- not yet address the relevant issues adequately. opment programs; a few propose freestanding Regional and country variations may, to some WID operations. extent, reflect political and cultural differences; Almost all the accompanying action plans they also suggest a need for greater attention call for specific steps in education and/or PHN within the Bank. And, while borrowers seldom to focus more on the needs of women and girls; took the initiative in the past, this, too, is about four fifths recommend raising the pro- changing. Several countries-including Nigeria ductivity and incomes of women farmers by and Pakistan-have recently requested Bank improving access to extension and other agri- advice on WID activities in several sectors, and cultural support services. Half propose steps others are likely to follow. to increase access to credit; many recommend A primary component of the Bank's WID involving women (and women's organizations) initiative has been the preparation of country- more in the design, management, and imple- specific WID assessment and action plans. For mentation of development programs; and sev- the past fifteen months-since April 1989- eral call for assessing the legal rights of women each of the Bank's nineteen country depart- and suggest legal reform. ments has been preparing, for one or more of This set of country WID assessments and its client countries, an assessment of women's action plans represents a significant advance. potential role in development, the policy Most of the more populous countries have framework affecting their welfare and produc- been assessed, at least in preliminary fashion. tivity, and the institutional bottlenecks stand- An information base, although fragmentary in ing in the wav of progress. These assessments some cases, has been compiled. Operational also outline specific programs of action to recommendations have been put forth and are assist women that could be implemented with the assistance of the Bank. '9 Two reports have been published by the Bank: Kenya: As of June 30, 1990, twenty-three assess- The Role of Women in Development (1989) and Women in ments and action plans had been drafted. Most Pakistan: An Economic and Social Strategy (1989). Environment 63 being evaluated. In some cases, talks with programs, therefore, are structured so as to plan governments have taken place or are under and implement environmentally sound develop- way, and recommendations have been made. ment in borrowing member countries and inte- Bank staff have a clearer picture of WID issues grate environmental concerns fully into the in particular countries and are able to make Bank's operational and research work. In imple- more informed decisions about how to involve menting its programs, the Bank pays consider- women more effectively in development. able attention to concerns voiced by citizens and Implementation of WID activities requires groups outside the Bank who want to know what careful tailoring of projects to local circum- and how the Bank is doing, and why. stances. The practical difficulties are consider- To achieve sustainable development in devel- able, and care must be taken to ensure that oping countries requires that the environmental intentions are followed by effective action. The agenda be integrated into customary and familiar Bank has some notion of "what will work" Bank operations: policy dialogue and technical based on earlier experience, but specific mea- assistance, economic and sector work, lending sures must be tested carefully as they are put in and supervision, and aid coordination. In this place to provide feedback on what works and way, environment becomes an indistinguishable what does not. part of Bank operations and not a separate or It is important to work with women-and separable function. Integration also implies that strengthen women's organizations-to give the environmental agenda is the product of women greater voice in the design and imple- agreement between the Bank and its borrowing mentation of programs. Attention must also member governments on what constitutes a co- focus on determining links and synergies herent country environmental strategy. among interventions-and on assessing costs The environmental agenda is being inte- and benefits. The research and operational grated into the Bank's internal structure arms of the Bank will continue to collaborate through a variety of approaches, from general closely so that their activities can support each education to targeted staff training, profes- other in the WID initiative and thus provide a sional review of the discrete elements of coun- stronger basis for the Bank's expanding WID try-assistance programs, interactive programs policy work. Policy work will focus on sector- with sector and economic departments, and by-sector WID guidelines and associated re- formal policies and procedures. search. Staff training will be increased. The With respect to the Bank's external audi- policy work and action plans can thus consti- ence, considerable effort has been made in tute a framework for strengthening the efforts responding to thousands of letters (some of a of the Bank, the developing countries, and the general nature and some on specific projects) broader donor community to help women. and preparing informational materials, such as the newsletter "Environmental Bulletin" and Special Operational Emphases: the booklet "Striking a Balance," as well as Environment through countless speeches, articles, and pub- Fiscal 1990 was marked by further intensi- lic appearances by Bank staff before members fied efforts to integrate environmental con- of the environmental community. A report on cerns into the Bank's operations, policy, and the Bank's environmental activities was pre- research work and by discussions on possible pared for the September 1989 meeting of the mechanisms to support efforts to protect the Development Committee, and work is under global environment. way on the production of the first annual report Integration of environmental concerns. The on the Bank's environmental activities. objectives of the Bank's environmental work The integration of environmental concerns must be viewed within the context of the into World Bank operations-the most visible of institution's primary mission-that of support- the Bank's efforts-continued throughout fiscal ing improvement in the quality of life for 1990. Reports identifying key environmental people in its developing member countries. problems and their underlying causes have been Reducing poverty and protecting the environ- prepared for most borrowing countries, and ment are at the core of that mission. work on environmental-action plans-progres- The Bank's key environmental objective is sively detailed studies, prepared by the Bank in to assist borrowing member countries achieve partnership with borrowing countries, that cul- sustainable development through efficient and minate in the implementation of environmental effective use of the Bank's human and financial projects and policies-continued. In May 1987, resources-in other words, through Bank op- the Bank's president announced that by the end erations based on the policy dialogue with of fiscal 1992, thirty such studies would be com- borrowing member governments and with the pleted. In the agreement that provided for a ninth support of donors. The Bank's environmental replenishment of IDA resources (IDA-9), donors 64 The World Bank-Fiscal Year 1990 Bno 3-2. Biological DiMersit, in MIadagascar A-n iland scarcels bigg:er than Fran,c. *Iho,e E imate f forest devtrri'nindicaiethaias c rlt 01 lites. landscape,. and orgcanisri much at ,11 percent of MNadagavcar , original qu,hltis n .it a, tnhinent in it' .%%n r-ichi. Maod- lore,t coser h.,. disapreared in the 1.51j10-2.lNj acasc>ar lies a hort 5ii ki-limeters 011 the mouth- earN since the arrival ol man. and ihi Conltinue c|,i coast ot Africa tjec'lngical for.es tep:iraed at a 'erleinous pace i pn-slbls e\ccdinc 25.1i1.1ii Madaae,scr from the lrictin cortinent sorne It, aC re, a Sear The eti,nltionf that ha'e occurred million \ears iLt'. and thi, 1oltionll hJa re'ulted during- thii period include at least muo pecies3 of in ihe ctolution .I unique hiotic torm- Ihat occur giant ortloise one .f fard.ark another of p>gmr in .reater nurnher, there rhan perhiapi .n,.i here hippopotimu' thc l.rge-r hird, e'er to %talk the el,c on earth eanh. and an incredliole it. tenera and fouricen Unprecedented le el, of endrmism-bi.iiu 'pLieNe of lemur form tunique to the ''land-can he lcund n nearh \hile the coniinued I... of biological dcherstt! all of\Iad.ae.scur launal and floral croup, Nine t' mn.ini the result ol Ill-con,ei'ed imesimcnt ts .cight percent ol ihe palm 'pece; are found policies. e%ternal debt pre-,LireN. or misguided no" here else. a, arc 43 prercent 0ft NladaL,cars aericulturil policlet. certainh at ihe root ol the primate'. ,ppro%irnatel .si percent oi .al lloicr- de'truction dre ihe burgeoning population earo%th ing plini, . i percentel asll eptiles. sarid cight of i and pre-ure ,of the rural poor "ho dcpend upon nine precei of earnir-ore U 1is e laued Lh.t . natural- re. 'urte csi.raclien and imall -scale agri- otcraIl. o.rme I ii.iiii .1 o iadicuscar 2 thi.itii.K culture and lIte'lock pik'duction for their sur- speies of li, ing ihings are found n,ht:re el,e. t1 and thi' ri-'imarkable enderrim ! acomnpanied M \S huel the current huma.n population ;5 around ier. high diserit in ni molt group, ithere are more I millMi-about hilf that of California in an p.ci' of Fh.-mclcon. in Nhatiavlg...ta than in all arc, 41 ptrLent larger-Ni.flaca'car is alread\ the orher countries % here ihet occur combined .-.ervopul ietl in orme treisi pariieularl% in the and ni,re crchid speccies than cin he found on cenir.l highlands %ith re-peet to usable and mriul ,nd Africa i arbhle land and the counir% s population grossih The numbet of unique and endancercd ;pecies ratti of 3 ptreim 1 aimon- Africa s highest. Thus. in Midlga;car incrc.l,e' vthb each oea in'en- Ito ie successlul. conertationtiof boloceal di% er- iors . tt1e re-eni oli,nt,ncl c tpcdition to th 'itt in NIadaejac ar mu,t ,nicraic rural-decelop- tirtualls un'tudied NlJaoala penint,uld di 'cot- ment goalsbs hlocu ing on programs that enhance cred t, nev genera and ie\cn ne. p'peci' of thc abilis of the \la.gS.\ people to mece their pain alo..ne. and itirue ncts uitta of lemrrurs hate de'elopment need' thro.ugh 'utainable and ra- heen documentyd during ihe pa't n%o tear' twitnal ute of asailahle naiural resources Efforis As it the case ihrougchoUt the ssoiId biologie.il to urinden ikr, ecol-ical in'entoro rpecies-letel diser'iLt in Nlaldaga.scar i' gieatest in the ircipical research. and en' ironnicntal education and [rain- lorcst, The counir. * thrce nait'r fuie.i ecI'. inc and to holster the nation, nettork of prc- tent, and iheir indicenout "ildlile face a, s'dc tecled areas must rjrallel l ork on agriculture I airet .of threats. ussidder agrculturc the clear- florestr. unijtitanon of seeoridar fonrest products inc -.I torc t l.:-r cultisa%tiori. uncontrolled rang!nL ind u )eful planti. fi'herie.. health and hsgiene of Ii.e-lock. irtmber c 'plorintin. choarecil hurn- arnd other ruril-deelopnient-criented aspecis of inc hdniin; ant .rnrnentail plant ctilection rcn0Ur%,, u'e and preser atnon urged that before the end of fiscal 1993. environ- All assessed projects were assigned to one of mental-action plans be completed for all IDA four categories: recipients. The environmental-action plan for * Category A-Projects that may have di- Madagascar led to the approval during the year verse and significant environmental effects ;20 of a freestanding environmental project there (see Box 3-2). 211 Projects that typically fall into this category usually The project pipeline. Systematic environ- encompass or otherwise pertain to large-scale aquacul- mental screening of all new projects was intro- ture/mariculture: dams and reservoirs: large-scale electri- cal transmission: forestry: large-scale industrial plants duced in fiscal 1990, leading to full environmen- and industrial estates: large-scale irrigation and drainage: tal-impact assessments in every project with land clearing and leveling: mineral development (includ- potential for substantial environmental effects. ing oil and gas): pipelines (oil, gas. and water): port and The screening system and subsequent assess- ment: resettlement: rivecrlbamation and d newland develop- ments ensure that development options under thermal and hydropower development: large-scale tour- consideration are environmentally sound and ism: transportation (airports, railways, roads, water- sustainable and that environmental conse- ways): large-scale urban development; large-scale urban quences are recognized at the earliest point in portatione and use of peiticiand the manufacture, trans the project cycle and are taken into account in toxic materials. Also included are projects that run the project design, prior to project appraisal. risk of causing a serious accident. Environment 65 * Category B-Those that may have only During appraisal, the Bank reviews the envi- limited, specific environmental effects; ronmental assessment with the borrower, re- * Category C-Those for which environ- solves any outstanding issues, evaluates the mental analysis is normally unnecessary;- and adequacy of the institution responsible for en- * Category D-Environmental projects, for vironmental planning and management in the which assessments are the main focus during light of the assessment, and determines if the project preparation. assessment's recommendations are properly The first round of assessments included addressed in the project design and economic projects at various stages in the project cycle. analysis. Of the 779 projects in the Bank's pipeline on Environmental-assessment recommendations June 30, 1990, 58 (7 percent) were included in also provide the basis for supervising the envi- Category A, 339 (44 percent) in Category B, ronmental aspects of project implementation. 253 (32 percent) in Category C, and 48 (6 Compliance with environmental conditionality, percent) in Category D. Categorization of the the status of mitigating measures, and the find- remaining 81 projects was either not applicable ings of monitoring programs are now a part of the (direct support for debt and debt-service re- borrower's reporting requirements and of project duction, for instance) or had not yet been supervision. determined. In the case of projects whose preparation With the establishment of a systematic and predated the requirement that an assessment obligatory screening mechanism, assessments be carried out of potential environmental ef- have become, like economic, financial, institu- fects, every effort is made during the super- tional, and engineering analyses, a standard vision stage to identify problems and, as part of project preparation. As such, they are necessary, redesign or retrofit the projects to the borrower's responsibility. Integration of en- bring them up to current standards. In Brazil, vironmental assessments with other aspects of for example, the Bank has provided funds to project preparation ensures that environmental restore and improve the living standards of considerations are given due weight in project- some 8,300 families displaced by a reservoir selection, siting, and design decisions. for the Itaparica hydroelectric project. The The Bank expects the borrower to take the Bank did not finance construction of the views of affected groups and nongovernmental reservoir. organizations (NGOs) fully into account in proj- In ex-post evaluation, project-completion re- ect design. One way of doing this is to expand ports, submitted to the Bank's operations eval- meetings called to coordinate the work of gov- uation department, are now required to evalu- ernment agencies in the assessment process to ate environmental effects, noting whether they include representatives of affected groups and were anticipated in the environmental assess- relevant NGOs. Similar consultations after the assessment report is completed are also valu- able in obtaining feedback on the report and 21 Projects in this category usually include those for educa- increasing community cooperation in imple- tion (except school construction), family planning, health menting assessment recommendations. (except hospital construction), nutrition, institutional de- Since environmental assessments usually ac- velopment, and techmcal assistance. count for between 2 percent and 3 percent (and 22The origins and funding mechanism of this program are a bit complicated. In June 1987, Japan announced the up to 10 percent in rare cases) of the cost of establishment of a $210 million grant facility to pay for project preparation, borrowers can request the project preparation work in IBRD countries only. In July Bank's assistance in financing them-either 1989, Japan established a $5 million grant facility for the through a project-preparation facility (PPF) ad- environment for IDA countries. Some funds from the throuh a rojet-prearatontchnicy(P)al d- $210 million facility were later reallocated to the 55 vance or with funds from the technical assis- million facility. In any case, by the end of Japan's 1989 tance grant program for the environment.' '22 fiscal year (March 31, 1990), funds in both facilities had Integration of environmental concerns into been exhausted. In the meantime, however, at the 1989 Bank operations means that environmental is- annual meetings of the Bank and the IMF. Japan an- nounced the launching of a three-year. $300 million Spe- sues are addressed throughout the various cial Fund for Policy and Human Resources Development stages of the project cycle. to provide "itechnical assistance for developing countries At the project identification and preap- and to help develop human resources that could take the praisal stage, the likely nature and extent of responsibility of formulating and implementing develop- ment policy.' Funds from this facility may be used by environmental effects are considered, and cat- developing member countries of the Bank to prepare egories are assigned. If needed, environmental environmental assessments. The Bank is actively seeking assessments are started at this point. The as- funds from other donors to help finance assessment work. sessments, which are reviewed with govern- As of June 30, 1990, funds totaling about $10 million had sessmens, whih are eviewedwith gverti- been made available for this purpose by Denmark. Fin- ments, influence both project site selection and land, France. Norway. and Sweden: a pledge had been engineering design. obtained from Canada ($5 million). 66 The World Bank-Fiscal Year 1990 ment, as well as the effectiveness of mitigating and control of marine oil pollution through im- measures taken and of institutional develop- provements in established regulatory systems, ment and training. integrated water-resources management, solid- It is expected that the effect of the system- and toxic-waste management, and coastal-zone atic incorporation of environmental assess- management (see Box 6-2 on page 127 for de- ments into projects in the Bank's pipeline will tails). Other such studies include the Asia water- first become noticeable in fiscal 1991. shed-sector review, the Asia forestry concept In the meantime, the number of projects that paper, the sub-Saharan Africa agroforestry had been designed to include environmental study, and a paper on tribal-people policy and its elements increased during fiscal 1990. Of the application to Africa. All these studies help pro- 222 loans and credits that were approved dur- vide a basis from which to derive rational prior- ing the year, 107, or 48 percent, contained ities for funding environmental activities. environmental elements. In fiscal 1989, eighty- The Economic Development Institute held five projects, or 38 percent of the total, had seminars devoted to different aspects of the such elements. Projects containing environ- environment in all four developing-country re- mental components in the agriculture and en- gions during fiscal 1990. For example, seven ergy sectors led the way. two-day national workshops on environmental Forty-four of the fifty-six projects in the assessment were held in Latin America (Bra- agriculture sector had environmental effects. zil, Bolivia, Chile, Colombia, Ecuador, Mex- Some of the recurrent environmental ele- ico, and Venezuela). At the workshops, the ments in agricultural projects are land and Bank's new standards of environmental as- soil management and conservation, inte- sessment of projects were explained, and their grated pest-management techniques, wildlife relationship with national laws and regulations management, protection and management of and the ways in which sufficient numbers of forests, rehabilitation of drainage and irriga- national staff could be trained in techniques of tion systems, institutional support, and re- environmental assessment were discussed. search. Eight projects supported forestry pro- International concern and the Bank's in- tection and management (in the Central volvement. The rapid emergence over the past African Republic, China, C6te d'Ivoire, few years of a succession of new global envi- Guinea, Indonesia, Mexico, Morocco, and ronmental issues has attracted broad public Zimbabwe). Projects totally focused on envi- interest and with it increased public pressure ronmental issues were approved for Bolivia, on the Bank. As part of its response, the Bank Brazil, and Madagascar. has participated in several international meet- As in fiscal 1989, just about half of the ings on environmental issues. For example, at energy loans approved during the year had meetings on the Montreal Protocol on Sub- components or measures to ameliorate adverse stances That Deplete the Ozone Layer, the environmental effects, and almost all of them Bank is represented on the International Eco- included conditions regarding the improve- nomics Panel on the Ozone Layer. The Bank's ment of price policy, which would increase position on transboundary shipments of toxic efficiency in energy consumption.23 All fifteen waste was first formally expressed in a state- projects in the water supply and sewerage ment by the president at a meeting in Oslo in sector contained environmental elements. Policy and research activities. Environ- mental concerns were also further incorporated 2' During fiscal 1990. a natural gas development unit was into the Bank's policy and research work during created within the Bank's industry and energy department the year. Some studies were sector specific; to promote the development and use of natural gas in developing countries. Natural gas releases only one third others covered regional or country-specific con- to one fourth of the carbon-dioxide emissions of coal, and cerns. Country studies, for example, are being about one half those of oil. The unit will also provide carried out for Brazil, Indonesia, Nepal, and the operational support and research work in the gas sector Philippines. Regional environmental studies in- and related environmental areas. The work of the energy- sector management-assistance program (ESMAP) also ac- clude the UNDP-supported metropolitan envi- celerated during the year. The program, which is supported ronmental-improvement program, which aims to by the Bank, the United Nations Development Programme arrest and reverse environmental degradation (UNDP), other United Nations agencies, and several do- from rapid urbanization, industrial pollution, and nor countries, identifies, analyzes, and proposes actions to address the most serious energy problems in developing general environmental neglect in the principal countries. It also offers a preinvestment facility to assist in cities of Asia. They also include the European the implementation of recommended actions. At its annual Investment Bank-supported environmental pro- meeting in Paris in November 1989, ESMAP was charged gram for the Mediterranean (EPM), through with continuing to provtde guidance to developing coun- tries in the areas of energy-effciency improvements, pro- which a regional action plan will be implemented motion of natural gas development, interfuel substitution to deal with critical issues such as prevention and alternate energy sources, and household energy. Environment 67 July 1988. The Bank has been an observer in countries that benefit the global environment subsequent meetings in Luxembourg, Geneva, and that would not proceed without some addi- and Basel that worked out the final text of the tional financial incentive. There was also broad Toxic Waste Convention for signature by de- agreement on the need for concessional funding veloping and industrial countries. for this purpose-provided that its uses could Environmental matters have also been a be limited to actions that were additional. The strong focus in the Development Committee. participants at the meeting urged that the Bank Particular attention has been paid to the prog- report to the Development Committee on the ress the Bank is making in integrating environ- substantial areas of agreement. mental issues into its policy and operational At its May 1990 meeting in Washington, work, and discussion by the committee has D.C., the Development Committee generally focused on issues such as environmental as- agreed that the Bank should play an important sessments, Bank environmental-action plans, role in funding global environmental protec- energy efficiency and conservation, forestry tion. Committee members agreed that further protection, and debt-for-nature swaps. work was necessary to develop methods for At the same time, the committee has empha- the Bank to assist developing countries to take sized the importance of global climate-change actions that contribute to the reduction of issues and has noted that technological trans- global environmental problems. Members also fers and additional external financial support agreed that it was important to continue efforts will be needed to help meet the increased costs to develop proposals for a pilot mechanism for and requirements of expanded efforts to inte- this purpose, taking into account the Bank's grate environmental considerations into devel- existing programs. They also urged the Bank to opment plans. At its September 1989 meeting, take steps to reinforce and expand its existing the committee asked the Bank to review asso- environmental programs and thus assist devel- ciated financial requirements and mechanisms. oping countries to contribute to the achieve- At the annual meetings of the Bank in Sep- ment of the same objective according to their tember 1989, the finance minister of France priorities. The Bank was urged to proceed with suggested that the Bank explore interest this work expeditiously in consultation with among its members in establishing a facility for interested parties and close collaboration with funding programs in developing countries that UNEP and the UNDP. Members underlined would address global environmental objec- the need for sufficient flexibility to attract the tives. He noted that France was prepared to widest support possible. support this with F900 million over three At a second meeting of prospective donors, years. held in Paris on June 11-12, views were solic- In response to the Development Committee's ited on (a) criteria to be used in determining request and the proposal by France's finance what measures the facility might finance that minister, a meeting was convened by the Bank could not be addressed through existing pro- in Paris in March 1990 to discuss a paper that grams and (b) how best to organize the facili- proposed the creation of a global environment ty's administration. facility to address four key areas of concern: the Participants endorsed the criteria proposed protection of the ozone layer, reduction of by the Bank and were of the view that these emissions of greenhouse gases that cause cli- allowed a clear distinction to be made between mate change and of emissions that result in existing programs and the work of the pro- transboundary pollution, protection against posed facility. They also confirmed their sup- degradation of international water resources, port for a tripartite management that would and protection of biological diversity. The draw on the comparative advantage of the meeting was attended by representatives from Bank, the UNDP, and UNEP. This effort, they seventeen donor countries, the United Nations added, should be seen as a part of a coordi- Environment Programme (UNEP), and the nated program of action that is compatible with UNDP.24 existing and emerging global conventions on The paper proposed the funding of a pilot multilateral issues and that takes account of program to address these issues through the relevant bilateral and multilateral programs provision of additional concessional finance and expertise. for technical assistance and investment pro- grams in developing countries. At that meeting, donors encouraged the Bank-working in close collaboration with 24 The seventeen donor countries were Australia, Austria. UNEP and the UNDP-to proceed with the Belgium. Canada. Denmark, Finland, France, the Federal Republic of Germany. Italy. Japan, the Netherlands, detailed work needed to spell out particular Norway, Spain. Sweden. Switzerland, the United King- modalities for financing actions by developing dom. and the United States. 68 The World Bank-Fiscal Year 1990 Special Operational Emphases: short-term results in its first eighteen months. Private-sector Development and Although much remains to be done before Public-sector Management these elements are fully and systematically integrated into the Bank's country-assistance Development strategies have been changing strategies, several noteworthy achievements over the past decade, moving toward a greater have been registered. They include: emphasis on private activity and competitive * an increase by over one third in the markets. From the 1940s into the 1970s, eco- number of operations with private-sector de- nomic policy in much of the developing and velopment components; developed world was characterized by confi- * a substantial expansion of Bank staff dence in the capacity of government to spur input on analytical work in this area; growth and correct market failures. By the late * growth in IFC approvals by 12 percent, 1970s, the public sector in many countries had diversification in the IFC's investments, and stretched its managerial capacity to the point expansion in the Corporation's use of such where serious inefficiencies emerged. As a instruments as quasi-equity and agency- result, the role of the state began to be increas- equity lines; ingly reexamined, and awareness grew of the * MIGA's first approvals of guarantees and need to reassess priorities, prune what had the launching of a program of investment- become unmanageable, and use all resources promotion conferences and provision of ad- more effectively and efficiently. vice; and Since the early 1980s, the focus has shifted * an expansion in the activities of the for- toward tapping private-sector skills and re- eign investment advisory service (FIAS), a sources wherever possible and strengthening joint venture between the IFC and MIGA those public-sector activities that complement that provides technical assistance to member and support private-sector development. Many governments in capital-markets develop- developing countries are now actively seeking ment, as well as advice to governments on to obtain the advantages of private initiative mechanisms to encourage foreign direct in- and market discipline. vestment. The World Bank, too, has begun to respond Progress has been made in each of the four to these changes: Intensifying its support of priority areas of the action program, and the competitive markets, it is actively and explicitly Bank is committed to building on this progress. pursuing private-sector priorities throughout In its effort to foster a supportive business the group of Bank institutions.25 It has always environment, the Bank continues to expand been the Bank's policy to help countries adopt a its assistance to governments that are under- supportive, or "enabling," environment for pri- taking specific initiatives to remove barriers vate-sector development so that they can obtain to entry and investment; reform labor legis- the advantages of private initiative and market lation; and streamline, strengthen, or reform discipline in promoting efficient development. legal and regulatory systems. In the eighteen- Indeed, one of the principal objectives of the month period from January 1989 to the end of Bank, as set out in its Articles of Agreement, is June 1990, 100 projects included components the promotion of private foreign investment for designed to improve the business environ- productive purposes. ment; in ten operations in seven countries- In January 1989, the Bank launched its pri- Cameroon, Ghana. Hungary, Indonesia, Mex- vate-sector development action program to ex- ico, Nepal, and Yugoslavia-support for legal pand and enhance support for the private sec- and regulatory reform was the principal com- tor. The program was designed to fill in the ponent of the project. gaps in the Bank Group's activities in private- Reform of the business environment is sector development, integrate private-sector essential in order to maximize the contribu- development into Bank operations, identify tion of the private sector to development. areas in which efforts should be intensified, Some reforms in the business environment and focus on ways to improve coordination are only beginning to be tackled (such as among the Bank, the IFC, and MIGA. those relating to bankruptcy law, the protec- The action program focused on four priority tion of property rights, and the reduction of areas: improvement of the business environ- collusion or monopoly practices). The sharp ment; public-sector restructuring and, where ap- increase under way or planned by the Bank in propriate, privatization; financial-sector reform; its country economic and sector work on and research aimed at developing new initiatives and increasing the effectiveness of Bank activi- 25 The Bank Group includes the World Bank, the Interna- ties directed at private-sector development. tional Finance Corporation, and the Multilateral Invest- This long-term effort has yielded encouraging ment Guarantee Agency. Private-sector Development and Public-sector Management 69 private-sector development is intended to en- by governments to attract buyers, or estab- courage and assist borrowers to come to grips lished procedures have been bypassed and the with these key issues. divestiture process has lacked transparency. In its analytical work on improving the busi- Both the Bank and the IFC are advising on ness environment, the Bank has focused on the design of divestiture strategies, providing practical measures to ensure a rapid and effi- financing to privatized firms, helping develop cient supply response to improvements in the capital markets, and assisting countries in solv- incentive system. One study completed during ing procedural and legal issues. Although rec- the past year yielded a conceptual framework ognizing that any adverse short-term effects for creating a permanent and fair competitive are outweighed by long-term benefits, the environment. Other studies analyzed the role Bank is also dealing, in its operations, with the of law in private-sector development and its social effect of divestiture, which, in some operational implications for the Bank; investi- cases, can be severe. While the dismissal of gated the effects of adjustment measures on redundant workers is usually a necessary part private supply response; and gauged the effect of any program to increase enterprise effi- of business taxation on private investment. ciency, whether under public or private own- The last-mentioned study noted ways to pre- ership. unemployment is seen in many coun- vent business tax laws from distorting invest- tries as a serious obstacle to divestiture, ment decisions. And a paper on foreign direct especially if alternative jobs are scarce. Train- investment analyzed how developing countries ing and redeployment funds have been incor- could attract foreign investors without resort- porated into certain operations in Africa as a ing to costly and distortionary promotional way to ease the burdens of laid-off public- policies. sector workers. A Bank-supported fund in Public-sector restructuring activities, the ac- Senegal, for example, refinances loans from tion program's second focus, include support participating commercial banks to small-scale for reforms that make public enterprises more projects employing workers laid off from di- autonomous and accountable, that expose vested public firms. Recent Bank operations in them to competition wherever feasible, and support of privatization have also taken ac- that restructure their operations to increase count of the need to avoid creating pressures efficiency. This set of activities also includes for hasty transactions. Thus, numerical targets support to interested countries for developing of enterprises to be divested are giving way to an appropriate framework and favorable envi- progress targets (such as the total value of ronment for successful privatization of state assets put up for sale). The Bank is also enterprises and the expansion-where that providing more technical assistance to help helps to ease financial constraints and increase governments establish and monitor privatiza- efficiency-of the role of the private sector in tion procedures and to scrutinize the economic the provision of social services and infrastruc- effects of privatization transactions. ture. It also includes public-sector expenditure Assistance to help member countries expand reviews, which are intended to help govern- the private role in the provision of social ments assess the effects of public expenditures services and infrastructure is also increasing. on private initiative and which explore oppor- Thirty-eight of the eighty-five projects support- tunities for greater private-sector involvement ing the private provision of social services and in the provision of social services and infra- urban infrastructure during the action pro- structure. gram's eighteen months contained components Privatization of state enterprises can en- designed to improve the regulations and incen- hance efficiency, remove a drain on the econ- tives governing private provision of public omy, and open new areas to competition and services, provide finance and training for pri- private initiative. The Bank has actively sup- vate contractors, and assist interested govern- ported privatization since 1983; in the eighteen ments in contracting private services. months since the action program became oper- In many countries, especially those in which ational, twenty-four projects with privatization the private sector is very weak, governments components have been approved, bringing the may be reluctant to relinquish direct control of total of such operations since 1983 to eighty- many activities. The Bank is working, there- six. Notwithstanding examples of progress (in fore, to help overcome governments' concerns Guinea, Jamaica. Mexico, and the Philippines, about equity and efficiency; recent efforts sup- for instance), the overall picture remains ported by the Bank have been aimed at dem- mixed. In most cases, the enterprises being onstrating that the private sector can, for in- divested are relatively small: in other cases, stance, provide services to remote areas or monopoly rights, favorable financing terms, poor communities that the government cannot and protection from imports have been offered reach, increase access to health services, or 70 The World Bank-Fiscal Year 1990 upgrade the quality of education. Expansion in ices in the water supply and sewerage, trans- such private provision is a slow process and port, health, and family-planning sectors and must take place carefully and with adequate have suggested ways for it to be expanded support to build the necessary institutions and while ensuring that issues relating to the ade- safeguards. In addition to continuing to pro- quacy of coverage and equity are addressed. vide essential public services, governments The Bank Group is supporting the develop- must regulate private providers of social serv- ment of well-functioning, market-oriented fi- ices, loosening some restrictions while also nancial systems through structural-adjustment setting quality standards. The Bank is review- loans and, increasingly, through comprehen- ing experience carefully, and the equity, effi- sive financial-sector adjustment loans and ciency, and institutional issues raised by the credits. From January 1989 through June 1990, private provision of social services constitute a nine financial-sector adjustment operations priority area for research. were approved, with commitments totaling Both the Bank and the IFC are active in $1,695 million. The IFC has been active in helping governments mobilize and attract pri- providing technical assistance and policy ad- vate finance and management to provide basic vice on financial-market development, either infrastructure. In cases where governments in collaboration with the Bank or directly at the will continue to carry primary responsibility request of member governments. Also note- for providing infrastructure and basic social worthy are the increase in the IFC's capital- services, they need to search continuously for market operations, the Corporation's support ways to discharge these tasks more effective- to new country funds (Indonesia, Malaysia, ly-for example, by increasing competition and Thailand), and its establishment of a unit and by holding parastatal managers more ac- (the international securities group) that is re- countable. Government capacities face limits, sponsible for introducing successful companies and it is encouraging that governments are in developing countries to the capital markets seeking to harness private-sector energies in of industrial countries. Eight Bank operations areas that many countries previously consid- during the eighteen months included compo- ered to be the domain of government-to build nents directed at the development of capital and operate highways, provide education, or markets; in each case, the Bank and the IFC own and run water supplies, for example. collaborated closely. Some seventeen public-sector expenditure The Bank continues to be active, also, in reviews were carried out between January 1989 increasing the transfer of resources to the private and the end of June 1990. All analyzed the sector through its financial-intermediation oper- prospects for divestiture and for increased pri- ations. In line with the conclusions of a Septem- vate competition with public enterprises. Since, ber 1989 task-force report on financial-sector with some exceptions, the reviews were not operations (which recommended, on the one able to specifically identify private alternatives hand, that more rigorous selection and perfor- to public programs or document possible ad- mance criteria be applied for Bank-assisted in- verse effects from the displacing or "crowding termediary institutions and, on the other, that out" of private expenditures, work is under these institutions be allowed greater latitude to way to develop a methodology to assist Bank onlend Bank resources on a businesslike basis), staff and governments in analyzing trade-offs Bank support is being given to competitive insti- and weighing the effects of crowding out and tutions that-in line with new Bank require- displacement against the complementary effects ments-increasingly mobilize their resources of public investment on the private sector. from the domestic market (see Box 3_3).26 Analytical work is also under way on two From January 1989 through June 1990, sixty- other sets of issues in the area of public-sector seven financial-intermediary operations, total- restructuring. One concerns the lessons that ing $6.6 billion, were approved; of that can be drawn from the effects of privatization amount, $4.6 billion was expected to be onlent on efficiency, employment, and public finance to private-sector businesses. and the extent to which experience is replica- The $6.9 billion in commitments by the Bank ble. Recently completed studies include a re- Group for private-sector financing since the view of Bank lending for divestiture, an assess- launching of the action program (67 percent ment of reforms of ownership and control from Bank operations and 33 percent from IFC mechanisms in China and Hungary, and a case study of railway privatization. A second issue concerns the respective roles of the public and 26 Institutions that currently fall short of the new criteria are private sectors. A number of Bank and IFC eligible to participate in the intermediation of Bank funds only if they have adopted institutional development plans studies undertaken during the past year have that are designed to make them fully marketworthy within examined the private delivery of public serv- a reasonable period of time. Private-sector Development and Public-sector Management 71 Bo% 3-3. The Bank's FinancIal-secLor Plicie' under Re%ie%% The report of , ti.ik Icrce -ihn nl,lfcI-e tag in'tttation, .,nm pertorimtlnce crlterita IBr contin- operations ha, concluded that both rolict mak.err ied Bank support. it the s.me time ihat .nerme- in de%eloping cauntrtc, and ihe \\tldBank h-i'e di ar- .nae alloted eLeler l.titude to onlend often overlooked the amponance o- truncial BHnk Ie'ourCv' .aco-:ding to otind hu,ines, cri- sector deselaipment arnd haxe uLed the eclor to tefl. purwse Nhorn-ierm ohiecta:e- in the nnna..mnnncild. The isk t -turce repori. a arn,. hotaecr. ih:it the or rcal ' sectorr. hbcrI,hlatiu,ln of fnan.ncil m;arkc1 r, he di langcer The underlh inm theme ol the repo'r a. Ihat oU,'l desiahiltzinr it the precondition, for effli the efficicnc, ond gro. th of.a c.inlrtr tinanctal tent. competili%e market operataons are not an ,ector and the efficierncy; and grot th of i,v real place Sp5cial attenthon \ill te g, en. therelire. sectors, are mutually dependent. Dt elopment kaf Lo esltblt'hing Nuppcrta e legal .and regulators thu real wector-. as producers of the S ind tranrie l ks and to itennthenine tupera,ioC inm sert tees that detine materinl 'elfare I' a central itutican, lIrl-reoer. b ocuuse ot the tincinna.nl pool o1eononiic polwX . Ho.v eter. ' ithoUit par sekltr % particul.ar %ulnerithith II and ro.le an. allel de' elopnient of finaLncial institr,, in tru- .inc r:ecor aminc inibaltancal. the dxct i,on to pro nients. and marl.es,. the real eclor' %aould skta- ceed %'ath bfinrancial -aeL.,-t orpratton, "ill Ne es nate. peciall, 'ensitile to trha adequ.ac\ ol the m:acro- The report recommended thai the BaInk '-L'r k ec6:oriint. en, ironiment and ectaai aetormi , ill "ouh mnmber po.ernnient- io design and imple- ha.c t he designed anrd pha-.d in ncoordinamon ment financial-ector operalionis..aah hea in sup- aith bru.ader macroecon-irnac *t.hit1zjtion cF- port of ikLoadd ecLtr reform, or of the de'clop htori C lowe cnqtl[.t:a.tnjndcaoididiatton t%ill be mnent o a Ninle-iecltr institution. In :accc.rd:attcaL matntaaned bet een ihe Ba,nk and ihe Inierna- with a. coiherent mncgrotar 57-CtI stratep i1 ltion ri J Moneit rt I- in in thi, ire.a enNure that its operationN and d. ice .,rc n,utu Ir, di,cu-inc the t.,'k lorce', recommnnda- alh con%i'tenri and supportiae of 'ect.-r .and rma,- uon,. the e\aeLLc tti director, %,ere riaradl, upr raeconornic objecitvee. porti.e ola thea- ceneral Ihrult and direcittin. [ he A corneraione af the Bank , tinancialt ector direlolrs generallk :,areed %\'ah ihe aer\ high de' eloprrent stratei2W . a' lad out ,n the Ta.k- prinorit\ ihar ihe t.a-k ror:e Lt.tched to finanolab force repart. i, ihe promotion ol tonipctitite. .c;tcvr de%clapmeni and endorsed ih recommen- tr.arket-oriented financial \,tem4 and in,itu1 diiono tht, the Bank t linancial-isctar oper:iLtons tion' The liherailiz,ation of linancial ma lketl Lan retlect a countr\ -pCLtinc sir,tes2. falr the ,ector protide potiertul n,entike, Ior mohbilziniz do de, ClOnaent me-iic sating' attract;nq capital floom abroad. Marl dir-0t-r' epra.--ed the ie, ihat tha. and directine these combined re,,Aurees ic. pro BRLnk niut rcmain enit' tLe to dalterence -Irmong ductime raxe'tmerat Ihu. the Hank dal ecie 'rraOaling Lc-aunl.trer in their general economic pairticulal emphasiN It the general le\el .,nd coZndii;ns.inLtheir an-tituitin'.andanliniheirleaels struaiurc of interc't ljte:, in it, malaroec-anoinic of tinana.iat.marktk de clt.prnent Ihes.e dilter and sectoral polic dIdlotLieN. It \ill asiI a pplI en;c t,ea 'aid. ,h-ild be retled in the [peed more rigara..u s selection crnierlt for iritermedarv a.nd 'equencanu o1 polic changie- in thector investments) accounts for no more than a small guarantees for private commercial loans and fraction of the credit available in any country, bond issues, as well as government obligations however. The Group's major contribution in the case of limited recourse financing-all in comes not from its direct provision of credit, the context of Bank-supported projects.27 The but from its role as a catalyst to other re- export-credit enhanced leverage (EXCEL) pro- sources and as an adviser on policies and gram was developed to promote export-credit institutional improvements that can enhance flows to medium-scale private enterprises for the overall functioning of financial systems in investments receiving Bank financing through developing countries. financial-intermediation operations.28 Through its cofinancing activities and its Much of the analytical work on issues of support of joint ventures, the Bank seeks to financial-sector development goes beyond pri- bring additional funds to developing countries vate-sector development in the narrow sense. to finance specific projects. Two new initia- Nevertheless. several issues of particular con- tives, the result of the Bank's increased em- cern to the private sector have been addressed or phasis on staff work devoted to cofinancing, identified. were begun in fiscal 1990. The expanded cofinancing-operations (ECO) program is intended to help improve financial 27 For details, see page 86. flows to developing countries by providing 28 For details, see page 86. 72 The World Bank-Fiscal Year 1990 World Development Report 1989 examined public and private sectors. The Bank's research broad issues of financial policies and their complex is working with a number of country effects on the private sector, and the previ- departments to draw from their experience and ously mentioned task force on financial-sector to develop a framework that can guide Bank staff operations examined Bank support for finan- in their efforts to ensure that private-sector de- cial-sector reform and development. Subjects velopment is coherently and systematically inte- identified for future study include the effect of grated into country-assistance programs. financial policies and capital-market imperfec- tions on private investment decisions, the role * * * of risk capital in private-sector development, and the experience with financial-sector ad- justment operations. A review of such experi- In May 1990. the Development Committee ence will, it is hoped, guide Bank staff in the focused much of its discussion on the contri- design of future operations. bution of the private sector to development It is clear that the program's promising be- and the role that the World Bank Group should ginning is but a prelude to wider and deeper play in this regard. support for private-sector development. For The committee welcomed the growing em- example, analysis of ways in which entrepre- phasis given by developing countries to the role neurial skills can be developed, especially in of the private sector and underscored the im- Africa, and technology transfer can be pro- portance of creating an enabling environment moted has recently been launched. favorable to private-sector activities. The com- As cooperative institutions bringing together mittee also noted that the confidence of private developing and developed countries, the insti- investors could be enhanced through the adop- tutions that make up the Bank Group are tion by all countries of open markets and sec- uniquely suited to help enhance private growth toral-adjustment policies and a supportive fi- and efficiency. Close collaboration among nancial environment. Group members is essential if success is to be Members of the committee encouraged the realized. Many strides have been taken in the Bank to give a very high priority to private- past eighteen months, and collaboration is to- sector development in its operations, to con- day excellent at the project level. tinue to expand the scope of its activities in this Further efforts are under way to systematize area, including new approaches and instru- collaboration through the development of coun- ments as may be needed, and to assist devel- try strategies. Attention paid in country strate- oping countries' efforts to implement long- gies to private-sector development, in many term institutional, regulatory, and legal cases, is still uneven. The extent to which coun- reforms. consistent with their socioeconomic try strategies effectively address issues of pri- situation. They therefore emphasized the im- vate-sector development are closely related to portance of close coordination within the Bank prior country economic and sector work on the Group-while avoiding duplication-so as to constraints to private initiative and the opportu- ensure that private-sector considerations are nities for redefining the relative roles of the better integrated in its operations. 73 Section Four World Bank Finances In fiscal 1990, the IBRD, with the strong ical and life-insurance benefits. Of this, $750 support of its member countries, continued to million was allocated to the general reserve. strengthen its financial structure and position That allocation is projected to increase the R/L itself for its important developmental role in ratio again at the end of fiscal 1991. the 1990s. Subscriptions to the IBRD's recent $74.8 billion general capital increase are on target, and total subscribed capital reached $125.3 billion at the end of fiscal 1990. The new currency-management policies introduced in Figure 4-1. IBRD Reserves-to- fiscal 1989 were successfully implemented, and Loan Ratio, Fiscal 1986-90 the reserves-to-loan (RIL) ratio continued to (percent) increase. The IBRD's net income also has become less subject to interest-rate risk due to the progressive decline of outstanding fixed- 12 rate loans as a proportion of its loan portfolio. Major financial achievements for the IBRD in fiscal 1990 included: * An increase in net disbursements to mem- ber countries-from $1.9 billion in fiscal 1989 to $5.7 billion in fiscal 1990. The surge was largely explained by disbursements of $2.0 billion to 9 Ri P Mexico in support of its debt and debt-service reduction agreements with commercial banks and by a substantial decline in prepayments- from $2.7 billion in fiscal 1989 to $0.6 billion in fiscal 1990. 6 1 * Implementation of the currency-manage- ment policies it adopted last year, which re- 6 duced the IBRD's exposure to currency ex- : change-rate volatility and made its loan = instruments more attractive to borrowers. * Continued improvement of the IBRD's re- serves position, as the RIL ratio increased to 10.8 percent at the end of fiscal 1990, up from 10.2 percent a year earlier (see Figure 4-1). That 3 improvement resulted from an allocation in fis- cal 1989 of $994 million of that year's net income to the general reserve effective in fiscal 1990. * Borrowing the equivalent of $11.7 billion in the world's financial markets, including the introduction of innovative U.S. dollar global 0 - bonds. 1986 1987 1988 1989 1990 * Net income for the year of $1,046 million, after a one-time charge of $106 million to fund accrued liabilities for staff postretirement med- 74 World Bank Finances Figure 4-2. IBRD Gross and Net Disbursements to Countries. Fiscal 1986-90 (US$ millions) 14.000 u~~~f NAeT * Gross 12.000 10.000 _____ 88.000 I I I - 6.000 II 4.000 __ 2.000 ~ ~ : I I__ 2°0 I - I :__ 1986 1987 1988 1989 1990 * Consistent with the IBRD's objective of equivalent in a combination of deutsche mark, setting its loan charges at a level needed to Swiss francs, and Netherlands guilders). The maintain its strong financial position while changes will improve the predictability of the minimizing the cost of its funds to borrowers, borrowers' debt-servicing needs, and, there- the IBRD reduced the commitment fee in fiscal fore, their ability to manage exchange risks 1990 on undisbursed loan balances to 0.25 associated with IBRD loans. Substantial prog- percent from 0.75 percent. This saved borrow- ress was made toward achieving the target ers about $150 million in fiscal 1990. The currency ratios for the composition of the loan executive directors also have set the commit- pool (see Figure 4-3). The targeted composi- ment-fee level at 0.25 percent for fiscal 1991. tion of the currency pool is expected to be met, as planned, in the next fiscal year. Loans: IBRD Pre-pool fixed currency loans. Fixed-rate Disbursements on loans. Gross disburse- loans made before 1980 are outside the cur- ments by the IBRD to countries were $13.9 rency pool. Borrowers are obliged to repay the billion, an increase of 15 percent over fiscal actual currencies received on these loans in the 1989. Net disbursements were $5.7 billion, an order requested by the IBRD. During fiscal increase of $3.8 billion over the prior year (see 1990, the IBRD changed its procedures so that Figure 4-2). it now recalls currencies for these loans on a Currency-pool loans. For loans in the cur- pro rata basis. Borrowers now know in ad- rency pool, in January 1989, the IBRD adopted vance the currencies required for debt-service a policy of targeting the currencies of the loan payments and can plan accordingly. pool to predetermined balanced proportions. Lending rate. Implementing the policy By the end of fiscal 1991, at least 90 percent of adopted last year, the IBRD introduced a new the pool is to be in three major currency groups lending rate on variable-rate loans in fiscal in the following proportions-I U.S. dollar to 1990. By excluding the cost of borrowings to 125 Japanese yen and to 2 deutsche mark (or its fund investments, the new lending-rate calcu- Loans: IBRD 75 Figure 4-3. Currency Composition of the IBRD's Loan Pool Actual Target Ratios June 30.1990 June 30.1990 rates U.S. dollar U.S. dollar 28.9% 31.6% Other Other 4.6% 4.6% Yen Yen 27.2% 25.7% Deutsche mark Deutsche mark group 39.3% group 38.1% Actual currency ratio: Target currency ratio: 1 U.S. dollar to 145.5 yen to 1 U.S. dollar to 125 yen to 2.3 deutsche mark 2 deutsche mark | Assurred unchanged trom June 30. 1990 lation is based on the cost of funds allocated to during the year of 8.22 percent, had declined to the loan pool plus a 50 basis-point (one half of $36.4 billion, less than half of the total of $89 1 percent) premium. billion of disbursed and outstanding loans; The new variable lending rate was 7.74 per- amounts remaining to be disbursed on fixed- cent and 7.75 percent, respectively, for the rate loans totaled less than $1 billion, com- first and second semesters of fiscal 1990, com- pared with $48.5 billion on variable-rate loans. pared with the old lending rate of 7.73 percent The policy change adopted in fiscal 1989 and 7.75 percent for the same periods. The new limiting the circumstances under which the lending rate applies to outstanding loans for IBRD's prepayment premium on fixed-rate which invitations to negotiate were sent after loans may be waived has also added to the May 18, 1989, and any other outstanding vari- stability of the IBRD's income. Prepayments able-rate loans that borrowers wish to convert. declined from $2,670 million in fiscal 1989 to On June 30, 1990, 30 percent of such outstand- $599 million in fiscal 1990, the result of both ing loans had been converted. the higher interest rates prevailing in most Declining interest-rate risk from the loan currencies and the limitations on waivers of portfolio. Another contribution to stable in- prepayment premia. come trends in the future is the decline in Loans in nonaccrual status. Seven of the interest-rate risk from prefiscal 1983 fixed-rate nine borrowers that were in nonaccrual status loans. Since these loans are not prefunded to at the end of fiscal 1989-Liberia, Nicaragua, their final maturities, the IBRD's income is Panama, Peru, Sierra Leone, Syrian Arab Re- exposed to refinancing cost increases. These public, and Zambia-remained so at the end of loans, however, have been declining as a per- fiscal 1990.1 Guyana cleared its arrears of $55.3 centage of total loans outstanding since fiscal million in June 1990 with the aid of a group of 1983, when the IBRD introduced variable-rate loans. At the end of fiscal 1990, outstanding A country is placed in nonaccrual status if it is six months fixed-rate loans, with an average interest rate overdue on debt service to the IBRD (or IDA). 76 World Bank Finances donor member countries led by Canada. Hon- market in the United States. The objective of duras paid $152.6 million, clearing its arrears global bonds was to reduce the IBRD's U.S. on its IBRD loans and IDA credits, with the dollar borrowing costs by developing an instru- support of a group led by the United States. ment and a system of distribution and trading Panama paid about $23 million during fiscal of U.S. dollar-denominated bonds that would 1990 so as to stabilize its arrears. Disbursed prove more attractive to investors and inter- and outstanding loans to the seven countries mediaries than competing products. Global totaled $2.9 billion, or 3.2 percent of the bonds were designed to respond to preferences IBRD's total loan portfolio at the end of fiscal of institutional investors and to permit the full 1990. Total arrears for the seven nonaccrual range of international and domestic demand to countries were $1.8 billion at the end of fiscal be reflected in a world price for the securities 1990, split about equally between principal and by eliminating impediments to liquid, transre- overdue interest and fees. Net income for gional trading. They are simultaneously of- fiscal 1990 was $248 million lower than it fered in the world's major financial centers and otherwise would have been had these seven trade fluidly among those centers thereafter. countries not been in nonaccrual status. The The IBRD offered two $1.5 billion global- accumulated provision for possible loan losses bond issues during fiscal 1990. Both of these at the end of fiscal 1990 was raised to $1.25 issues were coupled with a deferred rate-set- billion, equivalent to 43.5 percent of the out- ting mechanism which, while not affecting the standing principal on nonaccruing loans and to terms of the issue to investors, allowed the 134 percent of overdue principal. This is apart IBRD to spread its cost-fixing over several from the special reserve of $293 million, which months. This approximated the pattern that amounts to another 10 percent of nonaccruing would have resulted from averaging interest loans. rates through a series of smaller-sized bond issues, while capturing for the IBRD the ben- Liquid-assets Investments: IBRD efits of the new, global-bond structure. Finan- In fiscal 1990, the IBRD's executive board cial-market participants have cited the intro- reviewed and reaffirmed the IBRD's policy of duction of the global bond as a bellwether in an targeting liquid-assets investment holdings to evolving world marketplace and a precursor to at least 45 percent of the next three years' similar issues by other high-quality borrowers. estimated cash requirements. At the end of The IBRD completed an $11.7 billion equiv- fiscal 1990, the IBRD's liquidity totaled $17.2 alent program of new borrowings (see Table billion, equivalent to about 47 percent of antic- 4-1). This volume excludes $1.1 billion equiv- ipated net cash requirements for the next three alent of refinancings of Japanese yen loans that years, compared with $19.4 billion at the end of were prepaid and refinanced with the original fiscal 1989. The IBRD's primary objective in lenders and $5.2 billion equivalent of refinanc- holding liquidity at this level is to ensure ings of short-term borrowings. Outstandings at flexibility in its borrowing decisions should the end of fiscal 1990 were $81.2 billion of borrowings be temporarily affected by adverse medium-term and long-term borrowings and conditions in the capital markets. The IBRD's $5.3 billion of short-term borrowings. realized return on investments was 8.37 per- The borrowing program was completed at an cent in fiscal 1990, compared with 8.20 percent after-swap cost of 7.99 percent and an average in the prior year. The executive directors also life of 7.7 years, compared with 7.73 percent approved a number of technical changes in the and an average life of 7.8 years in fiscal 1989 investment authorities for IBRD (and IDA), (see Figure 4-4). including, among other things, formalizing two The program once again emphasized a sub- existing practices-that eligible agencies and stantial proportion of U.S. dollar borrowings instrumentalities of national governments and after swaps. This enabled the IBRD to increase multilateral organizations be limited to those that currency's share in the loan-currency pool having a long-term credit rating equivalent to to 29 percent at the end of fiscal 1990, com- AAA in the U.S. market and that eligible pared with 23 percent a year earlier. commercial banks be limited to those having a Although about 98 percent of fiscal 1990 long-term credit rating equivalent to A or borrowings, after swaps, were in deutsche higher in the U.S. market. mark, U.S. dollars, and yen (the three major currency groups of the loan pool), the IBRD Resources: IBRD continued to pursue its policy of diversifying Borrowings. A major feature of the fiscal its borrowings in a large number of markets 1990 borrowing program was the introduction and currencies. The IBRD borrowed fifteen of U.S. dollar global bonds in the international currencies. Ten currencies were used as vehi- capital markets and the government agency cle currencies. The IBRD used swap-arbitrage JDA Finances 77 opportunities to obtain target currencies-U.S. ously, since the currencies of reserves were not dollars and deutsche mark-at lower cost than aligned with those of loans, exchange-rate could have been obtained through direct bor- movements affected the reserves-to-loan ratio. rowings in those target currencies. Currency The realignment of reserve currencies under the swaps totaled $3.1 billion in fiscal 1990. new currency-management policies has already The currency swaps produced, in certain progressed so far as nearly to eliminate the cases, floating-rate funds in the target curren- vulnerability of the R/L ratio to movements cies. Interest-rate swaps were then used to formerly brought about by exchange-rate vola- produce the desired final outcome of fixed-rate tility. This ratio is an important indicator of the funding in these currencies. The combination adequacy of the IBRD's income and loan of currency swaps into floating-rate swaps plus charges and of its ability to withstand risks to interest-rate swaps from floating to fixed rates income and adverse eventualities.2 The R/L enables the IBRD to complete currency swaps ratio is used by the IBRD in much the same way whenever arbitrage is attractive and still retain as capital-adequacy standards are used by com- control over the timing of locking in fixed rates mercial financial institutions. on the funding obtained through swaps. Inter- Net income for fiscal 1990 was $1,046 mil- est-rate swaps completed for this purpose to- lion, after a $106 million one-time charge to taled $2.2 billion in fiscal 1990. fund staff postretirement health and insurance Borrowings from official sources (central benefits. This enabled the IBRD to boost the banks and other government institutions) con- expected reserves-to-loan ratio for fiscal 1991 sisted of $1.2 billion equivalent of medium- to 11 percent. A total of $750 million of fiscal term and long-term instruments. The principal 1990 net income was allocated to the general amount of short-term borrowings outstanding reserve; the remaining $296 million is included under the IBRD's central-bank facility was in unallocated accumulated net income pend- $2.6 billion, unchanged from June 30, 1989. ing a decision on its disposition. A total of $10,670 million equivalent of debt, IDA Finances not including short-term borrowings, was retired during fiscal 1990, including $8,290 million of Use of IDA reflows. In early fiscal 1988, the scheduled maturities, $2,239 million by exercises executive directors authorized the Association of prepayment rights, and $141 million by means to begin making commitments of SDR525 mil- of sinking-fund and purchase-fund operations. lion against future reflows. Such commitments The average cost, after swaps, of the $18.0 take two forms: advance commitments and billion of gross borrowings in fiscal 1990 was annual allocations. During fiscal 1990, the As- 7.99 percent, broken down as follows: the cost sociation made commitments based on reflows of $11.6 billion of fixed-rate medium-term and of SDR860 million, including a carryover of long-term borrowings was 7.97 percent; the SDR525 million from fiscal 1989. In addition, cost of $0.1 billion of additional short-term the program (the annual allocations) to supple- discount-note borrowings was 8.37 percent; ment adjustment credits for countries that are the cost of refinancing $5.2 billion of short- currently borrowers of IDA only and that have term borrowings was 8.42 percent; and the cost outstanding IBRD debt amounted to SDR73 of refinancings of $1.1 billion of prepaid Japa- million. (See Table 3-3 on page 46 for country- nese yen loans was 6.03 percent. specific amounts allocated during fiscal 1990.) Capital. On June 30, 1990, total subscribed Late in fiscal 1990, the executive directors of capital was $125.3 billion, or 73 percent of IDA agreed to increase the annual level of authorized capital of $171.4 billion. During advance commitments against reflows from fiscal 1990, phased subscriptions to the $74.8 SDR525 million to SDR575 million for the billion general capital increase (GCI), ap- period fiscal 1991-93. They also agreed to (a) proved in April 1988, continued smoothly: increase annual allocations to supplement ad- Twenty-three countries subscribed an aggre- justment credits to IDA-only countries with gate of $8.8 billion. A total of 250,881 GCI outstanding IBRD debt to SDR130 million in shares ($30.2 billion, or 41 percent of total fiscal 1991 and (b) set aside for one year SDR70 allocations) have now been subscribed by for- million to be used to supplement normal IDA ty-two members; 364,787 shares ($44.0 billion) allocations for IDA-only countries that are remain to be subscribed. As a result, at the end undertaking debt workouts. of fiscal 1990 the permissible increase of net IDA's commitment fee. In April 1988 the disbursements, "headroom," was $48.0 bil- executive directors decided to make IDA's lion, 35 percent of the IBRD's lending limit. 2The Reserves and net income. Reserves totaled reserves-to-ioan ratio is the sum of general and special $9.5 bllion and he reervesto-lon rato was reserves divided by the sum of total loan principal out- $9.5 billion, and the reserves-to-loan ratio was standing and the value of callable guarantees less accumu- 10.8 percent at the end of fiscal 1990. Previ- lated loan-loss provisions. 78 World Bank Finances Table 4-1. IBRD Borro%iings. Fiscal *'ear 1990O I amOLfli' Irl mlbon.l LIS uollar T%.pe 1'Lue Currenc% or i sue equInalen- AI,diwnu iid -Ioni -ie ri,h hl:i ,fICri'iers Auilria S y5s len-%ear bonds. due 2(110 S ,0H0).0 84.3 Germans. Federal Republic of h 71>. len-vear bonds. due I'l9 DM 1l)00.0 3)I.8 91ui- leve-; ear honds. due 1994 DN? ISO 1) 84.8 y 5-s ren*%ear bonds. due 200(I DON 5001.0 2'97.4 f 7'; ten- ear borlds. due 2NCO DON '50.1) 453 2 8 875'; ten vear honds. due 2100) DM N 2 o.0 149 5 9.01f- ten-jear bonds. due 2(H(1 D[NI 200 0 120.2 Hong Kong 8.95'; si%-%ear bonds. due 1996 HK$ 5(0.0 64.1 Japan s 525' ten-sear bonds due 1999 v '0.00)(,0 479.0 7.30'> se%en-sear bo,nds. due 1996 V 1000).0 69 1 i.s l fi'e-Near bonds, due 1994 V 50.11Hl000 347.3 Luwembourm 9 *'r tihe-sear hondi due 199i Lu\ F 1.000.0 2i.S Spain 11 3?5 - 6%e-%ear hond,. due I1$4 Ptus io.00t.4) 84 4 1I,4', five-ear bonds. due 1995 Pias Io.000.0 91.6 I! 375 fi-e-vear bondv, due 1994 Plas t3.0000 1 56 I Stitlzerlind 6. 1'2 lfleen-setr bonds. due 2004 S%% F 100 62 1 6, 0": ten-sear bonds. due 1999 SU F II,HI.0 61 1 7.Str Len-vear bonds. due 2000 Svi F I n10 70.6 7 5Y..- se%en-sear bonds. due IQ9' S& F 20) 0 140.7 7.i1¼- se%en-ear tonds. due 1997 S,. F I0). 0 70.3 Eurohond Miarket 14. 25> fi%e-sear notes. due 1494 S. '5.0 56.7 14 i'; "Ik-sear notes. due 199(% YA I100.0 76.8 111 125-; ten-sear honds. due 1999 Can$ 1I50O 126.0 13.2'C fite-sear bonds. due 199i CanS 150.0 127.1 10.0> seven-sear notes due 199' F LOIJ o 179 3 IUi 875% live-sear honds. due 1994 £ 1100.0 159.4 11- S'57 Iiec-scar bonds. due 1994 c 1110 (I If 8.2 Eigh-l ear flojtang rate notes. due 1997 Lit 204.110910.0 140.8 12'25', fiwe-se3r bonds. due 199i Lit 2(00.00(0.0 157.6 12 fiS e lise-searbonds. due 199i Lit 200.)Ot00 158.7 2I I2V' rCis-se-ar bonds. due 1995 Lit 400.000)0 331.3 7.6-5 the-sear bonds,. due 199q-1 v 1000.0 h9.9 6 '3'> ten-vear bonds, due 'Mtt) Y 5o.0000 328.h f i%e-sar bonds. due 1995 V 45.000 0 283.1 8'S'; se%en- ear bond,. due 199'7 v 30,00J.0 196.7 x .375 ;esen-% ear bond'. due l99 f .0 1997. 9' O fihe-ear bonds. due 1994 EC Li 100 110.9 9 5O`' si-%ear bonds. due 1995 ECU IJO 0 119.7 Io ;3'S. fi%e-.edr bond,. due 1495 ECU; I2 0 153. Global 8.35 ten-scar bonds. due 199 Li S$ 1.500.0 I.iO., 8 liS> sesen-scar bonds. due 1(97 LISS, 1.500.0) 1.500 0 Ttial mediun- and long-lermrr public otferingI 9,225.3 Mcditia.- ,ul wd h t ,-i , , Pht -t.rii - 'jith ,itwre) J,uANs .iis4 ot e'ramenits Germans. Federdl Republic of h 77'' note. due 1994 DNI 250 0 133.2 S 08*> note. due 1945 DNI 250.0 148.9 International' 8 htsso-xear bond. due 1991 USiS 10.0 150.0 xi )is. iQo.seHr hond'. due 1941 Li SS 1220 12 21 .5S l 78>-f tstc.-sear hond, due I02 LUSS 830 1) JR' z.59 l o-se.ir honds, due 1992 UIS' 141.11 140.5 7 0 -- to-:-car notes. Ouc 1(091 S%% F 300.0 179.3 8 43 iso-ear notes. duie 1992 S%% F 239.0 160.9 Total mediunm- and long-term placemenis with central bankss and governments 1.2 I6.8 Disbursements by Source of Supply 79 lJS d.ll.r T%pe k-Le l-LI'T. ',4Us ec,:iUr.Ieni' lellle iumr- and Iota',i-term, W'0/ic p/act weni'% Japan 6.()' loan. due 2014 l 10.1OW.0 0'9Y. 7 ir .1 loan. due 2011 I'.tiihli11 10.1 4 7.5ir r loan. due 211145 e I0.00.1).0 6'.6 7'tY. loan. due 19c5 S i-f100.1) 31 5 Ss itzerland i 7;, noies. due 1999 S%k F 0ItI.11 biJ. '.l25'-> noEes. due 199S Sv. F 10"1 0 66.4 737'. ' notes. due 1499 S%% F l.lt! I! 6. ' United States Coniinuou;I%v Ciflered Lornper-Lerm Securtfie- ICOLTS, Program US$ 4520 O 4i1 . International IR.0' notes. due IQ44 SA 1I00l11O C' I 20 0'i; notes. due 1494 10ltj11 -h.9 6.6C5'. noies. due 1995 v IS .001).(I 96.8 Total mediuim and long-term other placemenw l.IbI6.2 Shrl -term, h,i,*'. Central hank facilily LIS$ 0.2 ' II Discount notes USi H1I 5 1 1 1. Total borrowings. fiscal 199() ii. -20i.0 a Exclude. VI 5o t'ili-,n lL.SSi L5 I milhon equi%alenti ol en loar., tldI r.CIt rrcp,id nrd renr,.nced b Based on ,c;banpe rale -,t the tiine of ;etilemeni c European ;,Jrren,% uriis. d. The,e issues %tere pil;ed %iih ceritra1 bdnks eo,ernment agenoes. dnd international orgnjziiote.ns e. Repre,enm. excess Of refinancirg; oifr prcpaid rmouiv- f Naturing ti[hin one year g Incre,3c in arnm.unt Olitstandingl Jl June 3,:. 1t4'i. .0er arnoun, ouistanding al Jiine l1). 14.S'0 commitment fee variable within a range of Disbursements by Source of Supply 0.0-0.5 percent. For each fiscal year, the level of the fee is set by the executive directors Projects financed by the World Bank require based on an annual review of IDA's financial foreign and local expenditures to achieve proj- position. The commitment fee for fiscal 1990 ect goals. Disbursements are made to cover was set at 0 percent for all IDA credits, includ- specific foreign costs and, in addition, are ing those made under the Special Fund and the often made to finance some local expenditures. Special Facility for Sub-Saharan Africa. The specific procurement rules and proce- IDA commitment authority. In fiscal 1990, dures to be followed in the execution of projects the Association received the third installment depend on the circumstances of the particular payment, in the amount of $960.9 million, from case. Three considerations, however, generally the United States for its contribution to the guide the Bank's requirements: the need for eighth replenishment of IDA (IDA-8), bringing economy and efficiency in the execution of the the cumulative IDA-8 payments to 99.9 percent project; the Bank's interest, as a cooperative of the agreed total. The remaining portion of the institution, in giving all eligible bidders from third tranche from the United States is expected developing and developed countries an opportu- to be made to the Association during fiscal nity to compete in providing goods and works 1991. All other donors have released in full their financed by the Bank; and the Bank's interest, as IDA-8 contributions. As a result, IDA's com- a development institution, in encouraging the mitment authority from donor contributions development of local contractors and manufac- during the fiscal year was increased by turers in the borrowing country. SDR3,322 million. Resources from IDA-8 plus In most cases, these needs can be best the additional commitment capacity based on realized through international competitive bid- reflows enabled IDA to approve 101 credits ding, properly administered and with suitable totaling SDR4,255 million. allowance for preferences for local or regional 80 World Bank Finances Figure 4-4. After-swap Cost and Average Life of IBRD Borrowing Program, Fiscal 1986-90 14 12 % Life (years) 10 8 10 _ _ _ _ _ ~~~~~~~- - _- 6 Cost ipercenu) 4 1 1986 1987 1988 1989 1990 manufacturers of goods, and, where appropri- procurement from selected non-Part I coun- ate, for local contractors for works under pre- tries and disbursements made for goods, scribed conditions. works, and services procured from them by Through the end of fiscal year 1990, 64 World Bank borrowers. percent of IBRD and IDA disbursements cov- Table 4-4 shows IBRD and IDA foreign ered goods and services provided directly by disbursements to Part I and selected non-Part I suppliers located outside the borrowing coun- countries, by source of supply. e -. try. While most foreign procurement comes Table 4-5 is a record of IBRD and IDA from suppliers in developed member countries foreign disbursements for goods, works, and and Switzerland, developing-country suppliers services from Part I and selected non-Part I have become increasingly effective in winning countries in fiscal 1990. contract awards. Through the end of fiscal 1986, disbursements to these suppliers Cofinancing amounted to 12.3 percent. During fiscal year In July 1989, as recommended in the plan for 1990, the amount was 23.6 percent. the reorganization of the Bank, the cofinancing Table 4-2 shows consolidated foreign and and financial-intermediation functions of the local disbursements to the end of fiscal 1986, Bank were combined into a single vice presi- for each of the next four fiscal years, and to the dency, which, during fiscal 1990, was ex- end of fiscal 1990. panded to assist in the structuring and financial Locally produced goods and services usually packaging of operations involving private-sec- include a significant foreign-exchange compo- tor development and public-enterprise restruc- nent. Cumulative local disbursements in- turing. The new vice presidency for cofinanc- creased from 35.1 percent at the end of fiscal ing and financial-advisory services (CFS), 1986 to about 35.7 percent at the end of fiscal which reports to the senior vice president, 1990. Table 4-3 shows disbursements made in operations, is strengthening the catalytic role fiscal 1990 by the IBRD and IDA for local that the Bank plays in facilitating the flow of Cofinancing 81 Table 4-2. IBRD and ID.A Foreign and Local Disbursements. b! Source of SuppI am.-unt' in LS1 million. equ' alenrLi Cumul.l.u ,.I.,I. I.Jnr :I' 45 F, . .l4 - Fl 1.-I Po' b F- .1 I^.l 1-i.i l Si l IBRE) .tlr X, 'n,lr,rm,. 'if, Part I .uprrlng co;urries 4a e'.u1 I4 nrj * n' > 7 i r-. . ;I'I Non-Pdrt I 'dppI> ing coL1r,rrI4, ; ' a. 1 I I 4;l 4 ',, J ! 'r I I 8 1 2 4 J 1,4I 1 I-. - I , H I I Too l ill '45 11.11 ,, - Il Me N II" , ''Ii 1 # %% 1| ,, , _ I \. 1 ! l IHI 11 Ni11 IN, Ji II111 ID A r . r., .,Il J,., a 1t 'U1 P.ai I .uppl,ng ounficrk . I l - I N4i, NI I I K 4 1 . * 1 I I v% .. N 1 r.4 J SrI I Non Parl I ;upph% ir-L ..OunIrktritB ' f.2 I, 1 154 hI , ' . 2'' I. 2 4,; Il 1 ? I> To.1 I i.9 J 1l." 1 I. H 11 Jil.l) i 4J I.". 21 JS l44 1 1 J 11 1 1 ; 1 11 IBRDdnd ID A It relgn di,hur,eiiieniv h66 24 h4 9 V 41i' Ah n Y ,, 1 y ." 4 '.2 1I hi I I i-.f. h IIir. II '- h.4 IBRD and IDX d,I'ur . nu enI' r 76e1rr'eIn6IP 3; rI)- 3Y4 r. W"I' .i: " 2 . - > l - Grc.nL. 1t1a1l Ii. b41.J4 1'114 14 14 --- Wit 'I I' i1414 I .4 NIOT. IBRI) rlilureq CW.dldL dibur,. nr.T, oll Ilon , I,) he IF( r.d B 1.'.[n1 11 r.r. i,id, SpFXOl FIf-rd f.'-. Spcil F:a.ilit% fvr Sah-SS.har,rn Africl,, c4.dit, and ,\udr; ,i,._ n e,dijirricri r.p -1 % -'r. ; Dciadl rnr., n,.: add io nwll,1 lvc,u-e t t ror.dinj. a Include~ IBID dl;i r :,cnicr , oi : 1N4 milli,n r.r d (l isdl.n..lor, ,n 1b..l 11-1 technology and management skills, as well as counted for $9.1 billion. The volume of antici- financial resources, by encouraging cofinanc- pated export credits increased significantly ing, providing strategic financial planning and over that of recent years and reached an esti- advice, and developing and supporting private- mated $3.2 billion. Commercial bank cofinanc- sector operations in borrowing member coun- ing accounted for $657 million, reflecting the tries. continued difficulty experienced by Bank bor- The volume of cofinancing anticipated in rowers in attracting medium-to-long-term fi- support of World Bank-assisted operations nancing from commercial sources. reached record levels, totaling $13.0 billion In fiscal 1990, the volume of cofinancing with (see Table 4-6). Once again, more than half of official agencies represented a significant in- all Bank-assisted projects and programs at- crease in commitments from the whole of the tracted some form of cofinancing. By region, donor community. A growing and valuable col- 33 percent of the cofinancing volume was for laboration with the donor community was also operations in Asia, 32 percent in Latin Amer- evidenced in other areas. To date, consultant ica and the Caribbean, 23 percent in Africa, trust funds have been established with twenty- and 12 percent in the Europe, Middle East, and four donors. Under these agreements, donors North Africa region. In terms of number of have committed about $47.1 million in grant cofinanced operations, the distribution by re- funds to support World Bank operational work. gion indicates that 50 percent was in Africa, 22 In addition, special arrangements have been percent in Asia, 14 percent in Latin America established with five donors in support of envi- and the Caribbean, and 13 percent in the ronment-related activities, and discussions are Europe, Middle East, and North Africa region. under way in this area with other prospective The largest sources of cofinancing continued donors. The Bank has also received support to be official bilateral agencies and multilateral from a number of donors for work in member development institutions, which, together, ac- countries in Eastern and Central Europe. 82 World Bank Finances Table 4-3. IBRI) and IDA Disbursements for Goods, Works. and Ser ices Procured rrom Selected Non-Part I Countries. Fiscal 'ear 1990 rr,unoiJi ir. S ? rL, illcr- cn . 1ir,j Percen age 1-0-.1 Fo,-,e,n TLII11o iLtil \'_r.n Pal i . .lnljl. r-ro:.remnt rk-Uremcni i *.Funt dT;hui remenub - Ind,., 1 14'2 SU' 1.' '.2 Bra2il hi1) 1i China 442 143 x4 3 3 Indonu-,i 53 I -42 K2 32 kore.. Repulicl o2 'U4 1W' 3- '.1 COIo8mb,3 141 2" 214 12n .\recnrrn: I n ~ 4 '111 1.' t 2c lt I 21 IYII I I N1;la1, -'aI V; SI 1' |I11 I',e! 12 3 ISI 1 1' 'Ia2 Ug|.' !: 9b I> !1'4 I 1! 4 IS I"3 0"~~~~x Pak ,ijan li 4> Itl IJ q Sinizror.: i'.ll "'2J Ban.cladc h 52 3 I IJL9 ThalInI.,n,J *.h i ;'/U Philipp!ret 11' - 11 U_ .,m pa IUI nll, Tun ',-I I 11 U- iaudi \rahrh s!.4 Cote J 1 .,r, r, 1 ' 3 4 Ir.n. ldarrmii Repubilic - 65 h,5; u.4 Poriuig. l 19 'h to '1)4 P rduIllztm H 411 , Hungarr Ih 31 4 t1) 3 Ktm.l 'I '2 4h IJ 3 C.n,ero-rn 4Il 45 i11.3 Jordan 19 2' 41 2 Sri Linka '4 3 32 Rsornonia 31 31 u2 .\lgeria 29 I 29 2 Niger ' ~ ' '-' U.1,2 Ni1I ' 1 u11 Ecuador 6 6 '9 132 Nepi, ' - ' U 2 senepal 22 2' 0.2 Q,.i iUr 26 -'.1 Papua Ne%" (Jilirica "3 '3 23 I Iot,l 5r5 I 2'4uh 41 6 NiTE [Xi.,I- m- ni. qat I. j ,rTl. he,.,.e *-- 'Indiric ., RVi'r- i -. .:I-d ipii-. _ nir. h.,, . ..I1 ,kiji ..hl u.cicf- Cofinancing 83 Table 4-4. IBRD and IDA Foreign Disbursements. b% Source or SupplI Ian,ioLnI% in LS$ mnnI'llorn CqJLit,IenIi IBR D! v.mLII'c .G1Ijn,ILi - .Jucne 3'' lte, I Bkl) fi.; 1 Ili iiine li I"4t [ I [' ! 1 I'fiJI Nnnour.i . mnmuni ' ,rroan - A¾monlI Part I sUpph rL! (.01filnin Austral'a af n 9 3 6II Ihl II.4 Austria I.6 I I' t- l1 IX S Belgium 1.11- 14 4u I" n14 2' 5 2 Canada I Silt 2 3 Ih4 I . 1 4 41 L. Denmark 341 II 314 n 4 1431 n I I Finland 269' 1'. 21 1t 2 h9 tl 3 France 5.297 6 492 ; ','3h 4S 29 4 85 German,. Federal Republic ol battl 11.1 hiit n 2.',f It I '1 r Iceland S * 2 * I Ireland i' 1.1 1 ''. 3 t.l I i t.,2 lhaIN 455 4 5 ' t 29 1.1 46 ItIt t'I Japan I I S.l 14 i 7' ' - 1 394 ! '3 14 ; Kuaii 2t,C (1.3 4r I I 1101 i 4 3 I Luxe mbourg i ti 5 i.i.1 '- 1 ! Netherland4 1. I. 114 13 h"i- 24 h; 2h Ne%" Zealand 124 n4 I l u I 4 ti.2 5 ii 2 Nora% 21n9 I1.3 11 1i 3 r@ 13 9 u14 South Africa 2s4 11 4 6 '1I 2'hh II11 45 19 S%veden 1.31') 1 - 49 I I 3> l.A I lt4 Sn izerland 3.25ii 4.(I 32h 5 ri'S 2 - 3 I Linted Arab Emirate, 43ti I * 6h II. ' $ 2 6 Llnited Kingdom 6.1SI - N 4I I 1 J'.2 14 3 31 1i4.' Linted State4 16. 71 211.4 i.61 16 I3 II' 1.1 3 53* Total IS.941 $2.2 5.336 ' I 21-.n44 iu I 1.5t r! 3 ANni- Pari I sipplt inv ' i intrie! Argenitna r'3 IsI.X h4 I1I 46 tl lIt II 4 BraMtl lint 1.2 jhiII., f4 I I i' - 2 It I Chile >.9 11 4 14 Li 2 I t ii I ' 31 China 327 11.4 '6 1s1 4'i I 1 h, Colombia 'C4 0 4 I II 3 4 - India 35s 04 3' 04 41 f 44 I u 1 IndoneMja -' In 13 3 n4 I.4 I 3 u Iruq 4'1 to.5i I 25 nI * u 2 Korea. Republic Orf 78 114 1I3 1 4 49s I 3 1 4 Niala! sKi 26* i3 42 0] 4 Is th 11 4 ilet.ico 332 11 4 lh U14 h; Oi3 Nigeri a114 Ii I Ih I1 3 2q I I Pakistan I1l tl I - t I I1' o.5 s '3 Poland 42 '.1 1 I II I' - Romania 'h 3 tl I J2 Saudi Arabia 12 11.4 hil 1n1h 3j II 2*4 u t Singapore nI t! s 'Itl I Ii 345 .3 1 2 b Spjin 28 I I iI I I1 1t1C 1.1I., Ill 1.4 Turke% 2 '1 1 ih 11 h 14 0! I Yugosla.la 834 1l I is 143 or h 6 II Others 3.9118 4 I -h' I.,' 2. 19 S .l4 '4 1 Total 23 151 1.841 iU SIll I''- 45i 5 __ Dishursemenis for debi reduction .16,t 2 ' 1.11 I 3.1 Total foretun dt,bur,ementN SI)'5' l IN I 9.311 IIII 1i 25-'7 ItI-I 11 2542 11111t-t NoTE negii),ble. - = nil [.i§m not *ld I,l he, L ut ...1 ,i, 84 World Bank Finances Table 4-5. IBRD and IDA Foreign Disbursements. bs Source of Suppli and Description of' Coods. Fiscal 1'ear 1990 ToiU N,i'rraIi., r'-' 'P4 I ui2 ALIIn ~~uli'.p -- - - 4 II Ill II' '~~~~~~~~~~~~~~11 115 Bciciurn -- I I I.-. 2 - I I 2 I4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I 3~~~~~~ BeI,r.- c41w2 1 I S 44 -4 I France ..... P-Iii '4-. I. I 14 4.-. p 6I'I Giera, -., Fec RLf :I' Ž t 1 s I5 4 ~ I 4'' 1 Japanr . .... A i .1 i' ' Ne- Z..~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 1. UNci,dj.rj I -t1 'u. h 3'' ' 2i ~ 4 I S .L r .id in.c., -P i' .- - ' X '4 Un~iiz, al.,nd ; '2 421 .y K 24 K 434 Non-Part I SUI; c-ountries Are~nl'n i. .' IP ~ 44 - - -- I 4 'p C-hi. nI '2 - - I ' 1 Koire, Repubh 2 -C "' '2 4 'iI I Mei co ... . . i. - I ' '4 ~ ' i If.,4P'rL.,. . . . '3 23 44 'I. 4C ' Po an .. . . . . 4.' I I I i: .. I I '1 I R 0;n'r.4,I- .2' " ' 'r, - - - Others. ......p 4 ii - - I I 1 54 1II Ti'5 r'r d . . . 1. I2 1i- '1) 2 I Il Disbursements [,r debt reductiorn- - - - - - - - 2r IsN N.a .IE r.C I.sL.Ie-t - '1 -I 1 pl. 'T' ruo Ad. .'pi he~,u-re,l ro..nd'n; F . id jdioir. 'litnii or.)l B- m pippir. lo.IrlS I..' IFC Alik,rripi l ri- ~ f.'c I'I~. rel'.iQ i l rPh hin; nI hi -cduci'-Indi---.'Is,p cn1'C I.- 'p~co .ik Cofinancing 85 Table 4-6. World Bank Corinancing Operations. bs Region. Fiscal N'ears 1989-90 .amorunr ; in mnilh:,I , I LI S i.I jiirm I I r ,- r I . r.r .n- I k n. Tor t;~~~.iIl,I~ r: . e tl,J.c r{ Pr, .i.......e ~ ..r',lb.jci.;n .. Tol,' proie, I Reg-r.n jnd c.r N.o A--i i n, N r. . ..n .I Nr. I N, nl -. n N. . +n....n. IBRD) ID- 61c I Africa 19S9 (-1 2 .62' l I h. 21.4 3 4 12 9 4 tJ 11 UJ) I '11.1 1 ,44 I 6.551 I) 199lJ h4 '3A1ll t '.4 .'9 98 2 It. - I It' 11 S43 q 2.'74 7 7'994 1 19S9 k),13J I 3)9 1 3 I . I S h I I.S h' '9I1 I 391 4115.2 14.432 4 1991J IN 4.311 if. ' i 9 9 h I 59' X tl49 143 16.56) 0 Europe NMiddle Eai. aind North Vrica 1989 I . 9 1 I I I, I 41 l ! - I 6i.lu 8 13 J ill 7) 7 149tJ 1 7 .41 14 I4 I 'h-I 3 [C ! 1. I I I hl (! l.9(2 4 Latin America :nd the Czribbe,n 1989 |JP 2 U41 4 IS I 1)S 'I 4 613 5 '. tl I r' h 101 ' . .512 4 199t) 1S 4.14' 1 1 .lIr.s I .II ' II tl t.) 0 243rtt 1 86 4 14.993.9 Total 19Y9 1 '1 '9 - 3'.' ' I ' 2.'l 3 31 I ttiY ' 9'4 4 4.51 ' 4 436.266J(.4 199U I 2 1 '.9-14 s 124 9 JU41 1 1 I 4 23' A h5- tl N 2114 1 I. 34 16 - 4N i IO .; NITrE. Thl,C runibcr' areu c.rrp.Ied Iro,m he 4r.nm ,nr pl.n pre-emlcd ,i Ihr I.mrie .:.t ,rrro'.i of lh .1 ,oriJ B.,n1, loan, bh 1k hoard oi . e ui,%e dir-t or ThIe .'dJf. . t ,' I O! '.1 I .bl,n e.k, .e ,r, moo ,.e. ..c irm . rrT.imili-m.Trl It hat irage e%r.wrl cr.!dii *ad pri, alc collr nociniz-..ln . ho-- ,e ,- cene f.,11, ordl e,l.rr-Ie- ;uice .j,h zofinjr n,in 5 cluall. .rrinved -. requ.red lor pr..eci ,rrplemeni..on .nd .ei t4r--d .pe.o r I.-.. .- 1i b.rd ,rpr:.IJ The r.-umber ;. orer,iion- ~hw -n Ir-der dlffeirl -urn ,!l ; .-dd r1-m iv .i e e; edir.g ihe [oi.ll nurher .;1 .Inr.e rroieol be;l~u e number of proil.,. u.err ollin:,nred frorn cnrc lhn .:.n .-u. - Deiml, m,.nr. oi *dd Io. i.,g.. he .u-e -1 rounding a The.e figrure include oCir,..n,Ir , .. ih .unlkd l.-,. tr..ir, ine E r.e irnp..ri B13nk o! IJp.rn Plejs n...le ih.i In all repcns daled belore (0.l.rer I-J'N ,ucr. aried klan- . er, irncdI.d .n ihc c .rnro,i.di ce.lunir Official cofinancing from Japan, through the tranche of the three-year facility was allocated. Overseas Economic Cooperation Fund and the One hundred thirty-four separate grants were Export-Import Bank of Japan, continues to ac- made over the three-year period. Almost 50 count for the largest share of official cofinancing percent of the grants, by value, went to coun- in support of Bank-assisted operations. Both tries in the Asia region, while 19 percent went agencies have been increasing their lending ac- to Latin America and the Caribbean, 16 per- tivities on a global basis under Japan's expanded cent to Africa, and 15 percent to countries in capital-recycling program. Cofinancing from the the Europe, Middle East, and North Africa two agencies is expected to total $2 billion equiv- region. By value, almost a third of the grants alent for nineteen projects approved in fiscal financed environment-related technical assis- 1990. Over the past four fiscal years, the untied- tance. loan facility of the Export-Import Bank of Japan By the close of fiscal 1990, negotiations were has been particularly important for the Bank's substantially completed between the Ministry cofinancing program. To date, twenty-six loan of Finance of Japan and the Bank for the agreements have been concluded between the establishment of a special fund for policy and Export-Import Bank of Japan and World Bank human-resource development (the PHRD borrowers for a total of $6.1 billion equivalent in fund). The PHRD fund will extend several cofinancing, of which thirteen agreements, for a existing programs of support and collaboration total of $2.3 billion equivalent, were concluded in between the Ministry of Finance and the Bank. fiscal 1990. Over the three-year period covering Japan's In 1987, the government of Japan appointed fiscal years 1990-92, the Ministry of Finance the Bank as administrator of a V30 billion will contribute approximately $300 million untied-grant facility, intended mainly for tech- equivalent for the purpose of supporting tech- nical assistance in project preparation and im- nical-assistance and cofinancing activities for plementation work in countries that are bor- Bank-supported projects and programs, in- rowers of IBRD funds. In March 1990, the last cluding activities related to the environmental 86 World Bank Finances aspects of such projects and programs; training currently have very limited access to medium- and training-related activities implemented by term and long-term export credits. A number the Economic Development Institute (EDI), of possible operations have been identified for including studies on the experience of Japan's this program, and efforts are under way to economic growth; the provision of scholar- develop them in Mexico. Pakistan, the Philip- ships under the World Bank graduate-scholar- pines, and Turkey. The first EXCEL opera- ship program; activities related to human-re- tions are expected to be in place by the end of source development implemented by the Bank; calendar year 1990. The latest biannual meet- and the engagement of consultants. ing with the ECAs, held in May 1990, covered Calendar year 1990 is the third year of the a range of cofinancing-related topics of mutual three-year multidonor special program of assis- interest, including the EXCEL program. Sev- tance (SPA) in support of adjustment programs eral new ideas were developed for closer col- in sub-Saharan Africa. As of December 30, laboration and for future follow-up and imple- 1989, cumulative allocations by SPA donors mentation. amounted to $5.8 billion, of which $2.7 billon Since the establishment in 1983 of the "B- was in cofinancing with IDA adjustment opera- Loan" program for cofinancing with commer- tions and $3.1 billion was in coordinated financ- cial banks, the patterns of overall financial ing (quick-disbursing financing administered by flows to developing countries have changed. donors). Nearly half of these funds had been With the onset of the debt crisis and, more disbursed. In addition, a much stronger partner- recently, of stringent capital and mandatory ship has evolved among the participating do- reserve requirements by banking regulators. nors to improve the quality of assistance. In commercial-bank lending to developing coun- particular, the SPA framework has helped to tries has declined precipitously. At the same harmonize donors' procurement and disburse- time, however, innovations in capital markets ment procedures for adjustment support, and have become widely accepted and have signif- four joint IDA-donor missions were completed icantly broadened the range of instruments for in four recipient countries to evaluate procure- financing for creditworthy borrowers. In rec- ment and disbursement procedures and to ex- ognition of the need for the Bank to adapt its plore ways to expedite disbursements and lessen commercial cofinancing program to changes in administrative burdens in recipient countries. the market, and to enable it to provide flexible In recent years, through a series of biannual support for financing transactions undertaken meetings arranged in Washington. D.C., the by eligible borrowers in a broad range of Bank has intensified its dialogue with export- markets, the executive directors of the Bank credit agencies (ECAs). Ways in which cofi- approved the establishment of an expanded cofi- nancing with export credits could be generally nancing-operations (ECO) program in July 1989. expanded and in which the Bank can help the The ECO program is intended to support ECAs to be more supportive of the adjustment Bank borrowers that wish to tap international efforts being undertaken by many of the se- capital markets, including private placements verely indebted. middle-income borrowers of and public bond issues, as well as to improve the Bank have been explored. At a time when borrowers' access to medium-term credit facil- many of these countries are adopting strategies ities, syndicated and club loans, and limited- that rely on a greater contribution by the recourse project financing. As a new initiative, private sector to investment and growth, the ECOs are being implemented on a pilot basis. facilitating of export credits for the private The program will be reviewed in the light of sector has assumed greater importance in the experience during fiscal 1991. On June 14, World Bank-ECA dialogue. 1990. the executive directors of the Bank au- This dialogue led to the announcement in the thorized the Bank to negotiate the first ECO third quarter of 1989 of a new initiative, the operation, for a private placement of bonds in export-credit enhanced-leverage(EXCEL) pro- the U.S. capital market by the Housing Devel- gram, developed in close collaboration with a opment Finance Corporation Limited (HDFC) working group of the International Union of of India. The Bank's support is proposed to be Credit and Investment Insurers (Berne Union). in the form of a nonaccelerable guarantee to The program was designed to mobilize export- cover the principal repayment on the bonds at credit support for medium-sized private enter- final maturity. A number of other operations prises in selected developing countries that are also currently under consideration. 87 Section Five World Bank Activities~ IFC, MIGA and ICSID Research at the World Bank Council, which is the top policy-setting body for Bank research. The council establishes the broad Research helps keep the Bank in the fore- agenda and makes recommendations for re- front of debate on the development process. search and publications activities in the Bank. As such, it plays a critical role both in ensuring The executive directors annually review the the Bank's technical competence and in rein- Bank's research program and the research prior- forcing the institution's intellectual leadership ities guiding the program throughout the year in development. under review and in subsequent years. The Bank is actively engaged in the research Since 1987, considerable effort has been made process in three major ways. First, the Bank to refocus the Bank's research efforts towards identifies topics for research that are most the areas identified by the Bank as its special relevant to the development process and operational emphases. These areas are poverty makes these topics known to the research reduction and food security; debt, financial in- community. In this respect, the Bank acts as a termediation, and adjustment; human-resource catalyst in the wider research community by development: private-sector development and helping to formulate the research agenda in public-sector management; and the environment development. Second, it sponsors research by and natural-resource management. Resources carrying out research in house and by funding devoted to research in these areas account for research undertaken by others. Third, it dis- more than 70 percent of the total resources spent seminates new knowledge through a variety of on the whole research program. While Bank publications, conferences, and seminars and research continues to focus on these areas of by embodying that new knowledge in its eco- special emphasis, research management has sin- nomic and sector work, policy dialogues, and gled out three topics deserving additional re- project and adjustment lending. By performing search effort during fiscal 1990 and beyond. these three functions effectively, the Bank is These are the environment, private-sector devel- able to strengthen the foundation of its intel- opment, and the reform of socialist economies. lectual leadership and further its development The environment. Research on environmen- role and objectives. tal issues is now becoming integrated into the The policy, research, and external affairs activities of all PRE departments. Two major (PRE) complex is the principal locus of re- research papers were produced during fiscal search work in the Bank, accounting for four 1990, one on agricultural policies in industrial fifths of all Bank research and research-related countries and their environmental impacts, and activities. The operations complex accounts the other on conservation of the world's bio- for most of the remaining fifth. In all, research logical diversity. Other research initiatives un- absorbs about 3.5 percent of the Bank's annual der way or planned encompass a wide range of administrative budget. During fiscal year 1990, topics: forestry conservation; irrigation and resources devoted to research amounted to drainage; sanitation and water supply; energy about $21 million, of which about $15 million conservation and efficiency; air-quality man- represented the cost of approximately 120 agement; environmental institutions; treatment staffyears. Expenses for the research support of environment in cost-benefit analysis; envi- budget amounted to $6.1 million. Staff apply ronment and national-income accounting; fis- for funds from this budget by submitting re- cal policy and environmental management; search proposals to the Bank's Research Com- trade policy and resource degradation; privati- mittee. The committee's aim is to influence the zation of common resources; and international direction and quality of Bank research by industrial location and environment. Within allocating its central research funds through a this broad range of topics, three themes are competitive process. The Research Committee emerging as the priority areas for research in reports to the Research and Publications-policy the coming years: (a) global climate change, 88 World Bank Activities, IFC, MIGA. and ICSID chlorofluorocarbons, and energy conservation; search conferences or workshops are being or- (b) integrated water-resource management: ganized on several topics of special concern to and (c) linkages between economic policies socialist economies in transition: options and and the environment. One proposed project strategies for agricultural reform, privatization, will analyze the implications for developing and housing-policy reform. A new study will countries of the Montreal Protocol on Sub- attempt to address a number of issues related to stances That Deplete the Ozone Layer. An- the measurement of economic performance of other, still at an exploratory phase. will at- centrally planned economies. tempt to investigate the global "greenhouse" While part of the research resources is being effects from gas emissions with a view to redeployed towards these three priority topics, assessing the policy options for improving the research in the other areas of special emphasis efficiency of energy use and conservation. continues to represent a large and active compo- Work related to environment also includes nent of the overall research program. studies dealing with the exploitation and man- Poverty reduction and food security. Re- agement of natural resources (agriculture, fisher- search on this topic continues to be driven by ies, livestock, energy, and forestry). A compar- four central concerns: (a) assessing the conse- ative study was completed during the year on the quences of macroeconomic policy for poverty, political economy of agricultural-pricing policies. with particular attention to effective means to Two studies are to be completed in fiscal protect the poor during adjustment; (b) deliv- 1991-one on land tenure in agriculture and the ering public services to the poor through better other on the analysis of risk in agriculture. targeting and nontraditional delivery mecha- Private-sector development. The research nisms; (c) designing sectoral policies and pro- agenda on private-sector development is based grams to increase access by the poor to pro- on the priority areas identified in the private- ductive employment, incomes, and assets; and sector development action program, which was (d) measuring poverty and living standards. launched by the Bank in January 1989. These Using the results of some recently completed priority areas are the business environment, projects, staff are preparing a number of policy enterprise restructuring, financial intermedia- papers dealing with macroagricultural policy tion, private provision of public services, and links; issues in agricultural extension; causes public crowding out of private enterprises. Re- and consequences of poverty; poverty, hun- search is continuing in all these areas and will ger, and food security; land rights in sub- be reflected in a number of policy papers to be Saharan Africa: African food security; and completed in fiscal 1991 on an integrated ap- crop diversification. While work on living- proach to private-sector development, on strat- standards measurement is beginning to find its egies for industrial competitiveness, and on the way into Bank operations, research has moved lessons of experience in divestiture. Of partic- from identifying characteristics of the poor to ular note are studies analyzing the role and assessing the behavioral response of poor impact of technology and export policies, insti- households-as savers, producers, and wage tutions, and mechanisms; assessing gaps in in- earners-to changes in key prices and the dustrial competitiveness; and translating work quality of social services. A project recently on catalytic agents, trading companies, direct under way, based on the lessons of experience foreign investment, and commercial links into with subsidies and public-works programs, is Bank-supported policy packages and programs. addressing the issue of targeting the poor. Reform in socialist economies. Research on World Development Report 1990 is the central reform in socialist economies is being carried channel for the dissemination of findings from out in several departments of PRE, as well as recent research on poverty. Based on this in the Europe, Middle East, and North Africa report, a poverty agenda for the 1990s will be region of the Bank. A socialist-economies re- established that will influence the direction of form unit was established in PRE during the Bank poverty research in the near future. year to provide an anchor and coordinating Debt, financial intermediation, and adjust- mechanism for policy and research work on ment. In the past two years, a great deal of the problems that are encountered in moving work has been concentrated on issues of struc- from centrally planned economies towards tural adjustment and stabilization (studies have market-based economies. Work planned or un- been undertaken on strategies to stop high der way is grouped under five headings: macro- inflation, for example) and on ways to deal economic management and transitional policies; with the consequences of temporary trade comparative studies of policies, sequencing, and shocks. A new set of tools for analyzing macro performance; response of firms to economic issues has been developed and will be imple- reform; labor-market and social issues; and trade mented in fiscal 1991. These analytical tools and financial-sector reform. A number of re- are extensions of the basic macro models used Research at the World Bank 89 in the Bank. Research is now beginning to shift man-resource development, which will inte- away from the analysis of stabilization to that grate and provide coherent approaches to of longer-term growth, as evidenced by a series these five elements of human resources. A of studies on the determinants of savings, paper on improving primary education in de- investment, and growth. Greater emphasis is veloping countries was completed and will be also being given to research that seeks to followed by two other policy papers, one on improve understanding of the links among higher education and one on vocational educa- macroeconomic policy, growth, and sustain- tion and training. Work on higher and voca- able development. With the completion of a tional education will be narrowed down to the trade-policy paper, work will move away from analysis of education in science and technol- a macro view to a focus on the effect of ogy. In the areas of health and family planning, trade-policy reform in particular sectors, nota- two research projects were recently launched, bly agriculture. In the area of domestic finan- one on the economic effects of fatal adult cial intermediation, much of the work has dealt illness from AIDS and other diseases in sub- with the management, supervision, and regu- Saharan Africa and the other on the impedi- lation of banks and the banking sector. Empha- ments to contraceptive use and fertility decline sis is now given to dissemination of the results in different environments. Work is continuing through operational support in this area. Re- on social-sector service delivery and includes search to date on debt issues has resulted in a initiatives in assessing public and private fi- number of papers and a book, Dealing with the nancing of social services and alternative de- Debt Crisis.' The analysis of these issues and livery systems. Improving women's economic that of international capital flows will continue, productivity is the primary focus of research but more attention is being paid to the pros- work on women in development. This is a pects for external finance other than debt, such multifaceted effort that includes a study of as foreign direct investment. Finally, the sup- women's education and labor-market experi- port and analysis that the Bank has given to ence, as well as narrower studies focusing on developing countries in the Uruguay Round of the access of women to credit and to agricul- the GATT (General Agreement on Tariffs and tural-extension services. Trade) negotiations will be replaced by the The second annual Bank conference on de- analysis of the effect of the agreements velopment economics took place in April 1990. reached and of the determinants of interna- Sponsored by the Bank's Research Commit- tional trade growth. tee, the conference series is a forum for dis- Public-sector management. The principal cussion of policies and approaches for promot- thrusts of research and policy work on public- ing economic development. This year's sector management have been (a) reform of conference focused on four areas: the transi- public-revenue and expenditure policies and tion from adjustment to growth, sustainable practices, (b) public-enterprise reform, and development and the environment, population (c) sectoral management and reform. A study change and economic development, and ap- on tax-policy reform was recently completed. praisal of public-sector projects. Work will shift toward the analysis of public- The Research Committee also sponsors a expenditure issues, with particular emphasis program of visiting research fellows designed on ways to make public expenditures for to draw scholars from around the world into infrastructure and in the social sectors more the Bank's research activities. During fiscal efficient and effective. In the area of public- 1990, the committee has accepted eight fellow- enterprise reform, a study is planned on the ship nominations put forward by various Bank lessons of experience with public-sector re- departments. forms (to be addressed are such issues as In addition to these programs, research man- contract plans and Bank lending for state- agement is giving added emphasis to building owned enterprises), and a book is scheduled the capacity for policy research in developing to be published on the Bank's experience countries, especially in sub-Saharan Africa. with institutional development. Work on sec- The Bank is currently participating in two toral management will focus on efficient pub- donor consortia set up with the objective of lic and private delivery systems. A paper on building and strengthening research capacity in transport-pricing policy is planned for fiscal Africa. One is the "African economic-research 1991. consortium," which covers anglophone Af- Human-resource development. This cate- rica, and the second is the "network on indus- gory includes five main topics: health, nutri- tion, education, population, and women in development. Results from work to date are ' Ishrat Husain and Ishac Diwan, eds.. Dealing with the being incorporated in a strategy paper on hu- Debt Crisis (Washington, D.C.: World Bank. 1989). 90 World Bank Activities, IFC, MIGA, and ICSID trial policies and sectoral incentives." which organizing courses and seminars, mostly in covers francophone Africa. collaboration with African institutions, to pro- viding institutional assistance with an empha- Economic Development Institute sis on building up African institutional capaci- The activities of the Economic Development ties to train senior and mid-level staff. EDI Institute (EDI) increased on three fronts during assisted about twenty institutions and associa- the past year: (a) training those involved in tions of training institutions in designing and leading and managing development in develop- delivering courses and seminars, assembling ing member countries. (b) providing assistance outside support for training activities, or rein- to training and research institutions in devel- forcing collaboration among African institu- oping countries to help countries strengthen tions. A new initiative for strengthening train- their capacities for policy analysis and eco- ing institutions in Portuguese-speaking African nomic management, and (c) producing and countries got under way, initially in the form of disseminating training materials. EDI under- institutional-assessment missions to determine took all these activities within the framework training needs and capacities in national eco- of its strategic plan for the five-year period nomic management and the health sector; sub- 1990-94. The fiscal 1990 program adhered sequently, a course on national economic man- closely to the plan's aim of helping countries agement was organized in cooperation with improve the quality of their macroeconomic Portuguese institutions. management, the efficiency of their public- In terms of subject areas, adjustment and sector management, and the effectiveness of growth, women in development, and public- their poverty-reduction efforts. sector and private-sector management were During the fiscal year, EDI organized nine- priorities during the year. Several activities for ty-nine seminars and courses. Altogether, Africa that merit particular mention included: 3,656 participants attended these training ac- (a) six policy seminars held in different parts of tivities, as well as an additional thirty-seven Africa in collaboration with African institu- EDI-assisted activities. Fifteen percent of the tions under the framework of the sub-Saharan participants, or 553, were women, compared Africa transport program-a joint World with 13.8 percent, or 521, in fiscal 1989, an Bank/Economic Commission for Africa initia- increase that reflects EDI's efforts to encour- tive that deals with Africa's seriously deterio- age greater participation by women in its ac- rating road network; (b) a policy seminar on tivities (see Table 5-1). financial-sector stabilization and development Sub-Saharan Africa continued to account for in eastern and southern Africa; (c) a pilot half of EDI's activities, which ranged from project, assisted by the government of Italy, on Table :-I. EDI'\ Teaching and Instilutional-assislance Acliiiities. Fiscal 1987-90 i 1. .1. 14,~N ]-'.A 1 ,414t Seniur pilL. Ii 21 211 Ec.nomric and ctci.r ninn.i ,enr4en1 J 42 i!4 ProleL . .. 1nl. 'r. n-] m.n _tenienh 2i . . 9 4 TrJiner . .x,nk Ike 11 '1!,9 SUMOL.11ot 511 49 .ubtII ui hi IllS I' t13 I,11.1 Ih I I . 94 th 5S ,rIInulr I*tl, ,, 'ir 'lif lotil 1.44 2h 5 3E.'il 3.h56 0>1 v.hh \\vPmer 411' , l_ ili From 'n,in i an,d pr-rr couniri'c I l.h' I.i' I I h3tI E .olm .1 ln,ta..iiwn- -'I ij i Economic Development Institute 91 entrepreneurship training for African women, network effort in the field of urban finance and which reached full operation with the partici- management for the Maghreb countries; (d) a pation of an African training institution; (d) a seminar on agricultural-price analysis and pol- network of African environmental-education icy for Arab countries; (e) a policy seminar on and environmental-training institutions that managing inflation in socialist economies; (f) a was initiated with the help of the Swedish series of short national seminars on environ- International Development Authority; (e) a mental assessment of investment projects and training-of-trainers course on urban financial programs; and (g) a continuation of several management for francophone African coun- collaborative arrangements with institutions tries; (f) public-expenditure programming and such as the Royal Scientific Society, the Arab public-expenditure management seminars for Planning Institute, the Arab Monetary Fund, both anglophone and francophone African the Arab Organization for Agricultural Devel- countries; and (g) the launching of a women's opment. and the Near East-North Africa Re- management-training outreach program. gional Agricultural Credit Association. EDl made substantial progress in realizing For the Latin America and the Caribbean the objectives of a project-the UNEDIL proj- region, topics such as adjustment and growth ect (sponsored jointly by the United Nations (including financial-sector reform), public-sec- Development Programme (UNDP), EDI, and tor and private-sector management, and hu- the International Labour Organisation)-to man-resource development received priority. strengthen African management-training insti- A new seminar series was begun on macroec- tutions and associations. This project, sup- onomic policy analysis for senior and mid-level ported by several donors, set in motion the officials in collaboration with the Instituto active involvement of key African management- Centroamericano de Administraci6n de Em- training institutions and associations in mobiliz- presas in Costa Rica, as was a cofinanced ing relevant African expertise and experience program to assist a newly formed network of through networking and the pooling of skills. Central American and Andean institutions in The UNEDIL's current efforts emphasize ac- municipal-finance and municipal-management tion-oriented research and case-writing skills, training. Short national seminars on environ- the marketing of institutional services, and im- mental assessment were organized in several provements to the framework of government countries. Collaboration with institutions such policies that affect higher-level training institu- as the Caribbean Development Bank, Instituto tions. Consultants retained by the UNDP un- Latinoamericano de Planificaci6n Econ6mica dertook a mid-term evaluation of the project y Social, Instituto Interamericano de Cooper- during the year; they concluded that it was aci6n para la Agricultura, the Brazilian Super- beginning to yield important benefits, particu- intend6ncia do Desenvolvimento da Regiao larly in terms of strengthened faculty skills and Centro-Oeste. and Centro Agron6mico Tropi- networks among the training institutions. cal de Investigaci6n y Ensefianza continued EDI continued to provide technical support despite some difficulties in raising cofinancing to the agricultural-management training for Af- to augment EDI's resources. rica (AMTA) program, now in its fourth phase. A number of programs in the institutionally The AMTA program is managed by the African weaker countries of Asia, such as Viet Nam, Development Bank's training center under a the Lao People's Democratic Republic, and grant to the Organization of African Unity by those in the South Pacific, emphasized devel- the International Fund for Agricultural Devel- opment-management and project-related is- opment. On a subregional basis, EDI launched sues. A program to strengthen economic man- an expanded training program for rural and agement in Viet Nam was approved by the agricultural-sector management through a net- UNDP; its implementation by EDI is expected work of training institutions. to get under way in fiscal 1991. An important In the Europe, Middle East, and North Af- thrust of EDI's program in the Asia region, rica region (EMENA), EDI sustained its ex- within the subject area of public-sector and panded program for Arab countries and began private-sector management, was to increase to respond to increased interest in Eastern and the effectiveness of poverty-reduction efforts. Central Europe in collaborating with it. The EDI has made progress with seminars involv- highlights of EDI's activities in the EMENA ing Asian countries that examine international region included: (a) a policy seminar on em- experience in financial-sector reform and in- ployment and labor-market issues associated dustrial adjustment and restructuring. The with adjustment; (b) several new seminars in training program for officials from the South the field of human-resource development, such Pacific islands progressed well with the sup- as textbook production and vocational and port of the Australian International Develop- technical education; (c) a successful start of a ment Assistance Bureau. 92 World Bank Activities, IFC. MIGA, and ICSID Among the most important worldwide sem- program. cofinancing amounted to some $7.6 inars held during the year were those on hu- million, up from $6.7 million the year before. man-resource and social issues: access by the While the UNDP remained the largest source poor to urban services; vocational and techni- of external support, cofinancing from bilateral cal-education policy; structuring relations be- sources continued to expand more rapidly than tween the public and private sectors to pro- other sources, representing slightly more than mote international competitiveness, especially half of total external resources mobilized. This in industry; experience with structural adjust- was, in part, the result of the full effect of ment; and financial-sector reform. cofinancing arrangements entered into in prior During the year, EDI made substantial prog- years with aid agencies of Australia, Canada, ress in producing and disseminating training Ireland, Italy, Japan. the United Kingdom, and materials and in helping selected partner insti- the Commonwealth Secretariat; and, in part, of tutions enhance their capacities to prepare new arrangements reached with France, the their own training materials. EDI added nine- Netherlands. and the United States. Belgium ty-nine training materials in several languages became a donor for the first time in fiscal 1990. to its catalog during fiscal 1990. In addition to Among multilateral organizations other than printed materials, EDI has been developing the UNDP, the United Nations Centre for videos and computer software. Human Settlements (Habitat), the World EDI continued to administer the World Bank Health Organization, and the International La- graduate-scholarship program. funded by the bour Organisation were EDI's most important government of Japan, which saw rapid expan- collaborators. EDI's collaboration with the sion, both in the number of grants and in the Asian Development Bank continued to flour- number of applications. To date, the program ish, and recent agreements between the two has awarded 222 scholarships, 25 percent of institutions are expected to intensify the col- them to women and 80 percent to applicants laboration during the coming year. from developing countries. The program has Several executive directors have voiced con- begun to establish a distinctive character as an cern over the increased reliance on external international, highly competitive, and coveted resources to fund EDI's activities. To guard program for support of mid-career graduate against possible loss of flexibility and to ensure study related to development. Over sixty insti- that its activities are carried out evenhandedly tutions in Europe, Asia. and North America among regions. EDI has been negotiating with are currently hosting program scholars. Al- several donors (and with some modest suc- though economics as a field of study continues cess) to secure multiyear support for its pro- to dominate, a number of new scholarships grams instead of having to mobilize support have been awarded in business administration activity by activity. and management, public-health administra- tion, agricultural production. and law. Interagency Cooperation The McNamara fellowships program made Collaboration continued during the past year fifteen awards to researchers from Africa, among the Bank and other agencies of the Asia, Latin America, and North America for United Nations system in the search for research on development issues in a World growth-oriented solutions to many of the seri- Bank member country other than their own. ous problems that developing countries face. For the first time, more women than men The Bank, the United Nations Development received awards. The majority of the year's Programme (UNDP), the United Nations Edu- fellows will work in two areas: gender issues cational. Scientific, and Cultural Organization and the environment. (Unesco), and the United Nations Children's Evaluations of the effects of selected EDI Fund (UNICEF) launched a worldwide initia- activities continued during the year. A number tive that seeks greater priority, more resources, of studies on specific issues were carried out, and more urgent action for basic education. The and a systematic program, designed to cover World Conference on Education for All, held in all the main areas of EDI activity over a period Jomtien. Thailand, in March 1990, focused on of years, was started. The purpose is to assess. ways to improve the quality of primary educa- mainly by means of interviews with a sampling tion and increase educational opportunities in of former seminar participants and staff of developing countries. The conference also pro- partner institutions, how well EDI has suc- vided a forum to discuss issues that affect ceeded in strengthening country capacities. education, formulate follow-up action, and help EDI continued actively to mobilize re- broaden public awareness of the task of expand- sources in support of its activities for fiscal ing children's access to education. 1990 and beyond. Aside from cofinancing The executive board of the Bank approved funds for the World Bank graduate-scholarship participation by the Bank in an interagency Interagency Cooperation 93 training initiative aimed at strengthening indige- geared to raising the productivity and broaden- nous human and institutional capacities in sub- ing the range of goods and services derived Saharan Africa. The African capacity-building from forests on a sustainable basis, improving initiative (ACBI) is a joint effort of the African the contribution of forestry to food security, Development Bank, the UNDP, and the World and developing suitable approaches and ar- Bank.2 The International Labour Organisation rangements to enlarge and achieve equitable and the Bank's Economic Development Institute distribution of the socioeconomic benefits from are also working together in Africa to strengthen forestry activities. A review of the program is management-training institutions. currently being undertaken by the FAO. In another capacity-building exercise. de- In fiscal 1990, the Bank and UNICEF were signed to help developing countries cope with active partners in the Bank's nutritional work; the effects of increased volatility in the inter- population activities, particularly in Africa, national financial environment, the UNDP and were coordinated with UNFPA; and close col- the Bank have joined forces to transfer skills in laboration was realized with the World Health asset and liability management to the public Organization (WHO) on a number of global and private sectors in selected developing health programs, including WHO's program on countries. The goal of this financial technical- AIDS and its Special Program of Research and assistance program is to create and train core Training in Human Reproduction, which fo- teams in recipient countries to manage avail- cuses on contraceptive research. able financial services. An integral part of the Cooperation with the International Monetary program is the provision of guidance to local Fund. Collaboration between the Bank and authorities on the modifications to the regula- the International Monetary Fund (IMF) in as- tory framework that are needed to accommo- sisting member countries spans many areas date and ensure the proper use of risk-manage- and takes place at the level of both staff and ment techniques. management. In the area of the environment, a number of Interaction in country matters takes the form specialized agencies-the United Nations of (a) exchange of views and information be- Environment Programme, the UNDP, and the tween the staffs of the two institutions, (b) the United Nations Fund for Population Activities sharing of analyses and country expertise in (UNFPA)-and the Bank launched a pilot pro- specific areas, (c) knowledge of each other's gram that provides coordinated technical assis- plans, and, in many instances, (d) joint assis- tance to four countries (Costa Rica. Malaysia, tance to member countries in the preparation Mali, and the Seychelles) in planning for envi- of policy-reform programs. This is formalized ronmentally sound development. The program in the case of countries eligible for assistance envisages helping these governments establish under the IMF's structural-adjustment facility environmental data bases, analyze the environ- (SAF) and enhanced structural-adjustment fa- mental effects of development, and strengthen cility (ESAF) through the preparation of poli- legislative and regulatory frameworks, as well cy-framework papers (PFPs). A PFP, which as public-information and education systems. sets out the medium-term objectives of country The energy-sector management-assistance policies and priorities, is a tripartite effort program (ESMAP) is an ongoing interagency involving the IMF, the Bank, and country effort that identifies, analyzes, and proposes authorities. During fiscal 1990, twenty-two actions to address the most serious energy PFPs were prepared, usually by joint or paral- problems in developing countries. The pro- lel missions of Bank and IMF staff. Cross- gram is supported by the UNDP and other participation of staff in missions also takes U.N. agencies, the Bank, and numerous bilat- place outside the context of PFP preparation. eral aid agencies. Collaboration between the Bank and the The Bank is also participating in other inter- IMF continues to be close in the evolution of a agency efforts in the area of new and renew- strategy to deal with the problems of develop- able energy development and rehabilitation, ing-country debt. A joint task force was estab- with particular emphasis on energy derived lished to promote further cooperation in the from the sun, the wind, and biomass. analysis of debt-strategy issues and to ex- Deforestation, particularly in tropical re- change views and information on techniques of gions, is an issue of regional and global concern. financing. Interaction between the staffs of the The tropical-forest action plan, jointly spon- two institutions is continuous in those coun- sored by the Bank, the UNDP, and the Food tries that require Bank and IMF assistance for and Agriculture Organization of the U.N. debt and debt-service reduction operations. (FAO), provides the framework for efforts by the international community to address this problem. Activities under the action plan are 2 For details, see page 44. 94 World Bank Activities, IFC, MIGA. and ICSID Table 5-2. Aid Coordination Group Nleetings Chaired b) the World Bank in Fiscal t'ear 1990 ,conori. rid ni or,-.li : Jnd aid irfrop. DI i ot X Jao JuIl 1-; Philirpine, cLnmsltaumie proup Tok%o. Japan Jul 26-2'' Nljuritania consuliatite group P.ris. France cOther 17 Sri LUnka .i1d group Parn%. France (October 2ts' Boli% 'a coinsuliItiaie group Paris. France Nkvernber '-8 Nigeria con,ijiiaLte group Par's. France Nci%ember 1-i Mozamrnique con,ultane group Paris. France No.nemner 31-De,emrber I ULganda conouh,iive crop Paris. France DeLember l-21 I_Anzania cori,uft0ii%e group Pars. France April 9-I I Zjanbi con~uliati%e group Pa ri. France April I'- I Pakistan conso.rtiun Pa r. France April 19-'t1 Banglde%h aid group Paris, France April 23-2 Caribbean Group lor Cooperailon and Econornmc Ieelopmeni %%alshinglon. D C. 1aM.E 14-lh NIah%ki consultatie group Parns. France Ma'. I-IS Papua Ne%% Guinea consultatuie group Singapore MaN 24 Somalia consullaiise group Par,. France Juric I.. Cameioon consuulnhiae eiroup P.ris. France June I.Y India conmirtium Paris. France June 2tl Guinca conuulijLe gr.up Paris. France N.,yc In .ddioor. mac,i'rg .I i,b. Inierc.-) ,rn n.-lni .1r..up on Indone,a. chuired h, ihe gto'rn'nrneni o Ihe NeiherIand& %ka. hel.I ir. The H,rue .;.n .ne I '-I? i-1 I Collaboration has also been close in the area evaluation, aid practices, financial aspects of of overdue obligations to the two institutions. aid, and the statistical problems arising from Both staffs continue to engage in dialogue with reporting on aid flows. In fiscal 1990, the Bank the authorities of countries in arrears and to and the IMF began to work with the OECD on assist them in the preparation and implemen- ways to reconcile and standardize data on tation of programs that could result in the capital flows to developing countries. resumption of growth, improvement in country The Bank is contributing to a DAC effort to creditworthiness, and clearance of overdue develop principles of program assistance; a obligations to multilateral creditors. The staffs Bank delegation attended a meeting on popu- have also worked closely in the preparation of lation, which focused on the need for re- country-specific financial workouts for mem- sources; the Bank is serving on a new DAC bers in arrears, such as Guyana and Honduras, working group on development assistance and that are necessary for the mobilization of do- the environment, which is tackling such issues nor support through consultative or support as how donors can develop effective environ- groups. mental-impact assessments; and it participates Cooperation with the Organisation for Eco- regularly in women-in-development meetings. nomic Co-operation and Development (OECD). Participation in other OECD fora allows the The Bank seeks an active exchange of views Bank to add its development perspective to the and data with the OECD on economic devel- discussion of issues of concern to the industrial opments of relevance to developing countries countries, such as trade, inflation, and savings by working with the OECD secretariat and and investment. From the meetings that it attending key meetings-of the OECD's De- attends on banking, debt, economic forecast- velopment Assistance Committee (DAC), in ing, trade, and agriculture, the Bank is able to particular-as an observer. gain a perspective that enhances its advisory The Bank participates regularly in OECD and analytical work with developing countries. meetings and seminars on a broad range of The ministerial-level annual OECD meeting at issues. It contributes to DAC's work each year the end of May and meetings of the OECD's on the core concerns of aid coordination, aid Economic Policy Committee (which focus on Interagency Cooperation 95 such concerns as inflation, public expenditure, subsidies, competition, and the integration of environmental and economic policies) are im- Figure 5-1. Bank-NGO Operational portant fora for the Bank. The 1990 ministerial Collaboration, by Region, meeting highlighted the issues of the Uruguay Fiscal 1973-90 Round, agricultural trade and support policies, (number of projects) noninflationary growth, OECD relations with nonmember countries, and the global environ- ment. 50 Relations with nongovernmental organiza- tions. The Bank's relationship with nongov- ernmental organizations (NGOs) continued to deepen in fiscal 1990. NGOs, such as commu- 40 nity or religious organizations, private volun- tary organizations. women's groups, and coop- eratives, can be an important resource in 30 helping bring about improvements in the qual- 30 ity of life of poor people. Opportunities have increased for NGOs to become involved in Bank-assisted projects, as 20 governments in developing countries become more aware that NGOs can contribute to na- tional development. The Bank is working with 0 its borrowing member governments, in the 10 context of their policies toward NGOs, to expand the involvement of NGOs in Bank- supported activities. 0 The number of instances of operational col- - laboration has increased substantially in the -lb SP past few years. In both fiscal 1989 and 1990, A / forty-six projects had NGO involvement, up A from an average of thirteen projects annually during the period fiscal 1973 through fiscal D Europe, Middle East, 1988 (see Figure 5-1). Eighty percent of the and North Africa NGOs involved in Bank-supported projects are El Latin America and the Caribbean grassroots groups or national NGOs, rather than international ones (see Figure 5-2). D Asia The involvement of NGOs, especially bene- I Africa ficiary groups, in the planning of Bank-sup- ported projects has been encouraged by the executive directors and the Bank's senior man- agement. To facilitate this interaction early in the project cycle, the Bank periodically makes available to NGOs a list of prospective Bank- supported activities in which Bank staff see of-adjustment-related operations approved potential for NGO involvement. The fruits of during the year for Bolivia, Cameroon, Chad, these efforts are reflected in the greater num- and Jamaica. ber of projects during the past two years in The program to alleviate poverty and miti- which NGOs were engaged in the design stage. gate the adverse social costs of adjustment in Historically, about half the cases of NGO Uganda-approved in fiscal 1990-illustrates involvement in Bank-supported projects have the contribution that NGOs can make toward been in sub-Saharan Africa. but the share in drawing the most vulnerable groups into a other regions has been growing during the past country's economic-recovery process. The two years. NGO involvement continues to be program seeks to help the most disadvantaged most frequent in the agriculture and the popu- rural and urban poor and includes special ef- lation, health, and nutrition sectors. Social forts to help women widowed and children programs related to adjustment emerged in orphaned by war or AIDS. Several interna- fiscal 1990 as the next most common area of tional and national NGOs-including the Co- NGO involvement in Bank-supported opera- operative for American Relief Everywhere tions. NGOs are engaged in social-dimensions- (CARE), Save the Children Fund, the Lutheran 96 World Bank Activities, IFC, MIGA and ICSID A number of governments have become increasingly interested in how NGOs can I Figure 5-2. Bank-NGO Operational contribute to national development. For exam- Collaboration. by Type of NGO. ple, the government of Indonesia has been Fiscal 1973-90 gradually widening the scope for community initiative throughout the 1980s. The Bank co- sponsored a meeting on government-NGO cooperation in 1985 and helped finance the 1973-87 national expansion of a successful child-health program that relies heavily on a voluntary women's organization. For the 1990 meeting of the Inter-governmental Group on Indonesia, / 33'o 21-. the Bank prepared a report on Indonesia's impressive progress against poverty; the report included a chapter on government-NGO coop- eration and community initiative. The Bank continues to expand its dialogue with NGOs on important development-policy issues of common concern. Many NGOs, in both developed and developing countries, want to contribute to the Bank's thinking on a variety of issues, particularly those related to 1988-90 the social and environmental aspects of devel- opment. The NGO-Bank Committee provides a formal, international forum for such discus- sion. The majority of the twenty-six NGO 45-:: leaders who serve on the committee come from developing countries. The main topics dis- cussed at the committee's ninth annual meet- ing (held in Bangkok on October 31 and November 1, 1989) were grassroots participa- tion in development planning and NGO views on Bank policies in the areas of structural adjustment, international debt, and trade. The Bank's dialogue with NGOs is not lim- * International ited to the Bank-NGO Committee, however. LI National Other fora present opportunities for the Bank and NGOs to explore the range of development I Grassroots issues of mutual concern: NGO representa- tives were among the speakers at two well- attended training courses held for Bank staff during the past year on collaboration with NGOs; and, of the some 250 NGO representa- tives who came to Washington, D.C., to attend World Federation. Action Aid, Experiment in conferences organized to coincide with the International Living, Accord, World Vision, and annual meetings of the Bank and the Interna- the Ugandan War Widows and Orphans Foun- tional Monetary Fund in September 1989, 150 dation-are working with the Ugandan govern- received observer status from their govern- ment in implementing the program. ments and were thereby permitted to attend Under a small-scale infrastructure-rehabili- the Bank-IMF meetings. tation component of the program, for example. Cooperation on agricultural research. The Action Aid of the United Kingdom and World Consultative Group on International Agricul- Vision of the United States are helping local tural Research (CGIAR) is an informal associ- political organizations prepare subproject pro- ation of forty public and private-sector donors posals for consideration by local district devel- that funds research programs and related ac- opment committees for approval and funding. tivities, including training, carried out by a Under a health component, the Ugandan War network of thirteen international agricultural- Widows and Orphans Foundation is assisting research centers. The Bank is a cosponsor of the growing number of orphans whose parents the CGIAR, together with the FAO and the were victims of civil war or AIDS. UNDP. CGIAR-funded programs cover most Interagency Cooperation 97 of the world's major food crops and include International Potato Center (CIP) to develop research on animal-production systems, as cultivars adapted to both the highlands and the well as food policy. delta regions of their country. Viet Nam hopes Successor to the "green revolution.' In eventually to produce I million tons of pota- 1989, CGIAR scientists in the Philippines be- toes annually and to expand seed-potato pro- gan work on one of the most ambitious agri- duction by planting 50,000 hectares with seed cultural-research projects of the past thirty of improved quality. years. With the go-ahead from donors, plant Similar efforts are being made to quadruple breeders at the International Rice Research annual maize output. Viet Nam currently Institute (IRRI) made initial crosses for a series plants over 200,000 hectares to winter maize, of new rice varieties to replace the green- nearly all of it early maturing, short-statured revolution rices of the 1960s and 1970s. varieties supplied by CIMMYT, the Interna- According to IRRI, the first of the new lines tional Maize and Wheat Improvement Center. should be available by the end of the decade. The impetus for increased maize production The new materials will cover five distinct is largely homegrown. Drawing on their knowl- growing environments and will include a suc- edge of rice production, Vietnamese farmers cessor to IR-36, the world's most widely grown developed a technique for sprouting maize rice cultivar. IR-36 combines insect and dis- seedlings two to three weeks before the rice ease resistance with high yield. It is grown on harvest and transplanting them as soon as the an estimated II million hectares worldwide. rice was harvested. Prior sprouting and trans- IR-36's successors will be designed to raise planting ensure that a complete cycle of maize rice-yield potential from the current ten-to- can be grown within the relatively short inter- eleven tons per hectare to a sustainable fifteen val between the harvest of summer-grown rice tons a hectare by 2010. To achieve this, breed- and the arrival of winter temperatures. CIM- ing teams will redesign the rice plant by reduc- MYT-supplied germplasm. selected by Viet- ing the number of nonproductive tillers and namese scientists, currently outperforms local improving the plant parts responsible for grain cultivars by about 50 percent, mainly because production. The new varieties will produce an of its ability to stand in waterlogged soils. estimated 200 seeds per panicle, as compared Institutional development. The CGIAR with 150 produced by IR-36. They should also sought to redeploy its resources and efforts in reduce the need to produce rice in ecologically 1989 in response to challenges arising from unfavorable areas by increasing yields on lands global concerns about the sustainability of na- most suitable for production. tional resources and the dangers of environ- Diversifying agricultural produc tion. As mental degradation. These concerns led the work on new rices proceeds, CGIAR scientists CGIAR in the direction of broadening interna- will also be looking for ways to diversify tional efforts to tackle such problems as soil agricultural production in Asia. Experts be- erosion: desertification; increasing salinity of lieve that diversification will play a role in irrigated lands; deforestation; environmental developing more sustainable production sys- pollution resulting from excessive use of chem- tems in the region and will help to increase icals, fertilizers, and pesticides: and the loss of farm incomes. biological diversity as unique plant ecosystems Recent surveys show that productivity on 32 are destroyed. million hectares of rice-wheat rotation land in A systemwide committee explored the Bangladesh and the Philippines is declining. means by which the emphasis on sustainability The CGIAR and national-program scientists at CGIAR centers could be deepened and hope to reverse this trend by 1993 by introduc- strengthened. Opportunities were identified for ing improved management techniques. collaboration among centers, and between cen- Diversification will also play a role in efforts ters and national systems of agricultural re- to meet food-production requirements in search. A special role for universities in devel- Southeast Asia. As recently as two years ago, oping countries was defined as part of the Viet Nam suffered from food shortages and collaborative process. The CGIAR also de- depended almost exclusively on rice to feed cided that it should expand its mandate to itself. Today, farmers are growing maize and include research on the utilization of renew- potatoes, crops that were largely unknown in able resources related to agriculture, and espe- the 1970s. cially to forestry. Potato production had been limited mainly A timetable and process by which a number by the lack of heat-tolerant varieties and the of international centers that are not within the difficulty of maintaining seed of good quality. CGIAR at present could be scientifically as- Since the early 1980s, Vietnamese researchers sessed for possible inclusion within the system have been working with scientists from the were approved. Research at most of these 98 World Bank Activities, IFC, MIGA, and ICSID centers is resource-oriented, and their inclu- or implementation by building up the staff of sion within the CGIAR would reinforce the the entity and providing it with the means to system's efforts at sustainability. develop the plans, programs, and designs re- In keeping with its founding commitment to quired for preparation or implementation; increase food production, the CGIAR formu- completion of the preparatory work and de- lated a proposal for establishing a network in tailed designs necessary to ensure that project Africa for research on vegetables. The pro- preparation is sufficiently advanced so that posal responds both to the continuing interest implementation can start shortly after loan expressed by donors and to the formulation of approval; certain essential start-up activities development priorities by African govern- without which project implementation would ments, as well as regional organizations. be seriously delayed: and design of training CGIAR finances. Contributions to the programs and training of local staff. CGIAR continued to rise in 1989 despite a One of the few technical-assistance grant general slowdown in foreign aid by most major instruments in the Bank is the special project- donors. A total of thirty-six donors pledged preparation facility (SPPF). The SPPF was $225 million, a 6 percent increase over the established in 1985 to help IDA-eligible, sub- previous year. In 1975, the CGIAR received Saharan African countries finance preparation 0.35 percent of development-assistance out- activities (including the preparation of propos- lays by donor countries; in 1989. it received als for financing by other donors) that could 0.44 percent of the $48.1 billion total. The not be financed from other sources. Experi- World Bank's contribution to the CGIAR ence indicates that compared with PPFs, amounted to $33.3 million in 1989, up from which are either repaid by the borrower or $30.0 million in 1988. subsequently refinanced under Bank loans and credits, most SPPFs are converted into grants. Technical Assistance In calendar year 1989, thirty-one advances Technical-assistance components in loans were made for $3.9 million. and credits, which continue to be the principal The Bank's portfolio of United Nations De- source of technical assistance in Bank lending, velopment Programme (UNDP) projects under increased from $1,095.1 million in 1988 to Bank execution consists of 162 projects in $1,185.8 million in 1989. Such components are progress, for a total of $260.9 million. An used primarily in support of investment innovative UNDP project in the critical area of projects, in contrast with freestanding techni- financial risk management was launched in cal-assistance loans, which are increasingly August 1989. The Financial Technical Assis- becoming the vehicle for institutional support tance on Asset and Liability Management Proj- of the adjustment process. As a percentage of ect is designed to provide technical assistance investment lending, these components de- to developing countries that lack the knowl- creased from 7.9 percent in calendar year 1988 edge and expertise in the use of modern tech- to 7.3 percent in calendar year 1989. niques of financial risk management. Through In addition, in calendar year 1989, twelve this interregional UNDP project, the Bank, as freestanding technical-assistance loans were executing agency, draws on its own experience approved for a total of $126.3 million. Of these, and is able to transfer asset-management and nine, for an amount of $90.3 million, were in liability-management skills to selected groups the Africa region; the remaining projects were in the public and private sectors. in the Latin America and the Caribbean and As part of the new initiatives being carried the Europe, Middle East, and North Africa out under the Bank's special grant programs, regions. Although small as compared with the Bank, together with the UNDP and the other Bank lending instruments, freestanding African Development Bank, established the technical-assistance loans are a crucial com- African capacity-building initiative (ACBI), plement to structural-adjustment loans and which aims at providing a framework for build- sector-adjustment loans. Of the total freestand- ing capacity in policy analysis and economic ing technical-assistance loans approved in cal- management in sub-Saharan Africa. Specifi- endar year 1989, nine (for $96.3 million, or 76 cally. the key objectives of the initiative are to percent) were in support of adjustment opera- build a critical mass of professional African tions. policy analysts. strengthen national institu- In 1989, sixty project-preparation facility tions to provide wider local training in policy (PPF) advances were approved, for a total of analysis and management, increase the use of $48.8 million. PPF advances are made prior to indigenous policy analysis and economic-man- loan approval, and they typically finance such agement resources that already exist in Africa, activities as activation or strengthening of the facilitate the return of trained Africans to Af- entity responsible for project preparation and/ rica, enhance donor harmonization in the fields Operations Evaluation 99 of policy analysis and economic-management with other units in the Bank to ensure the support, ensure strong African leadership and continued relevance of its products, to support participation in such capacity-building pro- their dissemination, and to report on their grams, and provide for continued and consis- impact. tent financial support for long-term capacity Most of the OED's work falls into two building in policy analysis and economic man- categories: audits of completed Bank-sup- agement in sub-Saharan Africa. ported operations and studies that address The Bank, in consultation with its two other broader development issues at the country and partners, convened a donors' conference in sectoral levels. All adjustment-lending opera- Paris on June 5 to raise $100 million to fund the tions and 40 percent of the Bank's other oper- initiative for an initial four-year period. Initial ations are audited. results have been most encouraging. If the The operations evaluation department re- initiative proves successful, a permanent ceived 295 project-completion reports (PCRs) source of funding will be sought. The Bank's in fiscal 1990 and audited 134 of them, includ- executive directors endorsed the initiative and ing 30 on adjustment operations. The cumula- approved a Bank contribution in an amount not tive total of Bank operations subjected to ex to exceed 15 percent of the total.3 post evaluation reached 2.260 at the end of the The number of trust-fund projects has grown fiscal year. rapidly in recent years. Trust-fund donors in- For those operations not audited, the OED clude countries, multinational agencies, non- reviews the PCRs that are prepared by the governmental organizations. foundations-.and Bank's operational staff to ensure their quality other private organizations. Some trust funds and facilitate the transfer of experience to new involve several donors. At the end of 1989, the operations and then forwards them to the board. Bank was administering 720 trust-fund opera- The flow of PCRs increasingly reflects the tions (including the UNDP) for a total of $2,858 full scope and diversity of Bank lending. Those million equivalent in donor commitments. To- on adjustment operations now cover not only tal disbursements reached $461 million in 1989, structural-adjustment loans but a growing 61 percent of which were for cofinancing of number of trade-adjustment, export, and sec- Bank projects. The remaining 39 percent were tor-adjustment loans, as well. In fiscal 1990, for global projects such as the Consultative the number of PCRs that were released in Group on International Agricultural Research, previously underrepresented sectors-such as the Special Program of Research and Training oil and gas, urban operations, and forestry- in Tropical Diseases, the Onchocerciasis Con- also increased. trol Program, and pre-investment studies, as The department's fiscal 1990 program also well as environmental and special-studies included a broad array of studies. Like all of projects. the OED's work, these studies serve the twin functions of accountability and lesson learning. Operations Evaluation They seek to provide timely answers to issues Operations evaluation provides a system- of current concern to the Bank's board and atic, comprehensive, and independent assess- management, drawing out recommendations ment of Bank operations and activities. Its for operational work programs while keeping a principal goals are to account to the Bank's balance across sectors, countries, and regions. shareholders for the outcome of Bank-sup- Ten studies were sent to the board during the ported projects and programs and use the fiscal year. feedback from that experience to improve the Evaluation Results for 1988: Issutes in World design and conduct of future operations. Bank Lending over Two Decades, discussed by The director-general, operations evaluation the executive board in November 1989 and (DGO) has overall responsibility for the eval- published in April 1990, reviews the results of uation function. He reports directly to the operations that were evaluated in fiscal 1988 Bank's executive board and is supported by and makes use of improvements in the OED's the operations evaluation department (OED). data base to analyze the Bank's lending expe- The Joint Audit Committee (JAC) of the board rience since the late 1960s. It finds that four oversees the work of the OED. fifths of the Bank's operations were perform- As in the past, the findings and recommen- ing satisfactorily at the time the Bank com- dations of the JAC were reviewed during the pleted its disbursements-a good overall year by the full board, as was the fiscal 1989 record considering the range and scale of the annual report of the DGO and the department's Bank's initiatives in the period. The Bank's annual review of evaluation results for 1988. In his annual report to the board, the DGO noted that the OED had stepped up its interaction 3 For details, see page 44. 100 World Bank Activities, IFC, MIGA, and ICSID performance has tended to be strong in most of In fiscal 1990, a special program was the sectors in which it has a large portfolio- launched to produce training materials from power, highways, and water supply. The re- OED documents for participants in Economic view emphasizes the need for continued efforts Development Institute courses. OED staff con- to improve performance in Africa, especially in tinued to participate as resource persons in agriculture. Analytical chapters of the review EDI seminars on monitoring and evaluation of address the requirements for sustaining the development projects and in seminars on proj- performance of development projects after the ect sustainability. investment phase is completed and for achiev- ing sustainable development in the economy at Internal Auditing large. The review prompted the Bank to reas- The internal auditing department (IAD), sess the criteria it uses to appraise investment headed by the auditor-general, reports func- projects so as to ensure that financing deci- tionally to the president of the Bank and, since sions are based on adequate understanding of January 1990, administratively to the vice pres- how projects are likely to develop over the ident, corporate planning and budgeting. very long term. Internal auditing is an independent appraisal Studies published during the fiscal year were function within the Bank that reviews and Agricultutral Marketing: The World Bank's evaluates Bank operations and activities as a Experience, 1974-85; Project Performance Re- service to management. sults for 1987, Evaluation Results for 1988: The overall objective of the IAD is to assist Issues in World Bank Lending over Two Dec- vice presidents, department directors, and ades; and Renewable Resource Management other managers in the effective discharge of in Agriculture. their responsibilities by providing them with After the dissemination and use of the periodic reports and appraisals carried out on OED's findings were reviewed by a task force, activities within their respective areas of re- at the beginning of fiscal 1990, the Bank rein- sponsibility. troduced the system by which management In the period since the Bank's reorganiza- responds to important issues raised in OED tion, various steps have been taken by senior evaluations. Bank staff are required to seek out management to strengthen the internal-audit- the OED's findings, cite them in project docu- ing function. These include the establishment mentation that is reviewed by the management of a direct functional reporting relationship to and the board, and apply them in future oper- the president and the introduction of a system ations. During the year, the OED actively of periodic meetings with members of the supported initiatives by country departments president's council to discuss the IAD's work to step up the collection and sifting of experi- program and the implementation status of audit ence from operations in their countries and recommendations. elsewhere, so as to share it with country au- These measures have been accompanied by thorities and reflect it in new operations. Such a substantial expansion in the IAD's work in initiatives, which were supported by the OED the operations complex. This trend continued and other parts of the Bank, were welcomed by in fiscal 1990. Moreover, a number of audits the board because they hold out promise that completed during the year addressed issues of the Bank's evaluation system will be strength- significance to senior management in all four ened further. Bank complexes. Client managers responded The OED's evaluation-capability develop- positively to the large majority of audit recom- ment program (ECDP), now in its third year, mendations, and progress in implementing helps the Bank's developing member countries them has been satisfactory. to improve their own capabilities for evaluating Principal audit assignments completed dur- development efforts. Activities are arranged in ing the year concerned trust funds, loan-pro- response to the interests of individual coun- cessing arrangements, borrowers' accountability tries as part of a general effort to strengthen for the use of Bank funds, and various field public-sector management, of which evalua- offices in Europe, Africa, and Asia. Information tion is a tool, in the face of severe budget and resource-management activities, such as end- external-financing constraints. During the user support, systems under development, and year, the OED helped the Brazilian planning facilities management, also received attention. secretariat to define the steps needed to rein- The Bank's external auditors consider the stitute an evaluation system; in Morocco, it work program of the IAD to be an important held workshops on evaluation concepts for the element in the Bank's internal-control arrange- training arm of the planning ministry; and it ments in planning and executing their annual helped the West African Development Bank to audit. Audit reports issued by the IAD are establish an ex post evaluation unit. normally provided to the external auditors. International Finance Corporation 101 The IAD and the external auditors have also its readiness to assist them. Within the Corpo- traditionally allowed each other access to their ration, a new department of investments (Eu- audit working papers to facilitate audit plan- rope) was created to concentrate on Eastern, ning and minimize duplication of work. Peri- Central, and Southern Europe. odic consultations are also held on the scope A new department was also created to focus and content of the internal and external audit greater attention on the Middle East and North work programs. These consultations have been Africa, an area where IFC investment activity beneficial to both parties. has not grown strongly in recent years. Net investment approvals in Africa rose 50 International Finance Corporation percent in fiscal 1990 to a record level. Several The International Finance Corporation sizeable investments were approved, particu- (IFC), a member of the World Bank Group, larly in countries where the investment climate fosters private enterprise in its developing has benefited from private-sector-oriented member countries. It does this by financing economic reforms. The Corporation continued private-sector projects, mobilizing additional its efforts to assist small and medium-sized project finance from other investors and lend- businesses in sub-Saharan Africa. Thirteen in- ers, and providing technical assistance and vestments in such businesses were made advisory services to both governments and through the Africa Enterprise Fund. With staff private companies. in place, this program is expected to expand Fiscal year 1990 was one of continued considerably. Demand for the services of the growth for the IFC. The Corporation approved Africa project development facility (APDF), investments for its own account of $1.5 billion which was given a five-year renewal, contin- for 122 projects (including Africa Enterprise ued to be strong; during the year, the board Fund projects), with total costs of $9.4 billion. approved an IFC contribution to the APDF. Disbursements reached $1.0 billion. The IFC's Investment approvals in Asia were also up, financial position was strengthened. Net in- buoyed by a continued positive environment come for the year was $157 million. The IFC for private investment. The Corporation's fis- tapped the eurobond market for its largest cal 1990 program included major industrial single borrowing to date, a $300 million, five- investments in East Asia and in the energy year issue; the success of this issue furthered sector in South Asia. Following on the success the Corporation's objective of becoming a reg- of the Africa and Caribbean project develop- ular. high-quality borrower in the public bond ment facilities, the IFC is establishing a similar markets, supported by the triple-A rating (or facility for the Pacific island countries. its equivalent) conferred by the two major U.S. The share of new investments going to Latin credit-rating agencies in June 1989. America and the Caribbean, which had been Advisory services to both public-sector and over 50 percent for some years, was lower in private-sector clients grew in both volume and fiscal 1990. but the IFC's role in this region variety during the year. The IFC's corporate remained significant. Investments were ap- finance services group, established in fiscal proved in a number of large projects in Brazil, 1989, was given departmental status in re- Chile, Mexico, and Venezuela, and the Corpo- sponse to rapidly growing demand for advice ration was able to mobilize finance for some of on privatizations and corporate restructurings. them from international sources, partly The IFC's capital-markets department contin- through the sale of participations in IFC's ued to provide advice to member countries on loans, thus bringing commercial banks back the development of their financial sectors. into the business of financing development in During fiscal 1990, Eastern and Central Eu- the region. rope emerged as an important area requiring Approvals of capital-markets projects world- increasing emphasis by the IFC in support of wide tripled in value over the previous year. the reforms being undertaken there. The IFC is The IFC participated in the structuring and well equipped to give advice on the practical launching of eleven country funds and ap- problems that occur when centrally planned proved investments in several merchant banks economies begin to make the transition to mar- and equipment-leasing companies. Thirteen ket-based economic systems. In Hungary and projects, representing 12 percent of total ap- Poland, the IFC is providing advice on a variety proved volume, involved loans and equity in- of subjects to government agencies involved in vestments made through financial intermediar- the process of economic and financial reform. ies and facilities. The IFC has found that such and is engaged in a program of investments, investments enable it to enhance its develop- mainly joint ventures, in these countries. mental impact as it can reach more small The IFC has also assured the governments enterprises than it could reach as a direct of Bulgaria, Czechoslovakia, and Romania of investor. 102 World Bank Activities, IFC, MIGA, and ICSID The IFC developed a new instrument-the Policy and adv'isorv services. MIGA's pol- multicountry loan facility (MLF)-for mobiliz- icy and advisory services (PAS) office provides ing medium-term foreign-exchange lending advisory, consultative, and investment-promo- from international commercial banks for small tion services to developing member countries. and medium-sized projects in selected devel- Its work ranges from research, to technical oping countries. Three MLF operations were assistance, to the cosponsorship with govern- approved in fiscal 1990. The IFC is currently ments of investment-promotion conferences. having discussions with other commercial PAS's advisory services are carried out by banks about MLF lending to other areas, in- the foreign-investment advisory services cluding countries of sub-Saharan Africa. (FIAS), a joint IFC-MIGA initiative, which During the fiscal year, the IFC established a provides advice and technical assistance to formal environmental review for all projects. It developing countries on the content and ad- is undertaking a study of the possibility of ministration of investment laws, policies, and promoting and financing private-sector pro- programs that promote and regulate foreign duction of environmental goods and services in direct investment. The advice and technical developing countries. assistance are designed to promote, regulate, Full details of the IFC's fiscal year can be and otherwise influence the amount and char- found in its annual report, which is published acter of foreign direct investment that member separately. countries receive. Policy and advisory services were provided Multilateral Investment Guarantee to twenty-two countries in fiscal 1990. These Agency services ranged from investor identification to The Multilateral Investment Guarantee strengthening awareness of MIGA and its op- Agency (MIGA) has as its principal responsi- erations. In this context PAS, together with the bility the promotion of investment for economic government of Ghana, sponsored its first in- development in member countries through: vestment-promotion conference. The success * guarantees to foreign investors against of this event in February 1990 stimulated losses caused by noncommercial risks; and strong member-country interest in MIGA as- * advisory and consultative services to sistance on this front. The event in Ghana member countries to assist them in creating a brought leaders of that country's public and responsive investment climate and information private sectors together with officials from an base to guide and encourage the flow of capital. array of multilateral institutions, including the MIGA also works in cooperation with na- World Bank, the IFC, and the IMF. and, most tional insurance agencies. not only to provide important, more than forty senior executives additional capacity but also to insure investors from international business corporations. PAS who may not be eligible for their own national preselected the foreign corporations on the ba- insurance plans. Many times, citizenship or sis of their likely investment interest in Ghana, other eligibility criteria may prevent a national and several of the companies subsequently en- agency from offering coverage. In such cases, tered into joint ventures in the country. MIGA becomes the only alternative for long- Guiarantees piogram. MIGA's guarantees term investment insurance. In addition. MIGA program protects investors against losses aris- is unique in its structure as an international ing from the noncommercial (political) risks of organization whose membership of developed currency inconvertibility, expropriation, war and developing countries also includes the host and civil disturbance, and breach of contract by country for each insured project. the host government. MIGA can insure invest- MIGA's board of directors reviewed the new ments in new projects or the expansion of agency's activities and plans, and its meetings existing projects (including privatizations and were noteworthy in establishing procedures for financial restructurings). provided the project is MIGA, strengthening member awareness of registered with MIGA before the investment is many of the technical aspects of MIGA's made or irrevocably committed. MIGA's stan- work, and reviewing a three-year program of dard policy covers investments for fifteen action. Board discussions on proposed con- years, although coverage for a project may be tracts have underscored the priority that the extended to twenty years. MIGA also works in board and management place on ensuring that cooperation with national insurance agencies to MIGA's actions make a distinct contribution to coinsure or reinsure eligible investments. development and that investments obtaining In fiscal 1990, MIGA issued its first guaran- MIGA's noncommercial risk guarantees meet tees, with a maximum contingent liability to- World Bank environmental and economic-de- taling $132.3 million, for four projects repre- velopment standards. Attention was also given senting a total of $1.04 billion in direct foreign to the importance of MIGA's advisory roles. investment. According to information pro- International Centre for Seftlement of Investment Disputes 103 vided by the investors, these projects will 1990 appear in its annual report, which is generate approximately 2,700 new jobs in the published separately. host countries by the fifth year of operations. International Centre for Settlement The insured investors are Freeport McMoran Copper Company of the United States, which of Investment Disputes expanded its copper, gold, and silver mining The International Center for Settlement of project in Indonesia; International Mariculture Investment Disputes (ICSID) was established Partners of the United States, which is estab- in 1966 by the Convention on the Settlement of lishing a scallop-breeding facility in Chile; Investment Disputes between States and Na- Placer Dome, Inc. of Canada, which entered tionals of Other States (the convention). ICSID into a joint mining venture in Chile; and the seeks to encourage greater flows of interna- General Electric Company of the United tional investment by providing facilities for the States, which acquired an interest in the Tung- conciliation and arbitration of disputes be- sram Company of Hungary to manufacture tween governments and foreign investors. To lighting products. In the last two projects men- further its investment-promotion objectives, tioned, MIGA reinsured the national investment ICSID also carries out a range of research and insurance agencies of Canada (Export Develop- publications activities in the field of foreign- ment Corporation) and the United States (Over- investment law. seas Private Investment Corporation). In February 1990. China became the ninety- Extensive efforts were made during the year ninth country to sign the convention. The to broaden awareness of MIGA's programs number of signatory countries that completed and services. These efforts helped generate 223 the process of joining ICSID by ratifying the preliminary applications for political-risk in- convention also continued to grow, with Ton- vestment insurance by the end of fiscal 1990, of ga's ratification bringing to ninety-two the which 116 were registered and eligible for number of ICSID members. coverage at that time. These registrations cov- During the fiscal year. awards were rendered ered a broad range of economic sectors, in- in two cases and decisions were issued in two cluding mining, agriculture and agribusiness, proceedings for the annulment of awards. By manufacturing, energy, and services. Aside the end of the fiscal year. there were six cases from the investments insured in fiscal year pending before ICSID, including two arbitra- 1990, work continued on a number of other tion proceedings that were initiated during the definitive applications for coverage that can be course of the year. expected to result in insurance contracts in ICSID's foreign-investment law publications fiscal 1991. include a semiannual law journal, ICSID Re- Member relations. Eighty-five countries view-Foreign Investment Law Journal, and have signed the MIGA convention, represent- multivolume collections of Investment Laws of ing an increase of twelve over fiscal 1989 the World and of Investment Treaties. Two totals. Membership in MIGA rose from fifty- issues of the law journal and three releases of one countries to fifty-eight. MIGA member- the investment laws and treaties collections ship is open to all member countries of the were published in fiscal 1990. World Bank. Switzerland is also a member of Details of ICSID's activities in fiscal 1990 MIGA. appear in its annual report, which is published Details of MIGA's activities in fiscal year separately. 104 _~~~ ~ - W- V.T i}~~~~~~~~~A -.~~~ ~ = f _ _ b # _ ' ~~~- ,f -a\ '$ &' - ' A training school for agricultural-extension agents in China. Four out of five country-specific women-in- development action plans recommend raising the productivity and incomes of women farmers by improving access to extension and other agricultural-support services. 105 Section Six 1990 Regional Perspectives Africa Sub-Saharan Africa continues, by and large. exports. Better weather and supply response to to experience a modest economic recovery. adjustment efforts may also have contributed. Gross domestic product (GDP) rose by 3.5 About two thirds of the countries in sub- percent in 1989, as against 2.5 percent in 1988. Saharan Africa have begun to implement poli- Countries that are dependent on official devel- cies to effect structural adjustment of their opment (concessional) assistance (ODA) did economies, and still more are likely to embark even better, with GDP rising by 4.2 percent as on reform programs over the next few years. contrasted with 3.4 percent the year before. However, with continued high rates of popu- This more rapid growth follows an increase in lation growth, current GDP growth rates still nonoil commodity prices in 1988 and an oil- produce little or no per capita income growth price rise in 1989, and is associated with a in most countries. Even the current recovery is significant recovery in the volume of African fragile in the vulnerable economies of sub- Table 6-1. Africa: 1988 Population and Per Capita GNP of Counfries That Borro%%ed during Fiscal Years 1988-90 l r Y .1 , E r . (B.llr.rin 44t.-ll. 1 Pk, I n I.,.i,,rl. I, 1II Benin 4.44q 9 2111 . 111 I Burkin.l F,I-is .... . 'y II ;9 al"' ^1Z.' th Burundi i 1411 411 S1.1A .'t19 '9I CanieroOn 11. I4 1.I i MauIiu,Ini., I B9llt 4l1 C'apC \N .rde 1tnII t*. I MaLDu rIju I Ili I I l.litl Cenirdl .Xlriltn Republ., 2 m 3Mi.i N10fl1.,mhbitW 14 -49, 1011 C h.,d ;.3t IN' NI,xr - Congo. F'l.cop s RvpuLthI. NIri., I II . I .1 2t11 Of thc ' 199 '/li R\'n. 6 h e,i 321J ColI, d I' 1'i 5 I I A.i 2f 1' S,' .1\rn F.rin h Pe I 1 4911 DoIbotin 11.I I J a enelJI h.99h il Elhiopud 4' 9it,* I'u) ni.Iu ll j ornd (iho'n 1 if 2 ' wi J1UdiI1 '3 .T 4811 (Cnmblj. Thi; 2'till FVjn.::Ln i. 4 7 I lI Ghan 13't-- 4 41111 TotI - GuIn: 5.4111 41ti IL cand., II- 211 (jUifl1j-BI>faU 'J411 I 91I Z,irc 1-:i Ksen%l ''22 44 th 11 /nimb.,hte I.;Il1 l.'i L e s t., t t. k i I hlh 4211 IN-.;TE The Is' e.n.n ..e . (5,rr-p r ,-rr., pii rnr- -I-. e .Ir Ir-.. [h.. 'A -r1 1k 4Ir,rI Irmc . rl . 'c Ii h TI/ ,. . Ip,,|, k, A. p. / ri N.i . *. .. .. l Mid I99'. d GNP -rir cr <*'r. to f... 1 mi: pn- I.. -rid,1I.. l n.-..,r-l. d CiNF' rPLM d *r . J,r . ,I,lmAr, l ud 1 .n.:.,m,., 'rl- 106 1990 Regional Perspectives Saharan Africa. Long-term development pros- exchange markets. The manufacturing sector, pects are overshadowed by severe structural caught in the squeeze, experienced a decline in constraints requiring institutional strengthen- output. Later in the year. the adoption of a ing and deepened policy reform to overcome. more restrictive fiscal and monetary stance Increased resources will also be needed to slowed inflation, improved the business climate, finance the levels of investment and imports and, together with rising oil-export earnings, led required for faster growth. to an increase in the availability of foreign ex- change for use by the private sector. Taking the Subregional Trends year as a whole, manufacturing output was un- West Africa. In the oil-exporting countries of changed from 1988. West Africa, growth accelerated to an esti- Among the other West African oil exporters, mated 3.7 percent in 1989, primarily the result Gabon experienced a strong recovery, while of a significant recovery in oil-sector activity. In the situation of Cameroon and the People's Nigeria, overall GDP growth increased from 3.9 Republic of the Congo remained difficult. In percent in 1988 to 4.9 percent in 1989, led by Gabon, with prospects for increased oil output large increases in the production of hydrocar- from recently discovered fields, investment in bons. Nonoil GDP is estimated to have grown the oil sector has resumed on a substantial by 3 percent. Agriculture grew by 4 percent, scale since 1988. In 1989, GDP is estimated to reflecting a continuation of the recovery from have grown by 5 percent, for the most part the poor harvest in 1987. However, recovery of reflecting expansion of the oil sector. In the manufacturing sector stalled, as the country Cameroon, by contrast, the progressive ex- struggled to bring a deteriorating macroeco- haustion of known oil reserves has added to nomic situation under control. The first part of the severity of the economic decline triggered the year was characterized by a high rate of by the oil-price fall of the mid 1980s, which was inflation, which eroded purchasing power and followed by the drop in coffee and cocoa put severe pressure on the financial and foreign- prices. The recent recovery in oil prices has Table 6-2. Lending to Borro%sers in Africa. b.s Seclior. Fiscal Nears 1981-90 se,l.-n .. r lS ilyl.l I \n,ii.,I .A\2n.uilturc .nd Rur.,l DeL el..'pmner 14.' 414.' I.2 i, . '4S 49-.4 De% elopmen[ I inancc (Comr'Jnre- Ni I I I 232 311h I hi l u du ,ti ,n iI9 114 I I 1 149 1 ,y A 2 350 _ (l10. c ..t nd cuil I . -I I 1 1.2 ' I29 P 1''I' i1 Sxit I . 4 2t 1).J lnduL -11 . I.:1 9 - Is il 5S I lIIlj Nonrp'rieo Jr,5, i 1. I *11 .u '1 11 Popul.ulii.n. I-k.jilh, -ind Nutrition 2~.9 l I1 31.b 1'1 4 .I'3 2.1',' PNti,h. ,e;lkr N11inrVnicnt i'. 3 - ii II _ 4i 6 Srnall-kice Enteiprii, I 3tIi_ll Itl t)-1 lc.hni,;i A-.isr.;c 1i1,. ib4 .1 ' 95i - I44,h hE.U I !t2'tlllUturili.Atlt.'nv 43 9 4it ' '' S - 1 ,Il'. I 22, I r.,n4pc'[-l.i!tl l 34o I 19 1.A '', tI.t.f. '4Y ' 5.l3.te L Iruii Diei:pmeni i-14.2 li 11 3I'i 5 14h E -41-4 11 36(1.4 \\.,ler h''rpI' 4nd Sc..cr.,ce xx h l'. hi .X 45i '1Vl. oi T%'rer I x'4 ' 2pin l. i ' 1!9' - ',9',S, 4.Y28 3. 13'32.9 l )I hich I[BRD AlI it J 1l5 l '25 ! I. i l fh 1.14- tl I DA' I ihs I1 .14 3 1._31 9 2I',I _II,h _, 2 .44. | .s5Xj NUrmhbr r p -1ner ii,li 7 7i.) x1 I Sl h o.. F w-, . 1 - ; ma.. l.. Africa 107 a- | _~Pw A AP~~ _ -- A fish-processing plant in Senegal. Cumulative lending in suppoi-t o.f smnall-scale entem-plises topped the $5 billion mar-k in fiscal 1990. not markedly improved the situation. In 1989, levels of rainfall on agricultural output. Al- GDP declined for the third year in a row, by an though export volumes have remained roughly estimated 6.5 percent. Cameroon has now constant, on the average, the current-account started to implement a structural-adjustment deficit in the balance of payments of the eight program with suppport from the International countries increased, from 12.2 percent of GDP Monetary Fund (IMF) and the World Bank. In in 1988 to an estimated 12.9 percent in 1989. the Congo, the level of economic activity re- Adjustment programs, emphasizing fiscal dis- mained depressed, as the country continued to cipline, continued to be implemented in the struggle with large financial gaps and a sizeable subregion, and measures were adopted to im- debt overhang. prove international competitiveness through cost For the Sahelian countries, the past eighteen reductions and greater efficiency. In The Gambia months have been marked by continuing ef- and Mauritania, modest depreciations of the ex- forts to implement economic reforms and to change rate also conttibuted to the adjustment establish a stronger basis for improved growth process. Banking-sector reform, which is high on performance. Six of eight Sahelian countries- the agenda of several Sahelian countries, re- Chad, The Gambia, Mali, Mauritania, Niger, ceived a substantial boost in 1989 from a decision and Senegal-are actively implementing Bank- by the West African Monetary Union (UMOA) supported adjustment programs, and in a sev- to adopt a set of reforms designed to improve the enth country-Burkina Faso-the dialogue on operation of monetary and credit systems in the economic reform has advanced significantly seven member states (Benin, Burkina Faso, during the past year. Overall, growth was C6te d'Ivoire. Mali, Niger, Senegal. and Togo). modest in the Sahelian countries in 19W9 GDP Trends in the rest of West Africa varied is estimated to have increased, on the average, widely. In Ghana, the recent momentum of by about 1 percent. Growth rates varied con- growth continued, with GDP rising by 6 percent siderably by country, however, ranging from in 1989. Cocoa output reached its highest level 10 percent in Mali to a negative 3 percent in since 1976, although record low international Niger. reflecting, in part, the effect of variable cocoa prices reduced export earnings and fiscal 108 1990 Regional Perspectives revenues. The donor community has main- slowed to about 5 percent (from 6.1 percent in tained its support for Ghana's structural-adjust- 1988), sector policy reforms continued, and per ment program, and net capital flows from offi- capita income grew for the sixth year in a row. cial donor sources increased substantially. The The recent decline in fertility rates has contrib- foreign-exchange auction functioned smoothly uted to this good performance. and was widened further to include the transfer The rate of growth in Mauritius declined from of profits and dividends. Similarly, growth of an average of about 8 percent in the previous GDP in Guinea continued at an estimated 4.5 five years to an estimated 4.6 percent in 1989, percent in 1989, inflation decelerated, and the with the export-processing zones growing by exchange rate was allowed to depreciate at the only 6 percent, as compared with well over 20 weekly auction to maintain competitiveness. percent in previous years. Inflationary pres- Progress was made in the reform of public- sures are also rising, as the economy is begin- sector management and the civil service, as ning to overheat. The economy of Madagascar well. In Togo, real growth in 1989 was esti- is picking up, as it starts to respond to an mated at between 3 percent and 4 percent, and increasingly vigorous liberalization program. In the inflation rate declined further. During the 1989. the economy entered its second year of course of the year, Togo introduced a new positive per capita growth after almost a gener- investment code, rationalized its tariff and fiscal ation of decline. In 1989, GDP rose by about 4 systems, and continued efforts to reduce costs percent, reflecting a 3.9 percent increase in of the export-crop marketing agency. agricultural production, good performance in In contrast, C6te d'Ivoire continued in 1989 livestock and fisheries, and strong growth in to face a serious economic crisis with large trade and tourism. Rice production increased financial imbalances. For the third year in a by 7.6 percent. After eight consecutive years of row, GDP fell (by an estimated I percent in decline, the volume of imports increased (by 1989), and investment dropped to new lows in about 5 percent in 1989). and export volumes both the public and the private sectors. The rose sharply (by 29 percent). decline in the world market price of the coun- Internal wars and continuing insecurity con- try's principal exports (particularly cocoa) fur- tinued to plague other East African countries. ther heightened the already severe pressures The Sudanese economy is in a state of crisis as on the budget and the balance of payments. a result of the continuing civil war. Production Prices paid to producers of coffee and cocoa is much below capacity in both agriculture and were sharply reduced in 1989. Major structural manufacturing, and exports have stagnated. adjustments will be required to restore interna- Preliminary estimates for 1990 indicate a fur- tional competitiveness and growth. In Benin, ther decline in GDP, of 2.3 percent, and a 22 where GDP decreased by 1.4 percent in 1989 percent drop in export earnings, while financial and fiscal imbalances worsened, a new govern- imbalances deepen and inflation rises above ment is taking steps to raise revenue and 100 percent. In Ethiopia. a better harvest, restore the conditions for growth. combined with the effect of earlier liberaliza- Eastern and central Africa. Several coun- tion measures, caused the economy to recover tries in East Africa turned in a favorable eco- somewhat in 1989. In 1990, however, the econ- nomic performance in 1989. In Uganda, the omy took a turn for the worse, as world prices continued dismantling of trade and other con- for coffee declined and harvests failed in the trols improved the availability of basic com- country's northern and eastern regions. A modities and imported inputs on the domestic drought emergency has been proclaimed, and market. A cumulative nominal devaluation of it is estimated that 3 million to 4 million people the shilling by 59 percent during 1989 also may require relief assistance. In Somalia, weak contributed to the adjustment of the economy. stabilization efforts and the private sector's Impressive gains were made in the productive lack of confidence, prompted by political un- sectors; agricultural and industrial production rest and the continued fighting in the north and grew by an estimated 5 percent and 12 percent, elsewhere, continued to undermine economic respectively. Overall, GDP increased by about performance. Domestic inflation reached 150 5 percent, implying growth in per capita GDP percent by the end of 1989. of about 2 percent. Considerable progess has The central African states of Burundi, also been made in the rehabilitation of the Rwanda, and Zaire also performed poorly in country's social and economic infrastructure. 1989. Burundi was hit hard by the decline in However. inflation remains high, and the col- coffee prices, and food-crop production fell lapse in world coffee prices has greatly com- because of uneven rainfall. Real GDP is esti- plicated the task of financial stabilization. mated to have increased by only about 0.4 Kenya continued its favorable economic per- percent in 1989. A number of institutional and formance into 1989. Although GDP growth policy improvements are being implemented in Africa 109 the coffee sector, and the Burundi franc has and output, however, remains fragile, and in- been devalued by 16 percent in nominal terms security continues to be a serious problem in since November 1989 to improve external com- rural areas. In Zambia, where there was essen- petitiveness. In Rwanda, the fall in the price of tially no growth in 1989 (GDP grew by only 0.1 coffee (which accounts for 90 percent of ex- percent), significant changes were made in its ports) further deepened the country's economic policy framework, leading to the adoption of a and financial difficulties. In 1989, GDP declined reform program monitored by the Bank and the by about 6 percent, and budget and external International Monetary Fund that included ma- imbalances widened. Far-reaching domestic jor monetary and exchange adjustments. In policy adjustments will be required to put the Angola, which joined the World Bank in Sep- economy back on the path toward sustainable tember 1989, large macroeconomic imbalances growth. In Zaire, inflation slowed somewhat, and policy distortions will need to be ad- and an increase in copper revenues eased fiscal dressed. The economy continued to be bat- and foreign-exchange constraints. But growth tered by warfare. continued to be sluggish (less than I percent). as private investment slowed and personal in- Long-term Development Issues comes fell. The poor composition and quality of Structural obstacles to development are par- public expenditure remained a primary cause of ticularly profound in Africa, and long-term lagging supply response. efforts to overcome them are necessary on a Southern Africa. Performance in the South- broad front, ranging from human-resource de- ern Africa subregion continued the strong re- velopment and poverty alleviation to environ- covery begun in 1988 in response to adjustment mental protection, slowing the growth of pop- efforts in a number of countries. Aggregate ulation, and quickening the pace of agricultural growth in the countries that are members of the development. While the main focus of the Southern African Development Coordinating Bank's effort has always been on issues of Conference (Angola, Botswana, Lesotho, long-term development, this emphasis has been Malawi, Mozambique, Swaziland, Tanzania, reinforced in recent years with the adoption of a Zambia, and Zimbabwe) averaged 4 percent in number of special African initiatives to tackle 1989, yielding the second consecutive year of some of the more critical problems. per capita income increases. Agriculture con- Population. No single issue is more impor- tinued to lead the recovery process, confirming tant for Africa today than population growth. the deepening effect of appropriate policies Currently, of the forty-five countries in sub- during a year in which weather conditions Saharan Africa, seven have adopted a popula- deteriorated in some countries (drought in tion policy and twenty more are in the process Zimbabwe and floods in Malawi and Zambia, of developing such a policy (see Box 6-1 for for example). Lesotho and Malawi, which con- details of family-planning programs in Zimba- tinued to implement policy reforms, particu- bwe and Botswana). A principal objective of larly in the agricultural sector, have been stag- the Bank's efforts, therefore, continues to be ing encouraging recoveries over the past few to generate a consensus in the region on the years, with GDP growth at 7.7 percent and 5.0 need for a robust family-planning program. As percent, respectively, in 1989. Zimbabwe ex- a part of this effort, a joint initiative of the perienced a GDP rise of about 5 percent, World Bank. the United Nations Fund for Pop- caused mainly by buoyant manufacturing and ulation Activities (UNFPA), and the Interna- mining activity. The real effective exchange tional Planned Parenthood Federation is leading rate was allowed to depreciate, and there was a to the preparation of an agenda for action for the strong surge in export earnings. 1990s. Task forces have been formed to carry Tanzania and Mozambique continued to im- out studies in Ghana, Kenya, and Nigeria. Each plement their adjustment programs. In Tanza- task force is obtaining the views of family-plan- nia, GDP increased by an estimated 4.4 percent ning program beneficiaries, policymakers, and in 1989, as the performance of the agricultural implementers to determine how family-planning sector (and others, as well) continued to programs can be strengthened. Country experi- strengthen, reflecting an improving policy ence will be shared, and the final agenda will be environment. However, infrastructural bottle- pulled together under the guidance of an African necks and public-sector management problems Population Advisory Committee. African institu- led to worsening financial performance and tions and researchers are playing the leading continuing high inflation. In Mozambique, roles in preparing the country studies. GDP growth slowed to 3.2 percent in 1989. At the same time, a task force on population, Progress was made in foreign trade and ex- set up in the Africa region of the Bank in fiscal change management and the rationalization of 1989, has made recommendations to strengthen public expenditures. The recovery of income the Bank's population work in Africa. These 110 1990 Regional Perspectives Box 6-1. Familt Planning in Zimbahne and BoL%mana Zimbahv. e and Boi'% ana are thc leaders in t.im- cal educators and disinbutori and accounts for Is planninp in subh Saharan Xtfrica. Their pro a,bout half of all the councils' farmiIu-planning cram- ire a, ail3hle to mosi of their citizen,, and sern-ices. Program %%orker5 concentrate solelh on kno%tledee olf modern rmethods of cuntraception famil% planning and are %%ell paid. is %%idespread rmong their populations. In fact. Recentl. the eosernmrcni. uh ihe help of a le%els ol modern coniracepii'e uxe in the iso Bank-ali,ted health proiect.decided io offer t:am- counities-in 198;:. 16 percent in Zin1bab"e and Is planning scrvices through its osin neissork of 3- peient in Botivs ana-are the bewi In Africa. heith facilities. " hich are e:pected Io become the and ferrilit-, lesel, seem to he declining signifi- main prv%sders. Nonetheless. the ZNFPC out- cantl% reach s! stem remains the backbone of the coun- Yet the isio colinirie, hase tollosted different ir% 's familk-plannine program in rural areas. approache,. illuNirating ihat there is no hlueprint Botsuana s lo% kke% program differs in almost t;r icce'- in thi field and ihut all strategiec e%er% repect It has ne%er had an independent must tarn from the uniquc situ.aion in each ramils -planning a;ssciation. and the go'emmnent is counhrf Both countrie-. hoses%er. hJre a fU%or- irtuall; the sole prot ider of fardlyn planning her- able mix of bact-ground factors, including good- 'Ices. Thee sen-ice, are based in clinics and to-excelleni economic grossth and pcr capita in delivered through a maternal and child health come,. excellent intra,iructure and admirnsltrtive INItC'Hi famils -planning program that operates in s stem, high le-el, ol education and moderniza- e.erx health facilits. Clinic nurses do most of the lion among their populations the lossest le'els oif tamil -planning ssork. There is also a rudimentfu' mirlalits in sLih-Sjharan Africa. and strong go°' outreach neisork of comniaunim -elected %sorkers ernment onimminent to famils plnningn although ssho are supposed to carrti oa1 prexcnti'e healih ofllmcallN as . heilth iriner'entioni. actsj ti,e in their ' illages arid pros ide some farmil Zimbabsse ha: an inrmpre>ssse famil nplanning plinning promotion. referal - 3nd supplh ser ices. program Muchoftheresponsibilit; fordelisering Bot,lsana's healuhsers;ce netssurk is so far .,nd promoting famil -planning services resides reaching ihalt acces Lo famils planning is not a v. ith the Zimhosse Natlional Famil% Planning problem for mosi people. The main constraints are Council iZNFPCi. No"l a parasiatai bodi - ihe ihenadequaiec..'erageanuqualit ofinformatiorn. ZNFPC gress out of a noncosernmeniaJ familv eduCaiLon. and communication lECG activities on plann.ne as3ociat"n r%ith such a hislor; ol sue- both healith and family planning and the lack of ce,s 1hit the riesr untdependent gosernment serice ecared to men and teenagers. neither of I 1981i, elected IO IsorLrk %i ih it. n,hom frequent NICH clinics Nesertheless. the The ZN] PC rin, a neissork tof fIanm,iplannine countr. ' program has been successful in its effort' clinic, and. rmore Important, a communits-hbaed to promote knorsledge and acceptanee of the hen- di!trihution program that cmplo; s ahoul ntll II)- efiis of fariri planning. recommendations, which are currently being plans, which are the product of the Bank's implemented, include building up staff commit- dialogue with governments, are a vehicle ment and skills for population activities; in- through which environmental consciousness is creasing the emphasis placed on population being heightened in the region. Madagascar's issues in economic analysis and country dia- environmental-action plan has already led to logue; increasing the population focus of lend- concrete action, including an investment pro- ing operations for population, health, and nutri- gram, supported by a recent IDA credit (see tion (PHN), as well as expanding other forms of Box 3-2). Implementation has also started on lending for population activities; and involving the plans for Lesotho and Mauritius. Those for African institutions and experts, as well as Burkina Faso, Ghana, Guinea, and Rwanda nongovernmental organizations, more system- are nearing completion, and work has begun or atically in the Bank's work on population. is expected to start in the near future on plans Environment. It is now accepted that envi- for Burundi, The Gambia. Kenya, Malawi, ronmental degradation in Africa is a major Niger, Nigeria, Somalia, and Zaire. constraint against future economic growth. In addition, the Bank has started a program The principal problems are related to natural of regional studies that examines operational resources: soil erosion and degradation, defor- issues related to environmental work in Afri- estation, and declining productivity of range- can countries. Four studies have been com- lands, wetlands, and coastal areas. Work con- pleted-on agroforestry, remote sensing for tinues on the preparation and implementation renewable-resource management, wildlife-re- of country environmental-action plans. The source management, and integrated pest man- Africa 111 agement. Lending is also increasing for envi- groups, helping to strengthen national statistical ronmental investments. The number of services for better policy and program design, projects with an important environmental fo- and building up institutional capacity. Thirty cus has grown considerably over the past two African countries are now taking part in the years, and about twenty such projects are program. Apart from the three sponsoring agen- currently under preparation. In west-central cies, funding and/or secondment of staff for SDA Africa, in particular, the Bank has recently regional activities or country projects have come approved several projects for forestry and nat- from the International Fund for Agricultural De- ural-resource management (in the Central Af- velopment, UNFPA, and the European Commu- rican Republic, C6te d'lvoire, and Guinea), nity, as well as from the governments of Canada, and several more are under preparation. France, the Federal Republic of Germany, Ja- Agriculture. Agriculture is the primary pan, Norway, Sweden, Switzerland, the United source of growth in sub-Saharan Africa. Even Kingdom, and the United States. By June 1990, when full account is taken of environmental a total of twenty SDA country projects had been constraints, the scope for expanding agricul- appraised, of which ten are being implemented. tural production is considerable. To overcome Food security. It is estimated that about the nexus of weak agricultural production and one quarter of sub-Saharan Africa's popula- environmental degradation, agricultural re- tion-over 100 million people-is undernour- search and extension services must be ished, and periodic famine continues to afflict strengthened. Some twenty-two countries are several countries. Under a food-security initia- now included in the Bank's agricultural-ser- tive launched in 1989, the Bank is preparing vices initiative, which is aimed primarily at action programs designed to improve food se- strengthening extension services through more curity in individual sub-Saharan countries. efficient organization, regular training of ex- Food-security action plans have been com- tension staff, frequent visits to farmers, and pleted for Benin, Kenya, Malawi, Mozam- strong links with research. The goal is to bique, and Sudan, and are currently under increase production and yields by conveying preparation for a number of other countries. A simple, low-cost, low-risk technical messages food-security project has already been ap- to farmers. Planting of trees and simple soil- praised in Cameroon. The content of each conservation techniques are also emphasized. action plan varies by country. Some emphasize In Burkina Faso, for instance, considerable inadequate production, while others highlight success has been achieved with the use of people's inability to buy food that is available. simple contour lines made of stones to con- In Madagascar, aggregate food production is serve soil and water. Many of the extension sufficient for the country's needs, but despite messages are directed at women farmers. In recent improvement, malnutrition is wide- Nigeria, where special women-in-development spread; investments in rural infrastructure are initiatives have been launched, horticultural seen as being critical to link surplus areas to techniques are being brought to women's markets, as are income-generating investments groups for them to apply in their vegetable to enable the poor to buy food. Progress is gardens. The Bank is also working closely with currently being made in targeting food-supple- African governments and the donor commu- ment programs to the needy and vulnerable. In nity to improve donor coordination in the Mozambique, which currently depends on financing of agricultural research through the food aid for 90 percent of its marketed foods. special program for African agricultural re- the focus is on better targeting of consumer search (SPAAR), which has assisted several subsidies. In addition, an increasing number of countries already, including Tanzania and Ni- projects with a focus on nutrition are being geria. SPAAR has also been helping with the prepared: Six are freestanding nutrition networking of African researchers. projects, while ten projects have significant The social-dimensions-of-adjustment (SDA) nutrition components. program. This program, launched in 1987 as a Given the importance of food aid in Africa as joint undertaking of the World Bank, the African a resource ($1 billion a year) and as a way of Development Bank, and the United Nations De- addressing poverty issues, the Bank is prepar- velopment Programme, has the objective of ing, jointly with the World Food Programme, a helping African governments incorporate social study of food aid. The draft paper, which has concerns into their economic-reform programs been completed and circulated for comment, and long-term development plans. The SDA pro- recommends greater monetization of food aid, gram is providing assistance at both regional and evaluation of food-aid projects by the same country levels in four areas: improving manage- criteria used for those supported by financial ment of macro and sectoral policy, formulating assistance, and better integration of food aid social-action programs for poor and vulnerable into country development strategies. 112 1990 Regional Perspectives T'able 6-3. Net Transfers to Africa r,,nII-,n .:)L tS d.U,L t e.r.I NI LC-rJ F I"'ri. Z.I Tot.il reiown ller. ~~~~~1'44t, vsw.e4l I *l 4fR 1"-I v+.)[ ,I 14N,ff',,) 1 ,>,0t., xJtwh IX IBRD) ..ril ID.A c0rnnIln.nlllkil 5'. \ 5I 112.4 '2 49.7 i.94 15 h 3 3 14.93u.5 dibui 'enienr 4.S.Nx '.(iIs 7 4 3J '. 10-I ' (1 03 5 Il(lIth.6 lte p 5- ll, n III' . I 742 l it. i ..2 27.; n- S .h 234 . 2 .731.b Nei dI hu,uremcri i 4t,X 7 . 'h 11 ' 67 IS3. y 6. -E ix.-) I 9tl8 I 8,.275. 1 IntWre! m dnd ch.,r,es 2B . h 9r'4 - II 4 2.11 S 6 4.0 7 16 I .140.9 Nui Iran4er 35 3 1 1 s hW I I "4l.n. h7 i 363 9 1.263 9 4.934.2 NM iF: D,mnr.cniiv, Iroin the IDlA SreL:0 FundJ *, iJud,.iJ The OLunntnv, sho.r. in rhe T hle ..C Ih.hoe ' h th, L.1rpe,i Education. Although school enrollments women but also contribute to economic perfor- have been vastly expanded over the past three mance, poverty reduction, improved house- decades, too often this expansion has come at hold food security, slower population growth, the expense of educational quality. Improving and other development objectives. The WID quality is now the top priority for the sector. initiative. launched by the Bank in 1987, is As a follow-up to the Bank's sub-Saharan beginning to have an effect in sub-Saharan Africa education-policy paper, published in Africa: more than a third of the operations 1988, a task force composed of donors to approved in the past two years had specific African education was organized, and eleven components or were oriented to address this working groups were established to focus on issue, while more than a third of the Bank's key issues of education policy and govern- analytical economic and sector work has con- ment-donor collaboration. In parallel. a confer- tained significant discussion of gender issues. ence of sub-Saharan education ministers was In agriculture, provision of extension services held in July 1989 in Abuja at the initiative of the that meet the needs of women is critical. In Nigerian government to discuss these issues. Tanzania, a Bank-supported project includes Its objective was the formulation of coherent support for research on women's cashew pro- national education strategies that could be im- duction; it will provide extension services and plemented with appropriate coordinated donor recruit female extension staff, use marketing assistance. advisers to train women traders, and identify In this context, Bank lending has focused on constraints on women's access to trade credit. rehabilitation of basic education systems in In eight states of Nigeria, Bank-supported Somalia and Tanzania, improvement in the projects are completing a reorganization of the quality of primary and secondary education in extension system to take account of the fact Malawi, and deepening education-sector re- that 40 percent of contact farmers are female. form in Ghana. In Nigeria, the Bank is helping In Ghana, recent analysis has established that to finance an innovative federal university- by the year 2000, female farmers will dominate reform project that supports the policy-reform farming, a fact that will have profound impli- program of the National Universities Commis- cations for the extension service. In The Gam- sion. The program aims at improving quality. bia, the region's first freestanding WID project expanding access to higher education, and was approved during the year; it supports a increasing the efficiency of allocation and re- wide range of activities designed to provide source use in the subsector. opportunities for women to improve their eco- Women in development (WID). Expanding nomic status through expanded access to pro- opportunities for women will not only help ductive resources and basic social services. Asia 113 Asia The year 1989 completed a decade of expe- For the future, the development process in rience with the Asian "economic miracle" that Asia must address the sustainability of this saw the East Asian growth rate rise from 6.6 growth performance. It will require a three- percent in the 1970s to 8.5 percent in the late track strategy of even more sophisticated ap- 1980s. This achievement is a product of rela- proaches to economic management, the exten- tive macrostability, the rare occurrence of eco- sion of East Asia's growth performance to the nomic or financial crisis, and an underlying other Asian countries, where half of the consistency and prudence in economic man- world's poor reside, and an enhanced capacity agement. This record and its lessons are now to nurture and renew Asia's physical and hu- well known. man-resource base, the quality of which has generally not kept pace with economic growth. There is a growing consensus, shaped by the experience of the most successful economies in the region, on the framework within which Table 64. Asia: 1988 Population and to address these sustainability issues. Per Capita GNP of Countries That That consensus is already beginning to have Borrowed during Fiscal Wears 1988-90 an effect on the policies and performance of the slower-growing economies. Although Popul'Fuonl n c GNP- many poor Asian countries must first concen- Counr! ihoui.inds i LI,Si trate on raising agricultural productivity to Bangladesh ll!s.whl} l-ll sustain growth, they, too, are attempting to Bhutan 1.3';" 19J xl stimulate manufacturing sectors, and, in some China L.UNS.4II' 33io areas, have done so successfully. Other les- Fiui 732 L .52'i sons from the Asian experience-such as the India 811;.i(l 34l1 complexity of centrally managing modern-day lndonesia 174.X32 441) economies and the demonstrated limits to fis- Korea. Republic L*f 41.975 3.611l cal expansion-have also had an effect. The Lac, Pcople. !I Deniocrad; appeal of a more pragmatic economic frame- Republic l 9n1 I I work is growing in South Asia, where public talaysiia 16.9'1 1.9411 intervention has had a long tradition in eco- Nlaldies 2to2 41il nomic policy. Elsewhere (such as in Viet Nam N11%drnmar 39.91t n..j. and the Lao People's Democratic Republic) Nepulr 17.976 1 All this approach is already creating new and Papua New Guinea 3.7'' 'tll strengthened capacities for growth. In all these Philippine, I economies, one key result has been the begin- Sri Lanka 16.5S7 4211 ning of a change in emphasis of the economic Thailand i4.46,) I. role of government, from direct to indirect ronga ' Ali support for growth. Greater attention is being Vranuatu 147 given to policies that enlarge the role of market W'eslern Samru 1i9 hill forces, reform a machinery of government that, in many cases, has been inefficient, and NOTE. The 19'. e,urmnIe, oC GNP pH'r cdplia precnied promote decentralized decision making to pro- .e lnt he .onrI. De.ek'pntnt Ir.di;an-.r duce greater efficiency. n.a. N-n :j.jd,lbe - Nid ltiAo Policies for Medium-term Growth b. tt,.id BRank -l1,,, tnh,ohig. UJb, t.,e per'-td The Republic of Korea, Malaysia, and Thai- c GNP per vapa esurnmaed io he in the I.novtncOrMe land continued to set the standard for the rest ranwe. of Asia with impressive performance, al- 114 1990 Regional Perspectives though, in Korea's case, growth dipped some- investments, leading to a rapid recovery in what from the peaks achieved in 1987-88. growth. Throughout this process. Indonesia These achievements were registered even as maintained access to voluntary market fi- new pressures on macrobalances and the infra- nance. Building on these successes, Indonesia structure emerged. In response, a new-and continued, during 1989. the reform process in strikingly similar-structural policy agenda is the banking sector and the capital market and being developed to sustain the momentum of in investment policy, shipping, and public en- growth. terprises. In 1989, Thailand and Malavsia reaffirmed Through a similar orientation of economic the priority of prudent macroeconomic man- policy, the Philippines has emerged from a agement and took steps to concentrate public period of stabilization and adjustment with investment on infrastructure support-espe- three years of strong growth, a new and impor- cially in transportation-and enlarge the pri- tant agreement with its commercial creditors, vate sector's role in the economy. In particu- and an orderly approach to its debt problem. lar, they have accelerated the process of At the heart of the recent Philippine strategy privatization by further liberalizing regulations have been steps toward structural reforms in on domestic and foreign investments. trade, the financial sector, public institutions, One of Asia's largest debtors-Indonesia- and taxes. These reforms have begun to curtail has tackled fundamental structural problems the public sector's claims on resources while, and successfully boosted growth. In addition at the same time, raising private investment. to a major stabilization effort aimed at restor- Notably, the government has actively pursued ing macroeconomic stability. policies have em- reform of the large corporate sector, including phasized economic deregulation, the promo- steps toward privatization and dissolution or tion of private investment, and external restructuring of publicly owned enterprises competitiveness. As a result, economic perfor- and assets. Difficult issues still lie ahead for the mance has been impressive. From 1986 to Philippines. Foremost, macroeconomic stabil- 1989, Indonesia doubled nonoil exports and ity must be maintained. The priorities are to substantially increased domestic and foreign reverse the recent deterioration of the current Table 6-5. I-ending to Borro%%ers in Asia. bi Sector. Fiscal Y'ears 1981-94) I ,I . 1 1, d. I riIj . ak C,. . ,1 S Ilr,I, I A.zi iC Lltilr jiid Rur3i DC.)ei. nr I e.iA,| I Lt2i.Si Xl. 7 9t( 1.16211 1.243.' De. eloprleri Fin"ric. (I.ompninew 3, I-f, ; i 3l I , - I.IIJX.3 24x3.( 35-' 1i 44u.4 - .. - 4S4 5 91'2 7 1 I v_i^ :intl;5,J iN 4 q-I j17 i' Al aisI I 14r11 II W ll Pov.. er I 1i i I IIii 5 I.' h N I I I45( 1) I.93 5 l.5(3.3 Indu Lir% "111 ' l 5i1.I 19' 4 h.3 I h 650. n 11.0 No,)npro j eil I -4 'll II S-b ,1 i ill ( 452.5 344.4 P'ipii1r, HlealIh ,id Nutrrion 53 4 24' 4 - 4 . 914. ' 92 5 SrMill-mc.ilk erpi-sk I * .' t.5 t 185.1 1 Ii - T.;hnI,.,I A l".2 I 2.11 'II I- -ll I - CI eL -.n1nu,ilii,on, I45 3.9 3i4.5 - 12 - 391- rin%rm rta ori 3 IT X 449 a I 4 1s 1 36 Is i5!4. L rilin lDe%elopnieni IS' 9 Iin n X.i 1.1011 i 41.i S6.2 WiIel-!rSppi .ind Secr.agc 1'1l N 291i 4 II 4 - 4.1X T-lai i. i 6 54h 4'1.n V - h69 e . .3,9' 1 t IirCthWh I BRD 4114 114, 1 4 x45 II 4 .694. 5 SI. 5.I'. . 4.1 4S I D)A I .8 I14. 4 1 li l 1.1-4 1 91S.1 '.I'i 4 2 22.3 Nurnher .I isperjitini `,9 64 T 65i t ii NJ.ii, D i-.i ,i-. r.nCr 4.1 i. ' '11 . h1.0.1 . ..! ,,.rjIhlrfln Asia 115 - V X ~~~~~~~~~~~~~~K Ii siAL~~~~~~~~~~~~R A ferryboat disgorging the load it has brought across the Mekong riv,er at Pakse (Lao PDR). The ferrv vas financed under the third agricultural-rehabilitation and development project. account, the fiscal deficit, and inflation. Over ities. On the external account, while export the medium term, the Philippines must address earnings grew, payments increased at a faster the problems of a weak public and social infra- rate, resulting in a depletion of reserves. Thus, structure, widespread income inequalities, and after losses of $1.4 billion and an estimated poverty. These issues can be addressed by a $0.8 billion during the past two fiscal years, strengthening of public-investment capacity and respectively, India's gross reserves stood at improved targeting of infrastructure invest- two months' equivalent of imports in early ments, both key elements in the government's 1990. Elsewhere, other factors were at work: strategy. To sustain the recent recovery of Security concerns distracted policy agendas private investment, the government is further and frustrated the revival of private investment reviewing the environment for private-sector in Sri Lanka, and Nepal's trade and supply activity-domestic and foreign-and is planning systems came under great pressure. to dismantle remaining regulatory controls that In March 1989. the trade-and-transit treaties still shackle private-investor interest. between Nepal and India expired following a In India and in the other countries of low- breakdown in renewal negotiations. Nepal's income South Asia, the development agenda is imports of petroleum were restricted tempo- more complex, and there is a much greater rarily, creating serious shortages in the econ- need to address longer-term development is- omy, and its exports to India fell dramatically. sues. In all these countries, however, external Consequently, Nepal's GDP grew by only 1.5 reserves came under strong pressure in 1989. percent in fiscal year 1989,' well below the 4.5 and macrostability needs to be quickly en- percent target. The government implemented a sured. There was a common basis to these tight fiscal policy to cope with the impact of the demand pressures-continued large or increas- trade-and-transit impasse, which ended in June ing fiscal deficits that ranged from 8 percent of 1990 when the two countries agreed to restore gross domestic product (GDP) in India to 15 full arrangements by July. percent of GDP in Sri Lanka. India's domestic expenditure in relation to income resulted in heavy recourse to central- bank finance and increasing debt-service liabil- Nepal's fiscal year runs from July 16 to July 15. 116 1990 Regional Perspectives Although the economy of Bangladesh grew financial-sector reforms, all undertaken in by about 5 percent in fiscal 1989, largely the 1987, supported growth in agriculture, export result of a sharp rebound in foodgrain produc- manufacturing, and tourism. In the Solomon tion, fiscal and other macroeconomic reforms Islands and Vanuatu, efforts were directed are important issues for the government.2 Re- more towards the correction of fiscal imbal- cent problems requiring urgent attention in- ances but, as in Tonga, Western Samoa, and clude the continuing decline in development Kiribati. significant progress has been made expenditures, an acceleration in the inflation towards deregulation, public-sector reform, rate, and a marked depletion of foreign-ex- and the stimulation of private-sector develop- change reserves. A large shortfall in budgeted ment. Growth in the other small island econ- revenues, combined with continued rapid omy in the wider region, the Maldives, contin- growth of current expenditures and a large ued to be impressive. Overall, the growth deficit in food operations, has sharply reduced prospects of the island economies have im- resources available for development spending, proved, although Western Samoa now faces a resulting in a cutback, in real terms, for the period of reconstruction following a disastrous third year in a row. On the external side, the cyclone in February 1990. stagnation of exports and the rapid build-up of The past year has borne witness to vast import demand set the stage for an unexpected changes in Asia's centrally controlled econo- and rapid deterioration of foreign-exchange mies. Developments in China have signaled reserves, which stood at the equivalent of one that the Chinese economy has entered a new- and one half months of imports by the end of and more difficult-phase. December 1989, down from the equivalent of Two features of the recent Chinese experi- four months of imports in February 1989. The ence stand out: First, there are clear limits to government has taken several important steps the pursuit of rapid growth; pass these limits to address these pressing domestic and exter- and intolerable pressures are placed on prices, nal issues, such as a recent devaluation, a infrastructure, and supplies. Second, unfin- liberalization of the rules regulating the import ished elements in the reform agenda can no and distribution of agricultural inputs, the in- longer be ignored if the economy is to resume troduction of a value-added tax (scheduled to a path of accelerated growth with relative begin implementation on January 1, 1991). and macroeconomic stability. Thus, an austerity measures to restrain public expenditures. But effort has been required in China-and imple- further efforts will clearly be necessary to mented with considerable success in reducing improve the macroeconomic situation, im- the inflation rate. For enduring macrostability, prove external competitiveness, and ensure however, China will need to tackle the difficult the more effective utilization of aid resources. core of decisions that ultimately has to be Fiscal consolidation and reform thus remain faced by all centrally controlled economies at the forefront of the macroeconomic policy moving to a more market-oriented system. The challenge in all of South Asia-reform that government has begun to prepare an agenda of reduces public-sector demand and deficits but short-term and medium-term actions that will does so without displacing essential public establish a sound basis for strengthening mac- investment in the physical and social infra- roeconomic policies and institutions, for fur- structure. In confronting these issues, South ther liberalizing prices and markets, and for Asia, too, is developing a stronger consensus enterprise and ownership reforms. on the framework for combining the needed At the same time, forceful changes in eco- macroadjustment with structural reforms that nomic policies are under way in Viet Nam and deregulate economic activity and enlarge the the Lao People's Democratic Republic (Lao role of the private sector. PDR). Long-standing and centrally directed For Papua New Guinea, the past year was systems of economic management are being one of adjustment following the suspension of reversed, and the economies of these countries a large mining operation and the consequent are being reoriented towards the productive loss of export earnings and fiscal revenues. sectors, with increased attention being paid to The government responded promptly to this rural, export, and private initiatives. Viet Nam development and adopted an adjustment pro- has telescoped into a relatively short period gram aimed at maintaining financial stability wide-ranging structural reforms in its public and promoting the growth of the nonmining finances, in agriculture, in industry, and in economy. trade. Lao PDR has lifted almost all price Among the other Pacific island countries, controls and has taken other concrete steps to Fiji registered exceptionally good perfor- mance, as the effect of significant trade and exchange-rate reform, as well as fiscal and 2 Bangladesh's fiscal year runs from July I to June 30. Asia 117 develop the private sector with the aim of incidence of poverty from about 29 percent in stimulating exports and reducing the fiscal 1980 to 22 percent in 1984 and, further, to 17 burden of public enterprises. Although these percent in 1987. What factors accounted for reform processes will be complex undertak- this remarkable progress during such a short ings-as in other centrally directed econo- period when the economy was also faced with mies-Viet Nam and Lao PDR may well pos- the need to adjust to a series of major external sess certain advantages over other countries. shocks? Their public sectors have never embraced the In a number of ways, the adjustment effort entire economy; private markets in goods, was undertaken within a framework for pre- financial resources, and foreign exchange have serving the progress of poverty reduction. always existed; and initial responsiveness to First, a build-up of economic and social infra- changes in relative prices and incentives has structure had taken place during the early been demonstrably quick. These gains must 1970s and 1980s as oil revenues grew. Second, now be consolidated and supported. during the ensuing period of fiscal pressures and declining oil revenues, the government Issues of Public and Social Policy took steps to protect recurrent expenditures The region's impressive growth in the 1980s and consumption by absorbing the necessary was no guarantee of equity, nor of social and expenditure cuts in lower priority public-in- environmental safeguards. Especially in parts vestment projects, while, at the same time, of India, Bangladesh, and Nepal-but also reallocating available development expendi- elsewhere in Asia-growing landlessness and tures towards poverty-related sectors. And fi- disproportionately little access to irrigation, nally, the government's adjustment effort electricity, and social services have perpetu- maintained positive growth rates throughout ated concentrations of deepest poverty and the period. The associated pattern of growth accentuated income and regional disparities. In protected farmers' incomes and led to an in- China, growth in the 1980s has doubled the crease in employment and incomes in the man- incomes of 800 million people, but changes in ufacturing sector. income shares between workers with fixed Poverty-reduction strategies by the Bank's wages and industrial workers receiving bo- Asian borrowers must also confront the signif- nuses have increased disparities in the urban icant links among poverty concentrations, pop- sector, while regional pockets of poverty re- ulation densities, and environmental degrada- main an important concern. tion. In general, Asian countries are aware of, The face of poverty has changed in India in and are actively seeking to address, environ- recent years, posing new challenges for public mental issues, but there are differences among policy. First, the poor are increasingly concen- countries in their ability to do so and in the trated in regions that face serious developmen- severity of the problems they face. tal constraints. Second, the share of landless In the newly industrializing countries of East wage-dependent households among the poor is and Southeast Asia, increased attention is being growing, nearing half the rural poor in some given to the management of the natural-resource states. Third, many of the factors that contrib- base, particularly land and forest resources, and uted to the reduction of poverty in past years, to industrial pollution. Fortunately, economic such as the spread of irrigated agriculture, growth in these countries has increased aware- provision of credit to poor beneficiaries, and ness about environmental problems and has led subdivision of landholdings, appear less likely to the emergence of a political commitment to to be effective in the next ten to fifteen years. address them. In many cases, growth has also as further expansion of irrigated land becomes brought the financial ability to begin to tackle more expensive and capital intensive, and as key environmental problems. The centrally common lands available for privatization be- planned economies are struggling with the same come more scarce. An encouraging develop- environmental concerns as their industrializing ment is India's recent success in raising annual neighbors, and, like their Eastern European average growth rates. If the rate of growth counterparts, they also face problems related to achieved during the seventh plan period the wasteful use of natural resources caused by (1986-90) of 5.6 percent can be sustained at subsidized pricing and other economic distor- these levels and gains accrue to the poor. tions such as import barriers. poverty would be substantially reduced by the The South Asian countries, in general, face year 2000. the most difficult problems in reconciling rapid Against this background. Indonesia's prog- population growth, poverty, and a declining ress in alleviating its high incidence of poverty resource base. Given the extent of irreversible is notable. A recent Bank report on poverty in land degradation, there are serious questions Indonesia has pointed to a reduction in the about the capacity of countries such as Nepal 118 1990 Regional Perspectives Table 6-6. Net Transrers to Asia v- h. n, Ir., Ido|nc,i To-ldi reg,on Ilioni Q1*1 1 4A - H 1'41"11 1 QV_'411 I '4-4 4l*;b411 149v1 I 1-3S I IBRD -ind 10A. Gre.is ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ e. corr'i nIutrn e r* " 1.1 U r 192 !' I.94(1.4 I I. 123 I Is.i32 0 .X0S 3 f). 39: I 9 iSt1ur>.enicr,k I |5I> 2 4.341,7 .9J41 - qA4ol I -I' I h I 2 h. '6,6 I ` .4' I Re pr ment, K0 4 '41 4 4 4. ' I. ^ . 3 X 3 I .5h6 '.i46.1 I l noQ 5 Net di'bui emLnlk 1.119 h 4.111 . I .i 1t 9 I.t ' 41.b I. .sf 4.2411 t l 21. L I '. Interci jnd chir-ci 194 4 642 ' l4' 3 9.41S -9'. '.244 2 '.41' 6 J!.A Net ur.,nfcr N45.3 1.4f.fl Nn:4 r- i. 9 s 1 1. 49% 3i l .3 x n nh- 1i l 13-t.ar,ernini r. if;,m i ID A Spec'.fI Fund are ,nJ I,,d, Thc c.nmtlk ,h..% n ID r .. r'ihle .le IIho.e %s .th lhs Iarget r-LIll n 81i.i111". 11- 1 IJl1 1- kU 1 e, IU- bl, -1 .t ,--.r,djnc and Sri Lanka to support further population studies, including those on enterprise deregu- growth in the rural areas. Population pressures lation. trade reform, exports, and institutional on marginal and common lands in India are strengthening of the power sector. Lending op- intense. Add to this growing urbanization, in- erationsduringthe yearincludedagas-utilization dustrialization and water pollution from hu- project and a telecommunications project, both man, agricultural, and industrial waste, and the of which were designed to improve management list of environmental concerns becomes long. and operational efficiency in two important state Considerable commitment, resources, and enterprises. A cement-industry restructuring technical expertise will be required to address loan to India will expand capacity and support these issues. continuing policy reform in the sector. For Ban- gladesh, a financial-sector credit will strengthen Bank Operations and Strategy credit discipline, improve debt recovery of na- Commitments by the IBRD and IDA to the tionalized commercial banks, and reform poli- region in fiscal 1990 totaled $6,397 million, cies on interest rates, monetary instruments, and some $1,435 million less than the year before. treatment of subsidies. The drop resulted mainly from declines in The Bank's catalytic role has been evident in commitments to India and China of $1,096 the small Pacific island countries, where unit million and $758 million, respectively. Com- costs of operation are higher and where a new mitments to the Philippines, of $942 million, strategy aims at an expanded analytical effort increased by 90 percent over the previous that comprises a series of regional reports on year's total. economic and sectoral issues, rather than infre- Bank operations in Asia-lending, analysis, quent country reports. This strategy will pro- and policy dialogue-aim at the two principal vide the basis for enhanced policy dialogue; it prerequisites for self-sustaining growth and its will serve also to strengthen project identifica- extension to slower-growing economies: struc- tion and the Bank's cofinancing relationships tural reforms to enhance and diversify the with bilateral donors and the Asian Develop- growth momentum and well-targeted programs ment Bank. Lending programs for these coun- to strengthen the human, physical, and natural- tries, as well as for the Maldives, are concen- resource base of development. trating on support for education and training Structural reforms are aimed at economic programs; housing development; and key areas deregulation (especially in industry), the promo- of the economic infrastructure, especially tele- tion of competitive forces, and increasing the communications and transport, including, for role of the private sector. Thus, the Bank is Western Samoa in the wake of the February supporting initiatives in Asia aimed at public- cyclone, a road-reconstruction project. enterprise restructuring and privatization. finan- The Bank is pursuing its objectives in poverty cial-sector reform, trade liberalization and tariff alleviation by the development of 'core" pro- reform, and other activities related to industrial- grams that will allow a sharper focus on strategic sector reforms and private investments. issues and poverty-targeted lending operations. In Indonesia, for example, the Bank's analyt- Initial core efforts have been developed for ical support has involved a range of completed Bangladesh, India. Indonesia, and the Philip- Asia 119 pines (where country or sector reports on pov- ies and projects, the Bank is investigating new erty have been undertaken), as well as for China, and low-cost approaches to environmental con- Nepal, and Sri Lanka. The lending program trol: One of these, vetiver grass, already holds emphasizes projects in education-especially promise in arresting soil erosion and is a promi- primary education-population and health serv- nent component of two watershed-development ices, as well as watershed development and projects approved for India. A forestry project in improvements in water supply and sanitation. Indonesia will strengthen natural-resource con- Lending for education in China focused on servation and management capacities for conser- increasing the number of women completing vation areas and watersheds. In the future, the primary school and improving the quality of Bank's lending will focus more on building the instruction in secondary schools. An agricul- economic incentives necessary for the sustain- ture project will finance the diversification of able use of commercial forest resources and of production in Jiangxi, one of China's poorest agricultural land in forested areas. provinces. Another initiative, which focuses on flood A significant component of the region's core control in Bangladesh, has elicited broad inter- poverty work is directed at improving the eco- national interest following large-scale flooding in nomic and social status of women. During the 1987 and 1988. At the request of the government year, two detailed cross-sectoral studies were of Bangladesh and in response to a resolution of completed on the developmental role of women the economic summit meeting in July 1989 of the in Bangladesh and India. These two studies, major industrial governments, IDA agreed to plus other women-in-development country as- take a lead role in coordinating international sessments, have helped define operational in- action on flood control, and IDA's "action plan terventions and approaches that can address the for flood control" was endorsed at a conference economic and social constraints faced by of donors in London in December 1989. The women living in poverty. action plan charts a course for flood-control and In order to develop a core environmental preparedness initiatives over the next five years strategy, regional and country-related studies and beyond and proposes a staged approach that have focused exclusively on environmental is- will focus, in the early years, on measures to sues. Thus, environmental studies have been control flooding and improve drainage in areas undertaken in the past two years for China, bordering the main rivers. Close attention will India, Indonesia, Korea, Papua New Guinea, also be paid to the social and environmental and the Philippines so as to strengthen project effects of the embankments and other physical development. In these tasks, priority has been works proposed in the plan. These would be given to issues of forestry, land management, complemented by measures such as flood fore- and urban pollution. In the course of these stud- casting and preparedness. 120 1990 Regional Perspectives Europe, Middle East, and North Africa The Europe, Middle East, and North Africa and institutional infrastructure in order to raise region of the World Bank consists essentially the living standards of their peoples and pro- of the countries of the Mediterranean, Eastern mote longer-term development. These tasks and Central Europe, and the Middle East, with are made more complex by the need to intro- the important addition of Pakistan. This region duce and implement systemic reforms; and is characterized by great cultural, political, and harder for many of them by the need to deal economic diversity. The activation of relations with a heavy burden of debt. with Romania, the reopening of the economic Compared with 1988, the aggregate gross dialogue with Iran, and the applications for domestic product (GDP) of the region grew at a membership in the Bank by Czechoslovakia slower pace in 1989 (2.5 percent in 1988 as and Bulgaria continue the tradition of a region against 1.7 percent in 1989). Growth was rich in diversity. marked by broadly differing country experi- The countries of the region have much in ences. Algeria, Yugoslavia, and the Gulf Coop- common with each other, however, and with eration Council countries (Bahrain, Kuwait, other developing countries. They all face the Oman. Qatar. Saudi Arabia, and the United challenge to improve their human, physical, Arab Emirates) had increases in GDP growth that surpassed those of 1988. So, too, did Portugal, as GDP growth was estimated at 5.4 percent and increases in foreign demand more Table 6-7. Europe. Nliddle East. and than offset a slowdown in domestic demand. North Africa: 1988 Population and Per Egypt, Morocco, Poland, Tunisia, Turkey, and Capita GNP of Countries That Borro%ied the Yemen Arab Republic had rates of GDP during Fiscal jears 1988-90 growth lower than in 1988. In Tunisia and Turkey, the continuation of a severe drought Per :.pii, caused a sharp decline in agricultural output, PC.puldtlLr' GNP' c (ritr ilho.u;nd.i LS>I which, in turn, was the main factor behind the - l 2.ru fall in economic growth. In the Yemen Arab .AI2erI 6S, q .esu Republic, the high growth rate of GDP in 1988, CEgpr. pru h 6 7 6.2h6, which was caused mainly by the country's Hungjr R SlO161 2.4b0 emergence as an oil exporter, could not be JoHnanr x01I- 2.46 matched. ord cco X. 4R(J In Pakistan, the economic-adjustment pro- Morocco l1.9Nh 8;l xigJ gram agreed to by the government, the Inter- P.ikitand 106.'61 3I i national Monetary Fund (IMF), and the Bank Poriuk,l 17.8 in late 1988 fared reasonably well in its first PortuR-A 1(1.241 I 6itI year. Policy reforms were broadly on track, Turkh ,, and economic performance was encouraging: Tuemen Ab . i , ,_St! GDP grew at 5.6 percent, inflation fell to below Yerrien Arab Repuhlic 8 J'4 6-ti 1 10 percent, and private-sector investment in- ' emen. Pt'wlc' creased. The fiscal deficit was also reduced Democrjuic Republic ..i ' .3o,, .J.3I from 8.6 percent of GDP to 7.3 percent of 'I UgosI.i. h, '. "s !o9 '.!' GDP. This reduction fell somewhat short of the N'Ti.. The 19SIY einrrjI. nl GNP per :apai pre.nied target, as world prices for edible oils increased .b.e .,r Ircr.r, 1h,: %korid D,nc.-pTeml lrd.,ir, and substantial wheat imports raised the cost ie ..,.yn,A Df,~, .I ~ R. p...,i 'VW of subsidies over planned levels. At the same NWd 19'.h time, Pakistan was adversely affected by, h It 1.1 R,.,;l 4,1. me ih'd ...Iog. 198t-!S hj;c penrd among other things, political uncertainties and ; F,.i B.,n.-nl changes in government, floods. and a sharp Europe, Middle East, and North Africa 121 monw-~- 7~ inoculation at a maternal and child-health services clinic in Heliopolis (Egypt). The president of the World Bank announced in November- 1989 that the Bank intended to increase lending to the population, health, and nutrition sector to $800 million annually for the three-y,ear period 1990-92. deterioration in the terms of trade. The unex- Europe) were fairly robust, while exports to pected 8 percent deterioration in the terms of the Middle East declined. Workers' remit- trade resulted in a higher-than-targeted exter- tances rose by over 70 percent, aided by the nal current-account deficit of about 4.7 percent improved performance of the external sector. of GDP. Because of the considerable reduction in taxes In Turkey, economic performance continued and quasi-tax payments in the various catego- to be mixed. Three successive quarters of ries of imported items, stimulated demand due recession, caused by stagnation in industrial to the increase in wages and salaries, real output and a sharp decline in agricultural pro- appreciation of the Turkish lira against foreign duction (which fell by I11 percent because of a currencies, and an upswing in economic activ- severe drought), were the main factors in the ity from the third quarter on, imports increased decline in economic growth. The government's by 17 percent during 1989. Nevertheless, the effort to curb inflation met with only limited favorable developments in the invisibles ac- success, as the inflation rate dropped by ten count allowed Turkey to run a current-account percentage points to around 60 percent. The surplus of around $966 million (about 1 percent government's fiscal retrenchment, initiated in of GNP). The external-debt picture showed a 1988 after the expansion of 1986-87, produced modest improvement: Turkey's debt-to-GDP an estimated 1989 public-sector borrowing re- ratio fell from 58 percent in 1988 to about 52 quirement of 5.6 percent of gross national percent in 1989 (down from a high of 59 percent product (GNP), down from 6.4 percent in 1988, in 1987), and its debt-service ratio reversed its but still shor-t of expectations. trend, as it fell from 36 percent to 33 percent. Despite difficulties with the domestic econ- Continued good performance in Cyprus is omy and a significant real appreciation of the attributable to positive and flexible private- Turkish lira for the first time in the decade, sector performance, as well as to appropriate Turkey's external sector continued to perform and timely government policies. The country well. Exports to industrial countries (mainly in faces formidable development challenges, 122 1990 Regional Perspectives however: The impending internal unification of For the first time in three years, GDP growth the European Community (EC) has made more for the year was positive-at an estimated 2.8 urgent the need to raise competitiveness in the percent. Overall growth in GDP was supported agricultural and industrial sectors and to seek by value-added growth of 12.5 percent in agri- new avenues to take advantage of the oppor- culture that was caused by productivity in- tunities offered. The net effect of the customs creases following agricultural reforms and the union with the EC-which envisages the phas- end to the two-year drought. Nevertheless, ing out of tariffs between Cyprus and the EC in growth was held down by the manufacturing many agricultural products and most industrial sector, which experienced a decline in output of products over a ten-year period-may well be about 2.3 percent. On a more positive note, the positive during the early years of the transition composition of expenditures showed a growth period through the stimulation of exports. The of 5 percent in private consumption over the government is well aware of these challenges year, reversing a three-year decline. and has taken action on several fronts, includ- The government implemented a series of ing the introduction of changes to the basic wide-ranging structural reforms during the year, income tax laws to make them more equitable including the introduction of autonomy for most and less burdensome. The government has also of the public-enterprise sector and the entire announced that it intends to seek nonbank banking sector, the introduction of a more lib- domestic financing for budget deficits, thus eral system of foreign-exchange allocation, and deepening domestic financial markets. the passage of a law that introduced a more flexible mechanism for determining domestic Developments in the Maghreb Countries prices. The government's adjustment program In Algeria, a continued program of adjust- oversaw a substantial drop in the budget deficit ment and reform, combined with relatively fa- (from 8.5 percent of GDP in 1988 to 1.7 percent vorable terms of trade and climatic conditions, of GDP in 1989). Similarly, overall public-sector resulted in improved economic performance. borrowing for the year declined from 14.5 per- Iable 6-8. I-ending to Borro%%ers in Europe. Nliddle Easl. and North XIrica. h! Sector. Fiscal wears 1981-90 Ir,m , . 1' 1 0. .11 .1 %Lzgr, utwv,r ano R,.n .t !. x el,p i-cnn i 3 - -.h 2 .S 4 5fl i 1.41 1.4 i'J9, Descfl.-r'rnent Finn C -m ('rrr.nIC ic' - 35.1 i f-,' 9 I UI 3I111II 41tl II iEJac.a5,n I 11s ', '1 I I '' 1I 241 S 2l5 ' ,23 2 E ner£'. ejI IL n c d vljI ''114 - 'l ii 3') I I 15. Rs^t- er 'h.i I j 2 ,9_ II II ii 41 i lrrdu.r'.I ' 11 ii I '1 I( .' 11I *S! I 1II5 N ,'i-pro l I 4h,4 I '4I1 1I -II it '11111 1 ,lill 1,1 4 P,|Ul.,1,,n. [lelith flld "41-111inon . 1-I P' I 1' A 11-1 Pi,hI_ eI.SCC,,r nnen- - - - - - I 3 Il unw.ill->,.iIe trinieiprr,x 4h,11 1,14111 44 ii 32 II -- f,-hnic II -\ . h 11 II ,II - _3 41 It, II lCc..rnnlujnic.1'i..n. I 'I ~~ ~~- 245 II ~ I' - - Ir.,n;t'l lUrl.iF,. n - lB 5 545 'l 12 II 2 i 'I Is -il ilr,in,r,,riali. -1'-! Ji 5- | 'h1 IS L rh.in L c,.ck,prnri 65 i 'Ji 1-e] h '411 U i.>s II I[i' '1% I Supirli .ind Isi er u 2I i 11'' ii9h t 2i' '1. 1 233 25 1v.1,r1 '.,412 ~ I ' i 1.15 3.6 ,-. X3.35x 4 3. h, , 4.411 11 (If, hid IBRD 2.e4.'. ' Th 4 J .43'.4 A,133 A , I 4.131 ' I JA . 11 5n' _1 .2x 249.2 _ 2__.1 2 _ . _: . Nuniber .'l _pCrjr.r. 'n 4' \; 3Y 411 Europe, Middle East, and North Africa 123 cent of GDP in 1988 to 4.2 percent. These Developments in Four Middle East results can be traced to a substantial increase in Countries petroleum tax revenues, a limit on the increase in current expenditures, and much lower capital In Egypt, the economy slowed in fiscal 1989 transfers to the public-enterprise sector. after the slight acceleration in fiscal 1988 that Economic developments in Morocco in 1989 was caused by a sharp increase in manufac- were also mixed. Preliminary estimates sug- tured exports following the May 1987 devalu- gest that moderate real GDP growth for the ation of the pound. The decline in GDP growth year of about 3 percent resulted from the from 3.2 percent to 1.0 percent in fiscal 1989 balance of a good harvest, moderate growth of reflected not only a poor cotton crop (caused manufacturing production, and a slowdown in by bad weather) but declining exports of oil the phosphate sector. As a result of a large and textile products, as well. Tourism was the drop in exports of phosphate acid and an only sector that experienced growth. As a result increase in oil imports, the current account of adverse exogenous factors, including bad deteriorated to about 3.5 percent of GDP, as weather and lower oil prices, the country's bal- opposed to a surplus of about I percent in the ance-of-payments position remained precarious, previous year. On the fiscal side, the budget the resource gap widened to $5.4 billion (13 deficit increased from 4.5 percent of GDP in percent of GDP), and the current-account deficit 1988 to 5.9 percent-primarily because of in- increased to $3 billion (7 percent of GDP). On the creases in civil-service salaries and higher- fiscal side, the budget deficit continued its con- than-expected international prices for those siderable decline-from 20 percent in fiscal 1987 commodities still subsidized by the govern- to about 16 percent in 1989; however, it still ment (cooking oil and sugar, for instance). remains unusually high and represents a poten- Moreover, increases in international interest tial source of inflation. rates inflated the heavy burden of interest In response to this worsening situation, the payments on the government's external debt. government initiated a series of policy The Tunisian economy grew at a rate of 3 changes. Not only was the budget deficit cut percent: Agriculture remained depressed be- substantially, largely through a reduction in cause of a continuing drought, and service consumer subsidies and a tightening of other receipts declined as tourism from neighboring expenditures. but interest rates were in- countries, which had increased sharply in creased, as well (albeit they are still negative in 1988, fell steeply. Exports of manufactures real terms). The government has also increased continued to grow strongly, but this growth taxes on many goods and services and has was outstripped by increases in imports; the made strides in improving tax administration. result was a current-account deficit equivalent Prices of major fuels were raised in May 1990 to 3.8 percent of GDP, as compared with a by 30 percent, bringing the total increase in small surplus in 1988. Total investment picked energy prices and electricity tariffs since fiscal up for the first time since 1984, although this 1986 to over 300 percent and 250 percent, appears to have been mainly in the public respectively. These measures point in the right sector. On the fiscal side, an increase in food direction, but the economy is not yet on a imports and a rise in world cereal prices pre- balanced growth path. Since mid 1989, the vented a reduction in consumer subsidies; con- government has carried out an intensive dia- tinued subsidies, together with increased trans- logue with the Bank and the IMF with a view fers to public enterprises, kept the budget to developing a strengthened reform program. deficit at 4.2 percent of GDP, as compared Jordan's economy is closely linked to that of with 3.9 percent in 1988. its oil-producing neighbors. Stimulated in part The government's reform program, now in its by large remittances from Jordanians working fifth year and greatly amplified since its begin- abroad and rising demand for Jordanian ex- ning, aims at creating conditions for the rapid ports in neighboring countries, the economy growth of an efficient private sector and a operated at full employment and grew at about continuing increase in the outward orientation 10 percent a year from 1978 to 1982. The rapid of the economy. The reforms include the decon- decline in the price of oil and the subsequent trol of domestic prices and the removal in stages slowdown in regional economies that began in of import restrictions. As a necessary accompa- 1982 adversely affected the Jordanian econ- niment, the direct and indirect tax systems have omy. The regional recession dampened not been undergoing reform, as well. The govern- only the external demand for Jordanian goods, ment is also reducing the role of the public but domestic demand, as well. During 1984-88, sector, attempting to restructure or privatize real growth of output declined to an annual rate public enterprises, and is taking a broad array of of about 2.5 percent. Because of its high annual actions to address sector problems. population growth rate of 3.8 percent, Jordan 124 1990 Regional Perspectives has experienced a decline in per capita income, 1988 ceasefire between Iran and Iraq. Prelimi- as well as a fall in its standard of living. nary estimates point to continuous growth in In response to the slow growth in output, the nonoil sectors in Saudi Arabia and Qatar as increasing unemployment, the strain on its these economies become less dependent on oil; budget, and a deteriorating balance of pay- a remarkable recovery in Oman (3.5 percent ments, the government initiated a series of GDP growth in 1989 as opposed to -4.5 per- reforms in 1988 and accelerated the process in cent in 1988) and in the United Arab Emirates 1989. The reform process culminated in the (2 percent growth in 1989, up from -1.2 per- adoption of a comprehensive medium-term ad- cent in 1988): and an acceleration of growth in justment program supported by an IMF Kuwait (7.5 percent in 1989 as contrasted with standby arrangement. This was followed by 2.0 percent in 1988) and-to a smaller extent- agreements with the Paris and London Clubs in Bahrain (2.5 percent in 1989, up from 2.0 on the rescheduling of debt and with the Bank percent in 1988). on a $150 million industry and trade-adjust- A parallel improvement took place in the ment loan. Main elements of the reform pro- macrofinancial position of several of these gram that have been implemented to date in- countries. Thus, the external current-account clude measures to reduce the budget deficit, a deficits of Saudi Arabia and Qatar were consid- freeze on new external borrowing, devaluation erably reduced. Reduction was achieved of the Jordanian dinar, deregulation of the through higher exports (notably oil) and lower financial sector, and measures to stimulate imports (reflecting progress in import substitu- industry and trade. The government's program tion). The external current-account deficit of also includes the creation of a social-develop- Oman turned into a surplus, while the surpluses ment fund to alleviate the impact of adjustment of Kuwait and the United Arab Emirates in- measures on the economically disadvantaged. creased by 17 percent and 20 percent, respec- In the Yemen Arab Republic, following the tively. The current-account deficit of Bahrain, stabilization program of 1983-86, the govern- however, further widened, by 33 percent, to ment began to relax its tight economic policy about $200 million. Stable exchange rates and when oil production began in 1987.3 As a sustained imports helped keep inflation below 4 result, both the budget deficit and the current- percent in these countries, except for the account deficit in the balance of payments rose United Arab Emirates, where it was estimated dramatically. at 7 percent. This relatively low inflation rate Although the government took steps to re- was paid for, however. by the continuous draw- duce both domestic and external imbalances by down of foreign-exchange reserves, except in restricting growth in expenditures and by re- Kuwait, where gross reserves increased by al- stricting imports, the preliminary outcome for most 60 percent, and the United Arab Emirates, 1989 indicates that the current-account deficit where reserves remained unchanged. was still high at over $500 million. The govern- ment's budget deficit has declined during the Economic Transformation in Eastern and course of the year. but the drop was not enough Central Europe to have an immediate effect on the inflation The historic transformation that is sweeping rate, which is estimated at about 20 percent. across the countries of Eastern and Central In the People's Democratic Republic of Ye- Europe poses unprecedented and unique chal- men, the floods of March and April 1989 caused lenges to their governments, the international considerable damage to the country's infrastruc- community, and the World Bank.4 Following ture and destroyed a large part of the nation's the collapse of these uncompetitive economic crops. The floods hit at a time when the country systems, these countries are embarking on was facing large internal and external imbal- massive reforms to dismantle, often with great ances: The budget deficit and the current-ac- speed, the old systems and establish new insti- count deficit were both quite high. Following the tutions that can support competitive markets. recent discovery of modest oil reserves, the These reforms are being undertaken in the government has intensified oil exploration, and context of substantial macroeconomic imbal- expectations of substantial discoveries are high. Economic Developments in High-income, Oil-exporting Countries Significant economic growth in the member OnMayo22t 1990R the YemenArab Republic and the People's inDemocratic Republic of Yemen merged to formn the Republic countries of the Gulf Cooperation Council In of Yemen. Because the events described here occurred 1989 resulted primarily from higher interna- before the merger, the two constituent parts of the new tional oil prices and the business community's republic are treated as separate countries in this report. renewed confidence in the wake of the August 4 For details. see page 48. Europe, Middle East, and North Africa 125 Table 6-9. Net Transfers to Europe. Nliddle East. and North Africa imilIIkor . A U' s d111Ljr' IL l fi l PA1. . Toklr, . . Eg. pi ltal rntion 11cm I)iI Iyef4~LI IJ'JI I9i2f-4II I*-N I*,',MrI l'J9t1 I XSi. -JI IBRD and ID x .onintnient4 8 `.8 3.493.4 2rM, 2 4 22' 8 hl I 13 . 4.4; i! j Il,'4 4 Gro> di,bursementi ,35 3 1.932 hi 4'1 5 3.3.1I m lu S ' @44 3 53il 12.%) Repa n ent, '1S.4 3oll 2 i' 4 I ' 1 .'II I I i 4 hMi 2 2. l) IlMI.6 .i I Net di,bursemrnt 4i4 Li I i.85 4 -i 5.9 I..s 9 -h th 1-1.1 b I .331 ts nrierest and .harceN I2 t' 4511 A 4,J4 : 2244." 1 6 , h55. I ih 9 -,h4 4 Net lr.inster 329.9 1 131 L -S 1.7 -915.7 - 'in -51.1 - 1.".3 -- . I 1 f. NoTe tllburnmrrnl, Irn [he IDA Sprctijl FLin.. ire MC ILIJjc th. Curiliue, hie r. ir, I hc 1.Nc ..re Ihoie ih 11 e I- r .e p'opuI.limurn Dcild, in., nr I .-dd 1m 1 IJI bI-o ,i, . r- mildinl! ances and, in some cases, heavy debt burdens. context of a one-year standby arrangement. To The dislocation and unemployment that are complement these measures, the government certain to follow systemic reform and stabili- has resolved to initiate and accelerate struc- zation will strain the capacity of existing so- tural reforms, such as privatization of state cial-support systems, which themselves need enterprises, liquidation of loss-making activi- revamping. ties, and price and trade liberalization. The Economic performance in the past year in government also has proposed implementing these countries was mixed. In Hungary, while fundamental reforms of its social policy and exports to the convertible-currency area grew distribution framework to protect the poor and strongly (an estimated 6.6 percent growth in those most adversely affected by the economic volume in 1989), the current-account deficit restructuring. In the first half of 1990, in the with this area sharply increased. Real GDP wake of a significant improvement in the cur- growth remained weak (less than 0.5 percent in rent account, a new government was formed. 1988 and 1989), inflation accelerated (from 9 The government has announced its determina- percent in 1987 to 15 percent in 1988. and to 18 tion to take whatever steps are necessary to percent in 1989), and the external balance was keep the country solvent. fragile, reflecting a heavy external debt burden In Poland, the economy severely deterio- and a continuing inability to eliminate the rated in 1989, as production decreased by 1.2 underlying factors that cause excess demand. percent and reversed the expansion that had The significant slippage in fiscal policy in 1989 taken place since 1982. Faced with the chal- contributed to a much faster-than-planned lenges of hyperinflation (700 percent during the growth in nominal wages and a large increase year), a large budget deficit (7-8 percent of in foreign-travel expenditure; as a conse- GDP), and a more-than-tripled current-account quence, the convertible-currency current-ac- deficit of over $2 billion, the government initi- count deficit deteriorated, necessitating addi- ated a bold stabilization program in January tional external borrowing and adding to 1990 and, at the same time, moved rapidly to Hungary's already substantial external debt, initiate an adjustment program designed to now equivalent to 73 percent of GDP. achieve a market-based competitive economy. Towards the end of 1989, the government The stabilization program comprises two nom- implemented measures to halt the deterioration inal anchors, reforms in the exchange rate and in its fiscal and external balances: In early wages, and includes a virtually balanced bud- November, foreign-exchange allowances for get, credit restraint and appropriate interest Hungarians traveling abroad were sharply re- rates, and price liberalization, as well. Plans duced; a month later, the forint was devalued are under way to reduce the budget deficit of by about 10 percent against a basket of con- the central government to less than I percent vertible currencies, and a value-added tax on of GDP (to be achieved, in large part, by a private imports was imposed. The government drastic cut in subsidies and an increase in also announced its intention to implement tight revenues), increase interest rates (with the fiscal and monetary policies in 1990, the details objective of achieving positive real rates in the of which were negotiated with the IMF in the near future), and restrain wage increases, 126 1990 Regional Perspectives which had recently far exceeded increases in were caused primarily by hikes in real wages output and consumption. An important aspect and the continued financing of enterprise of the program is price liberalization: At the losses through the banking system. beginning of 1989, prices of 80 percent of GDP Faced with severe macroeconomic imbal- had been controlled; by the end of that year, 50 ances and mounting political problems, the percent of GDP was controlled, and starting government pledged to implement economic January 1990, the share was slashed to less reforms and create a market-based competitive than 10 percent. economy. The objectives of the new economic The IMF supported Poland's stabilization agenda are to stimulate supply response, efforts through a standby arrangement in Feb- strengthen financial discipline, allow the Na- ruary 1990, agreement was reached with Paris tional Bank of Yugoslavia to pursue an inde- Club creditors for the rescheduling of maturi- pendent monetary policy, and increase federal ties during 1990 and the first quarter of 1991, authority in fiscal relations between the federal and the Bank initiated its lending program by and republic governments. In addition, the committing a total of $781 million for projects government is pursuing a tight monetary policy in the areas of agroprocessing, export indus- to fight inflation and stabilize the economy. tries, transport, energy, and pollution reduc- The new reform program, which has the tion. In addition, the Bank established an of- support of the IMF and the Bank, has already fice in Warsaw to serve as a channel for dramatically reduced the rate of inflation and is dialogue on the country's development strat- expected to stimulate supply. At the heart of egy. While foreign-trade performance in Po- the new policy package and addressing the root land is likely to improve over the medium causes of persistent economic instability is a term, the country's external-debt problem will systematic program for restructuring financial- continue to circumscribe severely any oppor- sector and nonfinancial-sector enterprises; tunities for a return to creditworthiness. Both such restructuring is to be complemented by official creditors and commercial banks are fiscal financing of enterprise deficits. The eco- currently discussing new approaches to the nomic program supported by the Bank debt problem with the government. (through a second structural-adjustment loan) In response to a request from the govern- and the IMF (through a standby arrangement) ment of Romania, a Bank exploratory mission includes measures in the areas of incomes visited Bucharest in March 1990 to make a policy, monetary and fiscal policies, trade and preliminary review of the current economic foreign-exchange policies, bank and enterprise situation and discuss possibilities for cooper- restructuring, and the social safety net. ation, particularly in the agriculture, energy, and financial sectors. The Bank subsequently World Bank Operations, Fiscal Year 1990 received requests from the Romanian authori- The World Bank continued its active policy ties for technical assistance in restructuring the dialogue with, and lending to, the countries in banking and financial systems, designing a the region in fiscal year 1990. Commitments for social-assistance program to mitigate the ef- forty operations totaled $4,407 million, of fects of adjustment-induced unemployment, which $276 million was from IDA resources for and reconstituting workers' training and re- projects in Pakistan, the Yemen Arab Repub- training programs, which would become an lic, and the People's Democratic Republic of integral part of a coherent social safety net. Yemen. The $4.4 billion figure represented a 17 percent increase over fiscal 1989 amounts. Yugoslavia Embarks on Reform During the course of the year, the Bank ap- In Yugoslavia, following a 2 percent drop in proved its first loans to Poland, supported 1988, GDP grew by about I percent. The macroeconomic adjustment and sectoral reforms increase in GDP was mainly attributed to a rise in Algeria with a $300 million adjustment opera- in industrial output of about 2 percent. Exports tion, helped Jordan and Tunisia protect their continued to grow, and, despite the accelera- development objectives through sectoral-adjust- tion of imports, the current-account surplus ment loans, and supported the economic-adjust- reached nearly $1.6 billion (as compared with ment programs of Yugoslavia and Hungary. $2.2 billion in 1988). Despite the moderate Project lending to the countries in the region increase in output and the acceleration of im- was extensively varied, with almost all sectors ports, the economy continued to suffer from represented. The Bank approved projects in alarmingly high rates of inflation. The monthly agriculture (Algeria, Egypt, Hungary, Mo- rate of inflation increased from 17 percent in rocco, Pakistan, Poland, Tunisia, and Turkey), the beginning of the year to over 30 percent in education (Egypt, Pakistan, and Turkey), en- June, and to more than 45 percent in the last ergy and industry (Algeria, Hungary, Jordan, quarter of 1989. Increases of this magnitude Pakistan, Poland, and the People's Democratic Europe, Middle East, and North Africa 127 Box 6-2. The En%ironmen1al Program for the Niedilerranean En% ironmental degradation of ihe klediierrincan dc.elprnent of. and the qualiLt ot life in ,eieral basin. alread. ses ere. is ' or;ening h,s the day in cwuntriet; o%er h,K ne .1 fc, de,ades man) areas Tlo bring a halit 1) lhi, ,iuation. IhT. BH.,etf on .an e'.irnin.itim ot the turrcnli iuiU WVorld Bank and the Eurropean InieLrmeni Bank i tion and pr.'tuhle 'rend'. the repvt' idenritfe E[BiI Ijunched the en'irn.nmenral prieram t.,r t'ur pi iorit' ii c,as for atrioii-nteieraied , Iier* the Mediterranean [EPMIi in 1ISX to a'sCsS ihe rt'-oitie frlT,ri.tclirefi sotIt'i and halz-ard- en\ ironncntal polic. in,;tutiorial. and inseirs ou'-sasie iriangaement. pretention .rid c;ntrol ment need, of the countries borderinL on the of marine pollution frorm ..I and chemic.ld' Mediterranean oea. I[he EPM reflects th, Itr:ite ithrough impro% emintri in e*i,blished 'eculator' gies that the Is; o Kanks has e des cloped to protect \ sems I. and Lteatol-,zone man.ttenirlin Notin_ the Nlediterranean ensironment. thajt no,t countries hbae alreads de\ oLped Lir The EPMI buildsi on the .1ctiie, Initiated in otiseC pllIut'non.ita.tenlntn pro:r4,ms 'albel at d,li 197h b; the contracting parties ise'enteen con. tferin- I; el- ot intenr,oi 1 the r-port unders.core, triei and ihe Europe,an tnommunityi To the 1.r the need lo place more emphasis on longet term Lelona Con'enti-n for ihe Mediterranean S*i in re;o'iiiceconsei . .ton i- uies and 1t' dte- lop hj1l the eonLeu of the Niediteiranean Action Plan. anced progij'nm that \ould ha'e jrt aprropriate %khich %%as coordinated tM the L nited Nation, mi ot pi' nd mintitnunilntl retorr,. .a ell J, Ensironment Programnte illINEP To assist in in'e.timeni opportuniiies ihis. the t': o bank art. contribuling their e\pcr [he ecotnd phase of the [PM 1.a tauinched in lise ;n polics an.ils'' protect preparaion. intl *,nur-. Iu9lI It fO,-cuse. on the definition o1 the mobtlti,tion of' financial reo,uice, to the speciftc polic% menjures the identlilcation and implementation ofe\s,Sling internalionula rds .L.-d. plep.tration -,I in'stintcrit rrtiects jnd instiilU- The fir-; phase of the [PMI. v.hich concluded iin.1l- tirenolhening acti ite; at hoibh rce,onal at the end of l'8'. analsted the nature. etenrt. iantl ctunirs le:,;l- irhese .,tnins . ill he tased rnd causes of en ironmental degradation in ihe on the priorit% area' Id5nnfited during ihe hlir MiediTerrainean basin and defined the appropniate phase rhe ienterpiece ot the se;ond pha.,e ot the istruments and priorits are.is for inter'entrin EPM1 theN Medieiraneari en.uiron-reniol techni- [he findings :and reconin,endaions of' hi' studs c.d- sUistance prog rarnm i M.1 E I AP' %'.' I Wuiiched phase ssere included in the repo'lt Emihi triitiih iihii in Januar. IL4 1i Throughh NETAPgrant'. tuldies Pttiuiiilimoh Fr //1O II.'Jir',i,th.ni Pi, ..I I 1or.' I, ilth broatd rev!itnai inipllcatlion'. inrnos aii c prop SJir,d Ht.iitai! ,tdid tltini'i 1t C.ti.'n,it R. - eci-preparatiton uct, itiC, and institutional desel. %01'L t .That %ka-s puhished in Mlarch 1Yl91 The opment measure .sill he undruilAen The costs findings and reconrinendation, "ere presented at the rsartu p phase ol the MET AP are equ.ll: and discutNed stith representative' front tourteen disided aimrong the \\t'rld Bank. the Flb the Mledtterranean counirie5. the Europearn tComma- U!NDF'. and trie Europcan Coimniurti nit%. the Linited Ncition; De%elopment Pro- The ihtid pha-e of the EtMI-it i-. running gr:nime i 1NDPi. ind l NEP at a *torklho ihit etontLrreniI% v tth ihe cctnd pha'e because *)i Took place in Paris in Decemher 19SLi The nced tor earl; and Ltncrete iruit-,n The report finds that the tundarnen:al t.u ei of ol th1 implententattion ji .i hrt:iad arra. ot potic ensironnienial deerad.ation in nl'rit part' tf the measures .,rd pit'icts The \\,.rid Haonk .nd the region include high population groskth rates ipar- FIB nre poi-ed io plia irrportant rcie' in polie; ti,cularhs in costial areasi. inadequate economnic .itld prileci intlemenn:iort'n. nrot onk ts'ough in policies. .eakv regL.t1-tirt .nd adiiinisi ratise '. incre'.-.d nuLnher of ens .tirrimeni ,1 in:.esninernt' tern, and insufiliecnt puhlic a%;trene,s and pit. s tihin their osri lendine progrims b,U .aist' ltic'al resolt e As a resull en' ronmental degr.a- throug,lh ihe mrnthihil..at-n in.n coordin,lion oIM -:1. dation threatens the prospects for econlmic diiin.d'nl re'oure. Republic of Yemen). and infrastructure (Mo- with the United Nations Development Pro- rocco, Pakistan, Poland, and Yugoslavia). In gramme, including the commencement of as- addition, lending for projects providing basic sistance to the finance department of Abu health services in Morocco and the Yemen Dhabi for the acquisition of advanced finan- Arab Republic was approved. cial-management systems. The provision of reimbursable technical as- Fiscal 1990 also brought an end to the first sistance by the Bank to Saudi Arabia contin- phase of the environmental program for the ued under the active technical-cooperation Mediterranean, launched in 1988 by the Bank program. The Bank also provided reimburs- and the European Investment Bank. Work able technical assistance to member countries commenced on the program's second and third of the Gulf Cooperation Council in cooperation phases (see Box 6-2). 128 1990 Regional Perspectives Latin America and the Caribbean The 1980s marked a major change in the ning of the 1990s, average per capita output is economic history of the Latin America and the 8 percent lower than in 1979-81, and the fall of Caribbean region. A long period of economic per capita income and consumption is even growth came to an end at the outset of the greater. Furthermore, because economic growth decade, and the region has been struggling has been outpaced by population growth over since to restore per capita output, income, and the past thirty months, per capita gross domestic consumption to the average levels of 1979-81. product (GDP) has declined. As new stabiliza- These efforts have largely failed: At the begin- tion programs introduced in 1990 have deepened or precipitated a contraction of production in a few countries, the decline in the per capita in- come of the region will continue through the Table 6-10. ILatin America and the calendar year. Caribbean: 1988 Population and Per The region's disappointing overall growth in Capita GNP or C'ountries That the 1980s conceals a variety of individual coun- Borro%ted during Fiscal Years 1988-90 try experiences, including good performance by some and serious efforts in many to under- Fvruil.i rs iwn 1,11 - S1 41 .14,4 ^ 4 Lnerg, 0nI.t- ojI,rd-, 1 4 1 1 A I 1.144 - 44 It P" s | i I R .S 1 tJ 4 ; . ^> 4 ' . 1, I*I S i Tekl hri.. 1. 14nc nI _1 4 IS i -1;'{ xi.ll No.n.pirltec 53 4 1 1 1 11411, h1'l.3 1.,38 1i L'rb~n tX~ ci.ment . I t" 3 35 I '-I.1 I 411 \ erl "uppl .n.li rd erin '. 'e 21l111. Il Ii 2 . 32'i ' Te.,hn-ie.le A i-t,nceprv 4'\~ Ii,ll -N .1;^t ' Tele,opinlUlnl:icnon 1 1 4in Tr,n-pt-r1tu on i'; 4 54 2 . 4 1 !ll f. 149.I 1 .9 II Ulrh.n D).keliopnient 1^ Ji l IIn 4,11, o - tl 4,11 %%diler mlsLi Se,esr;lce -1Ni '1 h1 inllll N4 I Tona i '.4 4~I ,I iE I ',h-J 11 .JIt,h- tl , I. hh IBRDL) 4.11 4.94L4 r. I i2.11 i I i. 'h I DA 4 5ii i I .4 I12.11 I IN 4 I'%z. . NuITIbTr Lt .pI4IP ns 44 413 i 4 4, 41 NO.TE DXI 1,, ,m. n,.c i .. .1.1 ; i .di ,.: Latin America and the Caribbean 131 investors from entering into a number of pro- revenue, as these are appropriate only if the ductive activities. imbalances are the consequence of temporary losses in revenue or temporary increases in Policy Reform: Restoring Fiscal Discipline expenditures. Because governments wish to The value of fiscal discipline is now widely restore fiscal balance on a sustainable basis, recognized in Latin America. One of the re- their stabilization programs are paying atten- gion's most profound changes has been in tion to efficiency and equity considerations in attitudes toward the role of the state in the determining which expenditures should be cut economy and, in particular, toward fiscal dis- and revenues increased. cipline. It is now accepted that large public- For example, reform of the tax system, in- sector deficits have imposed heavy costs and, cluding reform of its administration, is a major to be sustainable, their size must reflect a element in Argentina's stabilization program. combination of consistent fiscal, monetary, The composition of public expenditures and and debt policies; that the quality of the fiscal determination of alternative sources of current adjustment matters, and efficiency and equity revenue are crucial features of the recent ad- should be important concerns when public justment programs of Mexico, Uruguay, and funds are allocated and resources are raised Venezuela. Mexico has recently eliminated re- from the private sector; and that the institu- maining income-tax loopholes; the Uruguayan tional relationship between the central govern- legislature has approved an important tax-re- ment and central bank and the rest of the duction and expenditure-reduction package and public sector-public enterprises, state banks, is considering initiatives to strengthen the fi- regional governments, for example-must be nances of the social-security system; and Ven- reevaluated and reformed. In each of these ezuela is considering the introduction of a three dimensions of fiscal reform-financial, sweeping tax reform, aimed at achieving the economic, and institutional-there has been basic objectives of stabilization and maximiza- some progress during the past year, although tion of tax revenues through effective but un- the experience of each country has been rather complicated instruments. Reform in this area different. has also been designed to prevent disincentives Large and sustained public-sector deficits or distortions to the efficient allocation of re- are still a source of macroeconomic dislocation sources. in Argentina, Brazil, Nicaragua. and Peru, The consolidation of fiscal discipline de- and, to a lesser extent, in Uruguay. The new pends ultimately on the institutional frame- governments of Argentina, Brazil, and Uru- work and the relationships between different guay are trying to implement comprehensive components of the public sector. The transfor- stabilization programs to reduce sharply their mation of the region's public finances will be fiscal deficits. These programs are likely to determined by political forces that may favor impose a short-term cost in the form of reces- decentralization of government powers (that sions of varying degrees of severity, but the is, the redistribution of authority to provincial alternative-not correcting the fiscal imbal- and local governments, as well as to autono- ance-has imposed its own long-term costs, mous national organizations-the central bank which have become much larger than those of and state enterprises, for example) and in- stabilization. The recognition of the dangers creased control of public expenditure and rev- inherent in large and sustained public-sector enue by the legislature. Examples of institu- deficits also has been shown in the prudent tional reforms in public finances include the fiscal policies of new governments not con- new scheme for sharing tax revenues among fronted with such imbalances. Chile's new different levels of government in Argentina, government, for instance, is considering some Brazil, and Ecuador; the delegation of specific increases in expenditures in the social sector- economic powers to local governments in Co- but only if they can be matched, first, by lombia and Chile; and the establishment of an increases in current revenues. In countries just independent central bank in Chile. beginning to recover growth-after painful pe- riods of fiscal adjustment and inflation control- Activities of the Bank, Fiscal 1990 governments have become very careful in their Given the context of continuing economic fiscal policies to avoid any reversals. crises, the Bank has focused its analytical and Unlike stabilization programs of earlier lending efforts on helping countries develop the years, the new ones are paying special atten- strategies and policies needed to restore sus- tion to identifying efficient ways to reduce tainable growth. Adjustment programs and ad- expenditures and increase revenues. These justment lending have played a large role in this programs are avoiding across-the-board cuts in effort. The Bank has also played a major role in expenditures and reliance on ad hoc sources of debt-reduction efforts, notably in the Mexico 132 1990 Regional Perspectives Box 6-3. Nlexico Renrg2tialle Its [)ebl 'le\I:.i rn.,hdi,t I c, *.r:,e its debt. in .\ucuia anno*unced hi, carntinued c'mmirtient In the re- 110 ircgcrcd ohat ha, *nme bhc.:,mr :kno.,n j form program. but 'tiled th.i tor It [co ucceed. the dehb crit, Sin;c then Ntle\co h.,; inple restorjioin of gro% th and a: n'edidintternm olution rnertcd a Ia, reci hin nnd lundarmnenll adi.'t* to the counlr% . debt problem. "ere etenti.il ment proi .ini hoce cornet tione ha; heL n a Thc inerialilionil otl.in'..tllont uLiden ltote re,olmie -itch lo" .rd- integrattn in the v -.iId Me\teo'' reco. er% program and prepared to com- cci0nOtrii mit uhbtritta, l relotl t i.:' -i AT ihe ame time. i,nit,ti.iL, e re 0rnction on irnern.aition., trarle. nrgc t. t-n' stanerd n ith Me%\ico cornimerc'l: i hlCh . c-ered i1ll iaded goid proiduction in I4S5. crediior, co%enng "4S 'J billion. or about half -f ha c airno t t been elinminated and tanib ha,ce been thc ountr:r- c\tcrnat deht The [ltk, recet'ed a reduced U!.l narr10 bando ofbeieenti pertent and mnaior hn,i,r t om ihe MItrch lwo' Peeeh hm Li S. t. perterit COmmercial hbnk'. t htch teetered at :rc,reior% oi ihe Trcatur% Brad% . in %% hich. or tlhe Ihe hin ! if banriptnkrl.-e. in 1Y0C.,crc natton:ilized f, .t time. dehb reliefir-tner than re chedultnL eta5 .Idl restructuredJ and are about to be prodatlikd propoted lor dehioi couniric 'ith gbcoed adiuil- ga,in .lelen-ie tndu niil deregulaUon ha. takern mei pt ogromin . And. in ihe tir'L hallf 01 VIY9. place it-, cntplemeni relrnrrt, i ihe tralde regime Nlc\icotC \itrn:tl ituilian i , hk -bl;tered runher In the p,ti feu . t tie p.,e if reform ;iP' h\ a coniprehenci e packge i01 adiutimert loans pIrned h% n ini,ain.aitt taibiliLaiion pr.glram ho' fr-m th~ \\ cr j Rank. tI..ltllnc SlI 3 hillion and :ic el rited The prtihdg.iitn ri Jm capped a co;ering financtat-ector retfrm. irade and tndu- mJl-t c 1 .1u.,, trneni thail ii .,ntornied :i non IrT reCrructurinc and ptiblk -rnter-npr- reform A m re , dck lit -f rercen, of grot dem&Ltc l thiec\ eAr \tActrded F.und faclitN iEFFi prograni priduct (aDIai in l],^I t.ia u rplfsio' S 4 percent %u' also concluded nih ihe Intemaitnal Nilone- ,n i 4% in pne * I ., d-.p iim u r :e-.e, .:qrtal 10e 6 tir, Fund i NIF, pr,,n mi ni.DP ni l L[n hi ,[,'e near ' per. tOn Xul\ 2*. I19 . a teniati'e aLrecment ,at cent fol i-o0 conet uti\ , Car'. J, , n irim irt,und rea hed %%iih. inb a '1 conmminitree repreemntin rfZl percent iu-,,rdJ the end of 19 commercial hbank under h ich c.mmnnrcial cred In rno-rnr,.l ir umi '.nct . intern.aional aJpItal tort - . r ec oftered a menu o O:,pttin t Claim' mn.rklit ,.ould ha -e .llocced Memco breathine LOiered b: ihe igrCLmenl could be etfhanged for 'pate iv , er the perod heic cn the cirr-eni co ti one f three necN mn,Irument, ltlo dis c,mnt bond aiJd tulturI h,,letile I t ihi .nhliiiout pl.'glran carting manrket rates hut at a 33 percent di scunt lri.;.id Ie\,ico "a' fi;,ed i.) irnster almnot h in principal. I hi a p.r bond. ewchanced at par 3' Percent -oI t,M. on the a rerage. to i t-oreigr. the name uoge f'. but carrini c fi.ed irtere't crdit,.r' o* c lthe period The ecmomric effct', .f- r te cl n 5 percent and IL i neT.e rrionc\ ininru* hee ir.an-ler' .eere tu tIantjill' e;.icerhnbed hi nieni' in'ol\ 'iw no dteouan .mn either interel er continuing u;ciltaini i abot Me -iO' futur , a pricipal. but %\ith thc rommitnient to inctea:c ce- to eiernrl capital mal kvei E cei t\ o sear' c'.po'ure b% per cnt o. er ihe leix-5i4C Period. or 'o. NIC\1uc. ri.id to engage in torticu- nngetia- The t debt-reltel riiprN ,erc enhinced nith tiont To U! cmh-ni reprieie frorn e%vn rger urjnte, :: lull corge *' Fprincipal and a rolline inan,fer chltgatio;nt Ih uinerentni, ih.1t P ien- u.ar.onlef for cighteen ni,inih; of interest The elated 'a' Ibc ITiain f,cllnl hehind the decline in enhincememn-. -re funded through a SI s Ntllion prt, ati 'a in2- and the increa inca:pital flight lhat -upp-ri packag: proi.1ded h tile trank. ,and the idded to ihe cuntr, e \I rn.l prc.hlenis INIF. 52 billion lent h, the co% -rnintent * f Japan. In thete c irc,Ti,t:inee ccononintc *r Uth c.imC ind M te.ks o n re ei%e' Ihec menu ipproach to . h.dit per :.pit i Ire-i th oc er ihe pernid. in fact. - a. r;ken hec,uue difterent creditor h-ink, 1aced V-I, rIeAt' e. \\"ih .a neT .dnu,ttdninron tAiing cec\ difterent tA SLnd i veul.tloi% envirenmenit In flfice in D eeniber ls it bec.ame clear ihat to addition. a' m.ll dehb equilt program nrirsim pr-ci .Sethe-dirniestic c nientut behind the refot in uted Li part tit the ol,ernnieni ' pri%it,iilon prccrnin. riccki :. f hr.- - Ihd to take pla,ce. In pro.gra m A recapture cl.,ue %sa, Included ihrough h. :i,e:ept.nc *peech. lIe';io Pretidenr S;ihn i c. hi,ch connc rcial cr-do,trt c--uld retrieSc- tine package put together in early 1990, in which. cial creditors agree on the precise amount of the Bank, through a combination of instru- debt to be retired. In addition, the Bank is paying ments, provided a total of about $2 billion to more attention to the environment-as reflected support the reduction of about $50 billion of in increased lending to the sector, notably in commercial debt (for details, see Box 6-3). The Brazil and Bolivia-and to poverty and human- Bank is also supporting the continuing debt resource issues related to adjustment. reduction of Bolivia by preparing an operation Lending to the region increased somewhat in that would provide funds under the IDA debt- fiscal 1990 over fiscal 1989. Commitments for reduction facility when Bolivia and its commer- forty-one operations were $6.0 billion, an in- Latin America and the Caribbean 133 of the debt relief granted-hut onlR from 194h erahl-h As a confelluentc. nominal interes rates onwards-in case of famorable de%velopments in tell Irnm Sh percent toC around 3h percent on an re%enues from oil uncompounded hjbas imnediatelk after the de- Bo: Tahle 6-3 shows the was ihe choices h, tati of the p.ai:kge had become kno%n ditferent creditor' came out and the resulting Bkoth the direst tran,tei efheit and the second debt relief. .atV effect through restoration of confidence and Almost half of the debt iS22.S billioni %.,N reduction of uncertaini' are likel\ to affect exchanged for ihe par hond. and close tIL that ger-w%th in nipior %.a. ' itahout the debt deal. amount $18.7 billion) c\changed old debt flr the grouith of output *ould ha%e been lower h! one discount bond. This led lo a combined debitrehef percentage point initialkl: a, time went b. the percentage inot colunting the recapture clJusci ot difference in crik,th wkould ha%e deepened to 26 percent. or o%er $12 billion The combination more than ' percent l's 1i94. a% both pnrate and of debt relief. rescheduling oi amortization. and public in,e,tment wkould hase declined. Over the newv mones commitments is e\pected to lead to a neflt ss .ears. average growlh would hbae been major decline in the net transfer that Me,ico almost tel) percentage points louer, to reach must make to in commercial creditors-almoxt '.nl\ ' 6 percent of C(DP 12 1994. Asout half of $4 billion a sear for the period 19911-94. or dloe the sto%.do\% n in groutIh w:ould hase been due ic to 2 percent of its (DP. In addition, the lor. the effect a failure it implenment a debt deal inlerest option chosen bs hail of the non-Nlest- w%ould h.l%e had on dome'tic real interesl rates can commercial creditors proWides Ntemio with and an as'ociated decline in pri%aLe in%eStment.' insurance against interest fluctuation, on the panr fo coriclide. \le%icos debt package is likeis of the old debt brought under thi, option. Thus, to h.ae a ma-iir beneficial effect on economic in addition to the debt relief' embedde- in the grn ith in ihe coiinir% rhi, is not 'o much package. Mfeico reduced its %ulnerabilitv to hecause olf ihe direct effects of ihe reduced fluctuations in internationil interc-t rates extern.l transfer, i has led to. sutiantiul though The reduction in required etermal transftr, ihes mrnt he. It is due more to the fact that the %sill hbae a direct beneficial effect on %Ie'co s deal pro'ided the one mis,ing imnl in an other fisc,d situation and its likel growth of olutput wt,e %sell-de,igned. conNi'tentts esecuted. and Howe%er. at least as important are the indirect wIdell supported program of domertic reformN. ef'fects that hase come about through reneued It remored the threat of failure resulttng from contidence. . reduced net eaternal iran'fer esiernal crise. Thi, dome'tic efTect ssas able to means reduced pressure on the c change rate come into pla\ because the deal had three char- Also. because this it a mediunm-term deal. uncer acteristics eentil tor domestic spiltosers to taint abOUt the fLuture has been rediuced consid Like place' It s3as a ciompr:hensis e packaee. cosering all ot NIc i reneponiahle commercIal debt it s a mediumtierni oluLuon. forestalling Box Teble 6-t . Creditor Cihuies and ReouIting ans need It renegotiate in the foreseeable future: DebI Relief and it capped seerat 'te.ars of coherent. far Non Ntesican reachinru domestic refoirms aimed at integrating creditir Dehi relict the countrs into thr worlrd economs Instrumeni I'e ' lto ac 'atat Without the debt deal, the reftirrm program Par bond 46h 28 ould hba e been in xertousjeopardv: w ithOut the Discount bond tR 2 retorm prucram. the dehb deal wtould hase had New% mones and neglikile ited. other; 15 2 (I rr., nidt uri.rne Ire r pr'.i,cltr. r,c- r-cncd inr Package 11.th ft 2 iPn 5 itnibcigen ii'' ih Ei. v,i0 ,/ ebtiii . R E. i1..li ; ROuIL .!, 11, lk.l' Pi'ic.. Researih. and E ,- NoTE Detail,tnmr,not add to total be,au'e..t round.nL . errial .trTair. \trking P.tpcr n1o -' i5-stirngion a S5cighited .serage D f v5orld Bank 19S'Ji crease of $123 million over fiscal 1989 totals. Although interest paid to the Bank increased Gross disbursements to countries in the region along with the region's outstanding debt to the were $6.2 billion, compared with $3.4 billion in Bank, net transfers from the region to the Bank fiscal 1989-an increase of 79 percent. This decreased during the year, mainly as a result of sharp increase was, in large part, due to the a large increase in gross disbursements. fast disbursements of the debt-reduction oper- About 41 percent of Bank commitments came ation in Mexico. Gross disbursements for the in the form of nonproject and adjustment lend- five-year period 1986-90 totaled more than $21 ing to support economic policy reforms aimed billion, for an annual average of $4.3 billion. at consolidating macroeconomic stability, to 134 1990 Regional Perspectives Table 6-12. Nel Traiislers to l alin Armerica and the Caribbean ,. 1. I. *. .1 1 !.... 1 ,., I s hflr -l l P.1 , ,. \,-hX r, ,r T.,t J rco.on iBRD jnd ILIA Comnilment I l S.II e . h - i ' h'r E IJI.Ji - I. 12 > i e.4 '4 'f.':14 i dilhur.¢mcnkn 9h e'~ S i|r,1 4i 3h I r.l h' f l 2rl ._ 2s b 15S 'I i iy Rep.,, menis I '.14- f- 4 211'0 h 7 ' 2 ' 2' 4 "2 I . I-1A . * l.>>- 14 Nec dIjIr.nL ri-. - - Yh3 .'4il- 4 1.-Sl r -'r * Ir, 1 - .,'J4.' 1111. I lntci.si ar,d ih.orie1 .,4. 4 I.t! Li 6J hii h 414 2 [II' 4 -.4' ' 'Ih h '.*447 i [Ne ua.n;li - 4 I - I I 1.r 2.',1 I 2.3w h - I'Jr P,3 i 4'-1. 211.3 N,,IF tlI.r-ell.. :rnr,l !rth,., I L) \ ir., IF.nd n A inJud-, I ThS *.,P. h n. n f I, T1 ,k Lir Ihr.!e v ir, r. Ih U -.i- poril , -T . 1), i- n. n.Y- I- .. J,' . . h .-1 assist in debt-reduction programs called for every country in the region. Analytical work on under the Brady Plan, and to support privatiza- human-resource issues focused on ways to redi- tion efforts. Nonproject and adjustment opera- rect subsidized services toward the poorer tions in Mexico. the largest recipient of this groups and to recover more costs from higher- type of lending. supported debt-reduction ef- income groups. forts, policy reforms in trade and export insti- tutions, road transport, and telecommunica- Cooperation and Cofinancing tions. Lending to Venezuela, the second largest To help ensure the timely availability of recipient of nonproject and adjustment lending. external funding. as well as to improve donor is supporting the continuing financial-sector lib- coordination on macroeconomic and structur- eralization, begun in fiscal 1989 and supported al-adjustment policy issues, the Bank sharply by a structural-adjustment loan, as well as re- increased its aid-coordination activities in Cen- forms in public enterprises and privatization. tral America. Consultative groups for three The Bank continued to provide substantial Central American countries-Costa Rica, Gua- traditional loans, as well. Brazil and Mexico temala, and Honduras-were established, with received the most commitments of IBRD invest- strong support from bilateral and multilateral ment funds. In Brazil, project lending included agencies. Depending on the pace of economic support for health, irrigation, highway manage- reform and adjustment, these aid-coordination ment, electric transmission and power conserva- activities could be extended to other countries tion. and the environment. In Mexico. Bank in the region. Aid-coordination activities car- projects supported the housing, electric power, ried out in Washington, D.C., included special agriculture, and forestry sectors. In other coun- donor meetings to support the structural-ad- tries, project lending supported the expansion of justment efforts of the Honduran government infrastructure and agriculture. as well as im- that took office early in 1990. With the assis- provements in the social sectors. tance of the support group, Honduras cleared Economic and sector work focused on key its arrears, totaling $152.6 million, to the IBRD areas of reform and served as the basis for policy and IDA in late June 1990. With its payment. dialogue with many of the new administrations the suspension of disbursements on existing that took office during fiscal year 1990. A large loans to Honduras was lifted. part of the work consisted of assessments of Following the Guyanese government's adop- macroeconomic conditions and debt negotia- tion of an economic-reform program in mid 1988, tions, fiscal reforms (on both the revenue and the Bank. in its capacity as chairman of the expenditure sides). and country economic mem- Caribbean Group for Cooperation in Economic oranda and policy-options papers that were used Development (CGCED), supported a major to brief incoming administrations. Studies of drive by Guyana in its efforts to mobilize the fiscal reforms at different levels of government- external assistance needed to finance the govern- state banks, public enterprises, and regional and ment's reform program. These efforts were in- municipal governments, for example-played an tensified within the framework of the Guyana important role in this effort, as well. Environ- Support Group, which was established in No- mental-issues papers were completed for almost vember 1988 in the context of the "intensified Latin America and the Caribbean 135 collaborative approach" endorsed by the Interim tion. a working group meeting was held on Committee of the International Monetary Fund environmental issues, and the group agreed to (IMF) in 1988 and which involved the provision adopt two new initiatives: a review of the of exceptional financial assistance by creditors problems and priorities for human-resource and donors in support of strong programs of development in the Caribbean region and a adjustment and structural reforms, such as those program to stimulate private investment in the being implemented by Guyana. region, with special emphasis on foreign direct The Guyana Support Group comprised Can- investment. A seminar on the agreements ada (Chair), France, the Federal Republic of reached among the European Community (EC), Germany, Italy, Japan, Sweden, Trinidad and its member states, and the group of sixty-four Tobago, the United Kingdom, the United African. Caribbean, and Pacific countries (Lome States, and Venezuela. Since the support IV) and on the implications of the full integration group's inception, Bank and International of the EC by 1992 on the Caribbean countries Monetary Fund staff have contributed substan- was also held. tially to its efforts to develop a satisfactory The volume of cofinancing to countries of financing plan for facilitating implementation the region was $4.1 billion for eighteen of the government's economic-recovery pro- projects, representing an increase of almost gram. These efforts were fruitful, and Guyana 60 percent over the previous year's total. The was able to clear its arrears to the IBRD, increase was largely the result of two factors: totaling $55.3 million in June 1990. with the (a) three IBRD loans to Mexico totaling assistance of a bridge loan from the Bank of $875.5 million, for which $1.7 billion is to be International Settlements and bilateral contri- provided by export-credit agencies: and (b) butions from members of the support group. the association of Inter-American Develop- Simultaneously. the arrears to the IMF and the ment Bank (IDB) and Export-Import Bank of Caribbean Development Bank were also cleared. Japan funds with IBRD lending to several The CGCED forum was also instrumental in countries. focusing the attention of the donor community Through the Overseas Economic Cooper- on assistance needed by Jamaica for a medium- ation Fund, Japan remained the largest source term economic-adjustment program. of bilateral official cofinancing for the region. At the tenth meeting of the CGCED. held in The Export-Import Bank of Japan was the late April 1990, the recent activities of the largest source of export-credit financing. The group were reviewed, and the requirements of introduction of sector lending into the lending the Caribbean countries for external assistance program of the IDB was also an important over the next two years were considered. factor in the substantial increase in the avail- Subgroup meetings for individual countries ability of resources for cofinancing. In fiscal were held to analyze their economic policies 1990, seven Bank projects drew cofinancing and determine needs for assistance. In addi- from the IDB in the amount of $1.3 billion. 136 i;44, Planting trees for future pulp-and-paper production in Costa Rica. Eight projects supporting forestry protection and management were approved in fiscal 1990. 137 Section Seven Summaries of Projects Approved for IBRD, IDA, and African Facility Assistance in Fiscal 1990 Acronyms and Abbreviations Used in This Section ADF-African Development Fund IFAD-International Fund for Agricultural AfDB-African Development Bank Development AFESD-Arab Fund for Economic and Social IFC-International Finance Corporation Development IMF-International Monetary Fund AGCD-Administration generale de la IsDB-Islamic Development Bank cooperation au d6veloppement ITTO-International Tropical Timber AIDAB-Australian International Organization Development Assistance Bureau JICA-Japan International Cooperation Agency AsDB-Asian Development Bank KFAED-Kuwait Fund for Arab Economic BADEA-Arab Bank for Economic Development Development in Africa KfW-Kreditanstalt fur Wiederaufbau CCCE-Caisse centrale de cooperation NORAD-Norwegian Agency for International economique Development CDB-Caribbean Development Bank ODA-Overseas Development Administration CDC-Commonwealth Development OECD-Organisation for Economic Corporation Co-operation and Development CERF-Council of Europe Resettlement Fund OECF-Overseas Economic Cooperation Fund CIAT-Centro Intemacional de Agricultura OPEC-Organization of Petroleum Exporting Tropical Countries CIDA-Canadian International Development SDC-Swiss Development Corporation Agency SFD-Saudi Fund for Development CIRAD-Centre de coop6ration internationale SIDA-Swedish International Development pour la recherche agricole et le d6veloppe- Authority ment UNCDF-United Nations Capital Development DANIDA-Danish International Development Fund Agency UNDP-United Nations Development DGIS-Directoraat Generaal voor Programme Internationale Samenwerking Unesco-United Nations Educational, EDF-European Development Fund Scientific, and Cultural Organization EEC-European Economic Community UNFPA-United Nations Fund for Population EIB-European Investment Bank Activities FAC-Fonds d'aide et de cooperation UNICEF-United Nations Children's Fund FINNIDA-Finnish International Development UNIFEM-United Nations Fund for Women Agency USAID-United States Agency for GTZ-German Technical Assistance International Development Corporation WFP-World Food Programme IDB-Inter-American Development Bank WWF-World Wildlife Fund Agriculture and Rural Development and incomes through rehabilitation and ALGERIA: IBRD-$32 million. The development improved operations and maintenance of of strong and responsive research and extension existing irrigation, flood-control, and drainage services in order to increase agricultural projects. Institution-building assistance to the production and reduce dependence on imported Bangladesh Water Development Board is foodstuffs will be supported. Total cost: $74.9 included. Cofinancing is anticipated from the million. BANGLADESH: IDA-$53.9 million. AboutA 700,000 families are to benefit from a project Data used in this section have been compiled from documentation that will protect and increase farm production provided at the time of project approval. 138 Summaries of Projects Approved EEC ($14.9 million) and the Netherlands ($12.6 fiscal 1988 in the amount of $132 million, to million). Total cost: $111 million. help finance the completion of five irrigation BANGLADESH: IDA-$44.6 million. The schemes and provide agricultural-production incomes of about 130,000 families of fishermen services for about 5,170 farm families resettled and pond owners will increase through a under the project. sectorwide fisheries project in the western part BRAZIL: IBRD-$47 million. The execution of of the country that focuses on stocking flood agreed priority research programs and the plains with fingerlings, improving shrimp dissemination of the results of those programs, culture, and developing institutions. designed to contribute to the fomnation of Cofinancing is expected from the ODA ($4.3 sustainable agricultural production systems in million) and the UNDP ($4.2 million). Total two distinct agroecological areas (the northeast cost: $62.7 million. and Amazon regions), will be supported. BENIN: IDA-$2.5 million. This first attempt to Institution-building assistance to the Brazilian reform the rural-credit sector seeks to help Agricultural Research Corporation is included. transform the country's savings and loan Total cost: $97.8 million. cooperatives into a better managed, more BRAZIL: IBRD-$33 million. Productivity will efficient, and financially viable rural be increased, the incomes of some 81,000 savings-mobilization and credit-delivery farmers-more than 90 percent small- network. Cofinancing is expected from the holders-in Santa Catarina state will be CCCE ($3.4 million), Switzerland ($1.2 improved, and natural resources there million), the EEC ($1 million), the FAC safeguarded through increased adoption of ($700,000), and the Federal Republic of sustainable modem forms of land management Gemnany ($500,000). Total cost: $12.8 million. and soil and water conservation. Total cost: BOLIVIA: IDA-$35 million. A comerstone of $71.6 million. IDA's environmental strategy for Bolivia, this BURUNDI: IDA-$28 million. A package of project seeks to ensure that the development of policy and institutional reforms to improve the the eastem lowlands will be based on a efficiency of the coffee industry will be comprehensive, long-term regional perspective, implemented. and investments in coffee- within which agricultural production and export washing stations, coffee research, and training expansion can take place at the same time the will be financed. Cofinancing is expected from natural-resource base is protected. Technical the CCCE ($6.1 million), the FAC ($1.5 assistance, agricultural and marketing credit, million), Belgium ($1 million), and CIRAD improvements to roads, research, and extension ($400,000). Total cost: $46.3 million. are included. Cofinancing is anticipated from CAMEROON: IBRD-$21 million. The the Federal Republic of Germany ($5.6 million) govemment will be assisted in implementing a and CIAT ($600,000). Total cost: $54.6 million. national agricultural-extension strategy, whose BRAZIL: IBRD-$210 million. Agricultural priority objective is to increase farmer production in the drought-prone northeast productivity by establishing operational systems region will be increased through irrigation for managing the extension services and by development of some 51,000 hectares. In providing training to facilitate improved addition, institutional arrangements for delivery of the services. Cofinancing ($3 irrigation development will be strengthened million) is being negotiated with Belgium and through the creation of private irrigation districts the Netherlands. Total cost: $31.1 million. and by improving public-agency performance. CENTRAL AFRICAN REPUBLIC: IDA-$19 Total cost: $465 million. million. Govemmental reforms in the forestry BRAZIL: IBRD-$1 17 million. Support for the and wildlife sectors will be supported, and first three-year phase of the country's national technical assistance, facilities, and equipment environmental program will strengthen the will be provided to the Ministry of Waters, protection of the most important conservation Forests. Wildlife, Fisheries, and Tourism. areas and endangered ecosystems, as well as Cofinancing, totaling $400,000, is expected reduce economic and environmental losses, in from the WWF and USAID. Total cost: $26.3 the Pantanal. Amazonia, Atlantic Forest, and million. Coastal zones. In addition, IBAMA (the national CHINA: IDA-$300 million. A national environmental agency), state-level afforestation project seeks to increase timber environmental agencies, and the regulatory production by expanding intensively managed framework will be strengthened. Total cost: forest plantations in fifteen provinces and by $166.4 million. improving their quality and productivity. It will BRAZIL: IBRD-$100 million. Supplemental introduce methods of sound environmental funds will be provided for the ongoing Itaparica management in forest plantations, strengthen resettlement and irrigation project, approved in research and extension programs that support Agriculture and Rural Development 139 plantation forestry, and sharpen the programs' million), the KfW ($6.8 million), and the FAC focus on species performance. Total cost: $499.6 ($500,000). Total cost: $88.8 million. million. GUINEA: IDA-$8 million. A forestry- and CHINA: IDA-$ 150 million. Per capita incomes fisheries-management project seeks to reverse are expected to more than double for 540.000 the overexploitation of the country's farm families in Heibei province as a result of a natural-resource base by strengthening the project that seeks to increase production. National Forestry Department and several productivity, and marketability of agricultural, regional forest departments, as well as the State livestock, and aquatic products. Total cost: Secretariat for Fisheries. Cofinancing is $309.6 million. anticipated from the KfW ($5.5 million), the CHINA: IDA-$60 million. The incomes of CCCE ($2 million), and CIDA ($1.5 million). almost 20,000 farm families will be increased Total cost: $23 million. through a project designed to accelerate and HUNGARY: IBRD-$ 100 million. A line of credit diversify agricultural development in Jiangxi will be provided to enable agricultural province. Training and technical assistance are enterprises, both public and private and large included. Total cost: $121.7 million. and small, to improve their operations, reduce COLOMBIA: IBRD-$78.2 million. A small-scale their production costs, and increase their export irrigation project seeks to increase agricultural orientation. Technical assistance and training, to productivity and cropping intensity in the La be financed by OECD donor agencies ($14 Mojana area, thereby raising the incomes of million), are included. Total cost: $274 million. about 43,000 small-scale farmers, and to INDIA: IBRD-$15 million; IDA-$150 million. develop the technological base for future sound Support will be provided to the state of Punjab's development of the environmentally fragile area. irrigation-investment program, which is Total cost: $196 million. designed to improve the productivity of the COTE D'IVOIRE: IBRD-$150 million. The existing irrigation system. raise living standards government's agricultural-sector reform in the most undeveloped areas of the state program, whose medium-term objective is to through the development of irrigation facilities, achieve a sustained annual growth rate of about and begin drainage works and studies to address 4 percent while reducing urban-rural and short- and long-term drainage problems regional income disparities, will be supported. threatening environmental and productive COTE D'IVOIRE: IBRD-$80 million. An resources. Technical assistance is included. Total ecosystem essential for the long-term cost: $246.5 million. sustainability of agriculture will be preserved, INDIA: IBRD-$13 million; IDA-$75 million. wildlife and biodiversity protected in remaining Designed to help alleviate one of the country's rain forests, and a sustainable production of worst environmental problems, watershed hardwood logs for export or local processing degradation, this project will protect sub- maintained through rational forest management. tropical and temperate contiguous areas in Cofinancing is expected from the CDC ($ 10 four northern states from further degradation, million). Total cost: $147.8 million. thus increasing the production of food crops, EGYPT, ARAB REPUBLIC OF: IBRD-$31 fuelwood. fodder, and fiber, as well as creating million. To avoid future declines in yields and substantial employment opportunities for the agricultural production, aging irrigation rural poor. Total cost: $125.6 million. pumping stations will be rehabilitated or, in a INDIA: IBRD-$7 million; IDA-$55 million. few cases, replaced with new ones. Technical Some 95.000 poor rural families are to benefit assistance and training are included. from the provision of watershed-development Cofinancing is anticipated from USAID ($1.1 works, totaling 265,000 hectares, in selected million) and other bilateral sources ($300,000). watersheds in three plains states-Gujarat, Total cost: $49.1 million. Orissa, and Rajasthan. Training and technical GUINEA: IDA-$40 million. Through a national assistance are included. Total cost: $91.8 million. rural-infrastructure project, feeder roads will be INDONESIA: IBRD-$20 million. A second rehabilitated; small bottomlands developed; forestry-institutions and conservation project boreholes drilled; and two small, community, seeks to reduce the pace of deforestation and piped water-supply systems (with sanitation maximize the long-term benefits from components) established. Institutional support Indonesian forest resources by addressing and training are included, as are the preparation critical needs in the areas of concession of studies and the launching of pilot actions, management, resource mobilization for the including one to develop labor-based methods forestry sector, nature conservation, for road works, thus promoting the emergence reforestation of degraded lands, and technology of small and medium-scale contractors. development to support sectoral programs. Cofinancing is anticipated from USAID ($27 Cofinancing is anticipated from the ITTO 140 Summaries of Projects Approved ($800,000) and the Japan Grant Facility MALAYSIA: IBRD-$71 million. More than ($500,000). Total cost: $33.1 million. 100,000 rubber smallholders may see their JAMAICA: IBRD-$25 million. The agriculture incomes and productivity increase through a sector's prospects for efficient growth will be project that will support the reorganization and enhanced through a project that seeks to institutional strengthening of the Rubber improve the sector's incentives framework, Industry Smallholders Development Authority continue the process of divestiture of public (RISDA), and help finance a three-year slice of assets, and establish an institutional basis for RISDA's agricultural program that centers on dealing with improper use of pesticides. replanting of smallholder rubber. Total cost: Cofinancing is anticipated from the OECF ($25 $206.7 million. million) and the KfW ($5 million). MALI: IDA-$53 million. Sectoral-reform KENYA: IDA-$46.8 million. The incomes of measures, concentrated on the cotton and cereals nearly 250,000 coffee growers will be subsectors and on selected institutional reforms augmented through a second project aimed at and natural-resource management measures, increasing productivity and improving product will be supported. In addition, investments will quality. Cofinancing ($18 million) is anticipated be made in the Mali Sud region, in the from the CDC. Total cost: $106.8 million. well-developed cotton zone, and in the LAO PEOPLE'S DEMOCRATIC REPUBLIC: Bougouni region, which was recently freed from IDA-$20.2 million. As many as 29,000 onchocerciasis. Cofinancing is expected from smallholder farmers are to benefit from a the FAC and the CCCE ($50.8 million), the project, covering areas in the Bolovens plateau SDC ($6.9 million), the Netherlands ($5.2 and Vientiane province, that will support upland million), and the Federal Republic of Germany crop production (coffee, in particular) and ($2.9 million). Total cost: $71.3 million. valley-floor irrigated production of rice and MAURITANIA: IDA-$25 million. The other crops. Irrigation rehabilitation is included, govemment's medium-term sector-adjustment as are technical assistance and training. program, designed to improve incentives to Cofinancing is expected from the AIDAB ($6.9 farmers and to private investors, increase the million) and France ($3.1 million). Total cost: effectiveness of the public sector, and identify MADAGASCAR: IDA-$26 million This development techniques and institutional project the first coherent effort in all Africa to arrangements conducive to more sustainable project, the first coherent effort in afl Africa to desertification control and to a livestock sector tackle environmental problems, seeks to less vulnerable to drought will be suported. In conserve threatened sites of world-renowned gess nerapproacht willhor biodiversity, while providing support to addition, new approaches to smallholder surrounding communities to make them partners irrigation in the Senegal river valley will be in conservation, and stop-or at least slow tested through an irrigation-lmprovement down-soil losses and sedimentation in priority operaton nm the Gorgol area. Cofinancing is areas where erosion has been most destructive. anticipated from the CCCE ($8 million), the Measures to increase institutional capacity are Federal Republic of Germany ($2 million), and included. Cofinancing ($42.3 million) is being the WFP ($1 million). Total cost: $37 million. provided by NORAD, the KfW, USAID, the MEXICO: IBRD-$ 100 million. Progress SDC, the UNDP, Unesco, the Federal Republic achieved under a first agricultural-marketing of Germany, the WWF, France, and Conser- project will be consolidated by providing credit vation International. Total cost: $85.5 million. to continue modemization of the food-marketing MADAGASCAR: IDA-$3.7 million. Some system throughout the marketing chain, from 125,000 farm families may benefit directly from agroprocessors to consumers, and increase a pilot phase of an extension strategy that private-sector participation in food distribution. emphasizes adaptation to the Malagasy context, Institution-building assistance to the Trust Fund sustainability in light of public-finance for Commercial Development (FIDEC) is constraints, and possible nationwide included. Total cost: $177.6 million. replicability. Total cost: $5.4 million. MEXICO: IBRD-$45.5 million. A forestry- MALAWI: IDA-$70 million. Measures to development project in Durango and Chihuahua continue and deepen ongoing macroeconomic states seeks to improve environmental and sectoral reforms will be supported, and new protection, stimulate increased production and policy changes, aimed at reducing poverty efficiency in the forestry sector, ameliorate the through agricultural growth, will be initiated. balance-of-trade deficit in forest products, and Cofinancing is anticipated from USAID ($25 increase employment and wages for the rural million), the United Kingdom ($16.5 million), poor, especially in the traditionally the Netherlands ($5 million), the Federal impoverished Amerindian communities. Total Republic of Germany, the EEC, and Japan. cost: $91.1 million. Agriculture and Rural Development 141 MOROCCO: IBRD-$49 million. Environ- and the critical production problems farmers mentally sound management and develop- face, will be built. Total cost: $81.9 million. ment of the country's forest and other natural PHILIPPINES: IBRD-$121.8 million. Support resources will be supported, and components will be given to the first phase of a coconut- for a national watershed-management program, farms development program which, over the aimed at addressing soil erosion in water- next twenty years, aims to rehabilitate the catchment areas, will be prepared and tested. smallholder coconut sector and alleviate rural Institutional support for the Department of poverty. Cofinancing ($1.3 million) is expected Forestry and Soil Conservation is included. from the ODA. Total cost: $176.6 million. Total cost: $100 million. POLAND: IBRD-$ 100 million. Constraints on NEPAL: IDA-$47.2 million. Agricultural Poland's exports of processed agricultural production and farm incomes will be raised products to convertible-currency countries will through the expansion of irrigation in the be remedied through the rehabilitation, south-central part of the country, and modernization, and expansion of agroprocessing privatization and farmer participation in industries. In addition, the import of about irrigation development will be promoted. 100,000 tons of protein feed for livestock will Institution-building assistance to the Department be financed. Total cost: $154 million. of Irrigation is included. Total cost: $52.7 SENEGAL: IDA-$18.5 million. Priority million. programs in the five-year research program of NIGER: IDA-$19.9 million. The first five-year the Senegalese Agricultural Research Institute phase of a longer-term development plan for (ISRA) will be financed. Institution-building agricultural research, whose basic objective is to assistance is included. Total cost: $38.9 million. strengthen the national capacity for agricultural- SENEGAL: IDA-$17.1 million. As many as 60 research planning and implementation, will be percent of the country's rural population (some supported. Cofinancing, totaling $4.6 million, is 360,000 families) stand to benefit from a anticipated from USAID and the FAC. Total project, based on lessons learned during pilot cost: $28 million. operations undertaken for two years, that seeks NIGERIA: IBRD-$106 million. The govern- to improve crop- and livestock-extension ment's objectives of increasing the scale and services. Total costp $20.2 million. efficiency of production of palm oil and rubber SOMALIA: IDA-$28.5 million. Food and will be supported through a project that will cash-crop production on about 5,000 small help finance public-sector and private-sector farms is to be increased through improvements investments, as well as provide institutional of the irrigation system and in water-use support. Total cost: $160 million. efficiency, in combination with adaptive NIGERIA: IBRD-$14 million. The availability research, extension, and input supply. Total cost: of quality seed will be increased through policy $32.1 million. reform and rationalization of the roles of TANZANIA: IDA-$200 million. Support will be public-sector institutions so as to create an provided for efforts to reduce dramatically the enabling environment for private-sector government's involvement in crop and input participation in the seed industry. markeng and een thm chand input Institution-building assistance to the Plant marketing and encourage other channels, as well Quarantine Service is included. Total cost: $20.6 as to substitute government-administered prices million. with a market-based pricing mechanism. PAKISTAN: IBRD-$148.5 million; IDA-$1.5 Cofinancing is anticipated from the Netherlands million. The development of a viable ($40 million) and the United Kingdom ($20 agricultural-credit system that can meet the million). expanding needs of the agricultural sector and TUNISIA: IBRD-$17 million. The implemen- increase its productivity, as well as increase tation of the first phase of a program of lending to small farmers and women, will be institutional reform and strengthening of the supported by a project that furthers the financial country's agricultural-research and -extension liberalization and progress already made in systems will be supported. In addition, a pilot increasing competition among banks. program to provide adequate extension services Cofinancing is anticipated from the AsDB ($150 to rural women will be launched. Total cost: $34 million) and IFAD ($25 million). million. PAKISTAN: IDA-$57.3 million. Provincial TURKEY: IBRD-$63 million. Agricultural- agricultural-research efforts will be strengthened extension services in nineteen provinces will be and upgraded, the efficiency and effectiveness strengthened, and research institutes that of resources allocated to research will be backstop the extension effort will be supported. improved, and sustainable research systems, In addition, pilot programs are included that will sensitive to national and provincial priorities provide improved extension services for women 142 Summaries of Projects Approved farmers and test the effectiveness of mobile rehabilitation and maintenance, as well as veterinary clinics. Total cost: $145.4 million. improvements to feeder roads located in priority URUGUAY: IBRD-$65 million. A second agricultural areas; developing rational programs agricultural-development project will broaden for servicing plots for low-cost housing; the scope of Bank lending to cover the whole improving municipal services in Bissau; and agricultural sector. Institutional support and helping public transport companies to become technical assistance will be extended to the financially viable concems, will be assisted. traditional crop and livestock subsectors, Cofinancing ($14.9 million) is being sought. forestry, and nontraditional agricultural exports. Total cost: $43.3 million. Cofinancing ($1.8 million) will be provided by KENYA: IDA-$44 million. Supplemental funds Japan. Total cost: $132.4 million. from IDA reflows will be provided to help ZAIRE: IDA-$5.9 million. As many as 500,000 finance the financial-sector adjustment credit famm families may benefit from the effect of approved in fiscal 1989 in the amount of $120 improved extension on farmer incomes and million. production. Cofinancing ($3 million) is MALAWI: IDA-$4.7 million. Supplemental anticipated from the UNDP. Total cost: $10.5 funds from IDA reflows will be provided to help million. finance the industry and trade-adjustment credit ZIMBABWE: IBRD-$14.5 million. Forests will approved in fiscal 1988 in the amount of $70 be conserved in densely populated "communal million. areas," and production of wood for fuel and MOROCCO: IBRD-$ 170 million. The expansion construction purposes increased by promoting and modernization of industry, with particular tree planting and woodland management. In emphasis on export-oriented, private-sector addition, a pilot program will test new firms, will be supported through provision of techniques for wildlife and forest-grazing lines of credit to seven commercial banks and management, and the productivity and quality of the National Bank for Economic Development the wood-processing industry will be improved. (BNDE). Cofinancing is expected from BADEA and PHILIPPINES: IBRD-$65 million. The DANIDA ($9.4 million each), as well as from Development Bank of the Philippines will be CIDA ($1 million). Total cost: $64.1 million. provided a line of credit for relending to financial institutions for financing equipment Development Finance Companies and working capital, leases, and equity and BANGLADESH: IDA-$175 million. The quasi-equity investments. Technical assistance is govemment's reform program for strengthening to be financed by the Japan Grant Facility ($3.5 financial-sector policies and institutions will be million). Total cost: $114.5 million. supported. Cofinancing ($18.2 million) is POLAND: IBRD-$260 million. Direct expected from USAID. foreign-exchange costs of needed physical BOLIVIA: IDA-$9.1 million. Supplemental improvements will be made available to funds from IDA reflows will be provided to help enterprises undertaking high-priority and finance the financial-sector adjustment credit high-retum investments to expand exports to approved in fiscal 1988 in the amount of $70 convertible-currency markets. In addition, million. technical assistance will be provided to assist in CARIBBEAN DEVELOPMENT BANK: enterprise restructuring and the development of IBRD-$20 million; IDA-$ 12 million. Funds small and medium-scale enterprises, and for will be relent by the CDB for public-sector and financial institutions that are beginning the private-sector projects, of the type normally process of adjustment to the new economic financed by the Bank, in common Bank/CDB environment. Total cost: $455 million. member states eligible to receive IBRD loans SENEGAL: IDA-$45 million. The govemment's and IDA credits. Cofinancing ($18 million) will efforts to restructure its banking system and lay be arranged by the CDB. Total cost: $102 the foundation for the development of million. well-functioning financial and capital markets CHILE: IBRD-$130 million. The further will be supported. Cofinancing is expected from deepening of the country's financial markets, France ($34 million) and USAID ($33 million). through adoption of measures to strengthen TANZANIA: IDA-$10.3 million. Supplemental securities markets and the banking system, will funds from IDA reflows will be provided to help be supported. Additional funding for the finance the industrial and trade-adjustment financially constrained leasing sector will also credit approved in fiscal 1989 in the amount of be provided. $135 million. GUINEA-BISSAU: IDA-$23.6 million. The TONGA: IDA-$3 million. A line of credit will be govemment's infrastructure-rehabilitation provided to the Tonga Development Bank so program, which aims at carrying out road that it might further assist agricultural, Education 143 industrial, services, and tourism development, and strengthening technical education. primarily in the private sector, and generate Capacity-building assistance to the Ministry of additional investment, production, employment, Education is included. Cofinancing ($3 million) and exports. Cofinancing ($5.3 million) is being is expected from the EEC. Total cost: $21.2 provided by the AsDB. Total cost: $15.3 million. million. VENEZUELA: IBRD-$300 million. The GHANA: IDA-$50 million. A second government's financial-sector reform program, education-sector adjustment credit has been which aims at liberalizing the financial-policy designed to continue support for the country's environment, reducing the government's direct ongoing reform program by extending reforms role in financial intermediation, and strengthen- to the senior secondary level, consolidating ing the competitiveness and financial condition reforms initiated at the basic education level, of intermediaries, will be supported. and ensuring the financial sustainability of the new system now being put into place. Education Cofinancing, in the amount of $10 million. is BANGLADESH: IDA-$159.3 million. Equitable being sought. access to primary and secondary schooling will GUINEA: IDA-$20 million. Educational policy be expanded through the construction and reforms, aimed at preventing a major renovation of classrooms, and the quality of deterioration of the educational system and general education will be raised through greatly creating a basis for the sector to contribute to expanded in-service teacher training and medium-term socioeconomic development, will improved curriculum, textbooks, and examina- be supported. tions. Institutional development is included. INDIA: IBRD-$25 million; IDA-$235 million. Cofinancing is expected from the AsDB ($57.5 The government's new national policy on million), the DGIS ($14 million), SIDA ($14 education, which recognizes the need for million), UNICEF ($10 million), the ODA ($5.7 technical education to become more responsive million), the UNDP ($5 million), and UNFPA to the expansion of science and technology, as ($2.4 million). Total cost: $310.2 million. well as the needs of the rural sector, will be CHINA: IDA-$50 million. Improvements in supported by a project that will help finance the selected existing vocational and technical- country's ten-year technician education- education (VTE) schools and teacher-training investment program. Institution-building institutions will be supported, VTE research and assistance is included. Total cost: $382.7 million. development centers will be created, and the INDONESIA: IBRD-$ 154.2 million. The quality management capability of the VTE system will and equity of secondary education will be be strengthened. Cofinancing is anticipated from improved through better teacher-training the Federal Republic of Germany ($7 million), programs, the supply of instructional materials DJIBOUTI: IDA-$5.8 million. Coordination of and science equipment, improved examinations, vJIBOcTIo trAini. wit .labor demands and institution-strengthening assistance to the vocational trainig with labor-market demands Miisr ofEuainadClue.oa ot will be improved, access to primary education Mistry of Educainon and Culture. Total cost: increased, and the quality of primary and $223.4 million. lower-secondary education improved. INDONESIA: IBRD-$117.5 million. The quality Institution-building assistance to the Ministry of of higher-level professional and technical Education in the areas of planning and personnel-critical to continued successful management is included. Cofinancing is implementation of the country's development anticipated from the UNDP ($420,000) and the policies-will be enhanced through EDF ($400,000). Total cost: $7.5 million. improvements in human-resource development, EGYPT, ARAB REPUBLIC OF: IBRD-$30.5 including postgraduate training, and increased million. The quality and relevance of existing efficiency of professional, technical, and faculties of engineering will be improved, and managerial training and employment. Total cost: the development of a new, more appropriate $168.8 million. type of technical teacher education will be INDONESIA: IBRD-$36.1 million. In the wake supported, thus contributing to efforts aimed at of the govemment's decision to transfer an increasing economic productivity and expanding increasing share of responsibilities in export-oriented industries. Total cost: $38.6 public-works planning and administration to million. provincial and local govemments, finance will GAMBIA, THE: IDA-$14.6 million. An be provided to help improve the coordination of education-sector project will finance invest- planning and the implementation of public- ments aimed at expanding and improving works activities through staff development and the quality of primary education, restructur- the development of more efficient management ing and improving secondary education, systems and procedures. Total cost: $54 million. 144 Summaries of Projects Approved KOREA, REPUBLIC OF: IBRD-$45 million. development process aimed at improving Selected universities will be assisted in school-management systems, facilitating the broadening and deepening their basic research transition to decentralized administration, and programs in priority fields in science and strengthening the Ministry of Education, technology in order to strengthen their capacity Cultural Affairs, and Administration. Total cost: to support technological innovation. Total cost: $75 million. $60 million. TANZANIA: IDA-$38.3 million. The education KOREA, REPUBLIC OF: IBRD-$31.6 million. sector's capacity to plan and implement A second technology-advancement project seeks appropriate and effective education policies and to reinforce the priority the govemment has programs will be strengthened, the quality of placed on technology-intensive industrial instruction at primary and secondary levels will development by strengthening basic research be improved, and ways to mobilize and and development and enhancing the application effectively use nongovemmental resources for of industrial standards to raise the quality of the upgrading of educational facilities will be products. Total cost: $45.8 million. promoted. Cofinancing is anticipated from MADAGASCAR: IDA-$39 million. The first SIDA ($12 million) and NORAD ($4.9 million). part of the govemment's long-term strategy to Total cost: $63.6 million. improve efficiency and the quality of education TURKEY: IBRD-$90.2 million. The govem- will be supported. Cofinancing is anticipated ment's education-development program, from the OPEC Fund for Intemational designed to raise the level of student learning Development ($5 million), the GTZ ($1.1 and achievement, will be supported through a million), and the UNDP ($1 million). Total cost: project that seeks to improve the quality of $55 million. primary and secondary education, the quality MALAWI: IDA-$36.9 million. A second and relevance of teacher education, and the education-sector credit will support reforms that effectiveness of management and administration include improving the quality of education at all skills and practices in the Ministry of Education. levels; expanding access, particularly at the Total costs $177p 2 million. primary and secondary levels; strengthening sector management, budgeting, and planning; Energy and improving resource-mobilization and BANGLADESH: IDA-$105 million. The timely resource-allocation policies. Total cost: $41 and effective implementation of the million. govemment's implelectahon ofotne NIGERIA: IDA-$120 million. The major, goverment's rural-electrificaton program, ongoing reform and rationalization of the based on the development of autonomous, federal university system, designed to improve member-owned distribution cooperatives, will the effectiveness of teaching and research, be supported. Institutional support to those expand access, increase nongovemmental cooperatives, as well as to the Rural income of universities, and make university Electrification Board, is included. Cofinancing activities more cost effective, will be supported. ($17.7 million) is anticipated from USAID. PAKISTAN: IDA-$112.5 million. The Total cost: $163.5 million. primary-education development program for BANGLADESH: IDA-$2.3 million. Sindh province-designed to increase school Supplemental funds from IDA reflows will be enrollment in rural and urban slum areas, provided to help finance the energy-sector improve the quality of primary education, and adjustment credit approved in fiscal 1989 in the increase student leaming and achievement-will amount of $175 million. be supported. Cofinancing is expected from BRAZIL: IBRD-$385 million. A time-slice of the NORAD ($6.6 million) and the ODA ($2.2 transmission-investment program of selected million). Total cost: $196.4 million. power utilities for the period 1990-93 will be SOMALIA: IDA-$26.1 million. The country's financed. In addition, energy-conservation and educational system, particularly at the primary energy-demand management programs will be level, will be revitalized through implemen- expanded through the implementation of the tation of sustainable measures designed to National Program for Electric Energy restore teaching quality and reverse the decline Conservation. Total cost: $3,851.9 million. in enrollments. Cofinancing will be provided by COTE D'IVOIRE: IBRD-$100 million. the UNCDF ($3.2 million). Total cost: $32.5 Comprehensive reforms in the energy sector, million. focusing on accelerating development of local SRI LANKA: IDA-$49 million. A general- sources of energy, improving investment education project seeks to improve teaching planning, increasing operational efficiency and conditions and reduce disparities between strengthening financial management of energy schools, as well as support an institutional- enterprises, improving resource allocation, and Energy 145 streamlining energy institutions, will be Technical assistance is included. Cofinancing supported. ($5 million) is anticipated from the ODA. Total GHANA: IDA-$40 million. Afifthpowerproject cost: $118.8 million. seeks to continue ongoing sector-policy reforms MEXICO: IBRD-$450 million. A two-year so as to help establish the Electricity slice of the investment program of the Corporation of Ghana as a commercially govemment-owned national electric utility oriented entity, capable of delivering a reliable will be financed. The government's goal of and economic supply of electricity to its improving efficiency and financial self- customers. Cofinancing is expected from the sufficiency in the power sector will also be governments of the United Kingdom and met. Cofinancing has been secured from the Austria ($19 million and $10.5 million, IDB ($300 million); other financing includes respectively), the CDC ($15 million), and the that from bilateral sources ($150 million), CCCE ($10 million). Total cost: $124.8 million. tum-key contracts ($560 million), and suppliers' GHANA: IDA-$20 million. A sixth power credits ($1,213 million). Total cost: $7,127 project in support of the investment program of million. the Volta River Authority (VRA) for the period NIGERIA: IBRD-$70 million. The National 1990-95 will enable the VRA to meet projected Electric Power Authority will be assisted in domestic and export demand, maintain the high carrying out much-needed maintenance and standard of reliability of the country's electricity rehabilitation of selected generation, supply, and implement its ongoing program of transmission, and distribution facilities. institutional development. Cofinancing is Institution-building assistance is included. expected from the EIB ($28.2 million), the Cofinancing is anticipated from the Federal CCCE ($600,000), and CIDA ($300,000). Total Republic of Germany ($24.5 million, including cost: $156 million. $9.1 million from the KfW), the ODA ($5 INDIA: IBRD-$485 million. The reliability, million), and suppliers' credits ($8.6 million). operating efficiency, and quality of service in Total cost: $154.6 million. the northem region's power system will be PAKISTAN: IBRD-$ 162 million. The Water and improved through a combination of investments, Power Development Authority's transmission technical assistance, and training. Cofinancing is system will be expanded and reinforced at least anticipated from the Japan Grant Facility ($1.1 cost to promote the effective evacuation of million). Total cost: $1,179.8 million. power from the power plants to be commis- INDIA: IBRD-$98 million. Additional peak sioned during the seventh-plan period (fiscal generation capacity to meet more of the 1989-93) by both the private and public sectors. increasing demand in the Bombay area and Technical assistance is included. Total cost: reduce Tata Electric Companies' dependence on $463.1 million. the state grid will be provided, the utilization of PAKISTAN: IBRD-$123 million; IDA-$37 existing thermal generating units at Trombay million. Funds will be made available to help will be increased, and a gas-based, cover the cost of the govemment's seven-year combined-cycle plant will be added. investment program in rural electrification, Cofinancing will be provided by the IFC ($30 which will supply electricity to about 1.2 million and Y4,600 million). Total cost: $273.7 million domestic and commercial consumers, million. about 27,000 tubewells, and 12,000 small INDONESIA: IBRD-$329 million. Through industrial consumers. Technical assistance is support for the development and implemen- included. Cofinancing is expected from the tation of an efficient rural-electrification OECF ($162 million), USAID ($56 million), program, as many as 1.3 million consumers in and the AsDB ($ 10 million). Total cost: $715 some 4,500 villages will be supplied with million. electricity. Institution-building assistance, PHILIPPINES: IBRD-$390 million. The first including the promotion of village cooperatives' phase of a reoriented development strategy for involvement in rural electrification, is included. the country's energy sector, aimed at minimizing Cofinancing ($1.3 million) is anticipated from the cost of energy supply, will be supported. Japan. Total cost: $524.7 million. Cofinancing from various foreign sources INDONESIA: IBRD-$86 million. The govern- ($1,170 million), as well as from the Eximbank ment's policy of substituting petroleum- of Japan ($150 million), is expected. Total cost: product fuels with natural gas will be $3,509 million. supported through a project that provides for the POLAND: IBRD-$250 million. The govem- detailed design, construction, testing, and ment's program of energy conservation and commissioning of systems to supply natural gas environmental improvement through to manufacturing and other commercial entities energy-pricing reform and fuel-switching from in Surabaya and two power stations in Medan. coal to gas will be supported through 146 Summaries of Projects Approved investments in equipment and materials to and allocate financial resources efficiently. Total increase the production and distribution of cost: $143.4 million. natural gas. The preparation of studies on sector INDIA: IBRD-$300 million. Through provision restructuring, gas development, the encourage- of funds for the modernization and restructuring ment of private-sector participation in the of the cement industry, the government's policy development of the oil and gas sector, and to eliminate controls on cement prices and technical assistance are included. Cofinancing distribution and assist the industry to adjust to ($60 million) is anticipated from the EIB. Total an increasingly competitive environment will be cost: $616 million. supported. Funds for establishing a pilot bulk THAILAND: IBRD-$94 million. A two-year cement-transport system, for training, and for slice of the Electricity Generating Authority of technical assistance are included. Cofinancing Thailand's investment program will be financed, ($5.8 million) is anticipated from DANIDA. thus helping to sustain the country's growth. Total cost: $736.2 million. Technical assistance is included. Bilateral INDIA: IBRD -$145 million; IDA-$55 million. financing and suppliers' credits, aggregating Easier access by firms to foreign technology and about $1,800 million, will finance a portion of more efficient and effective domestic technol- the program's costs. Total cost: $2,780 million. ogy development will be supported. In addition, URUGUAY: IBRD-$62.5 million. Through a research and standards institutions will program of investments and provision of undertake research and development and other technical assistance, suitable electricity service technological activities needed by industry, at least cost will be ensured, and the manage- while small innovative firms will be stimulated ment of the national power company will be through support from, and development of, four modernized to improve efficiency. Cofinancing venture-capital schemes. Total cost: $410 is anticipated from the Eximbank of the United million. States. Total cost: $239.8 million. JORDAN: IBRD-$25 million. Support for the YEMEN, PEOPLE'S DEMOCRATIC REPUBLIC country's phosphate sector will be provided OF: IDA-$ 15.5 million. Through a combina- through the development of a beneficiation plant tion of investments and institution-building at Shidiya to increase rock production and raise assistance, incremental demand for electricity in rock exports and the rehabilitation of the the Aden region will be met, and the technical fertilizer plant at Aqaba to enable its original and managerial skills of the Public Corporation design capacity to be reached and maintained. for Electric Power will be improved. Total cost: Cofinancing is anticipated from the AFESD and $20.9 million. the KFAED ($70.7 million), as well as the IsDB ($9 million). Total cost: $161.7 million. Industry MOZAMBIQUE: IDA-$50. 1 million. Funds will ALGERIA: IBRD-$99.5 million. To accelerate be channeled through the Bank of Mozambique successful industrial-restructuring efforts and to for the rehabilitation, financial restructuring, and demonstrate to the entire industrial sector the operational support of about fifteen existing process and its costs and benefits, technical and priority enterprises that are potentially viable. financial resources will be provided to four Technical assistance is included. Cofinancing representative enterprises that are expected to ($22.5 million) is anticipated from Italy. Total remain viable in a competitive environment and cost: $106.7 million. whose management and shareholders are committed to the restructuring. Export credits, in Nonproject the amount of $47.6 million, have been ALGERIA: IBRD-$300 million. The country's mobilized. Total cost: $193.9 million. ongoing reform program, designed to transform BANQUE OUEST AFRICAINE DE the economy from a centrally planned system to DEVELOPPEMENT (BOAD): IBRD-$15 one that is more decentralized and market- million; IDA-$40 million. BOAD will be oriented, will be supported. Constraints will be provided a line of credit for onlending to addressed in macroeconomic management, the investment projects, in both the private and incentive structure, the financial and productive public sectors, in its member countries-Benin, sectors, and the environmental, population, and Burkina Faso, C6te d'lvoire, Mali. Niger, social sectors. Senegal, and Togo. CENTRAL AFRICAN REPUBLIC: IDA-$45 HUNGARY: IBRD-$66 million. The million. The third phase of the government's modemization and strengthening of the adjustment program for addressing key country's financial system will be supported macroeconomic and sectoral issues over the (with emphasis on the banking system, medium term will be supported. securities markets, and accounting and auditing GHANA: IDA-$5.7 million. Supplemental funds reform), thus improving its ability to mobilize from IDA reflows will be provided to help Nonproject 147 finance the second structural-adjustment credit the amount of about $100 million, is anticipated approved in fiscal 1989 in the amount of $120 from the AfDB and several other donors. million. SENEGAL: IDA-$4.4 million. Supplemental GUYANA: IDA-$74.6 million. The govern- funds from IDA reflows will be provided to help ment's economic-recovery program, designed to finance the fourth structural-adjustment credit create viable and stable economic conditions approved in fiscal 1990 in the amount of $80 conducive to restoring a higher and sustained million. rate of economic growth, will be supported. SRI LANKA: IDA-$90 million. Policy reforms Cofinancing is expected from the CDB ($42 in four major areas-macroeconomic million) and the Federal Republic of Germany stabilization, public-sector rationalization, ($6 million). private-sector development, and poverty GUYANA: IDA-$3.4 million. Supplementary alleviation-will be supported. Bilateral funds from IDA reflows will be provided to help cofinancing is being sought. finance the country's economic-recovery SRI LANKA: IDA-$4.4 million. Supplemental program. funds from IDA reflows will be provided to help HUNGARY: IBRD-$200 million. Support will finance the economic-restructuring credit be provided to the country's structural- approved in fiscal 1990 in the amount of S90 adjustment program, which aims at establishing million (see above). a competitive market economy, restoring a TOGO: IDA-$200,000. Supplemental funds from reasonable and sustainable rate of growth, IDA reflows will be provided to help finance the improving the country's external credit- third structural-adjustment credit approved in worthiness, and reducing the rate of inflation. fiscal 1988 in the amount of $45 million. JORDAN: IBRD-$150 million. The govem- TRINIDAD AND TOBAGO: IBRD-$40 million. ment's ongoing structural-adjustment program The government's structural-adjustment will be supported through an industry and program will be supported by addressing trade-policy adjustment loan that encourages selected policy areas-public-sector resource implementation of policy reforms designed to mobilization and allocation, the incentive create a more uniform, nondistortionary set of framework, and the social sectors-that are key incentives across different economic sectors. to growth. Cofinancing ($40 million) is MEXICO: IBRD-$ 1,260 million. Funds will be anticipated from the Eximbank of Japan. made available to support the reduction of UGANDA: IDA-$ 125 million. The third phase Mexico's public debt with commercial banks. of the govemment's economic-recovery PAPUA NEW GUINEA: IBRD-$50 million. The program, involving measures to reinforce government's stabilization and structural- demand management, further liberalize trade, adjustment program, designed to preserve revitalize the private sector, and bring about a external and internal financial stability in the fundamental rationalization of public-sector face of large shortfalls in export income and management, will be supported. promote faster growth in the nonmining UGANDA: African Facility-$12.8 million. economy, will be supported. African Facility funds, generated by the PHILIPPINES: IBRD-$200 million. Provision of currency conversion following the termination. funds from the Bank, together with those from in July 1989, of the Special Facility for the IMF and certain bilateral sources, will Sub-Saharan Africa, will be used to supplement finance the debt-buyback portion of the IDA and African Facility funds approved in govemment's 1989-90 commercial-bank September 1989 in support of the government's financing and debt-reduction package. economic-recovery program. SAO TOME AND PRINCIPE: IDA-$9.8 UGANDA: IDA-$1.5 million. Supplemental million. Phase two of the government's funds from IDA reflows will be provided to help structural-adjustment program for the period finance the economic-recovery credit approved 1990-92-its broad thrust continues to be on in fiscal 1988 in the amount of $65 million. improved incentives for increasing the YUGOSLAVIA: IBRD-$400 million. Reforms to production of traded goods within a stable a socialist economy in transition, designed to macroeconomic environment-will be correct price distortions, increase the importance supported. Cofinancing is expected from the of competitive markets, and address the prob- ADF ($12 million) and the IMF ($2.6 million). lems of failing enterprises, will be supported SENEGAL: IDA-$80 million. A fourth through a second structural-adjustment structural-adjustment credit will support the operation. govemment's strategy to promote private ZAIRE: African Facility-$14 million. African investment and exports, improve the efficiency Facility funds, generated by the currency of public-sector resource mobilization and conversion following the termination, in July allocation, and alleviate poverty. Cofinancing, in 1989, of the Special Facility for Sub-Saharan 148 Summaries of Projects Approved Africa, will be used to supplement IDA and training facilities and productive activities, and African Facility funds approved in June 1987 in improvements will be made in primary health support of the government's structural- care and social services, as well as in adjustment program. N'Djamena's sanitation infrastructure. The government's ability to design and monitor Population, Health, and Nutrition programs targeted at disadvantaged groups will BOLIVIA: IDA-$20 million. About 790,000 also be supported. Cofinancing has been women and children, currently without access to obtained from the SDC ($6.7 million), the basic health services in the low-income UNCDF ($3.2 million), and USAID ($2.3 neighborhoods of the country's four largest million). Total cost: $26.9 million. cities, will benefit from a project that will help COLOMBIA: IBRD-$24 million. By reorient public-health expenditures in favor of strengthening an ongoing program of day care, basic health care and improve sector efficiency feeding, and health monitoring for poor urban through the integration of nongovernmental children, aged two to six, support will be organizations and municipalities with negotiated provided to the government's efforts to raise shares of responsibilities. Cofinancing ($6.2 incomes among the poor and improve their million) is expected from the Netherlands. Total well-being through cost-effective, targeted cost: $38.6 million. interventions. Total cost: $40.2 million. BOLIVIA: IDA-$20 million. The initial phase of GAMBIA, THE: IDA-$7 million. Some 50,000 the country's social-investment fund program, rural women are expected to benefit directly designed to help alleviate the worst aspects of from a project that aims to improve women's poverty through improvements in the coverage productivity and income-earning potential, and effectiveness of health and education improve their welfare and status, strengthen services, will be supported. Cofinancing, in the government institutions that deal with women's amount of $43.6 million, is being sought. Total issues, and contribute to bringing about a cost: $95.6 million. change in society's perception of the role of BRAZIL: IBRD-$267 million. Some 12 million women. Cofinancing is expected from the AfDB rural residents, particularly women and children, ($3.5 million), Norway ($1.6 million), the living in seven states in the northeast are to UNDP ($1.4 million), UNIFEM ($700,000), and benefit from a second project designed to UNFPA ($150,000). Total cost: $15.1 million. strengthen such basic health services as HAITI: IDA-$28.2 million. Policy reforms will women's reproductive health and be supported through program investments to immunizations, support investment in health expand service delivery for 2.1 million people facilities in previously underserved areas, and living in one of the country's four regions and to strengthen federal and state management of the control two major epidemics (AIDS and health sector. Total cost: $610.6 million. tuberculosis) nationwide. Cofinancing ($2.4 CAMEROON: IBRD-$21.5 million. By million) is anticipated from CIDA. Total cost: strengthening the country's socioeconomic $33.7 million. reform process through interventions in INDIA: IBRD-$10 million; IDA-$86.7 million. population, health, education, employment This second phase of the Bank's effort to creation, women in development, and support shifts in the approach, emphasis. and community development, as well as by orientation of the family-welfare program at the strengthening the country's socioeconomic data national and state levels aims to increase the base, a social-dimensions-of-adjustment (SDA) supply and quality of, as well as demand for, project will contribute to the restoration of family-welfare services. Institution-building sustainable growth over the medium and long assistance is included. Total cost: $141.5 million. term. Cofinancing is expected from the AfDB INDIA: IDA-$95.8 million. More than 5 million ($16 million), the EEC ($10 million), the relatively disadvantaged preschool children and Federal Republic of Germany ($7.7 million), an estimated 2 million pregnant and lactating CIDA ($7.3 million), France ($3.9 million), women are expected to benefit directly from a USAID ($3.5 million), UNFPA ($3.2 million), second nutrition project in the state of Tamil Japan ($1 million), and the UNDP ($800,000). Nadu that seeks to accelerate substantially the Total cost: $85.7 million. pace of improvement in nutrition and in the CHAD: IDA-$13.4 million. To address the health of young children, while contributing to a immediate needs of groups still at risk as a faster reduction in infant and child mortality. consequence of prolonged socioeconomic Total cost: $139.1 million. disruptions and of those expected to be JAMAICA: IBRD-$30 million. The adversely affected by the transitional effects of government's five-year human-resource the adjustment process, employment generation development program (HRDP)-designed to will be stimulated by increasing access to rehabilitate and develop the social sectors-will Small-scale Enterprises 149 be supported through a project that will finance million) is anticipated from a variety of priority investments, including primary health intemational nongovernmental organizations. care, preprimary and primary education, and Total cost: $37 million. HRDP administration and monitoring. Total YEMEN ARAB REPUBLIC: IDA-$15 million. cost: $67 million. A health-sector development project seeks to KENYA: IDA-$35 million. A fourth population improve health services and to facilitate their project has been designed to further increase the extension to underserved communities by availability, accessibility, and quality of family- strengthening the administrative, human- planning services, strengthen the demand for resources, and support-services base at the family planning, and increase the institutional regional level. Total cost: $19.1 million. capacity of the National Council for Population and Development. Cofinancing is expected from Public-sector Management USAID ($2.2 million). Total cost: $41.3 million. MADAGASCAR: IDA-$1.2 million. Supple- LESOTHO: IDA-$12.1 million. Necessary mental funds from IDA reflows will be provided financial and institutional-policy reforms will be to help finance the public-sector adjustment introduced to help slow the pace of population credit approved in fiscal 1988 in the amount of growth, continue the strengthening of the $125 million. national health system, reduce the spread of MAURITANIA: IDA-$40 million. The extension tuberculosis and sexually transmitted diseases, of the govemment's structural-adjustment lower the rate of malnutrition in children and program, aimed at deepening the reforms in the mothers, and increase sector-management public-enterprise sector, will be supported. capacity. Cofinancing has been obtained from Cofinancing is anticipated from Japan ($50 the EEC ($3.2 million), Ireland ($2.6 million), million), the SFD ($19.8 million), the KFAED and the ODA ($1.3 million). Total cost: $21.5 ($13.7 million), the AFESD ($10.3 million), the MOROCCO: IBRD-$104 million. The initial Abu Dhabi Fund ($6.1 million), Spain ($5 MOROCC: IBRD $104 illion The iitialmillion), and the Federal Republic of Germany phase of a long-term effort to rehabilitate basic ($4 million). public-health services and selected diagnostic RWANDA: IDA-$4.4 million. Technical and emergency services will be supported. In assistance will be provided to help the addition, support will be provided for a program govemment carry out its public-enterprise of sector and policy reforms. Total cost: $171.3 govrnment any o pulic-entrprise million. reforms in three areas: a policy-reform package NIGERIA: IBRD-$68. 1 million. The gover- covering the whole sector, restructuring of ment's national essential-drugs program, which specific enterprises, and development of the ment's beenidesignedsentiaformrundstrengthenwdru institutional capacity to design, implement, and has been designed to reform and strengthen drug monitor public-enterprise reforms. Total cost: supply and quality assurance at all levels, introduce equitable cost recovery to help ensure $4.9 million. sustainability, and, at a later stage, promote local TUNISIA: IBRD-$130 million. The implemen- drug production, will be supported. Total cost: tation of the government's public-enterprise $85.1 million. reform program, which centers on legal and TANZANIA: IDA-$47.6 million. Efforts to raise institutional reforms and privatization and the quality, coverage, and effectiveness of restructuring to reduce the role of the family planning, nutrition, and basic health government in competitive productive activities, services in urban and rural areas will be will be supported. reinforced. Institutional capacity building, VENEZUELA: IBRD-$350 million. The training, and support for policy reform in the govemment's public-enterpfise reform program, pharmaceuticals subsector and in health aimed at fundamentally diminishing the role of financing are included. Cofinancing is expected the public sector in the economy and expanding from the SDC ($12.2 million), DANIDA ($1.3 that of the private sector, will be supported. million), UNFPA and Belgium ($700,000 each), and the ODA ($100,000). Total cost: $70 million. Small-scale Enterprises UGANDA: IDA-$28 million. The productivity BOLIVIA: IDA-$16.1 million. Credit will be of some of the most vulnerable groups in the made available to finance the needs of private country-war victims, AIDS orphans, and manufacturing and tourism firms for fixed children and other residents of disadvantaged assets, working capital, and technical assistance. districts, including those living in dangerously Technical assistance will also be made available unhealthy urban slum areas-will be enhanced to support activities in the manufacturing sector and their income-eaming capacity increased (emphasizing small enterprises and women), through a project that will improve access to and to help strengthen the institutional capacity some basic social services. Cofinancing ($2.2 of the central bank. Total cost: $24.9 million. 150 Summaries of Projects Approved ECUADOR: IBRD-$50 million. Some 4,500 three-year period through a technical-assistance investment subprojects may be financed and project that focuses on strengthening key about 14.500 new jobs generated through a ministries in critical areas during the adjustment fourth small-scale enterprise (SSE) project that period. Total cost: $6.3 million. will provide credit to finance SSE fixed assets, GUYANA: IDA-$3 million. Technical assistance permanent working capital, and subproject- will be provided to help the govemment design related technical and managerial expenditures. and implement policy reforms and improve its Total cost: $83 million. macroeconomic-management capacity. Total GUINEA: IDA-$50 million. A private-sector cost: $3.1 million. promotion program seeks to establish a more KENYA: IDA-$6 million. Technical assistance favorable local business environment-through will be provided in support of the implemen- removal of existing regulatory, administrative. tation of restructuring plans for two and institutional constraints-that will industrial-sector development finance encourage both local and foreign promoters to institutions (DFIs), and training will be provided invest in new productive activities. to DFI staff. In addition, corporate restructuring HAITI: IDA-$11.4 million. Technical and plans for about two dozen potentially viable but financial assistance will be provided to private nonperforming enterprises carried in DFI industrial enterprises that need to restructure to portfolios will be prepared. Total cost: $7.5 adjust to new trade-reform policies and to million. enterprises (mostly small and medium-sized) KENYA: IDA-$5 million. The govemment's that need financial assistance only. Total cost: financial-sector reform program will be aided $24.6 million. through a project designed to strengthen the MADAGASCAR: IDA-$48 million. To help capabilities of the central bank to manage maintain the momentum of the reform process financial and monetary developments. In in the financial sector, funds will be provided to addition, a College of Banking and Finance, finance investments in rehabilitation and new which will provide training to banking projects, including joint ventures, needed to professionals, will be established. Total cost: foster growth in all productive sectors of the $5.9 million. economy. Technical assistance and training are MAURITANIA: IDA-$ 10 million. Technical included. Total cost: $66.3 million. assistance will be provided to help the MOZAMBIQUE: IDA-$32 million. The government implement its public-enterprise rehabilitation and development of the small- and sector reforms. Total cost: $10.5 million. medium-scale enterprise (SME) sector will be MEXICO: IBRD-$22 million. Provision of promoted through provision of credit to technical assistance will help develop a businesses capable of efficient operation within regulatory capability at the Secretariat of the reformed business environment. Institutional Communications and Transport, which is critical support and assistance in helping the govem- to the overall success of the privatization of ment formulate SME policy are included. TELMEX, the country's telephone company, Cofinancing is anticipated from the EIB ($7 and govemmental efforts to develop competition million) and has been received from the UNDP in the sector. ($500,000). Total cost: $50.2 million. MOZAMBIQUE: IDA-$21 million. The implementation of the country's economic- Technical Assistance recovery program will be aided through a ALGERIA: IBRD-$26 million. Implementation project that provides institutional support to the of economic-reform measures will be facilitated, Ministry of Finance and the Bank of and planning and management capabilities of Mozambique. Total cost: $23 million. govemment agencies involved in the reform TRINIDAD AND TOBAGO: IBRD-$4 million. process upgraded. Cofinancing ($1.3 million) is Technical assistance will be provided to help anticipated from the UNDP and the IMF. Total carry out studies and increase institutional cost: $41 million. capacity to ensure the effective design and CAMEROON: IBRD-$9 million. Priority implementation of the govemment's activities at the core of the govemment's structural-adjustment program, design and structural-adjustment program in policy analysis prepare the necessary complement of social and macroeconomic management. as well as in programs, and prepare possible future Bank reform of the civil service and the parapublic operations. Total cost: $5.2 million. sector, will be financed. Cofinancing ($4 VENEZUELA: IBRD-$30 million. Expertise and million) is being sought from the Japan Grant funding will be provided to carry out Facility. Total cost: $14.5 million. preinvestment work to prepare a program of GABON: IBRD-$5 million. The govemment's projects that may be suitable for Bank financing adjustment program will be supported over a during the next five years. Institution-building Transportation 151 assistance to sectoral and core government million), the AGCD ($5 million), the GTZ ($1.8 agencies, as well as assistance in implementing million), the FAC ($1.4 million), and Italy, a public-enterprise refonm program. is included. Japan, and/or the OPEC Fund for International Total cost: $41 million. Development (aggregating $7 million). Total cost: $90.8 million. Telecommunications CENTRAL AFRICAN REPUBLIC: IDA-$62 INDONESIA: IBRD-$350 million. A third million. A transport-sector project seeks to telecommunications project seeks to accelerate establish an efficient system of allocating expansion and modemization of telecom- resources to investments in priority sectors, munications facilities in the country and to increase institutional capacity, enhance increase the institutional capacity of operational capacity by expanding participation PERMUTEL, the public telecommunications of the private sector and local communities in corporation. Cofinancing is expected from the road works, and initiate a long-temm program of KfW ($169.6 million), the OECF ($28.9 transport-related environmental protection. million), and the UNDP ($2 million). Total cost: Cofinancing is anticipated from the FAC and the $1,150.5 million. CCCE ($16.7 million), the JICA ($15.1 million). LAO PEOPLE'S DEMOCRATIC REPUBLIC: the KfW and the GTZ ($6.9 million), the UNDP IDA-$24.5 million. Priority investments, ($2.8 million), and the EEC ($1.8 million). particularly the first phase of a nationwide Other donors, including the AfDB and the WFP, digital telephone network, will be carried out, have declared their intention to participate in the and intemational telecommunications services financing, as well. Total cost: $138.7 million. improved. Institution-building assistance is CHILE: IBRD-$224 million. A second included. Cofinancing is anticipated from Japan road-sector project will continue support for the ($11.7 million) and the UNDP ($1.2 million). govemment's careful financial management Total cost: $41.4 million. through increasingly efficient execution of its NIGERIA: IBRD-$225 million. A first tele- road-investment and road-maintenance program. communications project aims at alleviating a The project also seeks to improve an already major infrastructure constraint to the effectively functioning road-maintenance and sustainability of economic development and road-management organization. Cofinancing is adjustment in Nigeria through upgrading the expected from the Eximbank of Japan ($150 country's standard of telecommunications. million) and the IDB ($85 million). Total cost: Institution-building assistance is included. $907 million. Cofinancing in the amount of $110 million is COLOMBIA: IBRD-$55 million. The 1990-93 being sought. Total cost: $483.5 million. investment and maintenance program of the PAPUA NEW GUINEA: IBRD-$ 17.2 million. A National Agency for Feeder Roads (FNCV), third telecommunications project seeks to designed to address rural-roads priorities and expand access to service in urban and rural consolidate and further develop effective road areas, reduce the operating costs of the Post and management, will be supported. Institution- Telecommunications Corporation, and improve building assistance to the FNCV is included. its service to all subscribers. Suppliers' credits Total cost: $157.1 million. ($16.4 million) are anticipated. Total cost: $76 COSTA RICA: IBRD-$60 million. In order to million. assist the government's efforts to promote exports through increased efficiency in the Transportation transport sector, the project will concentrate on BRAZIL: IBRD-$3 10 million. A slice of the institutional strengthening and the promotion of five-year road-investment and road- sound investment policies. Total cost: $96.8 rehabilitation program of the National Feeder million. Roads Department (DNER) will be financed, INDONESIA: IBRD-$350 million. The appropriate environmental guidelines for the govemment's road-transport reform program, highway sector formulated, and compliance designed to achieve greater benefits from road with them strengthened. Institution-building expenditures, improve road-use policies, assistance to the DNER is included. Total cost: strengthen the Ministry of Communications, and $759 million. increase policy coordination, will be supported BURUNDI: IDA-$43.2 million. A four-year through a project that includes technical road-upgrading, road-rehabilitation, and assistance, training, and studies, as well as the road-maintenance program will be financed, as funds needed for the implementation of specific will institutional support for the General subprojects in the sector's expenditure plan. Directorates for Roads and for Transport. Cofinancing is anticipated from the OECF Cofinancing is expected from the AfDB ($6.8 ($197.2 million), the AsDB ($60 million), and 152 Summaries of Projects Approved the Eximbank of Japan ($51.4 million). Total de Mo,ambique (Centro) will also be made cost: $2,414.7 million. available in order to restore its financial viability MALAWI: IDA-$28.8 million. The maintenance, and its cost-effective transit functions. rehabilitation, and construction works of the Cofinancing is expected from Canada ($17 Ministry of Finance over a four-year period in million), Japan ($8 million), Spain ($3.5 three major areas-roads, water supply, and million), and Portugal ($1 million). Total cost: public buildings-will be financed. Institution- $73.8 million. building and training activities are included. PAKISTAN: IBRD-$184 million. With an Cofinancing is expected from the ADF ($38.8 emphasis on road and rail transport, a million), the EDF ($21.9 million), the KfW transport-sector project seeks to assist the ($15.9 million), the ODA ($15.4 million), the govemment in implementing sectoral reforms to JICA ($8.1 million), the UNCDF ($5 million), improve overall transport efficiency and meet the UNDP ($3.4 million), USAID ($3.3 future demand. million), the GTZ ($2.9 million), and DANIDA POLAND: IBRD-$ 153 million. The govem- ($1.5 million). Total cost: $157.7 million. ment's transport-sector restructuring program, MALAYSIA: IBRD-$83.2 million. Through a which emphasizes increased cost recovery, program of road improvement and road improved efficiency, and increased market rehabilitation, the government will be assisted in responsiveness, will be supported; investments achieving its goal of having the existing in the country's railway system will be financed; highway network meet increasing transport and activities of the Highways Administration demand, thus providing support to the will be supported. Cofinancing ($20 million) is productive sectors of the economy. Total cost: anticipated from the EIB. Total cost: $216.5 $239.2 million. million. MALDIVES: IDA-$7.5 million. Through a RWANDA: IDA-$40 million. A transport-sector project to upgrade Male airport, the project focuses on road maintenance, revenue-generating capacity of the tourist implementation of a pilot project of rural-roads industry will be maintained, and the basis rehabilitation, and support for improved local provided for its continued growth. Cofinancing and intemational access to the Lake Kivu area. will be provided by the KFAED ($8.5 million), Technical assistance and training are included. the IsDB ($3 million), and the OPEC Fund for Cofinancing is expected from the EDF ($32.6 Intemational Development ($2 million). Total million), the SDC ($9.4 million), the KfW ($4.7 cost: $26.0 million. million), and the OPEC Fund for Intemational MAURITIUS: IBRD-$30 million. A second Development ($4 million). Total cost: $148.9 highway project aims to strengthen and improve million. important road sections with high traffic SUDAN: IDA-$82.2 million. Through intensity, improve the capacity of the Ministry rehabilitation of the Khartoum-Port Sudan of Works for road maintenance and traffic road-the country's economic lifeline-further management, and establish effective deterioration will be halted, and the need for vehicle-safety and environmental greater investment in the future averted. In improvements. Total cost: $43.6 million. addition, load-control measures will be MEXICO: IBRD-$380 million. Support for a implemented, and technical assistance fumished program of deregulation in the trucking sector to the Road and Bridges Public Corporation. and a program of privatization and regulatory Cofinancing ($16.1 million) is anticipated from reform that will promote competition in the the KfW. Total cost: $114.4 million. telecommunications sector forms part of a wider TANZANIA: IDA-$180.4 million. The country's program of Bank support for the government's essential road network will be restored, and reform efforts that aim at resuming sustainable institutional capacity in the Ministry of economic growth. Communications and Works will be MOROCCO: IBRD-$79 million. A three-year strengthened. Cofinancing is expected from the slice of the country's road-rehabilitation and EEC ($171 million), Italy ($91.7 million), road-maintenance program will be financed, DANIDA ($57 million), FINNIDA ($48.4 thereby substantially reducing expenditures on million), the ADF ($45.2 million), NORAD deferred maintenance and, ultimately, on ($36.5 million), USAID ($32.7 million), the reconstruction. Cofinancing is expected from the Federal Republic of Germany ($32 million), the AfDB ($33 million). Total cost: $533.6 million. DGIS ($18 million), the ODA ($13.6 million), MOZAMBIQUE: IDA-$40 million. Assistance the SFD ($11.8 million), the SDC ($10.8 will be provided to help upgrade the Beira million), Ireland ($4.8 million), and the UNDP transport corridor-stretching 300 kilometers ($2.9 million). Total cost: $871.1 million. from the Zimbabwe border to the port of Beira. TANZANIA: IDA-$37 million. The physical, Institutional assistance to the Caminhos de Ferro managerial, and operational capabilities of the Urban Development 153 Tanzania Harbours Authority will be expanded continued. Cofinancing ($5.5 million) is to meet the traffic volume expected in the expected from Italy. Total cost: $38.5 million. 1990s, a more reliable and cost-effective CHINA: IDA-$30 million. Some 175,000 transport link with neighboring landlocked people, most of them poor, are expected to countries will be provided, and the profitability benefit from a project that will reconstruct or and commercial discipline of port operations rehabilitate housing, buildings, classrooms, rural improved. Cofinancing is expected from health facilities, and village water supplies FINNIDA ($17.9 million), SIDA ($17.5 damaged during the October 1989 earthquake, million), NORAD ($11.5 million), the whose epicenter was located in Yanbei Netherlands ($5.4 million), and DANIDA ($4.2 prefecture of Shanxi province. School and million). Total cost: $122.3 million. health-center equipment will also be purchased, THAILAND: IBRD-$50 million. The govem- and assistance provided for earthquake ment's five-year (1987-91) program for national prediction and disaster preparedness. Total cost: and provincial roads, as well as efforts to $45.3 million. improve road-traffic safety, reduce vehicular COTE D'IVOIRE: IBRD-$66 million. The emissions and noise pollution, and improve the govemment will be assisted in implementing its efficiency of the road-transport industry, will be urban-sector reforms-related to alleviating the supported. Cofmnancing is anticipated from the strain of urban development on national AsDB and the OECF. Total cost: $1,478.5 resources and facilitating the gradual shift of million. overall development to local authorities and the WESTERN SAMOA: IDA-$14 million. private sector-through a project that constitutes Assistance will be provided the govemment in the first phase of a long-term program to carrying out an emergency road-rehabilitation strengthen the economic contribution of program to alleviate the severe disruption in the municipalities to their own development. transportation sector caused by cyclone damage Cofinancing ($700,000) is anticipated from the in February 1990. Cofinancing ($500,000) is UNDP. Total cost: $93.1 million. anticipated from the AIDAB. Total cost: $16.3 ETHIOPIA: IDA-$40.2 million. The million. development of provincial towns, which serve YUGOSLAVIA: IBRD-$292 million. A third as market and service centers in areas of highway-sector project seeks to sustain recent agricultural productivity, will be promoted gains in road financing, systematize and expand through a project that includes sites-and-services road-maintenance operations, further improve construction, provision of municipal selection of investments, strengthen organiza- infrastructure, improvements to water-supply seetional efficinvmen, iproventhen ma orientation facilities, an employment-generation component tional efficiency, improve the market oinaon (including credit lines and technical assistance of the road-transport industry, and reduce air (mcludm all Im se and in sistance polluion b roadvehiles. ofinacing $190to promote small businesses), and institutional pollution by road vehicles. Cofinancing ($190 support. Total cost: $52.9 million. million) is expected from the EIB, while an supIA: IDal $5 million. additional $140 million is being sought. Total ETHIOPIA: IDA-$35 million. A second cost: $2 343 million, urban-development project for the Addis Ababa area is aimed at improving basic infrastructure and environmental conditions; supporting a core Urban Development housing-development program, primarily for BRAZIL: IBRD-$ 100 million. Infrastructure lower-income families; promoting opportunities investments, as well as technical assistance, for slum-dwelling women; providing training, and equipment in support of institution-building assistance to urban institutional and human-resource development, service-delivery agencies; and promoting the will be financed through a project designed to adoption of sound cost-recovery policies and enable municipalities in the state of Rio Grande practices. Total cost: $46.7 million. do Sul to assume increased responsibilities FIJI: IBRD-$ 16.2 million. About 6,000 under the new federal constitution. Total cost: low-income and moderate-income households $227 million. are to benefit from a housing project that seeks BURKINA FASO: IDA-$22.2 million. The to increase the supply of housing stock, improve organizational, technical, and financial capacity housing and urbanization policies and standards of the local governments of Ouagadougou and appropriate to lower-income housing, and Bobo-Dioulasso will be developed to permit strengthen sector institutions. Cofinancing has them to assume full responsibility for the been committed by the AsDB ($10.1 million), maintenance of urban infrastructure and the Japan ($1.1 million), and the UNDP ($300,000). provision of urban services. In addition, Total cost: $51.3 million. infrastructure in the two cities will be upgraded, GHANA: IDA-$70 million. By strengthening the enabling effective, regular maintenance to be local-government and housing sectors and by 154 Summaries of Projects Approved improving vital urban infrastructure and labor-intensive public works, designed to services, the govemment's economic-recovery counter growing unemployment resulting from program will be supported, the urban economy the govemment's program of structural and the financial system will be strengthened, adjustment and aimed at improving the urban the efficiency of land and housing markets environment, will be supported. Cofinancing increased, access by moderate-income ($8.3 million) is anticipated from the AfDB. households to affordable housing widened, and Total cost: $33.3 million. employment created. Cofinancing ($9.8 million) YEMEN ARAB REPUBLIC: IDA-$15 million. is being sought. Total cost: $100.4 million. Flood-control structures will be constructed in GUINEA: IDA-$57 million. The functioning of Taiz to protect private and public buildings and Conakry and secondary cities as centers of infrastructure, minimize disruptions to the local economic growth will be improved through a economy, and reduce the risks to human life. In three-pronged approach of infrastructure addition, a project cost-recovery mechanism at upgrading, institutional strengthening, and local the municipal level will be implemented, and resource mobilization. The role of private and implementation of a national municipal-resource municipal developers in replicable mobilization policy will be promoted. land-development operations will also be Institution-building assistance is included. Total strengthened. Cofinancing is expected from the cost: $22.3 million. CCCE ($14 million), the FAC ($1.5 million), YEMEN, PEOPLE'S DEMOCRATIC REPUBLIC and the UNDP ($1 million). Total cost: $81.7 OF: IDA-$10 million. The country's essential million. economic infrastructure, destroyed or damaged MEXICO: IBRD-$350 million. New or by the heavy rains and floods of March-April improved housing will be provided for about 1989, will be restored, and human deprivation 250,000 families through a project that will and suffering reduced through restoration of finance a slice of the conventional lending social services and shelter. Technical assistance program of FUNHAPO (Low-income Housing for a flood-preparedness and flood-mitigation Fund) for starter homes, serviced lots, and home study, as well as for consultants to assist in improvements. Institutional support is included. project implementation, is included. Total cost: $700 million. Cofinancing ($1 million) is expected from the MOROCCO: IBRD-$80.5 million. The scope UNDP. Total cost: $15.4 million. and functioning of housing finance will be broadened and improved and land and housing Water Supply and Sewerage supply rationalized through a project that COTE D'IVOIRE: IBRD-$80 million. The provides a line of credit in support of low-cost govemment's reform program, designed to and moderate-cost housing, as well as technical restore the availability of basic rural water assistance designed to strengthen institutions services, improve planning and sustainability of involved in the housing sector. Total cost: investments, improve control of costs and $354.5 million. efficiency of pricing, strengthen the protection NIGERIA: IBRD-$50 million. The efficient of water resources and of the environment, and functioning of Ibadan and of the secondary restore the financing autonomy of the towns in Oyo state as regional development and water-supply and sanitation sector, will be service centers will be promoted, and the state supported. and local institutions responsible for urban COTE D'IVOIRE: IBRD-$21.9 million. The management and services will be strengthened. deterioration in Abidjan's environment, caused In addition, help will be provided in mobilizing by the dumping of urban wastes and industrial financial resources at the state and local levels. effluents into the Ebrie lagoon, will be reversed Cofinancing ($3.7 million) is expected from the through the building of a floatable removal plant Japan Grant Facility. Total cost: $68.8 million. and of an outfall and diffuser to carry the PHILIPPINES: IBRD-$40 million. A second wastewater into the ocean, the establishment of municipal-development project seeks to assist sound environmental legislation, pollution local governments in Metro Manila and the monitoring, and measures to ensure the surrounding provinces to provide basic sustainability of the sewerage system. municipal infrastructure, services, and facilities; Cofinancing ($18 million) is expected from the improve their ability to plan, finance, and EIB. Total cost: $49.9 million. implement investments; and expand coverage of CYPRUS: IBRD-$25 million. This first phase of a long-term development fund to all local a program to provide sewerage and drainage govemments in the country. Total cost: $57.2 facilities in the greater Limassol area consists of million. construction of a central sewage-collection and SENEGAL: IDA-$20 million. A social- sewage-treatment system, upgrading of the dimensions-of-adjustment program of existing stormwater-drainage system, and Water Supply and Sewerage 155 technical assistance and training for the sanitation. Technical assistance and training are Sewerage Board of Limassol-Amathus. included. Total cost: $132.8 million. Cofinancing is anticipated from the CERF. Total PHILIPPINES: IBRD-$40 million. A cost: $69.1 million. water-supply project, which will maximize INDIA: IBRD-$10 million; IDA-$79.9 million. benefits from existing headwork investments at The amount of treated water supply available in the Angat dam, has been designed to meet the nondrought years to Hyderabad city will expected water demand in the Metro Manila increase by about 23 percent. and a systematic area until the year 2000. Institutional support is approach to the reduction of water-system included. Cofinancing is anticipated from the leakage will be introduced. Institution-building AsDB ($130 million) and the OECF ($80 assistance is included, as are the equitable million). Total cost: $361.9 million. resettlement and rehabilitation of an estimated POLAND: IBRD-$ 18 million. Technical 4,120 households whose dwellings will be assistance will be provided to help Poland submerged by the filling of the nearby Singur strengthen its ability to analyze and design a dam reservoir. Total cost: $140.6 million. series of policy, regulatory, institutional, and INDONESIA: IBRD-$190 million. A investment actions it plans to undertake to coordinated program of physical investments, improve environmental quality. Total cost: $27.3 technical assistance, and policies for urban million. water supply, wastewater disposal, and water- ST. LUCIA: IBRD-$2.5 million; IDA-$5.2 resource management will be developed million. The reliability and quality of long-term and implemented for the greater Jakarta area. water supply will be ensured and service levels Cofinancing is anticipated from the OECF improved by providing adequate raw-water ($44.7 million) and the Netherlands ($3.4 storage and treatment, as well as control of million). Total cost: $348.6 million. unaccounted-for water. Institution-building KENYA: IDA-$64.8 million. Nairobi's water assistance is included. Cofinancing will be supply will be augmented and secured through provided by CIDA ($19.3 million), the CDB the expansion of source works, and the city's ($7.3 million), and the OPEC Fund for water-supply system expanded so as to meet Intemational Development ($2 million). Total expected demand through the early years of the cost: $40.5 million. next century. Cofinancing is expected from the TURKEY: IBRD-$ 173 million. Facilities will be OECF ($40 million), the AfDB and the ADF constructed to enclose open flows of sewage, ($35.2 million), and the EIB ($18.6 million). eliminate discharges of untreated sewage into Total cost: $263 million. the Ankara river, extend sewerage to about KOREA, REPUBLIC OF: IBRD-$34 million. 850,000 unserved persons and improve the The supply of water in the Kwangju current facilities, and reduce flooding during metropolitan area, located in one of the heavy rainstorms. Technical assistance is country's poorest and least-developed regions, included. Cofinancing ($91.9 million) is will be improved and expanded so as to serve expected from the KfW. Total cost: $556.8 about 96 percent of the population by the year million. 2001. Institution-building support is included. UGANDA: IDA-$60 million. The first phase of Total cost: $183.1 million. the govemment's water-supply and sewerage- MADAGASCAR: IDA-$30.5 million. The living investment program for the country's seven conditions of the poorest people of Antanana- major towns, which calls for expanding rivo and its suburbs are to be improved through water-supply facilities and rehabilitating provision of flood-protection works and the sewerage systems, will be supported. improvement and extension of existing Institution-building assistance to the National irrigation, drainage, and sewerage systems. In Water and Sewerage Corporation is included. addition, steps will be taken to increase local Cofinancing is anticipated from the EEC ($23.8 govemment revenues and improve land-use million), Italy ($14.5 million), Austria ($4.7 planning and investment programming. million), and the GTZ ($2.9 million). Total cost: Cofinancing is anticipated from the CCCE $117.8 million. ($21.5 million) and the FAC ($800,000). Total YEMEN, PEOPLE'S DEMOCRATIC REPUBLIC cost: $68.6 million. OF: IDA-$12 million. An adequate quantity of PHILIPPINES: IBRD-$85 million. The potable water for about 53,000 people in Tarim government will be assisted in meeting the basic and adjacent villages will be provided, thus needs of the rural population through the eliminating current health hazards caused by the provision of safe, adequate, and easily poor quality of water and intermittent water- accessible water supplies, as well as adequate supply service. Total cost: $15.2 million. 156 Summaries of Projects Approved Table 7-1. Projects Approved for IBRD and IDA Assistance in Fiscal Year 1990, by Region (amounts in millions of US dollars) IBRD loans IDA credits Total Region and country Number Amount Number Amount Number Amount Africa Benin ................................. - - I 2.5 1 2.5 Burkina Faso .............. ........ - I 22.2 1 22.2 Burundi ............................... - - 2 71.2 2 71.2 Cameroon ............................. 3 51.5 - - 3 51.5 Central African Republic ................ - - 3 126.0 3 126.0 Chad ................................. - - 1 13.4 1 13.4 C6te d'lvoire ............... ........... 6 497.9 - - 6 497.9 Djibouti ...... .............. - 1 5.8 1 5.8 Ethiopia . .............................. - - 2 75.2 2 75.2 Gabon ................................ 1 5.0 - - I 5.0 Gambia. The ........................... - - 2 21.6 2 21.6 Ghana ............... ........ - - 4 185.7 4 185.7 Guinea ............... ................ - - 5 175.0 5 175.0 Guinea-Bissau ............. ............ - - I 23.6 1 23.6 Kenya ................................ - - 5 201.6 5 201.6 Lesotho ............................... - - I 12.1 1 12.1 Madagascar ............................ - - 5 148.4 5 148.4 Malawi ..................... .......... - - 3 140.4 3 140.4 Mali ................................. - - 1 53.0 1 53.0 Mauritania ............................. - - 3 75.0 3 75.0 Mauritius .......................... ... 1 30.0 - - 1 30.0 Mozambique ........................... - - 4 143.1 4 143.1 Niger ................................. - - I 19.9 1 19.9 Nigeria ..................... .......... 6 533.1 1 120.0 7 653.1 Rwanda ............................... - - 2 44.4 2 44.4 Sao Tome and Principe ....... .......... - - 1 9.8 1 9.8 Senegal ............................... - - 5 185.0 5 185.0 Somalia ............................... - - 2 54.6 2 54.6 Sudan ................................. - - I 82.2 1 82.2 Tanzania .............................. - - 5 513.6 5 513.6 Togo ................................. - - - 0.2 - 0.2 Uganda ............................... - - 3 214.5 3 214.5 Western Africa region ........ .......... 1 15.0 - 40.0 1 55.0 Zaire ................................. - - I 5.9 1 5.9 Zimbabwe ............................. i 14.5 - - 1 14.5 Total ................................ 19 1.147.0 67 2,785.9 86 3,932.9 Asia Bangladesh ............................ - - 5 540.1 5 540.1 China ................................. - - 5 590.0 5 590.0 Fiji ................................. 1 16.2 - - 1 16.2 India ................................. 10 1,108.0 1 832.4 11 1,940.4 Indonesia .............................. 9 1,632.8 - - 9 1,632.8 Korea. Republic of ......... ............ 3 110.6 - - 3 110.6 Lao People's Democratic Republic ....... - - 2 44.7 2 44.7 Malaysia .............................. 2 154.2 - - 2 154.2 Maldives .............................. - - I 7.5 1 7.5 Projects Approved by Region 157 IBRD loans IDA credits Total Region and country Number Amount Number Amount Number Amount Asia (contfined) Nepal ................................ - - I 47.2 1 47,2 Papua New Guinea .......... .......... 2 67.2 - - 2 67.2 Philippines ............................. 7 941.8 - - 7 941.8 Sri Lanka ............................. - - 2 143.4 2 143.4 Thailand ............................... 2 144.0 - - 2 144.0 Tonga ................................. - - 1 3.0 1 3.0 Western Samoa ........... ............. - - I 14.0 1 14.0 Total ...... ......... 36 4,174.8 19 2,222.3 55 6,397.1 Europe, Middle East, and North Africa Algeria ................................ 4 457.5 - - 4 457.5 Cyprus ................................ I 25.0 - - I 25.0 Egypt, Arab Republic of ................ 2 61.5 - - 2 61.5 Hungary ..................... ......... 3 366.0 - - 3 366.0 Jordan ...................... ... 2 175.0 - - 2 175.0 Morocco ............................. 5 482.5 - - 5 482.5 Pakistan ............................... 4 617.5 2 208.3 6 825.8 Poland ................................ 5 781.0 - - 5 781.0 Tunisia ............................... 2 147.0 - - 2 147.0 Turkey ................................ 3 326.2 - - 3 326.2 Yemen Arab Republic ........ .......... - - 2 30.0 2 30.0 Yemen. People's Democratic Republic of. - - 3 37.5 3 37.5 Yugoslavia ......2......... . 2 692.0 - 2 2 692.0 Total ................................ 33 4,131.2 7 275.8 40 4.407.0 Latin America and the Caribbean Bolivia ................................ - - 4 100.2 4 100.2 Brazil ....... ............. ....... 8 1,569.0 - - 8 1,569.0 Caribbean region .......... ........... I 2(.0 - 12.0 1 32.0 Chile .................................. 2 354.0 - - 2 354.0 Colombia .............................. 3 157.2 - - 3 157.2 Costa Rica ............................. 1 60.0 - - I 60.0 Ecuador ............................... 1 5().0 - - 1 50.0 Guyana ............................... - - 2 81.0 2 81.0 Haiti ................... ............. - - 2 39.6 2 39.6 Jamaica ............................... 2 55.0 - - 2 55.0 Mexico ................................ 7 2.607.5 - - 7 2,607.5 St. Lucia .............................. I 2'5 - 5.2 1 7.7 Trinidad and Tobago .................... 2 44.0 - - 2 44.0 Uruguay ............................... 2 127.5 - - 2 127.5 Venezuela ............................. 3 680.0 - - 3 680.0 Total ................................ 33 5,726.7 8 238.0 41 5,964.7 Grand total .............1 5............. 11 15179.7 101 5,522.0 222 20,701.7 NOTE: Supplements are inclided in the amounts. but are not counted as separate tending operations. Joint IBRD/IDA operations are counted only once. as IBRD operations. - Zero. 158 Summaries of Projects Approved Table 7-2. Projects Approved for IBRD and IDA Assistance in Fiscal Year 1990, by Sector (millions of US dollars) Sectora IBRD IDA Total Agriculture and Rural Development Algeria-Area development ......... .................. 32.0 - 32.0 Bangladesh-Fishing ................................. - 44.6 44.6 Bangladesh-Irrigation and drainage ...... ............. - 53.9 53.9 Benin-Agricultural credit ......... ................... - 2.5 2.5 Bolivia-Area development ......... .................. - 35.0 35.0 Brazil-Area development ......... ................... 33.0 - 33.0 Brazil-Agricultural credit ......... ................... 117.0 - 117.0 Brazil-Irrigation and drainage ........ ................ 210.0 - 210.0 Brazil-Irrigation and drainage ........ ................ 100.0 - 100.0b Brazil-Research and extension ....... ................ 47.0 - 47.0 Burundi-Agroindustry ........................... - 28.0 28.0 Cameroon-Research and extension ...... ............. 21.0 - 21.0 Central African Republic-Forestry .................... - 19.0 19.0 China-Area development ......... ................... - 60.0 60.0 China-Area development ......... ................... - 150.0 150.0 China-Forestry ..................................... - 300.0 300.0 Colombia-Irrigation and drainage ..................... 78.2 - 78.2 C6te d'lvoire-Area development ....... .............. 150.0 - 150.0 C6te d'lvoire-Forestry ........... ............ 80.0 - 80.0 Egypt, Arab Republic of-Irrigation and drainage ....... 31.0 - 31.0 Guinea-Area development .........I ............ - 40.0 40.0 Guinea-Forestry .................................... - 8.0 8.0 Hungary-Agriculture sector loan ....... .............. 100.0 - 100.0 India-Area development .......... ................... 7.0 55.0 62.0 India-Area development .......... .................. 13.0 75.0 88.0 India-Irrigation and drainage ......... ...... 15.0 150.0 165.0 Indonesia-Forestry .................................. 20.0 - 20.0 Jamaica-Agriculture sector loan ....... ............... 25.0 - 25.0 Kenya-Perennial crops .......... .................... - 46.8 46.8 Lao People's Democratic Republic-Perennial crops ..... - 20.2 20.2 Madagascar-Agriculture sector loan ................... - 26.0 26.0 Madagascar-Research and extension .................. - 3.7 3.7 Malawi-Agriculture sector loan ....................... - 70.0 70.0 Malaysia-Perennial crops ......... ................... 71.0 - 71.0 Mali-Agriculture sector loan .... . ................ - 53.0 53.0 Mauritania-Agriculture sector loan .................... - 25.0 25.0 Mexico-Agroindustry ........... ................ ... 100.0 - 100.0 Mexico-Forestry .................................... 45.5 - 45.5 Morocco-Forestry .................................. 49.0 - 49.0 Nepal-Irrigation and drainage ........ ................ - 47.2 47.2 Niger-Research and extension ........ ................ - 19.9 19.9 Nigeria-Area development... . ....................... 14.0 - 14.0 Nigeria-Perennial crops .......... ................... 106.0 - 106.0 Pakistan-Agricultural credit ........ .................. 148.5 1.5 150.0 Pakistan-Research and extension ....... .............. - 57.3 57.3 Philippines-Perennial crops ........ .................. 121.8 - 121.8 Poland-Agroindustry ................................ 100.0 - 100.0 Senegal-Research and extension ....... ............... - 17.1 17.1 Projects Approved by Sector 159 Sector' IBRD IDA Total Agriculture and Rural Development (continued) Senegal-Research and extension ......................- 18.5 18.5 Somalia-Irrigation and drainage ...... ......... 28.5 28.5 Tanzania-Agriculture sector loan ....... .............. - 200.0 200.0 Tunisia-Research and extension ....... ............... 17.0 - 17.0 Turkey-Research and extension ....... ............... 63.0 - 63.0 Uruguay-Agricultural credit .......................... 65.0 - 65.0 Zaire-Research and extension .................... - 5.9 5,9 Zimbabwe-Forestry .............................. 14.5 - 14.5 Total ............................................ 1,994.5 1,661.6 3,656.1 Development Finance Companies Bangladesh ......................................... - 175.0 175.0 Bolivia ......- ,9,,,,,,,,,,,............ .1 I Caribbean region ..... ............................... 20.0 12.0 32.0 Chile ............................................. 130.0 - 130.0 Guinea-Bissau ....................................... - 23.6 23.6 Kenya .............................................- 44.0 44.0b Malawi ............................................ - 4'7 4.7b Morocco ............................................ 170.0 - 170.0 Philippines .......................................... 65.0 - 65.0 Poland ............................................ 260.0 - 260.0 Senegal ............................................. - 45.0 45.0 Tanzania ............................................10.3 10.3 b Tonga ............................................. - 3.0 3.0 Venezuela ........................................... 300.0 - 300.0 Total ............................................. 945.0 326.7 1,271.7 Education Bangladesh ......... . . . . .... - 159.3 159.3 China .............................................. 50.0 50.0 Djibouti ............................................. - 5.8 5.8 Egypt, Arab Republic of .............................. 30.5 - 30.5 Gambia. The ......................................... - 14.6 14.6 Ghana .............................................- 50.0 50.0 Guinea ............................................. - 20.0 20.0 India .............................................2 5.0 235.0 260.0 Indonesia ........................................... 154.2 - 154.2 Indonesia ........................................... 36.1 - 36.1 Indonesia ........................................... 117.5 - 117.5 Korea. Republic of ................................... 45.0 - 45.0 Korea. Republic of ................................... 31.6 - 31.6 Madagascar ......................................... - 39.0 39.0 Malawi ........................................... - 36.9 36.9 Nigeria ............................................ - 120.0 120.0 Pakistan ........................................... - 112.5 112.5 Somalia ............................................. - 26.1 26.1 Sri Lanka ........................................... - 49.0 49.0 Tanzania ............................................ - 38.3 38.3 Turkey ................................... 90.2 - 90.2 Total ........................................... 530.1 956.5 1,486.6 (continued) 160 Summaries of Projects Approved Table 7-2 (continited) Sector' IBRD IDA Total Energy Oil, gas, atnd oeal Indonesia ........................................... 86.0 - 86.0 Total ........................................... 86.0 - 86.0 Power Bangladesh .......................................... - 105.0 105.0 Bangladesh .......................................... - 2.3 2.3 Brazil ...................................... ..... 385.0 - 385.0 Cote d'lvoire ........................................ 1(0.0 - 100.0 Ghana .... . ....... 40.0 40.0 Ghana ........................................... - 20.0 20.0 India ........................................... 98.0 - 98.0 India ........................................... 485.0 - 485.0 Indonesia ........................................... 329.0 - 329.0 Mexico ........................................... 450.0 - 450.0 Nigeria ........................................... 70.0 - 70.0 Pakistan .... , 123.0 37.0 160.0 Pakistan ............................................ 162.0 - 162.0 Philippines .......................................... 390.0 - 390.0 Poland .............................................2 50.0 - 250.0 Thailand ........................................... 94.0 - 94.0 Uruguay ......... .................................. 62.5 - 62.5 Yemen. People's Democratic Republic of ............... - 15.5 15.5 Total ............................................. 2.998.5 219.8 3,218.3 Industry Algeria-Industry sector loan ........ .......... 99.5 - 99.5 Hungary-industry sector loan .. . ......... ... 66.0 - 66.0 India-Industry sector loan ......... .................. 145.0 55.0 200.0 India-Industry sector loan . . ....................... 300.0 - 300.0 Jordan-Mining, other extractive ....... ............... 25.0 - 25.0 Mozambique-Industry sector loan ....... ............. - 50.1 50.1 Western Africa region-Industry sector loan ............ 15.0 40.0 55.0 Total ............................................. 650.5 145.1 795.6 Nonproject Algeria ............................................. 300.0 - 300.0 Central African Republic .......... .................. - 45.0 45.0 Ghana ............................................. - 5'7 57b Guyana ............................................ - 74.6 74.6 Guyana ............................. .......... - 3.4 3.4 Hungary ......................... .................. 200.0 - 200.0 Jordan ......................... ............... 150.0 - 150.0 Mexico ............................................. 1.260.0 - 1,260.0 Papua New Guinea ........ .......................... 50.0 - 50.0 Philippines ................. ........................ 200.0 - 200.0 Sao Tome and Principe ............ ................... - 9.8 9.8 Senegal ..... ...................... ............. - 80.0 80.0 Senegal .................................. - 4'4 4.4 Sri Lanka .......................................... - 90.0 90.0 Sri Lanka.. ........................................ - 4' 4 44b Projects Approved by Sector 161 Sector' IBRD IDA Total Nonproject (continued) Togo ............................................. - 0.2 0.2 Trinidad and Tobago ............. .................... 40.0 - 40.0 Uganda ............................................ - 125.0 125.0 Uganda ............................................. - 1.5 1.5 Yugoslavia... ...................................... 400.0 - 400.0 Total ............................................. 2,600.0 444.0 3,044.0 Population, Health, and Nutrition Bolivia ............................................. - 20.0 20.0 Bolivia ............................................. - 20.0 20.0 Brazil ............................................. 267.0 - 267.0 Cameroon ..................... ..................... 21.5 - 21.5 Chad ............................................. - 13.4 13.4 Colombia ........................................... 24.0 - 24.0 Gambia. The ......................................... - 7.0 7.0 Haiti ..............................................- 28.2 28.2 India ............................................. - 95.8 95.8 India ............................................. 10.0 86.7 96.7 Jamaica ............................................. 30.0 - 30.0 Kenya ............................................. - 35.0 35.0 Lesotho ............................................. - 12.1 12.1 Morocco ............................................ 104.0 - 104.0 Nigeria ............................................. 68.1 - 68.1 Tanzania ............................................ - 47.6 47.6 Uganda ............................................. - 28.0 28.0 Yemen Arab Republic ............ .................... - 15.0 15.0 Total ............................................ 524.6 408.8 933.4 Public-sector Management Madagascar ......................................... - 1.2 1.2 Mauritania .......................................... 40.0 40.0 Rwanda ............................................. - 4.4 4.4 Tunisia ............................................. 130.0 - 130.0 Venezuela .......................................... 350.0 - 350.0 Total ............................................. 480.0 45.6 525.6 Small-scale Enterprises Bolivia ............................................. - 16.1 16.1 Ecuador ........................................... 50.0 - 50.0 Guinea ............................................. - 50.0 50.0 Haiti ............................................. - 11.4 11.4 Madagascar ......................................... - 48.0 48.0 Mozambique ........................................ - 32.0 32.0 Total ............................................. 50.0 157.5 207.5 Technical Assistance Algeria ............................................2 6.0 - 26.0 Cameroon ........................................... 9.0 - 9.0 Gabon ............................................. 5.0 - 5.0 Guyana ............................................. - 3.0 3.0 Kenya .............................................- 5.0 5.0 (continued) 162 Summaries of Projects Approved Table 7-2 (continiued) Sector' IBRD IDA Total Technical Assistance (continued) Kenya ..... ........................................- 6.0 6.0 Mauritania .......................................... - 10.0 10.0 Mexico ............................................. 22.0 - 22.0 Mozambique . ........................................ - 21.0 21.0 Trinidad and Tobago ........... ...................... 4.0 - 4.0 Venezuela ........................................... 30.0 - 30.0 Total ............................................. 96.0 45.0 141.0 Telecommunications Indonesia ........................................... 350.0 - 350.0 Lao People's Democratic Republic ..................... - 24.5 24.5 Nigeria ............................................. 225.0 - 225.0 Papua New Guinea ................................... 17.2 - 17.2 Total ............................................. 592.2 24.5 616.7 Transportation Brazil-Highways .................................... 310.0 - 310.0 Burundi-Transportation sector loan ................... - 43.2 43.2 Central African Republic-Transportation sector loan .... - 62.0 62.0 Chile-Highways .................................... 224.0 - 224.0 Colombia-Highways ............... 55.0 - 55.0 Costa Rica-Transportation sector loan ...... .......... 60.0 - 60.0 Indonesia-Highways ................................ 350.0 - 350.0 Malawi-Highways ............ ...................... - 28.8 28.8 Malaysia-Highways ................................. 83.2 - 83.2 Maldives-Airlines and airports ....... ................ - 7.5 7.5 Mauritius-Highways ........... ..................... 30.0 - 30.0 Mexico-Highways .................................. 380.0 - 380.0 Morocco-Highways ................................. 79.0 - 79.0 Mozambique-Railways .................. ........... - 40.0 40.0 Pakistan-Transportation sector loan ................... 184.0 - 184.0 Poland-Highways ................................... 153.0 - 153.0 Rwanda-Highways .................................. - 40.0 40.0 Sudan-Highways .............. ..................... - 82.2 82.2 Tanzania-Highways ................................. - 180.4 180.4 Tanzania-Ports and waterways ....... ................ - 37.0 37.0 Thailand-Highways ................................. 50.0 - 50.0 Western Samoa-Transportation sector loan ............ - 14.0 14.0 Yugoslavia-Highways ........ . ......... 292.0 - 292.0 Total ............................................. 2.250.2 535.1 2,785.3 Urban Development Brazil .............................................. 100.0 - 100.0 Burkina Faso ........................................ - 22.2 22.2 China .............................................. - 30.0 30.0 C6te d'lvoire ........................................ 66.0 - 66.0 Ethiopia ............................................ _ 35.0 35.0 Ethiopia ............................................ - 40.2 40.2 Fiji .............................................. 16.2 - 16.2 Ghana .............................................. - 70.0 70.0 Guinea .............................................. - 57.0 57.0 Mexico ............................................. 350.0 - 350.0 Projects Approved by Sector 163 Sector' IBRD IDA Total Urban Development (continued) Morocco ............................................ 80.5 - 80.5 Nigeria ............................................. 50.0 - 50.0 Philippines ........................... ........ 40.0 - 40.0 Senegal ............................................. - 20.0 20.0 Yemen Arab Republic ........... ..................... - 15.0 15.0 Yemen, People's Democratic Republic of ............... - 10.0 10.0 Total ............................................. 702.7 299.4 1,002.1 Water Supply and Sewerage C6te d'lvoire ........................................ 80.0 - 80.0 C6te d'lvoire .................. ..................... 21.9 - 21.9 Cyprus ............................................. 25.0 - 25.0 India .............................................. 10.0 79.9 89.9 Indonesia ........................................... 190.0 - 190.0 Kenya ............................................. - 64.8 64.8 Korea, Republic of ................................... 34.0 - 34.0 Madagascar ......................................... - 30.5 30.5 Philippines .......................................... 85.0 - 85.0 Philippines ........................... .............. 40.0 40.0 Poland .............................................. 18.0 - 18.0 St. Lucia ............................................ 2.5 5.2 7.7 Turkey ............................................. 173.0 - 173.0 Uganda ............................................. - 60.0 60.0 Yemen, People's Democratic Republic of ............... - 12.0 12.0 Total ............................................ 679.4 252.4 931.8 Grand total ........................................ 15,179.7 5,522.0 20,701.7 NOTE: For additional details, see Tables 7-3 and 7-4. -Zero. a. Many projects include activity in more than one sector or subsector. b. Supplementary financing to a previous loan, not counted as a separate operation. 164 Summaries of Projects Approved Table 7-3. Statement of IBRD Loans Approved during Fiscal Year 1990 Principal amount Borrower or guarantor and purpose Date of approval Maturities (US$ millions) Algeria Economic reform support loan ....... ................. Aug. 31. 1989 1995/2004 300.0 Technical assistance project ........................... Mar. 6, 1990 1995/2005 26.0 Industrial restructuring demonstration project ..... ...... May 31. 1990 1995/2005 5.0 Agricultural research and pilot extension project ........ June 5, 1990 1996/2005 32.0 Algeria (Guarantor) Industrial restructuring demonstration project- Entreprise nationale de produits metalliques utilitaires . May 31, 1990 1995/2005 12.7 Industrial restructuring demonstration project- Entreprise nationale d'organisation et d'information ... May 31, 1990 1995/2005 5.0 Industrial restructuring demonstration project- Entreprise nationale de production de boulonnerie. coutellerie et robinetterie ........ ................... May 31. 1990 1995/2005 29.2 Industrial restructuring demonstration project- Entreprise nationale d'emballages metalliques ........ May 31. 1990 1995/2005 47.6 Brazil Third agricultural research project ....... .............. Oct. 24, 1989 1995/2004 47.0 Second northeast basic health services project ..... ..... Nov. 30. 1989 1995/2004 267.0 Highways management and rehabilitation project ........ Feb. 13. 1990 1995/2005 310.0 Northeast irrigation I project .......................... Feb. 20. 1990 1995/2005 210.0 National environmental project ....... ................ Feb. 27, 1990 1995/2005 117.0 Brazil (Guarantor) Municipal development project-State of Rio Grande do Sul .............................. .............. Oct. 24, 1989 1995/2004 100.0 Land management 11 project-State of Santa Catarina ... Jan. 30, 1990 1995/2005 33.0 Itaparica resettlement and irrigation project-Centrais Eletricas Brasileiras S.A . .......................... Feb. 20, 1990 1993/2003 100.0 Electricity transmission and conversion project- Centrais Eletricas Brasileiras S.A . .................. June 14. 1990 1995/2005 385.0 Cameroon Economic management project ....... ................. July 11, 1989 1994/2006 9.0 National agricultural extension and training project ...... Mar. 29. 1990 1995/2010 21.0 Social dimensions of adjustment project ..... ........... May 24. 1990 1995/2010 21.5 Caribbean region Fifth Caribbean Development Bank project-Caribbean Development Bank ................................. May 22. 1990 1995/2007 20.0 Chile Second road sector project ............................ Sept. 14. 1989 1995/2006 224.0 Financial markets loan .......... ..................... Dec. 14, 1989 1995/2007 130.0 Colombia Small-scale irrigation project ........ .................. Aug. 1. 1989 1995/2006 78.2 Community child care and nutrition project ............. May 22. 1990 1996/2007 24.0 Colombia (Guarantor) Second rural roads sector project-Fondo Nacional de Caminos Vecinales ................................. Jan. 16. 1990 1995/2006 55.0 Costa Rica Transport sector project .......... .................... May 24, 1990 1995/2007 60.0 Statement of IBRD Loans 165 Principal amount Borrower or guarantor and purpose Date of approval Maturities (US$ millions) Cote d'lvoire Agricultural sector adjustment loan ....... ............. Oct. 24, 1989 1995/2009 150.0 Municipal development project ................ ....... Oct. 24. 1989 1995/2009 66.0 Energy sector adjustment program ..................... Dec. 21, 1989 1995/2009 100.0 Abidjan environmental protection project .... .......... Jan. 9. 1990 1995/2009 21.9 Forestry sector project ........... .................... Apr. 3. 1990 1995/2010 80.0 Water supply and sanitation sector adjustment program . . June 28. 1990 1995/2010 80.0 Cyprus (Guarantor) Sewerage and drainage project-Sewerage Board of Limassol-Amathus ............. .................... June 7. 1990 1996/2005 25.0 Ecuador Fourth small-scale enterprise project ............... I ... Feb. 1. 1990 1995/2007 50.0 Egypt, Arab Republic of Engineering and technical education project ..... ....... Dec. 5. 1989 1995/2009 30.5 Pumping stations rehabilitation project 11 ............... May 15, 1990 1995/2010 31.0 Fiji Housing project ...................................... Apr. 17. 1990 1995/2007 16.2 Gabon Technical assistance project ........................... Aug. 3. 1989 1994/2004 5.0 Hungary (Guarantor) Financial system modernization project-National Bank of Hungary ............................. .......... Apr. 26, 1990 1995/2005 66.0 Structural adjustment loan-National Bank of Hungary . . June 20. 1990 1995/2005 200.0 Integrated agricultural export project-National Bank of Hungary ............................... .......... June 20. 1990 1995/2005 100.0 India Industrial technology development project .............. Sept. 12, 1989 1995/2009 145.0 Punjab irrigation and drainage project ...... ............ Dec. 14, 1989 1995/2010 15.0 Integrated watershed development (hills) project ........ Mar. 6, 1990 1995/2010 13.0 Hyderabad water supply and sanitation project .......... Mar. 27, 1990 1995/2010 10.0 Technician education project .......................... May 1. 1990 1995/2010 25.0 Integrated watershed development (plains) project ....... May 15. 1990 1996/2010 7.0 Cement industry restructuring project ................. May 15, 1990 1996/2010 300.0 Seventh population project ............................ May 17, 1990 1996/2010 10.0 Northern region transmission project ................... June 26, 1990 1996/2010 485.0 India (Guarantor) Private power utilities project-Tata Electric Companies . June 26. 1990 1996/2010 98.0 Indonesia Public works institutional development and training project ............................................ July 25, 1989 1995/2009 36.1 Highway sector project ............................... Nov. 14, 1989 1995/2009 350.0 Professional human resource development project ....... Nov. 28. 1989 1995/2009 117.5 Second secondary education and management project .... Jan. 25. 1990 1995/2010 154.2 Rural electrification project ......... .................. Mar. 22, 1990 1995/2010 329.0 Third telecommunications project .... ................. Mar. 27. 1990 1995/2010 350.0 Gas utilization project ............ .................... May 31, 1990 1996/2010 86.0 Second Jabotabek urban development project ..... ...... June 5, 1990 1996/2010 190.0 Second forestry institutions and conservation project .... June 28. 1990 1996/2010 20.0 (continued) 166 Summaries of Projects Approved Table 7-3 (continued) Principal amount Borrower or guarantor and purpose Date of approval Maturities (US$ millions) Jamaica Social sectors development project ...... .............. July II. 1989 1995/2006 30.0 Agricultural sector adjustment loan ...... ...... Mar. 6, 1990 1995/2007 25.0 Jordan Industry and trade policy adjustment loan .... Dec. 14, 1989 1995/2007 150.0 Jordan (Guarantor) Integrated phosphate project-Jordan Phosphate Mines Company, Ltd ..................................... Feb. 20, 1990 1995/2006 25.0 Korea, Republic of Juam regional water supply project ...... ............ Mar. 20. 1990 1995/2005 34.0 Universities science and technology research project ... . May 22. 1990 1995/2005 45.0 Second technology advancement project ................ May 22, l990 1995/2005 31.6 Malaysia Rubber Industry Smallholders Development Authority project ............................................ Dec. 12, 1989 1995/2007 71.0 Highway rehabilitation and improvement project ...... Dec. 14. 1989 1995/2007 83.2 Mauritius Second highways project ......... . ........... Nov. 7. 1989 1995/2007 30.0 Mexico (Guarantor) Forestry development project-Nacional Financiera, S.N.C . ........................................... Aug. 29. 1989 1995/2006 45.5 Second agricultural marketing project-Nacional Financiera, S.N.C . ................................ Dec. 12. 1989 1995/2007 100.0 Second low-income housing project-Banco Nacional de Obras y Servicios Ptblicos. S.N ................. Dec. 12. 1989 1995/2007 350.0 Interest support loan-Banco Nacional de Comercio Exterior. S.N.C . .................................. Jan. 30. 1990 1995/2007 1,260.0 Transmission and distribution project-Nacional Financiera. S.N.C . ................................ Apr. 17. 1990 1995/2007 450.0 Telecommunications technical assistance project-Banco Nacional de Obras y Servicios Publicos. S.N.C . ...... May 29, 1990 1996/2007 22.0 Road transport and telecommunications sector adjustment-Banco Nacional de Obras y Servicios Ptiblicos. S.N.C . .................................. May 29. 1990 1996/2007 380.0 Morocco Second housing finance project . ......... ........ Sept. 14. 1989 1995/2009 3.0 Second forestry development project ................... Jan. 9. 1990 1995/2010 49.0 Highway sector project .... ........... ....... Feb. 8. 1990 1995/2010 79.0 Health sector investment project ....... ............... Feb. 20. 1990 1995/2010 104.0 Morocco (Guarantor) Second housing finance project-Credit immobilier et hotelier ...................................... .... Sept. 14, 1989 1995/2009 77.5 Industrial finance project-Banque centrale populaire .... Dec. 5. 1989 1995/2009 12.0 Industrial finance project-Banque marocaine du commerce exterieur .................... ........... Dec. 5. 1989 1995/2009 40.0 Industrial finance project-Banque commerciale du Maroc ............................. ............. Dec. 5. 1989 1995/2009 25.0 Statement of IBRD Loans 167 Principal atmount Borrower or guarantor ind purpose Date of approval Maturities (USS millions) Morocco (Guarantor) (continuod) Industrial finance project-Banque marocaine pour le commerce et l industrie ............................. Dec. 5. 1989 1995/2009 12.0 Industrial finance project-Banque nationale pour le developpement economique ......................... Dec. 5. 1989 1995/2009 50.0 Industrial finance project-Credit du Maroc ..... ....... Dec. 5. 1989 1995/2(009 5.0 Industrial finance project-Societe generale marocaine de banques ........................................... Dec. 5. 1989 1995/2009 9.0 Industrial finance project-Wafabank ...... ............ Dec. 5. 1989 1995/2009 17.0 Nigeria Tree crops project ........... ....................... Oct. 17. 1989 1997/2011 106.0 Essential drugs project . . .............................. Oct. 17. 1989 1995/2009 68.1 National seed and quarantine project ................... Mar. 29. 1990 1995/2010 14.0 Oyo State urban project .......... .................... June 26. 1990 1996/2010 50.() Nigeria (Guarantor) Power system maintenance and rehabilitation project- National Electric Power Authority ...... ............. Aug. 29. 1989 1995/2009 70.0 First telecommunications project-. I n Telecommunications Limited ............ ....... June 26. 1990 1996/2010 225.0 Pakistan Rural electrification project ........ ................... Dec. 18. 1989 1995/2009 123.0) Agricultural credit project ............................. June 12. 1990 1995/2010 148.5 Transport sector project I . ............................ June 28. 1990 1995/2010 I84.0 Pakistan (Guarantor) Transmission extension and reinforcement project- Water and Power Development Authority ..... ....... Dec. 18. 1989 1995/2009 162.0 Papua New Guinea Third telecommunications project ...................... Jan. 4. 1990 1995/2010 17.2 Structural adjustment loan ......... ................... June 5. 199(0 1996/2010 50.() Philippines Second municipal development project .... .......... Dec. 14. 1989 1995/20)10 40.0) Debt management program ........................... Dec. 21. 1989 1995/2010 200.0 Energy sector project .......... ...................... Feb. 1. 1990 1995/2010 40.0 Small coconut farms development project ..... ......... May 24. 1990 1996/2(010 121.8 First water supply. sewerage. and sanitation sector project ................. ....... ............... June 28. 1990 1996/2010 85.0 Philippines (Guarantor) Angat water supply optimization project-Metropolitan Waterworks and Sewerage System ................... Oct. 5. 1989 1995/2009 40.( Industrial investment credit project-Development Bank of the Philippines ....... .......................... Oct. 5. 1989 1995/2009 65.0 Energy sector project-National Power Corporation ..... Feb. 1. 1990 1995/2010 200.0 Energy sector project-Philippine National Oil Company. Feb. I. 1990 1995/201() 150.0 Poland Environment management project ....... .............. Apr. 24. 1990 1996/2007 18.) First transport project Igenerall ........................ May 1. 19901 1996/20)07 8.1 (onttinited) 168 Summaries of Projects Approved Table 7-3 (continued) Principal amount Borrower or guarantor and purpose Date of approval Maturities (US$ millions) Poland (Guarantor) Agroindustries export development project-National Bank of Poland . ................................... Feb. 6, 1990 1995/2007 100.0 Industrial export development project-National Bank of Poland ........................................... Feb. 6. 1990 1995/2007 260.0 First transport project (railways)-Polish State Railways . May 1, 1990 1996/2007 145.0 Energy resource development-Polish Oil and Gas Company ......................................... June 5. 1990 1996/2007 250.0 St. Lucia Water supply project ............. .................... Mar. 29. 1990 1995/2007 2.5 Thailand Third highway sector project ......... ................. June 7. 1990 1996/2010 50.0 Thailand (Guarantor) Second power system development project-Electricity Generating Authority of Thailand ....... ............. Dec. 12, 1989 1995/2010 94.0 Trinidad and Tobago Technical assistance project ........................... Jan. 4. 1990 1995/2004 4.0 Structural adjustment loan .......... .................. Jan. 4, 1990 1995/2004 40.0 Tunisia Public enterprise reform loan .......................... July II, 1989 1995/2006 130.0 Agricultural research and extension project ..... ........ June 5. 1990 1995/2007 17.0 Turkey Second agricultural extension and applied research project ............................................ Mar. 13, 1990 1995/2007 63.0 National education development project ................ Apr. 26. 1990 1995/2007 90.2 Turkey (Guarantor) Ankara sewerage project-Ankara Water Supply and Sewerage Administration ......... .................. Dec. 21. 1989 1995/2007 173.0 Uruguay Second agricultural development project ................ Oct. 31. 1989 1995/2004 65.0 Uruguay (Guarantor) Power modernization project-Administraci6n Nacional de Usinas y Transmisiones Electricas ...... .......... June 7. 1990 1995/2005 62.5 Venezuela Public enterprise reform loan .......................... June 12, 1990 1995/2005 350.0 Financial sector adjustment loan ....................... June 12. 1990 1995/2005 300.0 Technical assistance project for preinvestment and institutional development ......... .................. June 12. 1990 1996/2005 30.0 Western Africa region Third regional development project ....... ............. Feb. 1. 1990 1995/2009 15.0 Yugoslavia (Guarantor) Second structural adjustment loan-National Bank of Yugoslavia ........................................ Apr. 12. 1990 1995/2005 400.0 Third highway sector project-Road Organization of Bosnia-Herzegovina ................................ June 20, 1990 1995/2005 55.0 Third highway sector project-Road Organization of Croatia ........................................... June 20. 1990 1995/2005 75.0 Statement of IBRD Loans 169 Principal amount Borrower or guarantor and purpose Date of approval Maturities (US$ millions) Yugoslavia (Guarantor) (continued) Third highway sector project-Road Organization of Macedonia ....................................... June 20. 1990 1995/2005 22.0 Third highway sector project-Road Organization of Serbia ............................................ June 20, 1990 1995/2005 55.0 Third highway sector project-Road Organization of Slovenia .......................................... June 20, 1990 1995/2005 60.0 Third highway sector project-Road Organization of Vojvodina ......................................... June 20. 1990 1995/2005 25.0 Zimbabwe Forest resources management and development project . . Mar. 22. 1990 1995/2010 14.5 Total ..15,179.7 International Finance Corporation (total amount for fiscal 1990) ......_.._... .._._.b 176.5 Grand total .15,356.2 NOTE: All loans approved in fiscal year 1990 are at variable interest rates. a. Various loans approved throughout the fiscal year. b. Maturities vary for individual loans. 170 Summaries of Projects Approved Table 74. Statement of IDA Credits Approved during Fiscal Year 1990 Principal amount (millions> uss Country and purpose Date of approsal Maturities SDR equivalent Bangladesh Energy sector adjustment credit (supplemental credit) ..............O.... Oct. 12. 1989 1999/2028 1.8 2.3 Bangladesh Water Development Board systems rehabilitation project ..... ...... Mar. 6. 1990 2000/2030 40.8 53.9 General education project ................. Mar. 29. 1990 2000/2030) 120.6 159.3 Third rural electrification project ..... May 1. 199() 2000/2030 79.6 105.0 Third fisheries project ............... .... May 29. 1990) 2000/2030 34.6 44.6 Financial sector adjustment credit ......... June 5. 1990 2000/2030 132.7 175.0 Benin Rural savings and loan rehabilitation project ................. .............. Jan. 30. 1990 2000/2029 2.0 2.5 Bolivia Financial sector adjustment credit (supplemental credit) ....... ............ Oct. 12. 1989 1998/2028 7.3 9.1 Integrated health development project ...... Feb. S. 1990 2000/2029 15.7 20.0 Eastern lowlands: natural resource management and agricultural production project ................................ Mar. 29, 1990) 2000/2030 26.5 35.0 Social investment fund project ..... ....... April 24. 1990 2000/2030 15.1 20.0 Private enterprise development project ..... May 17. 1990 2000/2031) 12.5 16.1 Burkina Faso Second urban project ..................... Oct. 24. 1989 2000/2029 18.0 22.2 Burundi Transport sector project ....... ........... Mar. 20. 1990 2000/2030 32.7 43.2 Coffee sector project ........ ............. April 10. 1990 2000/2029 21.3 28.0 Caribbean Development Bank Fifth Caribbean Development Bank project . May 22. 1990 2000/2030) 9.1 12.0 Central African Republic Transport sector project ....... ........... April 24. 1990 2000/2030 46.6 62.0 Natural resource management project ...... Mav 22. 1990) 2000/2030 14.5 19.0 Third structural adjustment program ....... June 21. 1990) 2000/2030 34.5 45.0 Chad Social development action project ..... .... June 14. 1990 2000/2030 10.4 13.4 China North China earthquake reconstruction project ................................ Feb. 8. 1990 200(0/2(025 23.4 30.0 Jiangxi agricultural development project .... Feb. 27. 1990 2000/2024 46.2 60.0 Vocational and technical education project . Mar. 27. 1990 2000/2024 38.5 50.0 National afforestation project ...... ....... Ma' 29. 1990 2000/2025 230.0 300.0 Hebei agricultural development project ..... June 14. 1990 2000/2025 116.1 150.0 Djibouti Manpower and education development project ................................ Dec. 21. 1989 2000/2029 4.6 5.8 Statement of IDA Credits 171 Principal amount (millions) US$ Country and purpose Date of approval Maturities SDR equivalent Ethiopia Market towns development project ........ Mar. 13, 1990 2000/2029 31.4 40.2 Second Addis Ababa urban development project ................................ June 20, 1990 2000/2030 27.1 35.0 Gambia, The Women in development project ............ May 24. 1990 2000/2030 5.4 7.0 Education sector project .................. May 24. 1990 2000/2030 11.3 14.6 Ghana Electricity Corporation of Ghana fifth power project ........... .............. Aug. 29. 1989 1999/2029 30.3 40.0 Second structural adjustment credit (supplemental credit) ................... Oct. 12, 1989 1999/2029 4.6 5.7 Volta River Authority sixth power project . . Mar. 27. 1990 2000/2029 15.2 20.0 Second education sector adjustment credit. . May 24, 1990 2000/2030 37.9 50.0 Urban 11 project ............. ............ June 14. 1990 2000/2030 53.7 70.0 Guinea Forestry and fisheries management project Oct. 24, 1989 2000/2029 6.3 8.0 National rural infrastructure project ........ Mar. 20. 1990 2000/2029 31.3 40.0 Second urban project ..................... Mar. 27. 1990 2000/2029 43.0 57.0 Private sector promotion program ..... .... May 31, 1990 2000/2030 38.7 50.0 Education sector adjustment credit ... June 12, 1990 2000/2030 15.4 20.0 Guinea-Bissau Infrastructure rehabilitation project ........ Dec. 14, 1989 2000/2029 18.5 23.6 Guyana Third technical assistance project .......... June 28. 1990 2000/2030 2.3 3.0 Second structural adjustment credit ........ June 28. 1990 2000/2030 57.2 74.6 Second structural adjustment credit (supplemental credit) ................... June 28. 1990 2000/2030 2.6 3.4 Haiti Industrial restructuring and development project ................................ Dec. 5. 1989 2000/2029 9.1 11.4 First health project ......... ............. Jan. 16, 1990 2000/2030 22.2 28.2 India Industrial technology development project . . Sept. 12. 1989 1999/2024 44.2 55.0 Punjab irrigation and drainage project ...... Dec. 14. 1989 2000/2024 117.7 150.0 Integrated watershed development (hills) project ................................ Mar. 6, 1990 2000/2024 56.8 75.0 Hyderabad water supply and sanitation project ................................ Mar. 27. 1990 2000/2025 63.9 79.9 Technician education project .............. May 1, 1990 2000/2024 178.2 235.0 Integrated watershed development (plains) project ................................ May 15. 1990 2000/2025 42.6 55.0 Sesenth population project ................ May 17. 1990 2000/2025 67.1 86.7 Second Tamil Nadu nutrition project ....... June 14, 1990 2000/2025 73.5 95.8 (continued) 172 Summaries of Projects Approved Table 7-4 (continued) Principal amount (millions) US$ Country and purpose Date of approval Maturities SDR equivalent Kenya Financial sector technical assistance project ... July 11. 1989 1999/2024 3.9 5.0 Third Nairobi water supply project ..... ...... July 25, 1989 1999/2024 49.1 64.8 Second coffee improvement project ........... Sept. 12, 1989 2000/2029 36.5 46.8 Financial sector adjustment credit (supplemental credit) ......... ............. Oct. 12, 1989 1999/2024 35.3 44.0 Fourth population project .................... Mar. 27. 1990 2000/2030 26.3 35.0 Financial parastatals technical assistance project ................................... May 31, 1990 2000/2030 4.7 6.0 Lao People's Democratic Republic Upland agriculture development project ....... Dec. 21, 1989 2000/2029 15.9 20.2 Second telecommunications project ..... ...... Mar. 13, 1990 2000/2029 19.1 24.5 Lesotho Second population, health, and nutrition project .................................. July 11. 1989 2000/2029 9.4 12.1 Madagascar Public sector adjustment credit (supplemental credit) ................................... Oct. 12, 1989 1998/2028 0.9 1.2 Education sector reinforcement project ........ Feb. 13, 1990 2000/2030 30.4 39.0 Financial sector and private enterprise development project ....................... Mar. 20. 1990 2000/2030 36.4 48.0 Antananarivo Plain development project ....... Mar. 29, 1990 2000/2030 23.0 30.5 Environment program ......... .............. April 17, 1990 2000/2030 19.8 26.0 Agricultural extension pilot project ........... May 31, 1990 2000/2030 2.8 3.7 Malawi Industry and trade adjustment credit (supplemental credit) ......... ............. Oct. 12, 1989 1998/2028 3.8 4.7 Infrastructure project ........................ Nov. 7. 1989 2000/2029 22.3 28.8 Second education sector credit ...... ......... Dec. 21, 1989 2000/2029 29.5 36.9 Agricultural sector adjustment program ........ April 3, 1990 2000/2030 52.6 70.0 Maldives Male airport upgrading project ...... ......... May 29, 1990 2000/2030 5.9 7.5 Mali Agricultural sector adjustment/investment project .................................. June 21. 1990 2000/2030 40.7 53.0 Mauritania Agricultural sector adjustment/investment project ................................... Feb. 13, 1990 2000/2030 19.4 25.0 Public enterprise sector institutional development and technical assistance project. . June 26, 1990 2000/2030 7.7 10.0 Public enterprise sector adjustment program .... June 26, 1990 2000/2030 30.7 40.0 Mozambique Beira transport corridor project ............... Sept. 14, 1989 2000/2029 31.0 40.0 Economic and financial management technical assistance project ......................... Oct. 17, 1989 2000/2029 16.5 21.0 Statement of IDA Credits 173 Principal amount (millions) us$ Country and purpose Date of approval Maturities SDR equivalent Mozambique (continued) Industrial enterprise restructuring project .. Dec. 21, 1989 2000/2029 40.0 50.1 Small and medium enterprise development project ................................ Dec. 21. 1989 2000/2029 25.1 32.0 Nepal Bhairawa Lumbini groundwater irrigation III project ....... .......... May 29. 1990 2000/2030 36.6 47.2 Niger National agricultural research project ...... April 10. 1990 2000/2030 15.0 19.9 Nigeria Federal universities development sector adjustment operation ........ ........... May 24. 1990 2000/2025 93.5 120.0 Pakistan Rural electrification project .. .............. Dec. 18, 1989 2000/2024 29.1 37.0 Sindh primary education development program ................ .......... Mar. 13. 1990 2000/2024 85.2 112.5 Agricultural credit project ................. June 12. 1990 2000/2025 1.2 1.5 Agricultural research 11 project ............ June 12. 1990 2000/2025 44.4 57.3 Rwanda Public enterprise reform project ..... ...... Mar. 27, 1990 2000/2030 3.4 4.4 Transport sector project ....... ........... May 22. 1990 2000/2030 31.1 40.0 Sao Tome and Principe Second structural adjustment credit ........ June 26, 1990 2000/2030 7.5 9.8 Senegal Public works and employment project ...... Dec. 14. 1989 2000/2029 16.1 20.0 Financial sector adjustment program ....... Dec. 18. 1989 2000/2029 35.3 45.0 Fourth structural adjustment program ...... Feb. 8. 1990 2000/2029 62.4 80.0 Second agricultural research project ....... Mar. 22. 1990 2000/2030 14.0 18.5 Agricultural services project ....... ..... Mar. 22, 1990 2000/2030 13.0 17.1 Fourth structural adjustment program (supplemental credit) ........ ........... May 18. 1990 2000/2029 3.5 4.4 Somalia Farahaane irrigation rehabilitation project Sept. 12. 1989 2000/2029 21.2 28.5 Education rehabilitation project ...... .... Mar. 27. 1990 2000/2030 19.7 26.1 Sri Lanka General education project ................. Dec. 12, 1989 2000/2029 38.5 49.0 Economic restructuring credit ...... ....... May 1, 1990 2000/2030 68.3 90.0 Economic restructuring credit (supplemental credit) ................................ June 26, 1990 2000/2030 3.5 4.4 St. Lucia Water supply project ......... ............ Mar. 29, 1990 2000/2025 4.0 5.2 Sudan Khartoum-Port Sudan Road rehabilitation project ......................... ...... Dec. 5. 1989 2000/2029 65.7 82.2 (continued) 174 Summaries of Projects Approved Table 74 (continued) Principal amount (millions) US$ Country and purpose Date of approval Maturities SDR equivalent Tanzania Industrial and trade adjustment credit (supplemental credit) ........ ........... Oct. 12, 1989 1999/2028 8.3 10.3 Port modernization project 11 .............. Feb. 27, 1990 2000/2029 28.9 37.0 Health and nutrition project ............... Mar. 6, 1990 2000/2029 36.1 47.6 Agricultural adjustment program ........... Mar. 29, 1990 2000/2029 150.4 200.0 Education planning and rehabilitation project ........... .................... May 22, 1990 2000/2030 29.0 38.3 Integrated roads project ....... ......... May 31, 1990 2000/2030 139.9 180.4 Togo Third structural adjustment credit (supplemental credit) ................... Oct. 12. 1989 1998/2027 0.2 0.2 Tonga Second Tonga Development Bank project .. Jan. 4, 1990 2000/2029 2.4 3.0 Uganda Economic recovery program (supplemental credit) ................................ Oct. 12, 1989 1997/2027 1.2 1.5 Alleviation of poverty and the social costs of adjustment project ................... Feb. 1, 1990 2000/2029 22.0 28.0 Second economic recovery credit .......... Feb. 1. 1990 2000/2029 98.1 125.0 Second water supply project ...... ........ April 12, 1990 2000/2030 45.1 60.0 Western Africa region Third regional development project ........ Feb. 1. 1990 2000/2029 32.0 40.0 Western Samoa Emergency road rehabilitation project ...... May 17, 1990 2000/2030 10.9 14.0 Yemen Arab Republic Health sector development project ......... May 31, 1990 2000/2030 11.7 15.0 Taiz flood disaster prevention and municipal development project ..... ..... June 14. 1990 2000/2030 11.7 15.0 Yemen, People's Democratic Republic of Emergency flood reconstruction project .... Dec. 12. 1989 2000/2029 7.9 10.0 Third power project ...................... June 21, 1990 2000/2030 11.9 15.5 Tarim water supply project ...... ......... Jun. 28. 1990 2000/2030 9.2 12.0 Zaire Pilot extension project .................... Feb. 27. 1990 200012029 4.6 5.9 Total 4,255.0 5,522.0 NOTE: Starting with the sixth replenishment of IDA. credits are expressed in special drawing rights (SDRs). The US-dollar equivalent of the original principal amount of credits denominated in SDRs is shown at the rate approved by the executive board. All credits approved in fiscal 1990 have a service charge of 0.75 percent on the unwithdrawn balance. Trends in Lending 175 Table 7-5. Trends in Lending, IBRD and IDA, Fiscal Years 1988-90 (millions of US dollars) 1988 1989 1990 Sector IBRD IDA Total IBRD IDA Total IBRD IDA Total Agriculture and Rural Development 2,932.1 1,561.8 4,493.9 2,066.1 1,423.9 3,490.0 1,994.5 1,661.6 3,656.1 Development Finance Companies 1,490.0 292.5 1,782.5 2,500.0 378.7 2,878.7 945.0 326.7 1,271.7 Education 654.9 209.1 864.0 514.6 449.1 963.7 530.1 956.5 1,486.6 Energy Oil, gas, and coal 325.1 63.0 388.1 549.5 31.2 580.7 86.0 - 86.0 Power 1,908.0 98.9 2,006.9 2,858.5 424.4 3,282.9 2,998.5 219.8 3,218.3 Industry 2,062.7 161.9 2,224.6 1,858.0 124.5 1,982.5 650.5 145.1 795.6 Nonproject 1,020.0 405.0 1,425.0 1,892.0 471.5 2,363.5 2,600.0 444.0 3,044.0 Population, Health, and Nutrition 109.0 195.9 304.9 326.5 223.5 550.0 524.6 408.8 933.4 Public-sector Management - 165.0 165.0 500.0 - 500.0 480.0 45.6 525.6 Small-scale Enterprises 493.0 20.0 513.0 585.0 - 585.0 50.0 157.5 207.5 Technical Assistance 15.2 80.5 95.7 64.0 154.3 218.3 96.0 45.0 141.0 Telecommunications 36.0 - 36.0 53.1 107.9 161.0 592.2 24.5 616.7 Transportation 2,117.2 525.3 2,642.5 1,137.7 693.1 1,830.8 2,250.2 535.1 2,785.3 Urban Development 1,108.5 634.8 1,743.3 959.0 229.5 1,188.5 702.7 299.4 1,002.1 Water Supply and Sewerage 490.3 45.0 535.3 569.2 222.0 791.2 679.4 252.4 931.8 Total 14,762.0 4,458.7 19,220.7 16,433.2 4,933.6 21,366.8 15,179.7 5,522.0 20,701.7 NorE: Details may not add to totals because of rounding. Table 7-6. Trends in Lending, IBRD and IDA, Fiscal Years 1988-90 (percentage) 1988 1989 1990 Sector IBRD IDA Total IBRD IDA Total IBRD IDA Total Agriculture and Rural Development 19.9 35.0 23.4 12.6 28.9 16.3 13.1 30.1 17.7 Development Finance Companies 10.1 6.6 9.3 15.2 7.7 13.5 6.2 5.9 6.1 Education 4.4 4.7 4.5 3.1 9.1 4.5 3.5 17.3 7.2 Energy Oil, gas, and coal 2.2 1.4 2.0 3.3 0.6 2.7 0.6 0.0 0.4 Power 12.9 2.2 10.4 17.4 8.6 15.4 19.8 4.0 15.5 Industry 14.0 3.6 11.6 11.3 2.5 9.3 4.3 2.6 3.8 Nonproject 6.9 9.1 7.4 11.5 9.6 11.1 17.1 8.0 14.7 Population, Health, and Nutrition 0.7 4.4 1.6 2.0 4.5 2.6 3.5 7.4 4.5 Public-sector Management 0.0 3.7 0.9 3.0 0.0 2.3 3.2 0.8 2.5 Small-scale Enterprises 3.3 0.4 2.7 3.6 0.0 2.7 0.3 2.9 1.0 Technical Assistance 0.1 1.8 0.5 0.4 3.1 1.0 0.6 0.8 0.7 Telecommunications 0.2 0.0 0.2 0.3 2.2 0.8 3.9 0.4 3.0 Transportation 14.3 11.8 13.7 6.9 14.0 8.6 14.8 9.7 13.5 Urban Development 7.5 14.2 9.1 5.8 4.7 5.6 4.6 5.4 4.8 Water Supply and Sewerage 3.3 1.0 2.8 3.5 4.5 3.7 4.5 4.6 4.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 NOTE: Details may not add to totals because of rounding. 176 Summades of Projects Approved Table 7-7. IBRD and IDA Cumulative Lending Operations, by Major Purpose and Region, June 30, 1990 (millions of US dollars) IBRD loans to borrowers. by region' Europe. Middle Latin East. and America North and the Purpose" Africa Asia Africa Caribbean Total Agriculture and Rural Development Agricultural credit ....... ...... 319.8 1,287.9 2,798.8 2,627.4 7,033.9 Agriculture sector loan ......... 14.6 427.3 1,332.0 2,107.1 3,881.0 Agroindustry .......... ....... 30.0 325.2 1,149.7 1,226.9 2,731.8 Area development ....... ...... 1,628.6 1,659.9 996.5 2,960.4 7,245.4 Fisheries .................. ... 0.0 106.7 48.0 16.2 170.9 Forestry ...................... 349.5 78.0 317.5 116.0 861.0 Irrigation and drainage ......... 110.2 3,815.7 2,676.8 2,215.5 8,818.2 Livestock ............. ....... 170.7 318.0 236.0 1,042.0 1,766.7 Perennial crops ......... ..... 634.5 1,410.8 108.0 123.0 2,276.3 Research and extension ...... 85.9 448.4 207.4 585.0 1,326.7 Total ....................... 3,343.8 9,877.9 9,870.7 13,019.5 36,111.9 Development Finance Companies ... 1,059.0 5.227.8 6,128.7 6,481.1 18,896.6 Education ....................... 392.1 2,929.4 2.120.5 1,212.7 6,654.7 Energy Oil, gas, and coal ........ ...... 167.2 4,364.8 1,630.8 1,122.2 7,285.0 Power ........................ 1,782.1 14,272.7 6,243.2 11,239.7 33,537.7 Total ....................... 1.949.3 18,637.5 7,874.0 12,361.9 40,822.7 Industry Engineering ............2....... 7.7 10.0 11.0 9.5 58.2 Fertilizer and other chemicals ... 0.0 1,701.1 776.4 848.5 3,326.0 Industry sector loan ............ 15.6 2,221.1 2,066.5 1,359.5 5,662.7 Iron and steel ......... ........ 20.0 189.0 512.8 1,067.0 1,788.8 Mining, other extractive ........ 533.5 0.0 237.2 547.5 1,318.2 Paper and pulp ................ 48.4 105.5 263.3 20.0 437.2 Textiles . ..................... 63.0 157.4 307.3 0.0 527.7 Tourism sector loan ...... ...... 54.5 25.0 96.6 187.5 363.6 Total . ...................... 762.7 4,409.1 4,271.1 4,039.5 13,482.4 Nonproject ...................... 1,943.6 3,579.3 4,775.9- 4,835.6 15,134.4 Population, Health, and Nutrition .. 194.4 444.8 263.2 799.8 1,702.2 Public-sector Management ......... 0.0 0.0 130.0 850.0 980.0 Small-scale Enterprises ............ 440.7 1,291.5 808.0 1,985.6 4,525.8 Technical Assistance , .............. 138.8 23.0 57.8 229.3 448.9 Telecommunications .............. 510.2 1,348.2 821.8 508.3 3,188.5 Transportation Airlines and airports ........... 59.0 14.8 7.0 218.5 299.3 Highways ..................... 1,802.9 4,871.7 3,340.3 5,714.3 15,729.2 Pipelines .... ................. 0.0 0.0 94.5 23.3 117.8 Ports and waterways .... 285.9 1,722.5 1,492.6 523.7 4,024.7 Railways ...................... 694.9 3,013.8 1,483.9 1,938.5 7,131.1 Transportation sector loan ...... 61.6 377.2 556.0 188.6 1,183.4 Total ....................... 2,904.3 10,000.0 6,974.3 8,606.9 28,485.5 Urban Development ........ ...... 921.3 2,708.7 731.3 3,489.1 7,850.4 Water Supply and Sewerage ....... 803.8 1,585.4 3,064.8 2,923.7 8,377.7 Grand total .................. 15,364.0 62,062.6 47,892.1 61,343.0 186,661.7 a. Except for the total amount shown in footnote d, no account is taken of cancellations subsequent to original commitment. IBRD loans to the IFC are excluded. b. Operations have been classified by the major purpose they finance. Many projects include activity in more than one sector or subsector. Cumulative Lending Operations, by Purpose and Region 177 IDA credits to borrwers, by region' Europe, Middle Latin East, and America North and the Total IBRD Africa Asia Africa Caribbean Total and IDA 369.1 2,154.3 305.5 23.5 2,852.4 9,886.3 611.7 327.7 40.0 1.4 980.8 4,861.8 361.4 676.9 138.0 15.0 1,191.3 3,923.1 1,602.1 1,685.9 200.6 86.1 3,574.7 10,820.1 46.9 192.3 54.1 0.0 293.3 464.2 338.7 1,010.0 1.7 12.8 1,363.2 2,224.2 855.6 5,174.0 1,214.2 18.5 7,262.3 16,080.5 416.4 331.2 49.5 67.5 864.6 2,631.3 472.4 491.5 15.0 3.2 982.1 3,258.4 413.0 735.1 159.2 0.0 1,307.3 2,634.0 5,487.3 12,778.9 2,177.8 228.0 20,672.0 56,783.9 1,142.4 575.1 273.7 129.6 2,120.8 21,017.4 1,779.3 1,955.2 711.1 73.6 4,519.2 11,173.9 334.5 368.7 111.0 33.0 847.2 8,132.2 975.1 3,635.3 393.6 189.7 5,193.7 38,731.4 1,309.6 4,004.0 504.6 222.7 6,040.9 46,863.6 16.7 0.0 0.0 0.0 16.7 74.9 35.0 884.0 76.4 0.0 995.4 4,321.4 302.7 91.4 29.5 0.0 423.6 6,086.3 40.0 0.0 0.0 0.0 40.0 1,828.8 20.9 16.0 0.0 49.5 86.4 1,404.6 50.0 0.0 0.0 0.0 50.0 487.2 20.0 104.7 7.0 0.0 131.7 659.4 18.0 20.2 48.5 0.0 86.7 450.3 503.3 1,116.3 161.4 49.5 1,830.5 15,312.9 2,294.9 3,063.5 395.0 245.1 5,998.5 21,132.9 504.3 1,003.8 95.2 68.2 1,671.5 3,373.7 302.0 0.0 0.0 0.0 302.0 1,282.0 228.7 236.5 88.8 27.5 581.5 5,107.3 670.9 155.2 44.6 27.2 897.9 1,346.8 339.3 812.3 142.7 0.0 1,294.3 4,482.8 14.0 7.5 2.5 0.0 24.0 323.3 2,601.1 1,042.0 282.3 167.3 4,092.7 19,821.9 0.0 0.0 0.0 0.0 0.0 117.8 413.9 327.7 44.7 16.0 802.3 4,827.0 511.6 1,124.2 138.5 45.0 1,819.3 8,950.4 327.2 348.5 0.0 0.0 675.7 1,859.1 3,867.8 2,849.9 468.0 228.3 7,414.0 35,899.5 782.6 1,356.3 251.3 127.0 2,517.2 10,367.6 675.5 1.205.5 436.9 43.8 2.361.7 10,739.4 19,887.9 31,112.5 5,751.1 1,470.5 58,222.0 244,883.7 c. Includes $497 million in European reconstruction loans made before 1952. d. Cancellations amount to $12,934.43 million for the IBRD and $2,007.99 million for IDA, totaling $14,942.42 million. 178 Summaries of Projects Approved Table 7-8. IBRD and IDA Cumulative Lending Operations, by Borrower or Guarantor, June 30, 1990 (amounts in millions of US dollars) IBRD loans IDA credits Total Borrower or guarantor Number Amount Number Amount Number Amount Afghanistan ............................ - - 20 230.1 20 230.1 Algeria ............................... 43 3,534.5 - - 43 3,534.5 Argentina .............................. 40 5,120.8 - - 40 5,120.8 Australia ............................... 7 417.7 - - 7 417.7 Austria ................................ 9 106.4 - - 9 106.4 Bahamas. The .......................... 5 42.8 - - 5 42.8 Bangladesh ............................ 1 46.1 126 5,248.6 127 5,294.7 Barbados .............................. 9 74.2 - - 9 74.2 Belgium ............................... 4 76.0 - - 4 76.0 Belize ............................... 4 26.2 - - 4 26.2 Benin ............................... - - 29 363.1 29 363.1 Bhutan ............................... - - 5 22.8 5 22.8 Bolivia .............................. 14 299.3 30 555.4 44 854.7 Botswana .............................. 19 265.8 6 15.8 25 281.6 Brazil ................................ 185 17,981.6 - - 185 17,981.6 Burkina Faso ............ .............. - 1.9 31 397.6 31 399.5 Burundi ............................... 1 4.8 38 542.1 39 546.9 Cameroon .............................. 43 1,271.4 15 253.0 58 1,524.4 Cape Verde ............................ - - 4 20.1 4 20.1 Caribbean Region ........... ........... 3 63.0 2 32.0 5 95.0 Central African Republic ....... ......... - - 20 343.3 20 343.3 Chad ................................ - - 23 320.9 23 320.9 Chile ........................-.-.... 44 2,668.7 - 19.0 44 2,687.7 China ............................... 50 5,280.2 33 3,927.3 83 9,207.5 Colombia .............................. 125 6,533.6 - 19.5 125 6,553.1 Comoros ............................... - - 8 40.5 8 40.5 Congo, People's Republic of the .......... 9 200.9 8 74.6 17 275.5 Costa Rica ............................. 33 676.9 - 5.5 33 682.4 C6te d'lvoire ........................... 58 2,535.7 1 7.5 59 2,543.2 Cyprus ................................ 28 356.8 - - 28 356.8 Denmark .......................... .... 3 85.0 - - 3 85.0 Djibouti ................................ - - 7 40.4 7 40.4 Dominica .............................. - - 3 11.0 3 11.0 Dominican Republic ..................... 19 472.9 3 22.0 22 494.9 East African Community ....... ......... 10 244.8 - - 10 244.8 Eastern and Southern Africa Region ...... - - 1 45.0 1 45.0 Ecuador ............................... 45 1,367.9 5 36.9 50 1,404.8 Egypt. Arab Republic of ................. 50 3,122.8 26 981.2 76 4,104.0 El Salvador ............................ 19 281.1 2 25.6 21 306.7 Equatorial Guinea ....................... - - 6 30.8 6 30.8 Ethiopia ............................... 12 108.6 47 1,264.8 59 1,373.4 Fiji ............................... 12 137.9 - - 12 137.9 Finland ............................... 18 316.8 - - 18 316.8 France ............................... 1 250.0 - - I 250.0 Gabon ............................... 9 154.3 - - 9 154.3 Cumulative Lending Operations, by Borrower 179 IBRD loans IDA credits Total Borrower or guarantor Number Amount Number Amount Number Amount Gambia. The ............................ - - 20 134.3 20 134.3 Ghana ................................ 9 207.0 51 1,448.7 60 1,655.7 Greece ............................... 17 490.8 - - 17 490.8 Grenada .............................. - - 1 5.0 1 5.0 Guatemala ............................. 21 585.1 - - 21 585.1 Guinea.3 75.2 36 737.1 39 812.3 Guna................................. 3 7. 6 771 3 1. Guinea-Bissau .......................... - - 15 152.8 15 152.8 Guyana ............................... 12 80.0 7 135.3 19 215.3 Haiti ................................ 1 2.6 28 403.0 29 405.6 Honduras .............................. 32 627.3 5 83.2 37 710.5 Hungary ............................... 22 2.342.9 - - 22 2,342.9 Iceland ..... . 10 47.1 - - 10 47.1 India ............................... 134 18,319.2 178 16,955.7 312 35,274.9 Indonesia .............................. 147 14,829.4 46 931.8 193 15,761.2 Iran, Islamic Republic of ....... ......... 33 1,210.7 - - 33 1,210.7 Iraq ........... .......... ....... 6 156.2 - - 6 156.2 Ireland ............................... 8 152.5 - - 8 152.5 Israel ............................... It 284.5 - - It 284.5 Italy ................................. 8 399.6 - - 8 399.6 Jamaica ............................... 50 936.4 - - 50 936.4 Japan ............................... 31 862.9 - - 31 862.9 Jordan ............................... 31 1,018.4 15 85.3 46 1,103.7 Kenya ................................ 46 1.200.0 49 1,397.4 95 2,597.4 Korea, Republic of ...................... 92 7.154.0 6 110.8 98 7,264.8 Lao People's Democratic Republic ........ - - 13 195.2 13 195.2 Lebanon .............................. 4 116.6 - - 4 116.6 Lesotho ............................... - - 19 157.2 19 157.2 Liberia ............................... 21 156.0 14 114.5 35 270.5 Luxembourg ........................... 1 12.0 - - I 12.0 Madagascar . ........................... 5 32.9 50 998.9 55 1,031.8 Malawi ............................... 9 124.1 46 858.5 55 982.6 Malaysia ......................... ..... 77 2,784.6 - - 77 2,784.6 Maldives ............................... - - 4 23.9 4 23.9 Mali ................................ - 1.9 39 622.6 39 624.5 Malta ............................... 1 7.5 - - 1 7.5 Mauritania .3 146.0 26 241.9 29 387.9 Mauritius .............................. 21 283.7 4 20.2 25 303.9 Mexico ............................... 123 17,363.6 - - 123 17,363.6 Morocco ................ _ ............ 89 5,177.7 3 50.8 92 5,228.5 Mozambique ........................... - - 12 493.0 12 493.0 Myanmar .............................. 3 33.4 30 804.0 33 837.4 Nepal ............................... - - 56 1,058.3 56 1,058.3 Netherlands ............................ 8 244.0 - - 8 244.0 New Zealand ........................... 6 126.8 - - 6 126.8 Nicaragua .............................. 27 233.6 4 60.0 31 293.6 (continued) 180 Summaries of Projects Approved Table 7-8 (continued) IBRD loans IDA credits Total Borrower or guarantor Number Amount Number Amount Number Amount Niger ................................. - - 32 450.5 32 450.5 Nigeria ............................... 79 5,594.2 4 256.4 83 5,850.6 Norway ............................. 6 145.0 - - 6 145.0 Oman ................................ I 1 157.1 - - I1 157.1 Pakistan ............................... 71 4.175.1 82 3.237.0 153 7,412.1 Panama ................................ 31 696.3 - - 31 696.3 Papua New Guinea ...................... 21 411.3 9 113.2 30 524.5 Paraguay ............................... 27 458.1 6 45.5 33 503.6 Peru ............................... 60 1,711.9 - - 60 1,711.9 Philippines ............................. 114 6,751.1 3 122.2 117 6,873.3 Poland ............................... 5 781.0 - - 5 781.0 Portugal ............................... 32 1,338.8 - - 32 1,338.8 Romania ............................... 33 2,184.3 - - 33 2,184.3 Rwanda ............................... - - 36 426.6 36 426.6 Sdo Tome and Principe ........ .......... - - 5 31.7 5 31.7 Senegal ............................... 19 164.9 49 832.7 68 997.6 Seychelles .....................I..... 1. 1 6.2 - - I 6.2 Sierra Leone ........................... 4 18.7 12 116.1 16 134.8 Singapore ................. ...... 14 181.3 - - 14 181.3 Solomon Islands ........................ - - 5 17.0 5 17.0 Somalia ................................ - - 39 492.1 39 492.1 South Africa ........................... 11 241.8 - - I1 241.8 Spain ............................... 12 478.7 - - 12 478.7 Sri Lanka .............................. 12 210.7 50 1,323.8 62 1,534.5 St. Lucia ............................... 1 2.5 - 5.2 1 7.7 St. Vincent and the Grenadines ........... 1 1.4 1 6.4 2 7.8 Sudan ............................... 8 166.0 47 1,336.9 55 1,502.9 Swaziland .............................. 1 75.8 2 7.8 13 83.6 Syrian Arab Republic .. .................. 17 613.2 3 47.3 20 660.5 Tanzania ............................... 18 318.2 69 1,769.2 87 2,087.4 Thailand ............................... 93 4,186.6 6 125.1 99 4.3] 1.7 Togo ................................ I 20.0 30 416.1 31 436.1 Tonga ................................ - - 2 5.0 2 5.0 Trinidad and Tobago .......... .......... 15 168.8 - - 15 168.8 Tunisia ............................... 82 2,530.2 5 74.6 87 2,604.8 Turkey ................................ 100 10,165.2 10 178.5 110 10,343.7 Uganda ............................... 1 8.4 37 1,090.6 38 1,099.0 Uruguay ............................... 33 1,048.1 - - 33 1,048.1 Vanuatu ............................... - - 3 12.0 3 12.0 Venezuela .............................. 18 1,818.3 - - 18 1,818.3 Viet Nam .............................. - - 1 60.0 1 60.0 Western Africa Region ........ .......... 2 21.1 3 92.5 5 113.6 Western Samoa ......................... - - 8 40.5 8 40.5 Yemen Arab Republic ................... - - 55 588.0 55 588.0 Yemen, People's Democratic Republic of.. - - 35 278.3 35 278.3 Cumulative Lending Operations, by Borrower 181 IBRD loans IDA credits Total Borrower or guarantor Number Amount Number Amount Number Amount Yugoslavia ............................. 89 5,814.7 - - 89 5,814.7 Zaire .................... ............. 7 330.0 54 1,061.1 61 1,391.1 Zambia ................................ 28 679.1 19 317.1 47 996.2 Zimbabwe ............................. 20 704.6 3 53.9 23 758.5 Othee' . ................................ 14 329.4 4 15.3 18 344.7 Total .............................. 3,176 186,661.7 2,005 58,222.0 5,181 244,883.7 NOTE: Joint IBRD/IDA operations are counted only once, as IBRD operations. When more than one loan is made for a single project, the operation is counted only once. Details may not add to totals because of rounding. a. Represents IBRD loans and IDA credits made at a time when the authorities on Taiwan represented China in the World Bank (prior to May 15, 1980). 183 Financial Statements of the International Bank for Reconstruction and Development Balance Sheets 184 Statements of Income 186 Statements of Accumulated Net Income-Unallocated 186 Statements of Changes in General Reserve 186 Statements of Cash Flows 187 Summary Statement of Loans 188 Summary Statements of Borrowings 192 Statement of Subscriptions to Capital Stock and Voting Power 194 Notes to Financial Statements 198 Report of Independent Accountants 202 184 IBRD Financial Statements Balance Sheets June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars 1990 1989 Assets DUE FROM BANKS Unrestricted currencies (including interest-bearing demand deposits $71,028-1990, $104,104-1989) . ..................................................... i 5I 47 $ 225,156 Currencies subject to restrictions-Note A ............. ............. 609 009 565,761 724 756 790,917 INVESTMENTS-Note B Obligations of governments and other official entities ......... ....................... 8 543.644 9,025,129 Time deposits and other obligations of banks and financial institutions .............. .8 302,080 10,403,750 16,845 24 19,428,879 CASH COLLATERAL INVESTED-NoteB ............... ........................... 4 522 818 2,753,843 NONNEGOTIABLE, NONINTEREST-BEARING DEMAND OBLIGATIONS ON ACCOUNT OF SUBSCRIBED CAPITAL (subject to restrictions-Note A) ........ ..................... I595,818 1,476,858 AMOUNTS REQUIRED TO MAINTAIN VALUE OF CURRENCY HOLDINGS-Note A Amounts due .......................................................... 704.546 659,263 Amounts deferred ......................................................... 268 781 474,650 973.32, 1,133,913 RECEIVABLES-OTHER Net receivable from currency swaps-Note D ........... .......................... 432 150 274,828 Receivable from investment securities sold ........................................ 1.690.338 1,090,826 Accrued income on loans . ................................................... 2 155.651 1,925,347 Accrued interest on investments .................. ............................. 186.373 166,262 4 464 512 3,457,263 LOANS OUTSTANDING (see Summary Statement of Loans and Note C) Total loans ........................................................... 138.269./81 127,918,200 Less loans approved but not yet effective ............ ............................. 10. 2: 300 14,971,500 Less undisbursed balance of effective loans ........... ........................... 39015.047 35,004,855 89 052 434 77,941,845 OTHER ASSETS Land and buildings (less accumulated depreciation $33,135-1990, $34,907-1989) ........ 2. 9 835 273,618 Unamortized issuance costs of borrowings ............ ........................... 61 3 356 553,390 Miscellaneous .......................................................... 340 645 392,352 1 233836 1,219,360 5119 413,225 $108,202,878 Balance Sheets 185 19jU 1989 Liabilities, Capital and Reserves BORROWINGS (see Summary Statements of Borrowings) Short-term ...........................................................219 $ 5,164,369 Medium- and long-term ................................................ . 1 7 75,084,639 P.F .'1 113 80,249,008 PAYABLE FOR CASH COLLATERAL RECEIVED . ..................................... 4 81 2,753,843 AMOUNTS REQUIRED TO MAINTAIN VALUE OF CURRENCY HOLDINGS-Note A Amounts due ... .................................................. .I 64,541 Amounts deterred ......... .. ...... ................... ....... .. 45., (1:n 349,697 :,'. ), 41 4,238 OTHER LIABILITIES Accrued charges on borrowings ..........4......................4I2........ 2,382,285 Net payable for currency swaps-Note D ............ ............................ 1 b' .3 1,256,811 Payable for investment securities purchased . ..................................... 1 407 ;124 1,384,084 Due to International Development Association and Debt Reduction Facility for IDA-Only Countries-Note G ............ ..... . . .. 44 511' 716,626 Accounts payable and other liabilities .... I 4"11' 631,969 . ;cl(ls 6,371,775 ACCUMULATED PROVISION FOR LOAN LOSSES -Note C .......................... ... I 2u ) 800,000 CAPITAL AND RESERVES Capital stock (see Statement of Subscriptions to Capital Stock and Voting Power and Note A) Authorized capital (1,420,500 shares- 1990 and 1989) Subscribed capital (1,038,357 shares-1990, 958.827 shares-1989) ....... I22 n K 115,668,095 Less uncalled portion ot subscriptions .....................................1 It6 4 4Ž 4 107,076,245 tJ,'il'i.'9_ 3 8,591,850 Payments on account of pending subscriptions (see Statement ot Subscriptions to Capital Stock and Voting Power) ................................................. . t It1 60,097 Special reserve-Note E ................................................... x ' 8 292,538 General reserve (see Statements of Changes in General Reserve) Accumulated net income ................... . . . . . .......... .... i 6 4 8,700,331 Cumulative translation adjustments .................. ........................ t., (1,124,689) t% '.45 .4 7,575,642 Accumulated net income-unallocated (see Statements of Accumulated Net Income-Unallocated)..:.... .......... ..... . . . ,,,,,,........ 45 8 r0 1,093,887 i1i1.41B 225 $108,202,878 See Notes to Financial Statements. 186 IBRD Financial Statements Statements of Income For the fiscal years ended June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars Income Income from loans: Interest ... . . . 6.6' I Ir, '.:' Commitment charge: 1 g - .I Income from investmeri:- I1,i, I- 1IA1II 8 I -,i Other income ..... . I I : Total income . il. l X -: Expenses Borrowing expenses: Interest on borrowino:-1i l I: F' n . . - I l Amortization of issu -,:,, - l ,r- 1,r,, r.,,c..,,,, :, I lr.1 ' h. ICC'4T Administrative expenset- I-, Inr H -lrj4.1H1' Ir.,; Provision for loan losst_. -i .lI:1. e,. r-.u Other expenses ..... Total expenses . : 6;i 4 ii-l Operating Income . a Z. ,r 1 XI u 4 Contributions to special 1. '' Il I a. n I r.. Cumulative effect of ch rx- : ur : jiriu n; ,ric:f-1J,.- I 1 .0l: Net Income ........11 l [1 ; Statements of Accumulated Net Income- Unallocated For the fiscal years ended June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars t 9'JIJ 1989 Accumulated net income-unallocated at beginning of fiscal year ..... ... ..... . i4 , $1,004,230 Allocation to general reserve-Note E ............ ........ (1,004,230) Transfer to Debt Reduction Facility for IDA-Only Countries-Note G . . I.1... I ILILI I U Net income lor fiscal year.. '4...... ..... II 1,093,887 Accumulated net income-unallocated at end of fiscal year ........................ . I $ 1,093,887 Statements of Changes in General Reserve For the fiscal years ended June 30, 1990 and June 30. 1989 Expressed in thousands of US dollars 1|4ji'l 1989 Accumulated Net Income Balance at beginning of fiscal year . .. . . . . .. . J 1 $ 7,696,101 Allocation from accumulated net income-unallocated ...... .........8.. 7 1,004,230 .6i'4 ',le 8,700,331 Cumulative Translation Adjustments Balance at beginning of fiscal year ......... ............................1 1 4 i,ewl (463,758) Translation adjustments for fiscal year ...................................... . t_," I 14 (660,931) t4 -4, F,, (1,124.689) Balance at End of Fiscal Year .........4.. $ 7,575,642 See Notes to Financial Statements. Statements of Cash Flows 187 Statements of Cash Flows For the fiscal years ended June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars Cash flows from lending and development ,i ii,n, Loan disbursements 1 4............... -dl I till 1W .-e Loan principal repayments ......... t. Loan principal prepayments .........'Jl l .I Sales of loans ................. Transfer to Special Facility for Sub-Sahnrir . A In. 1dI- l - 11.: i Net cash used in lending and developmn -' n-, !. j1'J 1?1i . g Cash flows from financing activities: Medium- and long-term borrowings: New issues .................. i Retirements i l.................. I J) f! blol 11 <: Net cash flow from short-term borrowing: I t i'4 AiY i Net cash flow from currency swaps . . 4j.t.I4i I 1'fl I Net cash flow from capital transactions ''It t.6 -,. .1 ' ' . Net cash provided by financing activi",- I riI 4,jt. ' I-,I_ Cash flows from operating activities: Net income 1.................... l114$ *?3C' 1 '. Adjustments to reconcile net income to -'-i r-,.n ri, n. i:r- I io activities: Depreciation and amortization 91..... 65l b;- Provision for loan losses ......... 451 AL ml Changes in assets and liabilities: Increase in accrued income on loar :md ,r.- v-I: KS'1491 i - I i Decrease (increase) in miscellaneou: J::-r: I.I.'' ri fI Increase in accrued charges on borroAir,,v: 11 . 6 1 r l (Decrease) increase in accounts pa;t,i,- ir,4 :,:r I 3t'ilii- : I.t 6.31 1,'. 'I Net cash provided by operating . 1 F..4 i Effect of exchange rate changes on cash art r,i;, 'iw :rrtri 1 .5 ?iIi9 6:3. I Net decrease in cash and liquid investment: 16 l 2 vj2, Im IA, Cash and liquid investments at beginning ui n: 3i ¾ 19360.., ni i . I4 Cash and liquid investments at end of fiscal ,.ir j17 244 55 1 i 1.6I' Composed of: Investments .4...2............... f. 16 G"45 I l4 ItS ' Unrestricted currencies .1.1.5...... . . l,. 47. Net receivable (payable) for investment r&:riIi t w poii ri1 n; &iji 114 2:. i.I Ž44585); 1 361' 7--l ~ Supplemental disclosure: Increase (decrease) resulting from excharnr- n'l iIiiijj,Iii Loans outstanding ......... . . . . i 20 20 45d i, S -, 1-1. Borrowings .4.3.4.2.3.4. .M. . . . .u . . . . r . I l l t 9'il Currency swaps .P.A..... F.r,.1r. In .- F ... See Notes to Financial Statements. 188 IBRD Financial Statements Summary Statement of Loans June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars June 30, 1990 Loans approved but Percentage of not yet Undisbursed Loans total loans Borrower or guarantora Total loans effectiveb loans' outstanding outstanding Algeria . .......................... $ 2,583,703 $ 220.500 $1,296,897 $1,066,306 1.20 Argentinad ............ .............. 3,483,410 - 1,172,630 2,310,780 2.59 Australiaa ................1.......... 7,405 - - 7,405 0.01 Bahamas, The ........................ 32,968 - 16,591 16,377 0.02 Bahamas, Barbados, Grenada, Guyana, Jamaica, Trinidad, Tobago, and United Kingdome .... 49,974 20.000 - 29,974 0.03 Bangladesh .......................... 60,768 - - 60,768 0.07 Barbados .......................... 47,593 - 13,294 34,299 0.04 Belize ........................... 26,975 - 11,606 15,369 0.02 Bolivia' ........................... 188,684 - - 188,684 0.21 Botswana .......................... 182,894 - 32,972 149,922 0.17 Brazil ........................... 13,447,004 1,702,000 3,614,559 8,130,445 9.13 Cameroon ........................... 1,130,047 42,500 496,217 591,330 0.66 Chile ........................... 2,311,983 130.000 519,384 1,662,599 1.87 China .... ....................... 5,201,079 - 2,662,541 2,538,538 2.85 Colombia .......................... 4,821,504 237,200 851,344 3,732,960 4.19 Congo, People's Republic of the ...... ..... 161,402 - 6,199 155,203 0.17 Costa Rica .......................... 539,943 60,000 83,476 396,467 0.45 CWte d'lvoirel ........................ 2,205,425 80,000 394,429 1,730,996 1.94 Cote d'lvoire, Ghana, and Togo' ........... 7,569 - - 7,569 0.01 Cote d'lvoire and Senegalh ........ ....... 19,933 15,000 566 4,367 Cyprus ........................... 133,143 25,000 77,608 30,535 0.03 Dominican Republic ........... ........ 348,490 - 135,483 213,007 0.24 Ecuador ........................... 995,465 50,000 193,772 751,693 0.84 Egypt, Arab Republic of ......... ........ 2,251,261 266,500 568,770 1,415,991 1.59 El Salvador ......................... 190,694 - 56,774 133,920 0.15 Ethiopia ........................... 28,264 - - 28,264 0.03 Fiji ................. ........... 97,466 16,200 15,883 65,383 0.07 Gabon ........................... 93,889 - 35,152 58,737 0.07 Ghana ........................... 109,277 - - 109,277 0.12 Greece ........................... 30,016 - - 30,016 0.03 Guatemala .................... ..... 467,539 61,500 137,865 268,174 0.30 Guinea ........................... 31,362 - - 31,362 0.04 Guyana ............................ 60,707 - - 60,707 0.07 Honduras ........................... 533,040 25,000 48,038 460,002 0.52 Hungary ........................... 2,284,617 366,000 638.693 1,279,924 1.44 Iceland ........................... 9,577 - - 9,577 0.01 India ............................ 15,122,547 948,000 7,127,539 7,047,008 7.91 Indonesia ................. ......... 13,102,537 975,000 3,341,440 8,786,097 9.87 Iran, Islamic Republic of ......... ....... 116,416 - - 116,416 0.13 Iraq ............................ 45,854 - - 45,854 0.05 Ireland ........................... 9,203 - - 9,203 0.01 Jamaica ........................... 752,946 - 106,530 646,416 0.73 Japan ........................... 7.706 - - 7,706 0.01 Jordan ........................... 795,110 25,000 286,082 484,028 0.54 Kenya' ........................... 865,068 - 12,147 852,921 0.96 Kenya, Tanzania, and Uganda9 ...... ...... 2.291 - - 2,291 Korea, Republic of ............. ........ 3,569,642 110,600 368,196 3,090,846 3.47 Lebanon ............................ 33.478 - - 33,478 0.04 Liberia ........................... 132,859 - - 132,859 0.15 Madagascar .......................... 26,418 - 26,418 0.03 Statement of Loans 189 June 30, 1990 Loans approved but Percentage of not yet Undisbursed Loans total loans Borrower or guarantora Total loans effective' loansc outstanding outstanding Malawi ............................. $ 92,550 $ - $ 3,525 $ 89,025 0,10 Malaysia .......................... 1,629,133 - 723,817 905,316 1.02 Mauritania ................. ......... 55,099 - - 55,099 0.06 Mauritius ........................... 210,555 30,000 12,365 168,190 0.19 Mexico .......................... 13,548,537 492,000 2,916,622 10,139,915 11.39 Morocco .......................... 4,128,237 232,000 1,094,767 2,801,470 3.15 Nicaragua .......................... 221,755 - - 221,755 0.25 Nigeria ........................... 5,033,913 560,800 1,408,223 3,064,890 3.44 Oman .......................... 102,124 - 52,975 49,149 0.06 Pakistan ............................ 3,405,176 617,500 1,191,659 1.596,017 1.79 Panama .......................... 503,241 - 49,722 453,519 0.51 Papua New Guineaa ............ ........ 333,196 67.200 93,264 172,732 0.19 Paraguay ........................... 310,259 - 39,519 270,740 0.30 Peru .......................... 1,308,043 - 202,881 1,105,162 1.24 Philippines ................. ......... 5,205,713 206.800 1,399,356 3,599,557 4.04 Poland .......................... 780,962 421.000 339,956 20,006 0.02 Portugal ............................ 388,294 - 155,152 233,142 0.26 St. Lucia .......................... 2,500 2,500 - - - St. Vincent and the Grenadines ....... ..... 1,400 - 1,400 - - Senegal ............................ 91,786 - 9 91,777 0.10 Seychelles ................. ......... 5,976 - 1,186 4,790 0.01 Sierra Leone ......................... 9,814 - - 9,814 0.01 Singapore .......................... 11,381 - - 11,381 0.01 Spain .............................. 4,311 - - 4,311 Sri Lanka .......................... 80,250 - 101 80,149 0.09 Sudan ............................. 22,941 - - 22,941 0.03 Swaziland .......................... 36,519 - 399 36,120 0.04 Syrian Arab Republic ............ ....... 442,576 - - 442,576 0.50 Tanzaniai ............................ 238,073 - - 238,073 0.27 Thailand .......................... 2,604,483 50,000 370,766 2,183,717 2.45 Togo .............................. 636 - - 636 Trinidad and Tobago ............ ....... 63,937 4,000 32,000 27,937 0.03 Tunisia .......................... 1,854,514 101,000 521,512 1,232,002 1.38 Turkey ............................. 8,687,222 338,200 2,507,548 5,841,474 6.56 Uganda' ........................... 33,812 - - 33,812 0.04 Uruguay .......................... 728,283 62,500 345,510 320,273 0.36 Venezuela .......................... 1,440,218 680,000 354,974 405,244 0.46 Yugoslavia ................. ......... 3,435,965 830,000 360,343 2,245,622 2.52 Zaire .............................. 101,157 - 58,024 43,133 0.05 Zambia .......................... 510,233 - 4,418 505,815 0.57 Zimbabwe .......................... 621,969 130,800 138,568 352,601 0.40 Subtotal members** ........... ....... 137,043,885 10,202,300 38,703,234 88,138,351 Intemational Finance Corporation ...... .... 1,221,106 - 311,813 909,293 1.02 Otherk ........................... . 4,790 - - 4,790 0.01 Toall-juri- 30. 1990" . . "Su 2163 8rl ¶$u I 2l I-.2,! $3s' os 1u0 4 02,' 054 ,4 r(I( ijf' Total-June 30, 1989 .................. $127,918,200 $14,971,500 $35,004,855 $77,941,845 Less than 0o005 percent. * May differ from the sum of individual figures shown because of rounding. (continued) 190 IBRD Financial Statements Summary Statement of Loans (continued) June 30, 1990 and June 30, 1989 NOTES d. One loan with an outstanding balance equivalent to $1,939,000 a. In some instances loans were made, with the guarantee ot a member , ($2,879001989) is shown under Bolivia (Guarantor) but is also territories which at the time were included in that member's membership but guaranteed by Argentina. which subsequently became independent and members of the IBRD. In order e. Loans made to the Caribbean Development Bank tor the benetit of the to avoid double counting, liabilities for these loans are shown under the territories of the members listed (in the case of the United Kingdom, the name of the original member (whose guarantee continues unaftected). These territories are those of its Associated States and Dependencies in the loans are shown below together with an indication of the member under Caribbean region). The members will be severally liable as guarantors to the whose name they are listed. extent of subloans made in their territories. f. One loan with an outstanding balance equivalent to $10,438,000 GUARANTOR US$ thousands ($10,346,000-1989) is shown under Cote d'lvoire (Guarantor) but is also Borrower 1 '49J i partially guaranteed by Burkina Faso. AUSTRALi4 g. Members are jointly and severally liable. Papua -A u,r lr;. L. 4ui i8 B. h. Loan made to the West Atrican Development Bank for the benefit of the territories of the members listed. The members will be severally liable as b. Loan agreements totaling $4,145,700,000 ($6,279,900,000--1989) guarantors to the extent ot subloans made in their territories. have been signed, but the loans do not become effective and disbursements thereunder do not start until the borrowers and guarantors, it any, take i. Includes portions of loans made to corporations of the East Atrican certain actions and furnish certain documents to the IBRD. Loans totaling Community. $6,056,600,000 ($8,691,600,000-1989) have been approved by the IBRD j. Represents portions of loans made to corporations of the East African but the related agreements have not been signed. Community. c. Of the undisbursed balance, the IBRD has entered into irrevocable k. Represents loans made at a time when the authorities on Taiwan commitments to disburse $1,054,214,000 ($1,105,377,000-1989). represented China in the IBRD (prior to May 15, 1980). Statement of Loans 191 Summary of Currencies Repayable on Loans Outstanding Currency rC9I? 19i] Currency 13 911 '4. ? Australian dollars ....... $ I03 444 i 99'4,335 Luxembourg francs ...........1 69.108 i Austrian schillings 1 9....... Y' 3,6ir,285 Malaysian ringgit. 41 18 3 . 4 Belgian francs 0.......... 3 .Jo.59 ,;c,659 Mexican pesos .22 .. Brazilian cruzeiros O........ 10 467 Myanmar kyats 441 1 j 441 : Canadian dollars ........19.518. 1,651 ,174 Netherlands guilders .......... . 174 .S4 14 -; Danish kroner ....... . 64.Cel. 49,263 Norwegian kroner ..... ....... 6 4 4 d4 Deutsche mark 1..3.... 1 9 7/9t 1 6K.,035 Portuguese escudos .... 1(4 1. IAli European currency units ... 534.2t9 4 ;9,904 Pounds sterling ............. 30 4 --.I'1'' Finnish markkaa ........ 53.925 46,206 Rials Omani ................ 6'8 French francs j1.......... 1.181 26 .,158 Saudi Arabian riyals .......... 9.3.. C'11') 1 8? Ghanaian cedis ......... 4 5 Singapore dollars .4.339 8 Greek drachmas ........ 572 South African rand ........... s.9 761 4A 1..I Icelandic kronur 9........ 169 1,019 Spanish pesetas ............. r0.948.8 14 Indian rupees ..........2 4,644 Sudanese pounds ............19 Iranian rials 17........... tJ,51 _`i,805 Swedish kronor ...........9..38 1 4, Iraqi dinars 2............ .609 ,034 Swiss francs ............... 49 459 15. . 1I- Irish pounds 242........... 16 19,282 Tunisian dinars ............. 128 l1½ Italian lire ............ . ' 5h.;6 2')3,306 United Arab Emirates dirhams ... 66f.6 Japanese yen .s.......... ,1. 309 1,776 United States dollars .........% ½ 21I. 1'-4?.< Kuwaiti dinars .......... 194 186 21,027 Venezuelan bolivares ......... 11 04e 9 lt Lebanese pounds ....... 16 28 Libyan dinars .......... 101.722 9e,033 Loans outstanding ........... S.53912.434 7941 1It Maturity Structure of Loans* Period June 5) 1060 July 1,1990 to JunV I319Q1 }. 8.973,96. July 1,1991 to lui, u' 199j 8 4'3,076 July 1, 1992 to June SC. 199 u 943 274 July 1,1993 to Jur,e 31J 1994 ,t608.194 July 1,1994 to lure O 1995 tO 175 4*3 July 1,1995 to 'uri pi hIuII' 46428,079 July 1, 2000 to Jure 302005 2t.678.284 July 1, 2005 to Jiie 3') 1 1 8 76d,00 3 Undetermined-* J9 141 Total . .128 r67,41 Includes undisbursed balance of effective loans. Represents cancellations and other adjustments which have not been allocated to specific maturities. See Notes to Financial Statements. 192 IBRD Financial Statements Summary Statements of Borrowings June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars Medium- and Long-term Borrowings and Currency Swaps Medium- and long-term borrowings Currency swap agreemenets Weighted Weighted average Payable average cost Principal oulslandingb cost (A) (receivable) (return)% Nel currency ebligations !.1- , P1/, ;I) !,n-i!1;1 l1,,s1!; 14l4 141 4 144.1 1f1 14'4 1'; r5)'r, ia'? Australian dolars I . 'ii 4 ' I .I4l1r,. I * it144-13I i Austrian schailings .. . i 4 - - ir I.: "U Belgian francs . 541 1. - 4.1 U 44. ' 4'tf 1.1 rJrw. 4.vnr Canadian dollars 4 . -. - .. . .i - | ,, Danish kroner . 1'S 4. I' : , - , Iii :4t Deutsche mark -. 4 t- .: 14 r - - -. 141 I, - 1,1 14'! 11'41 1-1' IlIl :. 1:A Jr European currency unts .... . t " I J 4' iv 1i 4e:941 .14 $1 Finnish markkaa . .4 -- , . I. 4 '1 French francs . . i4- .-04 4- li 1, 1 .4. 11 l I alu 14r. P, Hong Kong dllars . . ... ..- A 4.'Ii in 1 lIsian line I 47-' I .r 4 I i ., 6 II47 ,34 Japanese yen 142. i - ji - r II., 41 IX'1 Itik I., : 1,I434 ;l .1 Kuwaiti dinars . _ _ _ : u; Libyan dinars .. . '/ r - - Ulii3t Luxembourg francs . . -v 1 ' i -4 ' . Ml' I Nelherlands guilders. 4 r.J 4 4111 -, i ,; I r New Zealand dollars 44 4 114 4a i , ,, 4 Ir* u Norwegian kroner . --m i , - ,- 1- r.i Poundssterling . : .::: 4t ,i,I,I, Cu,t'. I Spanish peselas 41 . 1, ii h ',- ,i ,,St 1r.4 Swedish kronor Jt4, 'ii' l i ii 14r*41 I Ii'' I, 7J37 Swiss trancs.': , ' . - .. . .. . , - -. f ,'' -. United States dollars . i. Z4y ,i' I II - I - ) iu- I'1 .'i "1.4J 4.'1 1r4 J. V. J Ii. Jr " I4 Principal at face value . . . . I r -. - .r-- u Plus net unamortized d scounis and premiums. . .. i ' Total a. See Notes to Financial Statements-Note D. b. Includes zero coupon borrowings which have been recorded at their discounted values. The aggregate face amounts and discounted values of these borrowings (in US dollar equivalents) are: Aggregate Discounted face amount value Currency jtjrr .I5 ' la 1'l- 4 ii a Jr,- 3. 190ij% h .1%1 ' I Australian dollars ,. J :C. 094 1 21, l I 1111 t ra i 9I ''i .4i Canadian dollars . 1 6.I r.6 O. I tF liaWm. '.I 56 r O :&t. 'r..ut I Deutsche mark . 1.) rIll i 1. : ;b.t J 1Hi1i E9- UI 'i i Swiss francs .2i . 'aM' >- t'' .1 1 t .rog IS 41It Il LC Ii.1 United Slates dollars 24 t 1 0x1 I. - M r 1'ii 42_'SI')lt 4. '4 .'',II c. Includes Canadian dollars 200,000,000 (US equivalent $167,518,000-1989) of variable interest rate borrowings. d. Includes income and expense from interest rate swaps. The IBRD has entered into interest rate swap agreements with respect to notional principal amounts aggregating $3,424,800,000 ($2,076,400,000-1989), Swedish kronor 300,000,000 (US equivalent $49,751,000-1990, $45,059,000.-1989), Japaneseyen 5,000,000,000 (US equivalent $32,415,000-1990), and Deutsche mark 1,674,500,000 (US equivalent $1,006,552,000-01990). See Notes to Financial Statements-Note D. e. Includes Italian lire 200,000,000,000 (US equivalent $162,679,000-1990) of variable interest rate borrowings. f. Includes $288,720,000 ($853,550,000-1989) of variable rate borrowings and $174,652,000 ($177,408,000-1989) borrowed from the Interest Subsidy Fund. The Interest Subsidy Fund, which obtained its resources from voluntary contributions from member governments, was established to subsidize the interest payments to the IBRD on selected loans made to poorer developing countries. g. The weighted average cost of medium- and long-term borrowings outstanding at June 30, 1990, after adjustment for swap activities, was 7.36%. Statements of Borrowings 193 Maturity Structure of Medium- and Long-term Borrowings Outstanding Period June 3L; l9u July 1, 1990 to June 30, 1991 ....................................................,91 July 1, 1991 to June 30, 1992 . ........................ .................... &.419.108 July 1, 1992 to June 30, 1993 . .................................................... - ;,,)1.,3p July 1,1993 to June 30, 1994 ..... ............................................... i 226.32bo 5 July 1,1994 to June 30, 1995 .3..................................................... %E421 582 July 1,1995 to June 30, 2000 .................................................... i. 9 12I July 1, 2000 to June 30, 2005 . ................................................... 4 July 1, 2005 to June 30, 2010 ................ . ....................... ... July 1, 2010 to June 30, 2015 ..............................................1...... I1 1ll 374 Thereafter . .... .......... 1. .i2I Total ......... ... .......................................................... <,I 12 S,? Short-term Borrowings W~iuh,r1 Principal outstanding Ju,e 30 June 30, 194 1989 1'; Short-term Notes (US dollars) Principal outstanding at face value .....$2......................... $ 2b9O.,0 2,568,160 Less net unamortized discounts and premiums . .. ................... 29 427 40,304 Subtotal .............................................. '. ,527,856 Ot Fr Central Bank Facility (US dollars) 2..................... .59Y9 7L 2,599,820 841 Continuously Offered Payment-Rights (Swiss francs) 77 rl3.- 36,693 8 0u Total ........................................ ...... 5 27f.320 i,1164,369 8 24 See Notes to Financial Statements. 194 IBRD Financial Statements Statement of Subscriptions to Capital Stock and Voting Power June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars June 30, 1990 Subscriptions Voting power Percentage Number Percentage of Amounts paid Amounts subject of of Member Shares total Total amounts in (Note A) to call (Note A) votes total Afghanistan ................. 300 0.03 $ 36,191 $ 3,619 $ 32,572 550 0.05 Algeria .5,192 0.50 626,337 52,390 573,947 5,442 0.51 Angola .2,676 0.26 322,819 17,464 305,355 2,926 0.27 Antigua and Barbudaa .292 0.03 35,225 445 34,780 542 0.05 Argentina .10,052 0.97 1,212,623 103,803 1,108,820 10,302 0.96 Australia .21,610 2.08 2,606,922 171,430 2,435,492 21,860 2.03 Austria .11,063 1.07 1,334,585 80,728 1,253,857 11,313 1.05 Bahamas, The .1,071 0.10 129,200 5,432 123,768 1,321 0.12 Bahrain .619 0.06 74,673 3,910 70,763 869 0.08 Bangladesh .2,724 0.26 328,610 26,234 302,376 2,974 0.28 Barbados .948 0.09 114,362 4,496 109,866 1,198 0.11 Belgium .24,986 2.41 3,014,186 201,317 2,812,869 25,236 2.34 Belize .329 0.03 39,689 837 38,852 579 0.05 Benin .487 0.05 58,749 2,514 56,235 737 0.07 Bhutan .269 0.03 32,451 202 32,249 519 0.05 Bolivia .1.002 0.10 120,876 7,968 112,908 1,252 0.12 Botswana .615 0.06 74,191 1,987 72,204 865 0.08 Brazil .14,000 1.35 1,688,890 145,528 1,543,362 14,250 1.32 Burkina Faso .487 0.05 58,749 2,514 56,235 737 0.07 Burundi .402 0.04 48,495 1,831 46,664 652 0.06 Cameroona .857 0.08 103,384 6,575 96,809 1,107 0.10 Canada .31,543 3.04 3,805,190 286,974 3,518,216 31,793 2.95 Cape Verde .285 0.03 34,381 371 34,010 535 0.05 Central African Republica 484 0.05 58,387 2,482 55,905 734 0.07 Chad .484 0.05 58,387 2,482 55,905 734 0.07 Chile .6,931 0.67 836,121 49,568 786,553 7,181 0.67 China .34,971 3.37 4,218,727 299,479 3,919,248 35,221 3.27 Colombia .3,565 0.34 430,064 35,115 394,949 3,815 0.35 Comoros .282 0.03 34,019 339 33,680 532 0.05 Congo, People's Republic of the . . 520 0.05 62,730 2,868 59,862 770 0.07 Costa Ricaa .131 0.01 15,803 1,580 14,223 381 0.04 Cote d'lvoire .1,412 0.14 170,337 12,425 157,912 1,662 0.15 Cyprus .820 0.08 98,921 6,044 92,877 1,070 0.10 Denmark .10,251 0.99 1,236,629 74,610 1,162,019 10,501 0.98 Djiboutia .314 0.03 37,879 679 37,200 564 0.05 Dominica .283 0.03 34,140 350 33,790 533 0.05 Dominican Republic .1,174 0.11 141,625 9,793 131,832 1,424 0.13 Ecuador .1,555 0.15 187,587 13,822 173,765 1,805 0.17 Egypt, Arab Republic ofa . 3,989 0.38 481,213 39,627 441,586 4,239 0.39 El Salvador ................. 141 0.01 17,010 1,701 15,309 391 0.04 Subscriptions to Capital Stock and Votlng Power 195 June 30, 1990 Subscriptions Voting power Percentage Number Percentage of Amounts paid Amounts subject of of Member Shares total Total amounts in (Note A) to call (Note A) votes total Equatorial Guinea ............. 401 0.04 $ 48,375 $ 1,601 $ 46,774 651 0.06 Ethiopia ................... 549 0.05 66,229 3,170 63,059 799 0.07 Fiji ................... 641 0.06 77,327 3,537 73,790 891 0.08 Finland ................... 6,306 0.61 760,724 53,712 707,012 6,556 0.61 France ................... 55,227 5.32 6,662,309 469,082 6,193,227 55,477 5.15 Gabon ................... 554 0.05 66,832 3,556 63,276 804 0.07 Gambia, The ................ 305 0.03 36,794 660 36,134 555 0.05 Germany, Federal Republic of .... 72,399 6.97 8,733,852 542,920 8,190,932 72,649 6.75 Ghanaa .............. 856 0.08 103,264 10,326 92,938 1,106 0.10 Greece ................... 945 0.09 114,000 11,400 102,600 1,195 0.11 Grenadaa ................... 298 0.03 35,949 510 35,439 548 0.05 Guatemala .................. 1,123 0.11 135,473 9,251 126,222 1,373 0.13 Guinea ................... 725 0.07 87,460 5,037 82,423 975 0.09 Guinea-Bissau ............... 303 0.03 36,552 562 35,990 553 0.05 Guyanaa ................... 594 0.06 71,657 3,651 68,006 844 0.08 Haiti ................... 599 0.06 72,260 3,697 68,563 849 0.08 Honduras .... .............. 360 0.03 43,429 1,324 42,105 610 0.06 Hungary ................... 8,050 0.78 971,112 58,031 913,081 8,300 0.77 Iceland ................... 1,258 0.12 151,759 6,832 144,927 1,508 0.14 Indiaa ................... 31,692 3.05 3,823,164 286,310 3,536,854 31,942 2.97 Indonesia ................... 11,036 1.06 1,331,328 95,999 1,235,329 11,286 1.05 Iran, Islamic Republic of ........ 13,293 1.28 1,603,601 138,221 1,465,380 13,543 1.26 Iraq ................... 2,808 0.27 338,743 27,093 311,650 3,058 0.28 Ireland ................... 5,271 0.51 635,867 37,077 598,790 5,521 0.51 Israel ................... 2,666 0.26 321,613 25,664 295,949 2,916 0.27 Italy ................... 25,140 2.42 3,032,764 263,705 2,769,059 25,390 2.36 Jamaicaa ................... 1,824 0.18 220,038 14,057 205,981 2,074 0.19 Japan ................... 93,770 9.03 11,311,943 703,451 10,608,492 94,020 8.74 Jordan ................... 1,388 0.13 167,441 7,811 159,630 1,638 0.15 Kampuchea, Democratic ........ 214 0.02 25,816 2,582 23,234 464 0.04 Kenya ................... 2,461 0.24 296,883 15,900 280,983 2,711 0.25 Kiribati ................... 261 0.03 31,486 . 133 31,353 511 0.05 Korea, Republic of ............ 9,372 0.90 1,130,591 67,899 1,062,692 9,622 0.89 Kuwait ................... 7,453 0.72 899,093 76,341 822,752 7,703 0.72 Lao People's Democratic Republic . 100 0.01 12,064 1,206 10,858 350 0.03 Lebanon ................... 340 0.03 41,016 1,086 39,930 590 0.05 Lesotho ................... 372 0.04 44,876 1,294 43,582 622 0.06 Liberia ................... 463 0.04 55,854 2,570 53,284 713 0.07 Libya ................... 4,400 0.42 530,794 44,508 486,286 4,650 0.43 Luxembourg ................. 1,217 0.12 146,813 8,224 138,589 1,467 0.14 (continued) 196 IBRD Financial Statements Statement of Subscriptions to Capital Stock and Voting Power (continued) June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars June 30, 1990 Subscriptions Voting power Percentage Number Percentage of Amounts paid Amounts subject of ot Member Shares total Total amounts in (Note A) to call (Note A) votes total Madagascar ................. 798 0.08 $ 96,267 $ 5,812 $ 90,455 1,048 0.10 Malawi .................... 614 0.06 74,070 3,860 70,210 864 0.08 Malaysia .................... 8,244 0.79 994,515 59,491 935,024 8,494 0.79 Maldives ................... 263 0.03 31,727 137 31,590 513 0.05 Malia .................... 652 0.06 78,654 4,263 74,391 902 0.08 Malta .................... 653 0.06 78,775 3,922 74,853 903 0.08 Mauritaniaa ................. 505 0.05 60,921 2,704 58,217 755 0.07 Mauritius ................... 697 0.07 84,083 4,739 79,344 947 0.09 Mexico .................... 10,553 1.02 1,273,061 109,120 1,163,941 10,803 1.00 Morocco .............. .... 2,791 0.27 336,692 26,939 309,753 3,041 0.28 Mozambique ................ 522 0.05 62,971 3,281 59,690 772 0.07 Myanmar ................... 1,756 0.17 211,835 13,443 198,392 2,006 0.19 Nepal .................... 543 0.05 65,505 3,106 62,399 793 0.07 Netherlands ................. 35,503 3.42 4,282,904 264,798 4,018,105 35,753 3.32 New Zealand ................ 4,696 0.45 566,502 42,708 523,794 4,946 0.46 Nicaragua .................. 341 0.03 41,137 1,098 40,039 591 0.05 Nigera .................... 478 0.05 57,664 2,419 55,245 728 0.07 Nigeria .................... 7,102 0.68 856,750 72,610 784,140 7,352 0.68 Norwaya .................... 8,287 0.80 999,702 66,443 933,259 8,537 0.79 Oman .................... 876 0.08 105,676 6,626 99,050 1,126 0.10 Pakistana ................... 6,061 0.58 731,169 55,893 675,276 6,311 0.59 Panama .................... 216 0.02 26,057 2,606 23,451 466 0.04 Papua New Guinea ............ 726 0.07 87,581 5,049 82,532 976 0.09 Paraguay ................... 690 0.07 83,238 4,661 78,577 940 0.09 Peru .................... 2,992 0.29 360,940 29,050 331,890 3,242 0.30 Philippines .................. 3,841 0.37 463,359 38,029 425,330 4,091 0.38 Poland .................... 6,122 0.59 738,527 62,275 676,252 6,372 0.59 Portugal .................... 5,460 0.53 658,667 38,503 620,164 5,710 0.53 Qatar .................... 1,096 0.11 132,216 8,965 123,251 1,346 0.13 Romania ................... 2,251 0.22 271,549 24,139 247,410 2,501 0.23 Rwanda .................... 587 0.06 70,813 3,574 67,239 837 0.08 St. Kitts and Nevis ............ 275 0.03 33,175 302 32,873 525 0.05 St. Lucia ................... 552 0.05 66,591 1,512 65,079 802 0.07 St. Vincent and the Grenadines ... 278 0.03 33,537 297 33,240 . 528 0.05 Sao Tome and Principe ......... 278 0.03 33,537 297 33,240 528 0.05 Saudi Arabia ................ 25,140 2.42 3,032,764 263,830 2,768,934 25,390 2.36 Senegala .................... 1,163 0.11 140,299 9,681 130,618 1,413 0.13 Seychelles .................. 263 0.03 31,727 154 31,573 513 0.05 Sierra Leone ................ 403 0.04 48,616 1,841 46,775 653 0.06 Singapore .................. 320 0.03 38,603 3,860 34,743 570 0.05 Solomon Islands ............. 288 0.03 34,743 403 34,340 538 0.05 Somalia .................... 552 0.05 66,591 3,322 63,269 802 0.07 South Africa ................. 13,462 1.30 1,623,988 98,821 1,525,167 13,712 1.27 Spain .................... 16,758 1.61 2,021,601 150,543 1,871,058 17,008 1.58 Sri Lanka ................... 2,812 0.27 339,226 22,489 316,737 3,062 0.28 Subscriptions to Capital Stock and Voting Power 197 June 30, 1990 Subscriptions Voting power Percentage Number Percentage of Amounts paid Amounts subject of of Member Shares total Total amounts in (Note A) to call (Note A) votes total Sudan ................... 850 0.08 $ 102,540 $ 7,238 $ 95,302 1,100 0.10 Suriname ................... 412 0.04 49,702 1,954 47,748 662 0.06 Swaziland .................. 440 0.04 53,079 2,015 51,064 690 0.06 Sweden ................... 14,974 1.44 1,806,388 110,202 1,696,186 15,224 1.41 Syrian Arab Republic ....... ... 1,236 0.12 149,105 10.458 138,647 1,486 0.14 Tanzaniaa ................... 727 0.07 87,702 7,942 79,760 977 0.09 Thailand ................... 3,563 0.34 429,823 35,114 394,709 3,813 0.35 Togo .................... 620 0.06 74,794 3,924 70,870 870 0.08 Tonga ................... 277 0.03 33,416 287 33,129 527 0.05 Trinidad and Tobago ........... 1,495 0.14 180,349 13,406 166,943 1,745 0.16 Tunisia ................... 719 0.07 86,737 5,658 81,079 969 0.09 Turkey ................... 7,379 0.71 890,166 52,947 837,219 7,629 0.71 Uganda ................... 617 0.06 74,432 4,376 70,056 867 0.08 United Arab Emirates ... ...... 2,385 0.23 287,714 22,643 265,071 2,635 0.24 United Kingdom .............. 69,397 6.68 8,371,707 539,526 7,832,181 69,647 6.47 United States ................ 162,523 15.65 19,605,962 1,627,623 17,978,339 162,773 15.12 Uruguay .................... 1,578 0.15 190,362 14,084 176,278 1,828 0.17 Vanuatua ................... 329 0.03 39,689 838 38,851 579 0.05 Venezuela .................. 11,427 1.10 1,378,496 118,452 1,260,044 11,677 1.08 Viet Nam ................... 543 0.05 65,505 6,550 58,955 793 0.07 Western Samoa .............. 298 0.03 35,949 510 35,439 548 0.05 Yemen Arab Republicb ......... 573 0.06 69,124 3,420 65,704 823 0.08 Yemen, People's Democratic Republic otb . .............. 918 0.09 110,743 7,084 103,659 1,168 0.11 Yugoslaviaa ................. 4,381 0.42 528,502 46,463 482,039 4,631 0.43 Zairea ................... 2,643 0.25 318,838 25,379 293,459 2,893 0.27 Zambia' ................... 1,577 0.15 190,241 15,556 174,685 1,827 0.17 Zimbabwe .................. 1,866 0.18 225,105 17,136 207,969 2,116 0.20 1rjl-Jurne i C 199o, 18395 I 100 rilh j.t 7,5, I iM E , I9 92 ,1 VE. 1a 4 4 1.0I6 3!57 11ij3000 Total-June 30, 1989 .......... 958,827 $115,668,095 $8,591,850 $107,076,245 996,577 a. Amounts aggregating the equivalent of $59,311,400 have been received from members on account of increases in subscriptions which are in the process of completion: Antigua and Barbuda $57,000; Cameroon $2,000; Central African Republic $1,352,000; China $31,997,000; Costa Rica $532,000; Djibouti $4,000; Arab Republic of Egypt $9,450,000; Ghana $47,000; Grenada $759,000; Guyana $955,000; India $1,000; Jamaica $2,456,000; Mali $400; Mauritania $31,000; Niger $196,000; Norway $614,000; Pakistan $8,685,000; Senegal $130,000; Tanzania $107,000; Vanuatu $93,000; Yugoslavia $1,809,000; Zaire $15,000; and Zambia $19,000. b. See Notes to Financial Statements-Note A for the merger of the Yemen Arab Republic and the People's Democratic Republic of Yemen. * May differ from sum of individual figures shown because of rounding. See Notes to Financial Statements. 198 IBRD Financial Statements Notes to Financial Statements June 30, 1990 and June 30, 1989 Summary of Significant Accounting The IBRD does not reschedule interest or principal payments on its loans or and Related Policies participate in debt rescheduling agreements. It is the policy of the IBRD to place in nonaccrual status all loans made to or guaranteed by a member ot The IBRD's principal financial statements are prepared in conformity with the the IBRD it principal, interest, or other charges with respect to any such loan accounting principles generally accepted in the United States and with are overdue by more than six months, unless IBRD management determines International Accounting Standards. that the overdue amount will be collected in the immediate future. Interest and other charges on nonaccruing loans are included in income only to the Translation of Currencies extent that payments have actually been received by the IBRD. The IBRD begins to make provisions for losses on loans made to or guaranteed by a The IBRD's principal financial statements are expressed in terms of US member of the IBRD when the loans are placed in nonaccrual status. The dollars solely for the purpose of summarizing the IBRD's financial position Accumulated Provision for Loan Losses is periodically adjusted based on a and the results of its operations for the convenience of its members and review of the prevailing circumstances. Any such provisions are recorded as other interested parties. a reduction of income and will be used to meet actual losses on such loans. in Should such losses occur in amounts in excess of accumulated provisions The IBRD is an international organization which conducts its operations in (and ot the amoont ot the Special Reserve), the encess would be included the currencies of all of its members and Switzerland The IBRD's resources in the amon of t income. are derived from its capital, borrowings, and accumulated earnings in those m the determiation ot net Icome. various currencies. The IBRD has a number ot general policies aimed at minimizing exchange-rate risk in a multicurrency environment. The IBRD Investments matches its borrowing obligations in any one currency with assets in the same currency, as prescribed by its Articles ot Agreement, primarily by Investment securities are recorded at cost or amortized cost. Gains or losses holding or lending the proceeds of its borrowings in the same currencies in on sales of investments, measured by the difference between proceeds of which they are borrowed The currencies of borrowed funds include funds sales and cost (on a last-in, first-out basis), are recorded as an element of which have been swapped into other currencies. In addition, the IBRD income from investments. From time to time, the IBRD enters into forward periodically undertakes currency conversions to more closely match the contracts for the sale or purchase of investment securities; these transac- currencies underlying its reserves with those of the outstanding loans. With tions are recorded at the time of commitment. Financial futures and options respect to its other resources, the IBRD does not convert one currency into are valued at market, with both realized and unrealized gains and losses another except for small amounts required to meet certain obligations and included in income trom investments. operational needs. Due to the nature of the investments held by the IBRD and its policies Assets and liabilities are translated at market rates of exchange at the end governing the level and use of such investments, the IBRD classifies the of the period. Income and expenses are translated at the market rate at the investment porftolio as an element of liquidity in the Statements of Cash dates on which they are recognized or an average of the market rates of Flows. exchange in effect during each month. Translation adjustments, with the exception of those relating to capital subscriptions described in Note A, are Disposition of Income and General Reserve charged or credited to the General Reserve The IBRD has not declared or paid any dividends to its members. Valuation of Capital Stock Commencing in 1950, a portion or all of the accumulated net income has been allocated to the General Reserve. In the Articles of Agreement, the capital stock of the IBRD is expressed in terms at "US dollars ot the weight and tineness in effect on Juiy 1, 1944" From net income ot tiscal years 1964 to 1987, the IBRD transterred to the terms9of4"US dollars) Following the aboitionhot gold fines in efcmon Julo International Development Association the portion of each year's income (1944 dollars). Following the abolition at gold as a common denominator that was not needed for allocation to reserves or otherwise required to be of the monetary system and the repeal at the provision ot the US law retained in the IBRD's business and accordingly could have been prudently detining the par value at the US dollar in terms of gold, the pre-existing distriboted as dividends. The IBRD made similar transfers to the Special basis for translating 1944 dollars into current dollars or into any other n iltyou b-aaa n Ica ade Debt tion to IDA-Onl currncydisapeaed.On October 14, 1986, the Eoecutive Directors ot the Facilty ton Sub-Saharan Atnica and the Debt Reduction Facility tar IDA-Only currency disappeared, .n June30, 1987 the Executive a s the Countnes, which are administered by the International Development IBRD decided, effective June 30, 1987 until such time as the relevant Association, net ot tiscal years 1965 and 1989 net income, respectively. provisions of the Artcles of Agreement are amended, to interpret the words These transters were recorded as a charge to Accumulated Net tecome- "US dollars of the weight and fineness in effect on July 1,1944" in Article Unallocated. No such transters were made trom net income ton the fiscal 11, Section 2(a) of theArticles of Agreement of the IBRD to mean the Special Unallocaed June 30 e 1988e Drawing Right (SDR) introduced by the International Monetary Fund as the year ended June 30, 1988. SDR was valued in terms of US dollars immediately before the introduction of the basket method ot valuing the SDR on July 1,1974, such value being Reclassifications $1.20635 for one SDR. Certain reclassifications of prior-year information have been made to Loans conform with the current year's presentation. All of the IBRD's loans are made to or guaranteed by members, with the Note A-Capital Stock, Restricted Currencies, exception of loans to the International Finance Corporation. The principal and Maintenance of Value amounts of loans are repayable in the currencies lent. For loans negotiated since July 1980 (and for portions of certain earlier loans), the repayment oblgaton ofborowrs n vrius urrncesaedeerine onth bais Capital Stock: At June 30, 1990, the IBRD's capital comprised obligations at borrowers in various currencies are determined on the basis 1,420,500 j1,420,500-1989( authorized shares, ot which 1,038,357 of a currency pooling system, which is designed to equalize exchange-rate (958,827-1989) shares had been subscribed. Each share has a par value risks among borrowers. Interest on loans is accrued in the currencies lent. at58,000 1974 shared at the rate of $1 20635 per 1974 SDR Of the Incremental direct costs associated with originating loans are expensed as subscribed capital, $8,919,923,000 ($8,591,850,000-1989) has been paid incurred as such amounts are considered immaterial. in, and the remaining $116,342,274,000 ($107,076,245,000-1989) is Notes to Financial Statements 199 subject to call only when required to meet the obligations of the IBRD US$ thousands created by bortowing or guaranteeing loans. As to $100,209,757,000 ($92,534,476,000-1989) the restriction on calls is imposed by the Artic es June30 of Agreement and as to $16,132,517,000 ($14,541,769,000-1989) by Currency 1'6'4I 1989 resolutions of the Board of Governors. On May 22, 1990, the Yemen Arab Republic and the People's Democratic Deutsche mark r; (it .',] i 899,298 Republic of Yemen merged in a single state, the Republic of Yemen. Japanese yen - Un 2,964,601 Effective July 13, 1990, the Republic of Yemen is substituted for the Yemen Pounds sterling 16r. U 1,''.1 2,226,680 Arab Republic and the People's Democratic Republic of Yemen in the BRD's United States d -mr. t5 '0! 9.881,609 records as being a single member. As of that date, capital subscriptions and Other currenciet 1 .- e 3,456,691 voting power were adjusted to reflect the merger. The Republic of Yemen has Total . .t. ..4. :.16 7 -4 119,428,879 a subscription of 1,241 shares of capital stock of the IBRD, with a voting . . ..... * ' power of 1,491 votes. Restricted Currencies: The portion of capital subscriptions paid As part of its overali portolio management strategy, the IBRD is party to in to the IBRD is divided into two parts: (1) $891,992,000 financia instruments with off-balance-sheet risk, including futures, forward ($859,185,000-1989) initially paid in gold or US dol ars and (2) contracts, covered forward contracts, options, and short sales Futures and $8,027,931,000 ($7,732,665,000-1989) paid in cash or noninterest- forward contracts are contracts for delayed delivery of securities or money bearing demand obligations denominated either in the currencies of the market instruments in which the seller agrees to make delivery at a specified respective members or in US dollars. Of this second portion, an amount of future date of a specified instrument, at a specified price or yield At June 30, $506,033,000 ($513,570,000_1989) was subsequently repurchased by 1990, the total contract value of these futures contracts was $3,403,220,000. members with US dollars. The amounts mentioned in (1) above which are The IBRD has minimal exposure tc credit loss on futures contracts due to paid in gold or US dollars and the amounts subsequently repurchased with potential nonpertormance of counterparties since changes in the market US dollars are freely usable by the IBRD in any of its operations. The value of futures contracts on any given business day are settled in cash on remaining amounts paid in the currencies of the members or in US dollar the followng business day. The total contract value of forward contracts at denominated notes, referred to as restricted currencies, are usable by the June 30, 1990 was $761,000,000 and the IBRD's exposure to credit loss in IBRD in its lending operations only with the consent of the respective the event of nonperformance by counterparties was $405,000. members. The equivalent of $4,804,826,000 ($4,362,213,000-1989) has Covered forwards are agreements in which cash in one currency is been used for lending purposes, with such consent. converted into a different currency and, simultaneously, a forward exchange Maintenance oit Value: Article lI, Sectron 9 of the Articles ot Agreement agreement is executed with either the same or different counterparty provides for maintenance of value, as of the time of subscription, of such providing for a schedule of future exchanges of the two currencies in order restricted currencies, requiring (1) the member to make additional payments to recover the currency converted. At June 30, 1990 there were no to the IBRD in the event that the par value of its currency is reduced or the outstanding covered forward agreements. foreign exchange value of its currency has, in the opinion of the IBRD, Options are contracts that allow the holder of the option to purchase or sell depreciated to a significant extent in its territories and (2) the IBRD to a financia. instrument at a specified price and within a specified period of reimburse the member in the event that the par value of its currency is time from the seller of the option. As a seller of options, the IBRD receives increased. a premium at the outset and then bears the risk of an unfavorable change Since currencies no longer have par values, maintenance of value in the price of the financial instrument underlying the option At June 30, amounts are determined by measuring the foreign exchange value of a 1990 there were no outstanding options sold. member's currency against the standard of value of IBRD capital based on Short sales are sales of securities not held in the IBRD's portfolio at the time the 1974 SDB. Members are required to make payments to the IBRD if of the sale. The IBRD must then purchase the security at a later date and their currencies depreciate significantly relative to the standard of value. bears the risk that the market value of the security will move adversely Furthermore, the Executive Directors decided to adopt a policy of between the time of the sale and the time the security must be delivered. The reimbursing members whose currencies appreciate significantly in terms total contract amount of short sales at June 30, 1990 was $146,592,000. Of the standard of value. For both on- and off-balance-sheet securities, the IBRD limits trading to a With respect to restricted currencies out on loan, maintenance of value list of authorized dealers and counterparties. Strict credit limits have been obligations become effective only as such currencies are recovered by the estab ished for each counterparty by type of instrument and maturity IBRD. The maintenance of value amounts relating to restricted currencies out category. On loan are included in Amounts Required to Maintair Value of Currency Holdings-Amounts DeterredV Income from investments includes a net loss of $108,174,000 ($95,781,000-1 989) resulting from sales of investments. The annualized rate of return on the average investments held during the fiscal year ended Note B-Investments and Cash Collateral June 30, 1990, including net losses from sales of investments, was 8.37% Invested (8 20%-1989). The market value of investment securities and invested cash collater- al received on loaned securities was $21,355,142,000 ($22,220,084,000- Note C-Loans, Cofinancing, and Guarantees 1989), compared with a cost or amortized cost of $21,368,542,000 ($22,182,722,000-1989). Obligations of the United States Government and Loans: At June 30, 1990, principal installments of $225,000 and interest other official entides having a cost or amortized cost of $292,538,000 and other charges of $197,000 payable to the IBRD on loans other than ($292,538,000-1989) and a market value of $296,976,000 those referred to in the following paragraph were overdue by more than three ($302,211,000-1989), set aside in respect of the Special Reserve, as months. The aggregate principal amount outstanding on these loans was described in Note E, are included under this heading. The currency composition $5,158,000. The aggregate principal amount outstanding on all loans to any of the investment portfolio is as follows: (continued) 200 IBRD Financial Statements Notes to Financial Statements (contrned] June 30, 1990 and June 30, 1989 borrowers, other than those referred to in the following paragraph, with any The IBRD has parially guaranteed the timely payment of interest amounts on one loan overdue by more than three months was $213,007,000 certain loans that have been sold. At June 30, 1990 these guarantees, At June 30, 1990, the loans made to or guaranteed by centain member approximating $13,478,000 ($15,241,000-1989), were subject to call. countries with an aggregate principal balance outstanding ot Statutory Lending Limit: Under the Articles, the total amount $2,871,500,000 ($3,193,392,000-1989), o which $932,165,000 outstanding ot guarantees, participations in loans, and direct loans made by ($626,092,000 -1989) was overdue, were in nonaccrual status. As of such the IBRD may not be increased to an amount exceeding 100% of the sum date, overdue interest and other charges in respect of these loans totaled of subscribed capital, reseNes, and surplus. The IBRD's Executive Directors $824,835,000 ($683,721,000-1989). If these loans had not been in have issued guidelines pursuant to which all guarantees issued by the IBRD nonaccrual status, income from loans for the fiscal year ended June 30, will be counted towards this limit at the time they first become callable, 1990, net of cash collected of $10,200,000, would have been $248,406,000 irrespective of the likelihood of an actual call. As of June 30, 1990, the total ($262,670,000-1989) higher. A summary of borrowers in nonaccrual amount of callable guarantees and disbursed and outstanding participations status follows: in loans and direct loans was approximately $89,065,912,000 or 65% US$ thousands (62%-1989) of the sum of subscribed capital, reserves and surplus. June 30, 1990 Note D-Borrowings and Swaps Fiscal year 1990 The IBRD has entered into currency swaps in which proceeds of a borrowing Principal income are converted into a different currency and, simultaneously, a forward Principal and charges not Nonaccrual exchange agreement is executed providing tor a schedule of future Borrower outstanding overdue accrued since exchanges of the two currencies in order to recover the currency converted. The combination of a borrowing and a currency swap produces the financial Liberia . $ 132,859 $ 88,840 $ 12,045 June 1987 equivalent of substituting a borrowing in the currency obtained in the initial Nicaragua. . . 221,755 189,690 19,584 December conversion for the original borrowing. The IBRD also undertakes interest rate 1984 swaps, which transform a fixed-rate payment obligation in a particular Panama . . . 453,519 203,210 33,294 May 1988 currency into a floating-rate obligation in that currency and vice-versa. The Peru . . 1,105,162 760,360 111,174 August 1987 average cost of borrowings outstanding, including shont-term borrow- Sierra Leoxe . 9,014 0,200 71 Aunuot 1907 ilgs, during the fiscat year ended JLne 30, 1990 was 7.37% (7.38%- Sierra Leone . 9,814 6,280 715 August 1987 1989), retlecting a ireduction in interest expense of $337,770,000 Syrian Arab ($305,462,000-1989) as a result of swaps. Republic. 442,576 252,620 33,708 February 1987 At June 30, 1990, the IBRD had gross receivables from currency swaps at Zambia . . . . 505,815 256,000 37,886 August 1987 a book value of $13,060,831,000 and gross payables trom currency swaps at a book value of $14,241,419,000. In addition, the IBRD had interest rate $2,871,500 $1,757,000 $248,406 swap contracts covering a notional principal amount of $4,513,518,000 on June 30, 1990. In June 1990, two borrowers paid off all of their arrears and therefore came The IBRD is exposed to credit loss in the event of nonpertormance by its out of nonaccrual status. As a result, income from loans was increased by counterpanties in an aggregate amount of $636,390,000 tor outstanding $123,600,000 tor the tiscal year ended June 30,1990. In addition, three currency swaps. and $28,445,000 tar outstanding interest rate swaps, borrowers in nonaccrual status made partial payments in fiscal year 1990. representing the estimated cost of replacing, at current market rates, all On July 2, 1990, loans made to or guaranteed by Guatemala were placed in those outstanding swaps for which the IBRD would incur a loss in replacing nonaccmual status. The aggregate principal balance outstanding on these the contracts. loans at June 30, 1990 was $268,174,000, of which $15,757,000 was The IBRD follows strict guidelines regarding the counterparies with whom overdue. As of June 30, 1990, overdue interest and other charges in respect TeR io swap greemes and the cteditlis ta eh Of these loans totaled $11,008,000. Income previously accrued but not yet It will enter Into swap agreements and establishes strict credit limits for each at teseloas toale $1,008000 Inomeprevousy acrue hu no y~ ot those counterparties. The IBRD does not anticipate nonperformance by received as of June 30, 1990, amounting to $14,594,000, was excluded anyof its counterparties. from income from loans tor the tiscal year ended June 30, 1990. The IBRD also enters into deterred rate setting agreements in conjunction An analysis of the changes ta the accumulated provision for losses on loans with some of its bond issues. These agreements allow the IBRD, through the made to or guaranteed by all member countries in nonaccrual status appears use of a financial intemediary, to fix the effective interest cost on the issues below* in several tranches over a specified period of time aflter the issue date of the US$ thousands respective bond. The potential credit loss to the IBRD trom nonperformance of the financial intermediary is limited to any accrued, but unsettled. profits. June 30 Periodic mark-to-market settlements on these agreements limit this risk, '9i0 1989 however. At June 30, 1990, the effective interest rate had been tixed on all tranches ot the deferred rate setting agreements and the IBRD had no Balance, beginning of fiscal year ., v i i' Ll: $500,000 exposure to credit loss on the agreements. Provision for loan losses .'... . 45 l, 357,607 Translation adjustments i.9.i4 (57,607) Note E-Reserves and Net Income Balance, end of fiscal year ..... . n ') 'Iv0 ) $800,000 In June 1990, the Executive Directors approved the allocation of Cofinancing and Guarantees: Th 880BRD has entered into agree- $750,000,000 of the net income earned in the fiscal year ended June 30, Cotlinancing adG rnte:The IBDhsetrdit ge- 1990 to the General Reserve, effective July 1990. ments for loans syndicated by other financial institutions either by a direct participation in, or a partial guarantee of, loans for the benefit of member The Special Reserve consists of loan commissions set aside pursuant to countries. The 1BRD's direct participations in syndicated loans are included Article IV, Section 6, of the Articles of Agreement which are to be held in in reported loan balances. Guarantees of $934,741,000 as of June 30, 1990 liquid assets. These assets may be used only for the purpose of meeting ($932,863,000-1989) are not included in reported loan balances. None of liabilities of the IBRD on its borrowings and guarantees in the event of these guarantees were subject to call at June 30, 1990. defaults on loans made, participated in, or guaranteed by the IBRD. The Notes to Financial Statements 201 Special Reserve assets comprise obligations of the United States Govern- The portion of this cost that reates to the IBRD and is included in ment and its instrumentalities and are included under the heading Administrative Expenses for the fiscal year ended June 30, 1990 is Investments. The allocation of such commissions to the Specia Reserve was $36,004,000 ($21 ,496,000-1989) The balance has been charged to the discontinued, in 1964, with respect to subsequent loans and no further International Development Association. additions are being made to it. The fo lowing table sets forth the Plan's funded status at June 30, 1990 and Note F-Expenses June 30, 1989: Administrative expenses are net of the management fee of $354,380,000 US$ thousands ($259,000,000-1989) charged to the International Development Associa- tion and of the service and support fees of $7,186,000 ($3,501,000-i 989) charged to the International Finance Corporation and $450.000 Actuarial present value of bhne'' ($415,000-1989) to the Multilateral Investment Guarantee Agency Con- tributions to special programs represent grants for agricultural research, the obligations control of onchocerciasis, and other developmental activities. Accumulated benefit ob igat,- Vested .Ir'. . 'x i -r, i Note G-Transfers to the International Nonvested it . , '. Development Association, the Special Facility Subtotal . .' , -. for Sub-Saharan Africa, and the Debt Reduction Eftect of projected compensv , ,t I:rm n - l- I, Facility for IDA-Only Countries Projected benotit ohigatii The IBRD has authorized transfers by way of grants to the International Plan assets at fair value - . - t i . Development Association totaling $2,640,582,000 ($2.510,706,000-1989) Plan assets in excess of proie t-r from net income for the fiscal years ended June 30, 1964 through June 30, obligation . . . . . . . 1987, Of these transfers, $846,502,000 remained payable at June 30, 1990 Remaining unrecognized net a it:A, e5 il A' Unrecognized net (gain) loss 1 l4. i I:'. a During the fiscal year ended June 30, 1986 the IBRD authorized a transfer Prepaid pension cost.. . by way of a grant to the Special Facility for Sub-Saharan Africa of = $150,000,000 from net income for the fiscal year ended June30, 1985. These funds were paid to the Special Facility for Sub-Saharan Africa in the The weighted-average discount rate used in determining the actuarial present fiscal year ended June 30, 1989. value of the projected benefit obligation was 7.812% (7.562%-1989). The effect of projected compensation levels was calculated based on a scale that In September 1989, the IBRD authorized a transfer by way of a grant to the provides for a decreasing rate of salary increase depending on age, beginning Debt Reduction Facility for IDA-Only Countries of $100,000,000 from net with 13% at age 20 and decreasing to 7.6% at age 64 The expected income for the fiscal year ended June30, 1989. These funds remained long-term rate of return on assets was 9% (10%-1989). payable at June 30, 1990. Note H-Staff Retirement Plan Note I-Non-Pension Retirement Benefits The IBRD has a defined benefit retirement plan covering substantial y all of The IBRD provides certain health care and life insurance benefits to retirees its staff. The Plan also covers the staff of the International Finance All staff who are enrolled in the insurance programs while in active service Corporation (IFC) and the Multilateral Investment Guarantee Agency and who meet certain requirements are eligib e for benefits when they reach (MIGA). Under the Plan, benefits are based on years of contributory service early or normal retirement age while working for the IBRD. and the highest three-year average ot pensionable remuneration as defined in the Plan, with the staff contributing a fixed percentage of pensionable In prior years, the cost of retiree health care and life insurance benefits, net remuneration, and the IBRD contributing the remainder of the actuarially of retiree contributions, was recognized in expense on a cash basis. During determined cost of future Plan benefits. The IBRD uses the aggregate the current fiscal year. however, the lBRD changed to the method of accruing method for determining its contribution to the Plan. The amount of that the cost of these benefits as they are earned by staff The IBRD believes the contribution approximates the set peTiodic pension cost as detailed belDw accrual method is preferable to the method used previously since it is All contributions to the Plan and all other assets and income held for the consistent with the accrual basis used in accounting for other liabilities. purposes of the Plan are held by the IBRD separately from the other assets Under the new method, the estimated cost for post-retirement hea th care and income of the IBRD, IFC and MIGA and can be used only for the benefit and life insurance is accrued on an actuarial y determined basis. Such costs of the participants in the Plan and their beneficiaries, until all liabilities to are funded as accrued through contributions to a Ret red Staft Benefits Plan them have been paid or provided for. Plan assets consist primarily of equity (RSBP), which also covers the staff of the IFC and MIGA Ali contributions and fixed income securities, with smaller holdings of cash, rea estate and to the RSBP and a I other assets and income held for the purposes of the other investments. RSBP are held by the IBRD separately from the other assets and income of Net periodic pension cost for the fiscal years ended June 30, 1990 and June the IBRD, IFC, and MIGA and can be used only for the benefits of the 30, 1989 consisted of the following components: participants in the RSBP and their beneficiaries, until all liabi ities to them have been paid or prov ded for. The initial contribution to the RSBP on US$ thousands behalf of IBRD staff amounted to $1586880,000. Of this amount, .I.l . ; 4 $105,500,000 has been charged to the IBRD and the remaining $53,380.000 has been charged to IDA Service cost-benefits earned Had the new method of accounting been applied retroactively, net income during the period . it r !I. -, . - -8 wou d have been $1,143,140,000 and $1,086,407,000 for fiscal years 1990 Interest cost on projected benefit and 1989. respectively. obligation . . . .Ir,'' ....'.9. . 9 Actual return on plan assets . '14 A4r . i 4) Net amortization and deferral . . . a4 Jr. . 1'.. .4 Net periodic pension cost . . . 4 -- X '.7 202 IBRD Financial Statements Report of Independent Accountants Price Waterhouse The Hague Tokyo (international Firm) London Washington New York Price Waterhouse July 30, 1990 President and Board of Governors International Bank for Reconstruction and Development In our opinion, the financial statements appearing on pages 184 through 201 of this Report present fairly, in all material respects, in terms of United States dollars. the financial position of the International Bank for Reconstruction and Development at June 30, 1990 and 1989, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles in the United States and with International Accounting Standards. These financial statements are the responsibility of management of the International Bank for Reconstruction and Development; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As discussed in Note I to the financial statements, the International Bank for Reconstruction and Development changed its method of accounting for non-pension retirement benefits during the year ended June 30, 1990. P --) 203 Financial Statements of the International Development Association, the Special Fund Administered by IDA, the Special Facility for Sub-Saharan Africa Administered by IDA, and the Debt Reduction Facility for IDA-Only Countries Administered by IDA Statements of Commitment Resources 204 Statements of Changes in Liquid Funds 207 Statements of Condition 208 Summary Statement of Development Credits 210 Statement of Voting Power, and Subscriptions and Contributions 213 Notes to Financial Statements 216 Report of Independent Accountants 220 204 IDA, Special Fund, African Facility, and Debt Reduction Facility Financial Statements Statements of Commitment Resources For the fiscal years ended June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars Debt Reduction Changes in Commitment IDA Special Fund African Facility Facility Resources 1990 1989 1990 1989 1990 1989 1990 COMMITMENT AUTHORITY' Current period transactions. Subscriptions and contributions ............ $4.519,994 $5,002.403 Reflows available for advance commitments and annual allocations ............ ....... 791,656 751,772 Transfers from IBRD-Note G ............._- $100,000 Total current period transactions ........... 5,311,650 5,754,175 100,000 Less development credits approved ...... .... 5.521,950 4,932,590 $ 27,900 Effect ot current period transactions on resources available for commitment ...... (210,300) 821,585 (27,900) 100,000 Translation adjustments affecting commitment authority ............................. (288.897) 107,468 (9,516) (Decrease) increase in commitment authority ..... (499,197) 929,053 (37,416) 100,000 Commitment authority, beginning of fiscal year ... 750,727 (178,326) 37,416 Commitment authority, end of fiscal year . ........... $ 251.530 $ 750,727 $ - $100,000 CHANGES TO FULLY COMMITTED REPLENISHMENTS Current period allocations. Cancellations of development credits ......... $ 211.608 $ 207,869 $ 15 $148,492 $ 37 $ 192 Grant participation in development credits ..... 63 2,973 Income from investments ......... ...... 221.439 135,283 9.265 6,793 14,327 14,352 Income from operations ........ ........ (67,910) 12.492 Total current period allocations ...... II .. 365,200 358,617 9,280 155,285 14 364 14,544 Supplemental development credits approved' . . (26,800) Translation adjustments on resources under fully committed replenishments . ....... ...... (21.642) (140,365) 33,306 (14.893) 1,657 14,958 Increase (decrease) in resources under fully committed replenishments ..... ....... .. 343.558 218.252 42.586 140,392 (10,779) 29,502 Surplus in resources under tully committed replenishments, beginning of fiscal year ...... 601.021 382,769 172,335 31,943 29.502 Surplus in resources under fully committed replenishments, end of fiscal year ......... ........... $ 944,579 $ 601,021 $214,921 $172,335 $18,723 $29,502 .lfr.lit1r..IE1jl RESOURCES Commitment authority, end of fiscal year ..... $ 251,530 $ 750,727 $ - $100,000 Surplus in resources under fully committed replenishments, end ot fiscal year ..... .... 944,579 601.021 $214,921 $172,335 $18,723 29,502 Total commitment resources ........ $1,196.109 $1,351,748 $214,921 $172,335 $18,723 $29,502 $100,000 Commitment Resources 205 a. IDA reviews periodically the resource position under fully committed replenishments and, if necessary, allocates portions of the resources that become available for commitment during the fiscal year to those replenishments. For IDA, these allocations include income from operations from January 1, 1985 to July31, 1989 that tully covered the cumulative losses from operations incurred during the fiscal year from July 1,1979 to December 31, 1984. The Executive Directors have reviewed iDAs resource position under fully committed replenishments and approved a scheme whereby IDA can annually increase commitment authority by making advance commitments against the reflows that IDA is projected to receive in future years. b. Dn July 17, 1989, since all of the African Facility's commitments and encashments had been made, the Executive Directors decided that the African - ,, I, could rebalance its currency positions to match its obligations with its resources and that the surplus resulting from currency conversion be committed in the form of supplemental development credits to outstanding African Facility Development Credits on a fast-disbursing basis Composition of Commitment Resources Debt Reduction IDA Special Fund African Facility Facility 1990 1989 1990 1989 1990 1989 1990 Liquid funds .$..................... . . ............. . 1,827,217 $1,444,458 $100.041 $ 59,850 $112.957 $172,170 Cash not immediately available for disbursement-Note B ........... . . . 7.867 10,484 Receivables on account of subscriptions and contributions ............ ........ 16.324,085 444v69K 264,797 283,689 10 9 Subscriptions and contributions not yet available for commitment . . .......... (4,150) (4.321,215) Receivables from International Bank for Reconstruction and Development-Note G 846,502 716,626 $100.000 Other assets .......1.......... 179,640 146,508 56 268 421 814 Reflows available for advance commitments and annual allocations ....... ....... 1,589,932 751,772 Of which amounts received ......... ... (401,883) (184,636) 1,188,049 567,136 Less undisbursed credits, accounts payable and other liabilities .. . .............. 19,173,101 16,659,216 149.973 171,472 94,665 143,491 Total commitment resources . . . $1,196,109 $ 1,351,748 $214,921 11, $ 18,723 $ 29,502 $100,000 See Notes to Financial Slatemenis Changes in Liquid Funds 207 Statements of Changes in Liquid Funds For the fiscal years ended June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars Debt Reduction IDA Special Fund African Facility Facility 1990 1989 1990 1989 1990 1989 1990 .:"-lJh:E; OF LIQUID FUNDS Operations: Income from development credits-Notes D and H .... $ 286,470 $ 271.492 Less management fee to IBRD-Note H . . ......... 354,380 259,000 Income from development credits less management fee (67,910) 12,492 Income from investments- Note H ........... .... 227,006 140,242 $ 9,265 $ 6,793 $ 14,327 $ 14,352 Less amortization of subscription advances . 5,567 4,959 Non-cash items ............ (26,361) 23,988 267 (26) 1,246 (576) Liquid funds from operations 127,168 171,763 9,532 6,767 15,573 13,776 Drawdown of subscriptions and contributions ............. 3,678,957 3,509,751 54,302 30,034 - 264,817 Grant participations in development credits ......... 63 2,973 Repayments of development credits .................. 217,247 184,636 Total sources of liquid funds ................. 4,023,435 3,869,123 63,834 36,801 15,573 278,593 USES OF LIQUID FUNDS Development credit disbursements 3,813,916 3,559,206 31,358 37,670 85,333 209,612 Total uses of liquid funds . 3,813,916 3,559,206 31,358 37,670 85,333 209,612 Effect of current fiscal year transactions on liquid funds ............ ..... . 209,519 309,917 32,476 (869) (69,760) 68,981 TRANSLATION ADJUSTMENTS .... 162,892 (58,567) 6,775 (2,342) 9,569 (2,333) Of which translation adjustments on non-liquid funds ......... (10,348) 40,094 (940) 1,687 (978) 2,309 Translation adjustments on liquid funds ......... 173,240 (98,661) 7,715 (4,029) 10,547 (4,642) Increase (decrease) in liquid funds .............. 382,759 211,256 40,191 (4,898) (59,213) 64,339 Liquid funds, beginning of fiscal year ............ 1,444,458 1,233,202 59,850 64,748 172,170 107,831 Liquid funds, end of fiscal year .................... $1,827,217 $1,444,458 $100,041 $59,850 $112,957 $172,170 See Notes to Financial Statements. 208 IDA, Special Fund, African Facility, and Debt Reduction Facility Financial Statements Statements of Condition June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars Debt Reduction IDA Special Fund Atrican Facility Facility Assets 1990 1989 1990 1989 1990 1989 1990 Unrestricted assets LIQUID FUNDS Cash available for £ ...... Noninterest-bearing demand deposits . $ 31271 $ 80.949 $ 281 $ 715 S 851 $ 3.074 Interest-bearing demand deposits 5 622 48,246 1 255 4,384 35 432 Investments-Note A: Obiigations of governments and other official entities .... .... 571 423 683,134 13975 - - 17,092 Obligations ot banks and financial institutions ... ... . ..... I I ... 1248695 631,523 84530 54,751 112,071 151,572 Receivable for investment securities sold . . 12,873 12,490 Payable for investment securities purchased . 42.6671 (11,884) 1827217 1,444,458 100041 59,850 112957 172,170 . rIilil *r.r.LISrEL, AVAILABLE FOR ri y' lr r..llrFr r 8 . . . 7,867 10,484 CASH COLLATERAL INVESTED .. - 118,337 REi. i-i 4; i i- l -f, ri 41 e CI, ,,,1.,. I . 1 T ci r1',-: . . 15452403 14,724,701 264,797 283,689 10 9 Subscriptions and contributions-Note F Amounts due . .... . ...... 42 289 131,287 Amounts not yet due ..... . ... 829 393 4,590,979 16,324,085 19,446,967 264,797 283.689 10 9 RECEIVABLES FROM INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT-Note G.846 502 716,626 $100,000 DEVELOPMENT CREDITS OUTSTANDING (see Summary Statement of Development Credits and Note D) Total development credits . . .... ... 59 135 394 51,900,844 Less undisbursed balance ...... 19,083.318 16,556.580 40 052 076 35,344,264 SPECIAL FUND CREDITS OUTSTANDING (see Summary Statement of Development Credits and Note D) Total development credits . 470.225 442,848 Less undisbursed balance . . . 149 973 171 472 320 252 271,376 AFRICAN FACILITY CREDITS OUTSTANDING (see Summary Statement of Development Credits and Note D) Total development credits ... .. 1 267 476 1,167,496 Less undisbursed balance . . .. . 93581 143,446 1 173.895 1,024,050 OTHER ASSETS Accrued charges on development credits . 91,559 82,255 Accrued interest on investments . ... ... 40243 19,682 56 245 421 814 Miscellaneous-primarily advances for project preparation facilities .... 47.838 44,571 - 23 179,640 146,508 56 268 421 814 Total unrestricted assets .60731534 58523.070 364,894 343,807 113.388 172,993 100000 Restricted assets on account of subscriptions-Note C .270,840 265,713 Total assets . . $61 002 374 i58.788,783 $364,894 $343,807 $113,388 $172,993 $100,000 Statements of Condition 209 Debt Reduction IDA Special Fund African Facility Facility Sources of Assets 1990 1989 1990 1989 1990 1989 1990 Unrestricted sources ACCOUNTS PAYABLE AND OTHER LIABILITIES (for IDA this ncludes payable to IBRD tor management fee of $85,722-1990, $96,765-1989) ... .. .... $ 89 783 $ 102,636 $ - $ - $ 1,084 $ 45 PAYABLE FOR CASH COLLATERAL RECEIVED - 118,337 SUBSCRiPTiONS AND CONTRIBUTIONS (see Statement of .rc F ..h and Subscriptions and K:ri':. and Note F) 54.357,560 53,795.836 CONTRIBUTIONS TO SPECIAL FUND (see Statement of Voting Power, and Subscriptions and Contributions) Total ... ...... . 601.771 565,372 Disbursed .. . .. 285.865 254,507 (285.865) (254,507) Undisbursed . . .. 315 906 310,865 CONTRIBUTIONS TO AFRICAN FACILITY (see Statement of, .I,o., F h and Subscriptions and l Total 1022,730 1,021,733 Disbursed .. . ..... 1,022,720 1,040,791 (1 022 720) (1,021,723) Undisbursed. 10 10 CONTRIBUTION BY SWITZERLAND-Note E 51173 51173 TRANSFERS FROM INTERNATIONAL BANK FOR RECONSTRUCTION AND OEVELOPMENT-Note G . . , . 2,560,677 2,430,801 $100,000 TRANSFERS FROM INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO AFRICAN FACILITY-Note G . Total . . ....... 150,000 150,000 Disbursed 103,404 - (103,404) (19,068) Undisbursed. . ..... 46.596 130,932 ACCUMULATED SURPLUS (DEFICIT) ... 312,678 (3.254) 48,988 32,942 65 698 42,006 CUMULATIVE TRANSLATION ADJUSTMENTS ON DISBURSED AND OUTSTANDING DEVELOPMENT CREDITS: IDA . . . 1865516 732,115 Special Fund . .... . . 34,387 16,869 African Facility . . . 47,771 (16,741) 1 947 674 732,243 _ Total unrestricted sources 60,731,534 58,523,070 364 894 343,807 113 388 172,993 100,000 Restricted subscriptions-Note C . . 270 840 265,713 Total sources of assets $61,002,374 $58,788,783 $364,894 $343,807 $ 113 388 $ 172,993 $100,000 See Notes to Financial Statements. 210 IDA, Special Fund, African Facility, and Debt Reduction Facility Financial Statements Summary Statement of Development Credits June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars June 30 1990 IDA Special Fund _ Atrican Facility Total Total Credits Total Credits Total Credits Total Credits d Borrower or guarantor credits outstanding credits outstanding credits outstanding credits' outstanding outstanding Afghanistan $ 77,716 $ 77,716 $ - $ - $ - $ - $ 77,716 $ 77,716 0 19 Bangladesh .. 5,371,799 3,748,092 27.403 5,490 - - 5,399,202 3,753,562 9 03 Benin .376,747 261,789 10,984 10.977 . - 387,731 272,766 0.66 Bhutan 28,463 14,389 - - - 28,463 14,389 0 03 Bolivia 557,208 347,052 - - - 557,208 347,052 0 84 Botswana .13,747 13.747 - - - - 13,747 13,747 0 03 Burkina Faso .388,691 263,814 - - - 388,691 263,814 0 63 Burundi ... 578,613 337,040 - - 18,931 18,931 597,744 355,971 0 86 Cameroon . 237,856 237,856 - - - 237,856 237,856 0 57 Cape Verde ,20,652 12,388 - - - - 20,652 12,388 0 03 Central Atrican Republic 358,234 187,957 - 18,534 18,534 376,768 206,491 0~50 Chad , ... . 295,869 144,133 - 27,138 12.179 323,007 156,312 0.38 Chile .14 512 14,512 - - - - 14,512 14,512 0 03 China 4,260,028 2.501,070 75,194 73,429 - - 4.335,222 2,574,499 6 20 Colombia . 14.833 14.833 - - - - 14,33 14,833 0.04 Comoros .45.441 35.240 - - - 45,441 35,240 0 08 Congo, People's Republic o1 the 73,776 73,776 - - - 73,776 73,776 0.18 Costa Rica .3.544 3.544 - - - - 3.544 3,544 9.01 CWe dInvoire 6,975 6,975 - - 6,975 6,975 0 02 Djibouti . 47 182 26,789 - - - 47.192 26,789 0 06 Dominica . 12,021 9 382 - - - 12,021 9,382 0.02 Dominican Republic 20,334 20,334 - - - 20,334 20,334 0.05 Ecuador 32,095 32,095 - - 32,095 32,095 0.08 Eqnyr, Orih Republic ot 924,734 908,092 - - - 924,734 908,092 2.19 ~~i. i . . ~ 23,574 23,574 - - - - 23,574 23,574 0.06 Equatorial Guinea 35,214 29,337 - 4,766 4,766 39,980 34,103 0,08 Ethiopia . . . . 1,325,975 760,678 - - - - 1,t325,975 760,678 1 83 Gambia, The 144,963 79,741 - - 12,974 12,974 157,937 92,715 0 22 Ghana 1.514,160 876,674 44,862 44,862 177,757 176.358 1,736,779 1,097,894 2.64 Grenada 6.619 4,639 - - - 6,619 4,639 0 01 Guinea . , 759.519 323,124 - 20,652 20,652 780,171 343,776 0.83 Guinea-Bissau 164,054 112,777 5,163 5,160 11,253 11,176 180,470 129,113 0.31 Guyanla ... 130.714 34.844 - - 130,714 34,844 008 Haiti . 399,655 302,123 15,886 6,162 - - 415,541 308,285 0 74 Honduras 77,623 77 623 . - - - 77,623 77,623 0.19 India . 17,334,343 12 696,732 85,932 12,718 - - 17,420,275 12,709,450 30 59 Indonesia . 848.812 848.812 - - - 848.812 848,812 2 04 Jordan 77,710 77.710 - - 77,710 77,710 0 19 Kenya . 1,303.825 906,788 50,041 16,503 56.131 56,131 1,409,997 979,422 2 36 Korea. Republic o1 99,105 99,105 - - - 99.105 99,105 0.24 Lao People's Democratic Republic . 202,556 105.688 - 202.556 105,688 0 25 Lesotho .157,945 1 03,968 - - - 157,945 103,968 0 25 Liberia , . 103,866 100,989 - - - 103,866 100.989 0.24 Madagascar . .. 984,169 570.869 36.35 36,566 135,163 96.589 1,156.267 704.024 1 69 Malawi . 881,325 610.767 17,343 16,225 60,499 60,499 959,167 687,491 1 65 Maldtives 24,564 9.195 - - - 24.564 9,195 0 02 Mali ...659,944 439,120 14.112 12.687 9 399 815 683,455 452,622 1 09 Mauritania . 256,665 145,528 - 28.330 28.330 284.995 173,858 0.42 Mauritius , 18.882 18.882 - - - 18.882 18.882 0 05 Morocco . 39,526 39,526 - - - 39.526 39,526 0 10 Statement of Development Credits 211 June 30, 1990 IDA Special Fund African Facility Total Percentage Total Credits Total Credits Total Credits Total Credits of credits Borrower or guarantor credits outstanding credits outstanding credits outstanding credits' outstanding outstanding Mozambique . . $ 516,562 $ 182,442 $ - $ - $ 19,196 $ 15,238 5 535,758 $ 197,680 0.48 Myanmar ..... .. 850,292 668,394 - - - - 850,292 668,394 1.61 Nepal ... . 1,118,751 613,043 - - - - 1,118,751 613,043 148 Nicaragua .. . .... 59,998 59,997 - - - - 59,998 59,997 014 Niger ....... .. 457,100 338,065 - - 86,050 84,907 543,150 422,972 1.02 Nigeria ......... 252,358 29,290 - - - - 252,358 29,290 0.07 Pakistan ....... 3,277,662 1,968,979 - - - - 3,277,662 1,968,979 4.74 Papua New Guinea . . 112,528 112,528 - - - - 112,528 112,528 0.27 Paraguay 41,738 41,738 - - - - 41,738 41,738 0.10 Philippines .101,799 101,799 - - - - 101,799 101,799 0.25 Rwanda .......... 473,737 294,999 - - 29,786 19,196 503,523 314,195 0.76 St. Lucia .... ..... 5,295 - - - - - 5,295 - - St. Vincent and the Grenadines . . . 2,383 669 5.295 4.811 - - 7,678 5,480 0.01 Sao Tome and Principe 34,287 17,514 - - 3,045 2,818 37,332 20,332 005 Senegal ..... .. . 842,469 553,184 23,432 23,396 94,518 94,518 960,419 671,098 1.62 Sierra Leone .... . 127,503 77,893 - - - - 127,503 77,893 019 Solomon Islands ..... 19,383 14,800 - - - - 19,383 14,800 0.04 Somalia .. ...... 511,388 353,699 - - 37,994 37,994 549,382 391,693 0.94 Sri Lanka ....... 1,273,724 764,980 - - - - 1,273,724 764,980 184 Sudan ...... ... 1,312,586 923,644 12,698 12,698 - - 1,325,264 936,342 2.25 Swaziland ....... 6,873 6,873 - - - - 6,873 6,873 0.02 Syrian Arab Republic .. 45,466 45,466 - - - - 45,466 45,466 0.11 Tanzania .. ....... 1,756,539 1,042,155 - - 76,386 76,386 1,832,925 1,118,541 2.69 Thailand .... . . 109,338 109,338 - - - - 109,338 109,338 0.26 Togo . ...... .. 445,026 318,629 24,425 24,425 13,371 13,371 482,822 356,425 0.86 Tonga ........ . 5,295 2,048 - - - - 5,295 2,048 Tunisia .......... 60,152 60,152 - - - - 60,152 60,152 0.14 Turkey ........... 159,484 159,484 - - - - 159,484 159,484 0.38 Uganda . ......... 1,179,693 766,542 - - 38,126 36,371 1,217,819 802,913 1.93 Vanuatu .......... 12,382 3,211 - - - - 12,382 3,211 001 Viet Nam .. .. 58,802 58,802 - - - - 58,802 58,802 0.14 Western Samoa ..... 39,999 14,593 _ - - - 39,999 14,593 0.04 Yemen Arab Republicb 583,937 366,846 - - - - 583,937 366,846 0.88 Yemen, People's Dem. Rep. of" ........ 285,691 188,608 13,106 10,020 - - 298,797 198,628 0.48 Zaire ........... 1,146,705 814,228 - - 219,096 2D6,781 1,365,801 1,021,009 2.46 Zambia . ....... 342,725 182,567 7,414 4,123 68,381 68,381 418,520 255,071 061 Zimbabwe .. . . ... 63,137 62,674 - - - - 63,137 62,674 015 Subtotal members . 59,029,374 40,011,301 470,225 320,252 1,267,476 1,173,895 60,767,075 41,505,448 (continued) 212 IDA, Special Fund, African Facility, and Debt Reduction Facility Financial Statements Summary Statement of Development Credits (continued) June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars June 30, 1990 IDA Special Fund African Facility Total Percentage Total Credits Total Credits Total Credits Total Credits of credits Borrower or guarantor credits outstanding credits outstanding credits outstanding creditsa outstanding outstanding Regional development banks: West African Development Bank' .... $ 62,361 $ 15,515 $ - $ _ $ _ $ - $ 62,361 $ 15,515 0.04 Caribbean Development Bank',,,. 33,454 15,055 - - - - 33,454 15,055 0 04 Subtotal regional development banks 95,815 30,570 - - - - 95,815 30,570 Other' . 10,205 10,205 - - 10,205 10,205 0.02 Tota-June 30 1990 $59,135 394 $40 052 076 $470 225 $320 252 $1.267,476 $1 173 895 $60 873.095 $41.546,223 10000 Total--June 30, - - -______ 1989 ... $51,900,844 $35.344,264 $442,848 $271,376 $1,167,496 $1,024,050 $53,511,188 $36,639,690 Less than 0.005 percent a. Of the undisbursed balance at June 30, 1990, IDA has entered into irrevocable commitments to disburse $296,095,000 ($162,913,000-1989) b. See Notes to Financial Statements-Note C tsr the merger of the Yemen Arab Republic and the People's Democratic Republic of Yemen. c. These development credits are tor the benefit of Benin, Burkina Faso, Cote d'lvoire, Niger, Senegal, and Togo. d. These development credits are for the benefit of Grenada and territories of the United Kingdom (Associated States and Dependencies) in the Caribbean region. e. Represents development credits made at a time when the authorities on Taiwan represented China in IDA (prior to May 15, 1980). Maturity Structure of Development Credits* June 30, 1990 Period IDA Special Fund African Facility Total July 1,1990 to June 30, 1991 . ............ $ 286,217 $ - $ - $ 286,217 July 1, 1991 to June 30, 1992 ................... 323,755 - - 323,755 July 1, 1992 to June 30, 1993 ................. 374,035 80 - 374,115 July 1, 1993 to June 30, 1994 . ... ..... 440,244 1,742 - 441,986 July 1, 1994 to June 30, 1995 . . 504,054 4,847 - 508,901 July 1,1995 to June 30, 2000 . ..... 3,850,063 24,233 47,026 3,921,322 July 1, 2000 to June 30, 2005 .. . 6,683,576 36,854 63,374 6,783,804 July 1, 2005 to June 30, 2010 .. . 8,658,792 70,315 157,426 8,886,533 July 1, 2010 to June 30, 2015 .. . 10,014,537 70,315 190,121 10,274,973 July 1, 2015 to June 30, 2020 .. . 9,794,535 70,315 190,121 10,054,971 July 1, 2020 to June 30, 2025 . .. 8,938,273 70,315 190,121 9,198,709 July 1, 2025 to June 30, 2030 .. . 6,354,710 70,315 190,122 6,615,147 July 1, 2030 to June 30, 2035 ..... ....... . 2,647,292 50,894 190,122 2,888,308 July 1, 2035 to June 30, 2040 .... . 265,311 - .4'9ii¾ 314,354 Total ... $59,135,394 $470,225 $1,267,476 $60,873,095 Includes undisbursed balance. See Notes to Financial Statements. Voting Power, and Subscriptions and Contributions 213 Statement of Voting Power, and Subscriptions and Contributions June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars June 30, 1990 IDA Numnber Percentage Subscriptions Special African ot ot and Fond Facility Member' votes total' contributions contributions contributions Part I Members Australia . 95,118 1.38 $ 1,015,467 $ - $ - Austria . . . . ..43,146 0 63 417,317 -16,587 Belgium . . 81 027 1.17 877,422 48,531 8,030 Canada .. .. . . . . . . . . 219,916 3.19 2,558,371 162,246 78,249 Denmark 64,146 0 93 632.550 34,040 23,058 Finland ..39,593 0 57 360,053 - 17,580 France ..267,428 3 87 3,216,711 147,931 226,571 Germany, Federal Republic of.478,598 6.93 6,343,617 - - Iceland .... . 15,211 0.22 6,763-- Ireland . . . . 19,041 0.28 61,778 - 2,184 Italy ... . .... ...193,939 2.81 2,112,110 91,805 228,116 Japan ..664,752 9 63 10,472,119 - - Kuwait . 62,317 0.90 599,428 -- Luxembourg . 16,144 0.23 28,178 - - Neterlands . 146,491 2 12 1,960,550 - 164,555 New Zealand..... . 18,915 0 27 56,048 - - Norway .. .63,147 0.91 592,589 40,011 38,399 South Africa .. . . . 20,119 0 29 57,077 - - Sweden . . 142,160 2.06 1,473,666 77,207 68,683 United Arab Emirates.15,942 0.23 5,582 - - United Kingdom ... .392 447 5.68 4,639,987 -- United States . 1,189,128 17.22 14,764,907 - 136,580 Subtotal.4,248,725 61.52 52,252,290 601,771 1,008,592 Part It Members Afghanistan .. ..13,557 0 20 1,4-- Algeria 18,481 0 27 5,149 - - Angola ... 45,662 0 66 8,589 - - Argentina ... .. ..81,053 1 17 49,092 - - Bangladesh 41,020 0 59 7,028 - - Belize .. . . .. . . . . 1,788 0.3 243 - - Benin . 4,800 0 07 625 - - Bhutan .3,559 0 05 61 - - Bolivia .. ..13,748 0.20 1,328 - - Botswana . 14,852 0.21 211 - - Brazil . ... ...117,865 1.71 63,422 - - Burkina Faso . 9,720 0.14 649 - - Burundi ...12,667 0 18 980 - - Cameroon . 13,854 0.20 1,318 - - Cape Verde .....516 0 01 96 - - Central African Republic 10,920 0 16 656 - - Chad 6.790 0 10 649 - - Chile.31,782 0.46 4,503 - - China .., 138,951 2.01 39,168 - Colombia . 34,350 0 50 22,483 - - Comoros . 8,854 0.13 105 - Congo, People's Republic of the . 6,685 0 10 641 - - Costa Rica . , . 7,844 0 11 254 - - C6te dIvoire . .7,771 0 11 1,293 - - Cyprus .. 17,897 0.26 1,024 - - (continuted) 214 IDA, Special Fund, African Facility, and Debt Reduction Facility Financial Statements Statement of Voting Power, and Subscriptions and Contributions (continued) June 30, 1990 and June 30, 1989 Expressed in thousands of US dollars June 30, 1990 IDA Number Percentage Subscriptions Special African of of and Fund Facility Member' votes total' contributions contributions contributions Part II Members (continued) Djibouti 532 0.01 $ 193 $ - $ - Dominica 6,213 0.09 100 Dominican Republic 15,726 0 23 579 - - Ecuador 13,709 0 20 817 - Egypt, Arab Republic of . 28 424 0.41 6,433 El Salvador 6.244 009 403 Equatorial Guinea . 1,967 0.03 401 - Ethiopia 16,607 0 24 705 - Fiji ,, . 2.130 0 03 701 - - Gabon . . 2,093 0 03 627 - Gambia, The 10,644 0.15 339 - Ghana . 15 362 0.22 2.961 Greece 28,503 0 41 12.855 Grenada 14,496 0 21 123 - Guatemala . 12,713 0.18 509 - Guinea . . 17,221 025 1,308 - Guinea-Bissau 528 001 169 Guyana . 17,891 0 26 1.021 - Haiti 14143 0 20 1,016 Honduras . 12.290 018 403 - Hungary . 52,409 076 17,118 - India . . 219 269 317 53,651 - Indonesia . 69,651 101 14,347 Iran, Islamic Republic of 15.455 022 5,853 Iraq . 9.407 014 992 - Israel 9 386 014 2,401 - Jordan . .. 15.388 0 22 391 -. Kampuchea, Democratic . 7826 011 1.284 - Kenya 20.688 030 2,174 - Kiribat . . 512 001 72 - Korea, Republic of . 23.402 0 34 35.944 - Lao People's Democratic Republic . 11,723 017 627 Lebanon . ... . . 8.562 0 12 564 Lesotho 10,487 015 204 - Liberia . 13.867 020 1016 - Libya 7 771 011 1,303 - Madagascar 702 0 01 1,218 - Malawi . 17 897 0 26 991 Malaysia . . 26,693 0 39 3,396 Maldives . 14.248 0 21 39 - Mali 16,507 0 24 1,191 - Mauritania ... 6,685 0.10 636 - Mauritius 18428 027 1,163 - Mexico .41,391 0 60 46.673 - Morocco . 31.782 046 4,669 - - Mozambique 774 0 01 1,653 - Myanmar ... . 24 230 0 35 2,746 - Nepal .. 16,420 0.24 652 Nicaragua . 10,896 016 387 - Niger . . 16.541 0 24 663 - Vofing Power, and Subscriptions and Contributions 215 June 30, 1990 IDA Number Percentage Subscriptions Special Atrican of of and Fend Facility Member' votes tota lb contributions contributions contributions 4057 0 06 $ 4,211 $ - $ - 15,588 0.23 430 Pakistan .......63,432 0 92 13,356 Panama .. ..5,657 0 08 26 - Papua New Guinea .... 13,050 0.19 1,125 - Paraguay . .11,419 0 17 384 - - Peru . 854 0.01 2,135 - Philippines . 16.583 0 24 6,476 - Poland ........169,036 2.45 40,031 - - Rwanda ....12,667 0 18 1,014 - St. Kitty and Nevis . 526 0 01 158 - St. Lucia.. ..... 13,593 0.20 203 St. Vincent and the Grenadines . . 514 0.01 84 - - 580 Tine and Principe . 514 0.01 84 - - Saudi Arabia ..... .. . 226,623 3.28 1,593,214 - - Senegal .17,830 0 26 2,225 - Sierra Leone .12,667 0.18 953 - Solomon Islands .518 0.01 109 - Somalia . . ... 10,506 0 15 953 - Spain .. ..89,935 1 30 189,222 - 14,138 Sri Lanka ......29,246 0.42 3,920 - - Sudan .13,884 0 20 1,289 - Swaziland 11,073 0.16 408 - Syrian Arab Republic ..7 651 0.11 1,202 - Tanzania . . . .. 16,021 0 23 2,111 - - Thailand . . . . .29,246 0 42 4.073 - - Togo 17.143 0 25 1.029 - Tonga . . . . 11,380 0 17 91 - Trinidad and Tobago . 770 0 01 1.629 - - Tunisia . . .. . 2.793 0 04 1,893 - Turkey . . . . . .. 44.051 0 64 18,162 - Uganda .. . .. 16,021 0 23 2,106 Vanuiatu .. . ....4.994 0 07 235 - Viet Nam ..... .. ... 8.889 0 13 1,893 - Western Samoa 8,768 0 13 115 Yemen Arab Republic' . 14,753 0 21 557 Yemen, People's Democratic Republic otC 15,576 0 23 1,582 - Yugoslavia . . . . 44264 0 64 18,704 - - Zaire ......12,164 0 18 3,785 Zambia.. 19. 730 0 29 3.374 Zimbabwe . 1.324 0.02 4,970 - Subtotal . . 2.656.729 38 48 2.376,110 - 14,138 Tota--,une 30. 1990 6 905 454 100 00 $54,628 400 $601 77t $1 022.730 Total--June 30, 1989 ..... . . 6,461,746 $54,061,549 $565,372 $1,021,733 a. See Notes to Financial Statements-Note C for an expJavat onl of the two categories of membership b. Total may differ from the sum of individual percentages shown due to rounding c. See Notes to Financial Statements-Note C for the merger of the Yemen Arab Republic and the People's Democratic Republic of Yemen See Notes to Financial Statements. 216 IDA. Special Fund, African Facility, and Debt Reduction Facility Financial Statements Notes to Financial Statements June 30, 1990 and June 30, 1989 Summary of Significant Accounting into current dollars or any other currency disappeared On June 30, 1987, and Related Policies the Executive Directors of IDA decided, with effect on that date and unti such time as the relevant provisions of the Articles ot Agreement are Organization and Operations amended, to interpret the words "US dollars of the weight and fineness in effect on January 1, 1960" in Article II, Section 2(b) ot the Articles of IDA: IDA was established on September 24, 1960 to promote economic Agreement of IDA to mean the Special Drawing Right (SDR) introduced by development, increase productivity, and raise the standard o1 living of its the International Monetary Fund, as the SDR was valued in terms of United developing country members. States dollars immediately before the introduction of the basket method of valuing the SDR on July 1, 1974, such value being equal to $1 20635 for Special Fund: On October 26, 1982, IDA established the Special Fund one SDR (the 1974 SDR), and also decided to apply the same standard of constituted by funds to be contributed by members of IDA and administered value to amounts expressed in 1960 dollars in the relevant resolutions of the by IDA to supplement the regular resources available for lending by IDA. The Board of Governors arrangements governing the Special Fund may be amended or terminated by IDA's Executive Directors subject to the agreement o0 a qualified majority of The subscriptions and contributions provided through the third replenish- the contributors to the Special Fund. The resources of the Special Fund are ment are expressed on the basis of the 1974 SDR. Prior to the decision of kept separate from the resources o0 IDA the Executive Directors, IDA had valued these subscriptions and contribu- tions on the basis of the SDR at the current market value of the SDR African Facility: On May 21, 1985, IDA established the Special Facility for Sub-Saharan Africa (the African Facility) constituted by funds to be The subscriptions and contributions provided under the fourth replenish- contributed by the International Bank tor Reconstruction and Development ment and thereafter are expressed in members' currencies or SDRs and are (IBRD) and other donors to provide financing for countries of the payable in members' currencies. Prior to July 1, 1986, amounts receivable Sub-Saharan region. The African Facility is administered by IDA. The and amounts received but not yet disbursed were translated at market rates resources of the African Facility are kept separate from the resources of IDA. of exchange at the end of the accounting period Amounts which had been disbursed or converted into other currencies were translated at market rates On July 27, 1989, the Executive Directors decided to terminate the African of exchange on dates of disbursement or conversion Beginning July 1, Facility as of June 30, 1990. The decision allows IDA as administrator of the 1986, amounts received but not yet disbursed, as well as amounts disbursed Facility to convert its currency assets to match its SDR-denominated or convered into other currencies, are translated at market rates of exchange development credit commitments. All African Facility credits were substan- on the dates they were made available for disbursement in cash to IDA. tially disbursed as of June 30, 1990 and, effective that date, all remaining assets and liabilities of the African Facility, in excess of the undisbursed Special Fund and African Facility: Prior to April 1, 1989, amounts amount of credits approved were transferred to IDA receivable and amounts received but not yet disbursed were translated at market rates of exchange at the end of the accounting period. Amounts Debt Reduction Facility: On September 28, 1989, IDA established the which had been disbursed or converted into other currencies were translated Debt Reduction Facility for IDA-Only Countries (the Debt Reduction Facility) at market rates of exchange on dates of disbursement or conversion constituted by funds to be contributed by the IBRD to facilitate commercial Beginning April 1, 1989, amounts received but not yet disbursed, as well as debt reduction for IDA-only countries. The Debt Reduction Facility is amounts disbursed or converted into other currencies, are translated at administered by IDA The resources of the Debt Reduction Facility are kept market rates of exchange on the dates they were made available for separate from the resources of IDA. disbursement in cash to the Special Fund and the African Facility Translation of Currencies Development Credits IDA: IDA is an international organization which conducts its operations in the currencies of all of its members and Switzerland. Assets and liabilities All development credits are made to member governments or to the are translated at market rates of exchange at the end of the accounting government of a territory of a member (except for development credits which period Income is generally translated at an average of the market rates of have been made to regional development banks for the benefit of members exchange in effect during each month Subscriptions and contributions are or territories of members of IDA) It Is IDA's policy to place in nonaccrual translated in the manner described below Translation adjustments relating status all development credits made to a member government or to the to the revaluation of development credits denominated in Special Drawing government of a territory of a member if principal or charges with respect Rights (SDRs) are charged or credited to Cumulative Translation Adjust- to any such credit are overdue by more than six months unless IDA ments on Disbursed and Outstanding Development Credits. Other transla- management determines that the overdue amount will be collected in the tion adjustments are charged or credited to the Accumulated Surplus immediate future. In addition, if loans by IBRo to a member government are (Deficit), placed in nonaccrual status, all credits to that member governmient will also be placed in nonaccrual status by IDA Charges on nonaccruing credits are Special Fund and African Facility: Assets of the Special Fund and the included in income only to the extent that payments have actually been African Facility are translated at market rates of exchange at the end of the received by IDA. IDA has not suffered any losses on development credit period. Contributions are translated in the manner described below receivables and has established no provision for credit losses because no Debt Reduction Facility: The resources and grants of the Debt Reduction losses are anticipated Facility are denominated in US dollars. IDA: The repayment obligations of IDA's development credits funded from resources through the fifth replenishment are expressed in the development Valuation of Subscriptions and Contributions credit agreements in terms of 1960 dollars Pending reso ution of the valuation issue, as an interim measure, payments were accepted at the rate IDA: The subscriptions and contributions provided through the third of $1.20635 per 1960 dollar. On June 30, 1987, the Executive Directors replenishment are expressed in terms of "US dollars of the weight and decided to value such credits at that rate on a permanent basis. Development fineness in effect on January 1, 1960" (1960 dollars) Following the credits funded from resources provided under the sixth replenishment and abolition of gold as a common denominator of the monetary system and the thereaffer are denominated in SDRs: the principal amounts disbursed under repeal of the provision of the United States law defining the par value of the such credits are to be repaid in amounts equivalent to the value in terms of US dollar in terms of gold, the pre-existing basis for translating 1960 dollars SDRs of currencies disbursed Notes to Financial Statements 217 Special Fund: Special Fund credits are denominated in SORs The prncipai the difference between proceeds of sales and cost (on a last-in, first-out amounts disbursed under such credits are to be repaid in amounts basis), are recorded as an element of ncome from investments equivalent to the value n terms of SDRs of currencies disbursed. Special Fund credits are made on the same terms as regusar IDA credits Reclassifications except that the proceeds of Special Fund credits may be used only to finance expenditures for goods or services from (a) Part II members of IDA: (b) Part Certain reclassifications oy pnror yea information have been made to I members contributing to the Special Fund, and (cl Part I members conform wih the current years presentation contributing to the regular resources of IDA through IDA's FY84 Account who have notified IDA that such contributions are to be treated in the same Note A-Investments manner as contributions to the Specia Fund tor purposes of any future adjustment of the voting rights of the members ot IDA At Junei0 1990 and 1989 the currency composition os the investment porKfolios Is as showrn m Table A below African Facility African Facdity credits are denom nated in SDRs The principal amounts disbursed under such cred ts are to be repaid in amounts Note B-Cash Not Immediately Available for equivalent to the value in terms of SDRs of currencies disbursed Disbursement African Facility cred ts are made to member countries of IDA in Sub-Saharan Africa which are elgible for development credits of IDA and have undertaken Under the Articles of Agreement and the arrangements govern.g replen- or are comm fed to undertake medium-term programs of policy reform and ishments IDA must take appropriate steps to ensure that, over a reasonable stabilization measures acceptable to IDA. Proceeds of Afr can Facility credits period of time. the resources provided by donors for lending by IDA are equivalent to the amount contributed by the IBRD are used n the same used on an approximately pro rata basis Donors sometimes contribute cash manner as the regular resources of IDA The remaining proceeds are used substantially ahead of their pro rata share. Unless otherwise agreed, IDA only to finance expenditures for goods produced or services supplied from does not disburse these funds ahead of donors' pro rata shares. Cash Not (a) Pan 11 members of IDA, (b) Part I members contribut ng to the African Immediately Available for Disbursement represents the difference between Facility; and (c) countries which maintain special loint financing arrange- the cash contributed and the amount available for disbursements on a pro ments with IDA rata basis Debt Reduction Facility Grants Note C-Restricted Assets and Subscriptions All Debt Reduction Facility grants are made to member governments for the For the purposes of its financial resources, the membership of IDA is purpose of assisting in clearly identified debt reduction operations All divided into two categories fl) Part I members, which make payments of IDA-only countries with a heavy debt burden are eligible to receive grants subscriptions and contribut ons provided to IDA a convertible currencies Debt Reduction Facility grants are decided on a case-by-case basis, taking which may be freely used or exchanged by IDA in its operations: (2) Part 11 into account the existence of a medium-term adjustment program and a members wh ch make payments of 10 percent of their initial subscriptions strategy for debt management acceptab e to IDA Debt Reduction Facility in freely convertible currencies and the remaining 90 percent of their initial resources are available until September 28, 1992 unless this period IS subscriptions, and all additional subscriptions and contributions, in their extended Any funds not disbursed within that period wi revertt IDA and own currencies or in freely convertible currencies IDA's Articles of be available for use in its general operations Agreement and subsequent replenishment agreements provide that the currency of any Part It member paid in by it may not be used by IDA for protects financed by IDA and located outside the territories of toe member Investments except by agreement between the member and IDA Investment securities are recorded at cost or amortized cost which On May 22, 1990. the Yemen Arab Republic and the People's Democratic approximates market Gains or losses on sales of investments. measured by Republic of Yemen merged in a single state, the Republic of Yemen Ef- Table A. Currency Composition of Investments IDA Special Fund Atrcan Facility Currency 1990 1989 1990 1989 1990 1989 Australian dollars $ 241 362 000 $ 161.893,000 $ - $ - $ - $ Canadian dollars 297 088 000 78 447,000 35 779 000 Deutsche mark . 4.539.000 - 26 206.000 French francs 8.079,000 16 729 000 104,000 Italian Ire 150 1 t6 000 73 565 000 43 052 000 25,108,000 14,323,000 Japanese yen 2,647,000 - - 18 685.000 Netherland guilders 132 950.000 124,367,000 - - Norwegian kroner 63.859,000 86 000 17,224,000 25,923,000 Pounds sterling 986 698 000 428 134 000 19,588 000 - 12 615 000 - Spansh pesetas - 15,837,000 Swedish kronor - 104,471.000 - 10,949,000 433,000 United States do! ars 249,349 000 - - 37 836 000 102,446,000 Other currencies 11,904 000 15,307,000 - 1.470.000 _ 9,598,000 $1.820 118,000 $1,314,657,000 $98505000 $54,751,000 S112,071.000 $168,664,000 (continued) 218 IDA, Special Fund, African Facility, and Debt Reduction Facilily Financial Statements Notes to Financial Statements (continued) June 30, 1990 and June 30, 1989 tective July 13 1990, the Republic ot Yemen is substituted tor the Yemen Note F-Subscriptions and Contributions Arab Republic and the People's Democratic Republic of Yemen in IDA's records as being a single member. As of that date, capital subscriptions and Maintenance of Value: Article IV, Sections 2(a) and (b) of IDA's Articles contributions and voting power were adjusted to reflect the merger. The of Agreement provide for maintenance of value payments on account ol the Republic of Yemen has subscriptions and contributions of $2,139,000, with local currency portion of the initial subscription whenever the par value of a voting power of 20,029 votes. As of that date, all development credits the member's currency or its foreign exchange value has, in the opinion of previously made to or guaranteed by the Yemen Arab Republic or the IDA, depreciated or appreciated to a significant extent within the members' People's Democratic Republic of Yemen were accepted as obligations ot the territories, so long as and to the extent that such currency shall not have Republic of Yemen been initially disbursed or exchanged for the currency of another member. The provisions of Article IV, Sections 2(a) and (b) have by agreement been Note D-Development Credits extended to cover additional subscriptions and contributions of IDA through the third replenishment but are not applicable to those of the fourth and Special Fund and African Facility Development Credits Outstanding are subsequent replenishments. included in the Statements of Condition of IDA since principal repayments The Executive Directors decided on June 30, 1987, that settlements of on these credits shall become part of the general resources of IDA, unless maintenance of value obligations, which would result from the resolution of otherwise provided in a decision of IDA's Executive Directors to lerminate the valuation issue on the basis of the 1974 SDR, would be deferred until administration of the Special Fund by IDA and when the African Facility is the Executive Directors decide to resume such settlements. terminated as of Jone 30, 1990, respectively. Eighth Replenishment At June 30, 1990, the amount ot subscriptions At June 30, 1990, no development credits, other than those referred to and contributions from the eighth replenishment totaled the equivalent ot below, were overdue by more than three months $13,742,000,000. at current exchange rates, of which $251,530,000 was At June 30, 1990, the development credits made to or guaranteed by certain luncommiged and will be carried over to the IDA ninth replenishment. member countries with an aggregale principal balance outstanding of Ninth Replenishment: On May 8. 1990, the Board of Governors of IDA $539,416,000 ($676,590,000-1989) of which $7,435.000 ($6,256,000- adopted a resolution authorizing the ninth replenishment of IDA resources. 1989) was overdue, were in nonaccrual status As of such date. overdue The amount of the replenishment, including supplementary contributions charges in respect of these credits totaled $16,606,000 ($11,716,000- provided by certain members and resources from Switzerland, is equivalent 1989).1 these credls had not been in nonaccrual status, income from credits to approximately SDR11,679,000,000 (at the exchange rates determined for the fiscal Mear ended June 30, 1990 would have been $5,747,000 pursuant to a formula agreed among contributing members). The ninth ($3,952,000-1989) higher A summary of borrowers in nonaccrual status replenishment, on effectiveness, is intended to provide IDA with resources follows: to fund credits that will be committed during the period July 1, 1990 to June 30. 1993 June 30, 1990 Subscriptions and Contributions Not Yet Due. At June 30, 1990 and US$ thousands 1989. the composition of unrestricted subscriptions and contributions not Principal Fiscal yet due will become due as follows: and year 1990 Principal charges income not Nonaccrual Fiscal years 1990 1989 Borrower outstanding overdue accrued since 1990 2 - $2,833,802,000 Liberia . . $100,989 $ 4.042 $ 847 April 1988 1991 696.924,000 646.457.000 Nicaragua 59.997 4,871 462 April 1988 1992 . . 99341000 93,438,000 Sierra Leone 77 893 3,562 658 April 1988 Undetermined 33128 000 1,017,282,000 Syrian Arab Total . . . $829,393.000 $4,590,979,000 Republic 45,466 4,104 341 April 1988 Zambia . 255,071 7,462 3,439 April 1988 Total $539,416 $24,041 $5,747 Note G-Transters from The International Bank I______________ _ t for Reconstruction and Development (IBRD) In fscal year 1990, three borrowers paid off all of their arrears and therefore came out of nonaccrual status As a result income from development credits IDA. The IBRD has authoozed transfers by way of grants to IDA totaling was increased by $1,667 000 for the fiscal year ended June 30. 1990 In $2.640,582,000 ($2,510,706,000-1989) from net income of the IBRD additon, one borrower in nonaccrual status made partial payments in fiscal for the fiscal years ended June 30, 1964 through June 30, 1987. Of the year 1990 total amount, $79,905,000 ($79,905,000-1989) has been disbursed for grants for agricultural research, the control of onchocerciasis, and other developmental activities. Of the balance of $2,560,677,000 Note E-Contribution by Switzerland ($2,430,801,000-1989) available for general purposes of IDA, IDA has received grant contributions in the amount of Swiss trancs $18714,175,000 ($1,714,175,000-1989) has been received and 181,480,000 from the Swiss Confederation, which is not a member of IDA $846.502.000 ($716,626,000-1989) IS reflected as a receivable from the The agreements between the Confederation and IDA provide for converting IRD these grant contributions into subscriptions or contributions if Switzerland African Facility: The IBRD authorized a transfer to the African Facility of should become a member of IDA $150,000,000 from net income of the IBRD for the fiscal year ended Notes to Financial Statements 219 June 30, 1985 These funds were paid to the African Facility in the fiscal funded by the IBRD as accrued through contributions to a Retired Staff year ended June 30, 1989. Benefit Plan (RSBP), which also covers the staff of the IFC and IDA. IDA's Debt Reduction Facility: The IBRD authorized a transfer to the Debt allocated share of the RSBP of $53,380,000 is included in its management Reduction Facility of $100,000,000 from net income for the fiscal year ended tee to the IBRD in fiscal year 1990. June 30, 1989 These funds are reflected as a receivable from the IBRD. Special Fund and African Facility: The service and commitment charges payable by borrowers under Special Fund and African Facility devetopment Note H-Income and Expenses credits are paid directly to IDA to compensate it for services as administrator of the Special Fund and the African Facility. Income from investments of the IDA: IDA pays a management fee to the IBRD representing its share of the Special Fund and the Atrican Facility becomes part of the resources of the administrative expenses incurred by the IBRD. During fiscal year 1990, the Special Fund and the African Facility, respectively. IBRD changed its method of accounting for non-pension retirement benefits Under the new method, the estimated cost for post-retirement health and life Debt Reduction Facility. Income from investments of the Debt Reduction insurance is accrued on an actuarially determined basis Such costs are Facility becomes part of the resources of the Debt Reduction Facility 220 IDA Special Fund. African Facility. and Debt Reduction Facility Financial Statements Report of Independent Accountants Price Waterhouse The Hague Tokyo (International Firm) London Washington New York Price Waterhouse July 30, 1990 President and Board of Governors International Development Association, the Special Fund Administered by the International Development Association, the Special Facility for Sub-Saharan Africa Administered by the International Development Association and the Debt Reduction Facility for IDA-Only Countries Administered by the International Development Association In our opinion, the financial statements appearing on pages 204 through 219 of this Report present fairly, in all material respects, in terms of United States dollars, the financial position of the International Development Association, the Special Fund Administered by the International Development Association, the Special Facility for Sub-Saharan Africa Administered by the International Development Association and the Debt Reduction Facility for IDA-Only Countries Administered by the International Development Association at June 30, 1990 and 1989, and the changes in their commitment resources and their liquid funds for the years then ended in conformity with generally accepted accounting principles in the United States and with International Accounting Standards. These financial statements are the responsibility of management: our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Sr, 221 IBRD/IDA Appendices 1 Governors and Alternates of the World Bank 222 2 Executive Directors and Alternates of the World Bank and Their Voting Power 225 3 Officers and Department Directors of the World Bank 227 4 Offices of the World Bank 230 222 IBRD/IDA Appendices Governors and Alternates Appendix I of the World Bank June 30, 1990 Member Governor Alternate Afghanistan ................ . Hamidullah Tarzi ................... Zalmai Ahmadi Algeria ........ ......... Ghazi Hidouci ................... Mohammed-Salah Belkahla Angola ................. Antonio Henriques da Silva ............ Ant6nio da Silva Inacio Antigua and Barbudaa ............... John E. St. Luce ................... Ludolph Brown Argentina ................. Antonio Erman GonzAilez .............. Javier GonzAlez Fraga Australia ................. P. J. Keating ................... Bob Dun Austria ........ ......... Ferdinand Lacina ................... Othmar Haushofer Bahamas, Thea ................. Sir Lynden 0. Pindling ............... Ethelyn C. Isaacs Bahraina ......... ........ Ibrahim Abdul Karim ................ Isa Abdulla Borshaid Bangladesh ................ . Mohammad Abdul Munim ............ Enam Ahmed Chaudhury Barbadosa ................. L. Erskine Sandiford ................. Winston A. Cox Belgium ......... ........ Philippe Maystadt .................. Alfons Verplaetse Belize ....... .......... Said W. Musa ................... Yvonne S. Hyde Benin ....... .......... Paul Dossou ................... Fatiou Adekounte Bhutan ................. Dawa Tsering ................... Karma Dorjee Bolivia ................. Enrique Garcia Rodriguez ............. Raul Boada Rodriguez Botswana ................. F. G. Mogae ................... Baledzi Gaolathe Brazil ................. Zelia Maria Cardoso de Mello .......... Ibrahim Eris Burkina Faso ................. Pascal Zagre ................... Henri Bruno Bessin Burundi ................. Gdrard Niyibigira ................... Salvator Nkeshimana Cameroon ............. .... Elizabeth Tankeu ................... Simon Ngann Yonn Canada ................. Michael H. Wilson .................. Marcel Masse Cape Verde ................ . Arnaldo C. de Vasconcelos Franca ...... AntMnio Hilario Cruz Central African Republic .............. Thierry Bingaba ................... Gregoire Zowaye Chad ................. Ibni Oumar Mahamat Saleh ............ Ahmed Kerim Togoi Chile ....... .......... Alejandro Foxley Rioseco ............. Jose Pablo Arellano China ......... ........ Wang Bingqian ................... Chi Haibin Colombia ................. Luis F. Alarc6n-Mantilla .............. Francisco J. Ortega Comoros ................. Mohamed Ali ................... Said Mohamed Mshangama Congo, People's Republic of the ....... Pierre Moussa ................... Dieudonne Diabatantou Costa Rica ................. Thelmo Vargas Madrigal .............. Jorge Guardia Quir6s COte d'lvoire ................. Moise Koumoue Kofli ................ Leon Naka Cyprus ........ ......... George Syrimis ................... Michael Erotokritos Denmark ........... ...... Uffe Ellemann-Jensen ................ Ole Loensmann Poulsen Djibouti ................. Mohamed Djama Elabe ............... Ibrahim Kassim Chehem Dominica ........... ...... Mary Eugenia Charles ............... Gilbert Williams Dominican Republic ................ Luis Toral C6rdova ................. Manuel E. G6mez Pieterz Ecuador ................. Jorge Gallardo Zavala ................ Edison Ortiz Duran Egypt, Arab Republic of .............. Kamal El-Ganzoury .................. Maurice Makram-Allah El Salvador ................. Mirna Lievano de Marques ............ Jose Roberto Orellana Milla Equatorial Guinea ................. Marcelino Nguema Onguene ........... Miguel Edjang Angue Ethiopia ......... ........ Tekola Dejene ................... Seyoum Alemayehu Fiji ................. J. N. Kamikamica ................... Rigamoto Taito Finland ................. Matti Louekoski ................... Osmo Sarmavuori France ......... ........ Jacques de Larosiere ................ Jean-Claude Trichet Gabon ......... ........ Marcel Doupamby-Matoka ............ Richard Onouviet Gambia, The ................ . Saihou S. Sabally .................. Alieu M. Ngum Germany, Federal Republic of ......... Juergen Wamke ................... Horst Koehler Ghana ................. Kwesi Botchwey ................... Kwesi Bekoe Amissah-Arthur Greece ........ ......... George Souflias ................... George Papastamkos Grenada ......... ........ George Ignatius Brizan ............... Lauriston F. Wilson, Jr. Guatemala ................. Juan Francisco Pinto Casasola ......... Oscar Pineda Robles Appendix 1 223 Member Governor Alternate Guinea ..........I........ brahima Sylla .................. Kerfalla Yansane Guinea-Bissau .................. Pedro A. Godinho Gomes ............. Jose Lima Barber Guyana .................. Carl Greenidge .................. Winston Murray Haiti .................. Violene Legagneur .................. Ludovic Pierre Honduras .................. Benjamin Villanueva ................ Ricardo Maduro Joest Hungary ........... ....... Imre Tarafas .................. Istvan Major Iceland .......... ........ Jon Sigurdsson .................. Olatur R. Grimsson India ......... ......... Madhu Dandavate .................. Bimal Jalan Indonesia .................. J. B. Sumarlin .................. Hasudungan Tampubolon Iran, Islamic Republic of ............. Mohsen Noorbakhsh ................ Mehdi Navab Iraq ........ .......... Subhi Frankool .................. Hashim Ali Obaid Ireland .......... ........ Albert Reynolds .................. Sean P. Cromien Israel .................. Michael Bruno .................. Yaacov Lifshitz Italy ........ .......... Carlo Azeglio Ciampi ................ Mario Sarcinelli Jamaica' .............. .... Seymour Mullings .................. Omar Davies Japan .................. Ryutaro Hashimoto .................. Yasushi Mieno Jordan .......... ........ Awni Masri ................. . Mohammad H. Al-Saqqaf Kampuchea, Democratic..... (vaGant) ...... (vacant) Kenya .......... ........ George Saitoti .................. Charles S. Mbindyo Kiribati .................. Teatao Teannaki .................. Baraniko Baaro Korea, Republic of ................. Yung-Euy Chung .................. Kun Kim Kuwait ..................A Ali-Khalita Al-Sabah ............... Bader Meshari Al-Humaidhi Lao People's Democratic Republic ....... Sisavath Sisane .................. Soulingong Nhouyvanisvong Lebanon .................. Ali El-Khalil .................. Raja Himadeh Lesotho .................. E. R. Sekhonyana .................. Tom Liphapang Tuoane Liberia .......... ........ Elijah E. Taylor .................. Mary B. Dennis Libya ......... ......... Mohamed El Madni Al-Bukhari ......... Bashir Ali Khallat Luxembourg .................. Jean-Claude Juncker ................ Yves Mersch Madagascar .................. Jean Robiarivony .................. Nirina Andriamanerasoa Malawi .................. L. Chimango .................. Graham Chipande Malaysia ............. ..... Daim Zainuddin .................. Zain Azraai Maldives ............. ..... Fathulla Jameel .................. (vacant) Mali .................. Diango Cissoko .................. Souleymane Dembele Maltaa .................. George Bonello Du Puis .............. Edgar Wadge Mauritania ................ .. Moustapha Ould Abeiderrahmane ....... M'Rabih Rabou Ould Cheikh Bounena Mauritius .............. .... Beergoonath Ghurburrun .............. Madhukarlall Baguant Mexico ........... ....... Pedro Aspe Armella ................. Jose Angel Gurria Morocco ............. ..... Mohamed Berrada .................. Mohammed Dairi Mozambique .................. Abdul Magid Osman ................ Eneas da Conceicao Comiche Myanmar .................. D. 0. Abel .................. Min Aung Nepal .................. Devendra Raj Panday ................ Sashi Narayan Shah Netherlands .................. W. Kok .................. J. P. Pronk New Zealand .................. Graham C. Scott .................. Chris N. Pinfield Nicaragua ............. ..... Emilio Pereira .................. Francisco J. Mayorga Niger .................. Almoustapha Soumaila ............... Abdou Insa Nigeria ......... ......... S. Olu Falae .................. Ahmadu Abubakar Norway ........... ....... Arne Skauge .................. Tom Vraalsen Oman .................. Qais Abdul-Munim Al-Zawawi .......... Mohammed Bin Musa Al-Youset Pakistan ........... ....... V. A. Jafarey .................. Khalid Mahmud Chima Panama .................. Guillermo Ford B .................. Luis H. Moreno Papua New Guinea ................. Paul Pora ............. ..... Morea Vele Paraguay .................. Enzo Debernardi .................. Oscar Jacinto Obelar (continued) 224 IBRD/IDA Appendices Governors and Alternates Appendix 1 of the World Bank (continued) June 30, 1990 Member Governor Alternate Peru .. . . Cesar Vasquez Bazan ................ (vacant) Philippines .. . . Jesus P. Estanislao ................. (vacant) Poland .... Wladyslaw Baka .................. Grzegorz Wojtowicz F,.,rWi,jji ... Luis Miguel Beleza .......... (vacant) Qatara .... . . . Abdul Aziz Khalita Al-Thani ......... Madhat Abdul Latit Masoud Romaniaa .. . Theodor Dumitru Stolojan .Gheorghe Popescu Rwanda ... Benoit Jnw4li-I,A .Emmanuel Ndahimana St. Kitts and Nevis ................. Kennedy A. Simmonds ............ William V. Herbert St. Lucia ................. John G. M. Compton ............ Bernard Lacorbiniere St. Vincent and the Grenadines ......... James F. Mitchell ......... ... Henry A. Gaynes Sao Tome and Principe ............. Agapito Mendes Dias ............ Manuel de Nazareh Mendes Saudi Arabia ................. Mohammad Abalkhail . ........... Hamad Al-Sayari Senegal ................. Moussa Toure ............ Abdoul Aziz Diop Seychellesa ............. .... Danielle de St. Jorre ............ Bertrand Rassool Sierra Leone ................. Thomas Taylor Morgan ............ Y. T. Sesay Singaporea............. .. Richard Hu Tsu Tau .Ngiam Tong Dow Solomon Islands ........... Christopher C. Abe .Leonard Palmer Maenu'u Somalia ........... Mohamud Ghelle Yusut .Said Ahmed Yusuf South Africa .... ....... C. L. Stals .J. A. Lombard Spain ... ........ Carlos Solchaga .Mariano Rubio Jimenez Sri Lanka ... ........ D. B. Wijetunga .R. Paskaralingam Sudan ........... Abdul Rahim Mahmoud Hamdi .Mohamed Khair El Zubair Surinamea ., ............ Subhas Ch. Mungra .R. W. Braam Swaziland ........... Andreas Fakudze .Noreen N. Maphalala Sweden ........... Allan Larsson .Lena Hjelm-Wallen Syrian Arab Republic ........... Mohammed Khaled Mahayni .Adnan Al-Saty Tanzania ........... K. A. Malima .Simon Mbilinyi Thailand ........... Pramual Sabhavasu .Panas Simasathien Togo ........... Barry Moussa Barque .Kwassi Klutse Tonga ... ........ James Cecil Cocker .Selwyn Percy Jones Trinidad and Tobago ........... Selby Wilson .William G. Demas Tunisia .... ....... Mustapha Kamel Nabli .Abdellatif Saddem Turkey ........... Namik Kemal Kilic .Mahfi Egilmez Uganda ........... Joshua Mayanja Nkangi .Suleiman Kiggundu United Arab Emirates ........... Hamdan bin Rashid Al Maktoum. Ahmed Humaid Al-Tayer United Kingdom ........... Robin Leigh-Pemberton .Timothy Lankester United States ........... Nicholas F. Brady .Richard T. McCormack Uruguaya ........ ....Enrique Braga Garcia ..... ...... Conrado Hughes Vanuatu ... Sela Molisa .George Pakoa Venezuelaa . . ........... . . Miguel Rodrguez .Eduardo Quintero Viet Nam ........... Cao Si Kiem .(vacant) Western Samoa ........... Tuilaepa S. Malielegaoi .Kolone Va'ai Yemen Arab Republic ........... Mohammed Saeed Al-Attar .Kaid Mohammed Al-Hirwi Yemen, People's Democratic Republic of . Faraq Bin Ghanem ......... ... Abdulla Saeed Abaddan Yugoslavia .. . . Branimir Zekan ........... ... Boris Skapin Zaire .. . . Bombito Botomba Lompio ............ Mbonga Magalu Engwanda Zambia .... Gibson G. Chigaga .............. Lennard Nkhata Zimbabwe .... B. T. G. Chidzero .............. K. J. Moyana a. Member of the IBRD only. Appendix 2 225 Executive Directors and Alternates Appendix 2 of the World Bank and Their Voting Power June 30, 1990 IBRD IDA Total % of Total % ot Executive director Alternate Casting votes of votes total votes total Appointed E. Patrick Coady ............ Mark T. Cox, IV .......... United States ............... 162,773 15.37 1,189,128 17.41 Masaki Shiratori ............ Yukio Yoshimura ......... Japan .................. 94,020 8.88 664,752 9.73 Gerhard Boehmer ........... Bernd Esdar ............ Federal Republic of Germany ... 72,649 6.86 478,598 7.01 Frank Cassell .............. Robert Graham-Harrison .... United Kingdom ............. 69,647 6.58 392,447 5.74 Jean-Pierre Landau .......... Stephane Pallez .......... France .................. 55,477 5.24 267,428 3.91 Elected Jacques de Groote ........ Bahar Sahin ..... Austria, Belgium, Hungary, (Belgium) (Turkey) Luxembourg, Turkey .......... 53,945 5.09 236,777 3.47 Paul Arlman .. .. Cvitan Dujmovic ....... Cyprus, Israel, Netherlands, (Netherlands) (Yugoslavia) ........... Romania,a Yugoslavia .46,871 4.42 218,038 3.19 Frank Potter .. .. Clarence Ellis ...... Antigua and Barbuda,a The (Canada) (Guyana) Bahamas,a Barbados,a Belize, Canada, Dominica, Grenada, Guyana, Ireland, Jamaica,a St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines . . 46,808 4.42 293,978 4.30 Jorge Pinto .. .. Edgar Ayalesb ...... Costa Rica, El Salvador, (Mexico) (Costa Rica) Guatemala, Honduras, Mexico, Nicaragua, Panama, Spain, Venezuelaa ................ 43,300 4.09 186,970 2.74 Jonas H. Haralz ....... Jorunn Maehlum ........ Denmark, Finland, Iceland, (Iceland) (Norway) Norway, Sweden ..... ....... 42,326 4.00 324,257 4.75 Chang-Yuel Lim ....... Robert G. Carling ........ Australia, Kiribati, Korea (Republic of Korea) (Australia) (Republic of), New Zealand, Papua New Guinea. Solomon Islands, Vanuatu, Western Samoa ................... 39,580 3.74 165,277 2.42 Cesare Caranza .... .. Fernando S. Carneiro ..... Greece, Italy, Malta,a Poland, (Italy) (Portugal) Portugala ........... ...... 39,570 3.74 391,478 5.73 J. S. Baijal.. .. M. Mustafizur Rahman ... . Bangladesh, Bhutan, India, (India) (Bangladesh) Sri Lanka ...... ........... 38,497 3.63 293,094 4.29 Zhang Junyi ........... Jin Liqun .......... China .................. 35,221 3.33 138,951 2.03 (China) (China) Fawzi Hamad Al-Sultan ....... Mohamed W. Hosny ...... Bahrain,a Egypt (Arab Republic (Kuwait) (Arab Republic of Egypt) of), Iraq, Jordan, Kuwait, Lebanon. Maldives, Oman, Pakistan, Qatar,a Syrian Arab Republic, United Arab Emirates, Yemen Arab Republic ......... 32,337 3.05 255,712 3.74 (continued) 226 IBRD/IDA Appendices Executive Directors and Alternates Appendix 2 of the World Bank and Their Voting Power (continued) June 30, 1990 IBRD IDA Total % of Total % of Execubtve director Alternate Casting votes of votes total votes total Mourad Benachenhou ........ Salem Mohamed Omeish .. . Afghanistan, Algeria, Ghana, Iran (Algeria) (Libya) (Islamic Republic ot), Libya, Morocco, Tunisia, Yemen (People's Democratic Republic of) .......... 30,469 2.88 120,777 1.77 Vibul Aunsnunta ....... Le Van Chau ...... Fiji, Indonesia, Lao People's (Thailand) (Viet Nam) Democratic Republic, Malaysia, Myanmar, Nepal, Singapore,a Thailand, Tonga, Viet Nam ........ 29,523 2.79 200,362 2.93 Eduardo Wiesner . ....... Pedro Sampaio Malan ..... Brazil, Colombia, Dominican (Colombia) (Brazil) Republic, Ecuador, Haiti, Philippines, Suriname,' Trinidad and Tobago.... 28,641 2.70 213,146 3.12 J. S. A. Funna ........ Jabez A. Langley ......... Botswana, Burundi, Ethiopia, The (Sierra Leone) (The Gambia) Gambia, Guinea, Kenya, Lesotho, Liberia, Malawi, Mozambique, Nigeria, Seychelles,a Sierra Leone, Sudan, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe ......... 25,623 2.42 230,481 3.37 Ibrahim A. Al-Assaf ......... Abdulaziz Al-Sehail ....... Saudi Arabia ...... 25,390 2.40 226,623 3.32 (Saudi Arabia) (Saudi Arabia) Raymundo Morales .......... Felix Alberto Camarasa . Argentina, Bolivia, Chile, (Peru) (Argentina) Paraguay, Peru, Uruguaya ......... 24,745 2.34 138,856 2.03 Andre Milongo ............ Jean-Pierre Le Bouder .... Benin, Burkina Faso, Cameroon, (People's Republic of the (Central African Republic) Cape Verde, Central African Congo) Republic, Chad, Comoros, Congo (People's Republic of the), C6te d'lvoire, Djibouti, Equatorial Guinea, Gabon, Guinea-Bissau, Madagascar, Mali, Mauritania, Mauritius, Niger, Rwanda, Sao Tome and Principe, Senegal, Somalia, Togo, Zaire ...... 21,843 2.06 204,717 3.00 In addition to the executive directors and alternates shown in the foregoing list, the following also served after June 30, 1989: Executive director End of period of service Alternate director End of period of service Mario Draghi . ........... January 16, 1990 J. A. L. Faint ...... August 20, 1989 (Italy) (United Kingdom) Helene Ploix . . ... October 1,1989 Rodrigo M. Guimaraes ....... November 22, 1989 (France) (Portugal) Mohd. Ramli Wajib . ........ October 31, 1989 Veikko Kantola ....... July 31, 1989 (Malaysia) (Finland) C. R. Krishnaswamy Rao Sahib ..... July 31, 1989 Michael von Harpe ......... September 1,1989 (India) (Federal Republic of Jobarah E. Suraisry . ........ October 10, 1989 Germany) (Saudi Arabia) NOrT: Angola (2,926 votes in IBRD and 45,662 votes in IDA), Democratic Kampuchea (464 votes in IBRD and 7,826 votes in IDA), and South Africa (13,712 votes in IBRD and 20,119 votes in IDA) did not participate in the 1988 regular election of executive directors. a. Member of the IBRD on y. b. To be succeeded by Silvia Charpentier (Costa Rica) as of July 1,1990. Appendix 3 227 Officers and Department Directors Appendix 3 of the World Bank June 30, 1990 President ........................................................... Barber B. Conable* Senior Vice President, Operations ........................................... Moeen A. Oureshi- Senior Vice President, Finance .............................................. Ernest Stern- Senior Vice President, Policy, Research, and External Altairs ......................... Wilfried P. Thalwitz' Finance Vice President and Controller ............................... ........... Stephen D. Eccles Vice President and Treasurer ................... ................. ....... Donald Roth Vice President, Financial Policy and Risk Management ........ ..................... D. Joseph Wood Operations Vice President, Latin America and the Caribbean Regional Office ...... ................ S. Shahid Husain Vice President, Africa Regional Office ..... .................................... Edward V. K. Jaycox Vice President. Asia Regional Office ............. .............................. Attila Karaosmanoglu Vice President, Cofinancing and Financial Advisory Services ....... .................. Koji Kashiwaya Vice President, Europe, Middle East, and North Africa Regional Office .... ........... Willi A. Wapenhans Policy, Research, and External Affairs Vice President, Development Economics and Chief Economist ....... ................. Stanley Fischer Vice President, Sector Policy and Research .......... ........................... Visvanathan Rajagopalan Operations Evaluation Director-General ......................................................... Yves Rovani Corporate Planning and Budgeting Vice President .......................................................... Robert Picciotto Legal Vice President and General Counsel I........................................ Ibrahim F. I. Shihata** Secretary's Vice President and Secretary .. ............................................ Timothy T. Thahane** Personnel and Administration Vice President ......................... ................................ Bilsel Alisbah Office of the President Director . .............................. .................. Sven Sandstrom Finance Director, Cash Management Department ..................... .................. Hywel M. Davies Director, Financial Operations Department ....................................... Jessica P. Einhorn Director, Loan and Trust Funds Department ..................................... James H. Jennings Director, Resource Mobilization Department .................................... Basil G. Kavalsky Director, Tokyo Office ................. ................................... Nobuaki Kemmochi Deputy Treasurer and Director, Treasury Operations .... Caio K. Koch-Weser Director, Investment Department .............................................. Jean-Francois Rischard Director, Accounting Department ............................................. Michael E. Ruddy Director, Risk Management and Financial Policy Department ......................... (vacant)a Operations Director, Operations Staff ................................................. David R. Bock Director, Economic Advisory Staff . .......................................... Vinod Dubey Director, Central Operations Department ........... ............................. Ducksoo Leeb Director, Cofinancing and Financial Advisory Services Department ... ................ (vacant) Africa Regional Office Director, Country Department: Burkina Faso, Cape Verde, Chad, The Gambia, Mali, Mauritania, Niger. Senegal ........................................................ Michael J. Gillettec Director, Country Department: Burundi, Comoros, Djibouti, Madagascar, Rwanda, Seyche les, Zaire .......................................................... Paul Isenman0 Director, Country Department: Ethiopia, Kenya, Mauritius, Somalia, Sudan, Uganda ..... .... Callisto E. Madavo Director, Country Department: Benin, Cameroon, Central African Republic, People's Republic of the Congo, Cote dilvoire, Equatorial Guinea, Gabon. Guinea, Togo ....... .. ......... Ismail M. Serageldine (continued) 228 IBRD/IDA Appendices Officers and Department Directors Appendix 3 of the World Bank (continoued June 30, 1990 Director, Country Department: Angola. Botswana, Lesotho, Malawi, Mozambique, Swaziland, Tanzania, Zambia, Zimbabwe ................... ........................... (vacant)' Director, Country Department: Ghana, Guinea-Bissau, Liberia, Nigeria, Sao Tome and Principe, Sierra Leone . .................................................. (vacant)9 Director, Technical Department ................... ........................... Hans Wyssh Asia Regional Office Director, Country Department: Bangladesh, Bhutan, Nepal, Sri Lanka ...... ............. Shinji Asanuma Director, Country Department: China .............. ............................ Shahid Javed Burki Director, Country Department: Fiji, Indonesia, Kiribati, Maldives, Papua New Guinea, Solomon Islands, Tonga, Vanuatu, Western Samoa ........ ...................... Russell J. Cheetham Director, Country Department: Democratic Kampuchea, Republic ot Korea, Lao People's Democratic Republic, Malaysia, Myanmar, Frniip.pmK: Thailand, Viet Nam ..... ........ Gautam S. Kaji Director, Country Department: India ............... ............................ Heinz Vergin Director, Technical Department ................... ........................... (vacant)i Europe, Middle East, and North Africa Regional Office Director, Country Department: Algeria, Libya, Malta, Morocco, Tunisia ...... ............ Kemal Dervis Director, Country Department: Pakistan, Turkey .......... ......................... Hans-Eberhard Kdpp: Director, Country Department: Cyprus, Hungary, Poland, Portugal, Romanma, Yugoslavia ... Eugenio F. Lari Director, Country Department: Afghanistan, Bahrain, Arab Republic of Egypt, Islamic Republic of Iran, Iraq, Jordan, Kuwait, Lebanon, Qatar, Oman, Saudi Arabia, Syrian Arab Republic, United Arab Emirates, Yemen Arab Republic, People's Democratic Republic of Yemen ..... Everardus J. Stoutjesdijkk Director, Technical Department ................... ........................... Abderraout Bouhaouala Latin America and the Caribbean Regional Office Director, Country Department: Argentina, Chile. Ecuador, Paraguay, Peru, Uruguay ..... .... Pieter P. Bottelier Director, Country Department: Brazil ............... ............................ Armeane M. Choksi Director, Country Department: Antigua and Barbuda, The Bahamas, Barbados, Belize, Bolivia, Colombia, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, Venezuela ..................................................... Ping-Cheung Loh Director, Country Department: Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama ..................................................... Rainer B. Steckhan Director, Technical Department ................... ........................... (vacant)' Policy, Research, and External Affairs Director, External Affairs Department .............. ............................ Francisco J. Aguirre-Sacasam Director, Geneva Office .................................................... Jean Baneth Director, Industry and Energy Department ............ ........................... Anthony A. Churchill Director, Publications Department ................. ........................... James K. Feather Director, Economic Development Institute ............ ........................... Amnon Golan Director, Population and Human Resources Department ........ ..................... Ann D. Hamilton Director, European Office . .................................................. Olivier Lafourcade Director, Country Economics Department ............ ........................... Johannes F. Linn Director, Agriculture and Rural Development Department ........ .................... Michel J. Petit Director, Environment Department ................. ........................... Kenneth Piddington Director, Infrastructure and Urban Development Department ....... ................... Louis Y. Pouliquen Director, International Economics Department .......... .......................... D. C. Rao Director, Strategic Planning and Review Department ........ ....................... Alexander Shakowl Executive Secretary, Consultative Group on International Agricultural Research ..... ....... Alexander von der Osten-Sacken Operations Evaluation Director, Operations Evaluation Department ........... ........................... Ram Kumar Chopra0 Corporate Planning and Budgeting Auditor General, Internal Auditing Department .......... .......................... Allan D. Legg Legal Associate General Counsel, Legal Department .......... .......................... Hugh N. Scott Appendix 3 229 Personnel and Administration Director, Personnel Operations Department ......... ............................ Alberto de Capitani Director, Information, Technology, and Facilities Department ...... ................... Harinder S. Kohli Director, General Services Department .......... ............................... Richard B. Lynn Director, Health Services Department .......... ................................ C. Nordanlycke-Yoo (acting)P Director, Personnel Policy Department .......................................... Everardo C. Wessels Chairman, President's Counci . i. Daniel G. Ritchie appointed to position as of Ju y 1, 1990. Member, President's Counci . *. To be succeeded by Michael H. Wiehen as ot July 1, 1990. a. Everardus J. Stoutiesdiik appointed to position as of July 1, 1990 k. To be succeeded by Ram Kumar Chopra as of July 1, 1990. b To be succeeded by Hans Wyss as of July 1, 1990. Edilberto L. Segura appointed to position as of July 1, 1990. c. To be succeeded by Katherine Marshall as of July 1, 1990. m To be succeeded by Alexande, Shakow as of July 1, 1990. d. To be succeeded by Francisco J. Aguirre-Sacasa as of July 1, 1990. n As of July 1, 1990, a portion of this department will be incorporated into e. To be succeeded by Michael J. Gillette as of July 1, 1990. the External Affairs Department: another portion will become the Policy and f. Stephen M. Denning appointed to position as of Ju y 1, 1990. Review Department, with Paul Iserman as director. g. Edwin R. Lim appointed to position as of July 1, 1990. o. To be succeeded by Hans-Eberhard Kopp as of July 1, 1990. h. To be succeeded by Ismail M. Serageldin as of Ju y 1, 1990. p. To be succeeded by Dr. Bernhard H. Liese as of July 1, 1990 230 IBRD/IDA Appendices Offices of the World Bank Appendix 4 June 30, 1990 Headquarters: 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. New York Office G. David Loos The World Bank Mission to the Special Representative to the United Nations/New York Office United Nations 747 Third Avenue (26th Floor) New York. N.Y. 10017, U.S.A. European Office Olivier Lafourcade The World Bank Director 66, avenue d'lena 75116 Paris, France Geneva Office Jean Baneth The World Bank Director ITC Building 54, rue de Montbrillant Geneva, Switzerland (mailing address: P.O. Box 104, 1211 Geneva 20 CIC, Switzerland) Tokyo Oiiice Nobuaki Kemmochi The World Bank Director Kokusai Building (Room 916) 1-1 Marunouchi 3-chome Chiyoda-ku, Tokyo 100, Japan Regional Mission Peter Eigen The World Bank in Eastern Africa Director Reinsurance Plaza (5th and 6th Floors) Taita Road Nairobi, Kenya rrIn; irq, address: P.O. Box 30577) Regional Mission Elkyn A. Chaparro The World Bank in Western Africa Chief Corner of Booker Washington and Jacques AKA Streets Cocody, Abidjan 01 Cote d'lvoire (mailing address: B.P. 1850) Regional Mission Philippe E. Annez The World Bank in Thailand Chief Udom Vidhya Building (5th Floor) 956 Rama IV Road, Sala Daeng Bangkok 10500. Thailand Argentina Myrna L. Alexander Banco Mundial Resident Representative Bartolome Mitre 797- Piso 8 Buenos Aires, Argentina Bangladesh Christopher Willoughby Resident Mission Chief The World Bank 3A Paribagh Dhaka 1000, Bangladesh (mailing address: G.P.O. Box 97) Benin Eduardo Locatelli The World Bank Resident Representative Zone Residentielle de la Radio Cotonou, Benin (mailing address: B.P. 03-2112) Bolivia Fernando Mendoza Banco Mundial Resident Representative Edificio BISA, Piso 9 16 de Julio 1628 La Paz, Bolivia (mailing address: Casilla 8692) Appendix 4 231 Brazil George Papadopoulos Banco Mundial Resident Representative Setor Comercial Sul, Quadra 1, Bloco H Edificio Morro Vermelho-8 Andar Brasilia, DF 70.300, Brazil Brazil George Papadopoulos Banco Mundial Representative c/o Furnas Centrais Eletricas, S.A. Rua Real Grandeza, 219 Bloco C, Ncno Andar Rio de Janeiro, RJ 2400 Brazil Brazil Edward B. Rice Banco Mundial, S1127 Head of Field Oftice Edificio SUDENE Cidade Universitdria 50,000 Recife PE. Brazil Burkina Faso Claude R. Delapierre The World Bank Resident Representative Immeuble BICIA (3eme 6tage) Ouagadougou, Burkina Faso (mailing address: B.P. 622) Burundi Maurice H. Gervais The World Bank Resident Representative 45, avenue de la Poste Bujumbura, Burundi (mailing address: B.P. 2637) Cameroon Raymond Rabeharisoa The World Bank Resident Representative Immeuble Kennedy Avenue Kennedy Yaounde, Cameroon (mailing address: B.P. 1128) Central African Republic Jean-Paul Dailly The World Bank Resident Representative Rue des Missions Bangui, C.A.R. (mailing address: B.P. 819) Chad Horst M. Scheffold The World Bank Resident Representative P.O. Box 146 N'djamena, Chad China Edwin R. Lim The World Bank Chief Building 5 2 Fu Cheng Lu Beijing, China 100830 Colombia P. Hari Prasad Banco Mundial Resident Representative Carrera 10, No. 86-21, Piso 3 Bogota D.E., Colombia (mailing address: Apartado Aereo 10229) Congo, People's (vacant) The World Bank Republic of the Avenue Amilcar Cabral Immeuble Arc (5ime etage) Brazzaville, Congo (mailing address: B.P. 14536) (continued) 232 IBRD/IDA Appendices Offices of the World Bank (continued) Appendix 4 June 30, 1990 Ethiopia T. James Goering The World Bank Resident Representative I.B.T.E. New Telecommunications Building (lst Floor) Churchill Road Addis Ababa, Ethiopia (mailing address: P.O. Box 5515) Ghana Silvio Capoluongo The World Bank Resident Representative 69 Eighth Avenue Extension Northridge Residential Area Accra, Ghana rig address: P.O. Box M27) Guinea Michael Wilson The World Bank Resident Representative Centre Tertiaire Corniche Sud Conakry 1, Guinea Guinea-Bissau Yves J. Tencalla Banco Mundial Resident Representative Aparado 78 1041, Guinea-Bissau India Jochen Kraske Resident Mission Chief The World Bank 55 Lodi Estate New Delhi 110003, India (mailing address: P.O. Box 416, New Delhi 110001) Indonesia Attila Sonmez The World Bank Director Jalan Rasuna Said, Kav. B-10 (Suite 301) Kuningan, Jakarta 12940, Indonesia (mailing address: P.O. Box 324/JKT) Madagascar Jose A. Brontman Banque mondiale Resident Representative 1, rue Patrice Lumumba Antananarivo 101, Madagascar (mailing address: Banque mondiale, B.P. 4140) Malawi John M. Malone The World Bank Resident Representative Development House Capital City Lilongwe 3, Malawi (mailing address: P.O. Box 30557) Mali Monique P. Garrity The World Bank Resident Representative Immeuble Sogefih Quartier du Fleuve Avenue Moussa Travele Bamako, Mali (mailing address: B.P. 1864) Mauritania Sunil Mathrani The World Bank Resident Representative Villa No. 30, llot A Quartier Socofim Nouakchott, Mauritania (mailing address: B.P. 667) Appendix 4 233 Mexico Marko Voijc Banco Mundial Resident Representative Nacional Financiera, S.N.C. Isabel La Catolica No. 51 Primer Piso Colonia Centro 06006 Mexico City, D.F. Mexico Mozambique Nils 0. Tcheyan The World Bank Resident Representative Av. 25 de Setembro, 1218 2-Andar Maputo, Mozambique Nepal Nigel Roberts The World Bank Resident Representative Jyoti Bhawan, Kantipath Kathmandu, Nepal (mailing address: P.O. Box 798) Niger Whitney P. Foster The World Bank Resident Representative Immeuble BDRN Niamey, Niger (mailing address: Banque mondiale, B.P. 12402) Nigeria Tariq Husain The World Bank Resident Representative 1st Floor Plot PC-10 Engineering Close, off Idowu Taylor Street Victoria Island Lagos, Nigeria (mailing address: P.O. Box 127) Pakistan Luis de Azcarate The World Bank Chief 20 A Shahrah-e-Jamhuriat Islamabad, Pakistan T,Tjih,,, address: P.O. Box 1025) Philippines Rolando R. Arrivillaga The World Bank Resident Representative Central Bank of the Philippines Multi-storey Building, Room 200 Roxas Boulevard Manila, Philippines Poland Ian M. Hume Resident Mission Resident Representative The World Bank INTRACO 1 17th Floor 2 Stawski Street 00-193 Warsaw, Poland Rwanda Emmanuel Akpa The World Bank Resident Representative Blvd. de la Revolution BRD Building Kigali, Rwanda (mailing address: P.O. Box 609) Saudi Arabia John R. Bowlin Resident Mission Director The World Bank Riyadh, Saudi Arabia (mailing address: P.O. Box 5900, Riyadh, Saudi Arabia 11432) (continued) 234 IBRD/IDA Appendices Offices of the World Bank (continued) Appendix 4 June 30, 1990 Senegal Francois-Marie Patorni The World Bank Resident Representative Immeuble S.D.I.H. 3 Place de l'lndependance Dakar, Senegal Somalia Luciano Borin The World Bank Resident Representative Savoy Centre (2nd Floor) Mogadishu, Somalia (mailing address: P.O. Box 1825) Sri Lanka Hari C. Aggarwal The World Bank Resident Representative Development Finance Corporation of Ceylon (DFCC) Building 1st Floor 73/5 Galle Road Colombo 3, Sri Lanka (mailing address: P.O. Box 1761) Sudan Abhay Deshpande The World Bank Resident Representative MAID Building Block 9 East Khartoum, Sudan (mailing address: P.D. Box 2211) Tanzania Ian C. Porter The World Bank Resident Representative N.I.C. Building (7th Floor, B) Dar es Salaam, Tanzania (mailing address: P.O. Box 2054) Togo Jacques Daniel The World Bank Resident Representative 169, Boulevard du 13 Janvier Immeuble BTCI (Bme etage) Lome, Togo (mailing address: B.P. 3915) Turkey James Chaftey The World Bank Resident Representative Ataturk Bulvar, No. 211 Gama-Guris Building Kat 6 06683 Kalvaklidere Ankara, Turkey Uganda Grant Sladea The World Bank Resident Representative P.O. Box 4463 Kampala, Uganda Zaire Jdrome Chevallier The World Bank Resident Representative Immeuble de la Communaute Hellenique Boulevard du 30 Juin Kinshasa 1, Zaire Zambia Sarshar Khan The World Bank Resident Representative CMAZ Building Ben Bella Road Lusaka, Zambia (mailing address: P.O. Box 35410) Zimbabwe Mahmud A. Burney The World Bank Resident Representative CABS Centre (llth Floor) Jason Moyo Avenue Harare, Zimbabwe (mailing address: P.O. Box 2960) a. To be sLcceeded by Seung Hong Choi as of July 1, 1990 The World Bank Headquarters '1818 H Street, N.W. Washington, D C 20433, U,S.A Teiepnone: (202) 477-1234 Facsimile: (202) 477-6391 TVeex: WUI 64145 WORLDBANK RCA 248423 WORLDBK Cable Address: INTBAFRAD WVASHINGTONDC European Office 66, avenue d'iena 75116 Paris, France Telephone: (1) 40,69,30.00 Facsimile: (1) 4720.19.66 Telex: 842-620628 Tokyo Office Kokusai Building 1-1, Marunouchi 3-chome Chiyoda-ku, Tokyo 100, Japan Telephone: (3) 214-5001 Facsimile: (3) 214-3657 Telex: 781-26838 ISBN 0-8213-1561-7