20893 ANNUAL REPORT ON PORTFOLIO PERFORMANCE FISCAL YEAR 1997 November 21,1997 Quality Assurance Group FILE COPY ACRONYMS AND ABBREVIATIONS AFR Africa Region LACI Loan Administration Change ARPP Annual Report on Portfolio Performance Initiative CAS Country Assistance Strategy M&E Monitoring and Evaluation CMU Country Management Unit MIS Management Information System CODE Committee on Development MNA Middle East and North Africa Effectiveness Region CPMP Country Portfolio Management Paper MP Montreal Protocol CPPR Country Portfolio Performance Review MTR Midterm Review DO Development Objectives NGO Non-governmental Organization EAP East Asia and Pacific Region OCS Operational Core Services Network ECA Europe and Central Asia Region OD Operational Directive ECON Report on the Quality on Economic OED Operations Evaluation Department Evaluation OIS Operations Information System EIR Early Implementation Review PAD Project Appraisal Document ESSD Environmentally and Socially PCD Project Concept Document Sustainable Development PFG Project Finance and Guarantee FIL Financial Intermediary Loan Department FPSI Finance, Private Sector and PIP Portfolio Improvement Program Infrastructure PMTF Portfolio Management Task Force FY Fiscal Year PNG Papua New Guinea GEF Global Environment Facility PREM Poverty Reduction and Economic HDD Human Development Management HNP Health, Nutrition and Population PSD Private Sector Development IBRD International Bank for Reconstruction PSM Public Sector Management and Development PTI Program of Targeted Intervention ICR Implementation Completion Report QAG Quality Assurance Group IDA International Development Association RM Resident Mission IP Implementation Progress SAL Structural Adjustment Loan LCR Latin America and the Caribbean SAR South Asia Region Region SW Staff Weeks LLC Learning and Leadership Center TA Technical Assistance TAL Technical Assistance Loan ACKNOWLEDGMENT The report was written by Robert Hindle under the direction of Prem Garg. This report benefited from contributions of a large number of staff from across the Bank, including: Messrs.IMmes. Hans Adler, Florent Agueh, Suman Babbar, Constance Bernard, Jaime Biderman, Nicholas Burnett, Charles Chandler, Robert Crown, Anil Gore, David Hughart, John Kendall, Michael Lay, Jane Loos, Kathleen Mikitin, Herve Plusquellec, Derek Poate, Hari Prasad, Bilal Rabill, Daniel Ritchie, Rene Ruivivar, George Russell, Walter Schwermer, Kathy Sierra, Khalid Siraj, David Steeds, Bocar Thiam, Gerhard Tschannerl, Robert Van der Lugt, Christopher Walker and Richard Westin. Jaime Zaldivar provided data analysis and Leila Cruz and Nina Perez prepared the document. Patrick Grasso (OED) provided useful comments and the draft report was reviewed by Claude Blanchi, Gianni Brizzi, Zafer Ecevit, Katherine Marshall, Manuel Penalver, and Steven Weissman. ANNUAL REPORT ON PORTFOLIO PERFORMANCE FY97 TABLE OF CONTENTS Executive Summary ........................................................................................................... i 1. INTRODUCTION ................................................................................................,..... II. PORTFOLIO SIZE AND COMPOSITION.....................................................................3 III. PORTFOLIO PERFORMANCE ..................................................................................8 IV. PORTFOLIO MANAGEMENT ................................................................................. 16 A. Implementation Support to Borrowers ............................................................18 B. Strengthening Bank's Portfolio Management Capacity ..................................30 V. AGENDA FOR ACTION AND FUTURE PROSPECTS..................................................39 A. Maintaining a Focused Approach to Portfolio Management...........................39 B. Improving Quality of Supervision...................................................................41 C. Improving Project Performance Monitoring....................................................42 D. Enhancing Quality at Entry .............................................................................43 E. Monitoring Progress ........................................................................................43 F. Expected Outcomes ......................................................................................... 44 ANNEXES Annex I Performance of Trust Fund and Other Operations............................................46 Annex II Rating Methodology.........................................................................................49 Annex III Sectoral Portfolio Reviews: Systemic Findings..............................................52 TEXT TABLES Table 2.1 Bank Portfolio in Nominal and Real Terms, FY92-97.......................................3 Table 2.2 Portfolio Distribution by Sector, FY92-97.........................................................5 Table 2.3 Portfolio Distribution by Lending Instrument, FY92-97....................................6 Table 2.4 PTI Portfolio by Regions, FY96-97 ...................................................................7 Table 3.1 Portfolio Performance by Region, FY92-97.....................................................11 Table 3.2 Portfolio Performance by Country Portfolio Size ............................................12 Table 4.1 Realism and Proactivity Indices by Region, FY96-97 .....................................34 Table 5.1 Regional Distribution of Targeted Clusters......................................................41 TEXT BOXES Box 3.1 Technical Assistance Operations Necessary for Development but Problem Prone ............................................................14 Box 4.1 Status of Portfolio Improvement Actions ..........................................................17 Box 4.2 Yemen Portfolio Turnaround.............................................................................19 Box 4.3 Irrigation and Drainage Subsectors....................................................................22 Box 4.4 Evaluation of Country Portfolio Management Papers.......................................23 Box 4.5 Russia "Just in Time" Project Restructuring......................................................24 Box 4.6 Uganda Power III: A Decision Not to Close.....................................................26 Box 4.7 Fitting the Portfolio with Monitoring Indicators ...............................................28 Box 4.8 Effectiveness of Field Supervision ....................................................................30 Box 4.9 Implementing the New Form 590 ......................................................................33 Box 4.10 Assessment of Projects at Risk, Realism and Proactivity Indices .................................................................................35 Box 4.11 Selected Service Standards for Portfolio Management......................................37 B ox 5.1 FY 98 Priorities...................................................................................................40 Box 5.2 Improving Use of Log Frame and M&E............................................................42 Figures Figure 2.1 Portfolio Distribution by Region, FY92 and FY97..........................................4 Figure 3.1 Portfolio Performance ......................................................................................9 Figure 3.2 Selected "At Risk" Flags, FY92-97 ...............................................................10 Figure 4.1 Portfolio Improvement Program, FY95-FY97...............................................20 Figure 4.2 Evolution of the Net Disconnect by Closing Year.........................................36 Figure 4.3 Average Disconnect by Region......................................................................36 STATISTICAL APPENDIX EXECUTIVE SUMMARY 1. The FY97 Annual Report on Portfolio Performance (ARPP) is the sixth in a series of annual reports on the Bank's operations portfolio prepared in accordance with the recommendations of the Portfolio Management Task Force (PMTF) Report of 1992. The FY97 ARPP has three main objectives: * assess the current status of the portfolio and its evolution since the PMTF report; * describe measures taken in FY97 to manage the portfolio, evaluate their effectiveness, and identify additional measures to be taken over the coming FY; and, * provide an assessment of the medium-term prospects for the portfolio. Portfolio Status 2. The Bank's portfolio in FY97 comprised 1,766 operations, with a total commitment of US$141 billion. The portfolio continues to be concentrated in a relatively small number of countries. The seven largest country portfolios (China, India, Indonesia, Mexico, Brazil, Russia, and Argentina), each with more than US$6 billion in commitments, accounted for over one-quarter of all projects and over one-half of total commitments in the FY97 portfolio. 3. The portfolio has changed significantly in recent years. While the number of operations has been relatively stable since FY92, commitments in real terms have declined by nearly 10% . The ECA portfolio has increased rapidly, while Africa and South Asia portfolios had the largest declines. Among the sectors, the Agriculture portfolio has declined sharply, though it is still the largest in terms of number of projects. Lending for Electric Power and Telecommunications have also declined. Education and HNP lending have expanded rapidly and together account for almost one-sixth of the total commitments. Lending for Environment, Social Sector and Public Sector Management has also increased sharply. The above changes in portfolio size and composition reflect the Bank response to inter alia the changing role of the state in economic development; the increasing importance of private capital flows to developing countries; and the expansion of Bank membership. Changes in the portfolio also reflect the results of Bank efforts to strengthen linkages between lending decisions and past performance. 4. Overall portfolio performance improved in FY97. Projects at risk, which includes both actual and potential problem projects and is the most reliable measure of portfolio health, declined in FY97 from 31% of the portfolio to 26% by commitment value and from 34% to 30% by number of projects. Actual problem projects also decreased from 20% to 18%. Disbursements rose for the third consecutive year to nearly US$20 billion. - 11 - AFR had the highest proportion of projects at risk (45%) and EAP the lowest (15%). Water Supply and Sanitation was the sector most at risk (49%) and Telecommunications the least (11%). Realism, transparency and consistency of ratings have improved considerably in recent years but further improvements are required. Portfolio Management 5. Portfolio management in FY97 focused on two related fronts: (a) improving implementation advice and support to borrowers at the country and the project levels for immediate impact; and (b) reinforcing the Bank's ability to deliver high quality results over the medium term. The year was characterized by focused use of resources and portfolio management tools, reinforced by intensified supervision across the board. The Portfolio Improvement Program (PIP), launched in April 1996 and updated in December, identified country and sectoral clusters, and large projects for priority attention, providing the overall framework for the Bank's portfolio management efforts. Many of the traditional tools of effective portfolio management--CPPRs, MTRs, restructuring- continued to be used, but in greater number and with greater borrower and senior management participation. Work begun in FY96 with borrowers on retrofitting operations with improved performance monitoring indicators also advanced. 6. In parallel with the PIP, and as part of the Strategic Compact, institutional and process improvements were set in motion to improve portfolio quality over the medium term. The basis for the improvements is delayering, decentralization and delegation, backed up by credible, real time monitoring and enhanced accountabilities. The objectives of improved quality service were reinforced by systematic operational assessments, the establishment of Bankwide service standards, and establishment of professional Networks dedicated to supporting quality enhancement. 7. The FY97 portfolio improvement has continued the trend begun in FY95 with the share of projects at risk declining from about 40% in FY94 to less than 30% currently. This improvement has been, in part, the result of improved macro-economic management in a number of borrowing countries. However, Bank portfolio management has also improved in many respects including attention to the quality at entry; introduction of better tools for portfolio management and project supervision; and efforts to be more selective and focused. There is, however, no cause for complacency. About 30% of the portfolio is still at risk, some 35% of the Bank projects are receiving less than satisfactory supervision; and about a quarter of new projects have inadequate quality at entry. Agenda for Action and Future Outlook 8. The tools, procedures and institutional structures are in place for continued improvement in portfolio health. The challenge for the coming year is to persevere in executing initiatives already underway. The Bank must now stay the course it has embarked on to realize the full benefits of these initiatives for its clients. There are four parts to this: - iii - * maintaining the PIP approach of focusing attention on high priority problem areas; * improving the quality of project supervision; * improving further the quality of reporting, including a special emphasis on retrofitting the portfolio with M&E indicators; and, * enhancing further quality at entry. 9. Specifically, for FY98, countries in 18 CMUs, five sectors/subsectors (Agriculture Extension, Hydropower, Oil and Gas, Urban Water Supply, Urban Management), two lending instruments (Technical Assistance and Financial Intermediary Lending), and 39 large operations at risk are targeted for special attention. Taken together and correcting for overlaps among the categories, the targeted clusters account for about 40% of the total portfolio and about three-quarters of projects and commitments at risk. The objective of the PIP is to seek major improvements in these identified clusters, while continuing efforts to maintain quality of the rest of the portfolio. 10. Under the Strategic Compact, the Bank is committed to achieving high quality in all its operational work. Consistent with the Strategic Compact targets, the focus of the portfolio improvement effort over the coming year will be: * achieving a realism index of 75% or higher by end of FY98; * achieving a proactivity index of 80% or higher by the end of FY98; * raising the proportion of operations with satisfactory supervision during the year to 75% or higher; * raising the proportion of new entrants during the year with satisfactory quality at entry to 85% or higher, and, * completing retrofitting the portfolio with performance monitoring indicators and ensuring functioning M&E systems are in place for at least 50% of operations. 11. Achievement of the performance benchmarks outlined above should mean reducing portfolio riskiness by about 5 percentage points (a reduction of about $7 billion in risky commitments) by the end of FY98. 12. The ultimate objective, of course, is to improve results on the ground. Currently, the closest proxy to that are the OED evaluations of completed projects. Recognizing the lag between actions taken to improve the portfolio stock and evaluated outcomes from OED, evaluation results in the near term will be determined mostly by the actions already taken. Based on a status review of the operations likely to be evaluated by OED through ilv - FY2000, an average satisfactory outcome rate of about 75% by number of projects and 80% by commitment amount appears likely. Beyond FY2000, decisions taken now regarding new operations and country strategies will have an increasing impact, and a steady state of satisfactory outcomes at 80% in terms of numbers and 85% in terms of commitments appears attainable. Improvements beyond that level are likely to require greater selectivity among borrowers, instruments and development objectives. The ongoing work on the risk/reward methodology should help clarify strategic choices and trade-offs in that respect. Annual Report on Portfolio Performance, FY97 Page 1 CHAPTER 1. INTRODUCTION 1.1 The FY97 Annual Report on Portfolio Performance (ARPP) is the sixth in a series of annual reports on the Bank's operations portfolio' prepared in accordance with the recommendations of the Portfolio Management Task Force (PMTF) Report.2 Its structure, coverage, and methodology are based on an Approach Paper endorsed by the Committee on Development Effectiveness (CODE) on May 14, 1997. The report reflects comments by the Executive Directors during their discussion of the FY96 ARPP in December 1996. The ARPP process and its analytical underpinnings have been shared fully with OED, which has carried out a process review of it. 1.2 Objectives. The FY97 ARPP has three main objectives: * assess the current status of the portfolio and its evolution since the PMTF report in 1992; * describe measures taken in FY97 to manage the portfolio, evaluate their effectiveness, and identify additional measures to be taken over the coming FY; and * provide an assessment of the medium-term prospects for the portfolio. 1.3. Review Process. The FY97 ARPP started with issuance of guidelines to staff in May 1997, followed by two Bankwide clinics for staff to clarify the ARPP objectives and approach. As in previous years, country teams and managers undertook a review of project ratings at the end of the FY using the new Project Status Reports (Form 590s). The Regions prepared Country Portfolio Management Papers (CPMPs) for selected countries which summarized country portfolio performance, portfolio management activities as well as plans for the coming year. In parallel, the five Networks assessed the initial impact of the selected sectoral portfolio reviews undertaken as part of the Portfolio Improvement Program (PIP) described in last year's ARPP. Lastly, ad hoc panels of senior staff drawn from the Regions and the Networks examined special topics, such as experience in retrofitting the portfolio with performance indicators, the impact of CPPRs and experience with the field-based supervision. To improve the forward looking dimension of portfolio management, In this report, "Bank" refers to IBRD and IDA. The term "operations portfolio" refers to Bank supported operations under implementation, and is used interchangeably with "portfolio" in this report. The operations portfolio report should be distinguished from the annual IBRD portfolio reports that review country risk and related Bank financial management issues, and from reports on the Bank's investment portfolio. 2 Effective Implementation: Key to Development Impact (R92-195), November 3, 1992. 3 Approach Paper: FY97 Annual Report on Portfolio Performance (CODE/97-3 1, May 8, 1997) Annual Report on Portfolio Performance, FY97 Page 2 risk/reward analyses were also piloted during the year for selected countries; however, results so far are not sufficiently robust and efforts to develop the risk/reward methodology are continuing. This report distills the key findings and issues emerging from the above reviews and analyses. It is important to note that the ARPP-related reviews are only one part of the broad array of instruments and processes used for portfolio management. 1.4 This year's ARPP has several noteworthy features. First, the reviews of projects and portfolios took place during the transition to newly designated Country Management Units (CMUs) and managers in most regions. While disruptive in some respects, this transition also provided an opportunity for fresh views on many country portfolios. Second, to make the process more efficient, preparation of CPMPs was limited to 50 countries, targeting mainly those included in the Portfolio Improvement Program. Third, to provide a longer- term perspective on portfolio trends where appropriate, this ARPP examines developments since FY92-the year before the PMTF Report. Finally, and perhaps most importantly, the strengthening of self-evaluation systems in the Bank during the past year further reinforced the move towards making the ARPP process more evaluative and strategic. 1.5 Structure and Coverage. The report is organized into five chapters. Chapter II (Portfolio Size and Composition) discusses portfolio patterns and trends by region, sector lending instrument and age composition. Chapter III (Portfolio Performance) then provides analyses of performance Bankwide and by region, country and sector, as well as a discussion of factors affecting performance. Chapter IV (Portfolio Management) reviews progress achieved on recommendations emerging from previous ARPPs and discusses portfolio management activities undertaken in FY97 at the project and country level, as well as broader measures being implemented within the Bank to improve portfolio quality. Chapter V (Agenda for Action and Future Prospects) discusses proposed actions to improve portfolio quality further and provides a summary assessment of the likely evolution of the portfolio in the medium-term. Separate annexes on the Performance of Trust Fund and Other Operations, Rating Methodology, and summary findings of Sectoral Portfolio Reviews are attached to complement the discussion in the main text of the report. A Statistical Appendix contains the key data underpinning the report. Annual Report on Portfolio Performance, FY97 Page 3 CHAPTER II. PORTFOLIO SIZE AND COMPOSITION Portfolio Size 2.1 The Bank's portfolio in FY97 comprised 1,766 operationsY with a total commitment of US$141 billion (Table 2.1). While the number of operations remained essentially unchanged, total commitments decreased by about $2.4 billion during the year. In real terms, the commitments declined more sharply, continuing the downward trend experienced during the past several years; since FY92, the decline has been nearly 10%. 2.2 Of the 1,766 operations, the IDA portfolio comprised 912 operations (including 55 IBRD/IDA blend operations) with a commitment value of US$43.5 billion. Between FY92 and FY97, the number of IDA operations and commitments in real terms have remained essentially unchanged. In contrast, the IBRD portfolio, while stable in terms of number of operations, shrunk in commitment terms by about 13%, primarily owing to a shift from larger adjustment operations to smaller investment and technical assistance operations. The reduction in average loan size is likely to continue in the light of new product lines (e.g., Learning and Innovation Loans and Adaptable Program Loans), but numbers of operations and overall commitments are expected to increase. TABLE 2.1 BANK PORTFOLIO IN NOMINAL AND REAL TERMS, FY92-FY97 Number of Projects Commitments Average Loan Size (USsA) (USSM) Sources FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 IBRD 853 836 854 98.0 99.8 97.8 114.9 119.4 114.5 (112.3) (102.1) (97.8) (131.6) (122.2) (114.5) IDA 902 916 912 37.8 43.8 43.5 41.9 47.8 47.7 (43.4) (44.8) (43.5) (48.1) (48.9) (47.7) Total 1,755 1,752 1,766 135.9 143.7 141.3 77.4 82.0 80.0 (155.6) (147.0) (141.3) (88.7) (83.9) (80.0) a. Figures in parenthesis are in real terms based on the following commitment inflator: FY97, 100; FY96, 102.2; FY92, 114.6 b. Blend operations are counted as IDA An operation is included in the portfolio if it has (i) a closing date after the beginning of the fiscal year concerned, and (ii) a positive, undisbursed balance remaining at the beginning of the fiscal year. 2 The GEF (68 operations, US$662 million of commitments), Montreal Protocol (33 operations, US$230 million of commitments), Guarantees (11 Guarantees with a total Guarantee amount of US$1.3 billion), and operations in the West Bank and Gaza (11 projects, US$193 million of commitments) are also, in principle, part of the Bank portfolio, but are discussed separately (Annex I). Reporting on these operations is being progressively integrated into the operations information system and the integration process is expected to be completed by end FY98. Annual Report on Portfolio Performance, FY97 Page 4 Portfolio Composition 2.3 Regional Distribution. In terms of regional distribution (Figure 2.1 and Appendix Table 2.1), Africa continues to have the largest number of projects (28%), and East Asia has the largest level of commitments (27%). Since FY92, the ECA portfolio has increased rapidly reflecting the build-up of the Bank's program in new client countries. In East Asia, although the number of projects increased only slightly, commitments rose substantially owing to the growing importance of the China portfolio. South Asia had the largest decline in commitments owing to a combination of factors: cancellations to clean up the non- performing parts of portfolio; speedier implementation of the older portfolio; a shift in project design toward simpler projects with shorter implementation periods; and in some cases, a slow down in new commitments due to delays in reaching agreements on some critical sectoral reforms. The Africa portfolio also shrunk owing in part to civil strife and to greater selectivity in lending; the portfolios in the Democratic Republic of Congo, Sudan and Somalia were canceled entirely and those in Nigeria, Rwanda and Burundi were sharply reduced. FIGURE 2.1 PORTFOLIO DISTRIBUTION BY REGION, FY92 AND FY97 By Number of Projects ByComitmlents PercentofToWal PercentarTalWl 40 o0- 5 235 25 - 21 32 20- 121 15 - _15 101 10 - AFR EAP ECA LAC MNA SAS AFR EAP ECA LAC MNA SAS Region tegion 2.4 Although the Bank's portfolio included operations in 133 countries, it remained concentrated in a relatively small number of countries (Appendix Table 2.4). The seven largest country portfolios (China, India, Indonesia, Mexico, Brazil, Russia, and Argentina), each with more than US$6 billion in commitments, accounted for 26% of all projects and 52% of total commitments in FY97. Since FY92, there have been significant changes in the country composition of the portfolio, including the rapid expansions in China, Russia and Argentina and sharp declines in India, Nigeria and Turkey. Annual Report on Portfolio Performance, FY97 Page 5 2.5 Distribution by Sectors and Lending Instruments. Although year to year shifts in the sectoral composition of the portfolio have been relatively small, when looked at from a longer-term perspective, these shifts are more significant (Table 2.2). Since FY92, the agricultural portfolio has declined sharply, though it still remains the largest portfolio in terms of number of projects. The decline reflects primarily the reduced role of the public sector in agriculture, the relatively poor performance of the earlier generation of agriculture projects and more stringent Bank requirements in recent years in subsectors such as forestry, water resource development and agricultural credit. Recent initiatives led by the ESSD Network (including in particular, the Rural Action Plan) are expected to reverse the decline in agricultural lending. TABLE 2.2 PORTFOLIO DISTRIBUTION BY SECTOR, FY92-FY97 Projects Commitments (USSB) FY92 FY96 FY97 FY92 FY96 FY97 Network/Sector No. % No. % No. % Amount % Amount % Amount % ESSD Agriculture 451 25.7 341 19 328 19 26.8 19.8 21.8 15 21.3 15 Environment 26 1.5 76 4 86 5 1.6 1.2 4.8 3 4.9 3 ESSD Total 477 27.2 417 24 414 23 28.5 21 26.6 19 26.1 18 FPSI Electric Pwr & Eng 165 9.4 125 7 126 7 21.0 15.5 18.7 13 17.9 13 Finance 81 4.6 84 5 89 5 9.0 6.6 9.8 7 8.9 6 Industry 82 4.7 34 2 32 2 9.6 7.1 4.1 3 3.5 2 Mining 17 I 20 1 20 1 1.1 0.8 1.6 1 1.6 1 Oil & Gas 41 2.3 42 2 42 2 4.4 3.2 4.8 3 4.4 3 Telecommunication 31 1.8 26 1 18 1 2.3 1.7 2.2 2 1.9 1 Transportation 204 11.6 190 11 193 11 16.6 12.2 20.3 14 21.7 15 Urban Development 104 5.9 102 6 105 6 7.6 5.6 9.0 6 8.6 6 Water Supply & Sa 91 5.2 97 6 100 6 6.8 5 8.5 6 8.1 6 FPSI Total 816 46.5 720 41 725 41 78.5 57.8 79.2 55 76.6 54 HDD Education 166 9.5 197 11 193 11 8.9 6.6 13.1 9 13.2 9 Popultn, Hith & Nut 102 5.8 153 9 153 9 4.8 3.5 9.3 6 9.6 7 Social Sector 21 1.2 57 3 69 4 0.6 0.4 2.9 2 4.2 3 HDD Total 289 16.5 407 23 415 23 14.3 10.5 25.3 18 27.0 19 PREM Multisector 84 4.8 81 5 79 4 10.9 8 7.4 5 5.9 4 Public Sector Mgmt 89 5.1 127 7 133 8 3.6 2.7 5.3 4 5.7 4 PREM Total 173 9.9 208 12 212 12 14.5 10.7 12.6 9 11.6 8 Bank Total 1,755 100 1,752 100 1,766 100 135.8 100 143.7 100 141.3 100 2.6 Transportation is the largest sector in terms of commitments, reflecting the continuing need for high priority infrastructure investments in many borrowing countries. In line with the Bank's growing emphasis on human capital development, Education and HNP lending have expanded rapidly; in terms of number of projects, they are now the third and fourth largest sectors and together account for almost one-sixth of the total commitments. Lending for Electric Power and Telecommunications has declined, partly in response to the growing Annual Report on Portfolio Performance, FY97 Page 6 role of private finance in these areas. Lending for Environment,3 Social Sector4 and Public Sector Management has increased sharply. Multisector loans, primarily for Adjustment, have declined (especially in terms of commitments) reflecting the improved macroeconomic management in many Bank borrowers. 2.7 These changes in sectoral portfolios are reflected in similar changes in the Network shares (Table 2.2). FPSI accounted for the largest part of the portfolio especially on a commitment basis (53%), though its share is slightly lower than in FY92 (58%). ESSD and HDD accounted for similar proportions of the portfolio, slightly less than 20% of commitments and nearly 25% of the number of projects. ESSD's share declined in recent years because lower Agriculture lending was only partially offset by increased Environment lending. On the other hand, HDD lending increased with the Bank's greater emphasis on human development and poverty. The changes in the share of the PREM Network reflects, on the one hand, expanded lending for Public Sector Management and, on the other, fewer and smaller Structural Adjustment Loans. TABLE 2.3 PORTFOLIO DISTRIBUTION BY LENDING INSTRUMENT, FY92-FY97 Projects Commitments (USSB) FY92 FY96 FY97 FY92 FY96 FY97 Instrument No. % No. % No. % Amount % Amount % Amount % Adjustment Debt and Debt Service Reduction Loan 2 0 1 0 2 0 0.3 0 0.0 0 0.2 0 Rehabilitation Loan 0 0 12 1 7 0 0.0 0 2.0 1 0.4 0 Sector Adjustment Loan 75 4 56 3 52 3 13.6 10 8.4 6 9.8 7 Structual Adjustment Loan 56 3 40 2 43 2 7.9 6 5.0 4 5.1 4 Sub-total Adjustment 133 8 109 6 104 5 21.7 16 15.5 11 15.4 11 Investment Emergency Recovery Loan 18 1 25 1 27 2 1.5 1 2.4 2 2.0 1 Financial Intermediary Loan 130 7 64 4 53 3 11.3 8 6.5 5 4.8 3 Sector Investment and Maintenance Loan 289 17 200 11 174 10 22.5 17 17.4 12 15.2 11 Specific Investment Loan 1057 60 1198 68 1243 70 77.0 57 98.7 69 100.7 71 Technical Assistance Loan 128 7 156 9 165 9 1.8 1 3.2 0.4 3.3 2 Sub-total Investment 1622 92 1643 94 1662 94 114.1 84 128.2 88 125.9 89 Bank Total 1755 100 1752 100 1766 100 135.8 100 143.7 100 141.3 100 2.8 Investment lending continued to account for over 90% of the number of projects, though it was somewhat smaller in terms of commitments (Table 2.3). Since FY92, the share of investment lending has increased slightly, while adjustment lending declined. Among investment loans, there has been a reduction of sector lending in almost all regions. The reasons for this aggregate change are unclear and will be examined further during the coming As per MIS classification (primarily operations focused on environmental institutions/management). As noted in the Bank's Annual Reports, there is a much larger number of operations (166 in FY97) with substantial environmental objectives and components. 4 Social sector comprises social safety net and social investment fund operations. Annual Report on Portfolio Performance, FY97 Page 7 year. Technical assistance lending has increased, especially to help improve economic management and capacity building in the transition countries. Lending to financial intermediaries has declined, reflecting in part the poor experience with such lending in the past. 2.9 Age Distribution. The average age of operations in the portfolio at the end of FY97 was 3.9 years compared to 4.1 years in FY92. The portfolio has been getting gradually younger. Projects less than five years old comprised 63% of the investment portfolio, up from 58% in FY92. The proportion of projects 7 years or older declined from 19% in FY92 to 16% currently. These changes reflect both a shift towards projects with faster implementation, as well as tighter management of loan extensions and closing dates. 2.10 Composition by PTI Designation. The Program of Targeted Intervention (PTI) comprises the Bank's portfolio of projects directly targeted at poverty alleviation. PTI designated operations have grown steadily since being introduced in FY92. In FY97, 422 operations accounting for a quarter of the portfolio and about a fifth of commitments, were designated PTI. AFR and LCR had the largest PTI portfolio in terms of number of operations and LCR, the largest in terms of commitment, accounting for one-third of total PTI commitments (Table 2.4). PTI lending was lowest in ECA but is expanding. PTI, as such, will become less important in the future as the Bank begins to monitor not only PTI projects but also the impact on poverty of other projects and non-lending services. TABLE 2.4 PTI PORTFOLIO BY REGION, FY96-FY97 No of Projects Comnitments (US$B) FF96 FY97 FY96 FY97 Retion Total PTI % Total PTI % Total PTI % Total PTI Africa 516 101 20 493 116 24 189 32 17 181 3.6 20 East Asia & Pacific 302 56 19 307 70 23 36.4 4.7 13 374 5.9 16 South Asia 207 44 21 197 52 26 25.1 4.8 19 23.1 56 24 Europe & Central Asia 230 33 14 272 43 16 20.4 1.5 7 21.3 1 6 8 Middle East & North Africa 140 28 20 135 32 24 96 1 8 19 90 20 22 Latin America & Caribbean 357 84 24 362 109 30 33.2 75 23 32.4 8.8 27 TOTAL 1,752 346 20 1,766 422 24 143.7 23.6 16 141.3 27.5 19 Annual Report on Portfolio Performance, FY97 Page 8 CHAPTER III. PORTFOLIO PERFORMANCE 3.1 Portfolio Rating Methodology. The assessment of portfolio performance begins with the rating of individual projects by operational staff, which are reviewed by first line managers and, for particularly important operations, by higher management as well. These ratings, reported and updated periodically in Project Status Reports (Form 590s), include judgments on the project's Implementation Progress (IP) and its likely achievement of Development Objectives (DO), as well as on a number of specific aspects of performance, such as compliance with loan covenants, the provision of counterpart funds and the quality of project management. Projects for which IP and/or DO are judged to be unsatisfactory or highly unsatisfactory are termed actual problem projects. Comparisons of these ratings in final supervision reports with those in Implementation Completion Reports for the same projects (the "disconnect") has shown that DO ratings are often too optimistic, making this measure insufficiently reliable.' 3.2 As indicated in the FY96 ARPP, the concept of potential problem projects was introduced in the context of the Portfolio Improvement Program (PIP). These are projects, which although rated "satisfactory" by staff, have characteristics historically associated with unsatisfactory performance. It should be emphasized that the project at risk designation does not by itself predict a negative outcome. Indeed, its primary purpose is just the opposite-to ensure that risky operations get the attention necessary to improve the likelihood of satisfactory outcomes. These projects are identified by criteria ("flags") which take into account not only the project-specific implementation experience, but also contextual factors such as the country's macroeconomic management and the past portfolio performance in the country and the sector.? Taken together, actual and potential problem projects comprise projects-at-risk. The experience of the past 18 months in applying the projects-at-risk concept suggests that it is a robust and useful tool for portfolio monitoring and management. While not without limitations (refinements are under consideration), it is currently the most reliable indicator of portfolio health, particularly at the aggregate level. Accordingly, for the purposes of this ARPP, the projects-at-risk concept has been used as the primary measure of portfolio performance. 3.3 Overall Status of the Portfolio. As of the end of FY97, 26% of commitments and 30% of all projects were at risk of not achieving their major objectives (Figure 3.1). This The "disconnect" was 19% in FY92 and 11% in FY96. FY97 data covering about half the total to be evaluated show a disconnect of 10%. 2 The detailed criteria for identifying potential problem project are described in Annex 2. Some of these criteria may not be applicable for a particular project and hence may generate a "false positive" signal; Regional Vice Presidents may override them by the use of a "golden flag". Since the "golden flag" was introduced only in FY97, the Bankwide, Regional and Sector portfolio trend analyses in this ARPP are based on ratings without the golden flag, but the country analysis provides data both with and without the golden flag. Annual Report on Portfolio Performance, FY97 Page 9 represents a substantial improvement over FY96 when 31% of commitments and 34% of projects were at risk. The decline in projects at risk is consistent with the decline in actual problem projects, which fell from 18% to 15% in terms of commitments and from 20% to 18% in number of projects. 3.4 While the concept of project-at-risk was introduced only in FY96, it has been applied retroactively to put the current performance in a longer-term perspective. This analysis shows that the proportion of projects at risk, both in terms of numbers and commitments, began a steady decline after reaching a peak in FY94. This turnaround suggests that the increased attention to portfolio management following the PMTF recommendations in 1992, and its intensification during the past two years have begun to pay off. FIGURE 3.1. PORTFOLIO PERFORMANCE Potential Actual Projects at Risk Commitments at Risk 40 20. 4 - 35 3 30 * 30 rr 25To2 202N 15 0' FY92 FY93 FY94 FY95 FY96 FY97 FY92 FY93 FY94 FY95 FY96 FY97 Fiscal Year Fiscal Year 3.5 Factors Behind the Improvement. In addition to helping track changes in the overall health of portfolio, the evolution of individual risk flags gives an indication of the factors that lay behind these changes. Figure 3.2 shows the number of projects with selected risk flags in effect for each year since FY92. The most important contributor to this improvement has been the decline in the number of projects with a history of extended problems (for two or more years) in the past. In line with the increased proactivity in dealing with persistent problem projects, the number of such projects has been reduced by more than half since FY92. More recently, this improvement has been reinforced by a sharp drop in the number of projects in countries with weak macro-economic management; from almost 800 projects in FY95, it fell to 465 in FY97. FY97, in particular, was a good year for many borrowers in terms of improved macroeconomic management. Based on the annual ratings If countries in non-accrual status or suffering from civil strife are excluded, the proportion of at risk was 25% in terms of commitments and 29% in terms of number of projects. Annual Report on Portfolio Performance, FY97 Page 10 of country performance in FY97, 16 countries were deleted from the at risk category and only 5 were added. Moreover, improvements were concentrated among large borrowers (e.g., Hungary, Romania, Ethiopia, Senegal, Mexico and Brazil) and deterioration mostly among small borrowers (e.g., Turkmenistan, Sierra Leone, and Burundi). The number of projects with the effectiveness delays also declined since FY95, as did those with the slow disbursing flag. Sensitivity analysis of trends in projects-at-risk indicates that about 20% of the improvement since FY95 is directly attributable to better macro-economic management by borrowers, about 30% to greater selectivity by the Bank reflecting shrinkage of the portfolio share for chronic poor country performers, and the balance to a combination of proactive portfolio management by borrowers and the Bank. Number of projects flagged FIGURE 3.2. SELECTED "AT RISK" FLAGS FY92-97 700 Sow disbursements 500 300 200 0 - FY92 FY93 FY94 FY95 FY96 FY97 3.6 Portfolio Performance by Region. As is evident from Table 3.1, there are substantial differences in the health of Regional portfolios. With less than 15% of its portfolio at risk, East Asia had the least risky portfolio. In contrast, the AFR portfolio was most at risk (45% in terms of both number of projects and commitments). The MINA portfolio also had a very high proportion of projects at risk, although excluding the Algeria portfolio because of the unsettled conditions unique to it, would have meant a significant reduction in the riskiness of the MNA portfolio. In contrast to the rest of the Bank, the proportion of commitments at risk exceeded that for projects at risk in ECA and MNA, as larger operations in these Regions were also more risky. This would suggest the scope for Annual Report on Portfolio Performance, FY97 Page 11 improved risk management in these Regions, through recourse to a more differentiated mix of lending and non-lending instruments. TABLE 3.1 PORTFOLIO PERFORMANCE BY REGION, FY92-FY97 Projects At Risk (%) CommitmentsAt Risk (%) FY92 FY96 FY97 FY92 FY96 FY97 Region Africa 51.0 44.2 45.2 50.4 45.9 44.8 East Asia 13.7 12.3 15.0 7.2 9.8 13.1 South Asia 32.3 26.1 20.8 27.1 20.8 20.4 Europe & Central Asia 20.8 34.3 24.3 24.2 46.7 34.7 Middle East & North Africa 47.9 38.6 39.3 40.9 36.7 43.2 Latin America 45.1 38.9 28.7 47.4 40.5 24.1 Bankwide Total 38.7 33.7 30.2 32.2 30.6 26.1 Excluded Portfolios /a,b n.a. 68.4 70.0 n.a. 68.0 85.8 Bankwide Total (net) n.a. 32.1 28.5 n.a. 29.7 24.8 a. Countries that were in nonaccrual status or were suffering from civil strife in FY96 (Algeria, Angola, Burundi, Central African Republic, Rwanda, Sierra Leone, Somalia, Sudan, Zaire, Liberia) and in FY97 (Algeria, Burundi, Central African Republic, Congo, Sierra Leone, Somalia, Sudan, Liberia, Albania, Taijikistan). n.a. = Not Available 3.7 Over the past year, LCR and ECA had the largest portfolio improvements. South Asia also showed a modest improvement. AFR showed virtually no change in the overall riskiness of the portfolio though actual problem projects increased reflecting greater realism in recognizing problems. MNA's portfolio became more risky in terms of commitments but showed no change in percentage of projects at risk. EAP's portfolio deteriorated in terms of both commitments and number of projects, reflecting a shift towards more risky, but higher reward operations, especially in the social sectors. Nevertheless, EAP remained the healthiest regional portfolio. 3.8 The analysis of the historical trends suggests that the Bankwide turnaround in portfolio performance starting in FY95 applied to all regions except South Asia where the improvements began a year earlier. The improvements after FY94 are especially noteworthy in SAR, ECA, MNA and LCR. East Asia maintained its traditionally good portfolio performance. The improvement in AFR was modest (a reduction from 50% to 45% in projects-at-risk) and is rather disappointing considering the seriousness of the portfolio problems in that region. With the increased management attention being devoted to the portfolio and as the renewal program takes hold, a significant turnaround in the AFR portfolio is anticipated during the coming year. 3.9 Performance by Country. As to be expected, performance of the 133 active country portfolios varied widely. Fifty-nine country portfolios had less than 25% projects at risk and 15% commitments at risk. On the other extreme, 53 countries had more than 50% of projects at risk or 33% of commitments at risk (Appendix Table 3.6). Annual Report on Portfolio Performance, FY97 Page 12 3.10 In FY97 improvement of the portfolio was concentrated in the large portfolios' and, overall, large portfolios did considerably better than small portfolios (Table 3.2). In these countries, the percentage of commitments at risk fell from 30% to 25%. In the small portfolios, on the other hand, there was virtually no change. Total commitments at risk were reduced during FY97 by US$6.5 billion in the 38 large portfolios, a significant improvement. (Appendix Table 3.5). TABLE 3.2 FY97 PORTFOLIO PERFORMANCE BY COUNTRY PORTFOLIO SIZE % Projects at Risk % Conmitments at Risk No. of Commilments Portfono Size Projects (Sb) FY96 FY971 FY97/2 FY96 FY97!1 FY97/2 Large Country Portfolios (38) 1,112 120,166 34 28 24 30 25 22 Small Country Portfolios (95) 654 21,182 35 34 31 34 33 30 Bankwide Total 1,766 141,348 34 30 27 31 26 23 /1 without golden flag /2 with golden flag 3.11 Twenty-eight of the 38 large portfolios improved during FY97. The largest improvements were for Russia, Poland, Hungary, and Brazil. Ten large portfolios (including China, Vietnam, Ukraine, Albania, Morocco) deteriorated, although several among them remained strong performers. The sharp increases in actual problem projects in the Nigeria, Ethiopia and Uganda portfolios, resulted from greater realism in ratings and in the case of Nigeria, the share of portfolio at risk actually declined. In Madagascar, on the other hand, there was a decline in problem projects, although the proportion at risk increased. While greater proactivity may explain part of this apparent inconsistency, it also raises some doubts about the realism of ratings. 3.12 Performance by Sector and Networks. Different sector portfolios face considerably different levels of risk (Appendix Table 3.8). At the end of FY97, the major sectors with the highest percentage of commitments at risk were Water Supply and Sanitation and Oil and Gas, while those with the lowest percentages were the Social Sector and Education. In many borrowing countries, Water Supply and Sanitation is still seen as a social service rather than as a sector which needs to be managed on sound commercial principles; institutions tend to be weak, many governments are reluctant to adopt tariffs which fully reflect costs and the legal and regulatory environment does not provide adequate incentives for accountability and efficiency. OED's Annual Reviews of Evaluation Results have also found Water Supply and Sanitation to be a poorly performing sector. In Oil and Gas, market- oriented reforms raise difficult issues concerning pricing, reform of state enterprises and establishment of a legal and regulatory environment which will encourage private operators. As a result, government commitment to project objectives in both these sectors is often weak. Looked at on a subsectoral basis, Agricultural Extension, Financial Sector Development, 38 countries with portfolios over $1 billion in commitments and/or 20 or more projects accounted for about 85% of the portfolio in terms of commitments and 63% in number of projects. Annual Report on Portfolio Performance, FY97 Page 13 Urban Management, and Hydroelectric Power also have a high proportion of projects and commitments at risk. Differences in sector and subsector performance were reflected in the four networks with FPSI network having the most risky portfolio. Addressing poor performance is especially critical for FPSI, not only because it has the highest proportion projects at risk (33%), but also because it has the largest portfolio among the four networks. 3.13 Compared to FY96, most of the major sectors showed improvement or at least maintained the same level of performance in FY97. There were substantial reductions in commitments at risk in the Education, HNP, Agriculture, and Environment sectors, and smaller reductions in Finance and Transportation. The Electric Power and Urban portfolios showed declining performance measured by commitments at risk (IP/DO improved in Urban Management), and remained essentially stable in terms of numbers of projects at risk. The changes between FY96 and FY97 are generally consistent with the longer term changes since FY92. Among the larger sectors, the improvements since FY92 were particularly pronounced in Agriculture and HNP, with somewhat smaller improvements in Transportation and Education. On the other hand, the portfolios deteriorated considerably for Oil and Gas and remained stable for Urban development. Among the newer sectors, the Environment and Public Sector Management improved greatly. The performance did not, on balance, change significantly for Water Supply and Sanitation. As the sectors with improving performance are also for the most part the sectors in which the portfolio is growing, this pattern should help to further strengthen the portfolio in the future. 3.14 Performance by Lending Instrument. During FY97, the performance of adjustment loans continued to be considerably better (with 26% at risk in terms of numbers and 19% in terms of commitments) than that of investment loans (with 29% and 26% respectively) (Appendix Table 3.10). With 43% at risk in terms of numbers, Financial Intermediary Loans (FILs), are clearly the most risky instrument. A review of FILs undertaken in FY97, concluded that many were undertaken in an unsuitable environment, characterized by lack of credit discipline, poor loan collection and a weak legal system, as well as a difficult macroeconomic context. Technical assistance loans (33% at risk) have also continued to be particularly risky. Overall, technical assistance lending is a high risk, high reward instrument. Technical Assistance Loans (TALs) are multipurpose instruments, pressed into service to solve a host of development, institutional and bureaucratic problems. In many cases, they are used in place of other instruments - investment or adjustment operations - and they are sometimes used as a last resort to maintain dialogue with borrowers (Box 3.1). Annual Report on Portfolio Performance, FY97 Page 14 Box 3.1 TECHNICAL ASSISTANCE OPERATIONS NECESSARY FOR DEVELOPMENT BUT PROBLEM PRONE The World Bank is a major provider of technical assistance (TA). Most of this TA is provided as part of investment lending, designed to facilitate project implementation and build the capacity of the borrowers in areas ranging from health and school facilities to major engineering works. Less significant in volume, but highly critical for policy reforms and capacity building, in general, is free-standing TA funded through Technical Assistance Loans (TALs). In FY97 there were 165 TALs in the portfolio, accounting for 9% of the total. TALs are the Bank's most eclectic and fluid instrument in terms of subject-matter, design objectives, and implementation. They are used in pursuit of one or multiple objectives, such as project preparation, capacity building, civil service reform and sectoral development. TALs have a high rate of unsatisfactory outcomes as evaluated by OED and are among the Bank lending instruments most at risk. They are high risk, but high reward operations, often having an impact far beyond their modest size. Their importance, however, has not always been recognized. Technical Assistance operations were reviewed in detail under the PIP. The review identified the following reasons for the high risk of TALs: (i) unclear objectives both on the part of the Bank and the borrower; (ii) ambitious and overly complex designs; (iii) low levels of commitment and ownership; (iv) multiple implementation agencies; (v) indifferent quality of consultants; and, (vi) shortage of Bank staff with requisite skills and experience to manage TA operations. A forthcoming report prepared by the OCS Network recommends a systematic framework for use by task teams and borrowers in the design of TA operations. The framework identifies critical success factors including the country context (quality of the policy environment, institutional stability, and ownership); purpose (shared vision between borrower and Bank); strategy (level of complexity, phasing, and relationship with stakeholders); and project management (choice of counterpart, manageability of work load, logistics, and monitoring and evaluation). The intention is to use this framework to improve quality at entry. It will be incorporated into the QAG quality at entry criteria for TALs, and mainstreamed by the OCS Network through LLC training. 3.15 In FY97, the performance of investment lending, and in particular, specific and sector investment loans improved compared to FY96, while FILs deteriorated significantly. The share of FILs in the overall portfolio is rapidly decreasing, however, from over 11% in FY92 to less than 5% now. In FY97, the adjustment portfolio deteriorated somewhat, particularly for SALs, but remains above average. Over the longer term, the performance of both investment and adjustment loans has improved greatly since FY92. Since FY92 the number of TALs at risk has improved but not in terms of commitments. 3.17 3.16 IDA/IBRD Portfolio Performance. Both the IBRD and the IDA portfolio improved in FY97 compared to FY96, but the IBRD improvement was considerably greater. Nevertheless, the IDA portfolio also reflects sustained improvement over the last 5 years as projects at risk as a proportion of total projects decreased from 44% in FY92 to 33% in FY97. The IBRD portfolio at risk was 28% in FY97. The difference between the two portfolios was accounted for primarily by their country distribution. In AFR, which accounted for about a third of the IDA commitments, the proportion of IDA projects at risk Annual Report on Portfolio Performance, FY97 Page 15 was less than that of IBRD loans (40% compared to 49%). The same was true of EAP and SAR. In MNA and LCR, the IBRD portfolio out-performed the IDA portfolio. 3.17 Performance of PTI Portfolio. The PTI portfolio is younger than the Bank average. Based on an age adjusted analysis of its performance, it is performing at a level about the same as all other projects (Appendix Table 3.11). 3.18 Disbursement Performance. About half the portfolio's total commitments had been disbursed by the end of FY97, about the same as in earlier years. Total disbursements rose substantially in FY97 for the third year in a row to nearly US$20 billion. This was owing mostly to the increase in disbursements of adjustment loans (to US$5.3 billion), although simultaneously, the disbursement ratio for investment lending increased to 20 percent, the highest level since FY91 (Appendix Table 3.25). The largest increases were in AFR, and for adjustment operations in ECA and LCR, associated with debt restructuring. EAP and LCR had above average disbursement ratios, while MNA had the lowest (17.5%). In terms of sectoral performance, Oil and Gas, the Energy and Social Sectors had the highest disbursement ratios, while the Finance had the lowest (13%). Disbursement ratios improved in Education and Energy and declined in the Financial sector. 3.19 Financial Accountability. Timeliness of audit reports significantly improved in FY97 as a result of improved planning and follow up on audit compliance, and increased enforcement of sanctions. About 50% of audited financial statements due in FY97 were submitted to the Bank on time, compared to 40% for FY96. Only about 3% of statements are outstanding 12 months after due dates. While much emphasis has been placed on the timeliness of reports submitted, quality of audits remains an issue. To date, quality has been assessed mainly through the percentage of qualified audit reports received, which showed an apparent improvement in FY97. However, the assessment of the degree of accountability based on the above is uncertain as many qualifications are based on deviations from government regulations rather than adherence to internationally accepted standards. Moreover, owing to the low number of trained accounting professionals in the Bank, reviews are frequently not carried out and/or carried out by insufficiently trained staff. The key to enhanced audit quality will be qualified staff being brought in under the Strategic Compact to ensure that adequate accounting and reporting procedures are in place at project entry, and to review reports received including tests of auditors' performance. Annual Report on Portfolio Performance, FY97 Page 16 CHAPTER IV: PORTFOLIO MANAGEMENT Introduction 4.1 Portfolio management in FY97 focused on two fronts: (a) improving implementation advice and support to borrowers at the country and the project levels for immediate impact; and (b) reinforcing the Bank's ability to deliver high quality results over the medium term. The year was characterized by focused use of resources and portfolio management tools, accompanied by intensified supervision across the board. The Portfolio Improvement Program (PIP), launched in April 1996 and updated in December, identified country and sectoral clusters, and large projects for priority attention. In parallel with the PIP, and as part of the Strategic Compact, institutional and process improvements were set in motion to improve portfolio quality over the medium term. The centerpiece of the Renewal Program is delayering, decentralization and delegation, backed up by a credible, real time monitoring system. The objectives of improved quality service to borrowers were reinforced by QAG's operational assessments, the establishment of Bankwide service standards, and establishment of an Operational Core Services Network dedicated to supporting quality enhancement and introducing new and better products and procedures. 4.2 This chapter covers the status of recommendations emerging from the FY96 ARPP, the PIP and its impact, including use of the tools of portfolio management, institutional improvements initiated in FY97 and an evaluation of the overall effectiveness of what was done. Status of Past Recommendations 4.3 Last year's ARPP concluded with a number of recommendations to improve performance of operations in the portfolio, as well as the flow of new entrants (quality at entry). Some actions were specific to FY97, but most were designed for continuous implementation over the medium term. Of the actions proposed, all but one (revision of OD 13.05 on supervision, which is delayed pending simplification of the policy manual) are either completed or underway. The FY97 specific actions: mainstreaming revised documentation for supervision and appraisal, and eliminating the backlog of ICRs were completed. Action on all others has been initiated and progress is being made, although in some cases, such as retrofitting the portfolio with performance indicators and streamlining procurement, additional work is needed (Box 4. 1). Annual Report on Portfolio Performance, FY97 Page 17 Box 4. 1 STATUS OF PORTFOLIO IMPROVEMENT ACTIONS" Actions Proposed Current Status A. Portfolio Management Eliminate ICR backlog Completed Implement the revised Form 590 The revised Form 590 is now mainstreamed; it includes extended treatment of development objectives, performance indicators and risk management. Retrofit of the portfolio with improved performance Approximately 75% of projects in the portfolio have indicators2 development indicators although quality is uneven; all should have development indicators by end FY98. Revise OD 13:05 Project Supervision, to cover MTRs, Delayed pending simplification of the policy manual; to be CPPRs, restructuring completed during FY98. Upgrade staff training, for supervision and implementation New training modules, developed by LLC now being support. mainstreamed. Streamline disbursement procedures Analysis completed and pilot being assessed. Streamline procurement procedures Analysis completed; strengthening underway under Strategic Compact C;ntinue implementing the PIP PIP was updated in December 1996; further updated as part of this ARPP. Portfolio tracking indicators available at each work station to provide real time monitoring. Institute systematic assessments of Supervision Quality First annual assessment completed and findings being disseminated to staff. B. Quality at Entry Introduce revised project documents PCD/PAD being used Bankwide, with "help" system in place. Establish networks of sectoral specialists, and review staff Four sector and one cross-sectoral Networks established skills. Bankwide; staff skill reviews and training continuing within Network programs. Continue quality-at-entry assessments Program of in-depth assessments now mainstreamed; Also, QAG testing rapid assessment prototype as a followup to ECON reviews in FY98. FY96 ARPP; FY97 Actions (p. 43) 2 Questions addressed in OED FY95 ARPP Process Review. Annual Report on Portfolio Performance, FY97 Page 18 A. IMPLEMENTATION ASSISTANCE TO BORROWERS The FY97 Portfolio Improvement Program (PIP) 4.4 In order to reinforce ongoing actions to improve the quality of operations, the Bank launched a Portfolio Improvement Program in April 1996 which was updated in December 1996. Central to the PIP is the concept of projects at risk as a mechanism for tracking and managing the portfolio health. The program identified clusters of projects where enhanced attention was likely to have a high payoff. The PIP thus provided the overall framework for use of portfolio management instruments, such as restructurings, MTRs, cancellations and CPPRs. 4.5. The December PIP targeted for special attention 25 countries with a large share of projects and commitments at risk and the 100 largest projects at risk.3 Taken together, and allowing for overlaps, these targeted countries and projects accounted for just over one third of the total portfolio, about 60% of the projects at risk and some 80% of the risky commitments. 4.6 Targeted Countries. The impact of the PIP has varied considerably from country to country. Sixteen country portfolios improved as measured by projects at risk; two were unchanged. Improvements in 8 countries (Senegal, Bulgaria, Hungary, Russia, Brazil, Peru, Venezuela and Yemen) are especially noteworthy (Box 4.2). In seven countries (three affected by civil strife), the portfolios deteriorated despite the attention given to them under the PIP. In 6 of these countries portfolios shrunk in light of their continued poor performance. Overall, the cluster of 25 country portfolios improved substantially; moving from about 70% at risk in FY96 to less than 55% in FY97. In contrast, the rest of the Bank portfolio remained essentially unchanged (Figure 4.1 and Appendix Table 4.1). Countries for intensive supervision included those with at least 50% of projects or one-third of commitments at risk, with at least seven projects and $250 million at risk. The December countries were: Angola, Burundi, Cameroon, Central African Republic, Guinea, Madagascar, Mozambique, Nigeria, Rwanda, Senegal, Tanzania, Togo, Uganda, Papua New Guinea, Brazil, Peru, Venezuela, Bulgaria, Hungary, Romania, Russian Federation, Turkey, Algeria, Iran and Yemen. Twenty countries were included in the April PIP, all but seven of which were included in December. Of those dropped five show sustained improvement, but two (Kenya and Morocco) subsequently deteriorated. Annual Report on Portfolio Performance, FY97 Page 19 Box 4.2 YEMEN PORTFOLIO TURNAROUND Shortly after the two Yemens unified in 1990, the Gulf war erupted and a million Yemenis returned home from their jobs in the Gulf-bringing with them a sudden upsurge in need for basic services and halting the remittances which had been the foreign exchange lifeline. The collapse of the former Soviet Union, South Yemen's largest creditor, worsened the situation. The country experienced additional internal shocks as a result of the 1993 floods, and the 1994 civil war. At the project level, counterpart funds were scarce; contractors were abandoning works on projects due to inflationary pressures, and the Government resisted price escalation contract clauses. Further, with the merging of two different administrations, public administration functions came to a standstill, with backlogs of decisions on procurement and inability of project units to implement projects. By FY97, a different picture emerges. Problem projects are reduced to one-third of the portfolio; counterpart fund availability is an issue for only one project; and effectiveness delays are reduced from 15 months in FY95 to a little over 4 months, and the Government has agreed to request blanket approval from the Parliament to further shorten the effectiveness lag. Five elements drove the turnaround: * Focus on macro stability. With Bank and IMF support, the macroeconomic situation was stabilized and appropriate adjustment measures put in place. Yemen is now moving into the second stage of its successful economic reform program, with restored donor confidence and a marked increase in donor assistance. * Improved dialogue on portfolio management. Portfolio focus was elevated to the cabinet level. In addition, the CPPR was comprehensive, with each project reviewed in detail, 9 projects restructured, and funds amounting to $34 million canceled, thereby sending a powerful message of the Bank's keen interest in the health of the portfolio. * Strengthened portfolio management capacity in the Resident Mission.. The presence of the RM in Sana'a has made a major difference not only in portfolio improvement but in higher levels of cooperation and trust. Each year, more responsibility was delegated to the RM and today about 75% of the supervision task management and almost all procurement decisions are delegated to the field. * Greater focus on quality at entry. The approach to project design is "be realistic and practical, keep simple, add as you go, pilot when you need to." Also, as a matter of policy, key implementation staff are appointed and related funding secured prior to Board approval. * Building local capacity. This has involved training at every opportunity, including project launch seminars, procurement and disbursement seminars. Furthermore, as agreed under the FY96 CPPR, all project units have been restructured, staff recruited on a competitive basis, and private auditing firms engaged. Yemen continues to be a risky country and capacity issues are paramount, but the basis for further momentum in now in place. Annual Report on Portfolio Performance, FY97 Page 20 FIGURE 4.1 PORTFOLIO IMPROVEMENT PROGRAM, FY95-FY97 (W/O GOLDEN FLAG) Projects at Risk Commitments at Risk 69 69 70 --63- 70 66 6 60 -- - -60 0 5050 40 40 S 26 2130 220 20 FY95 FY96 FY97 FY95 FY96 FY97 Fiscal Year Fiscal Year a Total 25 Targeted Countries g Rest of the Ban Poio [3 Total 25 Targeted Countries a Rest of the Bank Portfolio 4.7 Targeted Projects. Large projects targeted for attention also improved. Supervision intensity for the 100 targeted projects was higher (26 sw per project on average versus 19 sw Bankwide). Twelve percent of these projects were restructured and 15% were closed; both above the Bank average. Among the 100 projects, about US$700 million was canceled. The status of the targeted projects improved comparatively more than the Bankwide portfolio. Of the 100 largest projects at risk, in addition to those closed, 44 were upgraded to nonrisky at the end of FY97 (33 if the golden flag is not taken into account). The level of commitments at risk was also reduced by one-third by the end of the fiscal year. Looking at the 50 largest projects from the April 1996 PIP, the impact is even stronger, which is consistent with the longer time horizon. 4.8 Targeted Sectors. While the predominant emphasis of the PIP was on risky countries and risky projects, it also had a sectoral dimension. Specifically, fourteen sector, subsector and instrument portfolios were identified for crosscutting reviews, some because they were at risk, and some in order to identify best practices for dissemination. The objective of these reviews was to identify systemic issues facing particular sectors and make project specific recommendations for improvement (Annex III). 4.9 The systemic portfolio problems which emerged from the sectoral reviews are consistent with findings from other portfolio analysis. The picture that emerges is one in which the Bank's objectives overall have become more ambitious and its operating Adjustment Lending, Agricultural Research and Extension, Financial Intermediary Lending, Forestry, Highways, Irrigation, Natural Resource Management, Oil and Gas, Power, Public Enterprise Reform and Privatization Operations, Social Funds, Human Development, Technical Assistance Loans, and Water Supply and Sanitation Annual Report on Portfolio Performance, FY97 Page 21 environment more complex. Bank projects have changed in the past decade, with many sectors increasingly moving from a more narrow focus on hardware to a much broader one that encompasses policy changes and institutional development. This shift is consistent with current thinking about development and should strengthen the impact of Bank operations, but also exposes them to a wider range of risks. Systemic problems were focused in five areas: * Inadequate attention to fundamentals such as borrower and beneficiary commitment and the macroeconomic environment; * Unrealistic project objectives, which in part reflected problems of Bank incentives and culture; * Insufficient supervision attention to progress in meeting development objectives, leading to overoptimism in DO ratings; * Failure to respond rapidly and proactively to problems and changing circumstances; and, * Erosion of specialized staff skills and a lack of staff continuity. 4.10 Overall, the sector reviews were instrumental in helping Networks focus on portfolio management issues. In addition, they reinforced communications between the Network anchors and the regions on portfolio issues and helped identify systemic issues for attention. The impact on individual operations has differed from sector to sector. In some sectors, there has been a clear improvement as a result of focused attention to sectoral problems (Box 4.3). In others, such as Technical Assistance operations and Financial Intermediary loans, problems remain. Clearly, more must be done to systematize the growing Network attention to portfolio issues. Networks also need to strengthen dissemination of findings and ensure better integration of lessons of experience in future sector assistance strategies. 4.11 Summary. While still early in its implementation, the PIP has had an encouraging start; it raised the visibility of portfolio issues, introduced better tracking of the portfolio and led to intensified actions to address portfolio problems. It can be improved, however. Specifically, there is a need to balance attention to large and small country portfolios, to strengthen dissemination of findings and to link systemic findings with project specific actions, as well as sector assistance strategies. Annual Report on Portfolio Performance, FY97 Page 22 BOX 4.3 IRRIGATION AND DRAINAGE SUBSECTOR At the start of the Portfolio Improvement Program in April 1996, the irrigation and drainage portfolio had an above-average concentration of projects at risk with 24 projects (38%) with high risk of failure at completion. Overoptimism during preparation and appraisal was identified as the most pervasive problem of the irrigation subsector during the Portfolio Review. Projects tended to be ambitious in terms of Borrower's commitment and administrative capacity, production benefits, and state of preparation. The recommendations of the Review were mostly related to better project preparation and appraisal: improving quality at entry, reducing the complexity of projects, more realistic work programs, and to enhancing resources for Portfolio Management. Specific recommendations were made for each at-risk project: intensive supervision, downscaling and restructuring, and closing if successful outcome was seriously in doubt. The Portfolio Review has had a positive impact on the performance of the subsector. The percentage of total projects at risk has decreased to 14% and irrigation is now the best rated subsector of the agriculture portfolio. Of the 17 problem projects in April 1996, only four are still rated problem projects. Four projects were closed. Nine projects were removed from the list of problem projects as a result of the actions taken by the Regions to improve the performance of the portfolio. The Regions mobilized resources for intensive supervision, in terms of frequency and staffing (India, Haryana Water Resources Consolidation Project and Indonesia, Java Irrigation Improvement Project). As a result of intensive supervision, a number of projects were restructured, for example Bangladesh National Minor Irrigation, to remove obstacles to performance. Major adjustments were also made to the Armenia Irrigation rehabilitation project after considerable cost overruns were identified one year after appraisal. 4.13 Country Portfolio Performance Review (CPPR). The CPPR and some of its variants have become mainstream portfolio management tools shared by borrowers and Bank Staff. In FY97, 48 such reviews were held, in countries which included 53% of Bank- financed projects and 58% of commitments. This is slightly above the level of FY96. The earlier, largely technical, reviews of portfolios and implementation problems saw greater involvement in FY97 at the policy level of government and most senior levels of Bank management. This included in FY97 on the Government's side, the participation of Heads of Government (Mozambique, Vietnam, Venezuela); cabinet members, and senior civil servants; and on the Bank's side, the President and Managing Directors, Regional Vice Presidents and Country Directors. New emphasis was also placed on the role of Resident Missions in all regions in organizing, conducting and following up on the CPPRs. 4.14 The methodology of CPPRs has matured, including discussion of traditional sectoral and project review papers, participatory diagnostic workshops, involvement of project beneficiaries and stakeholders and cross-sectoral systemic and thematic issues. In several countries (Colombia, Venezuela, Guinea Bissau, Cape Verde and Senegal), the CPPR exercise was part of the overall CAS discussions. From these experiences, it has become clear that the keys to effective CPPRs are: (i) good participatory preparation up front; (ii) solid partnership between the Borrower and Bank, so that the CPPR conclusions are "owned" by both parties; (iii) concrete and monitorable actions to track progress; and (iv) regular follow-ups to ensure adherence to agreed action plans. Reflecting the increasing use of the Annual Report on Portfolio Performance, FY97 Page 23 country as the "unit of account" for Bank work, the CPPRs are expected to remain important, especially for countries warranting special attention. 4.15 Country Portfolio Management Papers (CPMPs) were prepared for 50 selected countries as part of the ARPP. In some cases, CPMPs and CPPRs are identical documents and in all cases CPMPs are expected to reflect the results of CPPRs, if available. The CPMP is still evolving as a portfolio management tool; for those prepared in FY97, the quality was considerably better than in FY96 (Box 4.4). Box 4.4 EVALUATION OF COUNTRY PORTFOLIO MANAGEMENT PAPERS (CPMPS) A QAG panel evaluated the 50 Country Portfolio Management Papers (CPMPs) prepared for the FY97 ARPP. These 50 country portfolios accounted for 64% of projects and 83% of commitments in the Bank's FY97 portfolio. The panel evaluated the quality of the CPMPs in three key areas: (i) assessment of portfolio performance; (ii) portfolio management during FY97; and (iii) proposed portfolio improvement plan for FY98, There has been considerable improvement in the quality of CPMPs since last year's review. Of the CPMPs for FY97, 67% were rated as satisfactory or better, compared to only 44% rated likewise last year. Of the areas covered by the CPMPs, portfolio management was rated more highly (75% satisfactory) than the assessments of portfolio performance (58% satisfactory). There was an improvement in the quality of the portfolio management, but a slight deterioration in the quality of the assessments of the portfolio. The good CPMPs came in many different lengths and formats and included portfolios that were performing poorly as well as relatively good performers. They were characterized by, inter alia, the following: * Clear, realistic, and transparent assessments of portfolio performance and status, effectively using projects at risk as well as DO/IP ratings and linking past and curren performance; * A focus on achieving development objectives rather than just disbursements; * Systematic discussion of portfolio management activities in FY97 and clear evidence of a proactive approach, including comparison of actions undertaken with those planned or proposed in the previous PIP; * Comprehensive sets of planned actions (for FY98) to address generic as well as project-specific issues; and, * Realistic assessment of future prospects for the portfolio. Annual Report on Portfolio Perfonmance, FY97 Page 24 4.16 Project Restructuring. Restructuring is defined as major changes in development objectives or design of approved projects. It is usually undertaken because some project objectives are no longer relevant owing to changed economic conditions or new government policies and priorities, or because the project's original design will not achieve the planned objectives. Restructuring as used here does not include minor modifications and adjustments being made continuously, which represents best practice in adaptive supervision (Box 4.5), but does include changes which, while important, may not have required revision of legal agreements. Seventy-seven projects were restructured in FY97, compared to 30 in FY96 and 54 in FY95. More than two-thirds of the FY97 restructurings were for projects at risk. The rest appear to have been for projects with good implementation records, but which were restructured to accommodate changes in client priorities, enable the use of cost savings within the scope of the project, modify the size of specific components, or reflect substantial changes in the implementing agencies. Box 4.5 RUSSIA: CONTINUOUS PROJECT RESTRUCTURING The Russia portfolio experienced the fastest rate of growth in the history of the Bank, expanding from nothing to over US$8 billion in commitments in just five years. Along the way, the Government and the Bank have had to wrestle with a wide range of generic implementation problems which at one point resulted in more than 60% of the portfolio being classified as problem projects. In addition, given that many of the project concepts were being tried out for the first time in Russia with inexperienced implementing agencies, there was a high rate of "on-the-job" learning, with the result that frequent adjustments and changes in project design became necessary. The response by both the Government and the Bank has been to accept changes in project design as a necessary and desirable feature of portfolio management. In many cases, this was possible while remaining within the overall objectives of the project and, therefore, adjustments could be made during the regular supervision or the annual CPPRs in other cases. In other cases, adjustment to the portfolio took place through: * Major realignments of project objectives and components with formal restructuring (e.g., Privatization Implementation Assistance Project); * Cancellations, by mutual agreement, of major project component no longer deemed necessary or viable (e.g., Oil Rehabilitation and Energy Efficiency Projects); * Suspension of further work (including disbursements), pending resolution of key issues (e.g., Tax Administration Modernization and Portfolio Development Projects). While frequent reworking of projects may not resolve all problems (e.g., Agriculture Reform Implementation Support, which despite two restructurings remains a problem project), it has been an important element of the Bank's portfolio management strategy and has resulted in onlyl8% of the Russia portfolio classified as problem projects. Annual Report on Portfolio Performance, FY97 Page 25 4.17 Relative to the size of the portfolio, FY97 restructurings were most frequent in SAR (15% of the relevant' portfolio compared to 8% Bankwide); they were lowest in EAP (3%), reflecting the high quality of its portfolio. At the country level, nearly 20% of the Pakistan portfolio was restructured, mostly to address implementation issues in the social sector, where projects were not properly integrated with sector policies and facing serious delays. Restructurings were also important in Mexico (17% of the portfolio), Russia (12%), and Brazil (8%). 4.18 Restructuring has generally been an effective instrument for resolving problem, but its impact is felt only over time and project ratings are not generally upgraded until improved performance has been sustained. Evidence indicates restructuring does pay off. Of the 20 problem projects restructured in FY95, 11 were rated satisfactory by the end of FY96 and 16 by the end of FY97. Similarly, of the problem projects restructured in FY96, nearly two- thirds were rated satisfactory by the end of FY97. Despite the increase in restructurings, there is still a large number of long-term problem projects. Of the 41 problem projects with unsatisfactory ratings for two or more years at the beginning of FY98, only 11 had been restructured so far, suggesting scope for more active use of this instrument in the coming year. 4.19 Mid-term Reviews (MTRs). Mid-term reviews provide a structured opportunity for the Bank and borrower to assess whether project design is appropriate and implementation is on track. The scope and depth of the reviews depend on the project specific implementation problems. There were 168 MTRs in FY97, a considerable increase over 140 in FY96 and 130 in FY95, reflecting the greater emphasis on active portfolio management. MTRs are a flexible instrument and are used differently by different regions. One region (MNA) has introduced the concept of Early Implementation Reviews (IERs) within 18 months of effectiveness to catch problems before they become unmanageable. About one-third of all projects 2-5 years into implementation had MTRs. Relative to the size of the relevant portfolios, MTRs were most frequent in SAR (45%) and AFR (30%). 4.20 A review of 103 of the MTRs held in FY97 indicates that for nearly 55% of the MTRs, the projects had been proceeding well and no changes were required. About 25% of the MTRs led to minor modifications in project design, nearly 20% to project restructuring and 4% to full or partial loan cancellation. About 15% of the MTRs resulted in changes in project ratings to make them more realistic. Reliance on MTRs as a portfolio management tool may decline as adaptable lending is introduced and the supervision culture moves towards use of IERs and continuous adaptation throughout the project life. 4.21 Closing Date Management. Although, there was a slight increase in FY97 in the number of operations with closing date extensions of two or more years, the number of overaged projects (older than eight years) decreased in FY97 absolutely and as a proportion of the total portfolio (to 9%), reflecting tighter management of closing dates. Nevertheless, Projects between 2-7 years of age. Annual Report on Portfolio Performance, FY97 Page 26 some problem projects are allowed to linger. In FY97, 163 projects older than eight years remained, one-third of which were in AFR. Continued vigilance in managing closing dates is warranted, recognizing, of course, that closing operations at the originally agreed closing date is not always the right thing to do from a development standpoint (Box 4.6). Box 4.6 UGANDA POWER III: A DECISION NOT To CLOSE The Uganda Power Ill project was approved by the Board in June 1991. Its original closing date was June 1997. The project is central to Uganda's development strategy. Its objectives are to expand Uganda's hydro power generation by 50% and to strengthen operations of the Uganda Electricity Board (UEB). In April 1996 the project was rated as a problem project in terms of both IP and DO. Specifically, the main civil works contractor, was significantly and increasingly behind schedule. In addition, operational and financial performance of UEB had deteriorated since appraisal. With the closing date one year away, the Region needed to decide what to do. Closing as scheduled was considered, but about 40% of excavation was completed and turbines and transformers financed by bilateral sources were under construction. The costs to Uganda and other financiers of cancellation would have been very high. Restructuring was neither desirable nor possible. The original design remains good and the project as a whole is not divisible into separate components. It was decided to continue implementation. The original contractor was replaced using ICB and a new contract signed in September 1997. A sector restructuring plan has been discussed with government and will be implemented over the coming three years. The plant will now be commissioned in June 1999, two years behind schedule and the credit has been extended two years to accommodate it. The project remains rated as Unsatisfactory and will not be upgraded until there is actual progress on civil works and institutional performance. 4.22 Effectiveness Delays. Delays in effectiveness dropped significantly. In FY97, 76% of operations became effective within six months of Board presentation, compared to 59% in FY96 and 52% in FY92. This is especially important as delays in effectiveness create pressure for future extensions and have a high correlation with eventual unsatisfactory outcomes. At the end of FY97 only 8 operations had not become effective within twelve months. 4.23 Cancellations. The total amount of cancellations during FY97 was US$ 4.0 billion, an increase from US$3.0 billion in FY96. Cancellations were concentrated in a few large portfolios and the actual number of cancellations decreased (from 328 to 248). Among the largest amounts were: SAR (over US$1 billion, of which US$725 million in India); ECA (US$ 810 million in the Poland, Russia, Bulgaria and Hungary portfolios); LCR (US$ 972 million in the Argentina, Mexico, and Venezuela portfolios); and AFR (US$ 145 million in Nigeria). About half of the 66 largest cancellations (those exceeding US$ 10 million, or 20% of the loan amount) were problem projects, for which components were either canceled or reduced. Cost under-runs accounted for about 20% of the cancellations. Borrowers initiated about 20 percent of the cancellations, including for example, India Madras Water Supply II (US$189 million), in which a major component was dropped and India Financial Sector Annual Report on Portfolio Performance, FY97 Page 27 Development Project (US$200 million), where the backstopping facility for foreign currency loans was deemed unnecessary. 4.24 Cancellations of non-performing projects often hold several advantages for both borrowers and the Bank, providing an opportunity to redirect resources to better-performing parts of the portfolio and freeing up fiscal "headroom". At the same time, however, decisions to cancel require careful judgments, to ensure that borrower's interests are recognized. Cancellation of IDA operations has been problematic, as borrowers are reluctant to cancel in the absence of assurance that resources would be reprogrammed to their benefit. 4.25 Retrofitting the Portfolio with M&E Indicators. Since July 1995, all new operations are to have been systematically provided with monitoring indicators, while the decision was made to retrofit the ongoing portfolio by end-FY98. Retrofitting is progressing, although this is proving to be a difficult exercise (Box 4.7). At the beginning of FY98, 75% of the portfolio was fitted with indicators, including projects approved since FY95 as well as retrofits. Taking account of the projects scheduled to close during FY98, the portfolio should be about 100% fitted as scheduled. Quality of indicators remains an issue however, and there is much to be done before the full results will be felt. On the Bank side, additional use of the logical framework in project design is needed. On the borrower side, not all are equipped to manage and monitor the more sophisticated performance indicators or even accept their value. The emphasis on performance monitoring indicators is highlighting the need to be much more specific about project development objectives. Thus, while a good beginning has been made in this important area, much more needs to be done to tap fully the potential gains from this instrument. 4.26 Supervision Intensity and Quality. Resources devoted to supervision and implementation support reached an all-time high in FY97 (an average of 19 sw per project- almost 50% above the FY92 level (Appendix Table 4.6). In dollar terms, the increase was more modest (about 35% in real terms), reflecting increased reliance on local staff in supervision. With the additional attention being given to procurement and financial management, further modest increases in supervision effort measured in staff weeks are likely in the near term, before efficiencies lead to reduced dollar costs. 4.27 Supervision resources appear well targeted: problem projects received significantly more supervision compared to those rated satisfactory (Appendix Table 4.11). Supervision also emphasized support for early project start up. Projects in the 2 to 4 year age group received 23 sw of supervision, compared to 18 sw for projects four years or older. 4.28 Supervision intensity (both in terms of staff weeks and dollar costs) increased in all Regions with the exception'of LCR, where it declined marginally. In FY97, supervision was particularly high in South Asia (27 sw at $71,000 per project). (Appendix Table 4.8). It was also high in ECA (23 sw at $77,000 per project) where seven countries received more than 30 staff weeks per project (Uzbekistan, Russia, Ukraine, Lithuania, Azerbaijan, Kazakstan and Romania). Supervision inputs per project in both staff weeks and dollars were below the Bankwide average in MNA, LCR and EAP (about 15 sw and averaging $56,000). It is Annual Report on Portfolio Performance, FY97 Page 28 important to note that data on supervision intensity should be treated with some caution due to weaknesses in time recording, especially for operations with a high level of field-based supervision. Box 4.7 FITTING THE PORTFOLIO WITH MONITORING INDICATORS Good practice in project monitoring and evaluation comprises five elements: * clear operational objectives, verifiable by indicators; * a structured set of indicators covering inputs, outputs, outcomes and impacts; * a realistic process of data management and collection; * realistic assessment of institutional capacities to handle monitoring and evaluation; and * arrangements to feed findings back into project management. A random sample of 62 operations from across the Bank was assessed on the basis of the quality of project development objectives (i.e., specific, realistic, measurable), clarity of the link between indicators and development objectives, and whether or not the indicators were being used to report progress on the Form 590s. The link between the performance indicators and the development objective(s) was found to be satisfactory or highly satisfactory in 36% of projects, marginally satisfactory in 39%, and unsatisfactory in 25% of projects. About one-third of projects with indicators listed 10 or more outcome/impact performance indicators, creating a challenge for progress monitoring. A major area of deficiency was found in the fact that 57 percent of projects failed to report progress in terms of the key performance indicators. These findings are broadly consistent with results from a separate survey by the AFR Region, which assessed I10 retrofitted operations and found that the quality of monitoring indicators was unsatisfactory in one respect or the other for 43% of the projects. A concern arising from the ARPP assessment is the extent to which the project development objective(s) in existing projects are deficient: 27% of projects lacked objectives which were adequately specific, 48% of projects lacked objectives which were adequately realistic, while 6% of projects lacked objectives which were adequately measurable. These deficiencies may reflect the fact that use of the logical framework (contained in the new PCD/PAD) was introduced only recently. 4.29 While the aggregate supervision intensity appears to be broadly appropriate, its quality remains a matter of concern. In order to assess the quality of Bank supervision in FY97, QAG undertook an assessment (Rapid Supervision Assessment) of a sample of 250 operations in the current portfolio, assessing supervision quality on four dimensions: (a) attention to development objectives; (b) attention to fiduciary responsibility; (c) appropriateness of resource use and procedures; and, (d) realism and transparency of project reporting. The major findings of the assessment are: * About two-thirds (63%) of all projects were being supervised satisfactorily; slightly more than one-third (37%) were found to have less-than-fully- satisfactory supervision, including a small number (5%) rated unsatisfactory; Annual Report on Portfolio Performance, FY97 Page 29 * ECA and SAR had strong overall results and AFR and MNA were below average. * Results varied by sector, with Water Supply and Urban performing best and Electric Power poorest. * The fiduciary aspects of projects (procurement, financial reporting, etc.) were better supervised on balance than other aspects such as attention to development impact and quality of reporting; * Problem projects, and older projects, were generally less well supervised; and, * Projects supervised from the field had somewhat better supervision quality than those supervised from Headquarters. However, the quality was related more to the presence of experienced task managers in Resident Missions than by the location itself. 4.30 The review found that the best supervision was forward-looking, action-oriented and collaborative. Problems were identified and addressed promptly, through continuous "rework," the process of adaptation to changing circumstances. Poor quality supervision typically shared two flaws: management inattention and lack of focus on the ultimate goals of the project--the development objectives. It tended to be passive, retrospective and input- oriented. The panel concluded that it should be possible to improve supervision quality significantly over the next two years. With continued attention to fiduciary aspects of supervision and greater attention to development objectives, the number of less-than-fully satisfactory supervision efforts can be halved (to 15% of all projects), and unsatisfactory supervision eliminated altogether by the end of FY99. 4.31 Field-Based Supervision. The trend toward field-based supervision, which began a number of years ago, has been accelerated in the current process of the Bank's institutional renewal. Field based supervision enables more regular contact with clients, early identification of emerging problems, and speedier resolution of basic problems associated with loan supervision and administration, such as in the areas of procurement, disbursement and progress monitoring. Field based supervision is especially important for new style, adaptable lending. 4.32 Given the rapid organizational changes during the recent past and the weaknesses of the TRS data, it is difficult to determine precisely how much supervision is now "field based". At the end of FY97, about 15 percent of projects had task managers based in the field, although this is probably an underestimate of the real work done from the field. Initial evaluations of field based supervision are positive (Box 4.8). Annual Report on Portfolio Performance, FY97 Page 30 Box 4.8. EFFECTIVENESS OF FIELD SUPERVISION Decentralization to the field is a central element of the institutional renewal effort. It is expected that a growing proportion of supervision work will be managed from the field, drawing, of course, on headquarters based technical expertise as needed. In order to have a preliminary sense of the impact of this shift to field based supervision management, the ARPP looked at the special case of SAR, which has had a long history of field based supervision, the specific cases of Mexico, West Bank Gaza and Hungary, all of which have special supervision mandates, and at a small sample of operations from across the Bank. The results of the review are positive, but not yet conclusive. Specifically, * Cost savings can be identified, especially in the cases of countries where there is a strong cadre of local professions, such as India and Mexico; in parallel there is a moderate reduction in overheads associated with changed travel patterns from headquarters. * Problem solving seems to be more rapid and results on the ground improved; in Mexico sector leaders estimate they spend 25-30% of their time with counterparts, compared to 7-10% for headquarters based staff. * Actual quality of field based supervision, depends importantly on having a critical mass of locally based, high quality staff, who have a genuine sense of partnership with both the borrower and headquarters based colleagues. Overall, the initial evidence suggests that field based supervision will be both higher quality and more cost effective. Contrary to commonly held concerns, realism, fiduciary rigor and proactivity do not appear to be eroded by decentralization. But decentralization to the field is not a panacea, nor are its benefits automatic. Experience has shown (especially in India and Mexico) that to be effective, it must be built up carefully and systematically, it must ensure the right skill mix adapted to the country and its portfolio and there must be clear lines of delegation and accountability. Another major challenge will be preserving institutional memory in a decentralized environment and monitoring implementation experience across regions. B. STRENGTHENING BANK'S PORTFOLIO MANAGEMENT CAPACITY 4.33 During FY97 a number of organizational and process changes were introduced whose impact will be felt over the coming years. Seven aspects of the renewal program will contribute especially toward portfolio improvement: * Refocusing the Development Agenda. Broader participation in project design and implementation, strengthened partnerships, and new products will ultimately enhance the quality of the portfolio. The introduction of adaptable lending instruments explicitly addresses the need for constant adjustment and learning in project implementation; * Decentralization. Eighteen (including for the 8 largest borrowers) of the 51 Country Departments are field-based, with full responsibility for overall portfolio management. This will help ensure a better understanding of the realities of client circumstances and needs, prompter and more informed advice and faster problem resolution. * Greater delegation of authority. Responsibility for most operational decisions is being delegated from RVPs to Country Directors and task team leaders. Country Directors have overall authority for managing country portfolios, but the principal accountability for the quality of individual project supervision rests with the task Annual Report on Portfolio Performance, FY97 Page 31 team leader. Sector specialists are available for support and advice, but the lines of authority and accountability are clearer. The enhanced responsibility will speed decision-making and empower task teams to promote project "rework," the constant adaptation of projects to changing realities on the ground. * Refueling Current Business Activity. The reorientation of budget resources to the "front line" targets explicitly core operational services that support project implementation--procurement, disbursements and auditing and accounting. The creation of the Operational Core Services Network will facilitate improvements in these areas. The Loan Administrative Change Initiative (LACI) is piloting enhanced financial management and control capability for both borrowers and the Bank. * Knowledge management. One of the main responsibilities of the five Networks will be the management and dissemination of knowledge--best practices, lessons of experience, systemic portfolio and implementation issues. For example, FPSI is taking a thematic approach to evaluation and dissemination and the Operational Core Services Network's Knowledge Management Program will support crosscutting issues, like M&E. * Revamping Institutional Capabilities. Ultimately the quality of project supervision and implementation depends on people---task managers and teams, line managers and, most importantly, borrowers. The Renewal focus on managerial selection and staff training and development will provide skills and incentives for excellence in project design and monitoring among Bank staff, Expanded EDI programs and the stress on partnerships and participation should enhance the capability and effectiveness of borrowers; and, * Enhanced Accountability. Accountability is supported through monitoring the Strategic Compact, use of service standard benchmarks to ensure consistency of service delivery across the institution, and real time Quality Assessments by QAG. The Operations Information System (OIS) has been improved to deliver up to date information to staff and managers. Portfolio tracking indicators, including projects at risk, are all available at individual work stations. Further improvement in the OIS is planned as part of the systems renewal under the Strategic Compact. 4.34 Taken together, the Renewal Process and the Strategic Compact provide the overall context to improve the Bank's portfolio, both in the short term and into the next century. The challenge is to reap the full benefits of the work in progress. No new financial resources will be required overall, although there is a constant need for managers to assure that the targeted portfolios get the resources and attention they deserve. 4.35 Quality at Entry and the Country Assistance Strategy (CAS). Reviews of the quality at entry (the ECON reports and in depth QAG assessments) have identified problems in quality at entry in about one-quarter of cases. Common problems are: (a) many projects Annual Report on Portfolio Performance, FY97 Page 32 are not ready for implementation; (b) risk assessments are often poor; (c) design is often complex; (d) client ownership is. uneven. The Renewal Program described in para. 4.33 is designed to deal with this. 4.36 It is important to remember, however, that project specific analysis cannot be viewed in isolation from the country context. On the country basis, the strategy to sustain growth and development and eliminate poverty is articulated in the CAS. CASs are an evolving instrument, but have been lacking in the past in a number of respects; e.g., extent of borrower involvement, attention to core Bank objectives and use of performance indicators. FY97 saw a consolidated effort to improve them. A particular objective has been to ensure that CASs genuinely evaluate experience with portfolio implementation in a country and orient future Bank support to take account of that. Monitoring and Feedback Systems 4.37 The Bank's systems for tracking the performance of individual operations, the overall health of the portfolio and the quality and impact of the Bank's portfolio management were strengthened in FY97. A new Form 590, was mainstreamed; new indices to track realism of ratings and proactivity of project rework were introduced; an enhanced tracking system for quarterly portfolio reporting was initiated; and service standards for portfolio management actions were adopted. 4.38 New Form 590. An improved Form 590, the basic instrument that underpins all the Bank's portfolio monitoring and feedback systems was introduced Bankwide in FY97 after pilot testing. The new Form includes changes in content designed to provide comprehensive and transparent coverage of project performance and risks, as well as changes in information technology to facilitate recording and retrieval of project supervision information and assessments, and their aggregation into portfolio indicators. Experience with the new Form 590 thus far has been positive overall, especially for staff who have had time to adjust to the changes. However, realizing its full potential as a tool for managing the portfolio and improving further the realism of project ratings will take time as well as incentives for effective supervision. (Box 4.9). Annual Report on Portfolio Performance, FY97 Page 33 Box 4.9. IMPLEMENTING THE NEw FORM 590 The electronic Form 590 system for supervision reporting was developed in 1995 to facilitate better portfolio monitoring. The system was piloted in ECA in the second half of FY96 and mainstreamed in all Regions in FY97. In ECA, where the system has been implemented the longest, management credited the new system with demonstrated value as a management tool by providing easy assess to the latest, as well as historical, supervision data, and making rapid consolidation of portfolio information possible. This helped the Region focus its dialogue with member countries upon finding solutions to systemic problems. The QAG rapid assessment of supervision performance indicated that supervision performance in ECA is currently the highest among all the regions. Experience with the system Bank-wide indicates that more needs to be done to promote consistency in the use of the Form 590 system as a management tool. While the new system has the potential for improving the quality of performance ratings, owing to its transparency, many staff and managers have yet to use it effectively. Some general systemic problems have persisted and remain to be addressed Bank-wide: inadequate realism in the IP and DO ratings (particularly the tendency to upgrade ratings on the basis of promises rather than demonstrated results), inadequate focus on development impact, and inconsistencies between the IP ratings and other contributory ratings (e.g. procurement). These problems are expected to diminish as managers and staff acquire more experience with the system and with the continued management emphasis on candid supervision reporting. The information technology supporting the new Form 590 is substantially better than the system it replaced. However, there is scope for improving its "user-friendliness", particularly for field staff. Efforts are currently underway to improve the technology infrastructure and to respond to user suggestions. These changes are expected to be implemented in HQ and the field by late 1997. Additional enhancements to adapt the system to the specific requirements of lending instruments and sectors will follow as part of Bankwide system renewal efforts. 4.39 Realism Index. Effective portfolio management requires early identification of problems and rapid resolution of them. Realism and accuracy in ratings has been a consistent problem, reflected in differences in assessment between current and ex post evaluations of outcomes (the "disconnect") and in inconsistencies between overall ratings and sub-ratings. In order to monitor changes in the degree of realism, the Bank introduced in FY97 a realism index (the ratio of identified problem projects to total projects at risk). Reflecting the over- optimism in ratings described earlier, the realism index for FY92 was a low 49%. In FY97, it was 59% without the golden flag and 66% with the golden flag, with AFR improving the most. Realism of ratings remains a problem, and there is still scope for considerable improvement. Annual Report on Portfolio Performance, FY97 Page 34 TABLE 4.1 REALISM AND PROACTIVITY INDICES BY REGION, FY96-FY97 % Realism % Proactivity Region FY92 FY96 FY97 /1 FY97/2 FY96 FY97 AFR 54 48 60 68 61 54 EAP 29 78 72 72 46 71 ECA 86 66 53 54 39 82 LCR 41 52 46 61 62 78 MNA 37 67 70 77 65 69 SAR 57 89 71 72 52 79 Total 49 59 59 66 56 70 /I Projects at Risk without Golden Flag /2 Projects at Risk with Golden Flag 4.40 Proactivity index. Once recognized as having problems, actions should be taken rapidly. An index serving as a proxy for the speed of effective action (the percentage of projects rated as problems 12 months earlier that have been upgraded, restructured, suspended, or canceled partially or fully), is the "proactivity index." As with the realism index, the proactivity index has been retrofitted to the portfolio, although for reasons of data comparability, only to FY96. Greater gains have been made in proactivity than in realism, with proactivity increasing from 56% in FY96 to 70% for FY97. By this measure, ECA is most proactive (82%) and AFR the least (54%) (Table 4.1). Both of these indices, as well as the projects at risk index, are under constant review and adaptation to improve their usefulness (Box 4.10). Annual Report on Portfolio Performance, FY97 Page 35 BOX 4.10. ASSESSMENT OF PROJECTS AT RISK, REALISM AND PROACTIVITY INDICES The FY97 ARPP reviewed the usefulness of three indices of portfolio monitoring (projects at risk, realism and proactivity), as perceived by managers and staff in the Regions and Networks. Overall, there was uniform view the indices were reasonable and useful. Worries focused on the indices becoming too complex and unwieldy. Nevertheless, several suggestions emerged to improve their reliability, including: * refining the "at risk" criteria to include the level of past "disconnect"; i.e., consistent candid reporting can counterbalance a historic poor country performance; * refining the "at risk" criteria to be more responsive to major changes in country macroeconomic management performance; and, * clarifying that the "golden flag" is simultaneously a "red flag" and is applicable both to delete "false positives" as well as to identify operations which may be missed by the current system. These suggestions are being tested to ensure they lead to more robust results without creating discontinuities in the data series. Subject to satisfactory conclusions the indices will be revised during the coming year. 4.41 Quality of Ratings and the "Disconnect". Accuracy of staff ratings is vital for focusing supervision attention and for monitoring the overall state of the portfolio. A measure of accuracy has been the difference between DO ratings at the time of the final supervision and evaluated project outcomes ("the disconnect"). Since the disconnect was identified as a concern, there has been steady improvement in narrowing the gap. The net disconnect has declined from a high of 31% in FY88 to 11% for projects closing in FY96. It appears that the search for more realistic ratings has resulted in a structural downward shift in the disconnect. It can, however, be reduced even further and ratings throughout project life need to be more realistic. ECA (10%) and EAP (12%) have the best record in managing the disconnect over the period FY90-97, and LCR (24%) and AFR (23%) the worst. By sector, Transportation (6%) and Education (9%) were best and Water Supply, HNP, and Finance the worst (22-24%). Agriculture improved significantly over the period. Looking at recent years (1995-1997), ECA and LCR have shown consistent improvement, while EAP shows a worsening of the disconnect and SAR is stable (Figure 4.2). Another measure of quality is the consistency between IP/DO ratings and the subratings. Implementation of the new Form 590 in FY97 has also highlighted continuing problems in this area. Annual Report on Portfolio Performance, FY97 Page 36 FIGURE 4.1 EVOLUTION OF THE NET DISCONNECT BY CLOSING YEAR 45% % Unsat Ourcme (O 40% % Unsat DO ..... . .... % Net Disc 35% 30% 25% 20% 15% 10%S11 5% 0% FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FIGURE 4.2 AVERAGE DISCONNECT BY REGION Average Disconnect iF1B-FYS *FY92-FY9 QFY9-FYY7 30- - ---- -- -- 20 - - 25 - - - 24--- 21 21 21 20 20 20- 10 ~15p -- - _ 13 13 10 10 50 - 4-- 11 T7I- AFR EAP SAR ECA MNA LCR Total Region Annual Report on Portfolio Performance, FY97 Page 37 4.42 Service Standards. Service standards for the main operational products, including portfolio management, were established in FY97 (Box 4.11). Performance in meeting these standards at the Bankwide, regional and country levels is monitored quarterly through the OIS which also delivers current data on other aspects of the portfolio, including projects at risk. Performance with respect to these standards is reported to Management through quarterly reports. While compliance with portfolio management service standards shows improvements in certain respects, especially in processing disbursements and in reviewing financial reports, not all standards are being met, and continued attention to them is needed. BOX 4.11. SELECTED SERVICE STANDARDS FOR PORTFOLIO MANAGEMENT Product and Indicator Bankwide Benchmarks 90% cases within Portfolio Management Issue SPN report after return of mission 10 working days (including final Form 590 and letter to Govt.) Form 590 update frequency At least twice a year (100%) Time in problem project status 12 months (100%) Cancellation due to lack of effectiveness 12 months after Board Comments on bidding docs and evaluation reports (a) under mandatory review limits 7 working days (b) subject to RPA review 10 working days (c) subject to OCSPR review 17 working days Reply to procurement complaints; (a) Within clearance authority of RPA 5 working days (b) Within clearance authority of OCSPR 10 working days Processing of withdrawal applications: (a) Approval 5 working days (b) Disbursement 5 working days Comments on Audit Reports: (a) Acknowledgment of nonqualified reports 15 working days (b) Review of and response to qualified reports 45 working days 4.43 Effective Procurement. Effective supervision and administration of procurement is a key to improve project implementation. Although the current system has in general withstood the test of time well, some weaknesses have come to surface over time, including a perception that the system is inflexible, that there is a deterioration in the quality of post- review of contracts (particularly those subjected to National Competitive Bidding), and that internal capacity to manage the system effectively is over-stretched. These weaknesses have Annual Report on Portfolio Performance, FY97 Page 38 been compounded by changes in internal and external environment: (i) the change in the mix of projects towards social, financial and other sectors which require flexibility in procurement planning and implementation; (ii) a growing concern about the cost- effectiveness of the system; (iii) progressive decentralization of operational work and the need to service the borrowers' needs from the field offices; and (iv) procurement as an instrument in the Bank's anti-corruption strategy. As a result, it is necessary to accelerate the pace of adjustment to improve service to the borrowers and make the function more cost effective. 4.44 A paper articulating the Bank's strategy was presented to the Board in November. The strategy calls for a balanced approach emphasizing both fiduciary and development effectiveness objectives. Actions proposed focus in four areas: (i) strengthening of internal capacity by recruiting some 50 procurement specialists, revitalizing the training of procurement specialists and task managers, improving knowledge management through the newly established network, stationing (if cost-effective) more procurement capacity in the field to assist borrowers in procurement, and delegating (if certain conditions are met) clearance functions to field offices; (ii) streamlining ofprocesses and instruments by shifting procurement work upstream, rationalizing the prior-review thresholds, reinforcing post- reviews, and accelerating documentation delivery; (iii) augmenting client capacity by strengthening the country procurement assessment review process, linking it with the country assistance strategy dialogue, and continuation of the current 30-35 borrower training events and numerous project launch workshops; and, (iv) enhancing partnerships by intensifying joint work with other UN agencies, harmonizing procurement with multilateral development banks, and improving information on procurement to industry, advocacy groups, and other external stakeholders. It should be noted that implementation of many of the specific initiatives listed above is already well under way. The process of streamlining initiatives is being designed in close collaboration with LACI. 4.45 Loan Administrative Change Initiative. The Loan Administrative Change Initiative (LACI), which is currently being piloted, promotes the introduction in all Bank assisted projects of a financial management system within an environment of strong internal controls, which will provide financial information for project components linked with outputs and other monitorable indicators. The proposal to link Bank disbursements against these reports would foster the timely receipt of reliable reports, providing more timely accountability closer to the transaction event, as well as project information not now usually available. In addition to providing the borrower with much needed management information, it would facilitate the preparation of year end financial statements without involving the auditor in accounting, resulting in more efficient audits and lower audit fees. Annual Report on Portfolio Performance, FY97 Page 39 CHAPTER V. AGENDA FOR ACTION AND FUTURE PROSPECTS Introduction 5.1 The Bank's portfolio has continued the steady improvement from about 40% at risk in FY94 to less than 30% currently. This improvement has been, in part, the result of improved macroeconomic management in a number of borrowing countries. In addition, Bank portfolio management has also improved in many respects: including attention to the quality at entry; introduction of improved tools for portfolio management and project supervision; and efforts to be more selective and focused. There is, however, no cause for complacency. About 30% of the portfolio is still at risk, some 35% of Bank projects are receiving less than satisfactory supervision, and about one-quarter of new projects have inadequate quality at entry. 5.2 Fortunately, the tools, procedures and institutional structures are in place for continued improvement. The challenge for the coming year is to persevere in executing initiatives already underway. The Bank must now stay the course it has embarked on to realize the full benefits of these initiatives for its clients. There are four parts to this: (a) maintaining the PIP approach of focusing attention on high priority problem areas; (b) improving the quality of project supervision by implementing the recommendations emanating from Rapid Supervision Assessment; (c) improving further the quality of project performance reporting, including a special emphasis on monitoring and evaluation and retrofitting the portfolio; and, (d) enhancing further quality at entry to ensure the Bank is simultaneously doing the right things, and doing them right. A. MAINTAINING A FOCUSED APPROACH TO PORTFOLIO MANAGEMENT 5.3 Building on the successful beginning with the PIP, the program will be continued during FY98, albeit with adjustments to strengthen further its impact. Experience in FY97, indicated two shortcomings: a large borrower bias, which suggests that certain small borrower portfolios did not receive the requisite attention; and inadequate selectivity in choosing sectors/subsectors/ instruments for special attention. The creation of smaller, more focused Country Management Units (CMUs) and the Africa Region's broad based portfolio management plan provide the vehicles to deal with the first issue. Using the criteria from last year, i.e., portfolios with over one-half of projects at risk and/or over 33% of commitments at risk, the FY98 program identifies countries in 18 of the 51 CMUs for special attention (Box 5.1). In addition, five sectors/ subsectors (Agriculture Extension, Hydropower, Oil and Gas, Annual Report on Portfolio Performance, FY97 Page 40 Urban Management and Urban Water Supply), have been identified using the same criteria. The two instruments most at risk (Technical Assistance and Financial Intermediary Loans) are also targeted. Finally, 39 large projects at risk each with net a commitment of $200 million or more are included. Box 5.1 FY98 PIP PRIORITIES Countries/ CMUs Angola* PNG* Niger, Togo* Burundi*, Rwanda* Ukraine Cameroon*, CAR*, Chad, Turkey* Madagascar* Russia* Kenya Guinea*, Sierra Leone Caribbean CMU Nigeria* Venezuela* Tanzania*, Uganda* Pakistan Algeria*, Morocco Yemen*, Iran* Sectors/Subsectors Agriculture Extension Urban Water Supply Hydropower Urban Management Oil/Gas Instruments Technical Assistance Financial Intermediary Lending Large Projects 39 operations each with a net commitments of $200 million or more * countries included in December 1996 PIP 5.4 Taken together and correcting for overlaps among the categories, the targeted clusters account for about 40% of the total portfolio and about three-quarters of projects and commitments at risk (Table 5.1). The objective of the PIP is to seek major improvements in these identified clusters, while continuing efforts to maintain quality of the balance of the portfolio; specifically, to narrow by one half the difference between these clusters and the rest of the portfolio, measured by projects and commitments at risk. This would be roughly the same level of improvement (15-20 percentage points reduction in the riskiness of the targeted portfolios) as achieved during FY97. 5.5 Recognizing that those closest to the client are best placed to decide what to do, specifics of improvement programs are left to the respective CMUs and Networks. For practically all of the targeted countries CPMPs including portfolio improvement plans for the coming year, have already been prepared as part of the ARPP. In consultation with the borrowers, these will be further refined and sharpened, where appropriate. Suitable remedial action plans for large risky projects will also be prepared in the course of forthcoming supervision missions. Responsibility for targeted sub-sectors/instruments rests with the Network anchors, who would lead Network wide efforts to identify both systemic and project Annual Report on Portfolio Performance, FY97 Page 41 specific problems in their respective portfolios and help task teams develop appropriate solutions to them. The Networks (FPSI in particular, because of its size) face a special challenge to ensure the findings of the reviews are effectively disseminated throughout the Bank. Progress will be monitored as part of Bankwide monitoring and will form part of the CMU and Network accountabilities. TABLE 5.1 REGIONAL DISTRIBUTION OF TARGETED CLUSTERS1" Projects Commitments Total No. Total Atrisk Total No. % Atrisk % % % Countries 400 27 206 53 26.2 22 13.9 50 Sectors 158 11 75 19 13.9 12 6.4 23 Instruments 183 12 50 13 6.4 5 1.6 6 Projects 39 3 39 10 10.9 9 10.9 39 Total Targeted 12 644 43 283 73 44.7 38 22.1 79 Rest of Bank 848 57 104 27 74.2 62 5.8 21 Total 1492 100 387 100 118.9 100 27.9 100 1 Based on portfolio as of July 1, /2 Net of overlaps. B. IMPROVING THE QUALITY OF SUPERVISION 5.6 The Rapid Supervision Assessment carried out in preparing the ARPP concluded that the overall quality of supervision is not what it should be. As the Assessment noted, projects rarely turn out precisely as intended and successful outcomes depend on both flexible design and adaptable implementation. Recent decisions to put in place more flexible project design, as reflected in the agreement to pilot adaptable lending, will clearly have an impact over time. In the interim, however, additional proactive steps to rework problem projects in the current portfolio are vital. 5.7 The supervision assessment concluded, and managers and staff agree, that the single most important way to improve quality of supervision is through continuous project rework. Such an approach to supervision is principally a different way of thinking and behaving, and not a question of new tools or additional resources. Task managers should see project redesign and adaptation as a normal part of project implementation and not as a sign of failure (or threat to their performance rating). Similarly, line managers need to encourage explicitly rework and make follow-up decisions rapidly. In practical terms, this means that: * Task managers and task teams need to keep project goals and objectives constantly in mind, adapting projects to meet them and reporting candidly on performance; * Line managers need to read and react to supervision reports, encourage adaptation, pick the right teams and provide them enough resources; and, Annual Report on Portfolio Performance, FY97 Page 42 * Senior management needs to reinforce incentives for high quality portfolio implementation and consistently reward it. 5.8 With these actions, supplemented by the initiatives under the Strategic Compact, it should be possible to improve the quality of Bank supervision efforts considerably over the coming two years, eliminating entirely any unsatisfactory supervision. C. IMPROVING PROJECT PERFORMANCE MONITORING 5.9 Two interconnected efforts are currently underway, which should have a positive impact: (i) mainstreaming the logical framework approach to project design and (ii) retrofitting the portfolio with performance monitoring indicators. Training in the logframe and effective use of performance monitoring indicators is underway and a helpdesk exists to provide just in time advice to task teams. What is needed, however, is more flexibility in directing skilled resources to specific teams, and especially clients, to complete the work underway. As one of its initial initiatives, the Operational Core Services Network will concentrate on improving M&E in the current fiscal year (Box 5.2). The objective is to (i) ensure 100% of ongoing projects are fitted with monitorable and reasonable development objectives by the end of FY98 as scheduled; and that (ii) the log-frame and its use in project design and implementation has been mainstreamed and quality of performance monitoring indicators improved. This will be, however, a long term effort in light of the critical need to establish borrower capacity. Progress in establishing high quality M&E systems will inevitably be slow in aggregate and will vary considerably across Regions depending on borrower institutional capacity and commitment. Box 5.2. IMPROVING USE OF LOG FRAME AND M&E A strategy has been prepared to tackle deficiencies in project M&E. Support to operations will continue to be provided by Operational Core Services through the helpdesk and training in collaboration with LLC. In addition, attention will be given to selected new entrants to the portfolio. The aim is to improve both the quality at entry and the use of performance data. The strategy will be implemented through an Operational Core Services Network based M&E support team. The team will concentrate resources in a limited number of projects, but provide that support at critical times and in sufficient amount to have a catalytic impact. The selection of projects would be a regional decision, based to the maximum extent possible on OED's program of evaluation capacity development. Each project would be allocated up to three weeks of staff time by the M&E team. A typical project would receive up to one week of support at the pre-appraisal stage to help with project design and selection of indicators; a second week would be used for a project launch workshop, in country, to review project objectives and indicators with the borrower; the third week would be available during the first 12 months of implementation, to work on reporting, data collection and other M&E issues. The emphasis would be on supporting the regional operation and transferring skills to task teams, not on taking responsibility for the M&E component. Annual Report on Portfolio Performance, FY97 Page 43 D. ENHANCING QUALITY AT ENTRY 5.10 While maintaining a focused approach to portfolio management, improving the quality of supervision and emphasizing M&E should have a positive impact on the quality of the current portfolio, long term improvement will be driven equally by assuring high quality for new operations. As with improved supervision, the tools and programs to do this are in place. CASs are the fundamental building block for Quality at Entry, especially for defining future entrants based on past performance, by forcing selectivity in the choice of instruments and operations and in ensuring proposed operations are consistent with Borrower priorities. In ensuring the quality of specific operations, ownership is particularly important. Efforts are ongoing to deepen participation and beneficiary assessments and to develop better methodologies for assessing borrower ownership and institutional capacity. 5.11 Monitoring quality at entry will continue. Two tools have been used in this respect: the ECON reports and QAG's random assessments of new entrants to the portfolio. ECON has been evaluating the quality of economic analysis of all investment projects entering the portfolio. QAG audits cover a smaller group, but in greater depth than the ECON analyses. These latter will be continued, supplemented by a revised approach to ECON which will cover about half of all annual entrants, assessing them using more comprehensive criteria than had been the case under the ECON. The results of these assessments will be used both for feedback to staff and for establishing managerial accountabilities. E. MONITORING PROGRESS 5.12 The Strategic Compact provides the context to monitor overall improvements in operational outcomes. Operational outcomes, in turn, result from a combination of many factors, only some of which the Bank influences or controls. Consistent with the Strategic Compact, the Bank is committed to 100% quality work. The focus of the interim improvement effort over the coming year will be to ensure that the Bank continued to move rapidly toward that goal. Specific objectives are: * achieving a realism index of 75% or higher by end of FY98; * achieving a proactivity index of 80% or higher by the end of FY98; * raising the proportion of operations with satisfactory supervision during the year to 75% or higher; * raising the proportion of entrants during the year with satisfactory quality to 85% or higher, and, * completing retrofitting the portfolio with performance monitoring indicators and ensuring functioning M&E systems are in place for at least 50% of operations. 5.13 Monitoring systems are currently in place to establish accountabilities at the unit level. These will be reinforced in the coming year by an improved personnel performance appraisal process, emphasizing drive for results, client orientation and teamwork. Annual Report on Portfolio Perfomance, FY97 Page 44 F. EXPECTED OUTCOMES 5.14 Assuming there are no dramatic changes in the global economic environment or significant deterioration in macroeconomic management in key borrowers, achievement of the performance benchmarks outlined above should mean reducing portfolio riskiness by about 5 percentage points (reducing the risky commitments by about US$7 billion) by end of FY98. 5.15 The ultimate objective, of course, is to improve results on the ground. Currently, the closest proxy to that are the OED evaluations of completed projects. Recognizing the lag between actions taken to improve the portfolio stock and evaluated outcomes from OED, evaluation results in the near term will be determined mostly by the actions already taken. Based on a status review of the operations likely to be evaluated by OED through FY2000 (about 190 operations already closed but not yet evaluated, plus about 725 expected to close by end FY99), an average satisfactory outcome rate of about 75% by number of projects and 80% by commitment amount appears likely. Beyond FY2000, decisions taken now regarding new operations and country strategies will have an increasing impact, and a steady state of satisfactory outcomes at 80% in terms of numbers and 85% in terms of commitments appears attainable. Improvements beyond that level are likely to require greater selectivity among borrowers, instruments and development objectives. The ongoing work on the risk/reward methodology should help clarify strategic choices and trade offs in that respect. ANNEXES Annual Report on Portfolio Perfonnance, FY97 - 46 - Annex I PERFORMANCE OF TRUST FUND AND OTHER OPERATIONS The GEF Portfolio 1. As of end-June 1997, the Bank's GEF portfolio comprised 68 active projects with US$662.4 million of commitments. Fourteen GEF operations (US$177.2 million) were approved during FY97. This represents an increase of 26 percent in number of projects and 35 percent in nominal commitment value over the end FY 96 portfolio. 2. GEF grants are intended to provide funds for meeting the agreed incremental costs of measures to achieve global environmental benefits in the focal areas of climate change, biological diversity, international waters and ozone layer depletion. Biodiversity continues to receive the largest support in terms of number of projects (49%) as well as in terms of commitments (43%). 3. ECA has the largest number of projects in the portfolio (37%) , while East Asia has the largest share of commitments (31%). In FY87, Africa experienced the largest growth in number of projects and commitments with increases of 50% and 132%, respectively. Five projects exited the portfolio during FY97-three in ECA, one in EAP and one in MNA. 4. Cumulative disbursements during the year totaled US$76 million. The disbursement ratio for FY97 increased to 19% (excluding conservation trust fund projects that disburse their entire grant amount at effectiveness to provide initial capitalization of the trust funds). Disbursement performance was relatively consistent across projects. 5. Portfolio performance was examined at end-FY97 both in terms of implementation progress and likelihood of achieving development objectives. No regional, sectoral or country analyses were performed since the small size of the portfolio precludes obtaining meaningful results. Ten projects are classified in the "problem project" category, and three are designated as "potential problem projects" after applying the projects at risk criteria. These categories represent 14.7 percent and 4.4 percent of the portfolio, respectively. The number of problem projects more than doubled compared with FY96, however, problem projects as a share of the portfolio has increased by only 6 percent. The share of projects at risk has remained about the same as last year Montreal Protocol Portfolio 5. As of end-June 1997, the Bank's MP portfolio comprise 33 projects representing umbrella grants and one-time regular grants with total commitments of US$365 million, of which US$230 had been committed by the end of FY97. Four MP projects with an umbrella grant amount of US$47 million were approved during FY97. This represents an Annual Report on Portfolio Performance, FY97 - 47 - Annex I increase of 14% in number of projects and 15% grant value over the total end-FY96 portfolio. 6. Grants provided through the Ozone Trust Fund are intended to finance the agreed incremental cost of making the necessary changes for a country and its enterprises to comply with the Montreal Protocol. Funds are normally committed under "umbrella" grants which allow for faster processing of smaller "subprojects" within the larger Bank- approved projects. Financing is provided for investment projects as well as for projects that strengthen institutional capacity and public awareness campaigns. The vast majority of the Bank portfolio of subprojects consists of investment projects. 7. In terms of regional distribution of the portfolio, LCR has the largest number of projects in the portfolio (45%) while East Asia has the largest total amount of grants (57 %). No project exited the portfolio in FY97. 8. Actual disbursements for FY97 total US$48.8 million or 98 percent of the disbursement target of US$50 million. Cumulative disbursements as of end-June FY96 totaled US$45.6 million. This shows remarkable progress in disbursements for FY97: total disbursements for FY97 were greater than the cumulative disbursements for the previous five years of operation. This marked improvement in the Bank's MP disbursement is attributed to streamlined monitoring and evaluation and enhanced monitoring of projects, as well as increased training of the Bank's in-country partners. 9. As the Bank's portfolio of MP projects is actually made up of hundreds of "subprojects," the Form 590 has not proven to be a useful tool for analyzing the specifics of portfolio performance. The MP unit has therefore developed business planning targets, performance indicators, reporting requirements and monitoring and evaluation procedures specific to the implementation process of MP projects. In FY97 one project in LCR experienced a significant delay in becoming effective due to government delays in processing legal agreements. Of the 365 subprojects which make up the portfolio, 13 have experienced delays in disbursements and processing of legal agreements and 22 have experienced disbursement delays. This represents 3% and 6% of the subproject portfolio respectively. Quarterly monitoring procedures keep task managers abreast of these problems, and most are solved within 3 to 4 months. Guarantees 10. Since their initiation in FY89, eleven guarantees had been approved through the end of FY97. All these remain in force. Whenever guarantees are processed along with a Bank loan, supervision results of the associated Bank loan are used for monitoring the guarantee. This applies to nine of the eleven , all of which are rated as satisfactory. In the case of stand alone operations, these are monitored on the basis of progress reports received from private participants. Neither of these is currently rated as a problem. Supervision of guarantees raises two important issues which require different treatment from ordinary operations. First, guarantees need to be monitored throughout the life of the guarantee, not just up to the completion of disbursements. Second, private lenders, Annual Report on Portfolio Performance, FY97 - 48 - Annex I whose debt the Bank guarantees, have the primary monitoring role. The Cofinancing Vice Presidency and the Regions are discussing ways to monitor guarantees better to take account of their unique character. West Bank and Gaza 11. Of the US$230 million Trust Fund for Gaza and the West Bank, US$194 million was committed by June 30, 1997. The portfolio consists of 11 projects, of which 7 were approved in FY97. In spite of the difficult political situation in the area, project implementation is proceeding satisfactorily. While it is too early to have a firm judgment about portfolio performance, only one project has been rated as an actual IP/DO problem project, because of co-financing difficulties, which are now being resolved. Disbursements increased from US$26 million to US$40 million between FY96 and FY97. After some initial difficulties, the Palestinian Economic Council for Development and Reconstruction, which is the major implementation agency, has developed considerable professionalism in procurement management, though financial audits have been received only after considerable delay. The portfolio is supervised intensely by the Resident Mission, requiring a high 30 sw per project in FY97. Because recent projects emphasize policy and institutional development across a number of sectors, the more specialized supervision required in the future will have to be contracted to headquarters staff. Two projects closing in FY98 are expected to have a satisfactory employment and poverty impact and economic rates of returns exceeding 14%. Annual Report on Portfolio Performance, FY97 - 49 - Annex II RATING METHODOLOGY 1. The basic measure of portfolio performance is the number of projects at risk of not achieving their development objectives. Projects at risk consist of actual and potential problems projects. Actual problem projects are those for which Implementation Progress (IP) is unsatisfactory or Development Objectives (DO) are not likely to be achieved. Such ratings are the responsibility of Task Managers, who report them generally every six months in supervision reports (on Form 590). 2. The rating of an operation's DO, which is closest in concept to the measure of final evaluated project outcome in Implementation Completion Reports, is the likelihood of attaining the objectives set in the SAR/PAD (or formally revised during implementation). The IP rating is based on an overall judgment of implementation performance in relation to the benchmarks in the SAR/PAD. The DO rating takes into account not only implementation progress, but also other factors, such as inappropriate design, unforeseeable adverse economic and financial developments, price fluctuations of project outputs and changes in government policy. 3. The identification of actual problem projects has not been without problems. Inherent optimism of staff and managers, a perception that supervision reporting is a bureaucratic requirement rather than has substantive importance, and honest differences of opinion about what progress can reasonably be expected in a given context, have tended to make IP and DO ratings unduly optimistic. To address this deficiency, the FY96 ARPP introduced the concept of "projects at risk". 4. "Projects at risk" includes both actual and potential problem projects. Potential problem projects are those which are rated satisfactory on IP/DO but have other risk factors historically associated with unsatisfactory outcomes. These projects are identified by criteria ("flags") which take into account not only various aspects of actual implementation experience, but also other relevant factors such as the country's macroeconomic management and past portfolio performance in the country and sector. Specifically, potential problem projects are identified as projects exhibiting three or more of the following twelve "flags": * elapsed time between Board and effectiveness of more than nine months for investment and more than three months for adjustment and emergency reconstruction operations (this criterion is turned off three years after Board approval); * compliance with legal covenants rated 3 or 4 in the last Form 590; * management performance rated 3 or 4 in the last Form 590; * counterpart funds rated 3 or 4 in the last Form 590; Annual Report on Portfolio Performance, FY97 - 50 - Annex II * procurement progress rated 3 or 4 in the last Form 590; * financial performance rated 3 or 4 in the last Form 590; * environmental/resettlement rating of 3 or 4 in the last Form 590; * disbursement delays of 24 months or more for investment operations or. 12 months or more for adjustment and emergency operations; * unsatisfactory IP and/or DO rating for 2 or more consecutive ARPPs in the past; * located in a country with a history of high 'failure' rate (more than 50% unsatisfactory outcome ratings by OED for operations closed during past 5 years or share of commitments associated with these unsatisfactory projects exceeding 33%); * located in a country with weak macro-management (country risk ratings on a three year average of less than 3 on a scale of 1 to 5); * in a sub-sector for which the percentage of projects closed in the previous five years and rated unsatisfactory by OED is over 50%, or when the share of commitments associated with these unsatisfactory projects is more than 33%. 5. The "at risk" ratings are more realistic and provide a better picture of the current state of the portfolio than IP/DO ratings because they are more independent of task managers' judgments in that they also use indicators from other sources, such as the country macroeconomic performance. During FY97, the concept of "project at risk" was tested against actual project outcomes (Box 2.1). Although not perfect, it has been found to be robust and reliable in providing an early warning of potential failures and their causes. It has therefore been adopted as the basic measure of portfolio performance in this ARPP. The proportion of projects at risk is similar to the outcome of the ratings of completed projects on an aggregate basis. Annual Report on Portfolio Performance, FY97 - 51 - Annex II Box 2.1: How GooD Is THE PROJECTS AT RISK CONCEPT IN PREDICTING OUTCOMES? To assess the operational usefulness of the project at risk concept as an "early warning" signal, the concept was retroactively applied to ARPP data dating back to FY89. This was then correlated with eventual OED outcomes for projects closing during the period. The analysis covered a total of 3,839 such observations. Using the "at risk" concept, it was possible to identify 68% of the 1, 268 projects for which there was an eventual unsatisfactory outcomes. Unsatisfactory DO and/or IP ratings alone identified only 40% of the eventually unsatisfactory projects. As shown below, while 72 percent of projects that were actual problem projects (IP and/or DO) were eventually evaluated as unsatisfactory, a substantial 43 percent of potential problem projects also ended as unsatisfactory. Together, therefore, the two concepts added to the Bank's predictive power. Actual Evaluated Outcome Risk Category Number of Satisfactory Unsatisfactory In Implementation Projects Actual Problem Projects 708 198 28 510 72 Potential Problem Projects 806 457 57 349 43 Non-risky Projects 221,917 83 408 17 Total 3,839 2,572 67 1,267 33 6. During FY97 the at risk concept was refined in one significant respect that affects its comparability with previous years. The earlier concept was found to be unresponsive to recent significant changes-usually in country economic or political conditions-that were not immediately captured by the risk criteria, and which therefore gave wrong indicators of risk. To correct for this, the Regional Vice President could "override" the at risk rating with a thirteenth "golden" flag. The flag can be used to change ratings in either direction, although it was used exclusively in FY97 to remove operations from the projects at risk category (58 operations, or 44 percent of potential problem projects, in 22 countries). In order to ensure comparability with FY96 and earlier data, the discussion in the ARPP is based on data without the golden flag, except in the discussion of country portfolios, where both alternatives are shown. Annual Report on Portfolio Performance, FY97 - 52 - Annex III SECTORAL PORTFOLIO REVIEWS: SYSTEMIC FINDINGS 1. As part of the Portfolio Improvement Program, during 1996 the Quality Assurance Group commissioned 14 sector/lending instrument portfolio reviews' with the objective of identifying systemic problems bearing on the performance of these portfolios. Consistent with the findings of other portfolio analyses, the picture that emerges from these reviews is one in which the Bank's objectives overall have become more ambitious and its operating environment more complex. Bank projects have changed in the past decade, with many sectors increasingly moving from a more narrow focus on civil works to a much broader one that encompasses policy changes and institutional development. Systemic problems fall into five interrelated areas: * Inadequate attention to fundamentals such as borrower and beneficiary commitment and the macroeconomic environment; * Unrealistic project objectives, which may in part reflect problems of incentives and culture; * Insufficient supervision attention to progress in meeting development objectives, reflected in the trend toward overoptimism in DO ratings; * Failure to respond rapidly and proactively to problems and changing circumstances; and, * Erosion of specialized staff skills and a lack of staff continuity. 2. Listening to the Client. Almost all the reviews point to borrower commitment to policy and institutional reforms as the single most important factor influencing project success. Several reviews (Oil and Gas, Public Enterprise Reform/Privatization, Forestry) noted that sectoral policy issues were politically controversial. In some cases, staff may be slow to recognize that the borrower does not share the Bank's policy objectives. The Technical Assistance review suggested that a methodology to assess Borrower commitment during project design was needed. Other reviews stressed the importance of seeking evidence of commitment in the borrower's up-front action. For example, the Public Enterprise and Privatization Operation Review strongly emphasized the importance of frontloading conditionality in order to confirm commitment and to simplify implementation. I Adjustment Lending, Agricultural Research and Extension, Financial Intermediary, Forestry, Highways, Irrigation, Natural Resource Management, Oil and Gas, Power, Public Enterprise Reform and Privatization Operation, Social Funds, Human Development, Technical Assistance Loans, Water Supply and Sanitation Annual Report on Portfolio Performance, FY97 - 53 - Annex III 3. Especially when there are trade-offs and conflicts between economic and environmental/social benefits, active participation of beneficiaries in project preparation and decision-making is essential to building ownership. In difficult cases, it is particularly important to carry out broad stakeholder consultation and adequate assessment and enhancement of local political commitment and institutional capacity during project preparation. The Natural Resources review found that newer projects were increasingly relying on social assessment , but broader use of participation techniques needs to be fostered. 4. Unrealistic Project Objectives. The reviews highlighted fainnliar weaknesses in project design: excessive complexity, overestimation of local capacity, deficient sector analysis, and absence of strategic vision. These problems add up to a persistent overoptimism, possibly reflecting several factors. One may be a lack of understanding of the country and sector context. Several reviews mentioned that budget shortfalls were reducing funds available for sector work, which was consequently done less thoroughly as part of project preparation. More important, however, are problems with the incentive framework. The Adjustment Lending Review mentions the perceived pressure to lend, the desire not to offend the client, and the fear that operations with modest goals will be perceived as inadequate in their impact. A widespread problem is inadequate assessment of risk. Most reviews felt that risk assessments remain weak even though the Bank business has become riskier overall. 5. Supervision: Losing Sight of the Big Picture. Reflecting the Bank's historic emphasis on construction projects, supervision missions continue to focus mainly on physical progress, particularly in the early years of project implementation. The Water Supply and Sanitation Review indicates, for example, that until recently, projects were considered satisfactory largely on the basis of adequate completion of physical works, even if efficiency and financial criteria were not met. The Human Development portfolio confirms that there is much greater attention to, and consistency in, monitoring implementation progress than there is to development objectives. In general, the supervision of development objectives is weak. This reflects in part poor linkages between physical outputs and objectives in many projects. For example, in the social sectors, many projects include macroindicators, such as lower fertility and mortality, but supervision reports provide little insight into how project inputs will lead to these outcomes. 6. None of the reviews found evidence of deliberate misrating of projects, but several judged project ratings (in almost all cases the DO rating) to be overly positive. Several reviews noted that the ratings needed to be interpreted with care, because of changing sectoral policies during the project lifetime and because relative performance differentials among Regions are sometimes not credible. 7. Failure to React Quickly and Decisively. The Adjustment Lending Review found that ineffective supervision rarely stems from a lack of staff knowledge about what is wrong and what should be done, but rather from delays in remedial action. In general, problems tend not to be identified early in implementation, even when they are present from the outset. Annual Report on Portfolio Performance, FY97 -54 - Annex III For most unsatisfactory operations there were repeated signs of trouble, but a considerable period of time passed before management took action. Other reviews (Highways and Technical Assistance) identified a failure to distinguish between symptoms and causes, which militated against problem-solving. Several reviews underlined the failure to take remedial action when legal covenants are not observed. The Highway review noted that, in some cases, the Bank was unwilling to exercise its sanctions, undermining its credibility and raising doubts about the usefulness of legal covenants. Several reviews mentioned the need for different, more flexible instruments, which relied on incentives instead of conditionality. 8. Staffing Issues. Many reviews cited lack of staff continuity as a major factor undermining supervision quality. Several also expressed concern about erosion of specialized skills, particularly in Forestry and Irrigation. The Water and Sanitation review noted that eroding technical competence was creating a credibility problem with borrowers. Maintenance of team leaders through professional revitalization and renewal and investment in new team leaders through an apprenticeship and mentoring process are essential. The mentoring of new team leaders, including the transfer of knowledge and experience on a one- to-one basis, should be better organized. The unbundling of task management and the establishment of task teams with all the skills required was supported by several reviews. Follow-up Actions 9. Most of the systemic issues identified in the sector reviews are not new, and a number of initiatives already under way to address them. The most important ones include (a) establishment of the Networks and the matrix management system; (b) improved portfolio management tools; and (c) Introduction of adaptable lending products. 10. Network Role in Portfolio Management. The new matrix management system is designed to address many of the staff issues identified above, by focusing on staff training and development, unbundling tasks, and assembling well-equipped teams for tasks rather than relying on an overburdened task manager. An important issue emerging in several reviews is the need to review and strengthen the peer review system, through selecting reviewers more carefully (including "world class" and/or external reviewers); targeting skills to particular project issues, ensuring task budgets provide adequate resources for peer review, and holding reviewers accountable for their technical advice. The Networks will also serve as the main locus for developing global sector policies and strategies. In this context, the sector families need to develop ownership of their portfolios, including following up on the recommendations in the individual sectoral reports, tracking portfolio health, and disseminating good practice in portfolio management. 11. Improvement in Portfolio Management Tools. The tendencies to overly optimistic DO ratings reflect in part poor linkages in many projects between outputs and objectives. The new logframe for PCD/PADs and the form 590s should help make such linkages more explicit in the future, and should support better tracking of development objectives during the supervision process. Nevertheless, technical, financial and economic assumptions, as well as the macroeconomic framework, will need to be explicitly reviewed during supervision, if Annual Report on Portfolio Performance, FY97 - 55 - Annex III DO ratings are to be anchored in reality. DO ratings are also interpreted differently by individual task managers, and by different regions, despite efforts to improve Bank-wide consistency in rating. 12 The Bank change process has delegated greater authority to task teams and country directors, which should help improve both realism and proactivity performance. QAG is also providing feedback to management on performance of realism and proactivity measures; these both show an improving trend in this year's AARP. 13. Adaptable Lending Products. Recent introduction of the new adaptable lending products responds to the call for greater flexibility emerging from several of the reviews, and will provide the means of tailoring operations to better suit the borrower's needs and the changing circumstances.. By explicitly building in opportunities to modify and improve, the new products should help encourage early identification of problems and foster a rapid, proactive response. ANNUAL REPORT ON PORTFOLIO PERFORMANCE FISCAL YEAR 1997 Statistical Appendix November 21,1997 Quality Assurance Group Page 1 of 71 FY97 ARPP - STATISTICAL APPENDIX Contents Portfolio Definition, Classification and Data Sources Tables I. PORTFOLIO SIZE AND COMPOSITION Table 2.1 IBRD/IDA Portfolio Distribution by Region, FY92-FY97 Table 2.2 IBRD/IDA Portfolio Distribution by Sector , FY92-FY97 Table 2.3 Portfolio Distribution by Region and Country, FY92-FY97 Table 2.4 Portfolio Distribution by Size of Country Portfolio, FY92-FY97 Table 2.5 Concentration of Projects and Commitments by Country, FY97 Table 2.6 Exits and Entries by Region, FY95-FY97 Table 2.7 Exits and Entries by Sector, FY95-FY97 Table 2.8 Exits and Entries by Country, FY95-FY97 Table 2.9 Number of Projects by Age and Region, FY97 PORTFOLIO PERFORMANCE Table 3.1 Portfolio Performance by Project and Region, FY92-FY97 Table 3.2 Portfolio Performance by Commitment and Region, FY92-FY97 Table 3.3 Portfolio Performance in terms of Projects and Commitments at Risk by Region, FY92-FY97 Table 3.4 Portfolio Performance by Region and Country, FY92-FY97 Table 3.5 Portfolio Performance of Country Portfolio Size, FY96-FY97 Table 3.6 Projects at Risk by Region and Country, FY92-FY97 Table 3.7 Portfolio Performance by Sector, FY92-FY97 Table 3.8 Portfolio Performance in terms of Projects and Commitments at Risk by Sector, FY92-FY97 Table 3.9 Portfolio Performance by Lending Instrument, FY92-FY97 Table 3.10 Portfolio Performance in terms of Projects and Commitments at Risk by Instrument, PY92-FY97 Table 3.11 Performance of PTI Portfolio, FY95-FY97 Table 3.12 Number of Problem Projects(IP,DO) by Duration of Problem and Region, FY97 Table 3.13 Number of Problem Projects (IP,DO) by Duration of Problem and Region, FY96 Table 3.14 Number of Problem Projects(IP/DO) by Duration of Problem and Region, FY92-FY97 Table 3.15 Performance of Projects Exiting the Portfolio by Region, FY95-FY97 Table 3.16 Performance of Projects Exiting the Portfolio by Sector, FY95-FY97 Table 3.17 Percentage of Completed Projects by Region and Country Rated Unsatisfactory and Net Disconnect Table 3.18 OED Disconnect by Region and Closing Year, FY80-FY97 Table 3.19 Distribution of Ratings (IP/DO), FY92-FY97 Table 3.20 Portfolio Performance Indicators(sub-ratings), FY92-FY97 Table 3.21 Portfolio Performance Indicators (sub-ratings) by Region, FY97 Table 3.22 Portfolio Performance Indicators (sub-ratings) by Region, FY96 Table 3.23 Portfolio Performance Indicators (sub-ratings) by Region, FY92 Table 3.24 IBRD/IDA Disbursements, FY92-FY97 Page 2 of 71 FY97 ARPP - STATISTICAL APPENDIX Table 3.25 Disbursement ratio by Region and Sector, FY92-FY97 Table 3.26 Disbursement ratio by Region and Country, FY92-FY97 Table 3.27 IBRD/IDA Cancellations, FY92-FY97 Table 3.28 Percentage of Problem Projects By Region and Project Age, FY92-FY97 Table 3.29 Percentage of Problem Projects By Sector and Project Age, FY92-FY97 Table 3.30 Portfolio Peformance (IP, DO, IP/DO, At Risk) by Age, FY92-FY97 PORTFOLIO MANAGEMENT Table 4.1 Portfolio Improvement Program: Performance of 25 Targeted Countries, FY95-FY97 Table 4.12 Country Portfolio Performance Reviews (CPPR), FY95-FY96 Table 4.3 Number of Projects Restructured by Region and Country, FY95-FY97 Table 4.4 Number of Projects Restructured by Sector, FY95-FY97 Table 4.5 Number of Projects with MTR by Region and Country, FY95-FY97 Table 4.6 Average Staffweeks of Supervision by Region and Country, FY92-FY97 Table 4.7 Average Staffweeks of Supervision by Sector, FY92-FY97 Table 4.8 Supervision Intensity (in Dollars) by Region Table 4.9 Average Staffweeks by Rating Categories (IP), FY92-FY97 Table 4.10 Average Staffweeks by Rating Categories (DO), FY92-FY97 Table 4.11 Average Staffweeks by Rating Categories (At Risk), FY92-FY97 Table 4.12 Effectiveness Lag by Year of Approval, FY92-FY97 Table 4.13 Overage Projects by Region, FY92-FY97 Page 3 of 71 PORTFOLIO DEFINITION, CLASSIFICATION AND DATA SOURCES Portfolio Definition The Bank's' operations portfolio covered by the FY97 ARPP includes (i) all loans with revised closing dates after July 1, 1996 and a positive undisbursed balance at the beginning of the fiscal year; (ii) all loans approved through FY97. Operations that are canceled and/or actually closed during the fiscal year appear in the portfolio, and their performance ratings included in aggregate performance tables for that year. Portfolio Classification The operations portfolio is classified in the ARPP by sector, and lending instrument. Sector Lending Instrument * Agriculture Investment Operations * Education * Specific Investment Loan * Electric Power & Other Energy * Sector Investment & Maintenance * Environment' * Financial Intermediary Loan * Finance * Technical Assistance Loan * Industry * Emergency Reconstruction Loan * Mining & Other Extractive * Multi Sector Adjustment Operations * Oil & Gas * Sector Adjustment Loan * Population, Health & Nutrition * Structural Adjustment Loan * Public Sector Management * Debt Reduction Loan * Social Sector * Rehabilitation Import Loan * Telecommunications & Informatics * Transportation * Urban Development * Water Supply & Sanitation Note: Task managers and their managers are responsible for maintaining the accuracy of the portfolio classification. The classification by sector and program objective was revised last year. Data Sources The main source of data for the statistical tables was the MIS Portfolio Module which records the Form 590 ratings. The Form 590 ratings used in the statistical tables were those "frozen" by OPR on July 8, 1997. Other data sources included the Financial Database (Loan Accounting System) for data on disbursements and cancellations, and the Time Recording System for data on portfolio management resource inputs. "Bank" includes IDA, and "loans" includes credits. 2 The Environment category includes only those operations classified as such in the MIS. As noted in the Bank's Annual Reports on the environment, there is a much larger number of operations with substantial environmental objectives, components and/or dimensions. Page 4 of 71 TABLE 2.1 IBRD/IDA PORTFOLIO DISTRIBUTION BY REGION, FY92-FY97 Projects Commitments (US$B) Region IBRD IDA IBRD IDA FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 AFR 93 44 35 513 472 458 6.1 2.2 1.6 16.2 16.8 16.5 EAP 208 195 196 92 107 111 22.6 27.9 28.8 5.8 8.5 8.7 ECA 105 172 199 1 58 73 13.1 19.1 19.9 0.0 1.3 1.5 LCR 261 283 292 47 74 70 30.3 31.3 30.6 1.2 1.9 1.8 MNA 123 104 99 46 36 36 9.3 8.5 7.7 0.8 1.1 1.2 SAR 63 38 33 203 169 164 16.5 10.9 9.2 13.8 14.2 13.9 TOTAL 853 836 854 902 916 912 98.0 99.8 97.8 37.8 43.8 43.5 * Blend operations are counted as IDA. TABLE 2.2 IBRD/IDA PORTFOLIO DISTRIBUTION BY SECTOR, FY92-FY97 Projects Commitments (USSB) Sector IBRD IDA IBRD IDA FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 Agriculture 179 135 132 272 206 196 15.3 11.1 11.3 11.6 10.7 10.0 Education 74 92 94 92 105 99 4.9 7.7 7.9 4.0 5.4 5.3 Electric Pwr & Engy. 104 81 80 61 44 46 18.6 16.5 15.6 2.4 2.2 2.3 Environment 13 43 42 13 33 44 1.0 3.4 3.2 0.6 1.4 1.6 Finance 46 47 48 35 37 41 7.5 8.4 7.4 1.6 1.4 1.5 Industry 60 23 19 22 11 13 8.7 3.6 2.9 0.9 0.5 0.6 Mining 10 9 8 7 11 12 1.0 1.4 1.3 0.1 0.3 0.3 Multisector 32 28 28 52 53 51 7.4 4.2 3.0 3.5 3.2 2.9 Oil & Gas 27 28 28 14 14 14 3.9 4.2 4.0 0.5 0.6 0.4 Populm, Hlth & Nutn 39 58 59 63 95 94 2.2 4.7 4.6 2.6 4.6 5.0 Public Sector Mgmt. 36 53 62 53 74 71 2.7 3.1 3.6 1.0 2.1 2.1 Social Sector 2 12 23 19 45 46 0.1 1.4 2.7 0.5 1.5 1.5 Telecommunications 16 16 12 15 10 6 1.9 1.9 1.6 0.4 0.3 0.2 Transportation 110 104 109 94 86 84 12.4 15.4 16.7 4.2 4.9 5.0 Urban Development 55 53 55 49 49 50 5.4 6.6 6.2 2.2 2.5 2.3 Water Supply & Santn 50 54 55 41 43 45 4.9 6.2 5.7 1.9 2.3 2.3 TOTAL 853 836 854 902 916 912 98.0 99.8 97.8 37.8 43.8 43.5 * Blend operations are counted as IDA. Page 5 of 71 TABLE 2.3 PORTFOLIO DISTRIBUTION BY REGION AND COUNTRY, FY92-FY97 Projects Comuments (US$B) Country FY92 FY96 FY97 FY92 FY96 FY97 AFR AFR AFRICA REGION 2 2 2 0.1 0.1 0.1 ANGOLA 5 9 9 0.2 0.3 0.3 BENIN 15 16 16 0.3 0.2 0.3 BOTSWANA 5 1 0 0.1 0.0 0.0 BURKINA FASO 14 15 15 0.4 0.4 0.4 BURUNDI 18 15 10 .0.4 0.3 0.2 CAMEROON 13 9 8 0.7 0.4 0.4 CAPE VERDE 4 5 5 0.0 0.0 0.0 CENTRAL AFRICAN REPUBLIC 10 9 8 0.2 0.2 0.2 CHAD 8 12 11 0.2 0.3 0.2 COMOROS 4 4 6 0.0 0.0 0.0 CONGO, DEMOCRATIC REPUBL 22 0 0 0.6 0.0 0.0 CONGO, REPUBLIC OF 2 2 2 0.0 0.0 0.0 COTE D'IVOIRE 17 15 14 1.0 0.7 0.8 DJIBOUTI 4 2 2 0.0 0.0 0.0 EQUATORIAL GUINEA 4 3 3 0.0 0.0 0.0 ERITREA 0 2 3 0.0 0.0 0.0 ETHIOPIA 18 14 14 0.9 1.1 1.1 GABON 2 2 3 0.0 0.0 0.0 GAMBIA, THE 9 7 6 0.1 0.1 0.1 GHANA 37 42 39 1.4 1.9 1.7 GUINEA 20 18 13 0.5 0.5 0.4 GUINEA-BISSAU 9 6 6 0.1 0.1 0.1 KENYA 28 23 23 1.3 1.0 1.1 LESOTHO 10 8 7 0.2 0.2 0.2 MADAGASCAR 23 20 23 0.6 0.5 0.6 MALAWI 22 19 15 0.7 0.9 0.6 MALI 19 18 19 0.5 0.5 0.6 MAURITANIA 11 13 14 0.2 0.2 0.2 MAURITIUS 7 8 7 0.1 0.1 0.1 MOZAMBIQUE 15 24 23 0.7 1.3 1.2 NIGER 12 10 12 0.2 0.2 0.3 NIGERIA 43 29 22 4.2 2.2 1.6 RWANDA 20 12 12 0.4 0.2 0.3 SAO TOME AND PRINCIPE 8 5 4 0.1 0.0 0.0 SENEGAL 19 19 20 0.6 0.6 0.6 SEYCHELLES 0 1 1 0.0 0.0 0.0 SIERRA LEONE 6 11 9 0.1 0.3 0.3 SOMALIA 10 0 0 0.2 0.0 0.0 SOUTH AFRICA 0 0 1 0.0 0.0 0.0 SUDAN 17 0 0 0.6 0.0 0.0 SWAZILAND 0 1 1 0.0 0.0 0.0 TANZANIA 24 22 23 1.4 1.2 1.3 TOGO 15 10 9 0.2 0.2 0.2 UGANDA 28 26 23 1.3 1.2 1.1 WAN WESTERN AFRICA REGIO 2 0 0 0.0 0.0 0.0 ZAMBIA 12 18 20 0.6 0.8 0.8 ZIMBABWE 13 9 10 0.7 0.5 0.6 TOTAL AFR 606 516 493 22.3 18.9 18.1 Page 6 of 71 TABLE 2.3 PORTFOLIO DISTRIBUTION BY REGION AND COUNTRY, FY92-FY97 Projects Commitrments (US$B) Country FY92 FY96 FY97 FY92 FY96 FY97 EAP CAMBODIA 0 5 7 0.0 0.2 0.2 CHINA 89 109 111 11.1 18.6 20.4 FIJI 4 3 3 0.1 0.0 0.0 INDONESIA 76 76 78 9.4 9.5 8.9 KOREA, REPUBLIC OF 20 16 13 1.4 1.2 1.1 LAO PEOPLE'S DEMOCRATIC R 10 12 13 0.2 0.3 0.3 MALAYSIA 19 7 5 1.0 0.6 0.5 MONGOLIA 2 5 7 0.0 0.1 0.1 MYANMAR 9 0 0 0.2 0.0 0.0 PAPUA NEW GUINEA 11 9 8 0.3 0.2 0.2 PHILIPPINES 34 30 28 3.6 3.2 2.6 SAMOA 4 1 1 0.0 0.0 0.0 SOLOMON ISLANDS 1 1 1 0.0 0.0 0.0 THAILAND 17 14 16 1.0 1.2 1.5 TONGA 1 1 0 0.0 0.0 0.0 VANUATU 3 2 2 0.0 0.0 0.0 VIETNAM 0 11 14 0.0 1.2 1.6 TOTAL EAP 300 302 307 28.4 36.4 37.4 ECA ALBANIA 1 21 20 0.0 0.3 0.2 ARMENIA 0 9 9 0.0 0.2 0.2 AZERBAIJAN 0 4 5 0.0 0.2 0.1 BELARUS 0 3 3 0.0 0.2 0.2 BOSNIA-HERZEGOVINA 2 2 11 0.0 0.0 0.2 BULGARIA 2 8 11 0.3 0.5 0.4 CROATIA 5 7 10 0.0 0.3 0.5 CYPRUS 7 5 3 0.2 0.1 0.1 CZECH REPUBLIC 2 2 1 0.7 0.3 0.2 ESTONIA 0 6 6 0.0 0.1 0.1 GEORGIA 0 7 9 0.0 0.2 0.2 HUNGARY 18 13 14 2.0 1.2 1.2 KAZAKSTAN 0 9 11 0.0 0.8 0.6 KYRGYZ REPUBLIC 0 11 11 0.0 0.3 0.3 LATVIA 0 5 8 0.0 0.1 0.2 LITHUANIA 0 7 10 0.0 0.2 0.2 MACEDONIA, FORMER YUGOS 1 6 7 0.0 0.2 0.2 MOLDOVA 0 5 6 0.0 0.1 0.1 POLAND 15 20 17 2.6 3.0 2.0 PORTUGAL 4 1 1 0.2 0.0 0.0 ROMANIA 4 11 16 0.8 1.5 2.1 RUSSIAN FEDERATION 0 27 34 0.0 5.8 6.7 SLOVAK REPUBLIC 0 1 1 0.0 0.1 0.1 SLOVENIA 3 3 3 0.1 0.1 0.1 TAJIKISTAN 0 1 3 0.0 0.0 0.1 Page 7 of 71 TABLE 2.3 PORTFOLIO DISTRIBUTION BY REGION AND COUNTRY, FY92-FY97 l*ur Gcomns m Bs) counrby FY92 96 Y97 FF92 PF FY97 TURKEY 34 25 25 5.7 3.3 3.1 TURKMENISTAN 0 1 3 0.0 0.0 0.1 UKRAINE 0 7 11 0.0 1.0 1.5 UZBEKISTAN 0 3 3 0.0 0.2 0.1 YUGOSLAVIA B 0 0 0.6 0.0 0.0 TOTAL ECA 106 230 272 13.2 20.4 21.3 LCR ARGENTINA 20 31 38 2.3 5.2 6.1 BAHAMAS, THE 2 0 0 0.0 0.0 0.0 BARBADOS 4 3 2 0.0 0.0 0.0 BELIZE 4 4 5 0.0 0.0 0.0 BOLIVIA 19 27 25 0.6 0.8 0.6 BRAZIL 63 67 62 8.7 8.3 7.9 CHILE 17 14 13 1.4 0.8 0.8 COLOMBIA 26 22 21 2.5 1.9 1.8 COSTA RICA 5 5 5 0.2 0.1 0.1 CRB CARIBBEAN REGION 3 2 2 0.0 01 0.1 DOMINICA 2 2 1 0.0 0.0 0.0 DOMINICAN REPUBLIC 5 5 6 0.3 0.2 0.3 ECUADOR 13 15 16 0.7 0.9 0.9 ELSALVADOR 4 9 9 0.2 0.3 0.3 GRENADA 1 1 1 0.0 0.0 0.0 GUATEMALA 6 6 7 0.2 0.2 0.1 GUYANA 4 9 8 0.1 0.1 0.1 HAITI 10 8 9 0.2 0.2 0.2 HONDURAS 8 12 9 0.3 0.5 0.4 JAMAICA 12 11 11 0.2 0.4 0.3 MEXICO 43 35 35 9.4 8.8 8.1 NICARAGUA 1 8 9 0.1 0.3 0.3 OECS COUNTRIES 0 1 1 0.0 0.0 0.0 PANAMA 1 5 7 0.1 0.3 0.3 PARAGUAY 4 7 8 0.1 0.3 0.3 PERU 4 11 15 1.0 1.5 1.7 ST. KITTS AND NEVIS 1 1 1 0.0 0.0 0.0 ST. LUCIA 1 3 3 0.0 0.0 0.0 ST. VINCENT AND THE GRENA 2 1 1 0.0 0.0 0.0 TRINIDAD AND TOBAGO 4 6 6 0.1 0.1 0.1 URUGUAY 10 12 12 0.5 0.5 0.6 VENEZUELA 9 14 14 1.9 1.2 0.9 TOTAL LCR 308 357 362 31.5 33.2 32.4 MNA ALGERIA 25 23 20 2.9 2.1 1.9 EGYPT, ARAB REPUBLIC OF 23 17 16 1.8 1.2 1.1 IRAN, ISLAMIC REPUBLIC OF 3 6 5 0.4 0.8 0.6 JORDAN 17 12 11 0.6 0.6 0.6 LEBANON 0 6 10 0.0 0.4 0.6 Page 8 of 71 TABLE 2.3 PORTFOLIO DISTRIBUTION BY REGION AND COUNTRY, FY92-FY97 PRAect Cmmiabmn (USSB) CONF"92 P9 f F 2 FP FY97 MOROCCO 29 32 27 2.6 2.8 2.3 OMAN 4 0 0 0.1 0.0 0.0 TUNISIA 28 19 22 1.3 1.2 1.4 YEMEN, REPUBLIC OF 40 25 24 0.5 0.5 0.5 Total MNA 169 140 135 10.1 9.6 9.0 SAR BANGLADESH 38 28 29 2.5 2.4 2.4 BHUTAN 3 2 2 0.0 0.0 0.0 INDIA 113 89 87 20.9 16.2 15.1 MALDIVES 3 3 2 0.0 0.0 0.0 NEPAL 27 15 13 0.9 0.5 0.5 PAKISTAN 56 48 42 5.0 5.1 4.3 SRI LANKA 26 22 22 1.1 0.9 0.9 TOTAL SAR 266 207 197 30.3 25.1 23.1 TOTAL 1,755 1,752 1,766 135.8 143.7 141.3 Page 9 of 71 TABLE 2.4 PORTFOLIO DISTRIBUIMON BY SIZE OF COUNTRY PORTFOLIO, FY92-FY97 P ts! Conuwlatents(USMB) FF2 PM Y97 FY92 FY96 FY97 Large Portfolios CHINA 89 109 111 11.1 18.6 20.4 INDIA 113 89 87 20.9 16.2 15.1 INDONESIA 76 76 78 9.4 9.5 8.9 MEXICO 43 35 35 9.4 8.8 8.1 BRAZIL 63 67 62 8.7 8.3 7.9 RUSSIAN FEDERATION 0 27 34 0.0 5.8 6.7 ARGENTINA 20 31 38 2.3 5.2 6.1 PAKISTAN 56 48 42 5.0 5.1 4.3 TURKEY 34 25 25 5.7 3.3 3.1 PHILIPPINES 34 30 28 3.6 3.2 2.6 BANGLADESH 38 28 29 2.5 2.4 2.4 MOROCCO 29 32 27 2.6 2.8 2.3 ROMANIA 4 11 16 0.8 1.5 2.1 POLAND 15 20 17 2.6 3.0 2.0 ALGERIA 25 23 20 2.9 2.1 1.9 COLOMBIA 26 22 21 2.5 1.9 1.8 GHANA 37 42 39 1.4 1.9 1.7 PERU 4 11 15 1.0 1.5 1.7 NIGERIA 43 29 22 4.2 2.2 1.6 VIETNAM 0 11 14 0.0 1.2 1.6 UKRAINE 0 7 11 0.0 1.0 1.5 THAILAND 17 14 16 1.0 1.2 1.5 TUNISIA 28 19 22 1.3 1.2 1.4 TANZANIA 24 22 23 1.4 1.2 1.3 HUNGARY 18 13 14 2.0 1.2 1.2 MOZAMBIQUE 13 24 23 0.7 1.3 1.2 ETHIOPIA 18 14 14 0.9 1.1 1.1 UGANDA 28 26 23 1.3 1.2 1.1 EGYPT, ARAB REPUBLIC OF 23 17 16 1.8 1.2 1.1 KOREA, REPUBLIC OF 20 16 13 1.4 1.2 1.1 KENYA 28 23 23 1.3 1.0 1.1 SRI LANKA 26 22 22 1.1 0.9 0.9 ZAMBIA 12 18 20 0.6 0.8 0.8 MADAGASCAR 23 20 23 0.6 0.5 0.6 BOLIVIA 19 27 25 0.6 0.8 0.6 SENEGAL 19 19 20 0.6 0.6 0.6 YEMEN, REPUBLIC OF 40 25 24 0.5 0.5 0.5 ALBANIA 1 21 20 0.0 0.3 0.2 Total Large Portfolios 1,108 1.113 1,112 113.6 121.8 120.2 Small Portfolios VENEZUELA 9 14 14 1.9 1.2 0.9 ECUADOR 13 15 16 0.7 0.9 0.9 COTE D'IVOIRE 17 15 14 1.0 0.7 0.8 Page 10 of 71 TABLE 2.4 PORTFOLIO DISTRIBUTION BY SIZE OF COUNTRY PORTFOLIO, FY92-FY97 Projects Comminents (US$B) FY92 FY96 FY97 FY92 FY96 FY97 CHILE 17 14 13 1.4 0.8 0.8 LEBANON 0 6 10 0.0 0.4 0.6 MALAWI 22 19 15 0.7 0.9 0.6 KAZAKSTAN 0 9 11 0.0 0.8 0.6 IRAN, ISLAMIC REPUBLIC OF 3 6 5 0.4 0.8 0.6 MALI 19 18 19 0.5 0.5 0.6 URUGUAY 10 12 12 0.5 0.5 0.6 ZIMBABWE 13 9 10 0.7 0.5 0.6 JORDAN 17 12 11 0.6 0.6 0.6 CROATIA 5 7 10 0.0 0.3 0.5 NEPAL 27 15 13 0.9 0.5 0.5 MALAYSIA 19 7 5 1.0 0.6 0.5 GUINEA 20 18 13 0.5 0.5 0.4 BULGARIA 2 8 11 0.3 0.5 0.4 HONDURAS 8 12 9 0.3 0.5 0.4 CAMEROON 13 9 8 0.7 0.4 0.4 BURKINA FASO 14 15 15 0.4 0.4 0.4 LAO PEOPLE'S DEMOCRATIC REPUBLIC 10 12 13 0.2 0.3 0.3 PANAMA 1 5 7 0.1 0.3 0.3 JAMAICA 12 11 11 0.2 0.4 0.3 PARAGUAY 4 7 8 0.1 0.3 0.3 NICARAGUA 1 8 9 0.1 0.3 0.3 RWANDA 20 12 12 0.4 0.2 0.3 NIGER 12 10 12 0.2 0.2 0.3 ANGOLA 5 9 9 0.2 0.3 0.3 EL SALVADOR 4 9 9 0.2 0.3 0.3 KYRGYZ REPUBLIC 0 11 11 0.0 0.3 0.3 BENIN 15 16 16 0.3 0.2 0.3 SIERRA LEONE 6 11 9 0.1 0.3 0.3 DOMINICAN REPUBLIC 5 5 6 0.3 0.2 0.3 CZECH REPUBLIC 2 2 1 0.7 0.3 0.2 MAURITANIA 11 13 14 0.2 0.2 0.2 CAMBODIA 0 5 7 0.0 0.2 0.2 CHAD 8 12 11 0.2 0.3 0.2 HAITI 10 8 9 0.2 0.2 0.2 ARMENIA 0 9 9 0.0 0.2 0.2 MACEDONIA, FORMER YUGOSLAV REPUBLIC OF 1 6 7 0.0 0.2 0.2 LITHUANIA 0 7 10 0.0 0.2 0.2 LESOTHO 10 8 7 0.2 0.2 0.2 BOSNIA-HERZEGOVINA 2 2 11 0.0 0.0 0.2 BURUNDI 18 15 10 0.4 0.3 0.2 LATVIA 0 5 8 0.0 0.1 0.2 TOGO 15 10 9 0.2 0.2 0.2 GEORGIA 0 7 9 0.0 0.2 0.2 PAPUA NEW GUINEA 11 9 8 0.3 0.2 0.2 Page I1 of 71 TABLE 2.4 PORT#OLIO DISTRIBUTION BY SIZE OF COUNTRY PORTFOLIO, FY92-FY9 Projeb Condmeun (US$B) PM9 FY9% FY97 FM9 FM9 FY97 CENTRAL AFRICAN REPUBLIC 10 9 8 0.2 0.2 0.2 BELARUS 0 3 3 0.0 0.2 0.2 AZERBAIJAN 0 4 5 0.0 0.2 0.1 TRINIDAD AND TOBAGO 4 6 6 0.1 0.1 0.1 COSTA RICA 5 5 5 0.2 0.1 0.1 GUATEMALA 6 6 7 0.2 0.2 0.1 GUYANA 4 9 8 0.1 0.1 0.1 MONGOLIA 2 5 7 0.0 0.1 0.1 MOLDOVA 0 5 6 0.0 0.1 0.1 SLOVENIA 3 3 3 0.1 0.1 0.1 ESTONIA 0 6 6 0.0 0.1 0.1 MAURITIUS 7 8 7 0.1 0.1 0.1 UZBEKISTAN 0 3 3 0.0 0.2 0.1 GUINEA-BISSAU 9 6 6 0.1 0.1 0.1 TURKMENISTAN 0 1 3 0.0 0.0 0.1 CYPRUS 7 5 3 0.2 0.1 0.1 TAJIKISTAN 0 1 3 0.0 0.0 0.1 CRB CARIBBEAN REGION 3 2 2 0.0 0.1 0.1 AFR AFRICA REGION 2 2 2 0.1 0.1 0.1 SLOVAK REPUBLIC 0 1 1 0.0 0.1 0.1 GAMBIA, THE 9 7 6 0.1 0.1 0.1 BELIZE 4 4 5 0.0 0.0 0.0 ERITREA 0 2 3 0.0 0.0 0.0 CAPE VERDE 4 5 5 0.0 0.0 0.0 SOUTH AFRICA 0 0 1 0.0 0.0 0.0 COMOROS 4 4 6 0.0 0.0 0.0 FIJI 4 3 3 0.1 0.0 0.0 GABON 2 2 3 0.0 0.0 0.0 SAO TOME AND PRINCIPE 8 5 4 0.1 0.0 0.0 PORTUGAL 4 1 1 0.2 0.0 0.0 SWAZILAND 0 1 1 0.0 0.0 0.0 BARBADOS 4 3 2 0.0 0.0 0.0 CONGO, REPUBLIC OF 2 2 2 0.0 0.0 0.0 MALDIVES 3 3 2 0.0 0.0 0.0 ST. LUCIA 1 3 3 0.0 0.0 0.0 SAMOA 4 1 1 0.0 0.0 0.0 DJIBOUTI 4 2 2 0.0 0.0 0.0 SOLOMON ISLANDS 1 1 1 0.0 0.0 0.0 EQUATORIAL GUINEA 4 3 3 0.0 0.0 0.0 OECS COUNTRIES 0 1 1 0.0 0.0 0.0 VANUATU 3 2 2 0.0 0.0 0.0 BHUTAN 3 2 2 0.0 0.0 0.0 GRENADA 1 1 1 0.0 0.0 0.0 DOMINICA 2 2 1 0.0 0.0 0.0 SEYCHELLES 0 1 1 0.0 0.0 0.0 Page 12 of 71 TABLE 2.4 PORTFOLIO DISTRIBUTION BY SIZE OF COUNTRY PORTFOLIO, FY92-FY97 Projects Conaitents (US$B) FY92 FY96 FY97 FY92 FY96 FY97 ST. KITTS AND NEVIS 1 1 1 0.0 0.0 0.0 ST. VINCENT AND THE GRENADINES 2 1 1 0.0 0.0 0.0 BAHAMAS, THE 2 0 0 0.0 0.0 0.0 BOTSWANA 5 1 0 0.1 0.0 0.0 CONGO, DEMOCRATIC REPUBLIC OF 22 0 0 0.6 0.0 0.0 MYANMAR 9 0 0 0.2 0.0 0.0 OMAN 4 0 0 0.1 0.0 0.0 SOMALIA 10 0 0 0.2 0.0 0.0 SUDAN 17 0 0 0.6 0.0 0.0 TONGA 1 1 0 0.0 0.0 0.0 WAN WESTERN AFRICA REGION 2 0 0 0.0 0.0 0.0 YUGOSLAVIA 8 0 0 0.6 0.0 0.0 Total Small Portfolios 647 639 654 22.2 21.9 21.2 TOTAL 1,755 1,752 1,766 135.8 143.7 141.3 * Large country portfolios are those with 20 or more projects and/or at least $1 billion in commitments. Page 13 of71 TABLE 2.5 CONCENTRATION OF PROJECTS AND COMMITMENTS BY COUNTRY, FY97 Arranged by Countries with Largest Consmitments Ananged by Counties with Largest Number of Projects Commit Cummuavte Commit Cummative Country Projects us$ M % of Total Country Projects US$ M % of Total CHINA 111 20,415 14 CHINA 111 20,415 6 INDIA 87 15,077 25 INDIA 87 15,077 11 INDONESIA 78 8,859 31 INDONESIA 78 8,859 16 MEXICO 35 8,078 37 BRAZIL 62 7,905 19 BRAZIL 62 7,905 43 PAKISTAN 42 4,263 22 RUSSIAN FEDERATION 34 6,698 47 GHANA 39 1.694 24 ARGENTINA 38 6.108 52 ARGENTINA 38 6,108 26 PAKISTAN 42 4,263 55 MEXICO 35 8.078 28 TURKEY 25 3,118 57 RUSSIAN FEDERATION 34 6,698 30 PHILIPPINES 28 2,572 59 BANGLADESH 29 2,406 31 BANGLADESH 29 2,406 60 PHILIPPINES 28 2,572 33 MOROCCO 27 2,277 62 MOROCCO 27 2,277 35 ROMANIA 16 2,141 64 TURKEY 25 3,118 36 POLAND 17 2,028 65 BOLIVIA 25 642 37 ALGERIA 20 1,902 66 YEMEN, REPUBLIC OF 24 543 39 COLOMBIA 21 1,792 68 TANZANIA 23 1,321 40 GHANA 39 1,694 69 MOZAMBIQUE 23 1,167 41 PERU 15 1,681 70 UGANDA 23 1,113 43 NIGERIA 22 1,604 71 KENYA 23 1,077 44 VIETNAM 14 1,591 72 MADAGASCAR 23 649 45 UKRAINE 11 1,505 73 NIGERIA 22 1,604 46 THAILAND 16 1,499 74 TUNISIA 22 1,385 48 TUNISIA 22 1,385 75 SRI LANKA 22 865 49 TANZANIA 23 1.321 76 COLOMBIA 21 1,792 50 HUNGARY 14 1.243 77 ALGERIA 20 1,902 51 MOZAMBIQUE 23 1,167 78 ZAMBIA 20 826 52 ETHIOPIA 14 1,130 79 SENEGAL 20 583 54 UGANDA 23 1,113 80 ALBANIA 20 229 55 EGYPT, ARAB REPUBLIC OF 16 1.088 80 MALI 19 597 56 KOREA, REPUBLIC OF 13 1.086 81 POLAND 17 2,028 57 KENYA 23 1.077 82 ROMANIA 16 2,141 58 VENEZUELA 14 881 83 THAILAND 16 1,499 59 SRI LANKA 22 865 83 EGYPT, ARAB REPUBLIC OF 16 1,088 59 ECUADOR 16 855 84 ECUADOR 16 855 60 ZAMBIA 20 826 84 BENIN 16 266 61 COTE D'IVOIRE 14 764 85 PERU 15 1,681 62 CHILE 13 755 as MALAWI 15 602 63 MADAGASCAR 23 649 86 BURKINA FASO 15 372 64 BOLIVIA 25 642 so VIETNAM 14 1,591 65 LEBANON 10 604 87 HUNGARY 14 1,243 65 MALAWI 15 602 87 ETHIOPIA 14 1.130 66 KAZAKSTAN 11 599 88 VENEZUELA 14 881 67 IRAN, ISLAMIC REPUBLIC OF 5 597 88 COTE D'IVOIRE 14 764 68 MALI 19 597 88 MAURITANIA 14 241 69 SENEGAL 20 583 89 KOREA, REPUBLIC OF 13 1,086 69 URUGUAY 12 573 89 CHILE 13 755 70 ZIMBABWE 10 556 90 NEPAL 13 467 71 JORDAN 11 555 90 GUINEA 13 431 72 CROATIA 10 547 90 LAO PEOPLE'S DEMOCRATIC REPUB 13 321 72 YEMEN. REPUBLIC OF 24 543 91 URUGUAY 12 573 73 NEPAL 13 467 91 RWANDA 12 283 74 MALAYSIA 5 456 92 NIGER 12 276 74 Page 14of71 TABLE 2.5 CONCENTRATION OF PROJECTS AND COMMITMENTS BY COUNTRY, FY97 Arranged by Conagics with Larest Coumpiwents Annged by Comaes with LAwest Number of Projects Commit Cammwa"fe Commit Commulative Country Prvjecr tuS$ M % of ras COuNy h4ects US$ M % of Total GUINEA 13 431 92 UKRAINE 11 1,505 75 BULGARIA 11 426 92 KAZAKSTAN 11 . 599 76 HONDURAS 9 420 92 JORDAN 11 555 76 CAMEROON 8 379 93 BULGARIA 11 426 77 BURKINA FASO 15 372 93 JAMAICA 11 315 77 LAO PEOPLE'S DEMOCRATIC REPUB 13 321 93 KYRGYZ REPUBLIC II 267 78 PANAMA 7 321 93 CHAD 11 233 79 JAMAICA 11 315 94 BOSNIA-HERZEGOVINA 11 208 79 PARAGUAY 8 310 94 LEBANON 10 604 so NICARAGUA 9 306 94 ZIMBABWE 10 556 80 RWANDA 12 283 94 CROATIA 10 547 81 NIGER 12 276 94 LITHUANIA 10 213 82 ANGOLA 9 269 95 BURUNDI 10 205 82 EL SALVADOR 9 268 95 HONDURAS 9 420 83 KYRGYZ REPUBLIC 11 267 95 NICARAGUA 9 306 83 BENIN 16 266 95 ANGOLA 9 269 $4 SIERRA LEONE 9 265 95 EL SALVADOR 9 268 84 DOMINICAN REPUBLIC 6 262 96 SIERRA LEONE 9 265 85 CZECH REPUBLIC 1 246 96 HAITI 9 228 15 MAURITANIA 14 241 9 ARMENIA 9 220 86 CAMBODIA 7 237 96 TOGO 9 202 86 CHAD 11 233 96 GEORGIA 9 188 87 ALBANIA 20 229 % CAMEROON 8 379 87 HAIT 9 228 97 PARAGUAY 8 310 88 ARMENIA 9 220 97 LATVIA 8 203 88 MACEDONIA, FORMER YUGOSLAV R 7 220 97 PAPUA NEW GUINEA 8 187 89 LITHUANIA 10 213 97 CENTRAL AFRICAN REPUBLIC 8 172 89 LESOTHO 7 209 97 GUYANA 8 125 19 BOSNIA-HERZEGOVINA 11 208 97 PANAMA 7 321 90 BURUNDI 10 205 97 CAMBODIA 7 237 90 LATVIA 8 203 98 MACEDONIA, FORMER YUGOSLAV R 7 220 91 TOGO 9 202 98 LESOTHO 7 209 91 GEORGIA 9 188 98 GUATEMALA 7 130 91 PAPUA NEW GUINEA 8 187 98 MONGOLIA 7 112 92 CENTRAL AFRICAN REPUBLIC 8 172 98 MAURITIUS 7 95 92 BELARUS 3 166 98 DOMINICAN REPUBLIC 6 262 93 AZERBAIJAN 5 135 98 TRINIDAD AND TOBAGO 6 134 93 TRINIDAD AND TOBAGO 6 134 98 MOLDOVA 6 11 93 COSTA RICA 5 132 99 ESTONIA 6 96 94 GUATEMALA 7 130 99 GUINEA-BISSAU 6 91 94 GUYANA 8 125 99 GAMBIA, THE 6 51 94 MONGOLIA 7 112 99 COMOROS 6 41 95 MOLDOVA 6 111 99 IRAN, ISLAMIC REPUBLIC OF 5 597 95 SLOVENIA 3 105 99 MALAYSIA 5 456 95 ESTONIA 6 96 99 AZERBAIJAN 5 135 95 MAURITIUS 7 95 99 COSTA RICA 5 132 96 UZBEKISTAN 3 92 99 BELIZE 5 49 96 GUINEA-BISSAU 6 91 99 CAPE VERDE 5 48 96 TURKMENISTAN 3 90 99 SAO TOME AND PRINCIPE 4 37 96 CYPRUS 3 72 99 BELARUS 3 166 97 TAJIKISTAN 3 67 99 SLOVENIA 3 105 97 AFR AFRICA REGION 2 61 99 UZBEKISTAN 3 92 97 Page 15 of 71 TABLE 2.5 CONCENTRATION OF PROJECTS AND COMMITMENTS BY COUNTRY, FY97 Arranged by Countries with Largest Commitments ArrWaned by Countries with Largest Number of Projects Commit Cummulative Commit Cummulative Country Projects US$ M % of Total Country Projects US$ M % of Total CRB CARIBBEAN REGION 2 61 99 TURKMENISTAN 3 90 97 SLOVAK REPUBLIC 1 55 too CYPRUS 3 72 97 GAMBIA, THE 6 51 100 TAJIKISTAN 3 67 98 BELIZE 5 49 1o ERITREA 3 49 98 ERITREA 3 49 100 FII 3 39 98 CAPE VERDE 5 48 100 GABON 3 38 98 SOUTH AFRICA 1 46 100 ST. LUCIA 3 20 98 COMOROS 6 41 100 EQUATORIAL GUINEA 3 13 98 FII 3 39 100 AFR AFRICA REGION 2 61 98 GABON 3 38 100 CRB CARIBBEAN REGION 2 61 99 SAO TOME AND PRINCIPE 4 37 100 BARBADOS 2 26 99 PORTUGAL 1 32 100 CONGO, REPUBLIC OF 2 24 99 SWAZILAND 1 29 100 MALDIVES 2 23 99 BARBADOS 2 26 100 DJIBOUTI 2 18 99 CONGO, REPUBLIC OF 2 24 100 VANUATU 2 11 99 MALDIVES 2 23 100 BHUTAN 2 10 99 ST. LUCIA 3 20 100 CZECH REPUBLIC 1 246 99 WESTERN SAMOA 1 19 100 SLOVAK REPUBLIC 1 55 99 DJIBOUTI 2 18 too SOUTH AFRICA 1 46 99 SOLOMON ISLANDS 1 17 100 PORTUGAL 1 32 99 EQUATORIAL GUINEA 3 13 100 SWAZILAND 1 29 100 OECS COUNTRIES I 12 100 WESTERN SAMOA 1 19 100 VANUATU 2 11 100 SOLOMON ISLANDS 1 17 00 BHUTAN 2 10 100 OECS COUNTRIES 1 12 100 GRENADA I 8 too GRENADA 1 8 100 DOMINICA 1 6 100 DOMINICA I 6 100 SEYCHELLES 1 5 100 SEYCHELLES 1 5 100 ST. KITIS AND NEVIS 1 3 100 ST. KITTS AND NEVIS 1 3 100 ST. VINCENT AND THE GRENADINE 1 3 100 ST. VINCENT AND THE GRENADINE 1 3 100 TOTAL 1766 141,345 TOTAL 1766 141,345 Page 16 of 71 TABLE 2.6 EXITS,AND ENTRIES BY REGION, FY95-FY97 PAiects AppAved Prjects Evidivi Approvals - Exits Region FY95 FY96 FY97 FY95 FY96 FY97 FY95-FY97 AFR 58 53 49 91 72 67 -70 SAR 18 21 19 32 29 27 -30 MNA 15 21 17 24 22 21 -14 EAP 42 46 37 41 32 41 11 LCR 54 54 52 38 47 56 19 ECA 58 61 67 20 25 26 115 TOTAL 245 256 241 246 227 238 31 TABLE 2.7 EXITS AND ENTRIES BY SECTOR, FY95-FY97 Prfec& Appmed Projects ExitiK rals - Exits Sector FY95 FY96 FY97 FY95 FY96 FY97 FFP-Y97 Agriculture 37 32 43 52 56 57 -53 Multisector 23 19 22 35 24 27 -22 Industry 1 4 5 10 7 7 -14 Telecommunications 1 1 0 5 8 3 -14 Transportation 22 24 27 31 24 22 -4 Urban Development 13 10 13 12 10 17 -3 Oil & Gas 7 3 4 7 4 4 -1 Mining 2 8 2 3 2 4 3 Electric Pwr & Engy. 16 20 17 22 16 11 4 Water Supply & Santm 11 9 13 10 10 9 4 Finance 16 17 14 13 9 20 5 Education 26 29 18 23 22 19 9 Public Sector Mgmt. 20 27 20 13 14 12 28 Populn, lth & Nutn 25 23 15 8 15 12 28 Social Sector 9 17 16 2 4 7 29 Environment 16 13 12 0 2 7 32 TOTAL 245 256 241 246 227 238 31 Page 17 of 71 TABLE 2.8 EXITS AND ENTRIES BY COUNTRY, FY9S-FY9 Projects Affovd Prolects Eriin Apempals - EzkS Country FY95 FY96 FY97 FY95 FY96 FY97 FY95-FY97 NIGERIA 0 0 0 6 7 5 -18 BURUNDI 2 0 0 3 5 4 -10 BRAZIL 6 4 12 2 17 13 -10 NEPAL 0 0 1 7 3 0 -9 MEXICO 6 3 5 9 5 7 -7 INDIA 9 9 10 12 12 10 -6 ALGERIA 3 3 1 4 4 5 -6 SRI LANKA 1 3 3 4 3 6 -6 MOZAMBIQUE 0 1 1 1 2 5 -6 MALAYSIA 0 0 0 1 2 2 -5 PAKISTAN 5 5 2 4 8 5 -5 SOMALIA 0 0 0 5 0 0 -5 KOREA, REPUBLIC OF 3 0 0 3 3 2 -5 MOROCCO 1 6 2 2 7 5 -5 UGANDA 2 3 2 5 5 2 -5 TOGO 1 1 0 3 1 2 -4 CENTRAL AFRICAN REPUBLIC 1 0 0 0 1 4 -4 GUINEA 2 3 1 2 6 2 -4 HUNGARY 1 0 3 3 2 3 -4 PAPUA NEW GUINEA 0 1 0 1 1 3 -4 JAMAICA 0 1 3 3 3 2 -4 BURKINA FASO 1 0 2 3 2 2 -4 POLAND 2 2 1 2 4 3 -4 TURKEY 2 2 2 4 2 3 -3 RWANDA 1 0 1 3 1 1 .3 PHILIPPINES 1 3 4 2 6 3 -3 CYPRUS 0 0 0 0 2 1 -3 EQUATORIAL GUINEA 0 0 0 1 0 2 -3 GAMBIA, THE 0 0 0 1 1 1 -3 SUDAN 0 0 0 2 0 0 -2 YEMEN, REPUBLIC OF 0 4 3 3 4 2 -2 BANGLADESH 2 4 3 4 2 5 -2 JORDAN 3 2 2 3 3 3 -2 TUNISIA 4 2 4 7 1 4 -2 ETHIOPIA 2 2 0 3 0 3 -2 COLOMBIA 2 4 2 4 3 3 -2 BOTSWANA 0 0 0 1 1 0 -2 GUINEA-BISSAU 1 0 1 2 1 1 -2 OMAN 0 0 0 2 0 0 -2 PORTUGAL 0 0 0 1 0 1 -2 SAMOA 0 0 0 2 0 0 -2 SAO TOME AND PRINCIPE 0 0 0 0 1 1 -2 BAHAMAS, THE 0 0 0 2 0 0 -2 LESOTHO 0 1 0 1 1 1 -2 COSTA RICA 0 0 0 1 0 1 -2 Page 18 of 71 TABLE 2.8 EXITS AND ENTRIES BY COUNTRY, FY95-FY9 Projects Approved Projects Exiting Approvals - Exits Country FY95 FY96 FY97 FY95 FY96 FY97 FY95-FY97 BELARUS 0 0 0 0 0 2 -2 CONGO, DEMOCRATIC REPUBLIC OF 0 0 0 1 0 0 -1 MYANMAR 0 0 0 1 0 0 -1 MALAWI 2 3 1 2 5 0 -1 BHUTAN 0 0 0 0 0 1 -1 ST. VINCENT AND THE GRENADINES 0 0 0 0 0 1 -1 BARBADOS 0 0 0 0 1 0 -1 CONGO, REPUBLIC OF 0 1 0 1 0 1 -1 CZECH REPUBLIC 0 0 0 0 1 0 -1 FIJI 0 0 0 0 0 1 -1 MALDIVES 1 0 0 1 1 0 -1 TONGA 0 0 0 0 1 0 -1 HONDURAS 2 3 1 2 4 1 -1 NIGER 1 1 3 3 1 2 -1 WEST BANK AND GAZA 1 0 0 2 0 0 -1 SLOVAK REPUBLIC 0 0 0 1 0 0 -1 URUGUAY 1 1 1 1 1 2 -1 GHANA 6 5 2 4 5 5 -1 IRAN, ISLAMIC REPUBLIC OF 0 0 0 0 1 0 -1 GUYANA 2 1 0 2 1 1 -1 LAO PEOPLE'S DEMOCRATIC REPUBLIC 1 2 1 3 0 2 -1 CHAD 2 2 1 3 2 1 -1 EGYPT, ARAB REPUBLIC OF 1 3 1 1 2 2 0 YUGOSLAVIA 0 0 0 0 0 0 0 KENYA 2 4 4 5 4 1 0 ZIMBABWE 0 1 1 2 0 0 0 DJIBOUTI 0 0 1 0 1 0 0 DOMINICAN REPUBLIC 1 1 1 1 0 2 0 MADAGASCAR 2 2 5 5 2 2 0 VANUATU 0 0 0 0 0 0 0 AFR AFRICA REGION 0 0 0 0 0 0 0 CRB CARIBBEAN REGION 0 0 0 0 0 0 0 DOMINICA 0 1 0 0 1 0 0 MAURITIUS 2 0 0 1 1 0 0 SOLOMON ISLANDS 0 0 0 0 0 0 0 ST. KITTS AND NEVIS 0 0 0 0 0 0 0 BENIN 3 0 1 3 1 0 0 GABON 1 0 1 2 0 0 0 SEYCHELLES 0 0 0 0 0 0 0 COMOROS 0 0 2 1 0 1 0 SIERRA LEONE 1 2 0 0 2 1 0 CAMEROON 2 3 0 2 1 1 1 BELIZE 1 0 1 0 0 1 1 SLOVENIA 0 1 1 0 1 0 1 CAPE VERDE 1 , 1 0 1 0 0 1 Page 19 of 71 TABLE 2.8 EXITS AND ENTRIES BY COUNTRY, FY95-FY9 Prjects Approved Projects Exidng Approvals - Exits Country FY95 FY96 FY97 FY95 FY96 FY97 FY95-FY97 CHILE 2 1 0 1 1 0 1 GRENADA 0 1 0 0 0 0 1 GUATEMALA 1 0 2 0 1 1 1 OECS COUNTRIES 1 0 0 0 0 0 1 SOUTH AFRICA 0 0 1 0 0 0 1 ST. LUCIA 1 1 0 0 0 1 SWAZILAND 1 0 0 0 0 0 TANZANIA 1 2 4 1 3 2 1 ERITREA 0 1 1 0 0 1 MAURITANIA 3 2 2 3 1 2 1 ELSALVADOR 0 4 1 1 1 2 1 ANGOLA 0 1 0 0 0 0 1 BULGARIA 1 2 3 2 0 3 1 SENEGAL 5 2 4 0 3 6 2 COTE D'IVOIRE 4 4 1 5 2 0 2 HAITI 2 1 2 1 1 1 2 MALI 2 3 3 2 2 2 2 TRINIDAD AND TOBAGO 2 1 0 0 0 1 2 ECUADOR 4 1 2 2 1 2 2 TAJIKISTAN 0 1 2 0 0 1 2 UZBEKISTAN 2 0 1 0 1 0 2 ESTONIA 3 1 0 1 0 1 2 TURKMENISTAN 1 0 2 0 0 0 3 BOLIVIA 4 7 0 3 2 3 3 MONGOLIA 0 2 2 0 0 1 3 PANAMA 1 2 2 0 0 2 3 NICARAGUA 2 2 1 0 0 2 3 ZAMBIA 4 2 3 2 1 3 3 CAMBODIA 2 2 2 0 0 2 4 PARAGUAY 2 1 1 0 0 0 4 VENEZUELA 3 1 0 0 0 0 4 THAILAND 5 3 3 3 1 2 5 AZERBAIJAN 2 2 2 0 1 0 5 MACEDONIA, FORMER YUGOSLAV REPUBLIC OF 3 3 1 1 0 1 5 MOLDOVA 2 3 2 1 1 0 5 ARMENIA 3 4 1 0 1 2 5 PERU 3 1 5 0 1 3 5 INDONESIA 11 12 11 11 9 8 6 LATVIA 3 1 3 1 0 0 6 CHINA 16 16 11 14 9 14 6 KYRGYZ REPUBLIC 3 5 2 0 2 1 7 LEBANON 2 1 4 0 0 0 7 KAZAKSTAN 3 2 4 0 2 0 7 ROMANIA 1 3 5 1 0 1 7 CROATIA 2 3 3 0 0 0 8 Page 20 of 71 TABLE 2.8 EXITS AND ENTRIES BY COUNTRY, FY95-FY9 Projects Approved Projects Exitin Approvals - Exits Country FY95 FY96 FY97 FY95 FY96 FY97 FY95-FY97 GEORGIA 3 4 3 0 1 1 8 LITHUANIA 2 3 4 0 1 0 8 UKRAINE 3 3 5 0 1 0 10 VIETNAM 3 5 3 0 0 1 10 ALBANIA 7 5 0 1 1 0 10 BOSNIA-HERZEGOVINA 0 2 9 0 0 0 11 ARGENTINA 5 11 10 3 3 4 16 RUSSIAN FEDERATION 9 9 8 1 1 2 22 TOTAL 245 256 241 246 227 238 31 Page 21 of 71 TABLE 2.9 NUMBER OF PROJECTS BY AGE AND REGION, FY97 AGE (Yrs) AFRVP EAPVP ECAVP LACVP MNAVP SASVP Bank Total < 1 47 34 64 47 14 18 224 < 2 53 48 61 48 22 21 253 < 3 55 41 47 59 14 18 234 < 4 48 45 35 48 15 18 209 < 5 69 42 23 40 17 22 213 < 6 57 39 10 35 15 24 180 < 7 62 26 13 29 13 27 170 < 8 47 15 8 19 10 21 120 < 9 29 13 8 14 9 13 86 < 10 17 4 3 10 4 9 47 < 11 8 0 0 10 2 3 23 < 12 0 0 0 3 0 1 4 < 13 0 0 0 0 0 2 2 13+ 1 0 0 0 0 0 1 Bank Total 493 307 272 362 135 197 1766 Page 22 of 71 TABLE 3.1 PORTFOLIO PERFORMANCE BY PROJECT AND REGION, FY92-FY97 FY92 FY96 FY97 % PNMm % Problam % Probiem Region No. IP DO No. IP DO No. IP DO Africa 606 24.6 18.8 516 16.3 14.9 493 21.9 19.9 East Asia 300 3.3 1.7 302 8.3 3.6 307 9.4 4.9 South Asia 266 18.0 8.3 207 20.3 17.4 197 12.7 11.2 Europe & Central Asia 106 15.8 10.9 230 19.6 12.6 272 10.3 8.1 Middle East & North Africa 169 17.8 8.9 140 22.1 12.9 135 21.5 18.5 Latin America 308 18.2 8.4 357 17.9 8.1 362 11.9 6.6 Baakwide Total 1,755 17.7 11.0 1,752 16.6 11.4 1,766 14.8 11.7 Excluded Portfolios 11 n.a. n.a. n.a. 79 34.2 41.8 70 51.4 48.6 Bankwide Total (net) 1,673 15.8 10.0 1,696 13.3 10.1 TABLE 3.2 PORTFOLIO PERFORMANCE BY COMMITMENT AND REGION, FY92-FY97 YM2 Pr nY7 C4ounNmu % Prbem Commitmeut % Probem Co1mimenu % Problem RegiO (US$ M) IP DO (US$ M) IP DO (VS$ M IP DO Africa 22,304 23.0 18.2 18,935 16.1 11.0 18,130 24.0 20.1 East Asia 28,390 2.8 1.0 36,353 6.9 3.0 37,423 9.6 6.6 South Asia 30,336 16.6 7.5 25,147 15.5 15.7 23,112 13.9 10.0 Europe & Central Asia 13,178 19.5 13.3 20,408 18.9 17.6 21,318 8.5 11.2 Middle Eas & North Africa 10,125 15.5 7.6 9,616 22.5 9.5 8,952 21.8 17.2 Latin America 31,470 16.1 6.9 33,213 18.8 7.3 32,408 9.6 5.6 Bankwle Total 135,803 14.8 8.3 143,672 15.1 9.8 141,345 12.8 10.0 Excluded Portfolios /1 n.a. n.a. n.a. 3,408 27.2 23.9 2,841 48.9 46.8 Bnkwkle Tott (nt) 140,264 14.8 9.4 138,506 12.0 9.3 11 Couries that were in nonaccrual status or were suffering from civil conflict. In FY96 these were: Algeria; Angola, Burundi, Central African Republic. Rwanda. Sierra Leone, Somalia, Sudan, Zaire, Liberia; in FY97: Algeria Burundi, Central African Republic Congo, Siea Leone, Somalia, Sudan, Liberia, Albania, Taijikstan. Page 23 of 71 TABLE 3.3 PORTFOLIO PERFORMANCE IN TERMS OF PROJECTS AND COMMITMENTS AT RISK BY REGION, FY92-FY97 % Projects at Risk % Comuniments at Risk Region FY92 FY93 FY94 FY95 FY96 FY971 FY92 FY93 FY94 FY95 FY96 FY97!1 AFR 51.0 48.5 49.6 47.7 44.2 45.2 50.4 51.1 49.1 49.5 45.9 44.8 EAP 13.7 11.4 16.7 14.5 12.3 15.0 7.2 6.5 11.7 9.5 9.8 13.1 ECA 20.8 29.4 40.7 34.9 34.3 24.3 24.2 34.9 49.6 48.1 46.7 34.7 LCR 45.1 40.7 43.1 41.1 38.9 28.7 47.4 43.9 48.7 43.9 40.5 24.1 MNA 47.9 50.0 51.9 39.9 38.6 39.3 40.9 49.4 50.5 41.6 36.7 43.2 SAR 32.3 37.3 34.7 27.1 26.1 20.8 27.1 32.0 26.3 20.9 20.9 20.4 Total 38.7 38.1 40.2 36.1 33.7 30.2 32.2 34.0 36.1 32.6 30.6 26.1 /1 Without the "golden flag". Page 24 of 71 TABLE 3.4 PORTFOLIO PERFORMANCE BY REGION AND COUNTRY, FY92-FY97 IP DO IP/DO Country F93 FYM9 FY97 FY92 FVN FY97 F92 FY96 FY97 AFR AFR AFRICA REGION 0.0 50.0 0.0 0.0 0.0 0.0 0.0 50,0 0.0 ANGOLA 0.0 22.2 0.0 0.0 100.0 100.0 0.0 100.0 100.0 BENIN 13.3 6.3 25.0 6.7 0.0 6.3 13.3 6.3 25.0 BOTSWANA 20.0 0.0 0.0 20.0 0.0 0.0 20.0 0.0 0.0 BURKINA FASO 0.0 6.7 13.3 0.0 6.7 6.7 0.0 6.7 13.3 BURUNDI 5,6 26.7 60.0 5.6 40.0 70.0 5.6 40.0 70.0 CAMEROON 38.5 33.3 87.5 7.7 11.1 12.5 38.5 33.3 87.5 CAPE VERDE 25.0 0.0 0.0 25.0 0.0 0.0 25.0 0.0 0.0 CENTRAL AFRICAN REPUBLIC 40.0 55.6 87.5 20.0 66.7 100.0 40.0 66.7 100.0 CHAD 12.5 16.7 36.4 37.5 25.0 27.3 37.5 25.0 36.4 COMOROS 75.0 0.0 16.7 25.0 0.0 16.7 75.0 0.0 16.7 CONGO, DEMOCRATIC REPUBL 63.6 0.0 0.0 40.9 0.0 0.0 63.6 0.0 0.0 CONGO, REPUBLIC OF 100.0 0.0 50.0 100.0 0.0 50.0 100.0 0.0 50.0 COTE D'IVOIRE 29.4 13.3 7.1 11.8 0.0 7.1 29.4 13.3 7.1 DJIBOUTI 25.0 50.0 50.0 25.0 50.0 0.0 25.0 50.0 50.0 EQUATORIAL GUINEA 25.0 66.7 100.0 0.0 33.3 100.0 25.0 66.7 100.0 ERITREA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ETHIOPIA 22.2 0.0 14.3 16.7 0.0 21.4 27.8 0.0 28.6 GABON 0.0 100.0 33.3 0.0 50.0 33.3 0.0 100.0 33.3 GAMBIA, THE 11.1 28.6 33.3 55.6 28.6 16.7 55.6 28.6 33.3 GHANA 18.9 7.1 7.7 10.8 7.1 7.7 18.9 11.9 12.8 GUINEA 30.0 27.8 15.4 35.0 27.8 15.4 35.0 33.3 15.4 GUINEA-BISSAU 22.2 16.7 0.0 22.2 33.3 16.7 22.2 33.3 16.7 KENYA 14.3 21.7 39.1 10.7 8.7 17.4 14.3 21.7 39.1 LESOTHO 20.0 12.5 0.0 30.0 12.5 0.0 30.0 12.5 0.0 MADAGASCAR 30.4 10.0 4.3 30.4 5.0 4.3 30.4 15.0 8.7 MALAWI 13.6 5.3 6.7 4.5 10.5 13.3 13.6 10.5 13.3 MALI 21.1 16.7 10.5 10.5 16.7 15.8 21.1 16.7 15.8 MAURITANIA 27.3 7.7 21.4 18.2 0.0 14.3 27.3 7.7 21.4 MAURITIUS 0.0 0.0 14.3 0.0 0.0 14.3 0.0 0.0 14.3 MOZAMBIQUE 13.3 16.7 8.7 13.3 25.0 17.4 26.7 29.2 17.4 NIGER 25.0 10.0 8.3 8.3 10.0 8.3 25.0 10.0 16.7 NIGERIA 44.2 24.1 40.9 32.6 20.7 31.8 48.8 27.6 45.5 RWANDA 20.0 41.7 41.7 15.0 50.0 33.3 20.0 58.3 41.7 SAO TOME AND PRINCIPE 0.0 0.0 25.0 0.0 0.0 25.0 0.0 0.0 25.0 SENEGAL 10.5 15.8 5.0 10.5 15.8 5.0 15.8 21.1 5.0 SEYCHELLES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SIERRA LEONE 50.0 27.3 88.9 50.0 18.2 100.0 50.0 36.4 100.0 SOMALIA 100.0 0.0 0.0 100.0 0.0 0.0 100.0 0.0 0.0 SOUTH AFRICA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SUDAN 5.9 0.0 0.0 5.9 0.0 0.0 11.8 0.0 0.0 SWAZILAND 0.0 0.0 0.0 0.0 0. 0.0 0.0 0.0 0.0 TANZANIA 29.2 22.7 17.4 8.3 4.5 17.4 29.2 22.7 21.7 TOGO 46.7 10.0 33.3 20.0 10.0 11.1 46.7 10.0 33.3 UGANDA 14.3 7.7 26.1 17.9 3.8 21.7 25.0 7.7 26.1 Page 25 of 71 TABLE 3.4 PORTFOLIO PERFORMANCE BY REGION AND COUNTRY, FY92-FY97 IP DO IDO Country FY92 FY96 FY97 FY92 796 FY97 FY92 FY96 FY97 WAN WESTERN AFRICA REGIO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ZAMBIA 16.7 11.1 15.0 16.7 0.0 5.0 16.7 11.1 15.0 ZIMBABWE 7.7 11.1 10.0 15.4 0.0 0.0 15.4 11.1 10.0 TOTAL AFR 24.6 16.3 21.9 18.8 14.9 19.9 27.7 21.1 27.0 EAP CAMBODIA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CHINA 3.4 3.7 11.7 1.1 1.8 7.2 3.4 5.5 12.6 FIJI 0.0 33.3 0.0 0.0 33.3 0.0 0.0 33.3 0.0 INDONESIA 3.9 11.8 7.7 1.3 5.3 3.8 5.3 13.2 9.0 KOREA, REPUBLIC OF 0.0 6.3 0.0 0.0 6.3 0.0 0.0 6.3 0.0 LAO PEOPLE'S DEMOCRATIC R 0.0 0.0 0.0 0.0 0.0 7.7 0.0 0.0 7.7 MALAYSIA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MONGOLIA 0.0 0.0 14.3 0.0 0.0 0.0 0.0 0.0 14.3 MYANMAR 11.1 0.0 0.0 11.1 0.0 0.0 11.1 0.0 0.0 PAPUA NEW GUINEA 27.3 66.7 25.0 9.1 22.2 25.0 27.3 77.8 37.5 PHILIPPINES 0.0 3.3 10.7 0.0 3.3 3.6 0.0 3.3 10.7 SAMOA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SOLOMON ISLANDS 0.0 100.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 THAILAND 0.0 7.1 6.3 5.9 0.0 0.0 5.9 7.1 6.3 TONGA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 VANUATU 0.0 50.0 0.0 . 0.0 0.0 0.0 0.0 50.0 0.0 VIETNAM 0.0 0.0 21.4 0.0 0.0 0.0 0.0 0.0 21.4 TOTAL EAP 3.3 8.3 9.4 1.7 3.6 4.9 4.0 9.6 10.7 ECA ALBANIA 0.0 9.5 25.0 0.0 9.5 10.0 0.0 9.5 25.0 ARMENIA 0.0 11.1 0.0 0.0 0.0 0.0 0.0 11.1 0.0 AZERBAIJAN 0.0 50.0 0.0 0.0 25.0 0.0 0.0 75.0 0.0 BELARUS 0.0 0.0 0.0 0.0 33.3 33.3 0.0 3S.3 33.3 BOSNIA-HERZEGOVINA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 BULGARIA 0.0 50.0 27.3 0.0 50.0 27.3 0.0 62.5 36.4 CROATIA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CYPRUS 0.0 20.0 0.0 0.0 0.0 0.0 0.0 20.0 0.0 CZECH REPUBLIC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ESTONIA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 GEORGIA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 HUNGARY 0.0 30.8 7.1 0.0 15.4 0.0 0.0 38.5 7.1 KAZAKSTAN 0.0 22.2 9.1 0.0 0.0 0.0 0.0 22.2 9.1 KYRGYZ REPUBLIC 0.0 9.1 9.1 0.0 0.0 9.1 0.0 9.1 9.1 LATVIA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 LITHUANIA 0.0 14.3 20.0 0.0 14.3 0.0 0.0 14.3 20.0 MACEDONIA, FORMER YUGOS 0.0 0.0 0.0 0.0 0.0 14.3 0.0 0.0 14.3 MOLDOVA 0.0 20.0 16.7 0.0 0.0 33.3 0.0 20.0 33.3 POLAND 6.7 15.0 0.0 0.0 15.0 0.0 6.7 20.0 0.0 PORTUGAL 75.0 100.0 100.0 50.0 100.0 100.0 75.0 100.0 100.0 Page 26 of 71 TABLE 3.4 PORTFOLIO PERFORMANCE BY REGION AND COUNTRY, FY92-FY97 IP DO IDO Country FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 ROMANIA 0.0 27.3 6.3 0.0 18.2 6.3 0.0 27.3 6.3 RUSSIAN FEDERATION 0.0 33.3 8.8 0.0 25.9 14.7 0.0 37.0 17.6 SLOVAK REPUBLIC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SLOVENIA 0.0 0.0 33.3 0.0 0.0 0.0 0.0 0.0 33.3 TAJIKISTAN 0.0 0.0 33.3 0.0 0.0 33.3 0.0 0.0 33.3 TURKEY 29.4 16.0 4.0 26.5 20.0 4.0 35.3 20.0 4.0 TURKMENISTAN 0.0 100.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 UKRAINE 0.0 42.9 54.5 0.0 0.0 27.3 0.0 42.9 54.5 UZBEKISTAN 0.0 66.7 0.0 0.0 0.0 0.0 0.0 66.7 0.0 YUGOSLAVIA 25.0 0.0 0.0 0.0 0.0 0.0 25.0 0.0 0.0 TOTAL ECA 15.1 19.6 10.3 10.4 12.6 8.1 17.0 22.6 12.9 LAC ARGENTINA 20.0 19.4 7.9 15.0 3.2 7.9 20.0 19.4 7.9 BAHAMAS, THE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 BARBADOS 0.0 66.7 50.0 0.0 66.7 50.0 0.0 66.7 50.0 BELIZE 0.0 25.0 20.0 0.0 25.0 20.0 0.0 25.0 20.0 BOLIVIA 10.5 3.7 8.0 0.0 3.7 0.0 10.5 3.7 8.0 BRAZIL 23.8 13.4 8.1 6.3 9.0 3.2 25.4 19.4 8.1 CHILE 5.9 14.3 7.7 5.9 14.3 7.7 5.9 14.3 7.7 COLOMBIA 30.8 22.7 14.3 23.1 13.6 4.8 30.8 22.7 14.3 COSTA RICA 0.0 40.0 20.0 0.0 0.0 0.0 0.0 40.0 20.0 CRB CARIBBEAN REGION 0.0 0.0 100.0 , 0.0 0.0 0.0 0.0 0.0 100.0 DOMINICA 50.0 0.0 0.0 50.0 0.0 0.0 50.0 0.0 0.0 DOMINICAN REPUBLIC 20.0 20.0 16.7 20.0 0.0 0.0 20.0 20.0 16.7 ECUADOR 23.1 6.7 18.8 7.7 6.7 25.0 23.1 13.3 25.0 EL SALVADOR 0.0 11.1 11.1 0.0 0.0 0.0 0.0 11.1 11.1 GRENADA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 GUATEMALA 66.7 0.0 0.0 50.0 0.0 0.0 66.7 0.0 0.0 GUYANA 0.0 11.1 12.5 0.0 0.0 12.5 0.0 11.1 25.0 HAITI 90.0 50.0 11.1 40.0 12.5 11.1 90.0 50.0 22.2 HONDURAS 0.0 25.0 11.1 0.0 8.3 0.0 0.0 25.0 11.1 JAMAICA 8.3 27.3 27.3 0.0 9.1 9.1 8.3 27.3 27.3 MEXICO 11.6 22.9 11.4 2.3 5.7 8.6 11.6 22.9 14.3 NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 OECS COUNTRIES 0.0 100.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 PANAMA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PARAGUAY 0.0 28.6 37.5 0.0 14.3 12.5 0.0 42.9 37.5 PERU 25.0 27.3 0.0 0.0 18.2 0.0 25.0 27.3 0.0 ST. KITTS AND NEVIS 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 100.0 ST. LUCIA 0.0 0.0 0.0 0.0 33.3 33.3 0.0 33.3 33.3 ST. VINCENT AND THE GRENA 0.0 0.0 0.0 0.0 0,0 0.0 0.0 0.0 0.0 TRINIDAD AND TOBAGO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 URUGUAY 0.0 16.7 16.7 0.0 8.3 16.7 0.0 16.7 16.7 VENEZUELA 11.1 42.9 21.4 11.1 14.3 7.1 11.1 50.0 21.4 TOTAL LCR 18.2 17.9 11.9 8.4 8.1 6.6 18.5 20.2 13.3 Page 27 of 71 TABLE 3.4 PORTFOLIO PERFORMANCE BY REGION AND COUNTRY, FY92-FY97 IP DO ID0 Country FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 MNA ALGERIA 28.0 34.8 45.0 16.0 17.4 35.0 28.0 34.8 50.0 EGYPT, ARAB REPUBLIC OF 13.0 35.3 25.0 13.0 17.6 6.3 13.0 35.3 25.0 IRAN, ISLAMIC REPUBLIC OF 0.0 66.7 40.0 0.0 16.7 20.0 0.0 66.7 40.0 JORDAN 11.8 8.3 18.2 0.0 0.0 0.0 11.8 8.3 18.2 LEBANON 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MOROCCO 6.9 18.8 29.6 0.0 12.5 33.3 6.9 25.0 37.0 OMAN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TUNISIA 7.1 5.3 4.5 0.0 5.3 4.5 7.1 5.3 4.5 YEMEN, REPUBLIC OF 35.0 20.0 12.5 20.0 20.0 25.0 35.0 32.0 33.3 TOTAL MNA 17.8 22.1 21.5 8.9 12.9 18.5 17.8 25.7 27.4 SAS BANGLADESH 18.4 21.4 6.9 2.6 14.3 6.9 18.4 25.0 10.3 BHUTAN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 INDIA 15.9 16.9 12.6 7.1 15.7 11.5 16.8 20.2 13.8 MALDIVES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 NEPAL 29.6 46.7 23.1 14.8 46.7 23.1 29.6 46.7 23.1 PAKISTAN 23.2 20.8 19.0 12.5 18.8 11.9 23.2 25.0 21.4 SRI LANKA 7.7 18.2 4.5 7.7 9.1 9.1 7.7 18.2 9.1 TOTAL SAR 18.0 20.3 12.7 8.3 17.4 11.2 18.4 23.2 14.7 TOTAL 17.6 16.6 14.8 11.0 11.4 11.7 19.0 19.7 17.8 Page 28 of 71 TABLE 3.5 PORTFOLIO PERFORMANCE BY COUNTRY PORTFOLIO SIZE, FY92-FY97 No. of Commitment % Projects at Risk % Commitments at Risk Large Portfolios Projects Value(US$M) FY92 F96 FY97 /1 FT97 /2 FY92 FY96 FY97 /1 FY97/2 CHINA 111 20,415 4 6 14 14 5 9 13 13 INDIA 87 15.077 24 20 17 17 21 17 15 15 INDONESIA 78 8,859 8 14 15 15 3 12 13 13 MEXICO 35 8,078 30 29 17 17 18 23 14 14 BRAZIL 62 7,905 86 81 35 16 87 80 40 16 RUSSIAN FEDERATION 34 6,698 --- 67 38 35 --- 72 44 42 ARGENTINA 38 6,108 70 23 16 16 86 22 14 14 PAKISTAN 42 4,263 32 31 29 26 35 27 38 37 TURKEY 25 3,118 38 72 72 72 44 69 76 76 PHILIPPINES 28 2,572 21 10 14 14 20 7 26 26 BANGLADESH 29 2,410 50 29 24 24 48 26 22 22 MOROCCO 27 2,277 10 25 44 44 9 24 44 44 ROMANIA 16 2,141 25 27 13 13 18 30 8 8 POLAND 17 2,028 7 30 0 0 5 28 0 0 ALGERIA 20 1,902 76 70 80 60 67 69 89 49 COLOMBIA 21 1,792 35 23 14 14 28 28 13 13 GHANA 39 1,694 27 17 15 15 29 15 15 15 PERU 15 1,681 100 27 7 0 100 22 9 0 NIGERIA 22 1,604 79 79 64 64 72 89 63 63 VIETNAM 14 1,591 -- 0 21 21 - 0 11 11 UKRAINE 11 1,505 --- 43 73 73 -- 17 73 73 THAILAND 16 1,499 6 7 6 6 I 3 1 1 TUNISIA 22 1,385 11 5 5 5 1 6 4 4 TANZANIA 23 1,321 42 86 74 52 36 90 78 71 HUNGARY 14 1,243 0 38 7 7 0 36 11 11 MOZAMBIQUE 23 1,167 33 50 43 43 18 41 46 46 ETHIOPIA 14 1,130 78 36 36 29 80 21 28 27 UGANDA 23 1,113 54 38 57 43 56 51 50 41 EGYPT. ARAB REPUBLIC OF 16 1,088 52 41 38 38 60 40 27 27 KOREA, REPUBLIC OF 13 1,086 0 6 0 0 0 8 0 0 KENYA 23 1,077 43 61 57 48 31 50 52 49 SRI LANKA 22 865 19 23 14 14 24 19 11 11 ZAMBIA 20 826 67 22 20 20 21 14 19 19 MADAGASCAR 23 649 52 55 70 43 58 57 66 45 BOLIVIA 25 642 16 7 16 12 15 11 25 19 SENEGAL 20 583 37 58 5 5 37 68 3 3 YEMEN, REPUBLIC OF 24 543 85 68 46 46 82 65 44 44 ALBANIA 20 229 0 10 30 30 0 8 30 30 Total Large Portfollos (38) 1,112 120,166 36 34 28 24 31 30 25 22 Total Small Portfollos (95) 654 21,182 44 35 34 31 38 34 33 30 Bankwide Total 1,766 141,348 39 34 30 27, 32 31 26 23 * Large country portfolios are those with 20 or more projects and/or at least $1 billion in commitments. /1 without golden flag /2 with golden flag Page 29 of71 TABLE 3.6 PROJECTS AT RISK BY REGION AND COUNTRY, FY92-FY97 % Projectr atRisk % Commitments atisk Country FY92 FY96 FY971 FY97/2 FY92 FY96 FY971 FY97/2 AFR AFR AFRICA REGION 0 50 0 0 0 91 0 0 ANGOLA 0 100 100 100 0 100 100 100 BENIN 33 6 25 25 38 18 30 30 BOTSWANA 20 0 0 0 22 0 0 0 BURKINA FASO 7 7 13 13 2 4 6 6 BURUNDI 11 47 90 90 9 40 93 93 CAMEROON 62 67 100 100 63 80 100 100 CAPE VERDE 25 0 0 0 25 0 0 0 CENTRAL AFRICAN REPUBLIC 100 67 100 100 100 68 100 100 CHAD 63 50 45 45 56 51 54 54 COMOROS 100 50 17 17 100 40 4 4 CONGO, DEMOCRATIC REPUBLIC 100 0 0 0 100 0 0 0 CONGO, REPUBLIC OF 100 50 100 100 100 63 100 100 COTE D'IVOIRE 71 20 21 14 51 6 11 10 DJIBOUTI 25 50 50 50 29 66 63 63 EQUATORIAL GUINEA 75 67 100 100 76 81 100 100 ERITREA 0 0 0 0 0 0 0 0 ETHIOPIA 78 36 36 29 80 21 28 27 GABON 0 100 67 67 0 100 73 73 GAMBIA, THE 56 29 33 33 59 20 20 20 GHANA 27 17 15 15 29 15 15 15 GUINEA 85 78 77 62 79 80 78 63 GUINEA-BISSAU 22 67 17 17 28 44 17 17 KENYA 43 61 57 48 31 50 52 49 LESOTHO 40 13 0 0 26 2 0 0 MADAGASCAR 52 55 70 43 58 57 66 45 MALAWI 14 32 33 33 13 32 43 43 MALI 58 17 16 16 64 5 11 11 MAURITANIA 64 8 29 29 65 7 32 32 MAURITIUS 0 0 14 14 0 0 17 17 MOZAMBIQUE 33 50 43 43 18 41 46 46 NIGER 50 60 58 42 58 63 53 41 NIGERIA 79 79 64 64 72 89 63 63 RWANDA 40 100 92 92 44 100 82 82 SAO TOME AND PRINCIPE 25 20 75 75 29 27 73 73 SENEGAL 37 58 5 5 37 68 3 3 SEYCHELLES 0 0 0 0 0 0 0 0 SIERRA LEONE 67 36 100 100 45 33 100 100 SOMALIA 100 0 0 0 100 0 0 0 SOUTH AFRICA 0 0 0 0 0 0 0 0 SUDAN 94 0 0 0 97 0 0 0 SWAZILAND 0 0 100 100 0 0 100 100 TANZANIA 42 86 74 52 36 90 78 71 TOGO 53 90 89 44 55 77 98 43 UGANDA 54 38 57 43 56 51 50 41 ZAMBIA 67 22 20 20 21 14 19 19 ZIMBABWE 15 11 20 20 19 23 29 29 TOTALAFR 51 44 45 40 50 46 45 41 Page 30 of 71 TABLE 3.6 PROJECTS AT RISK BY REGION AND COUNTRY, FY92-FY97 % Projects aRik % Conmitmenis atRisk Country FY92 FY96 FY971 FF9712 FY92 FY96 FY971 FY97/2 EAP CAMBODIA 0 0 0 0 0 0 0 0 CHINA 4 6 14 14 5 9 13 13 FIJI 25 33 33 33 26 41 41 41 INDONESIA 8 14 15 15 3 12 13 13 KOREA, REPUBLIC OF 0 6 0 0 0 8 0 0 LAO PEOPLE'S DEMOCRATIC REP 70 8 8 8 68 3 12 12 MALAYSIA 0 0 0 0 0 0 0 0 MONGOLIA 0 0 14 14 0 0 9 9 MYANMAR 56 0 0 0 62 0 0 0 PAPUA NEW GUINEA 55 100 88 88 48 100 94 94 PHILIPPINES 21 10 14 14 20 7 26 26 SAMOA 75 0 0 0 90 0 0 0 SOLOMON ISLANDS 0 100 0 0 0 100 0 0 THAILAND 6 7 6 6 1 3 1 1 TONGA 0 0 0 0 0 0 0 0 VANUATU 33 100 0 0 25 100 0 0 VIETNAM 0 0 21 21 0 0 11 11 TOTAL EAP 14 12 15 15 7 10 13 13 ECA ALBANIA 0 10 30 30 0 8 30 30 ARMENIA 0 11 0 0 0 6 0 0 AZERBAIJAN 0 75 0 0 0 87 0 0 BELARUS 0 67 33 33 0 95 70 70 BOSNIA-HERZEGOVINA 0 0 0 0 0 0 0 0 BULGARIA 0 88 45 45 0 94 42 42 CROATIA 0 0 0 0 0 0 0 0 CYPRUS 0 20 0 0 0 21 0 0 CZECH REPUBLIC 0 0 0 0 0 0 0 0 ESTONIA 0 0 0 0 0 0 0 0 GEORGIA 0 0 0 0 0 0 0 0 HUNGARY 0 38 7 7 0 36 11 11 KAZAKSTAN 0 33 9 9 0 17 10 10 KYRGYZ REPUBLIC 0 9 9 9 0 5 6 6 LATVIA 0 0 0 0 0 0 0 0 LITHUANIA 0 14 20 20 0 16 17 17 MACEDONIA, FORMER YUGOSLA OF 0 0 14 14 0 0 8 8 MOLDOVA 0 20 33 33 0 21 36 36 POLAND 7 30 0 0 5 28 0 0 PORTUGAL 75 100 100 100 68 100 100 100 ROMANIA 25 27 13 13 18 30 8 8 RUSSIAN FEDERATION 0 67 38 35 0 72 44 42 SLOVAK REPUBLIC 0 0 0 0 0 0 0 0 SLOVENIA 0 0 33 33 0 0 47 47 TAJIKISTAN 0 0 33 33 0 0 75 75 Page 31 of 71 TABLE 3.6 PROJECTS AT RISK BY REGION AND COUNTRY, FY92-FY97 % Projects atisk % Commitments atrisk Country FY92 FY96 FY971 FY97/2 FY92 FY96 FY971 FY97/2 TURKEY 38 72 72 72 44 69 76 76 TURKMENISTAN 0 100 33 33 0 100 28 28 UKRAINE 0 43 73 73 0 17 73 73 UZBEKISTAN 0 67 33 33 0 35 23 23 YUGOSLAVIA 43 0 0 0 48 0 0 0 TOTAL ECA 21 34 24 24 24 47 35 34 LAC ARGENTINA 70 23 16 16 86 22 14 14 BAHAMAS, THE 50 0 0 0 50 0 0 0 BARBADOS 0 67 50 50 0 88 30 30 BELIZE 0 25 20 20 0 11 7 7 BOLIVIA 16 7 16 12 15 11 25 19 BRAZIL 86 81 35 16 87 80 40 16 CHILE 6 14 8 8 14 7 7 7 COLOMBIA 35 23 14 14 28 28 13 13 COSTA RICA 40 40 20 20 40 52 17 17 CRB CARIBBEAN REGION 0 0 100 100 0 0 100 100 DOMINICA 50 0 0 0 50 0 0 0 DOMINICAN REPUBLIC 80 40 33 33 89 57 25 25 ECUADOR 54 20 50 44 37 7 43 31 ELSALVADOR 0 22 11 11 0 34 15 15 GRENADA 0 0 0 0 0 0 0 0 GUATEMALA 100 100 71 43 100 100 70 49 GUYANA 25 11 63 63 6 12 61 61 HAITI 100 88 78 44 100 77 68 48 HONDURAS 25 33 11 11 8 53 7 7 JAMAICA 17 45 64 64 11 39 68 68 MEXICO 30 29 17 17 18 23 14 14 NICARAGUA 0 0 0 0 0 0 0 0 OECS COUNTRIES 0 100 0 0 0 100 0 0 PANAMA 100 0 0 0 100 0 0 0 PARAGUAY 50 57 63 38 61 67 78 52 PERU 100 27 7 0 100 22 9 0 ST, KITTS AND NEVIS 0 0 100 100 0 0 100 100 ST. LUCIA 0 33 33 33 0 39 39 39 ST. VINCENT AND THE GRENADI 0 0 0 0 0 0 0 0 TRINIDAD AND TOBAGO 0 0 33 17 0 0 58 38 URUGUAY 0 17 25 25 0 9 7 7 VENEZUELA 22 93 57 43 20 97 62 48 TOTAL LCR 45 39 29 22 47 40 24 16 MNA ALGERIA 76 70 80 60 67 69 89 49 EGYPT, ARAB REPUBLIC OF 52 41 38 38 60 40 27 27 IRAN, ISLAMIC REPUBLIC OF 0 67 80 60 0 51 72 59 JORDAN 59 8 18 18 78 14 18 18 LEBANON 0 0 10 10 0 0 11 11 Page 32 of 71 TABLE 3.6 PROJECTS AT RISK BY REGION AND COUNTRY, FY92-FY97 % holject WRk % Co.Umm..a Mkk Country FY92 FF96 F797/1 F97/2 FY92 FY96 FF97/1 FF9712 MOROCCO 10 25 44 44 9 24 44 44 OMAN 0 0 0 0 0 0 0 0 TUNISIA 11 5 .5 5 1 6 4 4 YEMEN, REPUBLIC OF 85 68 46 46 82 65 44 44 TOTAL MNA 48 39 39 36 41 37 43 34 SAR BANGLADESH 50 29 24 24 48 26 22 22 BHUTAN 0 0 0 0 0 0 0 0 INDIA 24 20 17 17 21 17 15 15 MALDIVES 0 0 0 0 0 0 0 0 NEPAL 63 53 31 31 64 49 41 41 PAKISTAN 32 31 29 26 35 27 38 37 SRI LANKA 19 23 14 14 24 19 11 11 TOTAL SAR 32 26 21 20 27 21 20 20 TOTAL 39 34 30 27 32 31 26 23 Note: /1 Without the golden flag /2 With the goldend flag Page 33 of 71 TABLE 3.7 PORTFOLIO PERFORMANCE BY SECTOR, FY92-FY917 IP DO IP/DO Sector FY92 FY96 FY97 FY92 FY96 FF97 FY92 FY96 FY97 Agriculture 22.4 19.4 17.7 13.5 14.4 13.1 23.5 21.7 20.4 Education 12.0 13.2 12.4 10.2 12.7 9.8 13.9 17.3 14.0 Electric Pwr & Engy. 19.4 16.8 15.9 9.1 13.6 15.1 21.2 20.8 19.8 Environment 11.5 15.8 7.0 7.7 2.6 7.0 11.5 15.8 9.3 Finance 14.8 15.5 20.2 12.3 15.5 13.5 16.0 22.6 22.5 Industry 18.3 29.4 9.4 18.3 23.5 15.6 22.0 35.3 18.8 Mining 17.6 5.0 10.0 5.9 5.0 10.0 17.6 5.0 10.0 Multisector 16.7 13.6 11.4 13.1 9.9 11.4 20.2 17.3 16.5 Oil & Gas 12.2 19.0 14.3 4.9 14.3 21.4 12.2 23.8 26.2 Popultn, Hith & Num 16.7 15.0 17.0 4.9 8.5 8.5 16.7 17.6 20.3 Public Sector Mgmt. 12.4 20.5 14.3 12.4 9.4 8.3 13.5 21.3 15.0 Social Sector 14.3 12.3 8.7 9.5 7.0 7.2 14.3 14.0 10.1 Telecommunications 12.9 3.8 11.1 6.5 11.5 5.6 16.1 11.5 11.1 Transportation 12.7 14.7 15.5 8.8 8.9 11.4 14.2 16.8 17.1 Urban Development 19.2 18.6 9.5 12.5 12.7 10.5 21.2 24.5 14.3 Water Supply & Santn 25.3 19.6 23.0 8.8 9.3 19.0 25.3 22.7 28.0 TOTAL 17.6 16.6 14.8 11.0 11.4 11.7 19.0 19.7 17.8 Page 34 of 71 TABLE 3.8 PORTFOLIO PERFORMANCE IN TERMS OF PROJECTS AND COMMITMENTS AT RISK BY SECTOR, FY92-FY97 % Prjects at Risk % Comuitments at Risk Sector FF92 FY93 FF94 FY95 FY96 FY97 /1 FY92 FY93 FY94 FY95 FY96 FY97 /I Agriculture 51.2 51.2 48.9 39.1 37.8 33.2 46.1 49.3 44.7 35.4 34.6 25.1 Education 30.1 32.2 31.5 33.5 26.9 23.8 21.9 27.8 29.9 28.9 27.7 16.7 Electric Pwr & Engy. 33.3 32.5 41.8 38.6 29.6 30.2 24.7 27.9 30.3 21.4 18.0 25.6 Environment 42.3 32.4 38.3 30.2 28.9 20.9 46.5 38.8 42.7 42.7 31.6 26.2 Finance 26.6 24.3 34.7 28.7 27.4 34.8 24.0 23.3 35.1 27.7 22.1 22.3 Industry 25.6 29.0 32.1 42.5 47.1 37.5 16.2 23.4 26.6 38.0 43.6 37.5 Mining 76.5 82.4 57.1 46.7 35.0 30.0 79.1 88.7 43.7 54.9 49.3 52.9 Multisector 39.3 33.7 31.9 54.6 29.6 30.4 28.8 28.6 23.3 55.6 21.5 24.6 Oil & Gas 24.4 31.8 54.2 30.4 40.5 38.1 23.5 26.8 58.3 33.8 52.2 45.3 Popultn, HIth & Nutn 37.3 37.5 41.3 31.9 32.7 29.4 37.0 33.9 38.7 33.1 26.7 21.0 Public Sector Mgmt. 32.6 30.2 38.7 28.3 32.3 27.1 41.5 35.1 37.0 28.5 34.8 29.5 Social Sector 19.0 28.6 30.6 21.4 28.1 21.7 27.7 18.8 29.5 8.6 20.0 12.9 Telecommunications 32.3 15.2 40.0 40.0 26.9 11.1 23.7 16.6 26.7 15.2 11.4 2.6 Transportation 33.8 33.2 31.6 30.5 33.2 23.8 29.5 25.2 28.8 25.0 33.2 19.9 Urban Development 34.6 38.5 36.3 35.6 38.2 38.1 28.5 38.1 32.5 31.5 28.6 34.7 Water Supply & Santn 51.6 50.0 53.6 49.0 48.5 49.0 53.6 57.2 59.3 53.0 54.1 52.4 Total 38.7 38.1 40.2 36.1 33.7 30.2 32.2 34.0 36.1 32.6 30.6 26.1 /1 Without the "golden flag". Page 35 of 71 TABLE 3.9 PORTFOLIO PERFORMANCE BY LENDING INSTRUMENT, FY92-FY97 IP DO IP/DO Instrument FY92 FY96 FY97 FY92 FY96 FY97 FY92 FY96 FY97 Adjustment Debt and Debt Service Reduction Lo 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation Loan 0.0 0.0 14.3 0.0 16.7 28.6 0.0 16.7 28.6 Sector Adjustment Loan 13.3 8.9 11.5 9.3 5.4 7.7 13.3 8.9 13.5 Structual Adjustment Loan 17.9 12.5 9.3 16.1 5.0 7.0 23.2 12.5 11.6 Adjustment Total 15.0 9.2 10.6 12.0 6.4 8.7 17.3 11.0 13.5 Investment Emergency Recovery Loan 11.1 8.0 7.4 5.6 0.C 0.0 11.1 8.0 7.4 Financial Intermediary Loan 16.9 21.9 22.6 14.6 18.8 24.5 19.2 28.1 28.3 Sector Investment and Maintenance 16.6 20.0 17.2 11.8 16.0 16.7 19.4 25.5 21.3 Specific Investment Loan 18.5 16.4 14.7 10.0 10.9 11.1 19.4 19.4 17.5 Technical Assistance Loan 16.4 17.9 14.5 13.3 12.2 10.3 18.0 19.9 17.6 Investment total 17.8 17.1 15.1 10.9 11.7 11.9 19.2 20.3 18.1 Bank Total 17.6 16.6 14.8 11.0 11.4 11.7 19.0 19.7 17.8 Page 36 of 71 TABLE 3.10 PORTFOLIO PERFORMANCE IN TERMS OF PROJECTS AND COMMITMENTS BY INSTRUMENT, FY92-FY97 % Projects at Risk % Comnitments at Risk Instrument FY92 FY93 FY94 FY95 FY96 FY97!1 FY92 FY93 FY94 FY95 FY96 FY971 Debt Reduction Loan 0.0 0.0 0.0 33.3 0.0 0.0 0.0 0.0 0.0 45.4 0.0 0.0 Rehabilitation Loan 0.0 0.0 10.0 13.3 25.0 28.6 0.0 0.0 9.7 27.4 40.0 43.9 Sector Adjustment Loan 34.7 45.7 45.9 40.4 21.4 23.1 35.5 45.1 46.4 33.8 19.9 20.1 Structual Adjustment Loan 42.9 37.7 27.3 66.0 22.5 25.6 30.1 30.5 20.1 62.3 11.4 19.3 Emergency Recovery Loan 55.6 44.0 50.0 38.5 24.0 22.2 47.0 44.8 49.6 30.1 23.4 30.9 Financial Intermediary Loa 31.3 30.9 41.1 36.4 39.1 43.4 26.1 27.1 38.3 35.0 33.4 36.0 Sector Investment and Mai 38.5 37.9 41.8 41.5 42.0 35.1 33.8 35.3 38.5 38.9 38.0 21.6 Specific Investment Loan 39.2 38.9 39.6 34.2 33.3 29.2 32.1 33.5 35.1 29.1 30.9 26.8 Technical Assistance Loan 41.4 34.7 44.4 33.1 34.0 33.3 34.4 24.5 40.8 31.0 34.7 33.0 Total 38.7 38.1 40.2 36.1 33.7 30.2 32.2 34.0 36.1 32.6 30.6 26.1 /1 Without the "golden flag". Page 37 of 71 TABLE 3.11 PERFORMANCE OF PTI PORTFOLIO, FY95-FY97 No. US$B % IP/DO Proj I AtRisk Conunit /I AtRisk Region FY95 FY96 FY97 FY95 FY96 FY97 FY95 FY96 FY97 FY95 FY96 FY97 FY95 FY96 FY97 AFR 84 101 116 2.5 3.2 3.6 10.7 14.9 23.3 26.2 30.7 42.2 25.1 28.4 42.8 EAP 43 56 70 3.8 4.7 5.9 7.0 10.7 12.9 9.3 12.5 15.7 5.2 8.6 11.0 SAR 33 44 52 3.4 4.8 5.6 12.1 20.5 9.6 12.1 20.5 11.5 15.3 18.6 9.1 ECA 22 33 43 1.0 1.5 1.6 13.6 18.2 14.0 18.2 24.2 20.9 40.7 29.0 34.1 MNA 21 28 32 1.5 1.8 2.0 33.3 14.3 25.0 33.3 25 40.6 38.6 29.7 50.3 LCR 65 84 109 6.2 7.5 8.8 16.9 19.0 11.9 32.3 34.5 25.7 36.1 44.5 27.7 TOTAL 268 346 422 18.3 23.6 27.5 13.8 16.2 16.1 23.1 26.3 27.5 24.9 27.7 24.3 Note: 11 Without the "golden flag". Page 38 of'71 TABLE 3.12 NUMBER OF PROBLEM-PROJECTS BY DURATION OF PROBLEM AND REGION, FY97 Implementadon Progress Development Objectives AFR EAP SAS ECA MNA LAC Total AFR EAP SAS BCA MNA LAC Total Years Project rated Prblenm-Project" Problem Projects for 1 year 64 19 12 15 17 22 149 56 12 7 9 19 13 116 Problem Projects for 2 year 20 5 8 7 3 12 55 23 1 9 9 2 8 52 Problem Projects for 3 year 13 4 3 5 1 5 31 9 2 2 2 1 0 16 Problem Projects for 4 year 11 1 2 1 6 4 25 9 0 3 2 1 2 17 Problem Projects for 5 years or more 0 0 0 0 2 0 2 1 0 1 0 2 1 5 Total 108 29 25 28 29 43 262 98 15 22 22 25 24 206 TABLE 3.13 NUMBER OF PROBLEM-PROJECTS BY DURATION OF PROBLEM AND REGION, FY96 Implementarion Progress Development Objectives AFR EAP SAS ECA MNA LAC Total AFR EAP SAS ECA MNA LAC Total Years Project rwted "Problem-Project" Problem Projects for 1 year 44 13 23 23 12 34 149 41 9 20 16 6 16 108 Problem Projects for 2 year 22 10 9 14 4 13 72 17 2 7 6 5 4 41 Problem Projects for 3 year 15 1 7 6 11 13 53 13 0 6 4 4 8 35 Problem Projects for 4 year 1 1 2 1 1 2 8 3 0 3 2 1 1 10 Problem Projects for 5 years or more 2 0 1 1 3 2 9 3 0 0 1 2 0 6 Total 84 25 42 45 31 64 291 77 11 36 29 18 29 200 TABLE 3.14 NUMBER OF PROBLEM-PROJECTS BY DURATION OF PROBLEM AND REGION, FY95-FY97 Insaretation Progress/Developtseat Objeedresj FY95 FF% F97 AFR RAP SAS ECA MENA lAC Total AFR EAP SAS ECA MENA LAC Total AFR EAP SAS ECA MENA LAC Total Years Project rated "Problem-P:rject" Problem Projects for I year 65 19 18 22 32 48 204 52 22 19 25 14 32 164 58 15 26 24 13 36 172 Problem Projects for 2 year 28 8 7 9 8 7 67 40 7 13 12 18 30 120 25 12 10 17 5 13 82 Problem Projects for 3 year 14 0 1 4 6 9 34 12 4 3 3 4 4 30 I I 8 7 13 i 65 Problem Projects for 4 year 15 0 4 2 5 2 28 8 0 1 3 4 3 19 3 1 2 2 2 3 13 Problem Projects for 5 years or more 8 1 6 4 2 5 26 9 0 3 1 3 4 20 5 0 2 2 3 2 14 Total 130 28 36 41 53 71 359 121 33 39 44 43 73 353 109 29 48 52 36 72 346 /1 Years refers to ARPP ratings Page 39 of 71 TABLE 3.15 PERFORMANCE OF PROJECTS EXITING THE PORTFOLIO BY REGION FY95-FY97 FY95 FY96 FY97 Region No. % DO % Atrisk No. % DO % Atrisk No. % DO % Arrisk AFR 91 33.0 64.8 72 30.6 59.7 67 22.4 48 EAP 41 12.2 19.5 32 0.0 12.5 41 9.8 17 SAR 32 18.8 37.5 29 20.7 27.6 27 14.8 15 ECA 20 20.0 70.0 25 12.0 24.0 26 19.2 35 MNA 24 20.8 45.8 22 22.7 36.4 21 28.6 48 LCR 38 15.8 39.5 47 10.6 51.1 55 12.7 27 TOTAL 246 22.8 48.4 227 18.1 41.0 237 17.3 33 TABLE 3.16 PERFORMANCE OF PROJECTS EXITING THE PORTFOLIO BY SECTOR FY95-FY97 FY95 FY96 FY97 Sector No. % DO % Atrisk No. % DO % Atrisk No. % DO % Atrisk Agriculture 52 30.8 57.7 56 23.2 51.8 57 24.6 43.9 Education 23 30.4 47.8 22 13.6 22.7 19 15.8 15.8 Electric Pwr & Engy. 22 18.2 31.8 16 12.5 37.5 11 36.4 54.5 Environment 2 0.0 50.0 7 14.3 28.6 Finance 13 15.4 46.2 9 0.0 0.0 20 20.0 35.0 Industry 10 20.0 30.0 7 42.9 71.4 7 28.6 42.9 Mining 3 33.3 66.7 2 0.0 0.0 4 0.0 25.0 Multisector 35 20.0 71.4 24 4.2 20.8 27 11.1 18.5 Oil & Gas 7 14.3 28.6 4 25.0 50.0 4 25.0 50.0 Popultn, Hlth & Nutn 8 12.5 25.0 15 13.3 73.3 12 0.0 16.7 Public Sector Mgmt. 13 23.1 53.8 14 35.7 35.7 12 8.3 33.3 Social Sector 2 0.0 0.0 4 0.0 25.0 7 0.0 0.0 Telecommunications 5 0.0 20.0 8 12.5 50.0 3 0,0 0.0 Transportation 31 22.6 38.7 24 16.7 37.5 21 14.3 23.8 Urban Development 12 16.7 50.0 10 30.0 60.0 17 17.6 47.1 Water Supply & Santn 10 30.0 50.0 10 30.0 40.0 9 22.2 44.4 TOTAL 246 22.8 48.4 227 18.1 41.0 237 17.3 32.5 Page 40 of71 TABLE 3.17 PERCENTAGE OF COMPLETED PROJECTS BY REGION AND COUNTRY RATED UNSATISFACTORY AND NET DISCONNECT FY8O-FY97 FF92-FY96 No. UNSAT (%) Net. No. UNSAT (%) Net- Country OED DO Disc (%) OED DO Disc (%) AFR BENIN 26 15 15 0 8 25 13 13 BOTSWANA 20 20 10 10 5 40 20 20 BURKINA FASO 30 30 7 23 8 0 0 0 BURUNDI 35 29 26 3 11 45 45 0 CAMEROON 44 52 23 30 12 83 58 25 CAPE VERDE 4 0 0 0 3 0 0 0 CENTRAL AFRICAN REPUBLIC 17 53 29 24 3 67 33 33 CHAD 13 38 23 15 6 17 17 0 COMOROS 9 56 33 22 2 50 50 0 CONGO, DEMOCRATIC REPUBLIC OF 54 78 46 33 21 90 77 14 CONGO, REPUBLIC OF 12 67 31 42 1 0 50 0 COTE D'IVOIRE 51 37 10 27 17 47 18 29 DJIBOUTI 7 43 14 29 3 33 33 0 EAN EASTERN AFRICA REGION 1 100 0 100 0 0 0 0 EQUATORIAL GUINEA 6 83 50 33 2 100 100 0 ETHIOPIA 33 33 24 9 11 36 45 -9 GABON 5 80 20 60 3 67 33 33 GAMBIA, THE 15 53 33 20 6 67 50 17 GHANA 51 24 12 12 21 19 10 10 GUINEA 34 41 23 18 17 47 29 18 GUINEA-BISSAU 16 38 13 25 6 33 33 0 KENYA 68 54 22 31 19 53 21 32 LESOTHO 15 25 20 7 5 40 60 -20 LIBERIA 25 52 36 16 0 0 0 0 MADAGASCAR 40 42 17 25 15 40 27 13 MALAWI 42 29 2 26 16 38 0 38 MALI 32 47 6 41 12 50 8 42 MAURITANIA 22 41 27 14 7 57 43 14 MAURITIUS 18 11 17 -6 3 33 0 33 MOZAMBIQUE 7 14 0 14 4 0 0 0 NIGER 26 46 35 12 7 43 43 0 NIGERIA 61 52 23 30 26 46 35 12 RWANDA 29 55 41 14 12 83 83 0 SAO TOME AND PRINCIPE 5 40 20 20 4 25 0 25 SENEGAL 51 31 16 16 12 25 25 0 SEYCHELLES 1 0 0 0 0 0 0 0 SIERRA LEONE 11 55 27 27 4 75 50 25 SOMALIA 28 57 45 18 6 83 100 -17 SUDAN 42 49 21 29 17 41 12 29 SWAZILAND 8 11 0 13 0 0 0 0 TANZANIA 65 54 28 26 14 36 29 7 TOGO 25 52 24 28 9 67 33 33 Page 41 of 71 TABLE 3.17 PERCENTAGE OF COMPLETED PROJECTS BY REGION AND COUNTRY RATED UNSATISFACTORY AND NET DISCONNECT F0-FFM PM2-FM No. UNSAT (%) Net- No. UNSAT (%) Net- Country OED DO Disc (%) ORD DO Disc (%) UGANDA 33 42 9 33 22 45 14 32 WAN WESTERN AFRICA REGION 4 25 0 25 2 50 0 50 ZAMBIA 35 49 17 31 8 63 38 25 ZIMBABWE 16 0 0 0 8 0 0 0 TOTAL AFR 1192 43 21 22 398 46 31 16 EAP CAMBODIA 1 0 0 0 0 0 0 0 CHINA 77 5 3 3 54 6 4 2 FI1 6 14 0 17 1 0 0 0 INDONESIA 162 18 7 11 51 18 1o 8 KOREA, REPUBLIC OF 77 10 1 9 17 6 0 6 LAO PEOPLE'S DEMOCRATIC REPUBLI 11 45 9 36 6 17 0 17 MALAYSIA 60 18 5 13 18 11 0 11 MONGOLIA 2 0 0 0 1 0 0 0 MYANMAR 28 29 11 18 9 44 22 22 PAPUA NEW GUINEA 23 52 17 35 7 71 14 57 PHILIPPINES 99 26 8 16 23 13 4 9 SAMOA 6 33 50 -17 3 0 0 0 SINGAPORE 2 0 0 0 0 0 0 0 SOLOMON ISLANDS 5 40 20 20 1 0 0 0 THAILAND 71 12 6 7 14 7 14 -7 TONGA 1 0 0 0 0 0 0 0 VANUATU 2 100 50 50 1 100 0 100 VIETNAM 1 0 0 0 0 0 0 0 TOTAL EAP 634 19 7 12 206 15 6 8 ECA ALBANIA 2 0 0 0 2 0 0 0 ARMENIA 1 0 0 0 1 0 0 0 AZERBAIJAN 1 0 100 -100 1 0 100 -100 BELARUS 2 50 50 0 0 0 0 0 BULGARIA 2 0 0 0 2 0 0 0 CYPRUS 19 11 0 11 4 0 0 0 CZECH REPUBLIC 2 0 0 0 2 0 0 0 ESTONIA 1 0 0 0 1 0 0 0 GEORGIA 1 0 0 0 1 0 0 0 GREECE 10 10 0 10 0 0 0 0 HUNGARY 22 5 18 -14 14 7 29 -21 KAZAKSTAN 2 0 0 0 2 0 0 0 KYRGYZ REPUBLIC 2 0 0 0 1 0 0 0 LATVIA 1 0 0 0 1 0 0 0 LITHUANIA 1 0 0 0 1 0 0 0 Page 42 of 71 TABLE 3.17 PERCENTAGE OF COMPLETED PROJECTS BY REGION AND COUNTRY RATED UNSATISFACTORY AND NET DISCONNECT PY8o-FY97 FY92-FY No. UNSAT (%) Net- No. UNSAT (%) Net- Counry OED DO Disc (%) OED DO Disc (%) MACEDONIA, FORMER YUGOSLAV RE 2 0 0 0 1 0 0 0 MOLDOVA 3 33 0 33 3 33 0 33 POLAND 9 22 11 11 7 29 14 14 PORTUGAL 23 26 17 9 3 67 67 0 ROMANIA 29 30 3 28 1 0 0 0 RUSSIAN FEDERATION 2 0 0 0 2 0 0 0 SLOVAK REPUBLIC 1 0 0 0 1 0 0 0 SLOVENIA 1 0 0 0 1 0 0 0 TURKEY 71 34 21 14 19 50 37 16 UKRAINE 1 0 0 0 1 0 0 0 UZBEKISTAN 1 100 0 100 1 100 0 100 YUGOSLAVIA 57 19 10 7 9 22 11 11 TOTAL ECA 269 22 12 10 82 23 20 4 LCR ARGENTINA 34 39 17 26 16 19 19 0 BAHAMAS, THE 5 20 0 20 2 50 0 50 BARBADOS 9 11 11 0 3 0 0 0 BELIZE 4 25 25 0 2 0 0 0 BOLIVIA 31 31 16 13 9 11 0 11 BRAZIL 128 39 11 28 34 35 11 24 CHILE 24 8 4 4 11 9 9 0 COLOMBIA 74 26 13 15 17 41 28 18 COSTA RICA 17 12 11 12 1 0 67 0 CRB CARIBBEAN REGION 4 25 25 0 2 50 50 0 DOMINICA 3 0 33 -33 2 0 50 -50 DOMINICAN REPUBLIC 16 56 31 25 2 50 50 0 ECUADOR 37 24 16 8 9 0 22 -22 ELSALVADOR 11 25 0 18 2 33 0 0 GRENADA 1 0 0 0 1 0 0 0 GUATEMALA 11 36 25 18 3 67 50 33 GUYANA 10 45 36 10 3 33 33 0 HAITI 21 52 17 43 4 75 50 50 HONDURAS 28 24 4 21 9 33 0 33 JAMAICA 40 46 10 35 10 40 10 30 MEXICO 91 32 7 25 32 16 6 9. NICARAGUA 13 15 0 15 1 100 0 100 PANAMA 23 48 13 35 0 0 0 0 PARAGUAY 22 36 5 32 3 67 0 67 PERU 36 65 19 44 4 25 0 25 Page 43 of 71 TABLE 3.17 PERCENTAGE OF COMPLETED PROJECTS BY REGION AND COUNTRY RATED UNSATISFACTORY AND NET DISCONNECT PY80-F797 pF9-Flrm No. UNSAT (%) Net- No. UNSAT (%) Net- Country OED DO Dic (%) ORD DO Disc (%) ST. VINCENT AND THE GRENADINES 2 0 0 0 1 0 0 0 TRINIDAD AND TOBAGO 5 0 0 0 1 0 0 0 URUGUAY 18 11 5 11 5 0 0 0 VENEZUELA 6 67 29 50 4 75 40 50 TOTAL LCR 724 34 12 23 193 27 IS 15 MNA ALGERIA 29 53 23 31 16 63 38 25 EGYPT, ARAB REPUBLIC OF 64 25 14 13 16 44 25 19 IRAN, ISLAMIC REPUBLIC OF 1 0 0 0 1 0 0 0 JORDAN 38 21 0 21 17 12 0 12 LEBANON 3 33 0 33 0 0 0 0 MOROCCO 71 17 7 10 19 21 5 16 OMAN 10 0 0 0 4 0 0 0 SYRIAN ARAB REPUBLIC 14 57 6 50 0 0 0 0 TUNISIA 69 17 6 12 21 29 10 19 YEMEN, REPUBLIC OF 74 28 19 9 26 42 38 4 TOTAL MNA 373 25 11 15 120 33 19 14 SAR AFGHANISTAN 0 0 0 0 0 0 0 0 BANGLADESH 98 32 13 18 24 33 21 13 BHUTAN 4 0 0 0 2 0 0 0 INDIA 196 28 11 17 76 30 17 13 MALDIVES 3 0 0 0 2 0 0 0 NEPAL 47 40 17 26 18 44 26 22 PAKISTAN 86 21 5 17 36 31 6 25 SRI LANKA 44 22 11 16 14 36 7 29 TOTALSAR 478 28 11 18 172 32 15 17 TOTAL 3670 32 14 18 1171 32 20 13 Page 44 of 71 TABLE 3.18 OED DISCONNECT ВУ REGION AND CLOSING YEAR, FY80-FY97 AFR ЕАР ЕСА LCA MNA SAR BANKWIDE TOTAL с о о о о о о OрΡ рΡ .. � D Г� � О_ � � О д � � А_ `� � р � О А � О А `� й А А й й р д й й б й д й й А W G а а+ � � ш с а й � � v с а а+ а � v � с а, � а � � Z о � 5 Z о � � z о � � z о � J z о � � z о � � Z z ае ае аг z ае ае де z ае ае ае z ёг ле ае z ае ае ае z аР а2 ге z ае ае ае 1980 47 34 15 19 32 12 0 13 9 0 0 0 24 25 4 21 20 l0 0 10 9 7 0 0 141 20 6 14 1981 44 28 11 16 11 9 9 0 23 9 4 4 43 21 0 21 23 24 4 22 16 28 6 25 160 22 6 16 1982 49 37 18 18 27 17 0 15 20 24 5 20 16 12 0 13 23 26 0 26 20 14 5 10 155 24 7 17 1983 77 42 17 26 31 12 0 13 14 7 0 7 53 36 2 34 14 !3 0 7 31 20 0 19 220 29 6 23 1984 60 44 10 32 42 16 5 12 20 19 10 10 41 35 9 24 34 21 6 1S 15 24 0 20 212 29 7 2] 1985 52 54 17 37 46 22 4 15 11 17 0 9 64 36 9 28 6 14 0 17 33 18 3 15 212 32 8 24 1986 64 45 18 27 38 21 8 13 17 29 24 6 40 25 10 15 20 10 5 5 46 33 17 15 225 31 14 16 1987 86 37 12 26 25 20 8 12 15 20 13 7 5Э 48 25 25 16 13 6 6 24 25 8 17 219 34 14 20 1988 77 48 10 38 44 39 14 25 11 27 9 18 50 52 16 36 27 30 14 15 25 44 12 32 234 44 13 31 1989 76 42 ]6 26 47 23 17 6 15 б0 12 47 47 52 17 34 25 36 11 24 36 39 8 Э1 24b 40 14 26 1990 56 38 21 16 32 25 3 22 11 27 15 9 40 40 15 27 21 19 14 10 9 33 27 22 169 33 15 19 1991 71 46 28 18 37 21 11 11 11 27 8 18 38 37 10 26 19 32 11 21 29 17 7 10 205 3Э 16 18 1992 76 49 32 17 47 9 0 9 12 8 0 8 34 35 9 26 20 35 5 ЭО 37 35 8 27 226 33 14 19 1993 73 5] 27 23 41 24 5 20 13 31 31 0 42 31 16 19 31 35 13 23 33 18 12 6 233 35 17 18 1994 94 50 32 14 45 7 13 -7 14 43 29 14 37 27 25 8 25 40 32 8 42 31 17 14 257 35 25 11 1995 85 36 Э2 7 40 20 12 7 19 20 21 0 36 31 16 17 22 32 23 9 32 34 19 16 234 31 23 9 1996 70 44 31 1Э 33 25 0 15 24 17 17 0 44 16 11 5 22 23 23 0 28 43 21 25 221 29 19 10 1997 Э5 43 2Э 20 16 13 6 6 10 10 10 0 22 14 1Э 5 5 0 0 0 1Э 23 15 8 101 24 15 10 TOTAL 1192 43 21 22 634 19 7 12 269 22 12 10 724 34 12 23 373 25 11 15 478 28 11 18 3670 32 14 18 Page 45 of 71 TABLE 3.19 DISTRIBUTION OF RATINGS (IPIDO) FY92-FY97 (Percentages) InVemnfation hWw Developnsent Objectiva FY92 FY93 FY94 FY95 FY96 FF97 FY92 FY93 FY94 FY95 FY96 7W7 Non-problem projects 78.1 80.7 81.2 82.0 82.4 91.3 84.7 85.5 84.4 98.2 87.7 84.4 Highly Satisfactory 25.1 25.5 13.9 12.1 9.8 7.0 45.0 44.9 22.6 18.1 13.4 10.0 Satisfactory 53.0 55.3 67.2 69.9 72.6 74.2 39.9 40.5 61.8 70.1 74.3 75.1 Problem Projects 17.6 16.9 18.4 17.8 16.6 14.8 11.0 12.1 13.4 11.5 11.4 11.7 Unsatisfactory 15.1 14.3 15.1 16.0 16.2 14.1 9.5 10.3 10.9 9.9 '11.0 10.9 Highly Unsatisfactory 2.5 2.7 3.2 1.8 0.4 0.7 1.5 1.9 2.5 1.7 i 0.5 0.7 Not Rated 4.3 2.3 0.5 0.2 1.0 3.9 4.3 2.4 2.2 0.3 0.9 3.9 Page 46 of 71 TABLE 3.20 PORTFOLIO PERFORMANCE INDICATORS, FY92-FY97 % Pees Pects indicater FY92 FY93 FY94 FY95 FF96 FY97 Implementation Progress 18.4 17.3 18.5 17.8 16.8 15.4 DevelopmentObjectives 11.5 12.4 13.7 11.5 11.5 12.1 Compliance with Legal Covenants 12.9 12.0 9.9 8.7 7.4 8.7 Management Performance 15.3 12.1 11.0 8.9 8.5 11.8 Availability of Funds 12.8 11.0 10.0 8.5 8.5 12.2 Procurement Progress 108 10.3 9.5 8.9 8.0 11.4 Environment Aspects 2.9 2.4 3.4 2.0 1.2 1.5 Financial Performance 17.0 15.2 13.2 10.3 9.3 13.3 a. The calculation of percentage of problem projects is based on the number of rated projects rather than the total number of projects. TABLE 3.21 PORTFOLIO PERFORMANCE INDICATORS BY REGION, FY97 % Pftbkam Pro)"eg Indicator AFR EAP ECA LCR MNA SAR Bank Implementation Progress 23.0 10.1 10.6 12.2 22.5 12.9 15.4 Development Objectives 20.9 52 8.3 6.8 19.4 11.3 12.1 Compliance with Legal Covenants 10.4 65 6.6 5.5 15.4 10.5 8.7 ManagementPerformance 15.0 10.6 76 8.3 17.8 13.0 11.8 Availability of Funds 18.3 7.7 12.7 11.0 9.6 7.9 12.2 Procurement Progress 18.3 10.5 3.1 7.2 15.1 10.9 11.4 Environment Aspects 0.9 0.5 0.8 2.1 2,6 2.8 1.5 Financial Performance 17.7 15.2 11.0 7.2 15.9 12.3 13.3 a. The calculation of percentage of problem projects is based on the number of rated projects rather than the total number of projects. TABLE 3.22 PORTFOLIO PERFORMANCE INDICATORS BY REGION, FY96 % Prohenm Ps4aecer Indicater AFR EAP ECA LCR MNA SAR Bank Implementation Progress 16.5 8.3 20.5 18.0 22.1 20.3 16.8 DevelopmentObjectives 15.1 3.6 13.1 8.1 12.9 17.4 11.5 Compliance with Legal Covenants 9.4 2.0 9.8 7.6 6.4 9.2 7.4 Management Performance 9.8 4.0 16.3 6.7 6.4 8 7 8.5 Availability of Funds 9.4 3.3 11.7 12.6 10.7 24 8.5 Procurement Progress 9.9 3.2 11.4 6.8 8.5 9.0 8.0 Environment Aspects 1.5 0.5 3.1 0.8 0.0 2.4 1.2 Financial Performance 15.1 2.1 10.1 5.7 10.9 10.1 9.3 a. The calculation of percentage of problem projects is based on the number of rated projects rather than the total number of projects. TABLE 3.23 PORTFOLIO PERFORMANCE INDICATORS BY REGION, FY92 % Problem Projects Indicator AFR EAP ECA LCR MNA SAR Bank Implementation Progress 24.9 3.5 19.0 19.3 18.5 18.7 18.4 Development Objectives 19.1 1.7 13.1 9.0 9.3 8.6 11.5 Compliance with Legal Covenants 17.4 1.7 10.7 15.9 12.3 12.8 12.9 Management Performance 20.2 4.2 16.7 16.2 14.2 15.6 15.3 Availability of Funds 18.9 3.8 11.9 15.5 10.5 7.0 12.8 Procurement Progress 14.6 3.3 11.7 8.9 11.4 12.4 10.8 Environment Aspects 4.3 0.5 0.0 2.3 0.0 5.6 2.9 Financial Performance 23.3 3.6 15.1 21.2 18.8 13.6 17.0 Page 47 of 71 TABLE 3.24 IBRD[IDA DISBURSEMENTS (USSB), FY92-FY97 Total Iresment Adjust-mnt Region FY92 FY96 FY97 FY92 F 96 FT97 FY92 FY96 FY97 Africa 2.5 2.9 2.5 1.5 1.8 1.9 1.1 1.1 0.6 East Asia & Pacific 3.6 4.1 4.1 3.3 4.0 4.0 0.2 0.1 0.1 South Asia 3.3 2.3 2.6 2.5 2.3 2.6 0.8 0.0 0.0 Europe & Central Asia 1.6 3.5 4.5 0.7 1.8 2.0 0.9 1.8 2.5 Middle East & N. Afric 1.4 1.5 1.2 0.7 1.1 0.8 0.7 0.5 0.4 Latin America & Carib 3.9 4.6 5.0 2.4 3.3 3.3 1.5 1.3 1.7 TOTAL 16.3 18.9 19.8 11.1 14.2 14.5 5.1 4.7 5.3 a. Includes disbursements for projects active in the portfolio. Disbursements that occur after the project has left the portfolio are not included. TABLE 3.25 DISBURSEMENT RATIO BY REGION AND SECTOR, FY92-FY97 Region FY92 FY93 Y-94 FY95 FY96 FY97 Africa 15.1 15.1 15.2 15.2 17.3 20.1 East Asia & Pacific 25.9 25.7 24.5 23.9 21.2 20.4 South Asia 13.7 14.2 15.1 17.7 15.5 18.7 Europe & Central Asia 12.1 13.5 10.9 11.7 17.5 18.8 Middle East & N. Africa 14.2 19.0 14.2 15.3 20.4 17.5 Latin America & Carib. 18.6 18.1 14.9 19.9 20.2 21.2 TOTAL 17.2 17.9 16.7 18.4 18.8 19.8 Sector Agriculture 19.8 18.8 17.5 16.3 19.6 19.1 Education 14.1 14.6 14.3 16.6 15.8 20.2 Electric Pwr & Engy. 15.8 15.4 14.5 20.1 18.5 22.6 Environment 8.6 9.5 13.0 10.7 15.3 16.5 Finance 17.7 22.0 12.3 17.4 16.7 12.5 Industry 24.5 23.4 23.0 29.8 24.8 17.3 Mining 13.7 20.3 27.5 32.8 25.7 17.7 Multisector 16.8 18.5 27.2 35.9 40.3 27.5 Oil & Gas 20.7 21.9 21,4 15.6 21.4 23.9 Popultm, Hith & Nutn 10.6 10.8 12.8 15.6 15.5 15.2 Public Sector Mgmt. 15.3 21.3 14.5 18.8 16.3 17.2 Social Sector 9.7 13.0 16.2 25.0 44.3 25.6 Telecommunications 14.7 16.0 12.5 15.8 13.3 20.5 Transportation 21.1 22.0 20.7 21.8 19.7 21.6 Urban Development 12.3 20.8 19.3 24.7 18.8 20.8 Water Supply & Santn 12.9 15.0 14.0 11.9 16.8 19.5 TOTAL 17.2 17.9 16.7 18.4 18.8 19.8 Note: a. Quick disbursing loans (i.e, adjustment loans) are excluded The distaursesens ratio is the ratio of disbursements during the fiscal year to the undisbursed balance at dhe beginning of she fiscal year, b. The Environment category includes only those operations classified as such in the MIS. As noted in the Bank's FY95 annual report on the environment, there is a much larger number of operations with substantial environmental objcctives, components and dimensions. Page 48 of 71 TABLE 3.26 DISBURSEMENT RATIO (%) BY REGION AND COUNTRY, FY92-FY97 Country F92 FF93 FY94 FY95 FY96 FY97 AFR AFR AFRICA REGION 0.0 0.0 10.8 20.0 16.6 32.3 ANGOLA 11.9 4.9 7.0 14.7 17.5 17.6 BENIN 21.9 17.4 11.5 13.3 17.5 17.6 BOTSWANA 27.3 49.6 49.0 24.0 0.0 BURKINA FASO 15.7 20.8 17.3 16.7 20.1 22.1 BURUNDI 15.9 12.8 13.4 14.0 11.4 8.8 CAMEROON 21.0 23.5 12.8 8.3 8.6 6.4 CAPE VERDE 34.5 13.0 28.1 20.9 20.3 26.1 CENTRAL AFRICAN REPUBLIC 14.5 17.7 20.2 32.5 29.6 27.9 CHAD 34.4 37.3 18.4 28.1 22.9 21.3 COMOROS 12.3 18.4 31.0 21.8 34.5 33.5 CONGO, DEMOCRATIC REPUBLIC OF 24.8 17.6 15.3 0.0 CONGO, REPUBLIC OF 2.4 0.0 0.0 -0.1 60.0 35.8 COTE D'IVOIRE 23.5 22.9 13.4 13.1 15.8 23.7 DJIBOUTI 8.4 15.8 20.7 26.4 30.9 49.5 EQUATORIAL GUINEA 27.6 30.6 14.0 28.5 24.8 34.4 ERITREA 0.0 38.8 75.4 70.3 22.9 ETHIOPIA 15.4 15.1 24.9 18.3 11.0 11.5 GABON 39.0 52.1 18.1 14.2 12.6 13.3 GAMBIA. THE 14.1 21.9 23.8 25.6 30.2 51.0 GHANA 13.8 16.8 13.1 16.9 19.3 22.9 GUINEA 18.5 30.9 25.3 26.1 20.7 27.2 GUINEA-BISSAU 16.7 32.4 18.6 20.5 16.1 42.9 KENYA 16.9 14.2 15.4 16.3 19.2 16.2 LESOTHO 17.0 14.7 9.4 11.1 16.1 13.3 MADAGASCAR 7.1 11.6 15.1 20.2 20.4 22.5 MALAWI 22.4 17.6 11.5 13.0 17.2 14.8 MALI 16.0 15.4 19.4 20.8 16.1 21.8 MAURITANIA 22.1 18.8 15.5 16.1 16.5 24.8 MAURITIUS 8.5 19.1 19.3 9.8 10.8 24.8 MOZAMBIQUE 10.7 11.3 9.2 13.2 16.1 19.4 NIGER 16.8 19.9 13.1 16.8 16.3 30.2 NIGERIA 12.7 9.7 14.9 13.6 15.8 20.9 RWANDA 8.2 10.7 11.4 0.5 24.9 22.8 SAO TOME AND PRINCIPE 19.4 15.6 20.7 21.5 28.5 22.9 SENEGAL 18.7 17.5 12.7 15.3 15.8 30.4 SEYCHELLES 0.0 11.6 27.1 21.7 9.7 SIERRA LEONE 0.0 8.8 17.9 24.3 27.1 17.2 SOMALIA 0.0 -0.1 0.0 0.0 SOUTH AFRICA 0.0 SUDAN 23.6 24.5 27.2 30.8 SWAZILAND 0.0 6.6 5.4 TANZANIA 9.0 13.0 12.0 12.6 18.4 17.9 TOGO 20.5 17.3 5.9 12.3 23.1 20.6 UGANDA 14.7 15.0 14.5 13.3 15.8 20.5 WAN WESTERN AFRICA REGION 67.6 ZAMBIA 8.9 9.2 20.5 21.8 12.1 21.8 ZIMBABWE 15.1 26.4 22.3 14.3 18.9 19.6 TOTAL AFR 15.1 15.1 15.2 15.2 17.3 20.1 Page 49 of71 TABLE 3.26 DISBURSEMENT RATIO (%) BY REGION AND COUNTRY, FY92-FY97 Country FY92 FY93 FY94 FY95 FY96 FY97 EAP CAMBODIA 0.0 13.5 20.4 CHINA 28.3 25.5 24.8 24.7 22.4 20.6 FIJI 20.5 26 9.7 22.1 21.2 44.0 INDONESIA 22.3 22.7 24.4 22.7 19.0 18.8 KOREA, REPUBLIC OF 24.7 35.8 37.8 29.3 19.1 30.6 LAO PEOPLE'S DEMOCRATIC REPUBLI 12.9 12.9 17.0 18.2 16.6 30.3 MALAYSIA 372 45.7 28.4 31.1 30.1 33.7 MONGOLIA 0.0 60.6 57.1 2.4 26.0 15.5 MYANMAR 18.6 15.5 5.1 0.7 PAPUA NEW GUINEA 20.6 6.0 14.7 17.9 13.2 19.2 PHILIPPINES 20.7 26.1 19.0 17.3 24.8 21.2 SAMOA 47.5 44.7 50.3 25.6 11.5 22.5 SOLOMON ISLANDS 102.5 0.0 12.7 14.5 29.9 38.5 THAILAND 58.5 45.0 25.5 46.1 26.2 13.6 TONGA 27.8 1.8 22.1 37.2 0.0 VANUATU 53.3 13.5 5.4 5.1 17.6 7.8 VIETNAM 0.0 22.5 6.3 19.3 TOTAL EAP 25.9 25.7 24.5 23.9 21.2 20.4 ECA ALBANIA 0.0 25.2 59.0 36.6 29.3 16.4 ARMENIA 0.0 33.5 44.1 33.4 39.1 AZERBAIJAN 0.0 2.4 10.7 BELARUS 0.0 7.7 8.4 15.1 BOSNIA-HERZEGOVINA 12.1 13.6 0.0 .0 4 29.7 BULGARIA 11.8 5.3 6.6 5.1 5.5 10.5 CROATIA 11.2 2.6 2.5 11.3 29.9 51.9 CYPRUS 11.7 14.0 23.1 24.6 9.1 15.2 CZECH REPUBLIC 0.0 2.5 5.0 16.7 18.8 26.9 ESTONIA 0.0 14.4 24.8 24.6 GEORGIA 0.0 46.3 37.4 HUNGARY 18.7 17.8 12.9 22.6 19.0 14.4 KAZAKSTAN 0.0 11.0 13.7 18.1 KYRGYZ REPUBLIC 0.0 6.8 11.0 16.0 LATVIA 0.0 21.2 15.5 37.5 LITHUANIA 0.0 0.5 2.6 12.2 MACEDONIA, FORMER YUGOSLAV RE 7.6 29.4 0.0 0.0 64.9 9.9 MOLDOVA 0.0 98.2 0.0 0.0 0.9 POLAND 6.9 17.6 7.4 8.4 15.7 22.9 PORTUGAL 6.9 11.0 8.2 11.2 10.2 0.0 ROMANIA 23.4 20.7 16.5 19.6 17.2 13.1 RUSSIAN FEDERATION 0.0 1.3 5.2 11.6 16.2 SLOVAK REPUBLIC 0.0 13.4 21.4 24.8 SLOVENIA 11.6 9.0 30.9 15.6 15.8 14.5 TAIKISTAN 0.0 26.9 Page 50 of 71 TABLE 3.26 DISBURSEMENT RATIO (%) BY REGION AND COUNTRY, FY92-FY97 Country FY92 FY93 FY94 FF95 FY96 FY97 TURKEY 11.6 8.9 12.9 12.2 30.1 20.2 TURKMENISTAN 0.0 8.8 10.4 UKRAINE 0.0 2.9 8.0 0.6 32.9 UZBEKISTAN 0.0 7.1 4.6 9.3 YUGOSLAVIA 49.5 28.0 7.8 TOTAL ECA 12.1 13.5 10.9 11.7 17.5 18.8 LCR ARGENTINA 9.3 23.3 22.9 22.6 16.2 14.4 BAHAMAS, THE 19.3 52.1 12.0 19.8 BARBADOS 39.1 12.3 5.6 11.4 10.0 3.6 BELIZE 17.5 137 38.8 21.5 21.3 37.0 BOLIVIA 12.5 14.9 11.9 16.8 20.7 28.3 BRAZIL 12.2 10.8 9.1 16.5 24.6 36.9 CHILE 45.1 22.2 12.5 19.4 12.1 17.5 COLOMBIA 16.2 16.0 15.4 25.2 20.3 15.2 COSTA RICA 8.0 5.6 6.9 11.8 10.8 15.6 CRB CARIBBEAN REGION 6.1 4.6 11.6 9.8 4.7 2.8 DOMINICA 40.4 38.7 21.6 80.0 0.0 8.5 DOMINICAN REPUBLIC 13.2 22.6 22.0 36.7 35.4 17.4 ECUADOR 12.9 14.3 14.5 22.2 37.5 19.4 EL SALVADOR 11.9 17.2 25.9 26.8 38.7 15.6 GRENADA 95.9 0.0 7.0 GUATEMALA 1.3 0.2 1.4 12.4 24.2 38.3 GUYANA 10.2 41.1 18.7 11.9 13.8 9.0 HAITI 2.9 0.0 0.0 41.2 29.2 37.2 HONDURAS 53.6 27.4 15.4 27.0 25.3 31.7 JAMAICA 8.8 22.0 16.5 13.4 21.6 25.7 MEXICO 34.2 31.3 22.7 26.2 21.7 13.1 NICARAGUA 0.0 51.0 24.0 15.2 29.8 OECS COUNTRIES 0.0 0.0 0.0 PANAMA 0.0 0.5 7.8 12.6 PARAGUAY 35.0 17.1 13.6 7.4 11.7 13.3 PERU 0.0 0.0 30.9 17.2 14.9 21.8 ST. KITTS AND NEVIS 22.0 15.8 38.0 62.9 11.1 0.0 ST. LUCIA 20.7 58.7 22.8 53.1 54.8 17.8 ST. VINCENT AND THE GRENADINES 29.4 13.5 12.8 9.5 11.6 14.5 TRINIDAD AND TOBAGO 12.6 12.7 8.0 18.6 29.8 14.9 URUGUAY 16.0 25.2 24.8 14.4 15.1 18.0 VENEZUELA 5.5 3.5 4.0 3.1 4.2 5.6 TOTAL LCR 18.6 18.1 14.9 19.9 20.2 21.2 MNA ALGERIA 13.8 14.3 15.9 19.8 27.0 17.2 EGYPT, ARAB REPUBLIC OF 8.5 12.7 18.6 12.2 17.3 17.3 IRAN, ISLAMIC REPUBLIC OF 0.4 33.9 6.2 7.2 18.4 17.0 JORDAN 20.4 29.9 25.4 32.9 15.2 21.1 LEBANON 0.0 13.7 25.3 11.6 10.6 Page 51 of 71 TABLE 3.26 DISBURSEMENT RATIO (%) BY REGION AND COUNTRY, FY92-FY97 Country FY92 FY93 FY94 FY95 FY96 FY97 MOROCCO 17.4 23.4 11.2 13.7 23.0 16.0 OMAN 33.2 47.6 17.4 -0.2 TUNISIA 23.2 24.0 20.3 20.7 17.9 23.7 WEST BANK AND GAZA 0.0 0.0 YEMEN, REPUBLIC OF 13.9 12.3 12.6 9.9 16.4 15.8 TOTAL MNA 14.2 19.0 14.2 15.3 20.4 17.5 SAR BANGLADESH 14.8 15.2 16.2 17.9 17.3 29.5 BHUTAN 5.2 9.8 36.1 14.6 17.2 15.8 INDIA 13.0 13.6 15.3 17.2 14.0 16.1 MALDIVES 40.1 34.4 43.4 44.6 17.4 24.9 NEPAL 10.7 9.5 12.4 13.8 18.0 20.5 PAKISTAN 17.0 17.7 14.9 19.7 17.5 23.3 SRI LANKA 13.6 10.4 11.3 17.1 24.0 18.6 TOTAL SAR 13.7 14.2 15.1 17.7 15.5 18.7 TOTAL 17.2 17.9 16.7 18.4 18.8 19.8 Page 52 of 71 TABLE 3.27 IBRD/IDA CANCELLATIONS (US$M), FY92-FY97 Country FY92 FY93 FY94 FY95 FY96 FY97 AFR ANGOLA 0.0 0.0 3.7 0.0 0.0 0.0 BENIN 0.0 0.1 0.0 1.7 0.6 0.0 BOTSWANA 2.3 6.4 1.9 0.6 2.5 0.0 BURKINA FASO 0.0 2.1 1.6 2.0 0.0 0.0 BURUNDI 1.0 3.8 2.2 0.0 50.0 17.5 CAMEROON 1.8 0.0 68.2 94.0 19.7 17.5 CAPE VERDE 0.0 0.2 0.0 0.3 0.0 0.2 CENTRAL AFRICAN REPUBLIC 0.0 0.0 0.0 0.0 0.0 0.0 CHAD 0.0 24.0 0.2 0.0 0.2 4.1 COMOROS 1.1 0.0 0.0 0.0 0.0 0.0 CONGO, DEMOCRATIC REPUBLIC OF 27.2 59.3 115.7 21.1 0.0 0.0 CONGO, REPUBLIC OF 0.7 0.0 0.0 15.8 0.0 0.0 COTE D'IVOIRE 3.6 2.4 261.1 9.1 47.9 3.1 DJIBOUTI 0.1 8.9 0.1 0.0 0.2 0.0 EQUATORIAL GUINEA 0.0 0.0 0.1 2.1 0.1 0.0 ETHIOPIA 1.5 3.4 40.8 50.4 0.0 31.8 GABON 0.0 0.0 0.0 0.2 0.5 0.0 GAMBIA, THE 0.0 5.4 2.6 0,0 0.0 1.7 GHANA 0.2 0.9 1.6 0.4 0.6 18.1 GUINEA 0.0 3.0 0.1 0.0 0.1 8.4 GUINEA-BISSAU 0.0 0.0 0.0 0.0 0.0 0.0 KENYA 3.7 47.8 10.6 6.8 3.7 7.4 LESOTHO 0.1 0.0 11.6 0.0 15.9 20.0 LIBERIA 0.0 0.0 0.0 0.0 0.0 0.0 MADAGASCAR 1.0 1.2 69.9 9.0 1.5 0.3 MALAWI 1.0 2.4 4.5 0.9 0.5 0.5 MALI 0.0 6.1 2.7 0.2 0.0 0.3 MAURITANIA 0.0 4.3 1.9 0.0 4.1 0.0 MAURITIUS 0.0 0.9 1.6 6.0 10.0 0.0 MOZAMBIQUE 0.4 0.5 1.0 0.0 1.6 12.7 NIGER 0.0 8.1 0.6 0.1 15.8 0.4 NIGERIA 5.3 243.1 83.3 301.4 48.3 145.3 RWANDA 3.0 4.5 30.8 69.1 2.6 11.6 SAO TOME AND PRINCIPE 0.0 0.0 0.0 0.0 0.0 0.0 SENEGAL 0.0 25.3 2.2 0.3 3.7 0.0 SIERRA LEONE 0.0 0.0 0.0 0.0 0.0 5.0 SOMALIA 0.0 0.0 0.0 113.2 0.0 0.0 SUDAN 10.2 4.7 113.1 1.2 0.0 0.0 TANZANIA 2.9 7.1 1.7 3.3 0.0 27.1 TOGO 6.9 0.0 0.2 29.5 1.4 0.0 UGANDA 0.0 10.6 2.9 31.8 3.3 6.0 WAN WESTERN AFRICA REGION 3.5 0.0 0.0 0.0 0.0 0.0 ZAMBIA 14.3 23.5 3.7 5.9 0.0 0.0 ZIMBABWE 2.2 0.0 6.5 0.0 35.7 0.0 TOTAL AFR 94.2 510.0 848.8 776.3 270.3 338.8 EAP CHINA 10.7 8.4 13.0 159.5 43.6 14.7 INDONESIA 55.1 65.2 57.6 336.1 134.9 153.0 KOREA, REPUBLIC OF 4.1 21.8 33.0 47.0 12.6 0.6 LAO PEOPLEIS DEMOCRATIC REPUBLIC 0.0 0.2 0.0 0.0 2.1 3.6 Page 53 of 71 TABLE 3.27 IBRD/IDA CANCELLATIONS (US$M), FY92-FY97 Country FY92 FY93 FY94 FY95 FY96 FY97 MALAYSIA 38.8 212.0 6.0 5.5 2.8 0.0 MONGOLIA 0.0 0.0 0.0 0.1 0.0 0.0 MYANMAR 3.6 2.1 42.9 0.5 21.1 0.4 PAPUA NEW GUINEA 2.7 2.2 12.8 0.0 0.0 5.7 PHILIPPINES 4.6 41.2 78.4 6.0 107.2 133.8 SAMOA 0.0 0.0 0.0 0.7 0.0 0.0 SOLOMON ISLANDS 1.3 0.0 0.0 0.0 0.0 0.0 THAILAND 0.6 3.8 1.8 14.4 40.2 14.2 TONGA 0.0 0.0 0.0 0.0 0.9 0.1 VANUATU 0.0 0.0 0.0 0.0 0.0 0.0 TOTAL EAP 121.5 356.9 245.6 569.7 365.5 326.0 ECA BELARUS 0.0 0.0 0.0 0.0 0.0 3.8 BOSNIA-HERZEGOVINA 3.7 0.0 0.0 10.4 0.0 0.0 BULGARIA 0.0 0.0 0.0 0.0 0.0 131.9 CROATIA 0.0 0.0 15.9 0.1 0.0 0.0 CYPRUS 0.0 0.0 0.0 6.2 1.0 20.4 CZECH REPUBLIC 0.0 0.0 0.0 0.0 69.7 0.0 ESTONIA 0.0 0.0 0.0 1.4 0.0 0.0 HUNGARY 0.0 0.0 101.4 100.5 60.0 78.1 KAZAKSTAN 0.0 0.0 0.0 0.0 0.0 0.0 KYRGYZ REPUBLIC 0.0 0.0 0.0 0.0 0.0 2.0 LATVIA 0.0 0.0 0.0 2.6 0.5 0.0 LITHUANIA 0.0 0.0 0.0 0.0 0.0 1.2 MACEDONIA, FORMER YUGOSLAV REPU 6.6 0.0 0.0 1.8 0.0 0.0 MOLDOVA 0.0 0.6 0.0 0.2 0.0 0.0 POLAND 0.0 0.0 92.5 43.4 355.0 349.6 PORTUGAL 33.7 0.0 20.9 28.3 10.7 0.0 RUSSIAN FEDERATION 0.0 0.0 0.0 15.2 0.0 249.7 SLOVENIA 0.0 0.0 0.0 10.6 0.0 0.0 TURKEY 91.5 88.1 519.8 338.1 62.8 85.9 YUGOSLAVIA 388.4 226.3 380.0 10.7 0.0 0.0 TOTAL ECA 523.9 314.4 1,130.6 569.4 559.8 922.6 LCR ARGENTINA 39.5 357.9 17.7 19.8 4.8 393.9 BAHAMAS, THE 0.0 0.0 0.0 0.0 2.5 0.3 BARBADOS 0.0 0.6 1.6 0.0 0.1 2.7 BELIZE 0.0 0.0 3.1 0.0 0.2 1.1 BOLIVIA 0.7 0.0 0.8 0.0 2.4 7.1 BRAZIL 248.3 509.4 134.2 521.5 68.7 35.1 CHILE 49.7 0.6 5.2 45.1 150.2 2.3 COLOMBIA 59.4 34.6 49.6 14.3 255.0 23.0 COSTA RICA 0.0 0.0 41.0 112.0 3.1 10.0 CRB CARIBBEAN REGION 0.0 1.2 0.0 0.2 0.0 1.7 DOMINICA 0.0 0.9 0.0 0.0 0.0 0.0 DOMINICAN REPUBLIC 1.6 0.0 0.0 0.0 0.0 2.1 ECUADOR 2.2 0.3 49.8 4.8 0.0 0.0 EL SALVADOR 0.0 0.0 0.0 0.0 0.0 0.4 GRENADA 0.0 0.0 0.0 0.0 0.0 0.0 GUATEMALA 3.2 22.0 99.0 5.9 0.0 0.0 Page 54 of 71 TABLE 3.27 IBRD/IDA CANCELLATIONS (US$M), FY92-FY97 Couanhy FY Y93 FY94 FY95 FY96 FY97 GUYANA 2.5 0.0 0.0 0.0 0.0 0.3 HAITI 0.0 5.5 0.0 38.7 0.1 0.0 HONDURAS 0.3 2.3 0.0 0.0 2.9 0.3 JAMAICA 0.9 0.0 13.2 3.4 0.0 4.6 MEXICO 7.8 57.3 8.2 36.6 644.2 280.9 NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.2 PANAMA 49.7 0.0 0.0 0.0 0.0 0.0 PARAGUAY 1.3 2.9 0.4 0.3 0.0 0.0 PERU 192.6 150.0 0.0 0.0 0.0 0.0 ST. VINCENT AND THE GRENADINES 0.0 0.0 0.3 0.0 0.0 0.0 URUGUAY 3.2 0.0 0.0 2.1 2.1 35.0 VENEZUELA 0.0 0.8 9.0 162.5 0.0 296.9 TOTAL LCR 662.9 1,146.1 433.0 967.3 1,136.3 1,097.8 MNA ALGERIA 0.0 34.8 135.9 59.6 113.2 82.9 EGYPT, ARAB REPUBLIC OF 130.0 39.6 193.5 241.7 4.2 12.3 IRAN, ISLAMIC REPUBLIC OF 0.0 0.0 0.0 0.0 0.0 4.5 JORDAN 2.1 3.7 14.2 0.0 3.2 4.7 MOROCCO 22.4 5.5 0.4 21.6 197.5 159.3 OMAN 0.0 8.0 0.0 6.2 0.0 0.0 TUNISIA 6.1 5.3 4.1 1.6 1.5 4.0 YEMEN, REPUBLIC OF 4.9 4.0 12.0 14.2 43.0 0.0 TOTAL MNA 165.S 100.9 360.1 345.0 362.6 267.8 SAR BANGLADESH 35.2 40.4 126.3 92.1 57.4 193.0 BHUTAN 3.7 1.3 0.3 0.0 0.0 0.0 INDIA 1,400.3 1,800.5 669.7 311.5 251.4 725.1 MALDIVES 0.1 0.0 0.0 0.0 0.5 0.0 NEPAL 3.2 13.5 37.3 52.8 46.6 2.2 PAKISTAN 35.7 22.9 137.4 59.2 29.0 119.8 SRI LANKA 22.7 0.0 30.1 33.9 35.5 12.9 TOTAL SAR 1,500.9 1,378.5 1,000.9 549.5 420.4 1,053.0 TOTAL 3,068.8 4,306.8 4,019.0 3,777.3 3,114.8 4,006.1 Page 55 of 71 TABLE 3.28 PERCENTAGE OF PROBLEM PROJECTS BY REGION AND PROJECT AGE, FY92-FY97 FY92 FY96 FY97 4xe <2 <4 <8 8+ Total <2 <4 <8 8+ Total <2 <4 <8 8+ Total lmplementedon Pogress Africa 9.7 28.9 31.9 21.8 24.6 4.6 22.8 16.9 22.2 16.3 11.0 21.4 25.5 27.3 21.9 East Asia & Pacific 2.5 2.7 4.0 4.8 3.3 4.6 12.8 7.8 7.7 8.3 7.3 15.1 6.6 11.8 9.4 South Asia 5.6 18.2 26.8 11.1 18.0 10.3 17.5 27.7 14.7 20.3 10.3 19.4 10.6 14.3 12.7 Europe & Central Asia 3.1 13.6 27.8 18.2 15.8 12.2 32.3 20.5 16.7 19.6 0.0 13.4 9.3 9.1 10.3 Middle East & N. Africa 2.7 25.6 23.8 13.3 17.8 5.7 27.3 31.0 14.3 22.1 11.1 27.6 25.5 20.0 21.5 Latin America & Carib. 4.6 22.7 25.6 14.3 18.2 11.7 22.8 20.7 15.2 17.9 0.0 16.8 15.4 16.2 11.9 TOTAL 5.9 20.8 24.0 14.8 17.7 8.4 22.1 19.0 16.3 16.6 7.5 17.8 17.0 19.0 14.8 FY92 FY96 FY97 Age <2 <4 <8 8+ Total <2 <4 <8 8+ Tol <2 <4 <8 8+ Total Development Objeedves Africa 3.2 22.6 24.8 25.5 18.8 1.9 15.4 16.9 31.5 14.9 7.0 17.5 25.5 23.6 19.9 East Asia & Pacific 0.0 0.0 4.0 0.0 1.7 3.4 3.5 4.3 0.0 3.6 1.2 4.7 5.7 17.6 4.9 South Asia 1.9 7.3 14.3 2.2 8.3 7.7 15.0 25.5 8.8 17.4 5.1 19.4 9.6 14.3 11.2 Europe & Central Asia 3.1 9.1 19.4 9.1 10.9 5.2 21.5 18.2 16.7 12.6 5.6 12.2 7.4 9.1 8.1 Middle East & N. Africa 2.7 10.3 12.7 6.7 8.9 0.0 15.2 22.4 0.0 12.9 5.6 24.1 20.0 33.3 18.5 Latin America & Carib. 2.3 8.0 14.4 0.0 8.4 1.9 10.9 10.3 10.9 8.1 0.0 11.2 7.3 8.1 6.6 TOTAL 2.3 12.3 16.2 9.8 11.0 3.3 13.0 15.3 15.6 11.4 4.0 13.1 14.6 17.8 11.7 FY92 FY96 FY97 Age <2 <4 <8 8+ Total <2 <4 <8 8+ Total <2 <4 <8 8+ Total IP/DO Africa 10.4 32.7 35.3 29.1 27.7 5.6 26.0 23.4 31.5 21.1 12.0 23.3 33.2 34.5 27.0 East Asia & Pacific 2.5 2.7 5.6 4.8 4.0 5.7 12.8 10.3 7.7 9.6 8.5 15.1 8.2 17.6 10.7 South Asia 5.6 18.2 26.8 13.3 18.4 10.3 20.0 31.9 17.6 23.2 10.3 22.2 12.8 17.9 14.7 Europe & Central Asia 6.1 18.2 28.6 18.2 17.8 13.0 38.5 25.0 16.7 22.6 10.4 17.1 13.0 9.1 12.9 Middle East & N. Africa 2.7 25.6 23.8 13.3 17.8 5.7 30.3 37.9 14.3 2S.7 11.1 34.5 32.7 33.3 27.4 Latin America & Carib. 4.6 22.7 26.4 14.3 18.5 11.7 26.1 22.4 21.7 20.2 0.0 19.6 17.1 16.2 13.3 TOTAL 6.3 22.4 25.6 17.5 19.1 9.0 25.1 23.5 22.2 19.7 8.4 20.3 21.4 23.9 17.8 Page 56 of 71 TABLE 3.29 PERCENTAGE OF PROBLEM PROJECTS BY SECTOR AND PROJECT AGE, FY92-FY97 FY92 FFV Y?97 Age <2 <4 <8 8+ Tol <2 <4 <5 8+ Total <2 <4 <8 8+ Toa I/DO Agriculture 10.7 31.3 26.4 19.0 23.5 11.9 23.9 25.5 20.7 21.7 8.1 24.7 22.3 27.5 20.4 Education 2.1 15.0 22.2 12.5 13.9 3.6 28.0 16.7 30.0 17.3 2.2 20.8 15.9 17.6 14.0 Electric Pwr & Engy. 0.0 25.8 28.6 20.8 21.1 11.4 21.4 26.9 20.0 20.8 5.6 11.1 32.0 30.8 19.8 Environment 0.0 30.0 0.0 11.5 6.9 19.0 20.0 100.0 15.8 4.2 20.7 0.0 50.0 9.3 Finance 5.3 13.3 24.0 40.0 16.5 6.3 41.7 25.9 0.0 22.4 10.3 28.6 28.6 25.0 22.5 Industry 0.0 26.1 20.5 50.0 22.0 0.0 75.0 42.9 0.0 35.3 11.1 25.0 16.7 28.6 18.8 Mining 0.0 33.3 25.0 0.0 17.6 0.0 0.0 20.0 0.0 5.0 22.2 0.0 0.0 0.0 10.0 Multisecctor 8.5 33.3 38.5 20.2 16.2 21.7 15.8 0.0 17.3 5.1 17.6 36.8 25.0 165 Oil & Gas 12.5 16.7 11.8 0.0 12.2 10.0 41.7 21.1 0.0 23.3 33.3 29.4 23.5 0.0 26.2 Popultn, Hith & Nutn 16.2 13.5 18.8 0.0 16.7 6.4 19.4 22.0 36.4 17.6 18.4 17.5 21.5 30.0 20.3 Public Sector Mgmt. 3.4 11.5 25.8 0.0 13.5 10.9 29.7 25.6 20.0 21.3 7.0 18.9 20.0 0.0 15.0 Social Sector 20.0 0.0 0.0 14.3 12.0 18.8 12.5 14.0 6.9 14.3 10.5 10.1 Telecommunications 0.0 25.0 10.0 33.3 16.1 0.0 10.0 15.4 0.0 11.5 100.0 0.0 8.3 0.0 11.1 Transportation 0.0 13.0 21.1 13.0 14.4 11.1 18.6 20.0 14.3 16.8 6.0 18.8 24.1 12.5 17.1 Urban Development 0.0 23.1 35.0 15.4 21.2 4.5 30.4 30.2 28.6 24.5 4.3 12.5 21.7 8.3 14.3 Water Supply & Santn 5.0 26.3 42.1 7.1 25.3 10.0 27.3 25.6 25.0 22.7 14.3 31.8 28.9 36.8 28.0 TOTAL 6.3 22.A 25.6 17.5 19.1 9.0 25.1 23.3 22.2 19.7 8.4 20.3 21.4 23.9 17.8 Page 57 of 71 TABLE 3.30 PORTFOLIO PERFORMANCE BY AGE, FY92-FY97 %Problem Projects FY92 FY96 FY97 Age Projects IP DO IPIDO Atrisk Projects IP DO IP/DO Atrisk Projects IP DO IPIDO Atrisk <1 214 1 1 1 19 243 2 3 3 7 224 4 3 4 9 <2 230 10 3 11 30 244 15 4 15 23 253 11 5 12 23 <3 211 17 10 18 40 216 22 11 25 34 234 17 10 18 32 <4 213 24 14 27 41 223 22 15 26 35 209 19 17 23 32 <5 188 23 18 25 41 194 19 15 24 36 213 22 16 24 34 <6 189 25 15 29 48 185 18 12 21 39 180 18 16 23 37 <7 170 28 18 29 49 154 19 15 23 46 170 15 14 19 35 <8 152 20 13 20 41 126 21 21 27 52 120 11 13 18 37 8+ 188 15 10 17 46 167 17 16 22 54 163 19 18 24 45 Bank 1755 18 11 19 39 1752 17 11 20 34 1766 15 12 18 30 Page 58 of 71 TABLE 4.1 PORTFOLIO IMPROVEMENT PROGRAM PERFORMANCE OF 25 TARGETED COUNTRIES, FY95-FY97 Prq0ecis at Risk (%) Commtments at Risk(%) REGIONCOUNTAY FF95 FF96 FY97/1 FI97/2 FY95 FF96 F971 FF97/2 AFR ANGOLA 38 100 100 100 40 100 100 100 BURUNDI 61 47 90 90 61 41 93 93 CAMEROON 88 67 100 100 97 80 100 100 CAR 67 67 100 100 68 68 100 100 GUINEA 77 78 62 77 73 80 63 78 MADAGASCAR 35 55 44 70 32 57 45 66 MOZAMBIQUE 42 50 44 44 36 41 46 46 NIGERIA 86 79 64 64 87 89 63 63 RWANDA 100 100 92 92 100 100 82 82 SENEGAL 29 58 5 5 34 68 3 3 TANZANIA 43 86 52 74 46 90 71 78 TOGO 92 90 44 89 88 77 43 98 UGANDA 50 39 44 57 63 51 41 50 SUB TOTAL AFR 60 67 56 66 64 72 58 64 EAP PNG 100 100 88 88 100 100 94 94 SUB TOTAL EAP 100 100 88 88 100 100 94 94 ECA BULGARIA 63 88 46 46 71 94 43 43 HUNGARY 31 39 7 7 36 36 11 11 ROMANIA 33 27 13 13 52 30 8 8 RUSSIAN 53 67 35 38 58 72 42 44 TURKEY 70 72 72 72 69 69 76 76 SUB TOTAL ECA 53 61 38 39 58 63 42 42 LCR BRAZIL 83 81 16 36 84 80 16 40 PERU 30 27 0 7 31 22 0 9 VENEZUELA 54 93 43 57 57 97 48 62 SUB TOTAL LCR 73 76 18 34 74 74 16 37 MNA ALGERIA 79 70 60 80 88 69 49 89 IRAN 67 67 60 80 51 51 60 72 YEMEN 54 68 46 46 52 65 44 44 SUB TOTAL MNA 67 69 53 63 76 64 50 78 Total 25 Targeted Countries 63 69 45 54 66 69 39 49 Rest of the Bank Portfolio 26 21 21 22 21 18 18 18 Bank Total 36 34 27 30 33 31 23 26 /1 With golden flag /2 Without golden flag Page 59 of 71 TABLE 4.2 COUNTRY PORTFOLIO PERFORMANCE REVIEWS (CPPR), FY95-FY97 REGIONICOUNTR FY95 FY96 FY97 Total REGION/COUNTRY FY95 FY96 FY97 Total AIR ECA Angola 1 I Albania 1 1 2 Benin 1 1 2 Armenia 1 1 Burkina Faso I 1 Azerbayan 1 1 Burundi 1 1 Bosnia 1 1 Central African Rep. 0 Bulgaria 1 1 Cameroon I I Hungary 1 1 Cape Verde 1 1 Kazakstan 1 1 Cote d'Ivoire 1 1 2 Kyrgyz Rep. 1 1 Chad 1 1 2 Poland 0 Comoros 0 Romania 1 1 Ethiopia 1 1 2 Russia 1 1 1 3 Gambia 0 Turkey 1 1 2 Ghana 1 1 2 Guinea 1 1 1 3 Sub-Total 2 7 6 15 Guinea Bissau I 1 1 3 MNA Sao Tome I I Algeria I 1 Kenya 1 1 2 Egypt 1 1 2 Lesotho I I Jordan I 1 Madagascar 1 1 1 3 Lebanon 1 1 Mali 11 Morocco 1 1 2 Malawi 1 1 Tunisia 0 Mozambique 1 1 2 Republic of Yemen 1 1 1 3 Mauritania I 1 Niger 1 1 Sub-Toal 2 4 4 10 Nigeria 1 1 LAC Rwanda 1 1 2 Argentina 1 1 2 Senegal 1 1 Bolivia 1 1 2 Sierra Leone 1 1 Brazil I 1 1 3 Tanzania 1 1 Chile 1 1 Togo 1 1 2 Colombia I 1 1 3 Uganda 1 1 1 3 Costa Rica 1 1 2 Zambia 1 1 Ecuador 1 1 1 3 Zimbabwe 1 1 El Salvador I I Haiti I 1 1 3 Sub-Total 16 15 16 47 Honduras I I EAP Jamaica 1 1 1 3 Vietnam 1 1 2 Mexico 1 1 2 China 1 I Nicaragua 1 1 Indonesia I I Peru 1 1 2 Laos I I Paraguay 1 1 2 Malaysia 0 Uruguay 1 1 2 Papua New Guinea 1 1 Venezuela 1 1 1 3 Philippines 1 1 2 Sub-Tol 10 9 17 36 Sub-Total 1 5 2 8 TOTAL 33 45 48 126 SAR Bangladesh 1 1 2 India 1 1 1 3 Nepal I 1 Pakistan 1 1 2 Sri Lanka 1 1 2 Sub-Toal 2 5 3 10 Source: ARPP -- FY96 and Regional Data Page 60 of 71 TABLE 4.3 NUMBER OF PROJECTS RESTRUCTURED BY REGION AND COUNTRY, FY95-FY97 Region Country FY95 FY96 FY97 Region Country FY95 FY96 FY97 AFR ANGOLA 2 1 1 LCR ARGENTINA 1 1 2 BENIN 1 0 1 BARBADOS 0 0 2 BURKINA FASO 1 0 1 BOLIVIA 1 0 0 BURUNDI 1 2 0 BRAZIL 3 1 5 CAMEROON 1 0 1 COSTA RICA 0 1 0 CENTRAL AFRICAN REPUBL 0 0 2 GUATEMALA 2 1 0 CHAD 0 1 0 GUYANA 0 0 1 CONGO, REPUBLIC OF 1 0 0 HAITI 0 1 1 COTE D'IVOIRE 0 0 1 MEXICO. 0 I 6 ETHIOPIA 1 0 2 PARAGUAY 0 0 1 GABON 0 1 0 TRINIDAD AND TOB 1 1 0 GHANA 0 0 1 VENEZUELA 0 0 1 KENYA 0 0 2 LESOTHO 0 0 1 Total LCR 8 7 19 MADAGASCAR 1 2 1 MNA ALGERIA 1 2 0 MALAWI 0 0 1 MOROCCO 0 0 1 MALI 1 0 0 YEMEN, REPUBLIC 0 I 0 2 MAURITANIA 1 0 1 MOZAMBIQUE 1 0 1 Total MNA 2 2 3 NIGER 1 0 0 SAR BANGLADESH 3 0 2 NIGERIA 3 0 2 INDIA 0 2 3 RWANDA 2 2 1 NEPAL 1 0 1 SENEGAL 0 1 0 PAKISTAN 0 1 8 TANZANIA 1 0 2 TOGO 1 0 0 SRI LANKA 1 1 2 UGANDA 3 0 1 Total 5 4 16 ZIMBABWE 1 1 0 Total 54 30 77 Total AFR 24 11 23 EAP CHINA 0 0 3 INDONESIA 0 0 2 LAO PEOPLE'S DEMOCRATI 1 0 PAPUA NEW GUINEA 4 0 0 PHILIPPINES 1 0 0 SOLOMON ISLANDS 0 0 1 Total EAP 5 1 6 ECA BULGARIA 0 0 1 CYPRUS 0 0 1 HUNGARY 0 0 2 KAZAKSTAN 1 1 0 KYRGYZ REPUBLIC 0 0 1 LATVIA 0 1 0 POLAND 2 0 1 RUSSIAN FEDERATION 2 1 4 TURKEY 5 2 0 Total ECA 10 5 10 Page 61 of 71 TABLE 4.4 NUMBER OF PROJECTS RESTRUCTURED BY SECTOR FY95-FY Sector FY95 FY96 FY97 Agriculture 14 9 16 Education 7 2 15 Electric Pwr & Engy. 2 1 4 Environment 2 1 2 Finance 2 3 5 Industry 1 2 2 Multisector 2 1 2 Oil &Gas 0 0 2 Popultn, Hith & Nutn 3 2 6 Public Sector Mgmt. 7 1 7 Social Sector 4 1 2 Telecommunications 1 0 1 Transportation 4 4 5 Urban Development 4 1 6 Water Supply & Santn 1 2 2 TOTAL 54 30 77 Page 62 of 71 TABLE 4.5 NUMBER OF PROJECTS WITH MTRS BY REGION AND COUNTRY, FY95-FY97 Region Country FY95 FY96 FY97 Region Cowury FY95 FY96 FY97 AFR AFR AFRICA REGION 0 1 0 SAS SRI LANKA 6 1 2 ANGOLA 3 1 0 BENIN 1 2 3 Total SAS 25 23 29 BURKINA FASO 2 2 1 BURUNDI 1 0 0 ECA ALBANIA 1 0 5 ARMENIA 0 0 1 CAMEROON 1 0 1 CROATIA 0 1 0 CAPEVERDE 0 0 2 CYPRUS 0 0 1 CENTRAL AFRICAN REPUB 0 1 1 ESTONIA 0 0 2 CHAD 0 1 2 COMOROS 0 0 1 GEORGIA 0 2 0 CONGO, REPUBLIC OF 0 0 1 HUNGARY 0 0 2 COTE D'IVOIRE 2 1 0 KYRGYZ REPUBLIC 0 0 2 EQUATORIAL GUINEA 0 1 0 LATVIA 0 1 1 GABON 0 1 1 POLAND 0 0 1 GAMBIA, THE 1 1 1 ROMANIA 1 0 1 GHANA 1 6 4 RUSSIAN FEDERATION 0 2 5 GUINEA 2 1 0 TURKEY 2 3 1 GUINEA-BISSAU I 1 0 TURKMENISTAN 0 0 1 KENYA 4 3 3 UZBEKISTAN 0 1 0 LESOTHO I 1 0 Total ECA 5 11 25 MADAGASCAR 3 3 2 MALAWI 0 3 3 LAC ARGENTINA 0 2 2 MALI 4 3 0 BARBADOS 0 0 I MAURITANIA 2 1 2 BELIZE 1 0 2 MAURITIUS 2 2 2 BOLIVIA 3 0 4 BRAZIL 4 4 7 MOZAMBIQUE 2 2 5 NIGER 2 1 1 CHILE 2 0 3 NIGERIA 4 8 2 COLOMBIA 0 0 1 RWANDA 0 0 1 COSTA RICA 0 2 0 SAO TOME AND PRINCIPE 1 1 0 CRB CARIBBEAN REGION 0 0 2 DOMINICAN REPUBLIC 1 0 0 SENEGAL 3 1 0 SEYCHELLES 1 0 0 ECUADOR 0 2 3 SIERRA LEONE 1 1 0 ELSALVADOR 1 0 1 TANZANIA 6 4 1 GUYANA 2 0 2 TOGO 1 0 1 HAITI 0 1 0 HONDURAS I I 1 UGANDA 3 1 2 ZAMBIA 1 2 1 JAMAICA 0 2 0 ZIMBABWE 2 3 0 MEXICO 2 3 4 NICARAGUA 1 2 2 Total AFR 58 60 44 PARAGUAY 1 0 2 PERU 1 1 0 EAP CAMBODIA 0 0 1 CHINA 3 8 6 TRINIDAD AND TOBAGO 2 0 0 INDONESIA 2 10 3 VENEZUELA 1 0 3 KOREA, REPUBLIC OF 0 0 2 LAO PEOPLE'S DEMOCRAT 3 1 1 Total LAC 23 20 40 PAPUA NEW GUINEA 0 0 2 MNA ALGERIA 3 2 1 PHILIPPINES 2 1 2 EGYPT, ARAB REPUBLIC 0 2 1 1 SOLOMON ISLANDS 0 0 1 JORDAN 0 0 1 THAILAND 0 1 0 LEBANON 0 0 2 MOROCCO 2 0 3 Total EAP 10 21 18 TUNISIA 0 1 3 YEMEN, REPUBLIC OF 2 1 1 SAR BANGLADESH 2 2 3 BHUTAN 0 0 1 Total MNA 9 5 12 INDIA 12 14 11 NEPAL 1 2 4 Bank Total 130 140 169 PAKISTAN 4 4 8 Page 63 of 71 TABLE 4.6 AVERAGE STAFFWEEKS OF SUPERVISION BY REGION AND COUNTRY, FY92-FY97 FY92 FY96 FY97 No. of No. of No. of Region/Country Projects Avg. SW Projects Avg. SW Projects Avg. SW AFR AFR AFRICA REGION 2 6.5 2 12.1 2 5.1 ANGOLA 5 20.6 9 16.6 9 23.6 BENIN 15 21.8 16 21.9 16 21.2 BOTSWANA 5 8.7 1 0.7 0 BURKINA FASO 14 24.6 15 19.7 15 24.8 BURUNDI 18 13.9 15 10.4 10 12.6 CAMEROON 13 23.3 9 19.1 8 28.6 CAPE VERDE 4 7.9 5 17.3 5 21.9 CENTRAL AFRICAN REPUBLIC 10 22.9 9 20.5 8 12.9 CHAD 8 18.0 12 18.7 11 16.7 COMOROS 4 16.5 4 12.4 6 7.6 CONGO, DEMOCRATIC REPUBLIC 22 10.1 0 0 CONGO, REPUBLIC OF 2 13.0 2 32.4 2 16.8 COTE D'IVOIRE 17 14.4 15 24.7 14 33.4 DJIBOUTI 4 10.2 2 13.2 2 14.7 EQUATORIAL GUINEA 4 16.8 3 6.9 3 4.0 ERITREA 0 2 19.1 3 13.5 ETHIOPIA 18 12.3 14 19.5 14 21.4 GABON 2 10.6 2 29.9 3 20.0 GAMBIA, THE 9 10.1 7 12.8 6 10.3 GHANA 37 16.2 42 18.8 39 20.9 GUINEA 20 15.7 18 14.0 13 24.4 GUINEA-BISSAU 9 23.5 6 10.1 6 8.8 KENYA 28 18.0 23 24.1 23 29.1 LESOTHO 10 14.5 8 15.5 7 15.8 MADAGASCAR 23 14.7 20 15.9 23 13.5 MALAWI 22 15.9 19 18.6 15 30.0 MALI 19 21.8 18 16.8 19 13.6 MAURITANIA 11 11.0 13 16.6 14 16.6 MAURITIUS 7 11.9 8 13.0 7 11.5 MOZAMBIQUE 15 11.6 24 15.9 23 18.0 NIGER 12 13.4 10 22.5 12 28.3 NIGERIA 43 31.7 29 25.7 22 30.8 RWANDA 20 10.9 12 19.4 12 20.1 SAO TOME AND PRINCIPE 8 10.0 5 10.9 4 9.4 SENEGAL 19 15.9 19 43.2 20 18.4 SEYCHELLES 0 1 4.0 1 10.1 SIERRA LEONE 6 6.0 11 18.3 9 16.9 SOMALIA 10 0.4 0 0 SOUTH AFRICA 0 0 1 0.1 SUDAN 17 11.1 0 0 SWAZILAND 0 1 24.0 1 33.1 TANZANIA 24 15.8 22 22.9 23 23.5 TOGO 15 12.2 10 18.7 9 15.0 Page 64 of 71 TABLE 4.6 AVERAGE STAFFWEEKS OF SUPERVISION BY REGION AND COUNTRY, FY92-FY97 F92 FY96 FY97 No. of No. Of No. of Region/Cowiy Prq/acts Avg. SW Projects Avg. SW Projects Avg. SW UGANDA 28 16.8 26 25.3 23 23.5 WAN WESTERN AFRICA REGION 2 2.0 0 0 ZAMBIA 12 16.5 18 19.3 20 17.3 ZIMBABWE 13 13.2 9 17.5 10 19.4 TOTAL AFR 606 16.2 516 19.9 493 20.4 EAP CAMBODIA 0 5 18.9 7 11.9 CHINA 89 11.4 109 16.2 111 15.5 FIJI .4 5.9 3 6.6 3 6.9 INDONESIA 76 15.4 76 15.5 78 17.9 KOREA, REPUBLIC OF 20 3.1 16 6.1 13 8.0 LAO PEOPLE'S DEMOCRATIC REPU 10 10.7 12 13.6 13 15.5 MALAYSIA 19 7.5 7 14.3 5 7.9 MONGOLIA 2 15.7 5 8.4 7 10.8 MYANMAR 9 7.6 0 0 PAPUA NEW GUINEA 11 11.0 9 15.0 8 14.3 PHILIPPINES 34 13.3 30 13.0 28 15.6 SAMOA 4 5.0 1 4.5 1 13.0 SOLOMON ISLANDS 1 7.9 1 18.2 1 13.1 THAILAND 17 7.9 14 6.5 16 10.1 TONGA 1 1.5 1 4.6 0 VANUATU 3 9.9 2 7.2 2 11.3 VIETNAM 0 11 26.6 14 22.6 TOTAL EAP 300 11.3 302 14.6 307 15.4 SAR BANGLADESH 38 22.5 28 29.5 29 37.0 BHUTAN 3 6.2 2 13.6 2 12.1 INDIA 113 20.3 89 25.3 87 26.1 MALDIVES 3 9.1 3 4.6 2 6.3 NEPAL 27 11.5 15 14.6 13 25.1 PAKISTAN 56 15.4 48 21.1 42 29.3 SRI LANKA 26 11.2 22 12.2 22 18.2 TOTAL SAR 266 17.5 207 22.3 197 27.1 ECA ALBANIA 1 0.8 21 17.0 20 20.1 ARMENIA 0 9 18.6 9 20.5 AZERBAIJAN 0 4 27.4 5 31.1 BELARUS 0 3 16.9 3 15.6 BOSNIA-HERZEGOVINA 2 1.2 2 0.0 11 28.9 BULGARIA 2 53.5 8 24.3 11 21.4 CROATIA 5 1.3 7 10.7 10 15.2 CYPRUS 7 9.7 5 8.7 3 5.1 CZECH REPUBLIC 2 21.0 2 8.8 1 7.5 ESTONIA 0 6 21.2 6 20.4 Page 65 of 71 TABLE 4.6 AVERAGE STAFFWEEKS OF SUPERVISION BY REGION AND COUNTRY, FY92-FY97 FY92 FY96 FY97 No. of No. of No. of Region/Country Projects Avg. SW Projects Avg. SW Projects Avg. SW GEORGIA 0 7 10.3 9 13.3 HUNGARY 18 14.8 13 12.0 14 14.0 KAZAKSTAN 0 9 25.1 11 30.1 KYRGYZ REPUBLIC 0 11 19.5 11 25.2 LATVIA 0 5 24.3 8 20.5 LITHUANIA 0 7 16.5 10 31.3 MACEDONIA, FORMER YUGOSLAV 1 1.4 6 14.2 7 18.3 MOLDOVA 0 5 6.9 6 14.0 POLAND 15 28.5 20 12.1 17 15.9 PORTUGAL 4 6.5 1 2.8 1 3.1 ROMANIA 4 44.7 11 38.2 16 30.1 RUSSIAN FEDERATION 0 27 33.3 34 33.2 SLOVAK REPUBLIC 0 1 12.9 1 17.1 SLOVENIA 3 5.9 3 5.4 3 4.9 TAJIKISTAN 0 1 3.8 3 10.7 TURKEY 34 16.1 25 23.5 25 22.7 TURKMENISTAN 0 1 25.6 3 8.4 UKRAINE 0 7 17.3 11 33.0 UZBEKISTAN 0 3 57.8 3 36.1 YUGOSLAVIA 8 2.6 0 0 TOTAL ECA 106 16.2 230 20.3 272 23.0 MNA ALGERIA 25 15.1 23 9.9 20 11.4 EGYPT, ARAB REPUBLIC OF 23 15.7 17 12.9 16 16.3 IRAN, ISLAMIC REPUBLIC OF 3 5.1 6 17.4 5 15.0 JORDAN 17 14.5 12 13.8 11 16.7 LEBANON 0 6 14.2 10 15.8 MOROCCO 29 13.5 32 14.3 27 13.5 OMAN 4 8.1 0 0 TUNISIA 28 7.6 19 13.2 22 12.5 YEMEN, REPUBLIC OF 40 10.0 25 12.4 24 15.2 TOTAL MNA 169 12.0 140 13.0 135 14.1 LCR ARGENTINA BAHAMAS, THE 20 19.6 31 17.8 38 15.9 BARBADOS 2 4.8 0 0 BELIZE 4 2.4 3 8.0 2 9.3 BOLIVIA 4 6.8 4 8.7 5 10.3 BRAZIL 19 17.6 27 17.7 25 16.0 CHILE 63 13.9 67 16.8 62 13.5 COLOMBIA 17 8.0 14 12.1 13 9.1 COSTA RICA 26 12.6 22 13.4 21 16.8 CRB CARIBBEAN REGION 5 14.4 5 17.8 5 15.8 DOMINICA 3 5.2 2 3.4 2 5.1 DOMINICAN REPUBLIC 2 3.0 2 3.4 1 11.4 ECUADOR 5 14.4 5 6.3 6 5.2 EL SALVADOR 13 18.3 15 18.8 16 16.7 Page 66 of 7I TABLE 4.6 AVERAGE STAFFWEEKS OF SUPERVISION BY REGION AND COUNTRY, FY92-FY97 FY92 Fr96 FY97 No. of No. of No. of Region/Coantry Prjects Avg. SW Projects Avg. SW Projects Avg. SW GRENADA 4 17.6 9 15.9 9 21.6 GUATEMALA 1 0.0 1 3.9 1 11.0 GUYANA 6 10.3 6 15.4 7 9.5 HAITI 4 8.0 9 8.8 8 12.0 HONDURAS 10 4.8 8 19.9 9 15.0 JAMAICA 8 22.5 12 13.2 9 21.7 MEXICO 12 12.5 11 7.0 11 12.9 NICARAGUA 43 16.8 35 20.2 35 13.6 OECS COUNTRIES 1 44.9 8 15.0 9 15.3 PANAMA 0 1 9.5 1 8.4 PARAGUAY 1 3.3 5 11.7 7 10.6 PERU 4 10.6 7 21.6 8 19.2 ST. KITTS AND NEVIS 4 6.2 11 17.0 15 17.2 ST. LUCIA 1 8.9 1 9.7 1 9.4 ST. VINCENT AND THE GRENADIN 1 9.7 3 6.1 3 6.9 TRINIDAD AND TOBAGO 2 4,8 1 4.4 1 5.2 URUGUAY 4 8.9 6 12.0 6 11.5 VENEZUELA 10 9.1 12 8.5 12 8.9 TOTAL LCR 9 18.5 14 16.6 14 26.0 308 13.7 357 15.4 362 14.6 Bankwide Total 1,755 14.7 1,752 17.8 1,766 19.0 Page 67 of 71 TABLE 4.7 AVERAGE STAFFWEEKS OF PROJECT-SPECIFIC SUPERVISION BY SECTOR, FY92-FY97 FY95 FY96 FY97 No. of No. of No. of Sector Projects Avg. SW Projects Avg. SW Projects Avg. SW Agriculture 451 16.7 341 18.9 328 18.8 Education 166 12.1 197 16.7 193 18.8 Electric Pwr & Engy. 165 10.2 125 16.6 126 17.9 Environment 26 15.3 76 21.6 86 19.4 Finance 81 11.9 84 18.6 89 18.1 Industry 82 11.9 34 12.8 32 18.7 Mining 17 12 20 11.3 20 27.6 Multisector 84 20.7 81 15.7 79 16.5 Oil & Gas 41 14.6 42 22 42 21.0 Popultn, Hith & Nun 102 21.2 153 19.4 153 25.1 Public Sector Mgmt. 89 13.7 127 19.7 133 18.1 Social Sector 21 19.7 57 17.3 69 18.2 Telecommunications 31 13.5 26 17.2 18 19.8 Transportation 204 13.4 190 15.7 193 16.9 Urban Development 104 14.5 102 16.8 105 17.5 Water Supply & Santn 91 13.9 97 18.5 100 19.9 TOTAL 1,755 14.7 1,752 17.8 1,766 19.0 Memorandum Item ESSD 477 16.6 417 19.4 414 18.9 FPSI 816 12.7 720 16.9 725 18.4 HDD 289 15.8 407 17.8 415 21.0 PREM 173 17.1 208 18.2 212 17.5 Page 68 of 71 TABLE 4.8 SUPERVISION INTENSITY (IN DOLLARS) BY REGION FY92 FY93 FY94 FY95 FY96 FY97 Projects Under Supervision (#) Bank 1755 1771 1764 1742 1752 1766 Africa 606 604 591 554 516 493 South Asia 266 255 242 218 207 197 East Asia and Pacific 300 298 300 297 302 307 Europe and Central Asia 106 122 150 189 230 272 Middle East and North Africa 169 168 154 143 140 135 Latin America and Caribbean 308 324 327 341 357 362 Supervision Costs (Sm) Bank 78.0 88.1 96.4 101.7 104.6 112.0 Africa 29.3 33.5 34.6 34.0 33.9 33.6 South Asia 12.1 13.7 14.5 13.4 12.0 14.0 East Asia and Pacific 12.1 12.6 13.5 14.2 15.3 17.2 Europe and Central Asia 5.2 6.4 10.1 14.8 16.0 21.0 Middle East and North Africa 6.8 7.3 7.2 7.8 7.8 8.3 Latin America and Caribbean 12.4 14.6 16.5 17.5 19.5 17.9 Supervision Intensity ($000) Bank 44.4 49.7 54.7 58.4 59.7 63.4 Africa 48.3 55.4 58.6 61.3 65.8 68.1 South Asia 45.6 53.7 60.0 61.6 58.0 71.0 East Asia and Pacific 40.3 42.2 44.9 47.6 50.6 56.1 Europe and Central Asia 49.5 52.7 67.4 78.2 69.7 77.4 Middle East and North Africa 40.5 43.5 47.1 54.7 55.8 61.3 Latin America and Caribbean 40.3 45.1 50.3 51.4 54.7 49.5 Page 69 of 71 TABLE 4.9 AVERAGE STAFFWEEKS BY RATING CATEGORIES, FY92-FY97 Average Staffweeks Implementation Progress FY92 FY96 FY97 HS 12.2 12.0 14.0 S 15.8 17.7 19.6 U 18.8 22.8 22.5 HU 11.7 6.9 24.9 TOTAL 17.1 17.8 19.0 TABLE 4.10 AVERAGE STAFFWEEKS BY RATING CATEGORIES, FY92-FY97 Average Staffweeks Development Objectives FY92 FY96 FY97 HS 13.9 13.8 14.6 S 16.6 18.4 20.0 U 16.0 20.2 22.5 HU 11.4 11.2 13.9 TOTAL 17.1 17.8 19.0 TABLE 4.11 AVERAGE STAFFWEEKS BY ATRISK CATEGORIES, FY92-FY97 AtRisk FY92 FY96 FY97 Actual 17.4 21.6 22.2 Non-Risky 13.6 16.3 17.9 Potential 15.6 19.6 21.8 TOTAL 14.7 17.8 19.0 Page 70 of 71 TABLE 4.12 EFFECTIVENESS LAG BY YEAR OF APPROVAL, FY92-FY97 Numbers Percentages <=3 3-6 6-9 9-18 > 18 Not Yet <=3 3-6 6-9 9-18 > 18 Approval FY mnths mnths mnths mnrks mnths Effective /I Bank mnths mnmths mnrhs mnths mnrhs 1992 37 74 45 56 7 3 222 17% 33% 20% 25% 3% 1993 40 77 59 59 7 3 245 16% 31% 24% 24% 3% 1994 39 75 49 57 7 1 228 17% 33% 21% 25% 3% 1995 49 86 53 52 4 0 244 20% 35% 22% 21% 2% 1996 52 95 64 35 3 7 256 20% 37% 25% 14% 1% 1997 47 78 33 10 0 73 241 20% 32% 14% 4% 0% Note: Effectiveness lag is measured by the number of months between Board Date and Effectiveness. 11 For FY92-95 projects shown as not effective were allowed to lapse. Page 71 of71 TABLE 4.13 OVERAGE PROJECTS BY REGION, FY92-FY97 Investmeat Acaustment Total Region FY92 FY96 FY97 PY92 FY96 FY97 FY92 FY96 FY97 AFR 53 53 53 13 16 13 66 69 66 EAP 21 13 17 2 1 1 23 14 18 ECA 11 6 11 2 1 3 13 7 14 LCR 21 46 37 6 4 2 27 50 39 MNA 30 14 15 1 1 1 31 15 16 SAR 45 34 28 0 2 2 45 36 30 TOTAL 181 166 161 24 25 22 205 191 183 Note: Overage is defined as: 8yrs or more for investment4 yrs or more for adjustment operations.