FILE Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-3330-TH REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE KINGDOM OF THAILAND FOR THE SIXTH (SECONDARY) EDUCATION PROJECT May 20, 1982 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit - Baht (B) US$1.00 = B 23 B1 = $0.04 B 1 million = $43,478 WRIGHTS AND MEASURES 1 hectare (ha) = 2.47 acres 1 meter (m) = 3.28 feet 1 kilometer (km) = 0.62 miles ABBREVIATIONS AND ACRONYMS DGE - Department of General Education in the MOE MOE - Ministry of Education NEC - National Education Commission NESDB - National Economic and Social Development Board REO - Regional Education Office THAI FISCAL YEAR October 1 - September 30 SCHOOL YEAR April 1 - March 31 FOR OFFICIAL USE ONLY THAILAND SIXTH (SECONDARY) EDUCATION PROJECT Loan and Project Summary Borrower: The Kingdom of Thailand Amount: $75 million, including the capitalized front end fee. Terms: 20 years, including 5 years of grace, with interest at 11.6% p.a. Project Description: The project would support the Government's development strategy to improve access, quality, relevance and efficiency in secondary education and to strengthen the Government's education planning and management capacity. The project would provide: (a) workshops, academic facilities, furniture, equipment, teaching-learning materials, in-service staff training and technical assistance to some 480 existing secondary schools in relatively disadvantaged rural areas; and (b) furniture, equipment, materials and technical assistance to the central, regional and provincial planning agencies of the Ministry of Education, the National Education Commission and the National Economic and Social Development Board (NESDB). Project beneficiaries will include not only the 335,000 rural secondary students served by the project schools each year but also future generations of Thai students at all levels who will benefit from systemic improvements in educational planning and management. The major risks associated with the project are that it may prove difficult to recruit sufficient qualified staff to teach work education subjects in project schools, and that the schedule for school upgrading might prove overambitious. Improved incentives and training of rural teachers, increased efficiency in the use of teachers, and the establishment of a mangement staff development program should minimize these risks. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Estimated Costs: Local Foreign Total …---- ($ million) --- Lower Secondary Schools Workshops 34.1 20.2 54.3 Academic facilities 57.8 30.8 88.6 Planning and Management Ministry of Education 0.8 1.3 2.1 National Education Commission 1.0 0.5 1.5 NESDB 0.2 0.3 0.5 Studies 0.3 1.2 1.5 Contingencies Physical 8.4 4.4 12.8 Price 38.5 14.6 53.1 Total Project Cost 141.1 73.3 214.4 /a Bank's front end fee - 1.1 1.1 Total Financing Required 141.1 74.4 215.5 Rounded Total 141.0 75.0 216.0 Financing Plan: Local Foreign Total …----(t$ million) ----- Government 141.0 - 141.0 IBRD - 75.0 75.0 Total 141.0 75.0 216.0 Estimated Disbursements: Bank FY 1983 1984 1985 1986 1987 1988 …--------------- ($ million) -------- Annual 1.1 15.4 18.5 20.0 18.5 1.5 Cumulative 1.1 16.5 35.0 55.0 73.5 75.0 Staff Appraisal Report: No. 3706-TH, dated May 18, 1982 /a This includes $27.9 million in taxes and duties. REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE KINGDOM OF THIAILAND FOR A SIXTH (SECONDARY) EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed loan to the Kingdom of Thailand for the equivalent of $75 million to help finance a Sixth (Secondary) Education Project. The loan would have a term of 20 years, including 5 years of grace, with interest at 11.6% p.a. PART I - THE ECONOMY /1 2. A Basic Economic Report entitled "Thailand: Toward a Development Strategy of Full Participation" (Report No. 2059-TH) was issued on September 18, 1978. Subsequently Thailand's economic situation deteriorated, and an economic report entitled "Coping with Structural Change in a Dynamic Economy" (Report No. 3067-TH), which proposed a medium-term strategy to deal with the problems was discussed with the Royal Thai Government in September 1980 and issued on January 8, 1981. Country data are given in Annex I. Recent Political Developments 3. Frequent changes at the top levels of government have character- ized recent political developments in Thailand. General Kriangsak Chomanan was Prime Minister from November 1977 to February 1980. His third cabinet resigned following increasing public and parliamentary criticism of its economic policies. General Prem Tinsulanonda was elected by the National Assembly as Prime Minister after receiving the support of nearly all major political parties. General Prem's government, formed in March 1980, included leaders from the political parties which supported him. General Prem soon announced his government's policies on a number of issues including economic and social development. These policies place high and immediate priority on accelerating rural development, raising rural incomes and improving health and education. Particular emphasis was given to generating more jobs, and a rural public works program, similar to the 1975/76 Tambon Program, was included as a major element in the strategy. The Government also * committed itself to containing inflation, although it recognized the need for a substantial adjustment of energy prices and most public enterprise tariffs. /1 Part I is substantially the same as that included in the President's Report (P-3175-TH) dated April 12, 1982 for the Fourth Telecommunica- tions Project (Loan 2143-TH) approved by the Executive Directors on May 13, 1982. - 2 - Furthermore, it decided to institute reforms in monetary and fiscal policy and to reduce the trade deficit through improved export performance and development of domestic energy resources. 4. After a period of political consolidation, during which an attempt was also made to inform the public better about the need to take corrective measures, the Government began to take steps to implement these policies in the fall of 1980. In March 1981, however, the Social Action Party and other coalition parties withdrew from the cabinet on an issue of handling fuel oil contracts and a new cabinet was formed comprising members of the United, Chart Thai, and Democrat parties as well as a number of technocrats. Shortly thereafter there was an attempted coup by a group of military officers which, however, failed. During much of the summer of 1981, the political position of the second Prem cabinet appeared to be weak, particularly in the wake of the devaluation of the baht against the dollar in July, which resulted in much public criticism. Since then, however, the Prime Minister's position strengthened, not least because of the relatively favorable economic developments, especially in the agricultural sector. Parliament passed the FY82 budget nearly unanimously. In December 1981, the Government's parlia- mentary basis was broadened significantly when the Social Action Party rejoined the cabinet. Past Economic Trends and Recent Changes 5. The 1960s and early 1970s were a period of unprecedented economic development in Thailand, with GDP growth averaging 7-8% per year (or 4 to 5% per capita). Real agricultural growth of nearly 5% per year, based largely on an expansion in cultivated area and development of new crops in response to export opportunities, was a major factor contributing to these develop- ments as well as to a sustained growth of exports. An increase in the investment level from about 20% to 27% of GDP contributed to rapid indus- trial growth. Investments were largely financed by domestic savings, keep- ing the debt service ratio quite low. The incidence of poverty was reduced substantially, from about 57% in 1962/63 to about 31% by 1975/76. However, poverty still remains a problem, and significant regional disparities exist, with the Central Region, including Bangkok, not only having the highest per capita income, but also being much better served by roads, telecommunica- tions, schools, public health and other services than the other three regions, the North, the Northeast and the South. Considerable variations also remain within regions: farmers who have diversified into the new cash crops have in many cases succeeded in crossing the poverty line, while the incomes of those unable to shift out of subsistence rice culture have stagnated. By the mid-1970s it became apparent that Thailand was facing increasingly difficult problems of development, including the lack of new arable land to continue to absorb the rapidly growing labor force, and an emerging balance of payments constraint as a result of deteriorating terms of trade. In order to deal with such problems the country needed to shift its pattern of growth from one based on the extension of land under cultivation and on -3- import substituting industries to one based on increasingly intensive use of land and on industries producing for domestic and export markets under competitive conditions. 6. In the past three years Thailand's development problems have been compounded by adverse external factors including oil price increases, a resurgence of inflation and slow growth in developed countries. A relatively high rate of overall growth was maintained (8.7% per annum between 1975 and 1978, 6.0% in 1979 and 6.3% in 1980) but this was accompanied by accelerating inflation, large fiscal and external deficits and growing dependence on foreign borrowing. Consumer prices increased by 8% in 1977 and 1978, by 10% in 1979 and by 20% in 1980. The overall Central Government deficit reached 4.4% of GDP in 1980. Notwithstanding continued rapid export growth, the current account deficit came close to 5% of GDP in 1977 and 1978, but it rose to 7.5% of GDP in 1979 and 7.2% of GDP in 1980; consequently there has been a rapid accumulation of Thailand's initially low external debt. 7. Over the years 1975-78 the Government was slow in responding to the changing internal and external conditions, but, beginning in 1979, policy adjustments were undertaken at a gradually accelerating pace. They included sharp increases in prices for most petroleum products and electricity; measures to increase government revenues; amendments to the usury laws, which permitted an increase in interest rates; and the introduction of regulations to increase financial stability and exercise more monetary restraint. In the second half of 1980, the Government began to give serious attention to developing a longer-term comprehensive program for the economy, and continued to implement necessary, but politically contentious, economic decisions. In October 1980 price controls were lifted on 29 of 36 goods. In the same month the Government started on a reform of the tariff structure, reducing import duties on 10 categories of electrical goods by between 10% and 60%. In November, retail prices of sugar, which had fallen out of line with inter- national prices, causing domestic shortages, were increased by 60%. In a number of successive steps, electricity and petroleum prices were increased further, and by mid-1981 they were nearly two-and-a-half times as high as at the start of 1979. During the first half of 1981, charges for other public services (water, transport, communications) were increased substantially (mostly by at least 50%). During this period, the Government also introduced various fiscal measures designed to limit the central government deficit. 8. Despite the effect that these measures inevitably had on the price level and on effective demand, economic performance in most areas appears to have been good during the first nine months of 1981. Agricultural production and incomes increased rapidly, due to favorable weather and, until recently, agricultural export prices (which a domestic rice price support program helped to reflect in farmgate prices). The demand and interindustry effects of a buoyant agricultural sector are stimulating the other sectors of the economy, largely compensating for the reduced stimulus from the public sector. Thus, while some sectors of the economy, notably construction, are - 4 - weak, the authorities do not foresee a general recession. At the same time, price pressures have lessened considerably; on a June to June basis, the increase in the Consumer Price Index of 24% for 1979/80 was reduced to 12% for 1980/81. Because of reduced inflation and increased nominal interest rates, real interest rates on 1-2 year time deposits have now become positive, and private commercial borrowing entails a substantial real cost. 9. The one area in which the situation did not improve in the first half of 1981, was the balance of payments. The trade deficit in that period was $1.6 billion, about $0.5 billion more than in the first half of 1980. Some deterioration was to be expected, as the deficit in 1980 had been below ,trend as a result of a bulge in imports of non-oil intermediates in 1979, which led to a below-normal level of such imports in 1980. In addition, exports in the first quarter of 1981 fell below the trend, while the capital account was negatively influenced by high interest rates abroad. In July, the pressure on the balance of payments became so strong that the Government decided to break the longstanding link of the baht to the (then rapidly appreciating) dollar, decreasing the dollar value of the baht by about 9%, but keeping the trade-weighted exchange rate of the baht approximately at the level of the preceding year. Subsequently, the trade deficit has started to decrease, but for the year 1981 as a whole, it is still likely that the current account deficit will be somewhat higher than the 1980 deticit in absolute amount, although it may be slightly lower (6-7% of GDP) in relative terms. Development Prospects and Constraints 10. In the coming decade, many of the Dositive features which contri- buted to Thailand's rapid socio-economic development over the past two decades will continue to do so. These factors include a relatively equitable distribution of rural land, responsiveness of Thai farmers to economic incentives and improved technology, provision of infrastructure by the Government, and the dynamism of the private sector in both industry and agriculture. Also, major gains have been made in family planning in recent years, slowing the annual rate of population growth from about 3% during the 1960s to an estimated 2.2% in 1979 (but only affecting labor force growth two decades later). A new favorable factor is that the first phase of the infrastructure to tap the substantial natural gas reserves in the Gulf of Thailand was completed in September 1981, enabling a gradual but significant reduction in Thailand's dependence on foreign oil. 11. Against these favorable factors, however, three major negative ones must be recognized. Firstly, partly as a result of external influences, Thailand's current account deficits reached, over the years 1979-81, levels which are unsustainable in the medium term and therefore must be reduced. Secondly, the outlook for the world economy is not favorable, and tendencies toward protectionism are increasing, thus limiting the opportunity to increase exports (unless offset by effective domestic policies). Thirdly, the exhaustion of land reserves threatens to severely constrain the growth in agricultural production, exports and absorption of labor. 12. In response to the challenges posed by the general economic out- look for Thailand, the Government has searched intensively for policy alternatives which would correct the fiscal and external imbalances without undue consequences for the growth of incomes and employment, especially for the poor. Its efforts are reflected in the Fifth Five-Year Plan, which covers the period October 1981 to September 1986. The major (and inter- related) objectives are equity, financial stability, and national security; growth is seen as a derived rather than a primary objective. The Government aims at reconciling these objectives over the five-year period of the Plan, partly through a reduction in lower-priority expenditures, which is already being implemented, but mainly through medium-term structural adjustments which improve production incentives and increase the efficiency of the economy, and improve its competitiveness, both in the external and domestic markets. 13. To assist it in realizing these objectives, the Government has sought the assistance of the IMF and the Bank. Agreement was reached with the Fund on a major standby program, which covers a two-year period starting in April 1981, and amounts to SDR 814.5 million. In addition, the Fund in July 1981 provided Thailand with SDR 186 million under its Compensatory Financing Facility. With regard to the Bank, the Government has requested assistance in further developing and implementing the structural adjustment program, incorporated in the Fifth Plan, through a series of structural adjustment loans. An appraisal mission for the first such loan visited Thailand in August/September and the loan was approved by the Executive Directors on March 2, 1982. Financing Requirements 14. While the Government is making considerable efforts to improve the efficiency and effectiveness of its spending, the implementation of policies needed for a satisfactory rate of economic and social progress will require continued growth in the absolute level of public expenditures, though they are expected to remain constant relative to GDP. Much greater efforts will be required to mobilize both domestic and external resources than in the past. The Government's domestic revenue, as a percentage of GDP (about 14% for 1978 to 1980), is low compared to other developing countries at similar levels of development. Recently the Government has taken steps to revise the tax structure and to improve collections. Further tax measures are planned, particularly in the area of improved tax administra- tion and structure. The goal is to increase Central Government revenues to about 18% of GDP by 1986, thus substantially reducing the budgetary deficits and thereby limiting the reliance on foreign financing. In addition, the financial situation of state enterprises, which has already improved substantially in the wake of recent tariff increases, is expected to continue improving as a result of appropriate pricing policies. 15. Despite these fiscal policy measures and the ambitious structural adjustment policies to be implemented in the agriculture, industry and energy sectors, the demand for external resources will increase. Macroeconomic projections indicate that the current account deficit will remain at levels over $2 billion per annum, but will decline as a share of GDP to about 4% in 1987. Even the realization of this target will require large amounts of external borrowing, totalling about $25 billion over the period 1982-87, of which about half is expected to be in the form of public and publicly guaran- teed debt. Assuming a significant level of concessional assistance, total debt service payments as a percentage of exports of goods and non-factor services will rise from 11.6% in 1980 to 17.9% in 1987. Given the diversification of Thai commodity exports and the continued expansion of agricultural and manufactured exports expected as a result of appropriate structural adjustment policies, these debt service requirements should be sustainable. 16. Official donors, particularly Japan and the development banks, have been expanding their programs to meet a larger part of Thailand's growing resource requirements. The rest has been financed through syndicated loans and bond issues. The Government has established a Foreign Loan Policy Commit- tee to coordinate and approve all foreign borrowing by the public sector. The Bank of Thailand is improving its procedures for recording private borrowing abroad in order to keep track of total foreign debt. External agencies, including the Bank Group, have in recent years increasingly concentrated on project lending to Thailand in some sectors that have high social benefits, but low foreign exchange savings or earnings. To achieve the level of external resource transfer that is now required, it is necessary, in selected projects where the foreign exchange component is low, to finance some local currency expenditures. PART II - BANK GROUP OPERATIONS IN THAILAND 17. Thailand first borrowed from the Bank Group in 1950 for a railway project and, as of March 31, 1982, had received 69 IBRD loans (including two third window loans) and six IDA credits, totalling (net of cancellations) $2,558 million in loans and $125 million in credits. As of that date, $1,337.3 million remained undisbursed on effective loans and credits. No IDA credits have been extended to Thailand since FY79. Annex II contains a summary statement of Bank loans, IDA credits, and IFC investments as well as the status of Bank Group projects under implementation. 18. The sectoral distribution of Bank loans and IDA credits, in dollar terms, has been as follows: 30% for energy; 28% for agriculture and rural development; 17% for transportation; 6% for telecommunications; 5% for urban development; 4% for education; 1% for industry; 2% for population/ health/ nutrition; and 6% for structural adjustment lending. Overall implementation of Bank projects in Thailand has improved steadily during the past five years. Thailand's disbursement ratio increased from 17.7% in 1977 to 24.9% in 1981. These rates are better than the Bank-wide average and the rates for other - 7- countries in the region. In 1981, the Bank-wide average was 21.5% while the ratios for two comparator countries, the Philippines and Morrocco, were 17.9% and 11.7%, respectively. 19. Over the past six years, the Bank has shifted its lending in Thailand from a program dominated by investments in traditional infrastructure projects (accounting for over 80% of the lending through FY75) to a program which places increasing emphasis on assisting the Government's efforts to reach the poorer segments of its population more directly. Since FY76, investments in transportation, power, water supply, telecommunications and industry have accounted for about 60% of Bank Group lending and about half of these, in dollar terms, were for projects specifically designed to benefit the rural population. The proportion of Bank lending to the agricultural/rural development sector has trebled, accounting for about 30% of lending operations since FY76. The design of projects in this sector has also changed, from exclusively large irrigation projects to a more balanced program covering irrigation (including land development and support services to the farmer) and a variety of innovative projects to assist farmers outside the central flood plain (including rubber replanting, livestock, agricultural extension, research and credit, and rural development). Projects in the social sectors which, prior to FY76, were limited to three in education, accounting for 6% of the program, have both diversified and grown. In recent years education, population and low-income housing projects have accounted for about 10% of the program. 20. For the future, the Bank's assistance objectives are to support the Government's development efforts, as articulated in its Fifth Five-Year Plan for the period 1982-1986, to address: (a) the long-term issues of poverty alleviation, promotion of employment, and reduction of income disparities; and (b) the medium-term issue of restructuring the Thai economy through the inten- sification of agriculture, efficient development of the industrial sector, promotion of domestic energy conservation and development, increased public resource mobilization, and improved institutional capacity in the public sector. In addition to these two broad objectives, Bank assistance in Thailand also aims at moving from project-specific to sectoral lending, especially in agriculture, industry, energy, and education, and at strengthen- ing the local Thai capacity for policy analysis and formulation. 21. In implementing this strategy, projects in the areas of agriculture and rural development will seek to generate employment and income growth particularly among the poorer farm households in the rainfed areas of the country and will support the structural adjustment process by aiming at continued growth of agricultural production and exports through intensi- fication. Lending for transport and communications will increasingly aim at expanding the rural road system and thus be in support of agricultural and rural development for the medium and longer term. In the urban development and human resources sectors, Bank lending will be geared to strengthening the long-term capacity of Thailand to transform itself efficiently from a - 8 - primarily agricultural and rural economy to a relatively more industrial and urban economy, while also supporting the Government's goal to address basic human needs in the more disadvantaged rural and urban areas of the country. Lending in the energy and industry sectors will be designed to support structural adjustment and growth through the efficient development and utilization of domestic energy resources and the strengthening of the financial infrastructure. Finally, structural adjustment lending will strengthen the Government's structural adjustment program through studies, development of action programs, and policy actions in the areas of agri- culture, industry, energy, fiscal policy, and institutional development. 22. Bank loans and IDA credits to Thailand, disbursed and outstanding, amounted to $1,063.2 million as of March 31, 1982. As of December 31, 1980, Bank and IDA debt disbursed and outstanding accounted for 11.7% of total debt (disbursed and outstanding), while the Bank Group's share of total debt service payments amounted to 8.3% in 1980. This is not excessive in view of Thailand's modest overall external debt (18% of GDP in 1980) and the declining shares of Bank debt in total debt, and of Bank debt service in total debt service. 23. As of March 31, 1982, IFC had made commitments totalling $110.6 million in nine projects in Thailand. IFC's investments have been primarily in industry and in the development of financial institutions aimed at mobilizing domestic resources and providing financing to smaller enter- prises. Prospects for increased IFC operations in Thailand have been enhanced by expanding private sector investment activity, and consultations with the Government have identified several areas where IFC's assistance may be needed. These areas include very large and complex projects such as a proposed soda ash project to serve the ASEAN community, projects in the petroleum and downstream petrochemical sector, and projects in the agricul- tural sector. A tantalum processing project and a shrimp farming venture are being considered by IFC management. PART III - THE EDUCATION SECTOR Overview 24. Thailand's education system has expanded rapidly during the last decade. In 1980 primary enrollment had reached 7.4 million, representing about 97% of the age group 7-12. Enrollment ratios are 39% at the lower secondary level (grades 7, 8 and 9), 9% at the upper secondary level (grades 10, 11 and 12), and 3.6% for higher education. 25, Responsibilities for educational administration and planning are shared among several central government agencies. Educational administra- tion of primary, secondary and postsecondary (nonuniversity) education, including teacher training, is under the Ministry of Education (MOE). The - 9 - Office of University Affairs, with the status of a ministry, oversees government universities and private colleges. For supervisory purposes the MOE has grouped the country's 71 changwats (provinces) into 12 regions with offices in each region. Educational planning is carried out by each of MOE's operating departments, by its Division of Educational Planning in the Under-secretary's Office and by various divisions in the central planning agency, the National Economic and Social Development Board (NESDB). The National Education Commission (NEC) has a policy-formulation brief, with responsibility for the review and evaluation of the education system at all levels. 26. Public education is supported almost entirely by central government funds, claiming about 20% of the national recurrent budget, or $1.24 billion, in 1980. Private schools, enrolling about one-fifth of students at the secondary level, receive some subsidies from the Central Government and must conform to standards set by the MOE. At the primary and secondary levels expenditure for improving facilities is inadequate as is expenditure on other quality improvements (teaching/learning materials and teacher upgrading). 27. Secondary schooling has been reoriented from preparation for post- secondary education to preparation for employment. In 1978 a new diversified secondary curriculum was introduced which supplements traditional academic- subjects with occupational subjects, including work education. Implementation of the new curriculum will be completed in 1983. The new diversified curriculum requires all students to take at least four periods a week of work education subjects, and in other subject areas there will be an increased emphasis on practical and manual activities to balance with theoretical or academic subjects. Issues in Secondary Education 28. In view of the rapid social and economic changes taking place in Thailand, the Government has decided on accelerated and universal improvements in secondary education. Enrollments in general lower secondary education in Thailand expanded rapidly during the 1970s, from about 600,000 in 1972 to about 1.3 million in 1980. A slower but still substantial rate of expansion is envisaged for the Fifth Plan period, to about 1.6 million in 1986. If this expansion is to be successfully carried out substantial changes are needed in the secondary sector (a) to improve the education system's performance relating to access, relevance, quality and efficiency; and (b) to strengthen the MOE's planning and management capacity. 29. Access. Access to lower secondary education is an important issue both in absolute terms and in terms of regional disparities. Because of rapidly rising primary enrollments and a slower expansion of secondary school places in recent years, the transition rate from primary to secondary fell from 61% in 1978 to 46% in 1980. Intake in grade 7 was held down in the same period to accommodate the enrollment bulge caused by the transition from - 10 - the old to the new secondary cycle and total lower secondary enrollments, which fell in 1981, are expected to rise again in 1982. The target for the expansion of public lower secondary education adopted by NEC for the Fifth Plan period implies an annual enrollment increase of 6.5% over the period 1980-86. 30. Although regional disparity in secondary enrollments narrowed significantly between 1973 and 1980, considerable imbalances remain in participation rates between and within regions. Thailand's north and northeast regions generally, and Yala province in the south particularly, lag behind the rest of the country. Access disparity is also evident within different administrative levels. Only 10% of tambons (subdistricts) are served by secondary schools, thus making access to secondary education difficult for much of the rural population. The Fifth Five-Year Plan gives priority to improving access to secondary education in the most disadvantaged regions in order to narrow disparities in secondary enrollments. 31. Facilities. Not only are there proportionately fewer secondary school places in rural areas, but the quality of existing rural secondary school facilities, particularly those limited to the lower cycle, tends to be much lower than that of the larger urban schools. Lacking adequate buildings, equipment and resource materials, such schools find it difficult to accommo- date student demand or to attract sufficiently qualified teachers. Based on the results of a comprehensive school-mapping exercise, the MOE has developed three basic models for the improvement of lower secondary schools; they are to be upgraded to accommodate 4, 6 and 8 classes in each grade, with a maximum class size of 45 students. 32. Relevance and Quality. The 1978 diversified secondary curriculum, with its emphasis on work-related activities, is meant to provide a more relevant education to the majority of students than the traditional curri- culum, which stressed academic subjects and prepared students for higher education. But implementation of the 1978 curriculum has been hampered by two main issues which also adversely affect the quality of education: inadequate preparation of teachers to teach the new curriculum and insufficient provision of materials, equipment and physical facilities as logistical support. There- fore, high priority is being given to the provision of improved practical facilities, appropriate instructional materials and equipment, and adequately trained teachers in the particularly disadvantaged lower secondary schools. 33. Internal Efficiency and Teacher Utilization. While the internal efficiency of secondary education in Thailand is high, as indicated by high transition rates from one grade level to the next, the teacher utilization rate in classroom teaching is low. An average teacher has only 16 teaching periods or 13-1/2 hours out of a maximum of 35 periods or 29 hours per week. The rest of the teacher's time is spent on preparation work and extra- curricular in-school activities, including administrative tasks. The low average teaching load is reflected in the low teacher-student ratio of 1:18 in 1980 compared with 1:22 in 1976, despite the fact that the average class size has remained at over 40 students. - 11 - 34. The low teacher utilization rate reflects faulty planning and management. Overall efficiency would be improved by raising the teacher-student ratio which would require teachers to spend more time in direct contact with students. A teacher-student ratio of 1:18 in 1986 would- cost $456 per student enrolled, compared to $373 at a ratio of 1:22, a difference of 22% per student. The cumulative difference in teacher-years over the period 1982-86 would be 87,800, corresponding to an estimated saving of about $175 million. Such a saving would more than offset the increased staffing costs resulting from the introduction of the new curriculum. This issue is being addressed under the proposed project (para. 52). Management Constraints 35. The principal units of the MOE involved in the planning and management of secondary education are the Department of General Education (DGE), the Division of Education Planning, the regional education offices and the provincial education offices. There is no strong central agency to direct and coordinate educational planning and administration either within the MOE or between the MOE and NEC and NESDB. Competent management of scarce resources requires a better integrated system of planning, monitoring and evaluation than presently exists. The fragmented responsibilities for management of the sector have resulted in a weak articulation of planning activities of the different departments of the MOE and an ineffective allocation of resources among subsectors and among projects. 36. Central Planning and Management. The main issue in the manage- ment of the education sector as a whole is the inefficient allocation and utilization of resources. Generally, short-term budgetary considerations take precedence over long-term objectives and broad development policies. There is no effective annual planning to serve as the bridge between long-term planning and annual budgeting. This may be explained by the absence of both a comprehensive management information system and continuous sectoral planning to provide the operational framework for setting priorities and targets, outlining strategies and programs, and guiding project planning and budgeting. MOE's educational management responsibilities have outgrown the capabilities of the Division of Education Planning, which consequently has suffered a loss of influence and effectiveness. The MOE's departments, with their own separate planning units, tend to bypass the Division and deal directly with NESDB or the Budget Bureau, the two national agencies concerned with resource allocation. As the Division of Education Planning is weak, there is practically no coordination among and within various educational levels. 37. While the NEC has responsibility for the review and evaluation of the education system at all levels, it has no control over the MOE's departments. It also lacks qualified staff in planning. Policy is formally - 12 - enunciated in the Five-Year Plan, but the fragmented planning system is not conducive to a comprehensive translation of national education policy into viable programs and projects. The weakness in planning is compounded by the lack of a reliable national data base for systematic analysis of sector issues. 38. The MOE's lack of sectoral development strategies and plans has been an impediment to the efficient use of resources for educational and manpower development in Thailand. The causes are the shortage of planning expertise in the agencies concerned and the lack of consistent coordination in social and economic planning between these agencies. The planning agencies require strengthening through staff development and through a better articu- lation of their planning functions. 39. Provincial Planning. The weaknesses of central educational planning are duplicated at the provincial level. In the 71 provinces the provincial education offices in theory represent the Office of the Under-Secretary of State of the Ministry of Education and should serve as coordinating agencies for all MOE departments at the provincial level. In practice, however, individual provincial departments and educational institutions report directly to the MOE's central agencies. There is no linkage between provincial agencies, and the provincial planning units lack trained and experienced planning staff. 40. Regional Management. Each of the 12 educational regions has a regional educational office (REO) responsible directly to the Office of the Under-Secretary of State for Education in the MOE. The REOs presently have four main functions: (a) coordination of activities by institutions and agencies at regional level under the MOE and other ministries relating to education, culture and community development matters and general guidance of educational development in line with official policies; (b) supervision of vocational, physical and general (academic) education; provision of in-service teacher training; and implementation of technical jobs initiated by the REOs or delegated by the departments of the MOE; (c) production and distribution of teaching-learning materials; and (d) research and evaluation, including designing standardized tests, with the focus on topics relevant to regional or local issues. There are substantial difficulties in carrying out these diverse functions. The REO's power of coordination is limited by the MOE's centralized decision-making process, which requires that significant matters be referred back to the departments concerned in the MOE. The functions and responsibilities of the REOs need to be rationalized, and their effectiveness improved through staff development. Government Development Strategy 41. Under the Fifth Development Plan (1982-86) the Government's main objectives for the education sector are to: - 13 - (a) expand educational opportunities and improve quality in formal and nonformal schooling, in response to local occupational and cultural needs and to labor market demands; and (b) improve and maximize efficiency in educational management. Consistent with these objectives, the Government seeks to expand and improve educational services in the underserved sections of the population, especially in rural areas and urban slums. In secondary education the distinction between academic and vocational streams is to be blurred by the new curri- culum which places due emphasis on work education and other occupational subjects. As a step toward achieving universal education through grade 9, the Government plans to increase the participation rate in lower secondary education, covering the age group of 13-15, from 39% in 1980 to 46% in 1986, with corresponding enrollments projected to rise from 1.3 million to 1.7 million. Simultaneously the Government plans to strengthen the planning and management capabilities of central, regional and provincial planning and management agencies. To achieve these objectives the Government plans to replace temporary, dilapidated buildings and to provide some 400,000 new places as well as workshops, laboratories and other facilities together with adequate equipment and materials for teaching work education and general subjects. To meet the goal of improving efficiency in educational management, the Government plans to introduce needed organizational changes in selected central and regional planning or management agencies in step with projected staff development in planning and management skills. The proposed project would assist the Government in meeting these objectives. 42. Bank Grop Participation. Five Bank loans/credits, totaling $106.9 million, have been made to the education sector in Thailand. These projects have pursued three main objectives, viz. manpower development, quality improvement and more equitable coverage. More than half of the loan/credit funds have been allocated to general education, with emphasis on secondary and postsecondary education. This reflects the relatively heavy input in diversified secondary education. The first project was completed in 1973, the second and third in 1980 and the other two are in various stages of implementation. To date, the projects have succeeded in achieving substantial institutional development at Kasetsart University, the National Curriculum Development Center and within adult education; quality improvements in secondary and higher agricultural education;. and more equitable coverage of secondary education. The projects have been less successful in producing middle-level skilled manpower since many graduates continue on to higher education. The projects have further shared in inefficiencies in implementation, leading to substantial procurement delays (averaging over two years) under the second and third projects. These delays have resulted largely from staff inexperience, underbudgeting, and cumbersome procurement procedures, problems which have gradually been overcome. 43. Future Bank Group education lending is expected to concentrate on four objectives: (a) increased equity by expanding opportunities for basic education; (b) improved quality of education through improvements in - 14 - curriculum, instructional materials, teacher training, school administration, and educational mass media (particularly radio); (c) middle- and high-level skill development to meet manpower needs in key sectors such as agriculture and energy; and (d) strengthened educational planning and management capabilities. 44. An OED Project Performance Audit Report (No. 770, dated June 13, 1975) has been prepared on the First Education Project (Loan 471-TH). The major audit finding of relevance to the present project is the need for more efficient use of teachers to improve student/teacher ratios. Under the present project the Government will prepare and implement a plan to improve teacher utilization. Further, the project will strengthen central planning with the object of improving the allocation of teacher resources. Audit reports on the second and third education projects are under preparation. PART IV - THE PROJECT History 45. The proposed project was prepared by the Government with UNESCO assistance. It was preappraised in April/May 1981 and appraised in October 1981. Negotiations were held in Washington from May 3-7, 1982; the Thai delegation was led by H.E. Kasem Sirisumpundh, Minister of Education. A Staff Appraisal Report dated May 18, 1982 (No. 3706-TH) is being circulated separately. Supplementary data are provided in Annex III. Project Objectives 46. The proposed project would assist the Government in pursuing two broad objectives: (a) to improve the lower secondary education performance in disadvantaged areas relating to access, relevance, quality and efficiency by (i) providing new and renovated classrooms, new workshops and laboratories, materials, in-service staff training and technical assistance; and (ii) improving teacher utilization through an increase in the average weekly teaching periods; and (b) to strengthen the national capacity of education and manpower planning and management by introducing systemic improvements and providing technical assistance, training, equipment and materials to the central, regional, and provincial planning agencies of MOE, NEC and NESDB. Project Components 47. Improvement of Facilities. To improve quality and access in secon- dary education, about 480 relatively disadvantaged lower secondary schools in rural areas have been selected for assistance. Under the project, the schools would be provided with new classrooms to replace existing temporary facilities and/or meet projected enrollment requirements, as well as workshops, labora- tories and other facilities which will enable the new diversified curriculum - 15 - to be introduced. Needed equipment and furniture would also be provided. During negotiations, it was agreed that the Government would select the schools to be upgraded in accordance with criteria acceptable to the Bank (Section 3.02 of the draft Loan Agreement). 48. Teaching Programs. With the proposed upgrading of facilities, it will be possible for all project schools to follow the new lower secondary curriculum, with work education subjects emphasizing practice rather than theory. The syllabus would be adapted to the needs of the students and the community and would take advantage of agricultural activities and nonfarm enterprises in the surrounding area to provide students with opportunities for field work. 49. In-service Staff Train. To improve the quality of teaching and learning in project schools, about 3,720 teachers and administrators would be provided in-service training in content and teaching methods in home mechanics, home economics, agriculture and industrial arts. Part-time community teachers would be recruited to teach specific skills such as tailoring, hairdressing, and small engine repair. This approach has been successfully used by the Nonformal Education Department in the operation of "interest group" courses for the out-of-school population. About 540 staff would be provided training in maintenance and repair of equipment, both at the School Equipment Center in Bangkok and at regional centers. Another 3,160 nonteaching staff, including principals, librarians, school counsellors and community development officers, would be provided short training in their respective areas of responsibility. 50. The principal training agency would be the Supervisory Unit of the DGE in conjunction with other agencies concerned such as the Departments of Vocational Education, Nonformal Education, and Community Development. In order to train a maximum number of staff with limited resources, "echo- training" would be used whereby central supervisors would train regional supervisors from the 12 regional centers, and they in turn would train the teachers in their respective regions. All training courses would be held in step with the development of the project schools. Seminars for principals, assistant principals and practical arts department heads would be held at selected regional centers by the DGE's Supervisory Unit. Outcomes of the seminars would be used as the basis for further improvement of training and curriculum implementation in the following phase. 51. Output. When fully operational, the project schools would enroll about 335,000 students (26% of total lower secondary enrollments) and are expected to graduate about 111,000 students (24% of total lower secondary graduates) each year. About 80% of lower secondary graduates are expected to continue their education at the upper secondary level. 52. Teacher Utilization. As mentioned above (paragraph 34), poor teacher utilization at the secondary school level adds significantly to educational costs. For example, an increase in the average weekly teaching periods from the current 16 per week (13-1/2 hours) to 18 per week (15 hours) - 16 - would allow an increase in the average teacher/student-ratio from 1:18 to 1:20 (without necessarily increasing class size) and reduce the expenditure on teacher salaries significantly. Meeting these targets would translate by 1986. into annual recurrent expenditure savings of $3 million for the project schools or over $17 million for all lower secondary schools. During negotia- tions the Government agreed to prepare and furnish to the Bank, by December 31, 1983, a plan to improve teacher utilization and thereafter carry out such plan in accordance with a schedule satisfactory to the Bank (Section 3.11 of the draft Loan Agreement). 53. Teacher Incentives. Rural schools find it difficult to attract sufficiently qualified teachers for a variety of reasons: distance from amenities of urban communities, reduced opportunities for supplementary income, and relatively poor physical facilities and teaching materials. The project is addressing this issue for project schools by improving the class- room environment through improved facilities and materials. The Government already provides housing and scholarships for rural teachers but additional incentives are required to offset the natural attraction of urban locations. During negotiations, the Government agreed to carry out a study on incentives suitable to attract and retain teachers in rural areas and submit its recommendations to the Bank by December 31, 1984. After an exchange of views between the Government and the Bank, appropriate measures would be taken (Section 3.10 of the draft Loan Agreement). Planning and Management 54. This project component would improve the Government's overall capacity for educational and manpower planning and help develop an integrated planning system in which there would be effective coordination of departmental and ministerial planning and ;3licy formulation within and between the MOE, NEC and NESDB. It would also strengthen the linkages between central and regional or provincial planning and management agencies. 55. Central and Provincial Staff Development. The objective is to develop an integrated planning system that would coordinate the management of resources at ministerial level as well as between central and provincial units. This would be achieved by (i) entrusting the NEC with responsibility for overseeing and coordinating interministerial planning; (ii) restructuring and strengthening the Division of Educational Planning to enable it to formu- late sectoral plans and policies and coordinate development plans of the MOE departments; (iii) undertaking a study to clarify the planning functions of, and relationship between, the NEC, NESDB and the Division of Educational Planning; and (iv) providing technical assistance and training in planning and management. During negotiations the Government agreed that it would, by January 31, 1983, submit a plan to the Bank for expanding NEC's responsibili- ties and for strengthening the Division of Educational Planning in MOE, and thereafter implement the plan after exchanging views with the Bank thereon (Section 3.08 of the draft Loan Agreement). - 17 - 56. In order to strengthen staff expertise in planning and management, training would be provided for the Division of Educational Planning, departmental planning units, the Office of the National Primary Education Commission, the Central Procurement Unit, and the 71 provincial planning units of the MOE; the Population and Manpower Planning Division of NESDB; and the NEC.- Overseas and local fellowships would be provided to these agencies for short courses as well as higher degree studies in manpower and educational planning and related subjects. Local staff training programs would focus on operational issues such as manpower and educational planning techniques, program or project planning and budgeting, and project monitoring and evaluation. These programs would be carried out at the central and regional levels by DGE for about 130 secondary school management personnel and at the provincial level by the NEC for 1,245 provincial planning staff. The project would provide some equipment to the Division of Educational Planning. 57. Regional Management. To improve regional management, the project would provide technical assistance and training to help rationalize the management and organization of REOs as well as to improve capabilities in school supervision, curriculum research and instructional materials develop- ment. The project includes the provision of 3 man-years of local consulting services for this purpose, and a total of 4 man-years of local fellowships. 58. The project would also strengthen the REOs in the four major geographical regions: Region 3 (Songkhla-south), Region 6 (Lopburi-central), Region 7 (Phitsanulok-north), and Region 11 (Nakhon Ratchasima-northeast) by providing office equipment and furniture and reference materials for curriculum development and production of teaching-learning materials. The government has already started work on improving the REOs in these four regions as the first phase of a plan to improve the management of all 12 REOs in the country. The objective is to enable the REOs to improve the quality and effectiveness of secondary education through more comprehensive supervision of schools and inservice teacher training, production and dissemination of supplementary instructional materials, and research into local educational problems. During negotiations, the Government agreed on a staffing plan for the four project REOs which would enhance their effective- ness (Annex B to Schedule 2 of the draft Loan Agreement). 59. Studies and Preparation of Future Projects. Financing for approxi- mately 100 man-months of foreign consultants and 80 man-months of local consultants would be provided to assist the Government with planning and management studies and preparation of future projects. Three major areas have been identified for priority studies: vocational and technical education and manpower needs, teacher training, and educational planning. Provision is made for other studies to be included in the course of project implementation. Terms of reference for specific studies would be agreed between the Government and the Bank. 60. Monitoring and Evaluation. The project would provide funds for about 80 man-months of foreign/local consultants to establish procedures for, and implementation of, monitoring and evaluation of the project. In addition, the NEC would undertake separate mid-term and final evaluations of all project components. - 18 - 61. Technical Assistance. A total of 51 overseas and 4 local fellow- ships, amounting to about 42.3 man-years and 6 man-years, respectively, would be provided to the MOE, NEC and NESDB for developing staff expertise in planning and management. Local and foreign consultant services would be provided to design and implement programs for local staff inservice training in planning and management for the MOE, NEC and NESDB, and to assist the MOE in project implementation. For the REOs, local consultant services would be provided to assist in curriculum research and development, and in training and supervision methods. Terms of reference for this assistance would be agreed between the Government and the Bank. Cost 62. The total cost of the project is estimated at about $214.4 million with a foreign exchange component of about $73.3 million (34%). Taxes and duties amount to about $27.9 million. Estimates of construction costs are based on bids for construction of buildings similar to those proposed for the project. Site development costs are estimated at 17% of construction costs; the cost of engineering and architectural services included in the project for 280 schools (services for 200 schools are being financed under Loan 1271-TH) is estimated at 1.5% of the cost of civil works and covers soil investigation and laboratory tests and reports at $870 and $220 per site respectively; topographical surveys of 180 man-months at $945 per man-month, and of working drawings of about 100 man-months at $820 per man-month. The salaries of clerks of works are estimated at 0.5% of the cost of civil works (240 man-years at $2,610 per man-year); and furniture at 10% of construction costs. Equipment estimates are based on preliminary equipment lists which were reviewed during appraisal and found reasonable. The cost of teacher training for the project's lower secondary school teachers is estimated at B 2,000 (about $90) per trainee, and allowances are made for planning and management, studies, evaluation and monitoring, and for the preparation of future projects. The cost of foreign consultant services, including salaries, housing allowances and airfares is estimated at $8,000/man-month. The cost of local consultant services is estimated at $2,500/man-month. Foreign fellowship costs are estimated at $1,500/man-month and local fellowship costs are $500/man-month. Costs for these components are in line with current costs. The unit building cost would amount to about $130 per sq m (April 1982 cost), which is within the unit cost for similar buildings in the region. 63. Contingency Allowances. The contingency allowance of $65.9 million includes: (a) physical contingencies amounting to 8.6% of the base cost (in April 1982 prices); and (b) price contingencies averaging 33% of the base cost and physical contingencies. Price contingencies were calculated on the basis of the implementation schedule agreed between the Government and the Bank and assume the following annual rates of inflation: for foreign costs - 8.0% in 1982 and 1983, 7.5% in 1984, 7.0% in 1985 and 6.0% in 1986; for local costs - 12% in 1982 and 1983, 10% in 1984, 9% in 1985, and 8% in 1986. - 19 - 64. Recurrent Cost. Full recurrent expenditures for project components would commence in 1984, amounting to about B 188 million ($8.2 million) per year. Annual incremental recurrent costs for 1984-87 are based on the comple- tion of 120 schools in each of the preceding years. Assuming that total recurrent expenditure for secondary education will grow at 14% annually over the Fifth Plan period as projected by Government, incremental recurrent expenditure generated by the project would account for.1O% of the total estimated recurrent expenditure for secondary education in 1987. Financing 65. The financial plan provides for a Bank loan of $75.0 million, including the capitalized front end fee, equivalent to the foreign costs or 40% of total project cost net of taxes. The Government would finance all local costs, including all recurrent expenditures. Implementation 66. Responsibility for implementing the project would rest with the Office of Under-Secretary of State for Education. A Central Procurement Unit (CPU) was established in this Office under the Fifth Education Project (Credit 913-TH) to provide support services and coordinate project implementation carried out by line units in the MOE for all externally financed projects. The CPU would continue to perform this role, including preparing quarterly progress reports to the Bank. While the CPU would assume responsibility for overall coordination, the DGE would be directly responsible for implementing the lower secondary schools component of the project, and the Division of Educational Planning, NEC and NESDB would be responsible for implementing their respective staff development programs under the planning and management component. 67. DGE architects have prepared preliminary designs of the workshops and academic facilities which have been reviewed and are acceptable to the Bank. Working drawings and tender documents are under preparation for the first phase of the project covering about 120 schools on the basis of detailed surveys and soil tests now underway by DGE, assisted by consultants. Tenders, review of tenders and award of contracts for the first phase would be com- pleted by January 1983; construction would start in February and be completed within a year. Each subsequent year, another 120 schools will be built. The DGE architects will supervise construction work at regular intervals and check progress, and clerks of works will supervise construction daily. Procurement of furniture will be phased with construction. The training elements of the project, studies, evaluation and monitoring, and preparations for future projects would be phased over four years, 1983 through 1986. The proposed project would be completed by December 31, 1986. - 20 - Procurement 68. Civil works and procurement of furniture and equipment would be grouped to the extent practicable to increase competition in bidding. Civil works contracts (totalling an estimated $165 million) would be awarded on the basis of local competitive bidding but foreign contractors would be permitted to participate. Thailand has a well-developed construction industry and foreign firms not already established in Thailand are unlikely to bid due to the relatively small bid packages ($200,000-1,000,O00), the mixture of alterations and new works under the contracts, and the 480 scattered construction sites. Local contractors have won all civil works contracts in past education projects. Bidding would follow current government procurement procedures acceptable to the Bank. Prior Bank review would be required on contract awards above $700,000 equivalent for civil works. 69. Equipment packages of $100,000 equivalent or more (totalling about $18 million) would be awarded on the basis of international competitive bidding in accordance with Bank guidelines. In bid comparison, domestic manufacturers would be allowed a preferential margin of 15% or the existing customs duty, whichever is the lower, over the c.i.f. price of competing imports. Equipment which cannot be grouped to form packages of $100,000 or more, and furniture, would be awarded without prior Bank review on the basis of local competitive bidding in accordance with current government procurement practices acceptable to the Bank. Miscellaneous items of equipment, in packages not exceeding $50,000 equivalent, subject to an aggregate total not exceeding $2.5 million equivalent, may be purchased through local procurement procedures satisfactory to the Bank. Books and journals (totalling about $726,000) would be procured through direct purchase after negotiations for discount. Disbursements 70. At the request of the Government, academic facilities would be financed exclusively from Thai budget. The proposed loan of $75 million would be disbursed on the basis of: (a) 80% of the cost of construction and site development for workshops; (b) 100% of the foreign exchange cost of imported equipment, books and journals, 100% of the ex-factory cost of locally manufactured equipment, books and journals and 65% of the cost of equipment, books and journals procured locally; (c) 100% of the cost of professional services, consultant services, and training. All disbursements would be fully documented except disbursements for civil works contracts not requiring prior Bank review and local training, which would be made against a statement of expenditure, documentation of which would be available for inspection by Bank supervision missions. Based upon experience of implementing previous Bank/IDA projects, the MOE has satisfactory capacity to use the statement of expendi- ture procedure. The DGE architects would certify the completion of the stages of construction. Disbursements are expected to be completed by December 31, 1987, one year after project completion. - 21 - Accounting 71. Accounts would be maintained in accordance with sound and generally recognized accounting principles and practices satisfactory to the Bank. Auditing would be performed by independent auditors appointed in consultation with, and acceptable to, the Bank. Annual audits would be submitted to the Bank within six months after the end of each fiscal year. Benefits 72. The secondary school component would provide improved classroom facilities, workshops, equipment and materials and in-service training for some 3,240 teachers in work education subjects to help prepare students for productive employment when they leave school. By focusing on the smaller rural schools, the project will improve access of rural students to a practical education which will enhance their income earning potential. By 1987 a target of about 335,000 students would be served by the 480 schools involved in the project. 73. The project would strengthen the Government's overall institutional development by improving the effectiveness of planning and management in the MOE, NEC and NESDB. The provision for staff development would strengthen the Government's capacity for effective planning, appraisal, monitoring and evaluation of sectoral and intersectoral projects and programs and advance the goal of developing an integrated planning system within and between ministries. The training of provincial staff in planning techniques would also strengthen linkages between provincial planning units and central planning agencies. Four of the regional education offices would be provided with equipment and materials and technical assistance for organizational and staff development to improve their effectiveness in school supervision, in-service teacher training, research, and production of local instructional materials. The improved effectiveness of the REOs would be part of the overall strategy to improve the quality, relevance and efficiency of secondary education. Teacher utilization in the project schools would be improved with a possible recurrent cost saving in 1987 of about $3 million for the project schools or over $17 million for all lower secondary schools. This could lead to improved efficiency in the use of teachers in secondary education as a whole. Improved teacher incentives would result in the rural lower secondary schools getting better qualified teachers. Risks 74. There may be some difficulty in recruiting sufficient numbers of qualified staff to teach work education subjects in the project schools but this risk is mitigated by in-service training of existing staff to teach work education, improved incentives to rural teachers and improved efficiency in the use of teachers in classroom teaching. An additional risk is that the implementation program, requiring 120 schools to be upgraded each year for four consecutive years, might strain the manpower of the DGE but this would be relieved by improved management capacity through the project's planning and - 22 - management staff development program. Despite these risks, the project is justified by its expected contributions to the quality, relevance and efficiency of lower secondary education, widening access to secondary education in deprived areas, and strengthening the Government's planning and management capacity. PART V - LEGAL INSTRUMENTS AND AUTHORITY 75. The draft Loan Agreement between the Kingdom of Thailand and the Bank and the Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement of the Bank, are being distributed to the Executive Directors separately. Special conditions of the project are listed in Section III of Annex III. 76. I am satisfied that the proposed loan complies with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 77. I recommend that the Executive Directors approve the proposed loan. A. W. Clausen President By: Moeen A. Qureshi Attachments Washington, D.C. May 20, 1982 ANNEX I - 23 - Page 1 of 5 THAILAND - SOCIAL INDICATORS DATA SHEET THAILAND REFERENCE GROUPS (WEIGHTED AVEjAGES LAND AHEA (IHUUS,AND SQ . IS. ) - MOST RECENT EStIMATE) a - TUTAL 5i4.0 MOST RECENT MIDDLE INCOME MIDDLE INCOME AGRICULTURAL 178.1 1960 /b 1970 /b ESTIMATE /b ASIA & PACIFIC LATIN AMERICA & CARIBBEAN GNP PER CAPITA (USS) 100.0 210.0 590.0 1136.1 1616.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF CUAL EQUlVALENT) 62.5 204.3 376.3 1150.6 1324.1 POPULATION AND VITAL STATISTICS POPULATION, MIU-YEAR (THUUSANDS) 27229.0 36499.0 45475.0 * URBAN POPULATION (PERCENT OF TOTAL) 12.5 13.2 14.2 40.8 64.2 POPULATION PRUJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 68.2 STAllIONARY POPULATION (MILLIONS) i03.0 YEAR STATIONARY POPULATION IS REACHED 2070 POPULATION DENSITY PER SQ. Eli. 53.0 71.0 88.5 373.1 34.1 PER SQ. KM. AGRICULTURAL LAND 210.3 247.5 250.0 2382.8 94.5 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 44.7 46.2 42.4 39.8 40.7 15-64 YRS. 52.6 50.8 54.5 56.7 55.3 b5 YRS. AND ABOVE 2.7 3.0 3.1 3.5 4.0 POPULATION GRKJIH BATE (PERCENT) TOIAL 2.6 2.9 2.4 2.3 2.4 URBAN 4.4 3.5 3.2 3.8 3.7 CRUDE BIRTH RATE (PER THOUSAND) 44.0 39.5 30.9 29.7 31.4 CRUDE DEATH RATE (PER THOUSAND) 15.8 11.3 7.9 7.5 8.4 GROSS REPRUDUCTION RATE 3.2 2.9 2.1 1.9 2.3 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. 202.9/c 761.0 USERS (PERCENT OF MARRIED WOMEN) .. 7.6 39.0 44.1 FUOD AND NUTRLTION INDEX OF FouD PRODUCTION PER CAPITA (19b9-71=IOO) 92.0 100.0 124.0 123.7 108.3 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 96.0 103.0 105.0 112.6 107.6 PROTEINS (GRAMS PER DAY) 43.0 50.0 49.0 62.5 65.8 oF WHICH ANIMAL AND PULSE 10.0 15.0 14.0 19.7 34.0 CHILD (AGES 1-4) MORTALITY RATE 15.6 9.6 5.9 4.8 7.6 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 50.8 57.1 62.0 64.0 64.1 INFANT MORTALITY RATE (PER THOUSAND) .. 86.0jd 68.0 50.2 70.9 ACCESS TU SAFE WATER (PERCENT OF POPULATION) TOTAL .. 17.0 22.0 45.9 65.7 URBAN .. 60.0 49.0 68.0 79.7 RURAL .. 10.0 12.0 34.4 43.9 ACCESS Tu EXCRETA DISPOSAL (PERCENT OF POPULATION) IOTAL .. 17.0 40.0 53.4 59.9 URBAN .. 65.0 58.0 71.0 75.7 RURAL .. 8.0 36.0 42.4 30.4 POPULATION PER PHYSICIAN 8003.8 8462.6 8154.1 4428.7 1728.2 POPULATION PER NURSING PERSON 4900.0 7058.4 3542.0 2229.7 1288.2 POPULATION PER HOSPITAL BED TOTAL 1351.0/e 897.8 814.2 588.5 471.2 URBAN .. 176.3 519.5 579.6 558.0 RURAL .. 13910.7 1268.5 1138.5 ADMISSIONS PER HOSPITAL BED .. 31.0 44.8 36.7 hOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.S/e 5.8 5.5 URBAN 5.3/e 5.8 5.5 RURAL 5.6/e 5.8 5.5 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. ,. 2.4 URBAN .. .. 2.2 RURAL .. .. 2.4 ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. 18.9 URBAN . 86.1 KURAL .. 9.0 -24 - AE Page 2 of 5 THAILAND - SOCIAL INDICATORS DATA SHEET THAILAND REFERENCE GROUPS (WEIGHTED AVEyAGES - MOST RECENT ESTIMATE)- MOST RECENT MIDDLE INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b ASIA & PACIFIC LATIN AMERICA & CARIBBEAN EDUCATION ADJUSlED ENROLLMENT RATIOS PRIMARY: TOTAL 83.0 81.0 82.0 99.8 101.7 MALE 88.0 85.0 85.0 100.6 103.0 FEMZALE 79.0 77.0 78.0 98.8 101.5 SECONDARY: TOTAL 13.0 17.0 28.0 53.5 35.3 MALE 16.0 20.0 29.0 58.4 34.9 FEMALE 10.0 14.0 27.0 48.6 35.6 VOCATIONAL ENXOL. (% OF SECONDARY) 19.0 24.0 17.0 21.1 30.1 PUPIL-TEACHER RATIO PRIMARY 36.0 22.0 28.0 34.2 29.6 SECONDARY 20.0 16.0 27.0 31.7 15.7 ADULT LITERACY RATE (PERCENT) 68.0 78.6 84.0 86.5 80.0 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 2.0 5.1 6.4 12.7 42.6 RADIO RECEIVERS PER THOUSAND POPULATION 6.0 76.0 131.0 174.1 215.0 TV RECEIVERS PER THOUSAND POPULATION 2.2 6.6 17.6 50.6 89.0 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 11.0 20.5 .. 106.8 62.8 CINEMA ANNUAL ATTENDANCE PER CAPITA .. .. 1.7 4.3 3.2 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 13958.0 17010.0 21547.7 FEMALE (PERCENT) 48.3 47.3 46.5 37.4 22.6 AGRICULTURE (PERCENT) 83.7 79.9 76.6 50.2 35.0 INDUSTRY (PERCENT) 4.4 6.0 8.7 21.9 23.2 PARTICIPATION RATE (PERCENT) TOTAL 51.3 46.6 47.4 40.2 31.8 MALE 52.7 49.3 50.9 49.8 49.0 FEMALE 49.8 43.9 43.9 31.1 14.6 ECONOMIC DEPENDENCY RATIO 0.9 1.1 1.0 1.1 1.4 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 21.8/f 23.8/g 14.0/h HIGHEST 20 PERCENT OF HOUSEHOLDS 50.97 49.7]j 42.27.. LOWEST 20 PERCENT OF HOUSEHOLDS 6.2/f 6.1/& 7.6/h LOWEST 40 PERCENT OF HOUSEHOLDS 14.9/f 15.9/g 19i.17 POVERTY TARGET GROUPS ESTIMATED ABSOLLTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 159.0 248.6 RURAL .. .. 106.0 a 193.7 187.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 115.0 249.8 513.9 RURAL .. .. 110.0 L 234.3 362.2 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 15.0 21.2 RURAL .. .. 34.0 32.2 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1976 and 1979. /c Covernment program only; /d 1964-65; /e 1962; /f 1962-63; /g 1968; /h Preliminary data for 1975-76; due to lack of data on national basis, the methodology for aggregating the available regional data overstates incomes of low income groups and understates incomes of higher income groups. Thus, this data is not suitable for any analytical comparisons. /i Estimates for 1977. May, 1981 ANNEX 1 - 25 - Page 3 of 5 MEIyy`IONS OF SOCIAL IDtCITOlaP Noons: Although rho -ass are draws Onus ...r.. generally, taged the ussr I-hrrrtc n rolnuh.c..ac..oald als an soe hot they wy oat he lase- sarosllyonarhlehesar-ath lak f sanar acd eflitoo andrsonptsaa h d teertosrorhe La tolrtr she data hu data .r Irn thc½te oeu ednslcrurs nagoltaud,icdssarorrnds, -ad caat -let~aia or d4ffcoceons ho--aroo.trlcs. fc cacoo rsp t I hyrr ore oroo of the sba- o toatoy and 727 soo gr..up steh -osohat highc- sont h Is hao toc toasry groa oftoeah r str rry o 'Ep salt Epo 01Opornen group sheer "Middle frost. Iarts dfrlld and Co-ddle EastI tn ohaco IfrIsua sos turur1 Ieflaes-lohd tfsu grop too the argeachpltoa eghdaltooasas e sh -dur-to rod shows oshy' ohas11 as rfofre utnurT 0dophatot a htsdotr. Ilsoc the ttrg ud oa-rrlir aong the oldilo-o depends ow to. a-alehthlil pat doat as tO tha oosato0 sad ref ercarieic r t n- 1 . 1 ~,Iarag -I a LAND1 ARfA Ithooaatd squ. ositoao lor HPioat hod - ot-W1 uis-.l, srdurl-h1lrr (tota, Total Tot., surf arc u-oso-pojSig ass area wad Oslat oos.uhsaWrnh Oohkh Irfe ras-tat nuder f -loopiral hoOt grrtoal - F-:ruatn aT a-rxltr-l area used soaac op-entally stae-spsllosas posture geare us a-re-iotAd hospItall Sad ne- f2rsas atra.r ahr ksdittrhar gardess on to 1 fallo 1978 data. haP1n7 lltaio orotor ' hepate la are aatablaht ntpnetrysafd ha a _brt use phrcia. Poacllnhse-ta prsoidig p-saips ITttaa lIP PEP _CAPITA (Mfl) GNOP per uIaot-aa thtet ahtpie,tl t-tr apbptiloudd.faa hoehatals%,,,P, hntr,alue eR oslated hp sane -sorrlo arthsd aS Worldls Alsaf1-79hais) 1911, oa eas -i sotr asa peresstal sf Sd hy -osa -c bhue by a 1970, and 1979 dana,. reasoo Sairtana , .srse, elidoife, st-o . ,hith offor Is-pet e'Ir o`rrne dathor and pras.d a, isOe sg f ne-als carlhit-e. Pa seta aetgieptol.ranrl osA ho-,olsadathrscc c Irara hnra1aauroahsaanesehaadaea trlotyl oi grc o ua t-rlert per -aplro; 196f. 190.sr.11 retr. Ip-oltee hspreaeloldd only udte total. data. Adorennorspro lasyltal ta - Total rneof rdls-l-an to or Oli-h-Sog Iran hospitals da-ide hy theruser sO beds POPULAtTIO ANIt VTo.ITALTATISTtCS Tota "'Po...lat- P11-Teen (tod-adla - As at July 1; 1960, 19ff, ash 1779 POtOitE data. ho-soo tact at nostl-od Ireorara prohanod - oa,ara,ad ru 1al Urha- Popstantis (per-eac at rota) - Patio of orhb rothlpplta;Ahsoala -oaitea of a goap of iscdioihsj who share Ii-ag quat"r ditfferret dellasator of arIas areas ry aftllsa s-bihllry -E dotI aedh alnos mels A hoonden or ladger nay so may aon he arrlsded to p ~ ~ ~ s-:lr os-her; oarS, 971 so~~~~~~~ad 1979 I. rho hoa-shld uretr Psrro poaea. Popoatls hr ear2110 -lrrrt pplahopea) erru.s. one hIIe or111hr of penso-s ret trn oaltht o rcIape uattfor -ese- and I faa r Id --1peay raitleta, a7. pe-ars Thle p....- OsoveSloa dollaswthoeroot I haa aotota eset oRet tar I.Ptll-y SIt ohas tho thre lsRi asotg a e to ofs toL, unar oe roa Oweltloagr renpecrl.ehy- fertIlIty. feaorlag "S S..toa - se uSIili.past a77hy Y..ts-. pThoranPe.- t_ld'ib t atiiyi fgq -. eetg hashsasregus hot -tn,a one, adI thlese e' uhost -ihso dar of sdtanaldtll sfEATIOp fert-lal redsfr oseatspupSo Idjte trtlocat RatIos the ItIa ,ratedI. Is eq alto thedath roa,, aed alsol the aigo stroorae r- erlon Raloe nsepleyhe spretgso epr o1fsoes erlat resdltsar lorar.yli. The ronotr pplla Ie s sco-ted Es-lt u..tIernf dsto orlme a eae 1 er theablnte soase ioss,lnaf the pothjrated oharaotrrlts h ate ppaate otrolle,nos pupta are Ie tho or4oboe .. th Seto p rho-tage. fe'a' Isth yar11h,an e os o doWe f otlsataetoshta Iteosodars n,,hoo= - toa,mlessdlegI - -rop t Ida ln;oordr nheat I... 1,,I1'l bas.baorthad te1to a hear difour. poe If poe pr ina..tpilateofar t Pet tIlsaypooht0: t nshn The yea iales storsosary SPoplttspoada aeri cororlhn"ethrI"fgg snsldnfr-uI .Stie.a ero masthedb7, Iasualply tfh .. haI 12 pesos ofII age bsrnenphoedneaeiooSohspI ar gena Lbpohattoyes.r 200oh Iao friiylt .Se lade Pe a. he.- Ol-rrpp.sru a qaerunto11 strs tErrr oalt. -rrllruo t Irersot of.. yeaaro - dtw Iitoaallacltutoaoi tona are; 191017 ash1979dato Thhere-altoyp...ib r,de ra nra,hlete,o othet prore-amssls oprae -lP. - OOSI. he. Laralsrlthral so..o.tds aorfu goalua l aly o as 1 teps7tneote of agtordory ..srltortors ony;197,h70as 17 datIIPpl_traed aI-rmn,cOsoaao-Ietsoer coldi Populatos Ags arooros (peroes) - ElIdnac 7-14tese) eshtgag 75 pfrlnot y aolssa1 o ad Vt-n yruhr ftesol ts in th Ioossh 6aloare 97t parsrdse19 eonnaesthdperppu seps-dlglae lotto; 190, 191, sd 199data ddale lespraetdoru Iaraeaot faiiel as - iproadtan ettr Pe,ultlat Ireet gti-to lo e - tot - C"-d as nob drwl oesI total er-IIaerely s dI.tatal adul popudla ttiItIn age ersah ot pear op196to-e too a 1978 d.61. dOtr-ft.Taol11t71-79 P..lalui- forS 195-I,hhlJR al 191-79. -1 lll,lll8-a~1 Pssaarilots (per ahcosso,y teepl. dicide- Pass,enge ten ror- rl- irnh Erodetlo - hahn fortoca) - na elrSe hrth per thesasf Iaf. nfl-ear oars nsot g s thn1 uh ano ealde salsts,hase o po 1als 96 t, l9 ft, od 1979 data. Adllttlrtehrral -e --a.Lie.edIt abet ad. Orosa leprasurn sen sans-hoerage soh r -of doghasrah eana etllI. leeiad-roe esleeI toterln nodt p,It-er hargsrw oo ai yerlipp rates;. farul 1ron-yer0 rroe 19 ahlrt In9 1-960 91 a 99 oreotlsaolhlloalg Pes,alt - Planta-hsRterora-. b-o-a A ( .oo ..t - inr-th rsue oof attnaptpos ft ReMPT ONe e hoadpplro)- Pnoaeafrhsdatt sOd lrE-uono de... e urh 1 I i,h er thnhaa.o..tn..hfat d pasfo pdoygran geors pahtoa per nh...Sht poprl...os; stashes etnedT h.reonscra Pa 960ylsa 1970enr Stdron7tofSwrtedsno-nnntaitsrlo iostrly csdayorhhioaltansaflctsa won. eatof Rhl-I(,rar ago-bd Il-l ye-. nr .thel oner thlnuuaendsi Icid-ro asdi Scspre Croa laco e osn o lAtll those ath as..eiegeolre-di lade o Pool P -uuoloy o-arCapit 19-ag71= 07i. - T960s of9per rod 19 salE9enoA-st A beliahr erd asopeha asdo h shno prosa- osofallfod ossdttes Poth ttcooa..e sd)-A.. -eed ash feel pealret ellrin `the y"or,-i"`la asast,ets nor leine-It tenow dcusuhed i er ls. oeredplulte f soe pe..lay goilo p (.g. sagansagrso oal ohl ice. 2 d ~~S lasnoad od opor) ehtohace odille ia~d taolo lean (e..tg. efc I rend a Ii.rI yl h -g!' t fTVSe i f. tatotl arrgapeloor runsegls;19h-h, 971 sd d97 hatsI. Total Lb or auood)-lsclthyatr-eaos nlla Potfra hild supply-o salaries 4 y Ilr erto hresoteesots)- frae trmarlfoo nmloe o ldr ocenSho- ethetS,,-S mo., all -d -poaula of .benae fo uylcaellea so per op.n-o1aniop poaattoril of ..all -egos.tef-apopass Inefitad sIsptriodione prrhas Aollll sophisosponalasstl podunlr, mpotslP,'n roe npaal- 91 Od iR eel 1979 Iota. 1 I Sde ,rad-totrao Is fod -nodentog, eel- tosses SIdeasnedholn aItc oeel Ag ltd (iokrt en..I - yahrnfaeIfaig tnt ry,hotlp o hto.acol lard; I.,I 191h,' 190 and ; .6-6,170 1977 data.T t197 sad. 1979ie dots...S )-E - ly-i - ,-.- soPar yo (o e o. e upyo soa us. tafco onrhcoe fr. Pt-ootdryaae. ac on.td anb asrald, rle h-c-lecah held-seer as- 50rorort far oI roltfrle -ntlhil4e hy, lOR prrle f. ,ar napitc pa-eoiogc of..t. ralf maile sadgemalDefi oti... I -r al - riage po Ialy; aSoareo 6 ooso dtrtdA-olalto-ppper dayIi sad-ti snar ofa animle. as16,9, _p ot.l. 1979 17 lg..Tes eon hoeda Il' antiprlnrae palnct proteIn of shlthi .1-ktraNs sh ppll ho urIna al proteIn. eThnsossscd lnlotgg-roea labnr of.rthe ppolrlco aol lan nine1 t.brend, tolsalpt sret as d ooi e f n arth ooole~g.d, proose. I PAR tlb.is. she Wirl- TAuoml lpeaert lth L-bbtlr a fpoysl grloro tro 15 ad 6t5 sadet hId (aeI-)OoalyRc hit~-afPpe rChf.al Aooldoit e thosdI oad .trse ftPoas -n sous (lat Is panh ash I late) ! ltnatrdr r-Ich1960 trc sod 19ias ore5of t97hhre; 1970 71 ort d 1979a dor.9o doe tolo Life layunsoop r floth peers) A Iteg suolt of yelarno lif prem-liagTefloIn ntae are sang_ - appoooie med asuresopney ,J,es, lalsot nrtellty Iore d'pa Nhoath .plyosf featd uP tofears at.e arSE 5-ntmtd holt-Ptn R.- a ioel(Il te toitoS-I Iha aof rtn her rofIpraple (total,-arIas, ashlcoral) -th fesnopahle -ooecalno safe.ep-trlolle pertantagec ~ of h hirt hspe t..oe h oao dlcn E norhara p- 0m The..O tyd easctioem e-of the -rooty f ra th esep-ais, derad hoeril the renAl easIlere as hIlag status- 75sowl ooor of tha hose Icd 23ra areas fnle Polt Ielo Ablco.. n Poer noelvl pret ra ocaosll s-treaS -ul u,age sltef hos.f r shnohdere ..d y A of the 'Tsahird aEnd roDral nl li - Reacro atino Ifoo.plasisod d rorelwh are aolol ... doro hwatoed r ,d1t ay don961 rto6 at pas1o7al day ir9f7rdateg thetp e r'. .. fl. faty sae e hr. _r.aI ~ Ptk PIya .dd -1. --Ipeoir Itout esla lasdrarel Pasrsnday cooredr65 a thel (ashaiog shdaoe, 14 r ' aut I0 ..tdeua neArn-o of hamseopert.n.. fowInoIh fo enh d kto-s-al DensdIbylrios a agetrh ett-nae by,,. rae- as aeso the eeif-prIInrOa ao sii.ga.- pusoir. 2 anslraw sad ... 40oesls p enotea Eat dasta hlotuas f-nsatb 1901 17 ,d17 dt.Ifh.. hl. urasslp .a..le frs St atalBaoo h. aleriY lere l. f iig _~eE1- g ..IaeVr fI-t ee Polabor tentrao Pnna9d s- dPapultda Ir...I cobelo,pa-IoIn maeahfmleglat oes, p as a odut-ed.baol tcsrttaori os...c. - 26 - ANNEX I Page 4 of 5 PoDulation 46,5nn (mid-1930, thousands) CNP per Canita U5S670 (1990) THAILANI, - ECONOMIC INDICATORS Amount (million TISS at Average annual increase (%) Share of GDP at market prices (5) current prices) (at constant prices) (at current prices) Indicator 590n /a 1960-70 1970-79 1975-80 1980-85/b 19R5-90/b 1960 1970 1975 19o/a NATIONAL ACCOUNTS Gross domestic Product 32,865 9.4 6.3 7.7 6.8 7.3 100.0 100.0 100.0 lo.n Agriculture 9,S72 5.5 5.3 3.9 4.2 3.8 39.8 28.3 31.5 26.2 Industry 7,499 11.5 7.8 11.7 8.6 9.0 18.7 25.3 24.8 27.5 Services 13,326 9.0 7.1 7.8 7.5 8.3 41.5 46.4 43.7 46.3 Consumption 25,716 7.3 7.0 7.7 4.9 6.2 95.7 78.7 79.3 77.6 Gross investment 9,166 15.8 3.8 8.9 7.0 6.7 15.7 26.2 25.4 27.9 Exports of GNFS 8,211 10.5 1.6 14.1 9.9 9.1 17.4 16.7 19.1 25.0 Imports of CNFS 10,229 13.9 3.7 10.5 4.9 5.6 18.9 21.5 23.7 31.1 Gross national savings 6,995 13.7 4.1 6.9 9.q 8.4 14.1 21.5 20.7 20.7 Composition of merchandise trade (%) (at current prices) 1060 1970 1975 1980/a 1985/b 1990/h EXTERNAL TRAnE Merchandise exports 6,657 9.5 9.n 14.7 10.2 9.3 100.0 100.n 100.0 100.0 100.0 100.0 Primary 3,795 4.2 6.6 10.8 6.1 5.n 97.8 80.5 77.3 60.2 46.6 37.4 Manufactures 2,872 29.2 20.9 25.n 14.6 12.7 2.2 19.5 22.7 39.8 53.4 62.6 Merchandise imports 9,987 11.S 3.3 10.1 5.2 6.0 10.0 100.0 100.0 100.0 100.0 100.0 Food 3 03 4.3 -2.7 11.2 S.0 6.0 9.6 9.4 4.4 3.4 3.2 3.1 Petroleum 2,924 11.8 5.0 8.6 -1.0 3.4 10.9 9.9 22.1 31.4 26.9 26.S Machinery & equiipment 2,110 16.1 9.9 4.4 7.8 7.n 29.3 36.1 35.8 23.5 25.2 25.4 Others 3,750 10.1 1.0 19.7 7.8 7.0 54.2 49.7 37.7 41.7 44.7 49.f0 1975 1976 1977 1978 1979 1990/a PRICES GCP deflator 100.0 103.3 112.1 121.9 135.0 154.0 Exchange rate 20.4 20.4 20.4 20.3 2n.3 20.5 Export price index 10.n 97.3 99.4 107.4 129.3 151.0 Import price index 100.0 105.5 113.4 122.3 141.4 176.0 Terms of trade index 100.0 92.2 97.6 87.8 90.8 86.0 As S of GCP 196n 1970 1979 1980/a PUBLIC FINANCE /c Current revenues 13.6 13.9 13.2 14.5 Current expenditures 10.6 12.6 11.7 14.1 Surplus (+) or deficit (-) +3.0 +1.2 +1.S +0.4 Capital expenditure 4.3 9.8 3.4 3.9 Foreign financing n.2 0.05 0.n6 0.2 1960-70 1970-75 1975-R0 1980-85/b 1989-90/b OTHER TNDICATORS CNP growth rate (5) 8.4 6.2 6.9 6.7 7.5 C1EP ner capita growth rate (5) 5.2 3.4 4.4 4.4 5.4 ICOR 2.9 4.0 3.4 4.1 3.8 Marginal savings rate 0.29 n.23 0.21 n.34 0.3 Import elasticity 1.7 0.6 1.3 0.64 0.77 /a Preliminary. lb Projected. /c Central government only. December 14, 1981 ANSNEX I Page 5 of 5 THAILAND - BALANCE OF PAYMENTS, EXTERNAL CAPITAL AND DEBT (Millions US$ at cuirrent prices) Actral Projected Indicator 1970 1975 1976 1977 1978 1979 1980/d 1981 1992 1993 1994 1985 1986 1987 1961 BALANCE0 OF PAYMENTS _ Exports of -oods aod nonfactor services 1,109 2,796 3,490 4,029 4,976 6,494 8,211 9,061 10,562 12,783 15,236 19,251 21,790 25,894 51,414 Of wVhch: 'lerchandise f.o.b. 686 2,178 2,959 3,456 4,041 5,233 6,657 7,333 6,573 10,397 12,491 14,963 17,832 71,221 42,574 Imports of goods -nd nonfactor services -1,430 -3,487 -3,992 -5,066 -5,9n5 -8,170 -10,229 -11,022 -12,319 -14,384 -16,833 -19,706 -23,115 -27,186 -52,347 Of which: Merchandise f.o.h. -1,148 -2,839 -3,146 -4,244 -4,909 -6,822 -8,987 -9,704 -10,929 -12,909 -15,049 -17,679 -20,808 -24,557 -47,913 Net factor incoe fron, ahroad 23 4 -63 -97 -261 -477 -703 -740 -933 -1,152 -1,4315 -1,773 -2,183 -2 646 -5,122 Net transfers 40 A1 24 40 41 61 353 342 347 373 402 433 467 505 697 Current accoont balance -250 -606 -441 -1,094 -1,149 -2,092 -2,367 -2,359 -2,343 -2,380 -2,630 -2,790 -3,037 - 3,443 -5,358 Private direct investment 43 86 90 106 51 53 55 60 65 70 75 s0 90 100 140 MLT loans (net) 32 111 188 205 644 995 2,093 1,732 1,916 2,273 2,515 3,005 3,238 3,412 4,019 Official 31 93 109 212 285 439 460 639 808 919 955 1,016 1,081 1,169 1,599 Private /a 10 19 89 -7 360 557 1,633 1,093 1,108 1,354 t,56i) 1,999 2,157 2,243 3,321 Other capitol /b 93 356 242 792 490 1,036 223 867 762 437 440 160 159 381 799 Change in reserves 82 52 -79 -9 -36 R - 300 400 400 400 450 450 450 500 International reserves 906 2,007 2,113 2,208 2,558 3,102 3,026 3,526 3,926 4,376 4,726 5,176 5 626 6,076 8,076 Reserves as months imports R 7 7 5 5 5 4 4 4 4 3 3 3 3 PXTERNIAL CAPITAL ANO lIST Gross lisbursements Concessionat loans 11 43 52 80 153 233 222 311 410 475 466 488 518 558 960 )AC 11 40 45 53 84 167 158 269 340 377 359 379 405 429 589 IDA - 3 7 9 5 4 4 9 14 18 19 is 10 5 0 Other - - - 18 68 62 60 34 53 80 88 94 103 112 371 Sonconcessional loans 196 403 556 559 1,160 1,792 2,395 1,930 2,000 2,6a3 3,269 3,986 4,563 5,229 8,373 Official -snort credits 7 - - 54 44 127 16Q 150 13A 86 89 88 95 113 195 1360 10 41 43 65 103 139 143 250 346 442 524 584 645 718 873 Other 'sltilatersl ? 37 46 33 46 36 93 77 107 149 1Sf, 225 265 302 470 Priv-te hublirle 1aaranteed 17 39 0o0 57 396 691 717 597 455 415 462 449 440 500 5on Private nonga-ranteed 143 196 367 349 571 799 1,288 856 954 1,581 2,008 2,640 3,118 3,596 6,329 Total gross 'lishoeseseots lss 536 0n9 636 1,313 2,025 2,617 2,241 2,410 3,161 3,735 4,474 5,081 5,787 9,333 Ixterval Debt (fixed-term) e:,lic debt vaitstaodiog it disbursed 328 622 929 1,084 1,816 2,91s 4,063 4,928 6,072 7,216 8,298 8,250 10,425 11,599 n.a. OFficial 291 549 466 917 1,270 1,638 2,098 2,737 3,545 4,464 5,419 6,435 7,515 8,685 14,440 Private 37 68 1S6 151 520 1,064 1,694 2,189 2,527 2,732 2,869 2,815 2,910 2,014 n.a. Private no-guoranteed debt o,,tstnoding and disbursed 382 730 '85 e8o 930 1,241 1,922 2,845 3,615 4,743 6,167 8,329 10,292 12,530 n.a. Total debt outstanding and disbursed 710 1,352 1,613 1,974 2,755 4,062 5,985 7,771 9,687 11,850 14,475 17,479 20,717 24,129 41,571 Undisb-rsed debt 118 666 840 1,401 1,9n2 2,358 3,204 3,066 3,386 3,734 4,087 4,514 5,001 5,459 7,710 Deht Service Total service pavments 162 378 199 443 708 954 1,250 1,149 1,325 1,913 2,490 3,011 3,733 4,647 6,614 Interest 16 35 44 126 199 325 461 640 831 1,019 1,260 1,544 1,890 2, 272 4,200 Payments as T esPorts of goods and 14.6 13.5 11.4 11.0 14.2 14.7 15.2 12.7 12.5 15.0 16.3 16.5 17.1 17.9 16.8 nosfactor services Average interest rate on no- loans (0) /c 6.8 7.5 7.8 7.0 6.7 7.3 11.5 10.5 10.7 11.3 11.6 11.q 12.5 12.3 12.4 Official 6.R 7.4 7.7 6.2 9.3 5.3 - - - - - - - - - Private 6.0 9.5 8.1 8.2 9.8 9.6 - - - - - - - - - Average vatarity of sea lonse (Teats) /c I8.9 27.9 17.4 14.8 17.3 17.1 14.1 15.6 15.9 14.8 14.2 13.7 13.5 13.1 67.8 Official : .4 24.2 20.7 19.3 22.3 23.6 - - - - - - - Private 11.2 7.0 7.3 8.1 9.4 10.6 - - - - - - - - - Bank Irors Zxposure (07 10RD DO)/total OT 22.6 20.0 19.3 17.5 l .S 13.7 11.3 T51R disb-rsenents/tal ro- dibharse-ents 9.5 7.7 7.1 10.2 7.8 6.9 5.5 IBR0 debt service/total debt service 11.1 6.5 9.0 10.0 7.9 7.0 6.3 IDA DOD/total 0D0 - 0.3 0.7 1.0 0.9 0.7 0.5 IDA disbarsesests/total gross disbursements - 0.5 1.1 1.4 0.4 0.2 0.2 ISA debt service/total debt service - 0.0 0.0 0.0 0.0 0.0- 0.0 As " of debt outstanding at end of 1979 Maturity struscture of debt o,itstanding 'rinciDal doe within S years 28.4 Principal dse within 10 years 61.3 Interest str,sct,.re of debt oatstanding Interest due within first year b.6 /a Due to change in classification, projected data for 'private MLT loans" tnclude so.e of the category 'other capital'. 7 "Other capisl iscludes net use of IMF f,onds and net flow of short-term capital. 7c Historical dait dnos not inc,lude nonguaranteed private debt. /d Preliminary. - 28 - ANNEX II Page 1 of 12 THE STATUS OF BANK GROUP OPERATIONS IN THAILAND A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of March 31, 1982) Loan or Amount ($ million) Credit Less Cancellations Number Year Borrower Purpose Bank IDA Undisbursed Thirty three loans and three credits fully disbursed 639.20 31.74 - 1149 1975 Kingdom of Thailand Irrigation 95.00 - 39.51 1198T 1976 Kingdom of Thailand Rural Dev. 21.00(TW) - 3.01 1199T 1976 Kingdom of Thailand Livestock 5.00(TW) - 0.54 1243 1976 Kingdom of Thailand Rubber 50.00 - 4.83 1271 1976 Kingdom of Thailand Education 31.00 - 8.29 1327 1976 Industrial Finance Corporation of Thailand Industry 25.00 - 0.03 1393 1977 Kingdom of Thailand Agriculture 28.00 - 3.10 1468 1977 Kingdom of Thailand Irrigation 55.00 - 18.53 1485 1977 Electricity Generating Authority of Thailand Power 50.00 - 6.90 767 1978 Kingdom of Thailand Population - 33.10/a 16.00 1519 1978 Kingdom of Thailand Highways 110.00 - 26.03 1527 1978 Provincial Electricity Authority Rural Elect. 25.00 - 4.79 1556 1978 Kingdom of Thailand Housing 8.60 - 6.03 1620 1978 Telephone Organization of Thailand Telecom 90.00 - 80.75 1630 1978 Kingdom of Thailand Irrigation 17.50 - 14.21 1638 1979 Kingdom of Thailand Urban Trans. 16.00 - 12.67 1662 1979 State Railway of Thailand Railways 16.70 - 9.10 1690 1979 Electricity Generating Authority of Thailand Power 80.00 - 43.79 913 1979 Kingdom of Thailand Education - 35.00 29.00 929 1979 Kingdom of Thailand Agriculture - 25.00 21.23 1752 1979 Kingdom of Thailand Ag. Extension 40.00 - 34.13 1770 1980 Electricity Generating Authority of Thailand Power 80.00 - 42.17 1773 1980 Petroleum Authority of Natural Gas Thailand Pipeline 107.00/b - 10.55 1787 1980 Kingdom of Thailand Irrigation 80.00 - 73.59 1816 1980 Kingdom of Thailand Ag. Credit 19.00 - 12.41 - 29 - ANNEX II Page 2 of 12 Loan or Amou-nt ($ million) Credit Less Cancellations' Number Year Borrower Purpose Bank IDA Undisbursed 1852 1980 Electricity Generating Authority of Thailand Power 72.no - 45.08 1863 1980 Provincial Waterworks Authority lWater Supply 40.00 - 39.71 1870 1980 Kingdom of Thailand Housing 29.00 - 28.46 1871 1980 Provincial Electricity Rural Elec- Authority trification 75.00 - 72.57 1889 1980 Kingdom of Thailand Inland Waterways 53.00 - 52.62 1918 1980 Kingdom of Thailand Ports 47.00 - 47.00 1922 1980 Kingdom of Thailand Ag. Research 30.00 - 29.95 1947 1981 Kingdom of Thailand Potash Engineering 8.90 - 7.73 1956 1981 Industrial Finance Corp. of Thailand Industry 30.00 - 10.18 2000 1981 Electricity Generating Authority of Thailand Power 100.00 - 100.00 2022 1981 Kingdom of Thailand Irrigation 57.00 - 56.50 2035 1981 Kingdom of Thailand Provincial Roads 35.00 - 34.27 2078 1982 Kingdom of Thailand /c Tree crops 142.00 - 142.00 2097 1982 Kingdom of Thailand Ic Structural adjustment 150.00 - 150.00 Total 2,557.90 124.84 1,337.26 of which has been repaid 279.36 2.85 Total now outstanding 2,278.54 121.99 Amount sold /d 68.63 of which has been repaid 50.88 17.75 Total now held by Bank and IDA 1,968.78 121.99 Total undisbursed 1,271.03 66.23 /a Of which $3.1 million is Norwegian grant participation. /b Includes refinancing of Loan S-10-TH ($4.9 million). /c Not yet effective. /d Of which $43.3 million sold to the Bank of Thailand. -30 - ANNEX II Page 3 of 12 B. STATEMENT OF IFC INVESTMENTS (As of March 31, 1982) Amounts ($ million) Year Company Type of Business Loan Equity Total 1959 Concrete Products and Cement and Construction Aggregate Co., Ltd. Materials 0.30 - 0.30 1964/ Industrial Development - 0.39 0.39 1970 Finance Corporation Finance Company of Thailand (IFCT) 1969/ Siam Cement Group Cement and 1975/ Construction 1978/1979 Materials 28.33 4.24 32.57 1977 Mutual Fund Company Money and Capital Limited Market - 0.29 0.29 1977 United Sugar Terminal Food and Food Limited Processing 2.50 0.20 2.70 1978 Siam Commercial Bank Small and Medium Scale Industries 2.00 - 2.00 1979/ Bangkok Glass Industry 1980 Company, Limited Glass Containers 4.85 0.34 5.19 1979/ Siam City Cement Cement and Construc- 1981 Co. Ltd. tion Materials 63.00 4.00 67.00 1979 Thai Orient Leasing Co. Ltd. Capital Market - 0.15 0.15 Total gross commitments 100.98 9.61 110.59 Less cancellations, terminations, repayments and sales 65.71 2.71 68.42 Net held by the Corporation 35.27 6.90 42.17 Total undisbursed 25.00 - 25.00 - 31 - ANNEX II Page 4 of 12 C. STATUS OF PROJECTS IN EXECUTION /1 (As of March 31, 1982) Credit No. 929 Northern Agricultural Development Project; $25 Million Credit of June 28, 1979; Effective Date: October 12, 1979; Closing Date: December 31, 1985 In general, reasonable progress has been achieved to date, but the completion of major work programs planned for this year will be important to the project's success. Actions are being taken to resolve difficulties relating particularly to management, staffing, contracting and budgeting. IDA staff are giving cl½se attention to these problems in an effort to help resolve them. Loan No. 1149 Phitsanulok Irrigation Project; $95 Million Loan of July 25, 1975; Effective Date: October 31, 1975; Closing Date: June 30, 1985 Project completion is now expected by mid-1985, two years behind schedule, due to slow progress in on-farm works. Construction work on the diversion dam is complete and works on the distribution systems are proceeding well. All studies financed under the project are proceeding satisfactorily. Loan No. 1468 Second Chao Phya Irrigation Improvement Project; $55 Million Loan of September 23, 1977; Effective Date: December 23, 1977; Closing Date: June 30, 1983 Equipment procurement is almost complete. Rehabilitation and on- farm development works for Part A of the project on about 13,000 ha were completed in 1981 bringing the total area developed to 48,000 ha, compared to 51,000 in the appraisal schedule. Under Part B, rehabilitation works are progressing satisfactorily. Under Part C, 65 km of service roads are being constructed. All physical works are expected to be completed in 1982 in accordance with the appraisal schedule. Under Part D, a feasibility study for about 175,000 ha in the Stage II area of Maeklong was completed in March 1980 and a study for a possible Third Stage Chao Phya Irrigation Improvement Project was completed in December 1980. /1 These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any prob- lems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project implementation. - 32- ANNEX II Page 5 of 12 Loan No. 1630 Second Northeast Thailand Irrigation Improvement Project: $17.5 Million of December 4, 1978; Effective Date: April 25, 1979; Closing Date: September 30, 1985 Project implementation is about one year behind schedule due to initial delays in procurement of equipment and supplies. Procurement of equipment is now proceeding smoothly. Construction of main and secondary canals is progressing satisfactorily but on-farm works are well behind - schedule. Two new diversion dams have been built in the Lam Takhong project area, and work on canal rehabilitation is progressing satisfactorily. Loan No. 1787 Eleventh Irrigation Project; $80 Million Loan of January 17, 1980; Effective Date: April 2, 1980; Closing Date: June 30, 1986 The project is about one year behind schedule due to delays in the appointment of consultants. Satisfactory progress is now being made in procuring equipment and vehicles. Canal rehabilitation work is progressing satisfactorily, but on-farm works are behind schedule due to delays in design work. Loan No. 2022-TH Twelfth Irrigation Project; $57 Million Loan of August 13, 1981; Effective Date: November 11, 1981; Closing Date: June 30, 1987 Consultants were appointed in September 1981. Surveys and mapping have been completed for 10,000 ha, and 8 km of main and lateral canals have been constructed. A contract for construction of about 60 km of main and lateral canals is due to be awarded in 1982. Good progress is being made in developing a Plan of Action for strengthening the Royal Irrigation Department. Loan No. 1198T Northeast Thailand Rural Development Project; $21 Million Loan of Februar} 27, 1976; Effective Date: June 28, 1976; Closing Date: September 30, 1982 Construction of almost 600 km of village access roads is complete and is under way on the remaining 700 km. The road maintenance program is being carried out at an acceptable rate with good quality work using equipment procured under the project. The village water supply component has provided 2,600 freshwater wells. The agricultural extension component was completed in 1978 and subsumed into the National Extension Project (Loan 1393). The upland crops component is being satisfactorily completed and research work is being continued by the National Agricultural Research Project (Loan 1922). The village electrification component has been completed with electrification of about 475 villages. The land settlement component is essentially complete; cash incomes of pilot cooperating farmers were roughly doubled in the project period, and settlement cooperative placed on a sound footing. - 33 - ANNEX II Page 6 of 12 Loan No. 1199T Livestock Development Project; $5.0 Million Loan of February 27, 1976; Effective Date: May 25, 1976; Closing Date: June 30, 1982 The project continues to make fairly good progress particularly with legume seed production, artificial insemination and private pasture development. However, disbursement remains behind schedule and the original loan closing date of June 30, 1981 was extended by 12 months to June 30, 1982. The Department of Livestock Development is developing plans for transferring project activities into the work programs of the regular divi- sions of the Department, and these transfers should be completed before June 30, 1982 as part of a departmental reorganization plan. Loan No. 1243 Rubber Replanting Project; $50 Million Loan of September 13, 1976; Effective Date: January 14, 1977; Closing Date: June 30, 1982 The project is one year behind schedule due to procurement diffi- culties and initial delay in loan signing as well as in agreeing on the formula of fertilizers to be procured through ICB. The replanting rate over the project period has been slower than that envisioned at appraisal, but for 1981 about 65,000 ha were replanted - 30% above the target of 50,000 ha. Management and the general level of staff efficiency at the Office of the Rubber Replanting Aid Fund is satisfactory. Bank disbursements for the project are expected to be completed before June 30, 1982. Loan No. 1393 National Agricultural Extension Project; $28 Million Loan of May 17, 1977; Effective Date: September 1, 1977; Closing Date: December 31, 1982 Delays in staff recruitment experienced in the early days of the project have now been overcome and the "T and V" system is operating reasonably satisfactorily. Vehicles, including motorbikes for village-level extension workers, remain in short supply. Shortages of audio-visual aids and counterpart funds for day-to-day operations are also adversely affecting progress. Subject matter specialist training is being given priority atten- tion. Civil works construction is nearing completion and disbursement has improved considerably in recent months. Loan No. 1752 Second National Agricultural Extension Project; $40 Million Loan of September 18, 1979; Effective Date: December 18, 1979; Closing Date: December 31, 1985 Project implementation is off to a reasonable start in seven provinces and disbursements are ahead of appraisal estimates. Subject matter specialist training is being given priority attention, as also is the relevance of the information being disseminated to farmers through the "T and V" system. -34 - ANNEX II Page 7 of 12 Loan No. 1816 Agricultural Credit Project; $19 Million Loan of April 30, 1980; Effective Date: August 29, 1980; Closing Date: December 31, 1984 Overall Bank disbursements for the project are ahead of schedule. The Bank for Agriculture and Agricultural Cooperatives' (BAAC) ongoing term lending in the North and Northeast, to be financed under the project, is progressing well. Implementation of works under the specified lending component, however, has been slow. The most critical factor affecting the financial viability of BAAC is the interest rate levels for agriculture. Satisfactory progress has been made by the Cooperative Promotion Department and the Cooperative Auditing Department in their training activities and in the construction of regional and provincial staff housing. Loan No. 1922 National Agricultural Research Project; $30 Million Loan of December 19, 1980; Effective Date March 20, 1981; Closing Date: June 30, 1989 The loan became effective in March 1981, but a budget deficiency in the first six months, which coincided with the last six months of the Government fiscal year, seriously affected project implementation, which was negligible, although much useful preliminary planning was accomplished. The recent approval of a project budget for FY82 and the pending approval by Cabinet of the reorganization plan for the Department of Agriculture should enable implementation to proceed satisfactorily in the latter part of FY82 after allowing for a delay of about nine months from the appraisal report schedule. Loan No. 2078 Second Tree Crops Project; $142 million Loan of January 29, 1982; Closing Date: March 31, 1987 The loan has not yet been declared effective. Loan No. 1271 Fourth Education Project; $31 Million Loan of September 13, 1976; Effective Date: February 9, 1977; Closing Date: June 30, 1982 Progress in project implementation is satisfactory and is expected to be completed by the original Closing Date. All civil work contracts have been awarded and nearly completed. Equipment and furniture is under procurement. Nearly all fellowships have been awarded. Staff training programs are on schedule but need to be improved, as does supervision by the Ministry of Education of its nonformal education programs. Credit No. 913 Fifth Education Project; $35 Million Credit of June 28, 1979; Effective Date: October 12, 1979; Closing Date: June 30, 1985 The project is being implemented in three phases. Acquisitions of sites and design work has been completed. Construction of workshops included in phase one has been completed, and equipment contracts have been - 35 - ANNEX II Page 8 of 12 awarded. Phases two and three will be completed mid-1982 and mid-1983, respectively. Project staff has been appointed or designated. Curricula are being developed. Technical assistance agencies have been contracted and staff training programs are being conducted as scheduled. The studies under the project are progressing satisfactorily. Credit No. 767 Population Project; $33.1 Million Credit of February 27, 1978; Effective Date: July 6, 1978; Closing Date: December 31, 1983 Under new management, the project is moving ahead smoothly and rapidly, and disbursements have improved considerably over the past year. Project implementation is now running, on the average, about 12 months behind the appraisal schedule. Six of the ten national level training facilities have been completed. Of the 430 rnral health facilities, 374 have been completed, 33 are under construction and 23 had to be deleted. The final round of procurement of equipment and furniture is currently underway. Most training, information/education/communication, and population-related research and evaluation activities have been completed on schedule. The Innovative Village Nutrition Activity has been successfully launched and Government is about to approve the use of most of the remaining funds for Innovative Activities for testing new ideas in continuing education and the role of mass communication in health education are about to be approved by the Government. Loan No. 1556 Bangkok Sites and Services Project; $8.6 Million Loan of June 15, 1978; Effective Date: September 22, 1978; Closing Date: December 31, 1983 Project implementation is about eighteen months behind schedule because of difficulties encountered with the largest contract. The National Housing Authority (NHA) has terminated the existing contract and steps are underway to hire a new contractor to complete the work. Good progress, however, has been made on the various policy concepts on which the project is based, and NHA's financial management has been strengthened through technical assistance. Loan No. 1638 Bangkok Traffic Management Project; $16 Million Loan of January 25, 1979; Effective Date: April 25, 1979; Closing Date: September 30, 1982 There has been a significant improvement in all aspects of the project. While no action seems probable on area road pricing, progress has been made in implementation of the bus lane system, parking restrictions/charges, experimentation of staggered work hour system and noise abatement. Construction is now underway on several traffic improvement schemes. Since November 1981, contracts worth $6.3 million have been awarded; further contracts for $10.3 million equivalent are to be awarded in the next 3-6 months. - 36 - ANNEX II Page 9 of 12 Loan No. 1870 National Sites and Services Project; $29 Million Loan of August 8, 1980; Effective Date: January 7, 1981; Closing Date: December 31, 1984 This project expands the National Housing Authority (NHA) programs initiated in Bangkok under the Bangkok Sites and Services and Slum Improvement Project (Loan 1556-TH) and extends the sites and services program to five regional cities. Design and procurement are proceeding satisfactorily. Construction has commenced in Bangkok and the regional cities. Loan No. 1863 Provincial Water Supply Project; $40 Million Loan of November 25, 1980; Effective Date: January 4, 1982; Closing Date: April 3, 1986 Engineering consultants were appointed in January 1982, about one year later than originally expected due to the Borrower's inexperience in hiring outside consultants. A UNDP-financed adviser has been appointed to assist the borrower in these and related matters. Loan No. 1485 Pattani Hydroelectric Project; $50 Million Loan of September 23, 1977; Effective Date: December 20, 1977; Closing Date: December 31, 1982 The project has been completed on schedule. The three units of turbine generators are operating satisfactorily. Good progress is being made under the transmission line and substation components associated with the project. Loan No. 1527 Accelerated Rural Electrification Project; $25 Million Loan of March 9, 1978; Effective Date: June 7, 1978; Closing Date: June 30, 1983. Work has been started on 3,480 villages, out of which 2,100 villages have already been electrified. The load promotion program started in April 1981. Disbursements have accelerated and are very close to initial appraisal estimates. Loan No. 1690 Bang Pakong Thermal Power Project; $80 Million Loan of August 9, 1979; Effective Date: May 23, 1980. Closing Date: June 30, 1984 The project is about two months behind schedule because of poor soil conditions encountered during foundation piling. Field works are now proceeding satisfactorily, and project execution is expected to catch up with the original schedule. The first unit is targeted for commissioning in July 1983, as scheduled. - 37 - ANNEX II Page 10 of 12 Loan No. 1770 Khao L,3Qm Hydroelectric Project; $80 Million Loan of June t., 1980; Effective Date: September 17, 1980; Closing Date: February 28, 1985 The project is about cT.e year behind schedule because of unexpect- edly poor rock foundation, but works are now underway satisfactorily. Disbursements are close to appraisal estimates. Construction of the resettlement program started at all five sites. Loan No. 1871 Second Accelerated Rural Electrification Project; $75 Million Loan of November 14, 1980; Effective Date: August 20, 1981; Closing Date: June 30, 1986 Construction started in 262 villages for the first nine provinces. Seventeen villages have been electrified. Procurement is proceeding satisfactorily. Loan No. 2000-TH Power Subsector Project; $100 Million Loan of July 8, 1981; Effective Date: October 26, 1981; Closing Date: June 30, 1985 Bids for the diversion tunnel will be issued in July 1982, and main civil works in May 1983 for the Chiew Larn Hydroelectric component of the project. Loan No. 1773 Second Natural Gas Pipeline Project; $107 Million Loan of February 15, 1980; Effective Date: May 27, 1981; Closing Date: December 31, 1983 Good progress was made with the overall physical works and major project components, including the offshore pipeline and onshore main line which have been completed on schedule. The pipeline started operations in September 1981, and all physical works should be completed by mid-1982. The project is being completed on schedule and below the original cost estimate. Loan No. 1852 Mae Moh Lignite Project; $72 Million Loan of June 17, 1980; Effective Date: September 17, 1980; Closing Date: December 31, 1984 Procurement of equipment is proceeding satisfactorily. However, the borrower, in its last progress report dated January 1982, indicated little progress in civil works. Loan No. 1327 Third IFCT Project; $25 Million Loan of December 8, 1976; Effective Date: March 14, 1977; Closing Date: June 30, 1982 The loan is almost fully disbursed. Only $29,000 remain against an outstanding letter of credit. - 38 - ANNEX II Page 11 of 12 Loan No. 1956 Fourth IFCT Project; $30.0 Million Loan of April 15, 1981; Effective Date: June 18, 1981; Closing Date: December 31, 1984 The project is proceeding well. By the end of March 31, 1982, an amount of $23.2 million has been committed and $19.8 million disbursed, considerably faster than originally estimated. Loan No. 1947-TH Potash Engineering Project; $8.9 Million Loan of March 4, 1981; Effective Date: December 29, 1981: Closing Date: March 31, 1983 The loan became effective on December 29, 1981 and is proceeding well. Loan No. 1519 Sixth Highway (Provincial Roads) Project: $110 Million Loan of March 23, 1978; Effective Date: June 22, 1978; Closing Date: December 31, 1982 All construction contracts have been awarded and work is over 80% completed. However, for three of the roads the bidding and awards were delayed about 10 months to synchronize with bidding and award of contracts in March 1979 on a link road financed wholly by the Government. Completion of the project may thus be delayed about twelve months. The maintenance equip- ment has been procured and with recently increased budgetary allocations, progress with the road maintenance program is improving. The studies are nearing completion. Detailed engineering of roads for construction under the Provincial Roads Project (Loan 2035-TH) has been completed and is underway on roads for future projects. Loan No. 2035-TH Provincial Roads Project; $35 Million Loan of August 13, 1981; Effective Date: December 1, 1981; Closing Date December 31, 1985 Contracts have been awarded on 19 roads, and are expected to be awarded shortly on the remaining four. Proposals have been obtained for a Transport Study. Loan No. 1662 Fifth Railway Project; $16.7 Million Loan of April 23, 1979; Effective Date: August 22, 1979; Closing Date: June 30, 1982 Mainly due to slow progress in procurement of equipment and material, project execution is behind schedule. Contracts are placed or being placed for all originally agreed Bank financed items, and most of the contracted equipment and material has been delivered. An amount of about -39 - ANNEX II Page 12 of 12 US$2.9 million remains unallocated. Disbursements are about two years behind schedule and an extension of the Closing Date to June 30, 1983 is being considered. Operational efficiency is in general good; however, availability of passenger and freight cars was below appraisal target. The financial position of SRT remains unsatisfactory despite the 35% and 73% tariff increases for passengers and freight respectively in June 1981, mainly because of a subsequent severe decline in freight traffic. Loan No. 1889 Inland Waterways and Coastal Ports Project; $53 Million Loan of August 27, 1980; Effective Date: December 10, 1980; Closing Date: June 30, 1984 The construction contract for improvements to the Chao Phraya River has been awarded and the contractor is in the process of mobilizing. Consultants have been appointed for design and construction supervision of the various project components and work is underway. Acquisition of land for port sites is still incomplete. Loan No. 1918 Bangkok and Sattahip Ports Project; $47 Million Loan of December 19, 1980; Effective Date: August 12, 1981 Closing Date: December 31, 1984 Implementation of project components concerned with the Port of Bangkok are progressing satisfactorily with construction work underway and selection of consultants to provide technical assistance to the Port Authority of Thailand in process. Work at the Port of Sattahip is temporarily in abeyance pending completion of the Master Plan Report now being prepared by consultants financed through bilateral aid (Australia). The appointment of consultants for the design of the Bang Su Container Freight Terminal has been long delayed. With Bank concurrence, consultants were selected and contract negotiations completed by the State Railway of Thailand but approval from higher authority is not yet forthcoming, causing serious delays in the implementation of this project component. Loan No. 1620 Third Telecommunications Project; $90 Million Loan of October 4, 1978; Effective Date: January 3, 1979; Closing Date: September 30, 1983 Due to a delay in the borrower's decision on standardization of switching equipment and subsequent delays in issue of bid invitation and in evaluation of bids, the project is currently about 18 months behind schedule. Recent progress has been satisfactory, with TOT awarding contracts for most of the Bank financed items. The financial condition of the borrower continues to be satisfactory. Loan No. 2097 Structural Adjustment Lending; $150 million Loan of March 15, 1982; Closing Date: March 31, 1983 The Loan has not yet been declared effective. - 40 - ANNEX III THAILAND SIXTH (SECONDARY) EDUCATION PROJECT Supplementary Project Data Sheet Section I: Timetable o!' hey Events (a) Time taken to prepare the project: 14 months. (b) Agencies which prepared the project: MOE and UNESCO. (c) Date of first presentation to the Bank: August 1980. (d) Date of first Bank mission to consider the project: April 1981. (e) Date of departure of appraisal mission: October 1981. (f) Date of completion of negotiations: May 7, 1982 (g) Planned date of effectiveness: September 1982. Section II: Special Bank Implementation Actions None Section III: Special Conditions The Borrower has agreed: (a) to select the schools to be upgraded in accordance with criteria satisfactory to the Bank (para. 47); (b) to submit to the Bank, by December 31, 1983, a plan for improving teacher utilization in secondary schools (para. 52); (c) to carry out a study on incentives for teachers in rural areas and submit its recommendations to the Bank by December 31, 1984 (para. 53); (d) to submit to the Bank, by January 31, 1983, a plan for expanding NEC's responsibilities and for strengthening the Division of Educational Planning and thereafter implement such plan after exchanging views with the Bank (para. 55); and (e) to improve the staffing of the four project REOs (para. 58).