June 1996 - World Bank Document

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THE WORLD BANK, WASHINGTON, D.C.

Photo credits Cover photo montage: The Magazine Group (oil drilling photo by Comstock, copyright 1995)Frontispiece: Kay Chernush; Page 13 World Bank; Page 24: Kay ChernushPage 43: World Bank; Page 46 Kav Chernush; Page 54: Curt Carnemark/World Bank5: Kay Chernush; Page 70 Sally Wiener Grotta; Page 73: Kay Chernush; Page 84: Franck ChartonPage 92: Kay Chernush; Page 104 Tim Cullen; Page I 2: Curt Carnemark/World BankPage 123: Kay Chernushi; Page 165 Neeraj lain; End page: Kay Chernush

Design Book design: Joyce Petruzzelli, Graphic Design Unit, The World Bank GrouIpChart design: May Eidi, Graphic Design Unit, The World Bank GroupTypography: Graphic Designi Unit, The World Bank GroupCover design: Glenn Pierce, The Magazine Group

Editorial Peter C. Muncie, Office of the PLiblisher, The World Bank Group

ISSN: 0252-2942ISBN: 0-8213-3254-6

4 THF WO(lRID BANK ANNIIAI. RFI'()Ri 199(6

LETTER OF TRANSMITTAI.

This Annual Report, wvhich covers the period July 1, 1995, to June 30, 1996, has been prepared bythe executive directors of both the International Bank for Reconstruction and Development (IBRD) andthe Internationial Development Association (IDA) in accordance with the respective by-laws of the twoinstitutions. James D. Wolfensohn, president of the IBRD and IDA and chairmani of the boards of execu-tive directors, has submitted this Report, together with accompanyinig administrative budgets and au-dited financial statements, to the board of governors.

The executive directors would like to take this opportunlitV to thank the staff of the World Bank forits support for the new agenda for change, whichi aims through quality improvements to more effec-tively help borrowing countries to reduce poverty, the Bank's raiisont d'etre.

Annual Reports for the Internationial Finance Corporation (IFC), the Multilateral Investment Guaran-tee Agency (NIIGA), and the International Centre for Settlement of Investment Disputes (icsIo) are pub-lished separately.

Executive Directors Alternates

Khalid M. Al-Saad Mohamed W. HosnyKhalid H. Alyahya Ibrahim M. Al-MoflehMarc-Antoine Autheman Arnaud ChneiweissAli Bourhane Luc-Abcli AdenAndrei Bugrov Eugene MiagkovMarcos Caramuru de Paiva Jorge Cock-LondofnoHuw Evans David StantonJean-Daniel Gerber Jan SulmickiLeonard Good Winstoni CoxEveline Herfkens Sergiy KulykRuth Jacoby Jorgen VarderLi Yong Zhu GuangyaoAbdul Karim Lodhi KaVim BrachemiLeonard Mseka Joaquim R. CarvalhoPeter WV.E. Nicholl Christopher Y. LeggAtsuo Nishihara Rintaro TamakiJulio Nogues Carlos SteneriFranco Passacantanido Helei a CorcleiroJan Piercy Michlael MarekWalter Rill Luc HubloueHelmut Schaffer Erika Wagenh6ferSurendra Singh Mushfiqur RahmanSuwan Pasugswad Khin Ohn ThantJorge Terrazas Roberto Jimenez-Ortiz

August 1, 1996

5

THE WORLD BANK, THE IFC, AND MIGA

The World Bank, wlhiclh to each member's quota in the their balance of paymentsconsists of the Interniationial itMPF, w, hich is designed to re- than IBRD loans. IDA's assistanceBank for Reconstruction and flect the couLntry's relative is concenitrated on the veryDevelopnment (iBsD) and the economic strength. poor countries-mainly thoseInternational Development The IBRD makes loans only with an annual per capitaAssociation (IDA), has one cen- to creditworthy borrowers. gross nationial product of lesstral purpose: to promote eco- Assistance is provided only to than $865 (in 1994 U.S. dol-nomic and social progress in those projects that promise lars). By this criterion, aboutdeveloping nationis by helping high real rates of economic re- seventy coulitries are eligible.raise productivity so that their turn to the country. As a mat- Membership in IDA is openpeople may live a better and ter of policy, the IBR[ does not to all members of the IBRD,

ftuller life. This is also the aim reschedule payments, and it and 159 have joined. Theof the Internationial Finance has suffered no losses on the funds lent by IDA come mostlyCorporation-which works loalns it has made. It has in the form of contribtutionsclosely witli private investors earned a net income every from its richer members, al-fi-om around the world and year since 1948. though some developinginvests in commercial enter- The IBRD obtains most of its cotLmtries contribute to IDA, asprises in developing coun- funds through medium- anid well. IDA'S resources have alsotries-and the Multilateral In- long-term borrowinigs in the been augmented by frequentvestment Guaranitee Agency capital markets of Europe, transfers from the net earnings(MIIGA)-which was established Japan, and the United States. of the IBRD.

to encourage direct foreign in- It also borrows funds at Inar- IDA credits are made only tovestment in developing couni- ket-based rates from central governments. They have to betries by protecting investors banks and other government repaid over a period of thirty-from noncommercial risk. instittutionis. The IMR us solid five to forty years. They carryCollectively, the World Bank, standinig in the markets is no interest, but there is an an-the IFC, anid MICA are known as based upon the combinationi nual service charge of 0.5 per-the World Bank Group. of conservative lending poli- cent on the undishursed

Of the four institutionis, the cies, strong financial backing amount of each credit. Al-IBRD, establishled in 1945, is by its members, and prudenit though IDA is legally and finan-the oldest and largest. The financial management. cially distinct from the IBRD,

IBRD is ownied by the governi- Apart from borrowings, sig- it shares the same staff, andments of 180 couLitries that nificant amounts also come the projects it assists have tohave subscribed to its capital. from the iBRD'S paid-in capital, meet the same criteria as doUnder its Articles of Agree- from its retained earinigs, and projects supported by thement, only countries that are from the flow of repayments IBRD.

members of the Interniationial on its loans. The success of the Bank'sMonetary Fund (rIr) can be The Internationial Develop- operations depends upon theconsidered for membership ment Association was estab- trust it has established within the IaRD. Subscriptions by lished in 1960 to provide as- borrowers, and this trust ismember countries to the capi- sistance to the poorer devel- based on the experience andtal stock of the IBRD are related oping countries on terms that technical skills the Bank has

wiould hear less heavily on

6 THE WORI i) BA\NK ANNI i\I. RlI,l)RI 1996

demonstrated over the years in working witlh its ating a responsive investment climate and infor-member developing countries. mation base to guide and encourage the flow of

Under its Articles of Agreement, the Bank capital.cannot allow itself to be influenced by the po- MIIGA is also an entitv separate from the Worldlitical character of a member country: Only Bank. Like the IFC, it has its own operating andeconomic considerations are relevant. It also legal staff but draWs Upon the Bank for adminis-seeks to ensure that the developing country gets trative and other services. MtIGA currenitly hasfull value for the moniey it borrows. Bank assis- 134 members.tance, therefore, is unltied in that it may be usedto purchase goods and services from any mem-ber country.

The PFc wvas established in 1 956. Its functionis to assist the econiomic development of devel-oping counitries by promoting growth in the pri-vate sector of their economnies and helping tomobilize domestic and foreign capital for thispurpose. One hundred seventy countries aremembers of the IIc. Legally and financially, theIFc and the World Bank are separate entities.The IFC has its owin operating and legal staff, butdraws uponI the Bank for adminiistrative andother services.

In its project-finarncing role, the II-c providesloanis and makes equity investmiienits. Ulnlikemost multilateral institutionis, the iF(: does notaccept government guarantees for its finanicinig.Like a private finanicial institutioll, the IF( pricesits finance and services, to the extent possible,in line with the market, while taking into ac-count the cost of its funds, and seeks profitablereturns. The IFL shares full projects risks with itspartners.

MICA, the newest member of the W\'Vorld BankGroup, was established in 1988. It has as itsprincipal responsibility the promotion of invest-ment for economic development in memlibercouLntries througlh guarantees to foreign inves-tors against losses caused bv nonocommiiercialrisks and through advisory and consultative ser-vices to member couLntries to assist them in cre-

THE WORID BANK ANNUAIL REPORT 1 996CONTENTS

LETTER OF TRANSMITTAL 5

THE WORLD BANK, THE IFC, AND MIGA 6

MESSAGE FROM THE CHAIRMAN OF THE EXECUTIVE BOARD 11

OVERVIEW OF WORLD BANK ACTIVITIES IN FISCAL 1996 14

SECTION ONE THE EXECUTIVE BOARD 25

SECTION TWO WORLD BANK OPERATIONS

Development Effectiveness 28Operations Evaluation 32Commitments and Guarantees 35Disbursements 3 7

Cofinancing and Trust-fund Programs 38Technical Assistance 42Inspection Panel 42Public Information Center 45

SECTION THREE MAJOR WORLD BANK PROGRAMS: FISCAL YEAR 1996

Human Capital Development 47Environmentally Sustainable Development 54Private Sector Development 61

SECTION FOUR 1996 REGIONAL PERSPECTIVES

Africa 71

East Asia and Pacific 82South Asia 90Europe and Central Asia 98Latin America and the Caribbean 110

Middle East and North Africa 120

8 THE WRLO B.ANK ANNI 'A. RLPORT I1996

SUMMARIES OF PROJECTS APPROVED FOR IBRD, IDA, TRUST FUND FOR BOSNIA ANDHERZEGOVINA, AND TRUST FUND FOR GAZA ASSISTANCE IN FISCAL 1996 127

SECTION FIVE OTHER WORLD BANK GROUP ACTIVITIES 151

Economic Development Institute 151

Research at the World Bank 153

The Administrative Budget, Corporate Planning, and Resource Management 155

International Finance Corporation 156

Alultilateral Investmetnt Guarantee Agency 157

International Centre for Settlement of Investment Disputes 158

SECTION SIX WORLD BANK FINANCES 159

FINANCIAL STATEMENTS OF THE INTERNATIONAL BANK FOR RECONSTRUCTION ANDDEVELOPMENT 167

SPECIAL PURPOSE FINANCIAL STATEMENTS OF THE INTERNATIONALDEVELOPMENT ASSOCIATION 1 97

IBRD/IDA APPENDICES

I Governors and Alternates of the W1orld Bank 220

2 Executive Directors and Alternates of the W1orld Bank and Their Voting Power 225

3 Officers of the World Bank 228

4 Offices of the World Bank 229

5 Country Eligibility for Borrowing from the World Bank 233

6 World Bank Budget bv Expense Category and Administrative Program, Fiscal 1 994-9 7 235

7 IBRD and IDA Payments to Supplying Active Borrowing Countries for Foreignand Local Procurement in Fiscal 1996 236

9

IBRD/IDA APPENDICES (continued)

8 IBRD and IDA Payments to Selected Supplying Countries for Foreign Procurement 238

9 IBRD anid IDA Payments to Supplving Countries for Foreign Procurement,by Description of Goods, Fiscal 1996 240

10 IBRD and IDA Foreign Disbursements, by Description of Goods, for Investment Lending,Fiscal 1994-96 242

11 IBRD and IDA Cumulative Lending Operations, by Major Purpose and Region,June 30, 1996 243

12 IBRD and IDA Cumulative Lending Operations, by Borrower or Guarantor,June 30, 1996 244

13 Projects Approved for IBRD and IDA Assistance in Fiscal Year 1996,by Region and Country 248

14 Projects Approved for IBRD and IDA Assistance in Fiscal Year 1996, by Sector 250

15 Development Committee Communiques, Fiscal 1996 256

INDEX 259

BOXES

Changing the Bank 15

Information for Development (InfoDev) Program Is Launched 21

2-1 "Next Steps". A Second Progress Report 30

3-1 Bank-NGO Relations at the Field Level 523-2 Accelerating Privatization in Pakistan 63

3-3 World Bank Contribution to Private Participation in Infrastructure 64

4-1 New Partnership for Water Management 80

4-2 Community Primary Schools in Balochistan 95

4-3 Bosnia and Herzegovina: Two-Pronged Strategy for Post-conflict Recovery 100

4-4 Process Changes Begun in the Latin America and the Caribbean Region 115

6-1 A Review of the First Two Years of IDA -I 0 164

I() Ti ii:W()i,i I) BANKANN I A I RI 'Ok I I'T)()

MESSAGE FRON'I TIHE CHAIRMAN OF THE EXECUTIVE BOARD

This Annui1wal Report, coveriing July 1, 1995 to counatries, global change has not brought signifi-June 30, 1996, details a critical period in the cant improvements to people's lives. We stillhistory of the World Bank Group, one of transi- live in a world where 1.2 billion people live be-tion designed to create an institution that is low the line of what the World Bank considersstronger, more agile, and more effective in re- absolute povertv-$1 per day-and in Africa,sponse to the needs of its developing country the number of poor people is expected to con-clients. tinue growing into the next century. A quarter

This transition has been made necessary bv of the developing wor-ld's population lacks ac-the extraordinary change taking place in the cess to safe drinking water, and almost half of itglobal economy, with explosive growth in has no electricity. One hundred thirty millionworldwide trade and private investment center- children, most of them girls, are not getting theing on the emerging market economies. In the chance to go to school. In too many places theI 990s, developing countries have contributed poor-and most particularly womeni-are shut70 percent of the growth in global (;DI' and half out of the opportuLnities that wotuld allow themthe growth in world trade. Private investment to improve the conditions of their lives.flows to the developing world have more than Despite the explosive growth in the worldtripled, from around $44 billion in 1990 economy, many countries are being left behind.to nearly $170 billion by the end of 1995. Seventy-five percent of private capital flows to

Economic change is about far more than the developing world are concenitrated in justnumbers. It is about change in people's lives. twelve couLntries (and East Asia receives 60 per-For many people, this change has been for the cent of the total). At the same time, official de-better. Many counLtries have cut their poverty velopment assistance-wvhichi might have filledrates by more than half and have expanded ac- the gap-has fallen to its lowest point in realcess to health, education, and social services to terms ($59 billion) in twenty-three years. Andtheir entire population. Far more people now many of the world's poorest countries are sohave access to econiomic opportunity than in deeply in debt as to make it practically impos-the recent past. Further, just a decade ago, only sible for them to sustain vital economic refortms.about I billion people lived in economies that Armed violence continues to plague thecould be called market-oriented; today, the fig- world. Iust last year, there were some fiftyure is around 5 billion people. Meanwlhile, com- arm-led conflicts worldwide. We are all aware ofmunications technology is drawing people from the horror in Bosnia, where a quarter of a mil-around the wvorld closer together. Today, doctors lion people have been killed, and unispeakablein Africa, Latin America, or Asia cani teleconfer- horrors cotimmitted. But Bosnia is far from theence with top medical researchers arounld the onlyv site of such abominlations. In the past de-world; entrepreneurs can get the latest global cade, 70( million people have been displacedmarket information instantly; and students in fi-om their homes or become refugees.the most remote parts of the globe have the And the world remains under the growingpossibility of access to the world's best libraries threat of environmental deterioration, uncon-and teaching resources. The potential of what trolled population growth, epidemic disease,the information revolution is unleashing is and an emerginig shortage of water resourc-es.extraordinary. The currenlt chanige under way around the

But growth and prosperity cannot be taken world carries great opportunlities-and risks.for granted. In many of the world's poorest The role of the World Bank under these condi-

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tions is to help its clients seize the opportunities, multilateral development banks, and the gov-avoid the pitfalls, and-for those countries just be- ernments of creditor nations to reduce the bur-ginning to make the transition to soundlv manl- den of debt in the poorest reforming countries.aged market economies-build the capacity to And we must lead the way in ensurinig thatstay on course. concessional resources-particularly in the form

This means we must stay close to our clients of IDA funds-continue to be adequate to fi-and develop our own ability to adapt to their nance our clients' development priorities.changing needs. It means we must be able to re- This Annual Report reviews what we have al-spond quickly to conditions on the grounld, and ready done and where we are headed in theseparticularly to the challenge of post-conflict areas, in addition to covering the Bank's ongoingsituations; create innovative new mechanisms development activities around the world. Itfor assisting the poorest; help build sound mar- provides the essential facts about Bank opera-ket systems; and ensure that development is en- tions in all regions of the world, and in all sec-vironmenitally sustainable. If we are to be truly tors of development.effective, we must expand and deepen our part- In the end, however, the Report is not onlynerships with the I IN system, regional develop- about financial statistics or percentages; it isment banks, bilateral assistance agencies, non- about people-the people who live in the coun-governmenital organizations, foundations, the tries we serve. It is about the immeasurable im-private sector, and others; and we must develop provements that the World Bank is bringing tothe professional capabilities of our own staff to people's lives. In the end, this will be the gaugethe highest possible level. We must also work by which we judge our success.with the International Monetary Fund, other

JAMES D. WOLFENSOHN

1 2 THE WORI.D BANK ANNIIAI. REPORT 1996

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OVERVIEW OF WORLiD BANK ACTIVITIES IN FISCAI. 1996

Poverty reductioni and sus- the end of fiscal 1996, seven Hoist Trust Fund, approved atainable development remain projects financed through the program to finance 21,10(0)the central objectives of the Trust Fund--emergency recov- short-term jobs. Stage two in-World Bank. In fiscal 1996, erv; water, sanitation, and volved the creation of moreseveral initiatives were solid waste urgent works; productive short-term em-launlched to strengthen the emergency farm, transport, plovment: The $90 million re-Bank's development effective- power, and education recon- plenishmenit of the Trust Fundness and to focus Bank efforts structioll; and xwar-victims refor Gaza and the West Bankmore on the needs of its cli- habilitation-had been ap- has been directed to fourents and results on the ,round proved; two IDA-assisted projects that respond in vari-(see accompanying box on tile projects-education recon- ous xvavs to the employmentBank's change process). structioni and war-victims re- crisis. Two of the projects had

The change agenda of the habilitation-had also been been approved by the end ofinstitution is focusing on two approved. Commitments in fiscal 1996.main areas: (a) immediate fiscal 1996 totaled $160 mil- * Responding quickly to asteps to raise the standards of lion, $150( millioni from the request made by the Bank'sall client services and (b) mea- Trust Fund and $10( million African governors at the Octo-sures to improve the Bank's from [IDA. It is expected that, ber 1995 annual meetings tolonger-term ability to meet cli- subject to approval of indi- expand the institution's capac-ent needs more effectively. vidual operations by the ity-building efforts in the re-

In particular, the Bank's abil- Bank's executive board, a gionI, a joint Africa-Worldity to respond quickly to the positive net transfer of funds Bank "partnership for capacityneeds of its clients has been to Bosnia of about $450 mil- building" was announced instrengthened. For example: lion over the next four years Febrruary 1996. In March and

* Three months after the will take place (For furtlher de- early April, leading experts insigning of the Dayton Peace taiils, see Box 4-3 on paige 100.) capacity building met in sub-Accords in December 1995, a * In the Middle East, the regional meetings with repre-$1550 milliorn Trust Fund for border closure that followed sentatives from various Afri-Bosnia and Herzegovina was the tragic events of late Fehru- can countries to define thecreated to support vital recon- ary and early March delivered partnership's purview, goals,structioni work in advance of a massive shock to the tasks, and methods. In addi-Bosnia becoming a World economy of the W'Vest Bank tion, a dozen counltries haveBank member and clearing its and Gaza. As the dimensionis begun to conduct internal as-arrears with the institution, of the closure emerged, it be- sessmenits of their individualThe Bank, together with the came imperative that Bank capacity needs, and a workinigEuropean l Union, convened strategy must adiust to tackle party of experts is reviewingtwo donor confer-ences durinig immediate goals; without the way Bank policies and pro-the year, at which the inter-nia- some provisioni of relief, there cedures have affected capac-tional commuLnity pledged a might be little need to plan itv in Africa in the past. Thetotal of $1.83 billion in recon- for the medium term. A two- group will offer suggestions forstruction aid. A field office for stage Bank response strategy improving the capacity-buildingthe WNorld Bank opened in was quickly agreed to with impact of Bank-supported op-early January 1 996 in Sarajevo the Palestinian Authlority and erations in the future.to coordinate the Bank's re- put into motion. Stage one Changes in operational ap-

construction effort. And, by comprised the immediate pro- proaches are also taking place

vision of emergency assistance:

In April, the Bank, through the

14 TiIF WORI. DBANK ANNIAL RI:RPORI 1996

CHANGING THE BANK

Under new leadership, an integrated effort is un- With a view to increasing the country focus of theder way for the Bank to better meet client needs, pro- Bank 's work, country directors are being appointedvide high-quality results on the ground, further im- in Afnca and Latin America to lead country teams.prove efficiency and cost effectiveness, strengthen Some-the country director for the new Mexico de-external partnerships, and increase Bankwide profes- partment and the country director for Kenya andsional excellence. Examples of initiatives in each of Djibouti-are already located in the field. The inten-these areas appear throughout the pages of this tion is to increase, over time, the number of countryAnnual Report. directors in the field. In the Africa Region, fifteen

An institutional framework for facilitating the country directors, reporting directly to the regionalchange process has been established. It has four vice presidents, lead country teams. The teams,main goals: which include the resident representative as "co-

* developing an institutional strategy that provides pilot," contract technical staff to work on specifica clear sense of direction about how the Bank will projects and programs. Country directors are respon-serve borrowers, donors, other shareholders, benefi- sible for allocating the operational budget across theciaries, and partners; work program and are accountable for delivering the

* enhancing institutional capacity by strengthen- services agreed on the country-assistance strategying management capabilities and improving incen- (cAs), includingportfolio management, disbursementtive mechanisms; performance, and the quality of services. Details of

* redesigning and putting into place improved and many change initiatives under way in the Latinmore efficient business processes with a view to im- America and the Caribbean Regional office may beproving the quality of the Bank's services; and found on page 115.

X pursuing a communications strategy that builds Measures aimed at strengthening technical unitsinstitutional and external support for implementing in the Bank and the capacity to share knowledgethe program of change. across the institution are being pursued to facilitate

Although it is still in its early stages, the momen- professional excellence in the Bank's work.tum for change is steadily building, and several ini- To sharpen focus on client needs, a new generationtiatives are under way. of cAss was designed in fiscal 1996 in closer consul-

Examples of the simplification of business pro- tation with borrowers and in collaboration with acesses and project documentation, steps to accelerate much broader array of partners. Special efforts werethe project cycle and reduce elapsed time for process- made to solicit the vfiews of government officials anding, as well as efforts to improve the quality of the donors throughout the cAs process for the Philip-Bank portfolio of projects are documented in Section pines, for example, with government officials partici-Two and the various regional sections of this Annual pating in a series of workshops to clarify develop-Report. ment strategies and the most productive areas for

Measures to strengthen the management of the Bank focus.Bank's human resources are reported on in the 'Ad- These and other efforts will be pursued further inministrative Budget, Corporate Planning, and Re- fiscal 1997, targeted primarily at the four mainsource Management" section of the Report. goals of the change agenda.

throughout the Bank. During fiscal 1996, for assess the Bank's performanice in addressingexample, there has been considerable progress these challenges.in upgrading country-assistance strategies (C ASS) Many examples of change at the regionalso that they (a) articulate the Bank's approach level have also taken place.to counltry-specific development challenges by * In Africa, approaches to different countriesdefining the appropriate mix of lending and are increasinigly being modulated according toadvisory services and (b) set out monitorable in- clients' commitment to poverty reduction, eco-dicators (both qualitative and quantitative) to nomic reform, and debt management.

OVvsRVIr.W OF W(RIL) BANK Acriv[ITIES 1 5

* In East Asia and Pacific, work priorities and international management and business schools;the allocation of resources are being redirected and staff exchange and secondment programs,from middle-income to low-income countries. involving private sector organizations and au-

* In South Asia, new initiatives are being fi- tonomous agencies in selected countries, arenanced from redeployed economic and sector being developed.work (ESW), and cost reductions are coming * A significant expansion of the activities offrom securing increased borrower responsibility the Economic Development Institute (EDI) hasfor project preparation and supervision. been proposed, includinig (a) expansion of high-

* In Europe and Central Asia, a major effort impact core programs in an increasing numberis under way to improve disbutrsements and of countries, (b) developmeent of more partner-portfolio implementation. ships to enable countries to deliver their pro-

* In Latin America and the Caribbean, in- grams, and (c) integration of the work of the EDI

creased resources are being allocated to portfo- into CAss and tying it more closely to the rest oflio management, and the redeployment of re- the Bank.sources, responsibilities, and activities to the * Creation of a coordination mechanism tofield is expected to enhance the Bank's respon- develop the Bank Group's overall strategy forsiveness to client needs. private sector development (PSD). The mecha-

* In the Middle East and North Africa, more nism, which comprises senior managementfocused and flexible CAss are being developed in from the Bank, the IFC, and MIGA, Will (a) fosterconcert with clients and other stakeholders. De- synergy among I'SD activities through CAS coor-centralized decisionmaking and redesigned busi- dination, (b) facilitate PSD operations that in-ness processes are aimed at increasing cost ef- volve tw,;o or more Bank Group institutions,fectiveness and results. (c) develop partnerships with the private sector,

These initiatives that are taking place at and (d) promote the sharing of expertise withinthe regional level are being supported by the the Bank Group.recently established Quality Assurance Group. The purpose of the Bank's agenda for changeThe group aims to strengthen accountability for is to increase the development effectiveness ofquality and results by providing line managers its services by improving the quality of workwith independent assessments of their work and across the board-lending, advice, and state-of-by helping to address critical problem areas in the-art financial products. Change that im-the portfolio. proves the quality of the Bank's staff and multi-

A number of other institutional initiatives plies the effectiveness of the Bank's programshave been put into place, or are being proposed, can have a significant effect on the Bank's per-to accelerate and sustain the Bank's change formance as a development institution.agenda (see accompatnyiing box). They aim to im- Improvements are being delivered in an in-prove substantially the Bank's level of perfor- creasingly cost-effective, responsive, and flexiblemance and its ability to meet changing client manner. The need to enhance efficiency hasneeds. These initiatives include: been recognized explicitly through a reduction

* The strengthening of top management- in the Bank's real net administrative budget byincluding the assignment of direct line responsi- some 6 percent a year during fiscal years 1996bilities to five managing directors-to provide and 1997. In the process, the Bank has mademore strategic direction to the institution. hard choices that have led to well-balanced

* The training and renewal of the professional efficiency gains and selective programmaticskills of Bank staff, to be coordinated and man- reduction, while permitting significant new ini-aged by the Learning and Leadership Center. tiatives and expanding programs.In-house training programs are being strength- Other inmmediate priorities were addressedened; professional skills for staff at all levels in throughout the past fiscal year, as well:major sectors are being expanded; selectedmanagers and staff are being sent to leading

16 THF WC)RI D BANK ANN.IAI. R!TRoRI ]996

* Representatives of more than thirty donor IDA management not only to continue strongcountries agreed on new funding for the Inter- support for such investments but also to helpnational Development Association. Donors governments restructure public spending, wher-meeting in Tokyo on March 19, 1996, endorsed ever possible, toward these sectors and awaya package that will allow concessional lending from nonproductive purposes.of $22 billion to poor countries over the period * In April 1996, the Bank's shareholders wel-fiscal 1997-99 (see accompatiying table). Al- comed the joint proposal of the Bank and thethough the level of donor funding is half that of International Monetary Fund of the "Frame-IDA.- 1O, it is expected that the total available re- work for Action" aimed at addressing the debtsources will be adequate to meet foreseen needs burden of heavily indebted poor countriesbecause of factors such as a large carryover of (HIPCS). The proposal followed the request,funds from IDA-10. made in October 1995 by the Development

The three-year package begins with a one- and Interim Committees, that the two institu-year interim fund of about $3 billion running tions undertaken further analysis of the debtfrom July 1, 1996, with decisionmaking and problems of these countries.procurement limited to contributing donors and On the basis of staff analysis, the executivedeveloping countries (see aiccompanpying table). boards of the institutions agreed that there wasIn each of the two subsequent years, starting a number of HIPCS, most of which are in sub-Sa-July 1, 1997, all IDA donlors will contribute haran Africa, for whom the burden of debt wasabout $4 billion to the Eleventh Replenishment likely to remain above sustainable levels overof IDA. the meditum term, even withl strong policy per-

These donor contributions, wlhen comple- formance and the full use of existing debt-reliefmented by other sources of IDA funlds, will be mechanisms.adequate to meet foreseen needs of some SDR Directors agreed that the following broad14.5 billion. They do not, however, leave room principles should guide further action:for contingencies-future operations that are (a) The objective should be to target overallnot now foreseen-in countries currently inac- debt sustainability on a case-by-case basis, fo-tive or borrowing below expected levels due to cusing on the totality of a country's debt.absorptive capacity constraints, for example. (b) Action should be envisaged only when theBosnia is the most recent example of an unlex- debtor has shown, through a track record of re-pected demand for IDA funding. While the cur- form and sound policies, the ability to put torent program for Bosnia can nlow be funded, good use whatever exceptional support is pro-IDA would have great difficulty in financing vided to achieve a sustainable outcome.new, unexpected demands within the available (c) New measures should build, as much aswindow, possible, on existing mechanisms.

Donor representatives (IDA Deputies) reaf- (d) Additional action for the problem casesfirmed IDA'S special commitment to Africa should be coordinated among all creditors in-within its overarching objective of poverty volved, with broad and equitable participation.reductioni, emphasized that private sector- (e) Any actioni to relieve the burdeni of debtled growth and social and environmental owed to multilateral creditors should preservesustainability are the foundations of effective the financial integrity of the institutionis andpoverty reduction, and called upon recipient their preferred creditor status, and he consistentcountries to improve governance and to with the constraints of their charters in orderbroaden participation by the poor in develop- that the institutions can continue to provide fi-ment. The Deputies emphasized that access to nancing to all member countries on appropriateprimary education, clean water, health services, terms.and basic infrastructure were vital to the emer- (f) New external finance for the countriesgence of families from poverty. They called on concerned should be on appropriate

concessional terms so as to support their efforts

OVERVIFA (OF Wk)R I 11 BANK AT IVIrS I,

TABLE 1. CONTRIBUTIONS TO THE ELEVENTH REPLENISHMENTOF IDA RESOURCES

(amounts in millions)

Supplementary TotalBasic contributions contributions contributions

Contributing member Share (percent) SDR amount SDR amount SDR amountArgentina' 0.10 5.05 5.05Australia bAustria 0.90 45.46 45.46Belgium 1.55 78.29 78.29Botswana 'If 0.01 0.67 0.67Brazil cf 0.16 8.08 8.08Canada 3.75 189.40 189.40Czech Republic 0.05 2.53 2.53Denmark 1 1.30 65.66 65.66Finland 0.50 25.25 25.25France 7.02 354.56 14.14 368.71Germany 11.00 555.58 555.58Greece 0.05 2.53 2.53Hungary f 0.06 3.00 3.00Iceland 0.03 1.52 1.52Ireland'cl 0.13 6.57 2.68 9.25Italy 4.35 219.71 219.71Japan 18.70 944.49 65.66 1,010.15Korea, Republic off 0.23 11.62 3.54 15.15Kuwait' 0.14 7.07 7.07Luxembourg 0.10 5.05 0.95 6.00Mexico 0.10 5.05 5.05Netherlands 3.30 166.68 166.68New Zealand 0.12 6.06 3.19 9.25Norway' 1.42 71.72 71.72Poland 1 0.03 1.52 1.52Portugal 0.20 10.10 10.10Russia a 0.20 10.10 6.90 17.00Saudi Arabia 0.65 32.92 32.92Slovak Republic 0.04 2.00 2.00South Africa 0.08 4.04 4.04Spain 1.00 50.51 50.51Sweden 2.62 132.33 132.33Switzerland ' 2.43 122.73 122.73Turkey 0.10 5.00 5.00United Kingdom 6.15 310.62 310.62United States 20.86 1,053.59 1,053.59

Subtotal 90.89 4,590.79 97.06 4,687.85Supplementary contributions 1.92 97.06Change in encashment 0.14 7.04 7.04Unallocated 7.05 355.88 355.88

Total 100 5,050.77 5,050.77

a. Argentina, Botswana, and Russia are donors to IDA- I I who did not participate in IDA- 10.b. In Australia, a new government has recently been sworn in and is expected to announce its pledge to the Interim TrustFund and to IDA-I I in the near future.c. Brazil, Ireland, Luxembourg, Portugal, and Switzerland increased their basic share from that in IDA- 10.d. France's contribution amounts to 7.3 percent. France's objective is to maintain a global national currency contribution toIDA of at least 7.3 percent.e. Kuwait is not in a position to commit to a final contribution to IDA- I 1. The level shown is therefore indicative.f Botswana, Brazil, Denmark, Hungary, Ireland, Korea (Republic of), Norway, and Poland made additional efforts byagreeing to accelerate the encashment of their contributions.

1 8 ItHE WORLD BANK ANNIIAI, REPORT 1996

TABLE 2. CONTRIBUTIONS TO IDA'S INTERIM TRUST FUND


Supplementary TotalBasic contributions contributions contributions

Contributing member Share (percent) SDR amount SDR amount SDR amountArgentina 0.10 3.00 3.00AustraliaAustria 0.90 27.00 3.00 30.00Belgium 1.55 46.50 46.50Botswanasi 0.01 0.33 0.33Brazil "' 0.16 4.80 4.80Canada 3.50 105.00 105.00Czech Republic 0.05 1.50 1.50Denmarkf 1.30 39.00 39.00Finland 0.50 15.00 15.00France " 7.02 210.60 8.40 219.00Germany 11.00 330.00 330.00Greece 0.05 1.50 1.50Hungary f 0.07 2.00 2.00Iceland 0.03 0.90 0.90Ireland "f 0.13 3.90 0.67 4.57Italy 4.02 120.60 120.60Japan' 18.70 561.00 39.00 600.00Korea, Republic oft 0.23 6.90 2.10 9.00Kuwaite 0.14 4.20 4.20Luxembourg' 0.10 3.00 3.00Mexico 0.10 3.00 3.00Netherlands 3.30 99.00 60.00 159.00New Zealand 0.12 3.60 0.97 4.57Norway r 1.42 42.60 10.00 52.60Poland f 0.03 0.90 0.90Portugal' 0.20 6.00 6.00Rulssia a 0.20 6.00 2.00 8.00Saudi Arabia 0.55 16.46 16.46Slovak Republic 0.03 1.00 1.00South Africa 0.08 2.40 2.40Spain 1.00 30.00 30.00Sweden 2.62 78.60 78.60Switzerland 1.74 52.20 52.20Turkey 0.07 2.00 0.23 2.23United Kingdom 6.15 184.50 184.50

Subtotal 68.63 2,058.80 126.38 2,185.17Supplementary contributions 4.21 126.38Change in encashment 1.09 32.64 32.64Unallocated g 26.07 782.19 782.19

Total 100 3,000.00 3,000.00

a. Argentina, Botswana, and Russia are donors to the Interim Trust Fund who did not participate in IDA-IO.b. In Australia, a new government has recently been sworn in and is expected to announce its pledge to the Interim TrustFund and to IDA-I I in the near future.c. Brazil, Ireland, Luxembourg, and Portugal increased their basic share from that in IDA- IO.d. France's obJective is to maintain a global national currency contribution to IDA of at least 7.3 percent.e. Kuwait is not in a position to commit to a final contribution to the Interim Trust Fund. The level shown is thereforeindicative.f Botswana, Brazil, Denmark, France, Hungary, Ireland, Japan, Korea (Republic of), Netherlands, Norway and Polandmade additional efforts by agreeing to accelerate the encashment of their contributions.g. The unallocated amount exists because the United States (which pledged 20.86 percent in IDA- 10) is not participating inthe Interim Trust Fund and the IDA- 10 basic shares did not add up to 100 percent, but included a "structural" gap of 8.72percent.

OVERVIuEW OF WORI D RVANK AD-IIVITIES 19

asked the president of the Bank to participate inits discussions on debt at its annual summit,

Countries, Fiscal 1987-96 held in June 1996 in Lyons. In their communiqu,(US$ mFislons) following the Lyons meeting, the seven heads of

governments stated that the solution for some4,667.5 heavily indebted poor countries (HIPCS) should

1987-91 10,287.5 "provide an exit for unsustainable debt and be5.620.0 based on a case-by-case approach adapted to

the specific needs of each country concerned,3,845.2 once it had shown its commitment to pursuing

1992 10,592.5 economic adjustment." The G-7 also endorsedan overall World Bank contribution of the orderof $2 billion for a trust fund initiative aimed at

3,504.8 assisting the HIPCS in dealing with their debt1993 10,342.6 situation. The president of the Bank subse-

quenitly stated that the exact amounts allocatedby the Bank would be determined by its share-

2,789.9 holders and would depend on coordination of1994 9,384.8 required action by all creditors involved and

6,594.9 those countries that would make voluntary con-tributions to the trust fund.

3,954.3 * Collaboration with existing and new part-1995 9,343.6 ners was accelerated and deepened. Nongovern-

5S389.3 mmental organization (NG0) liaison officers havebeen assigned in the Bank's offices worldwide,

3,555.6 including seventeen in Africa, ten in Latin1996 9,882.2 America, four in Europe and Central Asia, three

in South Asia, and one in East Asia and Pacific.

The goal is to have an NGO liaison officer in ev-0 2000 4000 6000 8000 10000 12000 ery Bank resident mission to facilitate participa-

tory approaches in Bank-supported projects.IBRD *IDA *TOTAL Participatory approaches to development have

been mainstreamed. T'he World Bank Participa-Note: The poorest countries are defined as those with a per capitaincome of $765 or less in 1995 U.S. dollars. hon Sourcebook, published earlv in 1996, is a

tool intended to encourage Bank task managersto use participatory approaclhes in their work.'The Private Sector Development Group, com-

to pursue reform and establish a track record of prising senior managers from the Bank, the IFC,

good policy. and MIGA, has become the focal point for privateAt their April 1996 meetings, the Develop- investors seeking assistance from, or coopera-

ment and Interim Committees, after their study tion with, the Bank Group. Coordination withof the joint proposal, asked the Bank and the other multilateral development banks (MDBS) isFund, in close collaboration with all involved, also being strengthened. The heads of the fiveto move swiftly to produce a program of action principal MDBS have agreed to meet every sixto implement this framework. Ministers urgedthat a decision be reached on this program andits financing as soon as possible, aiming to do so 1. World Bank. 1996. W1'orld Bank Participation Sourcebook.

by the annual meetings of the two institutioIns Washington, D.C.

in early October 1996. The Group of 7 (G-7)

20 THE WORLD BANK ANNI AI. REPORT 1'996

INFORMATION FOR DEVELOPMENT (INFoDEV) PROGRAM IS LAUNCHED

InfoDev, a cooperative program managed in the InfoDev was launched in September 1995. SinceWorld Bank's Industry and Energy Department, then, it has received more than 144 project proposalsbrings together finance and expertise from govern- from all over the world, rangingfrom distance edu-ments, mutilateral institutions, such as the World cation and sophisticated agricultural mapping toBank and the European Union, and the private sec- medical data bases. Of these, four have already beentor to promote reform and investment in the develop- approved as part of infoDev's Initiating Work Pro-ing world through improved access to information gram: the Afrcan Virtual University; Telematics fortechnology. InfoDev receives project proposals from African Development; Jamaica: Partnership forgovernments, private firms, and international and Technology in Basic Education; and the Sixth Inter-nongovernmental organizations wishing to foster national Telecommunications Union Regulatorysuch development in four main categories: creating a Colloquium. The standard funding amount permarket-friendly environment to accelerate access to project is around $250,000. Dozens more projectsinformation; reducing poveny and exclusion; pro- are in the process of being evaluated, of whichmoting education, improving health, and protectitng inifoDev hopes to fund ten to fifteen annuallythe environment; and improving the efficiency and Available funds for calendar year 1996 are expectedtransparency of governments. InfoDev focuses on fos- to reach about $4.5 million from sources in the pri-tering partnerships among the Wlorld Bank, govern- vate sector, member governments, and multilateralments, the private sector, and civil societv. institutions.

months to develop their collaborative approach, now feature investment seminars for private sec-including the sharing of best practice, wlhile re- tor participants, for example). It has alsospecting the value of diversity, competition, and launched infoDev, an initiative to hring new re-the individual characteristics of each institution, sources-from corporations, foundations, andIn addition, the Bank's independent operations governments-to promote reform and invest-evaluation unit and its partners in the regional ment in the developing world through im-banks have established a voluntarv coordinationi proved access to informationi technologygroup to help develop more consistent ap- (see accompanying box). More efforts are beingproaches and methodologies to evaluation undertakeni on mainstreaming the guarantee fa-across the MDBS. cility to encourage investment and on other ser-

Work with clients to attract private and vices that will catalyze private investment in de-public investment in high-quality projects- veloping countries.incltidinig capacity building in governments, Against this background, commitments bvstrengtheninig legal and accounting systems and the Bank were $21,520 million-$14,656 mil-property rights, the marketing of opportunities lion from the IBRD and $6,864 million from IDA

and providing assurance to investors that the (see accompanyinig table). A total of 256 projectsrules of the game will be followed-is being were approved (129 by the IBRD and 127 fromenihanced. IDA). Txvo loans on IDA-like terms, totaling $60

The Bank has stepped up its lending and ad- million, from resources provided bv the Trustvisory work in such areas, providing support for Funld for Gaza, were approved for the Westfinance-sector reform and the private sector Bank and Gaza. Seven projects in Bosnia andin Moldova; reform of the bankinig system in Herzegovina, totaling $150 millioni from theVietnam; export development in Jordan; private Trust Fund for Bosnia and Herzegovina, wereinfrastructure finance in Inidia; and land titling also approved. Partial guarantees, totalingin the Lao People's Democratic Republic. The $275 million, were approved for three coun-Bank is also working with business organizationis tries-China, Jordan, and Pakistan. Gross dis-in maniy counitries to provide businiess opportuni- bursemenits amounted to $19,256 million-ties in developing countries (the annual meetings

0\ ER\vIF\ l ('- WoRiRr' BANK At FIVITI1-S 21 I

TABLE 3. WORLD BANK OPERATIONAL AND FINANCIAL OVERVIEW, 1992-96

(millions of us dollars unless othenrise noted; fiscal years)

Item 1992 1993 1994 1995 1996

IBRDCommitments' 15,156 16,945 14,244 16,853 14,656bDisbursements' 11,666 12,942 10,447 12,672 13,372"Net disbursements to current borrowers, 2,502 2,865 19 1,651 2,100excluding prepaymentsw 2,767 3,319 983 2,238 2,882

Net disbursements to all borrowers, 1,828 2,331 -731 897 1,213Net income 1,645 1,130 1,051 1,354 1,187Financial return on average investments 8.07% 6.07% 3.53% 5.69% 4.43%New medium- and long-term (MLT)

borrowings after swapsb 11,789 12,676 8,908 9,026 10,883Average cost of new MLT borrowingsafter swaps 6.69% 5.97% 4.99% 6.31% 5.28%

Subscribed capital 152,248 165,589 170,003 176,438 180,630Statutory lending limit 168,368 183,312 189,189 198,988 201,125Loans and callable guarantees outstanding 100,968 104,606 109,468 123,676 110,369As a % of statutory lending limit 60 57 58 62 55

Headroom 67,400 78,706 79,721 75,312 90,756Liquidity ratio 48% 48% 51% 46% 43%Interest-coverage ratio 1.24 1.16 1.16% 1.19% 1.18%Reserves-to-loans ratio 11.7% 11.7% 13.9% 14.3% 14.1%

IBRD/IDA Joint ActivitiesAdministrative expenses 1,074 1,254 1,389 1,540 1,376

IDACommitments 6,550 6,752 6,592 5,669 6,864Disbursements 4,765 4,947 5,532 5,703 5,884Net disbursements 4,441 4,581 5,110 5,205 5,322Development credits outstanding 52,304 56,158 62,810 72,032 72,821Accumulated surplus 1,363 1,194 1,365 1,995 1,790

a. Excludes guarantees and loans to the IFC.

b. Includes the refinanced/rescheduled overdue charges of $1 68 million for Bosnia and Herzegozina.

$13,372 million from the IBRD and $5,884 mil- provide social safety nets (for a description oflion from IDA. each such targeted project, turn to the project

Assistance to the poorest countries-those summaries, which begin on page 127).with a per capita gross national product of $765 Grants during the year from the Debt-reduc-or less (in terms of constant 1995 United States tion Facility for IDA-only Countries totaled $77dollars) totaled $9,883 million-$3,556 million million. They were advanced to four countries:from the IBRD and $6,327 million from IDA (see Albania, Ethiopia, Mauritania, and Nicaragua.figure on page 20). The Debt-reduction Facility provides low-

Some 32 percent of total Bank investment income countries witlh grant funds to reducelending during the year was directly targeted to their commercial debt that is public, external,the poor, the same as in fiscal 1995 . These noncollateralized, and unguaranteed. The facil-projects supported activities to increase the pro- ity is finaniced through contributions from theductivity of and economic opportunities for the IBRD's net income and donors.poor, to develop their human resources, and to

22 THE WOR[.D BANK ANNUAl. REPORT 1996

On the financial side, the IBRD borrowed theequivalent of $10,883 million in the world's finani-cial markets. Its net income was $1,187 million.

And, at the end of the fiscal year, the executiveboard approved two initiatives that provide bor-rowers flexibility in determinling the currency com-position of their 16RI loans. One permits borrowersto select loans in a single currency for new loancommitments without volume restriction. Theother allows borrowers to convert the terms oftheir existing currency-pool loans to the offeredcurrency of their choice.

During the fiscal year, Bosnia and Herzegovinafulfilled the required formalities to succeed to themembership of the former Socialist Federal Republicof Yugoslavia as a member of the uIRD. BruneiDarussalam became a member of the iIFRD Olo

October 10, 1995, increasinig the IMRD's membershipto 180.

At the end of the fiscal year, action was penidingon membership in the IBRD for the Federal Republicof Yugoslavia (Serbia/Monteniegro).

Bosnia and Herzegovina also fulfilled the re-quired formalities to succeeed to the membershipof the former Socialist Federal Republic of Yugosla-via as a member of IDA, bringing the total member-ship of IDA to 1 59.

At the end of the fiscal y'ear, action wvas pendingon membership in IDA for Brunei DarLssalarmi,Ukraine, and the Federal Republic of Yugoslavia(Serbia/Montenegro).

0%Rv' v RIF:\v ' i1 BANK A( TIVl\ iFS 23

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SECTION ONE THIE EXECUJTIVE BOARD

The board of executive di- Budget Committee, Personnel a hoard committee canniotrectors is responsible for the Committee, and Committee on make a decision for the entireconduct of the general opera- Executive Directors' Adminis- executive board, the commit-tions of the Bank and per- trative Matters. The executive tees increasingly look in depthforms its duties unlder powers directors' Steering Committee, an at specific issues or Bank prac-delegated to it by the board of informal advisory body, also tices and report their findingsgovernors. As provided in the meets regularly. and recommendations to theArticles of Agreement, five of In addition to the meetings board. Also, the executive di-the twenty-four executive di- and committee work-, the ex- rectors reviewi major policy ar-rectors are appointed by the ecutive directors accompany eas in order to keep them cur-five member governments the president of the Bank rent. In a sense, the board ofhaving the largest number of wheni he travels to their con- executive directors in its over-shares; the rest of the board is stituencies. Groups of execu- sight role seeks to ensure thatelected by the other member tive directors and alternate ex- Bank policies are being inter-governments, who form con- ecutive directors at times preted and implemented cor-stituencies in the election pro- make special trips to borrow- rectly. The Operations Evalua-cess every two years. ing countries to observe Bank- tion Department, an

The executive directors supported operationls and its indepenidenit body within theconsider and decide on the assistance strategy first hand. Bank that reports directly toIBRD loan and IDA credit pro- They meet with a wide range the executive board, assists inposals made by the president, of people, includiiw, staff of this function. It was throughand they decide policy issues the Banik's resident mission or this oversight role that it be-that guide the general opera- field office, governmlient offi- came clear that the Banktions of the Bank and its direc- cials and project managers, should take a serious look attion. The executive directors N>COs alld project beneficiaries, the type of results it was

are also responsible for pre- and the business community. achievinig, which resulted insenting to the board of gover- In fiscal 1996, groups of execu- the Task Force on Portfolionors at the annual meetings an tive directors visited Eastern Management ancI its follow-upaudit of accounts, an adminis- and Southerni Africa (Ethiopia, in recent years.trative budget, and the Annual Kenya, Mozambique, Zambia), The executive directors areReport on the operations and Latin America and the Caribbean agenits of chanlge and also exer-policies of the Bank, as well (Brazil, El Salvador, Guyana), and cise a stronig and importantas any other matters that, in Central Asia (Kazakstan, Kvrgyz role in shaping more rapidtheir judgment, require sub- Republic, Ulzbekistan). shifts or innovations in Bankmission to the hoard of gover- policy. It is in this role that thenors. Durinlg fiscal 1996, the Shaping Policy dir-ectol-s represent the clhang-executive directors met 1 14 The board of executive di- ing perspectives of their share-times in formal board meet- rectors' oversight role covers holder governments regardingings and another fortv-one virtually all Bank policy, so its the Bank's role, particularly intimes in seminars, informal role cannot be clearly sepa- response to international eco-sessions, and as the Commit- rated from most olfthe Bank nomic shocks. In this context,tee of the Whole. In addition, activities andi initiatives cov- the neeci for a new role or em-most of the executive directors ered in this Report. This over- phasis for the Bank may be-serve on one or more of five sight role is exercised in part come wvidely recogniized hystanding board committees: Au- through the process of hoard shareholders within a rela-dit Committee, Committee on approval of each Bank or IDA tively short time. ExamplesDevelopment Effectiveness, lendinig operation and the an- are the visible refocusing of

nual budget process. Although

SF( I ON 0\11 Ti iF E1\1 (I Fl\ F BOARE) 25

the Bank on poverty reduction about ten years The directors agreed that the Bank will makeago and the emergence of such new areas of a progress report to the Development Commit-concern as governance, financial sector reform, tee in two vears.and private sector development.

These policy initiatives normallv reflect nieeds Poverty Reductionperceived by shareholders and involve a process The executive board in fiscal 1996 continuedof consensus building, both among executive its efforts to see poverty reduction, the Bank'sdirectors and with Bank management. That pro- overriding objective, more comprehensivelycess is presently ongoing on1 the issue of how integrated into the country-assistance strategiesto find a solution to the official debt problem and all Bank work and analysis in borrowingof the heavily indebted poor couLntries. The countries. Directors made it clear that theBank and shareholder governments are working poverty-reduction objective must not getto define their various roles in a coordinated downiplayed in the course of the changes thatapproach. are being made to increase Bank efficiency. Al-

The Development Committee's Task Force though recognizing considerable progress in theon Multilateral Development Banks was a past few years, directors stressed the importancedifferent type of shareholder initiative that of keeping current with poverty assessments forresulted in recommendationis for change in the borrowing countries, since it was difficult to beginBank and the other major MDBS. serious work to help a country reduce poverty on

The Task Force on1 Multilateral Development a sustainable basis without the basic information.Banks was established in October 1995 bv the They also asked for more efforts to identify theDevelopment Committee with a mandate to as- real causes of poverty in any country so that ef-sess the implications that economic chanige in the forts to lessen it could be appropriately targeted.world has had for the priorities, instrumenits, op-erations, and managemelnt of the wvorld's five prin- Institutional Initiativescipal multilateral development banks (MnDEs). In its The Budget Committee reviewed institu-April 1996 report to the Development Commit- tional initiatives proposed by the president withtee, the task force set forth five priorities that an eye to their effect on the budget and themultilateral development banks must support in board's desire to stay very close to previouslyorder to achieve sustainable developmenit. Poverty agreed budget reductionis. They asked manage-reduction, the task force said, is the main chal- ment to explain its justifications for the initia-lenge of development. The remaining four priori- tives, as well as detailed cost estimates, possibleties were promotion of effective governmenit and tradeoffs with other Bank programs, and rede-a strong civil society, assurance that development plovmenit options. The new initiatives will bebe environmentally sustainable, investment in in- paid for largely out of efficiency gains or budgetfrastructure and utilities, and encouragemenit of reductionis elsewhere.private sector developmenlt. The Personnlel Comm1iittee reviewed business-

The priorities should be carried out, the task process innovation in the Bank to date, particu-force continued, by enhanicinig the strategic role of larly, what had been done unider pilot programs.the NDBS' executive boards; strengtheninig national It has expressed the need for management toovvnership of reforms, programs, and projects; take a more comprehensive approach to person-learning from experience, developing better nel issues and monitor the effects of changeground rules for sharing country economic infor- management on1 personnlel issues.mationi more widely; and demonstrating height- The Audit Committee considered a report onened cost-conisciousness, especially in the light of the effectiveness of controls and supported thethe fact that their costs are borne by the world's use of the framework defined by the Commit-developing couLntries through fees and charges. tee of Sponsorinig Organization (coso) of the

26 THE WORI D BANK ANNI AI. RLPOR I 1996

Treadway Commission to carry out a Bankwidereview of internal controls. This review began infiscal year 1996.

Development Effectiveness

The board Committee on DevelopmentEffectiveness continued urging management todevelop indicators of development effective-ness, or development impact, that could be ap-plied to operations ex ante. This would consti-tute one major follow-up to the Task Force onPortfolio Management, and it woould help in ef-forts to design higher-quality projects.

The comnPittee is also interested in havingthe lFC develop indicators to measure the devel-opmental effectiveness of its investmenits.

Supervision and portfolio evaluation andmanagement are other areas of major follow-upto that task force report, and the board now re-views it via an "'Annlual Report on Portfolio Per-formance." It has expressed satisfaction that ac-tive portfolio restructuring and managementhave become increasingly employed by Bankstaff and country officials.

New Auditors

On the recommendation of the Audit Com-mittee, the board in fiscal 1995 decided to peri-odically rotate external auditors. In fiscal 1996,procedures for getting bids from five interna-tional firms were decided. The actual biddingprocess and the selection of the new auditor areexpected to take place in fiscal 1997.

SXi(IN ONI. THI E\ECI IIVI BOARD 27

SE.CTION Two WORLD BANK OPERATIONS

Increasing DevelopmentEffectiveness

Increasing development ef- This committee addresses to be affected; Bank residentfectiveness is the absolute pri- issues-including operational missions played a larger role inority of today's World Bank. policy and portfolio-manage- organizing opportunities forFor only by increasing the ef- ment issues-that have an discussion with, and feedbackfectiveness of what the Bank important bearing on the rel- from, key stakeholders.does can its goals-reducing evance, efficiency, and effec- Fundamental to the Bank'spoverty and fostering sustain- tiveness of the Bank Group's ability to meet client needsable development-be met. operations, and it monitors the more effectively were the

To enhance the quality and implemenitation of board deci- steps taken in fiscal 1996 toimpact of its operations, the sions on these issues. The improve management. TheBank gave heightened priority committee oversees the work president strengthenied thein fiscal 1996 to meeting client of the independent Opera- functions of senior manage-needs more effectively, improv- tions Evaluation Department ment, assigning direct line re-ing the quality of new opera- (0ED) and the responses of sponsibilities to five managingtions entering the portfolio, im- Bank management to evalua- directors. The two managingproving portfolio management, tioIn findings and recommen- directors for operations havemeasuring the performance and dations, so as to identify policy given prioritv to lightening thedevelopment effectiveness of its issues for consideration by the process burden and reducingactivities, and feeding back the board. Within the forum of- reviews, giving operationallessons of experience inlto new fered by CODE, fiscal 1996 saw staff more time and scope toinitiatives. an intense process of debate focus on results "on the

Actions taken by the Bank and decisionmaking; wvhile ground." Efforts to lightenduring the year and, in fact, maintaining their distinctive processes, reduce reviews, andsince the publication in fiscal institutionial roles and perspec- delegate responsibility are not1 993 of the report of the Task tives, the CODE, Bank manage- without risks to quality. ButForce on Portfolio Manage- ment, and OED initiated a col- Bank management is con-ment, are in line with the rec- laborative process aimed at vinced that quality resides inommendationis of the Develop- creating a learning culture in its staff, that reliance onment Committee's Task Force the Bank and shaping organi- lengthy documentation andon Multilateral Development zational change to make the multiple reviews providesBanks, wAhich, in April 1996, Bank more responsive to the false comfort, and that the keystrongly endorsed the need to needs of clients and more ac- to improved quality lies in re-instill an organizational culture countable for results on the formed personnel incentives,based not on approvals but re- ground. enhllanced skills, and tightenedsults, and not on the quantity Meeting client needs. During management.of lending but on the develop- fiscal 1996 the Bank made In discussions with the ex-mental impact of loans and considerable progress in focus- ecutive board and CODE, Bankother services. ing its country-assistance strat- management sought to signal

In pursuit of efforts to im- egies (CASS) more clearly on a break with the past by moreprove development effective- clients' specific needs, both for thorough reporting on the sta-ness, the interface between lending and for advice, and in tus of the lending program, thethe executive board and linking its budget decisions quality of portfolio manage-Bank mantagemtient impr-oved more closely to the goals of menit, disbursement perfor-through the work of the these strategies. More system- mance, and nonlending services,board's Committee on Devel- atic efforts were made to en- as well as on the implementa-opment Effectiveness (CODF.). sure that the CASs reflected the tion of management responses

views of interest groups likely

28 THE W(RLD BANK ANN\ Al RFP()RaI 191-16

to recommendations from the Operations To strengthen accountability for quality andEvaluation Department. In the same vein, the results, the president of the Bank establishedCODE agreed to review with top management the Quality Assurance Group in fiscal 1996.specific examples of significant project restruc- The new group provides line managers with in-turing and country-portfolio performance re- dependent assessments of their work and identi-views, so that all parties can better understand fies and helps to address critical problem areasthe management issues. in the portfolio. The group is reviewing opera-

Business-innovation programs are now uLnder tional products on a sample basis, initially fo-way in all the Bank's regional offices. In the Af- cusing on project-cycle activities-including re-rica region, changes in organization are designed views of supervision, checks on the quality ofto make operational approaches more respon- proposed new projects, and troubleshooting forsive to clients' differing needs and differing lev- problem projects-and on CASs and country-els of commitment to poverty reduction, eco- portfolio performance reviews.nomic reform, and better debt management. Staff training and education. The Bank began aMeasures are being implemented to simplify new education and training effort to raise thework processes and make lending and economic professional standards and diversify the skills ofand sector studies more timely and responsive its staff In-house professional training programsto needs. In East Asia and Pacific, work priori- were upgraded, and expanded training for tech-ties and resources are being redirected from nical staff promoted the sharing of best prac-middle- to low-income countries, and opera- tices and lessons from evaluation experience.tional processes have been accelerated. The The Bank expanded staff opportunities for ex-South Asia region is increasing its focus on so- ecutive education and for exchange andcial and environmental risks. Borrowers' in- secondment, including exchanges with, andcreased responsibility for project preparation secondment to, private sector organizationsand implementation has helped to increase de- and autonomous agencies, and it established avelopment effectiveness and reduce costs. Presidential Fellows Program to bring eminent

In the Europe and Central Asia region, a ma- scholars and leaders to the Bank. The educationjor effort is in progress to strengthen portfolio and training programs will help strengthen man-implementation and improve rates of loan dis- agement capacity across the Bank, restore thebursement. The region is reducing its unit costs Bank's skills base, and ensure professional excel-of lending and is making its economic and sec- lence at all levels, enhancing the Bank's aware-tor studies more succinct and better focused. ness and competitiveness. Ultimately the resultResources freed by these efforts, and by in- should be more effective services to clients.creased selectivity, are helping make possible a Improving the qualitv of new} operations. Theswift Bank response to urgent needs in Bosnia Bank continued with initiatives to improve theand Herzegovina. The Latin America and the quality of new operations. At the president's re-Caribbean region is allocating increased request, the Operations Policy Department andsources to portfolio management. A high-level the OED jointly reviewed the economic analysisBrazil-Bank commission has been set up to re- of new operations proposed for financinig andform portfolio-management processes. And, made recommendations for action. They foundseeking closer relations with its clients, it is de- that today's operations are based on somewhatcentralizing resources, responsibilities, and ac- better analysis than those approved three yearstivities to the field. The Middle East and North ago; nevertheless, a continuinig need for muchAfrica region is developing more focused and more analytical rigor in project appraisal, par-flexible CASS, in concert with clients and other ticularly in analyzing poverty-reduction im-stakeholders. Decentralized decisionmaking pacts, was identified. Another review confirmedand redesigned business processes aim at in- the value of the Bank's economic and sectorcreasing cost-effectiveness and improving work in client countries. It noted that in-depthresults on the ground. economic and sector studies facilitate the

SLT I11\ T\wO WOrI 1) BANK OPLRATIONS 29

dialogue with clients, encouraging project de- "Next Steps" Program began in fiscal 1993 (seesigns that are tailored to specific circumstances. Box 2-1). Actions in progress include identifyingProjects that were able to build on the results of concentrations of problem projects and makingeconomic and sector studies wvere found to give concerted efforts to deal with them. They alsomore thorough attention to institutional sup- include more intense portfolio supervision,port, budgetary provisions, project alternatives, greater reliance on reviews of countrv portfolioand risks. The (CODE endorsed the recommenda- performance, and making portfolio performancetions of both these studies, and throughout fis- a more important consideratioln in the designcal 1996, the OED reviewed the early documen- and adaptation of CASs.

tation for selected new lending operations and Monitoring and evaluation of ongoingdrew the attention of operational staff to rel- projects are fundamenital to getting results onevant lessons of experience. the ground. In fiscal 1996, the Bank began in-

Improving portfolio management. The Bank's troducing more objective indicators for measur-regional offices have been giving increased ating projects' progress toward developmenttention to portfolio management since the goals. Responding to OED findings that the

BOX 2-1. "NEXT STEPS": A SECOND PROGRESS REPORT

In the wake of the November 1992 report of the * Studies, policy papers, and related policyTask Force on Portfolio Management, which exam- changes had, for the most part, been completed; forined the quality of the Bank's project portfolio and example, a new information-disclosure policy hadmade recommendations on ways to reverse its de- been adopted, and the operational policies and pro-cline, a commitment was made in July 1993 to un- cedures for the economic analysis of investmentdertake eighty-seven specific actions ("next steps") to projects had been improved.enhance portfolio management. * New approaches to improve projects were either

These actions were grouped into the seven major in active use, or, in the case of performance-monitor-themes of the task-force report to facilitate progress ing indicators, were at an early stage of implementa-assessment and track specific deadlines. They were: tion. Their impact will only become evident overlinking country portfolio performance to the Bank's time.core business practices; providing for more active * Strengthened approaches to country- andproject and portfolio restructuring; improving the project-level implementation had also progressed,quality of projects entering the portfolio; defining the with evidence of many instances of good practices.Bank's role in, and improving the management of, * Changing the environment and organizationalproject performance; enhancing the role of the Op- incentives to support conscientious portfolio manage-erations Evaluationr Department; creating a support- ment also showed progress, with relevant changesive internal environment for better portfolio manage- made to staff incentives, more targeted recruitment,ment; and finally, generic issues affecting portfolio and redesigned training, as well as simplificationperformance were included. and more transparent and flexible mnagement

According to a first progress report (June 1994), processes.almost all of those actions had either been completed The report did not attempt to assess the effect ofor were at an advanced stage of completion by these actions or claim that the goals espoused in theJune 30, 1994. task-force report had been achieved.

The board reviewed a second report early in fiscal This second report was the final report on the1996. While it warned that "next steps" activities implementation of "next steps." Because the Annualshould not be viewed in isolation because they are Report on Portfolio Performance is the primaryinterrelated and together they form a whole, it exam- tool for assessing the development effectiveness of theined the program under four general categories of ac- Bank's portfolio, it will be used in the future to mea-tivities to illustrate progress in implementing the sure the overall effect of the "next steps" actions.program. Thus:

30 THE WORLD BANK ANNUIA. RFIPORT 1996

monitoring and evaluation of onigoinig opera- countries with a total commitmiietnt value oftions still need major improvement, manage- $143.1 billion.'ment undertook to ensure that appropriate The ARPP provides an overview of portfoliomonitoring and evaluation provisions are huilt performance, using the Bank's project-ratinginto new operations and the portfolio, and to system that assesses projects' likelihood ofprovide better technical leadership and support achieving their development objectives (DO)

services to operational staff for monitoring and and their implementation progress (IP). UInderevaluation. the first criterion, achievemenit of develop-

Menus of sector-specific project-performance ment objectives, the share of problemmonitoring indicators have been developed. As projects-those that get an "unsatisfactory"of the end of fiscal 1996, seventeen sector "first rating because they are not likely to achieveedition" notes have been issued, as well as a their developmental objectives-in the port-handbook for task managers. The sector notes folio fell from 13.4 percent in fiscal 1994 tocover each sector in which the Bank works and 11.5 percent in fiscal 1995. The modest im-areas of emphasis that cross economic anid so- provement reflects two factors. First, reflect-cial sectors, such as environmental concerns, ing efforts to clean Up problematic countrypoverty reduction, public sector managemenit, portfolios, fiscal 1995 saw the closuLre ofand technical assistance. The only note that re- many projects with higher-than-average un-mains to be isstied is on public sector manage- satisfactorv ratings. Second, projects that en-ment; it is expected later in calendar 1 996. All tered the portfolio during the year were ratedthe notes will be revised as the Bank and its cli- positively at this early stage of their implementa-ents gain experience with the use of indicators. tion.

The indicators are currently being incorpo- In terms of implementation progress, the sta-rated into the Bank's work in several ways. To tus of the portfolio seems to have stabilizedenhance the quality of projects at entry, the since about fiscal 1992, with 17 percent-to- 18Bank's six operational regions are responsible percent of the ongoing projects rated unsatisfac-for ensuring that project designs and implerment- tory each year. The gap between the iF' and Do

tation plans include appropriate monitoring in- ratings-about 6 percent-reflects overoptimis-dicators. Borrower and staff traininag, including tic assessmenits durinig project preparation andregional workshops, on the appropriate uses of offers a measure of the risks that projects willperformance-monitorinig indicators have taken not achieve their objectives. Greater attentionplace and will continue. The process of selecting to the quality of supervision ratings is beingindicators should help the borrower, imple- encotiraged, in part, through the developmentmenting agency, other stakeholders, and Bank of specific sets of performance indicators forstaff clarify project objectives. each sector.

The Bank expects that better-defined project !nidepe-ndent reiliewi of the tRtrF. In its "'rocessobjectives will lead to more objective project Review of the FY95 Anniual Report on Portfoliomonitoring, which, in turn, wvill improve the re- Performance," also reviewed by the board, thealism of project ratings. OED noted that operational untits are becoming

Assessing perfonnance. The Annual Report o01 steadily more realistic about the performance ofPortfolio Perfonrance (.ARPP) is the Bank's princi- ongoing operations. But it emphasized that a re-

pal means of informing management and the duction in the failure rate of Bank operations isexecutive board of the overall status of the still elusive. Concerned that about a third ofportfolio, as well as of identifying additional Bank operations are still rated unlsatisfactory onmeasures to improve portfolio performance and their completion, and that the failure rate hasmanagement. The ARPP for fiscal 1995, reviewedby the executive board in December 1995,examined 1,742 ongoing operations in 1 38

1. MVorld Banik. 1'9956. Aiznnul Report oTI Poriflio Perfonn1rance-Fiscal 1995. Washington, D.C.

SE1TION Two WO(RI D BANK OP'ERFrbONs 3 1

been stuck at about this level for five years, the implementation completion reports (ICRS) forOEt) pointed to the continuing need to deal ag- the executive board on all completed lendinggressively with weaknesses in the portfolio. It operations. Unlike project completion reportsrecommended the regions continue to push for (PCRS), which were prepared prior to fiscalmore careful treatment of portfolio matters in 1995, ICRs are sent directly to the executivethe development and review of (-ASS, linking as- board rather than through the OED. In fiscalsistance more closely to the performance of on- 1996, the OED reported onl the experience withgoing operations. It urged that country portfolio the first cohort of implementation completionperformance reviews take on a greater strategic reports. In general, it found that the reportsthrust, leading to agreements with borrowers on were providing candid reviews with thoughtfulbroad qualitative goals, and that progress to- insights on lessons learned. Borrower involve-ward these goals be systematically reviewed. ment in completion reporting had, however, re-

Performance of completed operations. The OED'S mained somewhat superficial, confirming aindependent analysis of completed operations need that the Bank has already recognized-forevaluated in calendar 1994, Evaluation Results strengtheninig evaluation capacity in its client

1994, which was reviewed by the board in fiscal countries.1996, pointed to some encouraging signs, but New emphases in independent evaluation. Re-confirmed the need to improve performance sponding to the Bank's new operational empha-and accountability further for results.2 Sixty-six ses, the OMD increased the country focus of itspercent of the completed operations that were work (by undertaking country-assistance re-evaluated in 1994 had satisfactory outcomes-a views ([cARS), for example); undertook follow-figure somewhat better than the average for up studies to report on the Bank's progress in1990-94, but still low. Only 44 percent of the implementing earlier oFn) recommendations;evaluated operations were expected to sustain and produced process evaluations of the Bank'stheir benefits throughout the operational phase implementation-completion reports, environ-that follows the completion of Bank loan dis- mental impact assessments, and the -4RP.. It is-bursements. This proportion differed little from sued impact evaluations that assessed the long-the average for 1989-94, though there was a run development effectiveness of a wide rangenoticeable drop in the share of operations of operations, drawing out the implications forjudged clearly unlikely to sustain their benefits. today's policies and programs.Institutional development goals were substan- Dissemination of evaluation findings. Atially achieved in 39 percent of the operations, Bankwide task force on dissemination of evalua-better than the 30 percent in the 1993 cohort tion findings examined how the Bank learnsand the average of 31 percent for the last five from evaluation work and other Bank experi-years, but again a low figure. Adjustment opera- ence; it made recommendations for greater ef-

tions performed better, on average, than invest- forts by the OED and the central vice presiden-ment projects. cies to disseminate these lessons and by

Evaluation ant feedback. As well as providing operational staff to apply them.'report cards" on the Bank's record, evaluationsupported the Bank's effort to improve develop- Operations Evaluationment effectiveness in two ways: by providing Operations evaluation at the World Bank haslessons of experience for policies and projects, a threefold mandate: to measure how far, howvand by helping to enhance quality management effectively, and how efficiently the Bank's ac-through links to training programs, the work of tivities are achieving their desired results; tothe Quality Assurance Group, and monitoring draw and disseminate lessons for application inand evaluating of ongoing operations.

Self-evaluation by regional offices. Under ar-

rangements introduced in fiscal 1995, theBank's regional staff and borrowers prepare 2. World Bank. 19)96. Eualuotion Results 1994. Washington,

D.C.

32 THE WORI.D BANK ANNIAI. REi-JIUR[ 1!996

policies, operations, and processes; and to help tive analysis of the determinants of performanicethe Bank and its member counitries improve in more than 1,()00 completed operations. Thetheir evaluation capabilities. Bank's board and management discussed the

Evaluators responided in fiscal 1996 to the implicationis of this analvsis. In particular, thenew president's emphasis on meeting clients' findings suggested that in countries without aneeds, introducinig hetter husiness processes, cohesive strategy to address economic funda-and achieving development impact on the mentals, the odds of successful investment op-ground. Assessing the extent to which these erationis are poor, and that, in consequence, thegoals are translated into practice, and making Banki should revisit its practice of maintainingrecommendations for further progress, are inte- substantial lendinig levels in countries with un-gral to the Bank's evaluation function. Some of helpful economic environments.the evaluation activities in support of greater In its impact evaluationis, the OED, assisted bydevelopment effectiveness were outlinied earlier agencies in borrower countries, analyzes the de-in this section. velopment effectiveness of projects five to eight

Evaluation work in the Bank is overseen by years after the close of loan disbursements.the director general, operations evaluationi, wlho These evaluations assess the economic worth ofreports to the board of executive directors projects and their long-term effects on peoplethrough the Committee on Development Effec- and the environment. They provide uLnique in-tiveness (CODE) and keeps a wvatching brief over sights into what makes development efforts sus-the large volume of self-evaluationi work done taimable. Among the twenity-two impact evalua-by the regional offices and other vice presiden- tions produced in fiscal 1996, subjects includedcies. Indepenidenit evaluation is done by the Op- urban improvement projects in Kenya and In-erationls Evaluationi Departmenlt (OF). Results dia; a steel project in Egypt; assistance to reftu-and recommendationis from evaluation are re- gees in Pakistan; road projects in Morocco; andported to the executive directors and fed back irrigation projects in South and Southeast Asia.into the design and implementation of policies Several of these impact evaluationis put into ef-and lending operations. fect a new set of guidelinies for more svstemati-

Lenidinig. All lendinig operations are evaluated cally involx ing stakeholders-including commu-on completion by the regional offices respon- nities directly affected by Bank operations-insible for them; borrower agencies contribute to evaluationis, so as to assess more accurately thethese completion reports. The OLD reviews the social impact of Bank lending.performance ratings presented and, for each Nonlendingservzices. Following recommenda-completed operation, provides the boardcl with tions made bv a Bankwide working group, Bankan indepenidenit assessmenit of overall outcome, management enhaniced the arrangemenits forsustainability, impact on the borrower's institu- evaluating the development impact oftional development, borrower performanzce, and nonlending services-including economic andBank performance, as well as the lessons to he sector work, trust ftunds, development training,drawn. research, and technical assistance-whlich now

For a representative sample of com-lpleted op- account for more tlan) a third of the Bank's ad-erations, the OLD produces performance audits. ministrative budget.

In fiscal 1996 the OED reviewed 250 comple- The oFD began a review of the self-evaluationtion reports and reported on their quality to the processes of the Bank's economic and sectorBank's board and management, and audited 100 work and of the Econiomic Develop,ment Insti-completed operations. The cumulative total of tute and, jointly with the Controller's Depart-Bank operations subjected to ex post evaluation ment, designed a process fo r evaluating thereached 4, 1 26 at the end of the fiscal year. Bank's administrationi of trust funds, which cur-

The OED's Evailufation Resu/lts 1994 provided rently finance more thani 3,000 schemes andan overviex of performanice in recently coI11- collaborative programs.pleted operations, as noted earlier in this sec-tion. It also broke new ground wvith a quanitita-

SFvi 1),\ T\wo() W)RI[ 1 BA'cK 0FERATIONS 33

Country and sector assistance, business pro- through the Public Information Center. The OED

cesses. The OED'S evaluation studies examine expanded its publications program, and its of-Bank processes and broader development issues, ferings on the Internet led to a large volume ofincluding policies and experience in countries, requests for evaluation information.regions, and sectors. Recommendations arising The OED gave seminars within and outside thefrom the studies are discussed by the CODE, Bank, including in borrower countries, to dis-along with responses from Bank management, cuss evaluation design and results, and issuesand agreements on follow-up actions are re- raised by evaluation results for the managementcorded in a policy ledger to have their imple- of ongoing programs.mentation monitored by the OED. In fiscal 1996, Several activities expanded and strengthenedthe OED sent twelve studies to the board. These the professional links between the OED anidincluded evaluations of counitry-assistanice pro- evaluators in other agencies. First, the OED par-grams in Argentina and Zambia, and reviews of ticipated as an observer in meetings of the DAC

lending for agricultural research and for electric Expert Group. Second, the multilateral devel-power development in Africa. opmnent banks (MDBS) established an Evaluation

OED'S counltry-assistance review for Ghana Cooperation Group, through which thevx willraised generic issues for the Bank's planning and systematically learn from each other's experi-management of CAss. The CODF pursued these ences in evaluation approaches and practices. Inissues xvith management. They included the this context, OEL) commissioned an independentBank's propensity to underestimate the time re- review of project-evaluation methods and stan-quired to implement policy-reform programs dards among the MDBs. Third, OED pursued pro-and achieve a sustainied response from produc- fessional contacts with Australian governmenters; the need for CASS to reflect the political evaluators, resulting in workshops for the Indo-economy; the need to design trade-liberalization nesian government and for Bank staff onprograms flexibly, with an eye to costs as well as Australia's well-established integration of evalu-benefits; the need for consistenit, thoroughgoinig ation into strategic planning and budgeting.efforts to promote partnership and borrower Fourth, evaluation staff contributed to severalparticipation in Bank operations; the need for professional evaluation meetings, including thehigh-quality, judiciously timed economic and first international conference on evaluationsector work and thorough analysis of proposed sponsored by the North American Evaluationoperations; and skill mix, staffing, and work- Association.location issues. Support for ev 'a/uation in 17orrower coun tries.

Through follow-up studies, the 0l:D assessed Bank country departments and the OED re-the progress the Bank had made in implement- sponded to requests for advice on evaluation ca-ing earlier OvD recommendations on agricultural pacity development from Colombia, Indonesia,credit policy and on monitoring and evaluation Turkey, and Zimbabwe.of ongoinig operations. The latter study high- Executive board review. In fiscal 1996 the ex-lighted examples of best practices and noted an ecutive directors reviewed the oFD's Evaluationimproving trend in the use of key performance Results 1994, the director general's "Annual Re-indicators. But it also found that institutionial port on Operations Evaluation in the Bank," andcapacity among borrowers and in the Bank, and the 'Annual Report of the CODE.' Thev founddata collection at the project level, had not kept that, overall, the Bank's evaluation system waspace, and that the record of tracking the devel- performing well. But they called for efforts toopmental impact of projects unider implementa- (a) strengthen borrower participation intion was uneven. completion reporting and borrowers' evaluation

Dissemination and outreach. In line with the capacity; (b) enstire more timely preparation ofBank's disclosure policy on evaluation results, reports on completed lending operations;all impact evaluations and country- and sector- (c) improve the economic analysis of proposedevaluation studies were released to the public projects and the monitoring and evaluation of

34 THF. W(IRIi.) BANK ANNtAI. RFIORT 1996

ongoing operations; and (d) make further previous year were fourteen projects for $979progress in the evaluationi of nonlenidinig ser- million. Lending volume also increased in thevices. And they asked for more concrete evi- Africa regioni. The sharpest drop occurred indence that lessons learned from experience are Latin America and the Caribbeani.being implemented in lending, portfolio man- Adjustment lending amounted to 21 percentagement, nonlending services, and cAss. of Bank commitmenits, downi from the previous

year s 24 percent (see Table 2-2). The fiscalCommitments and Guarantees 1996 adjustment total includes $65 millioni in

World Bank commitments (IBRD anid IDA com- rehabilitationi-import loans and $30 inillion inbined) amounted to $21,52(0 million in fiscal debt-reduction loans.1996, a decrease of $1,002 million (5 percent) The thl-ee largest borrowers from the iBCr0over fiscal 1995's total (see Table 2-1). Commit- were China ($2,490 million), Russia ($1,816ments by the IBRD (including the refinanced/ million), andc Argentina ($1,509 million). Therescheduled overdue charges of $168 million three largest borrowers of IDA credits were Indiafor Bosnia and Herzegovina) amounted to ($1,301 million), Vietnam ($502 million), and$14,656 million, whiile IDA credits totaled China ($480 million).SDR4,616 million, or $6,864 million equivalent. Two projects in the West Bank and Gaza,A total of 129 IBRD loans to forty-five countries totaling $60 million and funlded from the Trustwere approved; the 127 IDA credits weent to Fund for Gaza, were approved. Seven projects,forty-nine countries. totaling $1 50 million and funlded by the Trust

The biggest increase in commitments was in FuLnd for Bosnia and Herzego0ina, were ap-the Middle East and North Africa region, wihere proved for Bosnia and Herzegovinia.twenty-one projects were approved for a total Lending for electric power-at $3,247 mil-of $1,595 million. Comparable figures for the lion-led all sectors by volume, followed by

TABLE 2-1. TRENDS IN IBRD AND IDA LENDING, FISCAL YEARS 1994-96

(amounts in millions of us dollars)

1994 1995 1996

Sector IBRD IDA Total IBRD IDA Total IBRD IDA Total

Agriculture 2,194.3 1,674.0 3,868.3 1,171.4 1,540.4 2,751.8 1,160.3 1,416.4 2,576.7Education 1,499.9 658.1 2,158.0 1,280.6 816.2 2,096.8 920.8 784.9 1,705.7Electric powerand other energy 1,613.3 - 1,613.3 1,802.5 439.0 2,241.5 2,899.2 347.9 3,247.1

Environment 679.5 17.3 696.8 557.1 40.5 597.6 348.1 36.8 384.9Finance 1,093.5 411.1 1,504.6 2,935.4 129.3 3,064.7 1,199.2 161.4 1,372.7Industry 375.0 267.1 642.1 175.0 23.2 198.2 217.0 14.8 239.8Mining/Otherextractive 14.0 - 14.0 - 24.8 24.8 570.8 109.0 679.8

Multisector 606.3 896.5 1,495.3 2,295.0 867.8 3,116.5 906.3 758.6 1,685.5Oil and gas 957.3 186.2 1,143.5 461.5 141.6 603.1 30.0 25.6 55.6Population, health,and nutrition 366.0 519.7 885.7 451.3 711.0 1,162.3 1,495.2 858.2 2,353.4

Public sectormanagement 378.3 260.1 646.0 636.2 230.1 872.6 1,036.0 943.1 1,938.4

Social sector 130.0 20.6 150.6 596.5 51.0 627.5 240.0 554.5 794.5Telecommunications/

Informatics 405.0 18.0 423.0 325.0 - 325.0 35.0 - 35.0Transportation 2,202.5 1,117.7 3,320.2 2,026.8 104.1 2,130.9 2,236.9 535.7 2,772.6Urban development 857.0 442.4 1,299.4 1,466.0 241.0 1,727.0 632.0 236.5 868.5Water supply andsanitation 872.0 103.2 975.2 672.3 309.2 981.5 729.1 80.7 809.8

Total 14,243.9 6,592.1 20,836.0 16,852.6 5,669.2 22,521.8 14,655.9 6,864.1 21,520.0

Si( I k) N T\\() W( I I.) BANk O-I R lTIMN\

TABLE 2-2. WORLD BANK ADJUSTMENT OPERATIONS, FISCAL 1996


World Bank financing

Country Project IBRD IDA Total

Sector-adjustment loansArgentina Bank Reform Loan 500.0 - 500.0Argentina Health Insurance Reform Loan 350.0 - 350.0Bangladesh Jute Sector Adjustment Credit (IDA reflows) - 3.4 3.4Bolivia Capitalization Program Adjustment Credit - 50.0 50.0Bolivia Capitalization Program Adjustment Credit (IDA reflows) - 8.0 8.0Cameroon Structural Adjustment Credit 11 - 150.0 150.0Cameroon Structural Adjustment Credit II (IDA reflows) - 30.3 30.3C6te d'lvoire Agriculture Sector Adjustment Credit - 150.0 150.0C6te d'lvoire Agriculture Sector Adjustment Credit (IDA reflows) - 73.6 73.6C6te d'lvoire Private Sector Development Adjustment Credit - 180.0 180.0Guyana Private Sector Development Adjustment

Credit (IDA reflows) - 2.9 2.9Jordan Economic Reform and Development Loan 80.0 - 80.0Kazakstan Financial Sector Adjustment Loan 180.0 - 180.0Kyrgyz Republic Financial Sector Adjustment Credit - 45.0 45.0Mauritania Private Sector Development Credit (IDA reflows) - 0.8 0.8Mauritania Public Resource Management - 20.0 20.0Morocco Financial Markets Development Loan 250.0 - 250.0Nicaragua Emergency Recovery Credit (IDA reflows) - 5.8 5.8Romania Financial and Enterprise Sector Adjustment Loan 280.0 - 280.0Russia Coal Sector Adjustment Loan 500.0 - 500.0Senegal Agricultural Sector Adjustment Credit (IDA reflows) - 2.8 2.8Ukraine Enterprise Development Adjustment Loan 310.0 - 310.0Zambia Economic Recovery and Investment Promotion Credit - 140.0 140.0Zambia Economic Recovery and Investment

Promotion Credit (IDA reflows) - 12.1 12.1

Total 2,450.0 874.7 3,324.7

Structural adjustment loansAlgeria Structural Adjustment Loan I 300.0 - 300.0Armenia Structural Adjustment Credit - 60.0 60.0Cambodia Economic Rehabilitation Credit - 40.0 40.0Chad Structural Adjustment Credit - 30.0 30.0Georgia Structural Adjustment Credit - 60.0 60.0Ghana Private Sector Adjustment Credit (IDA reflows) - 4.8 4.8Honduras Public Sector Modernization Structural Adjustment - 55.0 55.0Honduras Public Sector Modernization Structural

Adjustment (IDA reflows) - 26.4 26.4Kenya Structural Adjustment Credit - 126.8 126.8Lao People'sDemocratic Rep. Structural Adjustment Credit Ill - 40.0 40.0

Malawi Fiscal Restructuring and Deregulation Program - 102.0 102.0Malawi Fiscal Restructuring and Deregulation

Program (IDA reflows) - 4.4 4.4Mali Economic Management Credit - 60.0 60.0Papua New Guinea Economic Recovery Program 50.0 - 50.0Sierra Leone Structural Adjustment Credit 11 (IDA reflows) - 0.3 0.3Togo Economic Recovery and Adjustment Credit - 50.0 50.0Yemen Economic Recovery Credit - 80.0 80.0

Total 350.0 739.7 1,089.7

Debt-reduction loanPanama Debt and Debt-service Reduction Loan 30.0 - 30.0

Total 30.0 - 30.0

Rehabilitation-import loanAzerbaijan Rehabilitation Credit - 65.0 65.0

Grand total 2,830.0 1,679.4 4,509.4

- Zero.

36 THE \,Vl.RI 1) RANK ANNHI RAi RI It) 1996

transportation ($2,773 million) and agriculture institution, in giving all eligible bidders from($2,577 million). developing countries and developed countries

Fiscal 1996 sawv the expansion of its partial an opportunity to compete in providing goodsrisk and credit-risk gurantee program that was and works financed by the Bank; and the Bank'srevitalized and amended during the previous interest, as a development institution, in en-year to catalyze the flow of private capital to in- couraging the development of local contractor-sfrastructure projects. Three such projects, total- and manufacturers in borrowing countries. Theing $275 million, were approved. Bank prescribes conclitions unlder which prefer-

ences may be given to domestic or regionalDisbursements manufacturers and, where appropriate, to do-

Gross disbursements by the IBRD to countries mestic contractors.totaled $13,372 million, an increase of 5.5 per- Table 2-3 shows consolidated foreign and localcent over fiscal 1995's $12,672 million. iD.A dis- disbursements for the IBRD and IDA through thebursements amounted to $5,884 million, up end of fiscal 1991 and for the period fiscal 1992$181 million from the previous year. through fiscal 1 996. Advance disbursements coni-

Disbursements, by source of supply. Projects fi- sist of payments made into special accounts ofnanced by the World Bank require procuremenit borrowers, from which funds are paid to specificfrom foreign and local sources to achieve suppliers as expenditures are incurred. Becauseproject goals. Disbursements are made prima- balances in these accounts cannot be attributed torily to cover specific costs for foreign procure- any specific supplying country until expendituresment and some local expenditures. have been reported to the Bank, these are

Three procurement considerations generally showin as a separate category.guide the Bank's requirements: the need for Table 2-4 provides details for foreign dis-economy and efficiency in the execution of a bursements by OEc:[ and 1nO0n-0ECD countriesproject; the Bank's interest, as a cooperative for the IBRL) and IDA separately.

TABLE 2-3. FOREIGN AND LOCAL DISBURSEMENTS,BY SOURCE OF SUPPLY


IBRD and IDA

Net advanceForeigna Local disbursementsb Total

Period Amount % Amount % Amount % amount

Cumulative toJune 30, 1991 103,433 58 70,923 40 4,592 3 178,948

Fiscal 1992 9,038 55 6,807 42 537 3 16,381Fiscal 1993 9,813 56 7,887 45 -325 -2 17,375Fiscal 1994 9,010 56 7,442 47 -473 -3 15,979Fiscal 1995 9,094 51 8,724 49 -97 -1 17,720Fiscal 1996 10,013' 52 8,787 46 456 2 19,256Cumulative toJune 30, 1996 150,401 57 110,570 42 4,690 2 265,660

NoTE: Details may not add to totals because of rounding.a. Amounts exclude debt-reduction disbursements of $313 million in FY91, $50 million in FY92, $515 million in FY93,and $655 million in FY95. Amounts include $556 million in disbursements under simplified procedures for structural andsectoral adjustment loans ih FY 96.b. Net advance disbursements are advances made to special accounts net of amounts recovered (amounts for which theBank has applied evidence of expenditures to recovery of the outstanding advance).

c Disbursements for FY96 include the refinanced/rescheduled overdue charges of $168 million for Bosnia and Herzegovina.

S II '( N TU\() 'V \RI D E3 \Nk OPF RATIC )NS 3 7

TABLE 2-4. FOREIGN DISBURSEMENTS, BY SOURCE OF SUPPLY


IBRD IDA

OECD Non-OECD Total OECD Non-OECD Total

Period Amount % Amount % amount Amount % Amount % amount

Cumulative toJune 30, 1991 66,071 86 11,104 14 77,176 20,783 79 5,475 21 26,258

Fiscal 1992 5,116 76 1,585 24 6,701 1,541 66 796 34 2,337Fiscal 1993 5,104 73 1,873 27 6,976 1,786 63 1,050 37 2,837Fiscal 1994 3,995 73 1,462 27 5,457 2,209 62 1,344 38 3,553Fiscal 1995 4,584 78 1,312 22 5,896 1,987 62 1,210 38 3,197Fiscal 1996 4,982 73 1,824 27 6,806 1,712 65 940 35 2,652Cumulative toJune 30, 1996 89,852 82 19,160 18 109,012 30,018 74 10,815 26 40,832

NoTE: Amounts exclude disbursements for debt reduction, net advance disbursements, and disbursements under simplifiedprocedures for structural and sectoral adjustment loans. Details may not add to totals because of rounding. OECD amountsare based on current OECD membership, excluding Czech Republic and Hungary, which became OECD members in December1995 and May 1996 respectively.

Appendix 7 shows disbursements made in fis- In all these tables and appendixes, IBRD figurescal 1996 by the MDR and IDA for local procure- exclude disbursements for loans to the IFC anid

ment by current borrowing countries and dis- "B" loans. IDA figures include Special Fund andbursements made for goods, works, and services Special Facility for sub-Saharan Africa credits.procured from them by other Bank borrowers Disbursements for Project Preparation Facility(foreign procuremenit) for projects funded by advances are excluded for both the IBRD and IDA.

the Bank.Appendix X shows the amounts disbursed Cofinancing and Trust-fund Programs

from the IRRD and IDA separately for foreign pro- Cofinancing is an essential tool in mobilizingcurement of goods, works, and services from se- resources for development and in harmonizinglected member counltr-ies in fiscal 1996 and cu- Bank assistance with other institutions, both of-mulatively through fiscal 1996. ficial and private. The volume of cofinancing

Appendix 9 shows the proportion of foreign anticipated in support of World Bank projectsdisbursements from the IBRR and IDA for specific approved in fiscal year 1996 was $8.35 billion,3

categories of goods and services provided by se- remaining within the range of $8 billion-$9lected member countries in fiscal 1996. billion achieved during the past two years (see

Appendix I() provides a summary listing of the Table 2-5). These funds helped finance 131amounts paid to OETD and non-oECo countrysuppliers in each fiscal year from 1994 to 1996unider irivestniefit proj ects. AmouLIfts disbursed . -3. Cofinancing tigtires, which represent planned cofinanicinlg,are compared with respect to significant catego- are compiled at the time of presentation of each IBR[) and IDA

ries of goods procured from foreign suppliers. operation to the Bank's executive board. The amounts of

The extenit to which oi:cD and non-OECD coun- official cofinancing, in most cases, are firm commitments bythat stage; export credits and private cofinanicing, however,

tries par-ticipated in supplying these major cat- are generally onlv estimates, since such cofinancing is actually

egories of goods in each of the past three fiscal arr-anged as required for project implementation, and the

vears is also compared. amounts get firmed up svithin a year or two after boardapproval. T'he amounLts of private cofinancing in Table 2-5 forany fiscal year do not necessarily reflect market placements.

38 THF W(lRI D )BANK AN\IIAi RFi'()I I ]1)16

TABLE 2-5. WORLD BANK COFINANCING OPERATIONS, BY REGION,FISCAL YEARS 1995-96


Source of cofinancing

Private

(of which

Projects Export Total IBRD World Bank Totalcofinanced Official, credit Private guarantees) contribution project

Region and year No. Amount No. Amount No. Amount No. Amount No. Amount IBRD IDA costs

Africa1995 36 1,296 34 1,285 - - 3 11 - - 65 1,349 3,683

1996 34 1,155 33 1,146 - - 2 9 - - - 1,618 4,828

East Asia andPacific1995 16 1,765 14 987 2 348 5 340 (1) (64) 1,336 334 6,186

1996 9 869 7 664 - - 2 205 (1) (50) 1,109 207 3,805

South Asia1995 9 1,108 9 527 1 50 1 531 (1) (240) 609 374 3,344

1996 12 2,032 11 1,271 3 433 3 328 (1) (75) 900 710 6,669

Europe and

Central Asia

1995 41 870 39 588 1 50 4 232 - - 2,542 424 4,961

1996 41 1,342 41 1,340 - - 1 2 - - 1,544 153 4,020

Latin America andthe Caribbean

1995 27 3,053 26 3,032 - - 2 21 - - 2,773 242 7,542

1996 26 2,081 25 1,901 - - 2 180 - - 1,266 262 4,944

Middle East and

North Africa

1995 11 639 11 639 - - - - - - 559 53 1,8071996 9 871 9 871 - - - - - - 364 196 1,912

Total

1995 140 8,731 133 7,058 4 448 15 1,225 (2) (304) 7,883 2,777 27,523

1996 131 8,350 126 7,194 3 433 10 724 (2) (125) 5,183 3,146 26,179

- Zero.

NoTE: The number of operations shown under different sources add up to a figure exceeding the total number of cofinancedprojects because a number of projects were cofinanced from more than one source. Cofinancing data are reported by thefiscal year in which the project is presented to the Bank's executive board. Details may not add to totals because ofrounding.

a. These figures include cofinancing with untied loans from the Export-Import Bank of Japan.

Bank-assisted projects, or about half of the lateral sources of cofinancing during the yeartotal number of projects approved during the were Germany ($394 million), France ($217year. million), the United Kingdom ($159 million),

About 86 percent of cofinancing came from and the United States ($96 million).official sources, both bilateral (37 percent) and The Inter-American Development Bank (IDB),

multilateral (49 percent). Japan remained the which provided $1.6 billion in cofinancingmost important bilateral source in fiscal year during the year, remained the Bank's largest1996. Japan's Overseas Economic Cooperation multilateral cofinancier. The second largestFund (OECF) and the Export-Import Bank of multilateral source of cofinancing came fromJapan (JEXINv) together cofinanced ten projects European Union (El i) institutions, including thefor a total of $1 . I billion. Other important bi- European Investment Bank (EIB). Together these

S II()N ONTWO W()RI.' BANK OPERAV1IONS 39

institutions accounted for $829 million in her of eligible counltries grew to thirty-one.cofinancilg. The Asian Development Bank ($703 Other large cofinancing efforts during the yearmillion) and the European Bank for Reconstruc- incltuded those with the Global Environmenitaltion and Development ($181 million) also Facility (GEE) and with special efforts for recon-cofinanced a significant number of operations struction in Bosnia and Herzegovina, as well aswith the Bank during the year. in the West Bank and Gaza.

Fourteen percent of cofinancitng was provided CoPfinancing management. In order toby export-credit agencies (ECAs) and the private strengthen its capacity to generate resourcessector. Private sector cofinancing amounted to and to better leverage funds for development$724 million in fiscal 1 996, compared with from other sources, the Bank consolidated its$1.2 billion in 1995. Export credit cofinancinig resource mobilization and cofinancing functionswas $433 million during the year, about the into a single vice presidency for Resource Mobi-same as last year. lization and Cofinancinig (R.-vC). This change,

Investment loans attracted the largest share of effective March 15, 1996, was made to bettercofinanicing, at 75 percent. The trend towards enable the Bank to forge more effective partner-lower levels of cofinancinig for adjustment lend- ships with the donor community and the pri-ing and other fast-disbursing loans resumed dur- vate sector.ing fiscal 1996, after temporarily rising in fiscal RMC (and its predecessor Cofinancing and Fi-1995 due to two large, fast-disbursing opera- nancial Advisory Services) carried out a numbertions in Mexico and Argentina. On a sectoral of specific activities during fiscal year 1996 tobasis, cofinancing in infrastructure (power, en- further enhance the Bank's cofinancing partner-ergy, telecommunications, transportationi, water- ships. A new Cofinancing Framework Agree-stupply) once again attracted the most cofinancing, ment was finalized with Australia, and an agree-amountinig to $3.8 billion, or 45 percent of the meent on processing Fifth Dimension cofinancingtotal. Cofinancing in the social sectors rose signifi- was signed with Norway. A total of twenitycantly, mainly due to large loans to Argentina, cofinancinig consultations were held with six-Brazil, and Egypt. teen major partners. Bank/dolnor consultations

Regionally, the largest amounlt of cofinancing help firm up cofinancing arrangements for spe-($2.1 billion) continued to go to Latin American cific projects in the Bank's lending program,countries, reflecting the Bank's close collaboration deepen the Bank's policy dialogue with its part-withl the Inter-American Development Bank. ners, and focus on coordinating official flowsCofinancing fell in East Asia, in part because of with private sector investment in developingthe stronger reliance of many East Asian counl- countries.tries on private sector financinig, particularly for RNIC: took steps, as well, to improve the Bank'sinfrastructure. This was offset by a significant ongoiing relations with ECAs and with the Bernerise in cofinancing for South Asia, due to a few Union, which comprises insurers of exportbig infrastrtucture projects in India and Pakistan. credit and private foreign investment. ActivitiesIn Eastern Europe and Central Asia, cofinancinig during fiscal year 1996 included: (a) a two-daygrew in line with donor readiness to support the meeting withl ECAS in Washington, in whichneeds of the transition economies and recon- prospects for increasing cofinancing xvere dis-struction efforts in Bosnia. Cofinancing in cussed, (b) a meeting between the BerneAfrica and the Middle East and North Africa Union's Cofinancing Committee and the Bankremained at about the previous year's level. where participants gained a better understand-

The Special Program of Assistance for Sub- ing of cofinanciing issues, and (c) consultationsSaharani Africa (SPA) continued to constitute the with major ECAs in order to build on the im-largest single on-going donor coordination proving dialogue with the Berne Union.effort. The third phase of the SPA (SPA-3) was During the year, RNIC sought to improve thelaunched in October, 1993, to cover the 1994- services and information it provides its clients.1996 period. lo date, seventeeni donors havepledged $6.7 billion uLnder- sIA-3, and the num-

40 THE W:RLD BANK AWNN Ai R FT()I I19'(

As part of this effort, it kept donors informed of environmenital sector, bringing the total numbercofinancing prospects through its bianniual otf TFs to forty-ninie, funded by twenty-six donors.Cofinancing Opportuniities Publication. It also The growth in the program reflects the continuingkept Bank task managers informed of donor need for consultancy services, particularly in theprograms and procedures through an updated environmental sector and in the transitionalversion of the "Cofinancing Handbook." As part economies of Europe and Central Asia. It alsoof its overall review of cofinancing activities, it reflects the continuing support for the programissued a report, "Cofinanicing With the World by donors who, despite constraints on aid bud-Bank-Twentv-Five Years of Cooperation." gets, made special efforts to increase their con-

Trust funds. Despite constraints on national tributions to support the Bank's programs of'aid budgets, donors continued to increase their assistance.funding in support of technical assistance trust- During the year, the Ban}k sought to improvefund programs. During the year, the two main its management and monitoring of trust funds.programs, the Policy and Humnan Resources De- Towards this end, a first "Annual Report" on c-i rvelopmenlt (PHRD) Fund-financed by Japan- activities wvas issued, internial controls on theand the Consultant Trust Fund (CTI:) program- use of funds were strengthened, and (tTF re-financed by twenty-six donors-botlh increased source information was placed "on-line" for easvtheir activities. access by Bank staff.

The PrIRD Fund extends untied grants to meet In order to improve flexibility and effective-the technical assistance needs of developing ness in the use of trust funds, the Bank re-countries. During the past fiscal year, the t'IIRD viewed with doniors ways to reduce the degreeFunid provided 270 grants for $162 million to to wlhich eTFF funds are restricted in terms ofsupport project-preparation activities of Bank- procurement. As a result, a number of donorsfinanced operations (270 grants for $177 mil- (ten to date) have agreed to untie ( TFs by atlion wvere extended in tiscal 1 995). Fifty-ninle least 25 percent on the basis of reciprocity.percent of projects approved during the year Trust-fund mnianagement. In response to thewvere prepared with grant assistance from the rapid grovth in the use of trust funds, thePHRM) Fund. The balance of the PHRD Fund is al- Bank has introduced a series of initiatives tolocated to financing the training and develop- strengthen the institutionial procedures for ad-ment activities of the Economic Development ministering externally funded trust funds. TheInstitute; the funding of Japanese experts Bank's prinicipal policy objectives are to ensurethrough the Japan Consultant Trust Fund; and that trust ftinds are: (a) used in accordance wvithother special programs. institutional priorities; (b) consistenit with coun-

During the year, the Japanese government try-assistance strategies; and (c) fully effectivealso provided, through the PHRD, finlancial sup- from a development perspective, particularlv inport to assist regions emerging from civil strife. the case of country-specific technical assistanceThis program began with $9 millioni in in which recipient ownerslhip of the productcofinancing funds allocated for the Emergency can be a critical factor. A report on the statusRecovery Project to assist Bosnia and of trust-fuinid programs was submitted to theHerzegovina. executive board in April 1996.

The Consultant Trust Fund (CT-iF) Program In order to strengtheni the coherence of theseprovides consultancy services to support the efforts, the newly created vice presidency forBank's operational and technical assistance Resource M'lobilization and Cofinancing waswork. The c(-F program financed a total of $78 designated as the focal point in the Bank to es-million in new allocations in fiscal year 1996, a tablish trust-fund policies and strategies, to be23 percent increase over the previous year. Dur- the institutional link withl donors and the maining the year, twvo new C-FS xvere established (by channel for trust-fund resource mobilization,Austria and Canada) to support activities in the and to improve trust-fund processing, moniitor-

in, and accountability.

SF1T(I)N 'V' \' ()kRI I) B-\NK OPIRA1 I()No 4 1

The Debt-reduction Facility for IDA-only range of activities, including a grant ofCountries provides grant funds to heavily $446,800 to Eritrea to help build theindebted IDA-eligible countries, which use these government's capacity for budgeting, monitor-funds to buy baclk their commercial dlebt at ing, and coordinating projects; a grant ofa deep discount. Four operations (Albania, $489,000 to Tanzania to help establish a Rev-Ethiopia, Nicaragua, and Mauritaniia) were enue Authority; and a grant of $198,000 tocompleted in fiscal year 1996 under facility aus- Vietnam to support water management.pices. They utilized $77 million in IBRD re- Measuring technical assistance effectiveness. Forsources from the facility and $135 million in many years, the Bank has used performance in-cofinancinig to extinguish a total of $1.7 billion dicators to measure the performance of invest-in eligible principal debt. ment operations-mostly the physical aspects of

a project rather than its IA components. Recog-Technical Assistance nizing that an effective means of measuring ca-

Technical assistance (IA) is an important in- pacity building is also essential in allocatinggredient in the Bank's menu of operational ac- scarce resources and identifying best practice,tivities. It provides the resources and expertise the Bank expanded its system of performancecountries need to build up institutions critical indicators this past year so that the performancefor development success-institutions that fa- of technical assistance operations can also becilitate a flourishing private sector, invest in measured. These indicators measure perfor-people, and protect natural resources and the mance by results and outputs (rather than byenvironment. inputs) and distinguish between quantitative

In calendar 1995 World Bank funding for and qualitative yardsticks.technical assistance totaled $1.9 billion. Of this The Bantik anid the United Nations Developmentamount, $1.3 billion was for the technical assis- Progranmme (UNDP). The Bank maintained a fre-tance components of investment or economic quent policy dialogue with the UNDP at thereform projects and $610 million was for highest levels of management throughout thetwenty-four freestanding technical assistance year. A letter to field staff, jointly signed by theloans. Bank's president and the LJNDPIS administrator,

While funding for technical assistance fluctu- reiniforced the institutions' commitments to en-ates from year to year, the overall share of Bank hanice their collaboration, and agreement waslending geared to IA has remained stable at reached on coordination mechanisms for con-about 10 percent. sultative group and roundtable activities.

Argentina was the largest single user of theBank's technical assistance funding ($250 mil- Inspection Panellion), followed by China ($227 million), India An independent inspection panel was estab-($218 million), and Indonesia ($159 million). lished by the executive directors in September

The Bank's Project Preparation Facility (PFi), 1993 to help ensure that the Bank's operationsas its name suggests, provides ftunds for coun- adhere to the instittution's operational policiestries that lack the resources to prepare projects and procedures regarding the design, prepara-for external funding. Use of the Pi'F does not sig- tion, or implementation of a project. Any groupnal a funding commitment to the project by the of individuals who may be directly and ad-113RD or IDA. In calendar 1995, the Bank made versely affected by a Bank-supported project or122 PPF advances totaling $96.2 million. Sixty- projects can ask the panel to investigate com-six of these (54 percent) were to countries in plaints that the Bank has failed to abide by itsthe Africa region, which traditionally has been policies and procedures. The executive directorsthe largest user of the facility. decide, on the recommenidationi of the panel,

The Bank approved 105 Institutional Devel- whether an inspection will take place.opment Fund grants to sixty-one countries to-taling $24.2 million. These covered a wide

42 THF WORILD BANK ANNUAt RFi')RI 1996

v

{'st~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~f W

7-T-

k4~~~~~~~~~~~~~~_

'.~~~~~~~~~~~~- -A4 4

Lt'~~~~~~~~~~~~~~~~~~~S

The panel has received numerous queries One relates to the execution of the Rondoniaconcerning potential requests for inspection. To Natural Resources Management Project (Brazil),date, however, it has received only five formal where the requesters claimed that the Bank'srequests for inspection, three of which were lack of enforcement of several covenants of thefound to be admissible. Two of those requests project's legal documenits caused material ad-were acted upon in fiscal 1996. verse effects on, among other things, their

SEC I ION TWCo WORLD BANK OPFRAI iONS 43

FIGURE 2-1PIC-Total Requests

(Direct & Indirect)

300000 -

250000 -

200000-

150000-

100000-

50000 -.

0Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Note: Data for Internet from July 94 to November 94 not available. FY 95 UtFY 96

FIGURE 2-2Part 11 Countries

SA'S20%

Africa23%

EAP5%

MENA14%

LAC19%

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ EC A19%

incomes and health. The panel recommended The panel conducted an "Additional Review"an investigation, but the executive board re- of the request for inspection and of the informa-quested more information on which to base the tion provided by Bank managemenit, and indecision of whether an investigationi should be December 1995, it submitted to the executivecarried out. board a report on the Additional Review. Later

44 THL WO)RIL) BANK ANNI 'Al. RFi)RI 1996

in the month, Bank management submitted a to inform the public about the center's services.status report on project implementation to the A brochtire on Pic services was distributed atboard, vwhich included a plan of action dealing the annual meetings. Printed copies, as wvell aswith the principal issues raised by the panel, an electroniic version on the Internet, are avail-The executive directors considered the request able in English, French, and Spanish. The ',lifor inspection, and, in light of the actioni plan also made its Internet programn more user-presented by managemenit and the follow-up friendly and added abstracts of many docu-now under way, concluded that it would not be ments that fall unider the Bank's disclosureadvisable to proceed with the investigation as policy.recommended by the panel. However, in view The lIc's usage continues to grow (see Figureof the complexity of the project and the Bank's 2-1). Requests for informationi received at thedesire to help ensure its success, the executive Pic totaled more than 2 million, a fivefold in-directors agreed to review a progress report by crease over fiscal 1995; users of the Internetmanagement and to invite the panel to assist in program numbered almost 2 million. In fiscalthe review. 1996, the highest demand for informationi from

The second involved a request related to the the mic came from the husiniess community, fol-provision of IDA financing for an emergency lowed by public agencies and the academicpower project in Tanzania. The requesters community. Figutre 2-2 depicts the breakdownclaimed that there was private sector financing of requests by developinig country region.(to be provided by the firm they ownved or The Plc manager visited Bank field offices inworked for) available for the project on reason- C6te d'lvoire, Kenva, Madagascar, and Senegalable terms. The board accepted the panel's rec- to revieew progress in implementinig the Bank'sommendation that no inspection take place, as disclosure policy, orient field staff on the policy,the panel had found that IDA management had and help establish a PIc section in their libraries.followed its policies in this regard. The panel New mics were opened in Colombia, Ecuador,also declared a related complaint on alleged and Tunisia, and several others are in the ad-possible adverse environmenital effects of the vanced planning stage. Many Bank field officesproposed emergency project not eligible, that do not have mics are making great efforts to

The resolution that established the panel re- make information available to the pu,blic.quires a review of its functions by the Bank'sexecutive board after two years of operations. Itis expected that the review process will havebeen completed early in fiscal 1997.

Public Information Center

Since the Bank's disclosure-of-informationipolicy was endorsed by the executive directorsin August 1993, the Public Information Center(Pic) has worked to make available a widerrange of operational information-formerlyavailable only to official users-to a wider audi-ence, in user-friendly ways. The Pic provides in-formation related to Bank-assisted projets, in-cluding project-preparation documents,environmental studies, and evaluations. ThePIc's aim is to support accountability and trans-parencv of the Bank's operations.

The PIC continued to expand its activites infiscal 1996. Several new initiatives were taken

Si (1i1O T\ .(RI I B) BANK Oi)rRAI IONs 45

A 0 it S S 0 SS X b w

tV :t : f: X; -

- i s- s n-

: j

SECTION THREE MAJOR WORLD BANK PROGRAMS

FISCAL. YEAR 11996

Human CapitalDevelopment (HCD)

When children in a kinder- That is what investing in people incomes in developing coun-garten in India, Kazakstan, or is about, and why "humani capi- tries have more than doubled,Kenya enjoy a nutritious meal, tal" are the key words in today's and, in some countries, theyplay with educational toys, or development economics. have grown by a factor of fiveget a health checkup through Investing in people is at the or even ten. Average life ex-one of the World Bank-funded center of the Bank's work in pectancy in developing coun-programs for early child devel- the I 990 s. It is one of the fast- tries has risen from aboutopment, the), do not know est growth areas of Bank ac- forty years to sixty-three yearsthat this is the last link in a tivities. Lending for human in the past four decades. In-long chain of planning, coordi- capital development has infant mortality rates have beennating, and implementing one creased by more than fivefold cut by two thirds. Child im-of the strategies for investing since the earlv 1980s. Loans munization, almost nonexist-in huLmlaln capital. Countries totaling $35 billion have been ent in the I 950s, now coversaround the world are investing extended to more than I 00 80 percent of all children.in people and building human countries for education, health, Smallpox has beeni eradicated.capital with the help of the populationi, and nutrition pro- A generation ago only 40 per-World Bank and other interna- grams since the first loan in sup- cent of children entered pri-tional aid agencies. port of human capital invest- mary school in the poorer

Children enrolled in early ments was approved in 1962. countries-today, that manychild development programs From 5 percent annually in the enter high schools, and manyare just some of the beneficia- early 1 980s, lending for human developing countries haveries of these efforts. They will capital development increased achieved close to universalget a better chance to grow up to 18 percent of total Bank primary education. But therehealthy, well educated, and lending in the five-year period is no room for complacency.prepared to become produc- fiscal 1992-96. Average yearly Disease, malnourishment, andtive and successful members lending amounts during this hunger are still a constantof their society. Thus they period totaled more than $4 curse for many millions ofhelp the World Bank accom- billion. poor people faced with suffer-plish its basic mission-reduc- The World Bank is now the ing and tragedy each day. De-ing poverty and creating better world's single largest provider spite progress, the lot of thelives for people in the devel- of external financin-g for social most deprived and vulnerableoping countries. services or human capital de- remains a serious development

One of the important les- velopment. In recent years so- challenge.sons from decades of experi- cial sector spending has in- The WNorld Bank, therefore,ence in development is that cluded new activities such as continues to increase its sup-there is no more direct road pensions, unemployment com- port for investments in humanto improving living standards pensation, safety nets, and capital. Special attention hasin developing countries than gender equity. The Human been paid to the provision ofinvesting in the well-being of Capital Development (HcnD primary health and educationpeople. Healthy, well-edu- vice presidency is the focal services, which have the great-cated people will not only point for the Bank's activities est impact on economicensure better lives for them- in this field. growth and poverty reduction.selves and their families but People in developing coun- In fiscal 1996, lending in sup-also contribute to the wealth tries today are, on average, port of primary health andand progress of their societies. better off than they were fif- education services amounted

teen years ago: Household

SEr'vioN THREE WORLD BANK PROGRAMS 47

to $1,595 million anid $686 million, respectively. The poverty-reduction strategy that the BankThe essence of the Bank's approach combines two is implementing today, while still based oncomplementar; tracks: investing in people and broad-based growth, human capital develop-sound economic policies. ment, and safety nets, is much more targeted to

Investments in people will not be effective the needs of each region and, witlhin regions, tounless governments establish anl economnic specific couLntry needs.framework that ensures macroeconomic stabil- The report shows that, although inroads haveity, markets that are open for trade and invest- been made in reducing poverty between thements, the right stutcture of incentives, proper- late I 980s and the early 1 990s, the gains havesocial sector policies, and efficiently functioning been small. While the incidence of poverty iscapital and labor markets. It is not a questioni of estimated to have fallen from 30.1 percent inchoosing between investing in people and sound 1987 to 29.4 percent in 1993, the number ofeconomic policies--it must be both. They go poor has increased from 1.73 billion to 1.31 bil-hand in hand and reinforce each other to re- lion. Efforts to reduce poverty have been moreplace the vicious circle of poverty with the vir- successful in some regions than in others, andtuous circle of growth and progress. This ap- success rates are unevenly distributed.proach is at the core oft the work and research The incidence of poverty has declined in Eastperformed by HCD'S two departments, Poverty Asia, the Middle East, Northern Africa, and inand Social Policy (irsP) and Humani Develop- South Asia. It has remained more or less stablement (HDD). in Latin America and sub-Sahlaran Africa, and it

The expertise and advice that the Banik pro- has increased in East Europe and Central Asia.vides to donors and developing countries is as About 90 percent of the poor live in Southimportant as the dollar amounits that it lends for Asia, sub-Saharan Africa, Indochinia, Mongolia,HCD projects. lmportant decisions must be made Centr-al America, Brazil, and China.on education strategies, labor-market policies, The Bank recognizes the importance of under-policies to advance gender equity or to reduce standinig, on a country-by-country basis, the manypoverty, health-care programs, -IjV/AIDS preven- dimensions of poverty: its causes, whether it is in-tion, or how to target food subsidies for the creasing or decreasing, what works best to reducepoor. fHCD focuses much of its effort on provid- it. The Bank has made tremendous gains ining such advice and helping developing coun- measuring and monitoring poverty throughtries design and implemenit proper social sector poverty assessments, so that poverty analysispolicies. To disseminate the Bank's experiences can be built into planning, policy dialogue, andand the knowledge of best practices, Hcn has re- decisions about lending operations.' Country-leased a numLlber of reports and studies dealing assistance strategies (CAsS) are the primary toolwith different aspects of humani capital devel- for incorporating poverty analysis into couni-opmenit and poverty reductioin. tries' overall developmenit strategies. Developed

in consultationi with borrowing governmentsPoverty-reduction Activities and discussed by the executive board, CAss de-

A thorough analysis of the Bank's work in re- scribe the unlique circumstances each countryducing poverty is presented in Povertj., Reduction faces. Because the problem of poverty is soanid the I4t'ork Bank: Progress anld Chtallenges itn overwhelming in many countries, its reductionthe 1990s-a comprehensive report on global is almost invariably the key element of thepoverty trends and the Bank's efforts and strat- Banik's CAss, and the C:As enables the mostegy to alleviate the suffering of the poor.' Thereport takes a more wide-ranging approach thanprevious reports in its analysis of methods, re- I. World Bank. I 'c36 PFo'emv Re,'dcictio cnod tih' 1f1Vrld Bolik.

Provgress onld Omlelrlge7s ill thle I1990s. Washington, D.C.sults, and future strategies based on the lessons bTrogres and C 0, t196 . Waofigtonr DoC.2. Ihroulgh Juine 3(1 . A996, a tot.@1 of eig'htv-fourJ povertylearined. asscssnenits--they provide the basis for a collaborative

approac h to pou erty reductionll b country officials and theBank-had been completed.

48 THR\ W\RI 11 BANK ANNI Ai. Ri iR )1 19 196

TABLE 3-1. PROGRAM OF TARGETED INTERVENTIONS, 1994-96

(millions of us dollars; fiscal years)

1994 1995 1996

Total World Bank PTI lending 4,440.5 5,436.7 5,408.1As share of investment lending (%) 25 32 32As share of all Bank lending (%) 21 24 25Total number of projects in the PTI 63 75 79Total number of investment projects 197 208 224

IDA PTI lending 1,853 2,423.2 3,246As share of IDA investment lending (%) 43 54 63As share of all IDA lending (%) 28 43 47Number of IDA PTI projects 35 48 51

NOTE: Investment lending is defined as all lending except for adjustment, debt and debt-service reduction operations, andemergency-reconstruction operations.

appropriate package of instruments for support- of poverty reduction. Many constraints preventing the government's poverty-reduction efforts the poor from benefiting from the opportunitiesto he defined. presented by growth. The Bank aims to take

The Bank has supported projects in a number steps to remove these constraints with programsof sectors that, among other objectives, aim to that (a) improve the access of the poor to essen-reduce poverty. During fiscal 1992-96, the Bank tial factors of production through affordableprovided $16 billion to support agricultural credits; (b) increase the productivity of and re-productivity, about $14 billion to improve turns to the poor's factors of production in agri-transportation, slightly under $10 billion for culture or the informal sector; (c) help marketseducation, more than $7 billion for population, work to the benefit of the poor by urging gov-health, and nutrition programs, over $6 billion ernments to lift unnecessary or burdensomefor urban development, and about $5 billion to regulations; and (d) support efforts to overcomeimprove water supply and sewerage svstems. discrimination of the poor and increase their

During fiscal 1996, $5.4 billion, or about access to the opportunities that arise from32 percent of WVorld Bank investmenit lending, economic growth.was channeled directly for poverty-targeted Due to the importance the Bank attaches toprojects, the same percentage as in fiscal 1995 reducing poverty in its operations, it will pre-(see Table 3-1). For IDA countries, lending for pare annual poverty updates, with a more de-projects in the Program of Targeted Interventions tailed and wide-ranging report monitoring(PTI) amounted to 63 percent, up from 54 percent poverty trends every five years. The W11orld De-of investment lending in the previous year. During velopment Report will focus on poverty issuesfiscal 1996, seventeen of the twenty-nine adjust- every ten years.ment operations that were approved containiedspecific poverty-reduction measures.'

Economic growth remains the cornerstone of3. A descr-iption of each p roject in the In that was

the Bank's strategy for reducing poverty, but the appro\ved in fiscal 1I996 can be foLind in the "project

study shows that growth by itself does not auto- summaries section of this Annual Report. The F'TI projects

maticallv translate into the fastest possible rate are marked by an (§). A description of each poverty-fociused adjustment operationi is also included; they aremarked by a (t).

SECTI()N THREE WoRi BANK PROGRAMIS 49

Gender Issues Mainstreamed status of Bank operations and describes the ini-tiatives that have been undertaken in support of

The World Bank took active part in the the Beijing agenda.preparation of the United Nations Conference The Bank focuses on three strategic areas inon Women held in Beijing in September 1995. its operations in mainstreaming gender issues:Two publications, Toward Gender Equality: The * building up women's economic capacity byRole of Public Policv and Advancing Gender investing in their human capital;Equality: From Concept to Action, highlighted * helping improve economic conditions andthe Bank's strategy 4 -first introduced in the ex- opportunities for women; andecutive board-approved policy paper, Enhancing * improving institutional capacity to advanceW47omen's Participation in Economic Devlelop- women's welfare and status.ment 5 -for empowering women and described Each region in the Bank is formulating a Gen-how gender issues are incorporated in Bank der Action Plan, which, when finalized, willprojects. Focusing on the economic arguments make up the basis for a coherent, Bankwidefor gender equality, the reports presented solid gender strategic framework.evidence that investing in women is good eco- An internal gender committee has beennomics, gender inequality hampers growth, and formed, which will report to the Bank's presi-investing in women enhances the quality of dent on a regular basis on progress in integratinggrowth. gender issues into operations, and an external

The Bank's commitment to promoting gender Gender Consultative Group was established toequality was underlined by the participation at strengthen the Bank's partnership with NGOS

the conference of James Wolfensohn, who had and women's organizations. It provides a forumassumed his position as World Bank president for discussion of gender issues, and, at the sameonly a few months earlier. In his speech and time, is a mechanism for promoting NGO-Bankmeetings with nongovernmental organizations cooperation and following the Bank's progress(NGos) and other participants, he left no doubt in implementing the Beijing agenda. The forma-about the Bank's commitment. tion of the consultative group is consistent with

Mr. Wolfensohn's speech focused on the role the Bank's efforts to enhance participation andeducation plays in eliminating gender inequali- partnership as an essential part of its develop-ties, particularly when special attention is given ment strategy.to girls' education. He defined a new goal-achievement of universal primary education by Participation in World Bank Activities2010 and attendance by 60 percent of children Fiscal 1996 saw the publication of the Wlzorldin secondary school. For girls, attainment of the Batnk Participation Sourcebook, a how-to guidefirst goal would mean an additional 90 million written by more than 200 Bank task managerscompleting primary school; realizing the second to highlight the importance of the participatoryobjective would imply that an additional 90 approach in economic and social development.million would go on to secondary school. The The importance of the issue is also being recog-estimated extra cost would amount to $30 bil-lion. Realizing that more resources are neededto make girls' enrollment equal to that of boys,Mr. Wolfensohn committed the Bank to allocate 4. World Bank. 1995. Advancing Gender Equality: Fr,on

$900 million yearly for girls' education. Concept to Action. Washington, D.C.; World Bank. 1995.

Responding to a petition from thousands of Toward Gender Equality: The Role of Public Policv. Develop-ment in Practice Series. Washington, D.C.

women at the Beijing conference, the Bank is- 5. World Bank. 1994. Enhancing U4'omnen's Participation in

sued a progress report on its gender activities, Ecotnomic Development. A World Bank Policy Paper.

"Implementing the World Bank's Gender Poli- Washington, D.C.

cies." It reviews the evolution and the current

50 THE WORILD BANK ANNLIAL REPORT 1996

nized in the Bank's Change Managemenit The principal factor promoting enhancedAgenda, which encourages greater awareness of Bank-Nco interactions during the past year wasclient-oriented and participatory approaches to the direct interest of the Bank's president. Hecreate a greater sense of ownership, achieve bet- meets NGOS in most countries he visits and haster results on the ground, and enhance had structured meetings with civil society lead-sustainability of Bank-supported operations. ership on poverty, the environment, adjust-

The Bank chairs the Inter-Agency Group on ment, gender, and sustainable agriculture. SomeParticipation. At the group's second meeting of these have led to important follow-up, suchin March 1996, strategies for mainstreaming as the creation of the previously mentionedparticipation, monitoring and evaluation, and Gender Consultative Group and the planning ofstrengthening in-country capacity to support a joint Bank-NGo initiative to study the impactparticipatory approaches to development were of adjustment in a number of countries. At thediscussed. The Bank is working on several time of the annual meetings, he joined leadersprojects to help design appropriate monitoring of major NCO networks in a media event toand evaluation instruments to better assess the highlight threats to the funding of developmentefforts and impacts of the participatory pro- assistance, including that to IDA. Strong empha-cesses. To highlight and help focus on these is- sis has been placed on field-level interactionssues, the Bank has set up a discussion netwlork, (see Box 3-1) and the notion of partnership withcalled "Participation Exchange," on the WVorld civil society.Wide Web. In addition to these issues, policy dialogue

The Bank is also taking steps to broaden pub- with NGOs has centered on multilateral debt,lic consultation in the shaping of c.ss by inprivate sector development, and the disclosurecreasing the use of participatory poverty assess- and dissemination of Bank information. A Bank-ments in which the poor and their organizations NGOc wvorking group on the last-named lhasare involved in the analytical process. The use helped improve the implemenitation of theof qualitative information on the needs and per- Bank's disclosure policy and has encouraged in-ceptions of the poor has increased greatly in novations at the field level. The NGo-WorldBank operations. Of the twenty-two poverty as- Bank Committee continues to be the principalsessmelnts (PAxs) completed in fiscal 1996, twelve forum for policy dialogue; annual meetings arewere participatory PAs. now supplemeinted by regional meetings, held

during the past year in Accra, Managua, andNGO Involvement Increases Manila. Major international gatherings, such as

As in recent years, a considerable proportion the Women's Conference in Beijing and theof projects approved in fiscal 1996 involved Habitat Il Conferenice in Istanbul (the CityNGOs.' It is clear that the depth of NCO involve- Summit), are also important fora for policyment is increasing, with NcOs being a central interactions.feature in both the design and implementation The Bank seeks opportunities to draw govern-of a growving number of projects. For example, ments' attention to the importance of NGOS andNGOS wer-e actively engaged in the planninig of civil society. It has launiched studies of state-NGOthe Ghazi-Barotha dam in Pakistan; implemen- relations in Bangladesh and Indonesia, it has orga-tation of the planned Pilot Participation Project nized government/civil society/donor "trialogues"(to tackle hunger) in Mali is to be the sole re- in Guiinea-Bissau, Lesotho, and Vietnam, and issponsibility of NGOS; and a trust fund to finance preparing a handbook, "Global Standards and BestNGO activities has been designed and launched Practices for Laws Governinlg NGOS.

for the West Bank and Gaza. NGO involvementin economic and sector work also continues to

expand. 6( Proiects involving N(:cos that were approsed in fisLal 1 996

are ma;rked hy a 0 it) the project sulimaries" section thatbhgins on page 127.

SECTION THREE WORLD BANK PROGRAMS 51

BOX 3-1. BANK-NGO RELATIONS AT THE FIELD LEVEL

Increasing attention has been placed in recent works, brief them on current initiatives, listen to theiryears on strengthening resident mission relations suggestions and concerns, explore collaborative ar-with the NGO community of the country and other rangements, become familiar with the country'scivil society institutions. Starting with India and In- NGOs, and discuss substantial policy issues.donesia, Bank staff have been appointed for this and It has become clear that more widespread dissemi-other functions related to participation and social de- nation of information is critical to strengthening thevelopment. Fiscal 1996 saw a substantial advance, Bank's relations with NGOs. Some resident missionswith both the Africa and Latin America and the have taken part in pilot initiatives by establishingCaribbean (Lac) regions systematically appointing public information centers, translating materials intoNGO liaison staff in resident missions. By the year's local languages, and undertaking other innovations.end, thirty-five such positions had been established. The Bank's NGO unit in Washington, D.C hasSeventeen were in Africa, ten were in LAc, four in concentrated on assisting resident missionsEurope and Central Asia, three in South Asia and strengthen their contacts with NGOs by designingEurope and Central Asia, and one in East Asia and tools for such functions, such as publishing ThePacific. Many other resident missions have asked ex- World Bank's Partnership with Non-Governmen-isting staff to undertake NGO liaison alongside their tal Organizations (available in three languages),existing responsibilities. providing training to NGO liaison staff, and facilitat-

Resident missions (particulariy in Africa) hold ing global networking between NGO liaison staff.regular meetings with NGOS to explain how the Bank

Labor-market Issues Policies to Protect the Old anld Promote Growth,made the case that countries need a multipillar"

Labor-market issues are increasingly attract- pension system, where part of the pension is pub-ing the Bank's attention, both in its lending op- licly and part privately funded, to minimize pov-erations and its analytical work. The Bank is ex- erty in old age, boost future growth throughpanding its links with international partners, greater savings and work, and to discourage eva-such as the International Labor Organization sion.' There has been a wave of pension-systemand the International Confederation of Free reforms since then, particularly in LatinTrade Unions, to undertake joint studies and or- America but also in transition economies withganize conferences. And a series of seminars in relatively old populations, where pension ex-the Bank on labor markets focused on issues penditures absorb a large share of the budget.covered in World Development Report 1995: The Bank is assisting these countries to under-WlAorkers in an Initegrating 1W4orld. take reforms that are fiscally sustainable, pro-

HCD's Social Insurance group is undertaking tect the poorest and most vulnerable, create in-analysis of the need for pension-system reform, centives for savings and work, and promoteespecially in middle-income countries that face growth.an increasingly aging population. Some coun-tries (in Eastern and Central Europe, the former Education Strategies and Child InterventionsSoviet Union, and Uruguay, for example) are Education is a particularly important invest-facing short-term imbalances with long-term ment because it affects the health and life ex-unfunded liabilities often in excess of their gross pectancy of people and equips them wvith thedomestic product (GDP). The challenge for theSocial Insurance group is to identify the optionsfor reducing unfunded liabilities and assist 7. World Bank. 1995. World Development Report 1995:

W11orkers in ai Integrating 147orld. New York: Oxfordcountries to move ahead toward a system that Uijiver-sitv Press.

distorts labor markets less. The 1994 Policy 8. World Bank. 1994. Averting the Oldl Age Crisis: Policies to

Research Report, Atverting the Old Age Crisis: Protect tile Oldi an,d Promote Growlth. World Bank PolicyResearch Report. New York: Oxford University Press.

52 THE WORLD BANK ANNLIAL REPORT 1996

knowledge and the means to live healthier lives. tion, Earlv Child Development: Investing in theEducation is a critical factor for a country's sus- Future, presents the theory in an overview oftained economic growth, and no country in the the many programs that target children fromInformation Age can compete in world markets birth to age eight."' It also examines Bank-sup-if it neglects education. ported "early child" projects around the world

The World Bank's education strategy supports and recommends nutrition, health, and educa-enhancing the productive use of labor, which is tion interventions that have proved to be suc-the poor's main asset. The book, Priorities and cessful and cost-effective.Strategies for Education: A Review, emphasizes To highlight the importance of early child in-the need for quality education systems as one of terventions HCD organized a conference in coop-the keys to progress and economic growth." eration with the Carter Center in Atlanta andPublic spending on education remains ineffi- the Task Force for Child Survival and Develop-cient and inequitable in many cases. In Africa, ment, an affiliate of the Carter Center. Some offor example, spending per student in higher the themes and issues that were analyzed at theeducation is about forty-four times that of ex- conference, such as the integration of nutrition,penditures per student in primary education. health, and psychosocial programs, active learn-Yet, one half of Africa's primary school-age ing and play, and the importance of parents' in-children are not enrolled in school. volvement, will help HCD devise new projects

Plrimary education deserves high priority and map new directions for the Bank's work infor four reasons. It is the foundation on which supporting early child development programs.higher education must build; the returns, asmeasured by individual wage gains, tend to Challenges of Population Growthbe largest for primary education; the poor, in Population growth is a major concern con-particular, benefit from public spending on pri- fronting the developing world. In 2020, worldmary education; and primary education brings population will total 7.9 billion (2.2 billionbroad additional benefits such as lower mortal- more than today). Although some regions haveity and fertility, and better health, nutrition, demonstrated that they can still register impres-and literacy. sive per capita G[)P growth despite rapid popula-

But waiting until children go to school may tion growth, others face a bleak future. This im-often be too late because the earliest stages of a plies that with expected population growth thechild's life can be decisive for success later. A number of poor will continue to grow. Withoutchild's earliest years are of critical importance a substantial increase in economic growth or afor the individual, the family, and society. Mil- marked drop in fertility rates, more than threelions of children suffer from malnourishment, times as many people will live in poverty by thelack of appropriate health care, and stimulation year 2020.through interaction with adults. In publications such as Population in Asia

Children deprived in this way are more likely and Kev Indicators for Family Planning Projects,to fail in school, drop out, be functionally illit- HCD has analyzed the challenges posed by popu-erate, and be only marginally employable. Con- lation growth and presented its recommenda-sequently, they affect labor productivity and the tions for mitigating them." I Improved economiceconomic prosperity of their country. The ear-lier intervention programs are implemented thebetter, and experience shows that children un- 9. World Bank. 1995. Priorities and Strategies for Edncation:A

Review Development in Practice Series. Washington, D.C.der twvo years of age should be p riority targets. 10. Young, Mary Eming. 1995. Earl' Child Development:

Building on this knowledge, HCD has taken Investing in the Future. Directions in Development Series.

the lead with its children's initiative to create Washington, D.C.: World Bank.

more understanding and support for early child 11. Sanderson, Warren C., and Jee-Peng Tan. 1995.

development programs as a key to breaking the Population in Asia. A World Bank Regional and SectoralStudy. Washington, D.C.; Bulatao, Rodolfo A. 1995. Key

intergenerational cycle of poverty. The publica- Indicators for Family Planning Projects. World Bank

Technical Paper No. 297. Washington, D.C.

SECTION THREE NVORLD BANK PROGRAMS 53

vi *

growth through human capital investments is Through seminars and workshops, the train-one key tool to curb population growth. Strong ing week gave participants exposure to the mostpolicies are needed to put in place programs recent research, best practices, and cutting-that can provide the necessary social services edge programs in various disciplines. Apart fromand, at the same time, ensure that people have knowledge sharing, the training week also pro-the capability to use those services appropri- vided participants with the opportunity to ex-ately. Social capacity is a central parameter. The plore partnership possibilities with other devel-challenge for governments is not just to ensure, opment agencies and discuss and define newfor example, that contraceptive services are de- leadership challenges. Over the next threelivered but also to understand that expanding years, the training program aims to give all H4CD

social capacity (for example, by educating girls) staff the opportunity to acquire the knowledgecan be even more important. and skills to help them do their wvork more

effectively.Meeting the Challenges of the Future

In an effort to increase the professional excel- Environmentally Sustainablelence of its staff, HCD launched a new training Development (ESD)

program during fiscal 1996. Professional Devel- As the Bank has helped countries understandopment WvVeek brought together staff and coun- the economic, environmen-tal, and social conse-terparts from around the world for a week of quences of ignoring depletion and degradationintensive and stimulating training. of natural resources, demand for its help to

mitigate these effects has grovn.

54 THE WORLD BANK ANNUAL REPOR'l 1996

A polluted river or stream is not only an eye- counts for about half of total lending, is beingsore, it poisons drinking and irrigation water, evaluated so that lessons learned can be builtpromotes waterborne diseases, kills off fish that into projects in the pipeline.are a valuable source of protein for local people,and adversely affects tourism. Loss of forests, Strategic Approaches to Meet the Challengelikewise, has many repercussions-biological Environmental management. An importantdiversity is lost forever, indigenous people lose part of the ESD portfolio is the Bank's targetedtheir homes, and the atmosphere loses a valu- lending for the environment. The primary focusable source of oxygen. But these are the most of the Bank's environmental work is to reduceobvious environmental problems developing the potential harm from Bank-assisted projectscountries face. New environmental challenges, and to ensure successful implementation of theincluding those arising from urban growth, young and rapidly growing portfolio of environ-increasing motorization, and from a recent lack mental projects. A key challenge is finding waysof attention to rural development, are emerging to effectively and appropriately integrate globalas priority concerns for the Bank and its bor- and local environmental dimensions in therowers. In addition, the continuing need to Bank's traditional lending sectors.extend basic services in water, sanitation, and As the Bank's lending portfolio has growntransport to both urban and rural populations and matured, the Bank has added new dimen-must be addressed in environmentally sustain- sions of environmentally and socially sustainableable ways. development to its activities. It has strength-

The Environmentally Sustainable Develop- ened its capacity to reduce adverse environmen-ment (ESD) vice presidency, created in 1993, is tal and social impacts of projects. Operationalthe focal point of the Bank's environmental ex- policies covering environmental and social is-pertise where a critical mass of environmental sues have been updated and refined, and thereprofessionals works to link environmental ob- has been a significant increase in the numbersjectives to the agricultural and infrastructure of Bank staff working on these issues. The Banksectors. These specialists undertake an active now has 288 higher-level environment staff, ofprogram of policy work, provide technical sup- whom two thirds have been recruited sinceport to regional staff, and help establish partner- 1992. Similarly, of the ninlety-nine staff special-ships with external institutions so that the izing in the social sciences, more thanBank's technical understanding of environmen- 60 percent have been recruited within the pasttal issues is strengthened and its ability to de- three years.velop operational solutions to on-the-ground Social polioy. Social concerns are becomingproblems is enhanced. more prominent in the Bank's operations, and

The primary challenge facing the Bank today to reduce the piecemeal approach to them so-is to improve the quality of the development cial assessments are being prepared, incorporat-impact of its assistance. This effort includes ing participatory processes. A preliminary re-ensuring that new operations are responsive to view of forty-two social assessments found thatbeneficiaries and are designed to be sustainable they are being used as a tool for social analysisand that measures are identified and undertaken and as a mechanism to identify stakeholders andto strengthen the effectiveness of ongoing op- put participatory processes in place in Bank op-erations. Work is under way to ensure that the erations. In addition, they are helping the BankBank's environmental assistance is in-line with and its partners reach the poor and build localborrower priorities. Environmenital concerns are capacity.included in country-strategy formulation, and Rural development and sustainable agriculture.state-of-the-art expertise is applied to sectoral Doubling food supplies over the next thirtyand project problems which the Bank is being years will require greatly accelerated effortsasked to address. The ESD portfolio, which ac- to develop and support the adoption of more

intensive agricultural production systems.

SEc rl()N THREE WC)RLD BANK PROGRAMS 55

Involving poor farmers and rural communities Delivery of transport, ivater, sanitation, andin rapid and sustainable technological change is urban sector services. Rapid urban growth has ac-an important challenge to which the Bank must companied economic development in all re-respond. But this challenge can be met only if gions of the world. However, the pace of thepolicies, institutional frameworks, and public exchange in low-income countries from societiespenditures adjust to reflect better the value of that have been predominantly rural to thosenatural resources, more thoroughly involve local that are mostly urban presents enormous chal-people in development planning and implementa- lenges in urban management and finance, envi-tion, more effectively target research and exten- ronmental regulation, and the provision of basicsion investments, and more equitably share access services, especially to the poor.to land and natural resources. Similarly, it has become evident in recent

During the past year the Bank's activities have years that more effective management of waterentailed analysis and synthesis of best practices on is critical to all aspects of the Bank's develop-(a) decentralization of the financing and implement work-the reduction of poverty, eco-mentationi of Bank-supported rural development nomic growth, and environmentally sustainableactivities; (b) tailoring public and private invest- development.ments that will both increase output in a sustain- To this end, effective delivery of transport,able manner and contribute to wvidely shared water, sanitation, and urban sector services togrowth in rural incomes; and (c) more effective the poor and institutional and policy reformtargeting of poverty-reduction efforts. were important elements of the ESD work pro-

The agricultur-al action plan, "From Vision to gram in fiscal 1996. This included woork onAction in the Rural Sector," produced during sustainable fiscal policies and targeting mecha-fiscal 1996, will guide the Bank's future activi- nisms, as well as effective institutional arrange-ties in support of rur-al, agricultural, and natural menits for the delivery of basic infrastr-tuctureresource operations. It proposed that the Bank services to low-income communiities in rural(a) incorporate key elements of the rural strat- and peri-urban areas. The Bank has been closelyegy into C(ASS, (b) improve portfolio implemen- involved in conceptual work and operationaltation and performance so as to increase the ra- support to help client countries improve infra-tio of projects receiving a 'satisfactory" rating, structure services, managemiienit, and finance

(c) increase the international communiity's com- through sector reform (including commercial-mitment to improve rural development and re- ization and restructuring) and by redefining theduce rural poverty, and (d) rebuild and enhance role of public and private participants in eachthe Bank's capacity to support agriculture and subsector.rural development. Bank staff and managersidentified reasons for reduced support for the Mainstreaming the Global Environmentrural sector in recent years and identified the As parties to global environmenit conventions,policy, staffing, and budgetary changes needed the Bank's country clients have committedto revitalize that support. The action plan was themselves to internalize global environmentalpresented to the Bank's president in March concerns into their ongoing economic develop-1996, and modalities to implement its recom- ment activities. The Bank assists them to meetmendations are being devised. Promoting devel- the obligation in three ways: first, by identifyingopmenit programs to benefit small farmers will and helping mitigate any negative global im-be the central focus of Bank efforts to reduce pacts of its own development assistance; sec-rural poverty. These programs will include, ond, by factoring global environment implica-in particular, measures to improve the access tions into its sector work; and third, byof poor people to financial services and to mobilizing grants from the Global Environmentdecentralize decisionmaking in planning rural Facility (GEF) and the Multilateral Fundinvestments. of the Montreal Protocol (mNiEP) to meet the

56 THE WORI.D BANK ANNLAL REPORT 1996

incremental costs of actions to further global projects. These new commitments brought theenvironmental objectives. Bank's active environnmental portfolio to 153

The Bank shares responsibility for imple- projects totaling $11.4 billion. The portfoliomentinig GEF activities with the United Nations supports catalytic and innovative work on natu-Environment Programme (UNE') and the Ulnited ral resources management ("green projects"), asNations Development Programme (UNDP). The wvell as actions focused on the urban environ-Bank's executive board approved $1 18 million ment (the "browni" agenida), specifically controlof grant financing for thirteen GEt projects dur- of water and air pollution, energy-related issues,ing the past year, bringing the total GE1S portfolio and environmenital institution building.to nearly $500 million for fifty-six projects cov- The Second Envirol7nmental Assessment Review:ering four focal areas: biodiversity, climiiate 7'1ie Impact of Environmental Assessment, com-

change, ozone-depletinig substances phaseout, pleted in fiscal 1996, takes stock of the Bank'sand international waters. The NMi' Multilateral progress in implemenlting its environmental as-Fund portfolio also grew and now totals $188.1 sessment (rFA) policy, focusing on the quality ofmillion for 241 projects. The rip is charged with EAS, the effects of FA on project design andredticing consumptioni of two groups of ozone- implementation, and the application of EA in

depleting substances; the Bank is one of the contexts such as privatization and financial in-Fund's implementing agencies. termediary lending. The review concluded that,

The Bank is also mobilizing NWO experience although significant progress had been made inand capacity, as well as private sector know- recent vears, weaknesses still exist (for example,how and capital, for global environmenital benin the areas of public consultation and projectefit. Examples of partnerships with NCOS, foun- supervision). There is evidence that high-qualitydations, and the private sector include the EAS, nlow denmanided by the Bank, are becoming,Forest Market Transformation Initiative for sus- in a growing number of couLntries, the norm intainable forestry and the Photovoltaic Market investments financed by others.Initiative for solar energy dissemination. TheBank has also helped leverage scarce grant funids Identifying Best Practice: Learning by Doingthrough establishinlg Venture Capital Funds In fiscal 1996 the Bank focused on environ-(biodiversity, renewable energy/efficiency) and mental activities with high potential for demon-by pioneering market-based instruments for the strating best practice or for testing innovativephase-out of ozone-depleting substances in de- approaches to rural poverty reduction. One ex-veloping countries. ample is the workshop convened in Africa to

During the year, the Bank, with support from examine soil-degradation issues with the inter-the Energy Sector Management Assistance national communitv and to set in motion a con-Program (ESMAP), a program funded by a consor- sensus-building process on how best to reversetium of donors and the Bank, advanced a solar it. And in Indonesia and Nigeria, support wasenergy initiative that aims to introduce the use provided to small farmers and herdsmen to helpof highly efficient, up-to-date, solar technolo- them find ways to identify and introduce moregies in developing countries. Identification and relevant approaches of sustainable smallholderpreparation of solar and renewable energy livestock development.projects are under way in at least fourteen The Bank has assisted a wide range of coun-countries, including Bolivia, Cameroon, Indone- tries in commercializinig or involving the privatesia, Kenya, and Mali. sector in water and sanitation utilities and in all

modes of transportationi so as to mitigate theThe Bank's Portfolio and Environmentally pervasive problems of poor performance (forSustainable Development example, in Albania, Brazil, Guinea, India, the

In fiscal 1996, the Bank committed $1.63 bil- Philippines, Romania, and South Africa). Worklion and leveraged another $1.64 billion from is under way on the development of a "toolkit"other sources for twenty new environmental

SECTrlON Tl;REE WORLD BANK PROGRA,SI 57

for preparing projects with public/private part- and appropriate roles for the private and publicnerships. The Bank is also helping to develop sectors. A work program was developed fromand implement innovative projects to provide the recommendations focusing on three themes:sustainable water and sanitation services to the (a) reforming transport sector institutions andpoor (in Bolivia, Brazil, India, Indoniesia, finanicial policies (economic sustainability);Uganda, and Uzbekistan, for example). (b) transport and poverty reduction (social

In related efforts, the Bank is distilling lessons sustainability); and (c) motorization and the en-of experience in the performance of large-scale vironmenit (environmental sustainability).rural systems and facilitatinlg partnerships be- Several "best practice" papers produced dur-tween nonformal institutions-community ing the year will help improve the Bank's opera-groups and small-scale private sector providers, tions, including those on rural finance,for example-and utilities in peri-urban areas. livestock management and environmental deg-The Bank is assessing its operational exper-ienice radation, improving biodiversity in agriculture,in implementing the water-resources policy and successful examples of water users' associa-paper,"' drawing on recent operations in manag- tions. A best practice discussion paper, "Ruraling water quality and mechanisms for water al- Finanice: Issues, Design, and Best Practices," ex-location (in Brazil, China, South Africa, sub- amines the case for intervention in rural finan-Saharan Africa, and Venezuela, for example). cial markets, promoting policies for creating aSimilarly, work to distill and disseminate lessons conducive environment for rural finance, andof experience with programs for targeting basic principles for building viable rural financialservices and environmental improvements in intermediaries. The paper, intended for a broad,poor urban settlements is tunder way. worldwide audience of policymakers and practi-

Important conceptual and methodological tioners of rural finance issues, proposes mea-work in support of the Bank's work on environ- sures to create a conducive environment andmentally and socially sustainable development build self-sustaining institutions that mobilizewas unidertaken during the past year. The publi- primarily local funds.cation, Monitoring Environmental Progress: A Re- "Livestock and the Environment" (June 1996)port on l l'ork in Progress, reported on a new sys- examines sources of environmental degradationtem for measuring the wealth of nations by caused by improper livestock management,integrating economic, social, and environmenital ranging from extensive grazing to intensive ani-factors."' The system is a major addition to in- mal-management practices. A follow-up to aternational perspectives that have looked only 1992 global assessment of livestock develop-at income and represents the first effort to cal- ment by ten donor agencies, the study is theculate wealth for nearly all countries of the outcome of joint Bank/Uniited States Agency forwvorld. The system measures the real wealth of International Development/Food and Agricul-nations based on a combination of natural capi- ture Organization of the U.N. (FAO) researchtal, produced assets, human resources, and so- that concentrated not only on interactions be-cial capital. The concept fits in well with the tween livestock and the environment but alsotraditional measures of economic performance identified practices that should be encouragedcommonly employed by the Bank. and discouraged.

The vision for the Bank Group's transport- Together witlh the Bank's Economic Develop-sector activities was set out in "'Sustainiable ment Institute (EDI), ESD has fostered a south-Transport," considered by the executive hoard south exchange of success stories in promotingin September 1995. The paper recommends the decentralized water management. The Partici-Bank pay greater attentioni than in the past to patorv Irrigation Management network, estab-the transport needs of the rural and urban poor,environmental issues, competition and markets, 12. World Baik. 1993. l44iter Resources Management. A

W'orli Bank' Police Study. Washingtoni, D.C.

13. World Bank. 1995. Monitoring Environmnental Progress:A Report on U'ork in Progress. Washington, D.C.

58 THE WORLD BANK ANNIAI. REPORI7 1996

lished by the EI, has widely disseminated the therefore deepened during the past year, andstory of Mexico's successful devolution of re- the Bank began integrating its work with part-sponsibility for irrigation operations and main- ners as a matter of course. An agreement totenance throughout the world. The Mexican ex- work jointly with the World Conservationperience of water-users' associations setting Union has been established, and joint activitiestheir own charges and managing their own re- are being conducted, among others, with thesources is being applied in Turkey and is being Earth Council, the World Wildlife Federation,used to guide similar undertakings in several the U.S. National Wildlife Federation, Conser-other countries. vation International, the U.S. National Academy

of Sciences, and the Federation of AmericanTraining Activities Are Intensified Scientists.

The Bank's environmental training activities More than 1,400 leaders of governments,were intensified in fiscal 1996. Buildinig on the NGos, businesses, and international institutions,previous year's initiatives, a core training pro- as well as noted scholars and financiers, partici-gram wvas developed for nonenvironmental spe- pated in the Third Annual ESD Conference, "Ef-cialists Bankwide. It focuses on improving the fective Financing," held in October 1995 inunderstanding of environmental issues and the Washington, D.C. Thematic roundtables in-mastery of cross-sectoral linkages among policy, cluded the role of the private and public sec-institutions, sociocultural factors, and technol- tors, effective financing at the global and re-ogy. The program was launched in January gional levels, water issues, commutnity1996. Similarly, a Bankwide core traininig pro- participation, and resouL-ce conservationi andgram was initiated for agricultural staff Four policv. Ten associated events, cosponsored byone-day modules have been piloted and are the World Bank and various Nc;Os and othernow being mainstreamed, with the objective of institutions, were held concurr-ently with thehaving all 360 agricultural staff participate in conference.the four modules over the next three years. ESD Agreement to create the Global Water Part-staff organized a large menu of specialized nership (cwp) was reached at a meeting of thetraining activities, supplemented by workshops Bank, the INDP, and the Swedish Internationaland study tours tailored to the needs of the Development Authority in Stockholm in De-Bank's, and its clients', technical staffs. Seminars cember 1995. The GWP is to serve as a coherent,and familiarization tours for water-policy, irriga- integrated, and collaborative framework to helption-maniagement, transport, and urbani devel- local, national, and regional authorities imple-opment specialists were emphasized. Other ac- ment internationally endorsed water-manage-tivities focused on soils, crop, pest-management, ment principles. The GWP would consolidate theand rural finance issues, existing lUNDI-'NVorld Bank WVater Program and

bring together key partners on a wide range ofStrengthening Existing Partnerships; water issues.Searching for New Ones Partnerships were also forged with urban

While the Bank continues to learn from its development practitioners in developing coun-experience, it recognizes that other institutions tries-through Bank-sponsored retreats andand organizations have rich experiences that seminars-to help the Bank develop new re-can be tapped and are better placed than the sponses to client needs. These efforts aim first,Bank to experiment with innovative environ- to support the overall improvement of urbanmental and social work, as well as to secure in- management and the financial sustainability ofput from in-counatry stakeholders. Strategic urban services, and second, to assist in develop-partnerships with these groups promise high ing programmatic solutions that directly addresspayoffs. Links with such external partners were the needs of the poor.

SECTION THREE WlORLD BANK PROGRAMS 59

With significant contribution from UINEP and On January 1, 1996, the renewed CGIAR be-the United Nations Industrial Development Or- came operational. The renewal program devel-ganization, as well as technical advice from the oped a more open and participatory system.United States Environmental Protection Agencv Four areas were specifically targeted:and the World Health Organisation, the new * expanding developing country membership"Pollution Prevention and Abatement Hand- to strengthen the CGIAR as a "south-north" coali-book" was prepared. The handbook summarizes tion and to enhance the basis of support for ag-the lessons learned from Bank experience in ad- ricultural research;dressing industrial and municipal pollution and * encouraging full participation of developingprovides advice on how to set priorities in pol- country NARS in setting priorities for the CGIAR;

lotioll management. * expanding the dialogue between the CGIAR

The preparationis for the City Summit, held and institutions with compatible interests; andin Istanbul in June 1996, provided a unique op- * increasing interaction with the privateportunity to generate interest and visibility for sector.the challenges of growing urban poverty urban Nine developing countries have joined theenvironmenital degradation, and urban financing CGIAR since its renewal program was launched inneeds. As part of the preparatory effort, inter- New Delhi, bringing the total membership toagency support (involving the United States sixteen-as compared with twenty-one indus-governmenit, the United Nations Centre for trial member countries-marking considerableHumani Settlements, and the Bank) was mobi- progress on broadening the base of developinglized for the Urban Finance Colloquium in Sep- country membership.tember 1995, which helped develop a consen- To further the aim of broadened partnerships,sos on financing issues to be reflected in the an NC;O committee was formed and met inSummit's Global Plan of Action. The Bank ex- Washington, D.C. in October 1995. Similarly, apects to define further the agenda for action private sector committee, established to provideduring fiscal 1997 to develop cities in a sustain- the CGIAR with a private sector perspective onable way. global agricultural research and to serve as a link

to agroindustrial companies, was convened inA Renewed CGIAR Becomes Operational December.

Fiscal 1996 saw the completion of the The twin pillars of CGIAR research-produc-changes begun by the Consultative Group on tivity increases and natural resources manage-International Agricultural Research (CcGIAR) in ment-were reaffirmed. In addition, threeNew Delhi in 1994. Internationial Centers additional obJectives were endorsed: savingWeek, held from October 30 to November 3, biodiversity, improving agricultural policy, and1995 in Washingtoni, D.C., formally brought the strengthening national research. CGIAR programsBank-led renewal program to closure and will now be more firmly anchored in the con-charted new directiolns for the future of the text of global agricultural R&D efforts and willCGIAR system. The renewal program, imple- be carried out in collaboration with othermented in eighteen months, was the outcome of actors.a collective effort involving C-GIAR cosponsors Financial support for the CGIAR has re-(the Bank, the FAO, I.NEP, and the UNDP), other bounded since the onset of the renewal pro-CGIAR members, the centers themselves, CcGIAR'S gram. Support for the 1996 research agenda isTechnical Advisory Committee (rAc), national estimated at $300 million, including a Bankagricultural research systems (NARS), and out- contribution of $45 million.side experts. The effort was based on a compre- Many challenges still face the CGIAR. The rel-henisive and critical self-examination of the evance of its research agenda must be main-CGIAR; it built on past strengths and aimed at tained and the scientific excellence of its workeliminating weaknesses.

60 THE WORI. DBANK ANNUAL. REPoRi 1996

nurtured. The CGIAR'S TAC is working on recom- of securities issues and investment funds. Syndi-mendations for a new set of priorities and strat- cations with banks and institutional investorsegies to help guide the research system into the exceeded the IFC'S combined loan and equity in-next century. vestments for the sixth year in a row, underscor-

ing the growing catalytic role of this program.Private Sector Development Projects approved by the lFC had total invest-

Countries throughout the world are working to ment costs of $ 19.6 billion; other investors andenhance the role of the private sector in their na- lenders provided a total of $5.1 3 for every dol-tional development because it is central to reduc- lar approved by the IFC. Projects were approveding poverty. Private sector development stimulates in sixty-eight countries in fiscal 1996. In addi-economic growth and creates jobs, and privati- tion, eight projects were regional or interna-zations create the fiscal space that allows govern- tional in scope.ments to allocate greater resources to the social Fiscal 1996 was another successful vear forsector. Many country initiatives-economic policy MICA'S guaranitee program. Business increased byreform, regulatory innovation, ownership changes, all measures compared with the results of fiscaland capacity building-have all been used to but- 1995. Sixty-eight guarantee contracts wAere is-tress this powerful trend. The Bank Group en- sued for $862 million in coverage, and incomecourages and supports the expanded role of the earned from premiums and commitment feesprivate sector through its various financial instru- amounted to $21.9 million. The contracts is-ments, advisory services, training, and the nurtur- sued in fiscal 1996 facilitated an estimated $6.6ing of business partnerships. billion in foreign direct investment in twenty-

In fiscal 1996, the Bank Group-the Bank, seven developing countries, the highest amountthe IFC, and MIGA-mounted a diverse program facilitated by MIGA in a single year so far. Theseof assistance to continue and enhance its sup- projects will generate an estimated 9,200 jobsport of member countries' private sector devel- and will involve substantial training programsopment. World Bank assistance to sectors in for their employees. Overall, forty developingwhich private sector development is making the countries have benefited from investments guar-most rapid inroads totaled more thani $5.6 bil- anteed by KSIGA, and more than $15 billion oflion through fifty-one projects-in the financial, foreign direct investment has been facilitated.power, telecommunications/information tech- Reflecting the importance the Bank Groupnology, oil and gas, and industry and mining sec- attaches to private sector development and intors. These operations supported the structural an effort to be more responsive to clients, achanges needed to attract private funding to managing director was given the specific man-productive enterprises. Operations were de- date to coordinate the Bank Group's privatesigned in many cases to leverage substantial pri- sector activities and strengthen its outreach tovate capital flows. The Bank also provided business audiences. This office has been facili-nonlending services, including technical assis- tating policy coordination across the Banktance, research, and knowledge brokering- Group institutions on a range of environmental,often in cooperation with bilateral donors, pri- social, and other issues, fostering closer workingvate companies, and NGOS. relations among the institutions in developing

In fiscal 1996, the IFC reached a record level joint country-assistance strategies, and coordi-in financing approvals of $3.2 billion for 264 nating financial sector strategies, multi-institu-projects, compared with $2.9 billion for 231 tional projects, and a more effective [BRD guar-projects in fiscal 1995. It was a banner year, as antee instrument. The office has also beenwell, for the IFc's resource-mobilizationi activi- promoting Bank Group representation at con-ties: $4.9 billion in financing was approved ferences and trade fairs and helping strengthenthrough loan syndications and the underwriting partnerships vwith business associations, NGOS,

and other groups. It will soon launch a BusinessPartnership Center, which will provide a focal

SECTION THREE WoCRI BANK PROGRA\IS 61

point for communications with the private an initial set of twenty PSAs.s14 As of June 30,sector. 1996, thirty-one PSAs had been completed, cov-

World Bank assistance for private sector de- ering countries in every region in which thevelopment is grounded in the institution's long Bank works-including, for example, C6teexperience with its clients, familiarity xvith the d'lvoire and Ghana in Africa, Indonesia and theglobal financial community, and the strong Philippines in East Asia, India and Pakistan intechnical skills of its staff. In fiscal 1996, work South Asia, Hungary and Poland in Eastern andwas under way in every region of the Bank to Central Europe, Brazil and Mexico in Latinimprove the business environment through en- America, and Egypt and Morocco in the Middlecouraging countries to identify and overcome East and North Africa. At least a half dozen ad-constraints to competitiveness, supporting ditional PSAs are targeted for completion in fis-privatization and enterprise reform, facilitating cal 1997. Moreover, the Bank and its clientgreater investment in infrastructure, and pro- countries have embarked on a variety of follow-moting microfinance. up studies to explore issues identified in the

P'SAS in more depth.Improving the Business Environment The "competitiveness framework"-the legal

The Bank assists countries in privatization and policy framework affecting business deci-and enterprise reform by providing direct ad- sions-is critical to the success of private sectorvice and analysis, making loans for technical as- development Without such frameworks manysistance to facilitate transactions, designing ad- privatization, infrastructure investment, and fi-justment projects to help governments face the nancial sector initiatives cannot realize their fullone-time costs that may be associated with potential. The Bank is helping focus the atten-privatization, making investment loans to help tion of key policymakers in client countries onprivatized companies restructure, and providing how to increase the competitiveness of the localguarantees to cover risks to private investors. business environment through joint competi-During the past year, the Bank stepped up the tiveness assessments, conferences to develop apace of technlical assistance to help govern- common vision of actions needed, and technicalments implement step-by-step, practical mea- assistance to develop competition law, competi-sures leading to greater privatization of owner- tion strategy, and firm-led capacity building.ship; to prepare sales strategies for large The goal is to create a sustained dialogue forenterprises, to design worker-participation and change among the Bank's borrowing countries.related schemes, and to recruit and supervise in- Earlier, successftul application of these approachesvestment advisers for large transactions. An ex- in Morocco was replicated in El Salvador duringample of results-oriented technical assistance in the past fiscal year, and preliminary work has be-Pakistan is detailed in Box 3-2. gun in Egypt and Jordan."'

The Bank contintued to be active in preparingprivate sector assessments (PSAS), which de- 14. The Banik and the itt have also begun a pilot program

scribe the structure of a country's private sector, of a limited number- of joint countrv-assistance strategies

identify the key constraints to its development, (cASs), which provide a vehicle for executive board

and lav out economically efficient wavs to re- discussioni of the Bank's viewvs of a particular country'sdevelopmenital constrainits zand priorities and the proposed

move those constraints. They represent the he- Bank-assistance strategy. These CAS wottld be considered

ginning of a process of dialogue with a govern- jointly by the executive director-s of the Bank and thement and form a baseline for joint work on exectttive directors of the IFn:. Eight countries in the pilotpolicy and inistitutionial reformi. program have been agreed uiponI: Brazil, Cite d'lvoire,

Egvpt, India, Indonesia, Kazakstan, Mexico, and Poland.Originally mandated by the executive board The objective of the joint ( AS is to ensure that there is a

in 1992 to strengthen the Bank's private sector coordiniated Banik Group private sector country view and

perspective in economic and sector work, PSAS strategy.further emphasized when the hoard man- 15. In Morocco four ptiblic-private "clusters" are work-

were turther emphaslzed whel1 tne noarcl man- ing-with suppor-t from the Bank-oni policy changes and

dated that the Bank and the IFC collaborate on action programs, for example, the Northwest RegionalTourism Development Program.

62 THF WORI.D BANK ANNI'Ai RlpoR'I 1996

BOX 3-2. ACCELERATING PRIVATIZATION IN PAKISTAN

When the Pakistani government requested techni- These included Wah Cement and Pak Saudi Fertil-cal assistance to accelerate its privatization program, izer. In addition, the Kot Addu Power Plant was solda team of experts was mobilized by the Bank-sup- for Rs. 7.5 billion ($215 million), and the sale ofported in part with Japanese trust funds-to work Banker's Equity Limited (BEL)-a development fi-with Pakistan's Privatization Commission. Team nance institution-raised Rs.314 million ($9 mil-members provided technical assistance on the design lion). The Commission expects the telecom utilityand implementation of the government's (vrc), gas company (SNGPL), two banks, three firmsprivatization program, recruited and supervised con- in the power sector, and other medium- and large-sultants, strengthened the Commission's staffing scale units to be privatized later in the calendar yearthrough training, drafted an operational strategy In addition, the government has begun initial workand action plan, and prepared valuations and bid- on privatizing the national airline, PIA.

ding rules.As a result, twenty manufacturing units were sold

in fiscal 1996, raising Rs. 9.4 billion ($268 million).

Private Provision of Infrastructure wide data base of 3,500 private infrastructureprojects (including those situated in industrial-

The Bank's focus on private sector develop- ized countries) to support its best-practicement comes together most vividly in private work.provision of infrastrticture (PPI). While divesti- The Bank facilitates PPF through loans andture of assets through privatization is an credits and guarantee operations. Over the pastessential step in facilitating private sector-led nine years, some 138 such operations were ap-economic growth, the provision of new infra- proved. These include adjustment loans forstructure with private financing cannot get policy reform, technical assistance, wide-ranigingunder way without a credible business climate. and diverse investment operations, and guaran-Creating a conducive climate is a complex pro- tees (see Box 3-3). Among the twenty-three Ppi

cess that requires appropriate market structures projects approved in fiscal 1996 was an adjust-and economic regulations for infrastructure de- ment credit in Yemen, which is paving the wayvelopment. The Bank is helping countries de- for multisector regulatory c hanges to allow pri-velop strategies for "unbundling" infrastructure vate participation in infrastructure. A technicalindustries where competitive supply is possible, assistance loan in Congo is facilitating privateand, where natural monopoly elements remain, participation in the telecommuntications, en-to develop economic regulations that protect ergy, power, and transport sectors, and a rail-consumers and provide incentives for efficient ways-rehabilitation loan in C6te d'lvoire is sup-supply. The Bank is providing advisory services porting the transition from state to privateto deal with this critical set of issues such as the management.technical assistance loan, approved during thepast year, to Mexico in support of PPI. Selected Instruments forAddressing Private

The Bank has also begun to develop a struc- Sector Developmenttured network of developing-country regulatory The guaranztee program. In fiscal 1996, theleaders and institutions to promote capacity Bank expanded its partial risk and partial creditbuilding in Pp[. It includes expert meetings, guarantee programs and integrated them into itshands-on seminars for regulators and stakehold- comprehensive package of development-assis-ers, and dissemination of best-practice informa- tance instruments. Guarantees can lowertion on planning and sequencing regulatory project risks and induce private capital invest-change. The Bank has also developed a world- ments and can be applied flexibly based on the

SECIION Ti RIRF WC)R.[) BANK PRUGRANIS 63

BOX 3-3. WORLD BANK CONTRIBUTION TO PRIVATEPARTICIPATION IN INFRASTRUCTURE

A wave of private sector participation in infra- Investment loans. World Bank investment loansstructure (met) is sweeping the globe: More than for physical infrastructure play a catalytic role in2,200 mpp projects are under preparation in develop- privatizing infrastructure services. Transport-sectoring countries as disparate as Albania and Colom- projects in Armenia and Georgia, for example,bia. The World Bank's lending and guarantee pro- funded road maintenance and investment in newgrams have supported this worldwide movement. equipment, thereby facilitating the privatization ofDuring the period fiscal 1988-96, the Bank pro- trucking and road-repair operations. Since 1988,vided funds for some 138 loans and credits, as well similar loans with Ppi-related policy componentsas partial risk and credit-risk guarantees. Each op- have been undertaken in some ninety-nine othereration embodied significant Ppi components, includ- countHes.ing the privatization of public utilities, onlending to Franchises. The Bank is helping to design man-private sector operators, and franchising operations agement contracts, leases, or concessions for infra-involving leases, concessions, and management con- structure services in a number of investment loanstracts. The Bank's primary focus has been to support that involve franchise arrangements. Franchise ar-policy-related reforms and work on less developed re- rangements are most common in Africa, where six-gions-particularly Africa. The range of this activity teen were supported by Bank infrastructure loansis shown in the table below. from fiscal 1988 to 1996. In some mpz operations,

Adjusttnent and technical assistance loans. Bank funds are onlent to private sector operators ofSince 1988, the Bank has developed single-sector infrastructure services, including power projects inand multisector adjustment loans to support major India and Turkey, water and telecommunicationspolicy improvements in, among other countries, Ar- projects in Argentina and the Philippines, andgentina, Bolivia, Mexico, Peru, and Venezuela. In transport-sector operations in Ethiopia and Mexico.fiscal 1996, the Bank supported multisectoral Ppn Guarantees. The Bank has provided eight guar-components as part of adjustment loans in Yemen antees since the inception of the program in 1994.and Ukraine. These loans depend on and require Catalyzing private funding for mostly public sectorlong-term government commitment to an infrastruc- projects, these operations have also involved guaran-ture-privatization agenda. Support to multisectoral tees to the private sector in two power projects in Pa-Ppi agendas has also been provided through stand- kistan, formed an important component in facilitat-alone technical assistance loans, such as those pro- ing the eventual privatization of Jordan's publiclyvided in fiscal 1996 to Congo and Mexico. These held telecom entity, and assisted with the financingloans support the design of stable, comprehensive, of a loan involving an independent power project inand consistent legal and regulatory frameworks for the Philippines.mpp, striving to ensure the sustainability of reformsundertaken.

World Bank PPi Operations, Fiscal 1988-96

East Asia Europe Middle Eastand South and Latin and

Instrument Africa the Pacific Asia Central Asia America North Africa Total

Adjustment: single sector 4 0 0 1 1 0 6Adjustment: multisector 0 0 0 1 7 1 9Technical assistance 4 1 1 1 9 0 16Investment lending 33 17 15 13 17 4 99Guarantees 0 4 2 0 1 1 8

Total 41 22 18 16 35 6 138

64 THE WORLD BANK ANNI Al RLPC)RI 1996

-. :12 -..A4'

characteristic of each project anid on countrv access-for a Jordanian companv-into the Eu-c onditions. In fiscal 1 996, the executive board robond market.approved three such operations totaling $275 The Bank also accelerated guaranitee process-million. ing by streamlininig documentation require-

T'hese included a partial risk guarantee for ments and developing model agreemenits for le-the privatelv sponsored Uch Pow er Project in gal documents. Action frameworks were createdPakistan ($75 million guarantee), a complex aind specific projects were idenitified in consul-package involving an IF:C loan of $1 1 5 m-iillioni tation ivith several borrower governments toUnited States Exim Bank guarantees, anid direct bulild a pipeline of guiarantee operations overloans from the Bank of Chinia. This project ex- the medium term. A broader program to mar-emplifies growing cooperation amonig the Bank, ket the Bank's guiarantees included coniveninig athe IFC, and other cofinanciers in finiancing seniinar oni guarantees at the Bank's 1995; ani-major inifrastructure investments. Other opera- nual meetings. A solid pipeline of prospectivetions inicluded a guarantee to mobilize $I150 guarantees nowv includes more than three dozenmillion of private debt financing on favorable operations, across all the Bank's regions, cover-terms for China's Ertani 11 Hvdro Project and ing v irtually all major infrastructure sectors.the guarantee of a bonid issue of $50 million to ccr4. Over the past decade, microcredit andsupport the Telecommunications Company of savings services have proved to be an effectiveJordan. This last operation led to unprecedented means of job creationi and income generationi

SI(FCI(N THRFE WORI-D 13ANK PROGtRAMs 65

among the very poor. Participation of the poor large advisory program in East Asia and the Pa-in credit and savings systems improves family cific-supported by its new regional office inwelfare, nutritional and educational status Sydney-as well as in others regions of the de-among children, and lowers birth rates. To veloping world.broaden and deepen this success, the Consulta-tive Group for Assistance to the Poorest ((CGAP), Financial Sector Developmentestablished late in fiscal 1995, is now imple- A well-functioning financial sector is essen-menting microfinance operations that provide tial for private enterprise to grow and flourish.assistance to the poorest. In turn, a healthy financial sector depends on a

CGAf' channels funds through sound favorable policy environment and on strong in-microfinance institutions that meet CGAP- stitutions, banks, capital markets, and special-approved eligibility criteria; improves donor ized institutions in areas such as housing fi-coordination for systematic financing of such nance, pension systems, and banking-sectorprograms; and provides governments, donors, supervision. In fiscal 1996, the Bank approvedand practitioners with a vehicle for learning and seventeen projects designed to help its clientsdisseminating best practices for delivering these develop their financial sectors.services. By the end of fiscal 1996, the consulta- The Bank's role in the financial sector istive group had twenty-three members. The rapidly changing; in the past, Bank operationsBank manages the CGAP secretariat, which ad- focused primarily on improving the policyministers a pool of pilot project-oriented exter- framework and mandating basic prudentialnal funding amounting to $32 million, of which supervision. While still important in many$18.8 million wvas received in fiscal 1996, in- countries, the Bank is increasingly becoming in-clluding a Bank contribution of $14 million. volved in assisting countries facing internal andSome fifty-seven initial project requests from external shocks (such as Argentina and Mexico)NGO and microenterprise-fundinig facilities from that result in pressure on their banking systemsabout thirty countries and several regional pro- from high real interest rates and economic slow-grams were reviewed during the past year, and down. Deterioration in asset quality increasesfourteen were approved for implementationi. the potential for runs on banks' liabilities, and

CGAP also provides training and information responses must deal with underlying problemsservices on best practices in microfinance to in hanking systems, accounting standards, andpolicymakers and practitioners in the field. A bank management. Operations must be de-seminar on methodologies for microfiniance was signed quickly since situationis can soon becomeheld in Ghana, for example, and a study tour svstemic within a country rather than affectingfor Tunisian policymakers to Guatemala and one or a few banks.Honduras was undertaken. Lending in support of the financial sector in

The Foreign Investment Advisory Sernfice (FHAS). fiscal 1996 included support to banking reformFIAS is a joint Bank-Irc program that provides in Argentina, Ghana, India, Moldova, Morocco,advisory services to governments to help them Tanzania, and Vietnam. In addition, supervisionimprove the policy environment for foreign pri- of earlier finanicial sector loans was intensive invate investment. The program-funlded by the both Argentina and Mexico to deal with theIFC, the Bank, other donors, and paying custom- systemic aspects of their banking systems. Loansers among the developing countries receiving to Ghana and India are assisting nonbanking fi-advice-carries out projects in twenty-five to nancial institutions-primarily leasing and otherthirty countries each year. During the year FIAS financial services organizations-to expandlaunched more-intensive work in Africa, with their finanicing of development-related infra-operations under way or expected soon in seven structure activities. These new-style financialcountries to help increase levels of foreign in-vestment to the region. vi.;s also carries out a

66 THF WORLD BANK ANNIIAl RFPI)RI 1996

sector operations rely heavily on staff with a The Bank aims to buttress borrower effortshigh degree of expertise in resolving systemic to increase private sector participation in theliquidity and solvency problems. They include powver sector. The past year's lending programspecialists in bank restructuring and privati- included power-generation loans with reformzation, banking supervision, central banking, and institutional strengthening components inliquidity management, and the collection and Bolivia, Cambodia, China, Colombia, El Salva-sale of bad assets. The Bank is building up its dor, India, Madagascar, Pakistan, and Romania-technical capability in these areas. among others. The loan for Colombia supports

Training client-country staff is an important power-sector reform by facilitating the opera-element of the Bank's assistance to the financial tion of a competitive bulk supply market forsector. During fiscal 1996, seven courses, at- electricity. In India, the Bank supported atended by about 400 participants, were held, pathbreaking operation in Orissa to unbundlecovering issues such as payment systems, bank- the state's power generation, transmission, anding supervision, and social security and pension distribution businesses and to achieve fullreform. A total of 1,100 Bank staff also under- privatization of power transmission by the yearwent short-course training in financial sector 2000.issues throughout the fiscal year.

Assistance in capital markets development- Supporting Reform in Telecommunicationsin close cooperation wvith the IFC-is a growing and InformationTechnologyarea of Bank support. In fiscal 1996, the Bank The Bank is shifting from investment in tele-provided technical assistance in market build- phone-companiy infrastructure to support foring, including the regulation and supervision of sector reform that sets the stage for competitioncapital markets, and in developing new financial and mobilization of private capital and manage-instruments to address investor concerns about ment. Traditional telecom lending is decliningrisk. Examples include upgrading regulatory and accordingly while technical assistance to pre-supervisory capacity and providing a backstop pare regulatory regimes and restructure pro-facility in Argentina, creating market infrastruc- grams is increasing. In Ghana, for example, theture in Russia, promoting debt-market develop- Bank's technical assistance has resulted in ament in India, and developing regional capital competitive telecommunications-sector strat-markets in West Africa. egy. With Bank assistance, increased private par-

ticipation in financinig and management is nowOperations in the Power Sector a reality in many borrowing countries, including

The Bank's assistance to the power sector Bolivia, Hungary, India, and Indonesia. IFC'S pri-emphasizes restructuring, private sector vate sector activities in the sector have in-involvement in financing and management, increased.novative energy sources, energy for the rural The Bank and the :Fc have worked togetherand urban poor, energy efficiency, and environ- closely on telecommunications financing and re-mentally sound energy technologies. The lend- form. During the past year that collaborationing program was robust in fiscal 1996, with became even closer, as the Bank and IFC telecomtwentv projects totaling $3.2 billioni in all re- divisions "co-located" their operations to facili-gions of the Bank. The Bank also carried out an tate joint work-for example in evaluating in-expanding program of nonlending services industry proposals for fiber cable systems including conferences and roundtables, direct Africa.technical assistance, and knowledge dissemina- In the new information age, economic devel-tion aimed at energy-sector decisionmakers in opment is intimately connected to the growththe Bank's borrowing countries. of telecommunications services. In recent years,

up to I 0 percent of project lending has fundedinformation technology-related procurement.

SECTION THREE WORLL) BANK PROGRAMS 67

However, before fiscal 1996 the Bank did not seminar to suggest faster, more innovative con-have a visible, freestanding program for apply- tracting procedures to facilitate investmenting information-technology solutions to the flows, for example through structured, directfull range of developing country problems and negotiations.priorities. The Bank also provides technical assistance

In July 1995, some 150 donors, industry rep- loans to speed up the privatization process. Inresentatives, and information-technology ex- fiscal 1996, for example, a technical assistanceperts participated in the Bank Group's first conI- credit helped the Bolivian government designference on information infrastructure. The and execute a hydrocarbon-sector adjustmentconference explored the role of information in program and capitalize YPFB, the state-owned oileconomic development, and participants dis- company.cussed how the Bank, together with the privatesector, can most effectively help developing Mining Sector: Active Bank Involvementcountries build, access, and utilize modern in- The mining sector is an important engine offormation infrastructure. The conferenice led to growth for many of the Bank's borrowing coun-the creation of infoDev (the Informationi for tries. IDuring fiscal 1996, the Bank actively fa-Development Program), designed to bring to- cilitated private sector involvement in a numbergether industry experts, other donors, the Bank, of ways. Bank lending is supporting a series ofand its borrowers, to focus on meeting develop- reforms, including rewriting mining laws, re-ment needs through technology applications forming public mining institutions, strengthen-(see box on page 21). ing environmental protection capabilities,

TechNet, an information-dissenmination and privatizing state companies, and addressing so-networking program, has also been launched to cial safety net issues. The Banlk also worksassess the technology status and requirements in closely with the IFC, MIGA, other multilateraldeveloping countries and link practitioners banks, and private investors to help govern-around the world through seminars, best-practice ments carry out broad, complex programs ofpapers, and electronic communications. TechNet is mining-sector privatization, restructuring, andworking with partners, such as foundations, the new investment-for example the miningUilited States National Research Council, and industry in Zambia.the European Union, to improve understandingof the role of science and technology in eco- Forging Links with External Partnershipsnomic development. The Bank is forging wider and stronger link-

ages with private industry, NGOs, trade groups,Oil and Gas Sector Activities and investors. For example, the Bank hosts an

Privatization of the oil and gas sector is well annual reviewv of progress and problems for pri-advanced in many of the Bank's borrowing vate power-sector companies that invest in de-countries. The Bank's role is catalytic; it pro- veloping couLntries. Information-technologyvides financing for the infrastructure that must companies are involved in infoDev as both do-be put into place along with private invest- nors and colleagues and are helping to carryingments, and develops worldwide methodologies out pilot projects. Two private energy groups,and standards for procurement to facilitate bid Mlarubeni of Japan and EnergyNet of the Neth-preparation. In fiscal 1996, the Bank joined erlands, have joined the FSMAP consultativewith1 private sector partners in the oil and gas group and participate in its deliberations andsector to find ways to overcome bottlenecks to funding. Links with trade associations and indus-private investment arising from traditional con- trial organizations are increasing-with the Japa-tracting procedures. Bank staff, country experts, nese Keidanren, the Internationial Businessand industry representatives held a productive

68 THF WORLD BANK ANN11Al. RFu()Ri 1996

RouLidtable, the Milan and Turin Chambers ofCommerce, the Global Informationi InfrastruC-ture Commission, and the International Insti-tute of Finance-to name a few. Contacts withthe petroleum industry are close, both inproject development and in dialogue on strate-gic issues. GroupLs such as the Prince of WalesBtisiness Leaders Forumll provide the opportu-nitv to a(lvanice the concept of cor-porate re-sponsibility.

In fiscal 1996, a network that provides tech-nical assistance in developing counitries, the Se-nior Volunteer Advisory Service, was invited toparticipate in the Baiki's work; it is supportilngBank developmenit activities in a number ofcountries. Linlkages with bilateral donors arelong-staniding (throughl LSMIAP), as well as new

(through infoDev and ( eA;x;\). Increasinigly, theBank is collaborating wvith bilateral donors inplanning and implementing technlical assistanceprojects.

Best-practice knowledge in private sector de-velopmeent, finanicial sector development, andindustry and energy is disseminated throughpublications and access to Bank data bases (forexample, in the private provision of infrastruc-ture). The Bank is stepping up its seconidmentof private sector staff into the Bank-and theassignmenit of its regular staff to enrichimientprograms in private companiies.

S I (N TiH Il1 WORI.D BANK PRO(cRA1is 69

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SE;CT1ON FOUR 1 996 RECGIONAL. PERSPECTIVES

AFRICA

Sub-Saharan Africa's gross populationi growth; noniethe- 6 percent and 7 percent annu-domestic product (GDP) is esti- less, this represented a reversal ally if significant progress inmated to have grownl by 4.0 from the negative growth rates reducing poverty is to bepercent in 1995-a significant of the previous year. achievable. Even then, suchimprovement over the period . Performance is responding progress is not possible, let1991-94 (1.4 percent on aver- to policy reforms, which are alone probable, unless povertyage)-and economists are spreading. (In 1995, for ex- reduction is at the center offorecasting an even higher rate ample, the sharpest increases the development efforts of allof growth in 1996. Aggregate in exports were registered by stakeholders: multilateral andnumbers such as these mask the group of countries in the bilateral donors, internationalwide variations by country, as CFA zone that had adjusted and local nongovernmental or-in the past. Thus, while at their exchanige rates in early ganizations (NGOS), and Afri-least fifteen countries grew 1994.) can countries themselves. Inby 5 percent or more in 1995 * In most of the conitilnenit, addition, all parties must work(four-Angola, Lesotho, growth is not nearly sufficient in true and strong partnership.Malawi, and Uganda-experi- to make a dent in poverty re- The Bank's strategy aims toenced growth rates in excess duction, and despite recent put in place a "compact forof 10 percent), others improvements, Africa's cDr poverty reduction in Africa,"(Burundi, Congo, Seychelles, and export growth rates, sav- the main componenits ofSierra Leone, Somalia, Zaire, ings and investment levels, which are:Zambia, and Zimbabwe) regis- and social indicators remain * a more vigorous commit-tered declines. Africa's exports below those of other regions. ment by African governmentsalso expanded in 1995-by Africa's recent development to increase economic growth5.7 percent, or roughly twice experience and current situa- rates and reduce poverty, and,as fast as the year before. In tion are consistent with both to this end, to improve gover-this case, too, performance the Bank's strategic agenda in nance;varied widely-from a nega- the region and its operational * more systematic attentiontive 38 percent (Sierra Leone) approach to it. The strategic by African policymakers toto a positive 23 percent agenda aims to accelerate and economic reform, including(Mauritania)-thereby conf'mn- spread growth dramatically- reform of public finances anding that "there is no single African to achieve a quantum jump- refor-mii aimed at macroec-reality," the conclusion of 'A to reduce poverty and to im- onomic stability, to ensure aContinent in Transition-Sub- prove the quality of people's strong broad-based and sus-Saharan African in the Mlid- lives; the operational approach tained supply response;1990s" (World Bank 1995). aims to maximize "results on * an improved pattern of

Several trends are clear, nev- the ground" by working in public expenditure that en-ertheless: partnership with all parties hances both the efficiency of

* Africa's economic perfor- with a stake in the outcomes investment and focuses expen-mance is improving; thirty and who can make a differ- diture on priority needs in thecountries, accounting for 61 ence. The following sectionis key social and economic sec-percent of the region's popula- highlight ohow the Bank has tors; andtion, recorded positive per pursued its strategic agenda * an improved environimentcapita income growth in over the past twelve months. for the private sector, which1995. In some cases (such as will lead to increased privateCameroon and Gabon), GDP A Compact for Poverty sector investment.growth fell short of the rate of Reduction Clearly, achieving these re-

Countries must realize sults requires strong nationalincome growth of between commitment and efforts. It is

S( r.'1()N FOt:R AFRICA 71

encouraging that a nuniber of Counlities have based lending instrument, vhich complementedstrengthened the focus on poverty reduction in the discussiolIs in the S',A fora. This review tookthe formulationi of their policies and investmenit into conisideration the views expressed hy a

programs. broad range of Africani partiners and donors dur-ing conistiltations on "A Continient in Transition,"

Working with External Partners as well as clisctission of policy-based lending in

Thle Special Progranm of Assistance for Afi-ica uovernment, academic, and nongovernmental(S}'A), established in December 1 987, has been fora in the early 1 990s. The aim of the review,the most importanit forumiit for the coordiniation and of the subsequent modificatiois, was to getof aid to the subconitinient. Its objectives have economic reform programils to achieve quicke-,been twofold: to mobilize adequate and timely stronger, and longer positive effects on thefinancing in support of Africani countries that grounid. Progress wvas also made under the SPA inare uLidertaking economilic reforms ancl to im- refining the concept, and addressinig the opera-prove the effectiveness of donor assistance. The tional aspects, of Sector Investment Programsprogram is currently in the final year of'its third (sis)s), wlhich are intended to enhanice the im-phase. Bilateral and multilateral donor-s dis- pact of dlevelopment lending in Africa by com-bursed $16 billion in halance-of-payments fi- ing to grips wvith the problems created by thenanice durinlg the years of the program's first fragmentation of donor-driven projects andtwvo phases (1 988 93). Planinecl financing for over-burdenied Africani capacity.the Currenlt phase, 1994-96, totals $13 billion, There are indicationis that the deepalthotigh current hudget pressures in many conitinenitwide econiomic ci-isis that led to thecapitals are expected to affect donors' ability to birth of the SPNA has been largely overcome.ftilfill these plans. Overall, the Sv)\ has suc- Many challenges still remain, however. Even theceeded in providing much needed external fi- strongest performiers among the countries of thenancinig to recipient Countries. Anniual net offi- regioni must still aspire to raise incomile beyondciial development assistance (ODi) in real teims cuirenit levels. Debt problems and xveak capac-to them has been mor-e than two thirds higher, itv continue to act as significant conistraints onon average, since the onset of the SPA (dcuring development. 'Thlese and other issues wvill he1988-94) than during the preceding seven-year discussed as SPA-3 completes its final year andperiod (1981-87). Just as real net (ODA has in- donors agree on an agenda for a fourth phasecreased sharply during the siN period itself so, beginning in 1 997.too, have real net transfers. T'lhese resources, Steps wvere also taken by the Bank toplus debt relief are aimed at ensuLinig that the strengthen its collaboration with IN agenicies. It

programs of economioic reform are adequately participated actively' in the preparationi of the

funded. Secretary-Genieral's Special Initiative for Africa,

Over time, the agencda of the SPA has evolved whici was launched on March 1 5, 1(996. Theto include the developmental context of'cco- initiative defines a program of conicrete actions

nomic reform. Various working groups have f'o- to accelerate Africani development and a part-cused on key subjects such as civil service re- nership to reduce the fragmentation of develop-form; economic reform in an era of political ment assistance. It seeks to greatly expand basicliberalization; gender; poverty, and social policy; edtiucationi and health care, to promote peaceand public expendituL-e maniagemeit. The SPA and better governaice, and to improve vaterhas he"unl to explore ways to improve the de- andi food security Up to $25 billion may be re-sign, sequencing anid implementation of eco- qLuired to finance the Special Initiative over anomic reform programs in order to promote ten-year period (this is an estimate of the costgreater coun try 'ownership' of themii and of all the investimienits necessary in tihe sectorsachieve sharper impact. Con-curreitlv, the Banik covereed by the initiative). Ftinding will come,initiated a comprelhenisive review of its policy- to a significant exteit, froml a continiLationi of

the cUrIrenit programs of support for the sectors

7 ' Ti it W\)RI I) BANK ANNuAI. Ri li'iI 1'9)'(

involved and a reallocation of resources to ini-tiative activities. The World Bank will partici-pate in all areas covered by the initiative andtake on particular responsibility for mobilizingresources for basic education and health careon the basis of well-prepared sector programsiissupported by local stakeholders and donors.

The Bank also worked closely with the X

United Nations Economic Commission for Af-rica (UNECA) in a number of areas such as pri-vate sector development. The collaboration .. i

with UNECA and other UN agencies has evolved ". .X

into one among 'genuine partners." In addition,the Bank has strengthened its collaboration withmultilateral lending institutions such as the Is-lamic Development Bank and the African De-velopment Bank (AfL)B). It responded, for ex-ample, to a request from the AfDB to provide -

extensive technical advice in selected areas(such as portfolio management, treasury opera-tions, and procurement) as part of its major re- . . /structuring. /

Partnership for Private Sector Development tilClose consultation with the private sector .i -. i '

and other stakeholder groups has become an in- - - . .- - . . *

tegral part of project design and policy reformsfor private sector development. Workshops that ,

bring all stakeholders together to discuss prob- !lems and develop an action program are becom-ing a popular and increasingly effective tool to ' . " '

this end. A private sector workshop in Mali, for _example, led to the restructuring of the $12 million Private Sector Assistance Project ap-proved in November 1993. Workshops aresometimes focused on specific issues, such as units to oversee project implementation.those held on export strategies in Madagascar Positive initiatives taken by countries them-and small and micro enterprises in Benin. The selves inclutde the establishment of privateAfrica Region of the Bank is working with the sector foundations in Madagascar, Senegal,Bank's Economic Development Institute to de- and Uganda to provide support to privatevelop consultation and training programs in businesses and to improve the dialogue be-these and other countries to facilitate increased tween the government and the private sector.dialogue between the public and private sectors. Mozambique and the Central African Repub-

In countries such as Chad, Malawi, Senegal, lic have established annual private sectorUganda, Zambia, and Zimbabwe, partnership conferences.among the Bank, governments, and the private In addition to supporting these national ef-sector, established through project-preparation forts, the Bank is encouraging dialogue withtask forces during the past year, has evolved to the private sector across counltries. It joinedthe creation of joint steering committees or Withl UNECA, the United Nations Develop-

ment Programme, the Global Coalition for

SECTION FOLJR AFRICA 73

Africa (GC A), and other bilateral and interina- governments to include participation intional agencies in sponsoring a regionwide Con- decisionmaking by NGOS, comimiunity groups,

ference on Reviving Private Investmiient in Af- ooperatives, women's organizations, the poorrica, held in Ghana in lune 1996. More and the disadvantaged, as well as the privatenarrowly focused subregional forums weere held sector. Using participatory approaches, theon "Agribusiness in Southern Africa" (March Bank is doing more listening than imposing.1996) and on1 the "Informal Sector and Micro The Bank has identified ninleteen "flagship"Finance in Westerin Africa" (June 1996). A sym- participatory operations-including five inposium in Johannesburg on Power Sector Re- Africa-that it is monitoring, and systematicfo'rm and Efficiency in December 1995 brought participatorv approaches are becoming thetogether ministers of finance and (EOs of utili- normal way of doing business for all major ac-ties from forty-three African countries to dis- tivities. In agriculture, the utility of systematiccuss reforms, investmenlt requirements, and farmer participation is illustrated by the ben-greater private sector involvement. These activi- eficiary assessment undertaken in Senegal. Inties also involved Looperation with other inter- addition, in three "gender" pilot projects-innationial and nationial agencies and NRCos. Burkinia Faso, Mali, and Mozambique-gender-

In a growiing numiiber of counitries, the Bank is related concerns are being introduced inacting as a low-key catalyst to help facilitate policy-based operations in close collaborationand foster improved dialogue betweeni African with beneficiaries.governments and private sector representatives. One of the "flagship" operations, theGovernment-private sector competitiveniess- Tanzaniia Human Resources Developmentreview groups and fora have been set up (nota- Pilot Project, currently uLnder preparation, is anbly in Ghana, Madagascar; and Senegal) to assess example of the close partnership being devel-major bottlenecks to private sector- competitive- oped among the Bank, governments, and localness and to propose solutionis for adoption by the communities. After three years of participatoryauthorities. These canl be instrumental in building consultation with parent associations, commu-ownership for polky reform. nity leaders, school teachers, and health work-

Meanwlhile, in the area of private investment ers, the Tanzanian government designed threepromotion, strengthenied coordination between pilot programs to be financed by the projectthe Bank, the Iw, anid ,UIGA is enhancing Bank that aim at making schools and health facilitiesGroup efforts to assist client countries to design more accountable to their clients and at pro-business-ei\viro-nmenit reforms-notablly moting a feeling of owniership among benefi-through the Bank/i( -runl Foreign Investmenit ciaries, who provide financial support.Advisory Service-and to execute promotion The Mali Pilot Participation Project-a "flag-programs with oic;,, assistanice. Increasingly, in ship" operation under advanced preparation-project finanice for private investmenit, the Bank was conceived at the June 1995 Mali Hungeris finding opportuLiities to catalyze 1FC and NIGA Workshop as a vehicle to experiment witlhinvolvement, both for major new projects partnership approaches in the fight against(in the energy sector, for example) and for hunger and poverty. The steering committeepostprivatization and postliberalization private designing the project is composed of represen-investments (in telecommunlications, for tatives of the central governmenit and districtexample). authorities, community-based organizations,

anid N(Os. Two confederations of NGOS are in-Partnership with Local Communities volved, one containinlg local NcoS only and theand NGOs other both local and international NGOs. These

The Bank is strongly committed to going actions and others are expected to help build abeyond traditional cooperationi with member basis for partnership between the government

74 THF WOALRI.L) BANK ANNI RI RI i)RI1 6

TABLE 4-1. LENDING TO BORROWERS IN AFRICA, BY SECTOR, 1987-96


Annualaverage,

Sector 1987-91 1992 1993 1994 1995 1996

Agriculture 671.1 707.4 318.3 152.6 415.1 328.0Education 197.6 402.9 417.4 325.5 201.2 131.6Electric powerand other energy 145.1 130.0 356.0 90.0 255.3 73.3

Environment 4.4 - - 2.6 - 11.8Finance 283.3 619.9 279.6 400.1 7.2 59.2Industry 122.0 200.0 20.9 16.8 - 11.4Mining/Other extractive 16.2 6.0 - - 24.8 -

Multisector 604.2 895.0 451.2 724.1 470.9 407.8Oil and gas 66.5 - 2.4 186.2 - -

Population, health, and nutrition 179.8 110.3 131.2 161.6 311.5 158.7Public sector management 103.3 128.1 139.8 61.0 117.3 654.4Social sector 5.8 59.0 12.0 - - 257.5Telecommunications/Informatics 73.8 - 89.1 - - -

Transportation 389.4 233.0 483.0 501.9 74.8 420.7Urban development 225.9 184.6 49.2 111.4 158.0 190.0Water supply and sanitation 167.3 297.4 67.2 74.1 248.2 35.7

Total 3,255.7 3,973.6 2,817.3 2,807.9 2,284.3 2,740.1

Of which: IBRD 992.3 738.4 47.0 127.7 80.7 -IDA 2,263.4 3,235.2 2,770.3 2,680.2 2,203.6 2,740.1

Number of operations 80 77 75 60 58 53

NoTE: Details may not add to totals because of rounding.- Zero.

and NGOS in the delivery of social services to the staff, forty African NGOs, four internationalpoor. NGOS, several Africani academics, and a represen-

Bank-NGo dialogue on Africa was strength- tative from the host government.ened in fiscal 1996 through systematic consulta-tion and the appointment of twenty-three NGO Partnership for Project Successliaison officers, who are attached to Bank resi- A significant characteristic of the 1 990s hasdent missions to facilitate participatory ap- beenl the increasinig divergenice amaonig Africanproaches in Bank-financed projects. I'he Third countries in terms of economic performance,African World Bank-NGO Consultation meeting completed political and structural reforms, glo-wvas held in Accra at the Bank's offices in Febru- bal integration, and domestic capacity for eco-ary 1996. This meeting was attended by Bank nomic management. At the same time, it has

bec(ome increasingly apparent that the policy-based lending instrument needed modificationi

SI t IION FoIIR AFRI(:.A 75

if it were to continue to be a potent instrtument nmanagement of its portfolio in the region,

for structural change and meet the emerging close collaboration withi borrowinig countries inneeds of such a diverse group of countries. Sev- project implementation, and efforts by theeral innovations were introduced durinig the various implementing agencies concerned.year, including the use of standard as well as of Many of the problems of poorlv performingfloating tranches on loans to minimize resource projects stem from a lack of government own-disruptions and accommodate uncertainties as- ership or their low priority in the currentsociated with difficult institutional reforms; policy framework. ProJects in the portfolio aregreater reliance on in-country knowledge at the being restructured to make them more consis-farm and firn level; a more intensive study of tent with the current country and sector pri-the potential effects of economic reforms on orities, and those elements no longer consid-various groups, especially the poor and woomen; ered to be of priority are being eliminated.and closer linkages between support for struc- Project restructuring is especially common intural reforms and the total package of lending the social sectors and in Nigeria, in particular.and nonlendinig assistance given to a country. In addition, a review of completed operationsClearly, mainstreaming such innovations in- in the agriculture sector has helped identifyvolves much closer and continiuous interaction lessons from experience that are expected tobetween African countries and donors, and lead to improved project outcomes. The re-among the differenit stakeholders in civil society view concluded, among other things, thatwithin the African countries themselves. while sound macroeconomic framework, po-

Performance of projects in the Bank's Africa litical stability, and governmental commitmentportfolio contilnues to improve. The proportion are important, complex project design thatof problem projects, based on the development- does not take into account weaknesses in localobjectives rating, eased from 17 percent in fiscal capacity can severely affect the results; benefi-1993 to 16 percent in fiscal 1995. On the basis ciary participation durinig project preparationof the implementation-progress rating, the pro- and implementationi is crucial for project suc-portion of problem projects fell from 24 per- cess; and pilot projects can be helpful by offer-cent to 18 percent over the same period. These ing opportunities to minimize implementationimprovements reflect the Bank's proactive problems and to test innovative approaches.

TABLE 4-2. WORLD BANK COMMITMENTS, DISBURSEMENTS, AND NETTRANSFERS IN AFRICA, 199 1-96


Cote d'1voire Ghana Kenya Total region

start start start startItem 1996 1996 1991-96 1996 1996 1991-96 1996 1996 1991-96 1996 1996 1991-96

Undisbursedcommitments 284 1,158 459 11,659

Commitments 464 1,634 276 1,62] 314 1,184 2,740 18,017Grossdisbursements 251 1,368 261 1,244 169 1,027 2,914 16.923

Repayments 180 1,051 23 106 105 637 1,120 6,247Netdisbursements 71 316 238 1,138 64 390 1,794 10,676

Interest andcharges 114 900 22 119 54 401 756 5,073

Net transfer -43 -584 216 1,019 10 -11 1038 5,603

NOTE: Disbursements from the IDA Special Fund are included. The countries shown in the table are those with the largestborrowings of Bank funds during fiscal 1995-96. Details may not add to totals because of rounding

-Zero.

,6 THE WORLD BANK ANN' \1. RuPUR 1'1996

New approaches adopted in recent vears are Africa, was brought together to review the im-expected to contribute to the quality-at-entry pact of World Bank policies and operations onof new projects and to project success. Leading capacity building ard utilization. Also, in Maythe way is the greater emphasis that is being 1996, a workshop was held in Mauritius, bring-placed on operations patterned on the sip ap- ing together Africans and East Asians to exploreproach, wlhose main characteristics are coherent the role of capacity building in the East Asiansector policy; sectorwide or subsectorwide miracle" and its implications for Afi-ica.scope; preparation by local stakeholders; effi- The work at all three levels (consultations,cient coordination of all major donors in the evaluation by the high-level group of the Bank'ssector, including common implementation ar- role, national assessments) is well advanced.rangements; and minimal resort to long-term While the coniclusions are not apparent yet,technical assistance. Fifteen siP operations were they are likelv to reflect the ideas that haveapproved in fiscal 1996, compared with five in emerged to date:the previous year. * capacity building is central to sustainable

development in Africa;Partnership for Capacity Building * African countries must grasp the initiative

Capacity-of human resources as well as of in building capacity and take steps to ensure itsinstitutions-permits countries to achieve (as optimal utilization;well as define) their development goals. For that * a new partnership for capacity building,reason, capacity has long received deserved at- leading to changes in the way both donors andtention; however, efforts in Africa, wlhere the borrowers do business, is essential. If donorschallenge is the greatest, have been generally in- change but countries do not or if African coun-effective. The need to correct this situation ur- tries change but donors do not, both will fail ingently, comprehensively, and effectively was put their capacity-building task; andon the agenda as never before during the past * The World Bank can be a leader in support-year-this time on the initiative of the African ing African efforts to build capacity by makinigcountries themselves. Through their governors capacity building a central objective of all itsin attendanice at the anllual meetings of the two developmlienit activities.Bretton Woods institutions, African countriesasked the president of the World Bank to work Partnership for Consensus Building andwith them to take concrete steps toward im- Regional Cooperationproving capacity in Africa. The Global Coalition for Africa, which was

Toward that objective, the executive directors launched followinig the Maastricht Conferenicefor African countries and Bank staff organized a on Africa in 1990, has been a key forum forseries of consultations, including wvorkshops in building consensus on development issuesAbidjan, Addis Ababa, Johannesburg, Libreville, among African countries and their externaland Nairobi, to gain a better understaniding of partners and in generating political validation atthe problems and concerns (including the rea- the highest levels in Africa on economic reformsons for past successes and failures), and to ex- and governance measures. A key element of theplore innovative approaches and pragmatic so- consensus is that regional cooperation/integra-lutions in the realm of capacity building. tion should be accelerated while integrating theParticipants were drawn from a wide range of African countries into the global economy.experience and expertise: government, private The Second Maastricht Conferenice, held insector, academia, "think tanks," professional as- November 1995, agreed that the GC&.A shouldsociations, and NGOS. Participants were asked to continue its catalytic role in focusing attentionicomment, for example, on ways to form better on critical issues and development priorities inpartnerships wvith the WNorld Banki and donorsto build African capacity. In parallel, a nine-member high-level group, of whom six are from

SRI 11kN FO(;R AFRICA 77

TABLE 4-3. PROJECTS APPROVED DURING FISCAL YEAR 1996, AFRICA

Principal amount(millions)

Country/project name Date of Approval Maturities SDR US$

AngolaSocial Action Project December 21, 1995 2006/2035 16.1 24.00

CameroonPrivatization and Private Sector TechnicalAssistance Project June 13, 1996 2006/2036 8.9 12.60

Transport Sector Project May 30, 1996 2006/2036 41.7 60.70Second Structural Adjustment Credit (IDA reflows) April 2, 1996 2006/2035 20.4 30.30Second Structural Adjustment Credit February 8, 1996 2006/2035 100.7 150.00

Cape VerdeCapacity Building Project for Private Sector Promotion May 21, 1996 2006/2036 7.9 11.40

ChadStructural Adjustment Credit February 15, 1996 2006/2036 20.2 30.00Capacity Building for Economic Management Project February 1 5, 1996 2006/2036 6.4 9.50

CongoPrivatization and Capacity Building Project September 5, 1995 2005/2035 5.8 9.00

C6te d'lvoireIntegrated Health Services Development Project June 27, 1996 2006/2036 27.7 40.00Private Sector Development Adjustment Credit April 1, 1996 2006/2036 123.9 180.00Railway Rehabilitation Project November 28, 1995 2006/2035 13.5 20.00Agricultural Sector Adjustment Credit September 26, 1995 2006/2035 95.8 150.00Agricultural Sector Adjustment Credit (IDA reflows) December 12, 1995 2006/2035 49.1 73.60

EritreaCommunity Development Fund Project February 29, 1996 2006/2036 11.8 17.50

EthiopiaSocial Rehabilitation and Development

Fund Project April 9, 1996 2006/2036 80.8 120.00Water Supply Development and Rehabilitation Project April 9, 1996 2006/2036 24.0 35.73

GhanaBasic Education Sector Project June 18, 1996 2006/2036 34.7 50.00Public Enterprise and Privatization TechnicalAssistance Project June 11, 1996 2006/2036 18.2 26.45

Highway Sector Investment Program May 14, 1996 2006/2036 67.8 100.00Urban Environmental Sanitation Project March 26, 1996 2006/2036 47.8 71.00Private Sector Adjustment Credit (IDA reflows) December 12, 1995 2005/2035 3.2 4.80Non-Bank Financial Institutions Assistance Project December 5, 1995 2005/2035 16.0 23.90

GuineaMining Sector Investment Promotion Project June 4, 1996 2006/2036 8.3 12.20National Agricultural Services Project April 2, 1996 2006/2035 23.6 35.00Higher Education Management Support Project November 28, 1995 2006/2035 4.5 6.60

KenyaStructural Adjustment Credit June 18, 1996 2006/2036 61.8 90.00Structural Adjustment Credit (IDA reflows) June 18, 1996 2006/2036 24.5 36.80Nairobi-Mombasa Road Rehabilitation Loan January 30, 1996 2006/2035 34.0 50.00Urban Transport Infrastructure January 30, 1996 2006/2035 77.1 115.00Arid Lands Resource Management Project December 14, 1995 2006/2035 14.8 22.00

LesothoRoad Rehabilitation and Maintenance Project May 9, 1996 2006/2036 26.8 40.00

MadagascarEnergy Sector Development Project April 16, 1996 2006/2035 31.8 46.00Social Fund II Project September 14, 1995 2006/2035 25.5 40.00

78 THE WORLD BANK ANNI AIl. RFI'()RI 1906



MalawiSocial Action Fund Project Mav 9, 1996 2006/2036 38.0 56.00Fiscal Restructuring and Deregulation Program April 30, 1996 2006/2036 70.3 102.00Fiscal Restructuring and Deregulation Program (IDA reflows) April 30, 1996 2006/2036 2.9 4.40Primary Education Project January25, 1996 2006/2035 15.1 22.50

MaliEconomic Management Credit June 27, 1996 2006/2036 41.6 60.00Selingue Power Rehabilitation Project April 25, 1996 2006/2036 18.5 27.30Vocational Education and TrainingConsolidation Project March 14, 1996 2006/2036 9.0 13.40

MauritaniaPublic Resource Management Project June 20, 1996 2006/2036 13.9 20.00Urban Infrastructure and Pilot Decentralization Project March 26, 1996 2006/2035 9.7 14.00Private Sector Development Credit (IDA reflows) December 12, 1995 2005/2035 0.5 0.80

MozambiqueHealth Sector Recovery Program November 30, 1995 2006/2035 66.3 98.70

NigerNatural Resources Management Project December 14. 1995 2006/2035 18.0 26.70

SenegalHigher Education Project June 4, 1996 2006/2036 18.4 26.50Pilot Female Literacy Project June 4, 1996 2006/2036 8.7 12.60Agricultural Sector Adjustment Credit (lIDA reflows) December 12, 1995 2005/2035 1.8 2.80

Sierra LeoneTransport Sector Project June 27, 1996 2006/2036 24.3 35.00Integrated Health Sector Investment Project March 14, 1996 2006/2035 13.6 20.00Structural Adjustment Credit (IDA reflows) December 12, 1995 2004/2033 0.2 0.30

TanzaniaUrban Sector Rehabilitation Project May 23, 1996 2006/2036 72.3 105.00Financial Institutions Development Project August 3, 1995 2005/2035 7.5 10.90

TogoEconomic Recovery and Adjustment Credit April 25, 1996 2006/2035 32.2 50.00

UgandaAgricultural Sector Management Project April 16, 1996 2006/2036 12.1 17.90Private Sector Competitiveness Project December 14, 1995 2006/2035 8.3 12.30Environmental Management Capacity Building Project September 14, 1995 2006/2035 7.5 11.80

ZambiaEconomic Recovery and Investment PromotionTechnical Assistance June 4, 1996 2006/2036 16.0 23.00

Economic Recovery and InvestmentPromotion Credit (IDA reflows) December 12, 1995 2005/2035 8.0 12.10

Economic Recovery and Investment Promotion Credit July I, 1995 2005/2035 90.0 140.00

ZimbabweEnterprise Development Project April 25, 1996 2006/2036 47.5 70.00

Total 1,831.20 2,740.10n.a. = not applicable (IBRD loan).

SRCTI();N Fc)IIR AFRI(CA 79

BOX 4-1. NEW PARTNERSHIP FOR WATER MANAGEMENT

Recent events in sub-Saharan Africa demonstrate holder participation, privatization of water utilitiesthe strategic importance that water plays in the (including small-scale irrigation and suppliers ofregion's food production, health, and economic devel- water), and demand-management approaches. Theopment. In 1995, drought in Southern and Eastern strategy also suggests that the international commu-Africa, as well as localized droughts in the Sahel, led nity needs to develop new instruments to promoteto significant drops in crop production and the risk of international cooperation and river-basin manage-price hikes and malnutrition. Increased water pollu- ment, including, among other things, multicountrytion and lack of accessibility to clean water and lending programs and projects within countries thatsanitation services throughout the region are having create an even playingfield between coripariana direct impact on human health. At the same time, states.water management is an issue of geopolitical impor- The concept of partnership shaped the way intance and hence requires close cooperation among ri- which the strategy itself was prepared. A group ofparian countries. This appreciation has led the Nile senior advisers from nine African countries wasBasin states' to create a forum for continuous dia- brought together by the Bank, in consultation withlogue, while in 1995, the states of the Southern Afri- other donors, in 1994 to form the African Advisorycan Development Community (SADC)

2 signed a Pro- Group (AAG). The AAG reviewed working drafts oftocol callingfor the equitable use and management the strategy in 1994 and 1995, gave advice, andof shared river basins. provided a crucial Africa voice in the process. Donor

In an effort to shed some light on this increasingly agencies, including the Food and Agriculture Organi-important area, the Bank put out a report entitled zation of the UN., the United Nations Environment'&African Water Resources: Challenges and Opportu- Programme, the United Nations Educational, Scien-nities for Sustainable Development." The strategy tific, and Cultural Organisation, the Internationaldocument provides a counterpoint to the old supply- Center for Research in Agroforestry, the Uniteddriven approach in the sector that focused on a single Kingdom's Overseas Development Administration,stakeholder (the public sector). The strategy calls and the World Bank, authored building-block papersupon donors to conduct business in new ways based integral to the strategy. The strategy was presented aton (a) the principle that water-resources manage- two stakeholder workshops held in Africa in earlyment needs to be country-driven, with Africans tak- 1996 attended by 235 participants from forty-oneing the lead in integrated, multisectoral approaches countries. One immediate result of the workshopsin the development and implementation of national was the agreement to form a Pan-African Partner-water strategies that involve all stakeholders and ship, to be led initially by the AAG, for fostering(b) a new emphasis on partnership among donors intercountry dialogue; sharing knowledge, experience,and countries. and best practices; developing consensus on key is-

The strategy builds on these two points by identify- sues and actions; and reviewing progress on agreeding five development priorities: enhanced drinking action plans.water and sanitation service coverage, with priorityfor the poor; food security through irrigation and 1. Burundi, Egypt, Ethiopia, Eritrea, Kenva, Rwanda, Sudan,

collection of rainfall; water quality and human Tanzania, Uganda, and Zaire.

health; protection of watersheds and wetlands; and 2. The members of S.ADC, the former Souithern African DevelopmentCoordination Conference (SADCC), are Angola, Botswana, Lesotho,

intercountry river-basin cooperation. It also calls for Malawi, Mozambique, South Africa, Swaziland, Tanzania,

more emphasis on rural and peri-urban areas, stake- Zambia, and Zimbabwe.

Africa. The Bank has supported the GCA from In line with the consensus on the importanceits inception and remains committed to provid- of regional cooperation in the development pro-ing technical and financial support to the coali- cess, the Bank supports a new vision of regionaltion, together with other interested partners integration in Africa based on the promotion ofand donor countries, factor mobility among countries, while, in paral-

80 THE WORILD BANK ANNt olU R F 'Rli 199t6

lel integrating Africani countries into the world external) as judiiciotisly and effectively as pos-economy. Together with the International sible thlrougih partnership. The nianagemient ofNMlonetary Fulid, the European lIAnion, and water resources epitomizes the neeci to viewvother interested institutionis and doniors, the partnership as a necessity not ani option (seeBank is sucpportinig efforts hy groups of African Box 4-I). In Africa, fifty-four rivers or lakes arecountries based on sucih a vision of inteoration. shared bvy more than one country, and majorThese include the Cross-Border Initiative to fa- drainage hbasins and aLiuifers are each shared bycilitate private investment, trade, and pay- seven or more cotiiies. Recenit developmenitsments in Fastern and Soutierlin Africa aLid in have demonstiatei anexv the vulnerability ofthe Indian oceani counitr-ies; the East Africani Afrkia's food production, health, and econiomicCooperation amonig Kenya, Tanzania, and developimienit to the av\ailability of wvater.Uoanda3 the West Africani Econoimic and Mon-etary IJnioin; and the Central African MonetarvUnion. The countries participating in the se ar-rangemenits are taking steps to remox\ the bar-riers to cross-border flows of goods, factors,and people. The Bank supports these effortsthrough techniical and policy adVice, institutionbuilding, and finanicin" in the context of cotiun-try-specific assistance programis.

Partnership Is Necessity, Not Optional:The Case of Water Management

The view that partnerchip ic a necessityrather than an option applies to nearly all areasin Africa, given the conistr-ainit on res ources-domestic and externral--and the distance thatneeds to be covered to achieCVe significa1nt SuIS-tainable improvement in well-being. Boththese factors put a premium on USing availahleresources (humlan and financial, internal aind

Si iik)N FOI R AmRI(.\ 81

EAST ASIA AND PACIFIC

East Asia and the Pacific is a the poorest. Despite huge suc- cent of the poor in all devel-region of spectacular develop- cesses, it is still, on1 average, a oping countries (4 percent ifment success and huge devel- low-income region with an es- China's total number of pooropment challenges. In 1995, timated per capita gross na- are excluded). Social indica-the region outperformed other tional product of $940. Eighty tors have improved remark-developing regions again and percent of its people, about I.3 ably. The infant mortality rateposted the most rapid growth billion, live in low-income (per 1,000 live births) has de-rate in the world: 9.2 percent, countries, almost entirely ac- clined from an already low 44up slightly from 8.9 percent in counted for by the six econo- in 1987 to 35 in 1993, com-1 994. Growth in gross domes- mies in transition (Cambodia, pared with 54 in all develop-tic product (GDP) accelerated China, the Lao People's Demo- ing counltries. Life expectancyin most countries: The Repub- cratic Republic, Mongolia, has risen from 67 to 68 yearslic of Korea, Malaysia, and Myanmar, and Vietnam). Re- in the same period, comparedVietnam were in the 9 percent ducing poverty and developing with 64 years for all develop-range, while the economies of the institutions for a market ing countries. Adult illiteracyIndonesia and Thailand grew economy are the primary chal- has been reduced from 29 per-from between 7 percent and 8 lenges facing these countries. cent in 1985 to 24 percent inpercent. The Philippines re- Througlhout the region, rapid 1990, and given the currentcorded a satisfuing increase in growth and urbanization are secondary enrollment rate ofits growth rate to 4.8 percent, placing heavy pressures on in- 52 percent (46 percent forwhile Mongolia's economy ad- frastructure, and environmen- girls), the region is likely tovanced by 6 percent. China tal degradation threatens to achieve the Bankwide objec-cooled an overheated economy undermine the hard-fought tive-set by Bank Presidentwithout stalling growth: Infla- gains made to date. UJnder James Wolfensohn at thetion declined from 22 percent these circumstances, the Ulnited Nations Conference onin 1994 to 15 percent, and Bank's role in East Asia has Women in Beijing-of provid-growth eased from 12 percent become increasingly diverse, ing access to secondary educa-to 10 percent. Growth in Fiji complex, and challenging. tion to 60 percent of childrenalso eased, down from 4.5 per- by 201 0.cent in 1994 to 2.5 percent. The Record East Asian countries havePapua New Guinea was the Mlarket-based East Asian been successful in integratingonly country in the region that economies have been exem- with the world market forexperienced economic decline plars of fast and relatively eq- both capital and goods. Since(4.7 percent). uitable growth that leads to 1990, the region has become

The region is faced with rapid reduction in poverty; the the predominant destinationmany development challenges mixed economies of China of private capital flows. Inas it moves towaard the and Vietnam have experienced 1995 alone, developing counI-Twenty-first Century. It has rapid poverty reduction early tries in the region receivedimmense diversity and con- in their transitions. Although an estimated $108 billion intains the world's largest and the number of people who foreign capital flows, of whichsmallest developing countries, live on incomes below $1 a $98 billion was from privatelandlocked states and both day has declined from 41 3 sources, including $54 billionlarge and small island coun- million in 1990 to 392 million in direct investment. The surgetries, some of the most pros- in 1.993, eqtuivalent to a quar- in foreign capital flows wasperous nations, and some of ter of the population in East induced by rapid economic

Asia, that number neverthe- growth, sound economic funda-less represents about 34 per- mentals, and a high level of

82 THFu\ WORLD BANK ANNDJAI RRPCRI 1 996

TABLE 4-4. LENDING TO BORROWERS IN EAST ASIA AND PACIFIC,BY SECTOR, 1987-96


Annualaverage,

Sector 1987-91 1992 1993 1994 1995 1996

Agriculture 827.8 826.7 1,089.3 1,735.4 891.1 865.6Education 308.0 474.1 478.9 436.6 526.5 437.9Electric powerand other energy 610.1 1,745.9 760.0 1,048.5 1,383.0 1,683.0

Environment - 125.0 300.0 216.5 110.0 150.0Finance 373.7 - 457.0 100.0 - 49.0Industry 287.5 82.7 - - 195.0 271.0Mining/Other extractive - - - - - 35.0Multisector 423.0 70.0 200.0 82.7 167.0 130.0Oil and gas 29.8 100.0 225.0 266.0 245.0 -

Population, health, and nutrition 65.9 129.6 200.4 160.0 242.2 296.0Public sector management 18.5 17.0 173.0 - 88.0 -

Social sector - - - 9.7 - 40.0Telecommunications/Informatics 83.8 375.0 134.0 250.0 325.0 -

Transportation 573.6 1,182.5 1,132.2 1,380.0 960.0 916.9Urban development 285.1 168.0 110.0 349.0 486.0 542.7Water supply and sanitation 105.4 150.0 310.0 - 75.0 57.0

Total 3,992.2 5,446.5 5,569.8 6,034.4 5,693.8 5,420.1

Of which: IBRD 3,263.5 4,386.9 4,404.8 4,623.8 4,592.6 4,252.2IDA 728.6 1,059.6 1,165.0 1,410.6 1,101.2 1,167.9


NoTE: Details may not add to totals because of rounding- Zero.

integration with the world market. East Asians ports of foreign-invested enterprises (mostlyare large investors in both their own economies joint ventures) account for nearly 40 percent ofand in their neighbors: Domestic savings rates all exports.have been 35 percent or higher of GDP, and The past year witnessed further rapid growthmore than 70 percent of foreign direct invest- in trade throughout the region. Exports andment is from within the region. Furthermore, imports grew at annual rates of 21 percent andthese countries have been able to use the for- 18 percent, respectively. East Asian developingeign capital inflows more effectively than other countries currently account for over one thirddeveloping regions, thereby contributing to of all developing country trade and just underrapid technological upgrading. Foreign direct 1O percent of total world trade. It is projectedinvestment has also wrought structtural changes that these countries will account for over oneby increasing manufacturing output as a share third of all incremental trade between 1992 andof GDP and exports; for example, in China, ex-

SECTION FOI JR EASY AsIA AND PACIFIC 83

~~~~ ,.~~~~~~~~~~~, ~~~~~sector (withi Vietniam phasinig inislbraliation over a somewhat loniger period). APEC iS be-coming a uinique forum of both developing and

y ~~~~~~~~~~~~~~~~~~~~~induistrial counitries with imiplicationis enicom-

passing cooperationi in areas that go far bievondtrade issues, including financial flows, humanresouirces, anid the environment.-

Continued strong commitment to interna-tional integration; high levels of saving and in-vestment; emphasis on health, education, andhumani capital development; plus a stablemacroeconiomic environment have enabled EastAsian countries to propel themselves success-fully on a rapid poverty-reducing growth path.Its rapid growth will continue to effect the glo-

ji bal economv anid serve as an important source* r ~~~~~~~~~~~of stability for the rest of the world.

Challenges Ahead

Several global and regional economic and so-cial processes underlie the present situation andfuture outlook for East Asia and Pacific. Theprocesses include:

* rising integration of international marketswith growing trade, capital flows, and interna-tional migration;

* the transition by several countries from cen-tral planning to market-based economies and itseffect on two thirds of the region's populationwho are entering the international market viatrade integration;

* the transition from predominantly rural topredominantly urhan societies. In the early1 990s, only about 500 million East Asians lived

2002, and their share in world trade is likely to in towns. By 2020 this figure wvill have grown tocontinue to expand. The determinationi of these about 1.5 billion. By then, seven East Asiancountries to liberalize their trade was recon- cities (outside .Japan) are expected to havefirmed by (nonbinding) commitments under- populations in excess of 0 ( million. As a result,taken at the Asia Pacific Economic Cooperation infrastructure requirements for the region are(APEC) meeting in Tokyo in November 1995. expected to surge to some $200 billion a yearChina announced plans to cut tariffs from an by 2000 (from $70 billion in 1992);average of 36 percent to 23 percent during * the move by 30 percent of the work force1996. The seven members of the Association of from informal to formal sectors by the yearSoutheast Asian Nations (.sFAN)' agreed toshorten the timeframe for tariff cuts under the . BrIlei, Indonesia, Malaysia, the Philippines, Singapore,

ASEAN Free Trade Agreement (AMFA) to reduce Thailand, and Vietnam.

tariffs to the 0 percent-to-5 percent range bv 2. API ( membership inclludes Australia, Brninei, Canada,Chiile, Chinad, Hong Konig, Indonesia, Japan, Republic: of

the end of 2002 (inistead of 2007) anid to ex- Korea, Malaysia, Mexico, New Zeailand. PazpuLia New

pand the coverage to include the agriculture Guiniea, the Philippines, Singapore,'rhailand, the tTinitedStates of America, and Taivan, China.

84 THE WORLD BANK ANNItlI RIEPORI 1996

202(0 and increased demiianLd for skilled workers return for their natural capital, principally for-brouglht about hy the structural changes that est and marine resour-ces.have occurred as countries move from agricul- There are a number of ways in which thetural to manufacturillg-based economies; Bank can make a significanit contribution in

the rapid aging of the population, the result helping the Pacific Islands build a more resilientof increased life expectancy and a rapid decline economic base and move toward a higher andin total fertilityV. By 2020, the percentage of the more sustainable growth path. Although sup-old in the Chinese populationi, for example, will port is tailored to the specific needs of eachbe equal of that in most industrial countries to- economy, it may include: higlh-level policy ad-day. Korea's population is aging even faster. This vice; economic and sector analyses; technical as-regional trend will not onily put pressure o1 iia- sistance in specific areas in wlhich the Bank hastional social security systems hut, in addition, a comparative advantage; strengtlheniing partner-will have profounid implicationis for long-term ships with key stakeholders, including NGOS; andeconiomic growth in East Asian coun1tries; and selected lendin2- activities in areas where the

* environmenital degradation, as deforestation Bank can provide positive support to nationalhas been more rapid thani in any other regioni, development strategies.and problems related to water availabilitv andair and water pollution are severe. The Bank's Strategy and Activities

All countries are facing policy and institu- The Banlk's activities in the region have beentional challenges even though most have been directed by this emerging developmenit agenda.successful in implementing the funldamiienitals of There has been a shift in its lending activitiesdevelopment policy. Future challeniges are likely from the region's middle-income counltries toto be more complex and difficult. The character the low-inicome Indoclhinese countries. Totalof the challeniges varies greatly between the conmnmitmiienits in fiscal 1996 were $5.4 billion,transitioni and market econonmies, and among while gross disbursemenits and net disbursementsthe low-, middle-, and high-income couLntries, were $4.1 billion and $1 .3 billion, respectively.Yet because they also have many commoni is- Net transfers, taking accounit of interest as wvell assues, a commoln agenda within the region is of principal repaymenit, were a negative $925emerging, of which the key ingredients are: million (see table 4-5). Lendinig to Chinla, a 'blend"reducing poverty and achievinig growth with country, accounited for 55 percent of the total.equity; meetinig growing infrastructure needs; Thirteen percent of the lending volume was todeveloping the institutions for market econio- loxv-income, LDA-only) countries (Cambodia, Laomies; providing social insuranice; managing Pi)R, Mongolia, and Vietnam), conmpared withstructural change and upgradinig labor; and deal- 6 percent in the period fiscal 1 993-95. Net trans-ing with environmental problems. fers to China and the three Indochinese na-

The challenges faced by the Pacific island tions-Cambodia, L.ao 'DR, anid Vietniam-economies differ in maniy important respects amounlted to almost $1 .4 billion, while thefromii nmost of E ast Asia. \hile life is relatively mature borrowvers-Korea (vhiclh "graduated"safe and secure, econiomiiic growth has been from wlnIR lendinig in fiscal 1'995), Malaysia, andslowv. Unless the island ecoiionoies achieve mod- Thailanid-became net repayers as their share oferate sustainable economic growth, improve- new lending from the Bank either stabilized orments in the quality of life may) not be possible. declined. These horrowvers, however, continueThe island econiomiiies face major constr-ainits to to make use of the Bank for special studies anddevelopmiient, suclh as long distances to large exter- projects in innovative areas.

nal marklets, a narrow resource and productionbase, high uLnit costs of infrastructure, limitations 3. The population in des eloping East Asian countries is

in the skilled w ork force, anid v\ulnerability to ex- gi,ng at a rel,itive) flaster pace thall did the population in

ternal shocks and natural disasters. To huild a today indtrial cuntries In thirts'Iour years forexample, (Chinia will double its shalre of elderly in ihe

nmore resilient base, these countries will nieed to population (fronm c) percent to 18 pecent), a process that

diversifyv their economic base and obtain higher took place ovcr a span of I(iP ye;ars in Belgium.

SICTI()\I Fi!ii EA', I AsIA ANI) PACIFIC 85

TABLE 4-5. WORLD BANK COMMITMENTS, DISBURSEMENTS, AND NETTRANSFERS IN EAST ASIA AND PACIFIC, 1991-96


China Indonesia Vietnam Total region


Undisbursedcommitments 9,831 4,984 625 19,172

Commitments 2,970 16,317 992 7,991 502 1,242 5,420 32,728Grossdisbursements 2,219 10,419 959 6,742 35 201 4,136 23,932

Repayments 364 1,616 1,213 5,330 1 4 2,859 15,089Netdisbursements 1,855 8,803 -254 1,412 35 198 1,277 8,843

Interest andcharges 534 2,178 901 5,182 2 5 2,202 12,252

Net transfer 1,321 6,625 -1,155 -3,770 33 193 -925 -3,409

NoTE: Disbursements firom the IDA Special Fund are included. The countries shown in the table are those with the largestborrowings of Bank funds during fiscal 1995-96. Details may not add to totals because of rounding.

Nonlending services are becoming broader focus on the special difficulties of groups at riskbased, since they cover not only middle- and of being left out of the development processlow-income countries but also activities in high- due to geographic isolation, ethnicity, or lack ofincome countries. For example, the regional skills. In the Population and Family Healthstudy, East Asia's Trade and Investment, was Project in Vietnam, for example, a model out-widely used at the 1994 APEC meeting, and reach system will be tested to supplement coin-policy recommendations for a concerted unilat- mune health-center (the country's lowest-leveleral trade liberalization were accepted.4 health facility) services in remote mountainous

Reducingpoverny remains a central priority of areas where most disadvantaged ethnic minoritythe Bank's activities in East Asia. While much populations live. Village-based health posts willlending has strong indirect effects on poverty re- be established in remote mountainous areas induction, 18 percent of total new commitmenits in the fifteen provinces covered by the project andfiscal 1996 was included in the Program of Tar- then extended to cover all such areas in thegeted Interventions. The Bank's poverty-reduc- provinces if evaluated as being successful. Thetion strategy varies across countries. In low- Bank continued to monitor and provide policyincome countries, projects aim at generating ef- advice by conducting poverty assessments infective rural development and delivering social Lao PDR, Mongolia, and the Philippines, andservices to the poor. For example, a poverty-re- through dissemination of the Vietnam povertyduction project approved during the past year assessment in provincial participatory work-in China facilitated "market-friendly" income shops. Other recently completed studies-on1generation and labor mobility so that higher-inhealth, education, and rtiral development-alsocome opportunities could be generated for the included a poverty-reduction component. A re-rural poor. Twvo health projects in Vietnam and a gional paper on poverty is currently underdisease-prevention project in China are helping to preparation, with publication targeted for lateprovide basic health care to vulnerable groups in calendar year 1996.such as poor womeni and their children. Rural fi- Meetinig the inifraistruicture needs of the regionnance and land-titling projects in Vietnam and has become the most significant component ofLao PDR, respective),, are helping to strengtleni in-

stitutions that support the poor and other vtilner- 4. World Bank. 1994. East Asia's Trade an(d Investne,,r:stitutions that support the poor and other vulner- Regional and Global Gains from Lilyeralizatrio. Develop-

able groups. In several countries, the need is to menit in Practice Series. Washington, D.C.

86 THE WORLD BANK ANNIIAI. REPORT 1996

TABLE 4-6. PROJECTS APPROVED DURING FISCAL YEAR 1996, EAST ASIA AND PACIFIC



CambodiaEconomic Rehabilitation Credit September 28, 1995 2005/2035 25.40 40.00Phnom Penh Power Rehabilitation Project September 28, 1995 2006/2035 25.80 40.00

ChinaYunnan Environment Project, June 25, 1996 2006/2031 17.40 25.00Yunnan Environment Project, June 25, 1996 2002/2016 n.a. 125.00Seed Sector Commercialization Project, June 18, 1996 2001/2016 n.a. 80.00Seed Sector Commercialization Project, June 18, 1996 2006/2031 13.80 20.00Chongqing Industrial Pollution Control

Reform Project June 18, 1996 2002/2016 n.a. 170.00Gansu Hexi Corridor Project' May 30, 1996 2006/2031 61.80 90.00Gansu Hexi Corridor Project, May 30, 1996 2002/2016 n.a. 60.00Second Henan Provincial Highway Project May 30, 1996 2002/2016 n.a. 210.00Animal Feed Project April 16, 1996 2001/2016 n.a. 150.00Shanxi Poverty Alleviation Project March 26, 1996 2006/2031 67.30 100.00Second Shaanxi Provincial Highways Project March 21, 1996 2001/2016 210.00Second Shanghai Sewerage Project March 21, 1996 2001/2016 250.00Third Basic Education Project March 21, 1996 2006/2031 67.30 100.00Henan (Qinbei) Thermal Power Project February 27, 1996 2001/2016 n.a. 440.00Labor Market Development Project' December 19, 1995 2006/2030 13.40 20.00Labor Market Development Project' December 19, 1995 2001/2016 n.a. 10.00Hubei Urban Environmental Project' December 19, 1995 2006/2030 16.80 25.00Hubei Urban Environmental Project' December 19, 1995 2001/2016 n.a. 125.00Disease Prevention Project December 12, 1995 2006/2030 67.00 100.00Ertan 11 Hydroelectric Project August 22, 1995 2001/2015 n.a. 400.00Shanghai-Zhejiang Highway Project August 1, 1995 2001/2015 n.a. 260.00

IndonesiaStrategic Urban Roads Infrastructure Project June 25, 1996 2000/2012 n.a. 86.90East Java and East Nusa Tenggara

Junior Secondary Education Project June 18, 1996 2002/2016 n.a. 99.00Higher Education Support Project-Development

of Undergraduate Education June 18, 1996 2002/2016 n.a. 65.00Social Sector Strategy and Capacity Building Project June 4, 1996 2002/2016 n.a. 20.00Second East Java Urban Development Project May 16, 1996 2002/2016 n.a. 142.70Sulawesi Agricultural Area Development Project April 30, 1996 2002/2016 n.a. 26.80Kerinci-Seblat Integrated Conservation andDevelopment Project April 30, 1996 2002/2016 n.a. 19.10

Nusa Tenggara Agricultural Area Development Project March 5, 1996 2001/2016 n.a. 27.00HIV, AIDS and sTDs Prevention and Management Project February 27, 1996 2000/2011 n.a. 24.80Second Power Transmission and Distribution Project February 20, 1996 2001/2016 n.a. 373.00Secondary School Teacher Development Project February 20, 1996 2001/2016 n.a. 60.40Industrial Technology Development Project December 21, 1995 2001/2016 n.a. 47.00

Lao People's Democratic RepublicLand Titling Project March 21, 1996 2006/2036 14.00 20.70Third Structural Adjustment Credit February 22, 1996 2006/2035 26.90 40.00

MongoliaCoal Project May 7, 1996 2006/2036 23.80 35.00Poverty Alleviation for Vulnerable Groups Project July 6, 1995 2005/2035 6.50 10.00

Papua New GuineaEconomic Recovery Program August 29, 1995 2001/2015 n.a. 50.00

PhilippinesManila Second Sewerage Project May 21, 1996 2002/2016 n.a. 57.00Transmission Grid Reinforcement Project April 4, 1996 2001/2016 n.a. 250.00Second Rural Finance Project September 14, 1995 2001/2015 n.a. 150.00

ThailandTechnical Education Project June 25, 1996 2000/2011 n.a. 31.60Secondary Education Quality Improvement Project June 25, 1996 2000/2011 n.a. 81.90Fifth Highway Sector Project December 21, 1995 2001/2013 n.a. 150.00

VietnamRural Finance Project May 7, 1996 2006/2036 82.70 122.00Power Development Project February 20, 1996 2006/2035 121.00 180.00National Health Support Project January 16, 1996 2006/2036 68.00 101.20Population and Family Health Project January 16, 1996 2006/2036 33.60 50.00Payment System and Bank Modernization Project November 21, 1995 2006/2035 32.90 49.00

Total 785.40 5,420.10n.a. = not applicable (IBRD loan).a. "Blend" loanlcredit.

SECIION FOUR EAS I ASIA AND PACIFIC 87

the Bank's lending program, accouniting for lations create the need and demand for formalabout two fifths of the new commitments (by mechanisms of social insurance. The design ofvolume) in fiscal 1 996. To cope with rapid social insurance systems is critical becausemodernization, rising urbanization, and interna- poorly designed systems can have large and po-tional integrationi, it is estimated that develop- tentially adverse fiscal and labor-market conse-ing East Asian countries will need to invest be- quences. There are potentially significant ben-tween $1.2 trillion and $1.5 trillion, or 7 efits from sharing experience in developingpercent of regional GDP, in transportationi, sound svstems of old age, health, unemploy-power, telecommunications, and water and sani- ment, and disability insurance. To this end, thetation facilities in the next decade. IMleeting this Bank has recently carried out formal and infor-challenge will require large-scale private sector mal studies on pension reforms in China, Indo-involvemenit for finanicing and efficiency. Dur- nesia, and Thailand, and provided policy adviceing the past year, in "Intfrastructure Develop- on the design of these systems based on itsment in East Asia and Pacific: Towards a New worldwide experience. A Health Care FinancingPublic-Private Partnership," the Bank laid out an study was conducted for China, and Educationoverall agenda to enhance private sector partici- Cost and Financing studies were undertaken forpation. The Bank explored the possibility of es- the Philippines and Vietnam. Because develop-tablishing an Infrastructure Fund in the Philip- ment of social insurance systems is still at anpines, developed a cofinancing strategy with the early stage, lendinig projects were few and ac-private sector, and undertook a large number of counted for less than 1 percent of the pastother activities at the project, sector, and couIn- year's commitments. In the $20 million Labortrv level to enhance private sector involvement. M/larket Development Project in China, em-in addition, recent economic and sector work ployee benefits-pensions, unemploymenthas included infrastructure studies for China, insurance, and medical coverage-are beingIndonesia, Mongolia, and Vietnamii. transferred on1 a pilot basis from SOES to the ad-

Building inarket-oriented institutions in the fi- ministration of five municipalities. This action isnanicial and enterprise sectors is another priority the first step in overall social insurance reformfor East Asia. Well-functioning market econo- and is intended to accelerate the redeploymentmies require effective and increasingly sophisti- of surplus labor to other productive activities.cated instittutions. These include efficient finan- Managinig stnrctural change and uipgradingcial systems, sound structure for corporate labor are also emerging issues in the region.governance and industrial relations, and well- Rising integration and swift technologicalfunctioning governmental institutions. To this change are encouraging rapid structural changesend, the Bank has recently conducted studies and shifting workers from rural to urban areasand provided policy advice on banking sector and from informal to formal sectors. Labor real-reforms, capital market development, and state- location and career changes for workers raise theowned enterprise (sol ) reforms in China, issue of how to design education and training sys-Indoniesia, the Philippines, and Vietnam. Twvo tems that provide flexible skills and mechanismsregionial studies, Malaging Capital Flows in East to support workers' mobility. During fiscal 1996,Asia and The Emerging Asian Bonid Market, were the Bank published a report, Involning ttiorkers inwidely disseminated in an international confer- East Asiatn Growt/2, a by-product of Wliorld Devel-ence in Hong Kong in mid 1995.' The confer- opmiienzt Report 1995;" a labor-market study inence was a success on all fronts: Participation Indoniesia; and an education financing study inwas greater than expected, both public and Vietnam.private sectors showed keen interest, and presscoverage was comprehensive and hiighly 5. World B,ink. 1996. Mtaaging Capital Flaivs in East Asia.

favorable. Washington, D.C.; World Bank. 1995. The Emerging AsiaBotd Mirket. Washinigton. D.C.

Providing sociail inisurantice svstemtis is an emerg- 6. -\orld Bank. 1995. lnvoluing WAorkers in East Asian

ing issue in the region. Urbanization, movement Growth, Washington, D.C.

of labor into the formal sector, and aging popu-

88 THF WORLD BANK ANNHAI. RT()R I 1)996

Dealing with eni'ironinental problems continues aiind a Imlix of products and services thalt betterto be a top pr-ioritv of the Ban<k's activity. hlie respond to their fast-chianginig needs.

Bank's strategy is to help the region's countries The initial results of these innovations havecor-rect the un1derpricinig of environmental costs been encourzaging. Elapsed time aind staff costsand to build the institutional capacity for sounid of preparing projects and econom-fic and sectorenvironimiiental managemenit and a healthy and work under- the new procedures are about oneattractive urban environimilent. A studc, East third lower Simultaneously, greater emphasis isAsia's Environmnet7t: Prinlciples 101n Priorities for being placed on preparing focused policv' notesAction, focused on1 uLiderpriciig, proposed mar- in response to ul-gelnt government requests.ket-based instrumenlts for government regula- Overhead costs have been reduced significantlytions, and recommended priorities f'or actionii as a larger proportion of staff time is being de-Subjects of'economic and sector work (vsw) in- voted to direct client vork. Results during fiscalc-luded industrial pollution conitrol (Indonesia 1997 are likely to be even more dramatic asand Vietnam), renewable ener'gy (China), and the full benefits of the businiess innovations arebiodiversity and for-estrv (Cambodia). har-vested.

M4ailitalling macroeconomic stability has been Greater attention is being given to portfolioat the heart of East Asia's success. The Bank managemeit. Portfolio performance in the Eastcontiniues to analyze the macrocconomnic situa- Asia and Pacific region has traditionally beention in relation to structur-al reforms. For ex- strong and it remiainis so. Studies by the Banlk'sample, it is helping Chinla huild institttiolal ca- Operations Evaluation Department (wofD) ofpacities to deal with an overheated economny com;pleted projects approved since 1980 showand is supporting governmient efforts at eco- that 8 I perc.ent of projects in the region havenomic recovery anid growth in the Philippines. met their development objectives. While thisIn addition to country econiomic memoranida showing is a good one, there can be no sense ofwhichi each year analyze individual macroeco- complacelncy.

nomic conditions, the Bank coniducted public Two complementary ohjectives have beenexpenditure reviews in the Lao 'Il)R and the adopted to impr-ove the performaLice of thePhilippines and provided public investment portfolio: first, to focus on project quality at en-analysis to China on wvays to mainitainl a sounid try by better defininig project objectives andfiscal and macroeconomic policy enviro-nment, simplifying designs at the concept stage, im-It also provided advice on howv to maniage the proving economic analysis, and introducing keymacroeconomic impaot otf large capital flows. performaface impract indicators; seconidl, to im-

The Bank's strategies for the Pacific island na- prove the overall qLuality of the existing stock oftions were articulated in the 1996)(j economri re- projects, with major and visible results in theport, "Pacific Island Fconomies. Recommenda- "development objectives" ratings and dishurse-tions were miade on1 helpinig thesc economilics lenit ratios.- The Regional Offlice has steppedmaintain an enahling macroeconomic environ- up the attention it pays to the semiannual port-ment, reducing anti-export biases in tracde folio reviewvs and is looking hard at every prob-policy and the tax regime, and reducing barriers lem project and the proposed action plan de-to domestic and foreign di-rect investment, signed to move it out of the unsatisfactory

category wvithin six to twelve months.Mainstreaming Business Innovations

The Bank's East Asia and Pacitic Regional Of- - Hmninr, l tfiC\y S, indi Sutdhir Shct ty F)')S Fast AsIaI'sfice begaln to iiainstreail compr-ehlensiv e bust- hi, 'im,,iii, t P 'rici'lw,1h' , wd f'ruwrintie tar rActui. WAaorld hBark

i a i c nsion Paper No 257 \Washington, D.C.ness innovationis at the beginninig of fiscal 1996. S. DISh atUlseliltt r.tio a i', the amIaLeIn t of loarns disbursedThese innovations, which were based on pilot tjnILII;Ig thie I-sI .11 % ea11r as a p11el-IIt.ge of the 0LItstJildiIlg

worik coompleted during the preCVious vear, are c,llitnim nt( A lt the I' g1iiniiig ot thK ";I-

designed to allow the Bank to provide memtibercountries with increased operational outputs

Sr( i1w\ Foi R E vs i As: AND P,N inC 8(

SOUTH ASIA

In 1995, South Asian and can lead to resource mis- improvement as the Southeconomies grew by 5.3 per- allocationi. Asian economies saw thecent. India continued to reap Regional cooperation re- growth of their export earn-substantial benefits from the ceived a boost with the ratifi- ings outpace the increase intrade and investnmenit-liberal- cation by menmbers of the their debt. All countries im-ization reforms undertaken South Asia Association of Re- proved their debt-to-exportafter 1991. Helped by favor- gional Cooperation (SAARC.) of ratios and debt-to-gross na-able monsoons, growth is esti- a trade agreement that intional product ratios. Southmated to be around 6 percent, cluded bilateral trade conces- Asian economies are the onlywhile manufacturing output sions that brought about cuts, group of developing countriesgrowth has averaged 10 per- ranging from 10 percent to that has not restructured itscent in the past two years. In 100 percent in tariff rates cov- debt in the past decade andNepal growth reached a re- ering more than 220 items. Al- has incurred almost no arrearsspectable 4.5 percent, and in though the trade impact is to external creditors. ButPakistan growth recovered af- likely to be small given the maintainiing sound economicter being held downi by a se- low share of intraregional fundamentals and pushingries of poor cotton crops. By trade, the SAARC: countries') ahead with economic reformscontrast, in Bangladesh and in have indicated their intention are essential if the region is toSri Lanka political difficulties to initiate negotiationis to- take full advantage of theand the continuation of civil wards establishing a free trade enormous potential for furtherstrife, respectively, have con- area in the near future. growth in private capital flowstributed to dampen private Reform programs and the to the region. The reductionsector dynamism and restrain active engagement in the of poverty and the improve-growth. world economy by South menit of living conditions con-

Export performance re- Asian counitries are now pav- tinue to be the major objec-mained vigorous, reflecting ing off in termis of higher for- tives of the countries in thetrade reforms, exchange ad- eign investmenit. Private capi- region. Although the inci-justments and buoyanit world tal is becoming increasingly dence and depth of povertydemand. Since 1991, the animportant and now accounts have declined since the latenual average export growth for close to 5(!) percent of the 1980s, the number of poor hasrate for the region has ex- resource flows to the region, increased. The most recent es-ceeded 10 percent, compared compared with 25 percent in timates suggest that about 43witlh an average of 5.6 percent 1990. Although aggregate re- percent of the region's popula-for the 1981-90 period. Nev- source flows fell in 1995 due tion lives on incomes of lessertheless, exports of goods and to a decline in overall portfo- than $1 a day and that Southnonfactor services represent lio flows following the devalu- Asia, with 22 percent of theless than 15 percent of domes- ation of the Mexican peso in wvorld's population, accountstic output, well below the av- December 1994, they were for 40 percent of the world'serage for developing countries. still much higher than in poor. The poor in South AsiaAlthough recent reforms have 1993. Foreign direct invest- tend to be located in ruralsucceeded in loweering trade ment reached a record $2.8 areas, to be illiterate, and tobarriers, South Asian tariffs re- billion, and although India was depend on subsistence agricul-main far higher thani those in the largest recipient (receiving ture and low-skill wage em-other regions. As a result, they about $2 billion), the other ployment for their livelihood.remain an impediment to countries in the region alsogrowth because, in conjunc- shared in the increase. Debttion with other trade restric- indicators showed a marked M. aldiveshl,Baitan, aidition Ni~~~~~~~~~~~~~~~~~~~~aldives, Nepal, Pakistanl, anid

tions, they create distortions Sri lanka.

90 THE WORILD BANK ANNI'Al, RlP()RI 1996

Thus the importance of policies that raise rural key factor accounting for the poor social indica-incomes. tors is the region's historicallv low investment

High and sustained growth that takes place in education and training.) These regional aver-in an environment of sound economic manage- ages, however, mask considerable diversity, bothment is essential for the reduction of poverty. across countries as well as within countries. SriThe good performance of the 1980s that less- Lanka and some Indian states, for example, haveened poverty was not sustainable because it led social indicators that are comparable with thoseto large fiscal and balance-of-payments imbal- in countries with a higher income per capita.ances. But growth is not by itself suffitcient to The status of women is of particular concernreduce poverty. South Asia's social indicators since they are less well educated, have lowerare very poor. Average life expectancy at birth is life expectancy, and work longer houirs thansixty years, half of the adult population is illiter- men. Increasing the access of women to basicate, and children under the age of five experi- educationi, health and nutrition services, andence the highest mortality rate in the world. (A water and sanitation is essential.

TABLE 4-7. LENDING TO BORROWERS IN SOUTH ASIA, BY SECTOR, 1987-96


Annualaverage,

Sector 1987-91 1992 1993 1994 1995 1996

Agriculture 732.6 346.1 451.9 387.8 551.3 684.5Education 271.9 145.6 339.0 220.0 423.7 499.8Electric powerand other energy 897.2 730.0 960.0 230.0 250.0 700.0

Environment 31.1 - 28.8 14.7 168.0 -

Finance 274.5 28.4 65.8 - 916.0 205.0Industry 233.8 - - 250.3 3.2 3.4Mining/Other extractive 68.0 - 12.0 - - 63.0Multisector 82.2 680.2 503.5 - - -

Oil and gas 365.6 330.0 - - 120.8 -

Population, health, and nutrition 156.0 377.5 827.0 233.1 257.9 376.7Public sector management 9.0 - - 296.8 - 92.0Telecommunications/Informatics 100.4 55.0 - - - 35.0Transportation 330.6 306.0 20.0 491.3 - -

Urban development 191.5 - - 246.0 39.0 21.5Water supply and sanitation 161.1 - 208.2 - 275.8 251.6

Total 3,935.5 2,998.8 3,416.2 2,370.0 3,005.7 2,932.5

Of which: IBRD 2,241.5 1,348.0 1,145.0 474.0 1,584.8 1,161.6IDA 1,694.0 1,650.8 2,271.2 1,896.0 1,420.9 1,770.9


NOTE: Details may not add to totals because of rounding.- Zero.

SE( I lON Fo: IR So) I H ASIA 91

achieve these objectives through participatoryapproaches, decentralization, increased involve-ment by the private sector, and a sharper clientfocus.

Consensus Building

Building conselnsus among project beneficia-ries through various communication tools-seminars, meetings, media coverage-is an im-portant aspect of improving ownership of, andlocal commitment to, projects. In many lendingand nonlending activities, the Bank has followeda participatory approach, involving large num-bers of stakeholders in the preparation of eco-nomic and sector work and in project design.The object is to broaden and deepen 'owner-ship" and thus increase the developmental im-pact of the Bank's activities. The preparation of

three sttidies-Sri Lanka 2000, Pakistan 2010,and Bangladesh Public Sector Management-in-

- 59 3::;=2_ volved close collaboration with country coun-terparts. Increased importance is being placedon dissemination of the Bank's analytical work.The Bank's poverty assessment for Pakistan, forexample, was the sole subject of a number ofseminars that brought together government of-ficials, nongovernment organization (NGO) rep-resentatives, staff from donor agencies, privatesector representatives, and academics. The as-sessment also received extensive press coverage.

The formulationi of the Teacher Educationand Teacher Deployment Project (Sri Lanka),

Achieving major poverty reduction is feasible. approved in fiscal 1996, involved manyBut to sustain more rapid growth and integra- in-country seminars and an informal reporttion in the world economy in the coming years, about solutions to the problems of teacher re-South Asian nationis will face tough policy chal- cruitment and assignment practices. In projectlenges that include addressing the deficiencies preparation, participatory approaches are in-in social areas, dealing with infrastructure creasingly becoming the norm. In Bangladeshbottlenecks, reducing still-excessive trade and the Bank focused on building government andinvestment barriers, and extending the scope of donor consensus around a revised scope for thecompetition in domestic factor and product Flood Action Plan that places more emphasis onmarkets. change in people's behavior and less on physical

The Bank continues to support policies that works. In the Coastal Embankment Rehabilita-promote sustainable growth, develop human re- tion Project, designed to prevent the loss of lifesources, extend the benefits to currently disad- and property during cyclones and prevent salin-vantaged groups (such as poor women), and ity intrusion during normal monsoons, commu-overcome obstacles to the sustainability of nity participation is essential to project success.growth, particularly in the environmental and A community-participation approach is beinghuman-resource areas. The current operational used to deal witlh the issues of foreshore andstrategy in the region emphasizes ways to

92 THE WORLD BANK ANNIl'Ai. RFPORT1 996

embankment afforestation, routine embank- in Pakistan and elsewhere, resettlement actionment maintenance, and the resettlement of plans have generally suffered from a number ofsome 2,000 families displaced by the project. weaknesses, including a lack of public consulta-NGos are being employed to assist in commu- tion and participation and shortages of funds tonity mobilization, provide training of partici- compensate the affected population in a timelypants, and facilitate community implementation mannler. As a result, an environimenital resettle-of project activities. ment and review panel was associated with

The implementation of a rural water-supply project preparation from the outset. A proactiveand sanitationi project in Nepal, currentlv at an approach for putblic participation and consulta-advanced stage of preparation, is to be carried tion was ensured, including the setting up of aout with assistance of local NGOS, private firms, public information center at the project site,and community-based organizations with a and sufficienit funds for land acquisition weretrack record in participatory rural development made available well in advance of eminent do-or water supply and sanitation. NGo-imple- main proceedings. An independent organizationmented schemes in Nepal have in the past per- was also established, tasked with maintainingformed better than those that have been cen- regular contacts wvith the local population on1trally managed. NC\Os have a strong presence in land acquisition and compensation issues.Nepal's water-supply sector, accounting for I0 The Nonformal Education Project inpercent of service delivery. The results of a pilot Bangladesh is expected to give "second-chance"project that reviewed more than 100 water-sup- education to some 2.5 million people betweenply schemes sutggest that communities are more the ages of fifteen and twenty-four, of whomvilling to contribute toward capital and opera- 1 3 million are expected to be female. The typi-

tion and maintenance costs-up to 40 percent cal beneficiary is likely to be poor and malnour-of the former and 1(00 percent of the latter- ished, live in a rural area, own no land, havewhen their input is solicited, little opportunity for occupational or geographi-

Public participation was integral to the design cal mobility, be illiterate, and be only seasonallyof Ghazi-Barotha, a run-of-the-river energy employed. The delivery of these programs, de-project that will help reduce the acute energy signed to provide young adults with literacy,shortages in Pakistan. Based on past experience numeracy, and life skills, will be made through

TABLE 4-8. WORLD BANK COMMITMENTS, DISBURSEMENTS, AND NETTRANSFERS IN SOUTH ASIA, 1991-96


India Pakistan Bangladesh Total region


Undishursedcommitments 9,430 2,991 1,589 14,971

Commitments 2,078 11,989 460 3,338 239 1,904 2,933 18,328Grossdisbursements 1,309 10,893 521 3,489 227 1,780 2,253 17,302

Repayments 1,149 5,306 261 1,100 50 189 1,482 6,711Netdisbursements 161 5,587 260 2,388 176 1,590 771 10,591

Interest andcharges 884 4,978 241 1,225 46 236 1,195 6.566

Net transfer -723 609 19 1,163 130 1,354 -424 4,025

NOTE: Disbursements from the iDA Special Fund are included. The countries shown in the table are those with the largestborrowings of Bank funds duringfiscal 1995-96. Details may not add to totals because of rounding.

SfR i Il F( iR So' rH ASIA 93

TABLE 4-9. PROJECTS APPROVED DURING FISCAL YEAR 1996, SOUTH ASIA



BangladeshNonformal Education Project February 27, 1996 2006/2035 7.10 10.50Agricultural Research Management Project February 8, 1996 2006/2035 33.60 50.00Jute Sector Adjustment Credit (IDA reflows) December 12, 1995 2004/2034 2.30 3.40River Bank Protection Project December 5, 1995 2006/2035 78.40 121.90Coastal Embankment Rehabilitation Project November 9, 1995 2006/2035 34.10 53.00

IndiaUttar Pradesh Rural Water Supply andEnvironmental Sanitation Project June 25, 1996 2002/2016 n.a. 59.60

Second District Primary Education Project June 6, 1996 2006/2031 291.70 425.20Coal Sector Environmental and Social Mitigation Project May 16, 1996 2006/2031 43.30 63.00Orissa Power Sector Restructuring Project May 14, 1996 2002/2016 n.a. 350.00Private Infrastructure Finance Project' March 28, 1996 2001/2016 3.40 5.00Private Infrastructure Finance Project, March 28, 1996 2006/2030 n.a. 200.00Second State Health Systems Development Project March 21, 1996 2006/2031 235.50 350.00Orissa Water Resources Consolidation Project December 19, 1995 2006/2030 194.80 290.90Hydrology Project August 22, 1995 2006/2030 90.10 142.00Bombay Sewage Disposal Projecte July 6, 1995 2001/2015 n.a. 167.00Bombay Sewage Disposal Project, July 6, 1995 2005/2030 15.90 25.00

PakistanNorthern Health Program Project June 13, 1996 2006/2031 18.40 26.70NWFP Community Infrastructure and NHAStrengthening Project March 14, 1996 2006/2031 13.70 21.50

Ghazi-Barotha Hydropower Project December 19, 1995 2001/2016 n.a. 350.00Telecommunications Regulation and Privatization

Support Project November 9, 1995 2001/2015 n.a. 35.00Balochistan Community Irrigation and Agriculture Project September 26, 1995 2005/2030 18.50 26.70

Sri LankaPrivate Sector Infrastructure Development Project June 13, 1996 2006/2036 52.90 77.00Teacher Education and Teacher Deployment Project June 13, 1996 2006/2036 44.00 64.10Telecommunications Regulation and Public EnterpriseReform Technical Assistance Project March 26, 1996 2006/2036 10.40 15.00

Total 1,188.10 2,932.50

n.a. = not applicable (rBRD loan).

a. "Blend" loan/credit.

qualified NGOS and local organizations. Nongov- opment of needs-based curriculum, participa-ernmental organizations or other voluntary or- tory teaching methodologies, and materials thatganizations currently provide most nonformal start with the experience of the learners and theeducation instruction in Bangladesh, either in communities where they live. Beneficiary com-programs focusing on nonformal education only munities will participate in identifying prospec-or within broader development projects. The ef- tive stLdenits, providing shelter for classes, andfectiveness of the country's major NGOS (there in recruitinig teachers. Women will be encour-are some 13,000 NGOS operating in Bangladesh) aged to participate in planning and implement-has been tested by both bilateral and multilat- ing project activities, and women teachers willeral organizations. At their best, NGO programs be hired to teach female students.have had real and direct relevance to the needsand aspirations of the learners, demonstrated by Decentralizationclasses with high attendance and low dropout In many existing operations supported by therates. This has been achieved through the devel- Bank there is scope for decentralizing the deliv-

94 TiF W()RILD BANK ANNIIAI REFPoRI 1996

ery of the programs. Pakistan and India, with phasizes a state's sector-policy framework andtheir federal/provincial or state setup, provide institutional strengthening rather than project-the most scope for initiatives toward decentrali- specific issues only. Operations focus on sup-zation. In Pakistan, supervision of the S200 mil- port for institutional and expenditure reform inlion Social Action Program Project, as well as states that are receptive to reform. The $290.9of various health and education credits, has million Orissa Water Resources Consolidationfocused more on provincial implementation, Project finances a program to improve the pro-while the Balochistan Primary Education ductivity and suLstainability of Orissa's water re-Project, approved in fiscal 1993, has fostered sources, involves farmers in decisionmaking anda successful model of community schools planning in irrigation management, and(see Box 4-2). strengthens the state institutional and technical

A project in India's Orissa state is representa- capabilities in water development and planning.tive of the Bank's new lending strategy that em- Orissa was chosen because, in formulating its

BOX 4-2. COMMUNITY PRIMARY SCHOOLS IN BALOCHISTAN

Involving parents in the process of delivering which "trial" schools survive for three years. The vil-primary education has had positive results in lage-education committee ensures that teachers andBalochistan. Village education committees, made up students regularly attend classes.entirely of parents, have established 295 new rural Government support for the community schoolsschools that enroll over 12,000 female primary stu- program has grown with its obvious success, anddents. The community schools component of the with the growing appreciation of its cost-effective-$106 million Balochistan Primary Education Project ness.' The program is now poised for a major expan-began as a pilot experiment in 1992 and is now part sion. Three additional NGOs are being contracted byof a comprehensive program supported by the Bank the government to replicate the community-schoolto improve Balochistan's primary education system. program throughout Balochistan, and a district-levelThe component is being implemented by the Society support structure, which includes improved trainingfor Community Support for Primary Education in facilities for the teachers, is under development.Balochistan, an NGO contracted by the Balochistan About 80 percent of the costs are beingfinanced bygovernment. the government; the remainder comes from a UNICEF

The society sends teams to selected villages where grant. Teacher salaries are paid through the regularthey go door to door encouraging parents to form vil- government recurrent budget. Because the community-lage-education committees to identify local females school program has been so successful, the governmentwilling to teach and who have at least an eighth is also experimenting with two additional measures in-grade education. (It has been found that the involve- volvingfurther devolvement to villages. A rural fellow-ment of parents in the selection of the teacher greatly ship program, now a year old, completely decentral-enhances the accountability of teachers to the com- izes school management and operations, includingmunities. The committees also provide assurance to the hiring of teachers, to the community. Thirtyfathers and husbands that it is all right for daugh- schools, with enrollment of more than 3,000 stu-ters or wives to work outside the family circle.) dents, are currently participating. Under the secondGiven the short supply of qualified female teachers measure, urban fellowship vouchers, which providein rural Balochistan, finding women with enough funds amounting to the salaries of four teachers, areeducation to be trained as teachers is the major con- transferred to urban communities, which then hirestraint to the expansion of the program. Selected can- private providers. Twelve schools, with enrollment ofdidates must pass a competency test, undergo three more than 1, 500 students, are participating.months of training, and teach without compensationfor three months to demonstrate their commitment toteaching and their ability to maintain enrollments.Successful teachers receive a regular teachingpost, . Success can be measured bv the high enrollment and low drop-out rates at the community schools. Girls in community schoolswhile the provincial government makes a commit- also score higher on achievement tests than those in regular govern-ment to build a permanent school in villages in ment schools.

SF( I ON F(u!R SOLITH ASIA 95

new water-resources strategy, it had demon- applicable to contractual savings institutions.strated a commitment to policy and institu- While such a reform program is being formu-tional reforms; multisector water planning, de- lated, and until its key elements are imple-velopment, and allocation, with attention to mented so that a well-functioning domesticenvironmental concerns; improved service de- long-term debt market can emerge, domestic fi-livery; and enhanced participation bv stakehold- nanicial institutions have to play a major role iners. Farmers and other stakeholders are an inte- supporting private investmenit in infrastructure.gral part of the project management and Working with a major nonbanking financialimplemenitation arrangemienits. Emphasis is also companiy that is major-ity privately owined, thebeing placed on fostering stakeholder awareness Private Infrastructure Finance Project, approvedand participation in water planning and man- during fiscal 1996, aims to develop the proto-agement, in particular in areas such as farmer type contractual arrangements for private in-participation in investment decisions, operation vestment in areas such as urbani bypasses andand maintenance, monitorinig of financial alloca- bridges, water and sewerage services, and othertions, and achieving full cost recovery. Over municipal infrastructure, thus facilitating entrytime, this stakeholder involvement is expected of the private sector in the sector in areas here-to foster a demand-driveni and client-orienited tofore dominated by the public sector.government service, as well as progressively in- The Private Infrastructure Finance Project, ascrease involvement of nongoverinment entities wvell as the Telecommunications Regulation andin project implementation. Public Enterprise Reform Technical Assistance

The Second State Health Systems Develop- Project in Sri Lanka are setting up systems toment Project supports three states in putting facilitate private investmiienit in formerly pub-into place a referral health-care system. The licly provided services. The Bank has been in-three-Karnataka, Punijab, and West Bengal- volved in three telecommunications projects inwere included in the project because, in addi- Sri Lanka. The first, closed in 1986, was gener-tion to their early commitment to uLndertake ally successful in separating the telecommunica-health reform, they had forged ahead of other tions and postal departments and supportingstates in setting up a framework to develop a expansion of the telephone network. The sec-package of policy reforms. The project will coII- ond supported reforms that separated the ser-tribute to improving resource allocation, vice provider from the sector regulator. Thestrengthening implementation capacity of the most recent continues reforn and efficient de-agencies in the sector, and enhancing the role of velopment of the sector through the strength-the private sector and of voluntary sectors in eninig of sector regulation and its institutions. Bythe delivery and managemenit of health services. such strengthening, interest of potential private

investor-s should incr-ease.Bringing in the Private Sector

In South Asia, severe absorptive capacity and Client Focus and Quality of Implementationimplementation deficiencies, coupled with fi- The Bank's proactive management of its port-nancial constraints, have resulted in chronic folio has led to major restructuring and supervi-underinvestment in infrastructure. The public sion efforts to improve project performance.sector alone does not have the resources to Portfolio management addresses generic issuesmeet the needs of the sector. One constraint to of quality of entr-y and of implementation bythe expansion of the private sector in this area keeping project designs simple; ensuring thatis the lack of available finance on terms com- key actions on procurement, land acquisition,mensurate with the typical long gestation and and environnmental and governiment clearancesrevenue-earning capacity of infrastructure are obtained prior to project approval; improv-projects. In India, for example, the development ing the mechanism for channeling externalof a domestic long-ter-m debt market requires a funds; restructurinig or cancelinlg componlenits with1number of significant policy reforms in the fi- little scope for improvement; making greater usenancial sector, particularly as regards regulations of consultants to supervise construction work;

96 THE WORL) BANK ANNtIAI. Ri l)RI 1996

and by adhering to the closing dates of loans offices, together with the Bank's headquarters,and credits. reviewed their work programs and identified

The regioni has undertaken a major review of specific tasks that can be devolved later in ainternal business processes in an effort to in- phased manner consistent with the buildup ofcrease efficiencies. Targets that were set for capacity in the field offices.portfolio improvement, with a special focus on Since the beginninig of fiscal 1994, the regionthe Nepal and Bangladesh portfolios, were has undertaken, with borrower participation,closely monitored, and cross-cutting themes in country portfolio-performance reviews thatsectors where problems are concentrated (such address generic issues affecting portfolio perfor-as agriculture and urban development) were mance at the project or sector-specific level.examined. As a result, several steps were taken These reviews have resulted, among otherto improve quality at entry, and ongoinig pro- thinigs, in supervision focus, at the outset, onjects were retrofitted with new performance in- projects deemed to be "at risk" and in increaseddicators. Other measures included sectoral allocation of resources to problem projects withmonitoring of the time taken to prepare lending ambitious community objectives such as theoperations, proactive maniagemenit of droppages Poverty Alleviation Project (Sri Lan ka) andin the lending program, and cost-cutting mea- the Rural Water Supply and Sanitation Projectsures in economic and sector work. (Pakistan).

Local input into project supervision has been The work program of the Bank's South Asiaenhanced by substantial decentralization to Regional Office relies heavily on partnershipsfield offices. This is the continuation of past witlh other institutionis. In particular, collabora-efforts that saw the Bank shift a number of tion is expanding with the Asian Developmenttasks-such as task management for some su- Bank through the formal coordination of coun-pervision, procurement and auditing oversight, try-assistance strategies in both institutions.as well as management of economic analysis A pilot case in Pakistan has resulted in an ex-work, for example-to the resident missions in change of documentation, coordination of sec-Bangladesh, India, and Pakistan. The objective tor strategies, and a better division of labor.of the decentralization exercise, which allows The Bank also continues to play a major rolethe Bank to take advanitage of its field offices' in several aid group meetings, such as those forproximity to the client and of their familiarity Pakistan and Nepal. The India Developmentwith social, cultural, and political contexts, is to Forum which, since 1994, has included officialraise development effectiveniess on the ground. aid agencies and private investors, last met inDuring the past year, the Bank's Sri Lanka resi- June 1995. The forum offers an opportunity fordent representative assumed responsibility for an open exchange of views on topics such asthe management of the Sri Lanka and Maldives state-level adjustment efforts, the continuity ofprograms (including the budget), as wvell as for government policy, and the opportunities forthe policy dialogue with, and the preparation of private sector investment in sectors such asthe country-assistance strategies for, the two infrastructure.countries.

In Pakistan, responsibility for the supervisionof the $200 million Social Action Program (SAP)

Project, approved in fiscal 1994, was shifted tothe resident mission. The SAI' is a complexproject that involves frequent and close interac-tions with federal and provincial govemrnents,NGOs, and local donors. In India, the highly suc-cessful initiative represented by the establish-ment of the procurement and the social devel-opment units in the resident mission is beingstrengthened. In addition, the region's five field

SI.( I 1()N FOIIR S() l ll ASIA 97

EUROPE AND CENTRAL ASIA

ThroughouLt Central and needed in a market economy, labor-force surveys. The initialEastern Europe and the Baltic In many countries-in particu- collapse of output and in-countries, output continued to lar, in Central and Eastern Eu- crease in inequality to market-grow during 1995, and in sev- rope-government spending- economy levels reduced realeral other countries of the and reventies to finance incomes for large portions offormer Soviet Ulnion (FStU)- it-continues in the range of the population, within bothArmenia, Kvrgyz Republic, 50 percent of gross domestic lower- and middle-incomeand Moldova-growth re- product (GDP). In some coun- households. Many householdssumed in 1995. There is evi- tries, however, progress has have been able to adjust to thedence that such growth is be- been made in reducing fiscal new opportunities, however,ing sustained during 1996. In aggregates. For example, the in particular those headed bythe other countries of the FSI , share of public expenditures younger and well-educatedoutput continued to decline, in G;DP in Hungary was cut by workers living in areas with aalthough at a slower rate- some 7 percent to about 55 diversified resource base orabout 6 percent in 1 995 ver- percent in 1995, helping to employed in jobs linked to ex-sus 1 5 percent in the year be- restore macroeconomic equi- ports and the service sector. Atfore. There is some evidence, libria. By contrast, in some FSU the same time, povertv has in-particularly if the new emerg- countries, the decline in pub- creased, and many householdsing private sector is fully in- lic expenditures reflects a remain vulnerable, even included, that 1996 will witness failure to collect broad-based countries where significant re-the bottoming out of output revenues, sources have been directed to-decline. Generally in line with wards social protection. Those

Private sector growth and growtlh trends, the fall in real headed by the very elderlyimprovements in the external earnings has been stemmed. have seen their pensionssector are largely responsible Real wages increased during eroded or, in some cases, havefor recovery of output in those 1 995 throughout most of seen their pensioni eligibilitycouLntries where output grew. Central and Eastern Europe vanish. Other vulnerableFor the region overall, exports and the Baltics. The unem- households include those thatgrew at 22 percent in 1995; ployment rate declined in al- depend on earnings of lessEstonia, Hungary, and most all countries of Central well-educated workers, in lineKazakstan experienced export Europe, but it is leveling out with greater dispersion ofgrowth in excess of 40 percent at rates comparable with those wages in a market economyin current dollar terms. For- of Western Europe, with evi- and their predominance in theeign direct investment nearly dence of structural unemploy- ranks of the structurally un-doubled between 1994 and ment and little turnover in the employed. Growth is critical1995. pool of unemployed. to improving household in-

Throughout the region in- By contrast, there was an come and reducing povertv.flation has been reduced, no- upward drift in unemploy- Early evidence from Polandtably in the countries of the ment--from far lower leve ls-- and Estonia, for example, indi-FStJ. In spite of progress on in- in the countries of the FSU1; by cates that growth has resultedflation, countries in the region the end of 1995, 3 percen1t in a decline in the number ofcontinue to struggle on the of the labor force in Russia poor in 1995. However, anfiscal front as they deal with was registered as being unem- important challenge of thelegacies from the past while, ploved, and 8 percent was transition is to assure that vul-at the same time, they work to unemployed as measured by nerable groups are not leftcreate scaled-down, yet effec- behinidtive public sector structures

98 THE WORI I) BANK ANNI AL. REPOR 1 996

TABLE 4-10. LENDING TO BORROWERS IN EUROPE AND CENTRAL ASIA,BY SECTOR, 1987-96


Annualaverage,

Sector 1987-91 1992 1993 1994 1995 1996

Agriculture 210.6 155.0 525.4 582.9 202.0 185.8Education 89.3 - - 59.6 40.0 5.0Electric powerand other energy 285.4 516.0 93.0 164.8 191.7 325.4

Environment 3.6 - - - 123.0 30.1Finance 351.7 - 55.0 280.0 232.0 638.9Industry 214.9 - - 375.0 - -

Mining/Other extractive - - - - 540.8Multisector 323.4 691.1 1,245.0 566.3 2,000.0 656.8Oil and gas 108.0 - 610.0 691.3 226.3 10.0Population, health, and nutrition 15.0 280.0 91.0 - 220.4 350.4Public sector management 20.0 269.2 335.0 210.0 70.9 505.6Social sector 20.0 - 67.0 10.9 127.5 12.0Telecommunications/Informatics 68.0 - 30.0 153.0 - -

Transportation 265.6 - 378.0 352.0 486.0 868.0Urban development 24.0 200.0 285.0 171.0 418.0 44.3Water supply and sanitation 132.0 32.0 129.5 109.6 161.0 221.5

Total 2,131.5 2,143.3 3,843.9 3,726.4 4,498.8 4,394.6a

Of which: IBRD 2,131.6 2,102.2 3,739.5 3,533.3 3,953.8 3,918.2aIDA - 41.1 104.4 193.1 545.0 476.4


NOTE: Details may not add to totals because of rounding- Zero.a. Includes the refinanced/rescheduled overdue charges of $168 million for Bosnia and Herzegovina.

Activities of the Bank Over the past fout- years, the project portfoliofor the most recent member countries has more

During fiscal 1996, Bosnia and Herzegovina than doubled. The entire portfolio now exceedsfulfilled the requirements providing for suc- $20 billion, of which $12 billion representscession to membership of the Socialist Federal uLndisbursed commitments, as illustrated in Fig-Republic of Yugoslavia (see Box 4-3); twelnty- ure 4-2. The portfolio spans a range of sectors:seven countries are now active borrowers in Support for infrastructure and energy continuesthe Europe and Central Asia (ECA) region. As to be significant; lending in support of the fi-shown in Figure 4-1, the volume of lending was nancial sector and onlending to the private sec-$4.4 billion, roughly comparable to the peak of tor is also robust, as is that for agriculture and$4.5 billion in fiscal 1995. Disbursements in- natural resources; and the share directed to thecreased sharply to more than $3.7 billion.

SF( II()N Fo(taR EI R1PF A\NLD CENTRAI AsIA 99

BOX 4-3. BOSNIA AND HERZEGOVINA: TWO-PRONGED STRATEGYFOR POST-CONFLICT RECOVERY

The signing of the Dayton Peace Agreement on The first project supported by the Trust Fund, anDecember 14, 1995 ended Europe's most destructive Emergency Recovery Project, was approved by thewar in the past fifty years. By providing an institu- Bank's board of executive directors on February 29,tional framework for the rebuilding of Bosnia and 1996. It provides financingfor critical imports forHerzegovina, the agreement opened the doorfor agriculture, power, and transport; lines of credit forpeace in the country. Given Bosnia's exceptional small- and medium-sized enterprises; support for theneeds and circumstances after the war, the Bank functioning of key government institutions; and anadopted a two-pronged strategy to support the Emergency Social Fund to provide minimal levels ofcountry's redevelopment. First, without waitingfor cash assistance for the poorest households duringfinancial normalization and membership in the 1996. The Trust Fund also helped finance six addi-Bank, an initial wave of emergency projects was pre- tional projects-for transport, water supply, agricul-pared to help jump-start the reconstruction effort. In ture, district heating, war-victims rehabilitation, andorder to finance these urgently needed projects, a education-which were approved by the executive$150 million Trust Fund for Bosnia and board later in the fiscal year.Herzegovina was set up, funded through the surplus The second prong of the Bank's strategy is de-account of the International Bank of Reconstruction signed to provide full-scale support to Bosnia's recon-and Development, the World Bank's main lending struction program and systemic transfornation to aarm. Its establishment was fornally approved by the market economy over the medium term. Given thegovernors of the Bank on February 23, 1996. Some vast size of reconstruction needs in Bosnia (they are$25 million is being provided to Bosnia as a grant estimated to be $5.1 billion over the next three-to-for immediate needs, while the remaining $125 mil- four years), its fragile fiscal capacity, and limitedlion is to be lent on "IDA terms": no interest, forty creditworthiness, the Bank stands ready to provideyears' maturity, and a ten-year grace period. an exceptional level of IDA support over the fiscal

social sectors is increasing. Adjustment lending largelv in the mature borrowing countries, wereremains an important vehicle, representing 34 restructured.percent of the portfolio. Many of the projects in newer member coun-

tries are at the earlv stage of implementation,Enhancing Results on the Ground where, typically, projects have a slower rate of

As a result of the rapid increase in the portfo- disbursement. At the same time, legal and ad-lio and in undisbtutsed commitments and in re- miniistrative requir-emiienits within countries fre-sponse to signs of portfolio problems, the Bank quently have delayed effectiveness. The Bankis placing more emphasis on enlhancing the de- has become increasingly alert to internal proce-velopment effectiveness of previously approved dures for processing approvals in borrowingprojects. Increased resources are being devoted countries and in integrating them into the se-to strengthening borrower implementation ca- quence of actions so as to avoid delays in dis-pacity so as to assist the absorptive capacity of bursements. Clients are also becoming morethe borrowers. During the past year, resources farniliar with Bank procedures. The translationdevoted to project supervision increased by 1 2 of standard bidding documents and assistance inpercent (to close to ninlety staff years). The pro- strengthening national procurement procedures,portion of operations with unsatisfactory for example, have facilitated procurement. As aprogress on implementation continiued to de-cline in fiscal 1996, and six problem projects,

100 THF WoRi )BANK ANNI' ,i. RFi()ir 1996

1996-99 period, which would be in addition to the the IBRD, including principal arrears, interest arrears,resources provided by the Trust Fund. To respond to and principal not yet due.the country's needs for immediate significant sup- Approval of the package follows the sanctioning byport, to rebuild infrastructure and jump-start the the Bank's executive board in March of an innova-economy, a significant proportion of this assistance tive arrears-clearance approach that, in addition towill be front-loaded during the first two years and maintaining the financial integrity of the Bank-itwill support further projects in de-mining, electric does not incorporate any financial concessionality onpower, housing, employment-creation, industry, and the part of the IBRD-also ensured a substantial posi-health. At least one Structural Adjustment Credit in tive netflow offunds to Bosnia.support of economic reforms in the enterprise and Donor contributions to pay off one of the highest-banking sectors and in public finance, is anticipated. interest loans have been arranged and include con-Bosnia is expected to borrow a comparatively large tributions from the governments of Italy, the Nether-amount from IDA over the next three years. As its lands, Norway, and Switzerland.creditworthiness improves, IDA lending will be phased The Bank expects-subject to approval of indi-down, and loans from the zBRD are expected to vidual operations by the board-to make a positiveincrease. net transfer of funds to Bosnia of about $450 million

Bosnia, which has fulfilled the conditions of suc- over the next four years, most of which will be oncession to the membership of the former Yugoslavia concessional terms. The Bank's executive directorsin the Bank, can access the Bank's lending resources will revisit the assistance package in 1997. At thatas a result of the approval late in fiscal 1996 of a time, the shape offuture assistance would be basedloan-consolidation package of up to $620.6 million on an assessment of Bosnia's performance and ab-that cleared the country's outstanding obligations to sorptive capacity and its creditworthiness.

result, during fiscal 1996, the ratio of disburse- There has been keen interest among the leadingments to opening balances for projects in- Russian commercial banks to be accredited un-creased from 1 2 percent to 18 percent, com- der the project: Some forty banks have beenpared with a Bankwide average of 19 percent. screened, and thirteen banks have been accred-

To assist project implementation, several in- ited. While disbursements have been limited,vestment projects now include components that the project already has achieved a good part ofstrengthen what often limits project impact: inits institution-building objectives througlh thestitutional capacity to effect systemic chanige. introductioni of international banking standardsFor example, considerable institutional and more extensive disclosure. Again in Russia,strengthening in Russia's banking sector has the auctioning-off of municipal land to the pri-been achieved under the Financial Institutions vate sector, a component of fiscal 1995's Hous-Development Project approved in May 1994. ing Project, has had the effect of introducingAmong the criteria for participation in the the concept of land as an asset, establishing aproject (and follow-up credit lines) are annual transparent system of land allocation and trans-audits by international accounting firms and ad- fer of ownership from local governments to theherence to prudential banking norms that are private sector, and introducing new market-much stricter than central bank regulatioins. oriented planning processes at the city and

oblast levels.

S( rIION FDLI'R EI RO)PE ANI CENTRA\ AsIA 101

fiscal vear. During the CPPR for Russia, for ex-

FIGURE 4-1 ample, important bottlenecks were resolved,TotalPortfoliGandURdisbursedBalanequantitative performance indicators and key tar-Tl t o U,ns Bngets were established, and corrective actions(US$ millions)

were identified for both the government and20000 - the Bank so as to improve the pace of imple-

mentation of the project portfolio. By the endof the fiscal year, performance ratings for indi-vidual projects met or exceeded the expecta-

15000 _ tions for improvements established during the

CPPR, and signed contracts and project disburse-ments accelerated and appear likely to meet

0000 _ | | S | | agreed targets with a delay of between one and1000f B P two months.

In Poland considerable progress was made dur-ing the year on implementing decisions from the

5000 - previous year's country-strategy implementationreview (CSIR), in particular, reallocating resourcesunder lines of credit. The fourth annual CSIR exer-cise resulted in agreement on action plans to

01992 1993 1994 1995 1996

DISBURSED/CANCELLEDFIGURE 4-2E UNDISBURSED Trends in Commitments and Disbursements

TOTAL PORTFOLIO (US$ millions)

5000 _

The portfolio also includes an increasing 4500 -

number of innovative projects that are testingcommunity approaches on ways to reduce thesocial cost of restructuring. In Ukraine, for ex- 4000 -

ample, the Bank is supporting a pilot projectdesigned to mitigate the social and environmen-tal impact of the government's decision to close 3500 - --

coal mines. Ways to close mines safely will betested, and out-of-work miners seeking employ-ment elsewhere will be able to choose assis- 3000 _- ----

tance from a menu of options. The lessons fromthe pilot project will be built into future sup-port for coal-sector restructuring. 2500 - - --

With implementation of the portfolio moving :to center stage, high-level Country Portfolio 0Performance Reviews (CFPRS) with member 2000 1 I 11992 1993 1994 1995 1996countries are now a central vehicle for ensuringeffectiveniess of Bank assistance, particularly in * COMMITMENTS

those countries experienicing implementation 0 DISBURSEMENTS

difficulties. Eight CPPRs wvere held during the

10)2 THE WORLD BANK ANN11'\l. Rl P ,R; 1006

address cross-cutting issues in the portfolio, inprivate sector share of GDP have taken place including amendments and clarifications of Polish countries that recently have implemented com-procurement regulations and extension of sover- prehensive privatization programs such as Geor-eign guarantees. The meeting also was used to ad- gia and Moldova. While progress in privatiz-vance preparations for the next country-assistanice ation of large-scale enterprises remains slowerstrategy, which is being prepared in a participatory than that of small- and medium-scale enter-program with Polish authorities. prises, there were several notable large-scale

The Turkey CPPR addressed mutual concerns privatizations in 1995, including a large part ofof the government and the Bank, with broader the energy sector in Russia, energy-sector utili-participation of the core ministries and imple- ties in Hungary, telecommunications in Hun-menting agencies than in the past. The Bank's gary and the Czech Republic, and several largeresident missions-with presence in almost all banks in Hungary and Poland through sales toactive borrowing member countries-play an private investors. In Romania, the Financial andincreasingly prominent role in routine supervi- Enterprise Sector Adjustment Loan supportssion and monitoring. the accelerated program of mass privatization-

with the design of the cash auctions resulting inSupporting Market Institutions broad local private sector participation. Tfo sup-

The Bank is devoting increasing resources to port the implementation of the masssupporting institutions essential to the function- privatization program in Poland, the Bank fi-ing of private markets and to consolidating nanced the fees of the national investmentprogress in privatization and liberalization, funds.T hrough a combination of new private start- Banking system reforms, combined with aups, formal privatization, and sales of enterprise sound regulatory and legal environment for se-assets to the private sector, the private sector cured lending, are essential to ensure adequateshare of economic activity continues to rise. Pri- access to credit for emerging private andvate sector shares in GDP and employment have privatized enterprises. These twin goals werereached over 50 percent in all but a handful of the focus of adjustment operations in Kazakstancountries in the region. Large increases in the and Kyrgyz Republic. In the face of a banking

TABLE 4-11. WORLD BANK COMMITMENTS, DISBURSEMENTS, AND NETTRANSFERS IN EUROPE AND CENTRAL ASIA, 1991-96


Russia Ukraine Romania Total region


Undisbursedcommitments 3,887 306 665 12,004

Commitments 1,816 6,447 343 1,016 510 1,916 4,395 22,474Grossdisbursements 981 1,710 137 504 215 956 3,736 13,238

Repayments - - - - - - 1,279 7,313Netdisbursements 981 1,710 137 504 215 956 2,457 5,925

Interest andcharges 88 162 24 24 59 136 1,178 5,334

Nettransfer 893 1,548 113 480 156 820 1,279 S91

NoTE: Disbursements from the IDA Special Fund are included. Regional commitment totals forfiscal 1996 andforfiscal1991-96 include the refinanced/rescheduled overdue charges of $168 million for Bosnia and Herzegovina. The countriesshown in the table are those with the largest borrowings of Bank funds during fiscal 1995-96. Details may not add to totalsbecause of rounding.- Zero.

S( I ION 1FOI)R Et ROI' AN[) CENI RAI AsIA 103

crisis in late 1995, the Bank provided timely the sharing of experiences throughout the re-advice to the Government of Latvia on how to gion. It cosponsors and supports financially theaddress the underlyinig structural problems of the Central and Eastern European Privatizationsector. Network that brings together privatization offi-

The Bank is also assisting newly privatized enter- cials from eighteen countries in the region forprises to adjust to the opportunities of the market sharing of experiences. This experience-sharingeconomy. In Moldova, for example, where by end- has as its goal the transferring of the lessons.June 1995, 741 medium- and large-scale enter- learned by the more advanced transition econo-prises and 563 small-scale enterprises had been mies to other countries. The Network's newlyprivatized, a Bank-assisted project is focusing on created Finanicial Forum brings together officialsmeasures to restructure private enterprises and from finance ministries and central banks, as wellbuild indigenous business-management skills. The as securities regulators and market participants, toproject is also providing medium-term finance share their experiences. In Budapest, the Bank or-for private sector enterprises in the context of a ganized a Pension Reform Conference in coopera-strengthened regulatory and supervisory environi- tion with the East-West Institute and the Unitedment for banks. The Bank continues to facilitate States Agency for International Development, at-

tended by officials from seven countries of Eastern

104 THE WORI.I1 BANK ANNUIAI RFi,()oR 1996

and Central Europe. The purpose was to learn rounding the restructuring of the enterprisefrom the experiences of countries in imple- sector, including facilitating the movement ofmenting multipillar pension systems. workers to higher-productivity jobs. In addition

to the pilot project in the coal sector inFacilitating Social Consensus and Reducing Ukraine, reported on earlier, the $500 millionSocial Costs Russia Coal Sector Adjustment Loan and a

Social consensus is critical to the sustain- companion implementationi-assistanice projectability of the economic transition in the will provide assistance to those affected by thatcountries of the region. As understaniding of its country's coal sector-restructuring program.newer member countries and rapport with its Community support and diversification pro-clients have grown, the Bank is increasinigly lis- grams are being supported in five coal basinstening to, and seeking advice from, nonigoverni- (Eastern Donbass, Kisel, Kuizbass, Moscow, andmental organizations (NGOS), community Pechora). To ensure that affected communitiesgroups, local governments, public service pro- receive adecluate information, a countrywideviders, trade unions, the academic communiity, network of major coal cities was established,and the growing private sector. The Armenia and public informationi and social impact-Social Investment Fund Project, for example, monitoring activities are being supported.aims to promote self-help and community soli- Elsewlhere, Bank-assisted adjustment lendingdarity. The project was designed based on the continiues to facilitate budgetary outlavs to as-lessons learned from a pilot implemented by an sist workers dismissed from large, distressed en-NCO. With financial support from the project, terprises. During the past fiscal year incentivesthe communities identify eligible microprojects and financial support were provided to morebased on their priorities, manage the implemeni- than ()5,000 workers leaving troubled enter-tation of their microproject, select conitractors prises in Romania, as well as to workers inand supervisors, and devise a plan for maintain- Kazakstan, Kvrgyz Republic, and FY'R

ing the facility after microproject completion. A Macedonia. Projects currently under implemen-project to support the divestiture of housing tation that support emplovment services-from Russian enterprises incorporated the views from countries as diverse as Hungarv andand concernis of tenants into both project design Kazakstani-are enabling workers not only toand the implementation process through sur- collect uniemplovment compensation but also toveys of tenant preferences and the establish- receive counseling to facilitate their search forment of condominium associations as the most other jobs. Such couLnseling has proven to beeffective way to encourage voluntary resident very cost-effective.participation in decisions. Through the Bank's Given that the incidence of poverty remainsEconomic Development Institute (.DI), the high in the region, the Bank accelerated itsBank is supporting seminiars to infornii parlia- work in this area, completinig an additional fivementarians and a broad range of' civil society- poverty assessments during the year. Eight suchin the Kvrgyz Republic and UJkrainie, for ex- assessmenits-designed to provide the basis for aample-on transition issues. 'Fhe ED), wvith collaborative approach to poverty reduction byfinancial support from Switzerland, also orga- countrv officials and the Bank-have so farnized the Former Yugoslav Republic (FYR) of been completed, with several others underMacedonia's Forum for Senior Policvmakers preparation. Restoration of growth is essential("Vision of the Future"), which broughlt to- to reverse the poverty trends. At the same time,gether the country's president, parliamentar- given that fiscal constraints are tight, the Bank'sians, private sector representatives, academics, adjustment lendinig is supporting improved tar-journalists, and out-of-country policymakers geting of social safety net assistance to the poor.\vith relevant experiences to share for a wide- In Georgia, for example, the government is de-ranging dicussion of the future of the country. veloping a backup program of social assistance,

A critical element of the Bank's assistanceprogram is to support the social agenda Sur-

SI ( I I()N FO Ei 'ROP[ ANL) CEN FRAL ACIA 1 5)3

TABLE 4-12. PROJECTS APPROVED DURING FISCAL YEAR 1996,EUROPE AND CENTRAL ASIA



AlbaniaNational Roads Project June 20, 1996 2006/2036 17.40 25.00Forestry Project April 16, 1996 2006/2036 5.50 8.00Power Transmission and Distribution Project March 5, 1996 2006/2036 19.70 29.50Agro-Processing Development Project December 12, 1995 2006/2035 4.10 6.00Urban Works and Microenterprise Pilot Project August 1, 1995 2005/2035 2.60 4.00

ArmeniaStructural Adjustment Credit February 29, 1996 2006/2030 40.40 60.00Structural Adjustment Technical Assistance Credit February 29, 1996 2006/2030 2.60 3.80Social Investment Fund Project November 9, 1995 2006/2030 8.10 12.00Highway Project September 14, 1995 2006/2030 10.30 16.00

AzerbaijanRehabilitation Credit August 22, 1995 2005/2030 41.60 65.00Institution Building Technical Assistance Project July 25, 1995 2005/2030 11.50 18.00

Bosnia and HerzegovinaEmergency Education Reconstruction Project June 28, 1996 2006/2031 3.50 5.00War Victims Rehabilitation Project June 28, 1996 2006/2031 3.50 5.00

BulgariaHealth Sector Restructuring Project April 9, 1996 2001/2016 n.a. 26.00Railway Rehabilitation Project July 6, 1995 2000/2015 n.a. 95.00

CroatiaCapital Markets Development Project April 4, 1996 2001/2013 n.a. 9.50Technical Assistance Project March 26, 1996 2001/2013 n.a. 5.00Farmer Support Services Project March 21, 1996 2001/2013 n.a. 17.00

EstoniaAgriculture Project March 5, 1996 2001/2012 n.a. 15.30

GeorgiaHealth Project Apri] 25, 1996 2006/2031 9.70 14.00Structural Adjustment Credit April 18, 1996 2006/2031 41.30 60.00Structural Adjustment Technical Assistance Project April 18, 1996 2006/2031 3.30 4.80Transport Rehabilitation Project January 18, 1996 2006/2030 8.10 12.00

KazakstanFinancial SectorAdiustment Loan June 25, 1996 2001/2016 n.a. 180.00Irrigation and Drainage Improvement Project June 18, 1996 2001/2016 n.a. 80.00

Kyrgyz RepublicFinancial Sector Adjustment Credit June 25, 1996 2006/2031 31.20 45.00Financial Sector Technical Assistance Project June 25, 1996 2006/2031 2.40 3.40Power and District Heating Rehabilitation Project May 23, 1996 2006/2031 13.60 20.00Sheep Development Project May 14, 1996 2006/2031 7.80 11.60Health Sector Reform Project May 14, 1996 2006/2030 12.60 18.50

LatviaMunicipal Services Development Project December 14, 1995 2000/2012 n.a. 27.30

focusing on1 the most vulnerable groups-in par- being increased with assistance from the Bank.ticular, children, the elderly, and invalids-to as- Armenia's attempt to target its humanitarian as-sist destitute families who are not protected by sistance better centers around a pioneeringother programs. In Armenia, child allowances, attempt to track and quantify the numbers offocused in particular on younger children, are needy in a "social passport," and it is being

106 Tl;E WORlO BANK ANNLIAi. REpo)i 1996



LithuaniaKlaipeda Geothermal Demonstration Project May 9, 1996 2001/2016 n.a. 5.90Private Agriculture Development Project April 2, 1996 2001/2016 n.a. 30.00Siauliai Environment Project December 5, 1995 1999/2011 n.a. 6.20

Macedonia, former Yugoslav Republic ofHealth SectorTransition Project June 20, 1996 2006/2031 11.80 16.90Private Sector Development Project May 16, 1996 2002/2016 n.a. 12.00Private Farmer Support Project May 16, 1996 2006/2031 5.40 7.90

MoldovaEnergy Project May 23, 1996 2001/2016 n.a. 10.00First Agriculture Project May 7, 1996 2001/2016 n.a. 10.00First Private Sector Development Project February 8, 1996 2001/2016 n.a. 35.00

PolandBielsko-Biala Water and Wastewater Project June 4, 1996 2001/2013 n.a. 21.50Power Transmission Project November 18, 1995 2000/2012 n.a. 160.00

RomaniaFinancial and Enterprise Sector Adjustment Loan January 18, 1996 2001/2015 n.a. 280.00Railway Rehabilitation Project January 18, 1996 2001/2016 n.a. 120.00Power Sector Rehabilitation and Modernization Project August 29, 1995 2001/2015 n.a. 110.00

Russian FederationCoal Sector Restructuring ImplementationAssistance Project June 27, 1996 2001/2013 n.a. 25.00

Coal Sector Adjustment Loan June 27, 1996 2001/2013 n.a. 500.00Legal Reform Project June 13, 1996 2001/2013 n.a. 58.00Medical Equipment Project June 4, 1996 2001/2013 n.a. 270.00Capital Market Development Project May 30, 1996 2001/20]3 n.a. 89.00Enterprise Housing Divestiture Project May 7, 1996 2002/2011 n.a. 300.00Community Social Infrastructure Project April 30, 1996 2001/2013 n.a. 200.00Bridge Rehabilitation Project March 28, 1996 2001/2013 n.a. 350.00Standards Development Project November 30, 1995 2001/2012 n. a. 24.00

SloveniaEnvironment Project May 28, 1996 2002/2011 n.a. 23.90

TajikistanInstitution Building Technical Assistance Project May 16, 1996 2006/2036 3.4 5.00

TurkeyRoad Improvement and Traffic Safety Project June 20, 1996 2002/2013 n.a. 250.00Public Financial Management Project September 21, 1995 1999/2011 n.a. 62.00

UkraineEnterprise DevelopmentAdjustment Loan June 27, 1996 2001/2013 n.a. 310.00Coal Pilot Project May 16, 1996 2000/2013 n.a. 15.81Housing Project March 14, 1996 2001/2013 n.a. 17.00

Total 321.40 4,226.81n a. = not applicable (IBRn loan).

a. Does not include the refinanced/rescheduled overdue charges of $168 million for Bosnia and Herzegovina.

reviewed as a possible vehicle for targeting gen- Rationalizing the Public Sectoreral cash transfers. Again in Armenia, as well asin Albania, projects are providing employment The Bank is also helping to facilitate theopportunities through nmicroprojects managed process by which the state adapts its role andby local communities for marginalized and vul- priorities in the transition to a market economy,nerable groups.

SI( I 1()1 Foi R ELIRKI'L ANI) CENIRAI. AsIA 107

and during the past year, it expanded its In Kazakstan, the Bank is working on the reha-nonlendinig support in this area. Public expendi- bilitation of the Uzen oil field in a way that fa-ture reviews were carried out in nine counltries cilitates foreign investment.of the FSI , and measures were identified to im-prove fiscal managemenit and reorient expendi- Support for Agriculture and Environmentaltures. In several counitries of the region, unider- RehabiltationIying budgetary systems require revamping. In In most countries of the region reform in ag-Turkey, for example, expenditure management riculture has been slow. But, because most stateand control is hampered by complex and out- or collective farms had been inefficienit produc-dated budgetary framework and systems, the ers and because the commercial links wereplethora of agencies and funds that are effec- highly monopolistic, restructuring of farms andtively outside the budgetary process, and defi- marketing structures are essential prerequisitesciencies in cash managemenit and public sector to increased agricultural productivity. For ex-accounting; partly as a result, government example, the breakup of Kazakstan's grain mo-penditures have exceeded targets in recent nopoly during implementation of a structuralyears. The Bank-assisted Public Financial Man- adjustment loan approved in fiscal 1995 hasagement Project is attempting to enhance the been instrumental in dramatically improvinggovernment budget's usefulniess as a fiscal farmgate prices. (As late as 1994, the monopolypolicy instrumenit and as a tool for managinig was paying only about 50 percent of world mar-public finances by reducillg the number of ket prices for the purchase of domestically pro-sources of government spending that now oper- duced grain.) While access to private plots ofate outside budgetary channlels and by introduc- land has been essential in helping householdsing budgeting of public administration positions across the region cope with the general eco-and payroll. A similar effort, also supported by nomic crisis, the difficulty of reaching politicalthe Bank, is under way in Kazakstan. and social consensus on issues of land owner-

About a third of the Bank's portfolio in the ship has compounded the difficulties of creatingregion is supporting efforts to increase the ef- an environment in which private rural activityfectiveness of governments' role in critical infra- can flourish. The Bank continues to activelystructure and energy networks. Road-improve- pursue reform in this area through an activemenit projects currently under way in Albania dialogue and outreach program. In Georgia, itand Russia have introduced competitive bidding convened a series of seminars attended by offi-by private contractors for awarding contracts. In cials at the highest levels of government; its ag-Bulgaria, reforms, aimed at ensuring that the ricultural sector work in Armenia is being usedrailways operate independently in a commercial as a textbook published by the government; andmanner according to market principles are be- in Romania, Bank staff together with local offi-ing supported by the Bank arid Europeani and cials, are analyzinig problems that conspir-e toNorth American cofinanciers. hinder rural entrepreneurship and are develop-

Capacity rehabilitation for both energy pro- ing policy options to mitigate them.duction and distribution needs public arid pri- The Bank is also supporting a number of ac-vate sector collaboration. Through its sector tivities aimed at the enierging class of privatework and program of donor coordination, the farmers, including operations approved duringBank is assisting Ukraine to develop a competi- the past vear strpporting extension and researchtive electricity subsector that will be an attrac- services in Croatia and FYR Macedonia. In Esto-tive target for private investriierits in the future. nia, the Bank is supporting efforts to stimulate

the rural economy through a project that ishelping to privatize rural lands arid privatizearid rehabilitate select rur-al infrastructure.

I ()8 THF WORI D BANK ANNI Ai RIj R11OU I)6

The Bank is also working with its member activities. Through innovative finanicing of pol-countries to reverse serious environmental deg- lution reduction in Sloveniia, the Bank is dem-radation. It continued to assist governments in onstrating how solutions to lo cal environmentaldeveloping anid implementing national environ- problems-conversions from low-qualitv coal tomental action plans (NFAPS). One Waas com- gas or district heat to reduce dust and sulfur di-pleted in the fiscal year, adding to eleven comii- oxide-canl also address regional ancd global con-pleted earlier, with preparationi uLider- way for cerns over sulftur The Global Environmentan additional five. Strengthening environmental Facility and the Bank are wvorking together oninstitutionial capacity is also receiving increasinig another coal-to-gas conversion project in Polandattention. to reduce greenhliouse gas emissionis, particularly

Although Ukraine has serious environimenital those of carboni dioxide and methane. The Bankproblems, especially in its industrial regions, lo- continiued to be involved in regional programscal environmental agencies lack experienice with to address degr-adationi of economically impor-modern regulatory practices. An Institutionial tant bodies of water-the Aral, Baltic, Blac-k,Developmenit FuLid grant in Donetsk ohlast, one Caspian, and Mediterranean seas, as xvell as theof Ukraine's "hot spots," is suppor-ting capacity [)anube riverbuilding and practical training in monitoringand controlling pollution, carrying out environll-mental audits of main polluting plants and im-pact assessments of investment projects, and ap-plying economic instruments in regulatory

Si' ii iw Fut,lr Ei \r \'Cl' ) l\'lR \i. A!\IA 1 (19

LATIN AMERICA AND THE CARIBBEAN

Mixed results characterized higher interest rates. Substan- peso contributed to a sharpeconomic performance in the tial efforts at macroeconomic rise in inflation.countries of Latin America stabilization occurred in Events of the past year haveand the Caribbean (LAC) in Mexico, stabilizing financial showni that the region's econo-1995. While the aggregate markets and lhelpinig to pro- mies are now sufficiently dif-regional economy grew by mote the recovery of investor ferentiated-and world finan-only 0.8 percent, sharp dis- and consumer contfidence. In cial markets sufficientlytinctions persisted among the Argentina, both an adjust- sophisticated-that adversecountries of the region. The ment of the fiscal stance and developments in one countryDecemlber 1994 peso crisis in an orderly restructuring of the need not pull others down.Mexico led to a substanitial 6.9 banking system combined to This realization, if accompa-percent decline in gross do- foster a climate more condu- nied by continued pursuit ofmestic product (GDP) in 1995. cive to financial flows, which, prudenit macroeconomic poli-In Argentinia and lruiguay, the by year's end, had returned cies, should serve to reducemain countries affected by international reserves and volatility and increase stabilityispill-over" effects from the monetary aggregates to their in the region.Mexican crisis, the economies pre-crisis levels. The credibil- The crisis did, however, un-contracted by 4.4 and 2.5 per- ity of the Real Plan in Brazil derline significant fragility andcent, respectively. also contributed to a sharp in- vulnerability in many of the

However, the rest of the re- crease in capital inflows from region's financial and bankinggioI xveathered the effects of abroad, including strong flows systems-not only in Mexicothe Mexican crisis quite well. of foreign direct investment. but also in Argentina and aFigure 4-3 indicates that ag- Amonig the other large couIn- number of other countries.gregate regional groxvth- tries, only Venezuela, where With Bank support, countriesexcluding Argentina and confidence in policies waaned are examining the main prob-Mexico-reached 4.3 percent. and investmenit stagnated, ex- lems in these sectors and areBrazil, the region's largest perienced a run on reserves, formulating reform programs.economy, with approximately culninlating in a devaluation Much work remains ahead,40 percent of the regional of 41 percent in Decembher. however.

DoP, grexv at a moderate 4.2 Inflation, which in the past In both Mexico and Argen-percent. tended to he exacerbated by tina, the weak position of the

The cGD' in Caribbean coun- macroeconomic crises, fell in banking system contributedtries grew only slightly slower most countries in 1995, with to the poor GDP perforimlance.on average-3.6 percent in the median inflation rate Investors-international arid1995. The two most populous dropping to ]2.3 percent domestic-feared that a col-countries, Haiti and the Do- from 16.8 percent in 1 994. lapse of important banksminicani Republic, were Throughout the region, coun- could result inl major eco-among the fastest growing, tries with historically high in- nomic dislocations, massivewith (DI' rising above 4 per- flationi rates have sucessfully and costly bailout programs,cent in both. containied inflation over the and a resurgence of inflation.

The "containment" of the past several vears; that success In the case of Argentina, thepeso crisis to a relatively small was maintained in 1995. An weakniess of the banking sys-group of countries was the exception to the regional pat- tem tested the convertibilitymajor economic news in the tern was Mexico, where the program and, in particular, theregion in 1995. By mid year, severe depreciation of the exchange-rate regime. Theinternational capital markets economic program survivedwere once again accessible to the crisis intact, possiblymost countries, albeit at

110 TuFr WORLM BANK ANNIUA. REPORF 1996

strengthened from the government's cornmit-ment to it under adverse conditiois.

In Brazil, the weakness of the banking sys- FIGURE 4-3tem-and especially of state-owned banks-- Comparison of Aggregate LAChas added significant uncertainty to the public GDP GDP Growthdeficit picture. Central hank schemes to provide Growth Rate

liquidity to private banks in distress and trea-sury obligations to recapitalize public banks willadd significanit amounts to public debt over the 4

1995-96 period.An important component of the Venezuelan

program is to recapitalize and strengthen the 3 - a

banking system. This program has a series ofelements, including strengthening the regula-tory framework, reprivatizing banks previously 2 -

taken over by the government, and liquidatinigthose banks deemed nonviable.

Challenges Ahead

Looking beyond recent developments, thelonger-ternm challenges facing the Latin America ° 1994 995 996

and Caribbean regioni include the following:Increasing eand sustaining economic gro'th. The 0 LACTOTAL

ILatin America anid Caribbean region is capable -LAC,EXCLUDING MEXICO &ARGENTINA

of achieving a growthi rate of 6 percent bv theturn of the centurvy-under reasonabile assump-tions about the evolution of the external envi-ronment and of appropriate domestic policies.Increased domestic savings rates will he crucial trade-creating regional arrangements such asfor more robust growth to occtir. One of the ME.RC S(I.R, the regional trade agreement be-important lessons of the Mexican crisis is that tween Argentina, Brazil, I'araguay, and Uruguay.domestic savings matter greatly. They are im- MI vR(os1 IR has been one of the more successfulportant because they help finan(ce the accumu- trade agreemenlts in the region, if not in the de-lation of capital and, thus, facilitate growth, and veloping world as a whole. It has continued tobecause high domestic savings are associated foster free trade, as mar-ked by the recentwith lower current-account deficits. LIatin associate membership of Chile and the antici-America, however, has traditionally had very pated associate membership of Bolivia. The re-low saving rates: In 1 980, for example, the region, at a minimnum, must sustain the robustgion saved on average only 19 percent of its export performance of 1995, when the nominalGDP; by 1994 this ratio was basically unialtered. value of total exports increased by 22.7 percentThis contrasts sharply with fast-growing regions over 1994. In Mvlexico and Argentina, exportsof the world that save 35 percent or more of responded particularly xvell to the nexw eco-,rP. Most policymakers now recognize that rais- nomic circumstances, growing at 33.2 percenting domestic savings is one of the funidamenital and 30.1 percent, respectively, in 1995. Duringchallenges faced by the region. the next eighteen months, a rapid recovery of

Factors enhancing the region's international these economies will requnire maintaining thecompetitiveness will also he important. These momentum in export expanision, as well as aunderlinie the necessity of continued and sus-tained trade liberalization, including through

Sl (1O0N FoI JR LATFIN AMERIC:A AND I-IFE CARIBBEAN I11

signiificant increase in the level of initernal the region over the past ten to fifteen years,demand. A more significant regional challenge however, has been in the cities, anid as such is ais to complement traditional trade in primary relatively new anid intractable phenomenon.products with fast growth in manufactures. Poverty in the region is also closely related toThere is also scope for productivity inicreases the distribution of income, which is still verythrouigh port reform and privatizationi, as skewed in nmost COuintries.well as the application of initernational quality Reduicinig urban poverty will require increas-standards. ing emiploymenit opportuniities for the urban

Reduicinzg poverty and inequality. Poverty in poor; extending access to urban services; mak-Latin America anid the Caribbean increased sub- ing social safety nets m-ore effective in uirban ar-stantiallv during the debt crisis of thet 1 98 0s, eas; increasing the productivity of the informalbut stabilized withi the resumption of growth in econiomy: increasing labor-force participationthe early 1 990s. Robust rates of econom-ic ex- rates; and reforminig municipal administration.pansion in recent years in counitries like Chile Reduicinig rural povertv will requiire eliminatinganid Peru, the payoffs fromi economic reforms in regulatory barriers to enable the agriculturalArgentina and elsewhere, and the decrease in sector to take advantage of trade liberalization.civil strife in parts of Cenitral Amierica have all Increasing the access of the rural poor to landhelped to reduce poverty, and social services is another importan-t require-

Nevertheless, poverty and inequality consti- mient for rural poverty reduction.tute the "Achilles heel" of Latin American de- Promnoting humian-resource development. Build-velopment. Abouit one fourth of the region's ing human capital is aniother ma jor challengepopulation lives oni less than $1 a day. The poor- confronting the countries of the region. With anest 10 percent-to-2O percenit live in ruiral areas average of 5.2 years' eduication for the adult(and are often indigenious people). This ruiral population, the region lags about two vears be-poverty tenids to be concenitrated in remote ar- hinid countries at comparable development lev-eas with low agricuiltuiral productivity and few els elsewhere. In additioni to expaniding accessnionfarm jobs. Most of the increase in poverty in

I I 2 THE WCORi.r BANK ANNI JAI, RF.r )R I 1096

to educational opportunities for the poor, there lic sector institutions. The effects of austerityis a critical need to improve the quality of edu- have been compounded by econiomic misman-cation, particularlv at the primary level. About agement. A number of governments in the re-1 00 million people in the region are without gion have recently implemented policy reformsbasic health services, and about 2.2 million ba- designed to reduce the role of the state in eco-bies are born every year without any medical nomic activities. However, major improvementsassistance. As a consequence, the occurrence of in the efficiency of government services as theydisease is significantly higher than might be ex- affect the lives of ordinary people-particularlypected given the region's average income level. the quality and coverage of social services-re-

Refonring anld mnodernizing the state. Repeated main to be attained. Among the challenges areeconomic crises have taken a heavy toll on pub- strengthening the management of public finance,

TABLE 4-13. LENDING TO BORROWERS IN LATIN AMERICA ANDTHE CARIBBEAN, BY SECTOR, 1987-96


Annualaverage,

Sector 1987-91 1992 1993 1994 1995 1996

Agriculture 862.2 1,118.6 390.0 407.9 460.7 412.8Education 181.7 597.1 588.7 1,083.3 747.1 493.1Electric powerand other energy 496.1 42.5 345.1 - 161.5 465.4

Environment 59.6 501.0 16.3 457.0 83.5 115.0Finance 1,055.0 827.0 125.0 604.5 1,909.5 11.9Industry 312.9 - - - - 8.0Mining/Other extractive 51.4 - 250.0 14.0 - 41.0Multisector 757.1 782.8 1,318.1 122.2 328.6 110.9Oil and gas 91.7 78.6 11.8 - 11.0 10.6Population, health, and nutrition 186.6 37.3 329.0 331.0 94.6 1,086.4Public sector management 322.2 362.2 443.0 58.3 596.4 666.4Social sector 7.9 10.2 45.0 130.0 500.0 262.0Telecommunications/Informatics 13.4 - - - - -Transportation 485.4 564.2 1,697.5 595.0 371.0 530.0Urban development 384.5 490.0 170.0 422.0 575.0 20.0Water supply and sanitation 224.3 250.0 439.0 521.5 221.5 204.0

Total 5,492.0 5,661.5 6,168.5 4,746.7 6,060.4 4,437.5

Of which: IBRD 5,328.8 5,256.5 5,851.8 4,434.5 5,715.3 4,047.2IDA 163.1 405.0 316.7 312.2 345.2 390.3


NOTE: Details may not add to totals because of rounding.- Zero.

SHJ IO'N Fo( IR LATIN ANiFRI(A AN I) IF CARIFREAN 11

building effective legal and regulatory functions, In addition, business-process innovations cur-reforming the judiciary, and improving the civil rently under way in the Bank's Latin Americaservice. A regionwide process of governmental and the Caribbean Regional Office are likely todecentralization is already under way. This has enhance the development effectiveness of theenormous promise, but difficult questions re- region's portfolio (see Box 4-4).main concerning the modalities of fiscal decen- Prograrn highilights. In fiscal 1996, a total oftralization and the matching of revenues and fifty-four newt projects, totaling $4.4 billion inexpenditures at the local level. ne;w conmmitmenits, was approved. As part of an

effort by the Bank's Regional Office to improveBank Operations, Fiscal 1996 loan quality and simplify operations, the average

As part of a coordinated effort to strengthen project size declined to $82 million, down fromportfolio quality, the Bank is paving closer at- $85 millioni in fiscal 1995 and $101 million intention to simplifying projects, focusing condi- the year before that.tions only on actions essential for successful In addition to a substanitial program of infra-project implementation, and working with structtire lending, the lending program includedclients to improve project irnpact and sustain- support to strengthen financial systems, as wellability. Following a visit by Bank President as a range of projects to assist in improved envi-James Wolfensohn to the Northeast of Brazil in ronmental management. The Bank lent $500July, 1995, a joint commission was established million for banking reform in Argentina, part ofwith the Government of Brazil to recommend a program seeking to increase confidence in theways of improving the effectiveness of Bank- banking system through a restoration of sol-financed operations in Brazil, with a special fo- vency and consolidation in the private bankingcus on the Northeast. The commission is identi- sector. The Bolivia program inclided fourfying possible ways of addressing some of the projects to develop the regulatory and legalpersistent problems that have impeded the de- framework to support the countryvs capitaliza-velopment impact of projects from being fully tion program, including the institutional capac-realized in four areas: edtication, health, rural ity to carry out financial sector reforms. To helpdevelopment, and the environment. ensure that future economic growth is also

TABLE 4-14. WORLD BANK COMMITMENTS, DISBURSEMENTS, AND NETTRANSFERS IN LATIN AMERICA AND THE CARIBBEAN, 1991-96


Brazil Mexico Argentina Total region


Undisbursedcommitments 4,512 5,483 2,380 18,709

Commitments 875 5,135 527 8,969 1,509 6,555 4,438 32,311Grossdisbursements 1,082 4,394 1,473 7,616 733 4,126 4,632 24,962

Repayments 1,315 7,794 1,461 6,548 260 2,002 4,886 26,145Netdisbursements -232 -3,400 12 1,069 472 2,124 -253 -1,183

Interest andcharges 453 3,497 951 5,463 317 1,509 2,588 16,742

Nettransfer -685 -6,897 -939 -4,394 155 615 -2,841 -17,925

NOTE: Disbursements from the {DA Special Fund are included. The countries shown in the table are those with the largestborrowings of Bank funds during fiscal 1995-96. Details may not add to totals because of rounding

114 THF WoRRI D BANK ANNI 'AI Rl:l'ORT 199()

BOX 4-4. PROCESS CHANGES BEGUN IN THE LATIN AMERICAAND THE CARIBBEAN REGION

In fiscal 1996, the Latin America and the cal resources (with the exception of those housed inCaribbean Regional Office of the World Bank imple- the Human Capital Development Group) to bear onmented a series of innovations designed to enhance specific initiatives at the request of country depart-implementation and effectiveness of Bank-assisted ments.projects and responsiveness to client needs; decentral- Human Capital Development Group. The Hu-ize responsibility to line managers and staff; and man Capital Development Group is a Regionwidestrengthen professional and technical expertise. pilot initiative that involves pooling the Region's hu-

Highlights of the process innovations undertaken man-resource staff-in the areas of education, healthduring the fiscal year include: and nutrition, poverty reduction, and gender con-

Revised country-assistance strategy. Perfor- cerns-into one discrete unit. The goal is to integratemance benchmarks will be spelled out in advance for better the Regional human-resource sector knowledgeindividual countries and important sectors. In help- and technical skills with the work of all the countrying countries to attain the development objectives, departments. As with staff in the Sector Leadershipgreater decisionmaking authority and accountability Group, staff in the Human Capital Developmenthave been delegated to country departments and Group will be deployed on an as-needed basis formanagers within the Region. project and analytical work in specific countries.

Changes in country departments. Effective April NGO liaison. The Region held two regional Bank-1, 1996, the former Country Department II (LA 2) NGO meetings to strengthen collaboration, particu-was replaced by separate departments for Mexico larly in the areas of poverty reduction. One outcomeand Central America. The bulk of the Mexico de- of the first meeting was the establishment of NGO

partment staff including the department director, is liaison officers in resident missions. Liaison officersbeing transferred to the field (in an expanded resi- are responsible for facilitating closer relations be-dent mission based in Mexico City). This is intended tween the Bank and grassroots organizations on allto improve the Bank's ability to tailor its lending and aspects of the Bank's country activities, In particular,nonlending services to Mexico's evolving needs; they will work to improve the flow of information be-quicken response time for both projects and analyti- tween the Bank and grassroots groups, help increasecal work; facilitate better management of existing NGO participation in Bank projects and economicprojects; and draw upon local expertise. In addition, and sector work, and explore new avenues for col-a Sector Leadership Group has been created to serve laboration.both new departments. This group will bring techni-

environmentally sustainable, Bank projects are Education Reform Project, which aimed at im-incorporating innovative approaches to environ- proving the quality of higher education throughmental assessments, such as regional and a new resource-allocation system, and bysectoral studies, and participation by nongov- strengthening planning and managerial capaci-ernmental organizations (NGOS). Some infra- ties. The Health Sector Reform Project in Brazilstructure projects include support for technical seeks to assist with policy reforms and improveassistance and training to improve environmen- the delivery of care under the national health-tal assessment capabilities of borrowers. care program, the sole source of publicly sup-

The Regional Office is also undertaking an ported care for the poor. A series of basic edu-extensive program of lending for both educationi cation projects was undertakeni in Dominiica,and health. Several of these operations were in the Dominican Republic, Grenada, Guyana,Argentina, including the Decentralization and Panama, and Trinidad and Tobago, whichImprovement of Secondary Education and includes initiatives to enhance access and quality,Polymodal Education Development Project, strengthen instittitional capacities for manage-which facilitated the decentralization of secondment reform, improve teacher training, refurbishary education to the provinces, and the Higher facilities, and develop curricula. In Haiti, the

Sl'( I lN Foi JR LATIN ANILRI(.\ AND IFHF CARIBBEAN I I 5

TABLE 4-15. PROJECTS APPROVED DURING FISCAL YEAR 1996,LATIN AMERICA AND THE CARIBBEAN



ArgentinaHealth Insurance Reform Loan April 25, 1996 2002/2011 n.a. 350.00Health Insurance Technical Assistance Project April 25, 1996 2002/2011 n.a. 25.00Decentralization and Improvement of SecondaryEducation and Polymodal Education Development Project December 21, 1995 2001/2015 n.a. 115.50

Enterprise Export Development Project November 28, 1995 2001/2010 n.a. 38.50Social Protection Project November 21, 1995 2001/2011 n.a. 152.00Public Investment Strengthening TechnicalAssistance Project November 21, 1995 1999/2011 n.a. 16.00

Forestry Development Project October 24, 1995 2001/2010 n.a. 16.00Provincial Health Sector Development Project August 3, 1995 2001/2010 n.a. 101.40Mining Development Technical Assistance Project July 25, 1995 2001/2010 n.a. 30.00Bank Reform Loan July 25, 1995 2001/2010 n.a. 500.00Higher Education Reform Project July 6, 1995 2001/2010 n.a. 165.00

BoliviaRural Water and Sanitation Project January 16, 1996 2006/2035 13.40 20.00Environment, Industry, and Mining Project December 21, 1995 2006/2035 7.40 11.00Capitalization Program Adjustment Credit July 6, 1995 2005/2035 34.00 50.00Capitalization Program Adjustment Credit (IDA reflows) December 12, 1995 2005/2035 5.30 8.00Financial Markets and Pension Reform TechnicalAssistance Project November 30, 1995 2006/2035 6.10 9.00

Power Sector Reform Technical Assistance Project November 30, 1995 2006/2035 3.50 5.10Rural Communities Development Project August 3, 1995 2005/2035 9.60 15.00Hydrocarbon Sector Reform and CapitalizationTechnical Assistance Project July 6, 1995 2005/2035 6.80 10.64

BrazilRural Poverty Alleviation and Natural

Resources Management Project June 27, 1996 2001/2011 n.a. 175.00Health Sector Reform Projet-REFoRsUs June 20, 1996 2001/2011 n.a. 300.00Federal Railways Restructuring and

Privatization Project June 20, 1996 2002/2011 n.a. 350.00Environmental Conservation andRehabilitation Project July 11, 1995 2001/2010 n.a. 50.00

ChileSecano Rural Poverty Alleviation and Natural ResourceManagement Project January 16, 1996 2001/2011 n.a. 15.00

ColombiaBogota Urban Transport Project May 23, 1996 2001/2013 n.a. 65.00Urban Environment MVlanagement Project January 16, 1996 2001/2013 n.a. 20.00Santa Fe I Water Supply and Sewerage RehabilitationProject November 16, 1995 2001/2012 n.a. 145.00

Power Market Development Project November 16, 1995 1999/2011 n.a. 249.30

DominicaBasic Education Reform Project' December 21, 1995 2006/2030 2.10 3.07Basic Education Reform Project' December 21, 1995 1999/2011 n.a. 3.07

Dominican RepublicSecond Basic Education Development Project November 9, 1995 2001/2015 n.a. 37.00

EcuadorEnvironmental Management Technical Assistance Project April 4, 1996 2000/2009 n.a. 15.00

El SalvadorLand Administration Project March 5, 1996 2000/2013 n.a. 50.00Basic Education Modemization Project September 28, 1995 2001/2012 n.a. 34.00Competitiveness Enhancement Technical Assistance Project September 28, 1995 2001/2012 n. a. 16.00Energy Sector Modernization Project July 6, 1995 2000/2015 n.a. 65.00

116 Ti IE WOR I i) BA\K AN\I Al Ri:F ()RI 1996



GrenadaBasic Education Reform Project, December 21, 1995 2006/2030 n.a. 3.83Basic Education Reform Project' December 21, 1995 1999/2011 2.60 3.83

GuyanaSecondary School Reform Project June 11, 1996 2006/2036 11.80 17.30Private Sector Development Adjustment Credit (IDA reflows) December 12, 1995 2005/2035 2.00 2.90

HaitiEmployment Generation Project July 11, 1995 2005/2035 31.80 50.00

HondurasPublic Sector Modernization TechnicalAssistance Credit February 8, 1996 2006/2035 6.40 9.60

Public Sector Modernization Structural Adjustment Credit February 8, 1996 2006/2035 36.60 55.00Public Sector Modernization Structural Adjustment Credit

(IDA reflows) February 8, 1996 2006/2035 17.60 26.40Third Social Investment Fund Project July 11, 1995 2005/2035 19.10 30.00

JamaicaGeneration Recovery and Improvement Project September 28, 1995 1999/2010 n.a. 21,00

MexicoWater Resources Management Project June 20, 1996 2000/2011 n.a. 186.50Second Basic Health Care Project September 26, 1995 1999/2011 n.a. 310.00Privatization Technical Assistance Project August 29, 1995 1999/2010 n.a. 30.00

NicaraguaRoad Rehabilitation and Maintenance Project May 30, 1996 2006/2036 17.20 25.00Second Economic Recovery Credit (IDA reflows) December 12, 1995 2004/2034 3.90 5.80Second Social Investment Fund Project July 11, 1995 2005/2035 19.10 30.00

PanamaDebt and Debt Service Reduction Loan March 28, 1996 2000/2011 n.a. 30.00Basic Education Project March 28, 1996 2000/2011 n.a. 35.00

ParaguaySecondary Education Improvement Project September 14, 1995 1999/2011 n.a. 24.50

PeruRural Road Rehabilitation and Maintenance Project December 5, 1995 2001/2012 n.a. 90.00

St. LuciaWatershed and Environmental Management Project' July 11, 1995 2001/2010 n.a. 2.65Watershed and Environmental Management Project' July 11, 1995 2005/2030 1.70 2.65

Trinidad and TobagoBasic Education Project November 16, 1995 1999/2011 n.a. 51.00

UruguayPowerTransmission and Distribution Project October 31, 1995 2001/2010 n.a. 125.00

VenezuelaWater and Sewerage Decentralization Project

in the State of Monagas June 4, 1996 2002/2013 n.a. 39.00

Total 258.00 4,437.54n.a. = not applicable (,BRD loan).

a. "Blend" loan/credit.

SF ( IIoN FOI IR LATIN AN1ERI( A AND I'HI- CARIBBEAN I 1 7

Bank's accelerated program in response to the Economic and SectorWorkeconomic crisis included an employment-gen-eration project. The Regional Office maintained its efforts to

One recent innovation in lending is taking improve the impact of the Bank's program ofplace in Brazil, where the Bank is supporting economic and sector studies as instrumenits offiscal adjustment, privatization and analysis and dialogue with governments, adopt-concessioning, and administrative reforms at the ing a range of formats and styles as appropriate.subnational level-particularly in states with The trend has been away from general countrystrong fiscal management and project-imple- economic memoranda toward more issue-mentatioin capacities. Honduras received a loan focused analyses of economywide and sectoralsupporting the implementation of its public topics. A recurring theme is the challenge ofsector reform program. This program includes efficient management at the subnational level,modernizing public management systems and both provincial and state (in the cases of Argen-strengthening financial managemenit. Several tina, Brazil, and Mexico, for example), as wellprojects devoted substantial attention to as the regional and municipal levels. An assess-strengtheninlg the regulatory frameworks of spe- ment of state creditworthiness in Brazil was un-cific sectors, particularly with respect to recent dertaken as a basis for assisting with fiscal ad-privatizations. They included the Power Market justment and structural reform programs at theDevelopment Project (Colombia), the Railroads state level. In Argentina's Tucuman provinceRestructuring and Privatization Project (Brazil), and in Mexico's Chiapas state, the Bank under-the Private Sector Development Project took studies (in the case of Tucuman jointly(Guyana), and the Second Basic Health Care with the IF, and in the case of Chiapas togetherProject and the Water Resources Project with the IFC and Inter-American Development(Mexico). Bank) to design strategies for stronger private

The regional lendinig program includes a large sector involvement in these regions. Inamount of cofinanciing activity-$2.1 billion for Tucuman, the resulting action plan is now beingtwenty-six projects. The Inter-American Devel- implemented with support from the Bank andopment Bank (IDB) provided the largest amount the IFC. Again in Argentina, another studv in co-of cofinancing-$1 .6 billion. The Health Sector operation with the IFC was carried out to iden-Reform Project (Brazil) provides a vivid ex- tify reforms for Cordoba province. Substantialample of close collaboration between the Bank work has also been undertaken on the manage-and the IDB. This $750 million project (sup- rial implications of democratization and decen-ported by $300 million in Bank funds and $350 tralization, particularly in the case of Colombia.million from the IB) was jointly identified and The program of poverty assessments contin-appraised by the two institutionis. It is being ued, bringing the total number completed tomanaged by one administrative unit (composed tweenty-five. These documents have helped toof Bank and IDB personnel), with joint supervi- provide a framework for the design of country-sory efforts. Even the loan agreements by the specific poverty-reduction strategies. Unem-two institutions are essentially identical, witlh ployment has become a serious political andcorrespondinig conditionality matrices and pro- social issue in several countries. Thus, in Argen-curement procedures. tina, a detailed quantitative look at the struc-

ture of unemployment was carried out, and thelinks between unemployment and collectivebargaining arrangements were explored. Work is

118 TiFE WORIlD BANK ANNI Al. Rim'u)R I 996

under way on labor-market characteristics atboth the nationial and regional levels in a num-ber of countries.

As is customar-y every second year, the Bankhosted the Consultative Group for CaribbeanEconomic Developmenit. In preparationi for thisJune 1996 meetinig, a program of analytic workwas undertaken, focusing on growth, trade,public sector maniagemenit, and poverty. Followv-ing the successful format of the previous meet-ing of the group, represenitatives from the pri-vate sector were again invited to participate inall aspects of the meeting, which ranged fromindividual country sessions to Caribbean

Businiess For-um and Tourism and Inforimatics

Promotion conferenices.

Si hIN [) h IA LI I ANiiiiM \ \'1i' 111. Jm .RlSA\ J P1

MIDDLE EAST AND NORTH AFRICA

The Middle East and North stave off the prospect of stability; unidertakinig some-Africa (1ENIA) region achieved growth-threateninlg water times difficult outwriard-looking,a modest upswinlg in growth scarcity. And the European private sector-oriented, andof gross domestic product Ullion (El-) launched a poten- competitiveness-enihanlcing((-DP) in 1995. Among tie tiallv far-reaching initiative for a economic reform; and makingeconomies in which the Bank Euro-Mediterranean Partner- complementary investments inis active, Algeria, Egypt, Iran, ship and Economiiic Area, wlhich the phvsical and humani capi-Tunisia, and the West Bank envisages complete free trade in tal required for rapid and bal-and Gaza all achieved G;DFP industrial goods betweein the anced growth.growth ranging from 2.5 per- FU and eight Arab countries hycent to 5 percent. Jordan and 201 (. Tunisia and Morocco The Bank's Operationall ebanon both continued to do have already signed free trade Responsewell, with growvth in excess of agreements with the Et l; nego- In recent years, NlLNA COUn1-

6 percent. Others fared less tiations are under way with tries have increasingly tuLr-iedwell. Morocco, hard hit by se- Egypt, Jordan, and Lehanon, towards the path of openness,vere drought, suffered an esti- while preliminary discussions reform, and private sector-mated decline in cLa of over 6 have heen comnpleted with hased competitiveniess, al-percent. Yemen's GDP grexv by Algeria and have begun withl thougll some are movingjust over 1 percent. Syria. faster than others or have

Recenit developmnents. Restor- The challenzge of global gained from starting the pro-ing rapid, widely shared, and integration. Accelerating re- cess earlier thani others. Dur-environmentally sustainiable gional and national growth ing the year under review, asgrowth remainls a top priority rates wvill depend above all on in the past, the Bank has sup-for the region. In additioni, fur- MENA couLitries' capacity to ported country efforts withther progress toward a just match external opportuL1ities both lendinig and nonlendingand comprehensive peace will with domestic policies and services.be crucial for securing region- programs that ready them for Promotinig precondtlitions j6 rwide stahility and security on greater integration into the raipid growth. Almost half ofwhich increased investment wider global economy. The the year's $1,595 million offlows and more rapid growtlh Bank's Global Economnic Pros- Bank and IDA comimitmienltsin turni demand. The past year pects for 1996 clearly indicate to NIFNA\ counitries was devotedhas offered both opportullities that the 'fast integrators' to macroeconomic stabiliza-and challenges in this respect. among the developing coun- tion and private sector and ex-

Agreement was reached on tries have reaped substanitial port-oriented reform. A $300the establishment of the new rewards from their participa- million Structural AdjustmentMiddle East Development tion in this process, while the Loan to Algeria is supportillgBank, whiclh Would provide an slow or lagging integrators the government's determinedadditional development fund- have fallen behind-and can efforts to turn towards a mar-ing source for the region. The he expecte(l to continiue to do ket-oriented economy. Theseseconid Middle East/North Af- so as the international iivest- efforts include measures torica Economic Summit was ment flows that fuel growth further cult the budget deficitheld in Amman, Jordani; at the increasingly reward the fast in- and move forward withSummit, the Bank called for tegrators and penalize the I. r Bank. 1996. Coba

initiatives to develop the slowv ones. ' The MlENA regioIn Ec nomWc ProsPectS ,1o tlte Developing

region's water resources to today fa-ces the challenige of Countries 1699. Washington, D.C.

securing rapid integrationi basedon mainitaininlg macroeconomic

1 2(0 THE WVORI.L BANK ANNI Ali RKi()R I 1 996

privatization and public enterprise and financial the year has further deepened the Bank's com-sector reform. The Government of Yemen has mitnient to both countries' refornm efforts. Inresponded to problems of inflation, unemploy- Tunisia, a $38.7 million loan for the Industryment, and budgetary and balance-of-payments Support Institutions Ulpgrading Project willdeficits with a comprehensive stabilization and help Tunisiani firnms to integrate into the pro-adjustment program, to be assisted by an $80 posed Euro-Med Economic Area by strengtheningmillion IDA Economic Recovery Credit that will the techniical services provided to industry,support macroeconomic stabilization; including sectorally oriented technical centers andprivatization; and trade, regulatory, and public nationial metrology services. Morocco has aenterprise reform-all essential building blocks strong and diversified private sector, but itsfor balanced private sector-led development, rapid further expansioni is inhibited by a short-

NMlorocco anid Tunisia were the earliest eco- age of resources to finance private investmenit.nomic reformers in the region. Lending during A $25() million Financial Mlarkets Development

TABLE 4-16. LENDING TO BORROWERS IN MIDDLE EAST AND NORTH AFRICA,BY SECTOR, 1987-96


Annualaverage,

Sector 1987-91 1992 1993 1994 1995 1996

Agriculture 275.0 299.2 463.0 601.7 231.6 100.0Education 132.7 75.0 115.2 33.0 158.3 138.3Electric power

and other energy 122.9 220.0 165.0 80.0 - -Environment - - - 6.0 113.0 78.0

Finance 127.2 250.0 - 120.0 - 408.7Industry 101.7 - - -

Mining/Other extractive 11.2 - - -

Multisector 270.0 275.0 - - 150.0 380.0Oil and gas 17.9 160.0 - - - 35.0Population, health, and nutrition 76.4 26.8 188.0 - 35.7 85.2Public sector management 35.8 9.0 - 19.9 - 20.0Social sector - - - - - 223.0Telecommunications/Informatics 32.2 - 100.0 20.0 - -

Tourism - - 130.0 - - -

Transportation 135.0 - 35.0 - 239.1 37.0Urban development 98.0 110.0 684.0 - 51.0 50.0Water supply and sanitation 87.1 57.0 - 270.0 - 40.0

Total 1,523.1 1,482.0 1,880.2 1,150.6 978.7 1,595.2

Of which: IBRD 1,433.4 1,324.0 1,756.4 1,050.6 925.4 1,276.7IDA 89.6 158.0 123.8 100.0 53.3 318.5


NOTE: Details may not add to totals because of rounding- Zero.

Sen riox) FoIIR \Nfii L i \NL) NoRI Fj AFRI( A 1 2)1

Loan, the first element of a proposed multiyear and a possible microenterprise program. Inprivate sector-development lending program, is Egypt, an IDA credit of $120 million is providingsupporting a governmilenlt policy package that a seconid tranche of support to that country'swill help liberate the finanicial system to serve Social Fund for Development (SFD), which isprivate sector expansioni needs more effectively, expected to create about 50,000 permanenlt

'IwO loans to Jordan during the year will help jobs and about 20,000 temporary jobs annuallyunderpini the governmrient's strategy for increas- between 1997 and the year 2000.ing the economy's outward orientation and in- Worker training was the focus of two opera-tegration into the global economy. Recognizing tions during the year, in TFunisia and Yemen. Athe constraints on growth represented by $60 million loan to Tunisia for the SecondJordan's small doomestic market, the govern- Training and Employment Project is helping toment plans to intensify its efforts to pursue a make trainin1g services more demand-driven andpolicy of private sector-led, export-oriented de- responsive to employers' needs by moving to avelopment. The $80( million Economic Reform system emphasizing enterprise-based training.and Development Loan is supporting a govern- Yemen's vocational training (vi) system is beingment policy package designed to promote new upgraded ancd expanded with the help of aforeign and domestic investment and foster $24.3 million IDA credit, which is also support-greater integration into world markets. lo help ing adult education and training programs fo-speed this process, the governmenit has also pre- Cusing on women, special v I programs for thepared an Export Sector Development Program, handicapped, and establishment of a largely em-whose aim is to enhlance the interniationial coill- ployer-finanaced Skills Development Fund.petitiveness of Jordaniani firms. The $40( million Despite heavy past investment, MENA COUn1-

Bank-assisted Export Development Project will tries' education and health services are stillhelp to finance this program. struggling to deliver high levels of literacy and

Supportinig hzumnani development. Humani devel- adequate health care, especially to rural popula-opment, broadly defined, is simultaneously an tions and women-and, in several cases, currentessential complement to, and a core component provision can barely keep pace with rapidof, a national strategy for balanced growth and population growth. 'These issues were directlyglobal competitiveniess. Projects to support hu- addressed in lending to Morocco and Egypt dur-man development accounted for slightly more ing the year. The Bank is supporting Morocco'sthan one third of the value of lendinig to M-:NA ininovative, multisectoral Social Priorities Pro-countries during the year. An IBRD loan to Alge- gram (spp) with three linked loans-a $68 mil-ria and an IL)A credit to Yemen are helping offset lion loan for health (focusing on basic healththe adverse effects of these countries' adjust- care and safe motherhood/family planning);ment programs on the poor by providing tem- a $54 million loan for education (focusing onporary employment in small public works ac- primary schoolinig, especially in rural areastivities. In Yemeni, the $25 million Public and for girls); and a $28 million loan for ruralWorks Project is expected to create up to 10,(000 employmlielnt-promotion through labor-intensivemanyears of labor-intenisive employment in a large public works. The si)P is targeted at Morocco'snumber of small-scale maintenance or extension poorest provinces, and will be implemented onprograms. In Algeria, a $50( millioni Bank loan a coordinated basis at the same sites so as tofor the Social Safety Net Support Project is maximize its synergistic effects. In Egypt, thehelping to launich an innovative pilot public aim of a $1 7.2 millioni II)A credit is to strengthenworks program that is expected to create nearly the operational and strategic leadership capacity20,000 maniyears of temporary work in poorly of the new Ministry of Population and Familyserved areas with high unemployment. The Planininig and promote family-planning services inproject has also been designed to strengthen currenitly underserved areas, particularly rural ar-Algeria's existing social safety net and support eas of Upper Egypt, whlere fertility remiiainscommuniity-level testing of a newv Social Fund high.

122 THE WRID BL!ANKi ANNNAI RiiP() I I 9INt

One other operation during the year was de-signed to ameliorate the lives of less well-off orvulnerable groups. The $100 million EmergencyDrought Recovery Project in Morocco will ad-dress the devastating effects of last year'sdrought on the (largely poor) rural population lby providing seeds and livestock feed, and byimproving rural water supply. Over the longerrLn, the project is expected to begin the processof reducing the vulnerability of the rural popu-lation to severe drought through greater pre-paredness, better rural infrastructure, and im-proved management of natural resources.

Investing in infrastnrcture and environmentalprotection. The remainder of the year's lendingfocused on twvo other aspects of rapid grovvth-providing the infrastructure needed to supportit and cleaning up the industrial pollution thatcan be one of its unintended consequences. In-frastructure investments included one transpor-tation operation-a $37 million IDA credit forthe Transport Rehabilitation Project in Yemen.This operation focuses on highway and airportrehabilitation works of high priority for theeconomy. It also includes assistance to the gov-ernment in devising financial mechanisms tomake the roads network self-supporting.

Efficient water-resource management and ser- -:vice delivery to consumer-s is a top pr-iority for the region. Water scarcity nlot only creates se-vere health hazards and costs, but also has thepotential to cripple economic growth prospectsin many MENA countries. A $50 million loan toLebanon is providing supplementary financingfor the water and wastewater-relbabilitationcomponents of the Emergency Reconstruction reform was the focus of the $21) million loanl inand Rehabilitation Project, approved in fiscal support of the Administrative Rehabilitation1994. The supplementary loan will help reduce Project to Lebanon, where restoring the basicthe health risks associated with contaminated capacity of public administration to functionwater and is expected to encourage refugees to effectively is a national priority.return to their towns and villages. The $40 mil- Finally, two of the year's operations addressedlion Second Sewerage and Water Reuse Project the need to clean up environrmental "hot spots'in Morocco will also have substantial health where industrial pollution is threatening humanbenefits-especially among the poor, since most health and essential natural resources. A $78sewerage extensions financed are to be in low- million loan to Algeria is addressing industrialincome neighborhoods-as well as help to ease air and water pollution by supporting hazardouswater constraints by treating wastewater for safe emissions reduction and treatment of industrialreuse. Administrative capacity building and wastewater. In Egypt, a $20 million IBRD loall

and a $1 5 million [A credit are supporting the

ShI ()N FoI1IR MIL)L v EA'I \NI) NuK i1 At RICA 123

Pollution Abatenaellt Project, whose centerpiece World Bank partial risk guarantee in Septemberis a Pollutioni Abatement Funid-to be estab- 1 995, was successfully oversubscribed, generat-lished in the National Bank of Egvpt acting as ing new private investment for the improve-an Apex bank-that Would finance loans and ment of telecommunications services in Jordan.grants throtigh selected local participating banks This was also the Bank's first guarantee opera-for industrial cleanup. (In the past, local finan- tion in the telecommunications sector world-cial institutions had not provided medium- and wide.long-term fiinancinig for environmental invest- An increasingly important and diverse com-ments because of a lack of technical capacitv ponent of nonlending services to MENA countriesanid flamiliarity with environimental lending.) is Bank policy and analytical work aimed at

helping governments refine and implementNonlending Services Are Diversified their national and sectoral development strate-

Operational lendinig across the increasingly gies. This work is of two main kinds. The firstbroad front exemplified by the year's record involves the preparation of broad-based coun-remains at the core of the Bank's support for try-assistance strategy (CAs) reports for each ac-strong and balanced economic growth in MFNA tive borrowing country in the region, whichcountries. But itlst as the lendinig program itself form the basis of stibsequent operational workis broadening to acco1mmodate new needs, it and the ongoing policy dialogtie between theis also being complemented by an increasingly Bank and national authorities. The second typediverse 'product mix" of nonilending services, of analytical work consists of policy and action-designed to expand the effectiveness of Bank oriented reports on topics of priority concern tosupport for governm11enits' development efforts. MENA governments. While this category of out-

An innovative ex-ample of broadening the put still includes important traditional productsproduct mix of Bank services during the year such as country economic memoranda (two ofwas the first use of the Bank's guarantee ftinc- which were prepared durinig the year, in a newtioIn in connection with a MlENA government series of MENA Economic Studies), it now em-bond issue on international markets. The bond, braces an increasingly diverse range ofissued by the Governmenit of Jordan with a topical areas. Examples from the past year

TABLE 4-17. WORLD BANK COMMITMENTS, DISBURSEMENTS, AND NETTRANSFERS IN MIDDLE EAST AND NORTH AFRICA, 1991-96


Algeria Morocco Tunisia Total region


Undisbursed

commitments 1,111 1,485 752 5,545

Commitments 428 1,785 540 2,510 99 1,236 1,595 9,106

Gross

disbursements 505 2,001 485 2,238 142 1,122 1,585 7,553

Repayments 249 1,166 344 1,724 199 961 1,095 5,813

Net

disbursements 256 836 141 514 -57 161 490 1,740

Interest and

charges 145 692 275 1,556 125 716 743 4,249

Net transfer 1]1 144 -134 -1,042 -182 -555 -253 -2,509

NOTE: Disbursements from the IDA Special Fund are included. The countries shown in the table are those with the largestborrowings of Bank funds during fiscal 1995-96. Details may not add to totals because of rounding.

124 l HL WoRI.o B\NK ANNI Al. R[r(v; I 1996

include reports on a framework for private sec- is critical for the credibility and grassroots effec-tor development in Algeria, on private partici- tiveness of the work of a development instittu-pation in infrastructure in Morocco, on trans- tion stuch as the Bank. Improving portfolio manl-port strategy in Tunisia, and on issues arising for agement, and conducting it in increasingly closeEgypt with respect to a European Unioni-Egypt partnerslhip with (especially grassroots) localFree Trade Agreement-along with an Environi- counterparts, therefore coontiniued to be a topmental Action Plan for l ebanon, a Water Sector priority. Features of this effort included furtherReview and a report on women in the labor acceleration of the pace and level of disburse-force for Jordan, and a poverty assessment for ments (as in Algeria), support for more effectiveYemen. implementation (as in Yemen), and portfolio

Maximizing the development impact of op- restructuring and rationalizationi in several coun1-

erations in terms of timely results on the ground tries, both as a result of formal Countnr Portfolio

TABLE 4-18. PROJECTS APPROVED DURING FISCAL YEAR 1996,MIDDLE EAST AND NORTH AFRICA



AlgeriaIndustrial Pollution Control Project June 11, 1996 2001/2013 n.a. 78.00Structural Adjustment Loan April 25, 1996 2(001/2013 n.a. 300.00Social Safety Net Support Project April 25, 1996 2001/2013 n.a. 50.00

EgyptPollution Abatement Project' Mav 21, 1996 2002/2016 n.a. 20.00Pollution Abatement Project, May 21, 1996 2006/2031 10.3 15.00Second Social Fund Project May 21, 1996 2006/203] 82.3 120.00Population Project March21, 1996 2006/2030 11.9 17.20

JordanExport Development Project March 28, 1996 2001/2016 n.a. 40.00Economic Reform and Development Loan October 24, 1995 2001/2015 n.a. 80.00

LebanonEmergency Reconstruction and Rehabilitation Project (supplement) May 30, 1996 2000/2013 n.a. 50.00Administrative Rehabilitation Project August 3, 1995 2001/2012 n.a. 20.00

MoroccoBasic Education Project May 30, 1996 2001/2016 n.a. 54.00Basic Health Project May 30, 1996 2001/2016 n.a. 68.00Coordination and Monitoring of Social Programs

and Labor Promotion Project May 30, 1996 2001/2016 n.a. 28.00Second Sewerage and Water Re-Use Project April 30, 1996 2001/2016 n.a. 40.00Emergency Drought Recovery Project August 29, 1995 1999/2011 n.a. 100.00Financial Markets Development Loan July 27, 1995 1999/2010 n.a. 250.00

TunisiaSecondTraining and Employment Project June 13, 1996 2002/2013 n.a. 60.00Industry Support Institutions Upgrading Project June 13, 1996 2001/2013 n.a. 38.70

YemenPublic Works Project June 11, 1996 2006/2036 17.00 25.00Economic Recovery Credit April 9, 1996 2006/2035 53.70 80.00Transport Rehabilitation Project February 20, 1996 2006/2035 24.70 37.00Vocational Training Project December 12, 1995 2006/2035 15.70 24.30

Total 215.60 1,595.20

n.a. = not applicable (IBRD loan).

a. "Blend' loan/credit.

Si ( I 1( N IF)I R Mim)i' E. FrA\ I 1,N[) NOlR I I I Al RR A I D25

Performance Reviews and on a project-by-project proposed Euro-Mediterranean Economic Area).basis. As a result, the percentage of poorly per- As the region increasingly gains a foothold informing projects in the portfolio is on the de- the wider international economy, fostering pro-cline, and the percentage of projects completed ductive partnerships will hecome increasinglyon time in line with their objectives is on the central to MENA countries' prospects. The Bankrise. The Bank considers enhanced portfolio expects to support partnership-building formanagement as central to the most fundamental prosperity in the MENA region still further in thedevelopment indicator of all-concrete welfare years to come.gains for the citizens of NIENA coUnItries.

Other steps taken to improve portfolioperformance, and thuis on-the-grounld results,include insistence on policy improvements be-fore executive board approval (actions on keypolicy measures are normally required prior toproject appraisal, for example), use of 'cluster"supervision to increase the cost-effectivenessof supervisioni (for example, in Yemen), moreextensive use of local consultanIts (Tunisia),strengtheninig compliance with audit covenants(Morocco), and continiued strengtheninlg of resi-dent missions and a shift of supervision respon-sibility to them (West Bank and Gaza, Egypt,and Yemen).

Finially, the Bank has continued to play animportant role as a connlector and catalyst of in-ternational partnerships for economlic develop-ment in MFNA. Partnership-promoting activitiesduring the past year included traditional aid co-ordinationi work, involvinig conveniing and chair-ing consultative groups that bring together NlENAgovernmenits and their donor supporters; neweraid-coordinationi functionis, such as acting as theSecretariat for the Ad Hoc l.iaison Committeefor the West Bank and Gaza, anid for the JointIsraeli-Jordan Steering Committee for the Jor-dan Rift Valley Development Program; contini-ued active sponsorslhip of bodies as diverse asthe multinationial Mediterranean EnvironmentalTechniical Assistance Program and the Economic

Research Forum (an intraregional network ofeconomists and development practitioners); andworking increasinigly closely with hilateral andmultilateral extraregional partners on activitiesranging from cofinancing individuial lendinig op-erations to supporting major initiatives that ad-dress critical problems (such as the MENA Water

Partnership referred to earlier) or build poten-tially transforming new linkages betweeni MENA

countries and the outside world (such as the

126 THE W(l!RI BANK ANNI IA[. Ri oi 1F 1 96

SUMMARIES OF PROJEcICS APPROVEI) FOR IBRD, IDA,TRI1SI FtUND) FOR BOSNIA AND HFRZEGOVINA,

AND TRU1ST FtJND FOR GAZA ASS ISTANCFE IN FISCAI. 1996

AGRICULTURE

t0 Albania IDA-$8 million. Degraded state-owned forest and pastul-e areas will herestored, and their stistainable use promoted. Total cost: $21 .6 million.

O§ Albania II)A-$6 million. The agroprocessing sector vill be developed, and themarketing of farm prodticts will be improved thtereby improving theincomile of poorer farmers and increasing the availability of food productsto urbani consumers. Total cost: $7.1 million.

fO§ Argentina [IR[)-$1 6 million . fficient and sustainable growsth of forest plantationand timber-processing institutionis will be stipported; in addition, some3,000 poor rural familiec will benefit from a program that targets,through techinical assistance and grants, grotips of small farmers forwhom agroforestry can play a cenitral role in improving farmer practices.Total cost $26i 7 million.

tO§Bangladeshi i[o;--$121 1. millioni. Between 2 millioni anid 3 million people living alongthe right bank of the Brahmaputra river at Mathurapara-Sariakandi,mostly poor, marginal farmers, will beniefit from a project that will helpfiBliace constructioni works to prevent the river from breaching its banlikand flooding the hinterland and to secure the Jamurna bridge. Total cost:$156 million.

tO§ Bangladesh i)j,-.-$53 million. Some 1 .2 million people will benefit from implemeni-

tation of coastal embankment rehabilitation works that will providepartial protectioni fromil cyclones of crops, infrastructure, and of humanlives. Since the poor are least able to recover from cyclone diamage andthe conctructioni works under this pr-oject will tise their labor intenisively,the poor will disproportionately benefit. Total cost: $87.8 million.

0 Bangladesh II)A--$5() million. An agricultural research-managemnent project designedto assist the government in generating and transferrinig agricultural tech-nology to producers, thereby increasing income and employmenlt, will bestipported. Total cost: $59.1 million.

tO§ Bolivia ll\--$1 5 million. Rurtal poverty shotild be reduced and the incomes ofthe rural poor increased throuigh a project that will execLute rural invest-ments iclentified and formulated following a participatory planninlg

process. Total cost: $31 million.

Bosnia aiid Trist Fund for Bosnia and Herzegovina-$2() million. An emergelncyHerzegovina farm-reconstrtiction prole(t seeks to jurmp-start agricultural prodtiction,

improve foo(d security, and create employment and income for thewar-affected rural popuilation. Total cost: $50.4 million.

Note Dita icd in this ic,tion ibse becn(l onopiled fromoii dot rimentaition pio dllt iat th,

time of pio;elt ipprov,fl Piojects marked by (s) are iloded in the Program of TargetedInterventions, and thole marked hy (t) are poverty-focused adjustment operationsProjects emploving at least a mechani'rm Ior joint assessment, marked hy (t), inclUdethe participation of directly affected stakeholders. Projects marked by (0) indicate \Li

involvement, fiom inforniation-sharing and consultatioll to active participation.

PROIF I SlisjsN,\jRIs 127'

tO§Brazil IBRD-S 175 million. More than 55,1000 stubsistence anid smaliholderfamilies, as well as migranit agricultural laborers, will benefit from aproject in ParanŽa state that will finanice small-scale investmenit activitieswith demonstr-able techii ical and economic viability proposed bybeneficiaries, social infrastructure, and on- and off-farm small-scaleincome-genierationi activities. Total cost: $353.5 miilioni.

tO§Chile IRDI-Sl 5 million. Some 2,400 small-scale farm fmniilies wvill benlefitdirectly froni a prograni of off-farni poverty-reductionl investments andanother that will introduce the benefits of irrigation to them, andiniprove rainfed cultivation practices, as wvell as pasture and livestockmanagemenit. Total cost: $35 million.

Ch1ina IBRD-$1 50 million. The nioderiiizationi and capacity expanlsion ofChinia's aninimal-feed industry will be suppor-ted and facilitated. Totalcost: $310.3 million.

to§ China IDA-$S 100 million. The inconies and living standards of some 3 millionpeople in two poor areas of Shanxi province xvill he raised throughterracing and irrigation improvements, improvenients to rural roads,expanision of livestock and horticultural productioni, and support forincomile-producinig enterprises andc activities for poor and disadvantagedwomeln. Total cost: $I 82.8 million.

China IERD-S8()0 niillioin; IDA-S2() niillion. The governillenit wvill he assisted indeveloping a viable, moderin, and comniercialized seed sector. Total cost:$185.5 niillion.

O§ Chinia 1BRi)-$60 million; iI)A-$9(0 niillion. Inconies and living standards of2) 00(,00 people now living in absolute poverty will be raised throughvolunltary emigratioo anci settlement on ne-ly developed irrigated landin GarisL, province. Total cost: $259.2 niilliori.

t Cote d'lvoire IDA-S1 50 niillion. The governnient's agriC-ultural refor-m program, de-signed to benefit the poor and which includes cocoa, coffee, anid rice-sec-tor reform, trade arid domestic price reform, arid ptiblic investment anddivestiture, wvill be supportecl.

C6te d'lvoire mL)A-$ I3.( iiillioni. Fnriids froni IDA reflowvs will he made available tohelp finanice the goxernmenit's agricudltural reform program (see abor'e).

tO Croatia iR-$17 riiilliori. Tec hniology-r-elated services that are relevant to pri-vate farniers will he supported, thereby iniproving farmer incomes andincreasing agricultural productivity. Total cost: $30 million.

tO Eston1ia IBRD-S 15.3 million. Rural incomes will increase arid the rural economywill be stimulated through a program of rural entrepl-elleul-shlip(privatizationi of rural lands and selected rural infrastructure, improve-ment of humnan-resource skills for entreprenieurship, introductioll of newfarminig teclinologies). Total cost: $30.) million.

tO GUilea HI)A-S35 imillioni. The scope of agricultural services-agricultural exten-Siorl, agricultural research, arid livestock and animal health in particu-lar-will be expanided tliroighiout the country. Total cost: S90.5 millioni.

128 TiiI WORVi.n BANk ANI \I Ri'(Ik I 096

t0§1ndia IDA-$290.9 million. The planning, management, and development pro-cess for Orissa state's water resources will be improved, while agricul-tural productivity will increase throtigh investments to improve existingirrigation schemes and complete other viahle schemes. A tribal develop-ment plan, enhanced employment opportunities for the landless, and ad-equate access to water will benefit the state's poorer populationi. Totalcost: $345.5 million.

i India IDA-$142 millioni. A six-year time-slice of a program to improve India'sinstitutional and technical capacity to measure, collate, analyze, and dis-seminate data concerninig all aspects of surface water and groundwaterresources wvill be supported. Total cost: $162.4 million.

0§ Indonesia IBRD-$27 million. Some 75,000 rural households living in two of thecounltry's poorest provinces will benefit directly from a project that seeksto raise smallholder incomes through agriculture-hased area develop-ment, strengthen local-level institutionis, and foster broad-based partici-pation at the grassroots level. Total cost: $41 .1 million.

IO§ ndonesia IBRD-$26.8 million. Some 90,000 households are to henefit directlyfrom a project designed to help the government reduce the incidence ofpoverty in Central and Southeast Sulawesi provinces through agriculture-based area developmenit, a strengthening of the capacity of local agriculturalsupport services, and support for farming systems and fisheries research.Total cost: $42.6 million.

t0§ Iidoniesia IBRD-$19.1 million.The 1.3 million-hectare Kerinci Seblat NationalPark in Sumi-atra will be protected through the preparation of a manage-ment and zoning plan, and some 1.5 million people living in the park'sbuffer zone, including tribal commun1ities and other disadvantagedgroups, will benefit from income-generating benefits and improved soiland water quality. Total cost: $46 million.

tO Kazakstal 1iRD--$80 millioni. Agricultural irrigation and drainage systems will beimproved.

t 0§Kenya IDA-$22 million. Community-driven initiatives to reduce widespreadpoverty and enhance food security and conserve the natural resourcebase in eight arid districts and parts of another will be supported,thereby benefiting a population of about I million wvho have poor link-ages to the rest of the economy. Total cost: $25.1 million.

t0§ Kvrgyz Republic IDA-$ 11.6 million. The sheep industry wvill he transformed into an effi-cient and sustainiable market-based production system, thereby increas-ing the incoml-es of private sheep producers, who are among the poorestgroups in the country. Total cost: $16.7 million.

0 Lao People's IDA-$20.7 million. More than a quarter of a million parcels of land willDemocratic Republic be registered, thereby improving tenure security, raising the possibility of

landholders selling their land-use rights, and improving the ability to useland as collateral. Total cost: $28.4 million.

Pt )l CT S'N1MAllRS 1 29

0§ Lithuania IBRD-$30 million. The government will be assisted in developing a vi-able, private agriculture sector and in fostering economic growth in ruralareas. In addition, alternative income opportunities will be identified forthose affected by a dramatic decline in rural employment, women in par-ticular, and help will be given them in starting their own businessesthrough increased access to credit. Total cost: $54.8 million.

tO Macedonia, Former IDA-$7.9 million. The provision of technology-related services to privateYugoslav Republic of farmers will be supported in order to improve their production and

income. Total cost: $10.2 million.

to Mexico IBRD-$186.5 million. Conditions for environmentally sustainable, eco-nomically efficient, and equitably allocated use of water resources will bepromoted. Total cost: $342 million.

t0 Moldova IBRD-$1 0 million. Agricultural research for key export commodities, aswell as related research institutions' farmer-outreach programs, will besupported. In addition, agroenterprise restrtcturing and investment plan-ning will be promoted. Total cost: $ 18.5 million.

0 Morocco IBRD-$1 00 million. Specific components of the government's Emer-gency Drought Relief and Recovery Program, which primarily benefitspoorer farmers, will be financed. Total cost: $333.8 million.

tO§Niger IDA-$26.7 million. The qualitv of life of more than 200,000 peopleliving in some 380 rural communities will be substantially improvedthrough the design and implementation of community-based naturalresource-management plans. Total cost: $42.7 million.

t0§Pakistan IDA-$26. 7 million. Balochistan's community-irrigation schemes will bedeveloped-especially those in small, remote communities-togetherwith farmer organizatiolns to operate and maintain them efficiently. Totalcost: $38.5 million.

Philippines IBRD-$150 million. The volume of commercial credit for agriculture andrural development will be expanded, and the policy framework of therural financial sector will be enhanced. Total cost: $262.7 million.

Senegal IDA-$2.8 million. Funds from IDA reflows will be provided to helpfinance the Agricultural Sector Adjustment Credit, approved in fiscal1995.

tO St. Lucia IBRD-$2.6 million; IDA-$ 2 .7 million. Priority river and drainage-reha-bilitation works will be executed, and a plan for integrated watershed-development and pilot watershed-management projects will be prepared.Total cost: $7. 1 million.

tO Uganda IDA-$1 7.9 million. Analytic capacity for policy formulation in the agri-cultuLral sector will be enhaniced. Total cost: $19.9 million.

0§ Vietnam IDA-$12 2 million. Efforts to improve living conditions in rtral areas

will be supported by a project that will provide finance for investment inrural areas and increase the access of the rural poor to financial services.Total cost: $139.7 million.

130 THF WORLD BANK ANNUAI REPORT 1996

EDUCATION

Argentina IBRD--$165 million. A more competitive environmelnt for the improve-ment of higher education will be established, and incentives will be pro-vided for continuous educational efficiency gains and quality enhance-ment. Total cost: $273 million.

t Argentina IBRD-$115.5 million. Institutional capacity in the provincial ministriesof education will be strengthened, the quality and efficiency of second-ary education will be increased, and physical capacity enhanced so asto serve secondary school students more effectively. Total cost:$164.4 million.

f0§Bangladesh IDA-S 10.5 millioni. The government will be helped in establishing anonformal education system that is capable of delivering effective, large-scale affordable literacy programs to low-literacy districts and females inparticular.'rotal cost: $51 million.

t Bosnia and Trust Fund for Bosnia and Herzegovina-$5 million. Through a programHerzegovina of primary school rehabilitation and of textbook printinig and distribu-

tion, classroom conditions permitting effective teaching and learninig villbe restored. Total cost: $32.8 million.

t Bosnia and IDA-$5 million. Additional funds will be provided to help finance theHerzegovina school-rehabilitation project (see above).

t0§China IDA-$1 00 million. About 5 million of the poorest school children insome of the economicallv most disadvantaged counties of China's poorerprovinces will benefit from a project designed to support the attainmentof universal primary education and expansion of coverage of lower sec-ondary education. Total cost: $191 .8 million.

Dominica IBRD-$3.1 million; IDA-$3.1 million. The first stage of a manjor reformof basic education, including quality improvement, expansion of access,and strengthened sector marnagement, wvill be suppor-ted. Total cost:$7.9 million.

t0§ Dominican Republic IBRD-$37 million. The government's development and investment pro-gram for basic education, designed to improve its quality and increaseenrollment and completion rates-with priority directed to childrenfrom low-income families-will be supported. Total cost: $100 million.

t0§El Salvador IBRD-$34 million. Some 32,000 presclhool children and 64,000 childrenin grades 1-6 living in 135 towns most in need of social services will ben-efit from a project designed to improve access to, and the quality of, theeducation system-with emphasis on preschool and basic education. To-tal cost: $80.2 million.

tO§Ghana IDA-$50 illio]i. Access to basic education, especially of girls, the poor,and other disadvantaged segmenits of the population, will be improved,and pedagogic effectiveness wvill be enhanced by improving the teachingprocess and learning outcomes. Total cost: $241.6 million.

Grenada IBRD-$3.8 million; IDA-$3.8 million. The first stage of a major reformof basic education, designed to ensure the existence of a needed mix ofskills, will be supported. Total cost: $9.9 million.

PRtEI,CT St \1ARIES 131

t Guinlea IDA--$6.6 million. Support for development and implementation of a

new policy franmewor-k in higher education, as well as for institutional

capacity building, wvill be provided. Total cost: $7.4 million.

t Guyalna )IDA-S1 7.3 million The "overnment will be helped in initiating a long-

term1, multiphased reform program to improve quality, relevance, equity,

and efficiency in secondary education. Total cost: $19.3 million.

tO§1ndia IDA--$425.2 million. The quality of instructioni and learning achievement

for approximately 1 () million childreni aninlually-most of whom are poor,

and, in particular, clhildreni with mild to moderate disabilities, girls, and

Scheduled Caste/Schedluled Tribe studenits-will be increased in seventy

distr-icts in elevenl project states. Total cost: $534.4 million.

tI§1ndonesia lBiar-$99 million. Geographical and financial obstacles barring poorer

childrenl froIml attenidinig junlior seconidary education (CISF) schools will be

offset througL a project that will increase access to ISE by adding class-

rooms to existing schools and building new schools in poor and remote

areas. Total cost: $146.4 million.

Indoinesia IBRD-$6i5 million. Improvements in higher education will focus on

six less well-established public universities, where the needs for im-

proved quality, efficiency, and relevance are the greatest. Total cost:

$102.1 million.

Indoniesia iIaIR-$60.4 mzillion. The quality of teachinig-learning processes in

seconclary schools will be enhaanced through improvements in teacher

educationi in thirty-onie teacher-traininig institutions. Total cost: $87.1

m..illionl.

tO§N'Ialawi IDA-$22.5 m1illion. A primnary education project will increase effective

access to education through the construction of classrooms to provide

shelter and adequate learning conditionis for about 1 00,000 children cur-

rently taking their- lessons in the open air Total cost: $25.2 million.

0§ Mali IDA-$ 13.4 million. A vocationial educationi and training project will fo-

c.us particularly un1 developing skills among relatively poor individuals-

especiallyv women-working in the informal sector, thereby improving

their productivity and earnings. Total cost: $22.9 million.

t§ Morocco eR[)-$54 millioni. The constructioni, rehabilitation, and equipping of

schools in targetedc rural areas of the country's thir-teen most deprived

provinces is expected to allow the school system to acconmniodate about

65,000) new pupils each year by the end of the project and raise primary

enrollimenit rates to 85 perceit. Total cost: $97.7 millioll.

t1§Panama IBRL)-$35 million. The quality, efficiency, and equity of the Panamanian

system of basic educationi will be im1proved through a project that fo-

cuses benefits on the poorest of the country's townsihips containinig 41

percenit of the sclhool populationi in grades 1-9. Total cost: $58 million.

t0 Paraguay uFRe-S24.5 million. The government's initiatives to improve the quality,

efficiency, and coverag,e of seconclary education will be supported. Total

cost: $40.5 miiillion.

132 TeIE WORIOD BANK ANN] Ai Roilt)R- 1 ()

t Seniegal IDA-S26.5 million. The government will be helped in refocuising theactivities of the country's twso universities around their pedagogic mis-sion, while reinforcing management capacity and quality control. Totalcost: $30.9 million.

tO§Senegal IDA-S 12.6 million. About 300)(I0() people, three quarters of whom arewomenl are expected to beniefit froml a project that supports the firstphase of the government's ten-year programn to reduce in half illiteracyamong people ages ten to thirty-ninie. Total cost: $14 million.

§ Sri Lanka [)A-$64. 1 million. Cost-effective and qulity preservice anid in-serviceteacher educatioll for primary and seconidary teachers will be put intoplace, thereby enhalncinlg the quality of educatioin for all children, but, inparticular, the poor, since their schools curr-enitly hlave the most unltrainiedteachers. Total cost: $79.3 million.

Thailand IBRI)-$81 .9 million. The quality of seconidarLy ecducationi in scienice andmathemnatics will be raised throug-h strengthening teacher- educationi inthose sulbects. Total cost: $14 0.2 million.

Thailand IBRna-$31 .6 million. The government's strategy to moderinize anid im-prove the couLitry's vocational anid technical education program 'ill besupported. Total cost: $52.7 million.

tO§Trinidad and Tobago IBRD-$5 I ni illiol. The cognitixe and social deseloprenct of preschoolchildren, mainly from loxv-income flamilies, vill be enilianced; the qualityof teachlinig and academilic achievement in priniary eduLcationl will be in-c*reased; and the physical infrastructure of facilities in poor areas wvill beupgraded. Total cost: $103 million.

Tutiisia IRRD-S60 million. Efforts to moder-niize tr;inil services with a viexv toinicreasiig the comilpetitiveniess of the T'un isiani ecolnomiy' will he sup-ported. Total cost: $104 million.

O Yemen IDA-$24.3 millioll. The country's capacity to traini skilled manpoweer inline withi pr-esenit and emerging needs of the economy will be strength-ened. Total cost: $59.8 million.

ELECTRIC POWER AND OTHER ENERGY

Albania t)A-$2L).5 million. The overall standard, reliability, and efficiency of the

country's electricity-tranismission anid distribution Sy'stemils will he im-

proved. Total cost: $117 nillion.

Bolivia I)A-$5. i million. Techlinical assistaLince will be provided to help the Sec-retary' of Ener-gy anid Ministr-y of Capitalizationi carry oLut key refor-m-

transitioni activities andcl complete various reforiml anid capitalizationi pro-grams. Total cost: $7 million.

Bosnia and Trust Fund for Bosnia and Herzegovina-$2() million. District heatinigHerzegovina will be restored in Sarajevo by reconstructilng the district heat-supply

system and building inter-nal heatinig installations; project preparatorywork for the same will be initiated in Banija Luka. Total cost:$58s miilliol.

PR[)TCTF Si NISIARILS 133

t0 Cambodia IDA-$40 million. Urgently needed rehabilitation of Phnom Penh'spower-distribution system will be supported, as will government effortsto strengthen sector institutions. Total cost: $45.7 million.

China IBRD-$440 million. Acute power shortages will be reduced and inte-grated development of the power system in Henan province will be fos-tered through a program of investments, power-sector reforms, and insti-tutional development. Total cost: $1,161.1 million.

* Chinla IBRO-$ 4 00 million. Construction of the Ertan hydroelectric develop-ment scheme, whichi includes a 240 meter-high dam and an unldergroundpowerhouse complex with an installed capacity of 3,300 mw, will becompleted. Total cost: $2,200.2 million.

Colombia IBRD-$249.3 million. Power-sector reform will be supported by facilitat-ing the operation of a competitive bulk supply market for electricity. To-tal cost: $410 million.

El Salvador IBRD-$65 million. The government's objectives for the power sector-improve service reliability and coverage, sector restructuring, and regula-tory reform-will be supported. Total cost: $101.2 million.

India utRu-$350 millioni. Orissa state will be assisted in implementing a pro-gram of regulatory, institutional, and tariff reforms in its power sector.Total cost: $997.2 million.

Indoiesia IBRD-$3 7 3 million. The physical capacity, efficiency, and reliability ofthe Java-Bali power-transmission system and distribution network will beincreased. Total cost: $649 million.

Jamaica IBRi)-$2

1 million. Lost generating capacity will be replaced, generationcosts reduced through upgrading existing facilities, system reliability en-hanced, electricity tariff reforms supported, and environmental damagereduced and controlled. Total cost: $76.5 million.

*O Kvrgyz Republic n[)A-$7 0) million. Economic growth will be supported by rehabilitatingand upgrading the country's electricity and heat-supply infrastructure.Total cost: $87.5 million.

0 Lithuaniia [BRD-$5.9 million. The feasibility and value of using low-temperaturegeothermal water as a renewable indigenous energy resource for use indistrict heating systems will be demonstrated. Total cost: $18 million.

Madagascar IDA-$4 6 million. The bulk of the investment program of the national

utility will be financed, thereby ensuring an adequate supply of electric-ity; in addition, power-sector reforms will be supported. Total cost:$132.5 million.

Mali IDA-$2

7.3 rnillion. The Selingue hydropower facilities-the country'slargest-will be repaired and rehabilitated to ensure that a major sourceof electricity supply is not lost. Total cost: $42.1 million.

t0 Pakistan IBRD-$350 million. A power complex and its ancillary works with an in-stalled capacity of about 1,450 mw will be constructed near the villageof Barotha, and the country's power-sector reform program will be con-solidated. Total cost: $1,863.5 million.

134 THE WORLD BANK ANN AI. RPn:RI 1996

0 Philippines IBRD-$250 million. Transfer capacity will increase, and the reliability ofthe extra high-voltage transmission of bulk power to the major load cen-ters in central Luzon will be improved. Total cost: $750 million.

Poland IBRD-$160 million. Investments in rehabilitation and upgrading of keysubstations, as well as modernization of high-voltage transmission lines,will be made. Total cost: $275.7 million.

Roimania IBRD-$l 1I0 million. The governmenit's power sector-reform program willbe supported, and about 1,445 mw of existing thermal generating capac-ity will be rehabilitated. Total cost: $363.9 million.

Uruguay IBRD-$125 million. The first of four phases of the modernization of thepower-distributioni system of Montevideo will be supported. Total cost:$228 million.

* Vietnam IDA-S 180 million. Help will be provided in meeting the rapid growth inelectricity demand in the south of the country. Total cost: $242 million.

ENVIRONMENT

Algeria IBRD-$78 million. The government will be assisted in reducing industrialpollution. Total cost: $118.1 million.

Brazil IBRD-$50 million. The entire environmental program of the CompanhiaVale do Rio Doce, a major mixed state-private company with mining, in-dustrial, transport, and port operations, will be supported. Total cost:$109.9 million.

China IBRD-$125 million; IDA-$ 2 5 million. A sustainable environmentalframework will be developed for the long-term economic and socialdevelopment of Yunnan province. Total cost: $307.6 million.

0O Ecuador IBRD-$15 million. Support for the ongoing process of strengthening thecapacity of the Environmental Advisory Commission (CAAM) to under-take environmental policy analysis and environimenital program designand management will be provided. Total cost: $20 million.

§ El Salvador IBRD-$50 million. Land registration for the country's estimated 1.6 mil-lion parcels of rural and urban land will be regularized, thereby enhanc-ing land securitv-and value-and contributing to better land use andenhanced collateral. Land registration will provide landowners, most ofwhom are smallholders, with security of tenure. Total cost: $70 million.

t Lithuania IBRD-$6. 2 million. The first steps toward reducing pollution from theUpper Lielupe river basin, a major water-pollution source into the Gulfof Riga portion of the Baltic sea, will be taken. Total cost: $22.9 million.

0 Slovenia IBRD-$23.9 million. Ambient concentrations of particulates and sulfurdioxide, along with health damage associated with exposure to air pollu-tion in Slove'nian cities, will be reduced.

t0 Uganda IDA-$11.8 million. Capacity for environmental management will bebuilt at the national, district, and community levels, and participatory ru-ral appraisals will identify microprojects and enable local governments tobase their plans on needs and priorities as identified by communities.Total cost: $15.2 million.

PROJECT SUNIMARIRS 135

FINANCIAL SECTOR

Bolivia IDA-$ 9 million. The institutionial framework and capacity for (a) pen-sion-funds operation and regulation, (b) the regulation and operatingnorms for securities markets, and (c) strong banking regulation and su-pervision will be established. Total cost: $S19.3 million.

Croatia IRRD-$9.5 million. The regulatory and policy framework of the capitalmarkets will be strengthenied, as will the infrastructure to support securi-ties transactions. Total cost: $20.6 million.

Ghana IDA-$23.9 million. The growth of an efficient, competitive, well-regulated, nonibanik finanicial sector and an effective payments systemwvill be promoted. Total cost: $24.9 million.

Guyana IDA-$2.9 million. Funds from IDA reflowvs will be provided to help fi-nance the Private Sector Development Credit, approved in fiscal 1995.

t0 India IBRs)-$ 7 0)0 million; IDA-$D million. Infrastructure Leasing and FinancialServices Limited, one of the country's top five nonbaniking financialcompanies, will be assisted in financing infrastructure subprojects to beimplementecl on a build-operate-and-transfer basis and expected to bestarted within the next thlree years. Total cost: $1,600 million.

Jordai 1,RRD-$8(J millioIn. The constrainits on Jordan's long-term growth im-posed by the limitation of a small domestic market will be addressedthrough close integration with international markets and the establish-ment of an investment-frienidlv environment.

Jordan IBRD-$40 million. The government's Export Sector Development Pro-gram, whlich aims at enhanicinig the interniational competitiveness of thecoountry's exports, will be supported. Total cost: $60 million.

Kazakstani IBRD-$180 million. The financial sector reform program of the govern-ment and the nationial bank will be supported.

Kyrgyz Republic I[A-$45 million. The policy and regulatory environmient conducive tothe soutnd growtlh of a competitive and efficient bankinig system wvill becreated.

Kyrgyz Republic IDA-$3.4 million. Technical assistance, designed to implemenit reformsin the finanacial sector, will be provided. Total cost: $7.3 million.

Macedonia, Former IRRD-$12 million. Private sector finaince will be provided to creditwor-Yugoslav Republic of thy private enterpr-ises and farmers to improve their profitability (by

increasing output or improving efficiency) and agricultural output.

Morocco IBRD-$ 2 50n million. The temporary cost to the Moroccan Treasury ofimplemeniting a program of financial markets reforms over a three-vearperiod will be financed.

0§ Russia [BRD-$300 million. The divestiture of enterprise housing will be acceler-ated and made sustainiable through housing privatization, cost recoveryof housing mainteniance and utility fees from tenants, a system of tar-geted housing allowances to protect vulnerable groups in the context ofincreased cost recovery, and an increase in private sector participation inthe provision of services in the housing sector. Total cost: $551 million.

136 rHE Wl'R I) BA\K ANNEIAI RFP()RT 1996'

Russia IBRD-$89 million. Advisory services, training, and information technol-ogy will be provided to help huild the regulatory infrastructure andmarket architecture needed for capital market development. Total cost:$132.2 million.

Tanzania IDA-$110.9 million. The downsizing and restructuring of government-o\vned banks, the strengtheninag of bank supervision, and the implemen-tation of a strategy to promote the gradual evolution of a capital marketwill be supported. Total cost: $13.4 million.

Tuniisia IBRD-$38.7 million. An efficient and market-responsive system of sup-port agencies that provides assistance to the industrial sector will he putinto place. Total cost: $62.1 million.

Uganda IDA-$1 2.3 mnillion. The Ugandan private sector will be made more com-petitive so that it canl expand sales on both domestic and internationalmarkets. Total cost: $7(.9 C million.

Vietinam IDA-$49 million. The development of a modern banking sector will beassisted through improving payment services and institutional strength-ening. Total cost: $60.5 million.

Zambia ID.A-$ 2.1 million. Funds from IDA reflows will be made available tohelp flinance the E,conomic Recovery and Investment Promotion Credit.

INDUSTRY

Banigladesh IDA-$3.4 million. Funds from IDA reflow,s will be made available to helpfinance the Jute Sector Adjustment Credit, approved in fiscal 1994.

Bolivia IDA--$8 million. Funds from IDA reflows will be made available to helpfinance the Capitalization Program Adjustmenit Credit.

Cape 'Verde IDA-SI 1.4 million. The governmenit will be assisted in its efforts topromote private sector development and modernize the financial sector.Total cost: $12.7 million.

i Chinia IBRD-$17/ million. Chongqing muniicipality will be helped to reducepollution and restrticture and increase the efficiency of production facili-ties in its most polluting industry-iron and steel. Total cost: $478.1million.

Indonesia IBRD-$47 million. The competitiveness of Indonesian indust-,v particu-larly of small and medium industries, w ill be enhaniced. Total cost: $60.9million.

MINING/OTHER EXTRACTIVE

0 Argentina IBRD-$30n million. The government's policy, regulatory, and institutional re-forms, designied to encourage the expansion of private investment in miningin an environmenitally sound way, will be supported. Total cost: $40 million.

t Bolivia IDA-$I I million. Implementationi and refinement of a regulatory frame-work to assure that privately led mining and industrial activities groxv ina more environmllenitally friendly fashion will be supported. Total cost:$22 million.

PRSUFT(-7 St N:\IARIES 13?.

tO§India IDA-$63 million. Coal India will be assisted in achieving its objective ofmakinig coal production more socially and environmentally sustainable.The implementation of Indigenous Peoples Developrnent Plans fortwenty-five mines that are slated to receive financial assistance is ex-pected to improve the lives of some 186,000 people, most of whom arepoor. Total cost: $84 million.

Mongolia IDA-$35 million. Sustainable production levels at the country's majoropen-pit coal mine will be increased through the modernization of tech-nology. Total cost: $60.4 million.

tOtRussia IBRD-$50() million. The effective implementation of a far-reaching re-structuring program in the coal sector, including reduction (and eventualelimination) of subsidies, provision of safety-net support, and sectorcommercialization, will be supported.

§ Russia IBRD-$25 million. Efforts to provide support for the implementation ofthe coal sector-restructuring program-including assistance in addressingthe inadequacies of the existing social safety net-will be supported. To-tal cost: $30.8 million.

tO§Ukraine IBRD-$15.8 million. The social and environmen-tal consequences thatarise from the government's decision to close uneconomic coal mines, aspart of the restructurinig program for the sector, will be mitigated. Totalcost: $28.5 millioni.

MULTISECTOR

t Algeria IRRD-$ 30() million. The government's program of structural reformand privatization will be supported, as will further improvements in thesocial safety net.

Argentina IBRD-$38.5 million. An Enterprise Assistance Program will be estab-lished to develop export competencies of the private sector in manufac-turing and service industries. Total cost: $74.2 million.

t Armenia IDA-$60 millioin. The government's reform program to stabilize theeconomy and create the coniditionis for a resumption of growth and animprovemenit in living standar-ds, including better targeting of social ben-efits, will be supported.

t Azerbaijan IDA-$65 million. The government's program of economic stabilizationand structural reform, including improved coverage of social safety netprograms, will be supported.

Bosnia and Trust Fund for Bosnia and Herzegovina-$45 million. Bosnia andHerzegovina Herzegovina's severely damaged productive capacity and infrastructure

facilities will be rehabilitated and restored, and production and economicactivities will be initiated. Total cost: $160 million.

t Cambodia IDA-$40 million. Cambodia's recovery program, which includes increas-ing public expenditures for social programs and its continued transitionto a market economy, wvill be assisted.

t Chad IDA-$30 million. A structural adjustmenit program wi'll restore criticalpublic sector capacity and improve public finances, increase the develop-ment and poverty impact of public expenditures, and create a favorableenvironment for private sector growth.

138 THF WORLD BANK ANNUlAI. REPORT 199(6

* Chad IDA-$9.5 million. The government's efforts to enhance revenue mobili-zation, improve the quality of public expenditures, strengthen capacityin economic policymaking, implement its divestiture program, and de-sign and implement a program of civil service reform will be supported.Total cost: $10 million.

El Salvador IBRD-$16 million. The gov'ernment's program to accelerate outward-oriented private sector development and raise productivity will be sup-ported. Total cost: $20 million.

t Georgia InA-$60 million. Structural adjustment assistance aims at consolidatinigstabilization, sustaiining growth recovery, and reducing poverty (throughsupport for improvements in the targeting of social benefits to the poor-est groups).

Ghana IDA-$4.8 million. Funds from IDA reflows will be made available to helpfinance the Private Sector Adjustment Credit, approved in fiscal 1995.

Honduras IDA-$26.4 million. FIunds from IDA reflows will be provided to supple-ment the Public Sector Modernization Adjustment Credit.

Kenya IDA-$90 million. Government reforms in the areas of public resourcemanagement, public enterprise reform, and civil service reform will besupported.

Kenya IDA-$36.8 million. Funds from IDA reflows will be used to finance theStructural Adjustment Credit (see above).

t Lao People's IDA-$40 million. Economic reforms, focusing on the private sector en-Democratic Republic abling environment and public resource management, will be supported,

thereby assisting the government in shifting its focus towards socialissues and the reduction of povertv.

t Malawi IDA-$102 million. The country's emerging macroeconomic reform pro-gram, aimed at ensuring the macroeconomic essentials to allow growthand a fundamenital restructuring of programs that address the country'spervasive poverty, will be supported.

Malawi IDA-$4.4 million. Funds from anA refloxvs will be used to finance theFiscal Restructuring and Deregulation Program Creclit (see above).

Mali IDA-$60 million. The government's efforts to deepen fiscal adjustmelntand provide a stable macroeconomic environment will be supported.

Mauritania IDA-$20 million. The government will be helped to improve economicmanagement capacity, strengthen and deepen recent fiscal gains, andimprove the efficiency of the allocation and management of publicexpenditure.

Panama IBRD-$30 million. Support vill be provided the government in theimplementationi of its debt and debt-service reductioni agreement with itscommercial creditors.

t Papua New Guinea IBRD-$50 million. The first phase of the government's economic reformprogram, which, among other things, will address poverty issues by re-structuring public expenditures so as to refocus them on basic social ser-vices, will be supported.

PROIICT SUMMAR[ES 139

Romania IBRD-S 2 8t) million). Balance of payments support wvill be provided tohelp the goverillnent pursue its stabilization and structural reformprogram.

Russia IBm[-$ 9 4 millioI. Russia's accessioni to the World Trade Organization

will be supported by ensurinig that its requiremenits in the area of prod-

uct and process standards are met; Russiani standards wvill be harmonizedwith international standards; and testing and certification capacity willbe upgraded and strengthenied. Total cost: $34 million.

Sierra Leone IDA-$300,000. Funds from IDA reflows will be made available to helpfinanice the Structural Adjustmenit Credit, approved in fiscal 1994.

t Togo mDA-$50 million. Support wvill be provided for (a) policies designed torestore a predictable and stahle macroeconiomiiic envir-onmillenit and (b) thereallocation of public expenditures towards basic services and physicalinlfrastructure, both of which are expected to be particularly beneficialfor the poorest segments of the population.

\Vest Bank and Gaza Trust FuLnd for Gaza-$20 million. A secon(d Emergencv RehabilitationProject wxill finanace broad-based improvements in the genieral quality oflife for the populationi in neiglhborlhoods and villages, as wxell as removeconstraints on economic activity.

t Yemen IDr-S80() million. Support wvill be provided in support of the initialphase of the governiment's structural reform program, which includesprotecting social sector expenditures.

OIL AND GAS

Bolivia IDA-$ 1 0.6 million. The government will be assisted in the analysis, plan-nin", design, and executioll of its hydrocarbon-sector adjustment pro-gramii and in the capitalization of the state-oxw'ned oil company. Totalcost: $13.3 million.

0 Egypt c1a n-S20 million; IDA-$ 15 million. The government will be assisted inreducing industrial pollution causing adverse health effects and/or eco-logical degradation. Total cost: $48.7 million.

Moldova IMED-$10 million. Maintenanice of a combined heat and power plant,repair of leaky gas-distribution points, and a pilot program of gas-meterinstallation fo rmll pal-t of a first step program that aims at moving theenergy sector towvard better financial and economic management. Totalcost: $26.5 million.

POPULATION, HEALTH, AND NUTRITION

t Argentinia fieRD-$350) million. The process that xvill improve the efficiency and eq-uity of Argenitinia's healtlh-inisuranice system and containi the already highlevel of health spendinu in the country wvill be initiated.

§ Argentina IBRD-$S 01.4 million. The government s objective of rationalizinghealth-sector- spending by strengthening policymaking and improving ser-vice-delivery capacity \wVill be supported, thereby increasing the effi-ciency and quality of services of public hospitals, xvhich are primarilyused by the poor Tlotal cost: $144 .7 million.

140 THE WORID BANxK A\NN Ali ()RT 1!996

Argentinia IBRD)-$25 million. Technical assistance wnill he provided to the govern-ment in the design and implementationi of health-inisur-ance reforms.Total cost: 329.8 million.

0 Bosnia and Trust Fund for Bosnlia and Herzegovina-$5 million. People with war-Herzegovina related disabilities wvil be integrated into productive life through a pro-

grain of cominmuniity-based rehabilitation and orthopedic and reconstruc-tive surgery. Total cost: $301 million.

0 Bosnia and I)A--$5 million. Additional funds will he provided to help finanice theHerzegovina War Victims Rehabilitation Project (see aboie).

tO Brazil IBRD-$300 million. The delivery of care under the counitrv's IUnifiedHealth System (si Is), the sole source of pLublicly subsidized care for thepoor, will be improved through the reliabilitationi and equippinig of stshospitals. Total cost: $75)0 million.

Bulgaria [BRD-$26 million. Restructurinig of the healthi sector wvill be supported,and the population at large-vulnerable groups, in particular- protectedby ensurinig continued provision of essential health serxices during thetransition periodl and beyond. Total cost: $47.1 million.

§ China [)A-$S10)(n million. About 6 million infanits born each year in ten of thecouLitry's poorest provinces wvill henefit by being immuniizedi againstmortality andc morbidity caused hy measles, polio, pertussis, diphtheria,tetanus, anvd tuberculosis. Total cost: $I 67 6 million.

tO§C5te d'lvoire IDA-$40i million. The ftoundation for universal access to hiealthi services,wlhich would be a great achievemenit in the country's fight against pov-erty, will he created. Total cost: $52 million.

tO§ Egypt IDA-$1 7.2 nmillion. The conditionis and status of womnen and children inareas where fertility remainis high-mainly in rural UIpper Egypt-willimprove though the stimulationi of additional demand for smaller familysize and for family-planning services. Total cost: $20).7 million.

0§ Georgia IDA-$I 4 million. The governimlenit's health-sector reform program,xvhichl increases total spending on health, ensures coverage of essentialhealth services to the entire populationi, improves the quality of health-care services, and incre-ases efficiency of the system, wviil he supported.Total cost: 319.7 million.

t0§ India IDx-$35() million. About 10 million outpatienits and 7(1(1,(100 inpa-tients-ablout two thirds of xvhoni belong to the lowest 40 percent of thepopLulationi in termis of income distribution-currently using hospital ser-vices in Karnataka, PIunjah, anid West Bengal are to benefit from a projectthat will assist the three state governments in putting into place a first-referral health-care system. Total cost: $416.7 million.

t Indonesia IkRL)-$24.8 million. The first phase of the government's strategy' aimedat slowing the transmission of iiiv and sexually transtimitted diseases willbe supported. Total cost: $35.2 million.

lidollesia iipR)-$2() million. The government will be helped in formulating clearsector strategies for- improving the performance of the social sectors. To-tal cost: $25 million.

PRO1I I I Si NINI \RIF, 141

tO§Kyrgyz Republic IDA-$18.5 million. The capacity of the health system to deliver efficientand cost-effective primary health services wxill be improved, thereby sig-nificantly improving the health status of the population, especiallyamong women and children, through improvements in the areas ofwomen's reproductive health, acute respiratory infections, diarrheal dis-eases, and tuberculosis. Total cost: $20.1 million.

§ Macedonia, Former IDA-$16.9 million. The health of the population will be enhancedYugoslav Republic of through investments in strengthening primary health care-especially in

rural areas, wlhere the poor- disproportionlately live-and in disease pre-vention. Total cost: $19.4 million.

tO§Mexico IBRD-$3 10 million. Significant improvements in the health status ofabout 15.5 million uLinisured people in the eleven poorest states will heengendered through the implementation of a cost-effective basichealth-care package. Total cost: $443.4 million.

t§ Morocco IBRD-$6S million. Improved primary health care is being targeted to theneedy and is expected to benefit some 27 percent of the population, in-cluding 1 .05 million iwomen of childbearing age and 1.4 million childrenunder age five. Total cost: $118.8 million.

0§ Mozambique IDA--$98.7 million. A five-year time-slice of the National Health Strat-egy, xvhich xvill increase coverage and quality of health services and in-crease equity in access to services, xith a shift of resources toxvard ruralareas and a basic package of health care, will be financed. Total cost:$355.7 million.

tO§Pakistan IDA-$26.7 million. The health status of the population-with emphasison1 xomen and young children-in the northern areas and in AzadJammu and Kashmir-will be improved through cost-effective improve-ments in primary health care. Total cost: $57.7 million.

Russia IBRD-$270 million. Medical equipment will be made available to pri-mary and secondary health-care facilities in thirty-four selected oblasts.

tO Sierra Leone IDA-$20 million. The health status of the people of the country will beimproved by increasing access to and improving the quality of a basicpackage of better-managed and increasingly decentralized health services.Total cost: $138.1 million.

§ Vietnam JDA.-$10(].2 million. The health status of the rural population in thepoorer areas of the country will be improved through provision of good,reliable primarv health care, a reduction of mortality and morbidity dueto diseases that disproportionately affect the poor, and a program of ca-pacity building. Total cost: $127.3 million.

tV§Vietnam IDA-$50 million. Family health and family-planning services at thegrassroots level xvill he improved through public sector programs,thereby contributing to poverty reduction. In addition, access to servicesfor disadvantaged and isolated ethnic minorities will be improved. Totalcost: $129.6 million.

142 THE WORILD BANK ANNI At. REPORT 1996

PUBLIC-SECTOR MANAGEMENT

t§ Albania IDA-$4 million. A five-year program to boost employment (more than5,000 manmonths) and small-scale economic activity in urban areas willbe developed. Total cost: $4.4 million.

Argentina IBRD-$500 million. The government's ambitious bank-reform programwill be supported.

Argentina IBRD-$16 million. The effectiveness and efficiency of the government'spublic expenditure management will be enhaniced. Total cost: $25million.

Armeniia IDA-$3.8 million. Technical support for privatization, as well as for fin-ancial and civil service reforms, will be funded. Total cost: $4.1 million.

Azerbaijan IDA-$18 million. Support will be provided to the government itn formu-lating and implementing reforms to move to a market-oriented system.Total cost: $20.3 million.

Bolivia IDA-$50 million. An appropriate legal and regulatorv framework toattract private investment and spur growth will be established, and thegovernment's program to divest six major public enterprises through thecapitalization process will be supported.

t Cameroon IDA-$150 million. The government's adjustment program in the areas ofpublic finance management (including reforms aimed at increasing theshare of key development sectors), domestic debt settlement, and finan-cial sector reform will be supported.

Cameroon IDA-$30.3 million. Funds from IDA reflows will be used to supplemiienitthe Structural Adjustment Credit, approved in fiscal 1994.

Cameroon IDA-$12.6 million. Financing to complete public enterprise privatizationwork in the agricultu-re and finanicial sectors will be provided. Total cost:$16.7 million.

Conigo IDA-$9 million. The government's capacity to prepare and implementthe second phase of its reform program will be supported. Total cost:$11 I million.

Cote d'lvoire IDA-$ 180 million. The government's private sector development pro-gram, designed to increase external and internial competitiveness andpromote investment and exports, will be supported.

Croatia IBRD-$5 millioln. Studies alid advisory services to help design and imple-ment reforms supported by the Enterprise and Financial Sector Adjust-ment Loan will be financed. Total cost: $6.2 million.

Georgia IDA-$4.8 million. Technical assistance necessary for the implementationof the government's reform program will be financed. Total cost:$5.2 million.

Ghana IDA-$26.5 million. The government will be helped in implementing itspublic enterprise reform and privatization program. Total cost: $36.3million .

Guinea IDA-$12.2 million. The government's abilitv to act as a facilitator andregulator of mining activities will be strengthenied, thus helping to attractprivate investment. Total cost: $16.8 million.

PROJECT SUMMARIES 143

Honduras IDA-$55 million. The government's public sector modernization pro-gram xvill be supported.

Honduras IDA-$9.6 million. Technical assistance will be provided the governmentto help it implemenit its public sector modernization program. Total cost:$16.6 million.

Lebanon I1RD-520 million. The public administration will be rehabilitated, whilethe process of administrative reform will be launched. Total cost: $29.5million.

Mauritania IDA-$5800,000. Funds from IDA reflows will be made available to helpfinance the Private Sector Development Credit, approved in fiscal 1995.

Mexico IBRD-$3() million. Technical assistance will be provided to the govern-ment to assist it in the privatization of infrastructure. Total cost:$46 millioI.

Moldova IBPD-$35 million. The government's reform program in the enterpriseand finanicial sectors will be supported and accelerated. Total cost: $49million.

Nicaragua IDA-$5.S million. Funds from IDA reflows will be made available to pro-vide additional finance for the Economic Recovery Credit 11, approved infiscal 1994.

0 Russia IBRD-$58 millioni. The performance of the Russian legal system in areaskey to the effective functioning of market institutions will he improved.Total cost: $89.4 million.

Sri Lanka IDA-$ 77 million. A long-term debt facilitv will be estab lished, and asso-

ciated technical assistance furnished, so as to promote significant partici-pation by the private sector in infrastructure investments. Total cost:$232 million.

Sri Lanka IDA-$ 15 million. Techniical assistance wvill be provided in support ofcontiniued reform and efficient development of the telecommunlicationlssector, as well as to help promote private investments, operation, andcompetition in the sector. Total cost: $21.6 million.

Tajikistal1 IDA-$5 million. Tajikistan's transition toward a market economy will besupported by helping the government design and implement a compre-hensive reform progr-am. Total cost: $5.5 millioIn.

TUrkeY IBRD-$62 million. Technical assistance vvill be provided to address prob-lems in taxation, government spending, and customs administration.Total cost: $94.2 nmillioI.

Ukraine IBRD-$3 1O million. The government's trade and price liberalization,privatization, capital markets developmient, and post-privatization re-structuring programs will be supported.

t Zambia [DA-S140 million. Support will be provided for continuincg macro-economic and structural policy reforms, including the reform of socialsecurity and the finanicial and mining sector and the protectioni of socialsector spending.

Zambia IDA-$23 million. The implementation of the governmenit's reform pro-gram, and of reforms that were the focus of previouLs adjustmenit opera-tions, wvill be supported. Total cost: $27.2 million.

144 THE WDRI.D BA\Ni ANNI!AI R EPtnr 1996

Zimbabwe IDA-$770 million. Efforts to increase the growth of export-based outputand to broaden participation in economic activity, in particular by indig-enous firms, will be supported.

SOCIAL SECTOR

t%§Algeria IBRD-$50 millioni. Twenty thousand manyears of temporary employ-ment will be created though creation of jobs for the underemployed, thecountry's social safety net system will be strengthened, and social devel-opment programs based on increased community participation will betested. Total cost: $70.4 million.

4%§Angola IDA-$24 million. A social action fund, designed to improve access to ba-sic services and to generate eniployvnent for the poor in rural and urbanareas through rehabilitating and equipping community infrastructure inhealth, educationi, and water and sanitation will be financed. Total cost:$52 million.

f0§Argentina IBRD-$ 152 million. Health and nutrition services for millions of peopleniow livinig in poverty or facing unemployment will be preserved, whilethrough a small social fund, ways to provide more basic social servicesand stimulate the economic productioLn of poor- households will betested. Total cost: $417.9 million.

0§Armnenia IDA-$12 million. The Armenianl Social Investment Fund, which financesthe rehabilitation of basic social and economic infrastructure on a grantbasis, wvill be supported, thus generatinig substantial benefits for the poorthrough the implementation of hundreds of microprojects. Total cost:$20 million.

China IBRD-$10 million; IDA-$ 20 illion. A pilot effort to test the impact on

labor-market development and labor mobility of impi-oved employmentand training services and an enhaniced policy and legal fi-amework forworkers and employers wvill be implemented. Total cost: $51.8 million.

tO§ Egypt IDA-$120 million. Some 200,000 permanent jobs are expected to becreated through support for small enterprises and labor-intensive wvorks.In addition, community infrastructure and services, in partnership withNGOs and local grouLps, will be supported. Total cost: $775 million.

tO§Eritrea IDA-$17.5 millioni. Community-initiated subprojects xvill be financedthat will support the rehabilitationi and development of basic social andeconomic infrastructure-especially in rural and xvar-torn areas-and im-prove the income-generatinig capacity of poor people and households.Total cost: $49.7 million.

tO§Ethiopia IDA-$120 million. The Ethiopian Social Rehabilitation DevelopmentFund, which provides finanacial and techniical support to poor, mainly ru-ral communities to launch small projects aimed at creating the assets andservices needed to upgrade their economic and social standards andstrengthen self-reliance, will be suppor-ted. Total cost: $242.4 million.

0§ Haiti IDA-$50 million. Short-term employment will he provided to people inextreme poverty in support of the government's pr-ogramii to reduce pov-erty. Total cost: $56.4 million.

PROIrCT SUIMNIARIES 145

tO§ nduras IDA-$30 million. A Third Social Investment Project seeks to help reducepoverty through improved access to basic infrastructure and social ser-vices in poor areas and for poor communities. Total cost: $112.6 million.

tO§Madagascar IDA-$40 million. The nationwide expansion of the activities of a socialfund currently engaged in poverty-reduction activities in two of thecountry's six provinces will be supported. Total cost: $45.4 million.

tO§Malawi IDA-$56 million. The country's Social Action Fund, targeted at ruralcommunllities in the poorest areas of the country, will be supportedthrough the financinig of subprojects aimed at increasing access to safewater, construction of primary schools, and provision of primary healthinfrastructure. Total cost: $71.3 million.

tO§Mongolia IDA-$ 10 million. The social costs of adjustment will he mitigatedthrough a project that seeks to create gainful employment and incomefor the poor and absolute poor, raise enrollmenit in basic education, re-duce mortality and morbidity rates, and provide assistance to the handi-capped, mentally retarded, and disabled. Total cost: $10.5 million.

t§ Morocco IBRD-$28 million. About 30,000 manyears of work in basic infrastruc-ture improvements will be created for underemployed persons in de-prived rural areas of the country's thirteen poorest provinces. Total cost:$49.5 million.

0§ Nicaragua IDA-$30 million. Poverty-especially among woomen--will be reducedthrough the provision of economic and social infrastructure and im-proved social services in poor areas. Total cost: $ 1 (:)2.4 million.

tO§Yemen IDA $25 million. Between 75,000 and 96,000 manmonths of new em-ployment will he created through small-scale civil works investments insectors with benefits accruiig mainly to the poor. Total cost: $28 million.

TELECOMMUNICATIONS

Pakistan IBRD-$35 million. The relform and efficient development of thecountry's telecommunications sector will be supported. Total cost: $53.6million.

TRANSPORTATION

Albania IDA-$25 million. A key infrastructural bottleneck to economic develop-ment will be overcome by rehahilitating and constructinig national roads.Total cost: $66 million.

Armenia [DA-$16 million. The level of maintenance for the country's road net-work will be expanded, and the institutional capacity to carry out futureroad-mainteniance activities will be strengthened. Total cost: $36.9million.

Bosnia and Trust Fund for Bosnia and Herzegovina--$35 million. U-Jrgent high-prior-Herzegovina ity links and services in the transport system will be reconstructed and

repaired. Total cost: $152 million.

Brazil IBRn-$35On million. The cost of freight transport in Brazil's main corri-dors will be reduced by restructuring and privatizing the federal railways.Total cost: $700 million.

146 Ti ir. WORIDL BANK ANNI IAI. RpovRi 1996

Bulgaria IBRD--$95 million. The restruCturing process begun by the BulgarianlState Railwavys and the government wvill be supported and deepened byfinancing investments that are in linec with the restructtirinig concept. To-tal cost: $126 million.

tO§Cameroon IDA-$6() 7 million. A three-year time-slice of the countr-y's road-reha-bilitation) and maintenianice program will be financed, directly impactingon the poor through the promiiotioni of local small and meditum enter-prises and use of labor-based methods and local materials. Total cost:$722.7 million.

t China aIRD-$260 ()million. Hlighway capacity in the Shanghai-Halngzhou corri-dor will be increased, and road safety in northern Zheiianig provinice im-proved. Total cost: S729i million.

China IBRD--$2 1(0 millioni. Continuled support will he provided for the develop-ment of road infrastructure in Shaan\i province. Total cost: $556.5million .

O Chinla IBRI-$2 10 million. Continued support xvill he provided for the develop-ment of road infrastl-uctUre in He-enan province so as to relieve conlges-tion, facilitate mobility, and increase the efficiency of road transport.Toital cost: $606 million.

i§ Colombia iBRD-$6(5 millioni. About 630,00()( loxv-incomne residents of Bogoti willbenefit from a project that will help facilitate public transport access tolow-inicomile settlements. In additioni, more efficient use will be made ofthe city's street system by improving vehicle flows in a maijor transportcorr-idor. Total cost: $14 1 million.

C6te d'lvoire IDA-$2 0n million Part of the Ivorian component of a larger programi

for the rehabilitationi of the Abidjan/Ouagadougotu/Kaya railway will befinanced. Total cost: $48 million.

Georgia mA-$l2 million. Policy reforrm in the transport sector will be supported,its institutionis restructured, and some of the system's most critical ele-ments repaired and maintained. Total cost: $2() millioni.

O Ghana IDA-$ 1(10 million. Funds will be provided to help miainitaini, rehabilitate,anid reconistruct the coulitry's entire road network. Total cost: $ 11 1.5millioni.

Indoniesia IBRI)-$86.9i millioni. Traffic bottlenecks on the nationial roads in selectedurblan areas in the North Java corridor wvill be reduced. Total cost:$167.6 million.

Kenya IDA-$ 115 million. The economic efficiency of the road network intwenty-six urbani centers will he increased, and a sustainiable road-maintenance capacity xvill be bhiilt. Total cost: $] 55 million.

Kenya IDA-$50n million. The primary transport link between Nairobi andMombasa xvill he rehabilitated and widened, while maintenianice financ-ing, planninig, and executioni wvill he strengthened. Total cost: $122million .

tOtLesotho ID.\-$4() millioni. Some 2 million mandays of xvork wvill be generatedover a five-year period through a project that seeks to develop thegovermiienit s capacity to regularly maintain the whole classified roadnetwork. Total cost: $129 million.

Pi(e Ft T SL\rMNIiArTs 147

t Nicaragua ILA-$25 million. The coniditioni of selected trunk roads will be improvedto enhanice the country's export competitiveness. Total cost: $28.4million.

i §Peru IBRD-$9() million. Investments-targeted to the poorest rural commiuni-ties-in the mainiteniance and rehabilitationi of rural roads, as well as sec-ondary and primary roads connectinig to the primary road network, willhelp reduce poverty and raise living standards of rural communities.Total cost: $250.3 million.

Romania iBRi)-$ 120 million. The restructuring program of Romanian NationalRailways, designed to improve efficiency and make it more commerciallyoriented, wvill be supported. Total cost: $383 million.

Russia [BRL)-$35() million. A four-year program of urgently needed bridgeworks on federal roads will he supported. Total cost: $466.3 million.

Sierra Leonc IDA-$35 million. A four-vear time-slice of the government's ten-yeartransportation-sector investment and maintenance program will be sup-ported. Total cost: $41 million.

t0 Thailand IBRD-$I 50 mi1lion. The government's various Highway Plans, which aimto increase network capacity by wideninig the country's major interurban

road links to four-lane standard, will be supported. Total cost: $325.5

million.

Turkey IBRL)-$ 7 (50 million. Road-transport costs will be reduced through infra-

structure improvements, and past investments will be protected through

rehabilitation and strengthening of paved highways. Total cost: $389.3

million.

Yeinen IDA-$37 million. Urgent rehabilitation needs in the roads and civil avia-

tion sectors will be undertaken, and institutional capacity for mainte-

nanice of the road network will be improved. Total cost: $51.8 million.

URBAN DEVELOPMENT

t China IBRD-$250 million. An investment program of environmentally oriented

capital works and institutional measures to support management and op-

erational capacity building of the Shanghai Municipal Sewerage Com-

panyv will be supported. Total cost: $633.3 million.

China IhRD-$125 million; IDA-$25 million. Environmenital conditions in cities

in liubei province will be improved through wastewater collection and

treatment investments and by improvements in solid waste and nightsoil

handling. Total cost: $385.2 million.

t0 Colombia IbRD-$2() million. Technical assistance will be provided to national, re-

gional, and local institutions for improving environmental management

in the countr-y's urban areas. Total cost: $40 million.

tO§ Ghana IDA--$71 million. Productivity and living standards in the country's five

major cities will increase, especially for lower-inicome people, through

provision of drainage, sanitation, solid waste, and community-upgrading

infrastructure. Total cost: $89.3 million.

1 48 THE WtRI,L1 BANK ANNI Ai. REiPl)I 1996

tO Iidonlesia BRP-$ 142. 7 million. A three-yeaLr program of high-priority cxpelidi-tires and subproject investments in 1()-2 urban areas of East lava wvill besupported. Total cost: 3357.3 nmillion.

Latvia j3RL)-$- 7 3 millioni. Riga's urbma transport system vwill he I-ehlabilitated,

as will the water aLid waastewater-treatment plant in Daugavpils. In addli-

tion, through the financing of the M1unicipal [Development Fulndi, funds

will be chanieled for a numbrllie- of small-scale investments in municipal

services elsexhere in the country. Total cost: $45.4 mzillion.

LebanloIn IBRD-$5() millioll. SU[pplemelntarl-y funds are being providied to he'lp

finanice additional components of the Emergency Reconistruiction aindRehabilitation Project, approved in M.larch 1!9)3.

tO§ Mauritania II)A-S 14 million. A program of poverty-oriented, labor-intensive wvorkssubprojects, conlsistinig of rehabilitation or conlstlructio11 of urbanl faCili-

ties, xvill be suIpported. T(otal cost $74 mnillion.

tO§Pakistan IIA-S2 I S million. The pr-oductivity and \xell-being of low-illcolmierlOulps in North-West Frontit'er Province will be increased throu,gh ilm-

provemelt of li ing cotl)ition-s by the pr-ovision of basic urban and ruralil1nfrstrlucttl-e. Total cost: 338.8 milliol.

tO Tanzania IDA--$105 millioll. Basic infrastructUre xxill Ie rehabilitatedJ ial eX-

panded inito high-priority, mnderserved urban areas. Total cost: $138.5millioni.

0 Ukrainie ILRD-$17i million. The development of a housing mnarkct to meet theneedis of the people of U)kraine x\ill be SUpprted. Total cost $)'S 7!)9

million.

West Bank and Gaza Trust Fu1nd for Gaza-$4() million. High-priority urban infr-astructurewill be rehabilitated, reconstructed, extennded, and mainitainied, anid thelocal government system wvill bhe strengthened. Total cost: $45 million.

WATER SUPPLY AND SANITATION

0§ Bolivia 11!:\-$)() mlillioln Somle 8()(),0()( rura-l dIwecllers, maost of vhomi ar-e indig-

enlous anld pooI-, wvill enjoy enhanced productivity through a project that,by providing for a rural water- andc sanitationi-ilnafl-rLstl-ucture program, willimprove health conditions and reduce the time spent collecting w\vater.Total cost: S48 million.

Bosnia and Trust Fulid ftor Bosnia andl Herzegovina-$ 9 () million. Watei- sanitation,

Herzegoviina and solid xaste services wvill be restored to a level thlt xvould mitigatepublic health risk in prioritv areas. Total cost: $7() million.

§ Coloinbia IF.RI)-$145 million. More than a millioni urban poor living in mar"inrllneighborhoods of Bogota will henefit from a project that will finan11ce in-vestments in seater, sewerage, and flood control/drainage systems nidprovide techniiical assistanice for institutional strengthening. Total cost:$717.9 million.

tO Etliiopia IDA-$35 .7 mzillion. The long-ter-mi vxiahility of weater supplV a.nd sa iita-

tion operations in line x ith the govcrnment s regionalization policies wvillbe enstiredi through provision of institutiolnal support, engineering

consultancies, and physical wvorks. Total cost: $65.5 million.

PRci, ! Si 1 45)

tQ India [E,RD-$1 67 million; IDA-$25 million. First-stage works to partially treatand dispose of sewage effluent in the greater Bombay area will be com-pleted, and slumn-saniitationi schemes will be implemented. Total cost:$295.6 million.

0 India IFRI)-$5().6 million. Some 1.2 million people living in 1,0(30 communi-ties in Uttar Pradesh will benefit from a package of investments in ruralwater and environmental sanitationi. Total cost: $71 million.

Morocco 1BRD-$40 million. Operational efficiency of sewerage-system operationswill he improved, and adequate sewverage service provided to the inhab-itants of Fes. Total cost: $97 million.

0§ Philippines iRL)-$57 million. Finance will be provided for the rehabilitation ofMetro Manila's separate sewerage network and of the Ayala treatmentplant, as well as implemenitation of the first phase of the septage-maniagement plan. Low-income households will benefit disproportion-ately from the project. Total cost: $76.2 million.

Poland 1BIRD-$21 .5 million. Bielsko-Biala's water and wastewater systems willbe rehabilitated and expanded, thus providing consumers with more reli-able, safer, and better-quality services. Total cost: $35.4 million.

t Russia IBRL)-$200 million. Decentralization of federal responsibilities will besupported by strengthening the ability of local governments to provideessential communlity services that are funidamenital to social well-beinig.Total cost: $288.1 millioIn.

tO Venezuela 1FRDL-$39 million. The efficiency and quality of water supply and sewer-age services will be increased through the development of a model fordecentralization, institutional strengtheninlg, and expanded private sectorparticipationi. Total cost: $71. I million.

15) THEW()R[.D BANK ANN I Al RvnnvRi 19i96

SECTION FIVE OTHER WORILD BANK GROUP

ACT l v iT-IE S

Economic DevelopmentInstitute (EDI)

Knowledge is often the key zations, including the Bank, and mass media products thatingredient in advancing social other multilateral and bilateral will extend its reach from theand economic development. agencies, foundations, NGOS, thousands to the millions inAmong the World Bank's government agencies, and in- the years ahead.greatest contributions in the country training institutions. EDI is building its future oncoming years will be to help EDI resources were concen- innovative programs that havecountries strengthen their ca- trated in sub-Saharan Africa proven to meet client needspacities to manage change and and the former Soviet Union and demand. Its goal is to in-economic reform by sharing in fiscal 1996, with the re- crease the number and qualityknowledge about best prac- mainder distributed among of high-impact programs ittices in policy design and other developing regions. can offer clients. These pro-implementation. The EN) Sup- Within the Europe and Cen- grams include those that:ports this goal by helping gov- tral Asia region, the Institute * Create national vision andernment officials share policy moved to place more empha- conzsensus. EDI has developed alessons and exchange experi- sis on the lower-income coun- number of programs to pro-ences, by imparting skills tries and the new transition mote national vision and con-needed to use resources effec- economies. Its program in the sensus. Two successful ex-tively, and bv helping to build Middle East and North amples include a jointan informed and engaged civil Africa, South Asia, and Latin wi-Latin America and thesociety committed to sustain- America grew during the year Caribbean Regional Officeing economic reform. The EDI and is expected to be larger seminar to facilitate a develop-pursues this mission by work- in fiscal 1997. The EDI also ment vision for El Salvadoring with a growing network of provided programs to coun- that involved 300 leaders ofBank and external partners to tries in post-conflict recon- the government, parliament,deliver seminars and training struction, including Angola, labor organizations, academia,programs, train trainers, pro- Bosnia and Herzegovina, the media, and private sectorduce and disseminate publica- Cambodia, and Haiti. as well as ex-guerrilla leaders.tions, and reach broader audi- EDi curriculum covered four The program was organizedences through new broad areas: by Salvadorians who hadtechnologies. During fiscal * macroeconiomic manage- participated in an EDI study1996, the ED! conducted 358 ment and policy, emphasizing tour in Malaysia. In theconferences, seminars, and decenitralizationi and fiscal Former Yugoslav Republic ofwvorkshops in all regions of the policy; Macedonia, EDI conducted aworld, reaching near-ly 7,000 * environment and natural senior policymakers forum at-people directly. More than resources, focusing on man- tended by the president,600 trainers, whio, in turn, agement and valuation of prime minister, governmentreached an additional 20,000, natural assets; officials, parliamentarians, andwere trained. EDI audiences * humani resources and pov- private sector and NGO repre-expanded to include parlia- erty, particularly girls' educa- sentatives. Macedonia's news-mentarians, journalists, education and reproductive health; papers and television gavetors, staff of nongovernmental and wide coverage to the program,organizations (NGOS), labor * regulatorv reform of pri- sparking broad public engage-and business leaders, as well as vate and public sectors. ment in the process of build-government officials. In fiscal In addition, EDI began devel- inig a shared vision.1996, the EDI worked with opment of distance learning * Strengthen regional coopera-partners from over 150 organi- tiotn. With the support of

SEL 1I()N FIVE. 01IER BANK GR01IF Ac IIVIIIES 151

France and Canada, FDI held a workshop on In- showni that the training has helped maketegrating Africa into the World Economy for microeniterprises more profitable and credit-ministers, CEOS, cenitral hank governors, and worthy.other leaders from Burkina Faso, Cameroon, * Increase impact through techntology. In fiscalCape Verde, C6te d'lvoire, Ghana, Uganida, and 1 996, I-DI began several pilot projects to im-Zambia. The objectives were to develop a long- prove access to knowledge within developingterm vision for the region; facilitate collahora- countries, particularly where local capacity istion betweeni public and private sectors; and absent or weak. Working with the Africanprovide feedback to the donor commtuniity on1 Economic Research Consortium and seven Afri-assistance to Africa. Experts from Chile, Malay- can1 uLniversities, ELi began to build an electronicsia, Maurititus, and Tunisia shared their experi- network of training institutions that will haveences in meeting similar objectives. access to courses in subjects where the World

Aid post-con-flict reconstruction. Post-coniflict Bank has unique competence. This will start acountries face huge challenges of demobilizing process to build their own capacity tosoldiers, repatriating refu-gees, rebuilding insti- offer such courses. Similarly, in Russia and else-tutions, restoring trust, and revitalizing their wvhere in the former Soviet Union, EDI startedeconomies. To support these needs in Angola, building a network of collaborating institutions.EDI held a five-day policy seminaar in February to As a first step, it began operating a Russian lan-clarify next steps on the path to normalcy. BI guage World Wide Web site with informationbrought officials from Uganda and Ethiopia about ELI training opportunlities, policy forums,who had guided those countries' recoveries and teaching aids.from war to share their experiences with Joini Vienna Institute. The Joint Vienna Insti-Angolan officials. A similar program was tute, cosponsored by the Bank, the Bank forlaunched in Gaza a[id the West Bank. LDI is also International Settlements, the European Bankcollaborating with the Austrian Peace Institute for Reconstruction and Development, and theon a program tor Bosnia. Organisationi for Economic Co-operationi and

* Integrtate sector policies in- the macroeconofniy. Development, conducted courses for public of-EDI conducted a seminiar series designed to help ficials in skills needed to implement reforms, asmainstream the enviionm iienlt in counti-y-assis- well as intr-oductory courses in market economii-taince strategies. For example, working closely ics through its regional centers in Kiev, Moscow,with the Bank's Sootlh Asia and East Asia and Prague, and Tashkent.Pacific Regional Offices, rBi conducted a three- Scholarship aniid Fellowvship Prograims. Theday ministerial lev el seminar in Manila in June .Joint Japan/World Bank Graduate Scholarshipfor senior policvmakers fiom Indonesia, the Plrogram, which supports graduate studies forPhilippilnes, Sri Lanka, and Thailand. The semi- midc career officials of member countries, pro-nar promoted better understanidinig among gov- vided funiding to 310 studenits in fiscal 1996.eminiient policymakers of the links between the Twenty-five students were enrolled in a two-economy and the environment. year Economic Policy Management program un-

* Buildl capacity (at the grassroots. Fri's highly der a special master's degree program funded byeffective six-year-old Grassroots Managemenit the Governnmenit of Japan. Under a program ini-Training program, which hegan as a pilot pro- tiated jointly with the African Capacity Build-gram in Malawi and Tanzania, was expanded to ing Foundation, eight studenits each were study-include Burkina Faso, India, Mali, Nepal, Nige- ing at McGill University and the Universiteria, Senegal, and Tunisia. This program trains d'Auvergnie in economic policy management.poor village women who manage tiny busi- Thirty students pursued advanced studies innesses, women farmers, traders, and artisans. Japan through the policy-management programFDI assisted local NG,:s and traininlg institutes to at Tsukuba University, the infrastructure-design the program and materials to meet managemenit and public policy and taxationthe needs of illiterate learners. Assessments have

152 Tar EW(!RI.D BANK A\N\t Al RI iE'(RI 1 S)6

programs at Yokohama National IJniversity, anid nearly three quarters of policvmakers reportedthe taxation-policy and management program using Bank publications in the process of for-at Keio University. mulating policy.

The World Bank's "Policy Research Bulletin"Research at the World Bank documents the Bank's current and recently

The Bank's research activities are intended to completed research. It reaches 18,00() subscrib-enhance understandinig of development and ers, 16,000 in developing countries. Some 2,10(0policy. The success of the Bank's work as it "Bulletin" readers responded to a survey indicat-tackles new and critical problems often depends ing that the "Bulletin" is a much-valued andon the reliability and depth of the research con- unique source of information about World Bankducted and on the effectiveness of communicat- research and what is beinig learned in develop-ing what has been learned to the developmiient ment studies generally. Based on the survey re-community. sults, the "Bulletin" wvas revised to meet respon-

The Bank's research budget has dropped by dents' desires for changes in timing, format, and30 percent in recent years-from a peak of $36 substance. A columni on electroniic informationmillion in fiscal 1992 to less than $25 million in was added, and a calendar and research briefsfiscal 1996. As part of an effort to assess how were discontinued. The "Bulletin" is now dis-best to use fewer resources, an assessrment of tributed quarterly.the influence of the Bank's research program A measure of the influence of a research pub-was undertaken during the fiscal year. It in- lication is hown many people cite it in their owncluded an assessment by internationally re- publications. Data on citations of articles innowned experts of quantitative performance 1,400 profe'ssional journals published in thirty-indicators and qualitative approaches, using sur- five countries were analyzed to estimate theveys, structured interview,s, case studies, and reach and influence of Bank research publica-evaluations of research products. tions. Articles in The World Bank Research Ob-

The assessments showved that Bank research sewver and The 'lorld Bank Economic Review areis broad in coverage, influential among cited more than articles in any other develop-policymakers, well-regarded by researchers, ment economic journal, and, based on this mea-heavily used as teachinlg material, and widely sure, the two Bank journals rank in the top thirdread. Howsever, the assessment also identified of all economic journals. Citation rates of pa-that the scope of research needs to be expanded pers from the Bank's major research conference,and the exposition of findinigs improved. The published in the Proceedings of the IWorld BankBank is revising its research processes and for- Annual Conference on Development Economics, ismat accordingly. even higher.

More than 3,400 readers from 113 countries World Bank research is also disseminatedresponded to a survey about World Bank publi- through many non-Bank publications. Bank staffcations and the Bank's broader dissemination published nearly 300 articles in professional jour-efforts. The results indicate that Bank research nals in each of the past two fiscal vears. The qual-is among the most extensively distributed of ity of this work is high: Bank-authored journalBank publications: World Developmenit Report articles are cited from I0 percent-to-50 percentcontinues as the Bank's flagship publication,'and the research journal, The lorld Bank Eco-nomic Review, is most widely read in borrowing I ll'orld Development Report 1996: From Plani to Matrketcountries. Bank products are commonly used observes that with consistenit and sustained reforms,for research: More than three quarters of gov- economies in transition can achieve successful long-term

economic growth; it also w:arns that manyv challenges anidernment organizations and more than half of risks--among them long-term stagnation and risingcommercial firms reported that they use them i poverty-still lie ahead for some cotntries. The report

for this purpose. In addition, more than half of concludes that consistent liberalization and stabilizationpay off, e\ en w'hen the institution.l underpinnings of a

respondents from government agencies and market system are wVeak, and notes that individual countrvcircumstances are importanit.

SE(CTI()N FIVE O rHER BANK C,ROt P ACTIVIn I,S 1 53

more than the average economics article. Bank was judged by reviewers to have met its goal ofresearch also receives wide press coverage, fur- facilitating communication among academics,ther extendinig its dissemination. Bank research ecolnomists, policy analysts, and World Bankfindings have been reviewed at an increasing staff and to have dealt with crucial and timelyrate over the past two years, averaging thirteen issues. But reviewers asked for more work onreviews a month in newspapers, magazines, and political econonmy and institutional issues andjournals. more airing of controversial approaches and

Bank-authored studies are also well repre- varying points of view in the future. The qualitysented on reading lists in university courses in of presentations and papers was seen to be high,economic developient. In a recently published but reviewers recommended stricter reviews be-collection of twenty-five course reading lists fore presentation. Finally, evaluators suggested(mostly at the graduate level), one sixth of the wide dissemination of the Proceedings in theentries were by Baink authors. The Bank's Eco- Bank's client countries.nomic Development Institute draws heavily on Evaluations of recent large research projectsBank studies in its courses, workshops, and on international economics, poverty and humanseminars-reaching thousands of participants in resources, macroeconomics and the transitionthe Bank's client countries, economies, and agriculture and the environ-

Research funded by the central Research ment were completed in fiscal 1996. The re-Support Budget are periodically evaluated by viewers were impressed by the emphasis on em-international experts in the relevant fields to pirical and policy-relevant topics, as well asimprove the selection process, project design, with the many multicountry studies, whichmanagement, and dissemination of results. policymakers find most interesting and useful.Evaluation of the two research journials, the An- CGenerally, they found the level of analysis to benual Bank Conference on Development Eco- appropriate to the topics and data and praisednomics, and more than sixty research projects maniy projects for their contributions to policywas completed in fiscal 1996. The evaluation formulation and the broader store of informa-reports were circulated to the Research Com- tion. Success in targeting dissemination wasmittee and the editorial boards of the journals more mixed, and, although many projects in-as a basis for decisions on policy and procedure volved local researchers, only a small numberrevisions, were seen to have enhanced research capacity in

Reviewers gener-ally lauded the Bank's jour- the Bank's member countries.nals, notinig the increased diversity in topic and The World Banik's policy and best-practiceviewpoint in articles over the past five years. papers, as well as economic and sector work, areThey praised the quality, exposition, and rel- often based on Bank research. They shape theevance of the Researchi Observer. While the jour- Bank's lending program and policy advice. Casenals were considered to be unparalleled in the studies of policy change in pension reform, roadquality and stature of their authors and their fo- maintenance in Africa, and emissions-reductioncus on1 the policy relevance of research, the ar- programs in several countries, for example, pro-ticles in the Econzomlic Review were often found vide evidence of the linkages of research toto be "dull," and reviewers called for efforts to policy formulation and illustrate a broad andmoderate the techlnical language used by au- continuous process of learning and diffusion.thors to meet the needs of policy-analyst read- The linkages work in both directions. Theers. Because readership in developing countries Bank's research agenda responds to emergingis so large and because the needs are so great- policy problems because research staff are ac-given the scarcity of research information in tively engaged in operational work. And Bankmany countries-the Bank was urged to further research also draws expertise from the externalexpand dissemination of the journals, research community. One third of Bank research

The Annual Bank Conference on Develop-ment Economics was held in April 1996 and

154 THE WORLL) BANKANNIIAI. REF(WiI 1996

projects involves local counterpart research insti- new approaches to assessment, more transpar-tutes and consultants. And in the Bank's vice ent selection procedures, and succession plan-presidencies responsible for sectoral advice and ninig. An upward feedback program from staffresearch, half of the consultant time recently to managers was also introduced, and perfor-spent on research was provided by nationals of mance evaluations made more rigorous.developing countries. Learizg and Leadership Center (LL-C). A re-

The various evaluations of the World Bank's vamped and expanded education and traininigresearch program are encouraging. They indi- effort, coordinated and managed by the LLC, in-cate that it plays a significant role in expandinig cludes: (a) upgrading of professional skills forunderstanidinig about development, while sug- staff at all levels through strengthenied in-housegesting where further efforts can be directed to training programs; (b) expanding training forfocus and improve World Bank research. the Bank's technical staff in major sectors and

promoting the sharing of best practices, cross-The Administrative Budget, Corporate fertilization, and selective secondm-lents to rel-Planning, and Resource Management evant organizations; (c) exeCutive education, in-

The Bank's total administrative budget for fis- volving sending selected managers and staff tocal 1996, as approved by the executive direc- leading internationial management and busillesstors in fiscal 1995, was $1,382.2 million. Late schools; (d) staff exchange and secondmenit pro-in fiscal 1996, the directors approved a total ad- grams, involving private sector organizationsministrative budget of $1,374.7 million, a drop and autonomrous agencies in selected countries;of 3.6 percent in real terms (0.5 percent in and (e) a Presidenitial Fellows program to bringnominal terms) (see Appendix 6). eminent scholars and leaders to the Bank.

The net administrative budget, which takes Iniformation} anid Technolog Services (ils).into account reimbursements and fee revenues Through a concerted and collaborative effortthat offset the costs of progr-ams not financed between II's and the vice presidential unitsfrom the regular budget, was set at $1,1 93.8 throughout the Bank, the Enterprise Network-milllion for fiscal year 1996; for fiscal 1997, it is a basic techniology platform-nwas implemenited$1,177.1 million. Fiscal 1997 will mark the across the entire headquarters and in many fieldthird consecutive year of a decline in the Bank's offices. Another important program during thenet administrative expenditures in real terms. year focused on managinig information through

The priority of the various units that com- an automated filing (imageBank) program, withprise the Bank's corporate planninig and re- some 10,0()() reports already imaged and acces-source-management services is to support the sible over the network at the desktop. In addi-Bank's emerging change agenda, with programs tion, improvements were made in customerfocused on upgrading professional skills, adjust- support, governance, computing technology,ing personnel policies to support key business and the management of Bank infor-mationi andobjectives, and providing support for changes knowledge. In the coming year, technology toolstoward a more results-oriented Bank culture. that will enhance collaboration in virtual teams,Efforts in different units have focused on the regardless of location, will be aggressivelyfollowing: implemented across the Bank. Such tools will

Human Resources (HR). The human resources also help to drive institutional change towardfunction was streamlined and realigned to pro- more opennless and sharing of information andvide more efficient and professional services to knowledge within the Bank and with its clients.management and staff, with a 15 percent sav- General Services (GsDj. In adapting success-ings in resources in the period fiscal 1 996-97. ftully to the institution's new directions, theIn the process, the HR vice presidency becamean important agent in the institutional changeprocess. Concerted efforts were made to en-hance managerial skills and potential through

Sr( I ioN FIVrE 01 -IER BAN\K GROu P AcIIVITIES 155

'cost-per-workplace" of ,SD services has been cluded in this cost are expenses associated withreduced hy about 11 percent in the past two job-search assistance, training, outplacementyears. At headquarters, with the upcoming consulting, pension-plan contributions, and re-completion of the second and final phase of the lated tax allowances.Main Complex, the medium-term strategy forspace has been updated in light of new organi- International Finance Corporation (IFC)zational changes. So far, more than 100,000 The IFC( sought to enhance the developmentalsquare feet in net office space have been surren- impact of its activities in fiscal 1996 by continu-dered, thereby enabling the redeployment of ing to expand and diversify its investment,$3.5 million in savings. Field-facilities projects mobilization, and advisory activities.2 The Cor-also were completed in Armeniia, Brazil, China, poration focused on areas of demonstrated com-the former Yugoslav Republic of Macedonia, parative advantage such as the development ofMexico, Moldova, Nigeria, lJganda, and the capital markets, the promotion of private sectorWest Bank and Gaza. infrastructure, privatization, the exploration of

Healthi Services (HSD). The Health Services new markets for investment finance and advisoryDepartmenlt (HSD) provided a variety of clinical services, and the direct mobilization of funds.and occupationial health services that included a Wbhere the climate for private investment was un-comprehensive Breast Care Program with an in- certain, the IFC concentrated on advisory serviceshouse mammograplhy screening and an on-site to build the capacity for private sector develop-clinic to assist staff with episodic, acute ill- ment, with investment to follow. Through thisnesses. Utilization of HSD services is high and process, it responded in a comprehensive way tocontiniues to increase. client needs in developing countries.

Headquarters con1stru-ction. The headquarters In November 1995 IFC clarified and strength-construction project continued its steady ened its traditional cooperation with private fi-progress towards completion of the Phase Two nancial institutions through the developmentnew building in the middle of the next fiscal and application of policies outlined in "Collabo-year; withini the approved budget of $314 ration with Private International Financial Insti-million. tutions-Practices and Policies." The underlying

Sta-ffing As projected at the beginning of fis- principles contained in the statement clearly de-cal 1996, the number of new appointments was fine iFc's role: to support investments and advi-lower than in previous years. The Bank Group sory projects with a strong developmental im-recruited 1 88 staff; of whom 33 percent were pact, and in situations where others could notfrom developing countries and 31 percent were have played a similar role.women. Regular and fixed-term staff on board The Corporation also further refined its dis-at the end of fiscal 1996-excludinig staff on closure policy during the year to better ensurespecial leave and leave without pay-numbered that its activities are undertaken with transpar-5,681, down from 6,059 as of June 30, 1995. encv and accountability. It continued to expandDuring fiscal year 1996, the Bank completed its advisory work, seeking to leverage its experi-the implementation of a special staff-redun- ence through technical assistance and dissemi-dancy program. In February 1995, the Bank's nation of knowledge. A new publication series,executive directors approved a special authori- focusing on lessons of experience in the areas ofzation to fund 568 staff redundancies for a total privatization, infrastructure, capital markets,amount of $153 million. As the program unl- investment funds, and leasing, was launched.folded, the total nuimber increased, while the The Corporation will continue to focus on dis-average cost turned out to be lower. In total, semination as a tool in achieving results on the608 staff left the Bank under the special pro- grouLnd and as a means for broadening its devel-gram, at a total cost of about $112 million. In- opmental impact. The IFC also continued its

2. Details of the IFr'S investment and mobilization activitiesduiring fiscal 1996 may he found on page 61.

156 THE WORLD BANK ANNIIAI. REPORT 1996

work in support of environmental sustainability * %IIGA issued its first guarantees in Kuwait,through joint projects with the Global Environ- Kyrgyz Reptublic, Mali, Nepal, and Papua Newment Facility, the Montreal Protocol, and other Guinea;donors. * MIGA'S risk-to-assets ratio was raised from

The 1Fc realized record net income of $346 2.5 to I to a new level of 3.5 to 1; andmillion, reflecting improved profitability of its * country limits for guarantees were raisedloan portfolio and strong capital gains perfor- firom $175 million to $225 million.'mance. It earned a return of 8.9 percent on its Technical aissistance activities. N11C;A offers tech-average net worth, which reached $4.2 billion nical assistance, through its Investment Market-at June 30, 1996. New commitments signed ing Services Department, to help developingduring the year totaled $2.1 billion, down from countries promote private investment opportu-$2.4 billion in fiscal 1995. Disbursements were nities more effectively. This support includes as-up, to $2.1 billion, and the IFC's total disbursed sistance in disseminiation of information on in-portfolio reached $7.8 billion as of June 30, vestment opportunities and business operating1996. The Corporation borrowed $3.0 billion conditions; organization or support of specificin the international markets and $8 million promotion activities; and training and other ini-from the IBRD. The IFC issued bonds in twelve tiatives designed to enhanrce the institutional ca-currencies. pacity of host-country investment-promotion

In fiscal 1996, the Corporation's membership agencies (II'AS). Wherever possible, N1.GA seeks toincreased to 170 countries with the additions of support promotion activities that can he orga-Azerbaijan, Bahrain, Eritrea, St. Kitts and Nevis, nized on a multicountry and/or sectoral basis.as well as of Bosnia and Herzegovina, which uIGA is also pioneering the use of new mar-suceeded to the membership of the former Social- keting and communications technologies as ve-ist Federal Republic of Yugoslavia. hicles for dissemination of information. During

Details of the IFc's fiscal year can be found in fiscal 1996, MIC,A formally launched its Invest-its Annual Report, published separately. ment Promotion Agency Electronic Network

(IPAnet). The product of two and a half years ofMultilateral Investment Guarantee Agency research and development efforts that has(MIGA) tapped user feedback and information from

During fiscal 1996, MIGA's board of executive over seventy countries, IPAniet is an on-line, mar-directors concurred with the president's deci- keting, communications, and information net-sion on all forty-four insurance projects con- work that links private investors with invest-veyed to it. Since MIGA'S inception, the board ment intermediaries and technology providershas considered 215 projects. MIGA'S net income worldwide to share information and promotebefore provisioning increased 62 percent to foreign direct investment (FDI) via the Internet.$20.7 million in fiscal 1996. IPAnet was opened in November 1995 to the

Six additional countries became members of world investment community for a free trial pe-the Agencv in fiscal 1996, increasinig the num- riod wlhile content and funrctionalities were be-ber of MIGA member countries to 134. An addi- ing added. Concurrently, MIGA initiated market-tional twenty-one developing countries and ing efforts worldwide to demonstrate theeconomies in transition are in the process of ful- facility to gatherings of IPA officials and privatefilling membership requirements; MIGA has 155 businesses. Favorable press coverage from majorsignatories to its Convention. business publications in North America, Asia,

During fiscal 1996: and Europe helped boost registration to more* MIGA issued sixtv-eight contracts for $862 than 1,000 organizationis in more than eighty

million in coverage, raising the outstanding countries bv May 1 996.maximum contingent liability to $2.3 billion;

3. Details of Xii -AS fisCal 1996 g,Uarantee programn may LeItlfkLid 0n page 61

SECTII N Fl\ Ev ( 11 IER BA\i\ GK(IP ACTIVITIES 1 5,

MIGCA also continued its support of more tradi- and advisory activities in the area of foreign in-tional forms of investment promotion during fiscal vestment law.1996, organiizing two major investmiienit-promo- During fiscal 1996, ICSID'S membershiption conferences focused on mininig in Africa and continued to grow with the ratification of theCentral Asia, respectively. MIGA also continiued ef- Convention by Algeria, the Bahamas, Bahrain,forts to promote investment betweeni developing Oman, Panama, St. Kitts and Nevis, andcountries, organi7ing in NMalaysia a svmposiumn de- Uzbekistan. As of June 30, 1966, 126 countriessigned to promote increased flow of 'south- had become members of ICSID; an additionalsouth" investment. Representatives from more thirteen countries had signed but not yet rati-than thirty countries attended this symposium, fied the Convention.which provided a forum for IPAS and firms seek- During the same period, five new requestsing to attract business collaboration from Asia for arbitration were registered. As of June 30,to learn ahout government policies and businiess 1996, ten cases were pending before thestrategies of leading companies from Japan, the Centre.Republic of Korea, Malaysia, and Singapore. IsSI's publications include a semiannual law

During fiscal 1996 MIGA expanided the scope journial, "ICSID Review-Foreign Investment Lawof its IPA capacity-building program, conductilng Journal" and multivolume collections of "Invest-several orientation/training programs on investment Laws of the World and Investment Trea-ment-promotion "best practices" for diplomatic ties." Two issues of the law journal and four re-officials of individual countries or groups of leases of the investment laws and treatiescountries, as well as an executive managemenit collections were published in fiscal 1996.workshop for chief executives and their depu- Details of ICSID's activities during fiscal 1996ties from seven African IPAs. appear in its Aninual Report, which is published

MIGA also provides technical assistanice separately.through its L.egal Department which helpsmember countries to develop appropriate legis-lation to facilitate FM inflows.

Details of Nil(-.A's activities during fiscal 1996appear in its Annual Report, which is publishedseparately.

International Centre for Settlement ofInvestment Disputes (ICSID)

The Internationial Centre for Settlemenit ofInvestment Disputes is a separate internationalorganization established under the Conventionof the Settlenmenit of Inivestmenit Disputes be-tween States and Nationals of Other States (theConvention), which was opened for signature in1965 and entered into force the following year.

ICSID seeks to encourage greater flows of inter-national investmenit by providing facilities forthe conciliation and arbitration of disputes be-tween governments and foreign investors. In ad-dition, ICSID undertakes research, publications,

158 THE WORLD BANK ANNHAL. RFR)RT 1996

SECTION SIX WORLD BANK FINANCES

IBRD Financial Highlights . 5100 million, hy way of with floating debt by July 1,In the fiscal year ending grant, to the Debt-reduction 1996. This will expose the

June 30, 1996, the CBRD Facility for IPAi-onlyV Countries; liRD'S net income to less inter-achieved strong financial per- * $250 million equivalent in est-rate riskformance, the highlights of SDRs as of June 30, 1995, as an Review' of sinigle currencvwhich include: immediate grant to 1D; and loans. Oin June 25, 1996 the

healthv net income of * the remainder, $634 mil- executive directors reviewed$1 187 million, despite a falling lion, to surplus. the single culrrency-loani pro-interest-rate environment and gram and agreed to removecontinuing strengthening of the Financial Policies the lendinig volume limitationUnited States dollar (the IBRD'S Conversion froni 1982 loan on new single currencv-loanreporting curreicy) against terms to 1989 loan tenrs. The commitments, effective imme-other major ctirrencies. program approved by the ex- diately. When the single cuir-

* strong growthi in loan dis- ecutive directors in November rency-loan program was ex-bursements to member coun- 1994 to encourage borrowers panded In May 1995, directorstries, tip by 5.5 percent to to conivert the lending terms felt it prudenit to limit bor-$13,372 million, from $12,672 of their IRRI) loans from the rowiing countries' access tomillion in fiscal 1 995; variahle lending-rate system in new single currenicy loans to

* an 8 percent reduction effect from July 1, 1982 unitil 50 percent of their lendingin the cost of new medium- July 1, 1 989 (VI R 1982) to the program or $100 millioni,and long-term borrowings, variable lending-rate system in whichever was greater. Theafter swaps, to 5.28 percent effect since July 1, 1 989 (Vl R single currency-loan programfrom 6.31 percent in fiscal 1989) has been very effective. has proved popular with bor-1995; Of the $38.8 hillion equiva- rowers, with about 50 percent

* a healthy reserves-to-loan lent of VI.R 1 982 loanIs ouit- of all new comnmitimnents in fis-ratio of 14.1 percent; standing at December 31, cal 1996 made on single cur-

" a 12 percent redtictioii in n1994, approximately $36.9 rency-loan terms. The decisionadministrative expenses to Ibillion equivalent had been to remove the volumne limita-$846 million, down from converted to vi R 1 989 loans tion was a response to hor-$961 million in fiscal 1995; by the end of fiscal 1996. The rower interest for increasedand successftul implenmentationi of currency choice, and follow's

* the retention of a 25 basis the vI R 1982 loan and conver- the successful conversion ofpoints interest w'aiver for eli- sion program enabled the IBR) Vi 1 982 loaIs to VI R 1989gible borrowers and a 50 basis to improve the interest-risk loan terms, and the wra's

point comimiitmiienit fee waiver management of its liquid port- progress in promoting in-to all borrowers. folio and enhanice its ability to formed decision making by

The board of governors expanid the currency and inter- borrowers during fiscal 1 996.agreed at the September 1995 est choices it can offer to its Rev'iew of currencv poolannual meetings to allocate borrower-s on new and existing loanyis. The currency-manage-net incomiie earned during fis- loans. menlt system approved incal 1995 as follows: Debt-funding liquidit-y. In ac- January 1 989 established tar-

* $28(0 million to the gen- cordanice wx-ith the IRRD's poli- get ratios for the currencyeral reserve to increase the re- cies on curreincy and interest- composition of currency-poolserves-to-loan ratio and rate risk management, the loans. Tlinder the currency-prefund partial wvaivers of in- executive directors approved pooling system, each loan is aterest charges; on May 7, 1996 a proposal to share of the currency pool and

* $90 million, by w'av of achieve full fuLidinig of the has the same curretncy comnpo-grant, to the Trust Fund for IBRD liquidity portfolio on a sition as all other currency-Gaza; currencv-by-currency basis

SECII(N SIX WORID BANK FINANCrS 159

pool loans. On Junie 75, 1 996, the executive currenlcy-pool terins will not be available for

directors reviewed the targeted curr-ency-pool new loans.loans. In response to borrower demand, they Accumulated provisions for loan losses. Theagreed to establisih neNw single currency-pool level of loan-loss provision is based on an assess-loans in four currencies (ULnited States dollars, ment of the collectibilitv of loans in nonaccrualyen, deutsche mark, and Swiss francs) aLid to status, together- withl an evaluationi ofoffer borrowers a choice of currencies for the collectibility risks in the remainder of the port-undisbursed and disbursed outstandilig balances folio. For fiscal year 1996, loan-loss provisionsof their existing currency-pool loans. Borrowers were maintained at a level equal to 3 percent ofcan select among three choices: (a) conver-t total loans disbursed and outstanding plus theundisbursed balanices to single currenicy-loani present value of callable guarantees for anterms; (b) convert undisbtur-sed balances to amount equivalent to $3,34(0) million at the endsingle currency-loan) terms anid disbursed and of the fiscal year.outstanding balances to single currenicy-poolterms; and (c) convert the entir-e loan (dis- Loanshursed and undisbursed balances) to one of the Disbuirsemenzts. The IBRS'S gross disbursementsfour newv single currenicy-pool loans, to couLitries during fiscal 1996 were $13,372

Borrower-s may also choose to remaini withi million, up $700 million from fiscal 1995's totalthe existing currency-pool loans. The CBRD will of $12,672 million. Net disbursements, exclud-continue to maintain at least 90 percent of the ing prepayments, to current borrowers wvereUnited States-dollar equivalent value of the cur- $2,882 million, an increase of $664 million overrency pool in fixed curienicy ratios of I United the previous year's total of $2,238 million.States dollar to 1 25 yen to 2 deutsche mark Lending rate. For loans made under, or con-equivalent (comprisig, deutsche mark, Swiss verted to, the IBRD'S newv variable lending ratefrancs, and Nethel-lanids guilders). These targets (\!LR) system, established in 1989, the interestwill be reviewed in five years. rate was 7.07 percent for the first semester and

The currency composition of the single cur- 6.98 percent for the second semester of fiscalrency-pool loans uLider options (b) and (c) will 1 996. By comparison, the interest rates forinitially be the same as the original currency- older variable rate loans (established in 1982)pool loans. Over time, the IBRD will shift the that have not been converted to the currenit sys-currency composition of each of the four single tem were 7.09 percent and 6.97 percent for thecurrenicy-pool loans to 1O0 percent in the desig- first and second semesters, respectively.nated currency and, at least, to 90 percent by The single currency lendinig rates ranged from.July 1, 1999. Starting from September 1, 1996, 5.38 percent to 6.13 percent in United Statesborrowvers can make their choices known to the dollars and from 4.41 percent to 6.85 percentsRD. The deadline for choosing is June 30, in Frenchi francs (the only currencies outstand-1998. The conversions to single currency-pool ing on loans). These rates are based on theloans will take place on July 1, 1 997, January 1, IBRD'S cost of lIBOR-based funding (PIBOR for1998, and July 1, 1998. Except for the single French francs) in these currencies.currenicy-pool loan converted from fixed rate Interest waivers. DuLing fiscal 1996, the IBRDcurrelIcy-pool loan, the lenidinig rate for each continued to waive 25 basis points of the se-single currency-pool loan will he variable, reset mester interest rate of loans to all borrowerssemianiniually, and equal to the semester- average that had made all loani-service payments withincost of IBRD borrowing allocated to funad that thirty days of their due date. (Approximatelypool plus the 0.50 percent conitractual lending 90 percent of the IBRD'S total voLume of' out-spread. The single currenicy-pool loani coii- standing loans is currenitly eligible for the inter-verted from fixed rarte cuirrency-pool loarn will est-spread wvaiver) This waiver was in additioncontinue to carry the same fixed lending rate to the continuation during the year of a waiveras in the original loan agreement. The single

160 THI W(R i.t) B,\Nk ANV \I. Rli a. I 9)9

of part of the IBRD's commitment fee on During fiscal 1996, the IBRD'S financial returnundisbursed balances that resulted in a reduc- on its portfolio was 4.43 percent. The financialtion of that fee from 75 to 25 basis points. To- return on investments in fiscal 1995 was 5.69gether, the partial waivers on loan charges percent. The portfolio was managed in relationamounted to $521 million in fiscal 1996. to a benchmark strategy of one year duration

Loanzs inZ nonaccrual status. At the end of fis- except for the held-to-maturity portfolio, whichcal 1996, six member countries (Bosnia and had an average duration of 5.55 years as of JuneHerzegovina, Iraq, Liberia, Sudan, Syria, and 301), 1996.Zaire), as well as one successor republic of theformer Socialist Federal Republic of Yugoslavia, Borrowings and Liability Managementthe Federal Republic of Yugoslavia (Serbia and The objectives of the IBRD's borrowing and li-Monetengro), were in nonaccrual status. Loans ability-management strategy are to ensure thein nonaccrual amounted to 2.3 percent of the long-term availability of funds to the IBR0) fortotal IBRD portfolio at the end of fiscal 1996. In lending and liquidity and to minimize the costsJune 1996, the IBRD approved a loan-consolida- of funds for the IBRD and its borrowers. The IRRD

tion package that ensured Bosnia and seeks to ensure the availability of funds by de-Herzegovina's continued access to IlRD lending veloping borrowinig capacity in a range of mar-resources while maintaining the financial integ- kets and by diversifying its borrowings by cur-rity of the IBRD. For further details on the agree- rency, country, source, and maturity to providement, see the box on page I)10. maximum flexibility in funding. It also seeks to

enhance the continuing appeal of its securitiesLiquid Assets Management by offering features tailored to satisfy investors'

In fiscal 1996, the IBRD once again abided by asset prefcrences and by positioning its securi-its underlilg stability-oriented liquid assets- ties advantageously in each capital market (formanagement policy by maintaining its liquidity example, from a regulatory, tax, and invest-at 43 percent of its next three years' estimated ment-classification perspective).cash requirements. The policy helps the IBRD to Within the framework of the currency com-ensure the flexibility in the timing of its bor- position of borrowinigs required to fund itsrowvings should borrowing ability be adversely lendinig products, the IBRD seeks to minimize theaffected by temporary conditions in the capital cost of borrowved funds by using, among othermarkets. At the end of the fiscal year, the (BRDs things, currency swaps to obtain savings overliquidity totaled $15,898 million, of which the cost of direct borrowings in target currencies;$1,168 million was segregated as "held-to-ma- structured financings converted to conventionalturitv." Further, to ensure reduction in interest liabilities using over-the-counter financial de-rate risks, on July 1, 1996, the IBRD will begin rivatives; short-term and variable rate instru-funding its liquidity portfolio by floating debt ments; and prepaymllents or market repurclhaseon a currency-by-currency basis. of borrowings, which, by varying margins, ex-

The IBRD'S liquid assets are invested exclu- ceed the costs of refinancing.sively in fixed-income markets and are actively Medium-term anzd long-term funzdin-g. Duringtraded, with the exception of the pound ster- fiscal 1996, the IBRD raised $10.9 billionling holdings, which have been matched to the through \1I,T borrowings in fifteen currenciesduration of underlying liabilities. The sterling (see Table 6-1). In connection with these bor-portfolio is classified as held-to-maturity. Port- rowings, the Bank also contracted $4.7 billionfolio-management activities are fully supported of currency swaps and a notional par volumeby comprehensive risk-management and moni- of $6.1 billion of interest-rate swaps. Aftertoring procedures covering both credit risk and swaps, most of the year's funding was denomi-interest-rate risk. Trading performance of ac- nated in Utnited States dollars and deutschetively managed portfolios is measured daily mark, with minor amounts in French and Lux-against detailed benchmark portfolios. embourg francs. The average maturity of all this

S(CI [Ot'N SIN WORiLD BANK FINAN(S 161

TABLE 6-1. IBRD MEDIUM- AND LONG-TERM BORROWINGS,FISCAL YEAR 1996


Currency US dollarType Issue Currency amount equivalent

Global 6.125% seven-year bond, due 2002 DM 2,975 2,005.76.375% ten-year bond, due 2005 US$ 1,490 1,489.96.375% five-year bond, due 2001 US$ 995 994.95% two-year bonds due 1998 Y 29,550 269.7Capped floater seven-year bonds due 2003 Lit 299,640 194.5

Structured 10.6% three-year callable bonds due 1998 Lit 149,820 93.110.6% two-year callable bond due 1997 Lit 250,060 157.16% five-year extendable step-up notes due 2000 US$ 30 30.09.375% three-year callable bonds due 1999 Lit 299,440 189.58.70% ten-year callable bonds due 2006 Ptas 9,988 65.19.65% three-year callable bond due 1999 Lit 199,800 128.1Floating seven-year callable bond due 2003 Lit 299,690 190.53% ten-year callable bond due 2005 X 10,000 99.73.25% ten-year callable double-up bond due 2006 X 5,000 47.5Investor puttable reverse dual currency note withmulticurrency coupon option due 2029 v 20,000 184.4

Step-up seven-year callable notes due 2003 DM 99 65.18.50% three-year callable notes due 1999 Lit 299,570 193.16.6% two-year dual currency bonds due 1998 X 6,890 63.9Zero-coupon ten-year callable bonds due 2006 Lit 399,786 255.1Floating rate five-year callable notes due 2001 Lit 199,810 128.78.25% four-year notes due 2000 $A 100 78.9

Conventional Loan due 1998 LuxF 1,000 34.98-3/4% DM bonds due August 28, 2001 DM 45 31.08 1/4% two-year bonds due 1998 Ptas 14,990 119.57.75% three-year bond due 1999 Ptas 9,975 79.17.5% four-year bonds due 1999 $A 199 151.8Zero-coupon four-year bonds due 1999 $A 297 226.6three-year FRN due 1998 Dr 19,980 84.74% three-year bond due 1998 US$ 192 191.75% five-year bond due 2000 US$ 49 48.87.6% three-year bond due 1998 $A 198 153.24% three-year bond due 1998 DM 198 139.510.2% two-year bond due 1998 KY 2,496 93.65.35% seven-year note due 2003 DM 148 103.1Zero coupon three-year bond due 1999 US$ 260 260.44.625% 3.8-year notes due 1999 DM 299 202.58.25% three-year bond due 1999 $NZ 99 68.27.05% five-year LAF-eligible notes due 2001 HK$ 1,000 129.4Zero coupon two-year bond due 1998 Lit 166,900 106.45.25% five-year notes due 2001 DM 299 199.45% three-year bond due 1998 $A 140 103.07.65% three-year bond due 1999 $A 247 197.88.75% three-year bond due 1999 $NZ 100 68.27% two-and-a-half-year bonds due 1998 £ 200 304.65.6% two-year bonds due 1998 Can$ 100 72.88.25% three-year bonds due 1999 $A 100 79.47% three-year bonds due 1999 HK$ 1,000 129.39% three-year bonds due 1999 $NZ 199 135.26.25% two-and-a half-year bonds due 1998 US$ 199 199.24.55% three-year bond due 1999 US$ 99 99.03.20% 12-year loan due 2008 X 5,000 47.65.75% six-year bonds due 2002 F 495 97.6

Total 10,883

Note: Borrowing amounts are based on net proceeds. United States dollar equivalents are expressed at the exchange rateprevailing at the time of launch.

162 THE WORLD BANK ANNUAI. REPORI 1996

TABLE 6-2. IBRD BORROWINGS, AFTER SWAPS, FISCAL YEAR 1996

(amounts in millions of us dollars equivalent)

Before swaps Currency After swapsMaturity swaps Maturity Cost

Item Amount % (years) (amount) Amount % (years) (%)

Medium- and long-termborrowings

U.S. dollars 3,313.9 30 6.8 2,605.8 5,919.7 54 5.7 5.71Deutsche mark 2,746.2 25 6.3 2,084.5 4,830.7 44 4.4 4.75Japanese yen 712.9 7 5.8 (712.0) - - - -Others 4,109.0 38 2.9 (3,976.5) 132.5 1 5.1 5.11

Totala 10,882.0 100 5.1 1.8 10,882.9 100 5.1 5.28

Short-term borrowingsoutstanding

Central bank facility 2,586.3 59 0.5 5.40Discount notes (U.S. dollars) 1,400.0 32 0.4 5.46OtherbU.S. dollars 300.0 7 0.9 5.52Deutsche mark 73.6 2 0.7 3.02Totalc 4,359.9 100 0.5 5.43

NoTE: Details may not add to totals because of rounding.

a. Excludes the cost of Liability Management Funding and the volume, maturity, and cost of Contingent Funding.

b. Executed under the IBRD's Global Multicurrency Note Program.

c. Short-term borrowings outstanding on June 30, 1995, totaled $3, 917 million.

funding, including the MLT funding held at float- Liabilitn management. During the past fiscaling rates, was 5.1 years, and the after-swap cost year, the IBRD prepaid an aggregate volume ofwas 5.28 percent (see Table 6-2). $216 million of borrowings in United States

Noteworthy among the vehicle-currency dollars and Luxembourg francs. In addition, ittransactions executed by the IBRD during the redeemed $25 million equivalent of outstandingpast year was the launching of its first Czech Swiss franc borrowings through market repur-koruna operation in December 1995, a two- chases. To improve interest rate matching be-year maturity, euro-Czech koruna 2.5 billion tween the IBRD'S liquid assets and its debtissue, the largest of its kind at the time. With a reallocated to fund such assets, the IBRD alsorevival of investor interest in structured financings, transformed a notional principal amount ofthe IBRD also took the opportunity to issue $2.4 $9.3 billion in such existing debt from a fixedbillion of such financings during the year. Strong rate- into a floating rate-basis during the year.demand from Japanese investors, especially from At the end of the fiscal year, NMLT funding out-retail, for non-yen paper offering a yield pick-up standing amounted to $92.4 billion, or 95 per-over historically low domestic Japanese interest cent ($93.8 billion, or 96 percent after swaps)rates, also enabled the IBRD to raise about $2.5 of total debt outstanding. As of Junle 30, 1996,billion in Japanese targeted issues.

SECTION SIX WORLD BANK FINANCES 163

the average maturity of total M4LT debt was 5.3 balances for assets and liabilities. For the Juneyears, and its average cost, after swaps, was 6.26 30, 1996 financial statemenits, expressed inpercent. United States dollar terms, the loan portfolio

Short-term funding. As of June 30, 1996, was reduced by $14.4 billion, the borrowingshort-term borrowinigs outstanding were $4.3 portfolio by $11.7 billion, and accumulatedbillion, an increase of $0.4 billion over June 30, provision for loan losses by $0.4 billion. In total,1995. These comprised $2.6 billion from offi- expressed in United States dollar terms, the to-cial sources through the IBRD'S central bank fa- tal assets fell by $ 17.0 billion and total liabilitiescility, $1.4 billion from market funding in by $14.0 billion.United States dollar discount notes, and $0.4 On June 30, 1996, the total subscribed capi-billion from short-term notes issued under the tal of the IBRD was $180.6 billion, or 96 percentIBRD's global multicurrency note program. The of authorized capital of $ 188 billion. During fis-cost of these borrowings was 5.4 percent, com- cal year 1996, subscriptions to the $74.8 billionpared with 5.85 percent at the end of fiscal 1988 general capital increase (Gci) continued on1995. schedule. Twventy-six countries subscribed an

aggregate $4.0 billion. A total of 20,584 GCI

Capital shares ($2.5 billion, or 3 percent of total alloca-

The IBRD seeks to avoid exchange risks by tions), including GCI shares allocated to newmatching its liabilities in various currencies wvith members that joined the IBRD after April 1988,assets in those same currencies and bv matching remain to be subscribed. At the end of fiscalthe currencies of its retained earnings and accu- 1996, the permissible increase of net disburse-mulated provision for loan losses with those of ments ("headroom") was $90.8 billion, or 45its outstanding loans. percent of the IBRD'S lending limit.

The IBRD presents its financial statements in On June 14, 1996 the board of governors ofUniited States dollars. Accordingly, changes in the IBRD approved a Special Capital Increase ofthe value of the United States dollar vis-a-vis 33,230 shares for Japan, in recognition of a seri-other currencies have an effect on the reported otus discrepancy that had developed over time

BOX 6-1. A REVIEW OF THE FIRST TWO YEARS OF IDA- 10

In October 1995, the executive directors of the ments (cAss) after having discussed thirty-five CASsBank discussed a review that reported on the use of in the previous year During the two years, the ex-resources during the first two years of IDA-I 0 (fiscal ecutive directors have reviewed cAs documents foryears 1994 and 1995). about two thirds of the seventy-eight countries that

The review covered IDA'S progress in the light of the were eligible to borrow from IDA. An increased focusobjectives agreed with donors. IDA's primary aim, pov- on stakeholder participation resulted in substantialerty reduction, is reflected in country-assistance pro- improvements in these documents. In addition, moregrams, as are the supporting objectives of economic than half of all IDA projects approved in fiscal 1995growth and environmental sustainability. The focus in benefited from beneficiary participation in their de-these country-speciftc programs is on the effectiveness sign.of iDA-funded development programs and projects, The directors took note of the report and endorsedsince imtproved results are needed if IDA is to help the implementation of poverty-reduction strategiesaccelerate the reduction of poverty so widespread in through country-specific assistance strategies, whileIDA-eligible countries. Country programs are increas- suggesting that these could be more firmly groundedingly tailored to each country situation on the basis in the analytical results of poverty assessments. Theyof the results of poverty assessments, national envi- also encouraged a clearer evaluation of the linkagesronmental action plans, and other country-specific between IDA programs and results on the ground. Theanalytical work. report, "IDA- I 0: The First Two Years-Review of the

In the second year of IDA-I 0, the executive board FY94-95 iDA Program," was made available to thediscussed nineteen country-assistance strategy docu- public.

164 THE WORLD BANK ANNI Al !E)kI 1R[! 996

~~ - s,*; s

~~~a - ' N

r~~~~ T tr A- '

lwtwecrl 1;.il9lRL) sharlehlOdirl" arld its t(>- As otJune 3() 1'96 ti th donor ftundcss rnd(

nornliQ po sition. Tllis im. re.ased the sharle ot' la- available fo r the ii)A\-I) per-iod (fiscal l!)94-'§ 1rall troi m (i. l ! pt-erent of the toul allmf ated totaled 4PR 11 036 million Dtiriig fiscal

slharcs t) S. I18 Percenit about sr)92 51l millioii wais derixed fr-oni theResren,s. Oin Jun1e 3() I 996,( reserve" r-elease Cot tlle tlhird- annUtal traitche of IL)A- I (

.1n10ou1ted to) $ 1171 hillion, Lind the reser\ es-to- tcomrnitrnen1ts Howvever, parjt of the thiirclloanl ratio stood at 1m 4I percent. trantche Oft ID)A- I() contribuitions is niot vet avail

able, Lis the Uliiited States' conitribUtIO11 WvasIDA Finances niot made on the agreed sc hedule, anid oint do-

lt)-Cs Collm1lWionen st aulJtloritW,. 11);\ is mainly inor, Gerimany, exerc ised its rMigt to wvithhold

tunided h! dlono r c-ontributtions, aid. SLII chfUlIdS its cointributioii proportioiiatelv to the shor-tfallare ' replenisled'' hy ani agreeelnelt arnon1g iln the Unlitecl States' p aviiieint The Associatit)ndonor-s ever) three veairs. Fiscal year 1'9(i was did receive a small finial payiment fromi thethe tlii-ci and finaLl year of'the tentlh repleilisi- Uniitecl States to--r its IDA-9 conltribLition, wVhii.I

mlelit of' ii)-\ (io) \- (), the agreedi size of ~,hich triggered a release of some funids fi-on-i Ger-\% as Sl ip I 3) hillionl (see Box li- I ). IL) \'s c-ominiit- naLiy that had beeni blocked becauise of the de-inieiit auth)ority is based oni these dotior contiri- lav in the Ufiiited States' pavment. These Ir A-L)

huitioins, which are made availabrle in three ain- paymeints increased IDA'S Comimitmeilt aUtitlio-

nuLal traLiiicles, and otlher reSOuLi-ces a\ ailable to itv by about S;DR84 mi]nilion. Also Liurinig fiscalii, (nmainly repayments t roim past creciits and 1996, the Association received fornmal notificLi-

inet illcolilt' tranisfers from- the IBRLD). tionis from- Greece and Italv that thev would

SE(-Tlt)r\ SI\ oi \;1t)13 A,I\ Fi\,A\( LS l 6in

contribute to IDA-IO, thereby increasing itscommitment authority by an additional SDR273

million. Only one donor, Kuwait, had not vetnotified the Association of its participation inIDA- Oby the end of fiscal 1996.

Other resources made available during thevear included the transfer of SDR 161 millionfrom the IBRD'S fiscal 1995 net income and SDR

942 million of commitment authority againstcurrent and future repayments of past credits.Of the latter amount, sDR800 million is forordinary credits, and another sDR 142 million isfor the Fifth Dimension Program. Therefore,the total available resoures for the entire IDA-1(I

period increased to SDR 14,895 million in fiscal1996.

Against these resources, the Association madeIDA-I 0 commitments of SDR4 ,616 million duringfiscal 1996. Of this amount, 40 percent went toAfrica, 26 percent to South Asia, 17 percent toEast Asia and Pacific, 7 percent to Europe andCentral Asia, 6 percent to Latin America andthe Caribbean, and 5 percent to the MiddleEast and North Africa.

IDA'S commitmentfee. Every year, the level ofcommitment fee is set by the executive direc-tors based on an annual review of IDA'S financialposition. The commitment fee for fiscal 1997was set at 0 percent for all IDA credits. IDA'S

commitment fee has been 0 percent from fiscal1989 through fiscal 1996.

Special Fuind teimnination. In May 1996, theexecutive directors approved the termination ofthe Special Fund, set up in 1982 to supplementIDA funding for fiscal 1984. As a result of thetermination, all credits, as well as all liquid as-sets, were transferred to IDA.

166 THE WVORLD BANK ANNUAL RFPORT 1996

FINANCIAL STATEMENTS OF THE

INTERNATIONAL BANK FOR RE CONSTRUCTION AND DEVELOPMENT

Balance Sheet 168

Statement of Income 170

Statement of Changes in Retained Earnings 170

Statement of Changes in Cumulative Translation Adjustment 170

Statement of Cash Flows 171

Summary Statement of Loans 172

Summary Statemnent of Borrowings 175

Statement of Subscriptions to Capital Stock and Ihting Power 178

Notes to Financial Statements 182

Report of Independent Accountants 196

IBRD FINANCIAL STATEMENTS 167

BALANCE SHEETJunte 30, 1996 and June/) 30, 1995Expressed itn millio,ns of US .dollars

1996 1995

Assets

Due from BanksUnrestricted currencies $ 27 S 40Currencies subject to restrictions-Note A 612 549

639 589

Investments-Notes B and ETradinig 15,001 19,821Held-to-maturity 1,169 1,203

16,170 21,024

Securities Purchased tinder Resale Agreements-Note B I ,282 246

Nonnegotiable, Noninterest-bearing Demand Obligations on Account ofSulbscribed Capital -Note A 1]765 1,610

Amounts Receivable to Maintain Value of Currency Holdings-Note A 732 1 106

Other ReceivablesAmounlts receivable from currenicy swaps-Notes D and E 18,010 16,735Amounts receivable from investment securities traded 2,365 1,762Amounts receivable fi-om covei-ed foriwar-ds-Notes B and E 204 1,307Accruedl income on loans 2,127 2,538Accrued interest on investments 92 159

22,798 22,50 1

Loans Outstanding(see Summary Statement ofLoans-Note C)Total loans 164,766 179,453Less loans approved but not yet effective 9,50( 11],982Less uLndisbursed balance of effective loans 45,020 43,972

Loans outstanding 1 10,246 123,499Less accumulated provision for loan losses 3,340 3,740

Loans outstanding net of accumulated provision 106,906 119,7 59

Other AssetsUnamortized issuanice costs of borrowings 412 485

Miscellaneous 1,300 1,2591,72 1,744

Total assets $152,004 $168,579

168 THE WORID BANK ANNI Al. REPORT 1996

1996 1995

Liabilities

Borrouwings (see Summary Statement of Borrowings-Notes D and E)Short-term S 4,328 $ 3,898Medium- and long-term 92,391 104,392

96,719 108,290

Securities Sold Under Agreements to Repurchase andPayable For Cash Collateral Received-Vote B 2,439 2,567

Amounts Payable to Maintain Value of Currency Holdings-Note A 4 24

Other LiabilitiesAmounts payable for currency swaps-Notes D and E 19,427 19,985Amounts payable for investment securities purchased 1,508 2,231Amounts payable for covered forwards-Notes B and E 202 1,306Accrued charges on borrowings 2,352 2,857Payable for Board of Governors-approved transfers--Note F 205 135Accounts payable and miscellaneous liabilities 848 723

24,542 27,237Total liabilities 123,704 138,118

Equity

C(apital Stock (see Statement of Subscriptions to Capital Stock and Vbting Power-Note A)Authorized capital (1,558,478 shares-June 30, 1996; 1,525,248 shares-June 30,

1995)Subscribed capital (1,497,325 shares-June 30, 1996; 1,462,574 shares-June 30,

1995) 180,630 176,438Less uncalled portion of subscriptions 169,636 165,580

10,994 10,858

Deferred Amounts to Maintain Value of Currency Holdings-Note A 136 770

Payments on Account of Pending Subscriptions-Note A 15 23

Retained Earnings (see Statement of Changes in Retained Earnings-Note F) 16,099 15,502

Cumulative Translation Adjustment (see Statement of Changes in CumulativeTranslation Adjustment) 1,056 3,308

Total equity 28,300 30,461

Total liabilities and equity $152,004 $168,579

The Notes to Financial Statements are an integral part of these Statements.


STATEMENT OF INCOMEFor the hscal years ended. hle 30, 1996 antid' Junre 30, 1995Expressed in millions of U.S. dollars

1996 1995

Income

Income from loans-Note CInterest $7,804 $8,069Commitmenit charges 118 118

Income from investments-Note BTrading

Interest 673 881Net gains/(losses)

Realized 31 (23)Unrealized (83) 168

Held-to-maturity

Interest 1(0 78Income from securities pur-chased under resale agreements 66 61Other income 11 10

Total income 8,720 9,362

Expenses

Borrowing expenses-Note [)Interest 6,455 6,832Prepayment costs 9 7Amortization of issuance costs and other borrowing costs 106 105

Interest on sectirities sold unider agreements to repurchase and payable for cashcollateral received 67 83

Administrative expenses-Notes G, H, I and J 733 842Provision for loan losses-Note C 42 12Other expenses 8 8

Total expenses 7,420 7,889

Operating Income 1,3()0 1,473Less contributionis to special programs-Note G 113 119

Net Income $1,187 $1,354

STATEMENT OF CHANGES IN RETAINED EARNINGSFor tie fiscal vewrs end2ed Jlne 3() 1996 and Jloe 30, 1905Expressed in millionis olf US. dollars

1996 1995

Retained earinigs at beginninig of the fiscal year $15,502 $14,468Board of Governors-approved transfers-Note F

To International Development Association (250) (300)To Debt Reduction Facility for IDA-Only Countries (100) -

To Trust Fund for Gaza and West Bank (90)f or Emergency Assistanice for Rwanda - (20)To Trust Fund for Bosnia and Herzegovina (15())Net income for the fiscal year 1,187 1,354

Retained earnings at end of the fiscal year $16,(099 $15,502

STATEMENT OF CHANGES IN CLUMlILATIVE TRANSLATION ADJUSTMENTFor rthe lisea yea7rs endiedi lo e 3il 19?96 and .lne 30 1 99sQExpressedl in millionis of US. lollatrs

1996 1995

Cumulative translation adjustment at beginining of the fiscal year $3,308 $1,394Translation adjustment for the fiscal year (2,252) 1,914

Cumulative translation adjustment at end of the fiscal year $1,056 $3,308


170 THE WWORLD BANK ANNUAL REPORTl 1996

STATEMENT OF CASH FLOWSn lthe iscal/ ea'S endede JneJ 30 1996 andlim Jumne 30, 1995

Eipressed iii miihons of 1J S. loldlars

1996 1 4995

Cash flows from lending and investing activities

Loans

Disbursements 5(13,321) I $(2,803)Principal repayments 11,494 11,30(1Principal prepayments 812 h 25

Investmienits: Held-to-maturity

Purchiases (5,417) (8,160)Maturities 5 422 6,576C

Net cash used in lending and investing activitics (1,13 () (2,085)Cash flovs frnn Board of Governors-approved transfers to

Interin.ationial Development Associationi (251)) (1427)Debt Reduction Facility for IDA-Only CouLntries (86) (25)

Trust Fund fo r Gaza anid West Bank, Trust FuLnd fcr Bosnia and Herzegovina andt forEmergency Assistance for Rwanda (179) (45)

Net casIl used in Board of Governors-approved transfers (5 15) (I,497)Cash flows from finanicing activ ities

Medium- and long-term borrowiingsNew issues 9,851 9,979Retirements (10,330) (11,579)

Net short-ter-m borrowings 340 563Net currency svaps (649) (413)Net capital stock transactions I1 1 1 i 7

Net cash used in financinig activities (6 77) (1,343)Cash flows trom operating activities

Net incoime 1,187 1,354Adjustments to reconcile net incoime to net cash provided by operatinig activities

Depreciationi and amortization 3'9 281Provision for loan losses 42 12Changes in other assets and liabilities

Decreases (increase) in accrueci inoiLe ono loarns and investments 1 76 (59)Increase in miscellaneous assets (80) (9S)Decrease in accrued charges on borrowings (214) (186)(Decrease) increase in accounits pa\yable andl miscellaneous liabilities (1 8) 1(09

Net cash provided b6 operating- aLtivities 1 4'9 2 - 1.413Effect of exchanie rate changes nn unrestricted cash and liquid inv estments (1, 632) 1 ,489Net decrease in unrestricted cash and liquid investments (2,342) (2,023)

Unrestricted cash and liquicl investments at bcginning of the fiscal year 17,3' 19,()5

Unrestricted cash and liqtjid investme1c nts at end of the fiscal year $ 14, 3(0 S 7,i)72Coimposed of

Investments held in trading portfolio $ 15,(0)(1 S 199,821UJnr-estricted cur-rencies 27 40Net receivable (payable) for investment secuLrities tradled/purchasted 857 (469)Net receivable from covered forwards 1 INet payable for securities pur-chased/sold uinder resale/repurchase agreements and

payable for cash collateral reteived (I 157) (2,321)

S 14,730 $ 17,()72

Supplemental dlisclosture

Increase (decrease) in ending balances resulting fr-omi exchange rate fluctuationsLoans outstaindino $(14,436) $ 13,331Borrowings ( 11],7'3 1) 10,269Currency swvaps (1,184) 1,553Investmiienits: Held-to-maturity (29) (_5)

Thze Notes to Financial Statemenets are an integral part of these Statements.

IBRD FINAN( [AL S FAQE\IENiS 171

SUMMARY STATE.VIENT OF LOANSJine 30, 1996Expressed in dllions o] U.S. dollars

Loains 1, ndisbursed Percenltage

approved balalu.e if of total

Total I(cit lot vet effective Loans loalis

Borroser or guarantor loalns effectivel loals2

outstancdiuig3

outstanding

Algeria 2 2.987 $ 1 2X8 S 793 $ 2.066 1.87Areentilra 7.964 561 2,591 4.81 2 4.36Armecni a 12 5 7 0).(lBahamas. The 11 - I (. (01Bangdadesh 50 - 50 0.05Barbados 39 __ 17 (.0)BelariLs 169 - 48 121 0.11Belize 54 - 24 30 0.03Bolivia 77 - 77 0.07Bosnia and Herzeeovina4 621 - 621 0.56

Botsw ana 80 - 8( 0.07Brazil 10.037 927 3.309 5,801 5.26Bul-aria 844 26 389 429 0.39Cameroon 603 _ 31 572 0.52Chile 1.746 5(i 442 1.254 1.14Chinia 15)082 182(1 5.930 7.33_2 6.65Colombia 3,323 85 897 2.341 2.12Colnco 95 - 3 92 0.0XCosta Rica 355 _ 86 269 (0.24C6te dlvoire 1,442 21 1.421 1.29

Croatia 350 31 175 144 0.13Cypilis 1 24 - 55 69 0.06Czech Republic 561 139 422 (0.38Dominic a 4 4 - -Dominiicati Republic 352 65 27 260 0.24Ecuador 1,396 15 347 1.034 (0.94Egypt 1.502 47 274 1,181 1.)7El Salvador 491 115 86 290 0. 2 6Estonia I 23 14 55 54 0.(5Fiji 5 1 - 19 32 0.03

Gabon I () - 21 99 (()9Ghliania 50 - - 50 0.05Grenada 4 4 -

GuIatel'mala 252 52 200 0.18Guyana 3(0 30 0.03Hondulas 89 - 389 0.35Hungtarv 2.556 - 52_ 2 2033 1.84Ice I alld 3 3Intdi a I 3.842- 8(4 3,440 9.598 8.71I ndonesi a 16.658 460) 4.423 11.775 10.68

Iratl. Islamic Republic of 851 - 509 342 0.311Iraq 50 - 50 ().05Jaimaica 689 142 547 0.50Jordant 917 - 2 1 8 699 0.63Kazakstatn 807 260 161 386 0.35Kenya 367 - 367 0.33Korea. Republic of 2.58 I 628 I .953 1.77Latvi; 1 48 - 88 6(0 0.05Lebanon 419 1(15 196 11 8 (.1 ILesotho I 10 55 55 ((.05

Liberia 152 - - 152 0.14Lithuania 161 42 58 61 0.06Macedonia. Forimler Yu goslatv Repulblic of 1()1 12 3 86 ().()8Mada etascar 9 - 9 0.01Malawci 48 - 48 0.04Malaysia 1.146 195 951 0.86Mauritanlia 9 - - 9 (.01

MaurLitius 21(9 7 74 12 8 0.1 2Mexico 16.716 187 3.7(06 1 2.823 11.63

1 72 THE WOR 1.) BAN K ANNt IAI Rill'(iR i 1 '96

Loallt Indi,hursed Pertcentageapproved halan e of of totIal

Total IoL-t 1lnt vet effettile Loans loantBorrower or giaranitor loais eftetlivei lotalt2 otutstaitding' oustatanding

Moldova $ 229 $ 54 $ 30 5 145 0.13Nolocco 5.1(1 190 1.140) 3.771 3.42Nicaragua *U1 - 51 0.05Nigeria 3.616 642' 2,974 2.70Oall , 22 (.(2Pakistan 4.432 - 1.441 '.991 2.71Panama 355 65 110 IX (.16Papua New Gttilea 403 - 117 286 0.26Paranuav 384 - 244 140 0.13Peru 2.370 713 1.657 1.5()

Philippinies 6.2(1 307 1.(99 4,794 4.35Poland s .479 21 1.201 2,257 2.().5PortuIgal 96 - 2 94 o.t)Romania 1.(24 120 838 966 (.8xRLIssia 6.41i3 1.899 2.824 1.690 1.53St. Kitts and Nevis 3 - ISt. Lucia I() 2 5 3St. Vincent al1d the Grenadine.s 3 2 I Senegal 2X8 - 28 0.03Sevcheliles 7 - 2 5

Sierra Leone ' 2 -Slovak Republic 2 - 37 256 0.23Slovenia 202 23 12 167 (1.15Sri Lanka 44 -- 44 0.04SLtdan 6 - - 6 (.01Swaziland 43 - 27 16 (.()1Syrian Arab Republic 399 - - 399 (). 6Tanzania 69 - 69 0.0)6Thailand 2.40)1 114 603 1,684 1.53Trinidad arid Tobago 171) 5 1 44 75 (.0)7

lunisia 2.320 99 6(9 1.612 1.46Tulkey 6.X28 250 1 382 4.596 4.17Turknmenistan 215 - 23 2 r

Ulkraine 982 375 1 37 470) (1.43Uirueuay 772 125 178 469 0.43Uzbekistan 234 Xl 153 (0.14Venezuela 2.552 39 1.008 1,505 1.37Yuguoslavia, Federal Repitblic ot'(Serbia/Montenegro)4 1.2(24 - - 1 2(04 1.(9Zaire 88 =X (8.08

Zambia 131 - - 131 C1.12Zimbabwe 698 - 164 534 0.48Subtotal 163.924 9.500) 44.978 109,446 99.27Caribbean Developmenit Bank 5 39 730 9 (.( )1Intern1ational Finance Corporation 803 - I2 791 (1.72

Total-June 30. 199'6 $ 164.766 $ 9.5(1(1 $45.1)20 $1 11.246 1()().()

Total--Jutne 30. 1995 $ 179.453 $ 11,982 l43.972 $1 223.499

Indticates am7ytnts less hattl 0 005 per ettt. Mvt v liflt'r ira oit tht' suti of intt ttt tIe I iigtt res sitowttn becaiset of roundtitigNO

TcT,>I Loaitns totnling 5.* 1 70 m/illion (55, 198 milliuont-Jt ime 30, 1 95) hav1e l-een aptrop/ et hy IBRD, lit the related1 e greemneitts hat'e tot

ieeni signied' Loui t ttgroetttett tOtttling $4,330 mil/lon ($6. 784 mtiliiit-h1ine 30, 199S) h1(ve Iteein signei. itt t the lotins a0o ntot iiCOmttojiectite '0 et dist u rsemtentts therettlider edo not stetrt mitil th I/ol /te ers ,' l guartanltors, iif tnyv, ta ke certa li ntloits zit itl lt rtt shi crltn miib/ciimtents to IBRD.' Of the uttn isbitrsedl alstnce, IBRD h(7s eitteredi itnto irrt'l ala/ble cittmnitments to t/tsiittrse $2,258 million / ($1 .'834 mnillion-Jiine 30 19QQ5)3. Tttai lotinsell outstanding at lltte 30, 1996 inchitte $8, 04 -tt illioii ($ 10, 371I itilliolt-lne 30, 1995) ait 'a na/'1o iliterest t rte.itid $ 12,199 itt hlatt ($1 7, 128 million-fIun e 30, 1905) ait fied intterest rtites.4. See Notes to Fttiancicl Sttetements-Naotes A etnti C.5. These lotins utIr for the bentefit of Tite Biahntms, Bariados GrentiIti, GuyCann Jat aial , Trinitad tnde Ttebage itInt tenitories otf tileULitted K i IIg(otan (-Associated Stares tI tlt1 Depoenct.iCiesj in to Ce nrtei/reei Regioetn, Il/let tire sev er/h 11y lile t1s glot rtt nt torl tihe extent ofsttblo/ans mitatle mt tielJ ter itonries.

IBRD FINs\e\ pA STA I[F \INTS I .3

S I U M M A R Y S T ATr E M E NFT O F LO A N S (continuedl)Jine 30, 1996 toolhim-e )0, 19t9Expressed in millimns of (US. tI/tars

Summary of Currenicies Repayable on Loans Outstanding

UrrenhlyN 1996 1995

Austrian schillings $ 196 $ 216Belgian franics 242 26SCanadian dollars l6- 165Danish kroner 8( 87Deutscihe mark 2',949 30,053European currency unrits 13 16Fininishi markkaa 54 '9French fi-acs 847 861Indian rllpees 23 26Irish poun(s 28 29

Italiall lire 17 176Japanese yen 34,353 44, .22KuWaiti dinarsLIuxemnbourg francs 14 41Malaysian ringgit 45 46Netherlanids guilders 2.17(1 3,016Norwegian kroncr 67 72Portuguese escudos 23 25Pounds sterling 255 263Saudi Arabian rivals 90 '!

South African rand 34 41Spanish pesetas 11 8 126Swedish kroior 83 7iSwiss francs 9,:1 8 13,068U.S. dollars 32,121 29,88(6Other currencies 17 20

loans outstanding $11 0,246 $123,499

Maturity Structire of Loans Outstandilig

1'eriod

July I,1I996 thr-omgh Jutnt 30, 1997) $ 12,705July 1, 1997 through June 30, 1998 11,673July 1, 1998 through June 30, 1999 11,839Jluly 1,19v99 through Junie 30, 2 000 11,534July 1 ,2000 throughi Junet 30, 20()01 10,761

Juily 1, 2001 th rough I miet 3(11, 200 6 37,090eJuly' I , 20(6 throughi June 3(, 20(11 13,27 iJuly 1, 2(11 throughl.iJUtn 30, 2016 I1,10July 1, 2016 througih JUne 30 )202 1 124Jluly 1, 2(121 througLh JunL 3(1 2026 124

July 1, 2(1)26 throuLh.l June 3 0, 2031 6

Total $1 1(0245G


174 THE WORI.I) BANK ANNI Ai. RFPORI 1996

SXIMMARY STATEMENT OF BORROWINGSJuin. .30, 19960ad Jlune 30, 1995Expressed in mii/lWits of US. dollois

Medium- and Long-term Borrowings and Swaps

Nt editumt- and long-termn h iro itig' Sw*ap agreetttentt

\\eiglted \\eighteda, crag.' Cttrrett. na a' no erage ost Net tirrelt.

Pirtin ,plalI otitant.ding '' ost '11) pavables ( retc,i abvle rtt.rt )(5.) obligations,I

1 996 1995 1996 1 996 I I 19ti 1996 1 995

Australian dollars S 1,)41 S 322 7 ) $()1,()2')) S (31 )) (77)) $ 12 $ 3Auistriani s(hdlings HIt0 215 7 SI - 18o, 21)5

Belgian frncs 151 353 7 42 (153) 1335)) ( 89) 6 14

Canadian dollairs 1,3'4 I '54 8.28 (1,1 96) (1348) ( '3) I S 2W11

CZeeCh koroLInV 91 - 11.()2 C(1) - )l))12( 1

Deutsche mark 14,51(6 14,456; 67 11,) I I,S 11826 5 7 2",435 20.282

FTuOpCan CuIrr_el u Lnit' 1,277 1,7()1 5.13 (1257) (1,518) (52S) 2)1 1R3

Finnish tmarkkaa 141 (1 3') - 2

French hians 966 I ret 8Sl (52,) (821) (S52) 440) 34S

Greek drar hmas 144 66 145) (144) ("6) (14 59)

Hong Kong dollars 323 *336 6 44 (32))) (333) (i.42) 3 3

Irish plltilds ")3 i 7 5 (63) ('5) (7 75)

Itaihan lire 4,'1 ;.642 11)25 (4. 8 ) ( (3.o I) ( 11.2) 47 2

Japarlese cen 3),118 42I1)30 5 11 41)6 li 3 27

.1:55) (1.24(iJ (5.,1) 3(,(14S 41,483

.Ltxclmhoui irgatra ins '; 141) 7115) (5)5 (IIlS) (7 46) 35

Netherlandds guilder- 2,837 3,250 7 23 i] 5(111 631

(1.447) (155i7) (7)) 1,481 162

New ZeaIland- dollars 3I6 llS I6))i. (31)4) I(-.) (1)11 ) 2 I

N orxrcgiu n] k.rc'taer 410 - 4()

PiortLIgoLese cS(tLdo, 341 2cli 11).31i (3 7) (2131) I111511 4 3

Pontids sterho" 2,41)4 2,3()8 ).12 (1,241) (1,1311) (8)18) 1,163 1,lS7

Spaiiish peSetais 816 Sil- 1).11 (8)18) (856) 1 1(1) 81

So edish krottor 76( 124 5) 84 (78) (1I'f ( 84 1 I

Sx is. francs 4, 9) 1)1) ,1).77 i 1)4 3.4 15 4, 7'2 5.3

(873) - 16l,.4 7 ,538 Mti

t'S dllars 24,7 7 66( 3,522 2.I4; 5.44

(2,21)4i) (2,5611) (7.32) 26,234 24, 11)

At face xaloe ()2,4114 11)4.375 6 8)) 93,821 117,61 7

Net tinMani art)zoed(diS Lotints) pro) iiiIS (7 3 1 I . (13) _ 1-7

Total $)92,39'1 $110)4,31)2 51,-'I I 3 ',242 9103,818 $1)11,034

ea. See Notes to F'mioici/l Stitatenelets-N tes D rotul Eb. I/tic/uf'es zerto-citpoli biorrolu!riigs tal3 t (no ve 'eon reco,/de/ it their discountedl lutes I lie tgregito faice dtMtitiltit 702ts 'l1i/ dfiscoi nl ted 1i?-uies iij these lborrowings (tt Jlioie 30, 1996 tian IhugJe .30, 1995 are

Itn millionis of t S. tlotllars equiialentA\ggregat' fate anilouit Di,(oi tuted Val e

Ctrrt'tcy 1 996 1995 1)61)

Australian dollars $ 317 S - $ 244 $ -

Canadian dollars - 145 - 132Deutsche mark 2,(092 2,3()3 471 486Italian lire 847 184 443 167Japanese yen '16 1, I89 822 1,(033Swiss francs 968 1 ,13() 278 31 ()U.S. dollars 2,894 6 t34 750 476

IBRD FINrAN IAI S'l ATFNIL\ is 1(75

SUMMARY STATEMENT OF BORROVWINGS (continued)Junle 30, 1'996 and Juhnte 30, 1995Expressed in inillions ofJ US. dollars

Medium- and Long-term Borrowings and Swaps (continuedi)

c. Includes incomle and e.xpense'orun initerest rate soaps. At Juiie 30, 1996, IBRD has entered inIto interest rate suwap tigreemetits with

respect to notijnieal principal anmounts ais Jfollows:

In millionisCuirresit v aniount U.S. dollars equivalent

Currenicy 1 996 1995 1996 1995

Canadian dollars 149 $ - $ 109Deutsche mark 16,436 14,293 10,744 10.289French francs 1 ,669 984 322 2(02Italian lire : 200,00),(:(1) 13(1 123Japanese y en 4210,9 7 t 55,(:)38 3,857 1,843Pounds sterling _100I - 158Sw iss francs 1, 24 1,1 24 892 977

U.S. dollars 10,451 2,435 1 0,451 2,435

d. Includes t1e f1ollowing 'arnable raite borrowings at June 30, 199Q onel Junrle 30, 1 995. hefohre Swa) ps:

he1 millionls

Cuirrency amlnounit I '.S. dollars equivalent

CurrelILV 1996 1995

Canadian dollars 10(0 7 3 $ 73Deutsche mark 550 55( 360 396European currency uniits 640 640 8(02 857Greek draciiihmas 2(0,000 - 82 -

Italian lire 650,00) 550,0(( 423 337Japanese yen 134,500( 144,500 1,232 1,718

Pounds sterling 25 25 39 40U.S. clollar-s 1,452 1,563 1,452 1,563

e. The weighted a verage cost of niedio in - and /otig terni borro,wings o utstandling at lune 30, 1 996, aJfter etdjustinent jer soap activities,

isIS 6.26 penreut (6.53 percerit-Junze 30, 1995).

J. Inc/idles the [fllowing varia/le reite borrowings atter in terest rate soIaps ait JI un e 30, 1996 neI1

, 11411,' 30, 1 995:

In millions

Currncwv anioeinit UtS. dollars equivalent

CuirreniLy 1996 1995 1996 195

Deutsche mark 5,645 - $3,690

Frenchi francs 31 6 61lapanese yven 265,941 - 2,436U.S. dollars 6,309 408 6,309 408

176 THa. W(RI I) BANK ANNIuAi RI P'R I 19 9c6

Maturity Structure of Medium- and Long-term Borrowings

Period

July 1,1996 throtigh June 30. 1997 $12,467July 1,1997 through June 30, 1 998 13,949July 1,1998 through June 30,1999 9,526July 1,1999 through Junle 3(0, 2000 14, 262July 1, 2000 throu gh Juie 31, 200 1 7 529

July 1, 2001 through June 30, 2006 25,886July 1,2(006 through June 30, 2011 2,490(July I, 2011 through June 30, 2016 2,t622July 1, 20(16 through June 30, 2021 1,660July 1, 2021 through June 3(0, 2026 1,693

Thereafter 320(

Total $92,4(14

Short-term Borrowings and Swaps

Weighted

C.urrlellw. %,ap ;aICe[age Lost

Prim. ipal pasableH (after swaps) Net tirrnilcy

o0utstalldbillg (receii bles) '() obligationus

I 996 1995 1996 1 995 196 (996 I 95

Short-term Notes (US. dollars) S1.309 $1.192) $ - $ - 5.46 $1.309 $1,192

Global Multicurlencv NotesCzech korL]1n\ 54 (54) _ _Deutsche maLrk _ - 74 94 3. 06 74 94

Italian lire 20 86 120) (16) - - -U.S. dollar-s 299 20 - 5.52 s299 20

Subtotal 373 106 -8 5.03 373 1 14

Central Bank Facility (U.S. dollars) 2, 86 2_6(1() - 5.47 2.586 2.60(0

Total $4,328 $3,898 S - $ 8 5.43 $4,328 $3,90(6

aI See V9otes tos Fin,,x-cut/ Srtepe;tslllz-Notes D) wel/ E.


IBRD FINAN'I5I S'TA\TrNIS 177

STATEMENT OF SUBSCRIPTIONS TO

CAPITAL STOCK AND VOTING POWERJunie 30, 1996Expressed in millions oJ US. dollars

Suhscriptioiis Voting powerAmounts

Percentage Amouints suibject Nuimber Perceitageof Total paid in to call of of

Meinber Shares total amiiotints (Note A) (Note A) votes total

Afghanistan 31)0 0.02 $ 36.2 $ 3.6 S 32.6 550 0.04Albania 83(1 0.06 1)0. 1 3.6 96.5 1,080 0.07Algeria 9,252 (0.62 1,116.1 67. 1 1,049.0 9,502 0.62Angola 2,676 (0.18 322. 8 17.5 305.4 2,926 0.19Antigua and Barbuda 520 (1.(3 62.7 1.3 61.5 770 0.05Argentinia 17,911 1.20 2,160.7 132.2 2,028.4 18,161 1.18Armenia 1,139 0.(8 137.4 5.9 131.5 1,389 0.09Australia 21,610 1.44 2,606.9 171.4 2,435.5 21,860 1.42Austria 11,063 0.74 1,334.6 80.7 1,253.9 11,313 0.73Azerbaijan 1,646 (:.11 198.6 9 7 188.8 1,896 0.12

Bahamnas,The 1,071 (1.07 129.2 5.4 123.8 1,321 0.09Bahrain 1,103 (1.07 133.1 5.7 127.4 1,353 0.09Bangladesh 4,854 (1.32 585.6 33.9 551.6 5,104 0.33Barbados 948 (.06 114.4 4.5 109.9 1,198 1.08Belarus 3,323 ().22 4(00.9 22.3 378.5 3,573 0.23Belgium 28,983 1.94 3,496.4 215.8 3,280).6 29,233 1.90Belize 586 0.04 7( 7 1.8 68.9 836 10.05Benini 487 0.03 5S.7 2 5 56.2 737 0.05BhLItan 479 (.(3 57.8 1.0 56.8 729 0.05Bolivia 1,785 1.12 215.3 10.8 204.5 2,035 0.13

Bosnia and Herzegovina 549 (1.04 66.2 5.8 60.4 799 0.05Botswana 615 11.04 74.2 2.0 72.2 865 0.06Brazil 24,946 1.67 3,009.4 185.1 2,824.2 25,196 1.63Brunei Darussalam 2,373 (.16 286.3 15.2 271.1 2,623 (.17Bulgaria 5,215 (1.35 629.1 36.5 592.6 5,465 0.35Btirkina Faso 868 11.06 1(14.7 3.9 I(0.8 1,118 0.07Burulidi 71 6i (1.(5 86.4 3.0 83.4 966 0.06Cambodia 214 (1.01 25.8 2.6 23.2 464 0.03Cameroon 857 ().(6 103.4 66 96.8 1,107 0.07Canada 44,795 2.99 5,4(03.8 334.9 5,1168.9 45,045 2.92

CapeVerde 5(18 (1.03 61.3 1.2 60.1 758 0.05Central African Republic 484 (.()3 58.4 2.5 55.'9 734 (.05Chad 484 ().03 58.4 2.5 55.9 734 0.05Chile 6,931 (1.46 836.1 49.6 786.6 7,181 0.47China 44,799 2.C99 5,404.3 335.0 5,069.3 45,049 2.92Colombia 1,352 11.42 766.3 45.2 721.1 6,602 0.43Comoros 282 (1.112 34.11 0.3 33.7 532 0.03Conigo 52(1 (0.113 62 7 2.9 59.9 770 (.05Costa Rica 233 0.02 28.1 1.9 26.2 483 0.03C6te d'[voire 2,516 11.17 303.5 16.4 287.1 2,766 0.18

Croatia 2,2-93 (1.15 276.6 17.3 259.3 2, 543 0.16Cyprus 1,461 11.10 176.2 8.4 167.9 1,711 0.11Czech Republic 6,30)8 11.42 761.0 45.9 715.0 6,558 0.43Denmark 10,251 (1.68 1,236.6 74.6 1.162.0) 10,501 (1.68Djibouti 314 11.02 37.9 (1.7 37.2 564 0.04Dominica 5(04 1.1)3 6(1.8 1.1 59.7 754 ().05Dominican Republic 1,174 (.08 141.6 9.8 131.8 1,424 0.(9Ecuador 2,771 (1.19 334.3 18.2 316.1 3.021 0.20Egypt 7,108 0.47 857.5 50.' 8116.6 7,358 0.48El Salvador 141 (1.01 17.0 1.7 15.3 391 0.03

Equatorial Guinea 401 1.03 48.4 1.6 46.8 651 1.04Eritrea 593 0.04 71.5 1.8 69.7 843 0.05Estonia 923 (0(.1 111.3 4.3 107.1 1,173 0.08Ethiopia 97 8 (1 O)7 118.(1 4.7 113.3 1,228 (.08Fiji 987 (0.7 119.1 4.8 114.3 1.237 0.08

178 THE WORLD BANK ANNUAL REPORT 1996

Stibscriptions .Voting powerAmoIunJts

Pvrcentage Amounits subject Ntiuiiber Percenitageof Total paidi in to call of of

Member Shares total amotilits (Note A) (Note A) sotes total

Finland 8,560 0.57 SI,032.6 $ 61.9 s 970.8 8,810 0.57France 69,397 4.63 8371.7 520.4 7,851.3 69,647 4.52Gabon 554 01.4 (6.S 3. 6 63 3 804 0.05Gambia, The 305 (.02 36 8 0, 36.1 555 (1.04Georgia 1,584 ().11 191 1 9.3 1.S 1,834 0.712Germanr 72,399 4.S4 8,733.9 54 2. 9 8,1990.9 72,649 4.71Ghana 856 0.06 1(13 3 1().3 '92. 1.(106 0 07Greece '-45 006 114.0 11.4 102.6 1,195 (0.()8Grenada 531 () 04 64.1 1 4 62 7 781 0.05Guatemala 2,001 (1.13 241 4 12 4 229.() 2,251 (.15

Guinea 725 .0(5 S7.5 5 ) 82.4 975 0.06Guinea-Bissau 31)3 1)02 36 6 1.6 36.1) 553 0.04Guyana 1,058 0.)7 127. 3 122.3 1,3()8 0.08Haiti 1,06.7 (1.07 128.7 5 4 123.3 1,317 0.(9Honduras 641 01.1)4 77 3 2.3 .5.)891 0.06)1Hungary 8,()5( (0.54 971.1 58 () 913.1 8,310( 0.54Iceland 1,258 1) (.(S 151.8 (i.8 144.9 1,51)8 (0.10India 44.795 2. 99 5,403 8 333.7 5,070.1 45,0)45 2.9)2Indonesia 14,981 1.()0 1,8(17.2 11(0.3 I,97.( 15,231 (1.99Iran, Islamic Republic of 23,681i 1 5S 2,857.4 175 b 2,6S1.5 23,936 1.55

Iraq 2,1808 11.19 33 S.7 27 1 311.6 3,I)5I (0.20Ireland 5,271 (135 635.9 37.1 598.S 5,521 11.36Israel 4,7511 (1.32 573.1) 33 2 539 8 5,(:00 I ().32Italy 44,795 2.99 5,4113.S 334.8 5,1)69.( 45, 045 2.92Jamaica 2,578 ().17 311.() 16.8 294.2 2,828 0. 8Japan 93,770) ( 26 11 ,311.9 7()3.5 1)1,6018 5 94,()20 6.10)

Jordan 1,388 (1.09 1 67.4 7 8 159.ti 1,638 (.11Kazakstan 2,985 0.21) 3611.1 19.8 340.3 3,235 1).21Kenya 2,4t61 11.16 296 9 15il 2S1 0 2,711 (1.18Kiribati 465 (1.03 56.1 0.' 55.2 715 0.()5

Korea, Republic of 9,372 110293 1,13(. 67'3 1152 7 9622 n062

Kuwait 13,28() 0.89 1,6o()2 o 97 4 1,5114.6 13,531) (1.88Kyrgyz Republic 1,10(7 I0.() 133.5 57 127.9 1,357 0.()0Lao People's Democratic Republic 178 ().(1 21.5 I 5 22).0 428 (1(13Latvia 1,3S4 10.09 167(0 7.S 15!.2 1,634 I1 11Lebanon 340 0(12 41.1) 1.1 3).9 591) )0.)4Lesotho 663 (1.0)4 8(.() 2 3 77.6 '13 (1.06Liberia 463 (i.()3 55 ') 2.(6 53.3 713 0.05Libya 7,84() 1).52 945.8 57 () 888.8 8,09(0 0.52Lithuallia 846 11.1)6 1)2 1 6.3 95.8 1,1196 0.1)7

Luxembourg 1.652 (1.11 19)L).3 9. 189.'5 1,'!)2 1.12Macedonia,

Former Yugoslav Republic of 427 1(.03 51.5 3.2 48 3 07 0.114Madagascar 1,422 0.()9 1 71.5 8.1 163.5 1,672 0.11Malavi 1,(94 (1.1)7 132. 0 5.6 126.4 1,344 O).10'Malaysia 8,244 (1.55 99!4.5 ;L) 935 1 8.494 (1.55Maldives 4169 ().1)3 56.6 ().9 55.7 719 i1 05

Mali 1,162 ().1)S 14(0.2 6.1 134.1 1,412 0.(09Malta 1,1) 4 (7.0 129 16 5.4 124 1 1,324 0.09Marshiall Islands 469 1).1)3 56.6 () 9 55.7 719 0.1)5Mauritania 51)5 (.()3 61. 2 2 755 (1.1)5

Mauritiis 1,242 M1.118 14'.S i., 143.1 1,492 ). 1(IMexico 18,8I4 1.20 2,2)i8.4 139.() 2, 129.4 19,054 1.24Micronlesia, Federated States of I 19 11.1)3 57.8 I 1) 5)i S 29 0.05Moldova 1,368 1,.19 165.0 7 (6 157,4 1,618 .11Mongolia 4(615 (0.1)3 56.2 2 3 53.9 71I6 (1.()5

IBRD FINANCIAL STATENlENFS 179

STATEMENT OF SUBSCRIPTIONS TO

CAPITAL1 STOCK AND VOTING POWER (continued)

June 30, 1996Expressed in millions oj LIUS. dollars

Subscriptions Votinlg powerAmnounilts

Percenitage Amounts subject Numilber PercenLtageof Total paid in to call of of

Member Shares total aimounts (Note A) (Note A) votes total

Morocco 4,973 1.33 S 599.9 $ 34.8 $ 565.1 5. 223 (0.34Mozambique 930 0.06 112.2 4.8 1()7.4 1,180 0.08Myanmar 2,484 0.17 29)9.7 16.1 283.6 2,734 0.18Namibia 1,523 0.10 183.7 S.8 174.9 1,773 0 INepal 968 ().06 116.8 4.6 112.1 1,218 0.(8Netherlands 35,503 2. 37 4,282.9) 264.8 4,018.1 35,753 2.32News Zealalnd 7,236 (0.48 S72_9 51.9 821.() 7,486 0.49Nicaragua 611S (0.0(4 73.3 2.1 71.3 858 0.1)6Niger 478 (1.03 57.7 2.4 55 728 (.(05Nigeria 12,655 (1.85 1,526.6 92.7 1,433.9 12,905 ((.84

Norway 9,982 (1.(67 1,204.2 7 2.6 1,131.6 1(1.732 0.66Oman 1,561 ((.1l) 188.3 9.1 179.2 1.811 0 12Pakistan 9,339 ((.62 1,126.6 6 7. 1,(58.)9 9,589 0.62Pananma 385 ((.1(3 46.4 3.2 43.2 635 (0(.14Papua New Guinea 726 (.(05 87.6 5.11 82.5 976 (0(.)6Paraguay 1,229 ((.0(8 148.3 6.6 141.6 1,47? (. 1()Peru 5,331 (1.36 643.1 37.5 6(05.6 5,5S1 0.36Philippines 6,844 ((.46 825.6 48.9 776.7 7,(094 (0.46Poland 1(1,9(8 073 1,315.9 79.6 1,236.3 11,158 (1.72Portugal 5,460 0.36 65.S7 38.5 62((.2 5,710 0.37

Qatar 1,1(96 0.117 1 32.2 9.0 123.3 1,346 0.09Romania 4,()11 (1.27 483.9 3(1.5 453.4 4,261 (1.28Russia 44,79)5 2.9?9 5,403.8 333.9 5,07(1.() 45,1)45 2.9)2Rwzanda 587 11.04 71.8 3. 6 67.2 837 (.(5St. Kitts and Nevis 275 (1 02 33.2 0.3 32.9 525 (1.03St. Luicia 552 ().(14 66.6 1.5 65.1 81)2 0.15St. Vincenit and the Grenadines 278 (:.012 33.5 (1.3 33.2 528 (0(.03SaoTome and Principe 278 ()(.12 33.5 ().3 33. 2 528 ()(:13Saudi Arabia 44,705 2.99 5,4(13.8 335.11 5,068.9 45,1145 2.92Senegal 2,11)72 0.14 2511.1) 13.0 237. 1 2, 32 (2 .15

Seychelles 263 (J.1(12 31 .7 (.2 31.1; 513 0(.03Sierra Leone 403 0.()3 48.6 1.8 46.8 6t53 ((.114Singapore 32() (1.1(2 38.6 3.9 34.7 570 (0.114Slovak Reptiblic 3,2 16 (1.21 388.10 23.0 365.1) 3,466 11.22Slovenia 1 261 1.()S 152. 1 9.5 142.6 1,511 0.0 IlSolomon Islands 513 ((.1)3 61.9 1.2 6(0.7 763 (1.1(5Somalia 552 ((.04 66.6 3.3 63.3 8()2 ().15SouthAfrica 13,462 0(.90 1,624.0 98.8 1,525.2 13,712 (3.89Spain 23,686 1.58 2,857.4 17 .6 2,68 1.7 23,936 1.55Sri Lanika 3,817 ().25 46(1.5 26.1 434.3 4,067 .26

Sudan 850 (.1(6 11(2.5 7.2 95.3 1,100 0.07Surintame 412 M1)3 49.7 2.0 47.7 662 11.114Swaziland 44(1 0.((3 53.1 2.0 51.1 690 (1.0(4Sweden) 14,974 1.M(11 1.80(6.4 110.2 1,696.2 5,2724 (().9Sxvitzerland 2i, 606 1.78 3,2(19.6 1'). 3,012.4 2i,856 I1.74Syrian Arab Reptiblic 1 236 (1.(1S 149.1 1 (.5 138.6 1,486 I (:(Tajikistan 1,060 I1.17 1 ' 5.3 122.5 1,3 1( (1.08Tanzania 727 (1.1(5 87., 7.9 79.8 9)77 (.06Thailand 6,349 (1.42 765. 45. 2 72(1.7 6,599 0.43Togo 62(1 (1.014 74.8 3.0 7(0.9 87(1 0.06

Tonga 277 0.02 33.4 ((.3 33.1 527 () 0.03Trinidad and Tobago 2,664 (1.18 321.4 17.6 303.7 2,914 (1.19TuLnisia 719 [.(5 86.7 5.7 81.1 969 0.0(6lurkey 7379 ().49 89(1.2 52.9 837.2 7,629 0.49Turkmenistan 526 (1.()4 63.5 2.9 60.5 776 (1.1(5

180 THE WORLD BANK ANNUAL REPORT 1996

Stibscriptioiis XiVoting powerAmounts

Percenitage Anmotints subject Ntimber Percentageof Total paid ini to call of of

Member Share, total amounlits (Note A) (Note A) votes total

Uganida 617 0.04 $ 74.4 S 4.4 $ 70.1 86'7 0.0(6Ulkraine 10,908 073 1,315.9 79.3 1,236.6 11,158 0.72United Ai-ab Emirates 2,385 O.1 287.7 22. 6 265 1 2,635 0.17Unlited Kinigdom 69,397 4.63 8,37]7 539.5 7,832.2 69,647 4.52United States 264,9j9 17.7() 31,964 5 1998 4 29,966.2 265.219 N)Uruguay 2,812 ).19 339.2 18.6 320.7 3,0b2 (1.21)

lzbekistan 2,493 1 117 30().7 16.1 284 7 2,743 (0.18Vanuatu 586 11.04 7().7 1.8 6 8.9 836 0.05Veniezuela 20,361 1.36 2,456.2 150.8 2,305.5 2(0, 611 1.34Vietnam 968 (1.06 116.8 8.1 1()8.7 1,218 (0.08

Westerin Samoa 298 (1.02 35.9 0.5 35 4 548 0 (14Yemeni, Republic of 2,212 1.1 i5 266.8 14.1) 252.8 2,462 0 I6Zaire 2,643 (0.I8 318.8 25 4 29)3.5 2,893 (.19Zambia 2,81(0 (.19 339.0 2(1(1 31,)).( 3,06(0 (0.2()Zimbab% e 3,325 11.22 4(11.1 22.4 378 3,575 (123

Total-Julne 30, 19996 1,497,325 1()l).0( 5180,630) $10,903.7 $169,j636 1,542,325 10).(0()

Total-lune 30, 1995 1,462,574 100.(:() $176,438 $10,8575 $165,58)0 1,507,074

Mav difter Jrtt the sot lJf ;udiiidual figures lue to roundafig


IBRD FNANCIAL STATEMENTS 181

NOTES TO FINANCIAI STATEMENTS

PURPOSE AND AFFILIATED ORGANIZATIONS has a number of general policies aimed at minimizing1 .1 ., . . . ~~~~~~~~~exchan,e-rate risk in a i-n-1ticulrrenlcy einvironnmeiit.The International Bank for Reconstrtuctioni and Devel- t e

opment ([BRD) is an interinationial organization that IBRD matches its borrowing obligations in any one cur-commenced business in 1946.The principal pu.rpose rency (after swap activities) with assets in the sameof IBRD is to promote economic development in its currency, as prescribed by its Articles of Agreement,member countries, primarily by providing loans and primarily bv holding or lending the proceeds of its bor-related technical assistance for specific projects and for rowings (after swaps) in the same currenicies in which

programs of eco -onic ref.rn in d g n ber thev are borrowed. In addition, IBRD periodicallvprograms Of econlomic rftormin d1 evelopinig IleiDr- countries. The activities of IBRD are complemented by condertakes currenci counverlsiogis to matchi morethose of three affiliated organizations, the Interna- closely the currencies underlying its Retained Eamingstional Development Association (IDA), the Initerna- with those of the outstandinig loans.tional Finance Corporation (IFC), and the Multilateral Assets and liabilities are translated at market exchangeInvestment Guarantee Agency (MICA). IDA's purpose is rates at the end of the vear. Income and expenses areto promote economic development in the less devel- translated at the market exchanige rate on the dates onoped areas of the world included in IDA's memlbership vhich they are recognized or at average marketby providing financing on concessionary terms. IFC's exchange rates in effect during each month. Transla-purpose is to encourage the growth of productive pri- tion adjustments are charged or credited to Equity.vate enterprises in its member counitries through loansand equitv investments in such enterprises withoit a Valuation of Capital Stock: In the Articles of Agree-member's guaranitee. MIGA was established to encour- ment, the capital stock of IBRD is expressed in terms ofage the flow of investmenits for productive purposes "U.S. dollars of the weight and fineness in effect onamong member countr-ies and, in particulai, to devel- Jtuly , 1944" (1944 dollars). Following the abolitionoping member couLntries bv providing guaranitees of gold as a common deniominator of the monetaryagainst noncommercial risks for foreign investment in system and the repeal of the provision of the U.S. lawits developing member countries. defining the par value of the U.S. dollar in terms of

gold, the pre-existing basis for translatinig 1944 dollarsSUMMARY OF SIGNIFICANT ACCOUNTING into current dollars or into anv other currency disap-AND RELATED POLICIES pearecl. The Executive Directors of IBRD have decided,

IBRD's finanicial statemenits are prepared in conformitv until such time as the relevanit provisions of the Arti-with the accouLntilng principles generallv accepted in cles of Agreement are amended, that the words "U.S.the tUnited States and wvith Internationial Accountinig dollars of the xeight and fineness in effect on July 1,Standards. 1944' in Article 11, Section 2(a) of the Articles of

Agreement of IBRD are interpreted to mean the SpecialThe preparation of financial statements in conformity Drawing Right (SDR) introduced by the Internationalwith generally accepted accounting principles requires Monetarv Fund, as the SDR was valtied in terms of U.S.management to make estimates and asstImptiolns that dollars immediatelv before the introduction of theaffect the reported amounIts of assets and liabilities and basket method of valuing the SDR on July 1, 1974,disclosure of contingent assets and liabilities at the date such value being $1 .20635 for one SDR.of the financial statements and the reported amounts ofreveniue and expenses during the reporting period. Retained Earnings: Retained Earnings consists of allo-Actual results could differ from these estimates. Signifi- cated amounts (Special Reserve, General Reserve, andcant judgments have been used in the computatioll of Surplus) and unallocated Net Income.estimated and fair values of loans and borroxviigs respec- The Special Reserve consists of loan commissions settively, the adequacy of the accumtilated provision for aside pursuant to Article IV, Section 6 of the Articles ofloan losses, and the present valute of obligations under Agreement wlhichi are to be held in liquid assets. Thesethe Staff Retirement and Retired Staff Benefits Plans. assets may be used only for the purpose of meeting la-

Certain reclassifications of the prior year's information bilities of IBRD on its borrowings and guaranitees in thehave been made to conform to the current period's event of defaults on loans made, participated in, orpresentation). guaranteed by IBRD. The Special Reserve assets are

included under Investmenits held in the Trading portfo-Translation of Currencies: IBRDLs financial statemenits lio, comprising obligations of the United States Govern-are expressed in terms of U.S. dollars solely for the ment, its agencies, and other official entities. Thepurpose of summarizing IBRD's financial position andc allocation of such commissions to the Special Reservethe results of its operations for the conveniienice of its wvas discontinued in 1964 with respect to subsequentmembers and othel interested parties. loans, and no furtlher additions are being made to it.

IBRD is an international organizaLtion) that conducts its The General Reserve consists of earnings from priorbusiness in the currenicies of all of its members. [BRD ' fiscal vears that in the judgmenit of the Executiveresotirces are derived from its capital, borrowings, and Directors should be retained in IBRD's bUsin1ess.accumulated earninlgs in those various currenicies. [3RD

182 THE WORInD BANK ANNUAL R'osr I ]996

Surplus consists of earnings from prior fiscal years that It is the policy of IBRD to place in nonaccrual status allare retained by IBRD until a further decision is made on loans made to or guaranteed by a member of IBRD iftheir disposition or the conditions of transfer for speci- principal, interest, or other charges with respect to anyfied uses have been met. such loan are overdue bv more than six months, unless

Unallocated Net Income consists of earnings in the cur- IBoRD management determines that the overduerent fiscal year. Commencing in 1950,a portion or all of amount wil he collected in the immediate fututpre. In

rentfisal ear Comeningin 150,a prtin o al of addition, if development credits made by IDA to athe unallocated Net Income has been allocated to the . . .General Reserve. The Board of Govermors, consisting of nmember government are placed in nonaccrual status,General Rserne a. TheiBoard of Gover, c,onistngo all loans to that member government will also beone Governor appointed by each member, periodiallay placed in nonaccrual status by [BRD. On the date aapproves transfers out of Retained Earnings, after an placed in nonaccrual status,

1 a . . r ' , ~~~~~member's loans are placed In nonaccrual status,assessment by the Executive Directors oflBRD's reserve unpaid interest and other charges accrued on loansneeds, to various entities for development purposes outstanding to the memher are deducted from theconsistent with IBRD's Articles of Agreement. Transfers income of the current period. Interest and otherhave been made out of unallocated Net Income and inco

to ID facilities admiistred charges on nonaccruinlg loans are Included in incomeSurplus to IDA (or bacilties admiistered by IDA), for only to the extent that payments have actually beenEmergency Assistance for Rwanda, the Global Environ- received by JBRD. If collectibility risk is considered toment Trust Fund, the Technical Assistance Trust Fund be particularly high at the time of arrears clearance orfor the Union of Soviet Socialist Republics, the Trust if IBRD refhliances/reschedules noniaccrillg loans to aFund for Bosnia and Herzegovina, and the Trust Fund member so that no debt-service payments remainfor Gaza and W'Vest Bank. overdue, its loans would not automatically emerge

Loans: All of iBRD's loans are made to or guaranteed from nonaccrmal status, even though its eligibility forby members, except loans to IFC. The majority of new loans would have been restored. The previouslyIBRD'S loans have repayment obligations in various cur- overdue interest and other charges would not be rec-rencies determined on the basis of a currency pooling ognized as income in the period the refinancing/system, which is designed to equalize exchange-rate reschedulinig occurs. After a suitable period of pay-risks among borrowers. IBRD also offers single currency ment performance has passed from the time of arrearsloans. Except for certain loans that were converted to clearance, a decision on the restoration of accrual sta-the currency pooling system, loans negotiated prior to tus would be made on a case-by-case basis.Julv 1980 and all single currencv loans are repayable in, . ,. , - ~~~~~~~~IBRD determines the Accumulated Provision for Loanthe currencies disbursed. Losses based on an assessment of collectibility risk in

Incremental direct costs associated with originating the total loan portfolio, including loans in nonaccrualloans are expensed as incurred as such amounts are status. The accumulated provision is periodicallyconsidered immaterial. adtjusted based on a review of the prevailing circum-

stances and would be used to meet actual losses onIBRD's policy is not to reschedule interest or principal loans. Adiustments to the accumulated provision arepayments on its loans or participate in debt reschedul- recorded as a clharge or credit to income.ing agreements with respect to its loans. In exceptionalcases, however, such as when implementation of a During the first quarter of fiscal year 1996, IBRDfinanced project has been delayed, the loan amortiza- adopted a new accounting standard that prescribes thetion schedule may be modified to avoid substantial methodology for calculating the accumulated provi-repayments prior to project completion. In additioni, sion for loan losses for impaired loans. The adoption ofin the special case of Bosnia and Herzegovina, IBRD has the new accounting standard had no impact on IBRD's

refinanced/rescheduled, through three new IBRD con- Accumulated Provision for Loan Losses or on itssolidation loans, certain loans made to the forner results of operations. In the context of determining theSocialist Federal Republic of Yugoslavia (SFRY) for adequacy of the accumulated provision for loan losses,which Bosnia and Herzegovina has accepted liabilitv. IBRD considers the present value of expected cash[BRD's special treatment in this case was based on the flows relative to the contractual cash flows for loans infollowing criteria: the country (i) has emerged from a making the required assessment.current, or former, member of IBRD, (ii) is assuming Investments: In fiscal vear 1995, IBRD began holdingresponsibility for a share of the debt of that member c s t(iii) has limited creditworthiness for servicing the debt certfolio ttith to dllbattuntd ign the he ivestminen tthat it assumes because of a ma or armed conflict in its . - . .th.db .

territory involving extensive destruction of physical specific currencies. Remaining investment securitiesassets, and .r. can improvesignficatitsrepare held in a trading portfolio and classified as an ele-

assets, and (iv) can Improve significantly Its repayment men t of liquidity in the Statement of Cash Flows duecapacity through refinancing/rescheduling if appropri- .tofthe itu an the poies gov th level

ate~~~~~~~~ sup,tn esrsa-ctkn tteBlic to their inatuire aind IBRD's policies governing the levelate supporting measur-es are taken. At the Balance and use of such investments.Sheet date no other country met these criteria.

IBRD FINANCIAL STATENILNTS 183

IBRD carries its investment securities and related finan- June 30, 1995) has been used for lending purposes,cial instruments classified as its trading portfolio at wvith such consentmarket value and investment securities in the held-to-

r amotie cos. Frmtiet Maimtenat2ce Of Value: Article 1I, Section 9 of thematurity portfolio at , , Articles of Agreement provides for maintenance of thetimiie, iBRD enters into forward contracts for the sale or value, at the time of subscription, of such restrictedpurchase of investment securities; these transactionis c rare recorded at the time of comm;itment. currencies, requiring (1) the member to make addi-

tional payments to IBRD in the event that the par valueFair Value Disclosures: Finanicial instrmeniets for of its currenicy is reduced or the foreign exchangewhich market quotations are available have been val- value of its currency has, in the opinion of IBRD, depre-ued at the prevailing market value. Financial instru- ciated to a significant extent in its territories and (2)ments for which market quotations are not readily IBRD to reimburse the member in the event that theavailable have been valued using methodologies and par value of its currency is increased.assumptionis that necessarily require the use of subjec-tive judgments. Accordingly, the actual value at xvhich Since currencies no longer have par values, mainte-such financial instruments could be exchanged in a nance of value amounts are determined by measuringsuch~~~~~~~~~~~~~~~ the foreignl exchange value of a member s currencycLirreiit tranisactioii or- whether they are actualilv 0currentctranseateion nor wethermi thbleyareactual against the standard of value of IBRD capital based on1

the 197 4 SDR. Members are recluired to make pay-NOTE A-CAPITAL STOCK, RESTRICTED CUR- menits to IBRD if their currencies depreciate signifi-RENCIES, MAINTENANCE OF VALUE, AND cantly relative to the stanidard of value. Furthermore,MEMBERSHIP the Executive Directors have adopted a policy of reim-

Capital Stock:At June 30, 1996, IBRD's capital coin- bursing menmbers xvhose currencies appreciate signifi-prised 1,558,478 (1,525,248-June 3(:),1995) autlho- cantly in terms of the standard of value.rized shares, of which 1,497,325 (1,462,574 Jun1e 30, The net mainiteniance of value amounits relating to1995) shares had been subscribed. Each share has a par restricted currencies out on loan are included invalue of O.] million 1974 SDRs, valued at the rate of Deferred Amounts to Maintain Value of Currency$1201635 per 1974 SDR. Of the subscribed capital, Holdings and shown as a component of Equity sinice$10,994 millioni ($10,858 million Junle 3), 1995) has maintenance of value becomes effective onlv as suchbeen paid in, and the remaininio $169,636 million currencies are repaid to IBRD.($5165,580 million-June 30, 1995) is subject to call onlywhen required to meet the obligations of IBRD created by Membership: In February I'993 [BR D's Executive Direc-borrowving or guaranteeing loans. As to $144,5t)4 million tors decided that the SFRY had ceased to be a member($141,150 million-Junie 30, 1995) the restrictioni on1 of IBRD and that the Republic of Bosnia and Herzegov-calls is imposed by the Articles of Agreement and as to ain (now called Bosnia and Herzegovina), the Republic$25,132 million ($4,430) million-June 30,1995) by of Croatia, the former Yugoslav Republic of Mace-resolutionis of the Board of Governors. donia, the Republic of Slovenia and the Federal Repub-

lic of Yugoslavia (Serbia and Monteniegro) (FRY) areRestricted Currencies:The portioni of capital sLbsc-rip- aulthorized to succeed to the SFRY's membership whentions paid in to IBRD is divided into two parts: (1) certaini requirements are met includinig entering into a$1,1((00 million ($1,086 million-June 30, 1995) ini- final agreement with IBRD on IBRD's loanis made to ortially paid in gold or U.S. dollars and (2) $9,894 mil- guaranteed by the SFRY which the particular successorlion ($9, 772 million-June 30, 1995) paid in cash or Republic wvoild assume. Four of the five successornoninterest-hearinig demand obligations denominiated Republics-Bosnia and Herzegovina, the Republic ofeither in the currenicies of the respective members or Croatia, the Republic of Slovenia and the former Yugo-in U.S. dollars. The amounts mentionied in (1) above, slav Republic of Macedonia-have become membersand (i) $777 million ($774 million-June 30, 1 995), of ]BRD. The paid-in portion of the SFRY's subscribedwhich xvere repurclhased by menmbers with U.S. dol- capital allocated to the FRY is incltided under Paymentslars, and (ii) $419 million ($364 million-June 30, on1 Account of Pending Subscriptions until the require-1995), xhich were the proceeds from encashnielits of ments of succession are met.U.S. dollar-denominated notes that are incliuded in theamoulits mentioned in (2) above, are freely usable by NOTE B-INVESTMENTSIBRD in any of its operations. The portion of the As part of its overall portfolio management strategy,amounits paid in U.S. dollar-denominiated notes are [BRD invests in government and agency obligations, timeencashed by IBRD in accordance with the schedules deposits and related financial instr-uments with off-bal-agreed between the menmbers and RfRD. The remaining ance sheet risk incltidinig futures, forwvard contracts,amouLnts paid in the currenicies of the memilbers, covered forward contracts, options, and short sales.referred to as restr-icted cuti-renicies, are usable bv IBRDin its lending operations only with the conselnt of the Government and Agency Obligations:These obliga-respective menmbers, and for administrative expenses. tions include marketable bonds, notes and other obli-The equivalent of $5,522 millioni ($5,967 million- gations. Obligations issued or unconditionally

184 TFIE WORLD BANK ANNtAL. REI'()R I 1996

guaraniteed by governmenlts of countries require a Options: Options are contracts that allow the holderminimum credit rating of x,s, if denomrinated in a Cur-- of the option to pur-chlase or sell a financial instrumlenltrency other thanz the home currency of the issuer; oth- at a specified prict within a specified period of timeerwise no ratinig is required. Obligations issuecd by an from or to the seller of the option. The puirchaser of aagency or instr-umelitality of a government of a coun- option pays a premium11 at the outset to the seller oftry, a multilateral organization or nov other official the option, wvho then hears the risk of an unfavorableentity require a credit rating of AAA. change in the price of the finanicial instrLlmellt Under-

Time Deposits:Time deposits include certificates of lying the option. [3RD only invests in exchange-tradeddeposit, bankers' acceptances, and other obligations options. The initial price of an option colitr-act is equalissued or unconlditionaHlly LuJramiteedi by banks anid to the premiumii paid by the purchiaser and is signifi-, , - ¢ - cant1v less thian the contract or notional amounit. IBRDother finiancial inistittitionis, does not vri te uncovered option conitracts.

Futures and Forwards: Futures and forward contracts Short Sales: Short sales ni-c sales of sectirities not heldare conitriacts for delayed delivery of securities or in [BRD s portfolio at the time of the sale. IBRD mustnionev niat-ket instrLunlelItS ill vxNlch thc selleir agreesmone , niarket instruments in which the seller agrees purchase the security at a later (late and bears the riskto mazke delivery at a specified future (late of a speci- tht the market value ofthesecurity ill movefied inistruiiileiit, at a speccifed pi-ice or viekld FuitLures ththeiartVlu fhesciywilIlv

fledinstrument, at a specified price oryield.Fuads erselv betwveen the time of the sale and the timeconitracts are tra(ied on regulated t I(ited States and the secur-itv must be delivered.international exCChanlges. BRI generally closes out mostopen positions in futures contracts prior to maturity Repurchase and Resale Agreements and SecuritiesTherefore, cash receipts or payments are mostly lim- Loans: Repurchase agreements are contracts uLideritecl to the change in market Value of the futures o011- wvhich a partv sells secur-ities and sinmiltalleouslytracts. Futures conitracts generally entail daily agrees to repLurchiase the same securities at a specifiedsettlement of the net cash margiln future date Lat a fixed price. The rev erse of this transac-

tion is called a rcsale agreement. Securities loans areC overed Forwards: Cov eredi forsardis are agreemienits cnrcsudrwihscrte r etu oaftrin which cash in one currency is convertcd intc) a dif- contracts under xvihch SeCL-ItieS are lent up to a futureferent cUrrellnV andi, simUltaneously. a forward specified dlate at a fixed price.exchange agreement is exeCutedi providing for a future Trading Portfolio: A summarv of IBR D's position inexchange of the two currencies in order to recovier the tradinu instrLmelnts at June 3f, 1 99fi and Junle 30c(irrency convxerted. 1 995 is as lollows:

lit flnillioiir of I '.S. dollars eqiuixaleiii

Otlier AllDewts lie imn rk I IallLst Xlil t '.S. dollars t urreiit vs iilrreIiT s

FY96 FY1(5 FY9ii FY95 FY96 FYV95 F1Y96 FY95 FY96 FY95

Investments

Tradilig

Gus ernisumit and ai ,gu iolligItioun

Carrving raIsUe 524 1 I8 I I, I 5,(,42- 3,53 4,281) 28 265 5,417 I[,5

A\s -ra.- bmld.i,s- during

period 87) 71 1)1 ' 2,738 I 4198 4 1,2o3 25 527 . :347 1 tOll)

Net gains ( f oses) tfu thepslriod 1I) (45) [11)i [4l) I ') - (5) [tl) I-

As rag% reId ('7) 4/til 5.43 1.35 1 43 51)3 5.95 4.82 5.65 4 12 37 5

Averaige lMatulritt be-) 5 1il 4 11 4 I L) 3 So 2S (8 8 41 I 7( 7 2.55

Tiimse JIepOsits

Carrs tug ilgl e 1, 1(11 YI 1 .75 1 221 5.822 6.(55 )4r 711 4511O 8Si 7

As,-rage Ialanes- dilringi"t-ri il 4iII 31I1 1.5 62 7305 3 793 -l l 1III35 I 25) 5SI 8

Net gains flis'vs) fl theperiod - ( t) U) _ C)

\vera-iges ield ('.) 3 4 73 1511 1 21; 552 28 3 9)1 61) 421 5.45

As-iag-ni,on,rinu [tears) 1)112 i I1 II I14 I1.111 11113 I 1.I12 llii2 11.11 1111

(r1tbi' ( .'ion-c,d "it trVst" ;isf-)

IBRD FIN:yr I-\a STA I F\ILNTS 1

(table cortinnned)

In milillionis of LU.S. dollars equisalelltOther All

DeUtsIhe imark Jpallese yell lU.S. dollars utirrerL ies cirrencies

FY96 FY95 FY96 FY95 FY96 FY95 FY96 FY95 FY96 FY95

E'lttiryes itid for\ards:

Car ryinig v alue I * 3 9 4 9)

Average hal anc e dUrilngperiold I I 3 9 - 1 4 11

Net gainls (losses) fOr the

period (2) (2) (3) (2i) 15 (I) () 2 10 (27)

Optiorns:

Carlryin)g va I tie (1 *

Aterage hala ncrci durinugperiod

Net gains (losses) fdv the

periovl () ) ) (I) (2) (2) *) H (2) (3)

Total Tradirig Ilvestmiielnts

Carrying \aloe I Sli5 1,1i38 2,897 L72 9,358 11!,335 I,jSi) 9716 1 5,(01 19,82 1

Average balanice diuirinig

period 1,29 1 1,336 4.31)3 9I,512 7,26(i 90,112 1 292 1I789 14,152 18,7 19

Net gains (losses) our the

perioid 17 3 (48) 79 ('8) (id 7 (3) (52) 145

Repuir(hase agreciiiemets anid

Seciurities loanis:

Carryinig taloe - (1(37) - (2,394) (2,40)()) (45) - (2,439) (2,567)

Average balanle dUring period (142) (81) - _ (1,406(i) (1,525) (27) (6) (1,575) (1,612)

Aver-age yield ("i) - (iO ()- 5.21 6 12 4.b - 5.1 8 5.95

Average M atU rity (yeslS) - )S - (.)2 0(.)1 0(.02 - .(.2 1).02

Resale agreeitieiits:

Calrryilig value 571 122 - 655 88 5d 36 1,282 '46

Av erage balance duti-inig peiiod 4ii3 (i37 775 557 68 21 1,30(6 1,215

Average yield ('!,5) 3.49) 4.44 5.12 6 17 4.41o 7.41) 4.39 5.49

Average matUritv (years) I.()1 0.()3 00(13 0111 1 1.()12 (1.02 11.0)2

Shlort sales

Cal-lyilng value (25) (77) (54) () ) - (79)) (77)

Average balance during period (44) (37) (5) (55) (133) (34 9) (12) (3) (194) (444)

Net covered forwvards:

CalryiVgI alHte 60 5S7 (9) (hId) (17) (7i33) SI) 283 2 1

Average balanCe du1-ring periodl 162 3011 (88) 8 (423) (611) 348 303 (1) I

Average yield 1(.) 3.33 4.62 (1.43 1.42 5.4(1 6.)5 3.17 5.14 3.69 4.83

Average matLirity (ears) 11.11 11.ih6 1. 014 (I. lii 01.02 (1.1(i M(l1 I (1.1)2 0.02 0.05

Less tlan $0.ŽS million. - Less tloinit 0.005 vecirs.

Held-to-maturityportfolio:The carrying and fair val- portfolio at JuLne 30, 1996 and June 30, 1995 are asties of investimienit securities in the Held-to-maturity follows:

lIn ntillionts

June 30, 1996

Average Gross Gross

Ca rrvi-ig Yield Unrealized UnrealizedValue ()i1) Gainis Losses Fair Value

Government andii agency obligations $ 1,()55 8.74 $56 $- $1,111

Time deposits 114 5.81 - - 114

Total $ I 611) 8.46 $56 $- $1,225

186 THE WORLD BANK ANNUAL RLPORj 19 96

In nmillions

June 30, 1995Average Gross Gross

Carryinig Yield tnllrealized tiinrealizedXValle ('5%) Gainis Losses Fair Value

Gover-nment and agency obligations $1,085 8 75 $19 $-- $1,104

Time deposits 118 6.50 - 118

Total $1,203 8.53 $1.9 $ - $, 222

At June 30, 1996 and June 30, 1995 the Held-tofor the fiscal year ended June 30, 1995. For the fiscal

maturity portfolio comprised investments in pounds year ended June 30, 1996 the effect of the commit-

sterling onil The annualized rate of return on average ment fee waiver was to reduce Net Income bv $235

investments in the Held-to-maturity portfolio, held million ($233 million-Junle 30, 1995).

during the fiscal ylear ended June 30, 1996, was 8.35

percent (8.11 percent-June 30, 1995). In connectioni with the cessation of the membershippercent (8.1 1 percent-June 30, 1995). of the SFRY discussed in Note A, in February 1993

The expected maturities of investment securities in IBRD reached an agreement with the FRY for the

the Held-to-maturity portfolio at June 30, 1996 are apportionment and service of debt due to IBRD on

summarized below loans made to or guaranteed by the SFR and assumed

by the FRY, which confirmed a Februarv 1992 interimIn millionls ___ ___ ___ - agreement between the SFRY (then consisting of the

Junl1e30, 1996 Republics of Bosnia and Herzegovina, Nlacedonia,

CNret Montenegro and Serbia) and IBRD pertaining, amongCarryiiig Fair Unlrealized

Value Value Gains other things, to such loans. As of the date hereof, no

July 1. 1996 through debt-service payments have been received by IlRD

June 30, 1997 $ 114 S 114 f- from the FRY.

July 1, 1997 thl-oulgh On June 1 4, 1996, the accumulated arrears on loans to

June 30, 2001 162 170 8 the former SFRY assumed by Bosnia and Herzegovina

July 1, 2)01 through were cleared throtigh three new consolidation loans

June 30, 2006 2 36 252 1 6 extended bv lBRD. These new loans consolidated all

Thereafter 657 689 32 outstanding principal and overdue interest on the loans

assumed by Bosnia and Herzegovina. This resulted inT'otal $1 ,1693 $1,225 $56 an increase in loans outstanding of $168 million and

the deferral of the recognition of the related interest

income. The first consolidation loan is a currency pool

NOTE C-LOANS, COFINANC1NG AND GUAR- loan of $29 million carrying l1RD's adjustable lending

ANTEES rate for such loans, cuL-rently 6.98 percent, plus 41

Loans: On Atigust 1, 1995, IBRi)s Executive Directors basis points. The second consolidation loan is also aapproved a one-year intereSt waiver of 25 basis points currency pool loan in the amount of $285 million car-

on disbursed and outstanding loans for all pavment rying IlRD's adlustable lendinig rate for such loans, cur-

periods commencing in the fiscal year ending June 30 rently 6.98 percent, plus 4 basis points. The third

1996 for all eligible borrowers. A similar waiver was in consolidation loan is a U. S. dollar LIBOR-based single

effect for the fiscal year ended June 30, 1995. In fiscal currency loan of $307 million carrying IlRD's lendingvear 1995, IRRD's Execuitive Directors approved a onie- rate for such loans, currently 5.38 percent. All threeyear 1995, lORD's Executive Directors approved a one- consolidationi loans have a fLnal maturitv of 30 vears,time 10 bass poin t t perdaiver, for two conseco- which includes a five-year grace period. The consolida-

loais, shich a borroi er cop verts from loan terms in tion loans aggregated the existing assumed loans, wvhich

effect between 1982 and 1989 to loa an terms in efect had final maturities ranging from April 1, 1992 to Mayeffet btwee 192 an 199 t loa tems i efect 15, 2001 anid a combined weighted-average interestsince 1989. For the fiscal year ended June 30, 1996 the rate of a ceintt

combined effect of these Lvaivers was to reduce Net rate of 7.95 percent.Income by $286 million ($251 million-June 30, At June 30, 1996, no loans payable to ilRD other than

1995). those referred to inl the following paragraphs wvere

Also, on August 1, 1995, the Executive Directors overdue by more than three months

approved a one-year commitment fee waiver of 50 At June 30, 1996, the loans made to or gtiaranteed by

basis points on undisbursed loans to all borrowers for certain member cotmitr-ies and the FRf witlh an aggregate

all payment periods commencing in the fiscal year principal balance outstanding of $2,520 million ($2,618

ending June 30, 1996. A similar waiver was in effect million-June 30, 1995), of which $1,227 million

IBRD FINANCIAI, STATENIEN1S 187

($1,41 1 million-June 30, 1995) was overdue, were in the fiscal year ended June 30, 1996 would have beennoniaccrual status. At such date, overdue interest and higher by $188 million ($156 million-June 30, 1995).other charges in respect of these loans totaled $808 mil- A summary of countries with loans or guarantees inlioni ($864 millioni-June 30, 1995). If these loans had noniaccrual status follows:not been in nonaccr-ual status, income from loans for

lii ujiilijois

Jtiune 30, 1996

Priincipal Principal and Noiiax rLualBorrow,er Outstanidinig Charges Overduie Sinice

W1!ith Oterdues

Federal Repuiblic of Yugoslavia $1,12()4 $1,143 September 1992

Iraq 50 66 December 1990

Liberia 152 2 50 Junie 1 987

Sudan 6 3 January 1994

Syrian1 Arab Repiublic 399 514 February 19877

Zai re 88 59Q No%ember 1993

r'otal $1,899 $21(135

lWithout Overdues

Bosnia and Herzegovina 6 2 1 - September 19992

Total $2,520 $2,035

The average recorded investment in nonaccruing loans try cannot be more than 60 days overdue on its debt-ser-during the fiscal year ended June 30, 1996 was $2,453 vice paymenits to lBRD or IDA. At June 30, 1996, IDA hadmillion ($2,474 million-June 30, 1995). approved credits of $1,379 million ($1,179 million-

June 30, 1995) under this program from inception, ofDuring the fscal years ended June 30,o1996 and June which $1,327 million ($1,128 million-June 30, 1995)

319nlnce tfnc t had been disbursed to the eligible countries.An analysis of the changes to the Accumulated Provi-sion for Loan Losses for the fiscal years ended June 30, Cofinanctng and Guarantees: pv RD has taken direct1996 and Junle 30, 1995 appears below: participations in, or provided partial guarantees of,loans syndicated by other financial institutions for

In iiillionis projects or programs also financed by IBRD through19}96 1999i regular loans. IBRD also has provided partial guarantees

Ballanice, bepriniin of the fiscai se.ar $3 74() $3,394 of securities issued hy an entity eligible for I3RD loanis.Pro h ision for l(iati losses 42 12 IBRD s partial guarantees of bond issues are included in

Provisinln for loan losses 42? 12 the guarantees amount mentioned below. IBRD's direct

Translation adjUstmen1t (442) 404 participations in syndicated loans are included inBalance, en.d of the fiscal yea r $3,340) $3.74)) reported loan balances.

Guaranitees of loan principal of $1,537 million at JuneUnder an IDA program established in September 1988, a 30, 1996 ($1,610 million-June 30, 1995) were notportion of principal repayments to IDA are allocated on included in reported loan balances. $122 million ofan aninual basis to provide supplemenital IDA credits to these guarantees were subject to call at June 30, 1996IDA-eligible countries that are no longer able to borrow ($173 million-June 30, 1995). IBRD has partiallyon IRD terms, but have outstanding IBRD loans guaraniteed the timely payment of interest amounts onapproved prior to September 1988 and have in place an certain loans that have been sold. At June 30, 1996,IDA-supported structural adjustment program. Suchi these guarantees, approximating $1 million ($4 nmil-supplemenital IDA credits are allocated to countries that lion-June 30, 1995), were subject to call.meet specified conditions, in proportion to each couni-trv's interest payments due that year on its pre-Septem- Estimated value of loans: All of lRD's loans are madeber 1988 IBLRD loans. To be eligible for such IDA to or guaranteed by countries that are members ofsupplemental credits, a member country must meet IBRD except for those loans made to IFC IBRD does notIDA's eligibility cr iteria for lending, mtrst be ineligible fOr- currently sell its loans, nor is there a market of loanisIRD lending and must not have had an lBRD loan comparable to those made by lORD. lRD has never suf-approved within the last twelve months. To receive a fered a loss on any of its loans, although from time tosupplemental credit from the program, a member couni- time certainl borronwers have found it difficult to make

188 THE WOR\LDD BANK ANNUAL REPORT 1996

timely payments for protracted periods, resultinig in (b) a spread of 50 basis points. The estimated value oftheir loans being placed in nonaccrual status. Several var-iable rate single currenicy loans has been based onborrowers have emerged from nonaccrual status after the relationship of the fair value to the carrying valuea period of time hy bringing up-to-date all principal of the uLiderlying horrowvings.payments and all interest payments, including interest The rues char-ed on fixed rate sinle currency loanisand other charges on overdue prinicipal payments. In

an attempt to recognize the risk inherent in these are set on semi-aninual rate fixing dates toI loanan attempt to recognize the risk inherent in these amountS disbursed dtne the recedin six-monthoverdue payments, IBRD maintains a provision for loan prod dired dg for sgicldisue ai-nontslosses. The balance of the Accumulated Provision for period and rempain fixed for suth disbursed amotinO tsLoan Losses at Junle 30, 1996 was S3,340 miillio until they are repaid. For the interim period from the($3,740 imiillioi-Junie 30) 19395) ldate each disbursement is madle until its rate fixing

udate, interest accrues at a rate equazl to the rate on vari-Fixed rate loans: On loans negotiated prior to July able rate single currency loans appli able for surh1982, IBRD charges interest at fixed rates. The esti- interim period. The fixed lending rate comprises a babemated v altie of these loans has been based on dis- rate reflecting medium- to long-terill market rates oncounted future cash flowvs using the rate at which IBRD the rate fixing date, plus a total spread consisting of (a)could undertake borrowiings of comparable maturities IRRD's funding cost margin foI- these loanis, (b) a riskat June 30, 1996 plus a 50 basis point spread. premium (inteindced to comi1pensate 1BRL) for market

risks incurred in fundilln thCse loans), and (c) a spreadAdjustable rate loans: In 1982 I3RD mitigated its of Sf) basis points The estimated value of these loansinterest rate risk by moving from fiNed rate to aditist- fas been basei d on discounatedi ftu'lre cash flohs usingable rate lending. This rate, reset txs ice a year, is the rate at whlichi IBRD cotild make similar loans ofbased on IBRD's ow n cost of qualified borrow ings pltis comparable matur ities at Junie 30, 1 996.a 50 basis point spread, resulting in a pass-through ofits average b orrowing costs to those memnbers that In addition to its other loan products, begilllilng on Sep-benefit from IBRD loans. Sinice the interest rate for tembier 1, 1996, IRRD vill offer its borroxvers the optionadtjustable rate loans is based oni the intere st rate of to convert un1disursed currency pool loan amllounlts tothe qualified borroxvings, the estimated value of sin, le currenicy loan termis. Furtier, borrowsers will beadiustable rate loans has been based on the relation- given the option to convert disbtursed and ulldisbursedship of the fair value to the carrying value of the curreicy pool loan lbalances to single cuLe-l-nlcV poolunderlyving borrossings. loans. Borrowers selecting single curr-enicy pool loans

iwill have their choice of ftour diffet-erit pools W.l S. dol-single currenicy loans:in l993 introduced variable srate lr- 1ars, Japanese yen, Deutsclhe ma-rik or Swiss francs) eachisingle currency loanas in 1993 adc fixed rate single ur-hutrency loans inl 1995. xvill be ad justed to reachi a level of at least 90 percent in

The rates charged on variable rate single currency the designated cun-rrencXy JIUl 1, 1 999 and svill beloans are a direct pass-through of IBRL-'s cost of ftond- maintained at or above that level thereaftering for these loans, and are reset semi-annually. They The folloxying table reflects the carrying and estimatedcomprise a base rate equal to the six-month reference values of the loan portfolio based on current borrow-initerbaliik offered rate for the applicabile *vui-reiicv on vausotelanprflibse cr-itbrrwinterbank offered rate for the applicableUcurrency1on ing rates net of the Aceumuolated Provvision for i oan

the rate reset date and a total spread conisistinig of (a) l.osses at June 30, 1 96 anI June 30, 1 995:IBRD's average funding cost mar-gin for these loans andl

II) Iflilli. ils

1996 1995

Carrying Valtie Esti nated Value (Ci rrvinug Valiue Esfiniated Value

Fixed -ate loans S 11,126 $ 2 p46c S I ,I 128 $ l lin

AdjLstable rate loans 96, 856 10)2>(P4 1 ((9I37 1 14,14]

Single currency loans 2,26 4 I7,. 234 235

Total 1li.246 11,6 38 123,4c919 133,441

Less aIccumulated rrovision for loan losses B,34(t 3,34(i 3,74() 3,.41)

$1(6,9066 $114,2)S 5119,759 $129,7 (1

IBRD FHNANCALv.E SNATF\IENTs 189

Statutory Lending Limit: Under the Articles of Agree- percent of the sum of Subscribed Capital, reserves,ment, the total amouLnt outstanding of guarantees, and surplus. At June 30, 1996 and June 30, 1 995, theparticipations in loans, and direct loans made by [BRD status of the statutory lending limit is as follows:may not be incr-eased to an amouLnt exceeding 100

Ini niilliolls

1996 1995

StatUtory Lending Limit

Subscribed ccapital 81.30 $17 6, 43SRetainecl earnings I 6,09)C9 1 5.02)2Cumulative translation adjuistmeit 1,056 3,308Accumliatlzted provisioni for loan losses 3,340 3,740

S201(1 25 81989ILoans and Gtuaraintees Outstanding

Loans outstandin.g 81 1 ( ,24)6 $123,499Principal guLarantees callable 122 1 73Inter-est guLarantees callable 1 4

$1 10, )3 69) $ 1 23(,676

Loans and gualaZlntees oLutstanFding as ai percentage of statUtory leniding limnit 6 25',

NOTE D-BORROWINGS Interest rate suwaps: Interest rate swaps are agreemenitsProviding liquidity and minimizing the cost of fu-ds that transforn a fixed rate pavment obligation in a

are key objectives to lORD's overall borrowing strategy, particular currenicv into a floating rate obligation inare ;v objectives to IBRD's overall horrowitig str-ategy.liRD uses swvaps in its borrowinig strategy to loxver the that currency and vice-versaoverall cost of its borrowiings for those members who Forward interest rate suaps:A forward interest ratebenefit from IBRD loans. IBRD ulidertakes swap transac- swap is an agreement ulider which the cash flowtions with a list of authorized counterparties. Credit exchanges of the underlyinig interest rate sxvaps wouldand maturity limits have been established for each begin to take effect from a specified date.counterparty

Stwaptions: A sxvaptioni is an option that gives theSwaps are used to modify the inter-est rate and/or cur- holder the right to enter into an interest rate or cur-rency characteristics of the borrowing portfolio and are rency swap at a certain ftuture date.linked to the related borrowings at inceptioni and remainso throughout the terms of their contracts. The interest Deferred rate setting agreements: liBRD enters intc)componient of a swap is recognized as an adjustmelnt to deferred rate setting agreemenits in contjunction withthe borrowing cost on er the life of the contr-act. Jpon some of its bond issues. These agreemenits provide fortermination, the change in a swap's market value is payments to be made to or by IRD reflecting gain orrecorded as an adjustment to the carrying value of the loss on1 one or more governmenit securities or relateduniderlyinig borrowinig and recognized as an adjustment of finaicial instrumeLints. These agreemenits allowv IBRD tothe borrowing cost over the expected remaining life of fix the effective interest cost to IBRD of all or a portionthe horrowing. In instances where the tinderlving bor- of the issues over a specified period of time after therowing is prepaid, the change in the associated swap's issue date of the respective bond. The potential creditmarket value is recognized immediately as an adjustment loss to IBRD from nonipertormance is limited to anyto the cost of the underlying borrowing instrumcnt. amoLits due, but unsettled, from the finanicial inter-

mediaryv However, periodic mark-to-market settle-Currency swaps: CuL-renicy swvaps are agreements in ments on these agreements limit this risk. At June 3(0,wlhich proceecis of a borrowving are converted into a dit- 1996 and June 3(0, 1 19195 the effective interest cost offerent currenicy and, simultanleously, a forward exchanige all principal amoulIts had been fixed.agreement is executed providing for a schedule of futureexchanges of the twvo currenicies in order to recover the The folloxving table reflects the carrying and estimatedcurrenicy converted. The combination of a b orroxving lair values of the borrowving portfolio at June 3(0, 1 996and a currenicy swap prodluces the financial equivalenit of and June 30, 1995:substituting a borrowing in the currency obtained in theinitial conversion for the originial borrowing

190 THF. WORLD BANK ANNIAL. RRPs(RT 1996

In millions

1996 1995Estimated Fair Estimnated Fair

Carrvinig Value Value Carrvinig Valuie Valuie

Short-tern $ 4,328 $ 4,371 $ 3,898 $ 3,898Medium- and long-term 92,391 99,250 104,392 112,977Swaps

CurrencyPayable 19,427 19,841 19,985 20,495Receivable (18,()10) (19,203) (16,735) (17,717)

Interest rate 1,064 - 1,059Forward interest rate - 23Swaptions - I - -

Total $8 ,136 $1 05,324 $111,540 $120,735

The estimated fair values are based on quoted market rowers self-interest in JBRD's continued strong inter-prices where such prices are available. Where no mediation capacity. Collectibility risk is covered by thequoted market price is available, the fair value is esti- Accumulated Provision for Loan Losses. IBRD also usesmated based on the cost at which IBRD could currently a simulation model to assess the adequacy of itsundertake borrowings with similar terms and remain- reserves in the case a major borrower, or group of bor-ing maturities, using the secondary market yield curve. rowers, stops servicing its loans for an extended periodThe fair value of swaps represents the estimated cost of time.of replacing these contracts on that date.

Commercial Credit Risk: For the pur-pose of riskThe average cost of borrowings outstanding during the managemenit, IBRD is partv to a variety of financialfiscal year ended JuLne 30, 1996 was 6.44 percent (6.62 instrumenits, certain of which involve elements ofpercent-June 30, 1995), reflecting a reduction in credit risk in excess of the amount recorded on theinterest expense of $170 million ($157 million-June balance sheet. Credit risk exposure represents the30, 1995) as a result of swaps. maximunm potential accounting loss due to possible

NOTE E-CREDIT RISK inonperformance by obligors and counterpartiesNinder the terms of the contracts. Additionally, the

Country Credit Risk: Country credit risk is risk of loss nature of the instruments involves contract value andincluding loss due to protracted arrears on payments notional principal amounlts that are not reflected infrom borrowers. IBRD manages country credit risk the basic finanicial statements. For both on- and off-through individual country exposure limits according balance sheet securities, IBRD limits trading to a list ofto creditworthiness. These exposure limits are tied to authorized dealers and counterparties. Credit limitsperformance on macroeconomic and structural poli- have been established for each couLnterparty by typecies. In addition, IBRD establishes absolute limits on of instrument and maturity cate gory.the share of outstanding loans to any individual bor-rower. The countryi o credit risk is further managed bnfinancial incentives such as pricing loans using JRD. exposure, as applicable, of these financial instrumenits

fiaca inetvssc spiiiglasuigfR at Tune 30) 1996 and Junie 30, 1995 are given below.:own cost of borrowing and partial interest chargewaivers conditioned on timely payment that give bor-

In millionis1996 1995

INVESTMENTS-TRADING PORTFOLIOFutures and forwards

Long position $ 1,499 $ 4,039Short position 5,875 8,051Credit exposure due to potential nonperformaince by counterparties 2 6

OptionisLong position 679 19Short position 429 -

Covered forwardsCredit exposure due to potential nonperformance by counterparties 2 7

Ca1'I, con tinued onl niext page)

IBRD FINAN\CIAL STATEME:NTS 191

(ta/ile cmntimtied)

1, m1illionls1996 1995

BORROWINGSCurrency swaps

Credit exposure due to potential nonperformance by couniterpar-ties 728 713Interest rate swaps

Notional principal 26.396 16,136Credit exposure due to potential nonperformance by counterparties 96 57

Forward inter-est rate swvapsNotional principal - 300Credit exposure due to potential nonperformance by counterparties - -

SwaptionisNotional principal 30Credit exposure due to potential noniperformnance by counterparties

NOTE F-RETAINED EARNINGS, ALLOCA- for IDA-Only Counltries (DRF) totaling $200 millionTIONS AND TRANSFERS throughi June 30, 1994. On October 12, 1995, the

Retained Earnings: Retained Earnings comprised the Board of Governors approved a transfer to the DRF,following elements at June 30, 1996 and June 30( 1995: hy way of grant, of $1 00() million out of Uniallocated

Net Income. At Junie 30, 1'996, $1 19 million ($105In iiilliolIOli million-June 30, 1995) remained payable.

1996 L99~,SiRr, --9 Transfer to Trust Fund for Gaza and Wt est Bank:The

General Reserve 23,009 136-'l B3oard of Governors has approved aggregate transfersto the Trust Fund for Gaza and West Bank (TFG), total-

surplus 711) 9226 ingr $5(0 millioni through June 30, 1994. On OctoberJunalilcated Net ln5 rnie I1,1K? I ,35 1 2, 1995, the Board of Governors approved a transfer

Total $15,502 to the [T', by way of grait, of $90 million out of Unal-

located Net Income. At June 30, 1996, $70 million($25 millionl-Junle 3(X) 1995) remained pavable.

On August 1, 1995, the Executive Directors allo- (cated $280 millioni of the net income earned in the Transfer for Ermergency Assistance for Rwanda:Infiscal year ended June 30, 1995 to the General November 1994 the Board of Governors approved aReserve. On October 12, 1995, the Board of Cover- transfer of $20 millioni for Emergency Assistance fornors approved the folloxving transfers, by way of Rwanda out of Surplus. At June 30, 1996, the transfergrant, out of Unallocated Net Income: $25)) millioi ftor the Emergency Assistance for Rwanida had beenin an equivalent amouLit in SDRs to IDA, $1 00 millioni made. At June 30, 1995, $5 million remained payable.to the Debt Reduction Facility for IDA-Only Coun-tries, and $90 million to the Trust Fund for Gaza and Transfer to Trust Fund for Bosnia and Herzegovina:West Bank. On the same dav, the 13oard of Governors On February 23, 1996, the Board of Governorsalso approved a tranIsfer of $634 million to Surplus approved a transfer from Surplus, by wax of grant. ofOn February 23, 1 996, the Board of Governors $1 50) millioln to a trust fund administered by IDA toapproved a transfer from Surplus, bv wva of grant, of hnance an emeigency reconstruction program in Bos-$150 million to a trust fund administered by Its to nia and Herzegovina. At June 30, 199 6, $16 millionfinanice an emergency reconstruction program in Bos- remained payablenia and Herzegovina. NOTE G-ADMINISTRATIVE EXPENSES AND

Transfers to International Development Association: CONTRIBUTIONS TO SPECIAL PROGRAMSThe Board of Governors has approved aggregate transfers In Febrmary 1995, the Executive Directors author-to IDA totaling $4,573 million from Unallocated Net ized expenditures for costs associated wvith plannedIncome through June 30, 1994. On October 12, 1995, staff reductions. During fiscal year 1995, IBRDthe Board of Governors approved a t-anisfer- to IDA, by charged to expense $13 1 million for these reductions,way of grant, of $250 millioni in an equivalenit amount in of w, hich $53 million xvas charged to IDA. The reduc-SDRs out of UJnallocated Net Income. At June 30, 1996 tions are designe(d to improve IBRD's and IDA's effi-and June 30, 1995, all transfers to IDA had been paid. ciency, adjust the staffing skills mix and thereby

,, ~~~~b etter meet c lient demands. The planned staf~f reduc-Transfers to Debt Reduction Facility for IDA-Only .ti r eectedt ler Tue yedrstadfinistr-Countries:The Board of Governors has approved tions are expectes to a owmer fiture years tadh istra-aggregate transfers to the Debt Reduction Facility

192 THE WORLD BANK ANNUAL. RF,PoR I 1996

associated cost. On October 31, 1 995, the program The responsibilities of IBRD tinder these arrangementsfor planned staff reductions w,vas brought to a close vary and ranoe from services normally provided underxvhen all affected staff had been identified and its own lending projects to ftill project implemenitationinformed. Under this program, 608 staff wvere identi- includiig procurement of goods and services Durinnfied as redundant at a total cost of $1 1 2 miilion. The the fiscal year ended June 30, 1 996, IBRD received $1 5difference of $19 millioni has been taken back as a million ($ 19 million--June 30, 1 995) as fees for admini-reduction of administrative expenses, of wvhich $8 istering trist fuinds These fees have been recorcded as amillion has been allocated to IDA as a reductioni to the reduction of administrative expenses.management fee chiaroed to IDA. At June 30, 1996,

o - > 1 5 .0 NOTE I-STAIFF RETIREMENT PLAN$26 million ($1 million-June 30, 1995) has beencharged against the accrual of $112 million. This IBRD has a defined benefit retiremenit plan (the Plan)

accrual included costs associated wvith job searcil covering substantially all of its staff The Plan also coy-assistance, training, outplacemelnt consulting, pension ers substantially all the staff of IF(c and M11GA. Underplan contributions, medical insuranice contributionis the Plan, henefits are based on the years of contribu-and related tax alloxvances. tory service and the highest three-year average of pen-

sionable remilunleratioi as definled in the Plan, xvith theAdministrative Expenses are net of the management staff contributing a fi\ed percentage of pensionablefee of $508 million ($571 million-June 30, 1995) remuntn, and [E prcntr ge remaindeclharged to IDA and $ 1022 millioni ($I I I million-Junle remunleration, .aid l BRD *ontrib titing thie re mainider of'3( 9)charged to rDead$12millionl ($111ramshio-Juned the actuarially determjined cost of fu-ture Plani benefits,.3(), 1995) charged to reimblursable programs. Inclded The actuarial present values of Plan obligationsin the amounts charged to reimbursable programs are throughout the fiscal year are dtermined at the begin-allocated charges of $22 millio1 ($21 million-June ning of the fscal ear by the Plan s actuary All ontri-30, 1995) chiarged to IFC and $1 millioni ($1 millioni- buin totePaLn l te sesadicmJunie30, 1995) charged to %IIGA. bLtioiis to t le Plain ani al ot ler assets aincl imcoi-iie

t o held for the purposes of the Plani ar-e held by [BRD sep-

Contributions to special programs represenit grants for- aratelv from the othier assets and income ofipRL), IDA,

agricultural research, the control of onchocerciasis, IF( and MIGA anid can be used only for the benefit ofand other developmental activities, the participants in the Plan anli their beneficiaries,

unltil all liabilities to them have been paid or providediNOTIE H-TRtUST FUNDS for Plani assets consist primarily of equity and fixed

IBRD, alone or jointly with IDA, administers on behalf income securities, x ith smaller holdings of cash, realof donors, includinig members, thei- agencies and other estate and other investments.entities, finds restricted for specific uises whlich Net periodic pension cost for BED participants for theinclude the cofinancinig of IBRD lending projects, debt fiscal years enided Junre 310, 1 996 anid JUne 30, 1995reduction operations, technical assistance for borrow-- consis-ted of the folloing components:ers, including feasibility studies and project prepara-tion, global and regional programs anid research adn1training programs. These ftulids are placed in trust and In million,s

are not included in the assets of IBRD. The distribution 1996 I995of trust fund assets bv executing agent at June 30, Service cost-benefts earned1996 and June 30, 1995 is as followvs: du]ring the fiscal year $216 $186

1996 995 _ Interest cost on projected benefitTotal Total obligation 360 348

Fiduciary Number FiduicIan NumberAssets offTrust Assets of Trtst Actual returin on) plan assets (91 ) (41N)

(ill Ftind (ill Fud Net amortization and deferral 437(3)millions) Accotiint llillions) Aloilnts

IBRD Net periocdic pension cost $ 96 $103executed $ 548 1.314 $ 64 5 1,294 -

Recipient The portion of this cost that relates to ERD aid isexecuted 1,3(8 935 1,27() 684 included in Administrative Expenses for the fiscal \ ear

Total $1,56 2,249 $1,915 1 978 ended June 30, 1 996 is $60 million ($65 million-______________- JRIlue 30, 199c5). The balance has been incltided in the

management fee charged to IDA.

IBRD FINAN'CAI. STA I LsNIENTS 1 93

The following table sets forth the Plan's funded status for RSBP assets consist primarily of fixed income andat June 30, 1996 and June 30, 1995: equity securities.

Net periodic postretirement benefits cost for IBRD par-In millionlis 1996 I995 ticipanits for the fiscal vears ended June 30, 1996 and

6-- 9 June 30, 1995 consisted of the followinig components:Actuiarial prese,nt value (I heeefit

ob ligaLtion., In lioi n

Acctimuilated henefit .,hligatioit

Vested $(3 543) 03,55 1 I 1996 1995Nottv,stedl (3S) (p2) Service cost benefits earned

Subtotall (3 570) (.,573) during the fiscal year $ 32 $ 28

Effect of'projected empeTslatiotn lcvels (171 S) 1IISf6) Interest cost on accumulatedProjected benefit obligation (5 7') (5 439) postretirement bernefit

obligation 45 48Plan asset.s at lair value 70153 o 925i4Plan assets ill exess (ft projecte d Actttal retuL-n on plan assets (I 30) (40)heneft ohligaItioln I1 16 4 86 Net amortization and deferral 87 ]

Rema1inJinig unrecognized Tlt -transition asset (91) (t (4) $ 34 $ 37

I' nrecignizei prior serviec cost 74 82exprecogizen niet gaint tromi past The portion of this cost that relates to IERD and iscx perleote difflerenlt frisml thl tassmlied ad fl+on I hcne.T1s ill included in Administrative Expenses for the fiscal year.tssnnptiiinisl7 (1 79,) (464) ended June 30, 1996 is $22 moillion ($23 million-

'repaid pensirniJ cost June 30, 1 995). The balance has been included in the- = - management fee charged to IDA.

The weighted-average discount rate used in determin- The following table sets forth the RSBP's funded sta-ing the actuarial present value of the projected benefit tus at June 30, 1996 and June 30, 1995:obligation was 7.5 percent (7.5 percent-June 30,1995). The effect of projected compensation levels was Ill iiillioniscalculated based on a scale that provides for a decreas- 1996 1995

ing rate of salary increase depending on age, beginniniig Accumulated p(ostretireement benefitwith 13.3 percent at age 20 and decreasing to 6.8 per- obligatinc.ent at age 64 The expected long-term rate of returin Reties Sf293) f257)on assets was 9 percent (9 percent-June 30, 1995) [ily e(28) (25s)

'itlly eligible acti\N, plan partic-ipants (1 2S) (125)NOTE J-RETIRED STAFF BENEFITS PLAN Other active plan participants 85 (292)

sBRD has a Retired Staff Benefits Plan (RSBP) that pro- (7()(n) (674)vides certain health care and life insuranice benefits toretirees. All staff who are enrolled in the insurance P s a l

programs wvhile in active service and who rneet certain Plan assets in excess of aectimatlaIted1requirements are eligible for benefits wvhen they reach postretireient benefit obliation 2

eary or normal retirement age vhile vorking forilRRD. Inorecognized prior sirsice cOsts (12) (14)

The RSBP also covers the staff of IF(1 and MIC,A. I Inrieognii7ec net loss fronti pastexpn rionce differ ent from that asSiTmeLI

Retirees contribute a level amount toxvard life insur- a n d fron nbahinges i n aLS,mptioI s 1(17 25ance based on the amount of coverage. Retiree contri-butions toward health care are based on length otf r

service and age at retirement. IBRD aninualiv contrib-utes the remainder of the actuarially determinied cost Of the $326 million prepaid at June 30, 1996 ($332for future benefits. The actuar-ial present values ofRSRp nilloiortJune 30, 1 995), S,95 million is attributableobligations throulghout the fiscal year are determinied to IBRM ($301 million-lune 30, 1995) and is includedat the heginning of the fiscal year by the R8bPS aCtUary. in Miscellaneous Assets on the Balance Sheet. TheAll contributions to the RSBP and all other assets and remainder has beeni attributed to IFt and MIGA.income held for purposes of the RsB1 are held by IBRD For June 30, 1996, the accummulated plan henefit obli-separately from the other assets and incotlie of IBRD, gation1 (APBO) was determinecd usilig health care costIDA, IFC, and MIGA and can be used only for the benefit trend rates of 14.4 percent to 11 .2 percent, decreasingof the participants in the RSRP and tlheir beteficiaries gradually to 5. 5 pecent in 20(10 and thereafter Theuntil all liabilities to them have been paid or provided health care cost trend rate used for Junle 30, 1995 was

194 THF WORLD BANK ANNHAI. REPORT 1996

15. 1 percent to 11 2 percent decreasing gradually to tirement benefit cost for the fiscal year then ended by5.1 percent in 2(010 and thereafter. $20 million.

The health care cost trend rate assumptioni has a sig- The weighted average discount rate used in determin-nificanit effect on the amouLits reported. To illustrate, ing the APLo wVas 8 percent (7.5 percent-June 30,increasinig the assumed health care *ost trend rates by 1995) The expected long-term rate of return on planone percentage point wx ould increase the APo at Junie assets was 8 percent (8.25 percent-June 30, 1995).30, 1996 by $145 million and the net periodic postre-


RF.PORT OF INDE-PENDENT ACCOUNTANTS

Price Waterhouse Thie Hague New York(Internatiortal Firm) Beijing Tokyo

Holig Kong WaslingtonLondon

Price fhitterho useC 0July 31, 1996

President and Board of GovernorsInternational Bank for Reconstruction

and Developmenit

In our opinion, the finanicial statements appearing on pages 168 through 195 of this Report presentfairly, in all material respects, in terms of United States dollars, the financial position of the Interna-tionial Bank for Reconistruction and Development at June 3(0, 1)996 and 1995, and the results of itsoperations and its cash flows for the years theni ended in conformity wvith generally accepted account-ing principles in the United States and with Internationial Accounting Standards. These finan-cial state-nients are the responsibility of management of the Interniationial Bank for Reconstruction andDevelopment; oui responsibility is to express an opinioni on these financial statements based on ouraudits. We conlducted ouraudits of these statements in accordance w!ith generally accepted auditingstandards, including Internationial Standards on Auditing, which requir-e that we plan and perform theaudit to obtain reasonahle assurance about wxhether the finanicial statemernts are free of material mis-statement. An audit includes examining, on1 a test basis, evidence supporting the amounlts and disclo-sures in the finanicial statements, assessinig the accounting principles used and significant estimatesmade by management, and evaluating the overall finanicial statement presentationi. We believe thatour audits provide a reasonable basis for the opinion expressed above.

1 'I)

19(6 THE W( ilr) BANK AN\II I \I Rio 1kVR 1996?t

SPECIAL PUtRPOSE FINANCIAL STATEMENTS OF THE

INTERNATIONAL. DEVELOPMENT ASSOCIATION

Statement of Sources and Applications of Development Resources 198

Statement of Changes in Accumulated Surplus 200

Statement of Cash Flows 201

Summary Statement of Development Credits 202

Statement of Voting Power, and Subscriptions and Contributions 205

Notes to Special Purpose Financial Statements 209

Report of Independent Accountants on Special Purpose Financial Statements 218

IDA SPECIAL PJRP( )kF FINANCIAL STATEMENTS 197

STATEMENT OF SOU'RCES AN) APPLICATIONS OF

D EVE 1.0 PME NT RESOURCESJlire 30, 1996,ve o.ini'30, 1 995Expressedl in niilliriiis ,,f U'S. j *lars

1 '96 1995 '

Applications of Developmenlt Resources

Net Resources Available For Development ActivitiesCash arid investments ininiediately available fior disilbui-senmenit

Due from banlks $ 15 $ 44Obligations of governninictts anid other- official entities-

Notes B and F 2 487 1,851Obligations of banks and other finanic Ial institutionis-

Notes B and F 2 25 2,590Net payable oni inVestmenIt securities transactions-

Notes B and F (3 07) (128)4,452 4 3

Cash and investments not irnmediatelv available for disbursementDue froim banks 8 3Obligations of governiments and othel- official entities-

Notes B and F 1,413 938Obligations of hanks and other financial inIStitUtiOnlS-

Notes B and F 73 4()21,694 1,343

Restricted cash and notes 69 73Nonnegotiable, noninterest-bearing demilanid obligations 2 1 232 23,677Other resources, net 166 1 53

Total net resotirces available for developmentactivities 2 ,613 29,603

Resources Used For Development Credits(see Summnary Statementt of Development Credits,

Notes E and F)Total development credits 97 4 i() 78C 5ILess undlisbursed balance 24 629 2G6 253

Total resources Utisd for development credits 72, 79 I , 93

Total applications of developmeint resotirces $100,434 $101,635

198 THE WOnRI.n BANK ANNWAL REPORI 1996

1996 1995,

Sources of Development Resources

Member subscriptions and contributions (see Statement of VotingPover, and Subscriptions and Contributions-Note C)

Unrestricted $ 90,614 $ 92,688Restricted 287 287

Subscriptions and contributionis comiiiitted 9(o)'1i 9297/5Less subscriptionis and contributions reoeivable-Note C 1,517 6,739

Subscriptionis and contributionis paid in 89,384 86,236

Deferred amoulits receivable to maintain value of curren'cy holdinigs (221) (218)

Payments on aCcount of penclin, memiibership-Note C 9

Transfers from the International Bank for Rcconistructiojnand Development--Note D 4,83 1 4,581

Cumulative translation adjustmenit on development credits 4,291 8,823ACcuLIMulated suIplus (see Statemilenit of Chalnges inAccuiimulated Stirplus) 1,7911 1,995

Securities sold under agreements to repurch3se andl payablefor cash collateral received--Notes 13 and F 352 2()9

Total sources of developmenit resources $100,434 $101,635

a. Restated to inchliue Speci,l1 Pid llc bdicev at J.o ie 30. 19')0 St'v Note A

The Notes to Special Purpose Financial Statements are an integral part of these Statements.

IDA SPFCIAL Pt:RPLS)s FINANCIAL STAIEWNTS 199

STATEMENT OF CHANGES IN ACCuMULATED SURPLUSFor thie fiscal yers ernie't June 30, 199n ; mlunp ne 0, 1 995Expressed in iidliomis of U.S. dotinvis

1996 1995,

Income fi-om developnei-t credits-Note E $ 5]2 $ 489Incomile from investmenits-Nott B 345 311Management fee charged bv the International Banik forReconistrctioll and Development-Notes G and H (5(18) (571)

Amortization of discouL1t on stibscriptioni advanices (9) (12)

Changes fromii operationis 340 217

Effect of exchange rate chianiges on accumulated surplus (545) 413

Net changes (205) 630

Balance at beginniniig of the fiscal year 1 ,995 1,365

Balance at end of the fiscal year $ 1,790 $1,995

-, Resettitreto intlle Special Eun it activitrfy r tlime bS(0 Tll volir en -4ledi;e 30, 1 95* see Note A.

The Notes to Special Purpose Finanicial Statements are an integral part of these Statements.

2)00 THF Wol,Ri r BANK ANNI A RELPORT 1 996

STATEMENT OF CASH Fi,ow-For the fistil tvears vine IIint' 30 IQI)6 a1n( lfiie 30, 19)95E.vprn'ssd(, ill on/llionis of U.S dollors

Cash flowvs from developmenit activitiesDevelopment credit disbursements 5(5,884J S(57(3)Developmelit credtit principal repayments 5i3 49S

Net cash used in developmiernt activities (5,321) (5,7(5)

Cash floWs from1 m1emChber sub)scriptiolns and contributions 5, () 5 I91

Cash flowvs fromil IBR[D transfers 2'5( 1,427

Cash flows from operating activitiesChanges fromil operations 340 217Less: Income from restricted ins estmnents 80 09

Adjustments to reconicile changes from operations to net cash providCed bvoperating activities

Amortization of discount on subscription advances 9 17

Net changes in othier clelopaient resources 24() (I,I)

Net cash provided by (used in) operatingl activities 50: 9 (41)

Effect of eNchange rate changes on cash and investments immediatelyavlailable for disbursement (431) 286

Net increase in cash and investments immediattely availahlefor dishuL-selmenIt (5 1,658

Cash and investments imrimediately available for disbursemnenit atbeginning of the fiscal year 4,3 57 2,(i'L9

Cash an.d investments immiediatelv available for disbuL-semilenit atenid of the fiscal sear $ 4,452 $ 4,357

Supplemental disclosureIncrease (Decrease) in ending balances resulting1, from exchange

rate flucttiationisDcvelopment c-edits outstandinIg $(4,532) S 4.107

Receiv\ able from1 the International Bank fotr Reconistrtctionlan.d Dev elopment _ 90

a Rtestted toi i f, l Spjvceicitl ii i actiei j,or t Iiu ic Il vamt, o, c, It/ed I 0. 199;se No te4 A

The Notes to Special Purpose Financial Statementts are an integral part oJ these Statements.

IDA SeF( sil Pi RP('s Fi\ s\( IAl SI siNI-\ I 20)1

SUMMARY STATEMENT OF DEVELOPMENT CREDITS

Jwne 30,199oExpressed ini ni/Winhes of Ut.S (hoWIVt

Percentage ofTotal 1 tUtdishbured Deseloproent credits development credits

Borrower or gwuaantor deseloproentt red it, depelout eut reditst

outstandintg outstanding

Afghanistani $ 75 $ $ 75 0.10Albania 276 153 123 0.17Angola 282 184 98 0.14Armenia 233 105 128 0.18Azerbaijan 153 91 62 0.(8Bangladesh 7,01(1) 1,402 5,608 7.70Benin 656 143 513 0.70Bhutan 28 6 22 0.03Bolivia I, 211 422 789 1.08Bosnia and Herzegovina 0 10 --

Botswana 11 11 0.02Burkina Faso 8(06 185 621 0.85Burundi 722 137 585 0.80Cambodia 174 81 93 (1.13Camerooni 733 2 18 515 0.71Cape Verde 69 34 35 (1.05Central Africani Republic 466 53 413 0.57Chad 547 127 420 0.58Chile 1 ( 10 (.01China 9,787 2,544 7,243 9.95

Colombia 11 - 11 (.01Comoros 79 13 66 0.09Congo 178 7 171 0.23Costa RicaC6te d'lvoire 1,292 406 886 1.22Djibouti 5(0 4 46 0.06Dominica 1 6 4 12 0.02Dominican Republic 17 - 17 (0.02Ectiador- 26 26 0.04Egypt 1,495 446 1,049 1.44

El Salvador 2() 2( 0.03Equatorial Guinea 56 4 52 0.07Eritrea 43 18 0.03Ethiopia 2,119) 585 1,534 2.11GCambia,The 184 22 162 (0.22Georgia 1 92 73 1 9 0.16Ghana 3,490 1,082 2,4(08 3.31Grenada l 4 7 0.01Guiniea 1,0(68 224 844 1.16Guinea-Bissau 249 39 21(0 (0.29

GuyaLIa 293 9 203 0.28Haiti 56(7 1 5( 417 0.57Hondur-as 6)23 218 405 0.56India 2-2,(72 5,263 17,409 23.91Indonesia 746 - 746 1.02JTordanl 68 - 68 0.(9Kenya 2,'59(6 557 2,039 2.80Korea, Republic of S0 8(.) 0.11Kyrgyz Republic 312 143 169 0.23Lao People's Democratic Republic 481i 189 297 0.41

Lesotho 241 87 154 (1.21Liberia I (1) 3 10)6 0.15Macedonia,

Former Yugoslax Republic of 159 74 85 0.12Madagascar 1,445 332 1,113 1.53Malawvi 72 396 1,329 1.83Maldives 5(1 14 36 0.05Mali 1,157 277 880 1.21Mauritania 475 13(0 345 0.47Mauritius 16 16 (1.02Mongolia 132 69 63 0.(9

202 THE WORLD BANK ANNIIAI RFP T)R-1 1 996

Perr entge ifTrrczl I erdk,huurred DerrIojrmernr creit, derrIrpmnee redits

Brrrrr r guacrantorr dle'rIpelIleiei nt dit, cd'elrpimeint ( rr'tit,' ttitartcidg orreanirr:ineg

Morocco 5 3 $ 33 0.04MvozarrbiqueC 1 6 19c 692 971.27Mlyannmar 77( - 70I.6

Nepail 1,3 18 2 86 1,032 I 42Nicarag~ua 468 15 2 31 6 0.43Niger 1) 1 13 589 0.81Niger-ia 82 5 51 8 307 0.42Pakistain 4,6801 1,333 3,34 -7 4.60RPapua Newx Guinea 1 06 106 0.15Paraguav 3 5 3 5 0.05

Philippines 277 9 18 5Rwanda 676 155 52 0.7St. Kitts and Nexts 2 2St. Lucia 1 4 6 8 R(I(St. \Vincenit anid the Grenadines Ii - 8 01San Tome and Prinicipe 69- I 2 5 7 0.08Seniegal 1.44L9 3 19 1, 130 1.55Sier-ra Leonec 4 14 168i 246 0.34Solomion Islanids 37 9 28 0(04Somalia 4 23 423 0.58

Sr-i Lanika 1,9311 453) 1,478 2.0()3SLudan) 1,2 47 - 1, 2 4 7 1.7 1Swvaziland 6 6 0.01Syriani Arab Repuiblic 44 44 (1(1Taijikistan 5 - -

Tanzaiaii 2,97 8 787 2,191 3.01Thailand II) 101 0.1 4Togo 62 I 102 57011 0.7-I8To i ig-a 5 0.01tTuniisia 48 48 ((.07

Turikey l ?7 1 27' 0.17 Ugandla 2 420 623 179 2.4 7

Vanuaro 1 ~~~~~~~~~~~~~~~~~ 4 1 3 002Vietnam I ,9( I 02-7 2303Western Samoa 4 7'4 43 R(16Yem-ten, Repuiblic of 1,191) 36 1 831) 1.14zaire 1,288 - 1, 2 88 1.,77Zambia 1 686 360 1,326 1 .82Zimbabev -5(17 17 33(10 (1.45Subtotal memiibers 97,336 2458 278 99.92

West Afr-icani Development Banik2 63 -19.L 3 4 (1.05Caribbean Development Bank5 44 21 23) 0.03SLubtotal regional developmi-ent banks 1(17 50 5;7 0.)8

Other 47__ 7___ __ 0.01I

Total-June 30, 1 996 $9 7,451)$ 5246 629 $ 72,8 21 110.0(

Total-l-unc 30, ] 9955$2 8 $ 26, 233 $712,032)

* (ildicactr' eotrlfiecte less tlcecic 0 0Ot percent* U ev' iftr J,no tiet' 01CCoff icric tritr figure's e'loii iii'Cib'crm Otesrf rcreeerliig

NuTnS1. Of Ihe' eueriifurer'e bleclriecje ati (incr 30, (QQ6, 1TJA hear 'enterr'd tite e''rrev.ril'lr eeomin cunoits tI. elslureoer 8340 millioen f$270 meil-oleere-Jule .30, 1 995).

2 These ricevelerpienrit ce'rd its arc' Jeer tier b'encht te Be'eeii. Beerkinae J see, Unedl civlerirr', MN/i , Ni ge'r, Seniegalc, reic] ?'rgo.3 '(he'eeeleee'icreel its cire- fece' the' len'erfi t of G;ir'mlc Crrireic terr terrie~s of theUiir 'ctr'c Ni igeir lt ("Assr)Cr'iei stee otri ir e1 [ e'peniei'11e

te's) ini tiir' Cci rilrlernei rr'pone4. Rr'pie'sentts eIce)elopeenlrt ree'irts icecicle cite t ime' whe "r tele it/it tltho rites (cUe iisletn ri'/err'ee'tre(ft Chmae in IDA (pl'err to Me ia ( 5, / 980)S. See Ntrites tee Speceeil Peerpcse' Finmc alee Ste te'ler'i s--Nere A foe' re'iciassfc hretieier

IDA SP'L.eIAI Pi Rrc.,ir FiNA\Nt IA! S IATLNIENi s 203

S t M MN AR Y S T AI' L NI E N T () I D IEb V E (I I'M b vE N T C R E DI FS (continued)luun .30, 1999

in mlliHmls oU S. s-hllovr

Maturity Structure of Developmenit Credits Outstandinig

Period

JuIl 1, 19)9() thrOuIgI Iune 3', 1 C!7 $ 753Juy 1, 1997 througI Julne I 3(, '83

IJul I .19S thruugli ltJne 3()1 11)99 898IJul 1 1,999 thlrFougL1 IJIue 3(1 _ 2II, 1 ()52Jul 1 290)0 thrOLuI11 jtlne 3() D))IM1 1,269

July I 1,2f(910 tlhr-ou,.glL Jut11e 3() 2799 9) 524Julv 1, 2()()(6 tl11tou1.1h1 Mlun 3() 21)1 I1 12,485luly I, 2()) I through JIuneI 3(1 201( 14,1-61uly 1, 2()I(I throulgJh .ITIhiu 3'()21 ]12,834JulV 1, 72 ) 12 th1ro uTghl Jlu 11e 3(L , I 1'2( 121( 10(:86

July I 2 )21 through Julne ̂() 2()3 I 6 537-July 1, 2()31 through lunte 3(1, 2!3 ( 2 3S8July 1, 2(:36 thlroughIl JLune 30) 2(4 1 80

Toutl . 2,821

The Notes to Special Puirpose Finanacial Statements are an integral part of these Statements.

294 TIIF V(IRuIL) B3N K AN\I,\I Riri,okII I1936

STATEMENT OF VOTING POWER, AND

Sl!BSCRIPTIONS AND CONTR I BIlITONSuime .30,1996

Ei-presse, iij jiiillioi)s of US ,lfllrs

Sulhqlripflnaios;ldN umvber PcrINentagc (oitri-hiLtioiis

Nleniberl of ole. of total (oiniiiiitted

Part I Members

Australia 141,883 ].32 S 1,6(0.8Austria 71,91) ().6i7 8 .SBelgium 1 26,316 1. I 1 I, s ;3 S)Canada 32-, 422 3.03 3,9S70.0Den mark 104,317 1) .7 1,2()4.3

Finlanid 68,0)91 I).63 iI 1.6France 41,()'54 4.20 6,446.3Germany 747,221 6 .97 111,466.2Icelanid 24.561 (0.23 16.6Ireland 31)0,1)1 (.2S8 1(04.5

Italv 2.97,641 2.76 3.767.))Japan 1, I 542St6 1(. 7. 2(),21 S.6Kuwait 69,834 0.65 6491.1Luxembourg 25,9 ( C)_24 48.8Netherlands 234, 73 2.19 3,387.2

New Zealand 31) '().2S 105.0)Norwav 1.1,1356 11.98 1,147.1Portugal 24,71)2 1).23 23.(1)Russiani Federation 2S, 2(2 1).26 143.8South Africa 31) 36 1.28 8 S2.

Spain 38,1 166 11.34 421.8Sw;eden 214,1 5'3 2.10 2,376.4Switzerland' 95.43(1 1.89 1,1)(19.5United Arab Emirates 1,36-i7 ()( t.6

nliiited Kingdom 3 411,211 '.5.04 6,R29. 7Inlited States 1,t:7,213 14.98 21,X31.5

Subtotal Part I Members-) 6,6(7.171 61.50 $88.457.0

Part II Members

Afghanistan 13,357 (1 .13 1.3Albania 24, 389 (i.23 11.3Algeria 27,72() 1..26 3.1Angola 4 i.662 1).43 7LIArgentin a 11 2,87') 1.)11 38.1)

Armenia 584 ().11 O.IAzerbaiian i644 (.()1 (I 9Bangladesh 61,)51 0.58 7.2Be]ize 1,7SS (1.112 11.2Benin i9. 01.1)3 (.(6

Bhutan 12,272 (.11 (IIIBolivia 3()1,97 () 'X 1.4Bosni anid Herzego\ina 17,8,1 (1.17 2.3Botswania 23, SI (1.22 (1.2Brazil 176.16' 1.64 92.4

Burkinia Faso 1 ,466 1 .1S 1.7Burundi 2311(16 (..2 I 1.0)

IDA SiI.( i.\i Pl F9 1\\\'S I I S Nix} NIRvNA9 21)5

STATEMENT OF VOTING POWER, AND

SUBSCRIPTIONS AND CONTRIBUTIONS (continued)

June 30. 1996Expressed ill tiilliois of U S- dollars

Stubscriptiotns anidNumiiber Per(entage contributionis

Miernber' of vtses of total comiitted

Cambodia 7,826 (0.07 $ 1.3Cameroon 19,459 0.18 1.3Cape Verde 5,012 (.(5 0.1Cenitial Africani Reptublic 1(,920 .10 0.6Chad I 090 01 0.6

Chile 31,78? (.30 4.5China 217,996 2.03 39.7Colombia 34,350 0.32 22.5Comoros 13,141 0 12 0.1Congo 6,685 0.06 (.6

Costa Rica 12,480 012 (0.3C6te dIlvoire 18,669 0.17 1.3Croatia 29,526 (0.28 5.5Cyprus 28,236 (0.26 1.1Czech Republic 40,537 0.38 23.7

Djibouti 532 -().2Dominica 15,049 0.14 (0 .Dominican Republic 25,658 0.24 0.6Ecuador 23,S(( (8.0022 0.8Egypt 49,528 (0.46 6.7

El Salvador 6,244 (.(6 0.4Equatorial Guinea 6,167 (0.06 0.4Eritrea 23,363 (. 22 () .Ethiopia 21 353 0.20 ().7Fiji 7,206 0.07 0.7

Gabon 2,093 0.()2 0.6Gambia, The 15,366 0.14 (1.3Georgia 22 (:i.21 (1.9Ghana 22 131 0.21 3.0Greece 45, 138 0.42 25.7

Grenada 18,999 0. 18 (1. 1Guatemala 2 5,634 0.24 (1.5Guiniea 28 ()17 ().26 1.3Gulillea-Bissau 5,090 (.05 (0.2Guyana 1 8,160 0 17 1 .0

Haiti 17,143 0.16 1.0HondLiras 21,5 x7( ().2() (1.4Hungary 80,9()2 0.75 34.3Iidia 338,9(01 3.16 54.9Indonesia 103,697 (0.97 14.8

Iran, Islamic Republic of 15,455 (1.14 5.7Iraq 9,4()7 (1.09 1.0Israel 21,954 (.2(1 2.5Jordan 24,865 0.23 0.4Kazakstan 8(06 (1.(1 1.8

Kenya 27,1 0(5 (0.25 2.2Kiribati 4,777 (0.04 (1 .Korea, Republic of 43,668 0.41 114.5Kyrgyz Republic 58( (0.(1 (1.5Lao People's Democratic Republic 11,723 (1.11 0.6Latvia 614 (1.01 (0.7

206 THE WORLD BANK ANNIAL REPORI'I 19)6

Stibscriptions anidNiimiher Perceritage k ontrihutions

Member' of lotel of total contmitted

Lebanon 8,5i2 0.08 S ().6Lesotho 23, 74 0.22 0.2Liberia 23,379 (0 22 1.1Libya ,771 ()0(7 1 3Macedonia, Former Yugoslav Republic of 15 759 0.15 1.0

Madagascar 11,60)0 0. 1 1 .2Malawi 27,96) ()0.26 1.(Malaysia 41,016 0 (.38 3. tMaldives 22,916 0.21 Mali 22, 407 (0.21 1.2

Marshall Islands 4,914 i)()5Mauritania 10,885 UI. I 0.6Mauritius 29,011 ) 1127 1.2Mexico 78,854 (1 74 123.7Micronesia, Federated States of 1 8 42 4 ().1 7

Moldova 612 ()(I ().7Mongolia 24,389 (.2) 3 (. 3Morocco 48482 (0.45 4.9Mozambique 6,81 5 (.06 1.7Mvanmar 37,47() 0.35 2.9

Nepal 26,16(0 0.24 0.7Nicaragua 24,865 () 23 0.4Niger 16,541 ( 15 (.7Nigeria 8,257 .()1(8 4.2Oman 24,870 (0.23 0.4

Pakistan 97,461 (Li91 13.6Panama 5,657 ().05Papua New Guinea 13,1(1 i) (1-2 1. IParaguav 11,419 1.1) 1 0.4Peru 13,524 (.13 2.2

Philippines 16,583 0.15 605Poland 249,421 2.32 52.1Rwanda 17,979 (1 .17 1 .()

St. Kitts and Nevis 5,0S2 ()(5 ().2St. Lucia 22,535 (21 0.2

St. Vincent and the Grenadines 514 (.) 1S5oTome and Prinicipe 4,714 1.0.4 C).1Saudi Arabia 377,110(1 3.52 2,033.2Senegal 28,447 11 27 2.2Sierra Leone 12,667 I1 12 1 .1)

Slovak Republic 2(0,893 (0.19 7.()Slovenia 18,956 0.18 3.0Solomon Islands 518 (. ISomalia 101,506I (1() 1 ()Sri lanka 44,784 () 42 4.1)

Sudan 23,0(89 0. 22 1 3Swaziland 11,073 (. I( (1.4Syrian Arab Republic 7,651 0.(7 1.2Tajikistan 2(1,568 ) 119 0.5Tanzania 34,943 0.33 2.1

IDA SPE(CIAL. PII)-POSE FiNANCIAL S1ATEMENTs 207

STI A-TI}M.1\ENT OF VOTING POWER, AND

S CB(RIPTIO NS ANL) CONTRIBT LTIONS (continue'd).1it,,e 30. 1 Q96Expressed ietol imillits of (U.S. IollaIrs

StI,sISriptiols, ind

Ni umer PI'vaentage rontribtiioliSNiemiber' of , olcs of total coiiiiiiittecl

Thailncl 44,784 0.42 $ 4.3Togo 22,455 (1.21 1.(Tonga 1,38( (.11 (I ITr-inidcaLd and Tohago ,7( °.()1 1.6

Tunisi 2,7'3 (.()3 1.9C

Turkey .7),837 ()0.66 76.3UgTandTIa 22,438 ().21 2.2Uzbekistaln 7 46 (1.01 1 .5\"anulatin 13,S21 (0.13 (.-Vietnam 8,889 ().08 1.9

X'Vestern Samoa 13,01 0.12 () IYemel1, RepLublic of 33,20 (:).31 2 0Zaire 1 164 (.1 1 3.8Zaibi 26a ,6S (88).25 3.4Zimbabwve 10,7 (). I 5).

Stibtotal Part 11 lMenmbers 4,1 2(),'9)1 38.41 2 .0

TOtal-June 3(1 1'19( - I( 7S1,28, 7 I( O . .9 1,413.1)

Totdl-.une 30, 1 995 I I 1,12,1( 7 $93,487.5

Ildicates eliiololuts less tfuiti $0.05 moillionfntficL,iti (iiiiounts le tn 0.0(95 pelrcet.

Norrs

1. See Notes t,) Spei iOf Plt-Ppose Fimnantial Stawtmnentts--Noi.e -i fort explanation of tile two c tegories of nimembi'ershifip

2. X5 1 2 omillion of Sweit:er-and 's smtlscriiption aims eontrilutirm line tlot lLeeni iliclefide in thze Statemteints of Sources and Applic(ationis ojDOt cilopneni) Re i i t Roures a it t nie 30, I Q96 t i iI le 30, I 9L9 s ii ie t i repr e sents t he d Iifferen ce be tw ee n tile total1 co fiI, i Icii ig grai ts of$5* 0 million pr-on 'idoe lv Switzerla til] lirectly to tue IDA 'aoraolverrs c,fina cohn cing grants letweein the olurthi ,1 l tile nbitil replensihmuents )of tIle IL- resotreoes, aild the Jliflv 1992 conitrilbution l' Swit-iorlat, of t$68 iiillion.

3 M, in! iHt0e r 1ti In tu e l , soh 4 tttd i viIIig) I I ea s 'eo t 4 Ic t ro IIotghig4. See Notes to Spei tal Purpose FIinin,(tl .Smtatcntsta-Noi, .-A for recltssihcatio,is.

The Notes to Special Purpose Financial Statements are ani integral part of ihese Statements.

2(0S Tii NV' R I) BANK A\NII\ i Rn M )Ri 19916

NOTES TO SPECIAL PLURPOSE FINANCIAI. STATEMENTS

NOTE A-ORGANIZATION, OPERATIONS AND transferred to IDA. On June 26, 1996 the Board ofSIGNIFICANT ACCOlJNTING AND RELATED Governors approved the allocation of voting rights inPOLICIES respect of contributiolns to the Special Fund, to be

PURPOSE AND AFFILIATED ORGANIZATIONS reflected in the genieral voting rights adjustment ofIDA's Eleventh Replenishment. Voting rights wvill be

The Interniationial Development Association (IDA) is an adtjusted upon the effectiveness of IDA's Eleventhinternational organization established on September Replenishment.24, 1960 to promote economic development in theless developed areas of the world included in IDAXs SUMM1ARY OF SIGNIFICANT ACCOUNTINGmembership bv providing finanicinig on concessionar-v AND RELATED POLICIESterms. IDA has three affiliated organizations, the Inter- Due to the nature and organization of IDA, these finan-national Bank for Reconistructioll and Development cial statements have been prepar-ed for the specific(IBRD), thle Interinationial Finance Corporationi (IFL ), puL-pose of reflecting the sources and applications ofand the Multilateral Investmnenit Guarantee Agencv member subscriptions and are not intenided to be a(MIcA). The principal purpose of the IBRD is to pro- presenitation in accordance with generally acceptedmote the economic development of its member couni- accountinig principles in the Uliited States or wvithtries, primarily by providing loans a.nd related International AccouLntinlg Standards. These special pur-technical assistance fo r specific projects and for propose financial statements have been prepared to com-grams of economic reform in developing member ply with Article VI, Section I I (a) of the Articles ofcounitries. IFC-s purpose is to encourage the growth of Agreemenit of IDA.

productive private enterprises in its member coulitriesthirough loans andL equity investments in such enter- IDA's special purpose financial statements are preparedprises without a member's guaranitee. NIIGA Xvas estab- in accordance Nvith the accounting policies outliniedlished to encoura,e the flowv of investments for helow.productive purposes amon,, member countries and, in RecMssifrationsparticular, to developing member countries bv provid-ing guarantees against nonicomiimercial risks for- foreigin Certain reclassificationis of the prior year's informationinvestmenit in its developing member couLitr-ies. have been made to cnnform to the cur-rent year's pre-

sentation. In pr-ior years, the Special Fund was pre-Special Fund: On October 26, 1982, IDA established seinted separatelv in the Special Purpose Financialthe Special Funid constituted by funds contributed hv Statements. The prior year's IDA balances have beenmebnbers of IDA and administered by IDA to supple- restated to include the Special FuLnd at June 30, 1995ment the regular resources available fcor lendinig by due to the Special Fund terminiation dul-ing fiscal yearIDA. On May 31, 1996, the Special Fund svas termi- 1996. The effect has been to increase the followiing innated and( all its assets, liabilities arid capital svere IDA's aCcouLIts:

Iii iiiiltioiis

Special Ft 11(1

NDla 31, 1996

(Prior to iran'fer) jlitile 3, 1995

Statemenit of Sources aiid Applicationis of Development Resources

Applications of Dcvelopment ResourcesCash and( investments immediately available for disbursement

Due from banks $359 I 1

Obligations of banks and other financial institutions - 333

Net resources available for development activities 359 334

Total application of development resources $359 $334

Sources of Development ResourcesMember subscriptions and contributions

Unrestricted $283 $203

Subscriptions and contributionLs cornmitted 203 203

Subscr-iptionis and contributions paid in 203 203

Accumulated surplus 156 131

Total sources of development resources 5 S359 $334

IDA SPR 'IAI PlRPOSF FINANCIAI. STAITFMFNTS 2(09

Basis of Accounting ment until such time as it becomes available in accor-IDA's special purpose financial statements are prepared dance svith the replenishment agreement. The noteson the accrual basis of accountinig for development are encaslhed by IDA as provided in the relevant replen-credit income, investment income, and admini-strative ishment resolutioll over the disbur-semenit period ofexpenses. That is, the effects of transactions and other the credits committed tinder the replenishment, andevents are recognized when they occur (and not as the cash received is recor-ded in Cash and Investmentscash or its equivalenit is received or paid), and they are Immediately Available for Disbursementrecorded in the accounting records and reported in the In certain replenishmenits, members have had thefinancial statements of the periods to which they option of paying all of their subscription and contribu-relate. tion amoun,t in cash before it becomes due and receiv-

Translation of Currencies irgng a discotint In these cases, IA and the memberagree that IDA xvill invest the cash and retain the

IDAs special purpose financial statements are expressed income The related suhscription and contribution icin terms of U.S. dollars solely for the purpose of sumn- recorded at the full uLidiscotinted amount. The cashmarizing IDAs financial position and the results of its and investments are recorded in Cash and Investmentsoperations for the convenience of its members and Not Immediately Available for Disbursement until theother interested parties. date wlhen it wotild have becoome due, at xvhich time it

IDA is an international organizationi that conducts its becomes available. The discount is recorded in OtherbuIsiniess in the currenicies of all of its members. Devel- ResouIrces and amortized over the projected dishtirse-opment resources and sources of development renit period for the replenishmient's cr-edits.resources are translated at market rates of exchange at I Inder the Articles of Agreement and the arrange-the end of the accounting period, except Member ments governing repleniishnieits, IDA must take approSubscriptions and Contributions, which are translated priate steps to ensure that over a reasonable period ofin the manner described below Income and expenses time the resources provided by donor-s for lending byare translated at the tar-ket rates of exchange at the IDA are tised on an approximately pro rata basis. Asdates on which they are recognized or at an average of discussed in the previous paragraph, donors sometimesthe market rates of exchange in effect during each contribute resources substantially ahead of their promonth. Translation adiustnients relating to the revalta- i-ata share. Uiniless otherwise agreed, IDA does not dis-tion of development credits denominiated in Special burse these finds ahead of donors pro rata shares.Drawing Rights (SDRs) are charged or credited to Cash and Investments Not Immediatelv Available forCumulative Translation Adjustment on Development Disbursen-it repr-esents the difference between theCredits. Other translation adjustmenits are char-ged or amoun1t contributed and the amount availahle for dis-credited to the Accumulated Stirplus hursemenits on a pro rata hasis.

Member Subscriptions and Contributions Transfers to IDA from IBRD) are recorded as Sources of

Recognition Development Resources and are receivable uponMember Stibscr-iptions and C ontributions for each I aApproval by IRD' Board ofGovernors.replenishment are recorded in full as Subtscriptions and For the purposes of its financial resources, the mem-Contributions Committed upon effectiveness of the bership of IA is divided into tvo categories: (1) Part Irelevant replenishment. Replen ishments hecome effec- members, vhich make payments of stibscriptions andtive when IDA has received commitments from men- contributions provided to IPA in convertible currenc ieshers for subscriptions and contributions of a specified that mav he freely tsed or exchanged bv IDA in itsportion of the full replenishment. Amoults not vet operations. and (2) Part II members make payments ofpaid in, at the date of effectiveness, are recorded as I0 percent of their initial subscriptions in freely con-Subscriptions and Contributions Receivable and show n vertible currencies, and the remaining 90 percent ofas a reduction of Subscr-iptions and Contributions their initial subscriptions, and all additional subshcrip-Committed. These receivables conme dte throughout tions and contributionis in their own cLirrencies or inthe replenislhmenit period (generallv three vears) in freely convertible currencies. Certain Part II membersaccordance xvith an agreed maturity schedule. The provide a portion of their subscriptions and contribu-actual pavment of receivables wlhen thev become due tions in the same manner as mentioned in (I ) aho e.from certain members is conditional upon the respec- IDA A Articles of A-greement and subsequent replenish-tive member's budgetary appropriation processes. ment agreements provide that the ctirrencv of any Part

It member paid in by it may not be used by IDA forThe Subscriptions and Contributions Receivable are projects finaniced bv IDA and located outside the terri-settled through payment of cash or nonnegotiable, tory of the memihber except bv agreemrent hetxveen thenoninterest-hearing demand notes. If the receivable is member- and [DA. These subscriptions of Part II mem-settled in cash, the caslh is recorded in Cash and hers are recorded as Restricted Cash ad NotesInvestments Not Immediately Available for Disburse-

210 T[iE WORsI1 BANK ANNUAI RFP)R1 1'996

Valuation applicable to those of the fourth and subsequenit

The subscriptions and contributionis provided through replenishments.the third replenishment are expressed in terms of "t1.S. The Executive Directors decided on Junle 30, 1 987dollars of the wveight and fineness in effect on January that settlements of mainteniance of value, wvhich would1, 1960" (1960 dollars). Following the abolition of result from the resolution ofthe valuation issue on thegold as a common denominator of the monetary sys- basis of the 1974 SDR, would be deferred until thetem anid the repeal of the provisioni of the U.S. Iaw Executive Directors decide to resume such settle-defining the par value of the U.S. dollar in terms of mnents. These amounts are shown as Deferredgold, the pre-existing basis for translating 1960 dollars Amounts Receivable to Maintaini Value of Currencvinto current dollars or anv other currency disappeared. Holclings.The Executive Directors of IDA have decided, witheffect on that date and until such time as the relevant Development Creditsprovisions of the Articles of Agreement are amended, All developmenit credits are made to or guaranteed bythat the words "l1.S. dollars of the weight and fineness member governments or to the government of a terri-in effect on January 1, 1960" in Article 11, Section 2(b) tory of a member (except for development credits thatof the Articles of Agreement of IDA are interpreted to have been made to regional development banks for themeani the SDR introduced by the Inter-nationial Mlone- benefit of members or territories of members of IDA).

tarv Fund as the SDR was valued in terms of U.S. dol- In order to qualift' for lending o11 IDA terms, a couit-lars immediately before the introduction of the basket try's per capita income must be Delow a certain level,method of valuing the SDR on July 1, 1 974, sutch value and the country mav have onilv limited or no credit-being equal to $1.20635 for one SDR (the 1974 SDR), worthiness for [BRD lenidiig. Developmenit creditsand have also decided to apply the same standard of carrv a service charge of 0.75 percent, generally havevalue to amoun1ts expressed in 1960 dollars in the rele- 35 or 40-year final maturities and a l()-year gracevant resolutions of the Board of Governors, period for principal payments. Development credits

The subscriptions and contributions provided through are carried in the financial statements at the full facethe third replenishmenit are expressed on the basis of amount of the borrowers' outstalndinig obligations.the 1974 SDR. Prior to the decision of the Executive It is the policy of IDA to place in noniaccrual status allDirectors, IDA had valued these subscr-iptionis and con- development creclits made to a member governmenttribution-s on the basis of the SL)R at the current mar- or to the governmenit of a territory of a member ifket value of the SDR. principal or charges wvithi respect to anv suchi develop-

The subscriptions and contributions pro\ ided tinder ment credit are ov erdue by more than six months,the fourthi replenishment arid thereafter are expressed unless IDA management determines that the overduein members' currenicies or SDR, and are pavable in amount w\ill be collected in the immediate ftuture. Inmembers' cur-renicies. Beginning July 1, 1986 sub- additioni, if loans hv II.RD to a memlber government arescriptions and contributions made available for dLis- placed in noniaccrial status, all development credits tohursement in cash to IDA are translated at market rates that member governmenit xvill also be placed in nonac-of exchange on the dates they were made available. cal status by IOA. On the date a members develop-Prior to that date, subscriptions and contriblutions thiat ment credits are placed in nonaccrual status, chargeshad been disbursed or converted into other currencies that had been accr ued on development credits out-were translated at market rates of exchange on1 dates of standing to the member that remained unlpaid aredlishursement or conversion. Subscriptions and conitri- deducted from the income fiom development creditsbutions not yet available for disbursements are trans- of the currenit periol. Charges on nonaccrIing devel-lated at market rates of exchange at the end of the opment credits are included in income only to theaccounting period, extent that payments have actuall,v been received by

IDA. On the date a member pays in full all overdueArticle IV, Section 2(a) and (h) of IDA s Articles of amoun1ts to IHRD arid IDA, the memher's credits emergeAgreement provides ftor maintenanice of value pay- from nonacerual status, its eligibility for neiw credits ismenits oi1 accoun1t of the local currenicy portion of the restored, and all overdue charges (including thoscinitial subscription whenever the par value of the from pr-ior years) are recogni7ed as incomne ftromil devel-meniber's currency or its foreign exchange value has, opnient credits in tht current period. If collectibilitvin the opinioni of IDA, depreciated or appreciated to a risk is considered to hc particularly hiigh at the time ofsignificant extent within the member's territories, so arrears clearance, or if CBR0 or IDA refinances/resched-long as and to the extent that such currencvy shiall not IIles nonaccruing loans or credits to a memiiber so thathave been initially disbursed or exchanged for the ctir- no debt-sers ice payments remalin overdue, its loans orrency of another mtember. The provisions of Article IV, credits would not automl`atic ally emerge from nonac-Section 2(a) and (b) have bv agreemenit been extended Crual status, cven though its eligibility for new loans orto cover additional subscriptions and contributionis of credits xvould have been restored. The previousIl over-IDA through the third replenishm,enit, but are not due interest arId other charges would not be recog-

nized as income in the pe riod the refinancing/

IDA SPECIA1. PLRIMc)9F FINANc-IAL SIl ATEMEN1S 21 1

rescheduling occurs. After a suitable period of pay- issued or unconiditionially guaranteed by banks andment perfor-imanice has passed from the time of artears other financial institutionis.clearance, a decision on the restoration of accrual sta- Futures and Forwards: Futures and forward contractstus would be made on a case-by-case hasis.

are contracts for delayed delivery of securities orIn fulfilling its mission, IDA makes concessionazil loans molney market instruments in which the seller agreesto the poorest counitries; therefore there is significait to make delivery at a specified ftiture date of a speci-credit risk in the portfolio of development credits. fied instrument, at a specified price or yield. FuttIresManagement conitiniually monitors this credit risk. contracts are traded on regulated United States andHowever, no provision for credit losses has been estah- interinationial exchanges. IDA generally closes out mostlished because it is not practicable to deter-inii1e such open positions in futures contracts prior to maturity.an amounat in X iexv of the nature and maturity StrUC- Therefore, cash receipts or payments are mostlv lim-ture of the credit portfolio. Should acttial losses occutI, ited to the change in market valtie of the futures coIn-they would be charged against ID:\, Accumulated Stir- tracts. Ftitures contracts generally entail dailyplus. To date, I[DA has not sutffered any losses on receix - settlement of the net cash mar-gin1.ables from develo1pment cr-edits.

Covered Forvards: Covered forsvards are agreementsThe repayment obligations of IDAs development cred- in w-hich cash in one curr-encvy is conver-ted into a dif-its funded from resotirces through the fifth replenish- ferent ctirrency and, simultaneously, a forwardment are expressed in the development credit exchange agreement is executed providing for a futureagreements in termis of 1 960 dollars. In June 1 987, the exchange of the txvo currenicies in order to recover theExecutive Directors decicied to value those develop- currency converted.ment credits at the rate of $1 .20)635 per 1960 dollar

. .. . , , . Op~~~0tions: 0ptions are contracts that alloxv the holdero(1 a permanient basis. Development credits fucecd pfrom resources provided ulider the sixth replenish- of the option to purcwhase or sell a financial instumentment and thereafter ar-e denominated in SDRs; the at a specified price within a specified period of timeprincipal amotints disbursed ulider- stich development friom or to the seller of the option.The ptorchaser of ancredits are to be repaid in currencv Lmounits cuL-renitlv option pays a premiti at the outset to the seller o

the option, who then hears the risk of an unfavorablechange in the price of the financial instrument under-

Investments lying the option. IDA oinly inlvests in exchange-tradedIDA carries its investnmenit securities anid relatedl finain- options. The initial price of an option contract is equal

cial i.istriiniejits Lit market value. Botli realized . a, d to the prenitim paid bv the purchaser anci is signifi-

inrealized gaiens and losses are included in Inzome cantly less than the contract or notional amount. IDAtiroea Izvestinaenits. tdoes not xvrite uncovered option contracts.

NOTE B-INVESTMENTS Short Sales: Shor-t sales are sales of secul-ities not heldill I[DA portfolio at the time of tile sale. [DA ImUSt pur-

As part of its overall portfolio maiagemenneit strategy, IDA C hase the sectirity at a later date and bears the risk thatinvests in government and agency obligations, time the market Value of the security will move adverselydeposits, and related financial instrimienits with off- betw een the time of the sale and the time the securitybalance sheet risk including futires, forward contracts, must be dlelivered.covered fo rward contracts, optionis, and short sales.

Rep urchase and Resale Agreements and SecuritiesGovernment and Agencv Obligations: These oAliga- Loans: Reptirchase agreements are contr-acts unidertions include marketable bonds, notes, and other- ohli- which a partv sells sectirities and simultaneotislvgations Obligations issued or unconditionally agrees to repurchase the same securities at a specifiedguaranteed by governments of couintries reqtiire a f'utur-e date at a fixed price. The reverse of this transac-minimtim credit rating of AA if denominiiated in a Ciii- tioin is calledl a resale agreemeit. SecLi-ities loans arerency other thani the home cUrrency of the isstier; oth- conitracts linder wlhich securities are lent tip to a futtireerwise no ratinig is required. Obligations issuecl h\ all specified date at a fixed price.agency or instrumientality of a government of a cotin-try, a multilateral organization, or any other official A summar\ of IDAs investment portfolio by instru-entity requir-e a credit rating ofAAA. ment for Investments Immediately Available for Dis-

hursement at uine 30:, 1996 and June 3(0, 1993 is asTime Deposits:Timre deposits incluide certificates of follows:deposit, hankers' acceptances, and other- obligations

212 THE WosRi11 BANK ANNI Al. REI'R I 1 996

III ultillions

1 9(96 1 995

Average Daily Net Gains Aserage Daily Net Gainis

Blalarnte (Losses) Balanaxe (Losses)

Carrying During the For the Carrrving Duirinig thli for theValLe Fiscal Y'ar Fista;l Year \alue Fistal Year Fis al Year

Government and agenicyobligations $2,282 S,I( (S) $(6) SI,642 $1.334 $19

Time deposits 2,257 2, 309 - 2,585 I 906 -

Futures and forwards I 1 4 1 1 (1)Covered forwvards (1) - 5 -

Options * (13 ) *

Resale agreements 204 629 - 208 41 5 -

$4,744 $4,838 $(3) $4,441 $3,657 $18

Short Sales $ (34) $ (32) $- $ (27) $ (46) $-Repurchase agreements andSecurities loans (3 19) (281) - (64) (1(12)

* Less tlttizi $0.5 million

A suLimtnary of IDA's investmenit portfolio by instrument for Iinvestmenits Not Imm-uediately Availalhic for [)isburse-ment at June 30, 1996 and June 30,1 995 is as follows:

iii mlillionsc

I 991i 1 995

Average l)ailv Net (ai is Asrage Daily Net Gains

B3alaince (Losses) Balan e for the

Carrying Dutriig the forl tlit Carrxing Durinig the Fiscal

Valuie Fist ai Year Fiscal Year Vlaue Fistal Year Year

Governmenit and agencyobligations $ 1,32il $ 963 $(I) $ 937 $ 562 $48

Time deposits 27 7 327 (402 393 -

Futttres and forvards I 1 4 1Covered forwards * _Options * *

Resale agreements 93 93 - 22$1 686 $1,384 S 3 $1,340) $977 $48

Short Sales $ (24) $ (8) $5- $ - $ * $Repurchase agreements and

Securities loans (33) (138) - (145) (63)

* Less 1itit i $0.5 miillioni

IDA SPECIAL Pt RP(SF FINAN( IAL STlATEMENTS 213

A summnary of the curr-ency composition of Investmenits linimediately Available fotr Disbursemenit and Not Imme-diatelv Available for Dishursenieiit at June 30], 1996 and Junae 3), 1995, is as folloWs:

nliimillinsiiis ft.S. dollar equi%alents1996 1995

Not NotImmediteael inimediatelv Ilnmediately immediatelyavailable for available fort available for asailable for

d ishtir,eienit di bturenieit Tiotal diski rsemeiit disbtirsemenit Total

Canadian dollars s - s - $ - $ 127 $ - $ 127

Deutsche miar-k 1,3'! 321 2,(60 1 ,587 236 1.823French fiancs 387 167 554 381 123 50)4

Italian lire 9 '5 S9Japanese yen 542 299 841 6 23 289 912Pound sterling 42)5 1416 571 288 95383Swes islh kronor - - - 59 - 59)U1S. dollars 1,651 753 )240)4 1,243 5937 1,8401Other currenicies 38 - 38

$44,744 51,6'86 $6,430 $4,441 51,340 $5, 81

Less tdan 50i $. )nillion.

For the purpose of risk management, IDA is party to a NOTE C-MEMBER SlUBSCRIPTIONS ANDvariety of finanicial instrumiienits, certain of which CONTRIBUTIONSinvolve elements of credit risk in excess of the amount

A 1- 1 o -n I 1- -~~I Subscriptions and Contributions Receivable:reflected in the Statement of Sour-ces and Applicationsof Development Resour-ces. Credit risk represenits the The payment of subscriptions and contributionis ismaximum1 potential accountinig loss due to possible condLitionial on1 the members budgetary processes. Atnonperformance by obligors and coun1terparties ulider Junie 30, 19 96, receivables from subscriptions and con-the terms of the contracts. Additionally the natur-e of tributions was $1 ,51 1 million ($6,739 million-the instruments involves contiract value and notional JLune 30, 1995) of xvhich $945 million ($475 mil-prinicipal amouLnts that are not reflected in the basic lion-Ju-ne 30, 1995) wvas due and $572 millionfinancial statemenits. Fo- bothi o- anid off-balance ($6,264 million-June 30, 1995) was not yet due.sheet securities, [DA limits trading to a list of autho- Subscriptions and contributions due at June 3J, 1996rized dealers and couLnter-parties. Credit limits havebeen established for each couLnterpal-t by type of Were as follows:instr-uLmlenit and matul-itV categor-v.

The credit risk exposur-e and contract value, as appliCa- ,Aiiiounts initiallydtieonble, of these financial instrmiienits at June 30(, 199( andJune 30, 1995 are given below: Lily 1, 195 throLIgh Junle 31, 1'996 S944

In iimillions lilU 1, I 994 throulghllJune 3(0, 1 995 J1I, 1 993 th01rough June 3(, 199)4

1996 1999.ILII 1, 1)93 and earlier *

Futures and Forwards T

Long position $ 75') $351)

Short position 2,S40 I 5651 Less tlu, $9.5 nzi//ion.Credit expOsure dLe to

pkoteiitial nonipei- foriidiice h:po01terpalnties r Sulbscriptions and contributionis not vet due atcptionterparsies Junle 30, 1996 will becomiie due as follows:

Optionls

Long position I 351 :

Short position 36 rIii 1111 lioPeriod

Covered lorx\vard conitr-acts

Credit exposure det to July , 19196 tilhough JuIe 3(1, 1997 5491

potenitial nonp,rforniance v JUVy I . I )I') thrOuIghl Jun11e 3(0, 91)8 1 IwLunterparties 1 5 Thel-eafter 71)

Total $5 9

214 THE WORl1D BANK ANNI Ai. RlincR I 1996

Eleventh Replenishment On lune 26,1996, the Board June 30, 1996, $512 million ($512 million-June 30,of Governors of IDA adopted resolutions authorizinig the 1995), representing the difference between the totalE:leventlh Replenishimienit of IDA's resouices. The Elev- cofinancinig grants of $580 millioni and the presententh Replenishment provides IDA with resources to value of future reflows of $68 million, have not beenfunid credits and granits committed durinig the period included in the Member Subscriptions and Contribu-Julv I, 1 996 to June 30, 1999. The total amount of tions in the Statement of Sources and Applications ofdonor contributions durinig this period, including stip- Development Resources.plementary conitributionis provided by certaini members, NOTE D-TIRANSFERS FROM IBRDis equivalenit to SLDN 6,894 millioni. The EleventhReplenishimienit will become effective whlell IDA has IIA has received from IFRD aggregate transfers totalingreceived commnitmen1ts for subscriptions and (ontribu- $4,823 million throuth June 30, 1996 ($4,573 mil-tions of SDR 3,746 million. As part ot'the Eleventlh lion--June 30, 1995).Replenishment, an Inter-im Trust FuLnd consistinig of NOT E-DEVELOPMENT CREDITSdonor contributions equivalent to Sf)R 2,2] million NT D E Ewill be establislhed and administered by I[A. At June 30, 1996, no development credits payable to

IntA other than those referred to in the followilig para-Interim Trust Fund- Thel fIteind Trast FLind sill be graphs were overdlue by more than three months.

adm-niiistered bv IL)A to lhelp ILulid opciation1s dLuriiigthe period JulI 1, 1996 to Jine 30, 1997 and countr-i- At lune 30, 1 996, the development credits made to orbtitiolIs will have a separate legal, proCurIllelnt ancd guaranteed by certaini member cotintries with ana(cOuuntilIg status. The Interim Trust Funld will become aggregate principal halance outstandinig of $3,1 83 mil-effective Wihell contlributions totaling m)R 400 millioni lion ($3,376 million--JUiie 30, 1995), of whichi $95from at least seven donors have been receixed. Credits millioIn ($65 million-June 30, 1995) was overclue,finaniced bv the Interi 'Irust F3und will be maade on1 were in nonaccrual status. At such date, overduethe same term-1s and conditions as those of IL)A credits charges in respect of these development credits totaledextept for proc urerment and decisioni-milaking. Service $86 million ($66 million-June 3(, 1995). If thesecharges paid bv borrowers c1i Inter-imil Trust Flulid crecl- development credits haci not beeni in nonaccrual sta-its wvill be received by IDA to compensate it for its ser- ttis, income fron) development credits for the fiscalvices as acminiistiator T he Interim Tnist BLId Will be vear ended RIFI 30, 1996 would have been higher byterminiated wheni the credits it financed have been $24 million ($24 million-June 30, 1995), which issubstantially disbursed. Upon termination, its assets net of charges received from such members durinig theand liabilities will transfer to nti. year. A suLmm111ar-y of memilber- countries withi credits or

Membership: In Febriar-y 1'993 the Socialist Feder-al guarantees in ncsnaCCrial status follows:Republic of'cugoslavia (SI-RY) ceased to he a member Inn lillioI,)of I[A dcie to the cessation of its membership in IRRI).

Four ofi the hve successor Republics-Bosnia and iUiw 30, 199t

Herzegovina, the Republics of Croatia and Slovenia, Prit1(ipaland the ftorimaer Yugoslav Reptiblic of Macedonia- Prilkipal aiid liarges Norw.rualhave sin e becomile memi bers of IDA. At Jtlie 30, 1 90)(6 Borrower otitsiaiidiiig Overdue silnce

[Vithi ovierciuesthe subscription andl contributionis allocated to the Afhaisa *7 JLdCIeoct`er sutessor cCouLIt-y, the 1-ederIal Republic of Yugo- Afghanistan 5 75 5 8 Jcne 1 cliPslavia (Serbia and Montenegro), arc included linder- 11i1)eriaL 1(1b 15 Apr-il 1988iayvimienits on1 Account of Pendingl Membership. Somali 423 33 July ]991

SLidan 1,247 59 .January r9394In May 1992 Switzerlacid became a membber of [DA. Svrian) AtabBefor e that date Switzerland had contributed to IDA RepuhliC 44 11 April 198Xan equivalent of $51 million. As agreed between the Zaire 1,728 55 NovemberSwiss Confederation antI IDA, these grant contribu- 1 993tioins wer-e cons erted to an IDA subscription. Further, Total 3 83 1 81S

(lurinig the commitment periods between the fourthand the ninth replen ishmenits of IDA resources, Swit- 1tit/ioio ii'erdu/eszerland haci cofhiainced projects by making available to Bos,i, alnd SeptemberIw- borrowers untied gl-anlts In the aggregate amoun1t Herzegox ina - - I qtc)2of Swiss f'ranics 1 055 million (historical U.S. dollaramounat of $580( million) In Jtly I992, as agreed Total $3 1x3 3 18Ibet een the Sx% iss Confederation and ILDA, these Cgranlt

contributions were toiverted to an IDA subscription a AhtJnic n0, 1096,BBosnieznd Hei-zego)vi1iuad2c$iI0) mzllionand contribution wlhen Switzerland contributed a fur- In uildisbirsed dei)elopnient credits.ther $68 milliol, representinig the presenit value offututre reflows ot the cofinarncing granits if they hadbeen mlade throughi IDA oi II DA repayment term1s. At

IDA SiP( [AI PIJP(i Si FI\\\( [Al SI A I FILNIS 215

During the fiscal year endted June 30, 1996, no devel- at the time the credit is committed. This grant elementopment credits came out of nonaccrual status. For the calculationi considers interest rates, maturity stmIc-fiscal year ended June 30, 1995, the increase in tul-es, an(d grace periods for the credits. It does not con-income fromn development credits due to countr-ies sider credit risk, portfolio seasoning, multilateral andcoming out of nonaccrual status was $7 million, sovereign credit preferences, and other risks or indica-

tors that woould be relevant in calculatinig fair value.Under argrm salihd m , a p Estimatin,g the impact of these factors is not practica-

tion of principal repayments to IDA is allocated on ani bannual basis to provide su-ppleental IDA credits to IDA- Creditswser, the fair a alue ot Total Development

,, , , ,, , ~~~~~~~~~~Credilts is sLubstaiitiallv lowetr tlnati the $9)7,4( ileligible coulaiti-ies that are ino loiigei- able to brorrowv oi011niliieligblecounrie tht ar nolongr ale o horox On reflected on1 the Statemenat of Sources and App lica-IBRD termns but have outstanding [BRD loans approvedl ed'o of t Developm enitReorcS. dprior to September 1 9SS and have in place an IDA-sup-ported structural adiustmllent program. Sutch sipple- NOTE G-INCOME AND EXPENSESmenltal IDA credits are allocated to countries that meet IDA paVS a management fee to wRI represeting its sharespecified conditiois, in proportion to each couLntrv's o t ainterest payments due that year on its pre-Septemlber )f the --- r.Larv 1')(5, the E\ecutive Directors authlorized expen-19SX IBRD loaiis. To be eligrible for suich IDA SUippleililell---19885 lons T beeliibleforsuc ID.\ spplmen ditures for costs associated with planned staff reductiois.tal credits, a member counltry must meet IDAO eligibility During fiscal year 1995, lBRD charged to expense $131criteria for lending, must be ineligible forilERD lending, million of \hich $53 million xvas charged to ID.Aand must not have hald an EN3RD loan approved within

lthrough the Managem1en1t Fee Charged hv IBRI) tor tlhethe last twelve monitis. To receiv e a supplemeital f y

- -~~~~~~~ hscail vear endded luine 30, 1 99)5 'Tlie reduictioiis arecredit froim thie prograrm a mICIIneCr COuLntry cainlot fiecredit from the 'program, a member countrycannotb designed to improve IERI)s and IDA's eficiencv, adjust

m-ore tliaii sixtv davs overciLle 011 its deb t-serv ice p Lv- -more than sixty daysoverdtieonitsdebt-servicepay- the staffing skills mix and therebv better meet clientments to IBRD or IDA. ~mdemands. The planined staff reductionis arc expected toA sunmmary of CuMulatiVe IDA credits committed and lover fIture vears' administrative expenises bv andisbursed ulider this progranm fi-om inception at Junle amoinolnt greater thani the associated cost. On30, 1996 and June 30, 1 993 is given beloxv: October 31, 1995, the program for planned staff reduc-

tionS wvas brought to a close. Under this p,rogram 608In millions staffxvere identified as redunldant at a total cost of SI 12

19956 1995 millioni. Of the difference of $1 9 million, $8 millioni hasbeen allocated to IDA throughi the Managemiienit Fee

Commnitlments Xi,. 8 1 7C Charged by NRD for tle fiscal vea enided -uie 3(0, 1996.Less: lildisltrsed 52 51 NOTE Hf-TRUST FUNDS

DisbNoLsed ainld IDA, alone or jointly wvith IBRD, administers on behalfotitstanding $1 37 SI178 ofdonors, inlfcuding milemillbers, tileir agenlcies, and

other entities, funds restricted for specific uses, whichinclude the cofinanicinig of IDA lendinig projects, debt

NOTE F-FAIR VALUE OF FINANCIAL reductioll operations for IDA memibhers, techniical assis-INSTRUMENTS tancet for borrowers including feasibility studies and

project preparation, global and regional programs, andInvestnzents: Siince IDA carries its investments at mar- r aresea.clil anid tramill in rogrrms. Tht~se fLtunds arec placedket value, the carrying amo111uLIt represenits the fair i,-, -, , , , l~~~~~n ti-tst ;lnid are inot included in the deNelopmentvalue of the portfolio. These fair- values are based on resources of IDA. At June 30, 1996 and June 3(0 1(9)9quoted market prices, where av ailable. If quoted mar- the distribtItion of trust fund aSsetS by executing agentket prices are not available, fair values ar-e btasedl onlcIuotecl market prices of comparable instrumilenits. The Is as follovs:fair value oftshort-term finalicial instruments aLpproxi- 1996 1995

mates their carrying Value.-~~~~~~~~~~~~~~~~~~~~~~~~~T t TIa Numbller Tota)l Ntimb)er

Development Credits: IDA des elopment credits have a Fid u in ry oF Frtiis FidLtKi9rV offTriSTsignificant grant element because of the concessional A,etis Futid A.ssets FtiundI

- t ~~~~~~~~~~~~~~~~~~~~~~~~~~(ill Illillini( \eIIS) t .(in) niilioiis) Accounlt,natire of IDA,\, terms. Discounting IDA, credits uSilng I nnthe standar-d I) percenit discount rate of the Develop- Exe,Lted 235 454 823 445ment Assistance Commilittee (DAC) of the Organiza-tidin for Econiomic Cooperation and Development EXCeLoteLl 57 384 404 280provides ani estimate for the grant elemenit of ID A cred-its. Usin" the 10 percent DAc discounit rate indicates T772that the tvpical IDA credit conitainis a grant elemilenit ot f_ -

7a percent to Sf) percent of the nominiial credit amouLnt

216 Ti IF. WORLD BANK ANNL'AI REIP()I 199)6

The responsibilities of IDA under these arrangements tion of the Managemenit Fee Charged by IBRD. Duringvary and range from services normally provided unlder the fiscal vear ended June 30, 1996, the IDA receivedits owIn lending projects to full projeLt implementationi $10 million ($12 million-June 30( 1995) as fees forincluding procurement of goods and services. [DA administering trust finds.receives fees for administerinig trust funds as a reduc-

IDA SPECIAL PUIRPOSE FINAM ]A[ STATENlENTS 21 7

REPORT OF IN L) PF. tN) F N Acco UNTANTS ON S P'L IA I.

PURPOSE FINANCIAL STATEMENTS

Price Waterhouse Thc Hague New York(Intetiatlioal Firm) Beijing Tokyo

HoIng Kong WasIinglonLondon

P'rice f JVterhIouseJly] 31, 1996

President an d Board of GovernorsInter-nationial Development Association

W'e have audited the special purpose Statement of Sources and Applicationis of Development Resources asof June 30, 1 996 and 1 995, the Summary Statement of Development Credits and the Statement of VotingPowet- and Subscr-iptions and Contributions as of lune 30, 1996, and the related special purpose Statementsof Chaniues in AcCumulated Sur-plus and of Cash Flows for the years ended June 3(J, 1'996 and 1995,expressed in terms of ULnited States dollars, of the International Development Association (IDA), whichappear on pages 1 98 througIh 21 7 of this Report. These finaicial statements are the responsibility of man-agement. Our i esponsihility iS to eNpress an opinion on these financial statemenits based on oui audits.

We conducted OuI audits in accordance \w'ith gener-ally accpted auditing standards, inicfcling InterniatiolialStaLidaL-ds on Auditing. Those standards require that we plan and perform the audit to obtain reasonableassuranice about whether the financial statements are free of material misstatement. An audit includesexamiiinig, on a test basis, evidenc,e supporting the amounits and disclosures in the financial statements. Anaudclit also includes assessinig the accounting principles used and significait estimates made by managemilelt,as well as evaluating the overall financial statement presentation. We believe that our audits provide a rea-sonable basis for our opinioi.

The special purpose financial statements were prepared to reflect the sources and applications of'develop-ment resources and the development criedits, voting poweri and subscriptions and contributionis of IDA tocomply with Article VI, Section I I (a) of the Articles of Agreemilenit ot' IDA as described in Note A, and arenot intenided to be a presentation in conformity vu'ith generally accepted accountinig principles in the UnitedStates or with Iiterniationial Acvoul1tin1g Stanidards.

In our- opinion1 the special purpose financial statemenlts refter-red to above present fairly, in all materialrespects, in terimis of United States dollars, the sour ces and applications of development resources as ofJUltne 3(0, 1 996 and 1 9955, the developimienit credits, voting pover, and sulbscriptionis and conltr-ibutiolis ofIDA at JuLne 3(, 1 996 and the changes in its accumulated surplus and its cash flows for the years endedJune 30, 1996 and 1995, on the hasis of acrounting descr-ibed in Note A.

This r eport is intenided solelx for the informiation of the Board of' Governors, maniagemlielit and members ofIDA. However, unfder- IDA's Articles of Agreemeit, this report is a matter- of publiC record and its distribu-tion is not limited.

2TWvAA Aik )

218S Tl3R \WORIu B A\K A\\;t AI l Rk ml I I 9?6:

o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

h-E

-A

-8

7 C'C C C C C ~~~~~~~~~ C~~~~CL N N N N C - - C C C C CL CL ~~~~~~~~~~~~~~~~~L CL N N N N - C -C¶0 > I

' _ D o ~~~~~~~~- - -C C a 5 - N - m - - C - - D 5-

-5 rG ,, - V, I C a ,>, O~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~= -I'

_~~~~~~~~~~~~~~~~ . . , N 5 ~

a>.~~~~~~~~~~~~~~~~~~~ C . -C >N -

7 'NI~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.

- r- r. -, 51 *4- - -4, I m I , 5 Sr- ' CL -± -. ' - - N ,5 > r

r C j5 2 1Xn e 0C: $

z ~ ~ ~ ~ ~ C _ (A <T<>ZWgzD m_ r r .

C> ~ ~ ~ ~ n . _~~~~~~~~~~~~~~~~~~~~~~~

IBRD/II)A APPENDICES

1. Governors and Alternates of the World Bank 220

2. Executive Directors and Alternates of the 14orld Bank and their Voting Power 225

3. Officers of the W{orld Bank 228

4. Offices of the World Bank 229

5. Country Eligibility for Borrowing from the World Bank 233

6. W'orld Bank Budget ky Expense Category and Administrative Program,Fiscal 1994-97 235

7. IBRD and IDA Payments to Supplying Active Borrowing Countries for Foreignand Local Procurement in Fiscal 1996 236

8. IBRD and IDA Payments to Supplying Countries for Foreign Procurement 238

9. IBRD and IDA Payments to Supplying Countries fir Foreign Procurement,by Description of Goods, Fiscal 1996 240

10. IBRD and IDA Foreign Disbursements, by Description of Goods,for Investment Lending, Fiscal 1994-96 242

11. IBRD and IDA Cumulative Lending Operations, by Major Purpose and Region,June 30, 1996 243

12. IBRD and IDA Cumulative Lending Operations, by Borrower or Guarantor,June 30, 1996 244

13. Projects ApprovedJfor IBRD and IDA Assistance in Fiscal Year 1996, by Region andCountry 248

14. Projects Approved for IBRD and IDA Assistance in Fiscal Year 1996, by Sector 250

15. Development Committee Communiquis, Fiscal 1996 256

APPENDIC[.S 219

Member Goerinor Alterniate

Croatia Bozo Prka Josip Kulisic

CyVprs Christodoulos ChristodouloU Anton1is Mlalaos

Czech Reptiblic Ivan Kocarnik Jan Vit

Denimiark Pol Nielson Ellen Margrethe Loj

D jibouti Mohamned Ah Mohbamed Hawva Ahmned YouIssouIf

Domninica JLu1iLs C. Timllothy Gillert Williamlls

Dominican RepLIblic Hector Valdez Albizu Luis M1Fnuel Piantilni NJ

Ecuador Ivan Andrade Apuite Jose E. Mantilla

Egypt, Arab Rep. of Atef Mohamed Mohamed Eheid Yousef Bouttros Ghali

El Salvador Mantiel Enrique Hinds Jose Robertc) O-ellanail Milla

Equatorial Guinea Baltazar Engoonga Edio Antonio Nve Ngu

Eritrea Haile Woldense Gebreselassie Yosief

Estoniia t N1art Opmanin Eon n Pant

Ethiopia Sufian Ahmed Girnia Birru

Fiji Berenado Vunibobo Tevita K. BanutVe

Finland Sauli Niinisto Pekka Haavisto

France lean Arthuis .lean l.emierre

Gabon Pierre-Claver Maganga Moussavou Richard O)nouviet

Gambia, The Bala Garha Jahumpa Alieu M N'gurm

Georgia David lakobidze Tengiz Geleishxili

Germany Carl-Dieter Spraniger luergen Stark

Ghania Richard Kwaame Peprah KNwesi Amissah-Arthuir

Greece Yannlos Papantoniou Christos Pachtas

Grenada Keith Mltchiell l1inus Spenicer Thomas

Guatemala Jose Alejandro Arevalo Alburez Wills' WV. Zapata Sagastumne

GCuinea Michel Kamano KerfaLlla Yansane

GCuinea-Bissau RuLi Dia de Sousa Francisco Correia, JI

Guyania Bhariat Jagdeo Michael Sheer Chan

Haiti Fred Joseph lean Erick Deryce

Hondulras Guillermo Bueso luan Ferrera

Hungarv Peter \MJedgyessy Almos Kovacs

Iceland Finilur Ilngolfssoni Fridrik Sophlusson

India P. Chidamiibaraimi Nliontek Singh Ahluwalia

IndonesiaN Mar ie MNuhammad Boediono

Iran, Islamic Rep. of Morte7a1 Mohamrnmad-Khain Aliakl.ar Ar-alirazar

Iraq Issamn Rashid Hsaish Hashim Ah OChaid

Ireland Rtiair-i Qtuinn Paddy Msillarkey

Israel Jacob A. F-enikel David Brocdet

Italy Antoniio Fazio Mario Draghi

Jamaica t Omarn lloyd Davies Wesley Hughes

APTFNLDX ONEL 221

GOVERNORS AND Ai:FERNATFS OF THE WORLD BANK (cointinue) APPENDIX 1limre, 30, 1996

Miember Governor Alternate

1alpan Watarm Kuihb YasuIO Matsushita

Jordan Rima Khalaf I lunaidi Nabil Ammari

Kazakstan Alexanderl S. Pavlov Altai A. Tlenberdin

Kenya W. Mul dVia Mudavadi Benjamin Kipkoech KipkoLlei

Kirihati Beniamina'Finga Kaburoro Ruaia

Korea, Repuhbli of Woong- Rae Rha Kvting Shik lee

KuL\ait Nasser Abdullah Al-Roudhan Bader Meshari Al-Humnaidhi

Kyrgyz Republic Kernelbek Nanaev Askar I. Sarygulor

I ao People's Demn. Rep Xavsomphonc Phonmihane Pany Yathotou

l atyia Aivars Guinitis KreitUss Giuotars Krasts

Leblanon FtIad A.B. Siniora Nabil Al-Jisr

l esotho Leketekete Victor Ketso E.M. Matekane

L.iberia Francis NI. Carabh Lasalnah V. Kromnah

Libya Mohbamed A. Bait El Mal Bashir Ali Khallat

Lithuania t Algimantas Krizinatiskas Jonas Niatira

l Luxemhotirg Marc Fischbach Yves Mersch

Macedonia, forime-r Ijube Trpevski Taki Fiti

Yugoslav Republic of

Madagascar Jean ClauIde Raherimanliato Mamy Rabemila

Malawi Aleke K. Banda Alex C. Gomani

Malaysia Awmar bin Ibriahini Clifford Francis Herbert

NIaldivees FathuIlla .lanlcel Adam niMan ikt

MNali Sunmaila Cisse Ibrahima Konate

MNalta t John Dalli Alber-t A. Attard

Marshall Islanids Rubeni R. Zackhras Michael Konelios

Mauritania Mohamied Oild AnlaLr Mohamed Lemine OUld Deidah

Mauritius RajkessxLr Purrvag Dharani Dev Manraj

Mexico Giiillermo ( )rtiz lose ltilia.n Sidaotui

Microniesia, Federated lohn F.:'ha Sebastian 1. Anefal

States of

Moldlova Valerim Serkgi Kitsam DLniitrni irsu

MNongolia F)ernc higjavvni MN'olomjamts Erdeniin Byamhaiav

Morocco Mohaimed Kabibaj Abdelfettah Benmansour

Mozarobiqule Adriain Afonso MialeiaLe I Uisa Diias Diogo

Mvanmar Win Fin Antt Kya%v

Namibia t Saara KutigongelWva Godfrey GaosebNepal Ram S Malhat Ram RinoLl Bhattarai

Netherland-s CGerrit /alm I.P. P ronk

New Zealand MNulraV Horn John Whitehead

NicaragUIa Enilio 1'ereiraL Alegria lose Evenor Taboada Arania

Niger AlMoUstapha SOtiialali Halidou Badje

Nigeria Anthotny A ATli Gidado l dris

222 THE WOR[.D BANK ANNUAL. REPORT 1996

Memiiber Gin ernor Alternlate

Norss av Sighioern Johnson [sarl Nordlh im-l.arsen

Onialn Ahnmedl Biii Abdsidinai Mahk-i Mohamimied Riin NIltisa Al Yousef

Pakistan VA Jatarev laved BFlat

Panama GUillermo 0). Chapman, Jr. (Ilmedo Mv1iranda, II

PapLa New Goiinea Christopher Haiveta G-eea A-pi

Paraguav C arlos AI her-to Faretti M astlli lose Frin osto Buittnenr I inlp riC h

Peo r Jorge Carinet Dick nm alln Altredo Iahliie Axsa paT-a

Philhppines Roberto F de (N. anpo ( ,albriel C Sinson

Poland Manna Gronkiessi7z-Ajlt,\ Witold iKoanshi

Portu gal Anto nio do So isa Franeco Ferniandri-) f i\ eiira dos S-aritos

Qatar t Mnhamimied Bini Khalifa Al-Thani Ahl-villlah RIin Khalld Al-Attiyah

Romania t Florin Georgesi o Vladimir Soare

RLissi an Federation Vladimir V Kadaonnikos Yes go nl YNsin

R wanda MNi are R ogen Iodra Pierre Clax oer (Gashsin iha

St Kitts and Nevis DPenrl Douglas I moths I ;arris

St. lucia VaLigh.an I essis Zenith anies

St VitLtent and James F Mit,hell Mlaurice Fd%sa,rd1

the tGrenadines

Sa'Tome and Principe Joaqtlini Rafael Branr iiI Mlarla das Noses Batista re Sousa

SaLidi Arahia Ibrahim A Al-Assat loharalt Al-gxirai,rv

Senegal Papa GLosmanie Saikho Assa Thimingan,e

Sevchelles t DaniellI do St r1r1 F In i' aniiel Fan re

Sier-ra Leone ThaimnL BLang-gUra Sannuira Kaiiiara

Singapore t Ricliard HoUTs Tanl Ngiarnl lig D)owSlovak Reptblic Sergej Ko7lik Vladimlir NI aTar

Slovenia Mitia Gaspari 1ozo t,ori

Solomon Islands Christopher Colimhsi Abe S nvder R mi

Somalia (asalit) ( acanIIt 1

Sooth Africa Trevor Andresw MNaLtiel (Gl1 am- ! s

Spain Rod rigii de Rato Figarvedi C ristohbl MIonltirs R(line nir

Sri l anka Chandrika Bandarnmaaila KnamaratrInga B C Perera

SLdan Abdel Wahab Osmain Ahdalli Has-an Ahrned

Soirinanie t HFumphre\ S Hildenhbrg Staillv h R lmI'aramn

Sswaziland Themba N MdUaslo NILis.a P n ,ko,d-

Sweden Frik Asbrink P'ierre St bIn

Switzerland leani-Pascal Del air r-a7 Fl as ( otti

Syrian Arab Reptbli,i Mohammed KhaledAl-NiAlahisniii Adnan Al Saitti

Tajikistan Niirotalti M Aliinarrdaio ShajiNI M Rajkhniis

Tanzania Daniel A N Yona Petei I Nguiniblllsi

Thailand Bodi ChUtillnan ainda M R (Chiatus Mon-oll Sonakil

Togo Kssassi Klsitse (vacant)

APPENDIX ONE 223

GOVERNORS AND AI.TERNATES OF THE WORLD BANK (Continued) APPENDIX IJune 30. 1996

Menmber Governor Alternate

Tonga Kinikinilau Tutoatasi FakafaLiua 'Aisake V. Eke

Trinidad aind To-bago Br-ianl Ktuei Ttiing T Ainsworth Harewood

Tu Bisia Mohameed Glbainnodtchi Ta 0u 6k Baccar

Turkey Mehmet Kaytaz CoLeIVt SetTurkmenistani t H-tidaiber d; A. (razsov Ora zmuradc)v Khakmutrat

Uganda lehoash Mava nia-NkVangi Emmaniuel TI.Mutebile

Ukraine t Ihor Mitiuko\ Olexan(ler Vesselovskv

United Arab Emirates HI-Laman bin Rashid Al-Maktourm Abimled HLImaid Al-Taver

Unlited Kingdom Keninetih Clarke Baroness Chalker of Wallasev

United States Robert E. Rtibin loan E. Spero

Uruguay t Luis Mosca Ariel Davrieu!x

Uzbekistanl Bakltivar S. Hamidco Akram MvukhidovVanuiatuL Barak rame Sope George Borugu

Vellezuela t Luis Raul Matos Azocar Teodoro Petkoff

'Vietnram Cao Sy Kiem Le Van Chau

Western Samoa Tuilaepa S. Malielegaoi Epa Ttuioti

Yemen, RepuLblic of Abdul Kacder Bajainal Mutahar A Al-Saeedi

Zaire Gilbert Kiakwama Kia Kiziki (vacant)

Zambia Ronald Damson Siame Penza lames M. Mtonga

Zimbabwe Ferbert M. Murerwa leonard Ladislas Tsumba

t Not a member of HI)A

224 THFn \'VORLD BANK ANNUMA. RER' I I (996

EXEC UTIVE DIRECTORS AND ALTERNATES APPENDIX 2OF THE WORLD BANK AND

THEIR VOTING POWERJit,e 30, 1996

IBRD IDAExecutive Total ',, of Total i, ofdirector Alternate Casting Sote> of % Ats total votes total

Appointed

Jan Piercv Michael Marek United States 2 65,7129 1 43 1, 60 7, 13 15 I.0

Atsuo Nishihara Rintaro 1'arTaki Japan 9)4,1() i6 18 1.154,2S6 1.83

Fritz Fischer ' Er-ika Wagenbhfer Germany 2,649 478 747.221 7.,1t

Marc-Antoine Arnaud Chneiweiss Fraince ('9,647 4.5S 451,054 4 23

Autheman

Huow Ev ans David Stantoni United Kingdom 69. 6 47 4.5S 540,21 1 5 (7

Elected

Walter Rill Luc Hublule Austria, Belarus,' Belgiuinm, Czeclh 76,7''20) 5.)4 45' 11 6I 4. 2c(Austria) (BelgiLlm) Republic, HUngary, Kazakqtan,

Lu\embourpg, Slovak Reptublic,

Slovenia, Turkey

Eveline 1lerikens Sergis KuIlyk Aritiietia, Bulgaria,' Croatia, 71,409 4 ) 353. '29 3 32

(Netherlands) (Ukraine) Cyprus, Georgia, Isr-ael, Macedonia

(former Y ugoslav RepLublic of),

Moldoa., Netherlands, Romania,'

Ukraine

Jorge Terrazas Roberto Costa Rica, El Salvador, Gtiate- 69,111 ( 4.54 233,47,t) 2 191

(Mexico) inienez-Ortiz mala, Hondtiras, Mexico, Nicara-

(El Sals ador) guia, PaLIam1a, Spaain. Vene7zula

Leonard Good Winston Cox AntiguLa and Barbucda,'The 6B2,21 4 1)9 43 7,95 4.1 1

(Canada) (Barbados) Bahamas,' Barbcados,' Belize,

Canadza, Dominica, Grenadla,

Guyana, I relanid, lamraica,'

St. Kittn5 and Nexvis, St. Lutcia,

St. Vincent a.nd the Greniadinle5

Biaai laJlan 0NI shIIq ir Rahman Banigladesh, BhUtJrl, India, 54.)45 3. I1 45.7 ,108 4.3(o

(India) (Bangladesh) Sri Lanka

Franco Helena Cordeiro Allbaniia, Grecce, [tals, Malta, 54,354 3.5 3S9,8-)1 3.bo

Passacantando (Porttigal) Portugal

(Italy)

Abdtl Karim Lodli Kayim Brachemi Afghaniistan, Algeria, Ghana., 5(,8 5 3.34 227,599 2.14

(Pakistan) (Algeria) Iran (IsianicL RepLib1ic of),

Moroacco, Pakistan. Ttinisia

RLth lacoby Jorgen Varder Denmark, Estonia, Finlaid, 5(t,178 3 3 ) 5 16,892 4 85

(Swedeni) (Denmark) Iceland, L,at a.i, Lithuania:

Norwvav, Sweden

Marcos CaramtuiL Jorge Brazil, Coloabia, Dominiican1 4S,23i) 17 2914,4 73 2 7

de Paiva Cock-Loindofto Republic, ELCador, Hlaiti,

(Brazil) (Colombia) Philippines. Surinane,'

Trinidaid antd Tobago

Jean-Daniel Gerber Jan Sulnaicki Azerbaijdll, Kyrgyz Republic, 46,01)96 3.03 3S67 ,3819 3 45

(Switzerland) (Poland) PolanId, SwVit7erlanld, Talikistan

Turkrneoistan, ' Jzbekistan

At,[L, I Twko 225

EXECUTIVE DIRECTORS AND ALTERNATES APPENDIX 2OF THE WORLD BANK AND

THEIR VOTING POWER fcopntinued)

June 30, 996

IBRD IDAExectitive Total °i of Total % ofdirector Alternate Castilig votes of votes total votes total

Peter W. E. Nichol[ Christopher Y Australia, Cambodia, Kiribati, 45,434 2.99 316,906 2.97

(New Zealand) Iegg Korea (Reptiblic of), Marshall

(Australia) Islands, Microniesia (Federated

States of), Mongolia, New'

Zealand, Papua New Guiniea,

Solomoin Islands, VanIattl,

\Vestern Samoa

Li Yong Zhui Guangyao China 45,049 2.9 6 217,996 2.05

(China) (China)

Khalid H. Alyahva Ibrahim M. Saudi Arabia 45,1)45 2. 6 377,1 0 3.54

(Saudi Arabia) Al-Mofleh

(Saudi Arabia)

Andrei Btigrov Eugenie Miagkov Russian Federation 45,049 2.96 28,2(02 (0.26

(Russian (RuIssian

Federation) Federationi)

Khalid M. Al-Saad Mohamed WV Bahrain," Egypt (Arab Republic 43,(118 2 83 250,660 2.35

(Kuwait) Hosnv of), Jordan, KuLwait, Lebanon,

(Arab Republic of Libya, Maldives, Oman, Qatar,"

Egypt) Syian Arab Republic, United Arab

Emirates, Yemeni (Republic of)

Leonard Mseka 1oaquim R. Angola, Botswania, BuIrnlidi, 41,332 2.72 440,377 4.13

(Malawi) Carvalho Eritrea. Ethiopia, The Gambia,

(Mozambique) Guin1ea, Keniya, Lesotho, Liberia,

Malawi, Mozambique, Namibia,'

Nigeria, Seychelles," Sierra Leone,

SuLdan, Swaziland, Tanzania,

Uganda, Zanimia, Zimbabwe

SuLwan Pasuigswad Khin Ohn Thant Fiji, Indoniesia, Lao People's 38,256 2.51 292,376 2.74

(Thailand) (Myanmar) Democratic Reptiblic, Malaysia,

Myanmat; Nepal, Singapore,"

Thailand, Tonga, Vietniam

Julio Nogues Carlos Steneri Argentina, Bolivia, Chile, 37,499 2.46 20(,001 1.88

(Argentinia) (UrtigUay) Paraguay, Perm, Uruguay'

Ali Bourhane l,tIC-Abdi Aden Benini, Burkina Faso, Canseroon, 25,337 1.67 299,724 281

(Comoros) (DiiboLiti) Cape Verde, Central Africani

Republic, Chad. Comoros, Congo,

C6te d'lvoire, Djibouti, Equiato-

rial Gulinea, Gabon, Gulinea-

Bissau, Madagascar, Mali, Maurita-

nia, Mauritius, Niger, Rwaanda,

Sao Tome anid Principe, Senegal,

Togo, Zaire

226 THE WORI.D BANK ANNI.AI. REPORT 1996

In addition to the e\Cctitive directors and alter nates shown in the for-egoing list, the fo)Ilowingq also ser-ved

after Jone 3(). 1 05)

Executive director End offperio(d ofserviLe Alter-nate diredtor End of period ofservice

Iahriiii\A. AI-Assaf Sepembher -O) 1 Y'l' Helgp Jonsdottir- Lly 31 I I 5(SJUdli Aiahia) (1 cland)

Fa sal A. Al-Khalc vd IJulv ' I , I1 )95 Armanir ldo MNIontenegio Im-ilujnV nr 1996

(KeLM11t) (( olonilai)

Enzo Gi-illi (O)ctobel- 3 1')95 Philippe l'eetcls August 7, 19)5

(Italv) (Bel i lol)

Zhang Shengmanr Deecrmbe- 3 I . 1 05(Chin.a)

No( I: Buoslria (ite Herce,goviria (700 'otis in rI, ) onidi! 17,871 votes or 1l,i) oli] Bri-wie DBirrrssdlirmrri (2 t23 votes in mkRIr) l'ecameererl'lers iifher tire 199))4 Regrgul - Electrol of Execrutiv'e Director s. Iralq (3,058 i 'ois in mllS I mis! 90,407 1otes it, irfS), S), ntilii (802

votes il I[RI itldl 10,%06 v'otes iii tism), air] Suthtlr . tti-ic (13,712 votes iiih rr) arnd 30,365i votes iul 1rr i) 'Ii niot pilrticipalte Ill tile1994 Regulhr Electron of 3Esecutit e Directtocs.a. Xlembler a) the iltit<R) ollv.

b. To le succeeded Irv Helienut Scilaffer (Germn(v) eftectrve luly 1, 1996.

APPENIJIX Twor 227

OFFICERS OF THE WORLD BANK APPENDIX 3Junt 30, 1996

President J.ames D. Wolfensohn

Vice President and Chief of Staff Rachel l.omax

Managinig Direct(ot; Corporate Planninig & Resource Managemilenit Sven Sandstrom

Managing Director, Finance and Resource Mobilization lessica P. Eiihorn

Maniaginig Directot-, Operationis Gautam S. Kaji

Managing Director; Operations Caio K. Koch-Weser-

Managing Director and Chairmnan, Private Sector Development Group Richard H. Frank

Vice Presideit, Africa Callisto Madavo

Vice Presideit, Africa Jean-LouLis Sarbib

Vice President and Controller Jules W. Muis

Senior Vice President and Chief Economist, Development Economics Michael P. BruIno

Vice President, East Asia anid Pacific Russell J. Cheetham

Vice President, Environimentally Suistainable Development M. Ismail SeraLgeldin

Vice President, Europe and Centr-al Asia Johanines Lini

Vice President, External Affairs Mark Malloch Brown

Vice President, Finanice and Private Sector Development lean-Franicois Rischard

Vice President, Finianicial Policy anid linstitutiotial Strategy Brian Wilsou

Senior Vice President and General Couinsel lhrahlimil F. I. Shihata

Vice Presideit, HUm11an Capital Development Armeane M. Choksi

Vice President, Humani ResouLr-ces Dorothy Hamnachi Berry

Vice Presideit, latin America anid the Caribbean S. Jav ed BLirki

Vice President, Middle East and North Africa Keemal Dervis

Director-Genier-al, Operations Evaluation Robert Picciotto

Vice President, ResotUice Mobilization and Colinancing Hiroo Fukui

Vice Presidenit anid Seci-etary ZHANG Shengman

Vice President, South Asia D. Joseph Wood

Vice President and TreasuLrel- Gary Perlin

228 THE WORL D BANK ANNIAI. RFEPORT 1996

OFFICES OF THE WORLD BANK APPENDIX 4Junie 30, 1 996

Headquarters: 181S H Street, NW., Waslinigton, D.C 20433, LI S A

New York Office: The World Bank Mission) to the Ulnited Nations/New York Office. 80)9 United Nation)S Plaza, Suite 900, Nesv

York,N. 1001(,1IS.A.

European Office: ThieWorld Baik, li6, avenLe dd'Ina, 75116 Paris, France

Brussels: TheWorld Bank, 1() rie Montover, B-1)001) Brussels, Belglum

London: The World Bank, Net% Zealand HoUse, 15th Floor, Haymarket, London, SWI Y4TE, England

Tokyo Office: The Wr(lid Bank, Kokisai Building (Roonm 916), 1-l, Marutiotchi 3-chome, Ciisioda-kL, Tokyo l1)0, Jlapan

Regional Mission in Eastern Africa: The World Bank, Hill Park Buildinig, Upper Hill, Nairohi, Keiva

(mailing address. PO. Box 30577)

Regional Mission in Western Africa: The WVorld Bank, Corner of Booker WVashington and lacques AKA Streets, Cocody, Ahidjan

01, C;ste d'Ivoire

(mailing address B. P 1850)

Regional NMission in Thailand. The World Bank, 14th Floor, Tower A, Diethelnii Towers, 93/1 Wireless Road, Bangkok 11)330,

Thailand

Regional Mission in Latvia: The World Bank, Kalku Street 15, Riga, Latvia LV-1 162

Baltics Regional Mission Satellite in Estonia: The World Bank, Kohtti 8,Tallinn EEO1 00, Estonia

Baltics Regional Mission Satellite in Lithtiania: Th1e World Bank, Vilniaus Str 28, 260)0 Vilnius. Lithuania

Albania: The World Bank, Deshmoret e 4 Shktirtit, No. 34, Tirania, Albania

Angola: Banco MLundial, RuaL Alfredo Troini (Editicio BPC), 15' Andar, CP 1331, Luanda, Angola

Argentinia: Banco Muindial, Avenida Leanidio N. Alem 628-3(0, Piso 12, BLienos Aires, Argentina

Armeniia: The World Bank, Republic Square, 2 Khorhertarani Street, Yerevan 10, Armenia

Azerbaijan: Thae World Bank, Neftchilar Avenue 65, Apartnmenlt 85, Baku, Azarbaijan

Bangladesh: The World Banik, 3A Paribagh, Dhaka 1)(00, Bangladesl

(mailing address G P0. 97)

Belarus: The World Bank, 6A Partizanskv Avenue, 5th Floor, Minsk 220(033, Republih of Belaris

Benin: I'he World Bank, Zone R6sidentielle dt Ia Radio, Cotonou, Benin

(mailing add-ess: B. P. ()3-2112)

Bolivia: Banco Mundial, Edificio BISA, Piso 9, I 6 de Julio 1628, La Paz, Bolivia

(mailing address: Casilla 8692)

Bosnia and Herzegovina: The World Bank, c/u National Bank of Bosnia and Herzegsivina, Marsala Tita 25, 71" 000 Sarajevo,

BosniLa anid Herzegovina

Brazil: Banco MUndial , SCN Quadra 02-Lote A, Ed Corporate Financial Center, Conjuntos 303/30)4, (70710-50(0 Brasilia,

DF, Brazil

APPENDIX FotuR 229

OFFICES OF THE W ORLD BANK (continued) APPENDix 4June30, 1996

Brazil: Banco Mundial, Avenida Isaac Povoas, No. 1251, Edilicio Nacional Palacios, Sala 603, Centro, 7S.045-640 CUiaha, Mato

Grosso (NIT), Brazil

Brazil: Banco Mundial, Edificie SIJDENE, S/IS-1OS Cidade Universitaria, 50()(i-9(0)(1 Recife PE, Brazil

Bulgaria: The World Bank, World Trade Center-Sofia, 36 Dragan Tsankov Boulevaid, Sofia, 1057 Bulgaria

Burkina Faso: The World Banlk, htinietible BICIA (3eme etage), OUagadoUgoU, Burkinia Faso

(mailing address: B P 622)

Buruinidi: The World Bank, Avenule CIuI 18 Septernbre, Bu jumnbura BuL-undi

(mailing address: B. P 2637)

Canseroon: IThe World Banlk, New Bastos, YaoeLd/, Cameroon

(mailinig address: B. P. 1 28)

Central African Republic: Banque Mondiale, RuLe des Missions, Banguii, C(AR.

Chad: The World Bank, 3244 P 67, Quartier CUrvette St. Martin, N djamiena. Chad

(mailing address: B.P. 146)

Chiia: World Bank Resident Mission in Chinia, 9th floor, Bulildinig A, Fuliua Mansion, No. 8 Chaoyanigmen Beidalie, Donigchenig

District, Beijing 100((27, China

Colombia: Banco MUndial, Diagonial 35 No. 5-98, Bogot., DE., Colombia

(mailing address: Apartado Aereo 10220)

Congo: BalLque Mondiale, ImmIneUhle Arc (5eme etage), Avenule Amilcar Cabral, Brazzaville, Congo

(mailing address: B. P. 14536)

Costa Rica: Regionial Implementation Mission-Banco Mundial, Bulevar Rohirmosern 151) mts. Oeste Residencia Ex-Presidenite

Oscar Arias, Sin lose, Costa Rica

(mailinig address: C P 1]92 5-1 000)

Ectiador: Bancn Munldial, Calle Asian Leon Mera 13(1 s Ave. Patria, Edificio Corporacirin Financiera Nacional, 6t(e Piso, Quito,

Ecuador

Egypt: The World Bank, World Trade Center, 1191 Corinichie El-Nil, 15th Floor, Cairo, Egypt

Ethiopia: The World Bank, Africa Avenue, Bole Road, Addis Ahaha, Ethiopia

(mailing address: PO. Box 5515)

Georgia: The World Bank, 1 SA Chonkadze Street, Tbilisi, Georgia

Ghana: The World Bank, 69 Di. Isert Road, Noriliridge Residential Area, Accra, Ghiana

(mailing address: PO. Box M27)

Guinea: Banque Mondiale, ImmLeuIble de I Archevjche, Face Baie des Anges, Conakry, Guinea

(mailing address: B P 1421))

Haiti: The World Bank, c/o IDB, BoLirdon 3S6, Por t-au-Prince, Haiti

(mailiig address: B.P. 1321)

Hunigary: Ilhe World Bank, Bank Center, Granite Tosver, Szahadsug ter 5-7, 1944 Budaplest, HuLngar-y

230 THE WORII BANK ANN' AL REPORT 1996

India: The World Bank, 70 Lodi Estate, New Delhi 110003, India

(mailing address: PO. Box 416, New Delhi 110 001)

Indonesia: The World Bank, Lippolife Building, 3rd floor, J I. H. R. Rasuna Saicd, Ka. B-1(), Ktiningan,-akarta 12940, Indonesia

(mailing address: P.O. Box 324/JKT)

Jamaica: The World Bank, Island Life Center, 3rd floor/north, 6 St. Lucia Avenue, Sulite S-South, Kingstonl 5, Jamaica

Kazakstan: The World Bank, Samal-l, Bldg No. 36, 3rd Floor, Almatv, Republic of Kazakstan 48009c9

Kyrgyz Republic: The World Bank, Moskovskaya and K. Akieva Streets, Bishkek 720000, Kyrgyz Republic

Macedonia, FYR: The World Bank, 34 Leninova Street, 3rd floor. Skopje, Forner YugOslav Republic of Macedonia

Madagascar: BaLnquie Mondiale, I Rut Patrice Lumumba, Antananarivo I01, Madagascar


Malawi: The World Bank, Development House, Capital City, Lilongwe 3, Malawi

(mailing address. P.O. Box 30557)

Mali: Banque Mondiale, Immeuhble SOGEFIH, Centre Commercial Rtie 321, Quartier du Fleuve, Bamako, Mali


Mauritania: 'I'he World Bank, Villa No. 30, Lot A, Qtiartier Socofim, N01-uakchott, Mauritania


Mexico: Mexico Resident Mission, Instirgenites Suir 1605, Piso 24, Torre Mural lIsurgenites, Col. San Jose Iisurgentes, 03900

Mexico, D.F

Moldova: The World Bank, Government Buildinig, Room 561. Piata Marii Aduni.ari Nationale 1, 277033 Chisinau, Moldova

Mozambique: The WVorld Batik, Ave. KIenneth Kaunda, 1224, 2-Andar, M,lapu1to, M%lozambique

(mailing address: Caixa Postal 4053)

Nepal: World Bank, Jyoti Bhawan, Kantipath, KathmanduL, Nepal

(mailing address: P.O. Box 798)

Niger: Banque Mondiale, Rue des Dallols, Niamey, Niger

(mailing address: B. P. 1 2402)

Nigeria: The World Bank, 1 st Floor, Plot PC-I 0, Engineering Close, off ldowu Taylor Street, Victoria Island, Lagos, Nigeria


Nigeria: The World Bank, Plot 433, Ecoxvas Road, Opposite Ecowas Secretariat, Assokoro District, Abuja, Nigeria

(mailing address: P.O. Box 2826, Garki)

Pakistan: The World Bank, 20 A , Shahra-e- lamhurivat, Ranna 5 G-5/ 1, Islamahad, Pakistan


Paraguay: The World Bank, Edificio City Tercer Piso, Estrella 345, Casa Chile, AsuLlcioln, Paraguay

Peru: The World Bank, Avenida Pardt y Aliaga 640, Piso 16, Sani lsidro, Lima, Peru

Philippines: The World Bank, Cential Bank of the Philippines, Multi-Storev BLilding, Room 200. Roxas Boulevard, Manila,

Philippines

APPENDIX FoUR 231

OFFICES OF THE W OR LD BANK fcontinued) APPENDIX 4June 3Q 1996

Poland: The World Bank, INTRACC) I Building, I 7th Floor, 2 Stax eki Street, 0)0--193 Warsaw, Poland

Romania: The World Bank, Boulevard Dacia 83. Sector 2, Buchalest, Romania

Russia: The World Bank. Sadovo-Kudrinskava No. 3, Nosco( 123242, Russian Federation

Rwanda: The World3 Bank, Blid. de Ia Revolution, SoRAS RBildinTg, Kigali, Rwvanda

(mailing address: P.O. BROx i19

Satidi Arabia: The Worlcd Bank Resident Mfission, l INDP BRildinig, King Faisal Street, Riyadh, Saudi Arabia 11432

(01 ailitiog addiess It). Box 59110)

Senegal: The World Banik, llliloleLllhe S.D.I. H., 3 Place de I Independance, Dakar, Seniegal

(mailing address B P 32'12-)

Sotith Africa: 'Ihe World Bank, Gro%svenor Gate, First Floor, Hyde Park Lane, Hyde PaLrk 2196, Johannesbhrg, SouIth Af-ica

(mailinig addresrs: P.). Box 41 283, Cranig Hall 21)24)

Sri Lanka: The Wolid RBaLIk, Developnient FiniaLTCe Co1rpor-atioll of Ceylon (DFCC) Buildinig, 1st Floor, 73/5 Galle Road,

Colomho 3, Sr-i lanka

(mailing addrlss: P.O. Box 176 1)

Tanzania: Thie World Bank, N. IC. Building (7th Flooi,r B), Samora AvennLe, Dar-es-Salanm, Tanzania

(mailiig addless: Pt). Box 21)54)

Togo: Baliqtie Mondiale, 1 69 boulevard du 13 lanvier; immeLble BlCI (Srme etage), Lomre Togo

(iliniilig addless: B. ft 3 15)

Tuirkey: The World Bank, Ataturk BUlvari, No. 21 1, Garra-GUris Building Kat 6, ()6683 Kavaklidere, Ankara, Turkey

lUganda: The World Baik, R enzo ri HoUse, I ILuIm-Irimba Avenue and 4 Nakasero Road, Kampala, tIganlda


Ukraine: The Wor Id Bank, 26, Slov kovchna St. (Ex. K Lielknecht St.), Suites Two and Three, Kiev 252024, Ukraine

lUzbekistai: Wor ld Bank Field Office, 43, AcaderiliciLiao Suleimanova St., Tashkent, Llzbekistain

Veneztuela: Banco MnIldial, Edificio ParCIle Cristal, Torr-e Oeste, Piso 15, Ohfiina 1 5-05, A enida Francisco de Miranda,

Los Palos G.ancdes, C.laaCtas, Vel eeoc a1'Z

Vietnia: Tli3he World Bank, 53 Iran Phu Street, Hanoi, Vietnam

\West Bank aid Gaza: [he WVnold Bank, CGaz3a CitN, Gajz

Xenren: [he World Bank. 1 4 Dijilhouiti St., Sana a, RepLob lic of Yemen

(mailing adir ess PC). Ro IS 52)

Zaire: Worl-d Bank Liaison Olfice, c/o UINDP, P C) Box 724, Kinshasa, Zaire

Zambia: The World Banik, Rel C(ross Hous-e, 2nd Floor, I olng Acres, Lusaka, Zambia,

(mailinig address: P.O. Box 354 1iI)

Zimbabwe: Ilhe World Bank, Finsure HoUse, 5th Floor. 84-816 Union Avenue, Harare, Zimbabxre

(mailing address: P[O. Box 2l(i 1)

232 THF W\VRHI1 BANK ANNI AI. RPkOR()I 1996

COUNTR\ ELIGIBILITY FOR BORROWING APPENDIX S

FROm THE WORLD BANK(us of .hPse 30, 1996J

COUNTRIES ELIGIBLE FOR IBRD FUNDS ONLY

Income category 1995 GNP Income categorv 1995 GNPand counitry per capita (US$)' and country per capita (US$)

Per capita incomne over $5,295 Perm 2,320SloveInia S1 (r) RuLssian Federiation01 2,2303

ArgeitinLa ,. 7 Belaruls-' 2.1I10Seyclielles 6,410 Lithuaniah 2,(150Antigna and Barbudoa n a. Namibia 2,000

Colombia 1,901)Per capita income $3,036-$5,295 TuLn isia I 86(

UrugLlay 5,10( Paraguay 1,650Hunigar-y 4.13( Ukrailne 1.63(0NSlalavsia 4,0)1()1 Algeria 1,58(Chile 3,061) El Sahador 1,58t)Czech Rolptiblic 3 ,82() Janmaica 1,511)Gabon 3,80)0 .)ordan 1,5((Trinidad and Tobago 3,721) Ir-an, Islamic Republic of nia.

Brazil 3,211 ( Marshall Islands n a.Me,cico 3,32-1) Micronesia, Fed. Sts. of n.a.Croatia 3, X()Mauritius 3,28() Per capita income $766-$1,465

Soith Africa 3,1 (1) DoninicancRipublic 1,460St. Kitts anid Nevis n ci Roriania 1,4510

ECLIador 1,39()Per capita income $1,466-$3,035 Bulgar-ia 1,340)Vene7uela 3,1)2() Guatemilalai 1,340)Botsxs ana 2,940) Papua New Gutinea 1,160Slovak RtptIblIc 2,941) Morocco 1,13()Estonia' 2,93211 Swxaziland 1,11()Polanrd8 2, 81 Syriall Arab RepLblic 1,1()

Panama 2 , 7 Plhilippiines 1,071)Tiballaiid 2,721) Kazakstant, 1,)04(Lebanon 2,67() Indolesia 98)1Turkee 2,6 6Th) 0Uzbekistanh 931)Belize 2,631) NMoldova) 920Costa Ricza 2,591) Turkmenistan1 k 921)Lajt%ah 2.42() SUriname 881)Fiji 2,4))

COUNTRIES ELIGBLE FOR A BLEND OF IBRD AND IDA FUNDS'

Income category 1995 GNP Income category 1995 GNPand counitry per capita (US$)' and country per capita (US$)

Per capita income $3,036-$5,295 Per capita income $765 or lessSt. LuLia) n a. Kyrgyz Reptiblic0 691)

Chin a 6211Per capita incomne $1,466-$3,035 Arienia 1 ' 57()Dominic) cd. a. Zimbabwe 540Grenaldad n. Azerbaijanih 480St. \V'icent and the GrenIadine)i SaL 1. Pakistan 461)

Georgiah 440Per capita income $766-$1,465 India 35()Macedonia, FYR ol f4) Nigeria 26(1

Egypt .o() Bosnia and Herzegoviia ia.

APPFND)X FiVE 233

COUNTRY ELIGIBILITY FOR BORROWING APPENDIX 5FROM THE W ORLD BANK (conitinuedl)(as of hite 30, 1996)

COlINTRIES ELIGIBLE FOR IDA FUNDS ONLYt

Income category 1995 GNP Income category 1995 GNPand couL1try per capita (US$)s and couLntry per capita (LiS$)

Per capita income $1,466-$3,035 Lao People's Democratic RepLIbliC 350)Tongac1 1,630) Sao Tome and Principe 34i)

Cenitral African Republic 330

Per capita itncome $766-$1,465 Mongolial 320Vanuatt'l I 200 Togo 310Western Samoa1 1, 11( Cambodia 26(1Cape Verde C.)) Kenya 26()Solomon Islands 910 Yemell 260Bolivia SC))) Guinea-BissaL 2-53Kiribati 780 Haiti 25))Lesotho -- o Mali 250DjiboLIti n a. Vietinamii 250Maldives na. BaLigladesh 240)

Madagascar 240Per capita income $765 or less Uganda 240Albania 6(0 Bul-kinia Faso 23()Sri Lanika 690 Niger 22(0Congo 6tS) Nepal 210)Cameroon 630 Chad IS()Cote d'lvoire 611) Sierra Leonie 170HondLiras 60)0) Malawi 160Guyana 590 BuLridi 150Senegal 57)) Tan0anllia 130)

Guinea 540) Zaire 120Coomoros 490 Rwanda 110Mauritania 46)) Ethiopia 1((Bhutan 42() Mozambique S0Angola 410) Afghaniistani n a.

Ghana 39)9 Eritrea n.a.Nicaragiua 39)() Gambia, Thle 1n.a.Equatorial Guinea 380 liberia n.a.

Benini 370( Myanmar n a.Taiikistanh 370) Solmalia n a.

Zambia 37)) Suidan n.a.

11.a. Not available.a. World Bank Atlas ntethodologv; per capita GNri figures are in 1995 US. dollars.b. Estimaltes fio- these countries nre preliminarvc. Countries are eligilble !for Iozi on the basis of (a) relative poverty and (b7) lick oj credituorthiniess. The operattiotal cutofffor ID.I eligi-bilit for FY97 is a 199 GNP pper capita of $905, using Atlas methodology'. 1; receitve 0m5 resources, cou,,tries also meet tests ofperfor-mnance. In exceptioial circumstances, i0A extends eligibility temporarill to coun)itres that are above the operational cutoff and areunndertaking major adjustmnent efforts but are not creditworth-y for IhRD lending A4n exception hIns also been made for small island econ-omies (see friotnote l).d During the n)A- N perod (FY97 99), an esxception to the G Nr per capita operational cutofffor i.s eligibility ($905 Jor FY97) hasbeen made for specific snall isaind economies, Uhich otherwise would have little or no access to Bank Group assistanice because they

lack credituwor-thiness. For such countries, ir)o fui nding is consideredt case by case for the financing of projects ntid adjustment progna ms

designed to strengthen credituworthiness.

234 THE WVORILD BANK ANNLJAI\ REPORT 1996

WORLD BANK BUDGET BY EXP'ENSE CATEGORY APPENDIX 6ANLD ADMINISTRATIVE PROGRAM,

FISCAI 1 994-979nitilrioirs otf (Us dollairs: fisil veries]

A\ ntul I 997

Iteiri 1994 1 992; 1 996 Program

Expense( C.ttegorrl

Staff costs 851 8 S74.8 83. 8"5.7

Consultantlts I 1 3 I I ] 0 1) 5 I05.6)

ContIactulWI serv\ices/representation 66 3 (i2 7 (6i 7 55 '?

Operational trav el I 2_.S 17 5 1-6.1 12 ?7

OVerhead 23.()8 2 2 272.5 210.9

Direct contributions to special 1 03 4 11 () I l( 2 I1 I

grants prrrogram

President's conti n gen cvb 1 a. 1. a. 1a.1I).C)

Reinibursemcilts (11)7.) (I Il 2) (102.5) (1 04.2)Pending benieit initiatives' i a. ai 3.2 1 4

Totala 1,388.4 TAW )IC 1,3 7.11 16'374 7

Adminiistrintive Programir'

Regional' 6407 74) 2 712 4 87.5

Financial 2' 113 1 113 4 1 11.(

Development and ad visor) 213.9 13) () 133.9 128 5Administrative >oIpport 123.7 133.9 12) 4 16(7.4

Corporate nmanagement, and legal ser viets 72 178 82 () 77 8

Total 1,ItS7 1,191 J 1,162.1 1,1 2.2

Overhebead/ nelieits 127. l 119 1 128.1 1 32.4

President's ContinYgent n a. n a ia.I I (I.

New initiaitves naII a. n1 '5 .4A

Pending btineft initiatl-es n a. is. 1.4

Reimbulrsements (11 73) (I11 2) (1(1)2.5) (1)042)

Net administrative programs I I8'9.) 1,1)9 8 I 19) 9 1,1771

Non-dist,-etionarv itemils 2 t ) 18.IS5' n a. 1n.a.

Special programs1 I 1 1.2 1 191.1 I I ) 1211 3

Boards 5() 5 55 56 I 61.1

Operations es aluation 14 8 15 7 1I 6.) 16.1

Total budLget 1 *388.4 1,410.0 1,376.1) 1,3 74

NOTE Dettiils ins' triot arid to total l 'ecrisre of rmOrildig.

nto. NJot applicable.ii. flitllldes Juistitritionril Devreliopmentl Fri rid.

h Allicsztiions t[eror president's nt i ntilof eni ' liar 'e ('cen iYnrli li {i7 rr'.srtrectr'e ei tegones//prigrn os forl si in I rCrQQ496.

c. Accuetiil//peiiisiordil rI/Ioc ations subject tio Bonrel pp/rrir s)l if zte police ntintiniv e sd. Fiscal /094-95 expenses hIis' 'een modifieldlbrn list vie'r's Report to iuclmt' deceirtrioer /Office iiisCCp(iiur costs, arid to s/tooeviii51tiiinil sripport uunider regiorrinl pro glraii

e. Irrcl/es ir operatiioiral sripprort' frm dei 'elopmreii m uOil I idivisorev /rrogri ins

!. rbicreles fAO Co-riperrtiive Progarim.

,g. Allo n tions Jor Leer1i1 ing mii Lemiiership Ceriter ($9 2in), C/ha inge Mii,iagemernt fSL.0 Om); ii cil EDI expi r ision (S I I .2rr).h Accnt /l fir rr'sett/enwrnt grants Oir teirTinotilion tinie to nccoiintbig cheirges (Firir ic-iei. Arc(rriiting St i1trl ds/s i 12)i t 0' tunle / hi;ges O/t $9.1 I 111lirir to fUnd rrcciriiud for loccil stiff 'terrii,itioni gri i tS for prr ir sveairs, onr r S9.4 millioii to fi lid rccrilrids

for lienr'fit costs of re/ri clrrirnt staflf/roccesseil prior tl Fermin , s' 21, 10')4.j. /rrclude Its fiirect csn.til nnleuus tfr rr ird wrhidliistrrtii 'e ctints orf tC/r Spec ia Progrreirs.

k. F.rh'.lre $20. 0 toillion fir So"Irlia? rerlief

APPE\DIX SIX 235

IBRD AND IDA PAYMENTS TO SUPPLYING APPENDIX 7ACTIVE BORROWING COUNT1RIES FOR

FOREIGN AND LOCAL, PROCUREMENT IN FISCAL 1996(milliolls of US dol/lrs)

Pe' eiltageBorrowinig Local Foreigii Total of totalLolntris tOitCrSlllIlfO( t procurenienit aniiotillt dlishuirsenincits

Albania I 7 1 19 !.10Algeria 32 15 4. 0.24Argentina 2)2 28 25i! 1.30Armenia 32 t 33 (.17Banglgadesh 113 1 1 20) .62EelIarus t 1 1 .) iBolivia 65 I1 67 0(35Brazil 962 12(1 1 ,0S2 5.62Bulgaria 1 51 53 0.28Btirkinia Faso 32 I 33 0 7Canierooni 35 1 36 1119Chile 6 2 15 77 (7.4(0China I 2 1 242 1, 542 8.01IColombia 181( 24 204 1 06Costa Rica 6 22 280. 15Cote dcIvoire 23 27 49 (.25Croatia 34 4 38 0.20CyprLIs 4 24 27 0.1 4Czech Reptiblic 6 29 35 (1.18Dominican Republic 23 t 23 ().12Ecuador I 22 4(0 163 ((.85Egypt 84 6 89 (1.46Ghana ?2 1 93 0.4SGuiinea 1 2 20 32 0.17Haiti 21 t 21 0.1 1Honduras 24 3 27 (11.14Hungary 81 2(1 101 0(52India 1.09 2 124 1 217 6. 32Inidonesia 661 25 686 3.56Iran, Islamic Reptiblic of 24 1 25 0).13Jamaica 27 1 28 0.15lordan 12 8 20() ()0 1Kazakstan 5 S2 87 0. 45KenIya 44 12 56 02)Korea, RepuLblic of 96 156 251 1.3(1Lebanon I(1 17 27 (1.14Macedonia, Former LI'goslav Repiblic of 21. t 2i ()li)Maclagascar 3 t 39 f) 2i:Malawi 44 t 45 ((.23Malaysia Si S 88 (0.46Mali 31 2 33 0.17Morocco 208 1 6 224 ]1(iMozambiqLe 2- 0.15Nepal 28 - 28 0.15Nigeria 137 5I 196 1.02Pakistani 3(14 14 31 ) 1.66Paraguay 24 3 27 0.1 4PeriL 53 4 57 (1.30Philippines 168 3 171 (.89)Polaid 11)2 36 38 ID.72Romania 14 34 48 0 25Russia 88 3Sl) 468 2.43Selnegal 47 1 3 60 .31Sri Lanka 89 1 90 (J.47Sw.aziland t 1 1 9 ()Iliian.1Tzania 42 4 47 ).24

Th.ailanid 42 211 (52 (1.32

236 THE W()R( BANK ANN) Al. REPORT 1996

Perceiitage

Borrowinig Lo(al Foreigin Total of total

coLnntries procoireinent procirenieilt all(onllnt disbTursementQ'

Togo 18 1 I 1. ( 1

Trinidad aid Tobago 14 3 lb ().(8

Tunisia 11. 4 121 0 63

Turkrnenistan t 21 21 0 II

Uganda 5 t 52 0.2 7

Ukraine t 2 125I

Uruguay 24 3 27) 14

VenezuLela 24 5() .4 (7.'3

Vietnam 14 1 1 2 (11

Yemen 21 t 21)

Zambia Ii 24 43 0.22

Zimbabwe 24 1() '-4 ( IS

Other 1 12 47 1() ( 83

Total 7 1 2,81(05 L)23 51())

- Zero. t less trhan $0 m million

No i: Anmounts exclude disbiursementsjor ilel't reictioun, net aivoince islbursemen ts, and ddisnursemenut tindersimnplfieid procedures tor

structural and sectoral adjustment loans. Details iena not a.dd to totals because of rotoidiig

a. Refers to the share of all IBRD and IDA payYments for fiscal 19906 which totaled S I 25 i6 miil/ion.

APIToNDI\ SL EN 23 7

IBRD AND IDA PAYMENTS TO SUPPLYING APPENDIX 8COUINTRIES FOR FOREIGN PROCUREMENT(amontis in mnillnts of US dollars)

IBRD etintiliative IDA ctiniiitlativeto Jlunie 30, 1996 IBRD fis<al 1996 to Junie 30, 1996 IDA fisLal 1996

Suipplyinig coulintrv Amount '/ Aiiuit t Aniouint ;I Aiount

Algeria 3S 14 11.21 13 2 0.06Argentina 816 ().75 24 (.35 106 0.26 3 11 13AIstrIlia 1,I 130 1.04 77 1 .13 636 1.56 35 1.33Auistria 1,5S4 1.46 123 1.8 235 0.S7 14 0.52Azerbaijan 3 t 2 24 (.1)6 14 0.52Belgium 1,562 1.44 61i 0.9( 111'7 2 52 47 1.78Brazil 1,877 I 72 1(12 1.5() 324 () " 18 0.67Btilgaria 40 * 12 (1.18 51 0) 12 4(1 I.5()Canada 2,406 2 2) 16 9 2.48 738 1.81 56 2. 13Chile 378 (:).35 1)0 (1.15 30 0.09 5 (1.17Chinia 1,381 1 27 115 1.69 1,139 2.7 9 128 4.8IColombia 2435 ( 2 23 11.34 2( 1 (.()5Costa Rica 43 * 6 0.09 36 0.09 16 (.59Cote d'lvoire 45 4 (1.()6 241 1.59 22 11.S4Cyprus 63 (1.'(:6 22 11.32 34 (1.0 2 111.11)6Czech Reptublic 75 ('.(7 27 0.40 7 2 (.09Denmark 735 1.6S -15 (.6( 308 0.75 27 1. 02

Ecuador 169 11.16 37 1.54 9 4 0.14Egypt 58 (1.()5 4 11.1)6 36 (1.1)9 2 (1.08Finlalnd 511 ().47 75 1 10 123 0).) 3 ( .11France 7fill 7.(6 4113 5Q)2 4,2°5 10.52 322 12 12Germany 12,3(14 11.3( 744 11 1.93 3,464 8.48 1 I 4.45Ghana 1( ' I * 14 I IGreece 2()S 1(1.9 I (1.156 75 (I.8 6 (121GLuatelIlala I 9 t 21 0.(:)5 3 (1.11Guinea 4 7 4(1 ().1() 19 ()1(IHUngary 226 (1.27 2(1 (6 2 26 (1.()6 I *

India 4()7 (i.37 4X8 1171 789 1.93 7 2.88Inidonesia 161 11.15 12 (1.18 117 (1.29 13 1.5(1Iran, Islamic Reptiblic of 145 1. 13 t 195 0 48 IIraq 45c) 1. 42 - 30 (1.(17 -Ireland 11i5 (1 15 22 (1.32 11)1 ( 25 II4 U.54Israel 253 1)23 " (:1.13 1(1 ':1.25 5 11.I8Italy 6,468 5.)3 468 6.8 1 ,746 4 28 111() 4.15Japan 14,315 13.13 358 5.26 4,124 11 .1(1 103 3.89'Jordan 50 t - 139 1).34 8 (1.31Kazakstan 75 (1)'7 58 (1.S5 31 (I.01s 24 (:1.91Kenya 28 t - 272 0.67 12 0.46Korea, Republiciof 1,62(1 1.49 11(7 1.57 747 1.83 48 1.82Kuwait 26i8 (1.2 11 )0.1t6 257 (')63 17 (1.63Lebanoni 94 (1.019 115 1. 24 24 (.(:6 1Malaysia 335 1131 5 (.1'7 233 0.57 3 0.13M'lexico 562 1 .2 45 1)66 98 (1.24 t *

Morocco 176 (11.16 15 (22 51 11.13 1Netherlands 2,1 11 1.94 148 2. 1 7 1,10 28 2 96 3.62Neiv Zealanid 178 1 .16 15 I ) 22 1()3 ().25 4 0.15Nigeria 389 (1.36 . 407 1.00(: 591 2 21

Norway 379 (1.35 52 11.76 141 (1.34 6 02 23

Pakistanl 119? 11.11 I:9 .13 173 0.42 5 0.2(1Panama 391) ('.3fi 11 (' 6(i 50 (1.12 1 *

Paraguay 113 I 1.111 1 * 1(:) 3 H. 1()Peru 12 (1.12 2 9 19 2 11(.11Philippines 22 1102 2 82 0. 2() 1 0(16Poland 243 11.22 34 11.511 46 ()1.1 3 (:.11Portugal 65 (1.1)16 8 11.12 21 () )6 38 1 42Qatar 123 11.11 - 17 7

Romania 31) (0.28 28 (1.41 75 0 18 6 (1.23R ussia 710) 0.65 354 5.20 69 (0 1. 215 0)97Saudi Arabia 576 10.53 t ' 225 () H3 4 (1.16

238 THE WORILD BANK ANNIJAi. REPORT 1996

IBRD cumiuiilative IDA cumtilativeto Juinie 30, 1996 IBRD fiscal 1996 to Juinie 30, 1996 IDA fiscal 1996

Supplyinig coulintry AnLIo II t A" ,,,Aount (n Amiount Anotnt

Senegal 26 * 3 90 0.22 10 0.38Singapore I,i50 ( 9( 64 0.(4 682 1 67 13 0.51Slovenia 38 * 6 (.(9 2 1 (.05SouthAfrica 414 0)38 15 (). 953 2.33 117 4.41Spain 1,314 1 21 1(i6 2.44 2S2 0.61 23 0.87Swaziland 33 15 979 30 0.07 4 0 15Sweden 1,637 1.50 55 ((S 452 1 11 28 1.05Switzerland 4,388 4 03 148 2.17 1,()X8 2 66 86 3.25Syrianl Arab Republic 38 7 (1.I 15 tTanzaniia 7 t 28 0.07 4 ((.17Thailand 145 ((.13 1 357 ).88 1 9 0.7Tunisia 91 ().(08 1 36 ()9 3 0.12Turkey 379 (o.35 1(19 1141 111 ((.27 446 1.75Ttirkmenistan 5 2 * 51 .2 19 0.73Ukraine 158 0.15 116 1.70 47 ().11 9' 0.35United Arab Emirates 566 ((.52 2(0 0.29? 351 () 86 8 0.29United Kingdonm' 8,200 7.53 406 5.9)7 5,388 13.20 318 11.99United States 21,395 19).63 1,272 18.69 4,01( 9.83 20(8 7.83Uruguay 113 (10 3 5 t *

Uzbekistan 4 3 1 2 6 0.22Venezuela 508 (0.47 35 9.51 201 0.49 15 0.56(Vietnam 46 t 51 (0.12 11 0.40Yemen t - 20!7 051 tYugoslavia (former)6 857 (179 1 - 172 (142 Zaire 6( - 41 1.1( 5 (0.18Zaambia 52 22 (2.32 112 0.27 1 ().()5Ziimbabwe 34 t 1)3 0.25 10 0.38Other 2,2 35 2.05 365 5 36 962 2.36 82 3 09

Total I )9() 12 1oJ(11 6,80( 1()() 4(1,833 1 )on 2,652 1()(

- Zero, t thain £0 S imlillioni, less than 0.05 percenit

NoTE: Amounts exclude iisbu rsement s for del't reduction, netl vdin cammc disbu rsement s, ant fdisbursements under sa mpliJedf procedu res

for stnrctural anld sectoral adjustment loints. Details nzay not add to toteils beca use oft rounding.a. United Kingdom includes Hong Kong

b. Figures represent payments to sulbcontractors in respect to cotitracts a a rded to soppliers Jrom Yu6goslaiin (former).

APPFNDIX EIGHT 239

IBRD AND IDA PAYMENTS TO APtPENDIX 9

SUIIPPLYING COUNTRIES FOR FOREIGN PROCUREMENT

BY DESCRIPTION OF GOODS, FISCAL. 1 996(amoounts iti millions olf US dollars)

EqLlipment Civil works Consultants All other goods lTtal lisbtirsenieitsAmotinit S! Amount S Anilount '!i, Aniouit a. Amzount

Albania ' 1 "i13 - 3

Algeria 14 0).19 - * I 0.0 1 0.13 15 0.1]6Angolai t I- _ 2 0.38 2Argentina 26 0.37 t I 0.13 t 2S 0.3(Australia 7) 1.(9 I 1 1.35 1 ) 2.1)5 4 0.75 I12 1.18Austria 123 1.71 0 1.13 3 (1.34 1 0.19 1 37 1.45Azerhaijan 16 11.22 - - 1 (7.19 16 0.1Bahamas, The 1 * I 0.1]6 - 3 *

Barbados I - - t 7 I *

Belarus 14 0.2(1 5 (.57 1 0.2(0BclgiLin 83 1.15 1 11.14 1() 1.09 I5 2.82 109 1.15Brazil 102 1.42 14 1.69 4 0.46 - - I 20 1.2IBuilgaria 51 0.7] t * t si 0.54Canada 159 2.2() 8 1.02 57 628 1 ((.19 225 2.3SChile 14 (1.2(1 - 1 O.('X - 15 0(.1(6

China 154 2.14 81 10 13 3 1-0.28 4 (. 5 249 2 .6Colombia 23 0.31 t * I (.14 - 24 0.25Costa Rica 17 0.24 - * 5 (1.51 - 22 0.23Ccte divoire 13 0I. 9 1.15 1 0.07 4 17'5 27 029Cyprms 2 * I (i 1.94 3 (.28 4 0(.75 24 ). 25Czech Republic 29 1).4(0 - t 7 t 29 0.31Denmark 51 11.71 3 0).34 1(5 1 6 2 0.38 72 ).756Ecuador 25 0.34 1 ().15 14 1.59 t 40 042Egypt 4 (0.(5 1 ()(9 1 1.11 t * 6 (0.06Finland 66 (1.91 9 1.(6 4 11.3 ) t * 78 0.82France 52S 7 3 8 84 111.47 90 9.S9 23 4.32 725 7 .j7Germany 6579 9.41 79 9.92 39 4.29 6(4 12.(03 862 9.11Greece 10 0.14 3 0.36 1 0.13 2 0.38 16 0.17G(uinea 19 (1.26 * 1 10.16 0 21) (1.21Hungary 19 (1.26 t t t 2() 0.21Iceland I I (.09 I (I.19 2India I1)11 1.39) 17 2(7 7 (1.77 1 (1.19 124 1.31Indonesia 25 0.35 - * t . - 25 0.26Ireland 20 0.27 * 7 1.85 t 37 0(.39Israel 6 (1.08 - * 8 (.85 t 13 10.14Italy 306 4.24 221 2 7. I]1 1.85 35 6.58 578 6.11Japan 412 5.71 1 2.31 8 0).86 23 4.32 461 4.87Jordan 8 (1) ] I ().(8 - * 8 (.(18Kazakstan 82 1.14 - t 8 * 2 0.87Kenya 8 (.1 1 - 5 0.50 * 12 (1.13Korea, Republic of 108 1.50 46 5.80 t * 1 (' 19 156 1.65Ku iwait 28 ()39 - 28 ().3(1Lebanon 2 2 ().23 3 0.3(1 11 2.()7 17 0.1SMalaysia 8 ().10 1 (0(7 7 t 8 0.08Mali t t* (:.19 2Mexico 43 0.59 2 11.26 t - 45 0.48Morocco 16 0.23 - t 1 6 0.17Netherlands 159 2.21 33 4.14 45 4.92 7 1.32 244 2.58New Zealand 1() 11.14 - 9 0.97 t 1) 0.20Nigeria 58 0.81 t * t - 59 0.62Norv-ay 52 0. 7 _ - 6 (1.66 1 11.19 5S 0.61Pakistan 1(:) 1.14 2 0.19 2 11.17 1 (1.19 14 (1.15Panama I) 1.14 2 (.I C t t * 12 (1.13Paraguay t * 3 0.35 t - 3 *Philippines t - 3 0.33 * 3 *Poland 36 0.49 1 0).(1)S 36 0.38Porttugal 17 ( 0.24 14 1.6t9 15 1.62 t 46 0.49Romania 32 0.45 1 0.17 .- * 34 0.36Ruissia 380 5.26 - * t * t 380 4.02

240 THE W)R.D BANK ANNlAI. RlRC)Rmr 1996

E.Jiipiment Cvjil works Co1nSUItmuts All olthir good Total dishu rsemients.\mout ,,.ont 5

i' Anto '` Amount , Aiioiiit "O

Senegal 6 0.08 4 049 1 ()'.0 3 1.50 13 (0.14Singapore 75 1 04 1 0 1() 1 1) 6 t 77 (.81Slovenia 6 11.119 1 1 6 - t 8 0.08Souti Afria II1 I (i2 3 1)32 8 0.8 5 0.(4 132 1.41)Spain I tI) 2.21 22 2 7() 4 (1.45 3 (.56 1 89 2.()11Suidani - 1 .17 1 (.06 - 2 2

Swaziland 18 1).25 t t 1 9C 0.21S edei 7)1 11 1 2 0).6 9 1(13 011.38 83 11.Sss itzerland I71 2.37 4 0.51 23 2 4 37 6 95 232 5 2.4Thailand I8 (1.25 t I 014 t 71) 02 21Trinidad ard Tobago t 2 (1.24 t (Ill5 - 3Tunisia 3 - 2 1116 - 4Turkey 153 2 12 2 1131 t 155 1.14Turkmenistan 9] 1.2 - t _ - 21 01.12Ukraine 125 1. 3 -- t I 5 1 .3United Arah Emirates 28 1.3 S 1 t t 28 0.30tUniited Kingdom

3 5118 7.14 33 4 )6 12 (7.7X 721 3.15 724 7 66United States 1,249 1_3I 8 ().)6 1 95 21.411 28 52( 1 480 1565Uzbekistan 9 (1.12 - t t t * ) (1.11Venezuela 45 (1.63 - - 5 0 53 t 50 II 53Vietnam 1(1 (.14 1 t I * 1 1I 2Zaire 5 ()1)7 I t 5 11 ()5Zambia 23 (1.32 t ( 1)0 t t 7 4 1) 25Zimbabwe 8 (1.11 I 017 1 1()6 t It) ()11Other 12(6 75 18 25 71 836 223 41.92 445 4.71

Totall 7,214 11)() 81.1) 1(111 OIl 1)(1 532 111) ('457 1(.(1

- Zero, t less tltht $0.5 million, less thot n 0.05 percent.

N( ,TS: A mtlouln ts exc1lude diisbllrsenleltts lo cIel't redlcltioIl . niet hlunlctle (llslburseltlel l t, /l d/l lsettllt7ts I lit iler sittplihal pr-cet'dtires

]or sturnCtUntl atid sectoral a,l iustincetnt toiiwS Deta its mtav lint itdd! to total's l'eca./e of rolltlldling.

,i Untited Kingdotm uznclndes Hon,g Konig.

APIvNDI\ NINF. 241

IBRD ANTD IDA FOREIGN DISBRLIRSEMENTS, APPENDIX 10 B1Y DESCRIPTION OF GooDs, FOR

INVESTNMIENT LENDING, FiSCAL 1 994-96

1994 1995 1996

Iteli OECD Noii-OECD) Total OECD Noni-OECD Total OECD Non-OECD Total

Millions ot US dolltrs

Civil works 3 17 201 52( 708 229 c 937 565 234 799Consultzlint 615 124 73 !9 626 140 766 720 159 879Goods 2..5I9 593 3,112 2,758 424 3,183 2,800 422 3,222All other l) h5 15 82 73 155 28 260 518

Total 3,512 991 4,502 -4,173 867 5,040 4,343 1,0(7 5 5,418

Percen t'

Civil works 6(7 40 12 76 24 19 71 29 15C onisuiltziltts S3 17 16 8i? 18 I 5 82 1 8 1 6Goods 8 1 9 69 87 13 63 87 13 59All other 48 52 3 53 47 3 5( 0 10

Total 8 2_ 10(l) 83 17 10o0 S0 20 1(0

INo.i : A mouits exclude disbursements for debt reduction and niet adi'atice disbursements. A mounits also exclude disbursements for

structural adjustment loans and hl'rids (loans tlhat support policv and institutional reforms in a specfic sector 1v financing both a pol-iE coMnpt01enHt disbursed a,gainst imports an t an iniilestment component). OECD amounts are based on cutrrent OECD membership,excluhding Cech Republic and Hungary which lbecame OECD memb'ers in December 19'5 and May 1996, respectivelva. =lll oIf the pe rCe1nta4ges are b:ased oin the dollar tmounits shown under the total disbursements sectiont. These percentages showt? both thebreakdown between OECD a4nd non0-OECD countries J0r indiuidual goods categories and the shtare of each goods category comiparedwith totial disbursements.

242 THE WORL[) BANK ANNIAL. REPORT 199(6

IBRD AND IDA CUMULATIVE LENDING APPENDIX I I

OPERATIONS, BY MAJOR PURPOSE AND REGION,

JUlNE 30, 1 996(millions of US elollars)

IBRD loais Ito bor towser', s region'

Enirope Latin Midl dleEas Asia attd Ameri,a East and

and Sotith Central :cld ilie NorthPurposeJ Africa Pad6, Asia Asia C(arihhbbeai Afria Totall

Agriculture 3,574 3 11,50S9 2,7 51. .7,146 2 16,255.6, 5,)53 3 46(378.5Education 5585 5,1 173 55.1) 9783 5,1X2.5 1,) 1.5 13,7S3.1Electric poVel- JILI other energy 1,87.1 1 ,I 612 10.462 6 5,48 I 121,172.5 2, 133.8 41,303.2Environment 21. ' 771 5 267)' 245.1 1.415.6 1 ' 7) 2,'91S.IFinanice I " to 5, i'25.() 3,658 2 4,')88 8 11,454 I 3,31 t 5 2",(6i4.5Industry (5!,1 3,5. 7 5 ' 3,1a) 7 4,7 17 ( 1,7()() 17,438.1,Minijng/Other e\tractive 335 484.1 7L3 5 541t.Y 1,1)73 3 264 2 3,6 8 9.4MuMltisector 2.14S 8 4,217 3 617))) S,"03.2 7,)4 72,3123 25,886 3Oil and gras 38 1. .767 9 3532 () 661. 1 1,424 5 711 2 111,48 'lPopulation1, healthl, alid nu-tritioln 28L9 4 '25 7 31.3 95().1( 2, 33 S 525 3 5,655.5Puhlic-sector maiagement 367 2(1).1) 15)).() 1,362 1 3,551.5 218 ' 5,510' 1Sociall sector- I8t ) J 2(3 83)).)) 781) 1, 181 .5Telecommunicaltltionis/,niformatics R51().2 1,S5 7 747 5 545 3 53().3 'i1.5 4,884.5Transportation 2,998.( 1 3,743.5 2.'89 1li,19)) 12,886].3 2,945 4 1,(t2.5Urhbandesecpment 9().3 3844.)) 2" I 1,211. 4,83St l,67661 12784.6Water supply an1d sallitatiofn 1.147 1 1,'19.4 (1)5 4 1,1 63 3 4, 944. 72,27.5 12,518.2

Total I7 .()21 ( )1 .') 3I), )1'4.(6 46, 733.8 1, 715.4 26,046 5 28(1,738.8

IL)A redits to bhoriro% ,rs, b region

Europv ILatin lliiddle TotalEast ,\ia aid Amnee)i.a East alt,l IBRD

and.l SouIth Central and the North anidPurpose5 Afrirn a a ihc Asia Asia Caribbehant Africa Totial IDA

Aericoiltulre ~,7, 8.3 6,41 1 .i) 14,0)1J 2 5.4 475 4 103 7 2- 9. 84 5 76,253(1Education 3,3 7 . 1,i2 1.) 3, 418 8 14. 3')S 4 415 8 9.15I6.2 22,939.3Elect-ic powei and other energy 1,)745 6 93S 3,745.5 9I 2.) 4 252.) 7,1)32 1 53,335.2Environmient 14 4 1S (I I(1.1 -u 55.3 - 324 8 3,242.79Finance 2,498.2 351 8 834.)) IS3.4 1l1 7 4.8 4, 131 3 337888IndustlV S32 2 1 2 1,546.5 - 11.4 97 ' 2,(653.2 2(1,0)01.2Miniing/Other extralCti\Le 13 )) SI () 82 ( BO).5 332.5 4, '?lMultnsector (3,247 .2 464 7 4.124.7 461 I 6 34.5 118(1 ) 2,4 7.2 3. 7,33.5

Oil adILI gas 571.)) 61)6 4'722 271 '142 191.)) 1,345.2 11,S2 17Poptilation, hesalth, antI riL tritioi 1,71 5. 4 97 8.3 3,184.2 66. 8 138 5 321) 8 6,40)4 IJ 12,59 ? 5Public-sector mandagement 1.685 1 18)) 2838 128.7 24'.65 13 2,538.6 8,1)57.Social Sector 357 5 39 7 - 53. 1) 5 5 145 U 752 6 1,934 1Telecomni i n i cat on s/infoi rmat cs 441 2 I1)1 8 882.2 18 11 S83 ( 1,52(6.2 6,41(.1TraInsportation 5,79 1, 5 o4 2, 44 .6 ")(.( 1 47,3 3(11 ' IO,866 2 52,5 22.7Urban development 1,512 532. 4 1, 6i 2. 633 1-4.2 i661) 4,1)(11 4 16, (86).Water sUpply ald sallitatioll 1,2". 1 4142 1 872. 6 2 6 i 111.1 2113. 2 3,c961 .8 16,481)0

Total 3 2)48._R 13,4'.9 3 ,1-747 1 538 3,4)y 3, 4 3,9 4 )941. 3.

- Zetsr.

a. No ricRDloit rc takei ofa coed?, ,wis sobseqiieut to ririsi,i t otnontoiit 1PRD Psios to tlhe IF? in' ,ire xc/iifc, .6. Operatinis lhat e been classi eil yb tile m00/r purpose tlie5. finiiicc.1, tile proidicts mllulr Oc ti it, i more thin .nectoror suiI'sectofic. Does niot iniclude' tie revuiadced/resciislole,l oi'erdiie chiarges oJ $167 8 miilbon for BJsiwii, aln Hei-egoviia.Details mav not nohl to totals becaiise of nruiiiiig

AP P ENDI\. ELEVEN 243

IBRD AN D IDA CUMULATIVE LENDING APPENDIX 1 2

OPERATIONS, By B OR ROWER OR GUARA NTOR,

JUINE 30, 1 996(aM17ollntS in MiWonS Of US doilllrS)

IBRD loants IDA credits Total

Borrower or gua rantor Nt umiber .Amotiiir Number Amounit N umliber Amouniit

Afghanistan - 20 230 .1 20 230.1

Africa region I 15.0 1 45.5 2 60.5

Albania - - 22 22 5 2.5

Algeria 6h) 5,31'?.5 - - 6( 5,3 19.5

Angola C) 272.8 C) 2 72.8

Argenitinia 7-4 1 i,6(762 - 74 1,( 6 6.2

Armienia I 12.) S 236. 5 ? 248.5Australia 7 417.7 7- 417 7

Auistria 9 106.4 - - C) 106.4

Azerbaijan - - 4 1]64.8 4 164.S

Bahamiias, ihe 5 42.8 - - S 42.8

Bangladesh 1 46.1 147 7,152.5 148 7,1 98.6

Barbados II 1 (3. 2 I- 1] 1(13.2Belarus 3 1'12 7 - 3 17().2

BelgiLim 4 76.1 - _ 4 6.)

Belize 7 64.8 - 7 64.8

Benin - 43 610.1 43 61I(.1

Bhutan 6 28.2 6 2S.2Bolivia 14 2'9)93 51 1,171.5 (i 1,47().8

Bosnia-Herzegovina 2 1(.0 1(1)

Botswana 2)) 280i 7 6 15.8 26 296.5Brazil 214 23,11i67 - 214 23, ]](.7

Bulgaria 1 S) 83.)) - 1() 8391.

Burkinia Faso -I.9 45 793.3 45 795 2

Brlu-ndi 1 4.8 46 69)4.0 47 698.8

Cambodia - - 5 179 7 5 17C)

Cameroon 44 1,2104.4 22 768.( 66 2.1)63.()Cape Verde - - 9 6. 8 9 67.S

Caribbean region 5 8).8 47' 7 7 137.5

Central African RenLblic - 24 403. 5 24 403.5

Chadl _ 3 551.0 3551.0Chile 27 3,425.4 -1911 57 3444.4

China 1(8 16,61 8.9 65 8,9)15.7 173 25,524.6Colombia 143 s,588.9 - 19 5 143 8,60X.4Comoros - 12 73.2 12 73 2

Congo 16 216.7 I)) 83 6 2( 40)0.3

Costa Rica 38 888.9? 5.5 38 894.4Cote d'voire 62 2,887.9 1 I2811.2 77 4,177.1

Croatia 6 27.9. - 6 2795

CVprTLs 3( 4 18. - 4 18.8

Czech RepubliC 2 326.)- - 2 326.0

Czechoslosakia 1 450.)) - - 1 450.0

Denmark 3 S5.)) - - 3 85. 0Djibouiti - - 8 51.6 8 51.6

Domimiica 1 3.1 3 14.1 4 17.1

Dominican Repuiblic 23 631.9 3 22.(0 2( 653.9East African ComrLnMits If) 244.8 - 1() 244.8

Easterin Africa regioni - - I 4S.) 1 45.0)

Eculador 59 2, 2399) 5 3(6.9 64 2,276.8

Egypt 58 4,)1)2.5 33 1 582.0 9)1 5,584.5

244 THE WORlD BANK ANNIlAl. RIp( PI 19 )96

IBRD loans IDA credits Total

Borrower or guaranitor Number Amiiouint Ntimber Amouint Numblher Amounit

El Salvador 29 650.6 2 25.6 3] 676.2Equtatorial Gulinea - - 9 45.0 9 45.0Eritrea - - 1 5 1 175Estonia 7 125.7 - - 7 125 7

Ethiopia 12 108.6 56 2,158 5 6S 2, 267.1

Fiji 13 1529 - -- 13 152.9

Finland IS 316.8 -- - 18 316 SFrance 1 250.0 - - 1 250.0Gabon 12 212.0) - -1 2 212.0Gambia, 'Tie - - 23 166.2 23 160.2

Georgia - , 193.9 7 193.9Ghana 9 20,7 84 3,069.9 93 3 276.9Greece 17 49)1 .8 - - I7 49(0.8

Grenada I 3.8 I .S 2 12.7Guatemiala 24 734.5 -2 -- 24 734.5

Guinea 3 75.2 46 9°73.8 49 1,049.0Guinea-Bissau - - 19 208.9 19 208.9

Guyana 12 80..1 15 29( I 27 370.1Haiti 1 2 6 34 593.() 35 595.6Honlduras 33 717 3 18 626.(6 51 1,343.9

Hurigary 33 3,67 2. -- -- 33 3, 6 2.9Iceland 1 47.1 - - Ii] 47 1India 16(1 23, 733.6 2'13 23,5299 373 47 ,63 7

Indonesia 211 22.820 4 46 931.8 257 23,7 '2 2Iran, Islamic RepLiblic of 3') 29,(15.1 - - C) 2,05.1I

Iraq 6 156.2 - 6 156.2Ireland 8 1525 - - 8 152.5

Israel 11 284.5 - - 11 2S4.5Italy 8 399.6 - - 8 399'.6

Jamaica 59 1,249.1 - 5 1,249.1

Japan 31 862.9 -) * I S62.9qJordan 42 1,465 1i 1 5 8 7 1,550.3Kazakstan 9 8 16 8 - - 9 81 6.8Kenya 46 1,2()0.(0 68 2,581.4 114 3,781.4Korea, Republic of 11( S,599(1 6 11 0().8 I I 8 6 ,7(1)9.8

Kyrgyz Republic I11 313.5 I 313.5Lao People's Democratic Republic -- 23 463.5 23 463.5;Latvia i 1 5(0.3 - - 6 150.3

Leban on 11 529 4 - - I) 529.4Lesotho I 110).0 24 264.2 25 374.2

Liberia 21 156.0 14 114.5 35 27(1.5Lithualia 7 16(0.5 - - 7 160.5

Luxembourg I 12.1) - I 12.11Macedonia, Former YugLslav Republic Of 3 76 U 4 1 63.8 7 239.8Madagascar 5 32.9 63 1,323.9 68 1,356.8

Malamwi 9 124 1 6(1 1,594.7 69) 1,71S.SMalaysia 8 3,446 6 - - 83 3.446.6Maldives _ -- 6 4-7.3 6 47.3Mali - 1.9 54 1(078S 54 1,08(0.6Malta 1 7.5 _ - I 7.5

APPENDIX TWELvE 245

IBRD AND IDA CUMULATIVE LENDING APPENDIX 1 2OPERATIONS, BY BORROWER OR GU ARAN T OR,

J U N E 3 0, 1 9 9 6 (otioned)

(0inuomts in m1 illio/ s of US do/lla rs}

IBRD loans IDA credits TotalBorrosscr or guarantor Niiumber Amilounit Number Amilouinit Number Amotitit

Mauritania 3 146.0 36 427.8 39 373.8MaulUritius 29 4(i)0.7 4 21) 2 33 4201.9Mexico 1 55 26,332.5 - - 153 26 .332.5Moldova 7 231.0 - 7 231 .0Mongolia 6 1 30. 6 130.0

Morocco Ill 7687.3 3 50.8 114 7,738.1MozamRbIcLI - - 2S 1,50(1.0 2S 15()0.(Myanmar 3 3.4 30 S()4.0 33 837.4Nepal - - 64 1,3 34.1 64 1,3'34.1Netherlands X 244 (0 - S 244.0

New Zealand 6 I 2(i S - - 6 1 6.8Nicalagua1 2. 233 16 13 464.5 40 698.1Niger - 13'3)I 6.( 3° n 616.0Nigeria 84 , 2 482 14 C?()2.(8 I 7,11.INorsx (ias 145.1) 6 145.()

Omanl I I 157. I 1 5I,1Paikistan S2 Ii ()14.2 lIii 4,735.5 183 10,749.7Panamiaa 36 )66.3 - - 36 '66.3PaIpula NewN Guinea 5'?2,1( 9' 113.2 3 7((5.2

Paraggtiay 34 746. I 6 45.5 4 ) 791 1.6

P'er-tu 73 39,,3,4.1 - - 3 3,974.1Philippines 137 95.9 5 294. 2 142 '00.1Polali2d3 4,1)5 *.5 - 23 4 )5 3.5Portui,l 32 1 338. S 32 1 ,338.8Romania 45 4, 1()(.3 - 45 4,100).3

Russia 2 6,447.3 - - 2S 644/.3Rs ancda - 45 6(94.4 49 694.4S2olbmS and Principe - 8 58.9 8 5X.9Selnegal 1'3 I(64 93 61 1,313.( so 1,4. .')Sey chelles 2 11) - - 2 1. 7

Sierra Leone 4 18 21 40)3. 6 25 422.3Singapolre 14 18I.3 - - 14 IS1.3Slovaki Republic 2 135.0) - 135.(3Slovenia 2 1(13.9 2 103.9Solonlon Islands - - 6 '3 6 33.9

SomalJlia 3" 41) 1 9 492.1South Africa II 241.S 11 241 .8Spairn 12 478 .7 - - 12 47SSri Lanka 12 21(1.7 6i5 ',(57.1 77 2,267.8St. Kitts and Nevis 1 1.5 _ 1.5 1 3.1)

St. lucia 3 8.5 - I 1 2 3 19.St. Vinceint and the Grenadines 1 1.4 1 6. 4 .8SuldaI1 8 1) I66.0 48 1, 352.(9 56 1,51 .9Swaziland 12 1(:4.8 .8 14 112.6Syrian A-ab RepLblic 1 i3.2 3 4 .3 2( t; 0.1 5

Taijikistan - - 1 5.0 1 5(Tanzania 1 8 3 18.2S S4 2,I 9.9 102l 3,138.1Thailand l()8 55 1(17 6 I I 114 5l i S35.STogo 1 2(3.1) 3. )i22.3 38 6(42.3Tonga 2. 5.I)

246 Ti fr W ORI L) ByNK AN:M Al RFi\o i 193'36

IBRD loans IDA tiredits Ttital

Borrower or guarantor Ntimiiber Aoitioit Nlilimber Aruloti at Number Amiounit

Trinidad and'lolago 2)) 2ciS . S - 2)) 29S 8Tunisia 9c9 3. 766i2 5 74.0 104 3,S4(1.8

TuLrkey 1I1 12.6i9 CI) 178.5 126I 12,798.4T'oc-knicuistan I 25 I- - 1 25.1

IU rnda I 8 4 2 2 240- 6'(1 2493

LIkrai ne 1 015. 7 1,()]5 SOirolgoacy 40) 1 372.27 - - 40 1 372.Ulzbekistan 3 24.7 I _ 3 247.0Valaltnl - - 4 15 4 4 15.4Venezuela 33 3,]. 117 - 33 3, 17.7

Vietnam - - 12 1,31)1 12 1,3.()Western AfricL regoion 1 6.1 525 4 586Westernl Samoa - - S 46 6 8 4t 6Yemen - 1(03 1,254 7 11)3 1,254.7Yugosllax a t(1 6,1 1 4 - - - 00 ) ,114.7

ZaLi-e 7 330.1) 5 1,151.5 66(i 1,481 5Zambia u. 1S 374 1,01)2 3 i5 2,2S1.4Zimbabw%e 24 9 832 7 513 4 31 140) 6Othet' 14 29.4 4 153 IS 3447

total 3,0C23 28S)7()3. 1i I' 6 ,8i I Lih0,')4 1.8 6(4,0) 37.7,(68()18 I

- Zero

NOTF- loint IBRD.IJDA peraitins rte counbete1 oi/v nice, as IBRD openitiois I10'/i tnio t z/in Oilt' iOi (iiI is man e ;t - a sit' i g1e proiect,tile operti onu is ccluilteit nilty otice De tails 11t1, iiot itd to tohl/s lectialse of ro nsitilnga. Represenits IBRD loans cod IDA crediits ilt/e (it aI tinI7'1 Wl jrte / ltithoiritles mIi 1n1i11xii ii/prestihitP/ CJiiiiu ii tile 11or/rl Baiik (priorto Ma,y 15 /980)l- Doe; lnit iiicliide tI/l reinerddeuescietIIll i tcn/iii' chiar,gc 5 S I t i f /illitn ftr Bosnia atiti Hir:i'goiina.

Asvi,\ I)\ T\ F) i7 2.4

PROJECTS APPROVED FOR IBRD AND IDA APPENDIX 13ASSISTANCE IN FISCAL YEAR 1996,BY REGION AND COUNTRY(aiounts in mi/lions of US diollars)

IBRD loans IDA tretlits Total

Region and Counitry Ntimber Amouiint Nuimber Amilounit NumlAber Amioiunt

AfricaAngola - - 1 24.0 1 24.0Cameroon 3 253.6 3 253.6CapeVerde - - 1 11.4 1 11.4Chad - - 2 3'95 2 39.5Coligo - 1 9.(0 1 9.()Cdte d Ivoire - - 4 463.6 4 463.6Eritrea - - I 17.5 1 17.5Ethiopia - - 15. 7Ghana - - 5 276.2 2 276.2Guinea - - 3 53.8 3 53.8Kenya - - 4 313.8 4 313.8Lesotho - - 1 40.0 1 40.0Madagascar - - 2 86.0 2 86.0)Malawi - - 3 3 184.9Mali - - 3 100.7 3 I()(.7Mauritania - - 34.8 2 34.8Mozambiquie I 98I.7 1 98.7Niger - - 1 2(6.7 1 26.7Seniegal 2 41.9 2 41.9Sierra Leone - - 2 553 2 33.3Tanzaniia - - 2 115.9 2 115.9Togo 1 5(I1.11) 1 50.(:)Uganda - 3 42.0 3 42.0Zambia - - 2 175.1 1 7.1

Zimbabwe - - 1 70.( 1 7 0.0

Total - 53 2,7.440.1 53 2,7,4(0.1

East Asia and PacificCambodia - - 2 8(1.( 2 8(.()China 1 3 2,490.0 3 480.0 1 6 2,C( (:1.0(Indoniesia 12 9917 - 12 991.7Lao People's Democratic Republic 2 60.7 2 6(:).7Mongolia - - 2 45.0 2 45.0PapLIa New Guinea 1 50.( - - I 50.0PIhilippinies 3 457.0 - 3 457 (.0Thailanid 3 263.5 - 3 263.5Vietnam - - 5 51)2.2 5 502.2

Total 32 4,252.2 14 1,167 9 46 9,4270.1

Soutb AsiaBangladesh - - 4 238.8 4 238.8India 4 776.6 5 1,3(1.1 9 2,(077 7Pakistan 2 385.0 3 74.9 5 459.9Sri Lanika - - 3 156.1 3 156.1

Total 6 1.161.6 1 5 1,770.9 21 2,932.5

Europe and Central AsiaAlbania 5 72. 5 5 72.5Armenia - 4 91.8 4 9) 1.8Azerbaijan - - 2 S3.0( 2 83 .Bosnia-Herzegovina 2 1]10.1 2 1 1(1.UBulgaria 2 121.0 - - 2 121.0Croatia 3 31.5 - 3 31.5Estonia 1 15.3 - 1 15.3

248 THE W!ORLD BANK ANNUMA. RLPOR I 1996

IBRD loans IDA (redits Total

Region and Coniitrv Ntimber Aminoiunt N umb her Amount Nuimiher Amiouiit

Georgia - 4 ((1.8 4 I0 SKazakstan 2 261 I - 210.0Kvrgvz Republic -- -9.5 518.5Latvia I 2 - - I

Lithuania 42.1 -- 3 42 1Macedonia,Fnrmner YLgmlov Republic of 1 17) 2 24S 3 SItS

Moldo\a 3 55 H _ _ 35SPo0land 2 IS1 5 - 2 IS1 5Rom.ania 3 5111( )j 3 501)1Russia I1 0S.) - -I1 I ,816(

Slovenia I 23 1 - - I 23 '1Tailkistan -- - I 5.11 1 5.0Turkey 2 312'' _ 2 312.0i Ukraine 3 3428 - - 3 342.8

Total 36 3,75().4 25 47o 4 0I 4,228 S

Latin America and thlet CarilbeaniArgentina II I,S()1 4 - - 11 1.50) 4BOlivia 7- 12S. 7 12S 7Bra7il 4 875.11 - -- 4 875 0Chile 1 15.I - I 15 1Colombhia 4 47') 3 4 47'13

Duminica I 3 I - 3.1 1 It]Dominican Republic I 3 II - - 1 37 U

EcudLot I 1 1 - 1 15.0El Salvador 4 105. 0 4 5

Grenada 1 3.S _ 3 s I 7.(Guyana - 1 2)2 1 21.2

Haiti I 5(1.) 1 511.11Honcluas _ 3 121.0 3]21 (I

Iamaia 1 2l 11 - -- I -) 1Mt(Xico 3 526 5 _ - 3 52 6.5Nicaragua t- -2 11.8 2 (t1.8

Panama 2 i5.1 - - 2 65 .)Parapuav I 24 5 I 24.5Peril I 11 1 ')1.l0

St. Ltmia 1 26 - 26 1 5.3Trinidad and Tobago 1 5111 - - I 51.11UrL1guay I 125.1 - I 125 2U

Vellczuel, 1 3'11U - -I 30.1

Total 4U 4,147 2 14 390.3 54 4,437 5

Mididle East and North AfricaAlge3ia 3 428.() - - 3 428.0Egyp.t 1 2(0.U 2 152 2 3 1-2.2JoidanL.l. 1211 U 7 12(1.0

lebah 1n . (T) - - I 7()1I

Molrc c C 54O111 - -- 6 5411 1)

Tunisia 2 98.7 - -7 2 08.7Yemenell - 4 1 663, 4 66.3

Total I S 1,2 67 6 3 1.5 21. 5I S 2

Grand Total 12" 14,4S I 127 6,(,S64 1 6 21,35 2.21

NOTE: Sippieent is (rt I clcuded1 inl tie oI m i)utnre I"t (o I1) tC/ed lis sepfrite len i idiing operotiori S. 1t IBRD/JD. upon ations inr

ounted onlilv N ice, (Ls IBRD opernitnis.

- Zetl.

.,. Does not inc/lide tilt' wievi no edu/r,es/ielu//ioi/io of 01 ]6/7.8 inmillion ionr B oiinl miiid He-egzvi u;io

APININIX Tono FF\ 249

PROJECTS APPROVED F1OR IBRD AND IDA APPENDIX 14

ASSISTANCE IN FISCAL YEAR 1996,BY SECTORa

(flolouts ill mtillios sof US dia/l ccr)

IBIRD IDA Total

AgriculttireAlbaniia 8 8.0

Albania 6(i 6(0Argenitina 16.0 - 16.0Bangladesh 50.0 5(.0Bangladesh - 121.9 121.9Bangladesh - 53.0 53.0Bolis ia 15.0 15.1)Brazil 75. 0 - I75.Chile 15.() 150Clhina 15(1.1) - 150.0China 60.0 91.(A) 150(.China S(.( 20.0 100.0China 1 (0(. 1(]0.(C6te d'lvoire 15(.() 15().0Cote d'lvoire - 73 6 73.6 h

Croatia 17.0 - 17 0Estonia 15.3 15.3

Guinlea - 35 35.0I ndiza 142.0 142.0India 270 9 290.9)Indonesia 27.) -27Indonesia 26.8 26.SIndonesia 1,).1 19.1Kazakstan 80.() - 8()(Keniya 22.0 227 0Kyrgyz Republic 11.6 1 1(6Lao People's Democratic RepLublic 2(.7 2(0.7Lithuania 31I.11 3()1()Macedoniia, Former Yugoslav Rep ublic of -) 7.9

Mexico 1 8 6.5 - 1 S6. 5Moldova I ) I I (1).()Morocco I((). () - 1 00 0

Niger 26.7 26.7Pakistan 26.7 26.7PIhilippines 15(. - 15(.0Senegal 2.8 2 St. Lucia 2.6 2.7 5.3Uganda - I7, 17 9Vietnam 220 120

Total 1,11I60.3 1]416.4 2,576.7

EducationArgentina 1155 - 115 5Argentina lb5.() - 16Sf!Bangladesh - 10.5 1 .5Bosnia andc Herzegovina 5.0 5.0C/sliua (0(0.() ) (1)()Dominica 3.1 3.1 6.1Dominican Republic 37 0 37.0El Salvador 34.( - 34(0Ghania - 5U() 50.(Greniada 3.8 3.8 7 7GuiLnea - 6. 6 6.6Guyana 17.3 17.3India 425 2 42 2Iindoinesia 60.4 - 60.4

250 THE WORLD BA\NK ANNU 'AL RvruvR-1I $ 196

IBRD IDA Totai

Indonesia 65.0 65 U

Indonesia 99 1) 9'.?)

Malawi 5 2 2.5

Mali 13 4 13.4

Morocco 54.0 - 54(.)0

Panama 35.() 35.)

Paraguay 24 5 - 24 5

Senegal - 265 26.5

Senegal - 126 12.6

Sri Lanka - 64.1 t4.1

Thailand 81.9 - 81.9

Thailanid 31.i 316

Trinidacd and Tobago 5111 51. U

Tunllisia 60.1) 6 60.11

Yemen 24.3 24.3

Total 92(18 784 9 1,7U5.7

Electric power and other energyAlbania 29.5 29 5

Bolivia 5.1 5.1

Cambodia - 4(1) 4(0.0

China 4().0 - 1()0)()

China 441.0 - 440.1)

Colombia 249 .3 - 249 3

El Salvador 65 1 - 65.1)

India 350)1 - 350.)

Indonesia 3 31) -3 3 ()

Jamaica 21 () 2) ()

Kxyrgyz Republic - 21) ) 2()1)

Li thlan ia 5 9 5_

Madagascar -46( 46.7.

Mali 273 2 3

Pakistan 35().0 350 1)

Philippines 25(0.)) 25 ). ()

Poland 160.)) 160j).)

Roomania 11().().().)

UrugLIaV 1250 125)

Vietinamn - I8 )).)) 1 1

Total 24890 2 347.) 3,24, 1

Environment

Algeria 78 0 7S ()

Brazil 51) U_ 51)

China 125.0 25.)) 15()))

Ecuador I5.)) 1 5.0

El Salvador 5()i)50))

Lithuania 6 2 62

Slovenia 23 9 23 9

Uganida - 11I8S11 8

Total 348.1 36 8 384. c

Fiiance

Bolivia - 0 9 ')

Croatia 9'5

A)'l') NDI\ F(u!R I LEN 2 51

PROJECTS APFPROVED FOR IBRD AND IDA APPENDIX 1 4ASSISTANCE IN FISCAI. YEAR 1 996,B Y S E C T ( R (countimel)(amuunts iUt millionIS Lif (S Ilollars)

IBRD IDA Total

Ghana 23.9 23.9)

Gttyana 2.9 2.9! 1

I ndia 20))).) 5.(1 205.0

lordai 80()) - 81)0

lordain 40.0 - 4())0Kazakstan I 8 (0 - 1 80.0Kvyryz Repuiblic 45.0 45.0KNrgvz RCp-blic 3.4 3.4Macedonia, Former Yugoslav Republic of 12() - 12 1)Mor occo 25il() 250.0

Russi;a 3(0.1:.) - 3(:H)0i:)R LI> i a 89 (i - 8!0.0Tanzaiia 10.9 1 0.9'Iisni a 3S 7 IS.j Jgald;a 12.3 12.3

Vietnam 49.c) 49.0

Zambia 12.1 12.1 h

Total 1 100 2 173.5 1,372.7

IndtUstrvBangladesh 3.4 3.4 hBolivia S. ( 8.0 h(Tape Verde 11.4 11.4(hinia I 71).() - 1 70.0Indonesia 47.0 - 47. 1

Ietal 217.) 22.8 23) .8

Mining and other extractiveArgentina 30.() - 3U0.0

Bolivia 1] .I 11.()India 63.1 63.0)Mongolia 35.0 35.0Russia 51)1.1) - 5()(

Russia _( - 25.)

Ukraine I5.8 15.8

Total 57(: 8 10).) 679.8

MNtltisector

Algeria 311.1W) - 31)11.0Argontin a 38.5 38.5Ariimenia 60.0 60.1)Azer baijan - 65.0 65.(Camboill(diaz- 401.1) 4(0.0Ch21ad1 30() (0 33.0)Chad1 9.5 9!.5El Sal a Ldor I 6.l:) 1 6.1Georgia 6(.1.) ( 60.0)Ghaia - 4.8 4.8 bHonTdukras - 26. 4 26.4 hKenia LiC) i.:) *9().()Kenya - 36.8 3(6.8 hlao2 People s Dcmoca-tic Republic 411.() 40(.,Malawi 1(12.(: 1()2.0

252 THR Wt )Rl l B \NK ANI\I Al. Rvi'k 1i I 196

II3RD IDA Total

MNalawi 4.4 4.4Mali 6_) ( 1)MaLIritaJi -a 20. 20.0PRI,sanm a 30) 30.))Pdptla New GuIeal 5( () - 50.0Romania 20 S() 280.()RLIssia 24.() - 24.Sierra Leone - 0.33Togo 5)!).)) 5()1

Yem-n) 80.0 S() 0

TotIa 78.5

Oil, gas, and coalBoliV ia 1 0.6 1 0.06Egypt 2)).)!) 15.() 35.0)

IoldoI 10) I (0.(

Total 3(. 25)3 55 6

Population, health, and nu1tritionArgentina 111.4 11)1.4Ar-gentinia 35().) - 35().()Argentina 25.)1 - 25.0Bo0SI a and H erazgovi na 5.() 5.)Brazil 31)0 ( .) 3)10 ()Bulgaria 26.1 - 26.()Clhina - ()(1).() I (1.1)(ite d Ivoire 40 () 40 )Egypt - 1 7 1.2 Georgia - 14.( 14.0India - 350).)0 350)).Indoneesila 24.8 - 24 .SIndonesia 21).)) 2.).0)l<rgvz Republic - 185 1S 5Macedonia, Fotmer Yiigolas' RepuliR of - I S 159Mexic;o 3 II ) 3 .I ).).Morocto (8 () 68.(3MIozarmbiCqtle 18 7 9SPakistan 26. 276.RUSSIa Th7() -) 27(Sierra Leone 20() 21).()\3ietnani 1-)1.2 1()1 2

Vietilana 5( 0 5)).()

Total 1 4915 2 S58.2 2 353. 4

Puiblic-sector manlagement

Albania 4.0 4.1

Argentina 1 6.() - 1).)

Argentina 5()0.() 5(1(1.1)

Armenia 3 3.S8

A7erba. In 1 8.1 18 i

Boli% ia -5().U 50.()Cameroon I_ 5U 1 5(J.()

Cameroon 1 2.6 12 6

AoF\NDIx FkwR I E.EN 23

PROJECTS APPROVED FOR IBRD AND IDA APPENDIX 14ASSISTANCE IN FISCAI YEAR 1996,B Y S E C T 0 R (continued)

(amolints in millions of US dollars)

IBRD IDA Total

Camneroon 30.3 30.3 bCongo 9.0 9.0C6te d'lvoire 180.0 180.0Croatia 5.- 5.0Georgia 4.8 4.8Ghana 26.5 26.5Guinea 12.2 12.2Honduras 55.( 55.0Honduras 9.6 9.6Lebanon 20.0 20.0Mauritania - 0.8 01. bMexico 30.(0 30.0Moldova 35.( - 35.0)Nicaragua - 5.8 5 .8 bRussia 58.) - 58.)Sri lanka 77.1) 77.()Sri Lanka 15.( 15.0Tajikistan - 5.0 5.0Turkev 62.1 - 62.0Ukraine 31().0 310.0Zambia - 140.0 140.0Zambia 23.0 23.0Zimbabwe 70.0 71).0

Total 1,036.0 902.4 1,938.4

Social sectorAlgeria 5(.0 - 50.0Angola - 24.0 24.0Argentina 152.0 152 0Armenia - 12.0 12.0(China 11(.0 2().() 31).0Egypt 12(0.0) 120.0Eritrea - 17.5 1 75Ethiopia - 120.( 120.0Haiti - 50.(:) 50.()Honduras - 30.0 30.0Madagascar - 40.0 40.0Malawi - 56.(0 56.0Mongolia 13(.0 10.0Morocco 28.) - 28.0NicaragLIa - 30.( 30.0Yemen - 25.() 25.0

Total 240.0 554.5 794.5

TelecomnIunications/InformiiaticsPakistan 35.0 - 35.0

Total 35.0 0.0 35.0

TransportationAlbania 25.0 25.0Armenia - 16.0 16.0Brazil 350.0 - 350.0Bulgaria 95.() - 95.0Cameroon 60.7 60.7

254 TFIE WORLD BANK ANNUAL. REPORT 1996

IBRD IDA Total

Chima 260(. - 260.0

China 21 L(:) - 210.0

Clhinia 210.() - 210(.()Colombia 6 5.0) - 65.U

C6te d Ivoire - 2( ( 2(0.11

Georgia I 2.0 12 0Ghana 1().(!) 01 (0(1

Indonesia X6. 86.!

Kenva 1150 115.1)

Kenya11

Lesotho 4().() 411.0

NicaragLla - 2S 25.(1

Perti 911.0 90.0Romania 12(1.() 12(1.()

RuLssla 35(0.0- 350.1)

Sierra leone 35 () 35.()Thailand 15().1) I 5(0.0

Turkes 25 ) - 2() 1)

Yemen- 371 .) 3 ()

Total 2 236.(i 535. 2, 2.6

Urbani developmenit

Chin1a 125 ( 25.0 150.(

China 2).11 5 25(0.()Colombia 2() 20.0

Ghana 711.( 711)

Inidonesia ]42 7 142.T

Lat\ ia 2 7.3 - 27.3

leballon 5( ( - 511.11

Mauritania - 14 lI 14.1(

Pakistan 21.5 21.5TaL11ia 17)5.( I ( 105.I

Ukraine 17 tI 17.0

lotal 6 32.() 236 5 868.5

WVater supply andl saiitationiBolivill 2(1.01 2(0)

Colombia ]45 145 ()Ethiopia 357 35.7IndiLa 16. .() 25 11 19 2.1

India S ) 6 - 6.

Morocco 41). -11 41).1.

Philippilnes 7) - 57.)

Poland 21.5 - 21.5

Rtissia 200.) - 20(1).()

VenezueLa 30.1) -3.1)

Total 72).1 8O.7 S9 1.8

Grand total 14,488.1 6,864 1 21 35 2.2

-Zeros.

a Manly projects inicludte activ iv I in'oe thana one sector or sulsectorb. Supplemen tan: fiunaiciig to a precious loan bit iOt ou'MItedt as (l separate operation.

c. Does tIot inclutie the refinance(dlresche,huledl overlue chitirges of $167.8 nzillioi tor Bosnia and Herzeg8oina

APLENDIx Fot RTFFtK 255

DEVELOPMENT- CONMIM ITTE E CO I M MU N IQUES APPENDIX 1 5FiSCAl. 1 996

COMMUNIQUE take steps to reduce administrative burdens onaid recipienits.

The 5 Ist Meeting of thze Development Committee 5. International Development Associationi (IDA).uvas held in W1"ashin7gton, D.C. oni October 9 1995 Ministers recognized the importance of support-under the chairmianiship of Mohlamed Kabbaj, ing the implementation of effective developmentMinister of Finlan1ce aind Foreigni InvestMenlt of policies and programs with adequate resourceiMorocco. Michiel Camndessus, Managing Director of flows, especially of concessionial funds, if povertythe Internationcal Moiletary, Fund and N'Goral is to be reduced. The committee recognized thatNiamien (C6te d'Ivoire), Chtairnman of the Group funidinog reductions facing IDA present a veryof 24, also took part in the miieetinig Observers fr-omf, serious risk to poverty reductioni and economica numnber of intenatitionial aend regionl( orgizmiza- growth in the world's poorest countries. Minis-tionis also attended. ters agreed on the importance of a significant1. Ministers welcomed World Bank Presidenit replenishmenit of IDA.James D. Wolfensohn to his first meeting of the 6. The Committee expressed great concern thatcommittee. The committee was pleased that, for potential reductions in contributions to IDA werethe first time, the lUnited Nations Secretary Gen- likely to jeopardize its future alnd stressed theeral, Mr. Boutros Boutros-Ghali, addressed the great importance donor-s attach to equitable bur-committee. den sharing.The comittee urged all donors that2. Supportlor poverty reductioni. Ministers have not done so to honor their commitments andreviewed the implications of the Uniited Nations' continulle the strong support that has markedSocial Summit Declaration. They focused partic- IDA's thirty-five-year life.ularly on how World Bank and IMF efforts to /. Ministers a-reed that everv effort should bereduce poverty could be strengthened through made to meet the essential finanicing require-enhanced policy dialogue with governments, ments of poor countries as reflected in IDA'sbased in part on results of poverty assessments. lendinig plans and to protect IDA's multilateralMinisters agreed that multilateral developmenit character.institutions should accelerate their investments S. Multilateral debt. Ministers agreed that cur-in social sectors and poverty reduction programs. rent instruments should be sufficient to bringThe committee encouraged the Bank to debt and debt service for the majority of heavilystrengthen its efforts to promote broad-based, indebted poor countries (HIPCs) downv to man-labor-intensive growvth through increasing the ageable levels. For a small group of countries,access of the poor to land, credit, and basic infra- however, this may still leave an unsustainablestructure. debt situation, a problem for which appropriate3. Ministers agreed that efforts to improve the approaches need to be further explored. Minis-composition and efficiencv of public expenidi- ters requested the Bank and Fund to continuetures were needed. The committee urged the their work on this issue, including detailed coun-Bank and Fund to work closely with member try-specific analysis of debt sustainabilitv, andgovernmenits to help them improve their public atter presentinig their findings and recommenda-finances, especially by increasing attention to tions to the Executive Boards, to report withfundinig social and economic development pro- proposals to the committee at its next meeting.grams and reducing noniproductive spending 9. Executive secretaly. The Committee selected(including excessive military expenditures) Alexander Shakow as Executive Secretary.within a frameework of sustainiable economicgrowtlh. COMNIMUNIQUE4. In this context, Ministers agreed that doniors'support should be consistent with goverinments' Thze 52nd Meeting of the Development Comm17nitteepublic expenditure programs. The coImm11 ittee wais hleld in 1VVdshington, D.C. on April 23, 1996urged donor governments to continue to under the chairmanship of Mohamed Kabbaj,strengtheni assistance for countries demonistr-at- Miniister of Finance and( Foreign Investment ofing strong commitment to social sector invest- Morocco. James D. IVl4Ilfensohn, President of thements and other high priority poverty reduction ll'orld Bank, Michel Camdessius, Managing Direc-programs. The committee also urged them to tor of the IntenlationIal MMonetary Fund, Qazi

236 THE WORIxD BAIIK ANNI Al RrRR I [ ] 996

Aliniullah, Deputv Chairman of the Planninig 5. Ministers urged that rapid progress also beCo1Rmmissioni of Pakistan1 for Finance an21d Econzom1ic made in ensurinig the continued financing of theAffairs and Chairman of tlze Group o -f 24, and IMF's Enhanced Structural Adjustmenit FacilityAbdll(atif Y. Al-Hamcrad, Directoir Genieral of th-e (ESAF), a vital complement to IDA, for the mul-Arab Funiid for Econoinic aZndt Sociail Dev,elopmnent tilateral ef'fort to be fully effective.anld Chairnman f of the Task Force oin MDBs, 6. Resolving debt problenms of the heavily iTnldebtedaddressed the plenary session. Obsen'ers fromz a poor countries (HIPCs). Ministers welcomed "Anumiber- of internlational alit] regiona(il organliZations Framework for Action" presented by Bank andalso attended. FuLid managemeint. The committee noted the1. Initernatitionzal Developmient Association (IDA). progress achieved since its last mee ting andMinisters expressed appreciation to all doniors ex-pressed appr-eciation for the joint efforts of thethat contributed to the three-year funding Banki and the Fuid.arrangement (a one-year interimn trust fund, fol- 7. Ministers agreed with the analysis of Fundlowed by a two-year replenishmenit of IDA's gen- and Bank staff that there were a number oferal resources) agreed upon in March 1 996, and HIPCs for whom the burden of debt, includingextended special recognition to those donors multilateral debt, was likely to renmain above sois-contributinu to the FY97 Interim Trust Fulid. tainable levels over the medium term, even withM-linisters noted that the funiding pledged by strong policies and ftull use of existing debt-reliefdonors, together with other resour-ces expected mechaiisnis.to be available to IDA, will allow IDA to lenid up S. Ministers agreed that for these couLntries fur-to US$22 billion over three years, commencing ther actioni is needed to address their debt prob-in July 1996. Although this represenits a signifi- lems, building on actions already being taken bycant achievenment, reachecd under difficult cir- official bilateral and commercial creditors. Thiscumiistanices, it leaves IDA with seriously' would involve the uste of both existing mecha-constrainied finanicial capacity to respond to nisms and nexv arrangements, including contri-countries' improved policy performiance. Minis- butionis hv the IFIs from their own resources,ters praised those countries that have become contributionls by bilateral donors, and appropri-neew IDA donors and encouraged others to take ate action bv the Paris Club and other creditors.similar action. They also thaniked those that have ). Ministers agreed that the principal goal of themade supplenienitary or increased contributiolis proposed framexvork should be to ensure forto IDA. these countries that adiustmenit and reform2. Ministers emphasized that the IDA-I I agree- efforts are not put at risk by conitiniued high debt

ment reflects a strong con1senisus on IDA's impor- and debt-service burdens. They endorsed the fol-tance to the support of effective development lowinig six principles to guide further action: (i)policies and programs in the poorest counitries, the objective should be to target overall debt sus-with its core objective of poverty reduction sup- tainability on a case-by-case basis, thus providingported by econonmic groxvth and environmental an exit strategv from the reschedulinig process;sustainability. Ministers urged IDA to raise its (ii) action vvill be envisaged only when theeffectiveness and development impact. debtor has shoxvn, through a track record, ability3. Ministers reiterated the importance of main- to ptut to good use wvhatever exceptionial supporttaining IDA's capacity to transfer resources to is provided; (iii) new measures will build ascountries xvith sound policy performance. They much as possible on existing mechanisms; (iv)stressed the importance of f'air burdeni shar-ing additionial action will be coordinated amonig allamong IDA donors and callecd upon doniors to creditors involved, xvith broad and equitable par-honor their commitments on a timely basis to ticipation; (v) actions by the multilateral credi-ensure successful implementation of IDA-] 1. tors will preserve their- finanicial integrity and4. Noting wvith great concern1 the difficulties prefer-ed creditor status; (vi) nevv externalencountered in the replenishmenit of IDA- 11, finanice ftor the couLntries concerined will be onMinisters agreed that the prospects for IDA appropriately conicessional terms.funding b e a key issue for discussioni by the com- 1O. While recognizing that maniy importantmittee in a year's time. aspects of the proposed framework of action

need to be developed and refinled further, Minis-

APPENDoI FiFTEEN 257

ters agreed that it provided an appropriate basis infrastructure, promotion of the private sector,for further work. They requested that the Bank operational orientation toward results on theand Fund-in close consultationi with concerned ground, and to increasing cooperation among thebilateral creditors, donors, debtors, the Paris Club, MDBs.and other multilateral institutions-move swiftly 13. The committee generally agreed with theto produce a program of action. Ministers urged report's conclusions and recommendations, rec-that a decision be reached on this program and its ognizing that not all apply equally to each insti-finanicinig as soon as possible, aiming to do so by tution. Bearing in mind the value of diversitythe next IMF-World Bank anllual meetings. among the MDBs, Ministers urged the MDBs to1 1. Report of the Task Force on Multilateral Devel- act upoIn relevant recommendations as a matter

opment Banks. The committee welcomed this of priority to strengtheni further their policiesbalanced and objective report. Ministers appr-eci- anid practices. Ministers invited the presidents ofated that it presented for the first time an overall the MDBs to advise the committee, in about twoassessment of the multilateral development years time, on progress achieved in implement-banks. ing the task force's major recommendations.

12. Ministers beliexe the report provides an 14. The committee expressed its great apprecia-excellenit analysis of the importance of multilat- tion and gratitude to Abdlatif Al-Hamad for hiseralism and the role of MDBs in a rapidly chang- chairmaniship of the task force, as well as to theing world. The committee appreciated the task torce members and the Secretariat for theirreport's careful assessment of the performanice of dedicated and productive work over the past fif-these five quite different institutiolns, with par- teen months. The committee requested that theticuLlar referenice to its support for poverty reduc- report be published and widely distributed.tion and sustainable developmenit, investment in

258 THF. Wk)RI) BANK ANN\[ AI. RI P)Ri I (06

INDEX

Adjustmenit lendinig, 35, 36 (table) Consultative Group for Caribbean EcotiomicAfrica region Dex elopment. See l atin America and tht Caribblean

capacity-building efforts in 7 Co Insuiltativ e GroLup Oi International AgricuIltural Rewarc hchange initiatives b9 the World Bank, 15, 15 zf'o.x) 2 ' (I-.Ak) J atvIities In f iscal 1)96, (60-6 ieconomic perfor umance in 1005% 71 COnsultatiVe GreuIp toi A-tst the Poorest ( s .) 65-60(Global Coalition ftor- Africa, 77 (_ountry-lasistanIce strategieslending to, ini fiscal 1'396, 75 (table) EuLrope and Central Asia region, 1)2-- 103nongos ernimental organization (N<.(:') collaboratioll, fo_s on meeti g c11enL needsc 28

74-75 role in pi sertv recdtL tion, 48participatory initiatives in, 74-75 uipgradiIg of, 15

portfolio performance in, 76

poverty-reducticoln ill, 71-72 Debt-redction Facility foi- InA-only COtintries, 42private sector development sulpport, 73-74 Development Committee, Task Foim on \liltilateralprojects appr-oved, fis,al 1996, 78-79) (t(able) Development Banks, 20Special Initiative for Africa, 72-73 L)evelopmenmt effectinen,ss mnitiatiies, 14-16, I (1six],Special Program of Assistance (sA), 4(). 72 28-30United Nations Economic Commission for Africa Dishurserricnts See InternationIal Bank for Reconstruction

collaboration, . ant Det e lopmtnt; hItLernlJ tion aJ Des elopm entwvater-maniagemilent partncrship, 8l) (b?{X) Association; World BEank

Algeria, Social Safety Net Support Project, 122 Disbursements, bysistirce if supply. 37-38, 7 (tale),

Aninual Bank (ConferlelnLe on Developmenit Econiomics, 154

Armenia, Social lIrestmerit FuLnd Project, 1I5 Early chilc d%cvlopmicnt See luman-capital developmelnt

East Asia a3iidl PaCFlitt regihoBangladesh Crtl lIV o S

Coastal Embankkment Rehabilitation Projett ca2-93pital fovti,Nonfoirmal EduCatioll Project, 93-0'4 changmnement innovations mainstreamled, 8'

Bosnia and Herzegovina econonic perfornac in I09 8 2infrastruLttire activities by the World Baik, 8h, 88

World Baink ibtrategy toward 14 (-1(1 lending t), In fihcal 1 996, 83 (toblt)World Ban strateg toscard 1(111-111 (box)Pacific islands' challemiges, 85

portfolio-manatgemienit activities 80Change managemenit

initiatives undertakeln bv the World Banik, 5 pos rtv-ri'dticon in, S2. 8o(bovx), 15-16 projects a1pp-oved, fis_cal 1996, S7 (tabl e)

in the Africa region, 15,29 social insurance system support, S8in the East Asia and Pacific region 16, 29, S'3 support lor mi0ket-oriented inst0tuiton P-Sin the South Asia regioni 16, 29 trade grssvth in, 83-84in the Eulrope and Central Asia region 16, 2c World Batiik operations in. 85-8Sin the Latin America and the Caribbean) region. I, 1), Econlomi Development Istittte (mm i)

115 (bo y) actIs\ tIes in fiscal 1 99o, 151 -5in the McIidcLle E'ast and North Africa region, 16, 20) 1ol lahoration sv itli the Joinit Vlenii a InistitLittI, I

suppolt from the QUality Assurance GrouIp, 16, 29 promoting dec cntrdli/ed svatcr manragement, 5S-5'3China, Labor lvMarket Developmenit Project, 88 scholarship aicd felloxsship programs, 152-53Cofinancing transition-issues semnalrs, 105

Consultant Trust FLinds program, 41 EdLCation. See HUmIall-5 Lapital development

Policy and HLuman Re.sources Deelopnment (PsHiR)Foind, 4 1

Special Pr-ogram of Assistaice (s'),41)voilume, fiscal i 196, 38, 39 (table)

World Bank relations with export-credir agencies anit1

the Berne UJnion, 40)

lswv\ 2 91)

Environmenit Hurmdan-Cdpital developmiient

Glohal Environment Facility (ver), 56 Early child development programs, 47. 53

Glohal Water Partinersiip, 59) education strategies. 52-53

sustainable tralnspol-t policies, 5S gender issuLes mainstreimed, 5(

Thbi-d AnnUal Environnientallv Sustainiablc Develop- llhor-milarzket issuLes Y52imient Confei-erice, 5') Latin Amer-ica aJnd the Ca ribhean1, issues in, 112-14

World Bank lending for, 55 notgm ernmental organizaLtion (Netl) involvement in,

World Biik pa-tiner-shiips witi nongovernmental 5(, 51 (box)}pa rtivipation in World Bank activities bs' stakeholders,

World Bank stalf training in, 59 poverty-redUCtion activities by the World Bank, 48

ErHope and Central A.sia region population concer-ns, 53-54

econiomic performane e in I i1')8,Is Progl-ram ofTargcted Initer ventions, 4'). 491 [table],

lenidinig to, in fiscal 1)996, 9) (maile) I 2 2(5

market-institItionls sip rt. .113-6)5 World Baink IlnCding patters for, 47

nongovernmelntal t)rgztniZa1tioii (N(~ ) World kank staff training in, 54

collahoration, 1(15

portfolio-mainagenitnlt of Balnk-sulpported India

proitects, 11(1)-1i)3 Orissa Water Resources Consolidation Project, 95-96

poxerty-reduction efforts i1i, 11(515- Second State Health SysLemns Developmnelnt Project, 96

projlects apploved, fiscal 191)6. 1(6O-1(17 (te(lte) InfOlDev (Information tfor De[velopmienit) progranm. 21

ptibliC sector rationalization in, 17 -11)8 (box), 68

unemploymi en t in, 98 Inspect.ito Pan el, ctisiti e s it If l 0i 4 2-4 5

World Bank suppoi rt for agr-i cult til-e and ent ironin-tnciital Institutio nalI Develoipment Ftlord SeeTeclhnical assistancerehahiilitation, 1I08-1((9 Inter-Amnerican De\elopment Batk,

World BaLik sUIp)Ior-t tor privatia7.tiOll a1nd financial cofinancingt wvith the World Batik ,39, I ISsector developmenlt,103 1()5 lproject collahoration vrith, I IS

Executive directors Interinaitional Bank for Recon.,trUCtiOn nilLd

Audlit Committee, 2, 27' Decelopment (ImpRI[)

Budget Committee, 2(i assistacLL to the poorest co1ntr-ies, 2() (iglure)

Committee otn Development Effectivenes.>, 26-27, borriwinigs in fiscal 1996, 22 (ttultle), 23, 1(1, 162

28 33 (table), 16(3 (table), 1 l2-64poverty-reduction initiatives. 2(5 ttmmitments ini fiscal 1119(, 22 (table). 35, 35 (tablte)

Per-solinnel Committee, 26 curreticy-pool loatis, reviex\ of, 159-5(1

nil e in shaping World Balitk po licy, 25-26 dishtirsnments, 22 (table), I (5o

travel to vIeselopi rig tllemlber co : iUtries, 25 caplitail stbscriptiotns to, 1(54

leiudilig late irn fiscal 109(5, 1(I)O

Foreigi direct investmILent, ]txVs to SSOIth AsiA, 9i1) liquid-assets manigement. IB I

Foreign Inve stmetcL Adx isory Service. S e Privaite li ulls in no 11a0 cr aIL Stat tIS. 161sector developmettt membership. 23

net inIcom-ne, 22 (uiltle), 23 ,j15Globall Coalition fti A (rica. See Af[rica pr-'visiruting fo r ptossible loat losses, I(f

Global En vironment Facility. See Envi-oronienit reserv es, 1ii4

Global WVater Partnership Set Eixvironnixetnt single-vu vrrency loan pr tgraaitn rex\iev of, 159

Guarantee program, 37, 63-64 Interinatiotnal Centre for Settlement o) Intvestment Disputes

(stol), activities ill ftisal 1995, 158lieavily indebted poor ctUtintries Internationlj Developmvnt Associatiotn (1o•A)

\Vorld Bank initiati( i's tct help 17, 20) asistance to the poorest counitries 2(1 (figlre)

CtOmIllitIllent atitl)trit%' in fiscal I 996, 1(54-65(5

tommsxitntents in fiscal 1996. 21, 22 (itiltle), 35, 35

(table'), I 66

26(0 THnE W'OR D BANK ArNNL[Ai. REI'ORT 19 96

dishLursemenits in fistal 1996, 22 (talele), 37 Mali, Pilot Partitipation Project. 74

eleventh ireplenishmienlt (In- I I ) agreement, 17, 1S Middlle East and Nortih Africa region(table) economtc per-formanice in I 095, I 2

Initerim Trust Fund, 17, 1' (tcIble) Euro-Meditel rralleanl Par tinershlipn aind Economic Area,

mInembershlip, 23 12(1review of thi fiscal 19'94-95 program, 164 (l'ox) human-development slupport iTI, I2 2

Inten-national Fina nce Corporation (yt ) lenldinl" to in afiSe LI I ILB, I21 (tabIle)

activities in fiscal 1996., il. 150-57 piirtfolio-manalgement activities in, 12-26imembership, 157, \'Wold Bank operations, fiscal Ilt)t6, 121(-24. 125

(t9sle)

Japani Morocco

tofinincin;g of W-irld Bank pirojects, 39) Enliergents Droghit Recovery Prolect, 123

sclholar-ship and fellowship program,s 1 52-5' Social Priorities Prograin 122PoliCy ild Fluman Resotirce Development (I'HKL)) Multilatera3 lneistmenit GuLarantee Agency (Ni[s,S)

Fund, 41 a Ctivities in fiscal 1 96 61, 157 58

Joint Viennia Iinstitute. See Economic Development tet hoitnal assistance actiXities 1 57-58Institute

Jordan, lendinig pi-ogam in, 1 22 Nepal, till aloition %is th nonigs%ernimental organizations,6)3

Labior-market IsstIes. See HumLan-capital development il;,-Wor-ld Bank Conimimittee, 5I

Latin Amerita and the Caribbean region Nongoernimental or-ganizations. See World Bank

banking system weakness, I 10-1 I

bhange management begull in, 1 5 (box) Operations evaltiatioii

cofinancing in, 118 attVitiec InI flsCal 19L(6, 33-35

collaboration sith the lnter-Ameritan Development country locus incLeased, 32Bank, I I dS dissemination aiind outr-each, 34

Coisultatise Group for Caribbean Etontomic ewecutive hoard -e\ iev\\, 34-35DeV\elopmelt, I 19 resies of experience %%ith implenieitationi completion

econiolimic per-for-mance in 1995, 1 If) relpor-ts, 32

ecoomIic and sector wvork (rIsv), I I8- I9 improv ing the tLjlalit of ne\\ operations, 29

htiman-i-esoLirce development in, I 12-14 nolnleldilln sersices, 33

lentding to, In fiscal 1996, 113 (table) process review oftlthe annual report on portfolio lper-for-

lessons from the Mexicanl cr-isis, I I I manje, 31

nolilentlinig services to, 124-25 revie\s oif performance of completed operationis, 32

partnerships for development in, 1 26

peso crisis (containment of), 1 1( Pakistanportfolio-management acti ities in, 1 25-26 Balochlistani Primaiy Etlication Project, 95 (boy)

pover-ty-t-edUCtiois 11i I2, 118-19 Ghazi-Bar-otha Hvdiopower Proiect, 03prolects approved, fiscal 1996, 1 16-1 (talle) Par ticipatorv Ies elopirnenlt

savings rates in, 111 Africa region, initiatises in. 45

trade liberalization in, I II Inter-Agent y Group on Participation, 51

World Bank operatioiis, 114-15, 1 18 participatory poverty assessment tise increases, S1

Lebanoni, Emergency Reconstructioin antI Rehabilitation projects approsed in fiscal 1996 insoling participants,Project, 123 1 5-))

social assessmenlts, 55Sotitl Asia; regioil, initiatis es in 93 9-14

Imrs-l B ank Participmtion Soiurtelbosok, 5(

Popuilation, health, and nu1ritioll See Human-capital

developmiienit

INDE\ 261

Portfolio management Public Information Center, activities in fiscal 1996, 44annual report on portfolio performance, 31 (figuire), 45

initiatives by the Bank's regional offices forimprovement, 30 Quality Assurance Group. See Change management

in the Africa region. 76-77in the East Asia and Pacific region, 89 Research program of the World Bank, 153-55

in the South Asia region, 96 Rural development and sustainable agriculture, 56

in the Europe and Central Asia region, 10()0-103 Russia

in the Latin America and the Caribbean region, 114 Coal Sector Adjustment Loan, 105

in the Middle East and North Africa region, 125-26 Financial Institutions Development Project, 101

performance monitorinig indicators. 31 Hotising Project, 101

Poverty assessments, 51, 1 05, 1 -1 9

Poverty reduction Single-cturrency loan program. See Inter-national Bank forAfrica region, initiatives in, 71- 2 Reconst-tictioni and Development

challenges to in Latin Amer-ica and the Caribbean, 112 South Asia

East Asia and P'acific, initiatives in 86 economic perfirmance in 1995, 9(1

Europe and Central Asia, poverty-reductionl w ork foreign investment in, 90accelerated, 10)5-106 lending to, in fiscal 1996, 91 (table)

executive directors initiatives on, 26 nongovernmental organization (N(O) collaboration,

program of targeted interventions (PTI), 49, 49 (table), 92-94127-50) participatory activities in World Bank operations, 92-94

World Banik lending targeted toward the poor, 2() portfolio-management activities in, 96-97(fignfre), 22, 127-50 poverty-reduction efforts in, 90

Private sector development private-sector development activities, 96

business environment-improvemnent assistance, 62 projects approved, fiscal 1996, 94 (talble)

BuIsilless Partnership Center 6 1-62 Sotith Asia Association of Regional Cooperation, 90

financial-sector assistance, 66-67 vnomen s status, 91

Foreign Investment Advisory Serv ice (HIAS), 66 74 Special Program of Assistance (sI'A).See Africa region;

guaranitee program, 63-64 cofinancing

links with external partners, 68-69

microfinance programs supported, 65-66 Tanzania, Human Resources Development Pilot Project, 74

private provision of intfr-astructure, 63, 64 (box) Technical assistance

private sector assessments, 62 cooperation w ith the u iN Ev, 42

telecommUnications reforms, 68S-69 Institutional Development Fund, 42

World Bank Group activities in support of, 61-69 pertormance indicators for techniical assistance, 42

World Bank support for in the Africa region, 73-74 Project Preparation Facility, 42

World Bank support for in the East Asia and Pacific World Bank activities in calendar 1995, 42region, 88 Trust funds. See Cofinancing

World Bank support for in the South Asia regioni, 96 Turkey, Public Financial Management Project, 108

World Bank support for in the ELurope and Central Asiaregion, 103-105, 1(18

Privatization

Bank Group assistance for- in Etirope and Cenitral Asia,1 (3-1 (5

Pakistan's program of, (53 (box)

Project Preparation Facility. See Technical assistance

262 THE WORLD BANK ANNUALI REPORT 19961

United Nations Conference on Women, 50, 82

United Nations Development Programme (UNor),

cooperation with the World Bank in technicalassistance, 42

WVest Bank and Gaza, World Bank initiatives in, 14

World Bank

adjuistment lending in fiscal 1996, 35, 36 (fable)

assistance to the poorest counitries, 20 (figure)

budget, 155

collaboration with nonigoverinmental organizations(NGOs), 20-21, 51, 52 (box), 57, 74-75, 92-94, 105,

127-50

commitments in fiscal 1996, 21, 22 (table), 35, 35(table)

dishursements in fiscal 1996, 21 -22, 22 (table), 37

commitmenits, disbursements, net transfers to Africa,76 (table)

commitments, disbursemenits, net transfers to East Asiaand Pacific, 86 (table)

commitments, disbursements, net transfers to SOuthAsia, 93 (tal'le)

commitments, disbLirsements, net transfers to Euiroptand Central Asia, 103 (table)

commitments, disbursemenits, net transfers to LatinAmerica and the Caribbean, 114 (tcible)

commitmeints, disbursements, net transfers to MiddleEast and North Africa, 124 (table)

headquarters constructioln, 156

heavily indebted poor coLntries (Hli'CS) and the Bank,17, 20

personnel, 156

reduLidancy program, 156

staff training, 29, 155

Yemen, Transport Rehabilitation Project, 123

INDF\ 263

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