Announcement of Highlights of the World Bank Group's Activities for Nepal in Fiscal 1972 on September 18, 1972

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W. WASHINGTON D.C. 20433 u~ 1-2/.M TELEPHONE; EXECUTIVE 3-6360 For Release AM Newspapers Monday, September 18, 1972 ~ HIGHLIGHTS OF WORLD BANK GROUP ACTIVITIES IN FISCAL 1972 GROUP'S OPERATIONS FASS $3 1 000 MILLION IN FISCAL 1972 IDA CREDIT OF $4.2 MILLION FOR DEVELOPMENT OF TOURISM IN ~PAL General The World Bank Group's lendirg and investment operations in developing countries reached a record annual figure of more than $3,000 million in the fiscal year ended June 30, 1972, according to the Annual Report of the World Bank and its affiliate, the Int~rnational Development Association (IDA), released here today. The year's lending included 72 Bank loans in 40 countries totaling $1,966 million. IDA approved credits of $1,000 million for 74 projects in 38 countries. The Bank's other affiliate, the International Finance Cor- poration (IFC), made 23 investments 0£ $116 million in 17 countries. The combined Annual Report of the Bank and IDA indicates the growth in the Group's development assistance to poorer member countries. IFC is publishing its own Annual Report • •  - 2 - The continuing rise in operations means that the a.mount of developme1nt financing record'ed by the Bank Gr,oup during the current iive, ... year period (1969-73) probably will be n>re than double the 1964-68 figure. s\,uth Asi.a -~---- The Annual Report revealed a steady rise in the volume of lending, in South Asia. A rapidly increasing share of Bank/IDA sssistance is being de\.·oted to the agriculture sector. Conrpari:n.g the average for the last four years 1969-72 ($518 .8 million) with the period 1964-68 ($285 million), the . yea'rly total has almost doubled while the amount provided fer agriculture has more than quadrupled at $127 million. Th~ cumulative t-9tal lending in So-µ.th Asia, amounting to $5,272 million, re;:·:-:-::.sents mere than a fourth of Bank and IDA financing in all develt'lping countries. JDA CrediJ of $4.2 Million Tourism in Nepal The ye~r's IDA credit to Nepal was for the first tourism project to be assisted by the Bank Group in Asia. Tourism is one of Nepal's most promising avenues for the expansion of foreign exchange earnings., The IDA credit of $4.2 million will help to alleviate a considerable shortage of acconm10dation in Kathmandu, the capital, through the modernization and expansion of an existing hotel -- Hotel de l'Annapurna -- and the construction of a new one -- the Yak and Yeti. At full operation in 1978, the project will increase N~pal 's foreign exchange earnings by $2 .8 million a year, more than doubling the earnings from tourism in 1970. It will contribute directly to the creation of 500 new jobs. Increased tourist • traffic will also stimulate employment in the handicfaft and tour operating industries. • \\ d - 3 - Two credits totaling $4.2 million were extended to Nepal in Novembe"t-i-'i69 and December 1970 for the development of telecommunications and highways. This year's credit brings the cumulative total of Bank Group's commitments in N.epal to $8 .4 million. All of the assistance from the Group to Nepal has come fiom IDA. Thie Association's credits to date have been for 50 years·, free of interest, but carry a service charge of 3/4 of 1%. Resident Representative To help stliengthen relatior1.s with Nepal and _facilitate the identific.ation and preparat-ion of projects, ,the Bank opened a re.sident office in Kathmandu in August 1971. 11r. Alexander Kirk is the Group's Resident Representative in Kathmandu. In May 1972, an economic mission · ( carried out a .comprehensive review of the country's economy. It is hoped that these developments will lead to a substantial increase in the Graµp's lending activities in Nepal. IDA Replenishment The World Bank Group I s abil~.ty to assist in poorest of its members // depends heavily upon funds made available to IDA which gives credits to member countries on highly concessionary terms. The resources of IDA are replenished periodicallly .by contribution~ from the more affluent member \\ \\ countries. Under an international agreem~nt concluded in 1970, contri- butions of about $800 million had been a,tpected during the current year.  By June 30, 1972, 16 of the 19 Part I (or richer) nations had ratified the agreement. But without ratifications by the largest contributor, the United States, the third replenishment of IDA could not come into effect. However, IDA was able to maintain and even increase the flow of assistance in fiscal 1972 because of special action by 15 governmen'ts in making~ advar,ce cdhtributions totaling $448 million. - 0 - . ((