Announcement of World Bank Group Lending Exceeds Three Thousand Million Dollars in Fiscal 1972: Thailand Obtains Aid for Education and Power Projects on September 18, 1972.

.., ·• INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (~) INTERNATIONAL DEVELOPMENT ASSOCIATION} Uf\) tZ/ l)i3 ........... 1818 H STREET, N.W. WASHINGTON D.C.20433 TELEPHONE: EXECUTIVE 3-6360 For Release AM Newspapers Monday, September 18, 1972 WORLD BANK GROUP LENDING EXCEEDS $3,000 MILLION IN FISCAL 1972 E)>BTAINS AID FOR EDUCATION AND FOWER PROJECTS The World Bank Group's lending and investment operations in deve!oping countries reached a record annual figure of more tha.., $3,000 million in the fiscal year ending June 30, 1972, The year's lending included 72 Bank loans in 40 countries totaling $1,966 million. The World Bank's affiliate, the International Developmant .. Association (IDA), approved credits of $1,000 million for 74 projects in 38 countries. The International Finance Corporation (IFC) made 23 investments of $116 million in 17 countries. The combined Annual Report by the Executive Directors of the Bank and IDA, released today, indicates that the Bank Group continued to increase the scope and depth of its development assistance in all forms, most notably to the poorer cotmtries in its membership. East Asia and P,acific Area Approved Bank loans and IDA credits to nine countries in the East Asia and Pacific area totaled $316.3 million in fiscal 1972. Besides Thailand, which obtained $42.4 million in loans, the countries assisted were: Bank Loans IDA Credits {In Millions of US Dollars) Fiji 2.2 Indonesia 105.5 Korea 33.0 '"25.'5 Malaysia 31.5 New Zealand 8.0 • Papua New Guinea 10.0 9.2 Philippines 29 .. 5 10.0 Singapore 9.5 /m~re  - 2 - The power, agriculture and education sectors accounted for the bulk of Bank Group,, lending to cotm.tries in the area. Bank Group funds were alaQ appt'oved for projr-cts in the transportation, industry, population planning and telecommunications sectors, and for technical assistance. Thailand A Bank loan of $15 .4 million, approved in May 1972, is helping to finance the expansion and improvement of Kasetsart University, Thailand's leading agricultural universi~y. Kasetsart is developing an additional campus at Kar:nphaengsaen, some 50 miles from its existing campus at Bangkhen, a suburb of Bangkok. Another loan, of $27 million, approved in November 1971, is assiPting further expansion of capacity at the South Bangkok power station through addition of a 310-megawatt thermal electric generating unit. Trends in Assistance The Report shows that the base of the Bank Group's as~istan,:e is being .. broadened, to include new fields such as urbanization, population planning, nutrition, education and rural development • In the Fast Asia and Pacific area, the Bank Group hopes to direct its assistance incraasingly to such aspects of economic and social growth as education and agriculture. At the same time, support for other sectors,. _.s,1Jch as industry, power and transportation, will continue. An IDA credit of $13.2 million for population planning went to ~ndonesia. The project includes not only physical facilities and technical assistance, but support for activities:ia,training, motivation, evaluation, research and population education. Development of Agriculture The Report notes that j with the exception of Indonesia, most countri1£~s in the area have advanced beyond the early stages of industrialization.. However, the effort to increase agricultural production wilL be important for futu1:,e economic development of these countries. While Korea, Malaysia, Indones:la anti,, intermittently, the Philippines all import food grains, the area include$ grai.n ~xporters as well, notably Thailand with its large surplus of rice. Despite tbe • drift to industrial urban centers in recent years, agriculture ,still employs tb,e majority of people in the area's developing countries, making it vital to 1:·c1d.se farm incomes which have lagged behind industrial wages. /more  - 3 - The "gmen te1'olution" has not yet produced dramatic changes in East Asia t the Report states. Although production in general has continued to grow, demand has increased at about the same rate because of rising population and incomes. Debt Problem One problem found almost universally among developing countries in the East Asia and Pacific area, as in other developing regions, has to do with debt and. debt management. Except for Indonesia, countries in the area were relatively free of heavy debt service burdt!DS until quite recently. Debt problems are beginning to appear, however, ofte~ because high growth rates have been financed by heavy external borro~~ng. The Report notes that Thailand's debt service rose during the 1960s mainly because of private ·extemal borrowings; public extemal debt and debt service remain low in relf.2.tion to exten1al. eamings and reserves. Inflow of Capital The debt situation of sane countries and the inves·tment needs of all require increasing capital inflows, at least for the ne!{t few years, the Report notes. For infrastructure and public sector investmentt several countries have difficulty in prepa~ing projects t~pidly enough to meet capital requirements. Countries cited by the Report are Malaysia, Indonesia, the Philippines and Thailand. As the fiscal year endedt plant; were being completed by the Bank Group to establish a mission in Bangkok pr:f.marily to identify and prepare projects in key sectors in Thailand and in Malaysia. Tpe mission will also be concerned with policies for the more rapid advancement of the less developed regions and conmumities in the two countries. Aid Coordination During fiscal 19 72, the Bank cc,nducted 11 formal me•~tings of aid co- ordination groups, as well as informial working party sessions. The Consultative Group on Development Assistance to Thailand met in Paris last February, tmder the chairmanship of the Bank. The 1972 sessions also considered t:tie development performance and prospects, and the extemal cap~tal requirements, of Ceylon, • Colombia, India, Kenya, Korea, Morocco, Pakia._~an, Peru, the Philippines and Tunisia. - 0 -