Nicaragua - Second Education Project

FILE COPY Document of The World Bank FOR OFFICIAL USE ONLY Report No.P-180 8-NI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATICINAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF NICARAGUA FOR A SECOND EDUCATION PROJECT March 31, 1976 This document hus a restricled distribution and ay be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bnnk authorization.  CURRENCY EQUIVALENTS US$1.00 = 7 Cordobas (C$) C$1.00 = US$ 0.1429 Fiscal Year January 1 - December 31  FOR OFFICIAL USE ONLY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORtT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF NICARAGUA FOR A SECOND EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed loan for the equivalent of US$11.0 million to the Republic of Nicaragua for a second education project. The loan would have a term of 25 years, including 7 years of grace, with interest at 8.5 percent per annum. PART I - THE ECONOMY 2. A memorandum entitled "Economic Memorandum on Nicaragua" (Report No. 914-NI) was distributed to the Executive Directors in November 1975. The following paragraphs summarize the conclusions of this report. A country data sheet is attached as Annex I. 3. Nicaragua's major natural resource is its arable land, which is suitable for a variety of products. Although the share of agricultural production in total output has declined in recent years, agriculture con- tinues to be the main source of economic expansion, and is responsible for about 50-60 percent of employment and over 70 percent of export earnings. The country is divided into three distinct agricultural zones: the Pacific Zone, where about 60 percent of the nation's 2 million population lives, is marked by a dual structure of farming -- a large number of small farms grow basic grains with conventional technology, and a few large farms specialize in cotton and sugarcarte using modern technology; the mountainous Central District is devoted mainly to coffee and livestock; and the large Atlantic Plain holds a largely unutilized potential for forestry and livestock production. 4. Nicaragua's longer-term economic growth prior to the 1972 earth- quake was impressive, although it was characterized by sharp cyclical changes. Real income grew at an average annual rate of 6.4 percent (3.5 percent per capita) during the 1946-1972 period. The strong upward trend This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -2- in income resulted from the expansion of production for exports, primarily of cotton, coffee, and beef, but also of less complicated manufactured goods. The substantial growth of the economy, however, did not mitigate the highly skewed distribution of wealth and income. Per capita cash income of US$120 in rural areas is less than one-third of that in Managua. More- over, within the rural sector, the distribution of income is even less equitable than in the urban areas. Many of these inequities, which are common in many other developing countries, result from the dualistic nature of agricultural production and the related, highly concentrated pattern of land ownership. The poorest one-third of the rural population, for example, holds only about 3.5 percent of the country's arable land. 5. Progress in reducing income disparities has been delayed by the persistently low level of public expenditures. The slow growth of current expenditures -- and a consequent shortage of important public service facilities such as education and health -- largely reflects budgetary stringency dictated by insufficient revenues. Outside the field of trans- port and electricity, the process of project identification and preparation has been extremely limited in the past. As discussed below, however, progress has taken place in both fiscal performance and project preparation in the past three years. 6. The earthquake which struck Managua on December 23, 1972 took a toll of about 10,000 lives, destroyed or rendered unusable practically all the central zone of the city, including most government offices, hospitals and schools, the financial and commercial buildings and perhaps 2,500 small shops engaged in small-scale manufacturing and retail trade. About 32,000 housing units, or about 45 percent of the housing in the Managua area, were destroyed. The impact of the earthquake on productive capacity, however, was considerably lower than initially feared, and the economy has recovered at a much faster pace than originally estimated. Growth in GDP was 2.2 per- cent in real terms in 1973 and reached 11-12 percent in 1974. The impressive growth of the latter year was mainly attributable to construction activity in Managua. Unemployment, which had increased very steeply in 1973, moved down to pre-earthquake levels in 1974. Present estimates are that GDP growth returned again to about 2.2 percent in 1975 as a result of slackening reconstruction activity, compounded by credit and import constraints. As far as the accomplishment of physical reconstruction is concerned, most public service facilities were back to, or exceeded, pre-earthquake levels by 1975, but much remains to be done to rebuild housing and shops for the poorer segments of the population. 7. The emergency taxes introduced after the earthquake, and the new taxes approved in late 1974 which succeeded them, reflect a major fiscal effort which has raised taxes as a percent of GDP from 8.9 percent to nearly 12 percent. However, even with this substantial increase in domestic resource mobilization, the financial requirements associated with the completion of reconstruction and projected levels of investment in the Government's develop- ment program will mean that Nicaragua will still require external assistance over and above the foreign exchange component of its projects submitted for international financing.  8. The improved fiscal performance has been accompanied by progress in overall planning and project preparation. The public investment plan prepared by the Government for 1975-79 assigns priority to expanding agricul- tural production and improving health, education and housing facilities for the rural poor. While a major effort is still required to improve project preparation in the fields of rural and social development, several projects have been developed recently or are in preparation in these fields; for example, in addition to the proposed Bank education project, the Inter-Amertcan Develop- ment Bank (IDB) recently approved a loan for rural electrification, and the Government is preparing a rural water supply project for our consideration. Also, the Government is proceeding with the reorganization of the public sector agricultural institutions with financial and technical assistance from USAID; the main focus is on the implementation of a recently created integrated rura] development program - INVIERNO - which will supply credit and technical assis- tance to small producers in the Central Pacific and Central Interior regions and will also coordinate public activities in education, health, housing and infrastructure for the same target groups. 9. With regard to balance-of-payments performance in the years following the earthquake, cotton., coffee and beef have continued to be the leading tradi- tional exports and constituted 29 percent, 13 percent and 9 percent respectively of total merchandise exports on average over the period 1973-75.However,manufactured exports (e.g., textiles, animal feed, chemical and wood products) have become the largest single category, constituting about one-third of exports. Although imports averaged less t;han 30 percent of GDP during the latter part of the 1960's and up to 1972, the post-earthquake reconstruction process, rapid credit expansion and higher import prices drove this figure up to 45 percent in 1974. Imports increased by 131 percent from 1972 to 1974 while exports increased by only 50 percent, so that the resource balance changed from plus US$22.5 million to minus US$184.0 million. Despite this, the heavy borrowing during the period (much of it on commercial terms) held the net decline in international reserves to only US$10.0 million. Even this small decline, however, reduced reserves to about two months' imports. Preliminary 1975 balance of payments estimates indicate a significant improvement over 1974; exports grew by 14 percent while imports grew by only 6 percent, thereby reducing the resource gap from a US$184.0 million to US$171.0 million, or from 13 percent to 11 percent of GDP. It is estimated that international reserves increased by US$17.0 million bringing the country's reserves to just over :2 months' imports as of the end of 1975. 10. Until recently, Nicaragua has maintained a reasonable and fairly constant level of external debt service -- about 10 percent of exports. However, since the earthquake, both the rising volume and the deteriorating average terms of new borrowing - the latter mainly as a result of increased recourse to commercial banks - have led to a rise in the debt service ratio to about 13 percent irL 1975. Two factors are expected, however, to reverse these trends in the volume and structure of the external debt and the debt service burden. First, the Government recently announced that all foreign borrowing by Government and semi-autonomous agencies must be cleared by the National Planning Council and then be presented to the national legislative  assembly for approval; the Government expects that this review will facilitate control of external borrowing. Second, it is likely that the Government will be able to reduce imports substantially in real terms from the exceptionally high levels of 1973 and 1974, without interfering with a satisfactory growth rate of GDP. Present projections indicate that, if imports return to a more normal share of GDP,and if, as seems feasible, loans from official sources rise from the present 50 percent of new commitments to about 65 percent by 1980, the debt service burden should reach about 26 percent at the end of the decade and decline thereafter. 11. The general prospects for the Nicaraguan economy for the near future depend heavily on movements in international prices of its major exports (cotton, beef and coffee) and imports (especially petroleum and fertilizers), as well as on the success of policies in the following fields: (a) export diversification, which is to be achieved through the promotion of resource-based exports such as wood products, fruits and vegetables; (b) sub- stitution of imports such as corn and some processed food products which could be produced efficiently in the country; (c) holding imports down to a reasonable level through appropriate domestic credit management; and (d) im- provement of external debt management. If these policies are implemented, the Nicaraguan economy may be expected to continue to develop at an acceptable pace. External Finance 12. External concessional finance is provided principally by the Bank, USAID, the Inter-American Development Bank (IDB), and the Central American Bank for Economic Integration (CABEI). In recent years a substantial portion of the USAID assistance has been channeled to the reconstruction of Managua. USAID has made loans for agriculture, highways, industry, rural electrification, housing, education and health. In agriculture it has played an important promotional role in developing the INVIERNO project to promote rural develop- ment in some of the more depressed areas of the country. CABEI is financing projects with regional impact, principally in transportation, industry and power. In addition, CABEI has lent for housing and in lesser amounts for education and agriculture. IDB is financing agriculture, water supply and sewerage, industry, housing, transportation and higher education. The lending of these agencies from 1950 to the end of 1974 is summarized below. IBRD IDA USAID IDB CABEI (In millions of US dollars) Total 110.3 23.0 137.1 124.5 98.0 Cumulative Lending 1950-65 35.6 3.0 20.7 42.4 13.3 Cumulative Lending 1966-74 74.7 20.0 116.4 82.1 84.7 Transport 11.0 - 2.8 3.5 36.5 Power and Telecommunications 44.3 - 15.0 - 16.0 Education 4.0 - 7.3 0.3 0.7 Health 6.9 - 6.2 20.9 - Housing - - 3.7 6.0 6.8 Agriculture 8.5 - 17.4 33.7 0.7 Industry - - 5.0 16.7 18.9 Reconstruction - 20.0 35.0 - - Other - - 24.0 1.0 5.1  - 5 - PART II - BANK GROUP OPERATIONS 13. To date Nica:-agua has received twenty Bank loans and two IDA credits, totalling US$:L38.9 million. As of March 26, 1976, a total of US$37.9 million remained to be disbursed on six loans for education, water supply, power, agriculture and ports and on the Earthquake Recon- struction Credit. Progress in general on most of these projects has been satisfactory, although cost overruns in the past three years have hampered execution of several projects, particularly in ports and electric power. With respect to the Earthquake Reconstruction project, the power and water supply components have been implemented without significant problems. A portion of the education component and the sites and services component were delayed initially., largely because of difficulties in acquiring sites, but are now proceeding satisfactorily. The industrial component suffered initial delays in the submission of acceptable sub-projects, but most of this component has now been disbursed. Annex II contains a summary statement Pf banx loans, IDA credits and IFC investments as of March 26, 1976 as well as notes on the execution of on-going projects. 14. In the past, Bank Group lending was heavily weighted towards assisting Nicaragua develop basic infrastructure, through loans for electric power, ports, and highways. More recently, an increasing share of Bank lending has been directed towards agriculture, water supply and education, and in 1973, IDA made a US$20.0 million credit for earthquake reconstruction. The Bank's current lending program is designed to respond to Nicaragua's development requirements in several different ways. Given the importance of efforts to strengthen the balance of payments, one objective Ls to support Government programs for export diversification through loans for agricultural and industrial credit. Another objective is to assist further institutional improvement, and help neet the growing resource requirements, of the electric power company, and to assist Nicaragua to develop its potentially large geo- thermal energy resources. The Bank is also planning to give major emphasis to assisting Government efforts to improve productivity and living conditions in the rural sector. This objective would be supported through the proposed Second Education Project, through components of projects for agricultural credit, through a project being developed for providing water and sewerage facilities for small towns and villages, and through projects designed to strengthen efforts, now beginning under the INVIERNO program, to promote the development of some of the most depressed areas. 15. The Bank's share of total external public debt disbursed and out- standing is likely to remain at about 10 percent on the average through 1981. The Bank's share of debt service in 1974 was about 12 percent; it is projected to decline during the remainder of the decade because of Nicaragua's substan- tial relatively hard-term commercial borrowing in the past few years. 16. In FY1968 IFC made two loans and an equity investment totalling US$2.1 million equivalent to help establish a new cotton and synthetic fiber textile company (FABRITEX). IFC's equity has since been sold to local investors. FABRITEX was hampered in its early years by marketing problems associated with difficulties in the operation of the Central American Common Market, and aggrava- ted by the 1972 earthquake in Managua. The company is now in the process of re- organizing its operations and financial structure. In March, 1976, IFC approved a loan of US$6.5 million to Propiedades Azucareras de Nicaragua to help expand their sugar production capacity.  - 6 - PART III - THE EDUCATION SECTOR 17. The formal education system comprises six years of primary schooling, five to six years of secondary education, and courses varying in length from two to five years at the post-secondary and university levels. 18. The Ministry of Education has the major responsibility for formulating policy and administering all formal and non-formal public education except for the universities. Private institutions, located mainly in the urban areas, account for about 15 percent of primary, 38 per- cent of secondary, and 25 percent of higher education enrollment. Education administration is highly centralized, requiring the Minister's attention even for relatively minor decisions. The Government plans to remedy this by (a) training and upgrading national and regional administrators, and (b) regionalizing the administration of primary and secondary education. 19. A ten-year Education Development Plan prepared in 1971 emphasized the importance of continued improvement and expansion of secondary education with greater emphasis on prevocational courses to prepare graduates for entry into the labor market or for future specialization. Recently, however, the Government has been reformulating its Education Development Plan for the 1975-79 period to reconcile it with the National Development Plan and to give emphasis to improving the socio-economic conditions of the poorer seg- ments of the population. This revised plan gives priority to formal and non-formal education and training for rural children and farmers, expansion of prevocational secondary education, and strengthening of upper secondary agricultural education. Primary Education 20. The curriculum is identical in all parts of the country. However, some qualitative improvements have been introduced in recent years; for example, the number of courses offered has been reduced and made more flexible, and school directors are allowed to adapt course content to local conditions. Primary education is characterized by a shortage of schoolrooms and qualified teachers, mainly in the rural areas, and by high dropout and repeater rates. In 1974, the national average participation in primary education (excluding over-aged students) was about 65 percent of the 7-12 group, while in rural areas the average was only about 46 percent. The national target is to increase participation ratios to 80 percent by 1981. As almost all school-age children are now enrolled in urban areas, the rural population would benefit most. 21. The Government plans to change radically the administration and supervision of primary schools through the establishment of a system of "edu- cational nuclei". A nucleus consists of one central school offering the full six grades of primary education, surrounded by several four-grade associated schools strategically located to serve the school age population of the catchment area. Multigrade teaching methods and a multigroup classroom organization would be introduced in the associated schools. The centval  - 7 - school would provicle technical supervision and administrative support to the associated schools and also serve as a community learning center where non-formal education and-training programs for youths and adults would be provided. 22. Other measures which are planned in order to improve efficiency include: strengthening the Ministry of Education's curriculum development unit and the recently created National Education Center (NEC) which is res- ponsible for training and upgrading teachers; introducing automatic promotion; increasing the supply of teaching materials; raising salaries to attract teachers to the rural areas; and training teachers in multigrade teaching techniques and practical subjects. With the implementation of this program, the Government expEcts to increase the primary education completion rate from 22 percent in 1973 to 28 percent by 1980, a modest target which might well be surpassed. The proposed education project would assist the Government in achieving these gozls. Secondary Education 23. The first Bank-financed education project supported a significant qualitative improvement in secondary education through the appointment of full-time qualified teachers and the introduction of a well balanced curri- culum, which is now being implemented in all secondary schools in the country. Secondary education consists of a common three-year lower cycle (grades 7-9) providing general and prevocational courses, followed by a two-to-three-year diversified upper cycle (grades 10-11 in academic streams and 10-12 in tech- nical streams) offering specialization in science and humanities, commerce, agriculture, industry and primary teacher training. In 1974 enrollment in secondary schools represented 23 percent of the 13-18 age group, including overage students. Expanded opportunities and a more efficient flow of students in primary education, as well as a growing demand for better trained manpower, will place increasing pressure on the secondary school system in the future. The Government's target is an annual rate of increase of about 8.5 percent in secondary enrollment during 1975-81, to achieve a 30 percent participation of the age group. Accordingly, secondary education facilities would be improved and expanded, mainly in semi-rural areas where they are most needed. 24. Future Government efforts will focus on decentralizing the adminis- tration and supervision of secondary education by establishing regional secondary centers, which will function as educational and administrative units. Each will consist of a central institution offering diversified upper secondary education and will be located in a departmental capital, surrounded by several associated lower secondary schools in semi-rural areas. The director of the central institute will be the administrative supervisor of all secondary schools in the department, and the senior teachers of the central institute will become technical supervisors responsible for providing tech- nical assistance on teaching methods and content of syllabi to other depart- mental teachers. Implementation of this system is feasible, since there already exists a nunber of well equipped and properly staffecl central insti- tutes established under the first Bank education project; associated lower secondary schools in semi-rural areas will be provided in the proposed project.  -8- Teacher Training 25. Teachers for primary education are trained in a three-year course at the upper secondary level (grades 10-12). The quality of training has improved since 1970, when the Government took a number of steps, including (i) the extension of the training program from two to three years, (ii) revi- sion of the curriculum, and (iii) consolidation of 14 public and private teacher training schools into five well staffed and equipped schools, three of which were financed under the first Bank education project. The number of graduates, about 400 per year, is adequate to meet the demand. However, there is need for an extensive program to upgrade 2,000 unqualified primary teachers (24 percent of the existing teaching force), assigned mainly to the rural areas. The proposed second education project includes technical assist- ance to help the National Education Center carry out such a program. 26. Secondary teachers are trained in the university faculties of educa- tion, where standards are comparatively high. Nevertheless, the number of graduates (about 100 per year) is insufficient to meet present and future demand. The National University has recently been expanding its teacher training program, in close collaboration with the Government. The training of teachers for practical subjects (industrial arts, home economics and agriculture) is almost nonexistent except for a limited program, organized by a private polytechnic institute. The Government will undertake a program in these fields under the second project, giving priority to teacher training for lower secondary and agricultural secondary schools. Training of guidance counselors to assist secondary students in selecting fields of specialization will also be part of the proposed second project. The National Education Center will coordinate these programs. Agricultural Education 27. Agricultural education is provided to about 1,000 students in six public and three private upper secondary agricultural schools. The public schools are handicapped by unsuitable physical facilities, limited or non- existent teaching equipment and materials, unqualified teachers, academically- oriented curricula, and general inefficiency of operation. The Ministry of Education plans to improve the quality and relevance of agricultural education through: (1) replacement of existing unsuitable facilities; (2) provision of equipment and teaching materials; and (3) development of new syllabi in accord- ance with an already revised, practically-oriented curriculum. Furthermore, the Ministry plans to concentrate efforts by phasing out two of the six public schools. Through this consolidation, some reduction in the costs per student will be obtained; the teaching staff will be better utilized; and study of four major fields of importance to Nicaragua (forestry, livestock, sugarcane, and basic grains) will be stimulated, with each school concentrating on one of the four. The second project would assist the Government in executing this consolidation program. Vocational and Technical Education 28. The Ministry of Education administers the most important vocational/ technical institutions in the country - the National Technical Vocational Institute and the National Technological Institute - both operating in new  - 9 - and well equipped facilities. The former is receiving assistance from USAID and the latter, from Spain. However, the number of graduates (about 100 a year) is insufficient to satisfy manpower requirements of0 the country's growing industrial sector; hence, the earthquake reconstruction project (Credit 389-NI) provides for construction and furnishing of a new two-year post-secondary technical institute. When fully operational in 1977, this institute will enroll about 500 students and graduate some 250 technicians annually, which would meet estimated demand by 1981. The Overseas Develop- ment Administration (ODA) of the United Kingdom is providing te!chnical assistance and equipment for the institute. Non-Formal Education 29. Various non-formal education/training schemes are being implemented by public and private agencies. The Ministry of Education provides accelerated literacy courses, in which about 12,000 youths and adults have been enrolled. Also, trade training courses of varying duration are offered for skilled and semi-skilled workers by the Ministries of Education and Labor and by private agencies. The Central Bank recently completed an inventory and evaluation of the existing resources for manpower training in the country and came to the conclusion that there is considerable duplication and overlapping of programs and a need to design a national scheme to coordinate vocational training and avoid further wastage of resources. The Government has not yet decided on the timing for implementing these recommendations. 30. Rural trainLng programs are being carried out by several agencies, but their scope is not commensurate with needs. The Ministry of Education operates eight agricultural schools ('"escuelas granjas") for out-of-school youths to complete thesir basic education and receive agricultural training. These schools have been unsuccessful because of irrelevant curricula, unquali- fied teachers, inadequate procedures for selecting students, and recurrent costs that are about esight times that of regular primary education and almost double that of secondary technical education. The Ministry has initiated a full conversion of the schools into agricultural training centers for small- scale farmers and rural youths. Curricula, regulations for selecting students, and the duration of courses are being determined by Ministry of Education staff, in consultation with the Ministry of Agriculture. Sites for the new centers have been selected and include land for farm activities. The Ministry of Agriculture, through its limited extension service, provides some farmer training; the service will be reinforced by better coordination with the new centers and by hiring qualified graduates of the reorganized secondary agri- cultural schools. Financial Aspects 31. Although public revenues and recurrent expenditures have traditionally been low relative to GNP, the education and training sector has been accorded priority within the Central Government budget. The sector was allocated as much as 20 percent of the total budget and 27 percent of recurrent expenditures in the early 1970's, which compares favorably with other countries at similar stages of development. (In 1974, when reconstruction expenditures commanded a large share of public resources, education and training received 13 percent  - 10 - of total Central Government expenditures and 22 percent of recurrent expenditures.) The Ministry of Education currently accounts for about 90 percent of total public expenditures on education, with 60 percent of the Ministry's budget allocated to primary education, 12 percent to secondary education and 13 percent to university education. About one-fifth of the Ministry of Education's total expenditures is for school construction and maintenance, half of which is financed by external sources in support of on-going projects at the primary (USAID), secondary (IBRD) and higher (IDB) education levels. 32. While public primary education is free, there is a fee of about US$35 per year for public secondary schools. This fee generates important financing for school management, additional teachers, school maintenance and materials. Although there is a scholarship program for deserving poor students, the fees are likely to limit the access of the poorer classes to secondary edu- cation, when the demand for places in the system rises as a result of increased output of the primary system, unless the scholarship program is expanded. In 1974, 18 percent of students at secondary level were on scholarships. The Govern- ment has agreed to take all necessary steps to insure that an adequate number of scholarships will be available for students from low income families wishing to attend lower secondary schools in semi-rural areas; such steps will be taken be- fore the beginning of each school year starting in 1977 (Loan Agreement, Section 4.08 ), 33. Based on the enrollment targets, Ministry of Education expenditures (including those for, and generated by, the second project) are projected to increase by 8 percent per annum (1974 prices) during 1974-81, which is approx- imately the same growth rate as that projected for total consumption expendi- tures of the Central Government. These projections assume that 20 percent of the enrollment in secondary education will be in diversified education, and they include provision for increased teaching materials and maintenance and for a real growth in teachers' salaries. Unit costs for primary education are estimated to decline by about 20 percent, as a result of more efficient utilization of teachers and some double-shifting of students. First Bank Education Project 34. The first Bank loan, signed in April 1968 for US$4.0 million, is supporting government efforts to improve and expand secondary education in major cities and upgrade primary teacher training. Despite delays in imple- mentation, related primarily to the 1972 earthquake in Managua and some administrative problems, 13 of the 20 project schools are now in operation and the remaining seven will be completed by the end of 1976. IDA is also financing an education component (US$2.0 million) of the reconstruction project, signed in June 1973, which includes the provision for Managua of four temporary general secondary schools to replace facilities destroyed by the earthquake, two new multilateral secondary schools and a post-secondary technical institute. The four general secondary schools are now operating satis- factorily,anu! the rest of the project is expected to be completed by September 197E.  - 11 - PART IV - THE PROJECT 35. A report entitled "Appraisal of a Second Education Project, Nicaragua" (No. 1003a-NI dated March 25,1976) is being distributed separately. The main features of the loan and project are summarized in Annex III. Sector uork in connection with the proposed project was carried out in 1972 by a UNESCO mission and updated in 1974 by local specialists, with planning assistance from the Bank. The Government prepared the project in July 1975 with the assistance of UNESCO and the Bank. The project was appraised in August 1975. Negotiations were held in Washington on March 4-5, 1976. The delegation of the Republic of Nicaragua was led by Dr. Marin Abaunza, Minister of Education. 36. The proposed project is designed to support the Government's rural education and training development strategy by (a) expanding and improving education and training opportunities through the establishment of basic schools and community learning centers; (b) increasing agricultural training opportunities by establishing centers offering non-formal training to farmers and their families; (c) contributing to meeting the manpower needs of the agricultural sector by establishing agricultural secondary schools in strategic geographic zones; (d) expanding and improving secondary education for the semi-rural populaticn and decentralizing education management by establishing regional secondary education centers; and (e) improving teacher qualifications by establishing in-service training programs. Elements of the Project (a) Rural Education Nuclei 37, Eighteen rural education nuclei would be constructed, furnished and equipped. Each educational nucleus would constitute a technical and adminis- trative education ur,it composed of a"base school",two or more "sub-base schools", and several "associated schools". The eighteen rural education nuclei would include 152 four-grade primary schools ("associated schools"), 52 six-grade primary schools ("sub-base schools") and 18 rural community learning centers ("base schools"). In 1981, when the 18 education nuclei are expected to be in full operation, about 48,000 students, or 87 percent of the 7-12 age group in the 18 areas, would be enrolled in formal educat:on courses on a double--shift basis, and about 7,000 out-of-school youths and adults are expected to be offered non-formral training courses. Accelerated primary education w:Lll be offered to the population 14 years and over. The Government has agreed that (i) the director of each nucleus will be selected on the basis of cril;eria acceptable to the Bank and will be paid a salary comparable to the h:igher salaries paid to urban school directors, and (ii) the taking of measures satisfactory to the Bank for the establishment of the nucleus system of school administration and supervision will be a condition to disbursement of funds for civil works. (Loan Agreement, Section 4.03(c) and paragraphs 1 and. 4(b) of Schedule 1.) Furthermore, the Government has agreed to establish before the opening of each institution included in this part of the project a comprehensive system for continuous evaluation of the educational and tra:ining programs to be carried out by each institution (Loan Agreement, Section 4.04).  - 12 - (b) Agricultural Training Centers 38. Nine agricultural training centers (five replacement and four new) would be constructed, furnished and equipped. The centers would be located close to selected project community learning centers in seven departments. These would support the Government:'s reorganization and transformation of the "escuelas granjas" into agricultural training centers and would train about 2,500 youths and adults annually. The facilities would include, at each agricultural training center, a classroom laboratory, a farm shop, a dormitory for 30 trainees, a staff house and a school farm for student prac- tice, demonstration and some production for marketing and school use. The potential target population, within 45 km of the proposed agricultural centers, includes nearly 30,000 farmers and more than 36,000 rural youths between the ages of 15 and 21. Farmers would attend short training courses in agricul- tural production techniques, farm planning, health, nutrition, child care, family planning and home management. The youths would attend a 10-month course during which they would alternate two weeks of training at the centers with two weeks of supervised practical work on their family farms. Their training program would focus on agricultural technology, farm planning and community leadership. The location of the agricultural centers close to the community learning centers would enable illiterate trainees to attend acce- lerated primary and literacy courses and would enable the agricultural staff to assist in teaching practical agricultural activities at the community learning centers. (c) Agricultural Secondary Schools 39. New facilities would be constructed, furnished and equipped at four agricultural secondary schools. The capacity of each school would be 210 students with boarding accommodations for 80 students. The project schools, which would replace existing inadequate facilities, would be located in four regions with distinct agricultural characteristics: Chontales (cattle), Chinandega (cotton and sugarcane), Matagalpa (basic grains and coffee), and Zelaya (forestry). The schools would offer a three-year upper secondary program (grades 10-12), with emphasis on practical activities to develop skills needed by agricultural technicians. The curriculum of the four schools would be the same except for the third year, when emphasis would be on the production of agricultural products predominant in the region; thus, graduates would be qualified to work in posts requiring general agri- cultural education or some type of specialization. The already revised curriculum is well balanced between general and professional education, but it will be necessary to revise syllabi to reflect the results of an occupational analysis study to be conducted by the Government. The schools would have a farm of about 70 hectares for student practice, agricultural experimentation, demonstrations for farmers and some production for marketing and school use. It is estimated that the recurrent costs per student in the project schools would be slightly lower than those in existing schools as a result of con- solidation of the six public schools into four schools and more efficient use of resources.  - 13 - 40. A National Advisory Committee, composed of the Ministries of Education and Agriculture and other public sector agencies with respon- sibilities in the field, will be created to establish overall agricultural education policy. The Min4stry of Education will establish a tracer system and conduct an occupational analysis study of agricultural technicians to assure relevance of the instructional program. The project wi:Ll provide technical assistance in implementing these programs and in improving the training of administrators and teachers. The Government has agreed (i) to initiate consolidation of the six secondary agricultural schools into four schools by discontinuing admission of new students to institutions other than those to be expanded under this project, effective with the school-year commencing February 1977 (Loan Agreement, Section 3.03);(ii) on or before December 31, 1976 to establish a National Advisory Committee for Agricultural Education (Loan Agreement, Section 4.07); and (iii) on or before December 31, 1977 to (a) complete an occupational analysis study (Loan Agreement, Section 4.06(ii), (b) establish a course for upgrading administrators and agricultural teachers (Loan Agreement, Section 3.06(b), and (c) establish a tracer system for graduates of agricultural schools and training centers (Loan Agreement, Section 4.06(i). (d) Lower Secondary Schools 41. The project would include the construction, furnishing and equipping of 18 lower secondary schools in semi-rural areas, each with a capacity of 240 student places. These new schools would replace and expand existing schools that are functioning without laboratories or workshops and in unsuit- able accommodations (mostly rented houses). The new school would be used to implement the Governinetit's policy of extending secondary education opportuni- ties to semi-rural areas and decentralizing secondary school supervision and administration by establishing regional secondary education centers composed of a "central institute" (selected secondary schools in the first education project located in the departmental capitals) offering diversified upper secondary education and a number of associated lower secondary schools. 42. The projeci: schools, working in two shifts, would enroll about 8,640 students when :in full operation by 1981. The curriculum to be imple- mented includes practical subjects (industrial, agricultural and home economics) to provide students with an opportunity for a more balanced education for further specialization or work. School workshop units would also provide facilities for job entry training for students and out-of-school youths and adults. The establishment of the regional secondary education centers would be a condition to disbursement for civil works (Loan Agreement, paragraphs 1 and 4(b) of Schedule 1). (e) Teacher Upgrading Program 43. The National Education Center (NEC) would carry out a comprehensive program for upgrading about 1,000 teachers and 100 administrators, for rural primary, lower secondary and agricultural schools during the period 1976-80. In addition, NEC would coordinate with the National Technological Institute the traini~-.g of 50 technical/vocational teachers for lower secondary schools  - 14 - and about 20 agricultural teachers. These programs would be of short duration, varying from four to twelve weeks. The Government has agreed that it will (i) establish upgrading courses which include multi-grade teaching techniques for existing rural primary teachers no later than six months from the signing of the Loan Agreement (Loan Agreement,Section 3.06(a)(i); (ii) establish teacher upgrading and training courses for lower secondary school teachers at the NEC and the National Technological Institute not later than six months from the signing of the Loan Agreement (Loan Agreement, Section 3.06(a) (ii); and (iii) in order to attract and retain primary teachers for rural communities, allow teachers in the rural education nuclei to work two shifts, for vwhich they would be adequately compensated (Loan Agreement,Section 4.03(d). (f) Technical Assistance 44. A total of 11 man/years of specialist services and 17 man/years of fellowships for local staff would be provided as follows: (a) specialist services in (i) primary school administration (two man/years) to help estab- lish and operate the nuclei system of school administration and supervision; (ii) teacher training (two man/years) to assist in the implementation of training programs for rural primary teachers, directors and supervisors, with emphasis on multi-grade teaching techniques; (iii) student evaluation (two man/years) for primary and secondary education; (iv) secondary school administration and teacher training (two man/years) to help establish and operate regional secondary education centers and advise on teacher upgrading courses; (v) agricultural education (two man/years) to advise on organization, operation and evaluation of the agricultural education programs of the project agricultural secondary schools and agricultural training centers; and (vi) short-term consultants (one man/year) in farm shops, extension service, farm management, irrigation, dairy, horticulture, and instructional mate- rials; and (b) fellowships for (i) primary and secondary school administra- tors and supervisors (seven man/years) in courses of six to twelve months' duration; and (ii) agricultural administrators, supervisors and teachers (10 man-years) in courses of six months to two years. (The cost of technical assis- tance is estimated at US$42,000 per man-year of specialist services and US$9,000 per man-year of fellowships.) If the Government is successful in obtaining tech- nical assistance from the UNDP or any other agency which might provide it on a grant basis, the funds for the items affected would be cancelled or reallocated for other project-related purposes acceptable to the Bank. The Government has agreed that specialists will be employed on terms and conditions acceptable to the Bank, and that all fellowship recipients will be selected and placed in consultation with the Bank (Loan Agreement, Section 3.05). Cost and Financing 45. The total cost of the project is estimated at US$19.8 million, of which US$8.3 million, or 42 percent, represents the estimated foreign exchange costs. Construction costs account for 58.3 percent of the total cost; furni- ture and equipment, 12.6 percent; technical assistance, teacher training and project administration, 6.3 percent; and physical and price contingencies, 22.8 percent. The proposed loan of US$11.0 million would finance 55 percent of total project costs (US$8.3 million of foreign exchange and US$2.7 million equivalent of local costs). The balance of the project costs will be borne by the Government. Local currency financing is justified for the reasons discussed in paragraph 7 above.  - 15 - Project Administration 46. The Government recently established a Direcci6n General de Inversiones y Asistencia Financiera (DIAF) within the Ministry of Educa- tion. The director of this office will be responsible for the implement- ation of all education projects assisted by external sources, including those of the Bank. Full-time personnel assigned specifically for Bank project administration would include an educator, an architect, and an accountant, all appointed in consultation with the Bank. Project adminis- tration expenditures. included in total project costs are salaries of key project staff, a vehicle, and essential office equipment. Basic designs for the rural primary schools are already available and could be adapted for project use with a minimum of professional input; this wo-rk may there- fore be carried out by technical staff of the Ministry of PubLic Works or Education under arrangements satisfactory to the Bank. All other architec- tural design work and all related engineering and construction supervision for the project institutions would be carried out by consulting firms acceptable to the Bank and employed on terms and conditions acceptable to the Bank. The Government has aereed to establish, within six months of loan signing and prior to disbursements for civil works, furniture and equipment, technical committees to review the architectural designs, equipment and furniture lists and specifications to assure that they meet economic and functional standards and the educational objectives of each project school; the composition of such committees is to be acceptable to the Bank and to include representatives of the Ministries of Education, Public Works and Agriculture and of the DIAF (Loan Agreement, Section 3.10and paragraph 4(c) of Schedule 1). Procurement and Disbursement 47. Contracts for civil works would be awarded to prequalified bidders on the basis of competitive bidding advertised locally and in accordance with procedures sat:isfactory to the Bank. As most of the civil works are of small size and scattered throughout the country, foreign contractors are not expected to be interested; but they would be permitted to participate in the bidding. Nicaragua has several medium and small construction firms which are competitive and qualified to carry out the civil works included in the project. Contracts for furniture and equipment would be awarded on the basis of international competitive bidding in accordance with Bank guidelines. Furniture and equipment would be grouped to form sizeable packages for bulk purchasing. However, items that cannot be grouped in packages of at least US$15,000 and would not in the aggregate exceed the equivalent of US$300,000 (equivalent to about 10 percent of the total cost of equipment and furniture) would be procured in accordance with local procedures satisfactory to the Bank. Domestic and other Central American Common Market (CACM) member countries' manufacturers would receive a preferential margin of 15 percent of the c.i.f. base price or 50 percent of the import taxes applicable to non-CACM produced goods, whichever is lower.  - 16 - 48. The loan would be disbursed over a period of four and one-half years to meet: (a) 40 percent of the total costs of civil works; (b) 100 percent of foreign expenditures for equipment and furniture and 85 percent of total costs of such equipment and furniture when procured locally; and (c) 100 percent of expenditures [or technical assistance specialists, fellowships abroad, teacher training, furniture and equipment for the project administrative unit, and architectural services. An amount of up to US$150,000 would be disbursed retroactively for expenditures incurred after September 1, 1975 for professional services, technical assistance and project administra- tion. PART V - LEGAL INSTRUMENTS AND AUTHORITY 49, The draft Loan Agreement between the Republic of Nicaragua and the Bank, the Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement and the text of a draft resolution approving the proposed loan are being distributed to the Executive Directors separately. The draft Loan Agreement conforms substantially to the normal pattern of loans for education projects, and its more important features have been included in Part IV of this report. 50. An additional condition of effectiveness would be that the full-time services of an educator, an architect and an accountant be obtained by the Direccion General de Inversiones y Asistencia Financiera (Section 5.01 of the Loan Agreement). 51. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 52. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachments March 31, 1976  Page i of 4 Page3 COUNTRY DATA - NICARAGUA LAND AREA (TNOU K142D NICARAGUA REFERENCE COUNTRIES (1970) TDOAL 110.0 MOSt RECENT ARABLE .1960 1910 ESTIMATE GUATEMALA PANAMA COSTA RICA GNP PER CAPITA (USI) 230.0 450.0 540.0 380.0 710.0 560.0 POPULATION AND VITAL STATISTICS _ - ---- - ---------_ _ - -_-_ - ------ POPULATION (MID-YR. MILLION) 1.4 1.8 2.0 4.9 1.4 1.? POPJLATION DENSITY PER SQUARE KM. 11.0 14.0 15.0 45.0 19.0 34.0 PER SOUARE KM. ARABLE LAND 51.0 r6.0 .2 . 295.) VITAL STATISTICS CRUDE BIRTH RATE PER THOUSAND 45.0 46.0 42.0 42.0 17.0 33.0 CRUDE DEATH RATE PER THOUSAND 16.0 17.0 14.0 L5.0 F.0 7.0 INFANT MORTALITY RATE (/THOU) r0.0 54.0 65.0 8s.0 41.0 62.0 LIFE EXPECTANCY AT BIRTH (YRS) .. 50.0 53.0 51.0 . 65.0 GROSS REPRODUCTION RATE Z.1 3.3 3.3 3.1 2.0 3.4 POPULATION GROWTH RATE (1) TOTAL 2.9 2.5 2.6 2.6 3.3 3.3 JRBAN 6.2/a 6.0a 4-.9/a 3.0 5. 0 4.7 URBAN POPULATION (I OF TOTAL) 41.0 45.0 49.0 34.0 *8.(0 46.0 AGE STRUCTURE (PERCENT) 0 TO 14 YEARS 68.0/b 67.0 4A.0 65.0 63.0 69.0 15 TO 64 YEARS 69.0/b 50.0 49.0 52.0 53.0 4A.o 65 YEARS AND OVER 3.o7h 3.0 3.0 1.0 4.0 3.0 AGE DEPENOENCY RATIO 1.0/b 1.0 1.0 0.9 0.9 1.1 ECONOMIC DEPENDENCY RATID 1.97 2.1 1 .7 1.5/a 1.5 1.6/a FAMILY PLANNING- ACCEPTORS (CUMULATIVE. THOU) . . 16.5 JSERS (2 oD MARRIED dOMEN) .. .. .. EMPLOYMENT TOTAL LABOR FORCE (THOUSANDS) 470.0/b 500.0 560.0 1600.0 500.0/a 540.0 LABOR FORCE IN AGRICULTURE (1) 60.o7 51.0 50.0 63.0 38.0 63.0 UNEMPLOYEO (I OF LABOR FORCE) .. 16.0b , 5, 7.0. INCOME DISTRIBUTION t OF PRIVATr INCOME RECDO 8Y- HIGHEST 5s OF POPULATION .. 42.4/c .1 14.8 a 2.2/b HIGHEST ZO0 OF POPULATION .. 65.67w .. 59.0 L 49.37. LOWEST 701 OF POPJLATION .. 3.I7 . 8.9 A. 17 LOWESt 40S OF POPULATION .. S.77w . 21.8 13.B7. DISTRIBUTION Of LAND OWNERSHIP I OWNEO BY TOP 131 Of 04NERS 67.0 .. .. .. 5.0 I OWNEO BY SMALLEST LO0 OWNERS 0.04 .. .. .. 1.0 HEALtH AND NUTRITION POPULATION PER PHYSICIAN Z0oo.0 2060.0 2080.0 3620.0/c 1550.0 1630.0 POPULATION PER NURSING PERSON 5080.0 46860.0 4120.0 6930.0 1210.0 1690.0 POPULATION PER HOSPITAL BED 440.0 410.0 400.0 460.0 320.0 250.0 PER CAPITA SUPPLY OF - CALORIES (I OF REQUIREMENTS) 93.0 L06.0 109.0 97.0 109.0 1 0.0 PROTEIN (GRAMS PER DAY) 68.0 70.0 71.0 59.0 61.0 63.0 -OF WHICH ANIMAL AND PULSE 38.0 33.0 . 19.0 31.0 35.0 DEATH RATE (/THOJ) AGES 1-4 8.4, .. .. .. 7.0 6.0 EDUCATION ADJJSTED ENROLLMENT RATIO PRIMARY SCHOOL 62.0 62.0 65.0 59.0 110.0 112.0 SECONDARY SCH03L 7.0 20.0 17.0 7.0/d 62.0 29.0 YEARS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 12.0 12.0 12.0 12.0 12.0 11.0 VOCATIONAL ENROLLMENT (X OF SECDNDARY) 26.0 9.0 9.0 20.0 32.0 lO-O /c ADULT LITERACY RATE (1) 38.0 53.0 57.0 . 82. 0/d 89.0 HOUSING PERSONS PER ROOM (AVERAGE) 2.21 .. .. .. .8 1.1 OCCUPIEO DWELLINGS WITHOUT PIPED WAT-R 87.0/b.d .. 72.0 .. 74.0/c ACCESS TO ELECTRICITY (I OF ALL DWELLINGS) 33.0/b . 4 61.0 .. 52.0 RURAL DWELLINGS CONNECTED TO ELECTRICITY (Z) 4.0/b .. 7.0 .. 16.0 CONSUMPTION RADIO RECEIVERS (PER THOU POP) 53.0 55.0 58.0 115.0 157.0 71.0 PASSENGER CARS (PER THOU POP) 5.0 17.0 17.0 9.0 34.0 23.0 ELECTRICITY (KWH/YR PER CAP) 131.0 310.0 352.0 150.0 562.0 591.0 NEWSPRINT (KG/YR PER CAP) 0.9 1.8 1.9 1.6 4,.0 6.2 - - - _- - - - --_- - - - - --- - - - - - -- - - - - - - -- - - - - --- -_---- _ . --- - - --_- _ * - ---- --- -- ...-  AMNE I Page 2 of 4 s Pge niseas otherwise noted, dats for 1960 refer to 1959-61, for 1970 to 1968-70, end for Most Recent Estimate to I97-73 asCosta Rica has been selected as an objective country since, althoughi it wee in the earne income bracket with Nicaragua in 1970, its per capita incme was 20-25 percent higher, which gave it a reasonable income target in the reditm term. Bat mnore ioportantly, Costa Rica, which has a resource base very similar to that of Nicaragua has manLaged to obtain a much more equitable distribution of income and social services at the samne tine as it haa achieved a siguificantly higer level of per capita incomes. NICAR 19IL 0 /a 1950-63; /b 1963; /c 1965; /d Insides only. 1970 La 1963-68; /b Nanagua only; /i Rural only. CDS? RECUWT ESIK(iE /a 1963-72; /b Ratio of population under 15 end 65 end over to total labor force. 92ME 1270 /a Ratio of population under 15 and 65 end over to total labor ferce; /b 1966, i-oral wage earners (households); /c Registered, not all practicing in the contariy Ad Net enroibzmt. 19AM I70 La Including residents working In Canal acme; lb Incam recipient; Li Inelds only; d 10 year end over. COSTA RICA 1970 /a Ratio of population under 15 end 65 end over to total, labor force; /b Open unemployment; Li Teacher training not included. R2 February 18, 1976 DoFPNrrlONS OP SOCT11. INDICATORS Lend Ares (thou luo ) Population per nursing person - Populetion divided by nmber of practl- Total -Total surface ems coprising land eras and inland waters, cing male and female graduate nurses. "trained" or "certified" nuses, Arable-Must resea ealimat of land ares used temporarily or peomanently and auxiliary personnel with training or enpariente. for Coitiv-ti-n, pastures. maket and kitchen gardens or to lie fallow. Population per hospital bed - Population divided by number of hospital beds available in public and private genea so. ed apecielleed hospi- GNP per capit. (01$) - GNP percapits estimates at maker prius. alu tel and rehabilitation centre, excludes nursing hone and establish- lated by sam conversion aethod as World Bank Atlas (19 72-74 basis). sants for custodial end preventive care. Per capita supply of calories (7. of ruimet)- ComPuted from Popuatin an vial tatistica energy equivalent of net food supplies available in coun.try per Population (mid-yr. nillion) - As of July first: if nor avsilable. avrrage capita per day: available supplies comprise donesic producti on. of two end-year estimates, imports less exports, end changes in stock; net supplies exclude an,imal feed, seeds, quantities used in food processing and losses. Population density - per esusre k. - Mid-year population per aquace kilo- is distribution; requiremsanta were estimated by F-60 based on phyni- motor (100 hoctares) sf total area. ologica1 needs for no.-I antivity end health considering environ- population densicy - per sqar of arabIe land - Computed as above fur mental ceeprsture, body weights, ago and sen distributions of srable land only. population, and all1wing 107. fur waste at househuld level. Per capita supply of protein (gres,a per day) - Protein concert of per Vital statintico capita net supply of food per day; net supply of food is defined as Crude birth rate per thousand - ~cnua.. live births per th ous and of mId- above; requirements for all ousntries established by USDA inonomic year population ; .usualy fluv0-near averages ending in 1960, 1970 and Research Servi.e. provide for a minim, allowance of 60 gresa of 1975 fcr developing con- .total protein per day, and 20 gram of animal and pulse prctein, cof Crude d!eath reMpteprthou.sand - Annual deaths per thousa nd of mid-year which 10 gram should be a-i-I peotein; these standards are lowr papulation; usually five-yea vunrage ending in 1960, 1970 and 1975 than those of 75 grams of total protein and 23 gram of animal pro- fur developing o.untries. tein as an average for the world, proposed by FiO in the Third World Infant mortality rate f/thou) - Annual deatha of infants under one year Pood lSrvey. of age per chosa..nd lion, births. Per napita protein supply from animal andpulse - protein supply of fod Life oxpectancy at birth (yi-) - 'verge number of years of life remin- derived Ores animls and pulses in gras per day. log at birth,usal flue-yea suerges ending in 1960, 1970 and Death rate f/thou) ages 1-4 - A-1ma deaths per thousand in age group 1-4 1975 for develapingrou-trie.. yerar, to children in this age group; suggested as an Indicator of Cr-us repeoduction rate - Average n-bh- of luve daughters a oa ill uslnutrition. bear in her norma reproductive period if she experiencos present age- specif-c fertility rates; usually flue-year averges ending in 1960, Education 1970 and 1975 for developing countries. Adiusced enrollment ratio - primary school - Enrolloent of all ages as Popleton rowh rte 7.)- ttal- Compound annual growth rates of mid- percentage of primary schoul-age population; includas children aged year population for 1950-60, 1960-70. end 1960 to most recent year. 6-Il yearn but adjusted for different lengths of primary education, Population growth race (7.1 - urban - Computed like groth rate of total for countries with universal. d-cation, enrollment may se...ed 1007, populotion, different definitions of urh a,oreas nay affect compass- since sam pupils are below or above the official school age hbility of dsta amog countries. kdlusted enra1lmet ratio - secodary school - Computed ao above, second- T;chae popolation (7. of total) - Ratio of urban to total population; ary education requires at least four years of approved primay onctru- dtfforecn doficitiona of urban areas ay affect nomparahiliry of data lion; provides gSs..rai, voctional. or teacher training instructions for amog countries. pupils of 12 to 17 years of age; correspondence corses are generally Age structure~ (prcnt - Children (0-14 year), working-age (15-64 veers), secluded. and retired (65 years and ove) as percentages of mid-year po,pulation. Years of schooling provided (fitre and secund levels) - Total ynar- of Age dependency ratio - Ratio of populacius under 15 and 65 and over toschooling; at secondary level, vocational instruction may ho portiaIly those of ages 1 through 64. or completely excluded. iconoic dependency ratio - Ratio of population onder 15 and 65 and over yocstgonal. enrollmsent (7. of secondary) - Vocational institu-lona include to the labor force in age grop of 15-64 years. technical, industrial or other program which opertet independently Family Pl.neinj - anneprors cmlaie thou) - Cumalative number of or as deparments of secondary institutions. acceptors of birth-central devices andec auspices of national family Adult literacy rate (7.) - Literate adults (sble to read and write) as planning prsgrm sInce ince.ption. percentege of total adult population gagd 15 years and over. F-icy planning - users (. oi marred woen) - Pnrcentagea of married wcn,en of child-bearing ago (5-44 years) who -se birth-control. devices Rousing to all earned woen tsae age group Persons per noon (overage) - averge number of parsons per room in~ occupied conventional dwellings in urbas areas; dwellings seclude non-pero-sent Employment structurea and unoccupied parts. Total lahor force fthuu..scd; - Encom-ically active perons, including Occu pied dwellings without pipad water (7. - Occupied conventional dwell- sowed forces end omemplaynd hut encluding housewives, students, etc.; legs in urban and rural areas without inside or outsIde piped water definitions in various uconteic are not cmp-rahle. facilities as percentage of all occupied dwellings. Labor force in ar~iculture (7.) - Agriculturl labor force (is farming. A.eees to electricity (7. of all dwellings) - Conventional. dwellings with forestry, hunting and fishing) as percentage oftota1 labor force electricity in living quarters as percent of total dwellings in urhan Ueemployed (7. of labor force) - Unemployed ore usually defined as persons and rural areas. who are able and vIlliog to take a joh, out of a Job on a given day. Rural dwellings connected to electricity C7) -Coputed as above for remaiced ,sut of a joh, and seeking work for a specified minimum rura dwellings only. period not enceeding one week; may not be comparable between coumtrie8 due to different definItions of unemployed end sourc of data, e.g., Consumption eaployment offico statistIcs, semple survys, compulsory unemployent Radio receivers (per thou pop) - All types of rece.ivers for radio bread- insurance, casts to general public per thousand of population. secludes on- licensed receivers in coutries and in yerar when ragistr-tion of Income distribution - Percentage of private incom (both in cash and radio sets w.as in effect; data for recent years may not be cumparable ki.d) received by riehesi 57., rIchest 207.. poorest 207., and poorest since most co-xtries abolished licensing. 407. of population. Passe.ngter cars (per thou pap) - Passenger care conprisa motnr care seating less than eight persons; encludes amabulance, heorsee and military Distribution of land ownership - Percentages of land owned by wealthiest vehicles. 107 ..ad poorest 10. of lend owers. Electricity (kwh/yr per cap) - Annual comnssption of industrial, co-- mersia1, public and private electtricity is kilowatt hours pee capits; Hesltb and Nutrition geserally bsaed on produccise data, without allowance for losses. in l'oulelonpe phsican- Populattion divided by n-mber of practicIng grids hut allowing for imparts end exports of electricity. physIcians qualified from a medical school nt university level. Newsprint (ha/yr per cap) - Per capitsaensuaI consumption in kilgram,a estimated from domestic production plus net imports of newsprint.  ANNEX I Page 3 of 4 pages ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 19714 ANNUAL RATE OF GROWTdH (%, constant prices) US$ Mln. _ 1965 -yo 1970) -73 1974 GNP at Market Prices :-,359.0 100.0 4.0 3.8 12.1 Gross Domestic Investment 411.9 30.3 2.4 8.5 30.8 Gross National Saving 186.1 13.6 1.0 13.3 -35.3 Current Account Balance -226.0 16.6 Exports of Goods, NFS 436.9 32.1 3.2 14.0 1.6 Imports of Goods, NFS 621.1 45.7 0.6 14.3 19.8 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1974 Value Added Labor Force V. A. Per Worker d JS$ Mln. % Ths. % US-$ %_ Agriculture 2,666 380.9 27.0 300.5 49.6 1,300 56.5 Industry 2/ 2,236 319.4 22.7 110.8 18.3 2,900 126.0 Services 4,965 709.3 50.3 193.7 32.1 3,700 160.8 Unallocated Total/Average 9,o67 ],040.96 100.0 605.0 100.0 2,300 100.0 GOVERNMENT FINANCE General Government Central Government (