Romania - Third Livestock Project

Document of The World Bank FILE COPY FOR OFFICIAL USE ONLY Report No. P-2629-RO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOE RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOANI TG THE BANK FOR AGRtCULTURE AND FOOD INDUSTRY WITH IHE GUARANTEE OF THE SOCIALIST REPUBLIC OF ROMANIA FOR A THIRD LIVESTOCK PROJECT October 11, 1979 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit : Leu (plural Lei) 1. Official Rate Lei 4.47 = US$1.00 Leu 1.00 = US$0.22 2. Tourist Rate Lei 12.00 = US$1.00 Leu 1.00 = US$0.08 3. Conversion Rate for Traded Goods Lei 18.00 = US$1.00 Leu 1.00 = US$0.06 The Official Exchange Rate of lei 4.47 per US$1 is used only for accounting purposes. The rate used for tourist transactions is lei 12 per US$1. Be- ginning in March 1978, a trading rate of lei 18 per US$1 has been used to convert the prices of all traded goods; this rate is considered representa- tive of the average cost of convertible foreign exchange. Fiscal Year January 1 to December 31 GLOSSARY OF ABBREVIATIONS AVICOLA - Poultry Central BAFI - Bank for Agriculture and Food Industry CAP - Agricultural Production Cooperative ICA - Intercooperative Association MAFI - Ministry for Agriculture and Food Industry ROMAGRIMEX - Romanian Foreign Trade Company for Agriculture  FOR OFFICIAL USE ONLY ROMANIA LIVESTOCK III PROJECT LOAN AND PROJECT SUMMARY Borrower: Bank for Agriculture and Food Industry (BAFI) Guarantor: Socialist Republic of Romania Beneficiaries: State enterprises and Cooperative complexes Loan Amount: US$85 million equivalent Terms: Repayable in 15 years, including a 3-year grace period, through semi-annual installments. Interest at, 7.95 percent per annum. Relending Terms: Relending to State enterprises at 2 percent per annum during construction and 4 percent after construction. Relending to cooperatives at 3 percent per annum. State enterprise subloan maturities would be for up to 19 years and would take into consideration the capacity of respective subprojects to repay from incremental income generated therefrom. For cooperatives, subloan terms would not exceed 15 years including three years of grace. The Government would bear the foreign exchange risk. Prolect Description: Agricultural credit subprojects to be financed under the proposed loan are expected to Include investments to be undertaken in 1980-83 for 37 new broiler breeding farms, modernization of 20 existing broiler production farms, 28 new mechanized broiler production farms, 15 new poultry slaughterhouses, provision of specialized equ:Lpment for quality control, applied research, disease control and performance standards improvement and provision for infu- sion of current pure line breeding stock with imported pedigreed stock. The project would be the first signif- icant step by the Government designed to contecibute to fulfilling unsatisfied domestic demand for friesh meat which has hitherto been suppressed due to the need to earn scarce foreign exchange. Annual incremental poultry meat production resulting from the project would reach 157,000 tons (liveweight) at full development in 1987. The project is also expected to create about 9,000 new jobs. The main risk confronting the project is that the pro- jected efficiency improvement in the poultry industry may not be attained unless the feed conversion ratio and the managerial and technical quality of the local staff improve as planned and sufficient specialized quality and 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.  - ii - health control equipment is provided. A technical assis- tance component has been included in the project to mitigate the risk. The other possible risk is a gradual decline in quality of the breeding stock. Infusion of the new pedigreed stock under the project is expected to avoid this risk and improve the quality of the breeding stock. Cost Estimates: Foreign % Local Exchange Total F.E. ---------------$ Million-------------- Slaughterhouses 29.9 9.3 39.2 24 Broiler Production Units 53.1 30.5 83.6 37 Broiler Modernization Units 23.2 18.5 41.7 44 Broiler Breeding Units 85.4 31.2 116.6 27 Technical Assistance - 2.0 2.0 100 Physical Contingencies 5.6 2.6 8.2 32 Price Contingencies 5.0 15.1 20.1 75 Total 202.2 109.2 311.4 35 Cofinanciers Sub- Financing Plan: IBRD and BAFI Borrowers Total ------------------$ Million--------------- Slaughterhouses 8.5 33.9 - 42.4 Broiler Production Units 28.4 51.2 13.4 93.0 Broiler Modernization Units 16.8 15.3 13.7 45.8 Broiler Breeding Units 29.3 98.9 - 128.2 Technical Assistance 2.0 - - 2.0 Total 85.0 199.3 27.1 311.4 Percentage of Total 27.3 64.0 8.7 100.0 Estimated $ Million Disbursement: FY 1980 1981 1982 1983 1984 1985 Annual 0.9 19.6 29.7 18.4 11.2 5.2 Cumulative 0.9 20.5 50.2 68.6 79.8 85.0 Economic Rate of Return: About 12 percent Appraisal Report: Number 2602-RO; dated September 24, 1979 EMENA Projects Department  REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE BANK FOR AGRICULTURE AND FOOD INDUSTRY OF ROMANIA FOR A THIRD LIVESTOCK PROJECT 1. I submit the following report and recommendation on a proposed loan to the Bank for Agriculture and Food Industry of Romania, with the guarantee of the Socialist Republic of Romania, for the equivalent of US$85 million to help finance a Third Livestock Project. The loan would have a term of 15 years, including 3 years of grace, with interest at 7.95 percent per annum. Cofinancing of up to US$100 million is being sought, all from comrmercial lending institutions. PART I - THE ECONOMY 2. The first basic report on Romania (Report No. 1601-RO, "The Indus- trialization of an Agrarian Economy under Socialist Planning") was circulated to the Executive Directors on April 20, 1978. As preparation for the produc- tion of a Country Economic Memorandum, an economic mission visited Romania during June 1979 to collect information on economic performance in 1978 and to discuss the 1979 Annual Plan and the new economic measures announced in February 1978. This part incorporates the mission's findings. Country social and economic data are given in Annex I. 3. Over the past 25 years the Romanian economy has undergone a radical transformation and has sustained one of the highest growth rates :Ln the world. The level and diversification of industrial production has increased rapidly, providing the basis for the modernization and expansion of other economic sectors and a general increase in labor productivity and national income. With the transfer of labor from agriculture to industry, the popu:Lation has become increasingly urbanized. Standards of living have increased substan- tially, not only because of the growth of personal incomes but also because of the provision through the state budget of expanded and improved education, medical services, housing and social expenditures of other kinds. Further- more, Romanian participation in the world economy has changed significantly as the level of trade has risen and its composition altered. 4. These changes represent the outcome of a development strategy designed to accelerate the rate of growth and to catch up, as quickly as possible, with the level and structure of development in the developed coun- tries. The main features of the strategy can be summarized as: high and increasing rates of saving and investment; the creation of a broad industrial base; the development of local natural resources; the reorganizat:Lon and modernization of agriculture; the balanced regional distribution of production and income; the expansion of foreign trade and international economic rela- tions; and the development of human resources. 5. The main instrument for carrying out the strategy has been the system of comprehensive central planning and management. Economic management is organized along socialist principles, which include state and cooperative ownership of almost all productive resources and obligatory development  -2 - planning coordinated by the central party and government authorities. The national plan, drawn up on a five-year time frame and elaborated each year in an annual plan, sets out for the economy, by sector and branch and on a regional basis, specific tasks for economic and social units. It is drawn up through a combination of central directives and aggregation of individual enterprise plans, any differences being reconciled through discussions between the entities involved. Over the past decade, Romania has undertaken measures to improve the planning and management system, to increase the responsibility of enterprises in preparing and implementing the plan and to orient the economy to a more efficient use of resources (see para 20 for the latest changes). 6. The technical and functional Ministries are the State's chief agents for the administration of economic activity. They are assisted by subordinate units known as Centrals, which coordinate and supervise activities within a common branch or industry without being directly engaged in production. Enter- prises subordinate to the Centrals are responsible for production which is controlled through a system of financial and physical production targets. In agriculture, large State farms and cooperatives are the predominant units of production. 7. To achieve the objectives of rapid growth and structural change, the Romanian authorities have made great efforts to mobilize domestic resources for development and to maintain a high rate of capital formation. Over the past 25 years, investment has grown at 13 percent per annum, and by the 1971- 75 Five-Year Plan, the proportion of national income utilized for accumula- tion 1/ had risen to 34.1 percent (equivalent to 27-28 percent of GNP). The sectoral allocation of investment throughout the period reflected the priority of industrialization and the creation of a broad industrial base oriented towards self-sufficiency; approximately 50 percent of investment has been allocated to industry and, of this, by far the largest part has been directed to the producer goods sector. This has resulted in rapid growth of the industrial sector, over 13 percent per annum during the last decade, with the producer goods sector growing more rapidly than consumer goods. In 1978 industry was the leading sector of the economy, accounting for 58 percent of national income, and employing approximately 33 percent of the labor force compared with 14 percent in 1950. Heavy industry, led by chemicals, ferrous metallurgy, engineering and machine building, comprised 64 percent of gross industrial production. 8. This industrialization strategy has greatly increased the demand for raw materials and energy. Romania has concentrated on exploiting local resources of fuels, metals and minerals to be as self-sufficient as possible in these items. However, in spite of the rapid growth in production of the wide range of raw materials found in Romania and recent efforts to conserve and economize on the use of raw materials and energy, Romania has become a net importer of many important items, particularly coal, iron ore and oil. The rapid growth of energy consumption, 8.6 percent per annum since 1950, has out- paced the growth of domestic production. Having started to import oil in 1/ That is, net investment plus change in stocks.  -3- 1968, Romania became a net importer of energy in 1973 and in 1979 is expected for the first time to import more crude oil than is produced domestically. In response to those changing circumstances, the Government has recently published an energy program for the period 1980-2000, proposing the develop- ment of all energy resources and the restructuring of energy uze tc reduce reliance on hydrocarbons. This program, and the reassessment of future petrochemical development which is taking place within the context of the preparation of the 1981-85 five-year plan, indicates the substantiaxl impact upon the Romanian economy that the oil price increases and the curtailment of oil production in Iran are having. It is not possible to quantify the impact of the price increases upon Romania's import bill because we have no informa- tion upon the contract prices; however, the impact was certainly exacerbated by the curtailment of supplies from Iran (which supplied about 50 percent of imported oil) and the need for Romania to purchase oil on the spot market in the short-term while looking for new contracts. 9. Notwithstanding the emphasis on industrialization, agriculture remains a key sector of the economy, still employing 33 percent of the labor force in 1978 (compared with 74 percent in 1950). Apart from supplying foods and other agricultural products as inputs for agro-industries, the sector also supplies about 30 percent of the nation's convertible foreign exchange earn- ings. Though agricultural output almost tripled in the last 25 years, the faster growth of non-agricultural sectors has reduced the share of agriculture in national income to about 15 percent by 1978. Over the past decade, agricul- tural performance has improved with the increased emphasis on agricultural development and the increased investment funds made available. However, the level and growth of production have remained below the sector's potential. 10. Romania's population growth is about 1 percent per annum. The rapid growth of industrial employment has therefore drawn labor from the rural areas. The estimated average GNP growth of approximately 9 percent per annum since 1950, calculated on the basis of official national income statistics, implies a percentage growth in output per head of about 8 percent per annum, with GNP per capita reaching an estimated $1,750 in 1978, using the Bank Atlas methodology. 11. The organization of the economy is such that all labor is employed (indeed, required to work). There is, however, some seasonal labor surplus in agriculture. Income distribution is also relatively equal, through govern- ment policy controls over the level, growth and structure of wages. By law the maximum wage is limited to five and a half to six times the minimum. Monthly wages were increased by 10.6 percent in 1978 to an average of 2,011 lei. The Government also promotes its income distribution policies through regional allocation of industrial investment. 12. The Government aims to give the population a basic needs package, partly by providing services such as education, health and housing. From this basic level, the Government has planned annual increases in living standards. Real incomes have risen at an annual rate of 6.6 percent since 1950, with the growth rate accelerating particularly in the last decade as more benefits of a rapidly expanding national income were channelled to consumption. Prices  of essential consumer goods and services such as foodstuffs, rents and urban transport remain low and most social services, notably education and health care, are provided free of charge. 13. The value of Romania's trade grew at an average annual rate ot 13 percent in the past 25 years, with a gradual acceleration in the last decade, reflecting not only the effects of international inflation but also an in- crease in the importance of trade, particularly industrial imports, to the economy. The level of imports rose in response to the need for capital goods and raw materials, reaching $8.64 billion in 1978. Exports have also grown rapidly, reaching a level of $8.06 billion in 1978, and the share of manufac- tured goods in total exports has increased to 50 percent, reflecting the progress of Romania's industrialization. Trade with LDCs and developed market economies has also been increasing rapidly in response to policies of diver- sifying sources of raw material supply and as a consequence of exports of more manufactured goods. In recent years, there has also been a tendency to move away from trade on a bilateral basis towards trade involving multilateral payments, within the framework of the general trade cooperation agreements signed with almost all of the country's trading partners. These agreements also cover cooperation in production, technical assistance and economic relations. In 1977 and 1978 the convertible balance of payments deteriorated, however, reversing the trend of-the previous three years. After a surplus of $76 million in 1976, the trade balance experienced a deficit of $81 million in 1977 as a result of additional imports made necessary by the earthquake, the diversion of export goods to the domestic economy for reconstruction and continued weak demand in the developed countries for some Romanian exports. In 1978, the deficit increased to $560 million; to a large extent this was the result of poor agricultural performance, but it also reflected shortfalls in production in some industrial subsectors, continued weak demand in developed market economies for some Romanian exports and the need for supplementary imports of raw materials. With an increased deficit on the invisibles account of $219 million compared with $192 million in 1977, there was a convertible current account deficit of $779 million in 1978 compared with $273 million in 1977. 14. The structure of Romania's trade with the developed market economies is still characterized by exports of natural resources and imports of capital goods, although there has been a gradual increase in the share of exports in the form of manufactured goods. Because of the present low level of reserves, any instability in export earnings, as frequently arises from shortfalls in agricultural output or a softening in prices, tends to place the import program, largely sophisticated machinery and components and raw materials, in immediate jeopardy. Recent Economic Developments 15. The current Five-Year Plan covers the period 1976-80. The high rates and the pattern of growth planned for this period suggest that the present decade has been viewed as the decisive period during which Romania should overcome the major constraints on its transformation from a developing country into a developed and technologically advanced country. There have  been substantial and comprehensive revisions to the Five-Year Plan targets during 1977 to help accomplish this. In July, increased targets for standards of living were announced and in December, following the Eleventh Conference of the Romanian Communist Party (RCP), revised targets for all other areas of the Plan were announced. Also, in January 1978 important decisions were taken to increase work incentives substantially by allowing workers to participate in sharing the profits of enterprises (see para 20). 16. According to the revised plan, national income is to grow at 11 percent per annum between 1976-80, practically the same rate as achieved between 1971 and 1975. Gross industrial production will increase at 11.5 percent, compared with the original target of 10.2-11.2 percent, while gross agricultural production is expected to grow at a rate of 6.9-9.0 percent per annum, which would require a significant improvement over previous results in that sector. In addition, investment is to increase by 12.7 percent per annum, approximately the same rate of growth as in the original plan. How- ever, the revised plan contains a larger number of investment projects, as new projects were added following a reexamination of existing projects which led to a reduction in investment costs of about 10 percent on average. This reexamination, which took place in 1976 and 1977 was part of the general campaign to increase utilization of existing capacity and to economize on the consumption of raw materials and intermediate goods. The volume of foreign trade is to increase by 109.1 percent in real terms over the five years, a much faster rate of growth than in 1971-75 when trade merely doubled in current prices. Furthermore, the Government plans to encourage the growth of exports so that it exceeds that of imports, so as to pursue its long-term objective of reducing external debt and allowing for the accumulation of reserves. While the rate of growth of consumption will remain below that of production, it will nevertheless be increased under the revised plan. Real wages are now to increase by 32.3 percent over the five years compared with the previous target of 22 percent. As a result, targets for retail trade and services for the population have been increased. 17. Although the most recently available figures published by the Gov- ernment indicate that the economy is expected to fulfill, more or less, the five-year plan targets, very high rates of growth of the major economic indicators will be required in 1979 and 1980 to make up for the relatively disappointing performance in 1977 and 1978. In March 1977, the economy was dealt a serious blow when a violent earthquake occurred in the east of the country, causing damage valued at $2 billion and leading to a detrimental effect upon the balance of payments totalling $630 million during 1977 and 1978. 18. The Government organized immediately an intensive reconstruction effort with the stated aim of avoiding any impact upon the implementation of five-year plan targets. While these efforts enabled the economy to continue its growth, 1977 plan targets were only partially fulfilled. National income increased by 8.6 percent compared to a plan target of 11.3 percent: and an increase in the previous year of 10.5 percent. Economic performance in 1978 also fell below plan, although the economy continued to grow at a relatively rapid rate. National income increased by 7.6 percent, compared wLth the  -6- annual plan target of 11-11.5 percent. Gross industrial production increased by 9.0 percent rather than the planned 10.6 percent, and there are sizable shortfalls in the production of several major products, particularly oil, coal, chemicals and food products. Gross agricultural production increased by only 2.4 percent compared with a plan target of 6.9-16.1 percent growth and most of the growth was in the livestock subsector. Arable output fell far below plan targets, partly because of climatic difficulties but also as a result of managerial weaknesses and shortages of inputs. The shortfalls not only affected the production of industries using agricultural raw materials but also resulted in lower exports than planned. Investment, on the other hand, increased almost as quickly as planned, 16.2 percent compared with a plan target of 16.8 percent; however, in absolute terms, it did not make up the shortfall brought about by earthquake, despite the considerable physical and human resources introduced into the construction sector. The transfer of labor from agriculture to the non-agricultural sector increased faster than planned, and, indeed, the economy, as in previous years, showed relatively greater ability to create new production than to use existing resources more efficiently; the targets for increased labor productivity and reduced material expenditures could not be attained. While production targets were generally underfulfilled, consumption rose more or less as planned. Average monthly wages rose by 10.6 percent and real incomes of the population by 8.9 percent, one percent more than planned. 19. The Annual Plan for 1979 signals no significant deviation from the previous path. The growth rates published in the plan - 8.8 percent for national income, 11.5 percent for net industrial production (in keeping with the new economic measures, the 1979 Plan specifies industrial growth in net rather than gross terms), 5.1-5.6 percent for gross agricultural production, 16.6 percent for foreign trade, 9.1 percent for investment and 7.5 percent for real incomes - do not, however, fully reflect the high rates of growth expected by the Government during the current year. Early in 1979, the Gov- ernment announced that the shortfalls in production from 1978 should be made up in the last two years of the plan period, so that the economy may attain its 1980 plan levels. Thus, for the major indicators the real growth rates must be considerably higher than those included in the annual plan. 20. In February, 1978 the Government announced changes in economic and financial mechanisms designed to improve the planning and management of the economy, to stimulate improvements in labor productivity, in cost reduc- tion and efficiency of production and also to make existing provisions for enterprise self-management more effective. The major change announced was the introduction of net production as a major plan target, both for inducing enterprises to fulfill plan objectives, particularly in the areas of increased efficiency and reduction of costs and as the basis upon which worker's wages and bonuses are paid. In future, enterprises are also to retain a higher proportion of profits, have increased responsibility for socio-cultural expenditures, be more concerned in the final stages of the annual plan prep- aration, be permitted to enter into longer term contracts to ensure a closer correlation between the plan and actual contract provisions and will have more direct responsibilities for the achievement of foreign trade targets. The measures are still under detailed discussion, with further refinements being  -7 -. considered, although the major changes in planning, net output targets, profit-sharing and enterprises' financial responsibilities were introduced as of January 1, 1979. In early 1979, the Government announced thalt the measures for net output and profit-sharing would be extended to cooperative agriculture. In a complementary vein, the creation was also announced of approximately 700 Agro-industrial Councils which will coordinate the develop- ment of agriculture within a given geographical area and provide a forum for determining the most efficient use of resources in the sector (see para. 42). All these measures are designed to make the existing management and planning system operate more efficiently rather than to cause radical changes. How- ever, they are a_step in the direction that the basic economic report sug- gested was desirable if the economy was to meet its objectives. Furthermore, they will set up new pressures between the various levels of the economy which may lead to more substantial changes in the future. External Assistance 21. The expansion of Romania's trade with the non-socialist industrial countries has led to an increased need to obtain convertible currencies to pay for imports from those countries. Romania has met this need both by borrowing abroad and by mounting a major effort to expand exports and tourism earnings. In 1978, new commitments of convertible medium and long-term loans totalled $1,216 million and consisted mainly of supplier and financial credits with .relatively short repayment periods. Gross disbursements of convertible medium and long-term loans during the year were $1,167 million. This repre- sented a net inflow of $585 million after accounting for the country's repay- ment obligations. There was also a net inflow of $456 million on s'hort-term during 1978. After almost a decade of gradually reducing the size of out- standing short-term debt, the Government was compelled in 1977 to reverse temporarily its policy of reducing reliance on short-term debt, because of the additional financing needs generated by the earthquake. This action had to be continued in 1978 because of the size of the current account deficit, which could not be covered by medium and long-term sources, despite Romania's increased involvement in the Eurocurrency market. 22. As part of its effort to expand its foreign trade and cooperation relationships, Romania has also taken active steps to attract long-term private capital. A regulation passed in 1972 defines the conditions under which foreign firms can establish joint ventures with domestic enterprises, preferably in foreign exchange earning or saving industries. As of November 1978, ten joint venture agreements had been signed and a number of others announced. In contrast with the earlier ventures, which involved total direct foreign investments of only $10-15 million, the seventh agreement, signed in early 1977 with Citroen, involves a contract of FF 2.5 billion (about $500 million) and will lead to a total capital inflow of aproximately $250 million. The eighth agreement is for a joint production company with British Aircraft for the manufacture of commercial aircraft; the ninth is with Data-products Corporation, USA, for the manufacture of computer software; and the tenth is a joint shipping company in cooperation with Libya. However, negotiations have been broken off by Romania and Kuwait for the construction of a petro-chemical complex which would have cost $1.25 billion and involved a capital inflow of about $500 million. Many other joint ventures are at various stages of nego- tiation.  - 8 - 23. Romania also receives medium-term trade credits from the U.S. Exim- bank and trades under Government guaranteed supplier credit schemes, ECGD, COFACE, and HERMES with the United Kingdom, France and the Federal Republic of Germany, respectively. During 1977, Romania became the first iast turopean recipient of a Japanese Eximbank loan, receiving $80 million for the expansion of the port of Constanta. In 1975 Romania succeeded in securing a $100 mil- lion, eight-year loan from Kuwait as part of a general cooperation agreement and also a $420 million loan from Iran on concessionary terms. However, it is in its Eurocurrency borrowings that the Government has made most progress in improving its access to capital markets and in raising substantial sums at good and improving terms. During 1977, it negotiated two Eurodollar loans totalling $125 million. In January 1978, Romania negotiated a further $100 million on the Eurocurrency market and late in the year, a further borrowing of $300 million. The terms for the latter, an eight-year loan with four- years' grace, are 0.625 percent above LIBOR for the first three years and 0.750 percent for the remaining years. As part of its strategy to secure long-term energy supplies, Romania has concluded a long-term contract with Occidental Petroleum for the purchase of coal from the U.S.; a banking con- sortium raised a $53 million loan in April 1978 to finance Romanian participa- tion in the Island Creek coal mine in West Virginia. In March 1979, Romania secured a loan of $320 million from a consortium led by Canadian banks to supplement a $650 million loan by the Export Development Corporation of Canada for the purchase of heavy-water reactors for the first nuclear power project in Romania. Finally, Romania has access to non-convertible currency invest- ment credits from the International Investment Bank, Moscow. 24. Nonetheless, Romania's access to long-term finance in convertible currencies is still very restricted as shown by the fact that, in 1977-1978, in spite of the above developments, short-term borrowing has been necessary. The IBRD remains the major source of long-term development finance, although Romania is making efforts to improve its access to financial markets. The Bank's presence on a significant scale, and its effort to associate Bank financed projects with co-financing through supplier or financial credits, has a positive influence in this regard and serves to build outside confidence in the country, thereby improving in the long-term Romania's independent access to the world's financial markets. Prospects 25. Romania has good potential for further economic growth. Endowed with important natural resources (fuels, some minerals, timber, rich soils and sources of irrigation water for agriculture, and a favorable climate for agriculture and tourism) and located conveniently with respect to its major international markets in the East and West, the country has built a broad industrial infrastructure (power, metallurgy, chemicals) which will serve as a base for the expansion of secondary manufacturing sectors such as machine building and consumer durables. Above all, Romania has a hard-working and increasingly skilled population. To attain its growth objectives, however, Romania will have to rely on a major expansion of exports of manufactured goods in order to finance modern foreign technology and an increasing depen- dence on imported raw materials and fuel.  - 9 - 26. Economic growth and structural change call for the introduction of new technologies, improvements in the quality of products, more efficient use of materials and factor inputs and reductions in production costs. The achievement of export targets requires improvements in the quality of products and responsiveness to customer demands, areas in which the economy appears to have lagged in past years. To keep up with these changes and requirements, large programs of education and manpower training have been mounted, invest- ments in scientific and technological research have been emphasized, and efforts are being made to strengthen technical cooperation with industrialized countries and international organizations. The increasing diversity and com- plexity of Romania's economic structure also require continuing improvements in the efficiency of economic planning and coordination and further refine- ments in economic management. 27. The growth rate is expected to remain quite high by international standards during the next five-year plan period, although the latest figures published by the Government do indicate considerably slower growth between 1980 and 1985 than originally intended. The draft plan Directives published in July indicate an annual growth of national income of 6.7-7.4 percent com- pared with 8.6-9.5 percent in the guidelines for the plan published at the end of 1977. Targets for industry, investment and standards of liviLng have been reduced correspondingly. The Government plans to achieve its targets by emphasizing, first, the utilization of the country's own resources and a large local investment effort, and second, more effective use of human, capital and natural resources. However, in order for Romania to attain its growth targets and its long term plans for creating a competitive industrial economay, it will have to attract foreign resources and technology and secure loans to support its development efforts. Creditworthiness 28. As of December 31, 1978, Romania's total medium and long-iterm external debt amounted to $5,357 million. Most of these debts ($5,254 mil- lion) were denominated in convertible currencies, the major creditor countries being the Federal Republic of Germany, France, the United Kingdom (1JK) and Italy. While the total debt does not appear excessive in relation to the volume and growth of external trade, average maturities are relatively short and convertible debt service payments are estimated to be in the order of $1,081 and $1,035 million a year in 1979 and 1980 respectively. The con- vertible medium and long-term debt service ratio was 18 percent in 1978 and is expected to be 19 percent in 1979. 29. The organization of economic activity in Romania, the pursuit of a development strategy involving high investment and saving rates, and rapid income growth ensure the effective use of foreign credits. Moreover, the country's major efforts to expand exports (particularly to convertible cur- rency areas) are increasing the foreign exchange available for debt service. Convertible export earnings rose from $830 million in 1971 to $4,072 million (not counting $387 million in non-factor services) in 1978. The preferential trade status accorded to Romania by the European Community in June 1973 is facilitating the expansion of exports, as is the granting of most favored  - 10 - nation status by the U.S. Since the early 1970s, the Government has restricted the use of short-term credit from Western suppliers in an effort to improve the structure of the country's external debt, but in view of the earthquake's impact upon the balance of payments and the trade performance in 1978, short- term debt increased again in 1977 and 1978. Assuming a continuation of present export and debt management policies, we estimate that the debt service ratio in 1980 will be about 20 percent after which it will remain fairly stable. The country's present outward-looking posture, the success of both its domestic growth and foreign trade policies, and its potential for continued development all support the judgment that Romania is creditworthy for substantial Bank lending. 30. With the exception of certain Swedish claims, all pre-war foreign debts of the country had been settled. The Swedish claims concern public loans from the prewar period, nationalized Swedish property and other in- terests, such as concessions granted to Swedish companies before the Second World War. The eleventh meeting to discuss settlement of these claims was held in Bucharest in October 1976 and further discussions were planned at a date to be established through diplomatic channels. The Bank has been unable to obtain a consistent picture from the two Governments of the present status of this matter and has, therefore, urged the Romanian and Swedish authorities to clarify their respective positions directly with each other. PART II - BANK GROUP OPERATIONS IN ROMANIA 31. The proposed loan would bring total Bank commitments to Romania to $1,262.8 million for twenty-three loans in agriculture, industry and power. Disbursements under the Bank's initial loans were slow during 1975, but this situation has improved considerably since 1976. Annex II contains a summary statement of Bank loans to Romania and notes on the execution of ongoing projects as of August 31, 1979. 32. Foreign exchange, especially in convertible currencies, continues to be a major constraint and one of the major objectives of Bank lending continues to be to help alleviate the country's shortage of foreign exchange by providing long-term external capital and by financing projects which will expand foreign exchange earnings or savings. The Bank has been assisting the Government by helping to mobilize cofinancing for appropriate projects. The Bank has helped to attract foreign commercial banks to provide $100 million cofinancing for the Second Livestock Project for which a Bank loan of $75 million was approved by the Executive Directors in March 1979. Through their contacts with commercial banks with assistance from the Bank, and subsequent negotiations with those banks, the Romanian authorities now appear convinced of the positive value of cofinancing in the form of financial credits, and have indicated their intention to seek similar arrangements for future proj- ects. Bank lending also aims at supporting the Government's efforts to introduce new industrial technologies, to improve the quality of products and production efficiency, to reduce production costs and to provide for necessary electric power development. Market aspects and marketing, especially for  - 11 - export goods, are also emphasized. Special attention is given to agriculture which is heavily dependent upon favorable weather and where productivity levels are still comparatively low. 33. A number of further loans are under consideration, including loans for projects for horticulture, irrigation, industry, power, and a fourth livestock project. A Bank loan for a major navigation canal linking the Danube and Black Sea is also being processed. The Government has also pro- posed that the Bank consider lending for an integrated road and rail transport project. 34. In addition to lending, the Bank (through EDI) has assisted Romania by conducting training courses on economic and financial evaluation and analysis methodologies in various sectors, including industry and transporta- tion, for 165 Romanian officials in Belgrade in 1973 and in Bucharest annually since 1975 in collaboration with an academic institution in Romania. Addi- tional courses, including one for agricultural project appraisal, are under discussion with the Government. The methodologies taught in these courses are becoming more widely known in Romania and are expected to beginL to supple- ment the methodology normally used by the Romanian planning authorities. 35. The projects, for which assistance has been committed or is being considered, represent only a small portion of Romania's total need for external financing of its total disbursed convertible debt. However, they will provide a substantial net addition to the inflow of convertible currency finance, and may set a pattern for obtaining longer-term convertible finance from other sources. The disbursed debt outstanding to the Bank is expected to constitute about 13 percent of Romania's total projected convertible currency debt in 1980; the Bank's share in Romania's debt service payments in 1980 would be about 4.5 percent. PART III - THE AGRICULTURAL SECTOR IN ROMANIA Agriculture 36. Agriculture continues to be a key sector in the Romanian economy, providing both convertible foreign exchange earnings and industrial raw materials which contribute to progress in other sectors, especially in indus- try. In 1978, agriculture accounted for 16 percent of national income and 33 percent of the labor force (compared with 74 percent in 1950). About 14.49 million hectares, or almost two-thirds of the land area, are used for agricul- ture. Of this area, 65 percent is arable, 20 percent is under pasture and the remaining 15 percent is used for orchards and vineyards. About 8.5 million hectares of all agricultural land is in Wallachia, the region composed of the southern plains in the Danube valley. Approximately 64 percent of all arable land is used for grain production (mainly maize and wheat), while industrial crops (mainly sunflower and sugar beet) are the next most important. Vege- tables are also produced for domestic consumption and export, predominantly by private farmers and individual members of cooperatives, but also often in  - 12 - large-scale commercial greenhouses operated by State farms and cooperatives. Livestock accounted for a relatively high 44 percent of agricultural produc- tion in 1978. 37. The major problems of Romanian agriculture are the instability of its output and low productivity. Growth achieved in agricultural production has been slower than in other sectors and has been characterized by year-to- year variations. Investment in agriculture accounted for 12.7 percent of actual total investment in the 1966-70 plan period and 14.1 percent in the 1971-75 plan period. Investment in agriculture in the 1976-80 plan period is expected to be 116 billion lei ($6.4 billion), about 12 percent of total investment and about 50 percent more than during 1971-75 plan period. In- cluded in these plans are major programs of irrigation investment to address the problems faced by agriculture, in particular, the problem of the instab- ility of production. In addition to investment, the Government has also taken other measures, including institutional reforms and price incentives, to stimulate agricultural production. It has also taken a number of other specific measures to increase agricultural productivity including increases in the supply and utilization of fertilizers, investments in livestock production and the promotion of agro-industrial enterprises to provide processing and marketing facilities. The Bank has also identified production instability and low productivity as the two major problems in the Romanian agricultural sector as stated in the Agricultural Sector Survey (No. 953a-RO) and the recent basic economic report (No. 1601-RO). Through the process of preparing these docu- ments and the Bank financed projects, the Bank has maintained a close dialogue with the Government and contributed to improving the design of agricultural development projects. The Bank has assisted the Government efforts in the sector by providing nine loans for agriculture totalling $516.5 million since 1975 when the first Bank loan for agriculture was made to Romania. Agricultural Productivity 38. In addition to improving its irrigation infrastructure, Romania is also taking measures to improve productivity through upgrading the quality of farm mechanization, increases in the supply and utilization of fertilizers, and the promotion of agro-industrial enterprises to provide processing and marketing outlets for increased farm production. Steps are also being taken to reduce inequality between State farms and cooperatives in access to farm inputs. State farms, which own 30 percent and cultivate 14 percent of agri- cultural land, received about 42 percent of on-farm investment in the 1971-75 Plan period. Productivity on State farms is correspondingly higher than that of cooperatives, but the Government is now moving toward elimination of the disparities between the two types of farm organizations in order to stimulate general improvement in agricultural productivity. The recent announcement by the Government, establishing Agro-Industrial Councils (AIC), is another step towards eliminating such discrepancies (see para. 42). The development of large-scale livestock complexes incorporating significant scale economies and the best managerial staff is contributing to the improvement in productivity.  - 13 - Sector Organization 39. State agricultural units and cooperatives account for the major portion of agricultural production; individual farmers play a much less significant role, except in the production of a few selected commodities. The current sector organization is primarily a result of collectivization and increased government participation from 1949 to 1962, when small-scale, peasant-oriented agriculture was replaced by large, State-owned or State- controlled production units. The dominant form of State-owned agricultural unit is the State enterprise. There are 392 such State farms averaging about 5,300 hectares and about 650 workers each. These large scale, capital intensive farms have been considered a pilot sector in Romania and, as such, have been favored in terms of land allocation, fertilizer distribution and investments in irrigation and mechanization. About 2.1 million hectares of agricultural land are cultivated by these farms, which also own substantial grazing and pasture lands. Workers on the farms are employed on salaries which are fixed by law but vary according to skill levels. The State farms are generally well managed by directors (usually agricultural engineers) who are appointed by the Director General for State Farms of the Ministry of Agri- culture and are responsible to workers' councils. The Ministry of Agriculture determines the production plans for individual State farms; it also has a role in determining the use of their 'net income, a portion of which is remitted to the State treasury. 40. There are about 4,400 agricultural production cooperatives with about 3.4 million member families and cultivating about 9.0 milliort hectares. Workers in cooperatives are entitled to a minimum salary, which is about 20 percent lower than the salaries of their counterparts on State farms. Sala- ries of cooperators may be supplemented by the cooperator s shares of pro- fits in excess of plan targets, a bonus programmed to be about 2 percent of the planned benefits. More than one member of a family frequently works (on a full- or part-time basis) in the cooperative, and some family members are employed outside of the cooperatives. Cooperators are also allowecd to farm about 0.15 hectares each in and around their villages for their personal use, and they are allowed to own livestock. Production on personal plots is always intensive, and produce is either self-consumed or sold to consumpt:Lon coopera- tives to supplement other income of the cooperators. A cooperative is managed by a General Assembly of cooperators and its elected President; it reports to the District Director General for Agriculture, the local representative of the Ministry of Agriculture. Some cooperatives have begun to pool their resources for large-scale investments in agroindustries and livestock production. These intercooperative associations (ICA) are operated by State employees paid from ICA revenues. Part of the net income from ICA sales is retained for further ICA development; the balance is divided among member cooperatives in propor- tion to their contribution to shares in the ICA. 41. Individual producers number only about 150,000 families and own about 10 percent of total agricultural land. Their lands are often located in mountainous regions, and include 19 percent of pasture lands and 21 per- cent of orchards. Individual producers own 16 percent of all cattle, 14 per- cent of sheep, and 6 percent of pigs. The individual farming subsector has  - 14 - not received strong government support but is significant in production of potatoes (16 percent of production), meat (13 percent), milk (20 percent), eggs (14 percent), wool (12 percent) and poultry (56 percent). 42. The Government has recently announced that integrated organizations known as Agro-Industrial Councils (AIC) will be established, each of which will consist of several State or cooperative farms and one State mechanization unit which is responsible for supplying agricultural machinery to these farms when required. There will be about 700 AICs to cover the whole country, each of which will hold on average about 200,000 ha of agricultural land. The Council will be responsible for the overall production plan, allocation of inputs, mechanization and marketing. Although each State and cooperative farm will maintain its budgetary autonomy, decisions on cropping patterns will be made at the Council level, in which directors of the member CAPs, IASs and SMAs will be represented. Implementation of the proposed Councils is cur- rently underway, and it is too early to assess the effectiveness of such Councils in meeting the intended objectives. However, agricultural produc- tivity in the cooperative sector is expected to be improved as a result of forming the proposed Councils by making available to the cooperative sector the underutilized resources tied up in the IAS such as technical expertise, machinery, and generally better management skills. 43. At the national level, the State institution in the agricultural sector is the Ministry of Agriculture and Food Industry. It plays a major role in preparing the Five-Year Plan for the sector and is the supervisory institution for plan implementation. In each district, the Ministry is represented by a general directorate, which is responsible for all agricul- tural activity in the district including both cooperatives and State farms. Marketing is organized nationally under 13 centrals accountable to the Ministry and responsible for processing and marketing specified commodities. Each central obtains produce at the district level and allocates it among domestic retail, processing, storage and export channels. A foreign trade company is responsible for the exports of each central. Agricultural Investment Financing 44. The Bank for Agriculture and Food Industry (BAFI) is the Govern- ment's specialized agency for financing projects in agriculture, irrigation and food processing. As such, BAFI has been the Borrower for all Bank loans in support of agriculture and would be the Borrower for the proposed loan. BAFI was established in 1968 as a channel for, and administrator of, all investment funds provided under the State plan for the agricultural sector. Financing in agriculture had previously been done by a department of the National Bank of Romania. BAFI is involved in all phases of project appraisal, execution and supervision, and it has a large technical and economic staff located in Bucharest, in 39 district (judet) branch offices and in 92 sub- branches throughout the country. One of BAFI's more important functions is that of fiscal agent administering for the account of the national budget all government investment in State farms and enterprises. BAFI also receives interest free funds from the State budget for investment lending to coopera- tives (and in some cases State farms) and repays the Government as it receives  - 15 - repayments of the sub-loans. BAFI has thorough review and approval procedures for all investment projects. In addition to BAFI's review, all agricultural investments for more than lei 10,000,000 ($560,000) are reviewed and approved by the Ministry of Agriculture and those greater than lei 70,000,000 ($3.9 million) must be approved by the Council of Ministers. BAFI aiso provides short-term credit to, and maintains settlement accounts for, all cooperative and State agricultural enterprises; it also acts as fiscal agent for the Gov- ernment for collection of State revenues from these enterprises. As the Government's channel for investment financing in agriculture, BAFI's primary source of funds is the State Budget; the Guarantee Agreement therefore in- cludes a provision that the Guarantor shall provide all necessary funds for the implementation and operation of the project (Guarantee Agreement, Section 2.02). The Guarantor will ensure that BAFI can meet the debt service on the Bank loan (Guarantee Agreement, Section 2.01). The Livestock Subsector 45. Livestock accounted for 44 percent of gross agricultural production in 1978, and its contribution to overall agricultural production has been increasing relatively more rapidly than crop production with a 5.8 percent average annual growth for 1965-75, compared with about 3 percent petr annum for crops. The livestock population at the beginning of 1977 consisted of 6.3 million cattle, 10.2 million pigs, 14.5 million sheep and about 90 million poultry. Nearly 10 million hectares, or about two-thirds of all agricultural land, are used for livestock production. Of these, about 4.5 million hectares are pasture and meadow lands, not suitable for cultivation, which are used for grazing, about 1.6 million hectares are used for fodder crops, and about 3.8 million hectares for feedgrains. Other important crops such as wheat, barley, soy beans, sunflower and sugarbeets provide by-products used for feeding livestock. In general the performance of the subsector is satisfactory, appropriate technologies are available and technical production coefficients are adequate. 46. Per capita meat consumption in Romania is about 30 and 25 percent below the average per capita consumption in the EEC and Eastern European coun- tries respectively. The Government has decided to make efforts to meet the unsatisfied consumer demand for fresh meat, particularly poultry meat, as part of its efforts to give increased attention to consumer issues (FAO estimates for Romania show a considerably higher income elasticity for poultry meat than for other types of meat), and has launched a major poultry expansion program during 1978-83. During this period, it is expected that investments in State and cooperative poultry enterprises for modernization and expansion of new facilities will absorb on average about 20 percent of total resource alloca- tion for the livestock subsector. Through these investments it is planned that an average net growth rate of 6 percent would be attained in poultry meat production for the next five years. Meat is allocated, through the central planning process, between domestic and export markets. In the past, domestic consumption of fresh meat has been deliberately suppressed due to the priority the Government has given to earning much needed scarce foreign exchange. This is evidenced by the recent Second Livestock Project (Loan 1669-RO) which has a heavy emphasis on exports. The proposed project would be the first step by  - 16 - the Government directed solely at improving the level of meat consumption in the hitherto suppressed domestic market. Total meat consumption in Romania is expected to increase from 47 kilograms in 1975 to 61 kilograms per capita in 1980; and by 1985 could increase to 73 kilograms per capita or about 1O percent less than the average for EEC in 1975. The share of poultry in per capita meat consumption is projected to increase from 21 percent in 1978 to 23 percent in 1980 and to 25 percent in 1985. Without the project, either meat consumption would remain low or exports of beef and/or pork would be foregone if the Government was to pursue its objective of improving the availability of meat for domestic consumption. The poultry industry also has considerable scope for technical improvements including introduction of the mechanized cage system as proposed under the project in lieu of the deep litter floor system which is the most commonly used at present. Improvement in managerial skills to deal with the new technology is also required together with improvements in the feed conversion rate which, in the absence of adequate availability of protein supplies, currently stands among the poorest in the world for poultry operation. There is also a scope for improvement of breeds. The Government is fully aware of these problems and, in order to resolve them, has requested the Bank's assistance for the first time in the poultry subsector. After a careful review of the subsector and the proposed project in collaboration with the Government, the Bank is in agreement with the Romanian view that priority should be given to extending the new poultry production technology, improving managerial skills and the feed conversion ratio, and the infusion of pedigreed stock through a Bank-financed project. The Bank also agrees with the Govern- ment's efforts to respond to consumer needs, to increase per capita meat consumption, particularly of poultry meat, and to arrange cofinancing from commercial banks. PART IV - THE PROJECT The Project 47. A poultry project based on the new mechanized cage system technology was first proposed to the Bank for financing in July 1977. After a prelim- inary review of this project, the Bank concluded that since there was only limited operational experience with the new technology, an additional year of operating experience and a comparative analysis of the mechanized cage system with the conventional deep litter system were needed before proceeding further. In September 1978, a Bank mission which included a technical expert on poultry visited Romania and on the basis of additional operating experience gained and the comparative advantage of the cage system over the conventional system that had been established, concluded that the proposed poultry project was technically acceptable. A preparation report was submitted to the Bank in February 1979 and the project was appraised in March and April 1979. Negotia- tions were held in Washington in September 1979. The Romanian delegation was headed by Mr. Ion Rusinaru, President of BAFI, and included representatives from Ministry of Agriculture and Food Industry and BAFI. A report entitled "Staff Appraisal Report Livestock III Project" (No. 2602-RO) dated September 24, 1979, is being distributed separately to the Executive Directors. The main features of the project are mentioned in the Loan and Project Summary and in Annex III.  - 17 - Project Description 48. The project represents a four year (1980-1983) time slice of the poultry production and processing portion of the Romanian National Develop- ment Program and the 1976-80 Supplementary Program (see Map). It would be a major contribution toward realizing the planned increase in poultry meat production required to fulfill domestic demand, making each district (judet) self-sufficient in poultry products. A small percentage of project output could be exported after meeting the domestic demand. It has the important additional features of introducing a new, technically advantageous m,echanized cage system with a technical assistance program attached to it, and substan- tial co-financing with foreign commercial banks. The inclusion of these features is significant in our work with Romania in that it was initiated by the Romanians despite the relatively innovative nature of the features. The project would also contribute to increasing labor and poultry productivity. The major project objectives include (a) expansion of broiler production units utilizing the mechanized cage system to achieve managerial and tech- nical improvements, (b) breeding of high quality parent stock for production of chicks, (c) provision of modern sanitary poultry slaughterhouses, and (d) provision of laboratory equipment and new pedigreed stock for infusi.on into Romanian pure lines both of which are essential to the successful expansion of broiler production and to improve health and performance standards. 49. The project provides for the construction of (a) 37 broiler breeding farms each with an average annual capacity to produce 6.6 million broiler chicks to be sold when they are one day old, (b) 28 mechanized broiLer produc- tion farms each with an average annual capacity of 4,100 tons and (c) 15 poultry slaughterhouses each with an average kill rate of 1,000 chickens per hour. Also included would be (d) the modernization of 20 existing lbroiler production farms, (e) provisions for procurement of specialized equipment to be used in quality control, disease isolation and control, and performance standards improvement; (f) provision for infusion of current pure line breed- ing stock with imported pedigreed stock; and (g) training of technical staff in use of specialized laboratory equipment. Construction is expected to be completed by the end of 1984 and full production reached by the beginning of 1987. It has been found that the current feed conversion ratios (2.5 kg of feed for 1 kg of meat gain) is one of the poorest conversion ratios in the world which is primarily attributed to the quality of feed ration. Under the project, the Government would take necessary measures to improve the feed conversion ratio to 2.3 kg of feed for 1 kg of meat gain when the broiler growing facilities included in the project will start or resume their opera- tions (Loan Agreement, Section 4.01(a)(ii)). Project Execution and Operation 50. The project would be carried out by cooperatives and State enter- prises under agricultural credit subprojects administered by BAFI, and BAFI's branch offices would be responsible for direct supervision of the implementa- tion of subprojects. BAFI maintains detailed records of borrowers' financial and production results relative to subproject appraisal expectations, and would submit to the Bank quarterly reports (Loan Agreement, Section 6.01(c)).  - 18 - Since necessary information would be available from BAFI's branch offices, the incremental cost of monitoring project implementation would be negligible. All subprojects estimated to cost $3.9 million equivalent or more, and other representative subprojects, would be subject to Bank review before disburse- ments would be made on account of such subprojects (Loan Agreement, Schedule 1, para 3(d)). Technical assistance to the cooperatives and state enterprises carrying out subprojects would be provided by AVICOLA and other specialized units of the Ministry for Agriculture and Food Industry (MAFI) under a well- developed program of assistance to such entities. MAFI would have responsi- bility for all necessary arrangements for international procurement. With the growing complexity of poultry breeding and quality control under the proposed project, feeding systems, ration formulae, disease control and technical and managerial capacity must also improve. For this purpose, the timely receipt of specialized laboratory equipment and imported pedigreed breeding stock and training of staff will be secured under a detailed technical assistance pro- gram including training of staff, equipment requirement and pedigreed stock purchases by year for the period between 1980 and 1983 under the technical assistance component of the project which will be carried out by MAFI. Market Outlook 51. The analysis of the market and of the demand and supply pattern indicates that no marketing problems need be expected. The incremental pro- duction under the project will mostly supply the domestic market, and small export volumes are anticipated, which will represent an insignificant propor- tion of total international poultry meat exports. Incremental consumption of poultry meat by 1985 over the 1978 level is projected approximately at 243,000 tons on liveweight basis, of which about 157,000 tons or 65 percent would be provided by the project. It is anticipated that up to about 3 percent of the total production could be exported. In the past, the Government emphasis on exports of meat has resulted in the severe shortage of fresh meat in the domestic market. This is evidenced by the fact that the prices for fresh pigmeat and poultry meat in the private markets have generally averaged about 50 percent and 25 percent higher respectively than the official producer prices. The proposed project is the first significant step by the Government to improve the level of meat consumption in Romania. Production allocated to the domestic market will assist Romania in meeting its targeted increases in per capita consumption which currently is below comparable countries and well short of desired consumption. Project Cost and Financing 52. The estimated total cost of the project is $311.4 million including $0.4 million duties and taxes, with an estimated foreign exchange component of $109.2 million. The cost estimates are based on unit rates of work under the Romanian system of administered prices. The cost of equipment and materials which are likely to be procured from foreign suppliers, has been estimated on the basis of the international prices prevailing in 1979. Physical contingen- cies have been provided at an average of 5.0 percent which will be adequate because the proposed project is in a well developed industry with proven design standards. Price contingencies on foreign exchange costs are based on  - 19 - an annual increase of 6.0 percent for 1980-84. Due to near zero infLation under the Romanian system of administered prices, annual price contingencies of one percent on local costs are included. 53. The proposed Bank loan of $85 million would finance 78 percent of the foreign exchange costs. The balance of the project cost would be financed by a loan from a syndicate of foreign private commercial banks 1/ ($100 mil- lion), sub-borrowers' contributions ($27.0 million), and the remainder as loans from BAFI ($119.4 million). The Government of Romania would bear the foreign exchange risk. The proposed loan would be made to BAFI with the guarantee of the Socialist Republic of Romania, and would be for a term of 15 years, including 3 years grace, at an interest rate of 7.95 percent per annum. BAFI would onlend these funds, together with its own funds, for terms of up to 15 years to cooperatives at 3 percent per annum and for terms of up to 19 years to State enterprises at 2 percent per annum during the construc- tion period and 4 percent thereafter. As in earlier projects, these rates result in a positive spread over BAFI's financial and administrative costs in providing the loans. As a result of Government controls on domestic prices, Romania maintains a domestic inflation rate of around one percent per annum, and no significant further increase is expected in the future. Thus BAFI loans under the project would be made at positive real interest rates, on the same terms and conditions as are extended to other borrowers in the agricul- tural sector. Audit 54. BAFI would keep separate accounts for all project expenditures and its transactions are subject to continuous control by internal auditors from the Ministry of Finance and to an annual audit by inspectors from the Court of Superior Control which reports directly to the Council of Ministers and the President. BAFI's accounting system and the audit of its transactions are satisfactory and BAFI's audited overall and project operating and financing results would be sent to the Bank not later than six months after the end of BAFI's fiscal year. Procurement 55. In Romania all civil works are constructed by the Romanian State- owned construction enterprises which are experienced and familiar with local conditions, methods and regulations. Installations similar to those proposed under the project have in the past generally proved well designed and con- structed. An agreed list of items estimated to cost $83 million would be procured by Romagrimex (Romanian Foreign Trade Company for Agriculture) under international competitive bidding in accordance with Bank guidelines. These items include concrete reinforcing steel ($8.76 million), structuraL steel 1/ Initial contacts by BAFI and the Bank have revealed considerable interest among foreign commercial banks in cofinancing this proposed project. BAFI is following up capital market trends through these contacts, and no problem is expected in arranging cofinancing for the project.  - 20 - ($6.34 million), steel pipes ($2.81 million), electric cables ($9.90 million), steel sheets ($2.73 million), asbestos sheets ($2.20 million), slaughterhouse and meat processing equipment ($50.26 million). Laboratory equipment, bio- logical products and pedigreed breeding costing $2.0 million would be procured under prudent international shopping. Cost estimates are based on the conver- sion rate of $1 = lei 18. Romanian manufacturers would be allowed a 15 per- cent preference margin, or the applicable customs duty, whichever is lower. Romanian manufacturers are highly competitive and it is anticipated that foreign suppliers would be awarded contracts for about $3.8 million mainly for slaughterhouse and specialized laboratory equipment not manufactured in Romania. Disbursement 56. The Bank loan would be disbursed at the rate of 30 percent of the amounts disbursed by BAFI for approved subprojects for construction of breed- ing units, slaughterhouses and new broiler production units and modernization of broiler production units, and 100 percent of foreign exchange expenditures for goods and services for applied research in poultry breeding and disease control. Disbursement for BAFI approved subprojects will be made against certificate of expenditure. Prior approval by the Bank would be required for subprojects costing more than le-i 70 million and also subprojects representa- tive of categories of subprojects costing less than lei 70 million, on the basis of technical and economic analysis of these subprojects made by BAFI according to the methodology agreeable to the Bank (Loan Agreement, Schedule 1, para 3(d)). Environment 57. Romania maintains a comprehensive system of standards and controls to ensure satisfactory waste disposal and waste water treatment. Facilities financed under the project would be constructed and operated in conformity with this environmental protection code. In the manure disposal system, solid materials from the mechanized broiler production units would be collected and sold to livestock fattening farms or to local farms for use as fertilizer. Since breeding units use the deep litter system, manure collects into litter (chopped straw, ground corn cobs or sunflower hulls) until the end of the growing cycle when the litter is removed and sold either for livestock feed or to local farms for use as soil conditioner-fertilizer. Slaughterhouse waste (feather, inedible offal, feet, blood and heads) is collected and processed into meat and feather meal. Benefits 58. The proposed project represents a major undertaking by the Govern- ment to satisfy the growing local demand for hitherto severely undersupplied poultry meat. At full development of the proposed project, annual chicken meat output would increase by 157,000 tons liveweight of poultry meat and about 124 million day old chicks/hatching eggs. It is expected that per capita poultry meat consumption in Romania will increase from 11 kg in 1978 to about 18 kg in 1985. Without the project, however, the choices facing  - 21 - Romania are either to continue sacrificing local demand and maintain the present low level of meat consumption (or reduce it with rising population), or to continue the Government's policy commitment to improve the availability of meat for domestic consumption by foregoing exports of beef and/or pork. Both options wuald be unacceptable to Government. Government therefDre assigns this project a high priority in its development plans. Furt'hermore, the technical assistance component has made provisions for purchases of laboratory equipmemt to be used in strengthening the adaptive research capab- ility of the poultry central (AVICOLA). In addition, new pedigreed stock would be procured for infusions into the Romanian pure lines to improve their performance. Additional employment in slaughtering plants, breeding and production farms financed under the project would create about 9,000 jobs. The economic rate of return to the project is estimated at about 12 percent. The analysis is based on the assumption that (a) the output from the project is considered as import substitute hence valued at import parity price; and (b) tradeable feed inputs are also valued at border prices either export or import parity. Furthermore, the 12 percent rate of return is based on the import parity price of poultry meat at the lower end of the sample price range of internationally traded poultry meat and it does not take into consideration the impact of a potential new large importer in the market if Romania were to import rather than produce poultry meat. The most critical coeff'icients determining the efficiency of poultry enterprises are the feed conversion ratio, broiler yield and the price of chicken meat. Assuming that only the present level of feed conversion efficiency (2.5 kg of feed to 1 kg of meat gain) is attained under the project, the economic rate of return would be 9 percent. It is possible that the feed conversion ratio under the project could be better than the 2.3:1 figure since the breeding stock already reared by Romanian producers has the genetic capability. With improvements in feed rations and management, the economic rate of return could increase Ito about 15 percent. The financial rates of return to the various components range from 5 percent for the broiler breeding units to 20 percent for the broiler modernization units, which are satisfactory in Romanian contexts. The admin- istered price system in Romania, based as it is on domestic costs of produc- tion, ensures that the enterprise is free of risks from price fluctuations. Risks 59. Possible risks confronting the project relate to production effi- ciency and quality of breeding stock. The sensitivity analysis revealed that feed conversion and broiler yield are critical coefficients determining the acceptability of the project. As one of the primary objectives of the project is to improve the efficiency of the poultry industry in general, through the gradual adoption of better feed, it is essential that the current feed composi- tion be revised. The Government would be required to alter the current feed quality (Loan Agreement, Section 4.01(a)(ii)). Coupled with availability of well balanced feed, the presence of well trained and experienced technical staff is indispensable for optimum utilization of all inputs. Experienced staff is necessary to be able to identify emerging disease problemsi. To safeguard against such risks, MAFI's training program would be supplemented by short-term specialized training. The program would be financed under the proposed technical assistance component. The other possible risk is the  - 22 - gradual declining quality of the existing breeding stock adopted a decade ago. The project, however, has made provisions for AVICOLA to continue its research program to introduce specific traits of high disease resistance, better feed conversion, better bone structure and higher yields. Moreover, it is envis- aged that new pedigreed stock would continue to be infused in Romanian pure lines. In the most unlikely event that feed costs increase and chicken meat prices fall, the project would be unacceptable. Such a combination of cost and price behavior can almost be ruled out. Past trends indicate that the most likely outcome is a parallel movement of chicken meat prices and feed costs. Furthermore the ratios of chicken meat price to feed cost over the past decade have remained nearly constant. PART V - LEGAL INSTRUMENTS AND AUTHORITY 60. The draft Loan Agreement between the Bank and the Bank for Agricul- ture and Food Industry of Romania, the draft Guarantee Agreement between the Socialist Republic of Romania and the Bank, and the report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement are being distributed to the Executive Directors separately. 61. Features of the project of special interest are listed in Section III of Annex III. 62. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATIONS 63. I recommend that the Executive Directors approve this proposed Loan. Robert S. McNamara President Attachments October 11, 1979 Washington, D.C.  -23- ANNEX I Page 1 of 5 pag,:s TABLE 3A ROANIlA - SOCTAI. INDICATORS DATA SHEET REFEREINCE CROUPS (ADJUSTED AVERACES LAND AREA (THOUSANI_ StH ROt1ANIA - HOST RECENT ESTIMATF) - TOTAt 237.5 SAM E SAME NEXT HICHER AGRICULTURAL 149.6 HOST RECENT GEOGRAPHIC INCOME INCOME 1960 /b 1970 lb ESTIMATE /b REGION lc CROUP ld GROUP le GNP PER CAPITA (US$) 190.0 530.0 1580.0 2154.0 1748.5 2754.2 ENERGY CONSUMPTION PER CAPITA ILOGRAMS OF COAL EQUIVALENT) 1342.0 3013.0 4036.0 2033.2 1646.7 2518.6 POPULATION AND VITAL STATISTICS POPULAtIN MID-Yt:AR (MILLIONS) 18.4 20.2 21.6 URBAN POPULATION (PERCENT OF TOTAL) 33.7 40.8 44,0 56.3 51.2 72.1 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 26.0 STATIONARY POPULATION (MILLIONS) 30.0 YEAR STATIONARY POFULATION IS REACHED 2095 POPULATION DENSITY PER SQ. I2. 77.0 85.0 91.0 81.5 28.2 33.5 PER SQ. KM. AGRICULTURAL LAND 126.0 135.0 144.0 138.8 100.5 91.3 POPULATION ArG STRUCTIURE (PERCENT) 0-14 YRS. 28.2 25.9 26.0 25.6 35.4 33.3 15-64 YRS. 6S.1 65.5 65.0 62.9 56.3 57.5 65 YRS. A!.D ABOVE 6.7 8.6 9.0 10.2 5.1 5.7 POPULATION GROWTH RATE (PERCENT) TOTAL 1.2 1.0 0.9 0.9 1.7 2.1 URBAN 3.8 2.8 2.5 2.6 3.0 CRUDE BIRTH RATE (PER THOUSAND) 20.0 20.0 19.0 18.5 27.5 31.4 CRUDE DEATH RATE (PER THOUSAND) 9.0 9.0 9.0 9.2 9.2 8.2 CROSS REPRODUCTION RATE 1.2 1.3 1.2 1.2 1.8 1.9 FAMILY PLANNING ACCFPTORS, ANNUAL (THOUSANDS) .. .. .. USERS (PERCENT OF MARRIED WOMEN) .. .. .. FOOD AND NUTRITION INDEX OF FOOD PRODOCTION PER CAPITA (1969-71-100) 85.6 89.0 140.0 115.7 102.0 98.7 PER CAPITA SUPPLY OF CALORIES (PERCE!.T OF REQUIREMENTS) 105.0 118.0 123.0/g 134.2 120.8 112.7 PROTEINS (GRJ1IS PER DAY) 81.0 92.0 96.7/g 95.'. 80.9 70.3 OF WHTCH ANIM!L AND PULSE 24.0 28.0 .. 45.4 31.3 CHILD (AGtS 1-4) MORTALITY RATE 3.0 2.4 1.0 1.3 5.1 2.5 hEALTH LIFE EYPECTANCY AT BIRTH (YEARS) 64.0 69.0 70.0 70.0 65.6 68.7 INFANT MORTALITY RATE (PER THOUSAND) 75.7 49.4 31.0 31.5 45.5 20.8 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. .. .. 69.4 73.9 URBAN .. .. .. .. 85.1 94.6 RURAL .. .. .. .. 43.0 64.6 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. .. .. 70.1 URRAN .. .. .. .. 88.3 RURAL .. .. .. .. 33.2 POPULATION PER PHYSICIAN 780.0/f 840.0/1i 750.0 661.6 1343.2 981.8 POPULATION PER NURSING PERSON 620.0P .. 590.0 677.1 765.0 397.8 POPULATION PER HOSPITAL BED TOTAL 130.01f 120.0 108.0 180.1 197.6 240.6 URBAN 50.0/7 50.0 60.0 .. 260.2 RURAL 620.04T 770.0 730.0 .. 1055.0 ADMISSIONS PFR HOSPITAL BED .. 23.0 .. 15.3 17.3 19.2 POLSING AVEFLAGE SIZE OF HOUSEHOLD TOTAL .. 3.2/h .. .. 4.7 URBAN .. 2.87h .. .. 4.4 RURAL .. 3.4/h .. .. 5.1 AVERAGE NULMBER OP PERSONS PER ROOM TOTAL 1.4/h 1.1 URBAN 1.37Wh 1.2 RURAL .. 1.4Th .. .. 1.2 ACCESS TO ELECTRICTY (PERCENT OF CWELLINGS) TOTAL .. 49.0/h .. .. 66.0 URBAN 86. 071 85.1 RURAL 27.o7i ..  ANNEX I - 24 - Page 2 of 5 pages TABLE 3A ROHANIA - SOCIAL INDICATORS DATA SHEET AREFERENCE GROUPS (ADJUSIED AYkRAGES ROMANIA _- HOST RECENT EStIMATE) - SAME SAME NTXT HICIGR M06T RECENT CCOGRAPHIC INCOME INCOME 1960 /b 1970 lb EST1iATE lb REGION /c GROUP Id GROUP /a EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 98.0 113.0 109.0 105.7 101.7 _ 107.6 !ALE 101.0 112.0 110.0 107.1 110.0 FEMiALE 95.0 114.0 108.0 104.5 92.8 SECONDARY: TOIAL 24.0 45.0 62.0 65.9 51.2 39.7 MtALE 27.0 51.0 65.0 70.3 56.4 FEMALE 22.0 38.0 59.0 62.2 43.7 VOCATIONAL ENROL. (2 OF SECONDARY) 54.0 58.0 70.0 20.4 18.3 PUPIL-TEACHER RATIO PRI"A.Y 25.0 21.0 21.0 26.7 27.1 SECONDARY 16.0 18.0 19.0 .. 25.3 ADL'LT LIIERACY RATE (PERCENT) .. .. 98.0 .. 86.1 CnNS LMPT ION PASSt NOFR CARS PEP. THnrISAN'D POPULATION .. .. .. 105.5 53.4 68.1 RADIO RECEIVERS PER THOUSAND POPULATION 109.0 152.0 146.0 233.7 225.9 210.3 TV RECEIVERS PER 111OUSAND POPULATION 3.0 73.0 120.0 148.0 102.6 117.7 NEWSPAPER ('DAILY GENERAL INTEREST") CIRCULATION PFR THOUSAND POPULATICN 147.0 169.0 129.0 .. 78.5 CINEMA ANNUAL ATTENDANCE PER CAPITA 9.0 9.8 8.7 6.4 3.6 LABOR FORCE TOIAL LAPROR FORCE (7HOUSANIIS) 9600.0 9900.0 10200.0 FE"ALE (PERCENT) 44.9 44.5 44.6 32.3 24.5 27.2 AGRICULTURE (PERCE-.T) 64.5 49.0 34.4 25.8 23.9 23.8 INDUSTRY (PERCENT) 20.5 23.0 32.7 33.1 30.6 PARTICIPATION RATE (iEROF'l1 TOTAL 57.1 56.0 55.9 37.6 33.8 40.1 MALE 64.5 63.3 62.8 57.0 51.3 55.7 FEMALE 50.1 49.0 49.1 28.0 16.3 24.7 ECONOMIC DEPENDENCY RATIO 0.7 0.7 0.7 1.0 1.3 1.0 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HICiHEST 5 PERCENT OF HOUSEHOLDS .. .. .. HIGHEST 20 PERCENT OF HOUSEHOLDS .. .. .. 47.9 57.6. LOWEST 20 PERCENT OF HOUSEHOLDS .. .. .. 5.0 3.4 LOWEST 40 PERCENT OF HOUSEHOLDS .. .. .. 15.4 11.0 POVERTY TARGET CROUPS ESTI?1ATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. RURAL .. .. .. ESTIMATED RELATIVE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. 378.0 .. 550.0 RURAL .. .. 378.0 436.1 403.4 ESTI!IATFD POPULATION BELOW ABSOLUTE POtERTY INCONE LEVEL PERCE.NT) URBAN .. .. .. RURAL .. .. .. Not available Not applicdhle. NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excltiding the extreme values of the Indicator and the most populated country in each group. Coverage of ccuntries among the indicators depends on availability of data and Is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for 4ost Recent Estimate, between 1974 and 1977. /c Europe; /d t'pper Middle Income (51136-2500 per capita, 1976); le High Income (over $2500 per capita, 1976); /f 1962; L Av. 1972-74; /h 1966; Li WHO estimate. HOy. 1979  - 25 - ANi<- b iIErlflT0I OF SOCAL TMICATOPS PFE " l0tOt-: Although the data ar drawn fromsore gecrsrily Judged the Wets s.tharitati-. sOd reliable, it should .150 be acted that tocy vp not O,o ritc c. ti.nally coemparable becosoas of the lack of standardin.d diflnitiona end conocepts used by different coUtci.ie in collecting the date. The data ar., ,crsthelo.- ...ef.l to describe orders of magotitde, Indicate tre,-ds, and charseterice certain major differences bet-o'n countries. The adjusted group acer... for .aOh iadicator are ppopaltion-eeighted geomtric smeng, aoloodiag the estrse. vales of the Indicator nod its -sot poplsa.td outry in each gproup. Tua to inch of data, group averages of al indicators for Capital Surplus Oil. Fb --esad of indicators of Acness lo Woter eod F.-rt. DisPot.. 1, tiOusig, Ioose Distribution end POverty for other oco~ntry groups ste populatica-osighted geomtric seen.1othOont exclusion of the ..teeo vIe.r ond the oust Ppclsl..d o..-try. Sinc thet coeag f coutries omnot the iniaosdpnso vilabiltiy of data sd 1~. ot -nifo.-. cautio otbnered In veinting -verages of Ion atd cator to enotbr. These &gvrerso sre sotly us.fu asapelain f eoo,'eoswhncnsl1,. onon ofco Ind.1catra te-mn the .-utry -d, refor-se groue.. EANDO AREA (thousand oqi.k.) Ae.... te feKrsta Di.pos (pr t of tcslto) - tc01. oct-0.vdvrs Total . Totalsraeae opiigln raedtln see limher of peol (teal urben end rural) served ty -creto dlsposal as Ag.ieultur.l - M.ter raecet eetimate of agricultural, area ..ed teepearaidy peoar..tmgse of their r-pe-tto- Pooc~itlouin.~ totrot. lisp-sc. TercnY d or permsnently for crops, peatures, merket and kitchen gardeng or to the oclleotlon s.d disposal, citb or without treat-me, of oseoovre. lie fello. and waste-et.tr by e.atr-horn eyotem or the Os. of pIt prives and 0. 1. rN E CPT (s) - CNIP per capita. estimete at current market prices, Inst&.94p9.n.ay.~~44n-ppttv iie yome fpeoibvyyi -co.iclt.d bysame .....ersio method ma World penis Atlas (1976-7 bie;iAItdiiilalschool St uni-ersity le-cI 1960, 1970,-ed 1.978 ddt.. 22gulati Pne Nursing Person - P.piolotico divided by o-ob-r of raio oy min SUSyCigtgft PER CAPTTA - hossonl consumption of c.meeio1 enrg ..dfel graduate oursee, practical tres., end se.t ,tt -Sev EOalnod C iognitE, etroleu, octural g a. nd bydro-, nuclear end gen- Ponulation Pot Hgneital Bed - total. orban sd rural - PopuIlti,, on ont., therml electr-cty) in kiliograms of no.1 eqivIn.lt Per capita; 1960, end rura) divided by their respectic nubr oiopt.t1 be- oilb.vc 1970, and 1976 data. pbhllo sOd privtat eSnral smd specialieed bacopital asd roo.IiLi totoon _-occ,-c Hospitals are~ establishments Permanently statffd by at least -t phciyeia.n POPUJIATIOTN AND VITAL STATISTICS Establishment. providing priooipaily cu4todial car art cot -ncluded, bn-.1 T.tisof.oy I 1F. 170, n hospital.s, hnsoeer, include health end medical cent-rs cot oereoe-l.y ot.ffed 1977 ~~~~~~~~~~~~~~~~~~by a physician (but by a medical esai.tent, tese, aiioife, eitc.) alic. off- Irben opulatdco lerceetof~ total) - Ratio of orbs. totctal population: in-_patient aeosmdati.. end D-icede a limited voge ,r medical faictl-cec aiffro definitions furban area nay affeet comparability of data Adminelona par Hospital Bed - Total sumber of &dm.ie...n to or diochergsr frva noun coetros; i6i,1970), end 1971 data. h.spital. dlided by -the -miol- cf bedo. Pcoaieproletins PopulIatiol I vent Oc05 - Torrent population projectoine are based on OitSINt 197 .toalpopulation by age sod nea end their eurtslity and ferIt PIr. lc fHoshl leroll por b2l hl(-toa.c00 ui ua rates. eojeoti.o. paaeesfrmtliyrat.s comprise of tte A hee-eheld conist. o gopf idIiduas ho stareliving carttro old levels aenoming lif.e pe.teney at birth increasing with tountry' a their main meals. A boarder or lodger sly or may cot be iovlooico in the per capita income level, ed female life cepentenny stabilizing at household fur siatietiosl psopoe.. 77.5 years. The parameters for fertilibty rate also have three levels Averag, number of persons pe om-ttl urban. end nasal Average cooleor asojlog. deoltos 1c fertility .....rding to income leve end pent or persons per ron. in Mre,- ent ua cuidCnvoinldein fC."l oIlsonlg pelfrfsormac. Cash country Is thea assigned one of these rsspentiveIy, Dwellinsg exclude aoo-peemneneet otrut-e end rooccupited enrtc. iee ccshieatlem if morality and fertility trends for projection Access to Electricity (peret of dSettng) total Lb adlra Con- purposes. c~~~~~~~~~~~entlonal dweling cu lctiiy! in livi;ng qMserters no yr-etsge StationaRy PopuIstioc - in a etati-oory Population there ie no growth total, orban, and rural d-1.lige respecti-eSy. si nce the bit ort icqa to the death rate, end aleo the age st ructUre remains consteont. This IS achieved only after f.rtiiity rates IEDUCATION doclilne to the repi. ement level Of unit not reproduction rate, eh.. Adjie.t;d Enorolimest Ration eac h generstion of women replaces itself exactly. Thee nnsypopu- Primary eehnol - inltel. al :d feml Gross toa. -sl d0 fenele enrll loIon oi.. eas eatomated on the basis of the projected charaoterietics mtof a11 ages attepisy lelaspercetag-s of ...sPotie P-cnry of the populatios Ie the year 2000, end the rate of decline of fertility school-age popnlatto...; normally includes children aged 6.11 yearl but rate to replacement level. adjus.ted for different lengths of primary educationi; for nic wc iti beer tatone""y "opuIti-n IS reached - The year shen Stationary Pepulation uniersal eduction enrollment ma emceed 100 perln-t oite acme pupils oiIe bus been reached, are hel..o above the official Scbool ge.- Povotaltio CeDoni1ty eondar Icol-tta,mlo femal - Compted a i.v roo Pre So. bkn. - Mid-rear pooclatio pee sioar kilometer (100 hectares) of odunno eoie tlat fu year of appro-eo ProcasY iSo trut total orea provides general voctional, cv tenher training i-ntr-oict- civ p,pilo Per So . gri-olturel Isoci- Conpoted no shon for agrinUorltr] ind usalY if 1.2 to 17 years of age; cors-ooce-rroc r covly only. ~~~~~~~~~~~~~~e-ltded. bOocetin ho Stoveue -ervt) - hitldre- 0-lA year), cork-g-ags voctioa enrollmen-t (prea f- eonao - V-ctLon-I -Occtlctet- loolde (-64 Ct t n rtedbSyars and over) ae percentages of mid-pear technical, industrial, or9 oth 'er rigssuhcdpeae ocenct vn populstico; 1960, 1970, end 1977 dots. departments of secodary institution- Pocroltion Growth bate pecent tongtal-nna roteanof total mid- -oi-ece ai rmried scnay-Total stodnt e nrolladoii YearppltosfrIO-p AST,ed17-7 primary an eodr Svl lled b .iobcr of teaciero in tie corme. PoS.Lation Growth bate )oervont) - irba; - Annual growth rates of irbon epooding level s. po,pulaions for 1950-bo, 9byC-70, eni 1970.75. Adult literacy rate (pEr... Literate ad.lts (able to reen smd write) So Cruct Birth Rate 'pe thcusand) - An...al Ice births pier thousand of sod- apercentaeo totl adul population, aged 15 years and over. YIar p`PocLtton; 196, 1970, end 1977 data. Cru.e Death Rote per thousan,d) - APnuoo1 deaths per tbou-aod 00 nod.ye- CSBSURPSITc pcPulatioo; 19bO, 1970. nd 1977 coata. p..eege Care (por thou.cd p.pulatiot. PaSengeTYcePr oompRChe ootor ror ,o P vooIct late-Overage 0-00- of daughters a sosa cil bear noai lees then tight pereons; .-edo.ue nmoulanc-s, he-.e. ed iLit-ry ccRic or-ca r-prodooti- p-juoc fC She errcw present age- -ehi.ln. .o-oflc rto- lity rntv -I u.-11y floe-year averages ending 1 1960, Radio_ Reiver (per-oon ppulatiot) - All types of rceeov.er foe r.di C-iTO, sodi975. had ttoenrlpbic per tbooe"no of popcIlatlon; oxcoldoS cc.Ocl-cood Fo.-ly P -`gio - oit-ne, cymbl tiousndn) - Oous center of recivers in Countrien sod it yearn oh.. regloSrtto- of -mol -et at -i coceictorn of iio-oorl eicvodr ,upces of national feelly effect; data for recent pear oy not be -oprototc < occtcv urecog Prcgroo. abolisied 1lice.. iog. moILly Pbnoi.tg- c-ev perceot If maried s-ne, - Per..enisge of mesied TV Receivers (per tonussOod population) - TVroevr for brondomo c eerc aimtof child-ccarting age 15-44 yeora) h.c bt birch-cntrol de-ices publ per t ounend opulation;cctt nieedT reiere itvc.v. ac Ii arird -ot in uam age groop. end in years ohen regiutration of TV setg ca. in effect. ctcl Omil Icffpiocccs Neesnane~~~~~~~~.FVr CIrculation (per thbueand pc ilaoo) - Sh... tie ooerog nIro tcic cC fod Ovcrictot r Ceite i9t97l.