Central African Republic - Technical Assistance Project

Document of FLLE COIP The World Bank FOR OFFICIAL USE ONLY Report No. P-3054-CA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE CENTRAL AFRICAN REPUBLIC FOR A TECHNICAL ASSISTANCE PROJECT May 6, 1981 This document hs a restricted distribution and may be used by recipients only In the performance of their official duties. Its eontents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1.00 = CFAF 235 1/ CFAF 1,000 = US$4.26 CFAF 1 million = US$4,255 ABBREVIATIONS ACCF Agence Centrafricaine des Communications Fluviales (Central African River Transport Agency) BADEA Banque Arabe pour le Developpement Economique en Afrique (Arab Bank for Economic Development in Africa) CAADE Caisse Autonome d'Amortissement des Dettes de l'Etat (Autono- mous Fund for the Amortization of National Debts) CAR Central African Republic CCCE Caisse Centrale de Cooperation Economique (Central Fund for Economic Cooperation) (France) EDF European Development Fund (European Economic Community) FAC Fonds d-Aide et de Cooperation (Aid and Cooperation Fund) (France) IFAD International Fund for Agricultural Development SOCADA Societe Centrafricaine de Developpement Agricole (Central African Agency for Agricultural Development) CAR FISCAL YEAR January 1 - December 31 1/ The CFA Franc (CFAF) is tied to the French Franc (FF) at the ratio of FF 1 to CFAF 50. The French Franc is presently floating.  CENTRAL AFRICAN REPUBLIC FOR OFFICIAL USE ONLY TECHNICAL ASSISTANCE PROJECT CREDIT AND PROJECT SUMMARY Borrower: Central African Republic Amount: SDR 3.3 million (US$4 million equivalent) Terms: Standard IDA terms Project Objec- tives and Des- cription: The major objective of the proposed project is to help improve the country's absorptive capacity for financing of development projects by external donors, and to stimulate private investment in key sectors of the economy. The project would also help to lay the basis for modest improvements in the organization of some key Ministries which have particularly important roles to play in the short-term rehabilitation of the economy. The project would include the following main components: (a) preparation of a road-rehabilitation program, and prepara- tion and start-up of an integrated cotton/food-crop project; (b) sector studies to review the organizational, financial, and legal setups of the important diamond and forestry sectors; (c) provision of resident technical advisors to assist in the preparation and implementation of development projects, and in monitoring the external debt; (d) vehicles and operating expenses for the resident advisers; (e) an organizational review of the civil service, with recommendations for modest, short-term improvements; and (f) provision of funds for further studies, training, consulting services, and related needs to be identified during project implementation. Benefits and Risks The proposed project would be expected to lead directly to preparation of two major rehabilitation projects (one in the highway sector and one in agriculture) suitable for financing by several external donors. Recommendations from the studies to be carried out on the diamond and forestry sectors should also result in specific measures to promote new foreign capital investments, and to re-activate production in those sectors. The reviews would also help the Government improve the fiscal regimes governing the sectors, and would suggest ways to strengthen Government control and increase public revenues from diamond and forestry operations. The most important risk is one inherent in all technical- assistance projects of this kind, namely, that expatriate staff may not become fully integrated into the local system, and that their relations with Central African personnel may not be as effective as required to fully achieve the objectives of the project. The other major risk is that delays may occur both in the execution of the project 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 - in follow-up of the recommendations to be put forward. Appro- priate steps have been taken to reduce this risk by (i) careful pre-identification of technical-assistance personnel by the Government in consultation with the Association, with special attention given to the ability of the advisers to work effec- tively in a similar environment; (ii) carrying out of detailed preparation activities with financing from the Project Prepara- tion Facility, and (iii) pre-identification of potential external donors for investment follow-up. Estimated Costs - ------US$ million- - ----- Foreign Local Total A. Project preparation 0.6 0.2 0.8 1/ B. Sector studies 0.2 - 2/ 0.2 C. Resident technical advisers 0.9 0.2 1.1 D. Vehicles and operating expenses 0.1 - 2/,3/ 0.1 4/ E. Review of civil service 0.3 0.1 0.4 F. Further studies, training, consultants services, etc. 0.9 0.1 1.0 BASE COST 3.0 0.6 3/ 3.6 Price contingencies 0.5 0.1 0.6 TOTAL COST 3.5 0.7 3/ 4.2 1/ Includes the refinancing of an advance of US$490,000 equivalent from the Project Preparation Facility for the preparation of the road rehabilita- tion program. 2/ Less than US$50,000 equivalent. 3/ Includes US$15,000 of taxes on imported vehicles procured locally (all other project items are exempt from taxes). 4/ Includes $7,500 of physical contingencies. Financing Plan Foreign Local Total IDA 3.5 0.5 4.0 Government - 0.2 0.2 TOTAL 3.5 0.7 4.2 Estimated Disbursements FY82 FY83 FY84 FY85 Annual 1.2 1.4 1.0 0.4 Cumulative 1.2 2.6 3.6 4.0 Economic Rate of Return: N.A. Staff Appraisal Report: None prepared. Map: IBRD 15646  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE CENTRAL AFRICAN REPUBLIC FOR A TECHNICAL-ASSISTANCE PROJECT 1. I submit the following report and recommendation on a proposed Development Credit to the Central African Republic (CAR) for the equivalent of SDR 3.3 million (US$4 million) on standard IDA terms, to assist in financing a technical-assistance project. PART I - THE ECONOMY 2. The last economic report, entitled "The Economy of the Central African Republic" (Report No. AW 16-a), was distributed to the Board on May 22, 1970. Since then, the Bank Group has monitored the economy with several missions and with the help of the IMF. The findings of these mis- sions have been integrated into this report. Political Situation 3. The present Government, headed by President David Dacko, was formed at the end of 1979 when the Emperor Bokassa was overthrown in a coup d'etat. The new Government has taken steps to return the CAR to a democracy. A new constitution was adopted at the beginning of 1981, presidential elections took place in March 1981, and elections for a national assembly are scheduled for early June 1981. Economic Potential and Constraints 4. The CAR is a landlocked country of 626,000 km2 with a population of 2.3 million 1/ growing at an annual rate of 2.5 percent. About 35 percent of the inhabitants live in urban areas. With a 1978 per capita income of US$270 (World Bank Atlas), the CAR is listed by the UN as one of the least- developed countries of the world. The CAR is a member of the Central African Customs and Economic Union (Union Douaniere et Economique de l'Afrique Centrale--UDEAC), and together with Cameroon, the Congo, Gabon, and Chad, it shares a common currency, the CFA franc, issued by a common central bank, the Bank of Central African States (Banque des Etats de l'Afrique Centrale--BEAC). 5. The CAR's economy is based on agriculture, which provides roughly 34 percent of GDP. Mining, manufacturing, and utilities account for 14 percent, and construction, transport, and services for 52 percent of GDP. * Although basically devoted to subsistence crops, the agricultural sector also produces export crops, of which cotton and coffee are the most important. Cotton and coffee exports combined have typically accounted for about 50 percent of the country's export earnings, but during the last three years, their share declined to an annual average of about 35 percent because of 1/ This figure is the United Nations' most recent estimate for 1980 and will be reflected in the 1981 World Bank Atlas. The 1980 World Bank Atlas reports 1.9 million as the estimated population in mid-1978.  -2- lower production and lower world market prices. The other major export products are timber and diamonds. Sedimentary basins along the border with Chad are being explored for possible oil resources. Tobacco, cocoa and palm products contribute marginally to the CAR's export revenues. 6. One of the principal constraints on developing the CAR's resource potential are transport conditions and the small size of the domestic market. The CAR-s economy is handicapped by high transport costs, and because the country is located some 1,500 km from the nearest seaport (Pointe Noire, in the Congo), it depends heavily on the efficient operation and adequate maintenance of the domestic road network and of the international river- and railway-transport system. The small size of the country's domestic market makes it difficult to take advantage of economies of scale, with the result that production costs and prices are high. Past Performance 7. In the 1960s, the Government pursued a development strategy which left most economic activities to the private sector. Government efforts focused on providing basic social services and on stimulating the production of cotton to increase exports and provide cash incomes for the majority of farmers. A successful cotton program (financed by the European Develop- ment Fund--EDF) raised cotton production from 25,000 tons in 1965/66 to 65,000 tons in 1969/70. Investments in import-substitution manufacturing and in forestry, increased diamond exports, and a well-functioning private river-transport system led to a growth in GDP of about 4-5 percent a year in real terms during the second half of the 1960s; both the state budget and the balance of payments remained in a generally comfortable equilibrium during that period. 8. During the 1970s, drought affected the economy of the CAR, as it did much of West and Central Africa. Moreover, international price upheavals and the recession in the industrial countries added to the country's economic difficulties. At the same time, domestic policy decisions and economic and financial management did little to consolidate the modest gains of the 1960s. In agriculture, hastily prepared and ill-conceived institutional reforms resulted in the departure of expatriate technical assistants working in the sector, and regional rural development offices were closed. The scarcity of trained manpower seriously weakened agricultural agencies, and research came to a standstill. Cotton yields fell and production declined throughout the 1970s to less than half the output at the beginning of the decade. Periodic shortages of food and edible oils were experienced in urban centers, attribut- able in part to flaws in Government marketing arrangements. Coffee production suffered sharp downturns as foreign-owned plantations were nationalized, commercial channels were weakened, and scarce labor tended to migrate to the diamond fields. The expansion of manufacturing also slowed down as the public enterprises that had replaced foreign private companies did not perform, while new investments by domestic and foreign private firms fell off. 9. During the first half of the seventies, accelerated development of the country's forestry resources helped to compensate for the difficulties in other economic sectors. Investment in new concessions proceeded at a fast  -3- pace, and forestry production and exports escalated. Forestry development in the CAR, however, came to a halt because of depressed demand between 1974 and 1976. This in turn affected the transport sector. The CAR-s river-trans- port monopoly, the Central African River Transport Agency (Agence Centrafri- caine des Communications Fluviales---ACCF), which had been set up following the Congo's nationalization of the transequatorial transport system in 1969, undertook an ambitious investment program to expand capacity in anticipation of rising forestry production. Management problems and the heavier debt burden added to the problems related to the downturn in forestry, and impeded its ability to provide efficient services. 10. A boom in coffee prices between 1975 and 1977, and the recovery of forestry in 1977, resulted in two years of 4 percent annual GDP growth, but in 1979 and 1980, the economy stagnated. In large part this was due to the fact that foreign donors did not continue their previous level of support as they were discouraged by the deteriorating performance of government departments and parastatal enterprises. The Budget 11. Growing public finance problems originated to a large extent in the budget. During the last three years of the decade, budgetary receipts increased at an annual average rate of only 5 percent, while expenditures rose at 11 percent. The result was a budget deficit which increased from US$26 million in 1977 to almost US$43 million in 1980, or 42 percent of revenues. Increasing budget support from France could not prevent a rapid accumulation of arrears, which reached approximately US$55 million in 1980, or about 58 percent of budgetary revenues. By then, erratic supply of essen- tial materials crippled the administration, and the foreign debt service remained unpaid. 12. The large deficits were the result of bad performance in almost all fields of budgetary policy. Wages and salaries in the civil service rose from 58 percent of current expenditures in 1975, to 67 percent of current expendi- tures in 1980 mainly due to a sustained increase in the civil service; unrestrained outlays for goods and services related, in part, to sumptuary expenditures, added to the problem. On the revenue side, a general relaxation in taxation discipline, a substantial rise in unrecorded imports, numerous tax loopholes accorded to the private sector, the generous granting of import franchises, and the rise in diamond smuggling, deprived the budget of revenues estimated at about US$11 million a year. 13. With the help of France and the IMF, President Dacko's Government has tackled its financial difficulties on a broad front. A detailed finan- cial program for a stand-by arrangement negotiated between the Central African authorities and the IMF in January 1981 and approved by the IMF in April 1981 puts the main emphasis on reducing the budget deficit. On the expenditure side, the Government is making efforts to reduce employment in the civil service by encouraging early retirement and by phasing out unneeded employees. Salary increases previously announced for 1981 have been cancelled, and the salaries of top-echelon civil servants are to be reduced. Budgetary  -4- outlays for gasoline consumption, and unnecessary materials and supplies are to be cut by about US$7 million. On the revenue side, the most important measures of the financial program are tax increases on gasoline in late 1980 and early 1981, and on beer consumption in 1981. Moreover, the Government is planning to raise several direct taxes, introduce a tax on insurance premiums, increase customs duties, and introduce various tax reform measures recommended by the IMF tax report in 1977. Finally, the control and collections of taxes and customs duties will be strengthened. Total revenues are thus projected to increase by US$26 million or 29 percent in 1981, compared with an average growth rate of about 10 percent during the preceding three years. The finan- cial program also places quarterly credit ceilings on the Government's net recourse to bank financing, and it subjects all expenditures to prior authori- zation in order to avoid extra-budgetary outlays. The Government has, in addition, agreed to avoid all foreign borrowing with maturities of less than 12 years other than loans contracted to refinance the existing debt and arrears. As a result of the above measures, the projected budget deficit, excluding foreign grants, is expected to be reduced to US$26 million in 1981. The budget deficit will be financed by exceptional foreign grants, by normal statutory advances from the Central Bank, and by the use of the counterpart of net drawings from the IMF. Balance of Payments 14. Since 1977, current-account deficits have exceeded net inflows of concessionary medium- and long-term capital by large margins, creating a vast external debt problem. In 1977, in spite of coffee exports twice as high in value as those of 1976, the current-account balance deteriorated, as imports rose by some 41 percent in current terms. This trend continued through 1980; while imports practically doubled from 1976 to 1980, merchandise exports increased only by some 22 percent. Since private transfers and services also showed increasing deficits, the current-account deficit rose from US$40 million in 1976 to US$163 million in 1980, or from 10 percent to 23 percent of GDP, respectively. In 1977, Government increased commercial borrowing substan- tially, and in 1979 and 1980 US$55 million in exceptional French aid was received. Net capital inflows, however, remained insufficient to cover the current deficits, and the overall balance-of-payments deficit more than doubled, from US$11 million in 1978 to US$24 million in 1980. The overall deficits were mainly financed by drawings on the IMF. At the end of 1980, the CAR's net foreign assets stood at US$9 million, and its gross official reserves amounted to US$65.4 million or about four weeks of imports. 15. During the last three years, the IMF has provided the CAR with balance-of-payments support. In 1978, the country received a US$7 million Trust Fund loan, and in 1980, balance-of-payments support amounted to US$14.6 million (US$5.2 million First Credit Tranche, plus US$9.4 million Trust Fund loan). In 1981, funds from the IMF are expected to amount to US$25 million (US$11.6 million from Compensatory Financing, and US$13.4 million from the remaining First Credit Tranche, the Second Credit Tranche, and part of the Third Credit Tranche). In addition, the country received SDR allocations of US$2.2 million in 1979 and 1980, and roughly the same amount is foreseen for 1981.  -5- The External Debt 16. In the second half of the 1970s, development assistance slowed down, mainly because of CAR's bad record in servicing the external public debt. In spite of substantial budgetary assistance from abroad, the public sector has, on average, succeeded in servicing only 40 percent of its debt- service obligations during recent years. When some donors stopped lending, the Government resorted increasingly to commercial borrowing, which aggravated its debt-service problem. At the end of 1980, outstanding arrears were estimated at US$53 million, or around 25 percent of the outstanding debt of approximately US$208 million. The country's scheduled debt-service ratio has been estimated at 11 percent in 1980, but would amount to almost 50 percent if arrears were included. 17. In 1981, the estimated public-debt service will amount to US$14 million. The financial program negotiated with the IMF provides for some reduction of external arrears. A debt-relief program to be negotiated at a meeting of the Paris Club in June 1981 is expected to result in a detailed plan for further reduction of external arrears. Internally, the Government took steps to improve the CAR's debt-servicing capacity by raising the rate of the beer tax, the revenues from which are earmarked for debt payment. Investment Plan 18. In June 1980, the new Government organized a donors conference at which it presented a national rehabilitation and short-term economic develop- ment plan. This Rehabilitation Program (Plan de Redressement, 1980/81) emphasizes the development of the agricultural sector and the rehabilitation of the road- and river-transport system, crucial for increasing exports and reducing imports. Planned investments amount to US$72 million in 1981 and US$96 million in 1982, or roughly 9 and 11 percent of GDP, respectively. Investments in agriculture (40 percent), transport infrastructure (30 per- cent), and industry (10 percent) represent the bulk of the program, the remaining 20 percent being reserved for urban sanitation, education, and health. Although modest in size and sound in content, the 1981/82 investment program will probably be only partly realized since the bulk of the projects will require further preparation, and only about 50 percent of the external financing required has been acquired. 19. Two large projects have been launched by the Government in the agri- cultural sector. An integrated rural-development project in the cotton zone, amounting to US$94 million, aims at restoring cotton production from its present low level of 27,000 tons a year to 45,000 tons a year by 1984/85. Through an integrated coffee-development project amounting to US$35 million, coffee production would increase from its present level of less than 16,000 tons a year to 20,000 tons a year by 1984/85. These two projects would repre- sent more than half of planned agricultural investment over the next five years. Investments in new construction, upgrading, and maintenance of roads and bridges would amount to US$36 million in 1981 and 1982. The Government has demonstrated its commitment to road maintenance by reactivating the Road Fund, the revenues of which come from the increased tax on gasoline (para. 13).  -6- Public enterprises 20. The very difficult situation of the public sector was the result not only of budgetary problems but also of the performance of public enterprises, which have incurred heavy operating deficits and debts which they are unable to service. To tackle this set of issues, the Government has begun to convert public enterprises into mixed enterprises, and has created a specialized unit in the Ministry of Planning and Finance which will assist the parastatal enterprises to adopt a strict accounting and reporting system. This unit is currently carrying out a comprehensive survey of all payments arrears that are owed by the Government to the enterprises, of the enterprises- overdue tax liabilities, and of inter-enterprise debt. With the help of a concessional loan of US$21 million from France, the Government is planning to liquidate the remaining balance. As an additional step toward strengthening the financial position of the public enterprises, the Government has decided to review the prices of goods and services supplied by several of the enterprises. Prospects 21. After three years of stagnation, the economy can be expected to grow at about 3 percent a year, a pace slightly higher than the demographic growth. A mixture of measures already introduced or in execution will contribute to this result. First, a revival of traditional exports will result from Government's recent decision to bring producer prices closer to world market prices, a policy which Government intends to pursue further in the near future. Second, a well-directed investment program in agriculture and road rehabilitation will stimulate exports in other sectors like forestry, and will also facilitate the supply of imported intermediate and capital goods needed for the country's reconstruction. Moreover, the Government's encouraging attitude to the private sector, as well as the improved financial climate, is expected to induce private investors to return to the CAR. Third, during recent years, certain efforts have been made to improve insti- tutions and economic"management. In several new mixed enterprises, private partners are given management control. In order to overcome the serious drawbacks of the overcentralization of agricultural services, the Government has returned to a policy of decentralization, and created several autonomous agencies to manage the integrated rural-development projects. On the other hand, to strengthen financial management, the country's three stabilization funds (for coffee, cotton, and foodcrops) were consolidated under one general manager. The full impact of these changes will not be felt immediately, but they have set the stage for further improvements in the years to come. 22. In view of the country's poverty and extraordinary balance of pay- ments and debt service problems, the CAR is not creditworthy for conventional borrowing, and donors should extend their assistance on highly concessionai terms. In addition, even assuming exceptional efforts to improve the public finance performance, public savings net of debt service are likely to be negative during the early 1980s. Therefore the Government's contributions to public investments will remain modest for several years. If performance continues to improve, however, foreign donors should be prepared to assist new development projects, financing a high proportion of project costs.  PART II - BANK GROUP OPERATIONS IN THE CAR 23. Bank Group commitments in the CAR amount to the equivalent of US$35.8 million and cover three transportation projects, one education project, and one livestock project. Two transportation projects have been completed. A combined Project Completion Report for the two transportation projects, dated July 23, 1976, concluded that a straightforward road-construction project which did not require much Government participation could succeed rather well, but that a maintenance project requiring substantial Government counterpart funds and recurrent-cost financing for its implementation ran the risk of encountering substantial problems and delays. The Credits for the third trans- portation project and the education project have been almost fully disbursed, and supplementary credits for the completion of the projects were approved by the Executive Directors in November 1980. Both projects are now being imple- mented satisfactorily. The Credit for the livestock project was declared effective in July 1980 after some delays, but the project is now well underway. Annex II contains a summary statement of IDA credits as of March 31, 1981, as well as notes on the status of the ongoing projects. 24. The level of IDA lending and the sectoral composition of the Bank Group's lending program over the past 16 years were largely circumscribed by the country's poor economic performance and limited absorptive capacity. The new policies of the present Government are, however, more encouraging, and the proposed technical-assistance project would help the Government to implement them. Should the efforts of the new Government to improve its financial and economic performance prove effective, the Association would be prepared to consider financing a road-rehabilitation and maintenance program and an agricultural project. PART III - THE NEED FOR TECHNICAL ASSISTANCE 25. When President Dacko came to power in September 1979, his Govern- ment was faced with a dismal state of affairs. After more than a decade of irrational economic management, private investment had come to a stand- still, the commercial agricultural sector had all but disappeared, the civil service was in a state of disarray, the wages of civil servants were paid only sporadically, and tax collection was hardly enforced. The country-s economy as a whole was barely functioning, and the Government was bankrupt. 26. The international community, led by France, moved rapidly to help the new Government redress this situation. France provided budgetary support and technical assistance, particularly to the Ministry of Finance (including a comptroller of expenditures and senior staff for the Directorates of Customs and Tax Collection), the Ministry of Transport, and the Ministry of Education. Assistance to strengthen the Ministry of Planning was extended by UNDP, the EDF, and France, and assistance to develop agriculture was provided by several traditional donors, including UNDP, the EDF, France, and the Federal Republic of Germany.  - 8 - 27. One of the very first steps taken by the new Government, with the assistance of foreign expertise, was to prepare the Rehabilitation Program (paras. 18-19). At the donors meeting in Bangui in June 1980 (para. 18), the program was presented to several external agencies, who praised it for its realism and moderation, and particularly for the absence of the economically unjustified prestige projects which had been proposed to the international community by the previous regime and which had never found much support. The donors did, however, also point out that few of the projects were sufficiently well prepared to permit specific pledges to be made for their financing, and that much preparatory work remained to be done before financial assistance could be forthcoming. 28. The main issue after the donors' conference was thus how to trans- late the proposed Rehabilitation Program into well-prepared development proj- ects. The problem was exacerbated by the weakness of the civil service, and by the fact that donors who were normally willing to provide technical assistance for project preparation found themselves unable to make such assistance avail- able at this time, either because they had exhausted available resources, or else because they had chosen to give priority to providing other forms of tech- nical assistance to the CAR. The Government therefore turned to the World Bank to seek its assistance in implementing the Rehabilitation Program. 29. In response to the request from the Government, the Bank reviewed the situation in the CAR in late 1980 with a view to preparing a technical- assistance project. The major conclusions of the preparatory work, which subsequently became the guiding principles for the proposed project, were the following: (i) assistance in project preparation and implementation was needed in all sectors, yet in view of the disruption of the civil service, the Government could not be expected to effectively coordinate and utilize a large number of foreign technical advisers; furthermore, in view of the bleak outlook for future availability of adequate budgetary resources, it would be unwise to undertake projects and investments in too many sectors at once; (ii) the highest priority would have to be given to activities which could rapidly attract foreign investments, and which would con- tribute immediately to the rehabilitation of the economy and an increase in Government revenues; and (iii) any support provided by the Bank Group should be carefully formulated to complement other development assistance already provided or committed. 30. On the basis of these conclusions, and in order to supplement the assistance of other donors (mentioned in the descriptions of the various project components, paras. 34-45), the Government, in consultation with the Association, selected the following areas for Bank Group assistance under the proposed project:  -9- (i) agriculture and transport projects, which together made up 70 per- cent of the Rehabilitation Program; (ii) forestry and diamonds, which used to contribute significantly to Government revenues and to the country's foreign-exchange earnings, but which have not done so in recent years because of illegal exploitation and diminishing investments resulting from unattractive fiscal regimes; (iii) external debt monitoring, which was hardly done under the previous regime, with the result that the Government had very little credibil- ity vis-a-vis foreign donors; and (iv) the civil service, which in its present severely disrupted state, is generally considered to be the main obstacle to any sustained economic recovery. PART IV - THE PROJECT Background 31. The proposed project was appraised in October 1980, and a post- appraisal mission visited Bangui in December 1980. Negotiations were held in Bangui between March 31 and April 2, 1981, and the Government's delegation was led by the Minister of State charged with Planning and Finance. Key events and special conditions are listed in Annex III. No Staff Appraisal Report has been prepared. Project Objectives 32. The main objectives of the proposed project are: (i) to improve the country's absorptive capacity for external-aid financing; (ii) to stimulate private investments in key economic sectors; and (iii) to provide on-the-job training and development of key local officials. The proposed project would furthermore endeavor to lay the basis for modest improvements in the organiza- tion of some Ministries which have particularly important roles to play in the short-term rehabilitation of the economy. Project Description 33. The proposed project would consist of the following: (a) Project Preparation and Start-up Activities: preparation of a road-rehabilitation program, and preparation and start-up activi- ties for an integrated cotton/food-crop project. The equivalent of US$800,000 has been allocated to finance about 50 man-months of consultants- services, some local-staff training, and other prepara- tion activities to be identified during project implementation in agreement with the Association.  - 10 - (b) Execution of Sector Studies: two studies, one of the diamond sector and the other of the forestry sector, would be carried out with the primary aim of identifying and defining the sectors' major problems, and presenting recommendations on how private investment and production could be stimulated in the sector and corresponding Government revenues increased. The equivalent of US$200,000 has been reserved to finance 15 man-months of consul- tants' services for these studies. The detailed terms of reference for the studies have been discussed and agreed with the Government. (c) Resident Technical Advisers: four resident experts (at a total cost of the equivalent of US$900,000), all recruited on terms and conditions acceptable to the Association, as follows: (i) a Project Coordinator, for 36 months, 1/ expected to be attached to the Ministry of Planning and International Cooperation; (ii) a Legal Expert, for 24 months, 1/ attached to the Ministry of Planning and International Cooperation; (iii) an External-Debt Expert, for 12 months, attached to the Ministry of the Economy and Finance; and (iv) an Agricultural Programs Coordinator, for 18 months, attached to the Ministry of Agriculture and Livestock. The duties of each of these are discussed below (paras. 36 and 39-43). (d) Organizational Review of the Civil Service: 36 man-months for this task, at an estimated cost of the equivalent of US$400,U0O. (e) Further Studies, Training, Consultants' Services, Related Activi- ties, etc., to be identified during project implementation. An amount equivalent to US$1.0 million would be reserved for further consultants' services, training, and other activities falling within the objectives of the proposed project. Funds under this component might only be drawn upon for activities or expenditures recommended by the Project Coordinator and approved by the Association (Schedule 1, para. 3(c) of the draft Development Credit Agreement). Project Preparation and Start-up Activities 34. Road-Rehabilitation Program. The CAR's road network is extremely dilapidated and urgently needs rehabilitation. Several donors are already 1/ The contracts would be renewable from year to year, to allow the Govern- ment and the Association to review the advisers' effectiveness after each 12 months in post.  - 11 - helping the Government to improve some specific roads. Nevertheless, the consensus of the Bangui donors meeting (paras. 18 and 27) was that a compre- hensive road-rehabilitation and -maintenance program should be prepared before additional funds would be committed to the sector. In view of the urgency of improving the road network, France, in consultation with the Association, immediately made funds available to start project preparation. These funds were exhausted before the preparation work had been completed, so the Association made available an advance of the equivalent of US$490,000 from the PPF to continue the already ongoing activities. It is estimated that the equivalent of US$600,000 (including the refinancing of the advance from the PPF) is required to complete all preparation for the program, and the proposed Credit would make this amount available. Specifically, this amount would finance (i) the final technical and economic studies for the road-rehabilita- tion and -maintenance program; (ii) the detailed engineering of a main access road to Bangui; (iii) an analysis of the requirements for improving the Bangui- M-Baiki road; and (iv) the preparation of bidding documents. The expatriate specialists currently doing project preparation are working together with the CAR government-s Director of Transportation (Ministry of Transportation) and his staff. It is expected that several bilateral and multilateral donors may be prepared to participate in financing the road program. 35. Cotton/food-crop project. The Rehabilitation Program envisages the rehabilitation of cotton growing, thus integrating the pilot efforts being undertaken by France, Germany, and the EDF, inter alia, into a comprehensive development project. Several other potential donors have indicated their support for the program, including the Association, IFAD, and BADEA. The project is being prepared by SOCADA, a mixed enterprise responsible for inte- grated agricultural development in the cotton zone. The two main problems facing the proposed project are: (i) limited Government capacity to coordinate the various donors- policies and inputs, and (ii) the lack of Government expertise for project implementation. 36. In order to better assess the institutional and policy questions facing the cotton sector in the CAR, the Association and the Federal Republic of Germany fielded a joint mission in November 1980. The mission's report will be discussed in late May 1981 in Brussels at a meeting chaired by the EDF of all donors planning to participate in the financing of the proposed project. While SOCADA has the technical expertise required to complete most of the project preparation work, the Government needs assistance to monitor SOCADA's project preparation and other activities, to maintain the dialogue with the donors, to recruit staff, and to commence training. The proposed technical- assistance project provides for the services of an Agricultural Programs Coordinator, who would work together with the CAR government's Director of Agriculture (Ministry of Agriculture and Livestock) and his staff, and includes an allocation of the equivalent of US$200,000 for additional assistance in project preparation and for project start-up activities. Draft terms of reference of the Coordinator will be finalized after consultations with the other potential cofinanciers at the forthcoming donors meeting in Brussels. As regards the start-up activities, they would only be defined during the appraisal of the cotton/food-crop project, envisaged for mid-1982, and before any disbursements were made under this category, the list would require the approval of the Association (Schedule 1, para. 3(b) of the draft Development  - 12 - Credit Agreement). However, since the Coordinator's role is most important during the project s preparatory phase, he would be recruited and his services would commence as soon as possible; it is planned that the contract would end when financing for the proposed agricultural project becomes available. Sector Studies 37. The declining revenues from the diamond and forestry sectors appear to be caused primarily by the Government's inability to monitor the sectors and to enforce tax payments. This in turn had caused the previous Government to increase taxes to the point where many foreign companies lost interest in making further investments in the sectors. 38. Under the proposed project, two studies would be undertaken which would review taxation systems and production conditions in the two sectors, but more generally, would study the entire organizational, financial, ana legal framework within which they operate. The detailed terms of reference for the studies have been discussed and agreed with the Government. It is estimated that the study of the diamond sector would commence immediately after Credit effectiveness with one diamond expert, who would undertake a one-month fact- finding mission to the CAR. Based on his findings, terms of reference would be drafted and agreed with the Government for a second phase,, which is tenta- tively believed to require the services of experts in geology, diamond market- ing, mining, and legislation. A total of eight man-months would be needed for this second phase, which should provide specific guidance on means to improve Government control of the sector, and recommend measures to stimulate the investment climate and encourage systematic diamond prospecting. The expatri- ate specialists would work together with the CAR government's Deputy Director of Mines (Ministry of Energy, Mines, and Geology). The forestry study would require about six man-months of consultants- services and would produce recom- mendations on policies to strengthen the national forest service, and on appro- priate fiscal and legal measures to encourage new investments in the sector. The study would also identify the priority needs of the forestry sector, and how the assistance of the Bank Group and other donors might be provided to meet those needs. The expatriate specialists carrying out the forestry-sector study would work together with the CAR government's Director of Water and Forests (Ministry of Water, Forests, Hunting, Fishing, and Tourism). Technical Advisers 39. Project Coordinator. The role of the coordinator would be to facili- tate the implementation and follow-up of the various components of the proposed project. In addition, he would function as an economic adviser to the Minister of Planning and International Cooperation, particularly with regard to: (i) project selection and preparation, including recommending studies or other activities to be financed from the unallocated category of the proposed Credit; (ii) determination of economic viability and recurrent-cost effects of project proposals; and (iii) budgetary and debt-service consequences of proposed external borrowing. Draft terms of reference have been discussed and agreed with the Government. The project would finance this post for 36 months.  - 13 - 40. Legal Expert. Although the CAR produces a large number of law gradu- ates from the University of Bangui, the country lacks lawyers with practical experience in almost all fields of law. At present, this gap constitutes a serious constraint both as regards the negotiation, ratification, and implemen- tation of projects financed by foreign donors, and as regards negotiations with present and potential investors in the private sector. It is thus proposed to provide the services of a resident legal expert for 24 months who would: (i) assist the Division Chief for Technical Cooperation in negotiating with foreign financiers and strengthening the cai:acity of the Ministry of Planning and International Cooperation's Directorate of Cooperation, so that it might deal more adequately with foreign financial agencies; (ii) assist the Deputy Director of Mines and the Director of Water and Forests, respectively, in reviewing the investment codes for the diamond and forestry sectors, and, building on the earlier-described sector studies (paras. 37-38), in reviewing existing concession agreements, and in negotiating concession agreements with investors in the diamond and forestry sectors and with other private enter- prises seeking to establish themselves in the CAR. Draft terms of reference have been discussed and agreed with the Government. 41. External-Debt Expert. The ability of the Government to mobilize foreign concessional financing will to a large extent depend on whether or not it manages to restore some order into the servicing of the external debt (paras. 16-17). The Government agency which is responsible for moni- toring, managing, and servicing the CAR's external debt is called the Autono- mous Fund for the Amortization of National Debts (Caisse Autonome d'Amortisse- ment des Dettes de l'Etat--CAADE). The CAADE lacks even the most basic resources for keeping records up to date. In addition, its funding is inade- quate to service the debt. The Government has taken steps to increase the CAADE's revenues by increasing the tax on beer, and expects to renegotiate its external debt under the auspices of the Paris Club (para. 17). The Association and the IMF have assisted the Government in preparing a prelimi- nary inventory of the debt, but continuous assistance is required if national personnel are to become capable of systematically collecting debt information, recording and reporting the debt, and doing the necessary processing to service it. It is therefore proposed under the project to provide a resident expert to the CAADE who would help to set up an adequate reporting system involving all concerned Ministries, and to train local staff to organize, record, and maintain external-debt information. In particular, the expert would work together with the CAADE's division chief for external debt, the chief of the accounting section, and the keeper of records. Draft terms of reference have been discussed and agreed with the Government. 42. Improved record-keeping would, however, still not enable the CAADE to fully manage the external debt. Such a task could require additional assistance aimed at strengthening the CAADE's capacity to assess proposed international borrowings and their impact on the country's debt-service obligations. Additional consultants' services could be supplied as needed under the proposed project, to be financed out of the currently unallocated amount of $1.0 million equivalent reserved for such needs. The specific services to be supplied would be defined during forthcoming economic missions to the CAR.  - 14 - 43. Agricultural Programs Coordinator. This expert would be attached to the Ministry of Agriculture and Livestock with the responsibility of coordinating the cotton/food-crop program described above (para. 36). Organizational Review of the Civil Service 44. The civil service of the CAR is a source of serious concern to the Government as well as to foreign donors endeavoring to assist the economic reconstruction efforts. In the first place, the country's estimated 18,000 civil servants constitute almost half of estimated wage employment, and their total wage bill is estimated at CFAF 21.3 billion or over 70 percent of projected budgetary expenditures for 1981. In the second place, the civil service is ineffective, since it is badly organized and rather dis- couraged after many years of being mismanaged. France is providing assis- tance to the public-enterprise sector in an attempt to reduce the number of enterprises and their size, and make their management more effective. In public administration per se, France has limited its role to helping the Government (i) determine the exact number and distribution of civil servants in the various Government services, and (ii) identify ways of rationalizing this distribution and possibly also of reducing the total number of civil servants (para. 13). The Government would, however, welcome additional assistance to improve the management of some Ministries. 45. At the urging of the Government, the Association sent a consultant to the CAR in December 1980 to make a first survey of the state of the civil service, and to prepare terms of reference for further studies. The consul- tant-s main conclusion was that the problems facing the civil service were indeed extremely serious, and that it would take a very long and sustained effort to bring about marked improvements. Nevertheless, the consultant suggested that some immediate efforts could be attempted, and he outlined two studies, one to streamline procedures in four key governmental units, the other to lay the basis for longer-term improvements in the management of the public sector. It is proposed to finance the two interrelated studies under the proposed technical-assistance project, to be carried out in cooperation with the CAR government's Director-General of Public Administration (Ministry of Public Administration, Labor, and Social Security). The two studies would be the following: (i) An organizational review of: (a) the Ministry of Planning and International Cooperation, (b) the Directorate of Budgeting (Ministry of the Economy and Finance), (c) the Ministry of Agriculture and Livestock, and (d) the Ministry of Transport. These four units were selected since they are of key importance to the implementation of the Rehabilitation Program. The recommendations of the study, which would require some 24 man-months of consultants services, would focus on relatively simple methods for introducing some element of orderliness into day-to-day activities.  - 15 - (ii) Preparation of more general guidelines. The analysis of the four key units discussed above would be expected to provide a model for tackling the problems facing other departments and Ministries, and would constitute the first phase in the elabora- tion of new standards for the civil service as a whole. This second study would essentially focus on the institutional changes required to strengthen management of the civil service, and would produce a set of decrees setting up a new civil-service structure and a manual of personlel procedures for management and budgeting. This second study would require an estimated 12 man-months of consultants services. Project Implementation 46. The proposed project is expected to be completed by June 30, 1984. Overall coordination, including the preparation 3f withdrawal applications and progress reports, would rest with the Ministry of Planning and International Cooperation, to which the Project Coordinator and the legal expert would be attached. Other project components would be overseen by the respective technical Ministry, i.e.: (i) preparation of the road-rehabilitation program by the Ministry of Transportation; (ii) preparation and start-up of the cotton/food-crop project and recruitment of an Agricultural Programs Coo:di- nator by the Ministry of Agriculture and Livestock; (iii) carrying out of the forestry-sector study by the Ministry of Water, Forests, Hunting, Fishing, and Tourism; (iv) carrying out of the diamond-sector study by the Ministry of Energy, Mines, and Geology; (v) public-administration studies by the Ministry of Public Administration, Labor, and Social Security; and (vi) assistance to the CAADE by the Ministry of the Economy and Finance. Cost Estimates 47. The total cost of the project has been estimated at US$4.2 million equivalent, including US$15,000 equivalent of taxes (on imported vehicles procured locally; all other project items would be tax exempt). The local- cost component is estimated at US$0.7 million equivalent. In calculating these costs, it has been assumed that, although the actual cost of any given expert or consultant would depend on the level of expertise required and the method of recruitment, the average cost per man-month would be about US$10,000 equiv- alent including travel, housing, agency overheads, etc. In particular, the short-term experts (such as those hired to carry out the diamond- and forestry- sector studies) are expected to cost US$12,000-$15,000 equivalent per man-month, whereas the longer-term experts (including the resident experts) are expected to cost US$8,000-$12,000 equivalent per man-month (the experts recruited for the public-administration survey are expected to cost US$10,000-$12,000 equiv- alent per man-month). The costs of expertise currently being employed to prepare the road-rehabilitation program with an advance from the Project Preparation Facility range from US$7,000 equivalent per man-month to US$15,000 equivalent per man-month. Physical contingencies of 10 percenit have been provided for vehicles and operating expenses. Price contingencies have been calculated at 10 percent per year. (Local rates of inflation are expected to be slightly higher; foreign rates are expected to be slightly lower.)  - 16 - Financing Plan 48. The total project cost of US$4.2 million equivalent would be financed by an IDA Credit of SDR 3.3 million (US$4.0 million equivalent), representing 95 percent of the total project cost net of taxes. The proposed Credit would cover all foreign-exchange costs of the project (IJS$3.5 million equivalent or 83 percent of total project cost), and about 71 percent of local costs. In view of the Government's extremely precarious financial situation, this level of financing is considered appropriate. Furthermore, the Government's contri- bution to the project would be mainly in kind and personnel: the provision of office space, support staff, counterparts, and office supplies, which together have been costed at US$0.2 million equivalent. A detailed list of counterparts, support staff, and office supplies has been drawn up in consultation with the Government, which has agreed to supply the personnel and items as needed (Section 3.03 of draft Development Credit Agreement). Procurement and Disbursements 49. All technical assistants and consultants would be recruited on terms and conditions acceptable to the Association (Section 3.02 of the draft Development Credit Agreement). Vehicles purchased under the project for the use of the resident technical advisers would be procured on the basis of competitive bidding advertised locally, in accordance with local procedures acceptable to the Association (Section 2.03 of the draft Development Credit Agreement). Disbursements would be on the basis of 100 percent of expendi- tures for (a) technical'assistants- and consultants' services, (b) project start-up activities, (c) additional services, studies, training, and related expenses, and (d) the repayment of the advance from the Project Preparation Facility, and 80 percent of expenditures for vehicles and operating expenses. Disbursements would be fully documented. Benefits and Risks 50. The proposed project would directly contribute to major investments in agriculture and road rehabilitation and maintenance. The project would furthermore help generate additional Government revenues from the diamond and forestry sectors, and it would possibly attract new investment funds to these sectors. In addition, the project would lay the basis for improved management of the public sector, especially of key departments which have particularly important roles to play in the short-term rehabilitation of the economy. 51. The most important project risk is one inherent in all technical- assistance projects of this kind, namely, that expatriate staff may not become fully integrated into the local system, and that their relations with Central African personnel may not be as effective as required to fully achieve the objectives of the project. One other major risk is that delays in project implementation may occur, due to the late recruitment of expatriate staff or consultants, or to the lack of Government counterpart contributions and per- sonnel. In order to minimize these risks, the Association has helped the Government to pre-identify two of the four resident experts to be provided (the legal expert and the external-debt expert). Priority will be given  - 17- to selecting experts who have previous experience in West Africa. The Asso- ciation extended an advance from the PPF to prepare the road program, and appraisal of the project was scheduled to begin in early May 1981. As regards the Government's inability to provide funds, the proposed Credit would provide 100-percent financing of all direct costs related to the employment of resi- dent and short-term experts. Finally, with regard to the possible lack of counterparts, the list of counterparts reqtired for all project components has been carefully drawn up (para. 48), and the various government officials who are to work together with the expatriate specialists have been specifically identified (by title). A further project risk could be unwillingness on the part of the Government to follow up on the recommendations arising from the proposed studies of the diamond and forestry sectors and of the civil service. To minimize this risk, the Government has agreed to furnish the recommenda- tions of these studies to the Association within two months after their com- pletion, and to exchange views with the Association on appropriate follow-up measures (Section 3.05 of the draft Development Credit Agreement). PART V - LEGAL INSTRUMENTS AND AUTHORITI 52. The draft Development Credit Agreement between the Central African Republic and the Association, as well as the Report of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Associa- tion, are being distributed to the Executive Directors separately. 53. Special conditions of the project are listed in Section III of Annex III. 54. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 55. I recommend that the Executive Directors approve the proposed Development Credit. Robert S. McNamara President Washington, D.C. May 6, 1981  -18 - ANNEX I Page 1 of 5 pages TABLE 3A CENTRAL AFRICAN REP. - SOCIAL INDICATORS DATA SHEET CENTRAL AFRICAN REP. REFERENCE GROUPS (WEIGHTED AVE9AGES LAND AREA (THOUSAND SQ. KM.-) - MOST RECENT ESTIMATE) TOTAL 623.0 AGRICULTURAL 60. 1 MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (US$) 110.0 150.0 290.0 260.0 868.0 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 37.0 63.0 44.0 80.0 699.4 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (MILLIONS) 1.3 1.6 1.9 URBAN POPULATION (PERCENT OF TOTAL) 22.7 31.1 38.9 17.3 28.9 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 3.0 STATIONARY POPULATION (MILLIONS) 8.0 YEAR STATIONARY POPULATION IS REACHED 2165 POPULATION DENS ITY PER SQ. EM. 2. 0 2.5 3.0 27.4 61. 7 PER SQ. 1M. AGRICULTURAL LAND 22.0 27.0 32.0 82.6 126.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 38.0 42.1 40.5 44.9 45.5 15-64 YRS. 58.0 54.8 55.6 52.2 51.6 65 YRS. AND ABOVE 4.0 3. 1 3.9 2.8 2. 8 POPULATION GROWTH RATE (PERCENT) TOTAL 1.4 2.2 2.2 2. 7 2.7 URBAN 7. 9 5.3 5. 1 6.8 4.9 CRUDE BIRTH RATE (PER THOUSAND) 42.0 41.0 42.0 47.4 46.8 CRUDE DEATH RATE (PER THOUSAND) 26.0 22.0 19.0 19.6 16.4 GROSS REPRODUCTION RATE 2.5 2.9 2.8 3.2 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 100.0 100.0 103.0 91.8 94.0 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 96.0 98.0 99.0 90. 2 92. 7 PROTEINS (GRAMS PER DAY) 42.0 44.0 46.0 53.0 53.0 OF WHICH ANIMAL AND PULSE 11.0 12.0 12.0 18.4 15.6 CHILD (AGES 1-4) MORTALITY RATE 40.0 32.0 27.0 27.7 21.3 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37.0 42.0 46.0 45.3 50.1 INFANT MORTALITY RATE (PER THOUSAND) 190. O0C .. ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 16.0 23.2 31.0 GRBAN .. .. 40.0 58.0 66.8 RURAL .. .. 5.0 16.8 - ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 72.0 .. 28.9 URBAN .. 64.0 .. 67. 0 RURAL .. 96.0 POPULATION PER PHYSICIAN 35595.0 38119.0 17613.0 30910.4 14508.2 POPULATION PER NURSING PERSON 2755.0 1384.0 1556.0 5793.2 3279.5 POPULATION PER HOSPITAL BED TOTAL 675.0 460.0 626.0 1198.9 1141.5 URBAN 420.0 512.0 .. .. .. RURAL 831.0 411.0 ADMISSIONS PER HOSPITAL BED .. 21.6 HOUS ING AVERAGE SIZE OF HOUSEHOLD TOTAL 3.9 .. URHAN .. .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOM TOTAL 3.4 .. URBAN .. .. RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. URBAN .. .. RIIRL .. ..  -19- ANNEX I pag,~ ' ot Page 2 TABLE 3A CENTRAL AFRICAN REP. - SOCIAL INDICATORS DATA SHEET CENTRAL AFRICAN REP. REFERENCE GROUPS (WEIGHTED AVERAGES - MOST RECENT ESTIMATE) MOSr RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTEE ENROELMENT RATIOS PRDIARY: TOTAL 32.0 69.0 81.0 57.7 61. 7 MALE 53.0 95.0 106.0 74.2 69.2 FEMALE 12.0 44.0 57.0 54,. 1 51.4 SECONDARY: TOTAL 1.0 5.0 9.0 10.0 20.6 !'LE 72.0 7.0 1J.0 13.7 29.7 FEMALE 0.3 '. t .- (. 1 14. VOCATIONAL ENROL. (X OF SECONDARY) 10.0 12.0 9.0 5.8 ,.J PUPIL-TEACHER RATIO PRIMARY 58.0 63.0 67.0 45.0 36.6 SECONDARY 25.0 22.0 .. 25. 2 24.3 ADULT LITERACY RATE (PERCENT) 7. O/d .. .. 25.5 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 2.0 4. 0 5.2 3.6 38.8 RADIO RECEIVERS PER THOUSAND POPULATION 9.0 29.0 41.0 31.5 83.5 TV RECEIVERS PER THOUSAND POPULATION .. . . 0. 1 1. 8 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATIONl 0.4 0.3 * 4.6 24.2 CINEMA ANNUAI ATTENDANCE PER CAPITA 0.3 0. 3 .. .. 0.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 778.4 924.0 1053.8 FE14ALE (PERCENT) 51.2 50.0 48.0 33.5 38.1 AGRICULTURE (PERCENT) 94.1 91.3 89.0 80.7 54.3 INDUSTRY (PERCENT) 1.8 2.5 3.0 8. 1 17.8 PARTICIPATION RATE (PERCENT) TOTAL 57.5 55.8 54.9 42.2 38.8 MALE 59.5 58.5 57.9 55. 1 48.4 FIMALE 55.7 53.4 52.2 29.5 29.4 ECONOMIC DEPENDENCY RATIO 0. 8 0. 8 0. 8 1. 2 1. 3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. HIGHEST 20 PERCENT OF HOUSEHOLDS .. LOWEST 20 PERCENT OF ROUSEHOLDS .. LOWEST 40 PERCENT OF HOUSEHOLDS .. POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 138.2 RURAL .. .. 49.0 86.1 ESTIMATED REIATIVE POVERTY INCOS4E LEVEL (US$ PER CAPITA) URBAN .. .. .. 107.0 RURAL .. .. 91.0 65.0 9 EESTIDAIED POPULATION BELOW POVERTY INCOME LEVEL (PERCENT) URBAN . . RURAL .. .. .. 66. 9 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless ot5erwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1974 and 1978. /c African population only, excluding 15X of population not covered by survey; /d 1962. Most recent estimate of GNP per capita is for 1979, all other data are as of April, 1980. October, 1980  - 20-..ANNEX I Page 3 of 5 pages fhfi~l JITItOS_h SW IdA L fINl I '--o'.hI N.otee, Alohouglo the, d-c a- ooo norr -oorltodgaol 0c -tbetade ndrlibe.htooad.lo ooc.0ta..te.syne .b..cr natt Locoeaal oa-tt obt --nrdroo e Ibln n ocpts used ho diffret --utrlc cc coil-oeto theda. Thedtaael,no- theles.- er- . ltel,oruy 01no at. dl!a-e oode . dcaatte tol oo crcte Theeearceoteac (Iao aeucot ru f chl oah rlt -otnt- nod (2) a ou-ytly 9crcoui lensaa ihrcotg noeta the oeunty group at the aujac_ ooroIocp too oaylta han I a -l po ptr' rhcher "Mide InoeNrhAtlaad fldl tea0 it oh.s beas f srne notlr-clocral l Ilsiteut to hc aectca daootrrtuta yaueion Ie iherd i .r.t.tnen -for eoh cod i-ta- end h.-t-oe h. ole ena lesehalfof the I0..0cri itt It leop a data foe that lodcer door- the oc-e-af oh otsI aog b inictrsdpends Io the a-nlbt ily nO daaan- nco-n-cn cato os eaeoae nreaIg ao--gea of one I~lodic- to another. Thes.a.. ga r ony aefu e paing the raise LAND5 ARIA floeo aql.tu.t foue coe-lhsce-cpuain uie by nse apatcn phy- Total . loa safece area cuslpootig Ibod arac aca ilondiaae.aician qua1if led Ieos a mdical -h-bc ela anl--rlty level. tor crps. yncures nartt od ltc"e i.d. oo s I lalos l ll aa sale, and tesl aadat coret ycll o lyea -sd assistant esrase. GNP PtR CAPITA (IhIl - CNP ptoalaotloe at c-roen arket petuen. al1- -aolsantt sete ted -lnotl. ubn nedn enel - Pepalaties Itanal. cs,tlae by .as .con..rniomrtlhod 00 Way1o b-o Atlstll-f(977 0Wbanca t 1960. ocher, and rr diotded by ebeilr etpentn. easber ef beepiea1 beds 1910, and 1011 data. a~~~~~~~~vaIlable In pabllo ian petoat geesel1 nod specialned hapitta1 nd ce- 19 h.~~~~~~~~~~~~~~~~~~~batliltiaetncetee. loapitnale are eaasbltsh-et pee=eecely etffed ENERCY CONS!tPTION PER XII[~ - A.-l pti- f --gyby a least one. phynicta. ImEaTbliethmnt pronidiag petape1ly ntodie1 tallaCh CoectoaLTlot P100000111 - uctoal c.oneooytoo of ooomorclaltoargf loal tareleye not Ino-aded.turdld hosyttah e. hasevec,.n,ladel henhebl sad aediee and lignIte, pecrole-s atr gas- codydho..ro-, coI-a ano gtaheerl alec - teeter non permanently etaffed by a pbyslota f hat by-a sedi.lal leas tesitl to ,,ilagras of col-1 lclotper cpilta; 19h0, 19100 and 1978 seeoddilfe I,-ec.9,htch offer ir-pnta.te ncadatie end peamide daee. Oilsttd rang at nediolfctttn.Pre1tes prpase. sehe- hoel- tal WHO,e itlepincIpa 1geetra ned eperaled to-pilet.al an cora POPUILATIiINIt 01 1110, tICiOSTICi hospitals 1coe or caet bopicae and leedtal end asters,teyte ee Tc,ta.l Porudatl- Mld-near teolli-)a - tn of la1y 1; 1960 1970 -.atd loot ldms.... re I Soe etllta - Total sebse ofteseae oo discharges daca. - - ~~~~~~~~~~~~- fo hospItals dioiide hy the nashee c beds. - differc l deitctn o .. nrsm effc ....c.. i o deco HOUtINt amaogco...tIlet; 1960,19, ll..ad 1910 deta. Sie.ae .e of risehld ...r..s. na-boas...hald - tonl. otb-e anld cr Panleto P ftiosA household ononiaets af a gace of tdi.latt 1980ebee Ilivn q-etsea Iaplleto in har lll Caoet hilalo croleotlocd are hlied 05loo so theIr.. neon senle A Porer- ode ayo.ayenbetooddI toalpyuaco h aean scan ter crace offetttoosts she honhoi .,ld el. cysAtietted. pspne.d,l- - t. I Prjetin ernaar fr oralsyaeeecoprseofthee.oe..se -be,aafnFebe... of, ceran peI om..ood r . an .d rrl-hsaee le-al aod feaelIeepecny tblllgan7. fes Tepra eoalhgs eyrenhy.tellg etad-i-eeast hotae n esae o trtisy rae aDn hnaihrs lnenasasna ecinetounuu-ledpaes fertility, lcadeg so inton Isod and past feaily plasing perfornast. Eaeon leotrltlsn lercnta0dtell f neal - n'tel. orbn. ed core - Each coa..try is atn signed one ot eb... ninetmbeln f macoalaty Casoselosa..l d-oiegll ithaltl-tr2lty' Ia liIg qoareers.P ae .pentnage cOn bleeb rat. e In qua tc the death rt,n ae the age --t-o r le- toUCATION matte... cntant. ThIs 0, ..chieoe onlyfatcfes ilhicy'rate deoIto. 10 adjste tEralle- Ratios the reylaceeo le-e of ..ti -oe reProduction rae he_ enbgnrto Plaoeh -h tal male cod f Gil.-..oe ent1, sale and fe-fl of ensn eloa esl snsy1Te1eeosayppuaIn.. oeeec et of all ages ecth p= 1ey1era Ce penatael f epste asetiatado t at o h rjd carteesic tohsotaut prsaryethrol-nge payilacton;eeod. nlis ids gd01 In the Year 20000, acd the faca of decIne. ci tetilisy laet to aee years hib adjiahed far diftfsant l.enths at priceny ed.. iossloalte set le-. ca laistoh iulseledcsoerdtatsyerad10prcn hetsa in- arlso Is meachad - The Year e.a stationary rJoi.or sio ,sn yard are - ee orehv th -yttl celae als e bes Seoed ...etoedaryshn - tct1. sale nod tesad - Caspated - ehats;ea-ede PPoelrtlo I telt Ido..atioreol es eae fnryastapcedPoaTytsirna - Pere.. .-00naopptco r -noac klo-ater 1100 heoreref of P_ote .serl,.... nnl or teache tpplate toacotye teet psptb fato- 19h 17,yo 178dte 12lnsoerata -7 yrsea. andetnee- y-Oocl ssstserlldc Pyeer cepndAts_ne. for 10p-60. 106-Clb. atd 10714-y-.) cokicnsnpnr- . dss isneitis..lt.Jd. latnn fo.r.),- -t0 -d-60 5 toga ad 1,f0-d y-seaperoetdegely sated- fdl prdyolisot ged1 et n vr 1ooltan6lh, 1910, and 1010d dana. - conco=top-1lop he ora r.edoitpro tsesprecsoeseasoeit fat- Radiop RetaIners -oertann osdatnl-Alnp a retiner teeed tiot :ats uusycltyer.ne.e adogit.00, 1,en9l60 tadaeeo aer7po0l ertcdac f197ltnp eJod"isi P.pAlloiPloGlt-b Rcutoro Otuccat -oounna -1 holth- fast ot . acupt-o ctaeoiaei coonttIt..ae sodIn 1ear she rgiststo of eah sat cindy Pltolffj-Coos'P"T Pcc f...crrlcf aosu1l - 'eruectage-0t marrie IdnoLodu tyodacte pan-eolt .llo I -lhtl0 ldeo at per capIta esta ptodoei. of alp. food co,nacdlif.e . Paota oldnte n teedand WIes of Pdaily general In recet ...ee Ap l'. t defne a .. Ieredoe psh-.d t Yoncledr a bss.Ceoaiee crr riay rds(.ghceran o e'diy'ofi ararft estPorrmsctek Per noic stebotof olucAn)prorth