Announcement of World Bank Assists Ecuador's Development Efforts Since 1954

FOR IMMEDIATE RELEASE \NorldBank 1818 H Street, N.W ., W ashington, D.C. 20433, U.S. A. December 1987 Contact: Ciro Gamarra (202) 676-12 17 WORLD BANK ASSISTS ECUADOR'S DEVELOPMENT EFFORTS SINCE 1954 The World Bank and the International Development Association (IDA) have assisted Ecuador's development efforts since February 1954 when a Bank loan of $8.5 million was made for a first highway project in the province of Guayas. Over the past 33 years, a total of 42 World Bank loans and fiv e I DA credits have been extended to Ecuador, amounting to nearly $1.25 billion. This total includes the $100 million loan approved in December 1987 for t he financial sector adjustment program. During this period, Ecuador's gross national product per capita has increased dramatically, from $190 in 1964 to $1,160 in 1985. This increas e mainly resulted from the discovery and exploitation of oil, which placed Ecuador firmly among the region's middle-income countries by the end of the 1970s. Subsequently, Ecuador has graduated from IDA together with some other 26 countries during the past 25 years. The IDA credits to Ecuador, approved between 1964 and 1973, amounted to $36.9 million and have been fully disbursed. Since July 1973, Ecuador has received only World Bank lo ans . By October 31, 1987, about $722 million of the Bank loans had been disbu r s e d. Ecuador has repaid about $227 million, and about $377 million in loans fo r projects under implementation are pending disbursement. The Government and the Bank have worked together in recent years to step up disbursements of Bank loans. Among other initiatives a Speci a l Action Program for the country provided for revolving funds in five projects. As a result of these general efforts, disbursements rose fr om $26 million in FY83 to $176 million in FY87. In FY86, the Bank approved four loans to Ecuador, for a total of $253.5 million, the highest amount in a single fiscal year. In FY87, the Bank approved three loans for $159 million, including an $80 million loan for the reconstruction of the oil pipeline. NOTE: Money figures are expressed in U.S. dollar equivalents.  - 2 - The World Bank and IDA lending to Ecuador was originally concentrated in transport and power, where there were substantial bottlenecks to be overcome. To date, approximately 25 percent of the lending has been for infrastructure. Seven of the nine loans and credits extended for transport were to improve the country's road network and two were to help finance the expansion of the port of Guayaquil. Three power operations aimed at improving generation and distribution facilities in Quito; the fourth power operation aimed at improving efficiency of the sector institutions. The first livestock development loan, approved in 1967, marked the beginning of a diversification in the World Bank lending program away from infrastructure. Since then, the Bank Group has made 12 other loans and credits for agriculture and fisheries, nine loans to support industrial development, and two for pre-investment studies. These productive sector loans comprise 60 percent of total Bank lending to Ecuador. The World Bank support for social sectors -- education, water supply and urban development -- now accounts for about 15 percent of total Bank lending. In the future, the World Bank strategy is to support government initiatives in macroeconomic and sector reforms over the medium term. This could be achieved through a series of sector and project loans aimed principally at supporting policy improvements in export development, energy, agriculture, and industry, and developing social and economic infrastructure as well as strengthening public sector management. In addition to the design and adoption of adequate sector policies, World Bank lending will emphasize the generation of exports and employment. Projects in the housing, education, health and water supply sectors will specifically target low-income groups. - 0 -  - 3 - WORLD BANK LENDING TO ECUADOR (By Sector - As of December 1987) SECTOR BANK IDA TOTAL* (in US$) (in US$) (in US$) Agriculture and Rural Development 234.8 17.0 251.8 Development Finance Companies 154.0 154.0 Education 20.0 5.1 25.1 Energy - Oil 80.0 80.0 Energy - Power 118.5 6.8 125.3 Industry 115.0 115 .o Non-project 100.0 100.0 Small Scale Enterprise 90.6 90.6 Technical Assistance 17.0 17.0 Transportation 162.1 8.0 170.1 Urban Development 66.7 66.7 Water Supply 54.2 54.2 TOTAL: 1,212.9 36.9 1,249.8 * Original amounts, round numbers, in millions of U.S. dollars.