Bolivia - Omasuyos - Los Andes Rural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Repor No. P-2574-BO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF BOLIVIA FOR THE OMASUYOS LOS ANDES RURAL DEVELOPMENT PROJECT June 4, 1979 Thi documet kw a restited dIdribtie sd my be used. by reeJlpiass ay in bke perfonae oP their o.ik0 . dufe. lb coInte may mt othrwise be dlisd..d witt!t WOelB Ibdk athoralies.  CURRENCY EQUIVALENTS US$1.00 = $b20.0O (Bolivian Pesos) $b 1.00 = US$0.05 WEIGHTS AND MEASURES Metric System GLOSSARY OF ABBREVIATIONS BAB - Agricultural Bank of Bolivia CDF - Forestry Development Center CONEPLAN - Ministry of Planning and Coordination CORDEPAZ - Development Corporation of La Paz DESEC - Center for Social and Economic Development FOMO - National Manpower Services IBTA - Bolivia Institute for Agricultural Technology IFAD - International Fund for Agricultural Development INBOPIA - National Institute for Handicrafts and Small Industries INC - National Colonization Institute INFOL - National Institute for the Development of Wool MACA - Ministry of Peasant Affairs and Agriculture PAN - Northern Altiplano Project PIL - Industrialized Mfilk Plant SNC - National Road Service SNDC - National Community Development Service FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY BOLIVIA Omasuyos-Los Andes Rural Development Project Credit and Project Summary Borrower: Government of Bolivia Beneficiaries: A semi-autonomous agency (Project Unit) under the Ministerlo de Asuntos Campesinos y Agropecuarios (MACA), the Banco Agricola de Bolivia (BAB), the Servicio Nacional de Caminos (SNC), and the Centro de Desarrollo Forestal (CDF). Amount: US$3.0 million equivalent Terms: Standard Relending Terms: Government would channel credits to farmers groups through the Central Bank and BAB, which would receive an annual service charge of 3%. On-farm investment credits would have a 12% interest rate and a maturity of up to six years, including up to two years of grace; production credits, a 12% interest rate and a maturity of up to 15 months with no grace period. Terms for forestry investment credits would be determined on a case-by-case basis. Project Description: The project would continue previous Bank efforts to foster rural development in the Altiplano. It would focus on increases in productivity and production of small farmers thus improving their incomes and living standards. The project would consist of a directly productive component including credit for on-farm investment, production inputs, forestry, and other productive activities; an infrastructure component, including upgrading feeder roads, and provision of water supply and waste disposal facilities; and an administ- rative and technical support component providing technical assistance, extension services and production inputs to participating farmers. The project design is considered to be of low risk because it is based on experiences gained under the Bank's two ongoing rural development projects in Bolivia. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Estimated Cost; Investment Category Local Foreign Total ----- US$ million ----- 1. Productive Investment 3.10 1.17 4.27 2. Infrastructure 0.45 0.24 0.69 3. Administrative & Technical Support 2.14 0.55 2.69 4. Total Base Line Costs 5.69 1.96 7.65 5. Contingencies 1.18 0.50 1.68 Total Project Cost 6.87 2.46 9.33 Financing Plan: Government Beneficiaries IFAD IDA Total Amount (US$ M) 2.2 0.1 4.0 3.0 9.3 % of total 24 1 43 32 100 Estimated Disbursement: Bank FY 1980 1981 1982 1983 1984 Amount 0.15 0.85 0.90 0.70 0.40 Cumulative 0.15 1.00 1.90 2.60 3.00 Economic Rate of Return: 36% Appraisal Report: Report No. 2475-BO, dated May 24, 1979.  REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF BOLIVIA FOR THE OMASUYOS-LOS ANDES RURAL DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed credit to the Republic of Bolivia for the equivalent of US$3.0 million on standard IDA terms to help finance the Omasuyos-Los Andes Rural Development Project in Bolivia's Altiplano. The project would be co-financed by the International Fund for Agricultural Development (IFAD) with an amount of US$4.0 million equivalent. PART I - THE ECONOMY Introduction 2. A report entitled "Economic Memorandum on Bolivia" (No. 2195-BO) dated November 3, 1978, was distributed to the Executive Directors. Economic missions have visited Bolivia in October 1978 and March 1979 to review current developments and discuss policy measures with the Government. Country data sheets are attached as Annex I. Background 3. Despite the increasing importance of natural gas exports, as well as significant mineral deposits, Bolivia remains one of the poorest countries in South America. The majority of its population is engaged in traditional agriculture; only a small part of the labor force is employed in the modern sector. The infrastructure of this mountainous country is primitive and the road and rail networks reach only a fraction of the country. Most of the pop- ulation live in the inhospitable 3,000 to 4,000 m high plateau, the Altiplano, where physical conditions are very harsh. 4. The 1952 revolution sought to put an end to the dual structure which had characterized Bolivia's economy since colonial times, and to deprive the landowning and mining oligarchy of its economic base. This objective was partially achieved. Progress was made in eradicating feudal relations, dis- tributing the land and eliminating obstacles to social mobility, notably through an impressive effort in primary education. The agrarian reform and the nationalization of large mines, however, were followed by falling produc- tion. GDP declined in the 1950s and did not recover to its pre-1952 level until 1961. During the subsequent decade, output increased steadily at an  -2- average annual rate of around 5%, providing for per capita income increases averaging 2.5% p.a. As a result, GNP per capita, which had fallen by 24% in the 1952-60 period, recovered to its 1952 level by 1970 and was more equally distributed. However, the momentum of economic growth was again lost in 1969/71, when political instability led to declining private investment and deteriorating public finances. The deterioration of public finances reflected a structural problem in the economy. Bolivia's public sector is proportionately one of the largest in South America and a source of liveli- hood for a sizeable segment of the population. With scarce employment oppor- tunities in the private sector, pressures to expand public employment proved difficult to resist. Large expenditures on wages and salaries, combined with a weak tax system, limited the resources available for public investment. Moreover, the inability of the public sector to generate adequate savings limited its capacity to utilize available external capital assistance effectively. 5. From mid 1971 to mid 1978, political stability and the Government's encouragement of private sector investment raised hopes for a more rapid pace of economic development. In addition, during the early 1970s Bolivia's ex- ports of petroleum increased considerably, and it was generally expected that this upward trend would continue in the future. Public investment and external lending decisions were largely based on this expectation which seemed reason- able at the time. The Government launched an ambitious public investment program financed largely through external borrowing, expecting to have no difficulty servicing the loans out of future petroleum revenues. Petroleum exports began to decline, however, in 1975, because of insufficient output in the face of rapidly rising internal demand. Through 1976 this decline was largely offset by increased exports of natural gas to Argentina, but in 1977 petroleum exports dropped to a point where current earnings from hydrocarbon exports declined. At the end of 1978 petroleum exports came to a virtual halt. As a result, Bolivia has become even more dependent, once again, on exports of minerals, mainly of tin. 6. Since most of the ongoing public investment projects were initiated when petroleum prospects seemed favorable, they cannot now be stopped without economic loss. The Government has therefore tried to make up the export shortfall through additional external borrowing. As a consequence, Bolivia's public debt outstanding and disbursed increased rapidly; the end-1978 estimate is US$1.8 billion. As a result of increased borrowing from commercial banks and suppliers, the structure of the external debt has worsened; the grant element of new loans fell from 40% in 1974 to 16% in 1978. Recent Economic Performance and Prospects 7. The Bolivian economy is going through a very difficult phase. The overall public deficit has increased from about 1% of GDP in 1974 to 11-12% in 1978. The current account deficit of the balance of payments has widened  -3- from 5.3% of GDP inr 1974 to 8.4% in 1978. 1/ During tite last two years, the rate of GDP growth has been declining and the rate of inflation accelera- ting. According to the La Paz Consumer Price index (the only official price index in Bolivia), prices increased by 10% in 1978; estimates made by the Central Bank indicate an inflation rate of about 19%. Indications are that the rate of inflation has been increasing further in 1979. The new Government is expected to take measures in order to bring the rate of inflation down to an average of about 15% over the next years, the same as the average during 1970-1977. 8. The service on external debt now absorbs about 30% of exports of goods and services. This ratio cannot be expected to improve during the next few years and will probably fluctuate around 35%, an undesirable figure for a country so dependent on a single export, tin, which is characterized by wide fluctuations in demand and price. The country's balance of payments prospects are not encouraging for the immediate future. The volume of mineral exports has been stagnating and, even with production-st`mulating changes in mining taxes, no sharp increase in volume is to be expec ed during 1979 and 1980. However, a more favorable environment for private mining enterprises, modernization investment in the Bolivian Mining Corporation, and greater exploration efforts could bring about substantial increases in output and exports in the medium term. Non-traditional exports account for a small share of all exports and while encouragement is also required in this area, favorable effects will only in the longer term significantly affect exports. 9. Bolivia's most promising export potential lies in natural gas. Exports to Argentina are expected to increase as additional pumps begin to operate on the pipeline during 1979. The construction of a natural gas pipe- line to Brazil could improve Bolivia's balance of payments position substan- tially. A letter of intent has been signed by the Bolivian and Brazilian Governments, laying down the principles regarding the pipeline- While further studies are required to prove the existence of sufficient gas reserves, once this is done the way would be open for an increase in total exports in the order of 25-30% in the mid-1980s. The petroleum situation is less clear; exports cannot be expected to resume on a substantial scale before additional reserves are confirmed. 10. In sum, while Bolivia's medium-term export prospects are moderately favorable if efforts are made to promote them, it is difficult to see much scope for improvement during the next two to three years. The vagaries of international mineral prices will continue to have a decisive effect on the country's export earnings during that time. 11. The main internal cause of financial strain is the weak position of the principal state enterprises. Foremost among them is the State Petroleum Corporation, whose finances have been seriously affected by the Government keeping domestic fuel prices at a fraction of the world market level. Since the Corporation is also one of the largest taxpayers in Bolivia its financial weakness is reflected in Central Government revenue shortfalls. Other state corporations such as COMIBOL, which owns and operates the country's major mines, and ENAF, the National Smelting Corporation, which has embarked on a large-scale investment effort, have large overall deficits which owing to considerable investment expenditures, low productivity and/or inappropriate 1/ These figures are but orders of magnitude because the statistics on which they are based suffer from considerable error, but they are indicative of a grave deterioration.  wage policies, rather than to depressed prices. The financial situation of the railroads has deteriorated because of severe damage resulting from recent floods. As noted above, because many of these investments are already well advanced, it is unrealistic to expect a drastic decline in expenditure over less than two to three years; nor would such a decline be rational when many projects are expected to show satisfactory rates of return once they are completed. As on-going investment projects are gradually completed it should become possible to reduce the amounts spent and to bring public investment in line with the country's public savings and export capacity. 12. A new Government is scheduled to take office in August 1979. The present administration considers itself a caretaker; this is the main reason why some of the remedial actions that the present financial situation requires have not been taken yet. The administration is fully aware of the seriousness of the situation and has outlined elements of a stabilization program aimed at reducing the public deficit, narrowing the balance of payments deficit on current account, and restricting external borrowing. The major measures con- templated are a much needed increase in the domestic price of petroleum pro- ducts and a series of tax and tariff adjustments. For the reasons outlined above and because of the temporary character of the present Government, sig- nificant improvement cannot be expected before late summer at the earliest. 13. Bolivia's creditworthiness for lending on conventional terms is limited at present. Emphasis should be given to projects in the hydrocarbon sector with a clearly identifiable effect on production for export. Because of the need to improve Bolivia's debt management--and the reluctance of com- mercial lenders to increase their exposure in the country--Bolivia will have to limit its foreign borrowing to priority projects and make maximum use of soft-term lending from international institutions and bilaterals to get through the difficult next two or three years. We are following economic developments very closely and are engaged in a detailed and frank dialogue with the Bolivian authorities. PART II - BANK GROUP OPERATIONS IN BOLIVIA 14. Although Bolivia is an original member of the Bank, it did not obtain any Bank Group financing until 1964. Because of Bolivia's restricted capacity to service external debt, Bank Group financing was, except for a US$23.25 million Gas Pipeline loan, exclusively on IDA terms until Bolivia started to export small quantities of natural gas and petroleum. In view of promising prospects for rapid expansion, Bolivia was graduated from IDA in 1975. In 1978, however, it became apparent that the expectations of large petroleum exports, and with it dynamic economic development, would not mate- rialize. Starting with the Ulla Ulla rural development project, financed in equal shares on Bank and IDA terms, Bolivia was made a blend country. Bolivia's economic situation has deteriorated significantly since then; petroleum production has declined and the country is expected to become a net importer in the near future. Development is still seriously constrained  by the dual structure of the economy; a large part of the population continues to live in extreme poverty. Limited creditworthiness and low per capita income qualify Bolivia for IDA eligibility. To date, the Bank and IDA have approved 23 operations (10 credits, 12 loans and one blend operation) for Bolivia amounting to US$313.8 million, of which 8 have been fully disbursed. 15. Bank Group lending to Bolivia has assisted in the development of infrastructure and social sectors. In the agricultural sector (7 operations amounting to US$45.2 million), the Bank Group has helped the Government developing a livestock industry, increasing agricultural production, improv- ing living conditions on the Altiplano, and promoting the development of the alpaca/llama industry; efforts to strengthen the Agricultural Bank of Bolivia as a development institution have met with limited success. In the power sector (5 operations amounting to US$53.4 million), the Bank Group has been instrumental in modernizing the sector, expanding electricity supply and setting up a regulatory agency and a public power company, which has been operated in an efficient and financially sound manner. In the transportation sector, Bank Group assistance to the railways (3 operations amounting to US$75.0 million of which US$3.3 million was cancelled) has helped to improve the railways' quality of management, efficiency of operations and financial condition; a US$23.3 million loan was made for the construction of a gas pipe- line from the Santa Cruz area to the border with Argentina; a US$25.0 million loan for an aviation development project is assisting Bolivia's efforts to develop hitherto isolated areas by providing efficient freight and passenger transportation; a US$25.0 million loan for a highway maintenance project is helping Bolivia protect its investments in highways. In the mining sector (3 operations amounting to US$28.2 million), Bank Group participation has aimed at increased production and improved sectoral coordination. A US$11.5 million loan for a water supply and sewerage project, of which US$6.3 million was cancelled as two cities withdrew from the project, is improving services in 70 rural communities. A US$15 million loan for an education and vocational training project is assisting Bolivia to develop its human resources in a more effective way. Finally, a US$17 million loan is helping Bolivia to improve the living conditions of the urban poor in the city of La Paz. 16. Because of the narrow scope for private investment, IFC became active in Bolivia only in 1973 through an investment of US$400,000 in a firm producing cables and plastic products. Three IFC investments since then have contributed to the establishment of a local market for long-term securities: an equity participation of up to US$550,000 in Banco Industrial S.A. (BISA), in conjunction with a Bank loan of US$10.0 million for the same institution, to assist in financing medium-sized industrial and mining enterprises; US$337,500 in Banco Hipotecario Nacional to assist in the development of mortgage banking; and a US$2.3 million investment in a plastics firm. Annex II contains a summary statement of the status of Bank loans and IDA credits in Bolivia as of January 31, 1979, and IFC investments as of February 28, 1979, and notes on the execution of ongoing projects. 17. Bank Group lending to Bolivia during the recent past has been sup- portive of a broadly based Government effort to expand and upgrade Bolivia's economic and social infrastructure. Until recently, the Government had  - 6 - established an excellent record in providing the required counterpart financing; in general projects have been adequately carried out. However, the recent deterioration in the public finances and the balance of payments have made it necessary to reexamine Bank Group lending objectives. Special efforts will be made in supporting projects that would help Bolivia to increase exports. In the longer run, Bank Group volume and composition of lending will depend on the measures taken by the Government to raise additional revenues and to stabilize the economy and improve the balance of payments. 18. For the period 1974-78, total official development assistance to Bolivia has been as follows: Bank, US$216.4 million; IDA, US$23.7; Inter- American Development Bank, US$188.8 million, US Agency for International Development US$157.5 million, other, US$203.3 million. Net of undisbursed balances, Bolivia's debt to the Bank and IDA in 1978 represented 7.2% of its public debt. Bank and IDA's share of the Bolivian debt service was 3.0% in 1978. PART III: THE AGRICULTURAL SECTOR Background 19. Sector Characteristics. Agriculture in Bolivia contributes 25% to GDP and provides employment for about 60% of the labor force. Until 1973, agricultural growth was low, averaging 1.9% annually; since then, however, annual growth rates have reached to 4-6%. In spite of this improvement, domestic demand exceeds domestic production, resulting in a negative agricul- tural trade balance. Currently, agricultural products (mainly edible oils, lard, dairy products and wheat flour) account for about 25% of Bolivia's imports. Agricultural exports (sugar, coffee, fruits and lumber) were of little importance until 1970, accounting for less than 5% of total exports. Since then, with the rapid expansion of commercial farms in Santa Cruz, agriculture's share has gradually risen to about 15%. In addition to these products, Bolivia has good potential for the production of tobacco, rubber, cocoa, oilseeds, and wool products of sheep, llama and alpaca. 20. The difference in soils and micro-climates of the three main pro- duction zones, the highlands (Altiplano), intermediate valleys, and lowlands, has resulted in a broad range of productive activities. In the Altiplano, farmers grow mainly potatoes, quinoa, barley and tubers and raise sheep, llamas, and alpacas and some dairy cattle. In the Valleys, a number of sub-tropical crops are grown and there are some livestock activities. In the lowlands, the predominant crops are sugarcane and cotton, and there are many medium and largescale livestock operations. The economic and social characteristics of the sector are highly diverse. Agricultural production in the Altiplano, largely based on subsistence, has remained stagnant at very low levels. The small scale of farm operations, adverse climatic conditions and low soil fertility impose stringent constraints on the application of improved technology. The subsistence economy contrasts sharply with the dynamic commercial agriculture in the lowlands, which has received the bulk of public and private investment.  - 7 - 21. Policy Issues. Thus far, the Government of Bolivia has not designed a coherent agricultural development strategy. While Government sought to expand the economy through hydrocarbon and mineral development, the agri- cultural sector received only little support after the large scale land reform of the early 'fifties, and there was no attempt to develop its produc- tive potential and export possibilities. Moreover, present policies have been a major obstacle to agricultural development. The most important problem is the Government's price policy. To support short-term interests of the urban consumer, the Government imposed price controls for most agricultural products in the late 1950s. As a result, agricultural growth slowed down and led to increasing imports. Adoption of new technology and application of modern inputs were impaired, and productivity stagnated. The price differen- tial between Bolivia and neighboring countries encouraged considerable smuggling, reducing the supply for the domestic market. While the Government recently relaxed price controls on some commodities, further adjustments will be necessary to provide sufficient incentives to the sector. Similarly, the Government's exchange rate and tariff policy constrain agricultural develop- ment. Although the general price level in Bolivia has increased faster than that of its major trading partners, the exchange rate has not been adjusted since 1972. Export taxes, one of the most important revenue sources for the Government, are high and discourage exports; at the same time, tariffs increase the prices of most imported agricultural inputs. In addition, the Government is selling large quantities of wheat and dairy products, which it receives as grant from international donors, at prices below the world market level thus discouraging domestic production. 22. In the last few years the authorities have recognized the negative implication of these policies and have sought to place more emphasis on the agricultural sector. The national development plan for 1976 to 1980 empha- sizes food production, eradicating rural poverty, and promoting agricultural exports. However, until now the Government has failed to transform its overall planning objectives into a detailed sector strategy, and it has done little to prepare and implement policies that are conducive to agricultural development. We intend to discuss the importance of policy changes with the new Government scheduled to take office in August 1979 and we plan, in this context, to carry out a detailed agricultural sector study. Structural Constraints and Development Strategy 23. Promoting Resettlement. A major development constraint in Bolivia's agricultural sector is the imbalance between its land resources and the distribution of its rural population. While most of the country's peasants live in the Altiplano and valleys, vast areas in the Oriente with fertile soils and a favorable climate are not cultivated at all. The Altiplano and valleys, which account for about 84% of the rural population, contribute only 52% to agricultural production. The lowlands, on the other hand, while comprising only some 16% of Bolivia's rural population, contribute 48%. In the future, migration from Altiplano and valleys to the lowlands will be increasingly important in expanding the agricultural frontier.  -8- 24. So far, the experience of the Instituto Nacional de Colonizacion (INC) with organized settlements has not always been encouraging; the spon- taneous colonization process has proved more flexible in responding to economic opportunities than Government directed colonization projects. Spontaneous settlers, on the other hand, while more successful in raising production, usually cause serious environmental damage. In view of the unfavorable experience with organized settlement and the necessity to promote migration on a large scale, the Government plans to concentrate its efforts on spontaneous migration by providing low cost assistance for the consolidation of spontaneous settlements and application of appropriate farming methods. 25. Improving Resource Utilization. On most farms throughout Bolivia, productivity and land use intensities are low and could be increased sub- stantially. In Valleys and lowlands, large areas have fertile soils and a favorable climate but lack water during the dry season. Irrigation would allow double cropping and yield increases. The Government is aware that developing this potential requires sizeable public investments. With the assistance of IDB, it is preparing a pilot project for irrigation development in Bolivia's Chaco, the area south of Santa Cruz; and it intends to implement irrigation projects in the valleys of Cochabamba and Tarija. 26. A major resource of Bolivia's agricultural sector are the natural pastures in the lowlands. With these resources, Bolivia has the potential for becoming an international supplier of beef. However, the country has hardly been able to meet its limited internal demand. While the Government has, with the assistance of the Bank, implemented several Livestock projects, new long term loans are required for modernizing investments and intensifying production. 27. Fostering Rural Development. The prevailing subsistence agricul- ture is a major obstacle to agricultural development in the Altiplano and an impediment to social progress. Production is based on traditional methods, fertilizer and graded seeds are practically not applied and modern farm machinery non-existent. Poor living standards and social services reflect the low level of economic development. With assistance from the Bank, the Govern- ment is attempting to alleviate the most urgent problems in the area. Assist- ance to farmers in the Altiplano concentrates on increasing productivity and raising incomes, based on limited investment costs per family and benefits spread to the largest extent possible. In addition, promoting migration from the highlands to the lowlands will be an important component in these efforts to reduce the population pressure and prevent further fragmentation of small farms. 28. Upgrading Support Services. A critical constraint to the modernization of the agricultural sector has been the lack of an efficient agricultural credit system. This has affected predominantly small farmers, but also the commercial agriculture in the Oriente. The Banco Agricola de Bolivia (BAB), the single most important source of agricultural credit, was designed as an institution to benefit small farmers, but it has gradually  - 9 - concentrated its efforts on financing medium- to large-size operations. Currently, BAB faces serious financial and administrative problems. Since BAB had to assume bad portfolios of commercial banks, a large percentage of its outstanding loans is in arrears. In addition, BAB has excessively high operating costs. As a first step of a rehabilitation program the Government recently paid off BAB's overdue debts and changed its management. The Bank has offered technical advice and is considering a livestock credit project in conjunction with a rehabilitation program. 29. Agricultural research and the extension service do not meet the requirements of the sector. Research has not been concentrated on specific areas nor directed toward urgent problems. Also, research stations receive only limited financial support, and hence, are forced to operate mainly as - commercial farms in order to generate income to sustain operations. The extension service suffers mainly from financial problems. Budget cuts and limited operational funds as well as salary reductions caused restrictions in the supplied services and forced a large number of trained Bolivian personnel to leave the extension programs. To provide an institutional basis for improving efficiency and coordinating research and extension the Government created the Bolivian Institute for Agricultural Technology (IBTA). In addition, IDB is currently processing a proposed US$8 million loan to expand and upgrade IBTA's operations. 30. Marketing. Marketing problems comprise mainly two areas--product quality and transportation. Lacking product quality has hampered exports and promotes imports of products for high income consumers. For example, processed milk is imported although Bolivia has the potential to produce it itself, and meat, a potential export product, cannot be sold abroad owing to, inter alia, bad quality and contamination. Insufficient transportation and storage infrastructure in Bolivia makes product exchange difficult and expen- sive, and prevents regional specialization. The Government's export strategy will have to give more attention to identifying potential markets and product quality requirements. It is expected that the National Transportation plan, which is currently being prepared, will identify priority areas for the improvement of the transportation network to facilitate access to production areas and markets. PART IV - THE PROJECT 31. The Government of Bolivia has requested an IDA credit to help finance a rural development project in the Altiplano provinces of Omasuyos and Los Andes. The project was appraised by a Bank mission which visited Bolivia in October/November 1978. A report, entitled "Staff Appraisal Report Omasuyos-Los Andes Rural Development Project", dated May 24, 1979, is being circulated separately to the Executive Directors. A supplementary data sheet is presented in Annex 3. Negotiations took place in Washington from May 14 to May 17, 1979. The Government of Bolivia was represented by Messrs. Alfonso Criales, Cesar Carrasco, and Felix Fernandez; IFAD was represented by Messrs. Ferdinand Stoces, and Guy van Melckebeke.  - 10 - Background 32. The Bank has been supporting rural development in Bolivia's Altiplano for some time. The first operation, a Bank loan of US$9.5 million for the Ingavi Rural Development Project in 1976, is benefiting about 4,000 small farm families through on-farm investments, incremental production credits, and technical assistance in an area south of Lake Titicaca. In addition, most of the 10,000 families in the project area benefit from improved roads, health facilities, and drinking water and waste disposal facilities. The second operation, a Bank and IDA credit of together US$18 million for the Ulla Ulla Rural Development project in 1978, focuses on developing the llama, alpaca, and sheep agro-business complex as well as handicraft and marketing developments in an area north of Lake Titicaca. 33. Since the Ingavi Project was the first attempt in Bolivia to coordinate rural development by cutting across institutional lines and provide services on an integrated basics, initial progress was slow. The project suffered mostly on the production side because of the unproven viability of its irrigation component and the lack of timely availability of necessary production inputs. However, more recently project implementation has improved significantly after arrangements were made for strengthening of the project administration and for greater flexibility in project emphasis and approach. The Ulla Ulla project, which took into account the experiences gained under Ingavi, is progressing satisfactorily. Both projects seem to have a positive impact on the attitude of Altiplano farmers; local communities have become more sensitive to progress and indicate strong desires to parti- cipate in the development process. Project Objectives 34. The proposed project would continue previous efforts by providing similar services to an area adjacent to Ingavi and Ulla Ulla. The project aims at increasing incomes and living standards in two provinces of the Altiplano by increasing productivity and production, and providing basic infrastructure and technical assistance. In addition, the project is ex- pected to facilitate the integration of subsistence farmers into the market economy. Project Description 35. Productive Component: Credit would be provided for on-farm investment and working capital requirements in agriculture, livestock and forestry production. About 2,500 farmers, organized in farmer groups, are expected to use funds for investments in livestock (cattle, sheep, and alpaca), corrals, sheds, silos, wells, pumps, equipment and farm tools. Tractors would be purchased by those farmer groups that could demonstrate the need as well as the capability to operate and maintain a tractor effi- ciently. Incremental working capital would be made available to about 6,000 farmers, participating in farmer groups, to purchase improved seeds, agricul- tural chemicals, and to support productive activities such as fisheries.  - 11 - About 600 farmers are expected to participate in the forestry program which would provide fuel wood, poles, and construction wood. 36. Infrastructure: The project would improve and maintain about 50 kilometers of feeder roads to facilitate communications and the flow of goods and services to and from the project area. Potable water supply and waste disposal facilities would benefit about 6,000 families. 37. Administration and Technical Support: The project would make provisions to cover administrative costs including salaries for the Project Unit staff, overhead cost, building, housing, equipment and machinery, and vehicles. In addition, provisions would be made for consultant services to provide support for cheese and dairy production. A technical assistance delivery system would be established to transfer simple, low cost technology to indi- vidual farmers and farmer groups. To strengthen this system, the project would establish a training center for project staff and farmers. A model-farm would be set up to demonstrate improved and appropriate technology to project farmers. The acclimatization facilities for cattle transfer from Bolivia's lowlands to the Altiplano and the input supply system, which have been estab- lished under the Ingavi Project, would be expanded to ensure timely availability of improved dairy cattle and farm inputs. Project Implementation 38. Organization and Management: The proposed project, together with the ongoing Ingavi Project, would be executed by an expanded and strengthened Ingavi Project Unit. The Government has issued a Project Decree and approved the statutes of the Project Unit; both are satisfactory to IDA. In addition, an assurance has been obtained that the Government would not modify decree and statutes without IDA's concurrence (Section 6.01 of the draft Development Credit Agreement). 39. The Project Unit would consist of central administration and independent Sub-Units for the technical implementation of the Ingavi and Omasuyos-Los Andes projects. The central administration and the Ingavi Sub-Unit would be located in Viacha, and the Omasuyos-Los Andes Sub-Unit would be located in Huarina, a center of the project area. The central administration would consist of a Project Director, an administrative unit, a monitoring unit, and consultant services. The Project Unit's Board of Directors would be composed of representatives of MACA, the Ministry of Planning and Coordination (CONEPLAN), the Ministry of Finance, the Ministry of Public Health, CORDEPAZ, BAB, the Project Director and Sub-Directors, and representatives of project farmers. The representative of MACA would be the chairman of the Board, and the representative of CORDEPAZ would be the vice chairman. The Board would be primarily responsible for formulating policy and project guidelines, and approving annual work programs and budgets. 40. The Project Unit would be headed by a nationally recruited General Manager with extensive experience in administration and agriculture. He would be responsible for day-to-day activities and would coordinate the hiring of  - 12 - staff, preparation of annual work plans and budgets, participation of public agencies in the project work and procurement of goods. The Government has appointed a General Manager with qualification and experience acceptable to IDA; replacements of the Project Director would be made in agreement with IDA. The General Manager would be supported by a small core of highly qualified staff and foreign consultants already hired under the Ingavi project. In addition, an internationally recruited specialist in cheese and dairy production would be employed by July 1, 1980 for twelve months on terms and conditions satisfactory to IDA (Section 4.04 of the draft Development Credit Agreement). 41. The General Manager would be supported by Sub-Unit Managers with qualifications acceptable to IDA. The Omasuyos-Los Andes Sub-Unit would be staffed by one economist-statistician, one senior agriculturist, 18 extension- ists, five agriculture and livestock specialists, five credit personnel, and administrative and support personnel. The extension service would be supported by "promotores" as is done under the Ingavi Project. Assurances have been obtained that replacements of the Sub-Unit Managers would be made in agreement with IDA, and that the Government would provide sufficient incentives so that the Project Unit could attract and retain highly qualified staff. Farmers would participate in project planning and implementation through a coordinating committee comprising representatives of project staff and beneficiaries (Section 4.04 of the draft Development Credit Agreement). 42. Since inputs from commercial sources are scarce, the Project Unit would, initially, assure timely availability and quality of inputs to project farmers. To this effect, assurances would be sought that the Project Unit establish a procurement committee, that it maintains the revolving fund for input supply, established under the Ingavi project, and that the Govern- ment increase the fund from US$120,000 to US$200,000. The Project Unit would not be subject to import restrictions, and import duties on goods imported by the Project Unit would be paid directly by the Government or reimbursed to the Project Unit. During project implementation, farmers in the project area would establish their own input supply system. The Project Unit would use its best efforts to establish, and provide technical assistance to a Central Cooperative, and would submit to IDA by December 1, 1982 a proposal outlining the terms and conditions, including a timetable, under which the Project Unit's input supply program would be transferred to the Central Cooperative (Section 4.06 of the Development Credit Agreement). The Project Unit would maintain separate accounts for the input supply system and the cattle acclimatization center, and it would establish competitive cattle prices at levels sufficient to recover its investments and operation cost (Sections 5.01 and 5.03 of the draft Development Credit Agreement). 43. The Project Unit would enter into contractual agreements with the Servicio Nacional de Caminos (SNC), and the Centro de Desarollo Forestal (CDF) to implement the road and forestry components. The signing of an agreement with the concerned entities, satisfactory to IDA would be a condition of disbursement for the component involved (Section 4.02 and Schedule 1 of the draft Development Credit Agreement). In addition, assur- ances have been obtained that the Government would cause SNC to (a) prepare by  - 13 - April 1, 1980, a study, including a timetable, satisfactory to IDA, for the improvement of feeder roads in the project area utilizing equipment from the Ingavi project; (b) improve by December 31, 1980, the sections of the road between Achacachi and Ancoraimes to ensure access throughout the rainy season; and (c) maintain the project roads during and after the project period (Sections 4.07 and 5.02 of the draft Development Credit Agreement). INFOL, INBOPIA, and the National Manager Service (FOMO) would promote farmer participation in handicraft activities; contractual agreements between the Project Unit and these institutions would have to be executed by April 1, 1980 (Section 4.08 of the Development Credit Agreement). 44. BAB would be responsible for disbursement and collection of sub- loans. It is not expected that BAB's present financial problems would have any bearing on the participation under the project since it acts only as financial agent for the Government. It would be a condition of effectiveness that, satisfactory to IDA, (a) an agreement between the Central Bank and BAB, and an agreement between the Project Unit and BAB, have been signed; and (b) the Government has established a fund, amounting to US$100,000 equivalent in BAB, to execute the credit program, set rules and guidelines for its opera- tion and has instructed the Central Bank to replenish the fund as necessary. BAB would open a regional office in Huarina where the Omasuyos-Los Andes Sub-Unit office would be located, and provide it with the necessary staff, furniture and equipment. Assurances to this effect have been obtained (Section 4.03 of the draft Development Credit Agreement). To avoid duplica- tion, the Government would coordinate the provision of credit in the project area so as to ensure that all credit would be provided by means of the project (Section 4.09 of the draft Development Credit Agreement). 45. Project Cost and Financing: The total project costs including price contingencies, expressed in mid 1979 prices are estimated at US$9.3 million of which US$2.5 million, or 26%, represent foreign exchange costs net of import duties and taxes. The project costs are summarized in the following table: Investment Category Local Foreign Total Foreign Exchange ------- US$ million ----- ------ % ------- 1. Productive Investment 3.10 1.17 4.27 27 2. Infrastructure 0.45 0.24 0.69 35 3. Administrative & Technical Support 2.14 0.55 2.69 20 4. Total Base Line Costs 5.69 1.96 7.65 5. Contingencies 1.18 0.50 1.68 Total Project Cost 6.87 2.46 9.33 26 46. The proposed IDA credit of US$3.0 million would finance 32% of total project cost, the International Fund for Agricultural Development (IFAD) would provide US$4.0 million (43% of total project cost), the Govern- ment would provide US$2.2 million (24% of total project cost), and the  - 14 - beneficiaries would provide US$0.1 million (1% of total project cost). The IDA credit and the IFAD funds would cover 100% of the foreign exchange cost (US$2.5 million), and 65% (US$4.5 million) of local cost. The Government would be the borrower and bear the foreign exchange risk. The IFAD loan would be on intermediate terms, with an interest rate of 4% annually, and maturity period of 20 years, including 5 years of grace. IDA would finance infrastructure, administration and technical support, and a part of the forestry program; IFAD would finance the credit program and the remaining part of the forestry program. The legal documents would contain a cross default and a cross effectiveness clause (Section 6.01, 6.02 and 7.01 of the draft Development Credit Agreement). The appointment of IDA by IFAD as cooperating institution would be a condition of effectiveness (Section 7.01 of the draft Development Credit Agreement). 47. Flow of Funds and Subloan Terms: Credit proceeds for components other than subloans would be channeled through the Central Bank to the Project Unit and participating agencies; credit proceeds for subloans would be channeled through the Central Bank and BAB to beneficiaries on terms and conditions satisfactory to IDA. BAB would receive a service charge of 3% on subloans. Subloans would be made to farmer groups, all members of the group would be responsible for repayments. Subloan maturities for on-farm invest- ments would not exceed 6 years, with grace periods of up to 2 years. Subloan maturities for incremental production credit would not exceed 15 months, with no grace period. Subloan terms for forestry would be determined on a case-by-case basis. The interest rate on the subloans would be 12%, the same as that charged to small farmers elsewhere in Bolivia. The interest rate is slightly negative in real terms, given the expected rate of inflation during the disbursement period. This is considered acceptable because the benefiting farmers are among the poorest in Bolivia; most of them would receive credit for the first time. Moreover, the project will be supervised closely enough to make diversion of funds unlikely. 48. Financial Analysis: The project would increase the incomes of participating farmers significantly. The farm models indicate that the financial rate of return for the farmers' own capital would exceed 100%. The high financial rate of return is explained by the small investment per family, its short gestation period and rapid production increases. Even with these substantial increases, farmers' average per capita income at full proXject development would remain significantly below the national average. 49. Marketing: Farmers in the Altiplano sell only a small portion of their agricultural output to the local markets. It is expected that the production increases under the project would raise farmers' marketable surplus substantially. The marketing prospects for the various products produced under the project are satisfactory. Future potato consumption in the La Paz area is expected to increase considerably. The produced milk is expected to be sold on the La Paz market, characterized by large unsatisfied demand for fresh milk, and to the PIL plant, provided the government raises its purchasing price. The incremental quinoa production would be small and, in view of the present supply shortage, should be sold without difficulty. Livestock would be sold through local commercial channels, and alpaca fiber would be sold to INFOL, which is in charge of promotion of alpaca and commercialization of alpaca products and has purchasing centers throughout the Altiplano.  - 15 - 50. Procurement: Contracts for the purchase of equipment and vehicles would total US$718,550, excluding contingencies. Individual contracts in excess of US$100,000 equivalent would be procured through international competitive bidding according to IDA procedures. Purchases of less than US$100,000 would be procured through local competitive bidding according to local procedures, which would be satisfactory to IDA. Procurement of farm inputs and cattle would be carried out by farmers through normal commercial channels. Since road works (US$363,000, excluding contingencies) are spread out within the project area and include mainly improvement of existing tracks, they would be undertaken by SNC on force account. Civil works (US$733,300, excluding contingencies) for project facilities would be carried out through local competitive bidding procedures which would be acceptable to IDA. Assur- ances have been obtained on the above (Schedule 3 of the draft Development Credit Agreement). 51. Disbursement: IDA would disburse over a period of 4 1/2 years 100% of foreign expenditures and 64% of local expenditures for the purchase of equipment and vehicles (excluding tractors) for the Project Unit and CDF; 100% of expenditures for consultant services for the Project Unit; 64% of local expenditures for civil works for roads, water supply and waste disposal facilities, and operating costs for the Project Unit. For the forestry component, IDA and IFAD would disburse, at a ratio of 3 to 1, 100% of foreign expenditures, 80% of local expenditures, and 80% of subloans. Disburse- ment would be supported by normal documentation except those for works carried out through force account which would be made against a certified statement of expenses, the documentation for which would be made available for inspection by IDA during project supervision. Justification, Benefits, and Risks 52. The proposed project would make an important contribution to improve the standards of living in the Altiplano. Together with Ingavi and Ulla Ulla, it would cover the whole Altiplano Norte. It is expected that the project design, which has been based on low investment costs per beneficiary, would demonstrate suitable ways of successfully approaching problems of Bolivia's rural poor. The project's economic viability, demonstrated by an ERR of 36%, proves that the Altiplano has production potential that can be developed. 53. The project would benefit some 6,000 families who, until now, have received only limited assistance for economic and social advancement. Some 85% of the project area's rural population belong to the poverty target group, defined as the poorest 40% of the country's population. Increased production under the project would help raise per capita incomes, currently below US$100, to almost US$200, and it would help integrate project benefi- ciaries, who are mostly subsistence farmers, into Bolivia's market economy. Promoting more intensive farm cultivation methods is expected to decrease current underemployment. At the same time, the Government program for reforestation and road maintenance would create temporary jobs for unskilled workers.  - 16 - 54. The value of incremental project production has been estimated at US$7 million. Incremental project output, consisting mainly of marketable food crops, would improve product supply in La Paz. Increased milk supply to the PIL plant in La Paz, which is operating below its capacity using imported powder milk, would assist in developing a dairy processing industry. Water supply and waste disposal facilities, which would be provided under the project, would improve the health situation of participating families. The project's institution building aspect would be particularly important. The former Ingavi Project Unit would be expanded and could serve as a central development agency for the implementation of future projects. The creation of a central cooperative that would take over some of the Project Unit's functions, would establish a institutional model which could be successfully replicated in other regions of the country. 55. Since project composition and design is based on experiences ob- tained under the two previous Bank operations in the Altiplano, the project is considered to be of no more than average risk. The main potential problem would lie in the difficulty of attracting and retaining a sufficient number of qualified staff for the project unit. Failure to obtain the envisaged number of extensionists would negatively affect the farmer's response to technology changes and the yields they would achieve. Because of this potential problem, project staffing has been kept at a minimum, and salaries would be high enough to attract and retain qualified staff. Sensitivity tests indicate that the rate of return remains high under various alternative assumptions. PART V - LEGAL INSTRUMENTS AND AUTHORITY 56. The draft development credit agreement between the Republic of Bolivia and the International Development Association, and the report of the committee provided for in Article 3, Section 4(iii) of the Articles of Agreements are being distributed to the Executive Directors separately. 57. Special conditions of the proposed development credit are listed in Section 3 of Annex 3. Additional conditions of effectiveness would be that, under the credit program, (i) an agreement between the Central Bank and BAB and an operational agreement between the Project Unit and BAB, satisfactory to IDA, have been signed; (ii) that the Government had established a credit revolving fund in BAB, amounting to US$100,000, for its operation; and (iii) that the Government has instructed the Central Bank to replenish the credit fund, established in BAB, as necessary. In addition, all conditions necessary for the effectiveness of the IFAD loan would have to be fulfilled and IFAD would have to appoint IDA as cooperating institution. It would be an additional condition of disbursement that, under the forestry program, an operational arrangement between the Project Unit and CDF, satisfactory to IDA, had been signed; under the road program, that an operational agreement between the Project Unit and CNC, satisfactory to IDA, had been signed, and, with respect to subloans for production capital, that the revolving fund, to be replenished with repayments from these subloans, is depleted.  - 17 - PART VI - RECOMMENDATION 58. I am satisfied that the proposed development credit would comply with the articles of agreement of Institutional Development Association. 59. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachment June 4, 1979  ANNEX I - 18 - Page 1 TABLE 3A BOLIVIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES 90LIVIA k LAND AREA (THOUSAND SQ. KM.) - HOST RECENT ESTIMATE) TOTAL 1098.6 SAME SAME NEXT HIGHER AGRICULTURAL 304.8 MOST RECENT GEOGRAPHIC INCOME INCOME 1960 Lb 1970 lb ESTIMATE Lb REGION Le GROUP 1d GROUP Le GNP PER CAPITA (US$) 180.0 290.0 540.0 1066.7 432.3 867.2 ENERGY CONSUMPTION PEE CAPITA (KILOGRAMS OF COAL EQUIVALENT) 147.0 229.0 303.0 911.1 251.7 578.3 POPULATION AND VITAL STATISTICS TOTAL POPULATION, MID-YEAR (MILLIONS) 3.8 4.9 5.9 f. URBAN POPULATION (PERCENT OF TOTAL) 29.2 32.3 34.0 57.9 24.2 46.2 POPULATION DENSITY PER SQ. KM. 3.0 4.0 5.4 25.6 42.7 50.8 PER SQ. KM. AGRICULTURAL LAND 13.0 16.0 19.0 77.6 95.0 93.3 POPULATION ACE STRUCTURE (PERCENT) 0-14 YRS. 42.4 41.9 41.6 42.0 44.9 42.9 15-64 YRS. 54.0 54.6 54.9 52.2 52.8 53.5 65 YRS. AND ABOVE 3.6 3.5 3.5 3.7 3.0 3.5 POPULATION GROWTH RATE (PERCENT) TOTAL 2.4 2.6 2.7 2.7 2.7 2.5 URBAN 3.6 4.2 4.1 4.3 8.8 4.7 CRUDE BIRTH RATE (PER THOUSAND) 46.6 44.4 44.0 35.8 42.2 37.8 CRUDE DEATH RATE (PER THOUSAND) 22.5 19.7 19.1 9.1 12.4 10.8 GROSS REPRODUCTION RATE .. 2.8 2.8 2.6 3.2 2.5 PAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. .. 7.6 USERS (PERCENT OF MARRIED WOMEN) .. .. .. 15.1 14.2 20.0 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1970-100) 80.9 100.0 110.8 102.1 104.3 107.3 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 69.0 76.0 77.0 103.9 99.5 105.3 PROTEINS (GRAMS PER DAY) 43.0 46.0 48.5 60.3 56.8 63.0 OF WHICH ANIMAL AND PULSE 13.3 /R 14.0 14.4 26.7 17.5 21.7 CHILD (AGES i-4) MORTALITY RATE 11.0 7.4 .. 8.7 7.5 8.0 HEALTH LIFE EXPECTANCY AT EIRTH (YEARS) 42.3 45.3 46.8 62.6 53.3 57.2 INFANT MORTALITY RATE (PER THOUSAND) .. 154.0 .. 56.9 82.5 53.9 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. 33.0 34.0 60.7 31.1 56.8 URBAN .. 92.0 81.0 78.0 68.5 79.0 RURAL .. 2.0 6.0 34.9 18.2 31.8 ACCESS TO EXCRETA DiSPOSAL (PERCENT OF POPULATION) TOTAL .. 12.0 .. 61.1 37.5 30.9 URBAN .. 25.0 .. 80.3 69.5 45.4 RURAL .. 4.0 9.0 25.4 25.4 16.1 POPULATION PFR PHYSICIAN 3900.0 2300.0 2120.0 1899.3 9359.2 2706.8 POPULATION PER NURSING PERSON .. 2730.0 2370.0 1220.1 2762.5 1462.0 POPULATION PER HOSPITAL BED TOTAL 580.0 510.0 .. 422.3 786.5 493.9 URBAN .. 200.0 .. 258.2 278.4 229.6 RURAL .. 2400.0 .. 2281.6 1358.4 2947.9 ADMISSIONS PER HOSPITAL BED .. .. .. 25.6 19.2 22.1 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. .. 5.2 .. 5.2 URBAN .. .. .. .. .. 5.0 RURAL .. .. .. .. .. 5.4 AVERAGE NlTIBER OF PERSONS PER ROOM TOTAL .. .. .. 2.0 .. 2.0 URBAN .. .. .. 2.1 2.3 1.5 RURAL .. .. .. 2.7 .. 2.7 ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL 22.0 /b .. .. 51.2 28.3 64.1 URBAN 76.0 7h .. .. 77.3 .. 67.8 RURAL 8.0 h .. .. 12.8 10.3 34.1  ANNEX I - 19 - Page 2 TABLE 3A BOLIVIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES BOLIVIA /a - MOST RECENT ESTIMATE) SAME SANE NEXT HIGHER MOST RECENT GEOGRAPHIC INCOME INCOME 1960 Lb 1970 Lb ESTIMATE Lb REGION /c GROUP Ld GROUP /e EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 64.0 68.0 74.0 103.5 75.B 99.8 FEMALE 50.0 56.0 65.0 102.9 67.9 93.3 SECONDARY: TOTAL 12.0 21.0 .. 37.2 17.7 33.8 FEMALE 10.0 18.0 .. 37.9 12.9 29.8 VOCATIONAL (PERCENT OF SECONDARY) 14.0 11.0 10.0 14.7 7.4 12.8 PUPIL-TEACHER RATIO PRIMARY 27.0 24.0 23.0 32.8 34.3 34.9 SECONDARY 13.0 17.0 .. 17.8 23.5 22.2 ADULT LITERACY RATE (PERCENT) 38.8 40.0 .. 74.9 63.7 71.8 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 3.0 4.0 2.0 26.9 7.2 12.4 RADIO RECEIVERS PER THOUSAND POPULATIoN 73.0 .. 78.0 173.5 71.1 104.5 TV RECEIVERS PER THOUSAND POPULATION .. .. .. 69.4 14.1 28.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 27.0 42.0 25.0 72.8 16.3 45.2 CINEMA ANNUAL ATTENDANCE PER CAPITA .. .. .. 4.3 1.6 4.6 EMPLOYMENT TOTAL LABOR FORCE (THOUSANDS) 2000.0 L4 2300.0 2500.0 FEMALE (PERCENT) 18.9 14 19.5 20.4 21.4 28.0 25.7 AGRICULTURE (PERCENT) 67.0 65.0 65.0 37.8 54.1 46.2 INDUSTRY (PERCENT) 18.1 21.1 PARTICIPATION RATE (PERCENT) TOTAL 34.1 33.2 33.0 30.8 37.8 33.8 MALE 56.0 53.7 52.7 47.2 50.3 48.1 FEMALE 12.7 12.9 13.4 13.2 20.9 17.3 ECONOMIC DEPENDENCY RATIO 1.0 1.0 1.0 1.7 1.3 1.4 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. 36.0 .. 28.9 19.5 23.6 HIGHEST 20 PERCENT OF HOUSEHOLDS .. 59.0 .. 57.7 48.9 52.3 LOWEST 20 PERCENT OF HOUSEHOLDS .. 4.0 .. 3.2 5.9 4.3 LOWEST 40 PERCENT OF HOUSEHOLDS .. 13.0 .. 10.7 15.7 13.1 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 251.9 155.9 191.9 RURAL .. .. 134.0 200.6 97.9 193.1 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 105.0 403.1 143.7 319.8 RURAL .. .. 75.0 258.0 87.3 197.7 ESTIMATED POPULATION BELOW POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 20.0 24.8 22.9 19.8 RURAL .. .. 85.0 65.2 36.7 35.1 Not available Not applicable. NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries 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 Most Recent Estimate, between 1973 and 1977. /c Latin America & Caribbean; /d Lower Middle Income ($281-550 per capita, 1976); /e Intermediate Middle Income ($551-1135 per capita, 1976); If Provisional 1976 population census gives estimate of 4.647 million; LI Av. 1961-65; /h 1963; /i 1965. September. 1978  - 20 - ANNEX I Page 3 DEFINITIONS OF SOCIAL INDICATORS Notes ;Ithough the data are drawn from sources generally judged the most authoritative and reliable. it should also be noted that they may not be fnter- nationally comparable botause of the Ick of rtandardized definitions and concepts used by different countries in collectiog the data The dat are. nonetheless, useful to describe orders of magnitude, indicate trends, and characterios certste major differeoces between co-ntries. The adjiusted gronp averages for each indicator are population-weighted geometric means, excluding the ectreme values of the indicator end the meet populated country in each group. Coverage of countries among the indicators depends on availability of data sod is not unifrn. Due to lack of dta, grotp averuges for Capital Dorplus Oil fEporters and indicators of access to water and escreta disposal, housing, inc-e distribution and poverty are simple population-oeighted genatrnir erans without the -ocl,,sion of eutreos valus LAND ARiA (thousand q. kho) PPooiatio per hospital bed - total, urban and rural - Papulatios (total, Total - Total uuriace area comprisiug land urea and inland watere. urbas, and rural) divided by their respective snkber of hospital beds Agricsltural - Host retest estimate of agricultural area used temporarily uvuiiable in public and private general snd specislieed hnspttaL and re- or permaro-tly for crops, paitures, market and kitchen gardens or to habilittion centers. Hospitals urn establishments permanently staffed by lie fallow. at toast one physiclao. Eatabliuhents providing principally cus1tndsi cue rac:nortnicoluded. Rural hospitals, howeve, include health and ma,di- GN oPER CAPITA (USS) - GNP per capita esticstes at current market prices, cal centers cot perma ently staffed by a physician (but by a medical a- oalculuted by sarn conversion nenbod us World Bank Atlas (1975-77 basis); sietant, nurse, idwife, etc.) which offer in-patient accommodation ead 1960, 1970, and 1977 data. prcvide a liited range of medical facilities. Admissions Sen hospital bed -Total number of admissions to or disoherges ENERGY CONSUMPTION PER CAPITA - Annual consumption of cocmercial esnrgy from hospitals divided by the number of beds. (coal and lignite, petroleum, natural gas and hydro-, nuclear and geo- thermal electricity) in kilogrmas of coal equivalent per capita. HODSING Average site of household (Persons per leasehold) - total, urban, sod rural- POPULATION AND VITAL SIATISTICS A bousehold consistn of a group of individuals who share living quartere Total population, mid-year (=illions) - As of July 1; if not available, and their main neals. A boarder or lodger may or may not be included in average of two end-year estimates; 1960, 1970, and 1977 data, the houaehold for statistical purposes. Statistical definitions of house- Urban population (pertent of total) - Ratio of urban to total popula- hold vary. Lion; different defiultioss of urban areas may affect comparability Average number of persons por room - total. urban. nd rural - Average nu of data aong countries. her of persons per coos it *ll, urban, asd rural occupied co.enetiomal Population density dwellinge, respectively. Dwellings exlude mou-permanent st-u tuesa sd Per anq ho. - Hid-year population per square kilometer (l00 hectares) unoccupied pants. of total area. Access tn electricity (percent of dwellings) - total, urban, and rural - Per sq. ek. agriculture lend - Computed as above for agnioultoral iand Conventional dwellings with slectricity in living qu-rtene as peree.tage only. of total, urban, and rural dwelings respectively. Population age structure (percent) - Childrsn (0-14 years), working-age (15-64 years), and retired (65 years and over) as percentages of mid- EDIUCATIOn year pcpula,iom. Adl..t.d enrollment rutios Population growth rate (percent) - total, nd urban - Compound annual Primary school - total, and female - Total and female enrollamnt of Lll ages growth rates of total and urban mid-year populations for 1950-60, at the pcinuey level as percentages of respectively primary school-age 1960-70, and 1970-75. populations; normally includes children aged 6-11 years but adjusted fo Crude birth rate (per thousand) - Annual live births per thausand of different lengths of prtimry dduostiom; fon countries with univereal edu- mid-year populuticn; ten-year arithmetic svetages ending in 1960 and cation enrollment may emceed 100 percent since some pupils are below or 1970 and five-year average ending in 1975 for most recent estimate, above the official school age. Crade death rate (per thoussnd) - Annual deaths per thousand of mid- Secondary school - total, and female - Computed as above; secondary educa- year population; ten-year arithmetic averages ending in 1960 and 197i tion requires at least four years of approved pria ry instruction; pro- and five-year average ending in 1975 f-r most recent estimate. videe general v-catloaal, or teacher training instructions for pupile Groas reproduction rate - Average number of d ughters a woman will bear usually of 12 to 17 years of age; corneepondence courses are generally in her normal reproductive period if sh esperiences present age- excluded. specific fertility rates; usually five-year averages ending in 1960, Vocational enrcll=ent toercent of secondary) - Vocational institutions iD- 1970, and 1975. clod technical indestrisl, ar other programa which apecate indepandently Family planning - acceptors, annual (thousands) - Annual naber of or as departments of secondary institutiona. acceptors of birth-control devices under auspices of nati.n.l family Pupil-teacher ratio - primary. and secondary - Total students enrolled im planning progra. primary and secondary levels divided by numbers of teachere in the corre- Family pl.nniu - usera (persent of maried woman) - Per-ntage of spending levels mrried women of child-bearing age (15-44 years) who use birth-control Adult literacy rste (percent) - Literate adults (able to read and vrite) a devicens o all married women in sase age group, a percentage of total adult population aged 15 years and over. FOOD AND NDTRITITN CONSUMPTION Index of food production per capita (1970-100) - Inde number of per Passenger cars iper thovsand population) - Psasenger cars comprise motor cars capita annual production of all fond cors_odities. seating less than eight persons; encludes ambulances, hearses and military Per capitr supPly of calories (percent of requirements) - Computed from vehicles. energy equivalent of net food supplies available is country per capita Radio receivers (per thousand population) - All types of reosivers for radio per day. Available aupplies comprise domestic production, imports less broadcasts to general public per thu..s.d of population; excludee unlicensed euports, and changes in stock. Net supplies seclude nimal feed, seeds, receivers in countries and in years when registration nf radio sets was in quantities used in food processing, and losses in distributien. Re- effect; data for recent yearn may not be comparable since mast countries quire=encs were estimated by FAO based on physiological needs for nor- abolished licensing. mO utcioity and health considering envirounental temperature, body TV receivers (per thousand population) - TV receivers far broadcset to genert weighte, age end sen distriburions of population, and allowing 10 per- public per thousand population; excludes unlicensed TV receivers in coun- cent for waste at household level, tries snd in years when registration of TV aets was in effect. Per capita supply of proteis (eras per day) - Protein content of per Newspaper circalation iper thousnd population) - Shows the average nircula- capita net supply of food per day. Net supply of food is defined as tios of "daily general interest newspaper". defiued as a periodical publi- above. Requirements for all countries established by USDA provide for cation devoted primarily to recording general news. It is coneidered to a sinimur allowance 0f 6i gnaom of total protein per day snd 20 grema be "daily" if it appears at least four times a week. of unimal and pulse protein, of bhich 10 grams should be animal protein. Cinema annual attendance per capita per year - Based on the number of tickets Th .ee standerds er lower thou those of 75 grasm of total protsin and sold during she year, inoludins udnisions to driAo-in inemas ed mobil 23 gra=s of animal protein an an average for the world, proposed by units. FAO in the Third World Food Survey. Per capita pnocein supply from animal and pulse - Protein supply of fond EKPLOYMENT dicived iro aimals nud pulsess in gram per day. Total labor force (thousands) - Economically uctice per.n.. including armed Child ( fgos 1-4) mortality rate (per thousand) Annual deaths per thous- forces and unemployed but sncludinog hoosewtives, etc. Dlu firi- and in ago group 1-4 years, to children in this age group. tioun in various countrien are not comparable. Female (percent) - Female labor force as percentage of total labor force. HEALTH Agriculture (percent) - Labor force in faming, forestry, hunting and fishing Life expectanoy at birth (years) - Average number of years of life as percentage of total labor force. reneiniog at birth; usually five-year avorages ending in 1960, 1970, Industry (percent) - Labor force in mining, construction, manufacturing and and 1975. electricity, water and gas as percentage of total labor force. Infat mortality rate (pee thouseod) - Annual deaths of infants under Participation rate (percent) - total, male. and female - Total, male, and one year of age per thousand live birhts. female labor force as percentages of tieir respective populations. Access to safe water (percent of Population) - totsl, urban, and rural - These ore IO's adjusted portitipatioc rates reflecting age-.ee Number of people (total, urban, and rural) with reasonable access to structure of the popnlation, and lung tine trend. safn water supply (includen treated surface waters or untreated but Ecoso=ic dependency ratio - Ratio of population under 15 and 65 and oven to ocotntinued wtoer such as that from protected bro.holos, springe, thn labor force in age group of 15-64 years. and o.nitary wells) as percentages of their respective populations. In or urban area a public fountain or standpost located nOt more INC0OdE DISTRIBDTION than 200 ot.eru from a house may be considered as being within reu- Percentage of private inco=e (both in cash and kind) received by richest 5 .sonbleaccess of that house. In rural areas reasons. able cess would percent, richest 20 percent, poorest 20 perceot, and pooreur 40 pernert itply that the housewif. or members of tho household do not have to of houueholds. upend a disproportionate part of the day in fetnhiug the faily's water neds. POVERTI TARGET GROUPS Access toaxcruta disposal foernent of population) - total, urban, and cannoted abeoiute poverty inucoe level (USS Per capita) - urban and rural - rural - Narber of people (total, urban, and rural) served by excneta Absolute poverty inco=e level Dn that income level below which a minil disposal as porrcntages of their respective popuattions. Ecreto nutritionally adequate diet plus .s.ontial non-food requirenents is not disposal may include the collection and disposal, with er without uffordablr treatmeuL, of hbaan ourneta and vaste-water by water-borne nysteni Estimated relatioe poverty incoma leyel (OS) per capita) - urban and rural - or thi use of pit privieo and similar installations. Relative poverty inuone level is that income level less than one-third Ppotion per yhysician - Population dividod by number of par-ticing per capita porsonal income of the cosutry. physicians qualified from a medical school at university level, Estimated population below poverty income level (percent) - urban and rural - Population per nursing person - Population divided by number of Percent of population (urban and rural) who are either "absolute poor" or prouctcing mole and fe=ale graduate nmrses, practical nurses, and "relation poor" whirhener is groater aissitant-urues. Econoic and Social lats Division Econo=ic Analysis and Projections Department  - 21 - ANNEX 1 Page 4 BOLIVIA: ALANCE 07F PA NTS, EXTERNAL ASSISTANCE AND D01T (trrent US dollars million.) Actual Pr-lioni..I lj td 1972 1973 1 1975 1976 197 1970 198- A. Sumarv of blance of Da.ventS Imiports (lncl. 9e731 -260.6 -509.2 -485.1 .667.3 -711.2 -627.9 -1,167.9 -2,066.3 op,orta (Incl. 97S1 224.7 297.2 67.6 527.8 637.1 721.1 1 023. 3 1,919.9 teaurtee balance *35.9 - 12.0 12.5 -139.5 - 74.1 .-16.8 - 144.5 - 146.9 Fctor intore - 21.8 - 22.9 - 37.2 - 31.4 - 41.2 - 92.4 . 146.6S 264.0 et interast payments (- 13.4) ( 118.1(0) -1.6) 1- .1 ( 37 .1) 35.0 247.81 Other factor service ince <net) (- 8.4) (- 4.9) (- 17.6) 6 - 5.5) 4- 38.31 (- 11.8) /- 16.21 Current tr.ns..rs os(t) 13.4 15.4 13.7 13.1 14.0 15.0 24.8 33.3 Current ccount balance 44.3 - 1-5 119.0 -137.8 -101.3 -184.2 . 266.5 - 377.6 Direct fotelac icvestmnnt - ~~~~13.4 4.6 16.7 53.4 12.1 11.0 13.3 17.8 Official capital srants 8.U 10.0 9.0 10.35 20 1 1 3.4 20.0 Public 962T loans Dinb ranmentn 122.5 37.0 108.0 150.4 292.2 427.5 446.2 685.9 Oeraymnnurst7ent- - 28.4 - 30 3 50 7 -56.6 -29.7 83.5 - 173 1 - 286.6 lat diehorannets 94.1 6.7 37.3 93.8 222.5 344.0 273.1 399.3 Other 1lng-term lo-nO Dinb_raam nts 17.7 24.0 14.2 16.4 25.0 25.0 29.0 33.0 Ospepnents - 2.6 - 7.6 - 15.1 - 18.2 . 23.0 - 24.2 - 27.0 - 31.0 Not diaburnenenan 15.1 16.4 - 0.9 . 1.8 2.0 1.3 2.0 2.0 Capital traneactiona n.e.i. - 40.9 - 32.1 - 89.6 - 42.5 . 74.0 -163.4 - 18 6 - 24.8 ChanSe in net raserren - a1.6 13.9 -111.5 44.4 . 61.3 - 8.4 - 23.6 - 36.7 Cranta and loana coefismants Total M6LT Io.n. 179.9 78.9 172.4 397.5 461.0 587.9 509.1 747.5 1BRD - - - 32.0 68.0 92.0 80.0 89.9 IDA 8.0 6.0 6.2 7.5 - - 10.0 - Other mitilateral 27.0 11.2 35.0 104.6 80.4 15.3 95.0 95.0 Cover., eant 71.7 34.1 60.8 109.3 43.8 177.2 55.0 61.3 Ouppliar- 40.1 16.6 13.8 4.4.2 464.3 55.5 30.0 75.7 Pin.npioi ier titctlong 23.1 9.9 56.0 89.3 222.5 225.7 199.1 405.6 other 10.0 1.1 0.6 10.6 - 22.2 20.0 20.0 C. !--draodum ite-o Grunt eItent of total co_it,nnnto (7) 32.2 36.5 39.7 19.0 19.2 13.9 A-rarg intnrnat (74 4.9 4.9 5.6 6.8 6.9 7.2 Average natority (y.orn) 19.2 22.0 25.6 17.6 15.0 12.4 Actual debt outstanding Public naternal Pro-iional on Dec. 31, 1977 debt and debt entijn 1974 1975 1976 1977 D. Eto-rnci debt Dioburend onIy Porecnt IBR1 42.1 3.1 A. Olediom- cud lone-ter debt (dinb.r.ad onto) IDA 54.8 4.1 Othor -ltiloteral 94.7 7.0 Tot-l debt outst-nding (DOD end of peniod) 691.b 778.0 1,003.8 1,347.8 Ocrerceecto 504.7 37.4 ItlnudLg undiabuta-d 809.4 1,206.0 1.3SS.9 2,089.8 Suppliorn 89.9 6.7 Public debt service 68.0 80.2 104.6 135.6 Pi-oncil in-titut.ons 438.8 32.6 Interest 17.3 23.5 34.8 51.6 Bocda 69.8 5.2 Public dabt not 53.0 3.9 8. Debt b-rden Total public M63S debt 1,347.8 100.0 Debt service ratIo 10.8 15.2 16.4 18.8 E. Debt protile Debt carrion ratio /I 13.6 16.2 17.1 24.1 Debt ser-ica:ODP 3.1 3.2 3.5 3.8 Total debt service 1978-80/ totl DOD end of 1977 60.6 C. Tera Intereat on DOD/OOD 2.5 3.0 3.5 3.8 D. -epedanto -ting for M8LT debt Crose dlabornne. nt/icports (Lcl. of- 22.3 22.5 41.1 51.6 Bet transfer/laporta (intl. nfs 7.8 10.2 26.1 35.0 Net transfer(/gros diabarnemant 34.9 45.1 63.4 67.3 E. E.posurr 86RD DOD/total DOD 3.0 2.7 3.1 3.1 Bank group dinb./total BOD 8.9 9.0 8.4 7.2 1BHO debt service/total debt .erv-J. 5.0 2.0 3.6 2.9 B.nk Sroup debt .ervicn/total debt o-ryica 5.4 2.6 4.2 3.4 /1 Incvding vet ditrct i-veetnant incame.  - 22 - ANNEX 1 Page 5 BOLIVIA: 80030CaC DEKWLPINF DATA (Ase.- Ln Us9 million) Acta.-oiIoo Protectd 1970- 1974- 1977- 1980- otlooal ACco-t 1974 - 1975 1976 1977 1980 1985 1974 1977 1980 1955 1974 1977 1980 1985 Cenc...t 1977 Price. ic Million 05 Grwh Care A. Pecn f 057 G-oce do-eti product 3 ,251l 3,202 3,412 3,564 4,129 5,347 6.3 5.2 5.0 5.3 99.7 100.0 101~.2 t100.1 Gales fre torm of trade (9+ 9 -139 - 73 0 - 48 - 4 - - - U .3 0.0 - 1.2 - 0.1 loose. de-etic Inc 3,760 3,063 3.339 3,564 4,081 5.343 7.2 71.2 4.6 0.1 100.0 100.0o 100.7 100.7 Imports (tool. nfl) ~ ~~~~~~~~~_576 702 740 928 937 1,213 7.6 12.9 4.7 5.3 18.8 03.2 23.0 22.7 oos(o,of:), (le...rt capaity) 7445 5036 663 -721 -821 4.,127 14.9 -1.0 4.4 6.5 44.3 20.2 20.1 '21.1 - losoarce gop ~~~~~ ~~~~ ~~~~-167 146 184 107 116 86 - - - - -5.5 3.0 2.9 1.4 Coouptioe enpe-ditores. 0.311 2,343 2,879 2,971 3,442 4,421 5.1 0.7 5.0 5.1 75.3 83.4 04.3 92.7 In--t-n eorsdltur- (hod. stoks 502 666 644 700 735 1,008 0.7 4.3 2 .6 6.0 19.0 19.6 19.5 18.9 -oeoceioge 749 520 460 093 639 922 16.0 -7.0 2.5 7 .6 24.5 16.6 15.7 17.3 -sine aLoge 719 489 433 516 530 779 18.9 410.5 1.4 7.,7 73.5 14.5 13.2 14.6 o tt-rh-ndl- Trade C.nomr -rble 9oode 52.7 67.5 62,7 64.9 90.6 159.2 23.7 7.2 11.8 11.4 12.2 9.9 I., 8.6 C -sme ~-d,-ca.R0 gds 37 .7 60.3 560 61.8 113.0 208.4 40.3 17.9 22.4 13.01 8.6 8.9 10.0 11.2 P4005 ~~~~ ~~~~ ~~~~ ~~~~ ~~4.0 7.0 . 6.2 10 .0 01.9 38.1 1.7 17 .3 17.0 0.9 0.9 0.0 1.2 Re- mateiall. goods 015.6 192.0 189.7 213.1 288.8 479.4 18.4 22.6 10.7 10.7 26.9 292 27.7 25.9 Coitel god 177.2 223.7 235. 067. 377.8 699.2 2:7.9 14.7 12.2 13.1 41.2 36.6 36.2 3 7 .7 Other coode ~~~~~ ~~~~~ ~~~~42.0 52.2 67.4 17. 102.62 287.6 7. 0.0 11.4 1. 00 1. 56 1. T-tI eorhendioe ImPOrt. (.if) 430.0 602.9 637.6 750.9 1,542.3 1,955.7 22.6 19.3 12.6 12.0 100.0 100.0 100.0 .100.5 Ac eret of Tocl bE-oo- Prineo prod-.t 361.9 274.3 3899 513.6 675.2 1,301.3 18.7 12.4 9. 5 14.0 61.6 7.2 73. 75.2 Fuels ~~~~~~ ~~~~~~ ~~~~~223.4 188.0 105.4 134.9 238.8 429.9 103.3 -10.7 21.1 12.4 38.4 20.8 26.2 24.9 c/ct Crud. petroletmn (~~~~~~~~~63.0) (63.4) (64. 0) (67.5) (119.6) (289.2) (47.87 (2.3) (21.0) (17.6) (10.7) (10.4) (13.1) (15.57 T-to -hrcoedios soP-te (fob) 587.2 462.3 570.3 64. 91r. 1,731.4 31j6 3T4 12.2 13,h 100.0 1000 i3 T Nstbheodics Credo tedic.. teport price loden 0~~~ ~ ~~~~ ~~~6. 74.2 86.0 100.0 117.7 169.8 Import prIce loden 8~~~ ~ ~~~~ ~~~5.1 95.6 96.7 100.0 124.6 10.4 Toe of crdo oden 171 4 77.6 a8.9 100.0 94.5 99.6 Enpor cu.L_n lden (1i-1. oft) 90.2 71.3 98.9 100.0 129.0 053.0 Volne Addd6 Sco An-oe Dot at 1977 Price. nod E-chon8 Rate. A-er.go Ae..ul Groth R-tee Ac Peroot of T.cl 194 1975 1976 1977 1980 1985 Agricultur 554 591 612 620 715 891 5.0 3.8 4.9 4.5 18.2 17.4 1'.3 14.7 Industr and i10ic0 900 a73 960 1,010 1,162 1,504 7.7 3.9 4.8 5.3 29.5 28.3 28.2 78.1 Osnc 1.597 1.738 140 1.934 2.252 2.952 6.0 6.6 5.2 5.:6 52.3 54.3 54.5 55.2 Totl 3,051 3,202 3,412 3.564 4,129 5,347 6.3 5.3 5.0 5.3 130.0 130.0 100.0 100.7 PublIc Finace Perc-t of GDP Detil on.S Percen of Coto (Contro G-rremot 1974 1975 1976 1977 46110 OSocor Flre-Y..r PIco) Curret recipto 13.1 13.1 13.5 12. nnometProe 1970680 Curentenedi tuL 13.8 106 16 05 rOltr 9.6 POodgeterysc-ioge 2.3 25 1.9 2.4 KinIng cod hypdr...rbote 23.4 blIc setrecoe9.3 5. 5 7.2 6.2 lentyedpwr25.3 Public fiord capitol fornatioo 6.9 11.3 1~~~ ~ ~~~~~~~~3.4 10.3 Treo or :en coIialos1. Poblic -erice.d ...i9 -ool eite 02,0 as tocol current enp-ndlt-re 1974 1975 19 76 1977 Goode an erie 15.2 19.0 27.4 19.3 A. Percer or ote W.,. cd to_air 52.7 51.3 52. 0 52.0 Ftn-ocln 1977-980 Tra..ofer pny-Ott 29.7 24.9 24.6 30PiAes o 20.331~ Other 3.3 4.0 . 3.7 FoegIcre 0. TocI curet -opedil- tos oo.o 100.0 100.0 100.0 Publ10i eco 3970 100.0 Selected Indicato 0970- 1674- 1977- 1980- 1974 1977 1980 1985 bOOR ~~~~~ ~~~~~ ~~~~~ ~~~2.64 3.60 3.63 3.50 Imprr releetlctoy ~~~~ ~~~~ ~~~~1.2 2.38 5. 1. Averge -nioa ...1 ring. rot 19.0 180. 13.0~ 14.40 fterginel not-iol -aitgeot .42 - .34 .04 .20 aIa Adedrm ore Lbor Foro and Ototrt P-n Rocker n Tho...aode 71 7u Totol Grwt.Rte In.7 Do ddre dPrc- of-k ece 150 97O17 97 76 190-19 7 970 197I 6 ~ 1970 1976 ugricultore 1,307 ~~~~~~ ~~~~~ ~~~~1,459 64.0 58.0 19 349 -419 29.7 30.9 Ioduetrv nod nitiog ~~~~ ~~~ ~ ~~276 278 14.0 15.0 5.4 2,420 2,140 205.9 167.3 S-mma _446 680 22.0 07.0 7 3 2.834 1U26 741.0 199.6 CocI 2.329 2,507 100.0 100.0 3.7 1,176 1,356 100.0 100.7  ANNEX 1 -23 - Page 6 CONTRACTED PUBLIC AND PUBLICLY GUARANTEED EXTERNAL DEBT, 1969-1977 (US$ millions) 1969 1970 1971 1972 1973 1974 1975 1976 1977/1 International Organizations 39.1 6.9 26.8 35.0 17.2 41.2 144.1 148.4 107.3 CAF - - 0.1 2.0 1.2 - 38.1 6.7 1.7 TBRD 23.3 - - - - - 32.0 68.0 92.0 IDA 7.4 1.4 6.8 8.0 6.0 6.2 7.5 - - IDB 8.5 5.5 19.9 25.0 10.0 35.0 66.5 73.7 13.6 Governments 30.0 17.2 35.2 71.7 34.1 60.8 109.3 43.8 177.2 Argentina 3.2 14.3 4.3 4.2 3.4 2.9 3.4 4.6 50.0 Czechoslovakia - - 3.9 1.4 - - - 0.3 - Germany F.R. 1.7 1.4 - - - 28.6 - 5.2 21.7 United Kingdom 1.4 - - 6.8 - - 1.0 - - USA 22.7 1.5 25.3 40.0 26.5 28.8 26.9 26.3 75.5 USSR - - - 15.9 - - 0.5 5.2 16.6 Others 1.0 - 1.7 3.4 4.2 0.5 77.5 2.2 13.4 Suppliers' credits 11.5 1.6 3.9 40.1 16.6 13.8 44.2 46.3 55.5 Argentina - - 1.6 5.1 5.9 1.6 1.7 0.3 1.9 Belgium - - - - 5.8 0.1 - - - Canada - - - - 3.7 1.9 - - - Denmark 0.7 1.3 - 0.8 0.2 0.2 4.9 - - Germany F.R. 3.9 0.3 - - - - 13.6 2.8 1.3 Israel - - - - 5.5 - - Italy 2.1 - - 26.6 - - - - - Japan - - 2.0 6.4 - - 10.8 19.5 10.3 Spain 3.3 - - - - - - - - USA - - - 1.1 0.9 1.9 2.4 - 25.2 Others 1.5 - 0.3 0.1 0.1 8.1 5.3 23.7 16.8 Private Banks 1.3 - 23.3 23.1 9.9 56.0 89.3 222.5 225.7 Brazil - - 12.0 7.9 4.7 13.5 - 13.7 7.7 USA 1.3 - 10.0 12.8 1.5 34.3 63.9 146.2 159.8 Others - - 1.3 2.4 3.7 8.2 25.4 62.6 58.2 Other 14.1 4.1 0.1 10.0 0.4 0.6 10.6 - 22.2 Nationalization (US ) - 78.6 - - 0.7 - - - - Total /2 96.2 108.4 89.3 179.9 78.9 172.4 397.5 461.0 587.9 /1 Provisional /2 Net of adjustments and cancellations. Source: Central Bank, IBRD Social and Economic Data Division.  ANNEX II - 24- Page 1 of 4 THE STATUS OF BANK GROUP OPERATIONS IN BOLIVIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of March 31, 1979) -------- US$ million ------ Loan or (Amount less cancellations) Credit # Year Borrower Purpose Bank IDA Undisbursed Fully disbursed loans and credits 23.3 44.6 261 1971 Bolivia Livestock 6.8 0.8 455 1974 Bolivia Mining/Manufacturing 6.2 0.8 561 1975 Bolivia Agriculture 7.5 3.2 762 1978 Bolivia Ulla Ulla Development 9.0 8.5 1121 1975 ENFE Railways 28.7 0.1 1211 1976 Bolivia Rural Development 9.5 7.6 1238 1976 ENDE IV Power 25.0 8.6 1290 1976 Bolivia Mining/Manufacturing 10.0 8.1 1324 1976 Bolivia Water Supply and Sewerage 5.21 4.1 1331 1976 Bolivia Small-Scale Mining 12.0 11.0 1404 1977 Bolivia Education and Voca- tional Training 15.0 12.9 1422 1977 ENFE Third Railway 35.0 21.8 1423 1977 AASANA Aviation 25.0 23.3 1489 1977 Bolivia Urban Development 17.0 16.8 1510 1978 Bolivia Ulla Ulla Development 9.0 9.0 1587 1978 Bolivia Highway Maintenance 25.0 25.0 Total 239.7 74.1 of which has been repaid 7.5 0.9 Total now outstanding 232.2 73.2 Amount sold 0.1 - of which has been repaid - 0.1 - Total now held by Bank 232.2 73.2 161.6  ANNEX II - 25 - Page 2-of 4 B. STATEMENT OF IFC INVESTMENT (As of March 31, 1979) Fiscal Amount in US$ million Year Obligator Type of Business Loan Equity Total 1973 Plasmar, S.A. Cables and Plastic Product 0.3 0.1 0.4 1976 Banco Hipotecario Nacional Capital Market 0.3 0.3 1976 Banco Industrial S.A. Development Financing 0.6 0.6 1978 Molino Andino S.R.L. Plastic Products 2.3 - 2.3 Total 2.6 1.0 3.6 Repaid, cancelled or sold 1.2 0.4 1.6 Held by IFC 1.4 0.6 2.0 C. PROJECTS IN EXECUTION Credit 261-BO - Third Livestock Development Project, US$6.8 million, June 23, 1971; Effective Date: September 15, 1971; Closing Date: December 31, 1979. The credit portion of the project has been almost fully disbursed; about US$400,000 for technical assistance remains to be disbursed and the credit should be disbursed by the Closing Date. Credit 455-BO - Mining Credit Project, US$6.2 million, January 18, 1974; Effective Date: June 18, 1974; Closing Date: June 30, 1978. The project is proceeding satisfactorily and the credit should be disbursed by the Closing Date. Credit 561-BO - Agricultural Credit I, US$7.5 million, June 20, 1975; Effective Date: December 15, 1975; Closing Date: March 31, 1981. Funds originally allocated for cattle are fully committed; credit demand for grape production has been as anticipated, whereas demand for sheep, annual crops and sugarcane has been less than anticipated. Demand for sheep and annual crops funds is expected to accelerate; demand for sugarcane is not expected to materialize. Loan 1121-BO - Second Railway Project, US$28.7 million, June 5, 1975; Effective Date: August 6, 1975; Closing Date: December 31, 1979. Project progress has been satisfactory with performance targets either having been attained or exceeded. The loan is now almost fully committed.  - 26 - ANNEX II Page 3 of 4 Loan 1211-BO - Ingavi Rural Development Project, US$9.5 million, March 8, 1976; Effective Date: October 7, 1976; Closing Date: June 30, 1982. There have been delays in the implementation of some components of the project. Corrective measures have been taken, and project is now proceeding satisfactorily. Loan 1238-BO - Fourth ENDE Power Project, US$25 million, June 2, 1976; Effective Date: August 23, 1976; Closing Date: June 30, 1980. The project has recently been delayed somewhat by poor performance of local contractors and difficulties experienced in the transportation of a major equipment component. Other components of the project have been proceed- ing satisfactorily. Loan 1290-BO - Banco Industrial Mining and Industrial Credit Project, US$10 million, October 15, 1976; Effective Date: April 14, 1977; Closing Date: December 31, 1980. After initial delays, the project is now proceeding satisfactorily. Loan 1324-BO - Urban and Rural Communities Water Supply and Sewerage Project; US$11.5 million, October 15, 1976; Effective Date: December 10, 1976; Closing Date: June 30, 1981. The Government has requested that the water supply and sewerage investments for the cities of Sucre and Potosi be cancelled inasmuch as these cities are not prepared to proceed without substantial Government subsidies. In spite of initial delays, the other components of the project are now proceeding satisfactorily. Loan 1331-BO - Small-Scale Mining Development Project, US$12 million, October 15, 1976; Effective Date: July 15, 1977; Closing Date: December 31, 1980. Due to institutional managerial problems, the preparation of subprojects was delayed about 15 months. To facilitate loan utilization a number of measures were taken in mid 1978; the first disbursement under the credit component was authorized November 1978. Loan 1404-BO - Education and Vocational Training Project, US$15 million, May 11, 1977; Effective Date: September 7, 1977; Closing Date: December 31, 1981. The project has experienced some delays but is proceeding without significant problems.  - 27 - ANNEX II Page 4 of 4 Loan 1422-BO - Third Railway Project, US$35 million, June 6, 1977; Effective Date: September 29, 1977; Closing Date: December 31, 1981. The progress of the project has been seriously impaired by the recent heavy rains and extensive floodings. A reduction in the project scope is expected as the railways have to divert funds to repair damages. The Bank is discussing with the Government on how best to proceed. Loan 1423-BO - Aviation Development Project; US$25 million, June 9, 1977; Effective Date: September 29, 1977; Closing Date: June 30, 1983. The project is proceeding slower than expected but without significant problems. Loan 1489-BO - Urban Development Project, US$9 million, November 30, 1977; Effective Date: June 22, 1978; Closing Date: June 30, 1983. The project has been delayed nine months because of slow processing of subsidiary loan agreements. Most components are now proceeding satis- factorily. Loan 1510-BO and Credit 762-BO - Ulla Ulla Development Project, US$9 million each, April 6, 1978; Effective Date: July 31, 1978; Closing Date: June 30, 1983. The project is proceeding as scheduled. Loan 1587-BO - Highway Maintenance Project, US$25 million, July 10, 1978; Effective Date: October 4, 1978; Closing Date: December 31, 1983. Initiation of the maintenance works delayed six months because beneficiary has to concentrate on emergency measures to repair damages to road system, caused by heavy rains and extensive flooding.  ANNEX III Page I BOLIVIA OMASUYOS-LOS ANDES RURAL DEVELOPMENT PROJECT SUPPLEMENTARY DATA PROJECT SHEET Section I: Timetable of key events (a) Time taken to prepare project: 12 months (b) Agencies which prepared the project: Government, FAO/CP, Bank (c) First Presentation to Bank: March 1978 (d) First Bank mission to review project: July 1978 (e) Departure of Appraisal Mission: October 1978 (f) Completion of Negotiations: May 17, 1979 (g) Planned Data of Effectiveness: October 1979 Section II: Special Bank Implementation Actions None Section III: 1. IDA has obtained assurances that: (a) the Government would not modify the decree and statutes creating the Project Unit without IDA's concurrence (para. 38); and that any replacements of the Project Director and Sub-Directors would be made in agreement with IDA (paras. 40 and 41); (b) a "Procurement Committee" within the Project Unit to be responsible for acquiring goods and services under the project would be established, the Project Unit would continue to maintain the revolving fund for input supply and the Government would increase this revolving fund to US$200,000 to ensure sufficient and timely availability of inputs for project farmers, and, for purposes of the project, the Project Unit would not be subject to import restrictions and import duties on goods imported by the Project Unit would be paid directly by the Government or reimbursed to the Project Unit (para. 42);  - 29 - ANNEX III Page 2 (c) the Government would provide the Project Unit staff with adequate incentives to ensure that the Project Unit could attract and retain highly qualified staff (para. 41); (d) the specialist in cheese and dairy production to be contracted by the Project Unit, would be employed by July 1, 1980 under terms and conditions satisfactory to IDA (para. 40); (e) the Project Unit would use its best efforts to establish, and provide technical assistance to, a Central Cooperative, and would submit to IDA by December 1, 1982 a proposal for the transfer of the input supply system to the Central Cooperative; maintain separate accounts for the input supply system and the acclimatization center and establish cattle prices at sufficient levels to recover its investment and operating costs (para. 42); and establish a Coordinating Committee in the Project area, consisting of project staff and representatives of project beneficiaries, to ensure direct farmer participation in the execution and planning of the project (para. 41); (f) the Government would cause SNC to (i) prepare by April 1, 1980, a study, including a timetable, satisfactory to IDA, for the improvement of about 50 km of feeder roads in the project area utilizing the Ingavi Project road equipment; (ii) improve by December 31, 1980 the sections of the road between Achacachi and Ancoraimes to ensure accessi- bility throughout the rainy season; and (iii) maintain the project roads during and after the project period (para. 43); (g) the Government would cause BAB to establish an office with adequate staff and necessary furniture and equipment in Huarina (para. 44); (h) the Government, by April 1, 1980 would cause the Project Unit to enter into a contractral arrangement with INFOL, INBOPIA and FOMO for the promotion and development of handicraft activity in the project area (para. 43); (i) the Government would coordinate the provision of credit in the project area so as to ensure that all credit shall be provided by means of the project (para. 44); (j) the monitoring system to be established in accordance with the IFAD Loan Agreement would be satisfactory to IDA.  - 30 - ANNEX III Page 3 2. Condition of effectiveness would be that: (a) Under the credit program (i) a subsidiary agreement between the Central Bank and BAB and a contractual agreement between the Project Unit and BAB, satisfactory to IDA, had been signed; (ii) the Government had established a credit revolving fund in BAB, amounting to about US$100,000, for the execution of the credit program, and set rules and guidelines for its operation (paras. 44 and 57), and (iii) the Government has instructed the Central Bank to replenish the credit fund, established in BAB, as necessary. (b) All conditions necessary for the effectiveness of the IFAD loan have been fulfilled. 3. Conditions of disbursement would be that: Under the forestry program a contractual agreement between the Project Unit and CDF, satisfactory to IDA, had been signed; under the road program, that a contractual agreement between the Project Unit and SNC, satisfactory to IDA had been signed (para. 43); and, with respect to subloans for production capital, that the revolving fund, to be replenished with repayments from these subloans, is depleted (para. 57). 4. Condition of board presentation would be that: The Sub-Directors for the Ingavi Project and also for the Omasuyos-Los Andes Project with qualifications and experience acceptable to IDA, had been appointed (para. 41).  IBRD- 14079 BOLIVIA *; %\E/Ei l:\ ' 0 \ \ ' ~ \ ZR OMASUYOS-LOS ANDES RURAL DEVELOPMENT PROJECT 01 E~, Z9l l .- 5. , ~~~~~~~o MN Al \ \,. A Fg E iX 7 EIEthrl >~~~~~~~~~~~~~~~~~~~~~~~~~~~~ * A _tO\ -CMrERS t>'.,,""'-..< 6,,'\ 12~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~h, P E R U s W - D j ~ + 5 s < < X(9 / - L_~~ ~ ~~~ ~~~ ~ ~ ~~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ 0 L a = I V MIU AMr A ' \ t O F v \ C \ / ' \ 'i%/ ' -' /~~~~~~~~~~~~~~~~~~99,9 / \ _ \ X X t \S / X i 4e~~~~~~~~~~~~~~~~~~~~~~~~3 R / / , \ ' 4 . A t g i 0: P~~~~~~~~~~~~~~~~~~ 4 / /9 Nq\\ \91/\1> g oln