Jordan - Second Cities and Villages Development Bank Project

Documnt of The World Bank FoR oMciAL USE ONLY Rkpot NO. P-4133-JO , REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ft ~~~~ ~ 0 TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US S15.0 MT.-ION TO THE RASHEMITE KINGDOM OF JORDAN FOR A SECOND CITIES AND VILLAGES DEVELOPMENT BANK PROJECT July 29, 1985 Tbb docments hu a rsiced dieribtieo and may be sed by rendiemtsonly in the performance of f thofi cial dadas It. mmbmay net .thewhe be disclomi within Weld Bet satbrlxaiom.I  RASHEMITE KINGDOM OF JORDAN CURRENCY EQUIVALENTS Calendar 1984 My18 Currency Unit Jordanian Dinar (JD) JD US$1.00 D .384 JD .405 JD 1.00 US$2.60 US$2.47 Exchange rate used in Appraisal Report: 3D I = US$2.50 -GOVERNMIT OF JORDAN FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS CVDB Cities and Villages Development Bank EEC European Economic Commission EIB European Investment Bank HB Housing Bank IDB = Industrial Development Bank MMRA" = Ministry of Municipal and Rural Affairs SSC = Social Security Corporation INDP = United Nations Development Program USAID = United States Agency for International Development  FOR OFFICIAL USE ONLY HASHEMITE KINGDOM OF JORDAN SECOND CITIES AND VILLAGES DEVELOPMENT BANK PROJECT LOAN AND PROJECT SUMMARY Borrower: The Hashemite Kingdom of Jordan. Beneficiary: The Cities and Villages Development Bank (CVDB). Amount: US$15.0 million equivalent. Terms: 15 years, including 3 years of grace, at the standard variable interest rate. Onlending Terms: The proposed loan would be onlent to CVDB under the same terms as the Bank loan, but with the interest rate to CVDB fixed at the rate in effect at the time of loan signing. The Government would bear the foreign exchange and the interest rate fluctuation risks. Project Description: The objectives of the project are: (i) to support the Government's efforts to improve living standards in Jordan's less developed outer regions; (ii) to continue to facilitate the execution of municipal and village development plans by funding well-appraised projects; (iii) to strengthen CVDB's institutional capacity; and (iv) to support CVDB's role in organizing financial training for local government personnel. The project components include a line of credit to CVDB, representing 75 percent of CVDB 's foreign exchange needs from mid-1985 to end-1987; equipment and technical assistance for CVDB; and training for local government and CVDB personnel. Possible project risks include difficulties by CVDB in attracting and retaining qualified staff. The project, however, includes features to minimize the risk. Individual Free Limits: US$60,000 and US$125,000, depending upon the type of subproject. I s document has a resuicted disuibution and may be used by recipients only in the performance of | their official dudes Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Prolect Costs: Foreign Local Total ~~~~- -(US$ million)---- Line of Credit 14.9 18.2 33.1 Equipment 1/ 0.1 0.0 * 0.1 Technical Assistance 0.4 0.2 0.6 Training 0.1 0.2 0.3 Total 15.5 18.6 34.1 *Estimated to be about $ 25,000 Financing Plan: Bank 15.0 0.0 15.0 Government 0.5 0.4 0.9 CVDB 0.0 18.2 18.2 Total 15.5 18.6 34.1 Estimated Disbursements: Bank Fiscal Year (US$ million) 1986 1987 1988 1989 1990 1991 Annual 1.5 3.0 5.5 3.6 1.0 0.4 Cumulative 1.5 4.5 10.0 13.6 14.6 15.0 Economic Rate of Return: N.A. Appraisal Report: No. 5623-JO, dated July 19, 1985. Map Number: IBRD 14569R. 1/ Exempt from taxes and duties.  INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE HASHEMITE KINGDOM OF JORDAN FOR A SECOND CITIES AND VILLAGES DEVELOPMENT BANK PROJECT 1. I submit the following report and recommendation on a proposed Bank loan to the Hashemite Kingdom of Jordan of US$15.0 million equivalent to help finance a Second Cities and Villages Development Bank Project. The loan would be for 15 years, including three years of grace, at the standard variable interest rate. The Government would onlend the Bank loan to the Cities and Villages Development Bank (CVDB). The terms of the onlent funds would be the same as those for the Bank loan, except that the interest rate to CVDB would be fixed at the interest rate in effect at the time of loan signing. The Government would bear the foreign exchange and interest rate fluctuation risks. PART I - THE ECONOMY 11 2. A report entitled "Jordan Review of the Five-Year Plann" (No. 4129-JO, dated May 1983) was distributed to the Executive Directors in June 1983. An economic mission visited the country in May/June 1983; its findings have been included in the present text. 2/ Country data sheets are attached as Annex 1. Recent Economic Developments 3. Conscious of the country's limited natural resources, its relatively narrow productive base and the sensitiveness of the economy to changes in its oil-rich regional environment, the Government has pursued liberal, outward-looking policies in trade, labor migration and foreign exchange. This has enabled Jordan to alleviate the effects of a very high natural population growth rate (3.4 percent) through massive emigration stimulated by high salaries in the neighboring countries and through rapid expansion of domestic production fueled by an exceptionally high investment rate and rapidly growing export demand. At present, a large part of Jordan's total workforce is employed abroad. In addition to sizable workers' remittances, Jordan has benefited from large inflows of grant aid from neighboring countries as well as from a rapid increase in regional demand for its exports. During the period 1976-82, the yearly inflow of workers' remittances and grants reached on average close to two-thirds of Jordan's GDP. The abundant supply of these resources and a favorable entrepreneurial climate enabled -Jordan to maintain both very high consumption and investment rates. 4. As a result, the Jordanian economy expanded rapidly with an annual average GDP growth rate of over 10 percent in real terms during the 1976-82 period; almost full employment was reached. The overall balance of payments remained strong despite a large chronic deficit in merchandise trade. 1/ This section is substantially the same as Part I of the President's Report for the Second Urban Development Project (P-4095-JO), dated May 22, 1985. 2/ References in the text which follows are to the East Bank of Jordan.  -2- Although exports of goods and non-factor services (primarily agricultural products, manufactured go ds, tourism and exports of the new commodities, fertilizers and potash) grew at a rapid rate of about 16 percent in real terms during 1976-82, its small base in relation to imports led to a continuous deterioration of the resource gap. These trade deficits, however, were almost fully covered by factor income and transfers from abroad. Governmen:- guaranteed external borrowing remained therefore within reasonable limits and borrowing on commercial terms was reduced to a modest level (para. 14). 5. Beginning in 1982, however, the economic slowdown in the neighboring countries has affected the Jordanian ecouomy in many ways, leading to a slowdown of domestic economic activity and a reduction in the inflow of external transfers. The overall economic growth rate slowed to about 4.2 percent (in real terms) in 1983, still a satisfactory performance considering the unfavorable economic environment. Economic activity in 1984 further slowed to an estima.ed growth rate of about 3 percent, and is expected to remain at that level throughout 1985. The slowdown in economic activity was due to a decrease in the growth of foreign aid by another 30 percent between 1983 and 1985 and to slower growth in worker remittances and in exports of manufactured goods and services to neighboring countries. The effect of these factors was exacerbated by a marked decline in export prices of raw and processed minerals. Imports also declined, in line with the sizable reduction in public and private investments. As a result, the current account deficit for 1983 showed only a slight increase to $390 million. It was mainly covered by the proceeds of a $225 million Eurodollar loan contracted in early 1983. Jordan also drew on its reserves, which remained, however, equal to three months of imports. The decline in merchandise imports, continuing in 1984, combined with an increase in exports of goods to contribute to an improvement in the balance of trade deficit, from nearly $2.4 billion in 1983 to about $2.0 billion in 1984. A slight reduction in officiil transfers was more than offset by the decline in imports, and the current account deficit improved to $229.3 million. Preliminary estimates for 1985 show imports increasing, but at a slower rate than exports, leading to a further reduction in the current account deficit to about $190 million. 6. With the decline in Government revenues from grants, public investment has been reduced, and the Govern ent has further intensified its domestic resource mobilization efforts through cuts in subsidies and improved collection of direct and indirect taxes (about 90 percent of recurrent expenditures is covered by domestic revenues). 7. The main concerns of monetary policy have been mobilizing savings and controlling domestic liquidity. Private savings have improved, but public savings have continued to be negative because of the high level of defense expenditures. To promote domestic savings, greater discretion is being allowed the Central Bank in adjusting interest rates and banking commissions. As a result of increases in deposit rates in 1983, savings deposits rose faster than the money supply. A parallel situation materialized in 1984 though both savings deposits and the money supply grew at slower rates in that year. Together with a marked decline in inflation to 3.9 percent in 1984, these increases have resulted in interest rates becoming substantially positive again in real terms.  3 Medium-Term Prospects 8. Given the changed situation and outlook in the neighboring oil producing countries, continuing GDP growth in the 9-11 percent range as projected by the 1981-85 Plan would no longer appear feasible in the medium term; a rate in the neighborhood of 5 percent per annum in real terms appears more likely during the next Plan (1986-90). This projection assumes a reduction in the exceptionally high level of investments achieved during the early 1980s, which was mainly due to implementation of a number of major new projects such as potash, fertilizer and a refinery, now at initial stages of production. While the new, major natural resource-based industries have * provided some new employment opportunities in the short term, the economic slowdown is likely to change the manpower situation in Jordan from one of selective shortages to one of general excess supply requiring finding employment for a rapidly increasing domestic workforce (para. 12). 9. The industrial sector (including mining, manufacturing and construction) is expected to lead the growth of GDP and exports, with the new industries contributing more than one third towards incremental GDP during 1986-90. Together with an expansion of phosphate mining and cement production, total industrial output would grow at an annual rate of about 7.5 percent per annum for the period 1986-90. Since the rapid expansion of infrastructure and private housing during the boom years of the 1970s and early 1980s has slowed down substantially, the construction industry is likely to grow at a substantially lower rate (3 percent) during 1986-90. Thus, industrial growth during the next plan period will have to rely increasingly on development of more small and medium-scale higher technology manufacturing, largely for exports. The projected 7.5 percent for industrial growth assumes that adjustment of the industrial sector in this direction will be achieved, inter alia through changes in protection policies and improvements in export incentives. 10. Curtailment in growth of public expenditures and the slowdown in domestic and foreign demand for banking and transportation services are expected to slow down growth of services to an average annual rate of a little over 3 percent per annum for 1986-90. In particular, it is expected that the transportation sector and the hotel industry, which at present are facing large surplus capacity, will undergo a period of consolidation. In the trade sector, efficiency gains from modernization would likely be offset by increased pressure from higher unemployment to expand the i-ess efficient informal sector of trade. In contrast to the expected slow growth performance of traditional private services, the prospects are favorable to exploit Jordan's potential in skilled labor and meet the demand for special services in areas such as consulting, contracting, and maintenance. Agriculture is projected to continue to grow by about 5 percent per annum. Overall, the sectoral growth rates would enable Jordan to maintain a GDP growth rate of about 5 percent per annum for throughout the later 1980s- 11. On the external balance side, the projections assume that exports of goods and non-factor services would grow by an average rate of about 8 percent per annum in real terms for 1985-90. Exports from the output of previous and  -4- new industrial, natural resource-based projects to the world market would make the largest contribution to. this growth performance. The export projection.: for the later 1980s assume that adequate measures are taken to develop Jordan's manufacturing exports. The external balance projections assume th-it imports would increase less rapidly because of the slow overall economic growth rate and the expected sizable reduction in the level of investments after completion of the major industrial projects. Even though merchandise exports are projected to approach a high rate of increase while imports would grow at a significantly lower rate, the trade deficit could remain large at about $1.9 billion in 1985. I-n relation to GDP, however, the resource gap is expected to show a further decline from about 51 percent in 1984 to about 38 percent in 1987. Unlike the past, net workers' remittances and foreign grants, which are likely to decline, may no-t be sufficient to meet the growing trade deficit. Jordan therefore would have to rely more on external borrowing (para. 15). In order to maintain its prudent build-up of externial debt, Jordan will need to combine external borrowiag with increased efforts to mobilize domestic resources, particularly ina the public sector. Social Issues 12. Due to the substantial migration of Jordanian workers to neighboring countries and the rapid economic growth, the labor market situation has been characterized until recently by selective manpower shortages. However, according to recent manpower projections, supply of labor in Jordan in the medium term is likely to show selective surpluses, particularly throughout certain categories of skilled professionals. In 1983, it is estimated that 312,000 Jordaniianis were working abroad compared to a total domestic employment of about 570.000. Domestic employment includes at present a relatively large number of foreign workers currently estimated at about 130,000, half of whom are uinskilled. A comprehensive manpower and training plan is needed to help ensure that the education and training system is geared to meet both domestic and external demands for manpuwer. 13. The Government has emphasized social issues in the current Five-Year Plan (1981-85). Although the social indicators are relatively favorable in most sectors, social services are unevenly distributed across income groups and between urban and rural areas. Housing remlains a problem despite the boom in 1978-80, mainly bec-ause housing costs have far exceeded the means of the lower income groups. External Assistance 14. With the large, chronic trade deficit offset by inflows of remittances and foreign transfers, the current account of the balance of payments was on average in equilibrium in the period 1975-81. Net workers' remittances increased from about $160 million in 1975 to about $900 million in 1983 and 1984. Following the Baghdad Arab Simmit Conference in November 1978, which pledged assistance of about $1.2 billion per year over a 10-year period, net foreign grant aid rose from $400-500 million in 1977-78 to about $1.3 billion in 1980 and 1981; it declined to some $0.8 billion in 1983 and to $0.7 billion in 1984. In 1985 it is expected to fall to $0.6 billion. This  -5- decline was the main reason for the current account deficits of $390 million in 1983, and $230 million in 1984, both of which were financed largely by external borrowing and partly by drawing on reserves. The external public debt outstanding and disbursed reached $2.2 billion at the end of 1984 (about 52 percent of GNP). External debt service payments amounted to $319 million in 1984 or 9.6 percent of total exports of goods and services. 15. Jordan's impressive growth, pragmatic economic and social policies and efficient economic management have helped to attract large amounts of foreign assistance. The grant component of this foreign assistance is projected to decline gradually in real terms over the next few years. The projections on that basis indicate a need for average gross external borrowing of about $0.9 billion over the 1985-1990 period, mostly in later years. While bilateral and multilateral sources can be expected to provide the bulk of external resources, Jordan is likely to resort increasingly to the financial markets, and this would result in a hardening of loan terms. On these assumptions, debt service as a percentage of exports of goods and services is projected to reach 10.0 percent by 1990. Given this outlook and the country's record of prudent management, Jordan remains creditworthy for Bank lending. PART II - BANK GROUP OPERATIONS l/ 16. Jordan has received 18 Bank loans totalling $452.3 million and 15 IDA credits totalling $86.1 million (net of cancellations), of which all the credits and two loans have been fully disbursed. Project implementation and disbursement performance have been generally satisfactory. In recent years, disbursements have amounted to about 50-60 percent of appraisal estimates. IFC has made investments in Jordan with total commitments of $94.2 million. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of March 31, 1985. 17. Under its last two development plans, Jordan has aimed at restructuring its economy to achieve a wider manufacturing base, reduce its dependence on external grants, and spread the benefits of development among different regions. The Bank's strategy has been tailored to support those objectives and in particular is designed to help the Governmer.t: (a) to diversify tie country's economic base and promote exports; (b) to alleviate manpower and infrastructure constraints in the productive sectors; and (c) to encourage more balanced growth and distribution of social services among regions and income groups, with particular emphasis on low-income groups. 1/ This section is substantially the same as the corresponding part of the President's Report for the Second Urban Development Project (P-4095-JO), dated May 22, 1985.  -6- 18. Within this broad framework, past lending has emphasized support for capital infrastructure and manpower development. Since 1962, Bank Group lending has focussed on water supply and sewerage, power and energy development, education and urban and municipal development. The Bank Group has also lent for irrigation, agricultural and industrial credit, transpbrtation, and tourism, and recently became involved in the health sector with a loan for a Primary Health Care Project. In addition, the Bank Group has financed technical assistance for developing and implementing a plan for expanding phosphate rock mining. An engineering credit was made in FY75 to help prepare a large project for potash production from the Dead Sea via solar evaporation, for which a loan was approved in September 1978. These projects have been designed with an emphasis on institution building to assist the agencies involved to develou their capabilities to plan, prepare, and implement projects on their own. In addition to the proposed project, future lending would include projects for mining, transportation, manpower development, water supply and sewerage, urban development, power and energy development, and industry. IFC has provided loans and equity contributions for a major fertilizer project and for projects in the construction materials subsector. It has also assisted the capital market and leasing ventures. 19. The Bank has recently helped the Government to review the energy, water supply, health, and urban sectors, and the Bank's economic and sector work will continue to focus on strengthening the macroeconomic and sector base for our lending program. The Bank's economic work program aims to deepen and broaden the well-established policy dialogue with the Government in three priority areas: (i) development planning, with a focus on resource mobilization and allocation; (ii) industrial and trade policies, including technology transfer and export strategy/promotion and industrial subsector studies; and (iii) regional development and equity and efficiency of government revenues and social expenditures. These subjects are crucial because the substantially tighter balance of payments situation expected for the rest of the decade calls for increased efforts to step up domestic resource mobilization, to stimulate manufactured exports and to optimize resource allocation, while making particular efforts to reduce rural and urban poverty. 20. At the end of 1983, the actual Bank Group share in Jordan's total external public debt was estimated at 12 percent, and its share in debt service was 5 percent. In 1985, the Bank Group's shares in debt outstandi-, and in debt service are expected to be about 14 and 8.5 percent respectively. PART III - THE URBAN SECTOR Background 21. Jordan is a highly urbanized country. Following three decades of rapid population growth and massive immigration, about 70 percent of its 2.6 million population lives in urban areas of 5,000 people or more. By the year 2000, Jordan's urban population is expected to have increased by some 2 million. Unemployment is an increasing problem, since the labor force is  -7- rising at about 6 percent per annum while domestic and external Jdexn::d .or Jordanian labor is weakening. Given Jordan's scarce natural resources, limited arable land and water and small domestic market, the country's future economic growth and employment must depend upon export-based manufactures and services. In an era of expected slower economic growth, the development and management of efficient and cost-effective services and infrastructure for urban areas to support these activities, as well as to improve the welfare of a rapidly increasing urban population, are crucial challenges facing Jordan. 22. Jordan's population is highly concentrated. Most of its urban population lives within 30 kilometers of the capital, Amman, which itself accounts for over 750,000 people and produces most of the country's services and industrial output. While the Amman region is expected to accommodate most population growth for the remainder of this century and to continue its role as the main engine for Jordan's economic development, the Government is taking active measures to stimulate growth in other areas. The proposed Second Cities and Villages Development Bank (CVDB) Project would assist the Covernment in achieving this goal by financial support and technical assistance for the financial institution best situated to promote the development of cities and villages outside Amman. Institutional Framework 23. The Ministry of Municipal and Rural Affairs (MMRA) is the major authority in charge of the delivery of services to villages and municipalities and is responsible for the preparation of their master plans, for project design and execution, for budget review, and for channelling loan applications to CVDB. The Directorate of Works and Engineering Services in MMRA is responsible for buildings, roads, water, sanitary engineering, and rural development; it plays a major role in the preparation of projects for CVDB financing. Although this directorate is short of staff, especially of qualified engineers, MMRA or the concerned local government engages consultants as necessary, with satisfactory results. 24. Several government corporations or authorities provide services or coordinate local functions, including, most notably, CVDB, which lends to local governments (para. 40); the Jordan Housing Corporation, which develops housing for moderate-income and public-sector employees; the Housing Bank, which finances housing, usually for moderate and upper-income groups; the Water Authority of Jordan, which is responsible for sewerage works, water production and distribution; and the Jordan Electric Power Company, which is responsible for electricity distribution. Local governments have an essential role to play, especially in transport, streets and roads, solid waste management, land use planning, health c.ntrols, provision of markets, schools and health centers and licensing functions and investments. 25. Local government management, planning, and finance need to be further reinforced to enable local councils to prepare and implement investment programs to meet the needs of a rapidly growing urban population. Better  -8- planning and coordination of public investments in different sectors at che regional as well as city level will become increasingly important in avoiding waste and encouraging efficient patterns of urban development. The proposed project is designed to contribute to this goal. Local and Municipal Finance 26. Municipal and village councils derive revenues from the following sources: national revenue sharing; land and building taxes; taxes and charges directly collected by local authorities; profits, rents and interest; and loans, grants and donations. The national revenue sharing allocation system (commonly referred to as the fuel tax allotment) accounts for 17-80 percent of the total revenue of individual municipalities. It provides local governments with a share of customs duties, annual registration fees for drivers and vehicles, taxes on petroleum products and fines for traffic and public health offenses. The shares are distributed according to a set of rules based largely on popalation and administrative status, which favors less developed municipalities. Land and building taxes are imposed only in municipalities. They are assessed and collected by the Ministry of Finance and distributed to councils of origin. The basis of the tax is 10 percent of rental value. As a result of a revaluation of all propertie; currently in progress, significant increases in yields are expected in 1985 and 1986. Sources of taxes and dues collected directly by local authorities include registration license fees for commercial premises, garbage collection fees, building permit fees and charges for road and pavement construction. Loans, grants and donations, which are made mostly to the Amman Municipality, are an ad hoc and infrequent source of revenue. 27. Municipal budgets are prepared by the mayors, with the approval of councils, and go to MMRA for approval. Because municipal and village councils, while responsible for capital development, have limited responsibility for provision of services, most municipal budgets show a considerable margin for capital and non-recurrent expenditure after meeting general expenses and debt service. Inflation and rapid urban growth have underlined the need in recent years to maintain the buoyancy of the tax base by frequently reviewing tariffs and assessments and improving collection efforts. However, the underlying framework of local finance is sound and should sustain further, additional capital development supported by the proposed loan, provided CVDB maintains a careful review of this by means of its aew solvency test (para. 43). Local and Municipal Government 28. Administratively, Jordan is divided into five governorates, which are further subdivided into districts and subdistricts. Each level is headed by a public official responsible through his superiors to the Minister of Interior. Governors are responsible for internal security, coordination of central government departments, supervision of the village councils and, under the aegis of MMRA, of municipa. councils. During the last five years, the number of local government bodies has increased rapidly. There are three  -9- Estypes of local government: municipal councils, village councils and common service councils. There are currently 136 municipalities embracing three quarters of the population, although three (Amman, Zarqa and Irbid) account for about 60 percent of the total. Municipal councils are presided over by mayors and comp-:se 7-12 councillors who, in general, are elected for a four-year term (some are still appointed by MMRA). There are about 300 village councils, which are normally appointed by Governors, although informal nomination of members by tribal groups is customary. Executive responsibility is vested in village heads, but virtually all decisions are subject to approval by the Governor. Common service councils are mixtures of neighboring municipalities and village councils that have combined to share a particular service, such as slaughterhouses or waste disposal. Since their establishment in 1983, they have grown rapidly and now number 54. 29. InsufEicient qualified staff in local government is of concern to the Government, although the situation is improving with the slackening of the labor market. MMRA runs an ad hoc program of short training courses for local government employees. Twenty courses were held at varied locations in 1984, attended by 500 mayors, councillors and employees. These courses included financial management, municipal engineering, surveying and planning control. The Ministry recognizes the need for a more systematic provision of training and has asked CVDB to take over the task of organizing the training effort (para. 53). The Financial Sector in Jordan 30. The financial system of Jordan includes the Central Bank of Jordan, 16 commercial banks, a number of non-bank financial institutions, and six specialized credit institutions. Commercial banks, which constitute a pivotal part of the financial system, were very active in the 1979-81 period, with total assets and liabilities rising on average 28 percent per year; their activities have been slower since then, reflecting a slowdown in the overall level of economic activity. Non-bank financial institutions comprise the Pension Fund, the Social Security Corporation (SSC), and over 30 insurance companies. The Pension Fund, which operates as a parastatal institutional investor, has expanded rapidly; in the 1979-82 period, its assets more than quadrupled. SSC began operations in 1980 to complement the operations of the Pension Fund; at the end of 1984, its assets amounted to about JD 106 million, compared with less than JD 5 million in 1980. 31. The specialized credit institutions were established to assist in the development of certain sectors, primarily through medium or long-term loans, usually at concessional interest rates. They include the Housing Bank (HB), the Jordan Housing Corporation, the Agricultural Credit Corporation, the Industrial Development Bank (IDB), Jordan Cooperative Organization, and CVDB. These institutions are wholly Government-owned except for IDB, which is only one third Government owned, and HB, which is privately owned except for a small minority ownership by several Arab governments. The loan resources of these institutions consist primarily of their capital and reserves and Central Bank borrowing, although HB accepts demand, time and savings deposits. Net lending by specialized credit institutions rose by 15 percent to JD 365 million in 1984, compared to an increase of 25 percent in 1983. HB accounted for the major part of credit extended by specialized institutions.  - 10 - Government Actions and Policies 32. The Government has long been concerned with significant disparities between regions in terms of economic activity, public services and other basic facilities, and especially with the concentration of population and economic activity in Amman. The current Five-Year Plan contains major electrification, water supply and health care programs that address regional disparities, and the Government provides resources from its tax revenues to local government using a highly progressive scheme (para. 26). To identify development strategies and investment projects, MMRA has undertaken regional studies for Amman, Irbid, and Aqaba, and is in the process of preparing a study for Karak. In order to improve the coordination needed to implement investment projects resulting from such studies, the Ministry of Planning has recently established a regional planning section. It also is now undertaking, with assistance from USAID, a comprehensive survey of basic needs and income-generating projects in each locality as an input for the next Five-Year Plan (1986-90); as a consequence, the Plan is expected to have a much stronger regional development emphasis than in the past. 33. CVDB can play a significant role in achieving regional development objectives without overly burdening government finances by helping maunicipalities and village councils (i) to select and design cost-effective projects that have a high investment priority, (ii) to provide resources for priority projects, and (iii) to strengthen the financial management and technical capabilities of local staff. Because funds for capital expenditures are lent through CVDB, rather than given as grants, local governments will continue to be prudent in their use. Role of the Bank Group in the Urban Sector 34. Bank Group assistance has been responsive to the problems created by rapid urbanization and to the Government's desire to promote growth in all parts of the country. Extensive economic and sector work related to urban development in Jordan has been carried out, as well as project financing. Recent studies include the Urban Sector Review, the Water Sector Report and a regional development study. The Bank also plans to carry out a study on municipal management, with special emphasis on resource mobilization and taxation at the local level. Based on discussions of these reports, the Bank's strategy in the sector includes assistance towards: improving main urban service levels (water, sewerage, solid waste management, urban transportation); increasing the supply of serviced land in locations and at costs that reinforce sound spatial development patterns and are affordable to relevant commercial and household groups; and strengthening the capacity of local councils to plan, implement, and manage the functions for which they are rezponsible. 35. In support of this strategy, Bank lending follows a "three track" approach, which focusses on the water supply and sewerage, shelter, and muicipal subsectors. Seven water and sewerage projects have been undertaken in urban areas; the most recent one, the Greater Amman Water Supply and Sewerage Project (Loan 2483-JO for $30 million), was signed January 31, 1985.  - 11 - The First Urban Development Project (Loan 1983-JO, $21 million), approved in September 1980, and the Second Urban Development Project (Loan 2483-0-JO, $28 million), approved on June 18, 1985, are addressing the need for cost-effective, low-cost housing in the Amman region and for appropriate educational, health, training and community facilities for people in the lowest 40th percentile of the Amman region income distribution. The on-going Amman Transport and Municipal Development Project (Loan 2334-JO, $30 million) is assisting the Municipality of Amman to improve traffic conditions, to upgrade the ability of municipal departments to plan and execute works (including maintenance and operation functions), to upgrade solid waste management, and to initiate systematic investment programming. The project has experienced some initial delays, mostly caused by procurement problems. However, overall progress is accelerating and is, on the whole, satisfactory. Except for some early water supply and sewerage projects, no Project Completion Reports have been undertaken in the urban sectnr, since the projects are still under execution. 36. Experience with Past Loans to CVDB. The First CVDB Project (Loan 1826-JO, $10 million) was made in 1980 with the objective of improving and increasing the capacity of CVDB to help local governments to provide urban services. Under this loan, CVDB evolved from an almost bankrupt disbursement fund, controlled by MMRA, to an independent bank that is growing in administrative and operational ability. The loan was fully committed in June 1984. Estimated economic rates of return for the 20 revenue-earning projects financed under the loan ranged between 10 and 32 percent and averaged 15 percent, well above the opportunity cost of capital of 10 percent. Because of some initial delays caused by difficulties in recruiting suitable personnel and in establishing appraisal procedures acceptable to the Bank for road projects and to allow sufficient time to complete construction under some subprojects, the closing date was extended to June 1986; project execution and disbursements, however, are now proceeding satisfactorily. The proposed project would build upon CVDB I and is designed to strengthen CVDB's capability to help municipalities conceive and execute good projects, especially in the less developed areas of Jordan. PART IV - THE PROJECT Project History 37. The proposed project was identified in August 1984 and appraised in January 1985. Negotiations were held in Washington, D.C. during July 15 - 18, 1985. The Jordanian delegation was led by Mr. M. S. Hourani, General Manager, Cities and Villages Development Bank (CVDB). A Staff Appraisal Report (No. 5623-JO), dated July 19, 1985, is being distributed separately to the Executive Directors. The main features of the loan and project are included in the Loan and Project Summary and in Annex III. A map of Jordan is attached. Project Objectives and Description 38. The objectives of the Second CVDB Project are: (i) to support an institution that can improve the living standards of populations in the outer,  - 12 - less developed regions without significantly burdening the Central Government; (ii) to facilitate the execution of municipal and village development plans by funding well-appraised infrastructure and revenue-earning projects; (iii) to strengthen OVDB's instilutional capability and improve further its policies and proceduies, especially those relating to project appraisal; and (iv) to support CVDB's role in organizing financial training for local government personnel and CVDB staff. 39. The project includes the following components: financial assistance to CVDB: a line of credit for $14.9 million, representing 75 percent of CVDB's foreign exchange needs from mid-1985 to end-1987; equipment for CVDB: $100,000 to purchase microcomputers to rationalize data compilation and cars to improve CVDB's outreach and site supervision capabilities; technical assistance to CVDB: to reinforce its ability to appraise and supervise projects; and training for local government and CVDB personnel. Cities and Villages Development Bank 40. The Institution. CVDB was developed in 1979 with Bank assistance (para. 36) as a public institution with semi-autonomous administrative and financial status. Its role is to assist villages and municipalities in the identification, preparation, implementation and follow-up of projects designed: (i) to meet the basic needs of all segments of Jordan's population, especially the less developed; (ii) to raise living standards by providing improved infrastructure services; (iii) to create local employment opportunities through the financing of productive projects; and (iv) to improve income distribution by integrating the less developed areas into the national development process. Towards this end, CVDB is empowered to grant long-term loans to villages, municipalities and entities owned by them, such as corporations, in the framework of regional and sectoral plans and in accordance with Government priorities; it can also take equity participations in their projects and guarantee loans and manage funds made available by other sources to its borrowers. Funds collected on behalf of villages and municipalities by the Central Gover_-aent are transferred to CVDB on a monthly basis and serve as collateral for its loans. 41. CVDB is administered by a board of nine directors comprising the Minister of the Ministry of Municipal and Rural Affairs (MMRA) (Chairman), CVDB's General Manager (Vice-Chairman), representatives from the MMRA and Ministries of Planning, Public Works, and Finance, the Central Bank, and two representatives from CVDB's borrowers. The chief executive officer, the General Manager, is appointed by the Council of Ministers upon the recommendation of the MMRA. CVDB is organized along functional lines in five departments: technical, financial, internal audit and organization, administration and planning and statistics. 42. CVDB staff numbers at present about 90. Because the salaries, which are set according to Jordanian civil service regulations, have not been competitive with the private sector, attracting and retaining qualified staff have been difficult. However, CVDB's Management has been able to increase employee compensation by remunerating overtime. The recent decline in  - 13 - employment possibilities in the neighboring Gulf countries, the slowdown in the Jordanian economy and the rapid growth rate of the skilled labor force have made salaries relatively more attractive and thus reduced the turnover rate. This is expected to continue in the medium term and should enable CVDB to build up and consolidate its personnel strength. To enhance personnel quality and etrectiveness, CVDB has initiated measures to provide training. To better organize this effort, CVDB has established a small training division (para. 53). Since the strength of the Technical Department is essential for the success of the proposed project, CVDB would review with the Bank the staffing requirements of this department at the beginning of each fiscal year (Project Agreement, Sectiot 2.06 (a)). 43. In February 1985, bVDB drafted a new Policy Statement, in consultation with the Bank, which covers the general goals of CVDB, its management, and its loan, deposit, financial and outreach policies. It also incorporates a new analytical solvency test to replace the old rule that limited local council borrowing from CVDB to about 80 percent of the estimated fuel tax allocation (para. 26). This rule underestimated the borrowing capacity of large municipalities, for which the fuel tax allocation is only a small portion of total revenues, and overestimated it for smaller communities, for which it is the main source of revenue. The new solvency test requires CVDB to scrutinize the borrowing capacity of the local authority for each loan; it enables CVDB to produce consistent local council accounts and to advise local councils on improvements in their financial management. The new Policy Statement is complemented by Project Eligibility Criteria, also drafted in cooperation with the Bank, which are general guidelines for the preparation and appraisal of projects. The new Policy Statement and Eligibilicy Criteria have now been ratified by CVDB's Board. Amendments to them would be subject to prior Bank approval (Project Agreement, Section 2.11). Furthermore, to streamline and rationalize CVDB's operations, Executive Regulations have been adopted by CVDB's Board concerning the technical, financial, and the internal audit and organization departments. 44. Operations. CVDB has an authorized share capital of about JD 12 million ($30 million), held by the Government, the Central Bank and local councils. Between 1981 and 1984, CVDB's 1-ong-term loan portfolio grew at a compounded rate of about 41 percent per year, more than three times faster than estimated at the time of the CVDB I appraisal. At the end of 1984, total outstanding long-term loans amounted to about $90 million. Between 1980 and 1984, almost half of CVDB's projects were located in villages, and the regional distribution of its loan portfolio proportionally favored the less developed governorates of Ma'an, Karak and Irbid. Lending has been concentrated in the neediest sectors: 53 percent for infrastructure projects such as roads, schools, electricity networks, markets, workshops, offices and waste disposal equipment. CVDB has also lent to local communities for revenue-earning projects such as markets, trade centers and commercial buildings. A small part of CVDB's lending is in the form of short-term loans and overdrafts.  - 14 - 45. Financial Performance and Resource Needs. CVDB's financial perEormance was satisfactory during 1981-84 and is p .ojected to continue to be so for the 1985-88 period. At the end of 1984, CVDB's debt-equity ratio of 0.7:1 was well below the current statutory ceiling of 4.0:L stipulated in the Policy Statement, which would be maintained under the project (Project Agreement, Sections 3.03 and 3.04). Interest income increased by 54 percent per year from 1981 to 1984; interest paid on term borrowings increased slightly faster, by 55 percent per year. Administrative costs as a ratio of average assets declined from 1.0 percent in 1982 to 0.7 percent in 1984, which is satisfactory. The marginal cost of borrowing has been increasing in recent years and was 9.8 percent in 1984. To protect CVDB against a negative marginal spread, the Policy Statement stipulates a minimujm spread over total resources beyond which CVDB will ask the Government permission to increase onlending rates (para. 51). There are virtually no arrears on loan repayments, which are deducted automatically from the deposits kept in escrow by CVDB. However, in a number of cases municipalities have been overdrawn, and CVDB has advanced them funds for debt-servicing. It is estimated that the marginal collection rate is between 85 and 90 percent. Due mainly to the old, overly strict solvency test that poorly estimated the borrowing capacity of municipalities (para. 43), CVDB rescheduled loans worth JD 9.3 million at the end of 1983 for 30 municipalities that had reached their statutory borrowing ceilings. By reschedul ng their debt, these municipalities were able to contract new loans with CVDB and use more of their actual borrowing capacity. In 1984, the operation was repeated on a smaller scale, with sev:n borrowers for loans worth JD 1.3 million. As a result of rescheduling, 69 percent of CVDB's net worth was immobilized for about five years. The overall improvement in local council financial management as a result of training and better procedures and by the new solvency test for assessing the borrowing capacity of municipalities (para. '3) should reduce the need for such reschedulings. 46. In 1985-1988, CVDB's loan portfolio is expected to increase from JD 36.7 million to JD 45.1 million. Identified resources are expected to cover requirements. The main sources of financing would be collection on loans net of debt-service (44 percent), the proposed Bank loan (20 percent), an increase in short-term liabilities (16 percent), cash-flow generation (7 percent), and the balance shared between the first Bank loan, the Central Bank of Jordan and recent loans from the Euro1)ean Investment Bank (EIB) and the European Economic Commission (EEC). It has been agreed that CVDB would update and review annually with the Bank a financial plan to enable it to achieve agreed financial objectives (Project Agreement, Section 3.10). CVDB's profits are expected to be half the level of the early 1980s, but will still be satisfactory at above 2 percent oE average assets. To protect CVDB against insolvency caused by a temporary mismatch of maturities, the Policy Statement stipulates a minimum debt-service ratio in terms of principal at least equal to 1.15:1. It has been agreed that this will be maintained under the project (Project Agreement, Section 3.05).  - 15 - Project Implementation 47. Onlending Arrangements. The proposed loan of $15 million would be made to the Government for 15 years, including three years of grace, at the standard variable interest rate; it would be onlent to CVDB under a subsidiary loan agreement satisfactory to the Bank, the execution of which would be a condition of loan effectiveness (Loan Agreement, Sections 3.01 (b) and 5.01 (a)). The maturity and grace period of the onlent funds would be the same as under the Bank loan; the interest rate would be fixed at the rate in effect at the time of loan signing. As under CVDB I, the foreign exchange risk would be borne by the Government, since neither CVDB nor the ultimate borrowers-villages and municipalities-can manage the uncertainty of parity fluctuations. The Government would also bear the interest rate fluctuation risk, as CVDB should not bear such a risk and the Government does not want variable rates passed on to municipalities and villages (Loan Agreement, Section 3.01 (b)). This arrangement is reasonable in view of the fact that CVDB is lending to some of the poorest local authorities in Jordan, which in most other countries would receive their funds as grants through budgetary allocations. 48. Financial Assistance to CVDB. The proposed line of credit ($14.9 million) would be onlent by CVDB to municipalities, villages and commoq service councils to finance eligible subprojects, i.e. those social, infrastructure or revenue-earning subprojects described in CVDB's Policy Statement and listed below, except land acquisition. It is estimated that the proposed loan would finance about $33 million worth of commitments and about 120 subprojects during the period from mid-1985 to end-1987. In order to ensure adequate Bank review and comment especially during the early stages of loan commitment and to provide CVDB with a maximum amount of technical assistance, CVDB would submit to the Bank for approval the first appraisal report for each subproject category mentioned in the Policy Statement. Thereafter, some subprojects, including those dealing with civil works and solid waste collection equipment would be subject to a $60,000 free limit; all other categories 1/ would have a $125,000 free limit (Loan Agreement, Section 1.02 (c); Project Agreement, Section 2.02). It is estimated that about 50 subprojects would be above the free limit. 49. CVDB would utilize the appraisal form and the Eligibility Criteria 2/ agreed with the Bank in approving subprojects. CVDB's appraisal form includes 1/ Street and road segments, footpaths, sidewalks and stairs, school buildings, local council buildings and public libraries, cemeteries, health centers, local electricity distribution networks and street lighting, and revenue-earning projects such as markets, cold stores, commercial and trade centers, offices, workshops, slaughterhouses, and garages. 2/ The Eligibility Criteria require the following information for each sector: type of settlement which can apply for a loan, type of project, technical restrictions, standards, general and specific financial conditions, minimum size, and necessary documents to be provided by the applicants.  - 16 - inter alia a review of the overall finances o' the applying local councLl, the solvency test and an economic and financial justification. Financial rates of return would bo calculated for all revenu. tearning projects, anH4 CVDB's Eligibility Criteria require that these be at least 12 percent. For other subprojects, the requirement by CVDB of least-cost solutions and appropriate cost recovery from immediate beneficiaries would ensure that subprojects are economically justified. 50. As under CVDB I, the proposed line of credit would finance the foreign exchange component, or 50 percent of CVDB's total disbursements, for acceptable subprojects. This is equivalent to 45 percent of the total cost; 10 percent would be financed by the borrowing local authority and the remaining 45 percent by CVDB. To ensure a fair allocation of CVDB's resources among its large number of potential borrowers and to avoid a disproportionate share of its portfolio being concentrated in a few, large projects, the Policy Statement limits CVDB's total exposure in a single project to one percent of its paid-up capital and general reserves (about $400,000 equivalent) and in a single borrower to 10 percenc of the same base (about $4 million equivalent). 51. Terms and interest rates of CVDB subloans would be differentiated as follows: for infrastructure projects, 11 years, including one year of grace, at 7.5 percent interest for municipalities, and 16 years, including one year of grace, at 6 percent interest for villages; for revenue-earning subprojects, the interest rate would be 8.5 percent for municipalities and villages, with a 12 and 14-year maturity, respectively, including two years of grace (Project Agreement, Section 2.03 (b)). With domestic inflation currently at 5 percent and expected to be 6 percent in 1986 and 7 percent in 1987 and thereafter, CVDB's weighted interest rate should be positive in real terms over the co.,muitment period of the loan. This interest rate structure compares favorably with interest rates charged by other Jordanian institutio;; and is reasonable in view of the fact that: many CVDB loans are for basic needs, which in many countries are financed by government grants; the income of the ultimate beneficiaries is low; the Central Government imposes statutory limitations on the ability of local governments to tax; and, as loans to local communities are virtually risk free because of collateral funds kept in escrow (para. 40), CVDB's interest rate is net of the risk premium included in commercial rates. It has been agreed that, if at any time CVDB's margin over total resources is forecast to decrease below two percentage points, the Government would allow CVDB to increase the minimum interest rates or take other measures to ensure that CVDB maintains a minimum spread of two percentage points above the average cost oE its resources (Loan Agreement, Section 3.03). 52. Technical Assistance to CVDB. This component would reinforce the ability of CVDB's Technical Department, which is responsible for appraising  - 17 - and supervising projects, for assessing local councils' solvency, Ear loan disbursem-nts and for repayment collectiotis. It would consist of two staff-years of a project appraisal specialis' and three staff-years of a civil engineer. At the request of the JordAnian Gcvernment, this component, which is estimated to cost $550,000, would be financel either from external grants or from its ow.. resources. A project appraisal specialist is already being financed for one year (renewable up to three) by a grant from the EEC; a candidate for this post, recruited by the EEC, has joined CVDB. With regard to the civil engineer, UNDP has indicated an interest in financing the full salary or a salary supplement of a Jordanian senior engineer for CVDB possibly in cooperation with the Arab Gulf Fund. The Government would finance the technical assistance from its own funds if cofinancing is not available. CVDB has agreed to employ by December 31, [985, the project appraisal specialist for two years and civil engineer fo three years, with qualifications, experience and terms of reference satisfactory to the Bank (Project Agreement, Section 2.06 (c)). 53. Training Municipal and Village Council and CVDB Personnel. CVDB would be responsible for organizing training for project preparation, follow-up and financial management for local council officials, the total cost of which is about $100,000. For this, and for the training of CVDB personnel in project appraisal, accounting, auditing and municipal finance, which is estimated to cost $200,000, CVDB has established a small division to organize training. Training would continue to be undertaken by existing Jordanian institutions such as Jordan and Yarmouk Universities, the training institute of the Industrial Development Bank and the Institute for Public Administration and would include accounting, financial manageme:t, project identification and appraisal. The MMRA would transfer to CVDB the funds that it would have spent had it continued to organize the training of local officials. Appointment by CVDB of a qualified training specialist to head its trtining division would be a condition of effectiveness of the proposed loan. CVDB would also prepare training programs by December 31, 1985 and would submit reports on these programs to the Bank at the end of each year (Project Agreement, Section 2.13; Loan Agreement, Section 5.01 (b)). Procurement and Disbursements 54. The proposed Bank loan would be disbursed over a five-and-a-half-year period, with full disbursement expected by December 31, 1990. The closing date would be June 30, 1991. While this period is somewhat shorter than the DFC disbursement profile for the EMENA Region, a shorter period is warranted by Jordan's generally good project execution performance, past experience under the first project, and the use of a revolving fund. In order to help expedite disbursements, a revolving fund of $750,000 would be established by the Government at CVDB (equivalent to an average of about three months of disbursements) and replenished on the basis of standard documentation for eligible reimbursable expenditures. In view of the large number of small subloans, disbursements would be made periodically on a reimbursement basis, covering a flat 50 percent of CVDB's total disbursements for eligible projects against statements of expenditure for an aggregate value of not less than $100,000 (Loan Agreement, Section 2.02 (b), Schedule 4; Project Agreement, Section 3.02 (b)). The Bank's standard disbursement procedures would be used for the equipment component, estimated at a total cost of $125,000, and would  - 18 - be procured by obtaining quotations from at least three suppliers; disbursements would cover 100 percent of foreign exchange costs or 80 percent of local costs. Accounts, Audit and Monitoring 55. As under the first project, CVDB would continue to mairntain procedures and records adequate to monitor the progress of the project, its operations and financial condition. The accounts of CVDB are satisfactory. Annual audits performed by SABA and Co., a local firm associated with Touche Ross International, have been of good quality. CVDB's accounts would continue to be audited annually by an experienced accounting firm acceptable to the Bank, and audited accounts would be submitted to the Bank no later than five months after the end of the year. CVDB would also send to the Bank semiannual progress reports and financial accounts (Project Agreement, Sections 3.02). In order to enhance CVDB's internal monitoring system, the Planning and Statistics Department is being reorganized, and it has been agreed that it would be strengthened by the appointment of two statisticians by December 31, 1985 (Project Agreement, Section 2.06 (b)). Benefits and Risks 56. The project is expected to help strengthen CVDB to enable it to identify, prepare and appraise local council subprojects better. This would be accomplished through training and implementation of the new Policy Statement, Executive Regulations and appraisal and follow-up techniques. With these institutional improvements in place, CVDB should play a greater role in resource mobilization for local councils and would be an effective national organization capable of reaching even the smallest communities throughout Jordan. 57. In the longer run, the project is also expected to contribute to strengthening management at the local government level. By emphasizing selection of subprojects by local councils, the project places responsibility for investment planning and implementati -n at the local level. The technical assistance program under the loan is designed to reinforce this emphasis. The appraisal of local councils through the application of a more rigorous financial analysis should also contribute to more realistic investment planning and strengthen communities' capacity to manage resources better by helping them to generate increased revenue and to invest it more efficiently. 58. CVDB's outreach covers the whole country. It, therefore, has the possibility of financing projects in all regions of Jordan, outside Amman. Although it lends to municipalities and villages, the ultimate beneficiaries are the residents of the communities whose projects are financed by CVDB. Inasmuch as projects cover a large number of subsectors, they may be expected to affect the lives of residents in many ways. The project should help improve the population's standard of living through better facilities and infrastructure, which in turn should lead to greater productivity. About half the subloans under the proposed loan would be made to villages throughout Jordan, including some of the more neglected regions, and would have an impact not only on the communities themselves but also on the surrounding rural areas. The project would thus contribute to improving interregional income distribution by creating new income and employment in the less developed areas  - 19 - of Jordan and help integrate remote areas into the national development process. 59. CVDB has performed satisfactorily under the first project, and there are no major risks associated with the proposed project, which builds upon experience gained with the first. Nonetheless, given that CVDB's salary structure is similar to that of the Jordanian civil service, CVDB has had difficulty in attracting and retaining qualified staff to meet the challenges implicit in its ambitious program. This, however, is being addressed by incentives provided by CVDB inter alia in remunerating overtime work and providing training opportunities for its staff. Assistance will also be provided by the technical assistance included under :he project. Thus, the risk is considered manageable. PART V - LEGAL INSTRUMENTS AND AUTHOR iTY 60. The draft Loan Agreement between the Hashemite Kingdom of Jordan and the Bank, the draft Project Agreement between the Bank and the Cities and Villages Development Bank (CVDB), and the Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement of the Bank are being distributed separately. 61. Special conditions of the project are listed in Section III of Annex III. The conditions of effectiveness are: (i) the execution of the subsidiary loan agreement between the Government and CVDB; and (ii) appointment of a training specialist (Loan Agreement, Sections 5.01 (a) and (b)). 62. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Ban'. PART VI - RECOMMENDATION 63. I reconmend that the Executive Directors approve the proposed loan. A. W. Clausen President Attachments Washington, D.C. July 29, 1985  -20- ANNM I PAge 1 of 6 SOAR (~~IUuC 133impM DAT R fM zo ATEROS h i- ~u ~ L1Lb 197711 DIU*X& 1. AFRCA A MD RUT IA. AMG CAR AMM IMMRNa 2Q. 30 TOTAL 97.'7 97.7' 12.0 14.0 14.6 SW Sfl CM) .. 39f.IC/ 1690.0 ac 110.6 2100.6 - uu0MZlfm- cam= (EWARA OF OIL nrJUVAM) 117.0 211.0 706.0 622.1 3s.5 7WmAm AD VnL SMMC FPMLAI.OU,ND-LTR (OfUDUM) l65.0 229.0 3127.0 u1M POVULATIO (Z0O TOTAL) 42.7 50.3 5.9 4.2 6.3 POPULAZIOS nWOic POLTIOil DAR 2000 CIUL) 6.2 POMULTIOU (KIELL) 16.2 POPULATION UM 2.0 mR EQ. U. 17.3 23.5 30.9 36.3 35.7 a BQ. UN. *ax. Lai 141.4 1".2 203.9 461.7 92.4 POPULATION ACE STRCTUR (3) 0-14 u 44.4 43.6 46.1 43.6 39.9 13-61 IRSl 51.5 51.0 51.5 33.1 36.0 65 AND AO 4.1 3.1 2.6 3.3 4.1 POPUL&anam Swi mA (CZ) TOTAL 3.1 3.0 2.6 2.6 2.4 Util 5.2 4.7 6.0 4.3 3.6 CRUDE 31R32 WE (PRa TOUS) 47.4 47.6 44.6 40.4 31.3 aUnm DEASI RATE (PM Tmo0s) 19.9 13.5 8.1 11.3 8.1 G303SS 2PODUCTIP lAE 3.5 3.3 3.2 2.8 2.0 PANXLT PLANIN ACCrEORS. LL o) . .. .. USERS aC or MARK= ..) 22.0 Id 23.0 __ 22.2 *0.3 mOOD AM DInX OF moon -. ma CAmm (1969-71-100) 220.0 79.0 70.0 97.3 114.2 PM Corn SUmPTY or CALRIES (C Or EEQUIRENTS) 93.0 93.0 102.0 1lO.8 110.6 E1301 (SANS PR DAT) 61.0 35.0 64.0 70.1 67.3 or WHCH AEDIL AND PUSE 15.0 15.0 16.0 If L7.8 34.1 CHILD (CACS 1-4) DEATH RATE 26.3 12.5 6.0 16.6 5.7 LIFE EXPECT. AT DRIX (TFAS) 46.9 54.1 64.0 37.5 64.7 XZAIA HOET. RAZE (PS TUOUS) 135.5 97.5 64.6 101.5 60.6 ACCESS TO SAEZ WAM (110) TOML 21.3 .. 30.0 le 59.7 65.4 I2* 48.6 .. .. 64.5 78.1 RURtAL 2.1 .. .. 38.4 46.2 ACCESS TO CIrA DISPOSAL tE or POULAIN) TOTAL. .. .. 78.0 c .. 52.9 033*3 .. .. .. - . 67.0 RDUL .. .. .. .. 24.5 POPULATION PER 5mSICXAN 30.0 3710.0 1700.0 4365.1 1917.7 Por. PER ODINC PrSO 1930.0 I 1480.0 1168.0 1831.1 813.8 PmP. IER S`AL NED TOTAL 560.0 1350.0 1060.0 lb 632.9 367.2 n331 .. l2O.0 6eo.o T 545.5 611.5 RUAl .. 5340.0 .. 2513.5 2636.3 AOsSIIS II nOSPM LLln .. 36.5 65.7 /f 26.2 27.3 AVERAGE SmE oF USEDOLO TOTAL 5.3 6.1 6.7 IC.. UlRi 5.5 .. RURAL 5.1 .. nvEuE NO. or PERsoNs/RO TOTAL .. .. 6.5 /c.1 . ~ ~ ~ u ., BR.''. ' '* ~~~-RURAL. .. .. . .. - ACCESS TO ELECT. (Z Or SIELflGS) TOTAL 7.0 .. 66.0 /c 46.2 :C-A- 39.2 .. 90.0 lET 77.7 RU-R-A'L- 1.4 .. 20.0 Ic.1 16.1 :- , - - i :-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~