Mauritania - Technical Assistance Project

FILE COPY Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-1916a-MAU JQ DE RETLRNED) ,T0 I?EjORTS UESK REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE ISLAMIC REPUBLIC OF MAURITA.,,. FOR A TECHNICAL ASSISTANCE PROJECT November 16, 1976 West Africa Regional Office This decument has a restricted distribution and may be used by recipients only In the performance of their offical duties. Its contents mty not otherwise be disclosed without World Bank atborlstion, CURRENCY EQUIVALENTS Currency Unit = Ouguiya (UM) US$1.00 = UM 45 UM 1 = US$0.22 UM I million = US$22,000 WEIGHTS AND MEASURES EQUIVALENTS 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 squ re kilometer (km ) = 0.386 square mile (sq mi) 1 kilogram (kg) = 2.2 pounds (lb) 1 metric ton (m ton) = 2.204 pounds (lb) 1 liter (1) = 0.26 US gallon (gal) 0.22 British gallon (imp gal) ABBREVIATIONS AND ACRONYMS CCCE - Caisse Centrale de Cooperation Economique CIDA - Canadian International Development Agency EEC - European Economic Communities FAC - Fonds d'Aide et de Cooperation FED - Fonds Europeen de Developpement KFAED - Kuwait Fund for Arab Economic Development MIFERMA - Mines de Fer de Mauritanie SOMIMA - Societe Miniere de Mauritanie SONADER - Societe Nationale pour le Developpement Rural UNDP - United Nations Development Program FISCAL YEAR January 1 - December 31 FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE ISLAMIC REPUBLIC OF MAURITANIA FOR A TECHNICAL ASSISTANCE PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Islamic Republic of Mauritania for the equivalent of US$2.7 million on standard IDA terms to help finance a Technical Assistance Project. PART I: THE ECONOMY 2. A report entitled "The Current Economic Situation and Prospects of Mauritania" (243-MAU) was distributed to the Executive Directors on May 9, 1974. A mission visited Mauritania in December 1975 at the invitation of the Government to comment on a draft Five-Year Plan then under preparation; its findings are included in this report. Country Data appear in Annex I. Background 3. Mauritania is an extreme case of a dual economy with little inter- action between the modern sectors (mining, fish processing Industry, public administration) and the traditional sectors (livestock, agriculture and traditional fishing). Productivity levels in these two sectors are widely divergent: about 75 percent of the population is active in the traditional sectors but contributes less than a quarter of gross domestic product at fac- tor cost. Most of the country is desert; the bulk of the rural population is located in the South along the northern bank of the Senegal River, where soil and rainfall conditions permit agricultural and pastoral activity. Elsewhere, economic activity centers around Nouakchott, the capital, and Nouadhibou, an effectively isolated port serving the mining activities in the North and containing some fish processing plants. 4. The country is endowed with some natural resources, most notably large Iron ore and copper deposits, fertile land along the Senegal River Valley, and exploitable fishing grounds in territorial waters all along its Atlantic Coast (now extended with the annexation of part of former Spanish Sahara). However, development of these resources is retarded by the great distances separating the centers of economic activity and the accompanying prohibitive costs of transport, by the harsh Sahelian climate with low and irregular rainfall even in the South, and perhaps most Importantly, by the lack of skilled manpower at all levels--adult literacy and school enrollments are among the lowest Ln the world. This document has a restricted distribution and may be used by recipients only in the performance of their offcial duties. Its contents may not otherwise be disclosed without World Bank authorization. - 2 - 5. Mauritania's main political and economic links have traditionally been with France and the French speaking African countries south of the Sahara; recently however, it has established close relations with some of its North African neighbors as well as with other Arab countries, particularly members of OPEC. In June 1972, it asked for revision of the 1961 Cooperation Treaty with France in the economic, monetary, technical, cultural, and military fields, and a new agreement was reached in February 1973, except, however, for monetary affairs. As a result, Mauritania left the West African Monetary Union and the franc zone and established its own central bank and introduced its own currency, the ouguiya, in June 1973, with financial support from Arab OPEC countries. However, it still wishes to keep and develop economic ties with all its West African neighbors and is a member of OMVS (Organisation pour la Mise en Valeur du Fleuve Senegal) with Senegal and Mali. 6. In 1976, after Spain relinquished its control over the Spanish Sahara, Mauritania and Morocco divided the administration of the territory between them, with that part south of the 24th parallel to be administered by Mauritania. The population of the Mauritanian part is estimated at only about 30,000; even so, the extension of Mauritanian administration into this territory is straining the Government's already limited domestic resources, both financial and human; this strain is compounded by political unrest and occasional violence. Except for rich coastal fishing grounds, and discount- ing minerals yet to be located, the resources of Mauritania's part of the former Spanish Sahara are limited. In its Third Development Plan (1976-1980) Mauritania has included a special allocation of $22 million (2.5 percent of total planned investment) for the territory. Past Developments 7. Between 1960 and 1968, the Mauritanian economy grew at 10-11 percent annually in real terms, mainly due to a rapid expansion of the mining sector. From 1969 to 1973, overall economic growth slowed down to 3 to 4 percent per year as mining production increased only slowly while the rural sector was struck by the Sahelian drought. As a result of this drought, the rural output decreased by one-third and, despite improved weather in the following years, was in 1975 still below its 1970 level. Output in the industrial and services sectors was not affected by the decline in agricultural production. It continued to expand, albeit more slowly than before, through an enlarged capacity of the existing iron ore mine, a new copper mine, and an expansion of government services. The abysmal conditions in the rural areas between 1970 and 1974 led to a concentration of population around the urban centers; the modern sector was unable to absorb significant numbers of these migrants, and they were obliged to find work in the low productivity informal sector or remain unemployed. 8. The balance of payments showed small current account deficits from 1970 to 1973 and a large deficit in 1974 due, among other factors, to substantial imports of food and other supplies for drought relief. Because of - 3 - financing associated with drought relief and of important balance of payments support and project aid from OPEC countries, capital inflows in 1973 and 1974 outstripped the deficit on current account, leading to a build-up of foreign exchange reserves. In 1975, the balance of payments deteriorated, mainly due to the impact of lower world copper prices and lower production of iron ore due to slackening demand. 9. Around the end of 1974 the two foreign-controlled mining companies (MIFERMA iron ore, SOMIMA copper) were nationalized. In the case of MIFERMA, this reflected domestic pressures for greater Mauritanian control over the ex- ploitation of national mineral resources as well as concern that a large share of the proceeds was being diverted abroad at the expense of the country's de- velopment. Takeover did not jeopardize Mauritania's good relations with the former private shareholders who provide substantial technical assistance to the mine and continue to purchase a large share of its production. Even though debt service on the funds borrowed abroad to acquire the company will be substantial, this transaction will in the long run have a beneficial impact on public savings as well as on the balance-of-payments. In the case of SOMIMA, the government took over after the private sponsor had already decided to close down the mine because of mounting technical and financial problems. The importance of the former MIFERMA mining operations to Mauritania's econo- my is evidenced by the fact that they generated some 80 percent of Mauritania's foreign exchange earnings and financed nearly two-thirds of the country's total investments including substantial reinvestments in the mine itself. 10. In the early 1970s public savings (after debt amortization) averaged about 4-5 percent of current budget revenues, financing some 20 percent of the public investment programs with the balance financed by foreign aid.. In 1975, following a slight decline in budgetary revenues (due to lower mining revenues) and a sharp increase in current expenditures, reflecting worldwide inflation, the current budget surplus was substantially reduced; Government was only able to supplement the inflows of fresh foreign capital destined to finance public investments by drawing down its reserves. Strategy and Prospects 11. The Government's economic policy in the first decade after indepen- dence focused on the development of urban and transport infrastructure in an effort to equip Mauritania with a modern capital and the facilities needed to run the country and decrease the dependence of Mauritania on Senegal for the transport of goods into and out of the country. Thus, about 80 percent of public investments between 1963 and 1972 were absorbed by projects in the transport and urban sectors. Even though public investments increased consi- derably during this period, averaging some US$15 million p.a. in 1970-74 or 6 percent of GDP, investments outside infrastructure have remained small because of the limited capacity of government services to identify, prepare, and execute under difficult conditions projects in such key sectors as agri- culture, livestock and education. -4- 12. In spite of these difficulties the Government's future strategy, as reflected in the Third Plan (1976-80), will accord increasing priority to developing the country's natural resources in livestock, agriculture, and fisheries. Indeed, the number of projects already under consideration in the rural sector indicates that a larger share of public investments would be devoted to this sector than in the past. The development of irri- gated agriculture in particular is expected to play an important role in ensuring that the consequences of a recurrence of the recent drought would not be so drastic. 13. Future growth in the modern sector is also essential to improve the public finance situation and provide a substantial part of the revenues needed to finance investment and recurrent expenditures for the development of the rural sector. However, while new iron ore investments are planned, mining alone cannot provide employment for more than a very small fraction of Mauritania's active population and its indirect effects on the rest of the economy will continue to remain limited. Similarly, establishment of manufacturing industries cannot raise the standard of living for the mass of the Mauritanian population, as high production and transport costs, limited skilled manpower, and small local markets severely limit possibilities. 14. Even assuming normal rainfall conditions, growth in real terms in the rural sector will probably not exceed an estimated 2-3 percent per annum for the rest of the decade. Therefore, the standard of living on a per capita basis in the rural sector cannot be expected to reach its 1968 level again before the early 1980s as the reconstitution of the national herd will be a slow process and the effects of the investments planned in the agricul- tural sector will only be felt after a substantial lag. Growth in the modern sector during the same period could reach about 5 percent, with iron ore mining and fish processing the two main motors of economic growth. As a result, economic growth for the country as a whole could be about 4 percent per annum until 1980 or 2 percentage points more than population growth. Balance of Payments Prospects and the Need for Aid 15. At this juncture prospects for the current account of the balance of payments appear particularly uncertain. While--contrary to many African countries--the outlook for Mauritania's export prices is reasonably favorable, the pace at which it can increase the volume of both exports (minerals, beef, and fish) and import substitutes (food crops) is severely constrained by physical factors as well as cost considerations. In this respect, Mauritania, like most other small African countries, is particularly vulnerable to imported inflation. 16. On the other hand, prospects for a high inflow of foreign capital are good. Mauritania has raised substantial amounts of foreign capital assis- tance over the past few years--$160 million in 1973 and 1974 alone of which about half was for drought relief and balance of payments support. Govern- ment's Third Plan (1976-80), which comprises a list of projects totaling some $900 million in 1975 dollars, reflects the expectation that these generous flows will continue; indeed, Government claims to have nearly $250 million already committed for projects to be implemented during the Third Plan period (of this, about $100 million is committed to the Nouakchott-Nema road project). -5- About two-thirds of the large inflows of 1973 and 1974 were provided by Arab OPEC countries, and the bulk of the anticipated commitments for the Third Plan period are from the same source. 17. The size of the public investment program is in large part attribu- table to the inclusion of major investments in such capital intensive sectors as mining, mineral processing and basic transport infrastructure. In addi- tion, however, the government plans to spend nearly one-third of total plan outlays for the rural sector and social infrastructure (mainly education), sectors which are particularly demanding in terms of project identification and preparation. Thus, whether Mauritania will be able to absorb the pro- posed amounts of foreign aid discussed above over the next five years will depend to a large extent on Government's ability to improve the preparation and implementation of the projects for which it is destined. In any case, the availability of local financing is expected to remain severely limited. Even assuming continuing of tight budgetary policies, the increases in current expenditures necessitated by the acquisition of part of the former Spanish Sahara coupled with sharply increased debt service obligations resulting from the MIFERMA compensation package and other new borrowing will preclude Government's contributing more than 10-15 percent to the financing of its public investment program. 18. Actual debt service obligations during and beyond the Third Plan period will, of course, be determined largely by the amount of foreign borrowing and its terms. As mentioned before, Mauritania has an urgent need to step up public investments substantially. To start with, a considerable amount of investments will be needed just to prevent mining production from falling; to achieve some real growth considerable additional investments will be necessary. Considering the country's general poverty, its strong reliance on a single export product, and the long gestation period of many of the most important projects included in the Plan, Mauritania can only afford the necessary amount of borrowing if most of the foreign capital becomes available at concessionary terms; otherwise debt service would almost certainly exceed 10 percent of export earnings by 1980 and increase rapidly thereafter. PART II: BANK GROUP OPERATIONS IN MAURITANIA 19. The Bank Group has participated or is now participating in the financing of ten operations in Mauritania. Total lending amounts to US$118.3 million. The first operation was a Bank loan of US$66.0 million for the MIFERMA iron ore mining operation in 1960. Eight others are IDA credits totalling US$32.3 million. Four of these operations are in the transportation sector: US$6.7 million in FY66 for the construction of the Nouakchott-Rosso road; US$3.0 million in FY69 for a four-year road improvement and maintenance program; US$3 million in FY75 for another six-year follow-up to the first maintenance program; and US$8 million in FY76 for the enlargement of the Nouadhibou Port. Three operations are in the rural sector: US$4.2 million for livestock development in FY72; US$2.5 million for a drought relief fund project in FY73; and US$1.1 million for the Gorgol irrigation engineering project in FY74. One operation is in the education sector amounting to -6 - US$3.8 million in FY74. In 1968, IFC made a loan to and an equity investment in SOMIMA, a copper mining company, which totalled US$20 million; this IFC participation and the accompanying loan were paid back when the Government nationalized SOMIMA in 1974. Annex II contains a summary statement of Bank loans, IDA credits, and IFC investments as of September 3u, 1976, and notes on the execution of ongoing projects. 20. Implementation of these projects has often been retarded because of cumbersome Government administrative procedures. The combination of administrative delays and those due simply to the exceptionally difficult conditions prevailing in Mauritania (very unfavorable climate, huge dis- tances separating the few population centers, inadequate or nonexistent transport network, and a general lack of trained manpower) has led, in a period of high inflation and adverse changes in exchange rates, to cost overruns on nearly all of the projects financed in the period from FY69 to FY75. The scope of many of these projects has, of necessity, had to be reduced accordingly to stay within the financial envelope provided. 21. Government is acutely aware of the problems it is encountering in project execution. The proposed technical assistance project described in this report is an important part of Government's program to overcome these problems; by strengthening Government's project preparation capacity and by providing for monitoring of project execution on a more systematic basis, the proposed project will help Government anticipate problems in project implementation and take steps to deal with them before they occur. To preclude recurrence of the cost overruns recently experienced, Govern- ment has on occasion called for bids before finalizing the financing plan of projects with substantial civil works components or other special fea- tures lending uncertainty to initial cost estimates; thus, the final financ- ing plan for the FY76 Nouadhibou Port project was based on actual bids. To circumvent some of its own administrative procedures and to help reduce the high cost of civil works through increased domestic capacity on force account, Government has recently set up a new autonomous public company, SONADER, to implement rural development projects, particularly those involving irriga- tion. SONADER is as yet untested and will need considerable assistance, material and human, before it will be able to carry out its assigned tasks. In August 1976 Government asked the Bank Group to provide technical assis- tance to SONADER; we are preparing a project. 22. In 1970-72, the Bank Group was the third largest donor (providing about 18 percent of Mauritania's external capital assistance) behind France (21 percent) and the European Communities (19 percent). Given the rapidly growing external financial assistance available to Mauritania, the role of the Bank Group is likely to change somewhat over the coming years, with increased emphasis on technical assistance and on a possible role as catalyst for cofinancing arrangements, both with traditional donors and with Arab OPEC countries. - 7- PART III: THE NEED FOR TECHNICAL ASSISTANCE FOR PLANNING 23. Mauritania has been committed to some form of central development planning since the early 1960s with varying degrees of success. Knowledge of the country and its people is defLcient so that essential facts and data are lacking. Plans have tended to be overly ambitious given the limited absorptive capacity of the country, particularly in rural areas where the harsh natural environment, lack of trained manpower, and inadequate infra- structure make identification, preparation and execution of projects diffi- cult. Modern sector development, mainly mining, has shown the greatest prog- ress and has been mainly developed by foreign interests. The country has also lacked an effect[ve central institution capable of framing development options and formulating development programs and coordinating their execu- tion despite several changes in the organization and control of the Plan- ning Ministry over the years. There has been a notable lack of coordination between medium term investment programs and the annual Government budget exercise thus making it difficult to bring available financial resources to bear on high priority investment. 24. Mauritania's first plan as an independent country (1963-1967) had the principal objectives of (1) reducing dependence on foreign financing and personnel and (2) providing the basis for the next stage of economic and social development by carrying out studies and completing vital infrastructure. Before this Plan period ended the Government decided on a major reassessment of its development strategy, economic institutions and resources. As a first step, it obtained the World Bank's agreement to send a technical assistance planning mission to Nouakchott for three months in 1967. The report of this mission "Mauritania: Guidelines for a Four-Year Development Program", published In 1968 made a number of recommendations for strategy, organization, and projects by sector. The new interim Plan (1970-73) incorporated many of the findings of the World Bank mission. More realistic investment targets were set, but continued difficulty was experienced in identifying and preparing technically feasible and economically viable agricultural and livestock projects. Lack of trained personnel was a major factor, most notably in the Planning Ministry. 25. Between 1972 and 1975 a team of planners financed by the UNDP under- took to provide technical assistance to the Ministry of Planning. Composed pre- dominantly of economists with a strong background in research but limited practical experience, the team concentrated its efforts on preparing a number of valuable basic studies that were used as background papers in the prepara- tion of the new Five Year Plan. This team was poorly integrated, however, in the Planning Ministry and could not strengthen the Ministry's role as the key coordinating body within Government in charge of project selection and prep- aration. With the drafting of the Third Plan completed in mid-1976, this second role will become particularly important during the next five years. 26. In November 1975, a major reorganization of Government took place; seven super-ministers were appointed who are also members of the Political Bureau of Mauritania's sole party and each of whom supervises the work of -8- several ministries. A main purpose of the reorganization was to improve the country's economic management. The Ministry of Planning became part of the complex of Ministries supervised by the new Super-MinLster of National Economy (who was formerly Minister of Planning); he also supervises the Ministries of Finance, Commerce, Transport and Tourism, Industry and Mineb, and Fisheries. In this reorganization, the Planning Ministry was expected to become the central agency which will integrate overall plan and policy formulation with the preparation and financing of sectoral programs and their related projects. The Planning Ministry is to collaborate closely with other departments and agencies of the Government and in fact share responsi- bility for tasks ranging from conception to control. Specifically, the decree defined the functions of the Ministry of Planning as follows: (1) Prepare long range development plans and programs, arrange for their financing, and monitor their execution. (2) Take the necessary measures to coordinate the activities of all public agencies engaged in executing the development plans and programs. (3) Define research priorities and coordinate the execution of research programs. (4) Undertake surveys and collect, analyze and diffuse statistics. The Ministry of Planning is organized into two directorates. The Directorate of Planning and Economic Research performs the first three functions listed above and the Directorate for Statistics and Economic Studies the fourth. 27. Since the early 1960s Mauritania has been making great efforts to train skilled high level nationals needed for its development programs; but the demands for such personnel have grown even faster than the supply. The rapid expansion of the public sector through the recent nationalization of the mining sector together with the acquisition of the new Sahara province have further increased the demand for trained manpower. The next phase of development, as reflected in the Third Plan, will require a good deal more professionally trained staff. The shortage of people who are able to identify, evaluate and supervise the execution of projects is thus likely to become even more acute. Equally critical is the Government's lack of qualified staff at the national planning level to elaborate long-run general and sectoral strat- egLes, set priorities, and undertake economic and financial analysis. 28. As mentioned above, the Third Plan includes a substantial number of projects in mining, manufacturing and transport infrastructure. Prepara- tion of mining projects is little hampered by limited local planning capacity. In the manufacturing sector, however, a number of large projects are under preparation that need to be assessed very carefully from the economic and financial point of view. In addition, there is need to work out in detail strategies for the development of small and medium scale enterprises, for which there is considerable potential. In the transport sector, the main - 9 - project is the Nouakchott-Nema road, already under construction. As this major transport artery represents a huge investment, its realization demands a careful rethinking of future transport investments so as to make the best possible use of it. Finally, long 'term port development remains an open question in the new Plan; foreign assistance will be crucial in this respect. 29. Rural sector investments, considered to be of highest priority by Mauritanian planners, suffer the most from the lack of absorptive capacity and the number of good projects included in the Third Plan is severely lim- ited. While irrigation along the Senegal river within the general framework of OMVS becomes increasingly important, the Government is eager at the same time to improve traditional rainfed crop cultivation in selected areas by using the integrated rural development approach. Both irrigation and rain- fed crop development will need substantial additional analysis and preparatory work to generate economically feasible projects and the same holds true for livestock development. In all three sectors major foreign help is necessary to complement the limited local capacity to prepare feasible sector strategies leading to the formulation of concrete development projects. Implementing such projects is, however, not assured by their sound preparation; Govern- ment has learned through bitter experience that its rural administrative services are woefully inadequate in executing development projects. SONADER, the new agency created to fill the existing void in project execution capabil- ity, will require considerable foreign assistance to become a going concern. 30. Government would also like to step up its development efforts in the social sectors (education, health, and urban development) where comprehensive sector strategies have to be worked out based on the real needs of the coun- try. Again, this will only be possible with substantial technical assistance from abroad. 31. Between 1970 and 1975 total funding for foreign technical assist- ance rose from US$4.6 million to US$14.4 million in current prices. In 1973, the latest year for which detailed data is available, Mauritania received 6260 man/months of technical assistance, 80 percent of which was provided by DAC countries with France giving the single largest share; multilateral agencies (UN, EEC, etc.) financed the rest. The bulk of the assistance in 1973 went into education (32 percent -- mainly teachers) and into various ministries to supplement their operational staff (26 percent); short term, high level advisors represented 12 percent of the total, while less than 2 percent was specifically for planning assistance. Most World Bank projects in Mauritania contain substantial technical assistance components as well. 32. In spite of the high amount of technical assistance Mauritania has received over the last years, the Directorate of Planning and Research still lacks qualified personnel. Aside from the Minister of Planning, who is the former Director of Planning, the Mauritanian professional staff consists of one economist recently appointed Director, three young economists who returned with Masters degrees from Canada in late 1975 and were appointed respectively - 10 - Chefs de Service for Economic Programs, Studies and Documentation, and Financ- ing and Foreign Aid, and two other recently returned graduates. The foreign advisory staff of the Directorate consists of one general adviser seconded by the German Government, and two Canadian Government financed (CIDA) experts, a general economist and an agricultural expert. Approximately 10 more Mauritanians whose training abroad was financed under the 1972-75 UNDP technical assistance project are expected to complete the requirements for Masters degrees in Canada during the Spring of 1977 and are scheduled to join the Ministry. 33. The Government's request to IDA to finance a policy and project ad- visory team is motivated by the need to provide urgent support to the work of the reorganized Ministry of Planning. Equally important is the fact that with this group of educated young Mauritanians returning next year, a well organized technical assistance advisory team can play a major role in providing timely on-the-job training and thereby make a major contribution to endow the Ministry for the first time with a permanent professional staff capable of carrying out planning, programming and monitoring functions. The UNDP financed the prepara- tion of the proposed project and supports its conception and priority for early implementation; the UNDP does not, however, have sufficient resources available within its program for Mauritania to finance its execution. PART IV: THE PROJECT 34. The project was prepared by the Government of Mauritania with the aid of a Bank staff member seconded to Mauritania for two months in the Spring of 1976 and financed by the UNDP. Negotiations were held in Manila, Philippines on October 8, 1976. The Mauritanian delegation was led by Mr. Ibrahima Ba, Minister of Planning. A credit and project summary is provided in Annex III. Personnel and Functions 35. The project would provide 5 professionals, for a period of four years for the team leader (the extra time to permit him to set up house- keeping and work with the Planning Minister to recruit the remaining team members) and for a period of three years for the others, as follows: (1) A team leader who is a general economist and who would coordinate and supervise the work program of the team within the Ministry of Planning. He and the other team members would report to the Minister of Planning and the Director of Planning. However, they would also be avail- able to the Super-Minister for National Economy and other Ministers to provide guidance and assistance on economic policy questions. (2) A macroeconomist to advise on matters of financial, trade, balance of payments and debt management policy. - 11 - He would also assist in relating annual and multi-annual plans and investment programs to the annual budget exer- cise, to foreign aid availability, and to the mobiliza- tion of resources for development in general. (3) Three sectoral advisers in the fields of (i) industry, fisheries and small-scale enterprises; (ii) transportation and other infrastructure; and (iii) rural development including livestock, dry farming and irrigated agriculture. These experts would be responsible for formulating medium and longer term development strategies in their respective sectors and for project identification. In addition, they would assist government in appraising such projects and would help monitor their implementation in collaboration with the technical Ministries concerned. The proposed terms of reference for these five experts are provided in Annex IV. The project would in addition provide for consultants to be engaged from time to time to help fill the gaps in the detailed knowledge of each advisor in the fields for which he is responsible and to deal with special subjects such as urbanization, health, nutrition and human resources development. Project Organization 36. The team would be located in the Ministry of Planning under the direct supervision of the Minister of Planning and the Director of Planning and Research. The team leader would serve as an Economic Adviser to the Minister and would supervise the activities of the team within the Director- ate following an agreed work program which would be discussed semi-annually with the Association. He would work in close collaboration with the Director of Planning and Research with respect to carrying out the work program and training of personnel. 37. The Government does not expect the formal organization of the Ministry to be fully operational for several years, at least not until a sufficient number of Mauritanian staff has been trained and tested on the job with the help of foreign advisers. Accordingly, an interim organi- zation of the Directorate would be established which would require close collaboration of advisers and counterparts in all aspects of the work including the establishment of the Ministry's coordinating role with the other Ministries and agencies of the Government. Training 38. The major lasting contribution of technical assistance is in terms of the trained local staff who remain after the expatriates have been with- drawn. Accordingly, a major role would be assigned to on-the-job training of up to three Mauritanian professionals by each of the foreign advisers on secondment to the Ministry of Planning; the training program for each coun- terpart would be an integral part of the team's work program to be reviewed - 12 - with the Association every six months. The 10 young Mauritanian economists due to return from Canada in 1977 are to be trained under the project, and their salaries are included in total project costs. In addition, provision would be made for 10 man years of overseas training for selected Mauritanian staff to attend courses which cannot be effectively conducted in Mauritania and which would not otherwise fall within bilateral fellowship programs. Costs and Financing 39. Total project cost is estimated at US$3.38 million (net of taxes) of which approximately 50 percent is expected to be foreign exchange. The proposed Credit of US$2.7 million would finance 80 percent of total project costs, including 100 percent of the foreign exchange and about $1.0 million of the local costs. The financing plan, showing the proposed application of the contribution of the Association and of Government, is: US$ million IDA Government Total Salaries and allowances of advisers 1.32 1.32 Salaries and allowances of local counterpart staff 0.07 0.60 0.67 Consultant budget 0.40 0.40 Bilingual secretary 0.14 0.14 Overseas training 0.12 0.12 Offices 0.19 0.19 Clerical and Secretarial services 0.08 0.08 Equipment and vehicles and related operating costs (including fuel) 0.10 0.10 Unallocated 0.33 0.36 TOTAL 2.70 0.68 3.38 The estimated cost provides for 192 man/months of advisers and approximately 48 man/months of consultants; it includes as well the cost of Mauritanian counterparts and support services for them and the advisers. The offices allowance is to provide rental space, on the basis of known local standards and costs, for the entire team, including counterparts and secretaries; this is necessary because there is no space available in the existing, small build- ing occupied by the Planning Ministry nor in any of the aged administrative buildings nearby owned by the Government. Procurement and Disbursement 40. The five advisors would, at the request of Government, be re- cruited by the Association and seconded to Mauritania; the Government agrees that the added security of a Bank Group contract would help attract people with the skills and qualifications needed. The entire cost of the advisors, their salaries and allowances and including costs incurred in their recruitment, would be covered out of the proceeds of the credit; to - 13 - facilitate early recruitment of the team leader and, hopefully, some of the team members, provision for retroactive financing of up to US$100,000 for recruitment expenses after October 1, 1976, is proposed. Selection of con- sultants would be in accordance with the Association's normal procedures except that for short-term consultancy contracts up to $10,000 we would not, in the interest of efficient operation of the advisory team, insist on prior approval by the Association of the proposed contract. Procure- ment of equipment and vehicles would be in accordance with the Borrower's normal procedures which are acceptable to the Association. 41. The financing plan is set up so that Government and the Associa- tion can disburse against discrete categories of expenditure; this was done at the request of the Planning Minister so as to preclude the project's being delayed because of difficulties within the Mauritanian administra- tion. The sole exception to this arrangement is the modest provision for the Association to contribute to the allowances of counterpart staff. The competition for trained people in Mauritania, within the administration and between Government and the private sector is fierce; the Planning Minister feels he needs the resources to offer a small premium to returning grad- uates to ensure they will serve in his Ministry for the duration of the technical assistance and training program envisaged under the project. Benefits and Risks 42. The technical expertise to be provided under the proposed project would help the Government in its efforts to formulate an effective and well planned development program and to identify and prepare specific investment projects. It would help strengthen the Government's planning machinery by alleviating the critical shortage of experienced economists and sectoral advisers. The risk is the normal one for projects of this kind involving finding suitable expatriates and ensuring their cooperation with local staff; while it is difficult to recruit high quality experts for this type of advisory position, our initial efforts to identify suitable candidates have brought encouraging results. In addition, there is always the risk that despite the government reorganization and the expanded role given to the Ministry of Planning, this ministry might in fact not be able to fully exercise its coordinating function, thus reducing the overall impact of the project. PART V: LEGAL INSTRUMENTS AND AUTHORITY 43. The draft Development Credit Agreement between the Islamic Repub- lic of Mauritania and the Association, the Recommendation of the Committee provided in Article V, Section I (d) of the Articles of Agreement of the, Association and the text of a draft resolution approving the proposed credit are being distributed to the Executive Directors separately. The draft Development Credit Agreement follows the form previously used for this type of project. - 14 - 44. I am satisfied that the proposed Credit would comply with the Article of Agreement of the Association. PART VI: RECOMMENDATION 45. I recommend that the Executive Directors approve the proposed Development Credit. Robert S. McNamara President ATTACHMENTS Washington, D.C. November 16, 1976 М 1,�(NFZ г TAbLE ЗА ра8е I ot 4 рвgев MAUNITINIA - SOC1Al 1NOICATORS DATA SИЕЕТ IANO AitEA tTHOU КИ21 --"-'�--'----�----�---------�----^------•---- --------------- MAUдITANIд REFERENCE GOUNTRIES 119701 rOTAL 1030.7 И05Т RECENr ' 4GR1f,. .. 1560 1970 ESTIMдTE SENEOдL tYORY СОАSТ ZAMBiA +� -�-'----�------------"-----° ---'-'------ -----�'-'--- --'----^---- . GND PER СлРIТд 1U5f1 90.0 • 210.0 310.0 240.0 340.0 410.0 -------------------- vCPiJlлrrw дЧс vtтAE SrдrlsttCS • . -------------------°---------- � POPUtAт1GN (MIO-YR, MILlI0N1 1•0 1.2 т•j 4•4 5.4 4.3 PПPULAr(С'N OENSITY v�P sOV+Re кн. 1.о 1.о т.о 22,о 16.о ь.о РЕР 50. КМ• dGR1C11LTUaлL L6ND 3•0 �4 .. .. 39.0 30.0 ., VIiдL STATi5TIC5 CPUDE Р14Тн Р4ТЕ PEfl THOUSAND Ц4.8 W1•9 11L•8 47.6 46.1 49.Т CRUDF ПЕДтН 4АтЕ PER ThCUSAND 27•1 2L.7 24•9 24.4 2з.з 20.9 гиFлиТ моRта�tтУ чАтЕ 1/тноиl . �.. �69.о, 1sь.о LIFF Е%РЕГТА��СУ лГ 8iЧТН (YR$) 35•9 41.0 38.$ 40.0 41.0 4Э.5 сагs5 еFРаосистlои алтЕ ., z.9 2.9 з.о з.1 э.з PO�UleT1ГM G4!IЧТн 4АТЕ 1i) ' готл� о•8* т.В 2.7+ь 2.6 з.4 Lв� 2.9 uQnaN .. 7.В 14•t ь.о 'е.Т_Ть 1з.ь L uRpev о0РVЕатlои с'к с� тсtА�1 е.о 14.2 2I.7 z9.o za.o зо.о eGE SТ�цГТ!1д� 1РЕQСЕЧТI о тП Iч vEaoS 41•Ь D1.8 41.9 a1.z 4z.5 чь.о !5 Т'1 64 У�лаS S5•2 SS•1 SS•о 54•9 5le.e 51.0 ь5 vFa�� nvn ovEQ 3•2 3.1 3.� 3.9 , 2.7 ?.0 лGг ГЕvЕ�!СВЧСУ адТ1П 0.8 О.В 0.8 0.8 0.В 1.0 ЕГС^:Оиfг ^fPFNCENCY 4етlп 1.lа LD .. .. 1.2 L 0.9 L 1.В Fдм1LV Р�АNЧ П1Г, аССЕРтГFS 1CUMU�aTIVE. тн0U1 .. .. .. .. .. .. I,SFRC 1ч� Сс иеРоIЕП kC,�EN1 .. .. .. .. .. .. EMfICYMf\'Т � ТПТлL LаРГ� �ПRCF (ТнС'USANn) 300•`J 630.0 1600.0 2600.0 tлРГр FпоГ� 1И pGR1CVLTUPE 1х1 91.0 BS.J 75.0 7З.J 82.J •• UNF.MPL(�УгГ 1: nF L4POR FCPCE) .. .. .. 7•0 6.0 10.0 /Ь INСГмЕ Г15Т`•IP�1i1C": ---------" -----'-- • ПF PP1V�"� IИССиЕ FFC'D вУ- нlсн�Sт 5� CF н�иSЕнnLоS .. .. .. „ н]СнгSт �Ся пГ нпiiКгнПL05 .. .. .. •• •• LnwESт z,ix ПF• нoUSFн0LD5 .. .. .. „ •• �• LCY'с'�' 4JC .^,F MПVSEhПLOS .. .. .. „ •, � D15TDiHUT14•. OG LлiVC ОWЧ=дSнI -_'------------------------°- 'т Jw�JEC АУ т1Р 10Е OF СЧИЕрS •• •• •• •• •• ч� гwЧF� Pv SNeLLEST 10т CWNERS .. .. .. .. .. .. rЕеLтн л'� "UТг1Т(0�� • р�РU�лт� �� о=р РнчslггАи зс0ос.0 Lс� т7210_0 i�650.o /а 16640.о 1tt4o.o lзsао.0 р�рислТl�� р=К ЧцаSгис дЕвsпИ 683о.о Ld_ 43zo.o цу3о.о � 268о.о z4ea.o � 29чо.а РСРцlлтlг.^ лго нПSРlтАС вЕ0 чlчо.о[q,,_е 279о.о(а 273о.0 вь- .8т0:о Ly ьео.о зtо.о рсо Слоlтл SUUOIY �F - f.ALUa1E5 1Е CG д°OUIREMENTSI в5.0 89.0 8$•0 � 97.0 IOd.J 88.0 PPOTFI�' 1с5лм$ PF4 ПАУ1 73.0 75.0 68.0 с 64.0 60.0 ЬЧ.О -CF ЧнIСн лN1идL eN0 PЦISE .. 44.0 Lb .. 28.0 L 18.0 (р 25.0 [с ОЕлТн аАтГ 1/тнСU1 дсЕS 1-4 34.0(,� .. .. .. .. .. ЕОUСлт[Пи aDJUSTEn ЕЧFПIIмЕЧт длтlг SЕСГИПдрУСSСн�GL 0.4 L8 12.0 о 13.0 а д 15.0 д е 11.0 L 12.0 е YPncS пF SCнCOLIhG PPCVIOEC lF!и5Т г.+.; SEC']и� 1.EV�L1 .. 13•0 1h•0 13.0 13.0 12.0 vC•едтtеИе� Fч�г��и=Ч* 1ж oF SГСоvrаиУl 1г•о �е . 1z.o Lв 7.о 7.а з.о Аоиiт СtтЕрАСУ 4лтЕ гя► 5•0 "r 1о.о .. 1о.0 z0.o 17.о ноиsгис , PEЧSCNS PEF RОСм 1AVEPAGEI .. .. .. .. .. 2•Ь L ОССUРIЕП 9NELL1NG5 ЧIТЧОСт PIPEC ЧАТЕR (Е1 .. .. .. .. . ВВ.О АССЕ55 т0 °�ЕСтРtсtтУ ' 1Е OF ALL OЧELLINGS) .. .. .. .. .. .. RURлL CЧELLINGS СПИИЕСТЕD 1п F.�ECT?ICITY 1Е1 .. .. .. .. .. .. CCNSUЧPT I ��И RAD10 RFCFIV�PS tPFR THOU РОР! 16.0 47.0 6Li.0 69.0 1Т.0 1В.0 PA55ENGEP cA4S (PFP TF'ПU РпР1 0•4 а.0 4•о L 9.0 10.0 14.0 ELFCTRICITY fКЧн/УН PER CAD1 1•0 63•0 7L.0 73.0 120.0 9S7•0 иЕЧ5Ра1ит (кG/Yk РЕа СдР1 .. 1.3 1.2 0.1 0•2 0.5 ---------------------------------^-------'-�-------'-------------------"--^ ------------------------�------ SFF NOTFS АNП ПEFINITIGNS ON RFVFRSE Page 2 of 4 pages NOTES Unless othamine noted, data for 1960 refer to any year between 1959 and 1961, for 1970 ba,i )9 b and 1970, and For m-t Recel.t E,timai. .at 1973 and 1975. Differences between IBRD population growth rate and U.N. rate of natural increase have not yet been reconciled. Zambla is selected a. an objective country because it has a large export oriented mining sector which, like Mauritania, cons titut.s the bulk of CDP and account. for most exports. MAURITANIA 1960 /a 1964; /b Ratio of population under 15 and 65 and over to total labor force; /c 1962; /d Government personnel including midwives and assistant nurses; Le Government hospital establishments, Lf 1964--65 ; /1 12-18 years of age. 1970 /a Government hospical eatabliahmants; /b 1964-66, /c 6-12 years (1970) and 12-18 years (1968) respectively. MOST RECENT ESTIMATE: La 1971; /b Government hospital establishments; /c 1969-71 average; /d 6-12 and 13-19 year. of age respectively; /a 1972. SENEGAL 1970 /a Ratio of population under 15 and 65 and met to total labor force; A Government hospital establishme-s; /c 1964- 66; Ld Unadjusted; /a Lower secondary level. IVORY CO T 1970 La Due to immigration , population growth rate is higher than the rate of natural increase; A 1965-70; /c Ratio of population under 15 and 65 and over to total labor force; /d Government only; /a 196Z--66; /f 12-7 years of age. ZAMBIA 1970 /a 1965-69; /b Persons seeking work; /c 1964-66; /d Total, urban and rural; /a 5-12 and 13-17 years of age respectively. R3, Sept 9, 1976 --------------------------------------------------- - ------------------- - --------------- - -- - -------------------------------------------------- DEFINITIONS OF SOCIAL INDICATORS Land Area (thm km2 Population per nursing person - Population divided by number of practi- latal Total surface area compriaing land area and inland wa rare. cing =Is and female graduate nurses, "trained" or "certified" Agric. Most recent estimate of agricultural area used temporarily or nurses, and auxiliary pers onnel with training or experience. permanently for crops, pastures, market 6 kitchen gardens or to lie Population per hospital bed - Population divided by number of hospital fallow. beds available in public and priva to general and specialized hospital and rehabilitation centers; excludes nursing homes and eatablishments GNP per capita (US$) - GNP per capita estimates at current market prices, f or cus todial and Preventive care. calculated by same conversion method as world Bank Atlas (1973-75 basis); Per capita supply of calories (% of requirements) - Computed it= 1960, 1970 and 1975 data. energy equivalent of net food supplies available in country per capita per day; available supplies comprise domestic production, imports less Population and vital statistics exports, and changes in stock; net supplies exclude animal feed, seeds, Population (mid-yr. million) - As of July first: if not available, quantities used in food processing and losses in distribution; require- average of tow end-year estimates; 1960, 1970 and 1975 data. mants were estimated by FAD based an physiological need. far normal activity and health considering environmental temperature, body weights, Population den' ity - per square Ian - Mid-year population per square kilo- a Be and sex distributions of population, and allowing 10% for waste .star (100 hectares) of total areas. at household level. Population dens I - gr square km of agric. land - Computed as above for Per capita supply of protein (grams per day) - Protein content of per .gri..Itur.1 1 d 1;. capita net supply of food per day; not supply of food is defined as above; requirements for all countries established by XSDA Economic Vital statistia Research Services provide for a minimum allmance of 60 grams of Crude birth rat vcE thfsand - Annual live births per thousand of mid- total protein per day, and 20 grams of animal and pulse protein, of year populati t.7 ,r- rlthmal ic averages nailing is 1960 and 1970, which 10 grams, should be animal protein; these standards are I war and five-year average ending in 1975 for moat meant estimate. than those of 75 gram of total protein and 23 grew of animal protein Crude death to te per thousand - Annual deaths per thousand of mid-year as an average for the world, proposed by PAO in the Third World Food population; ten-year arithmetic averages -a"Ing- LAI 1960 and 1970, and Survey. five-year average ending in 1975 for meet recent estimate. Per capita pr ote!Uypply from animal and PuLn - Protein suppIv of food Infant me - Ana-1 deaths of infants under me year derived fro; a aWd gia per day. of W3. p.r thousand li- birth.. ath rate (/th as 1=4 - Annual deaths per thousand in age group Life expectancy at birth (yrs) - Average number of year, of life remain- 1-4 years, to chitdi7en in this age group; suggested as an indicator of Ing at birLh, usually five-year averages ending in 1960, 1970 and malnutrition. 7' 'or " countries. I;r!:. r.pr.dd..'t1iopirate - Average number of live daughters a woman will Education bear in her normal reproductive period if she experiences present age- Adjusted enrollment ratio - primary school - Enrollment of all ages as .Pacific fertility rates; usually five-year averages ending in 1960, percentage of primary schooL-age populatim; includes children aged 1970 and 1975 for developing countries. 6-11 years but adjus ted for different lengths of primary education Population Rr2 for countries with universal education, enrollment my exceed 100% mith §:ate,q N total - Compound amwl growth rates of mid- Yen a Lvou-70 and 1970-75. since osme pupils are balm or above the official school age. gul:tPizal"'raw th rate (%) - urban - Computed like growth rate of total Adjusted enrollment ratio - secondary school - Computed as above; population; different definitions of urban areas may affect compara- secondary education requires at least four years of approved primary bility of do 'a among countries instruction; provides general, vocational or teacher training Urban populati an (% of total) - atio of urban to total population; instructions for pupils of 12 to 17 years of age; correopondence different definitions of urban areas my affect comparability of data courses are generally excluded. among comLr ia ' Years of schooling provided (first and secand levels) - Total years of Age structure (percent) - Children (0-14 years), working-age (15-64 years), schooling; at secondary level, vocational instruction may be par- and retired (65 years and war) as percentages of mid-year population. tially or completely excluded. Age dependency ratio - Ratio of population under 15 and 65 and war to Voceitional enrollment (% of secondary) - Vocatimal institutions those of ages 15 through 64. include technical, industrial or other programs which operate Economic dependency ratio - Ratio of population under 15 and 65 and Over Independently or as departments of secondary institutions. to the labor force in age group of 15-64 years. Adult literacy rate (%) - Literate adults (able to read and write) as Family p lann Ing - acceptors (cunat lative, thou) - Cumulative number of percentase of total adult population asted 15 veArs and war. acceptors of birth-cmtrol devices under auspices of national family P lanning program since inception. Family planning - war. (% of married woman) - Percentages of married per row (average) - Average number of persona per room In women of child-bearing age (15-44 years) who we birth-control device. oce u pl d conventional dwellings in urban areas; dwellings exclude to all married women in same age group. noa PoLnent structures and moccupied parts. .e,l.,t nL 01,u,12L _11.1 n,8 11,thou iMd -,ter (%) - Occupied conventional Employment r;.; n I w ithout inside or Outside piped Total labor force (thousand) - Economically active persone, including water facilities as percentage of all Occupied dwellings. armed forces and unemployed but excluding housewives, students, tc.; Access to electricity (% of all dwelll Con-tional dwellings deMitiont, in various countries are not comparable. s:ng with electricity in living quarters a"aspercent of total dwellings in Labor force in agriculture (%) - Agricultural labor force (in fan urban and rural areas. 'or' t:y hunting and fishing) as percentage Of total labor force. Rural dwelling cMnqed to electricity Computed as above for Un..,l d'(% of labor force) - Unemployed are usually defined as rural dwell 14; ml;. persons who are able and willing to take a job, out of a job an a given day, remained out of a job, and seeking work for a specified Con-ption minimum period not exceeding me week; may not be comparable be tween Radio receivers 1E thSm - All types of receivers for radio broad- S I PT _ p_g) countries due to different definition. of ==played and mrce of casts to genera bile r thousand of population , excludes data, a - 8 - , employment office statistics, sample surveys, compulsory unlicensed receivers in countries and in year. When registratim of unemployment insurance. radio sets was in effect, data for recent years my not be comparable -.or -o-tr.. I'. bedpli:eas Ing. income distribution - Percentage of private income (both in cash and Pa=Z r at. 1,.r tUboop) - as anger care comprise motor cars kind) received by richest 5%, richest 20%, poorest 20%, and poorest seating less than eight persons; excludes ambulances, hearses and 40% of households. ilit - vhlcl,,. .I. rri:lry (. yr per cap) - Annual consumption. of industrial, com- Distribution of land Ownership - Percentages of land Owned by wealthiest martial, public and private electricity in kilowatt hours per capita; 10% and poorest 10% of land Owners generally based on productim data, withoat allowance for loose. in . gridLbut 1,1.ui. for I.,-t. and exports of electricity. Health and Nutrition _.Pr , (,R/ r per cap) - Per capita annual cenamptim in kilograms P1 4,1,!= 2,,.phy,Ician - Population divided by number of practicing estimated from domestic production plus net imports of newsprint. I... alified from a medical school at university level. Page 3 of 4 pages MAURITANIA ECONOMIC DEVELOPMENT DATA SHEET (amounts in millions of U.S. dollars) Actual Bstimated Projected 1970- 1973- 1975- 1 17 1976 1980 93 g 1980- 1970 1975 1980 NATIONAL ACCOUNTS 3-Year Averages at 1967-69 Prices & Exchange Ratae kverage Annual Growth Rate As Percent of GDY Gross Domestic Product 194.9 208.2 225.5 243.6 251.5 299.4 2.2 8.2 4.2 104.0 109.8 104.6 Gains from Terms of Trade ()-7.5 - 6.1 - 13.7 - 21.8 -22.7 -13.1 . .. -4.0 - 9.8 - 4.6 Gross Domestic Income (+) 2 86.3 2.5 4.7 5.2 100.0 100.0 Imports (incl. NFS) 94.2 111.8 121.2 132.0 137.0 156.0 5.9 8.7 3.4 50.2 59.5 54.5 Exports "(import cpScit 94.1 104.4 93.3 83.8 76.4 105.6 3.5 -10.4 4.7 50.2 37.8 36.9 Resource Gap cpiyA p .." T , . . 0.0 T7 Consumption Expendit.ures 148.3 170.6 185.0 200.1 206.9 237.3 4.8 8.3 3.5 79.1 90.2 82.9 Investment "(Incl. stocks)" 39.2 38.9 54.7 69.9 82.5 99.4 -0.2 34.0 7.3 20.9 31.5 34.7 Domestic Savings 39.1 31.5 26.8 21.7 21.9 49.0 -7.0 -16.7 17.7 20.9 9.8 17.1 National Savings 25.5 29.9 30.6 22.4 16.5 40.8 5.4 -13.4 12.7 13.6 10.1 14.3 MERCHANDISE TRADE Annual Data at Current Prices As Percent of Total Impo 8.0 26.8 37.8 49.1 45.8 48.5 49.0 35.0 -0.3 8.4 17.6 10.7 Consumer goods 46.7 33.9 42.4 51.6 53.2 79.4 -10.1 23.5 9.0 49.0 18.5 17.5 Petroleum products 5.0 10.0 23.5 26.7 29.2 43.5 26.0 60.5 10.3 5.2 9.6 9.6 Intermediate goods 19.6 27.6 36.6 50.8 56.9 91.5 12.1 35.0 12.5 20.5 18.2 20.2 Capital goods 16j. 53.7 73.2 100.4 114.7 191.0 35.0 37.0 13.7 16.9 36.1 42.0 Total Merchandise imports cif 95.4 152.0 213.5 278.6 299.8 453.9 116.8 35:5 10.2 100.0 100.0 100.0 Exports Iron ore 77.8 102.8 129.6 120.4 130.5 225.1 9.8 8.2 13.3 79.3 78.7 70.5 Copper concentrate - 12.8 39.2 15.1 19.4 36.6 - 8.6 19.4 - 9.9 11.5 Fish products 7.3 12.3 10.6 11.0 16.2 43.2 19.0 -5.4 31.0 7.4 7.2 13.5 Other 13.0 9.1 6.7 6.5 8.5 14.4 -11.2 -15.5 17.2 13.3 4.2 4.5 Total Merchandise exports fob 98.1 137.0 186.1 153.0 174.6 319.3 11.8 5.6 15.8 100.0 100.0 100.0 Merchandise Trade Indices Average 1967-69 - 100 (in uqSj Export Price Index 102.0 135.4 162.4 168.5 183.2 285.5 9.9 11.5 11.1 Import Price Index 112.9 147.1 191.3 227.1 241.4 324.2 9.2 24.5 7.4 Terms of Trade Index 90.3 92.0 84.9 74.2 75.9 88.1 0.6 -10.2 3.5 Export Volume Index 117.8 118.4 139.1 108.2 113.8 135.4 0.2 - 4.4 4.6 VALUE ADDED BY SECTOR Annual Data at 1967-69 Prices & Exchange Rates Average Annual Growth rate As Percent of Total Agriculture 69.3 46.7 61.2 65.8 69.8 80.1 -2.4, 18.7 4.0 38.4 30.4 30.2 Industry and Mining 66.0 83.7 98.2 85.0 88.5 105.0 8.2 0.8 4.3 36.6 39.3 39.5 Service . 51.4 5 68.6 80.5 4. 13.0 .2 25.0 30.3 30.3 Total 180.4 181.8 217.3 216.5 226.9 265.6 0.3 9.1 4.2 100.0 100.0 100.0 PUBLIC FINANCE In Billions of Current UM As Percent of GDP (Central Government) 1973 1975 Current Raceipta 1.4 2.4 3.5 3.5 19.7 20.0 14.0 19.9 17.1 Current Expenditures 1.3 __I __2Aj .4 15.4 30.0 12..& 16..4- .6.. Budgetary Savings 0.1 0.4 1.0 0 1 . . 1.2 3.4 0.4 Other Public Sector 1/ 0.02 -0.3 0.6 0:3 2 . 0.2 -3.0 1.5 Public Sector Investment 0.2 0.7 1.1 4.2 50.0 . 1.9 5.7 20.7 DETAIL ON Public Investments (1970 - 74) CURRENT EXPENDITURE DETAILS Actual - - PUBLIC SECTOR (As % Total Current Expend.) 1970 1971 1972 1973 INVESTMENT PROGRAM 1973 US$ 7 of total General Services 38.6 38.3 35.8 38.3 Social Services 32.2 29.6 32.4 30.0 Rural Development 9.0 11.4 Economic Services 7.3 6.8 6.8 7.0 Industry and Mining 11.2 14.3 Other expenditures 21.9 25.3 25.0 2 Transport infrastructure 31.4 40.0 Total current expenditures 100.0 100.0 100.0 100.0 Social infrastructure 26.9 34.3 78.5 100.0 SELECTED INDICATORS 1970 1973 1975 (calculatdd from 3-year averased data) 1973 1975 1980 Average ICOR 6.12 7.53 8.98 Import Elasticity - 0.83 0.35 0.62 Average National Savings Rate 0.17 0.14 0.20 LABOR FORCE AND Total Labor Force OUTPUT PER WORKER In Thousands % of Total 1970 1970 Agriculture (incl. livestock) 460 92.0 Industry 7 1.4 Service 33 6.6 Total 500 100.0 not applicable e staff estimate not available - nil or negible ... not available separately -- less than half the but included in total smallest unit shown 1/ After Debt Service & Including MIFERMA ANNEX I MAURITANIA Page 4 of 4 pages BALANCE OF PAYMENTS, EXTERNAL ASSISTANCE AND DEBT PROJECTIONS (amounts in millions of U.S. dollars at current prices) Avg. Annual Growth Rate Actual Estimated Prolected Proj. 1970 1975 1980 19709 191 17 93 =*~~ 96 if 198-97 180 1985 X95 90 198 5 SUMMARY BALANCE OF PAYMENTS Exports (incl. NFS) 105.5 111.8 126.1 144.8 194.0 16C.6 182.8 211.1 252.3 297.0 341.5 544.9 8.8 16.3 9.8 Imports (incl. NFS) 106. 10L 12J- 162 .2327 102 32 . . A3A.-.. I6.2.. ..Q_..Rn 23.0 10.3 10.6 Resource Balance (x-M) -1.1 7.7 -2.7 -22.4 -38.7 -142.6 -143.6 -151.5 -156.0 -157.4 -154.7 - 275.6 Not Factor Service Income -12.5 -18.5 -20.3 -21.1 -18.6 -18.2 -21.2 -23.8 -25.4 -27.5 -29.4 -46.3 7.8 10.1 9.5 Current Transfers (net) -0.9 - 0.8 - 0.6 -2. -36.8 -20.0 7. 5.0 5.5 6.0 6.5 8.2 Balance on Current Accounts .14.5 .-11.6 -22.4 419.6 -20.6 :40.8 -157.8 -170.3 -17-5.9 -178.9 -177.6 'z313.7 Private Direct Investment - 0.6 - 0.5 3.9 9.8 36.2 15.5 16.3 17.1 18.0 18.9 19.8 25.3 5.0 5.0 Official Capital Grants 8.3 7.2 11.9 12.5 20.0 22.0 24.2 26.6 29.3 32.2 35.4 50.2 21.5 10.0 7.2 Public M&LT Loans (net) 2.9 8.8 4.0 29.5 55.1 74.7 87.0 105.1 118.5 130.5 135.3 228.1 Disbursements - Repayments- Net Disbursements Other M&LT Loans (net) -1.5 -1.9 3.0 - 7.9 3.6 18.1 32.1 23.4 25.5 30.5 38.0 45.0 Capital Transactions n.e.i. 5.3 2.0 5.5 -12.1 -52.9 -31.3 25.3 28.3 18.6 4.7 - 9.6 25.1 Change in Net Reserves 0.1 -4.0 -5.9 -12.2 -41.4 41.8 -27.1 -30.2 -34.0 -37.9 -41.3 -60.0 GRANT AND LOAN COMMITMENTS Public M&LT Loans t er Multilateral - 4.2 - 2.5 7.9 8.0 5.6 9.0 8.0 10.0 10.0 12.0 Governments 32 - - 1.0 8.9 - 25.0 26.9 28.9 31.1 33.4 35.3 Suppliers 3.2 43.1 2.3 39.3 90.9 104.8 75.0 80.7 86.7 93.2 100.2 264.0 Financial Institutions 0.5 - - - 49.9 2.0 25.0 26.9 28.9 31.1 33.4 35.3 Bonds - - - - 4.7 5.0 - - - - - - Public Loans n.e.i. ___ Total Public M&LT Loans 3.7 47.3 2.3 42.8 162.3 119.8 130.6 143.5 152.5 165.4 177.0 346.6 DEBT AND DEBT SERVICE Public Debt Out. & Disbursed Interest on Public Debt 0.4 0.5 0.4 0.5 2.4 3.8 Repayments on Public Debt 3.0 2.9 6.8 2.4 5.3 25.3 Total Public Debt Service 3.4 3.4 7.2 2.9 7.7 29.1 Debt Service Ratio (%) 3.2 3.1 5.7 2.0 4.0 18.1 Average Terms of Public Debt Int. as % Prior Year DOD 1.3 1.8 1.1 1.4 3.7 2.4 Amort. as % Prior Year DOLD 11.4 10.7 18.3 6.8 8.2 16.4 IDA Debt Out. & Disbursed as % Public Debt S&D 18.1 23.0 27.2 17.3 9.0 9.1 - 0.6 - 0.7 1.5 0.5 Actual Debt Outstanding on Dec. 31, 1975 ACTUAL AND PROJECTED EXTERNAL DEBT: Dieb. Only Percent Total A/ Percent IDA 14.1 9.1 34.0 8.3 Other Multilateral 7.3 4.7 12.4 3.0 Governments 126.2 81.7 301.6 73.7 Suppliers' 1.6 1.0 51.9 12.7 Financial Institutions 5.3 3.5 9.6 2.3 Bonds- -- - Public Debts n.e.i Total Public M&LT Debt 154.6 100.0 409.5 100.0 Other M&LT Debts Short-term Debt (diab. only) not applicable e staff estimate not available - nil or negible ... not available separately -- less than half the but included in total smallest unit shown 1/ Including undisbursed ANNEX II Page 1 THE STATUS OF BANK GROUP OPERATIONS IN MAURITANIA A. Statement of Bank Loans and IDA Credits (as of September 30, 1976) Loan or Amount less Cancellation Credit (US$ million) Number Year Borrower Purpose Bank IDA Undisbursed 249-FR 1960 MIFERMA Iron Ore Mining 66.0 69-MAU 1964 Mauritania Road Construction 6.7 159-MAU 1969 Mauritania Road Maintenance 3.0 273-MAU 1972 Mauritania Livestock 4.2 2.3 444-MAU 1973 Mauritania Drought Relief Fund 2.5 1.3 459-MAU 1974 Mauritania Education 3.8 3.5 S16-MAU 1974 Mauritania Irrigation Engineering 1.1 0.3 519-MAU 1975 Mauritania Third Highway 3.0 2.8 588-MAU 1975 Mauritania Nouadhibou Port 8.0 7.0 TOTAL. 66.0 32.3 17.2 of which has been repaid 66.0 Total now outstanding - Amount sold 63.4 - of which has been repaid 63.4 - Total now held by Bank and IDA I/ - 32.3 17.2 I/ Prior to exchange adjustments. B. Statement of IFC Investments (as of September 30, 1976) Amount (US$ million) Type of Equity Year Obligor Business Loan Investment Total 1968 SOMIMA Copper mining Total gross commitments 18.8 1.2 20.0 less cancellations, terminations, repayments and sales 18.8 1.2 20.0 Total commitment now held by IFC - - - Total undisbursed ANNEX II Page 2 C. Projects in Execution Cr. No. 159-MAU - First Road Maintenance Project: US$3.0 million; Credit Agreement: June 26, 1969; Closing Date: December 31, 1975 This project included (a) the purchase of highway maintenance equipment, (b) the provision of technical assistance to execute a four- year highway maintenance and betterment program, and (c) the training of mechanics and operators. The project is now nearing completion; it has contributed to setting up an effective maintenance organization. The major difficulty encountered during implementation was the inability of the Gov- ernment to assign a sufficient number of counterparts to the expatriate experts as a result of a general shortage of middle and upper level staff in Mauritania. This project is being continued by a Third Highway MaLnte- nance project (Credit No. 519-MAU), hereunder described. Cr. No. 274-MAU - Livestock Development Project: US$4.15 million; Credit Agreement: December 17, 1971; Closing Date: December 31, 1978 The project included (a) construction and maintenance of wells; (b) operation of animal health campaigns, (c) firebreaks in an area contain- ing about half of Mauritania's population. The implementation of the proj- ect was delayed due to the lack of a strong project unit. Because of world- wide inflation, this delay in turn considerably increased the cost of the project. Meanwhile, a severe drought reduced the number of livestock by half and consequently the need for wells. At the end of March 1975, the Government and the Association reached an agreement to slightly modify the scale and components of the project. The modification entailed: (a) a 50 percent reduction in the number of wells to be constructed; (b) establish- ment of a project management unit with a project manager; and (c) hiring of extra well diggers and mechanics. The amendment was approved by the Board and the Government signed it in March 1976. The project manager as well as the extra well diggers and mechanics are in the field since the beginning of this year. The project is advancing satisfactorily. The closing date has been postponed from December 31, 1976 to December 31, 1978. Cr. No. 444-MAU - Drought Relief Fund Project: US$2.5 million; Credit Agreement: December 7, 1973; Closing Date: November 15, 1977 This Credit is part of the total US$14 million provided to the six Sahelian countries - the Republics of Tchad, Mali, Mauritania, Niger, Senegal and Upper Volta, which were affected by the severe drought of 1968-1973. Content: (a) rehabilitation and extension of small irrigation ANNEX II Page 3 schemes; (b) development and improvement of irrigated vegetable production; (c) feasibility study and establishment of an irrigated fodder production center at Rosso; and (d) technical-assistance to the Ministry of Rural Develop- ment. The feasibility study of the Rosso Center was completed in mid-1975 by SEDES. The project as formulated far exceeded the original allocation for its implementation and implied an operation which would run at a chronic deficit. The Government and the Bank agreed to reallocate the remaining amount in this category to other components of the project. The technical assistance component to the Ministry of Rural Development ended after a year, as it was originally planned. The remaining components of this project suf- fered from a delay in implementation and disbursements. A multi-disciplinary mission was sent to Mauritania in March 1970 to discuss the various problems of implementation and formulated major proposals relating to reallocation of the funds, and improvement of administrative procedures. We are waiting for the decision of the Government on these proposals. Cr. No. 459-MAU - Education Project: US$3.8 million; Credit Agreement: February 11, 1974; Closing Date: December 31, 1980 This project provides for (a) the establishment of a vocational training center in Nouakchott to meet training needs for clerical, mechanical and construction workers; (b) the establishment of a technician training pro- gram in Nouadhibou; (c) equipment and technical assistance for the National Pedagogical Center for the upgrading and counseling of teachers through educational broadcasting and related teaching materials; (d) the establish- ment of a pilot farmer training center in the irrigated rice perimeter of M'Pourie; (e) the establishment of a farmer radio programming center at Kaedi; (f) an experimental study of the feasibility of introducing basic education (reading, writing, arithmetic) in the Koranic school system; and (g) technical assistance for the Directorate of Planning to help develop better indicators of manpower demand. The project is experiencing a substantial cost overrun due to the depreciation of the dollar and general inflation. The July 1975 super- vision mission recommended that the project be reduced in scope to address the priority sectors of farming and mining as well as the study of Koranic schools. The Government agreed to exclude two items, primary teachers upgrading program and the rural radio station. The first has been inte- grated into an ongoing UNDP/FAO project. The second is being considered by FAC for possible financing. The remaining components of the project are in progress. Cr. No. S-16-MAU - Irrigation Engineering Project: US$1.1 million; Credit Agreement: June 12, 1974; Closing Date: December 31, 1977 The project provides for (a) the execution of the engineering studies needed for the implementation of the first phase of the Gorgol Basin Development Scheme; (b) the carrying out of related health and ANNEX II Page 4 education studies; (c) the preparation of final designs, tender documents and technical schedules; (d) assistance to the Government in bid evaluation; and (e) technical assistance to the Ministry of Planning for the analysis of rural development projects. Since the study completed in 1975 has shown alarmingly high costs, an IBRD/FAO mission was sent in March 1976 to review project costs and the possibility of a more economic alterna- tive. We are now in the process of reviewing this report. Cr. No. 519-MAU - Third Highway Project: US$3.0 million; Credit Agreement: December 11, 1974; Closing Date: June 30, 1980 The principal aim of the project is to consolidate and expand the maintenance and betterment efforts started under the First Road Main- tenance Project (Cr. No. 159-MAU). The project consists of: (a) technical assistance to relieve the shortage of qualified highway personnel and to allow for the continuation of the training program undertaken under the previous credit; (b) purchase of highway equipment for maintenance and bet- terment works; (c) a betterment program of about 365 km including earthworks in new alignments to avoid sandy or periodically flooded areas, construction of surface drainage and high river-crossing structures; and (d) a feasibil- ity study and detailed engineering of the Rosso-Boghe road (200 km). The project, which costs a total of US$13.7 million, is cofinanced by the KFAED (US$3.8 million) and the Government of Canada (US$4.2 million). Due to in- flation, the proposal submitted by the group of consultants for technical assistance and the pre-investment study of the Rosso-Boghe road called for much higher fees than estimated by our appraisal team. To avoid possible cost overrun, the Government and the Association agreed to reduce the total technical assistance program from 350 man/months to 200 man/months with the balance of the program not financed by this project to be continued in a sub- sequent project. The Credit became effective on June 8, 1976. Cr. No. 588-MAU - Nouadhibou Port Project: US$8 million; Credit Agreement: October 31, 1975; Closing Date: March 31, 1979 This project supports the development strategy of the fishing sector in Mauritania. It aims to enlarge the port and improve its admin- istration and operation. Content: (a) construction of civil works, con- sisting of fishing and commercial berths and an approachway, a sewerage scheme, and various buildings; (b) purchase of a harbor master's launch and navigation aids, maintenance equipment; (c) technical assistance to PAN for port administration, operations and reorganization of its account- ing and financial systems; and (d) consulting services for studies on the need for and development of ship-repair facilities. The Credit became effective on June 2, 1976. The project is progressing satisfactorily. ANNEX ill Page 1 Islamic Republic of Mauritania Technical Assistance Project Credit and Project Summary Borrower: Islamic Republic of Mauritania Amount: US$2.7 million Terms: Standard Project Description: A four-year program to finance (1) five professionals for the Ministry of Planning to elaborate long-term general and sectoral strategies, set priorities, identify projects, under- take economic and financial analysis; and (2) temporary con- sultants to deal with special subjects when needed. (US$ million) Estimated Cost: Local Foreign Total Salaries and allowances of advisers (192 man-months) .41 .91 1.32 Salaries and allowances of counterparts .67 - .67 Consultant Budget (48 man-months) .086 .314 .40 Bilingual secretary .07 .07 .14 Fellowships .12 .12 Office rent .19 - .19 Clerical and Secretarial services .08 - .08 Equipment and vehicles and related operating costs (including fuel) .038 .062 .10 Unallocated .16 .20 .36 TOTAL 1.71 1.67 3.38 Bank's share of local cost = 60% ANNEX III Page 2 Financing Plan: US$ million IDA Government Total Salaries and allowances of advisers 1.32 1.32 Salaries and allowances of local counterpart staff 0.07 0.60 0.67 Consultant budget 0.40 0.40 Bilingual secretary 0.14 0.14 Overseas training 0.12 0.12 Offices 0.19 0.19 Clerical and Secretarial services 0.08 0.08 Equipment and vehicles and related operating costs (including fuel) 0.10 0.10 Unallocated 0.33 0.36 TOTAL 2.70 0.68 3.38 Estimated Disbursements: FY 77 FY 78 FY 79 FY 80 FY 81 Total .30 .80 .60 .60 .40 2.7 Procurement Arrangements: The five advisors would, at the request of Government, be recruited by the Association and seconded to Mauritania. The entire cost of the advisors, their salaries and allow- ances and including costs incurred in their recruitment, would be covered out of the proceeds of the credit; to facilitate early recruitment of the team leader and, hopefully, some of the team members, provision for retro- active financing of up to US$100,000 for recruitment ex- penses after October 1, 1976, is proposed. Selection of consultants would be in accordance with the Association's normal procedures except that for short-term consultancy contracts up to $10,000 we would not, in the interest of efficient operation of the advisory team, insist on prior approval by the Association of the proposed contract. Procurement of equipment and vehicles would be in accord- ance with the Borrower's normal procedures which are acceptable to the Association. Appraisal: There is no separate appraisal report. ANNEX IV Page 1 MAURITANIA - LONG TERM ADVISER 1. Team Leader/Senior Economic Adviser Qualifications: Professional economist with graduate degree in economics. Substantial experience with economic issues and policies at the national level and thorough familiarity with the preparation and administra- tion of national development plans in developing countries. He should be sensitive to the problems of establishing priorities given limited means while recognizing the employment and income distribution objectives of de- velopment; he should, in addit[on, have demonstrated his capacity to deal with high government officials, to handle expatriate technical staff, and to design training programs intended to facilitate the transfer of skills to local counterparts through on-the-job training and special courses. Duties: Advise the Minister of State for National Economy and the Minister of Planning on national economic policy problems such as public finances; money and credit, the balance of payments, debt management and others relating to the official allocation of resources in relation to eco- nomic and social development; advise and assist the Ministry of Planning on the formulation and carrying out of team work programs and the establish- ment of the Ministry's coordinating role with the technical ministries. Par- ticular stress is placed in this respect on assisting with the process of identifying projects which form part of the investment program; advise and assist the Minister of Planning with the training activities to be undertaken as part of the project to include the formulation of detailed training pro- grams for each counterpart to be trained under the project while ensuring that these programs do not conflict with those being carried out by bilat- erally financed advisers working in the Ministry; coordinate and develop the project and maintain close coordination with the Director of Planning. Train up to three Mauritanian counterparts, following a detailed, objective- oriented program which will be reviewed every six months. 2. General Development Economist Qualifications: Professional development economist familiar with the techniques of development planning, the methodology of social cost benefit analysis of projects and preferably some specialized experience in one or more of such fields as public finance, balance of payments, trade policy, indus- trial policy, regional development and problem of urban-rural imbalances in- cluding migration. Should have some experience in training counterparts. Duties: Assist the senior economic adviser in carrying out his duties. Participate in elaborating annual and multi-annual plans. Play a leading role in making a finance plan and balance of payments projections within macro-economic framework. Assist in the training and coordination of activities of the mission; and train up to three Mauritanian counterparts, following a detailed, objective-oriented program which will be reviewed every six months. ANNEX IV Page 2 3. Industrial Development Adviser Qualifications: Professional training and experience in develop- ing countries as an industrial economist; desirable to have had experience in the fish processing industry and some knowledge of the problems of small and medium scale enterprises in developing countries. Should be very familiar with the techniques of financial and economic analysis of industrial, and mining projects. Should have some experience in training counterparts. Duties: Lead a team of counterparts in providing policy advice to the Ministers and formulating a strategy for industrial development. Advise and assist the Ministry of Planning and the technical ministries on the tech- niques and methodology of industrial project analysis. Advise and assist the Ministry of Planning on instituting a Government wide system of project identification, appraisal and monitoring within the context of an annual and multi-annual development program. Train up to three Mauritanian counterparts, following a detailed, objective-oriented program which will be reviewed every six months. 4. Transport and other Infrastructure Development Adviser Qualifications: Good basic training and experience in transporta- tion economics and project preparation, with preferably a background in regional economic planning, transport systems and some experience in port development. Should have some experience in training counterparts. Duties: Lead a team of counterparts in providing policy advice to the Minister, formulate a comprehensive sector strategy of transportation and other infrastructure development and identify projects in these sectors. Advise and assist the Minister of Planning and the technical ministries on the techniques and methodology of infrastructure project analysis. Advise and assist the Ministry of Planning on instituting a Government wide system of project identification, appraisal and monitoring within the context of annual and multi-annual development programs. Train up to three Mauritanian counterparts, following a detailed, objective-oriented program which will be reviewed every six months. 5. Rural Development Adviser Qualifications: Experienced agricultural economist familiar with the Sahel region. He should have some background in planning for rural development and should be very familiar with the techniques of economic analysis of projects aimed at development of rainfed agriculture, irrigated agriculture, and livestock. Duties: Lead a team of counterparts in providing policy advice to the Minister, formulate a comprehensive sector strategy of rural development and identify projects in this sector. Advise and assist the Minister of ANNEX IV Page 3 Planning, SONADER, and the technical ministries on the techniques and meth- odology of project analysis. Advise and assist the Ministry of Planning on institutLng a Government wide system of project [dentification, appraisal and monitoring within the context of annual and multi-annual development programs. Train up to three Mauritanian counterparts, following a detailed, objective-oriented program which will be reviewed every six months. IBRD 3172R NOVEMBER 1972 1S2M' 120TN11 IS.AMIC REPUBLIC OF MAURITANIA ALGERIA SPAN SH LIBYA SAHARA -- Paved roods ----- Paved roods under construction MAURITANIA Gravel roads MALI NIGER ----Tracks sEN GALCHA Railroads P.AUINE PPR * Airflelds V Copper MOROCCO LON oAS -°r LIBER ~CA.,JN.AFR T8 04110M CA FROON' Date polms 2 - E >4s Fishing - - - Wharf 100 = Annual roinfall, millimeters Aaiun i International boundaries, A L G E R I A AGRICULTURAL ZONES Soharan desert Sahoran sub-desert Sahelien - - o 5 100 I so MILES Mogrern 0 50 00 150 200 250 S PAN 1S H KILOMETERS -24. S A.HA.. R F.D MALI Nouadhibo -o, 20 \00 NOUAKCHOT * CMude Outilimit 200 Tørmchake 100 300 OMederdrd ,I CE unl Atrouss GU 10-Nma 200 Boghé GUM Kiffo N Ross ø0, Koedi *MBout GUTimbe r s 16. St. Louis 300 00Motam DAKAR * 60O Seli aby 600 Bakel M A L S E N E G A L