Bolivia - Small-scale Mining Development Project

FI LE COPY 6 rDocument of The World Bank FOR OFFICIAL USE ONLY Report No. P-1909 REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF BOLIVIA FOR A SMALL-SCALE MINING DEVELOPMENT PROJECT September 9, 1976 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY AND EQUIVALENT Currency Unit Bolivian Peso $b US$1 $b20.00 $bl US$0.05 $bl million US$50,000 MEASURES AND EQUIVALENTS Kilometer (km) 0.62 miles Square Kilometer (km ) = 0.386 square miles ABBREVIATIONS AND ACRONYMS BAMIN - Banco Minero de Bolivia BISA - Banco Industrial S.A. COMIBOL - Corporacion Minera Boliviana GEOBOL - Geological Survey of Bolivia  FaO OMCIAL USE ONLY REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF BOLIVIA FOR A SMALL-SCALE MINING DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed loan to the Republic of Bolivia for the equivalent of US$12.0 million to assist in financing a small-scale mining development project. The interest rate on the proposed loan would be 8.9% per annum. The Government would make available US$9.0 million of the loan in US dollars to Banco Minero de Bolivia (BAMIN) at the same interest rate. BAMIN, in turn, would relend the loan proceeds in US dollars to small miners at an annual interest rate of 12% plus various charges that would bring the effective rate to about 13% per annum, and with terms of between 8 and 13 years. The remaining US$3.0 million of the proposed loan would be used to continue a national survey of small mines and to provide technical assistance. Amortization of the proposed loan would be made on the basis of the aggregate of two amortization schedules, i.e.: (a) equal semi- annual principal payments over a period of 15 years including a three-year grace period, for the non-credit portion of the loan; and (b) for the credit portion of the loan, a flexible schedule with a maximum term of 15 years based on the aggregate of the amortization schedules of BAMIN's subloans. PART I - THE ECONOMY Introduction 2. An economic report entitled "Current Economic Position and Prospects of Bolivia" (786a-BO) dated July 28, 1975, was distributed to the' Executive Directors. An updating economic memorandum is near completion and will be distributed to the Executive Directors in the near future. Country data sheets are attached as Annex I. Background 3. Despite the increasing importance of petroleum and natural gas exports, as well as significant mineral deposits, Bolivia remains one of the poorest countries in South America. The majority of its population is engaged in traditional agriculture. Only a small part of the labor force is employed in the modern sectors. The infrastructure is primitive and the road and rail networks cover only a fraction of the country. The combination of strong traditional ties within the Indian communities and geographic, health and educational obstacles to population mobility has perpetuated the demographic concentration on the inhospitable 10-15 thousand foot plateau, the Altiplano. About half of Bolivia's population lives a physically, culturally and econo- mically isolated subsistence existence in this region, which is rich in mineral deposits but limited in agricultural potential. This document has a restricted distribution and may be used by recipients only in the performance | of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - 2 - 4. The 1952 revolution sought to put an end to the dual structure which had characterized Bolivia's economy since colonial times and to deprive the landowning and mining oligarchy of its economic base. This objective was only partially achieved. Progress was made in eradicating feudal relations, distributing the land and eliminating obstacles to social mobility. The agrarian reform and the nationalization of large mines, however, were followed by falling production. GDP declined in the 1950s and did not recover to its pre-1952 level until 1961. During the subsequent decade, output increased steadily at an average annual rate of around 5%, providing for per capita income increases averaging 2.5% p.a. As a result, GNP per capita, which had fallen by 24% in the 1952-60 period, had recovered by 1970 to its 1952 level and was more equally distributed. However, the momentum of economic growth was again lost in 1969/71 when political instability led to declining private investment and deteriorating public finances. The deterioration of public finances reflected a structural flaw in the economy. Bolivia's public sector is proportionately one of the largest in South America and a source of liveli- hood for a sizeable segment of the population. With scarce employment oppor- tunities in the private sector, pressures to expand the ranks of public servants proved difficult to resist. Increased expenditures on wages and salaries, combined with a weak tax system, left few resources for investment. Moreover, the inability of the public sector to generate adequate savings limited its capacity to utilize available external capital assistance. 5. On coming to power in 1971, President Banzer faced the need to provide jobs for the unemployed and to revitalize investment and output growth. Initially, this task was faced in the context of a sharp deteriora- tion in Bolivia's terms of trade which produced a weakening in the balance of payments and a further deterioration in public finances and eventually re- sulted in a substantial devaluation in 1972. At the same time, however, more rational economic policies were put into effect and a more favorable climate for private investment established. New laws offering guarantees and incen- tives to private inves-tors especially in the hydrocarbon field were promulgated and claims arising from earlier nationalizations were settled. The Government also improved public administration and the pricing policies of some public undertakings. These policies were successful in increasing private investment and in bolstering the rate of growth. Recent Economic Developments and Prospects 6. The most important events affecting recent economic performance have been the substantial improvement in the terms of trade in 1974 and the subsequent deterioration last year. The sharp increases in petroleum and mineral prices in 1974 allowed a simultaneous and large expansion of both consumption and investment and brought about an unprecedented improvement in public finances, the balance of payments and foreign exchange reserves. After current deficits in 1970-73, the Central Government achieved savings equivalent to one-third of its capital expenditure. For the public sector as a whole, savings in 1974 exceeded 10% of GDP and covered nearly 90% of capital expenditure. On the balance-of-payments side, the terms of trade  - 3 - gain in 1974 was equivalent to about 11% of GDP; the trade surplus exceeded US$150 million; and net capital inflows approached US$90 million, nearly four times their 1973 level, as a result of substantially higher loan disbursements to the public sector and increased foreign investment associated with hydro- carbon exploration. However, part of this improvement was lost in 1975 when Bolivia's terms of trade and export volumes declined under the impact of the world economic recession, which brought once again the extreme dependence of the economy on its external sector into foeus. Mineral exports fell by well over 20% as mineral prices declined by approximately 13%, on weighted average, and shipments of most minerals fell as a direct result of the recession and unloading on international markets of speculative stocks accumulated during the commodity boom of 1973/74. Exportable surpluses of crude petroleum were significantly reduced for the second year in a row due to falling production and rapidly rising domestic consumptio% of hydrocarbon derivatives. A significant price increase for natural gas exports to Argentina could not compensate for the overall decline in export earnings:. Om the whole, merchandise exports in 1975 declined by 18% while imports rose by nearly one-third in the wake of the start-up of new public investment projects and the liberalization of imports for consumer durables and motor cars earlier in the year. Despite further substantial increases in disbursements of medium-term loans to the public sector, net foreign exchange reserves fell by US$60 million to US$100 milfion, or about two months of imports. The Central Government's current surplus was just about 1.7% of GDP, after 2.6% in 1974, and some borrowing from the banking system was necessary to finance growing public investment. However, some public utilities attained stronger financial results due to improved rates. 7. Bolivia's terms of trade are expected to again improve in 1976 and beyond. Mineral prices have bottomed out in 1975 and hydrocarbon prices have resumed their rising trend. 'Furthermore, with gradual economic recovery in industrialized countries, mineral exports volumes should increase. Government measures taken in late 1975 to increase prices of domestically consumed petro- leum products by about 70% on the average, especially of gasoline, should slow down the rise in domestic demand for these products, thus contributing to preserve exportable surpluses. The outlook for 1976, therefore, is for somewhat accelerated growth and an improved fiscal and balance-of-payments position. 8. Economic growth prospects over the medium- to longer-term depend on the0Government's ability to increase savings and stimulate investments, particularly those for developing the hydrocarbon, mineral and agricultural resources. Government measures taken since about 1973 and designed to broaden the fiscal revenue base are now beginning to show results. Firm wage policies applied since 1974 have resulted in a reduction of inflation to an annual rate of well below 10%. Investment in mining and hydrocarbons is accelerating. Intensified exploration for hydrocarbons by the state-owned petroleum company and private foreign companies is underway and may lead to significantly in- creased production and export of crude petroleum and natural gas which would stimulate an acceleration of economic growth towards the end of the decade.  - 4- Debt Service and Creditworthiness 9. Service on external public debt in 1975 amounted to 16.8% of exports of goods and non-factor services net of investment income abroad. Average terms of the external debt outstanding have remained soft, reflecting the high proportion of concessionary aid channeled to Bolivia. Average interest in 1975 was 4.4% and average maturity about 22 years. 10. This position is bound to change, however, as it can be expected that lending terms will become harder and the share of loans on conventiolal terms will increase. Of new loans attracted during 1974 and 1975, over 25% were financial and suppliers' credits. With substantial disbursements envisaged during the next five years, the service on external public debt will move well above its historical average (12.8%) by 1977/78; but in line with growing exports, the debt service ratio should decline in subsequent years. In view of the nature and growing size of Bolivia's debt, prudence in selecting and utilizing external capital will have to be an essential element of debt management. 11. Bolivia enjoys a substantial resource base in agriculture, minerals and hydrocarbons which has to be developed to sustain rapid economic growth and, in particular, rapid expansion of export earnings in the foreseeable future. If production in the export sectors can be increased as planned and prices for major export products are adequate, Bolivia can be considered creditworthy for substantially increased amounts of external lending on con- ventional terms. Nevertheless, some additional lending on soft terms (avail- able from the Inter-American Development Bank's Fund for Special Operations and the USAID) is justified by Bolivia's poverty and its large and continuing external capital requirements. The country will require substantial external financing of investment to supplement the domestic savings effort at least until the early 1980s. While the Government is making a serious effort to mobilize domestic resources and prepare a development program, implementation of this program will require external assistance well in excess of the foreign exchange component of suitable projects presently available for international financing. Although substantially increased suppliers' and financial credits will probably become available, they should prudently cover not more than 35% of the public capital inflows required during 1976-80 for meeting a GDP growth target of 5-6% annually. The remainder should be obtained on softer terms from bilateral and international development financing agencies, including an expanded Bank lending program. PART II - THE BANK GROUP OPERATIONS IN BOLIVIA 12. Although Bolivia is an original member of the Bank, it did not obtain any Bank Group resources until 1964. Bank Group assistance to Bolivia until 1974/1975 was limited by the country's tight budget and restricted capacity to service external debt. Lending to Bolivia was in the form of IDA credits except for a 1971 Bank loan to help finance an "enclave" project. Because of the narrow scope for private investment, IFC became active in  Bolivia only in 1973 through an investment of US$400,000 in a firm producing cables and plastic products. With expanding opportunities for private invest- ment, however, IFC has most recently agreed to take an equity participation of $550,000 in Banco Industrial S.A. (BISA) in conjunction with a Bank loan for the same institution to assist in financing medium-sized industrial and mining enterprises, and US$337,500 in Banco Hipotecario Nacional to assist In the development of mortgage banking. The latter two IFC investments also aim at contributing to establish a local market for long-term securities. Annex II contains a summary statement of the status of Bank Group operations in Bolivia as of July 31, 1976, and notes on the status of ongoing projects. 13. The proposed loan would be the Bank's seventh and the Bank Group's eighteenth operation in Bolivia. Net of undisbursed balances, Bolivia's debt to the Bank and IDA in 1974/75 represented 8.3% of its external public debt and the share of the Bank Group in total debt service is now about 4%. Both figures are expected to increase marginally by 1980. Although the Bank Group has ranked below the U.S. Government and the IDB as a source of financial assistance to Bolivia, its role has been expanding. 14. Future Bank lending will continue to support Government efforts to strengthen and expand the productive base of the economy, in particular the export sectors, while simultaneously emphasizing improved distribution of the benefits of economic growth. In the social sectors, Bank actLvities will focus on the less-developed regions of the Altiplano and the interme- diate valleys where Bolivia's rural and urban poor are concentrated. 15. Additional agricultural projects under consideration are designed to meet the needs of poorer farmers and an education project for the improve- ment of rural and vocational education is in an advanced stage of preparation. A water and sewerage project has also been prepared and will be presented to the Board in early September. Further financing of economic infrastucture is contemplated in the transportation and power sectors. A project to provide access to remote area9 of the country through a program of airport development is being prepared and continued support for the railway rehabilitation program is planned as well. PART III - SECTORAL BACKGROUND A. Mining Sector 16. Mining of non-ferrous metals has traditionally exerted a dominant influence on the Bolivian economy. Despite very slow growth in recent years, mining at present still accounts for 11% of GDP, about two-thirds of merchan- dise exports, and 25% of Central Government current revenue. As a capital- intensive activity, it employs only about 3% of the labor force, but several hundred thousand Bolivians depend on it for their livelihood.  - 6 - 17. Mining is carried out by public and private enterprises, the latter consisting of medium and small mining firms. The public sector [ncludes the largest mines, owned and managed by the Corporacion Minera de Bolivia (COMIBOL), which accounts for over 50% of mineral exports and 40% of employment. COMIBOL is beset by problems of operational inefficiency, over-centralization, and difficult labor relations, despite substantial welfare expenditures, the resolution of which would require difficult decisions by the Government. 18. Medium mining consists of 31 private firms, mainly domestically owned, which form the National Association of Medium Miners. Its members must have a share capital of at least US$100,000 and attain certain minimum output levels. Medium mining is the most efficient segment of the sector, account- ing for 22% of exports and 28% of taxes generated by mining. Medium mines are relatively modern and capital intensive. They therefore employ relatively less labor than COMIBOL or small mines, but provide their workers with better health and safety conditions. The number of medium mining companies will continue to increase as the larger and more efficient units of the small mining subsector are expanding. This process would be accelerated through the proposed project. 19. Small mining consists of 2,000-3,000 actual operations, a signif-i- cant number of which are frequently brought into or taken out of production depending on international market conditions. Size of operations vary-from one-family activities to enterprises comparable in output to smaller medium mining firms. There are also about 100 mining cooperatives working under marginal conditions. Small private and cooperative producers sell their output mainly to BAMIN which assumes the full marketing risk. While the contribution of small mines to overall mineral output has been small and declining, they employ as much as 40,000 people, equivalent to well over half of mining employment. Their share in output of tin, antimony, tungsten and lead is still significant. 20. In general, small mining operations are rather primitive, have low productivity, and employ little capital and low levels of technology. Only the richest and most easily accessible portions of ore deposits are normally exploited, thus making subsequent exploitation by more advanced methods difficult. Problems faced by small mines are compounded by the fact that these mines are widely dispersed over Bolivia's difficult terrain and tend to produce mainly tin, whose demand has grown little, and complex minerals which are difficult to recover. Operations often are feasible only because costs are kept low through inferior wages and disregard for essential health and safety standards. However, many small mining firms have the potential to become viable entities, provided they receive substantial inputs of capital and technical assistance.  21. Recent developments in mining have been disappointing. Even apart from temporary adverse effects of weak mineral markets in 1975, the sector's contribution to GDP has been declining, reflecting the existence of deep- seated structural problems. These include inadequate exploration, under- capitalization and inadequate maintenance of the existing mines, and an excessive dependence on tin. Past political instability, adverse mining policies and lack of long-term credit have discouraged investment and have largely contributed to the present situation. However, the Government is determined to resolve these problems by initiating improved planning and more rational policies. Its immediate aim is to levy equitable mining taxes, establish a central fund to finance exploration, and open public lands for joint exploration and exploitation by public and private interests. The gradual change-over from the inadequate production tax to a profits tax is expected to induce mining firms to modernize and expand existing operations and to search for additional mineral reserves. Opening of public lands and the creation of an exploration fund should further facilitate mining expansion and induce the formation of joint ventures between foreign and local investors, private or public, thereby bringing in foreign capital, technology and admin- istrative know-how. 22. Past efforts to inject capital into the small mining sector achieved very little, mostly because it was not accompanied by appropriate technical assistance. Bank Group assistance to Bolivian mining, based on the recommen- dations of the 1972 sector report, 1/ is focused on the provision of term credit for private mining, but it also contains a substantial technical assistance component. The first operation of the Bank Group in the Bolivian mining sector, i.e., IDA Credit No. 455-BO, provided term financing for medium miners through Banco Industrial and technical assistance, including studies of mining taxation and of an exploration fund. The Credit also partially covered costs of a survey of small mines as a prerequisite for the proposed small- scale mining development project. The portion of the Credit sublent to Banco Industrial is now about 60% committed and should be fully committed by end-1976; the other components of the Credit are proceeding as scheduled. The most recent Bank/IFC operation (approved on 22 June, 1976) for Banco Industrial will further increase financing available for medium mining. The proposed project is designed, among other things, to finance modernization and expansion of potentially viable small mining units and to gradually transform BAMIN into a more effective development finance institution for private mining, thus com- plementing the gains made with the two preceding Bank Group operations. 1/ The Mining and Metallurgical Sector, Report No. P1-14, dated December 7, 1972.  - 8 - B. Financial System and Financing of Mining 23. Bolivia's financial system, which consists of the Central Bank, commercial and specialized banks and other financial institutions, is still at an early stage of development. Nevertheless, rising incomes, greater political stability, and more development-oriented government policies have accelerated financial development as reflected in the formation of some new banks and financial companies. Also, the share of overall credit going to the private sector has increased as rising public revenues--due to higher oil prices--have reduced the need for deficit financing. However, while commercial banks' resources and lending volumes have increased, average lending terms have been shortened to less than one year following the full commitment of concessionary funds derived from foreign capital assistance. As a result, short-term working capital credit is now easier to get, but the scarcity of term financing for investment and permanent working capital remains severe. Of total credit, only 9% was allocated vo minin,g during 1972-75, over half of which was for helding mineral stocks. .jEven thle largest medium mining firms have difficulties in raising long-terS funds. 'Banco Industrial has only recently become a major source of term financing for private mining and the most recent Bank/IFC operation should provide signj.- ficant additional funds for medium mining financing. Small mines generally have no access to credit, except for cash advances from BAMIN for future mineral deliveries and short-term loans for purchases of supplies from BAMIN. In turn, BAMIN's credit operations have been seriously restricted by the institution's decapitalization and its very limited access to loan capital. The proposed projelct is expected to improve the traditional pattern of BAMIN's credit activities and make term credit for small mines available. 24. Real interest rates in Bolivia have generally been positive since the late 1950s with the exception of about 18 months during 1973-74 when there was a spurt of high inflation following the 68% devaluation in 1972. However, real interest rates have again turned positive after mid-1974 when inflation returned to a level of about 7% per year, at which level it is expected to remain over the short-to medium-term. 25. In order to mobilize domestic funds for productive uses, interest rates on savings deposits in commercial banks were raised from 9% to 10% in 1974 and, at the same time, the Central Bank started to guarantee the dollar value of the savings deposits of individuals. In August 1975, the dollar guarantee was extended to time deposits, whose interest rates were raised to 10-1/4% for 90-day deposits and up to 11-3/4% for 360-day deposits. Central Bank regulations permit commercial banks to charge nominal interest rates of up to 15% per annum on loans made from their own resources. However, because of taxes, commissions and prepayment of the interest normally required by banks, the effective rate to the borrower may exceed 23% on "productive" peso loans, and 33% on personal and commercial loans, usually of short-term maturity.  - 9 - 26. In comparison to commercial banks, the cost of term loans made by development institutions, such as BAMIN, is lower. The maximum lending rate on development banks' own resources was 13% per annum until early 1976, when the rate was raised to 15% per annum to conform to the maximum nominal rate of commercial banks. Including a closing fee, this rate may reach 16% p.a. The need for such a rate increase had been discussed with the Central Bank during project preparation and it will facilitate mobilization of domestic resources for investment. Some development institutions, e.g., Banco Industrial, lend their own funds denominated in U.S. dollars, making their clients responsible for the exchange risk. Development funds from Interna- tional organizations may not be relent at more than 12% per annum in foreign currency. Subloans from these international sources are usually denominated in U.S. dollars and, after some fees and commissions, their cost to the borrower is about 13% per annum. 27. Interest rates in Bolivia are determined by the Central Bank, and though there have recently been notable improvements in the financial system, it still suffers from structural weaknesses. The term structure of interest rates can still be improved as the present rate structure does not set a proper differential between short and longer term loans. It theretore dis- courages term lending, since it offers cbtimercial banks no incentive to pay, higher interest rates to mobilize longer term savings. As to the future, how- ever, the financial system should be able to increasingly mobilize resouvrces and this will assist in lengthening the average term of both assets and liabilities. The re-establishment of positive real interest rates has set the stage for healthy financial development and made feasible the initiation of a small capital market which would aid in the efficient allocation of investment funds throughout the economy. PART IV - THE PROJECT 28. Project Description. The proposed project would be the Bank Group's third operation in Bolivia's private mining sector and the first operation for the benefit of small mining firms. As was the case with the first Bank Group mining operation (IDA Credit No. 455-BO), the proposed project also provides for important technical assistance inputs, in addition to loans for small mining investment. The project, whose total costs are estimated at US$18.2 million equivalent, has three components, as follows: (a) A program of supervised loans to be channelled through BAMIN to potentially viable small mining firms, including financing of feasibility studies, combined with obligatory technical assistance to these firms during project implementation;  - 10 - (b) continued assistance to GEOBOL (initiated with IDA Credit No. 455-BO) in order to strengthen its capacity to prepare prefeasibility studies of small mining investment projects, provide technical assistance to subloan recipients and carry out prospection, exploration, and evaluation of mineral deposits; and (c) a program of technical assistance to the Ministry of Mines and Metallurgy for strengthening sector planning and carrying out cadastral surveys, and to BAMIN designed to improve project appraisal and supervision, and management control. 29. Overall project responsibility would rest with the Ministry of Mines and Metallurgy. The Ministry would make the necessary arrangements to assure coordination among the participating agencies, supervise implemen- tation of individual project components, carry out the cadastral survey, and administer the technical assistance contracts for its planning depart- ment and BAMIN. GEOBOL's small mining unit would select potential mining subprojects, prepare prefeasibility studies, and assist subloan beneficiaries in project execution and mining management. BAMIN would be in charge of the execution of the credit component of the proposed loan and be responsible for appraising, approving, financing and supervising the small mining subprojects. 30. The loan summary is provided in Annex III. The proposed project was appraised in November/December 1975. Negotiations were held in Washington in August 1976 with a Bolivian delegation led by Mr. Armando de Urioste, Undersecretary, Ministry of Mines and Metallurgy. The Appraisal Report (No. 1236b-BO dated September 1, 1976) is being distributed separately to the Executive Directors. 31. Cost Estimates and Financing Plan. The proposed Bank loan of US$12.0 million would finance the foreign exchange component of the project, representing 66% of the overall project cost of US$18.2 million. Of the loan proceeds, US$9 million would be for subloans to small miners; US$1.9 million for continuing assistance to GEOBOL; and US$1.1 million for technical assist- ance to the Ministry of Mines and Metallurgy and BAMIN. No other external financing for the project is envisaged. Local costs would be shared among the project beneficiaries, i.e., the Ministry of Mines and Metallurgy, BAMIN, and sub-borrowers, the latter financing at least 10% of their investment. In order to enable BAMIN to finance local investment costs, its resources are being increased through a US$2 million contribution from the Central Govern- ment to BAMIN's paid-in capital (see Section 3.03 of the draft Loan Agreement). The Government has also converted into equity a Central Bank loan to BAMIN of US$3 million equivalent.  - 11 - 32. The US$9.0 million credit portion of the proposed Bank loan would be onlent by the Government to BAMIN in U.S. dollars at the same interest rate as the Bank loan. The exchange risk between the currencies disbursed by the Bank and the U.S. dollars would be assumed by the Government, which would charge a fee of 1/4 of 1%, to be collected from BAMIN's sub-borrowers. The US$280,000 portion of the Bank loan for BAMIN's technical assistance program would be given by the Government to BAMIN as a grant. The Government will also bear the total cost of the technical assistance programs for GEOBOL and the Ministry of Mines and Metallurgy. Each of these institutions would administer its technical assistance program under the general coordination of the Ministry of Mines and Metallurgy (see Section 2.09, 2.10 and 3.01(b) of the draft Loan Agreement). The loan is expected to be committed by the end of 1979 and fully disbursed by the end of 1980. The proposed loan would be repaid on the basis of the aggregate of the following two amortization sche- dules: (a) for the US$9.0 portion relent to BAMIN, repayments would be made over a maximum period of 15 years and would follow a flexible schedule based on the aggregate of the amortization schedules of BAMIN's subloans; and (b) for the US$3.0 million non-credit portion of the Bank loan, repayments would be made on the basis of equal semi-annual principal payments over a period of 15 years including a three-year grace period. 33. Subloan Terms and Conditions. Subloans would normally be for 8 to 13 years, including up to 3 years of grace, and would be denominated in U.S. dollars. BAMIN would relend Bank funds at an annual interest rate of 12%, plus various fees and charges (Section 2.01 (b) of the draft Project Agreement) which would raise the effective cost of BAMIN subloans to about 13% p.a. At the current Bank interest rate, BAMIN would have a 3.1% spread on relent Bank funds. Subloans would be limited to projects selected on the basis of GEOBOL's prefeasibility studies. Subloan applicants would have to submit a feasibility study, prepared by a qualified consultant acceptable to a supervising committee composed of representatives of the Ministry, GEOBOL and BAMIN. 34. Approval Limits. As BAMIN has limited project appraisal experience, Bank approval for all subloan proposals would be initially required. However, it is expected that a free limit in an amount to be determined by the Bank would be established after Bank review of the initial subprojects (see Section 2.02 (a) and (c) of the draft Loan Agreement). A free limit of US$350,000 would ensure that the Bank would review a representative sample equalling at least 50% of the credit portion of the loan. 35. Procurement and Disbursement. The loan proceeds would be used to finance the foreign exchange costs of imported and domestically procured equip- ment, materials and services, including the foreign exchange component of civil works contracts. Procurement of mining machinery and equipment for sub- projects would be in accordance with standard practice for DFC projects, i.e.,  - 12 - on the basis of quotations from several suppliers. Equipment leasing and service contracts would be eligible for partiaL financing under the proposed loan. Equipment for the Survey of Small Mines and technical assistance programs would be procured on the basis of International shopping, with the exception of diamond drills and accessories (pric;ed at about US$200,000 each) which would be procured through lnternational competitive bidding, in accord- ance with Bank Guidelines. Expenditures for some! equipment and services needed by GEOBOL prior to the signing of the proposed loan for continuing the survey of small mines would be reimbursable up to a maximum of US$250,000. Also, retroactive financing not to exceed US$50,000 would cover foreign exchange cost of ongoing planning assistance to the Ministry of Mining and Metallurgy. Disbursements would be made dlrectly to the institution in charge of implementation of the respective project component. Disbursements would cover the full foreign exchange cost of direct imports, 35% of con- struction costs, and 60% of Imported goods purchased locally, both representing the estimated foreign exchange component (Section 2.02 (a) of the draft Loan Agreement). Foreign equipment suppliers are well represented in Bolivia. Participating Agencies A. Geological Survey of Bolivia (GEOBOL) 36. In 1974, GEOBOL established a special unit to carry out the Survey of Small Mines financed under IDA Credit No, 455-BO. The professional staff, which consists in its entirety of Bolivian nationals, is adequate. The survey of small mines, while falling short of its original scope, has produced acceptable results, considering the novelty of the task, the lack of data and the hesitancy of small mines to provide information. About 5,200 Indi- vidual properties have been identified and classified according to their development potential. Prefeasibility studies on the most promising mines have been initiated and on the first ones have been virtually completed. 37. Under the proposed project, the Unit would be responsible for identifying potential subprojects, carrying out further prefeasibility studies, and providing technical assistance to sub-borrowers for project implementation and mine management either directly or through arrangements with other suitable entities or consultants. B. Banco Minero de Bolivia (BAMIN) 38. BAMIN, which is entirely owned by the Government, was established in 1936 as the principal credit and marketing institution for private mining but at present is primarily oriented towards small mines, BAMIN has a history of inefficient operations and, in the past, it was often Influenced by non- economic considerations, This resulted in deterioration of BAMIN's loan portfolio and in its decapitalization. The Government now aims at the rehabilitation of the entity and Its transformation into an effective devel- opment bank for private mining. Institution building at BAMIN therefore is a central element of the proposed project and is in line with the Government's  - 13 - mining development policies. Steps have already been taken by BAMIN to strengthen its financial position and organization. While a direct Bank loan to BAMIN at this time is not proposed, BAMIN can serve as channel for Bank funds and should also be capable, with the technical assistance envisaged under the proposed project, of undertaking satisfactory appraisal of mining subprojects. 39. Management and Staff. BAMIN's eight-man Board of Directors includes the Minister of Mines and Metallurgy as its president, three representatives of other Government agencies, three representatives of the private mining sector and one representative of BAMIN's employees. During project prepara- tion, the number of Government representatives was increased from three to four in order to reduce the excessive influence of private mining interests, and to assure speedier implementation of Government policies. Rotation of management, which was serious in the past, is less of a problem now; the present manager, an able professional and administrator, has been in charge since early 1975. BAMIN employs a total staff of about 500 people, of which 250 are unskilled workers employed in BAMIN's warehouses. The professional staff of 36 would be upgraded, in part in connection with the technical assistance included in this proposed project, and, in part, through partici- pation of the staff in professional courses both in Bolivia and abroad. 40. Organization. BAMIN is divided into two functional units with separate operational accounting, i.e., the Trading Department in charge of purchasing, storing and selling minerals, and the Credit Department in charge of providing financing to mining enterprises and the selling of some mining supplies. In order to ensure adequate financial control over the two distinct operations, BAMIN has fully assigned BAMIN's existing assets, liabilities and capital resources between the Credit and Trading Departments and will not transfer resources from one of its departments to the other (see Section 3.04 of the draft Loan Agreement and Section 2.09 of the draft Project Agreement). As a condition of loan effectiveness, BAMIN would have to submit to the Bank the first financial statements separately for each department in a form and substance satisfactory to the Bank. External audit of the effectively sepa- rated departments would be performed starting with the accounts on December 31, 1976 (see Section 6.01 (e) of the draft Loan Agreement and Section 3.02 of the draft Project Agreement). 41. The Credit Department would administer the credit portion of the proposed loan. It has been recently reorganized and its technical office upgraded. The professional staff of this office, i.e., five engineers and one financial analyst, has the necessary technical background but lacks experience in project appraisal and supervision. To strengthen its staff, BAMIN will hire an additional experienced analyst with good background in economics (Section 6.01 (f) of the draft Loan Agreement). For assisting BAMIN in training its staff and in establishing satisfactory project appraisal and supervision techniques, two consultants are to be financed under the proposed loan. Additional consultants would be employed to improve BAMIN's management control system, including accounting. The hiring of such consultants would be a condition of loan effectiveness (see Section 6.01 (h) of the draft Loan Agreement).  - 14 - 42. Policies and Procedures. The Credit Department's procurement and disbursement procedures are satisfactory. BAMIN's policy statement, which was recently adopted and which includes lending criteria in general and for small mining projects in particular, is adequate. It establishes a 4:1 debt/equity ratio, and an exposure limitation to any single client not to exceed 25% of the Credit Department's equity. It also stipulates that BAMIN will require its clients to improve health and safety conditions. As a condition of loan effectiveness, BAMIN will approve revised internal loan regulations pursuant to its Policy Statement (see Section 6.01 (g) of the draft Loan Agreement). 43. Past Operations and Results. In the past, the Credit Department has mainly extended working capital loans to small mines averaging less than US$50,000 per loan. Although 3% of the number of loans representing about 60% of the loan amount outstanding went to medium miners, most of them derived from special foreign commercial bank credit lines designed, in part, for inventory financing. Occasional equipment financing was also made on the basis of credits extended by bilateral foreign assistance agencies. Including the latter loans, the debt/equity and current ratios as of December 31, 1975, are estimated at 4.0 to 1 and 1.5 to 1, respectively, which are both satisfactory. While BAMIN is not exposed to foreign exchange risk as loan- able funds obtained abroad are onlent in foreign currencies, BAMIN's debt to equity ratio would deteriorate in the event of a devaluation to the extent that there are peso-denominated loans out of its own funds. Therefore, the Government has agreed to take any necessary action to ensure that the debt/ equity ratio of BAMIN's Credit Department is not affected by any devaluation of the Bolivian peso (see Section 4.02 of the draft Loan Agreement). 44. The Credit Department has had reasonably good loan collection experience and was able to obtain a modest return on equity of about 2.2% in 1975. While this return on equity is still low, it represents an improvement over the previous years, since BAMIN had to pay corporate income taxes for the first time in 1975 and considerable provisions for portfolio losses were also made out of 1975 earnings. Of the Credit Department's arrears, those over three months amount to about 10% of the loan portfolio, which is acceptable considering the nature of operations. Reschedulings and write-offs have been insignificant in terms of loan amounts and mostly affected loans to very small miners carrying out precarious operations. Provision for bad debts was increased at end-1975, from $b 9.3 million to $b16.5 million (approximately US$825,000). 45. BAMIN has no uncommitted resources. The Government would contribute US$2 million to BAMIN's capital during 1976-78, to be applied exclusively to the Credit Department's equity, which would be sufficient to finance BAMIN's contribution to the proposed program. Payment of a first installment of US$200,000 equivalent is a condition of loan effectiveness and would be followed by US$1 million in 1977 and US$800,000 in 1978 (see Sections 3.03 and 6.01(c) of the draft Loan Agreement).  - 15 - 46. Projected Operations and Financial Prospects. As a result of the proposed loan, BAMIN's annual loan disbursements should triple during 1975-78 to $b130 million in the last year (approximately US$6.5 million). Return on equity is expected to rise above 4% for the whole 1976-79 period. This expan- sion is to be achieved while preserving a 4:1 debt/equity ratio, a satisfactory current ratio, and an acceptable debt/service coverage. Project Benefits and Risks 47. The proposed project would contribute to mining development in various ways. By providing investment financing to small miners, it would fill a major gap in the financing of productive investment. It would help to develop viable mining enterprises, transform BAMIN into a more effective development lending institution, increase the technical capability of GEOBOL, and improve the Government's sector analysis and planning capacity. The latter should result in more rational policies in the mining sector. The project should also contribute to the upgrading of local mining consulting services and the establishment of equipment leasing and service enterprises in Bolivia. 48. Based on a preliminary analysis of subprojects suitable for financing under the proposed loan, it is expected that the average economic rate of return of small mining subprojects would be about 20%. This rate, while satisfactory, would be lower than for medium mining subprojects financed through Bank operations, as small mining investment would be relatively costly (averaging US$600,000) and involve major initial costs of installations and equipment in presently underequipped mines. Projections indicate a contribu- tion from the small mining subprojects to Bolivia's foreign exchange earnings of about US$110 million (net of import requirements) and to Government revenues of about US$35 million, cumulative from inception through 1985. Direct employ- ment generation would be relatively minor, due to the need for mechanization of underequipped mines to increase output. However, it is hoped that workers' incomes would rise as a result of increasing labor productivity in mines participating in the project, as well as increased exposure of these mines to Government scrutiny. Health and safety standards in participating mining firms should also improve as modernization of these mines progresses and in accordance with conditions to be attached to subloans. 49. The project is relatively complex due to the number of institutions involved and the need for substantial technical assistance to improve the administrative and managerial capabilities of the executing agencies and sub-borrowers. Therefore, there are potential difficulties which could initially delay project implementation. Also, since this is the first Bank Group operation in the small mining subsector, which is inherently risky, unexpected problems may be encountered during project implementation. Close project supervision combined with constant advice to executing institutions and the Ministry of Mines and Metallurgy, which has overall coordination responsibilities, will therefore be required.  - 16 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 50. The draft Loan Agreement between the Republic of Bolivia and the Bank, the draft Project Agreement between the Bank and BAMIN, the Report of the Committee provided for in Article III (Section 4 (iii) of the Articles of Agreement) and a draft Resolution approving the proposed loan are being distributed to the Executive Directors separately. 51. Features of the Loan and Project Agreements of special interest are referred to in paragraphs 31, 32, 33, 34, 35, 40, 41, 42, 43, 44 and 45 of this report. Special conditions of effectiveness are that the Government: (i) has made the first installment payment of its additional contribution to BAMIN's capital of not less than US$200,000 equivalent; (il) has caused GEOBOL to prepare satisfactory terms of reference for consultants required for the execution of its part of the project; and (iii) has selected satisfactory consultants for the cadastral survey; and that BAMIN: (i) has delivered, in form and content satisfactory to the Bank, the latest balance sheet and profit and loss statement separately for the Credit Department and the Trading Department; (11) has hired a qualified project analyst; (iii) has furnished satisfactory internal loan regulations; (iv) has hired a consultant to set up a proper management control system; and (v) has selected consultants for technical assistance in project appraisal and supervision. 52. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATIONS 53. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachments September 8, 1976  'rae of 5 pages T`AdHL 3A BOLIVIA SOCIAL INOICATORS UATA SHEET LAND AREA (THJU (4M2) - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - OLIViA FiEF7tkLNCE COUNTRILS C 1970) )'UTAL 1 39d. 6 MUST .~. AURIC. 312.9 1960 11 IAT L5T :m4- ~ AmEA0OoN HONDJURAS PERU * u.NP PEAt CAP ITA C USS) 120.0 190.C 320.0 233.0 29C. C 5 20. 3 POPULATION AND vITAL STAtlSTIC-4 ,'3PUJLATION (M10-YR. MILLION) 3.8 4.9 5.6 5.8 2.5 13.3 POPULATION DENSI TY PE .JUARE rnY. 3 .0 4.0 5. 0 1 2. 0 22. C 10. 0 PER z,3. NM. AGAICULTURAL LA%ND 114.0 /a. . 1.0 37. 0 VI TAL STATISTICS AVERAG AIRIN RAI (/HOU) 46. 6 4A. 4 4 3. 7 42. 1 5 1. 42. 9 AVERAGE DEATH RATE W/HOU) 22.5 19.7 18.0 23.9 19.1 14.1 INFAAT MIORTALITY RATE C/THOU) .. 15 4. 0 .... 6 5.0 LIFE :x?EEcrANCY AT 81RIrH (YRS) 4 2 .3 4 5. 3 46.8 41.0 49.4 5 3.:4 oj.,i 4P3,F1UCTION SATE .. 2.8 2.8 2. 7 3 .4 2. 9 ,'JPJLATI3N GiOHTI RCATE (Z) TOrAL 2. 4 2. 6 2. 6 2.0 2 . f/e 2. 8 URBAN 3.b 4 .2 4~.1 b-1 7 .9 5. 0 JYakN POPULATION (D UF TOJTAL) 2 9 .2 3 4 .6 37. 2 23.3 3 2 .0 5 3.30 A.~E STRUCTURE (PERCENT) 0 10 1. YEARS 4 2. 4 41.9 41.6 /,4 3.0 4 6 .7 45.0 o aa 15 TO 64 YEARS 54 .0 54 .6 55.0 o9 54. 0 5 0. 8 52. 0 a9 65 YEARS AND OVER 3. 6 3. 5 3.4 / 3.0 2 .4 3. 0 La A.E )L?ENOEAZY RATIO 0.9 0.86 0. /9 09 1 .C 0.9 /a -_'UVUNIC JEP; lQENCY V ATI IO 1./b 1.0 /a, 1. 1.~b I2 1.:5 /a 15 ~~HILY PLAUN.,rl A-CLPTJVli (,.UMJLATA; V TjOLu) . .. 2 0. 7 Ui~nS (% JF MAKAVIE3 .OMIE) . . ;.N?'LUYMRL:V TOTAL LAH3R FORCE (THIOUSAND) 2000.0 /_2. 43OU.0 2500.0 2803.0 800a. 0 4 300. 0 /a LAaOR FORCE IN AGRICULTURE CZ) 67.0U Lcd 6 5. 0/b 6 5. 0/L 82.0 6 5 .0 45.09 J,4E4PLOYEJ CZ OF LAAIJR FORCE) 14. /9 16 .0 la.0 8.0 5. /9.o itNCORE 01SVVIBUOTION I OF PRIVATE INCUINE SECID AY HI.HEST 53 OF HOUiEH0LDS 36.0 /9 .. 28.0 31. 4 C2 HIAHEST 200 CF HOU3EH0L0S . 59.C C9 .. 60.6 /. 62.6 C LIWEST 2 0 OF H3USEHOLDS 4. K 0C 2.. .. 2.5/ L'ThE.T 403 OF HOUOIEOLS . 13 a~ .. .4 /8 . ~ISFRldO,Tj3N OF LAND JWNiERSHIP . UVNE) Hf TLlF 13% OF ..WNERS .. ... 93.0 CANED If' SIALLeST lOC 3ANEAk.. .... 0.1I HEALT4 AND 40--illTIN PJIPOL&TI0N PEk ?hYSICIAN 3700.0/9, 2300.0 ..2 5 960. 0 3710.0 /j 1 920. 0 PUPIOLArtIJN PEAi NURSING PERSO,. . 230.0 2370.0 /d.f 2 470.0 . 3 2 00. 0 P,PJLAT 10.4 P0. AUSPIIAL SED 580.0 490.0 ..480.0 570.0 470.0 .'cJ' C.~174 SJr'PLY OF C4LjO IE3 CZ 3)' RE;jI~EmE.NT.,) 6 9 .0 77.0 79.0,9 6.0 96.0 98.0 PRJTEIN (GkAM5 PER AYIK) 43.0 46.0 46.0/9 59.0 58.0a 6 2.0 -uF kHlC.-t ANI1MAL A~-D 0UL3 .. 14.C /d -. 23.0 /a~ 25.0 24. 0 uCATAl 7ATE C/HOU) A.)ES 1-4 11.0 A I 7.4 I. 0. 0 1 2. 4 _bUCAT jUN 4UOJUJTEO :NFJLLM-NT RATIU ''INAVV 33~~~~~J3C 67.0/9, 71.0 /o. 73.~~~~~~~0A /~,108.0 86.0 _~ 107.0 i.30N3ARY SLHJUL 11. 0 a 2 0.0 Le 3 1.0 ~j9.0 /b~ 10.N / 35. 3 YL0 3)' iCVOJLING PROVIDEDD (Fl NUT AKOD iECCNC L.CVEL) 14A.0 12.0 1 2. 0 1 4. 0 /2. 12.0 12. 0 VOCATIONAL ENROLLMENT CT~ OF SECCuJOAR Y) 14. 0 13S.0 / 1fI0. 0/a. h 22.0 186. 0 17.0 /d ADULT LITi0RCY PATE (). 40.0 . 12.0 . 61.0a e RSJNS PER 34UJIY (AYEiAGE). . OJCCUPIED UOELLINOa WITHiOUT PIPED WATER CI) 8. ACCESS TI ELECTRICITY890, (0 OF ALL OkELLALGS) 2 2 .0/, . AURAL 3WELLINUS CJNNECTED TIl ELECTRICITY C)8. 0/ CONSUIPTILON .4ADIU RECECIV7CS (PER THOU POP) 73.0 288.0 . 36.0 57.0 134.0 eASSE N57R CA6, ( PE R THOU POp) 5.0 4.0 . 6.0 5.0 17.0 E..E~TKICIYY KWHi/YFA rEF CAP) I11 . 0 160.0 I17.0 201.:0 12 7.0 407.0 AEWSPRLNT (K./ Y.-4 PER CAP) 1.* 1.0 0.9 . 1.0 3.6 SL.~ (OTES AN4D 0EFINIT;W.S ON iEVERbE  ABNER I Page 2 of 5 pages NOTES Unless Other ntd data far 1960 refor to any yoar botta-a 1959 ted I9b1, [or 1970 bat-oon 1968 end 1970, and for the Most Rleet Esti.ttat beMcsan 1973 and 1975. - P are has bent, selected an an abjoctino country bennuse Of siti1ar nat-ral rendition and otperahla human and resorce endto,cete. BOLIVIA 1960 /a 1963, /b Ratio of pepalatien sedar iS ned 65 and eve to itotl lnbor force; Ic 19h5; Id As percen.tage of labor Eerie in nepleytnen-t; /a 7-12 and 13-18 yearn Of age -sp-eively. 1970 /. Ratio of pepulation under 15 aned 65 end over to total labor farce; /b A. peroentage of labor farce is aepleynent, In Popualtionnt /d 1964-66; /n 6-13 eed 14-17 years of age; If Betwen 1965 and 1970 the duration of general neenenry education stan reduced frnm 6 en 4 years. MOST RICEINT ESTIMATE, In 1971; /b Ratio of populatiae under 13 and 63 and veer to teta1lSaber faree; Ic An percntage of labor farce In e`tploy,seet, /d Including nidaive; /e 1969-71 averagc; If 1972; LT b-I3 aned 14-17 pests Of egee renpectivaly; /h Between 1965 ned 1970 tbe deratice of genera eodary edaati.n was reduced free 6 to 4 yearn. CAMEROON 1970 /a [964-66; /6 12-is years Of age; I. 13 yeara for lEnt Catnero.- HONDURAS 1979 /A Ratio of population under 15 and 65 and ovr to total Saber Eerie; /b 1967-68 population; l/e Regieteend, net all practicing in tbe country; /d 7-12 end 13-18 year. of age renpectively; _eLa.Lrgely due te emigration7niece 1969 of El Salvadorc...s renident Ln Honduran, Population groth rate is laster than rate of natural increase. PERU 1970 la gEaluden, Indian Jungle population; lb urban areas only; /c Eononically active populatiem; /d Including evening sehonla. R5, September 3, 1976 DEFINITIONI OF SOCIAL INDICATORS Lend Area (thos knn2) Pocolation Net nusinlg pterson - Population divded by omber of practicing Tetagl- Total serface area conprising [and ore end inland waters. ..le and finale iradunre esroes, "trained Or 'aerrifled" noea-, ad, Agric.- Meat recent estiaeate of agricultural area aned temperorily or ...eillory personne w.1itb trining oreprica perm.enetly for crps, pastures, narkset & kitchen gardens or to lie Peecllaco ner hbosrital bed - Popelation divided by nsoter Of hospital hods fallow. -nifable i Isplic seth private general and epecialioed bosplital ad rmr,% Dit. -lGtU p.r -pit. ~~~~~~~~~rehabLlitation centers, .ecludes nuinisg homn. and astabLahnn-te far - Synri-cpit ei-min at curretl mackt prinena -stdilad preventive core esc aed Y nnecnversion esihod an World Snask Atllen (1973-75 knsal); Per caPite supply of Moeis( of reernet) -Ceputcd free, energy 196W, 1970 .ms 1975 dsts. equivalent of net fend supplies available in country per capita par day; acalla-ble supplies comprise domestic proclacrion, importe lens esports. P,p HIato and vtaL tatinLics and changes in tack; net n-ppLine enclose antnal feed, aenda, q.anti- fyBoi9tLOn (7 id ZirflIm n Tos at -y7c,.s.,s,.lus, ties 'no-d is fead po-ene g and IDsne In distribetiom; rqieei overage of w- ond-year -ncleecen; 1960, 1970 and 1975 data, stre ac-tivtd by FA0 based on phyni,Olaical neada for no.-a activity and health -onidering -serescreetol t-nperatnre, body cOighite, age and oem dlotribo tioun of Ppuplation, and allowie 10% far woate at ..oss- fonslarlon denaity- cet esoare lot Sid-year Population pet eq.ata kilo- held level. enter (110 heccac-) Of total are.. Per capita aeppI of protein <ctees per day) - Protein rosiest of pcr Popeletion densiy - on sar eefarc.ln I--Cpted as above for caia e spl OF feed per day, not aupply of leod is deflied as egriculiural lasi only. a~~~~~~bove;' reqelreoesia fee all coutries notablieheduby fIDA gE.onAic vit-I Statistics ~~~~~~~~~~~~~~Reneancrh Services provide for a nini-o alwneof 60 grams Of total Vital liscistica ~~~~~~~~~~~~~proceSs per day, and 20 grarm of -aimal and pulse pretaina of sItlb Crude birthrt oenaead- Annual liee itirtha per thosaund of aid- 10 gee hudb enlpeen heesadrsaeiwcta b yes pplco,inya arilhsatie aegan sdieg in 1960 and 1970, of 75 rat of itatl Protein and 23 grams of animal protein an.a aiud fe-aeaeaeedgin17 fonathrecen etimateavraga for thse world, proposed by yAO in the Third World Peed Survey. Crdede th rate n hos - AnnualI deaths prtoaad of old-year Per eanita Brotein espey iron animal and Pslee - Pmetini nupply Of lend populcim;te-year arsibantic averages cending in 1960 and 1970, aed deieP te eei n plc ngasprdy filee-year ovetre9 ending in 1975 for moat recent estie.tac. Deathrated I/tou ag.s n ples i-n Aca dgacb per tbd an iyaegru Infant motltAat /b An..aI deaths ef infants under one yearo 1-4 yers, tho chlren in4 this.. age gdeutsp,ages teo d en amginicatro age Pee thnusoud live births.- .r,t id. L h.aegop .getda nid.tro Lifa enncac tbrhCrl-Anerage itober of years of life renainig ealenttitin.. at birth; usually fine-year averages cedieg in 1960, 1970 sod 1975 for Education developing countries..olue someirto-piayeho naleto l gsn iras cenrod-ntion race -Average cuo,ker of lien dasghters a omn Jtll pertedntae lpr1 ryscol-g poplaIon; inIludeof abldeem age ba in her normal Preprdctive Period if abe esperiencee present age- 6-li yeanbtajsetordfeetlstsofpiayeoain sPecific fertility rete; auall1Y fle-year averages ending is 1961, Lot coontriebu wi -th univrsal ecn egt.- Pi education,enolnt ayeed117 1970 aed 1973 for derelopieg -ntoso trioa.sne oe uisar bnieloo- aov d. th,e offieiat acyo ag.e. 07 ,PopltI_n growth rate 1%) - total - Cuepo...d a..ual growth races of mid- Adjused e Pupine s arati be- se ondry nb o -h off puta d anoo above year popslatiea for 1930-61, 1960- 70 . ad 1970-75. sed edaryed uca-tio requies a . ead e fhour- yeanpt ppoed pribo ary Papulati n grwi ttef.) - sehen - Competed tike growth rate of total InstructIon; proide general nottina omr iearcbef tpraining .. pbpiilyOf; diffe-rent. dfnitrion fahsara a.fec.aaa instrunt;an for pupils of 12 to 17 years Of age; nerreaponden- bilitylofdata~ ftt.)-Rtoo ubnr o. omougcaatcfee cou..rses are geceraIly occluded. dferet dfiniiions of ura'aesmy affeci nmparobiliiy of data scnln,arnnnaybd veat mlinstruc Tion 1 n ybepar- o neetog counAts ic. tianlyrorotipnerey beoleded iRe strucor: feree)- Children (0-14 Yeare)a working-age (15-64 years), Voceilaa nrlno 1.o ecnay -rVocational institution end retired (65 years and once) as percentages ~of nid-year population. isnlude elaol nec lO te rguawihoeae A -eenec atI -Ratio of POPs1ation under 15 end 65 and over t. inde pendently or as deparunenta of secondary inetrtutims. thsc fagsS hruh6. Ads1t literacy rate LX-literate adolte (able to red end wetat) aa E Dateicdpneceal - Ratio of Pepulatin under 15 and 63 and over percentaBe of total adult Population aged 15 yearn and over. to the labor force in age group of 15-64 Yearn. Fomily elannieg enooptar- -cm latine. ihos) - Comulaive comber efNoig acc eptors of bIrtch-anntre deie ne upeeo in fmly Persona oar roAn (average) - Average eunher of persona per room in Planning pregrocn stoe incpti on. Fomii elanieg -use,. 1% o earn d wc en) - Peroentages of married ou.spied cnetimldwellings in urban areas; dwellings ec.lude women afhild-bearing age (15-44 years) wab .use birth-control devices nn-peonanent Struecturee end enocspiad P.orte. to .1 - rri-d - in -.- age gr..p. ... Occupid dwllns ihot ladw ter 1%) - Oco-pied cOmVentio...i in nil carried socee in name age group.duelleg in uran and rural areas without inside er outside piped E.pl,ymnt -a~~~~~~~~~~~~~~~~~taer EaIiiie as Percent age af all uccapied dwellings. Ttapl lv rfarc Access tc eletricity(7 of all dwellngs) - C-Onvetioni dwelinjgs Total ohor frce i honsand) - loonoical1y active persons, Secluding wih Aenrc. inlvn ures sproto Ea ieiesi armedforces and unemployed bat eacluding hosovinna, etodento, etc.; urba and truraly ara. jV. uresa ecn fttld .i definitions in variou an..ntrien are not comparable. gura dwllng rureedaoelatiit ..-.np...a aoe e Leharforc Ia gaicliuc 1%) - Agricaltrora labor force (is farming, ruraltriilitayonly forestry busting and fishing) an ercegtagen of total labor forc..ruad. U-,sen!elyd (7 g ae fre _-SoPl1yed are uaually defined as persons CODsapro wh re able and.willing to Eaha a Joh, out of a job on a given day, Rado ecives" e h uo e l ye frciesltrdobod remined out of aJeb, and neeking stork for a Papcified cleaia, eldcsstognrlpbic per Athousand fi ppelaiom; fa ralde obrad not ..o. ing one web; nay not he comparable between cauntrfes dueit nicne reeiver Pbin peuniesand in yepuarniwhn ...gIntrd io o different de fimitlon of unemployed and Soures of data, e.g., enplyt- radio nets was. iVeeface dautafar recent years mayenrgitrbetcomarabl neat office Statistica, -a-PI. asereyn, oocpolaory unomploy-tnes Ic ane sainc act- coerien abolished.t o licnsing.y -tbecnpr.l Income dl rbto -Pretg tprvte I-ncome (both In cash and bled) Pn:Aeregeg iepa than POPighi perons egarludes unbupanios bea.rs and reevd byrebn %, richestf207., P-epeac 20% and poorsat 40% if military vehices.egtprn. X.d b1....hass d households. glace~~~~~~~~~~~~~~~~~~~K-rgifty kwh/yr met cap) - Annual consuption ef industrial, cons D___trib_t_______of ______ _r_ Ia-Peeretlal,lad~e y .Itis pabili and prima te elecicticity ie killowei bouts per napita, DIstriutin Pofr land ownrsi -an Pecerage. fln wedb elbegenerally based on prodsro dta, without allowance far [can.es in 10% and poorest 10% of lend sweets. ge~~8ida hoc allowing for imports and enperts of electricity. 1pleauth ..d Nutritt (".~~~~~~~Rwerle L /er Pe r cap) - Par capita ane..al acasomptiom In kilograms Puat im per rhyninian - Populatien divided by onubor ci practicing estimated from domeaticProdantion plea set imports of e-wprint. pyici4an qualified from a medical school at anversity level.  BOLIVIA ANNE.X I towmicDEVLOPMENT DATA (Am,owit n milons of U.S dollars) Actual Est. 19 73.. 1975 - 1980 17 95~~ NATIONAL ACCOUNTS 1973 -1974 752 -g 1975 1980 1985 Constant 1974 Prices in Million US$ Growth Rate Aa Percen+ of GDY Gross Domestic Product 1,606 1,6B6 1,Z773 1,8651 2,358 3,245 I. 5.9 6.6 100.0 105.3 105.4 Gains from Terms of Trade (+) -223 - _9 4O _21 _172 - - - 5.3 5.4 Gross Domestic Income 17,283 TM,6 1,8 ,72'3073 10.3 5.8 6.6 100.0 ~ 100-.0 T 100.0 Import (incl. NF'S) 409 519 608 615 812 985 21.9 6.0 3.9 30.8 36.1 36.3 Exports " (import capacity) -381 -588 -44 -48 -8 932 80 56 983. 64 2. Resource Gap 27 --4t6478 -5284 -5 -8. 5. 9. 34. 26. 26. -69 164 ~~~~~~~~~'*~~~T~~7 228 54 - - - ~~~~~~~~~4.1 9.7 10.2 Consumption Expenditures 1.187 1,336 1,466 1,477 1,901 2,478 11.1 5.3 5.4 Investment 224 281 382 421 564 649 79.2 87.1 85.0~~~~~~~~~~~~~~~~~~~~~~~79. 8.1 5. invetmen 11(inc. stocks) 24 28 32 41 56 69 30.6 8.1 2.8 16.7 22.7 25.2 Domestic Savings 196 350 218 285 336 595 5.5 9.0 12.1 2. 29 1. National Savings ~~~187 331 206 260 276 483 5.0 6.0 11.8 19.6 12.2 12.3 MERCHANISE TRADE Annual Data at Current Prices As Percent of Total Imports Food 27.7 40.0 55.4 58.3 93.0 156.0 41.4 10.9 10.9 10.3 10.4 8.9 Other Consumer Goods 28.7 33.0 62.7 67.7 111.2 192.5 47.8 12.1 11.6 8.5 11.7 10.6 Fuels 1.8 5.0 6.9 7.6 11.7 19.6 95.8 11.1 10.9 1.3 1.3 1.1 Raw Materials & Int. Goods 56.3 94.6 167.2 186.6 308.9 563.3 .72.3 13.1 12.8 24.3 31.3 29.5 Capital Goods 99.8 181.0 196.8 238.2 470.9 758.7 40.4 19.1 10.0 46.4 36.9 45.0 Other Goods ......5.2 36.4 44.9 29.1 51.9 88.5 12.9 2.9 11.3 9.3 8.4 5.0 Total March. Imnports 249.5 390.0 533.9 587.6 1,0475 1,78.6 46.3 14.4 11.2 'T00.0 T.o ThM.O Exports Primsary products 217.3 362.4 300.6 357.4 541.8 1,330.9 17.6 12.5 19.7 65.4 66.6 63.6 Fuels 64.7 185.7 148.7 157.5 304.1 588.9 51.6 15.4 14.1 33.5 33.0 35.7 o1v crude petroleum (46.8) (156.8) (106.6) (112.1) (229.5) (578.5) (50.9) (16.6) (20.3) (28.3) (23.6) (27.0~ Manufactu edmods 1.9 5.8 1.9 2.5 5.4 12.3 - 23.2 17.9 1.0 0.4 0.6 Total March. Excports -M3.9 --53.9 --51. 2 -M.4 T-51.3=T32.1 26.1 13.5 17.8 =00.0 *T00.o =00.0 Merchandise Trade Indices Export Price Index 51.3 100.0 92.4 96.7 131.7 188.0 34.2 7.3 7.4 Import Price Index 81.3 100.0 110.8 117.9 159.1 222.8 16.7 7.5 7.0 Terms of Trade Index 63.1 100.0 83.4 82.0 82.8 84.4 - Exports Volume Index102.8 100.0 90.6 99.2 119.3 165.6 -6.1 S.,71 6.8 VALUE ADDED BY SECTOR Annual Data at 1974 Prices As Percent of Total 1973 1974 1975 1980 1973.75 1975-80 Agriculture 401 425~- - 454 608 6.4 6.0 25.2 25.6 25.8 Industry and Mining 551 562 560 757 .8 6.2 33.3 31.6 32.1 Service 654 699 75 ....223 7.7 5.515--48--21 Total 1,606 1,686 1,773 2,358 5.1 5.9 100.0 100.0 100.0 PUBLIC FINANCE Annual Data at Current Prices Average Annual Growth As Percent of GDP (C'entral G'overniment) 1973 1974 1975 19-80 1973-75 1975-80 1974 1975 1980 Current Receipts 141.9 29 0 326 697 51.5 16.4 17.2 16.2 18.0 Current Expenditures 142.2 246 292 604 43.3 15.6 14.6 14.5 15.3 Budgetary Savings -0.3 44 34 93- 22.3 2.6 1.7 . 2.7 Public Sector Savings 68.6 209.1 145 344.6 45.4 18.9 12.4 7.2 8.9 Public Fixed Capital Formation 92.5 175.1 209 503.3 50.3 19.2 10.4 10.4 13.0 CURRENT EXPENDITUJRE DETAILS DETAIL ON As % Total Current Expend.) 1973 I97- 1975 PUBLIC SECTOR As Percent of Total Goods and Services 20.5 15.0 19.8 INVESTMENT PROGRAM ~ 1976-4980 Wages and Salsries 61.6 52.7 51.3 Transfer Payments 12.8 29.0 24.9 Agriculture 9.6 Other 5.1 3.3 4.0 Mining and Hlydrocarbons 23.5 Total Current Expenditure 100.0 100.0 100.0 Industry and Power 25.8 Transport sod Communication 19.0 Public Service and Social Service 22.2 SELECTED INDICATORS 1973-75 1975-80 1980-85 ~~~~~~As Percent of Total SELECTED INDICATORS 1973-75 1975-80 ~~~~~~~~~