Bolivia - Highway Maintenance Project

FILE Copy Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-2329-BO 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 HIGHWAY MAINTENANCE PROJECT May 19, 1978 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 EQUIVALENTS Calendar 1977 May 1978 Currency Unit - Bolivian Peso ($b) US$1 a $b.20.00 20.00 $b1 = US$0.05 0.05 FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS IDB - Interamerican Development Bank MTCCA - Ministerio de Transporte, Communicaciones y Aviacion Civil (Ministry of Transport, Communications and Civil Aereonautics) SNC - Servicio Nacional de Caminos (National Highway Service) UNDP - United Nations Development Programme USAID - United States Agency for International Development FOR OFFIC USE ONLY BOLIVIA HIGHWAY MAINTENANCE PROJECT LOAN AND PROJECT SUMMARY Borrower: The Republic of Bolivia Beneficiary: National Highway Service (SNC) Amount: U1S$25.0 million equivalent Terms: Twenty years including 5 years of grace at an annual interest rate of 7.5%. Relending Terms: The proceeds of the loan would be passed to SNC as a grant. Project Description: The project seeks to improve road maintenance in Bolivia by: (a) carrying out required road mainte- nance, including deferred maintenance, in the districts of La Paz, Cochabamba and Santa Cruz; (b) providing the necessary equipment, vehicles, tools and spare parts; (c) strengthening the National Highway Service; and (d) preparing a country-wide highway maintenance, rehabilitation and upgrading program. It includes the acquisition of equipment, spare parts, workshop tools and equipment, hand tools for labor intensive maintenance, and the provision of consulting services for technical assistance and engineering and economic studies. Project benefits consist of 12% average reduction of vehicle operating costs; not quantified benefits are reduced passenger time and accidents, and prevented economic loss by avoidance of road closures. The project faces no special risks, although realization of all the benefits will depend on the progressive raising of the beneficiary's efficiency. Estimated Cost: (US$ Million) Local Foreign Total Deferred maintenance 3.9 3.1 7.0 Equipment, vehicles, tools and spare parts 2.0 15.4 17.4 Technical Assistance 0.4 2.3 2.7 Studies 0.9 0.9 1.8 7.2 21.7 28.9 Contingencies 4.0 3.4 7.4 Total Project cost 11.2 25.1 36.3 This document has a restricted distribution and may be used by recipients only in the performance of their oMcial duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii - Financing Plan: The Bank would finance US$25.0 million; the Government would finance the remainder. Estimated Disbursements: (US$ Million) Bank FY 1979 1980 1981 1982 1983 Annual 3.0 14.3 3.4 3.1 1.2 Cumulative 3.0 17.3 20.7 23.8 25.0 Rate of Return: The economic rate of return exceeds 100% (the benefit/ cost ratio is about 12/1 and the present value about US$160 million). Appraisal Report: Report No. 2011a-BO dated May 18, 1978. REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF BOLIVIA FOR A HIGHWAY MAINTENANCE PROJECT 1. I submit the following report and recommendation on a proposed loan to the Republic of Bolivia for the equivalent of US$25.0 million to help finance a highway maintenance project. The loan would have a term of 20 years, including 5 years of grace, with interest at 7.5% per annum. PART I - THE ECONOMY Introduction 2. A report entitled "Economic Memorandum on Bolivia" (1546-BO) dated March 23, 1977, was distributed to the Executive Directors. Country data sheets are attached as Annex 1. 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. Even though Bolivia is one of the world's foremost exporters of tin, only a small part of the labor force is employed in the modern sector. The infrastructure is primitive and the road and rail networks reach only a fraction of the country. The combination of strong traditional ties within the indigenous communities and geographic, health and educational obstacles to population mobility has perpetuated the demogra- phic concentration on the inhospitable 3,000 to 4,000 m high plateau, the Altiplano. About half of Bolivia's population lives a physically, culturally and economically isolated subsistence existence in this region, which is rich in mineral deposits but limited in agricultural potential. 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 labor 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, recovered to its 1952 level by 1970 and was more equally distributed. However, the momentum of economic growth was again lost in 1969/71, when political instability led to declining private investment and deteriorating public finances. The deterioration of public - 2 - finances reflected a structural problem in the economy. Bolivia's public sector is proportionately one of the largest in South America and a source of livelihood for a sizeable segment of the population. With scarce employment opportunities in the private sector, pressures to expand public employment proved difficult to resist. Large expenditures on wages and salaries, combined with a weak tax system, have limited the resources available for public invest- ment. 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, the present Government faced the need to provide jobs for the unemployed and to revitalize investment and growth. Initially, this task was complicated by a sharp deterioration in Bolivia's terms of trade, which produced a weakening in the balance of payments and a further deterioration in public finances, eventually leading to a substantial devaluation in 1972. However, more rational economic policies were put into effect and a more favorable climate for private investment was established. New laws offering guarantees and incentives to private investors, especially in the hydrocarbon field, were promulgated and claims pending from earlier nationalizations were settled. The Government also improved public adminis- tration and the pricing policies of some public undertakings. These policies were successful in increasing private investment and in bolstering the rate of growth. 6. A number of important steps have been taken by the Government to improve the living conditions in both the rural and urban areas. In the urban sector, a new housing bank was created in 1974 to promote and coordinate the financial aspects of low-cost housing and infrastructure schemes. In the rural sector, investment is being directed towards integrated rural development projects to provide basic social services, infrastructure, and credit and extension services (see Part III below). More generally, the lack of suffi- cient public investment projects suitable for external financing, which held back economic and social development in the 1960s, is being overcome thanks to efforts on the part of the Government (see paragraphs 13 below). Recent Economic Developments and Prospects 7. Bolivia's economic performance has continued to be strongly in- fluenced by movements in its terms of trade, which have been particularly volatile in recent years. The sharp increases in petroleum and mineral prices in 1974 resulted in a major terms of trade gain, which led to a dra- matic reversal in the balance of payments and increase in foreign exchange reserves. While GDP increased by about 5%, improvements in the terms of trade helped raise gross domestic income by more than 20%, permitting a substantial increase in both consumption and investment. Moreover, this was accomplished within the context of an unprecedented improvement in public finances. 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 expendi- ture. On the balance-of-payments side, a near doubling of exports permitted a trade surplus which exceeded US$160 million despite a rapid increase in imports. The current account balance showed a surplus for the first time in decades - 3 - despite a rapid increase in imports, and net capital inflows approached US$90 million, nearly four times their 1973 level, as a result of substan- tially higher loan disbursements to the public sector and increased foreign investment associated with hydrocarbon exploration. Consequently, foreign exchange reserves rose by a record US$112 million. 8. The extreme dependence of the Bolivian economy on its foreign sector was once more brought into focus in 1975 and early 1976 as, with world economic recession, the country's terms of trade deteriorated and export volumes declined. Mineral export earnings fell by well over 20% as the weighted average of mineral prices declined by approximately 13%, and shipments of most minerals fell as a direct result of the recesion and the selling of speculative stocks on international markets. The situation was exacerbated by the fact that exportable surpluses of crude petroleum were reduced significantly for the second year in a row, owing to falling produc- tion and rapidly rising domestic consumption of hydrocarbon derivatives. While the export situation was helped by a significant price increase for natural gas exports to Argentina, this did not compensate for the overall decline in export receipts. On the whole, earnings from merchandise exports declined by 16% in 1975. On the other hand, growth of GDP and investment continued unabated. Expenditures for merchandise imports rose by about 41% as new public investment projects gathered momentum and imports for consumer durables and motor cars were relaxed. As a result, the balance of payments current account shifted to a deficit of US$158 million in 1975. Despite further substantial increases in disbursements of medium-term loans to the public sector, net foreign exchange reserves fell by US$54 million to US$134 million, or about three months of imports. 9. The weakening of the balance of payments in 1975 was accompanied by a deterioration of the fiscal situation. The Central Government's budgetary savings decreased to about 1.7% of GDP and increased borrowing from external sources and the domestic banking system was necessary to finance growing public investment, even though some public utilities strengthened their finan- cial situation through increased rates. 10. The authorities, reacting to the weakening of the external sector, took action late in 1975 to tighten import restrictions. The growth in payments for merchandise imports fell from 41% in 1975 to 9% in 1976 allowing a US$13 million trade surplus. A small trade surplus was also achieved in 1977. However, largely as a result of rising interest payments, the service balance deteriorated and the current account showed a deficit of US$184 mil- lion (5.2% of GDP), the largest in recent times. This deficit was offset by greatly increased net inflows of long and medium-term capital--a large part of which was in the form of commercial borrowing. Uncertainty, caused in part by the presidential elections to be held in July 1978, created pressure on Bolivia's reserve position during 1977. Thus, despite the strong performance in world tin prices, Bolivia's net reserves declined by US$150 million over the first 11 months of 1977. However, the country's reserve losses were reversed in December and the balance of payments registered an overall surplus equivalent to US$8 million for the whole year. '1. Public sector performance remained weak during 1977 despite the expansion of foreign trade activities, the main source of government tax revenue. The overall public sector deficit exceeded 8% of GDP as in the two preceding years. This situation is attributable in large measure to effective pressures from decentralized agencies and state-owned enterprises on the Government to finance expansion programs. This has been aggravated by marketing difficulties in the State Rice Enterprise (ENA), in subsidiaries of the Bolivian Development Corporation (CBF) and by inadequate pricing policies for hydrocarbon derivatives. At the same time, inadequacies in public sector financial management, increased availability of freely dispos- able external credits and an expansionary monetary policy have accommodated a large increase in total spending which, in turn, led to accelerated price increases. The rate of inflation rose from 9% in 1976 to 11% in 1977. The La Paz consumer price index, the only official price index, showed considerably smaller increases, rising by 4-1/2% in 1976 and 8% in 1977. 12. Since decentralized public enterprises are the main cause of the public sector's weak financial performance, the Government intends to make legal changes to allow private sector participation in state concerns. Furthermore, the Government has taken measures to bring the state enter- prises under more direct governmental control. The Presidential Directive No. 2 of September 1977 sets out guidelines aimed at reducing public enter- prises' excessive expenditures and at improving accounting procedures. It also establishes a Technical Council on Public Enterprises chaired by the Minister of Planning. A draft Law on Regional Development Corporations is under consideration, intended to strengthen investment planning and budget allocation procedures. In addition, tax administration should become more effective through a new taxpayer register (that brings professionals and large farmers on the tax rolls), an increase in the number of firms subject to external auditing requirements and changes in indirect taxation. 13. Economic growth prospects over the medium- to longer-term depend heavily upon the Government's ability to increase export earnings. Mining and hydrocarbons are likely to be major contributors to the necessary export expansion. Investment in these sectors has accelerated in recent years. Major emphasis has been placed on further growth and diversification of mining output (e.g., zinc, antimony, tungsten and silver) and the development of related processing industries, particularly metallurgy. The share of mineral output refined domestically can be expected to increase substantially as a result of expansion and diversification of refining capacities. Nevertheless, it appears that the direct contribution to GDP growth and to the balance of payments derived from the expansion of the metallurgical sector will be limited at least over the medium term. Past neglect of exploration and mine development together with the decreasing ore grade of existing mines are bound to limit expansion of output volume in the next few years until new production facilities become operational. Over the longer-term, develop- ment of Bolivia's mining potential will depend heavily on the scope and quality of geological work. A minerals exploration fund is being established, which will provide capital for prospecting and exploration activities espe- cially to increase mineral reserves in known mining districts. Moreover, a - 5 - new mining law now under consideration seeks participation of foreign investors in exploration and exploitation of mineral deposits including potentially mineralized areas thus far considered as "fiscal reserves." At the same time, the law will move Bolivia away from export taxes and towards taxat,in of profits. 14. Explorations for hydrocarbons by the state-owned petroleum company and private foreign concerns have had only moderately positive results. A new oil field with immediate commercial potential was discovered by Occidental Petroleum in the Tita field in the Department of Santa Cruz. Occidental's initial oil production this year is targeted at 7,000 barrels per day, equivalent to 18% of Bolivia's daily output. Tesoro Petroleum made a gas and petroleum strike in Tarija; the commercial potential of this field has yet to be assessed. The State Petroleum enterprise has had a few finds but in complex fractured rock structures with limited yields. Natural gas discoveries have been more encouraging than crude oil discoveries; gas reserves have increased from the equivalent of 30 years to 50 years of production at present extraction levels. A contract has been signed with Argentina to increase gas exports by 40% to 220 million cubic feet of gas daily starting May 1979. This represents foreign exchange earnings of about US$90 million per annum at current prices. There have been difficulties in finalizing an agreement, made in principle in 1973, in which Bolivia was to supply 240 million cubic feet of natural gas a day to Brazil in return for substantial Brazilian assistance with various industrial projects. Thus Bolivia is not yet realizing its potential earnings from natural gas exports. 15. In an effort to reduce Bolivia's reliance on mineral and hydro- carbon exports, the Government passed a law on Fiscal Incentives for Non- traditional Exports in August 1977. These incentives are mainly intended for agricultural products. Their impact is likely to be limited, in the short term, however, in part because of the need to improve quality in order to meet export market standards and to establish marketing arrangements. Debt Service and Creditworthiness 16. Bolivia's external public debt outstanding and disbursed at the end of 1977 amounted to 1.4 billion and the service on this debt represented 19% of exports of goods and non-factor services in that year. (When other medium and long-term debts are included, the debt service ratio rises to 22%.) As a result of increased borrowing from commercial banks and suppliers' credits over the last few years, the structure of the external debt has been worsen- ing. Thus, between 1971 and 1977 the average maturity of public sector borrowing has decreased from 24 to 12 years, while the interest rate has risen from 4.5% to 7.2% and the grant element of new loans fell from 36% to 13%. This is a natural consequence of Bolivia's greater development effort and increasing reliance on the private financial markets. Because of the heavy investment requirements associated with development of the mining and hydrocarbon sectors and the large import content of these invest- ments, Bolivia's trade gap and current account deficit can be expected to rise for the next few years. The public debt service ratio is expected to increase significantly over the next few years. However, as investments -6- in these sectors come to fruition, exports should accelerate. A gradual fall in the debt service ratio is therefore to be expected in the later 1980s. In view of the nature and growing size of Bolivia's debt, prudence in selecting and investment external capital will be essential. 17. Bolivia enjoys a substantial resource base in agriculture, minerals and hydrocarbons which has to be developed to sustain rapid growth and, in particular, rapid expansion of export earnings in the foreseeable future. Bolivia can be considered creditworthy for some external lending on conven- tional terms, as present policies designed to diversify and augment production in the export sectors--including particularly mining, hydrocarbons and agri- culture--continue. The price of tin, the country's main source of exchange earnings, depend on the investment cycle of industrialized countries as well as on the stockpile policy of the United States. Bolivia's external dependence on few nonferrous metals and minerals makes the balance of payments parti- cularly vulnerable to market fluctuations, and this lowers the ratio of debt service to exports that may be considered consistent with prudent debt management. This consideration, together with Bolivia's somewhat constrained capacity to generate additional savings, argue for a mix of lending on conventional terms with some concessional loans. This is particularly the case at a time when Bolivia's capacity to use foreign capital to good advantage has expanded more rapidly than has its debt servicing potential. The review of Bolivia's investment program by the Interim Consultative Group Meeting in La Paz during April 3, and 4, 1978, led to the conclusion that the country may be entering an adjustment period with somewhat lower rates of economic growth and greater need for financial stability; a downward adjustment of the ambitious targets set in the Five Year Socio-economic Development Plan will be necessary. Donors and the Bolivian authorities agreed to strengthen their cooperation so as to ensure that the projects and programs with external financing are both well planned and responsive to the country's development objectives. PART II - BANK GROUP OPERATIONS IN BOLIVIA 18. Although Bolivia is an original member of the Bank, it did not obtain any Bank Group funds until 1964. Bolivia's tight budget constraints and restricted capacity to service external debt have limited Bank Group assistance until recently. Apart from a Bank loan for a gas pipeline, Bank Group operations until FY75 were exclusively through IDA. After Bolivia started to export, in small quantities, natural gas and petro- leum, IDA's lending was reduced. To date, the Bank Group has approved 23 operations for Bolivia amounting to US$295.1 million, of which seven have been fully disbursed. Net of undisbursed balances, Bolivia's debt to the Bank and IDA in 1975/75 represented 7.2% of its public debt. The Bank's share of the service on this debt is about 3%. Both figures are expected to increase marginally by 1980. 19. Bank Group lending to Bolivia has assisted in the development of several sectors. US$45.2 million have been for agriculture where our lending has helped the Government to initiate long term progress for the development - 7 - of a viable livestock industry, to increase agricultural, and alpaca and llama wool production and to improve living conditions on the Altiplano, as well as to strengthen the Agricultural Bank of Bolivia as a development institution. The five credits for power projects, totalling US$53.4 million, have been instrumental in modernizing the sector, expanding electricity services, stabilizing the electricity supply and setting up a regulatory agency. Also, a public power company was set up which has been operated in an efficient and financially sound manner. A US$23.3 million loan was made for the construc- tion of a gas pipeline from the Santa Cruz area to the border with Argentina. Two loans and a credit for railways totalling US$75.0 million, of which US$3.3 million were cancelled when the Borrower obtained funds from bilateral sources to purchase locomotives, have helped to improve the quality of manage- ment, efficiency of operations and financial condition of the national railways. A recently approved aviation development project will assist Bolivia's efforts to develop agriculture in hitherto isolated areas and to provide efficient freight and passenger transportation. Three operations, for a total of US$28.2 million, for medium- and small-scale mining aim at increased production and improved sectoral coordination. A loan for a water supply and sewerage project of US$11.5 million is expected to improve services in 70 rural communi- ties. A loan of US$15 million for an education and vocational training project will assist Bolivia to develop its human resources in a more effective and rational way. Finally, a loan of US$17 million will help Bolivia to mitigate the serious urban problems in La Paz and improve the living conditions of the urban poor particularly in that city. 20. Because of the narrow scope for private investment, IFC became active in Bolivia only in 1973 through an investment of US$400,000 in a firm producing cables and plastic products. Three IFC investments since then have contributed to the establishment of a local market for long-term securi- ties: an equity participation of up to US$550,000 in Banco Industrial S.A. (BISA) in conjunction with a Bank loan of US$10.0 million for the same insti- tution to assist in financing medium-sized industrial and mining enterprises; an equity participation of US$337,500 in Banco Hipotecario Nacional to assist in the development of mortgage banking; and a loan of US$2.3 million for a 72,000 metric tons per year mill for wheat and quinoa. Annex II contains a summary statement of the status of Bank loans, IDA credits and IFC investments as of March 31, 1978, and notes on the execution of ongoing projects. 21. Remarkable progress has been made in achieving the goals set for Bank lending to Bolivia. On the macro-economic level, the Government has made important strides towards formulating a coherent and consistent set of overall economic policies. On the sector and project level, public services have been improved and the institutions strengthened. The financial position of the railroads and power sectors compare favorably with that of similar entities in other developing countries. Also, during the last two years, the Government has established an excellent record in providing the required counterpart funds for Bank-financed projects. Future Bank lending will con- tinue to support Government efforts to establish infrastructure necessary for sustained economic development while simultaneously improving the distribution of the benefits of economic growth. In this context, recent Bank activities have focused on the less developed regions and the lower income strata of the population. At present, rural development, mining, industry, irrigation, electric energy, railways and forestry projects are under preparation. -8- PART III - THE TRANSPORTATION SECTOR General 22. Bolivia, with an area of 1.1 million km2, is geographically divided into the barren highland plateau, or Altiplano, the Andean valleys and the lowlands. Population is concentrated in the Altiplano and the valleys. Mineral exports are generated in the Altiplano; agricultural exports in the eastern lowlands. 23. Transportation in Bolivia is difficult and costly because of the exceptionally difficult topography and the long distances among population centers. Investments in transport required are relatively larger in Bolivia than in other countries, making analysis and planning of modal allocation particularly important. The major transport modes have played complementary roles to meet particular requirements: railways, for Bolivia's export trade of mineral products; domestic aviation, for passengers and perishable goods, particularly beef; roads, mostly for domestic freight and passengers; waterways, to provide access to otherwise isolated towns and villages in the lowlands; and pipelines, to carry oil and gas. 24. Since Bolivia relies heavily on exports and imports for the develop- ment of its economy, the provision of reliable external trade routes assumes particular importance. Being a mediterranean country, Bolivia has sought to link its transport network with those of neighboring countries and to diversify and modernize access routes to the Atlantic and the Pacific. It has relied mostly on railways for this purpose. This reliance would persist in the future while road transport may gradually play a more important role, especially with respect to regional trade. 25. The Ministry of Transport, Communications and Civil Aviation (MTCCA) is responsible for planning and investment in the sector, except for pipelines which are the responsibility of the Ministry of Energy and Hydrocarbons. The railways and the major airline are Government owned. The Transport System Railways 26. Bolivia's railways consists of two meter-gauge systems linked through Argentina: the 1,300 km Eastern system and the 2,100 km Western system. External trade accounts for respectively 80% and 90% of freight traffic by system. The Western system largely serves to transport mineral products from the Altiplano to the Pacific Coast. It is also an important transport mode for the rural poor. The Eastern system connects with the Brazilian and the Argentine systems; it is the most important mode of surface transport in the lowlands, where most of the agricultural exports originate. - 9 - 27. Since 1972, the Bank Group has partly financed three projects of the Bolivian Railways (Credit 346-BO, US$8 million, December 1972; Loan 1121-BO, US$28.7 million, August 1975; and Loan 1422-BO, US$35 million, June 1977) consisting of the rehabilitation and modernization of track, rolling stock, motive 1ower and workshops, and in technical assistance. The first project has been completed satisfactorily; implementation of the second project is well advanced; implementation of the third project is proceeding satisfactorily. The third project includes a National Transport Survey and initial technical assistance for highway maintenance. Waterways 28. The river transport system is made up of about 1,600 km of inland waterways in eastern and northern Bolivia. Although quantities moved by river are relatively small, river navigation plays a vital role in providing access to isolated towns. Lake Titicaca is part of an important transport corridor to the Pacific. Aviation 29. Air transport is a vital means of communication in Bolivia and is likely to remain so because of the country's topography and population disper- sion. There are approximately 300 airports in the country; 30 with scheduled service. Airports at La Paz, Cochabamba, Santa Cruz and Trinidad account for more than 80% of the regular passenger and 70% of the cargo traffic. Virtually all other airports are in poor condition and can accept only small propeller- driven aircraft. Demand for air transport has increased rapidly in the recent past. The main objective of the Aviation Development Project (Loan 1423-BO, US$25 million, June 1977) is to facilitate growth in domestic air transport by adding two airports for jet aircraft and two smaller all-weather airports for turbo-prop aircraft. Pipelines 30. The state oil company operates about 2,500 km of oil and 750 km of gas pipelines. The oil pipelines run from the major production fields in the lowlands to the Pacific seaport of Arica and to the Argentine border. A pipe- line partly financed by the Bank (Loan 635-BO, US$23.25 million, September 23, 1971) carries natural gas to Argentina. Depending on the success of intensive exploration efforts now under way and the confirmation of identified reserves, significant new pipeline construction, especially to Brazil, may be undertaken. Highways 31. The highway sector is discussed in Section IV. - 10 - The Development Plan 32. The Government's transport strategy as presented in the Development Plan (1976-1980) can be summarized as follows: (a) establish a comprehensive transportation system within the country and maintain adequate international links; (b) continue the rehabilitation and modernization of the rail system, particularly to serve the export-import needs; (c) extend and improve the highway network to serve the needs of local and regional trade and to provide rural communities with better access to markets and services; (d) upgrade and modernize aviation infrastructure, particularly in the north and northeast; (e) improve the river transport system to assist the social and economic integration of the northeast; and (f) improve fleet and facilities in Lake Titicaca. 33. This strategy had to be translated into specific programs and policies. This was achieved only partly in the Plan, which was mostly a list of perceived investment requirements. The Plan addresses itself primarily to new construction, but at present, the Government is giving increasing emphasis to rehabilitation and maintenance of the existing infrastructure, particularly highways. Transport investments in the Plan make up almost 20% of total public sector investment. Transport Planning and Coordination 34. Transport planning and coordination in Bolivia has been weak. In an attempt to correct this deficiency, the UNDP financed a national transport study, with the Bank acting as executing agency, which was completed in 1969. It proposed a program for integrated transport development over the following ten years. Most of the works recommended by the study have either been started or included in the 1976-1980 Development Plan. Following one of the recommendations of the study a Directorate of Planning and Coordination was created and is now part of the MTCCA. 35. At present, there is insufficient knowledge about transport facil- ities and equipment, and their condition and ability to meet expected demands. Although studies for individual projects have been undertaken, there has not been sufficient coordination among them. The Government has decided to undertake a National Transport Survey, to be carried out by the Directorate of Planning and Coordination with assistance of consultants. The Survey is to be financed partly under Bank loan 1422-BO ($1.5 million) and by an UNDP grant ($250,000), for which the Bank is executing agency. The Survey would provide the necessary basis to plan further development of the transport infrastructure and to define and introduce improved sector management policies. The Survey is to start in mid 1978. Phase I of the Survey, which would be completed by December 31, 1979, will involve the preparation of a comprehensive report on transport development and policies; Phase II, which would be completed by December 31, 1981, the implementation of policy recommendations. The Bank has already proceeded with the selection of consultants and initiated contract negotiations. The Government has agreed to consult the Bank on the measures required to carry out the recommendations of the Survey (Section 4.05(b) of the draft Loan Agreement). - 11 - PART IV - THE HIGHWAY SUBSECTOR The Highway Network 36. Bolivia has a highway network, under the jurisdiction of the National Highway Service (SNC), totaling about 38,000 km, of which 3% is paved, 18% gravel surfaced, and the remaining 79% earth roads. The highlands benefit from 50% of the roads, the valleys 34% and the lowlands 16%. The network in the highlands is well integrated. The rest of the network is composed of branches often lacking adequate connections with each other and frequently closed during the rainy season. Despite considerable investment undertaken over the last ten years, many productive areas are still not connected to the network and most of the roads have low standards and are generally in poor condition. There is a need for added emphasis on maintenance, rehabilitation and upgrading of existing roads, as well as construction of additional road links. Road Traffic and Overloading 37. Road transport has expanded rapidly in recent years; total vehicle fleet increased by 9% per year from 1970 to 1975, to about 70,000 vehicles. Of these, 70% are light vehicles, 25% trucks and 5% buses. Over the period 1970/76, the annual average consumption of gasoline increased 7%, and of diesel oil 15%. 38. An axle load survey was conducted in 1976 and suggests that overload- ing is about 20%. The effort to improve highway maintenance would have to be combined with a program to control widespread overloading of trucks. Legisla- tion regulates dimensions and weight of vehicles. Enforcement, entrusted to SNC, has so far never been attempted on a continuing basis. SNC would, there- fore, have to develop the necessary organization, which, in view of the rela- tive low volume of traffic and the high cost of permanent enforcement, would require careful planning and evaluation. The National Transport Survey would, in its initial phase, analyze the most effective way to control overloading and facilitate development of an enforcement program. A program, satisfactory to the Bank, for the enforcement of vehicle dimension and axle load regulations throughout Bolivia would be adopted at the time of issuance of the final report on Phase I of the Survey, expected December 31, 1979; enforcement of the plan would commence three months later (Section 4.05 of the draft Loan Agreement). Highway Administration 39. Bolivian highways are managed by SNG, a semi-autonomous agency under the MTCCA. SNC originated from a Bolivian-American Highway Cooperative Service and was established in 1955 with the assistance of the Federal Highway Admin- istration under a USAID program. SNC's organizational structure is basically sound but needs to be strengthened. SNC has been overburdened with force account construction works which taxed its managerial capabilities heavily, resulting in a growing neglect of its maintenance obligations. The Govern- ment is aware of the need to re-direct SNC's activities and plans to curtail - 12 - _C's direct involvement in construction and to strengthen its maintenance capacity. SNC's field operations are hindered by an insufficient number of t-ined mid-level technicians and foremen, in spite that a training center was established in 1973 to remedy this deficiency and to train operators and mechanics. Highway Planning and Financing 40. SNC is responsible for preparation of investment programs to be submitted through MTCCA to the National Planning Council. The planning department is presently understaffed to carry out its many tasks satisfac- torily. The National Transport Survey and the technical assistance under the proposed project would help strengthen it. 41. Highway expenditures for the period 1971-1976, comprising construc- tion, improvements, maintenance and administration have increased steadily from US$13.8 million in 1971 to US$43 million in 1976. These expenditures have been financed from earmarked road user charges (6%), from the national budget (73%) and from external sources (21%). The revenues from existing road user charges have, on the average, been sufficient to cover all highway expenditures, including construction. Highway Engineering and Construction 42. Engineering design work by SNC staff has been limited to minor projects and has been of adequate quality. Over the last decade SNC has increasingly used consultants for engineering of large and medium size projects. Traditionally, SNC has carried out rehabilitation and construction of secondary and tertiary roads by force account through special regional units under a project manager. A greater use of contractors will be made as SNC maintenance effort increases. Until recently, the capacity of the national road construc- tion industry has been sufficient, but the planned expanded activity in this field will require participation of foreign contractors. The National Transport Survey will address itself to the need to develop further the domestic construction industry, including strengthening of its managerial capability and technical know-how. Highway Maintenance 43. Road maintenance is financed under the SNC budget and carried out by SNC's maintenance department through its nine field districts. SNC's annual road maintenance program recognizes three levels of maintenance depending on the road's traffic density: (a) permanent maintenance, carried out on 21% of the road network; (b) temporary maintenance carried out on 20% of the network; and (c) occasional maintenance carried out on 59% of the network. Road maintenance expenditures remained almost constant during the early 1970s and started to increase by about 10% per year since 1974, reaching US$7.6 million in 1976. The average annual road maintenance expenditures amount to US$217/km, are still very low and not adequately distributed. 44. A review of SNC maintenance operations showed that the volume of maintenance is deficient and that maintenance policies and practices are not fully adequate. The main shortcomings are: (a) maintenance of paved roads, - 13 - mostly surface treatments, is limited to some patching and surface dressing. Periodic operations, e.g., patching, seal coat, surface treatments are neglected as well as rehabilitation and strengthening; shoulder maintenance is also inadequate; (b) maintenance of gravel roads is impeded mainly because high surface r hughness resulting from the use of oversized materials cannot be diminished effectively, even by frequent grading; and (c) earth road mainte- nance is widely neglected because of lack of equipment. The resulting surface deformation and the lack of adequate drainage and slide controls cause high operating costs and, also, extensive interruptions of traffic during the rainy season. Labor-intensive Maintenance 45. The intensive use of labor in road maintenance is quite common in Bolivia. The main source of labor evolves from the duty of every citizen between the ages of 18 and 60 to work for three days per year on road construc- tion or maintenance. This three-day highway service can be avoided by paying a tax of the equivalent of US$0.50 per year, which SNC is proposing to raise to US$5 per year, to increase the number of people willing to work. Another source of free labor used with varying success is manpower supplied by some well-organized rural communities, either on a voluntary basis or in exchange for equipment hours from SNC. The tax-induced as well as the community-supplied laborers are mostly unskilled and very often do not receive adequate tools for their assigned tasks. These tasks are mainly right-of-way clearance, some of the drainage maintenance, and most of the occasional maintenance. PART V - THE PROJECT Project Development and Preparation 46. A report entitled "Staff Appraisal of a Highway Maintenance Project," No. 2011a-BO, dated May 18, 1978, is being distributed separately. A Supple- mentary Project Data Sheet is presented in Annex III. The project has been prepared by SNC, with assistance from Bank staff. Negotiations were held in Washington from May 2 to 8, 1978; the Bolivian delegation was headed by Mr. Fernando Anker, Assistant Director, National External Financing Institute. 47. At the time of the formulation of the current Development Plan, the Government recognized that the upgrading and expansion of the road network would have to be accompanied by improvements in road maintenance. The Bank's April 1976 transport sector mission confirmed the priority of maintenance. The Government subsequently requested Bank assistance in this field to complement ongoing and planned assistance from IDB (highway construction) and USAID (feeder road construction). The expansion of SNC's maintenance capacity is perceived as a long-term objective to be achieved gradually, starting with the improvement of field operations in key districts and leading eventually to the preparation of a countrywide program for road maintenance, rehabilitation and upgrading. - 14 - 48. The proposed project, which would be the Bank's first involvement in Bolivia's highway sector, has two primary objectives: a) to carry out four- year road maintenance programs in the districts of La Paz, Cochabamba and Santa Cruz of about 15,000 kms of roads, including deferred maintenance programs of about 2,000 kms; and b) to strengthen SNC. The roads covered are about 40% of the national network and carry 75% of the traffic. The Development Plan puts major emphasis on development in these three districts, which comprise the most important urban, industrial and agricultural areas and represent Bolivia's three distinct geographic regions. To achieve the project objectives, there will be a need to acquire new, and overhaul existing, equipment, to implement improved maintenance methods and to train personnel. 49. The project components are: (a) implementation, in the three project districts, of four-year programs of current and deferred maintenance; (b) acquisition of equipment and vehicles to complete and expand, as necessary, the maintenance facilities in the three project districts; (c) acquisition of spare parts for preventive maintenance and major overhauls, and construction or expansion of workshops and warehouses; (d) acquisition of training equipment and tools, traffic counters and specialized equipment for the SNC soil laboratory, and of hand tools for labor intensive maintenance operations; and (e) consultant services for technical assistance at SNC headquarters and in the project districts, and for engineering and economic studies to prepare a program for rehabilitating and upgrading of earth, gravel and paved roads. Following acquisition of the necessary equipment during mid-1978 to mid-1979 field work would be carried out over the period mid-1979 to mid-1983. The Four-Year Maintenance Program 50. Surface-treated highways with satisfactory subgrade conditions in La Paz district require intensive patching, whereas the surface-treated highways in Cochabamba and Santa Cruz districts require rehabilitation and would be maintained with the present policy of limited patching. The rehabilitation of these roads would be studied under the project. The new asphalt concrete highways in the Cochabamba and Santa Cruz districts require patching of a few cracks. All surface-treated highways would receive regular right-of-way, shoulders and drainage maintenance. SNC has accumulated a backlog of periodic maintenance of surface-treated highways, which is to be eliminated by carrying out maintenance above normal requirements on about 700 km of paved roads during the project. - 15 - 51. All gravel roads with average daily traffic above 20 vehicles per day in La Paz and Cochabamba districts and above 50 in Santa Cruz district would be resurfaced with graded crushed or screened materials of much smaller size than the coarse gravel currently used and would be watered and compacted every third grading. Gravel roads with less traffic would not be resurfaced. Each gravel road would receive one grading for every 7,000 to every 11,000 vehicle passes. Regular maintenance of gravel roads would stay at its present level, but greater use of labor-intensive methods would be made. There is also a backlog of adequate surfacing of gravel roads, which calls for surfacing of about 1,400 km above normal requirements during the project implementation period. 52. Earth roads will receive grading frequencies increasing from its present low level of one grading every 11,000 vehicle passes to frequencies ranging from one grading every 1,500 to 4,000 vehicle passes, according to their particular characteristics. Regular maintenance would be substan- tially increased, mainly through labor-intensive methods. 53. Average annual road maintenance expenditures in the three districts, excluding deferred maintenance, would be about US$380/km, at the end of the project. SNC would prepare detailed annual maintenance work programs for the three project districts, and consult with the Bank on the scope and content of these programs before including them in the SNC budget; for deferred mainte- nance the programs would have to be approved by the Bank (Section 3.04 of the draft Loan Agreement). SNC maintenance includes minor improvement works. These works would be 10% or less than SNC budget for the project (Section 3.03 of the draft Loan Agreement). Equipment 54. The project would provide the equipment and vehicles required to carry out the maintenance programs through the purchase of new equipment and the overhauling of existing salvageable equipment; obsolete equipment would be scrapped. The lists of equipment and vehicles, and the requirements for tools and spare parts were reviewed and agreed during negotiations. In addition, SNC would prepare by September 30, 1978, with the help of the initial technical assistance provided under the Third Railway Project, a detailed list of equipment units to be overhauled and start implementation of a systematic scrapping program of obsolete units by July 1, 1979 (Section 3.05(a) of the draft Loan Agreement). The maintenance equipment, overhauled or purchased under the project, would be used exclusively for limited improvement and maintenance of roads in the three districts, and no further acquisitions of maintenance equipment, would be made over the project period without prior information of the Bank (Section 3.05(b) of draft Loan Agreement). Workshops and Spare Parts 55. To improve equipment availability, the project would include: (a) expansion of existing workshops and warehouses in Cochabamba and Santa Cruz and construction of new facilities in La Paz; (b) provision of work- shop tools and equipment in the three districts and for the central workshop at El Alto; (c) provision of spare parts for preventive maintenance; and (d) improvement of workshop and warehousing practices and management. SNC - 16 - ould take all action necessary to ensure proper maintenance and repairs of _s equipment and vehicles; the Government would provide SNC sufficient funds for the purchase of spare parts (Section 3.06 of the draft Loan Agreement). It would be a condition for disbursement for spare parts that SNC reorganizes its supply and distribution system for spare parts in the three project dis- tricts (Schedule 1, para. 4(ii) of the draft Loan Agreement). Tools and Equipment for Labor Intensive Activities 56. The project would assist in the efficient utilization of labor for road maintenance operations, including highway service labor and community labor, by providing technical assistance to improve the management of these operations and an adequate supply of hand tools. In addition, the project would provide intermediate technology equipment, such as agricultural tractors with trailers, towed graders and drags, to be used independently or in com- bination with hand labor in the maintenance of earth and gravel roads. Training 57. Although SNC is a well established organization, its manpower is relatively poorly trained and accustomed to working under conditions not conducive to efficiency. Training and introduction of improved planning and management methods are necessary for long-term improvement of SNC's maintenance capacity. SNC, with the assistance of consultants, would: (a) establish a permanent training unit responsible for planning, implementing and supervising all training activities; (b) expand and broaden the activities of its Training Center and carry out a program for the training of about 1,000 equipment opera- tors and drivers, mechanics, road and equipment supervisors and administrative/ accounting staff; (c) organize periodic workshops and seminars on maintenance- related topics for middle and high level staff; and (d) prepare a five-year manpower development program giving consideration to SNC's nationwide require- ments. SNC would furnish to the Bank before December 31, 1978, a plan of action to meet the above objectives. SNC would also undertake to carry out a review of its personnel management policies to identify necessary improve- ments, to be furnished to the Bank not later than December 31, 1979 (Section 4.04 of the draft Loan Agreement). Technical Assistance 58. Technical assistance would be provided in the following areas: (a) maintenance organization and management; (b) maintenance programming; (c) warehousing and workshop practices; (d) personnel training; (e) super- vision of the deferred maintenance program; and (f) preparation of a country- wide road maintenance project. Fourteen experts would be required over a four-year project period for a total of about 350 man-months. 59. Technical assistance to SNC is crucial for the successful implemen- tation of the project. SNC would make available experienced counterpart staff for the technical assistance provided under the project (Section 3.02(b) of draft Loan Agreement), as well as that provided under the Third Railway Project. The number and qualifications of the counterpart staff have been discussed and agreed upon. A condition of effectiveness would be that SNC makes available key counterpart staff (Section 5.01 of the draft Loan Agreement). - 17 - Preparation of Road Rehabilitation and Upgrading Program 60. In order to meet high priority requirements identified during project preparation, the proposed project includes detailed engineering and additional eco7_omic studies necessary to prepare a program for rehabilitation and upgrading of about 300 km of paved roads and 900 km of earth and gravel roads. The specific list of studies to be prepared would be established by SNC in agreement with the Bank in the light of the recommendations of Phase I of the National Transport Survey (Section 3.07 of the draft Loan Agreement). These studies would be carried out by consultants financed under the project. Project Cost, Financing and Disbursements 61. Total project costs would be about US$36 million. The foreign exchange component would be financed by a Bank loan of US$25 million. The Government would finance the balance, as well as $22 million of recurrent maintenance expenditures. The estimates for the technical assistance and engineering services are based on recent contract negotiations by SNC, and average about US$3,000 per month equivalent for Bolivian experts and US$7,800 for foreign experts. 62. The proposed maintenance program would be in line with SNC's operat- ing capacity; maintenance in other districts would be kept at least at present levels (Section 4.06 of the draft.Loan Agreement). The Government has confirmed that the funds needed to carry out the project in the three districts would be provided promptly as needed to SNC (Section 3.01 of the draft Loan Agreement). 63. Disbursement of the loan would be made as follows: (a) 100% of foreign expenditures or 90% of local expenditures for equipment, vehicles, tools and spare parts; (b) 46% of total expenditures for construction and expansion of workshops and warehouses and for deferred maintenance; (c) 100% of foreign expenditures or 85% of total expenditures for technical assistance; and (d) 100% of foreign expenditures on 46% of total expenditures for consultant services. Disbursements for deferred maintenance by force account would be supported by monthly certificates approved by consultants financed under the project. Execution, Procurement and Monitoring 64. SNC would be responsible for the execution of the project. The technical assistance services would be provided by consultants acceptable to the Bank under terms of reference which were discussed during negotiations. The scope of the technical assistance required calls for an established international firm. Consulting services for road studies would normally be entrusted to local firms or joint ventures of foreign and local firms, selected following SNC established procedures. SNC would employ consultants whose qualifications, experience and terms and conditions of employment be satis- factory to the Bank (Section 3.02(a) of the draft Loan Agreement). 65. The procurement program for equipment, parts and tools, indicating lot sizes and estimated costs, would be subject to prior approval by the Bank. Contracts with estimated value of over US$50,000 would be awarded through - 18 - international competitive bidding in accordance with the Bank's "Guidelines for Procurement". Lots with estimated values of less than US$50,000 and within an overall ceiling of US$1 million, would be advertised locally follow- ing SNC's procurement regulations, which are satisfactory. When necesssary, spare parts for specific makes of equipment, for individual orders of less than US$50,000 and within an overall ceiling of US$250,000, would be procured directly from established dealers in accordance with SNC regulations. Construc- tion and expansion of workshops and warehouses would also be procured in accordance with SNC regulations. Bids would be advertised locally since only local contractors would be interested in these small-scale works. 66. The progress of the project in each district would be monitored through indicators covering (a) the volume of maintenance operations performed; and (b) the efficiency of the equipment, assessed through systematic control of equipment availability and utilization. Project Risks 67. Risks are limited and derive in part from the fact that this would be the Bank's first project with SNC. It is possible that the implementation of the specific maintenance programs would encounter delays. The annual targets for the maintenance programs for the three districts take into account the fact that the full development of the operational capacity and efficiency of the districts would be realized gradually over the project implementation period. Improvements in efficiency, however, may lag, unabling SNC to meet fully the annual targets. In addition, delays in project execution could ensue if the economic situation deteriorated so as to make impossible for the Government to provide the required budgetary funds. Economic Evaluation 68. The evaluation was carried out by means of the Bank's Highway Design and Maintenance Standard Model, adapted to Bolivian road conditions. The Model has been used to simulate total costs for road maintenance and vehicle operation of the "without" and "with" project cases over on assumed seven-year economic life corresponding to the average economic life of the vehicles, and equipment provided under the project. Benefits from implementing the project were assumed to occur on account of reduced vehicle operating costs. On average, about 12% of vehicle operating costs is saved by carrying out the project. Benefits not quantified in the evaluation are reduced passenger time costs, decreased or prevented economic loss due to road closures and reduced accident costs. Road maintenance in the other districts, although not the object of specific improved programs at this stage, would benefit from project measures dealing with SNC central organization: improvements in the Central Workshop, in the countrywide training of maintenance personnel and the systematic exchange at a national level of maintenance information and experience in periodic workshops and seminars. The evaluation performed is therefore conservative. 69. The proposed highway maintenance program is clearly well justified with an overall benefit/cost ratio of about 12/1 and a net present value esti- mated at about US$160 million when an 11% opportunity cost of capital was - 19 - used. The corresponding results for the three districts show a benefit/cost ratio of about 16/1 for La Paz, of about 7/1 for Cochabamba and of about 8/1 for Santa Cruz districts with a net present value estimated at about US$112 million for La Paz, US$15 million for Cochabamba and US$37 million for Santa Cruz districts respectively. Thus, for the project as a whole, the economic rate of return would be well in excess of 100%. These high rates of return reflect, of course, the fact that a small investment would permit to preserve the productive capacity of the large investment made in highway construction. 70. Sensitivity tests applied to the economic evaluation consider a 25% decrease in benefits and a two-year delay in the completion of the project. The overall benefit/cost ratio would be about 9/1 and the net present value about US$120 for the benefit decrease hypothesis, and 11/1 and US$116 million respectively for the delay hypothesis, thus indicating that the project would still be well justified. 71. Most of the benefits resulting from savings in vehicle operating costs would initially accrue to the road transport industry. Rates are fixed by the Government; they are reasonable and have been virtually unchanged since 1973 despite substantial price increases for oil products in 1975. Under the prevailing circumstances, it is likely that savings in vehicle operating costs due to improved maintenance would be, to a significant degree, progres- sively passed on to shippers, farmers and passengers over the project period in the form of reductions or, more probably, avoided increases in rates for road transport services. In addition to the benefits to be derived from reduced rates, farmers would benefit from the increased availability of transport; they are now suffering from the reluctance on the part of the vehicle owners to travel over poorly or not maintained rural roads, parti- cularly during the rainy season. The quality of service would also be sub- stantially improved, bringing additional transport safety and punctuality, as well as important passenger time savings, to the rural population. PART VI - LEGAL INSTRUMENTS AND AUTHORITY 72. The draft Loan Agreement between the Republic of Bolivia and the Bank and the Report of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement of the Bank are being distributed to the Executive Directors separately. 73. In addition to the features of the Loan Agreement which are referred to in the text and listed in Section III of Annex III, the following features are of particular interest: (a) a condition of effectiveness is that SNC has made available the required counterpart personnel to the technical assistance consultants (Section 5.01 of the draft Loan Agreement); and (b) a condition of disbursement for the spare parts component would be that SNC reorganizes its supply and distribution system for spare parts in the three project districts (Schedule 1, para. 4 of the draft Loan Agreement). - 20 - 74. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VII - RECOMMENDATIONS 75. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachments Washington, D.C. ANNEX I Page 1 TABLE 3A BOLIVIA - SOCIAL INDICATORS DATA SHEET LAND AREA (THOU KM2)------------------------------------------------ BOLIVIA REFERENCE COUNTRIES (1970) TOTAL 1098.6 MOST RECENT AGRIC. 304.8 1960 1970 ESTIMATE CAMEROON HONDURAS PERU** -- ---------------- - ---- -------- GNP PER CAPITA (US$) 130.0 220.0 390.0 200.0 250.0 470.0 POPULATION AND VITAL STATISTICS POPULATION (MID-YR. MILLION) 3.8 4.9 5.8* 6.8 2.5 13.3 POPULATION DENSITY PER SQUARE KM. 3.0 4.0 5.0 14.0 22.0 10.0 PER SQ. KM. AGRICULTURAL LAND 13.0 16.0 19.0 44.0 59.0 44.0 VITAL STATISTICS CRUDE BIRTH RATE (/THOU, AV) 46.6 44.4 44.0 42.1 51.5 42.9 CRUDE DEATH RATE (/THOU,AV) 22.5 19.7 19.1 23.9 19.1 14.7 INFANT MORTALITY RATE (/THOU) .. 154.0 .. .. .. 65.1/a LIFE EXPECTANCY AT BIRTH (YRS) 42.3 45.3 46.8 41.0 49.4 58.0 GROSS REPRODUCTION RATE .. 2.8 2.8 2.7 3.4 2.9 POPULATION GROWTH RATE (%) TOTAL 2.4 2.6 2.7 1.8 2.7/a 2.8 URBAN 3.6 4.2 4.1 6.1 .. 4.7/b URBAN POPULATION (% OF TOTAL) 29.2 32.3 34.0 20.5 .. 52.5 AGE STRUCTURE (PERCENT) 0 TO 14 YEARS 42.4 41.9 41.6 43.0 48.1 45.0/a 15 TO 64 YEARS 54.0 54.6 54.9 54.G 49.2 51.9/a 65 YEARS AND OVER 3.6 3.5 3.5 3.0 2.7 3.l/a AGE DEPENDENCY RATIO 0.9 0.8 0.8 0.9 1.0 0.9/a ECONOMIC DEPENDENCY RATIO 1.0/a 1.0/a 1.0/a 1.2 1.5/b i.5/-,b FAMILY PLANNING ACCEPTORS (CUMULATIVE, THOU) .. .. .. .. 20.7 USERS (% OF MARRIED WOMEN) .. .. .. ** EMPLOYMENT TOTAL LABOR FORCE (THOUSAND) 2000.0/b 2300.0 250.0 3300.0 700.0/C 4300.0/a LABOR FORCE IN AGRICULTURE (9) 67 05' c 65.0/b 650/b 82.0 62.3/ 45.0 UNEMPLOYED (% OF LABOR FORCE) 14.0/t' 16.0 - 16.0 .. 8.0 4.7 INCOME DISTRIBUTION K OF PRIVATE INCOME REC'D BY- HIGHEST 5% OF HOUSEHOLDS .. 36.0 .. .. 26.0/d HIGHEST 20% OF HOUSEHOLDS .. 59.0 .. .. 60.6t LOWEST 20% OF HOUSEHOLDS .. 4.0 .. .. 2.5/P LOWEST 40% OF HOUSEHOLDS .. 13.0 .. .. DISTRIBUTION OF LAND OWNERSHIP % OWNED BY TOP 10% OF OWNERS .. .. .. .. % OWNED BY SMALLEST 10% OWNERS .. HEALTH AND NUTRITION POPULATION PER PHYSICIAN 31700.0 /2300.0 2120.0 25960.0 3710.0 Le 1920.0 POPULATION PER NURSING PERSON .. 2730.0 2370.0 /c 2470.0 9120.0 3200.0 POPULATION PER HOSPITAL BED 580.0 490.0 .. 480.0 570.Q 470.0 PER CAPITA SUPPLY OF - CALORIES (% OF REQUIREMENTS) 69.0 76.0 77.0 96.0 99.0 99.0 PROTEIN (GRAMS PER DAY) 44.8/e 46.0 48.5 59.0 5.0 62.0 -OF WHICH ANIMAL AND PULSE 13.3/e 14.0 /d 14.4 23.0 /a 25.0 24.0 DEATH RATE (/THOU) AGES 1-4 11.0/b 7.4 .. .. 10.0 EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 64.0 68.0 74.0 100.0 94.0 107.0 SECONDARY SCHOOL 12.0 21.0 .. 9.0 12.0 36.0 YEARS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 12.0 10.0 10.0 14.0 /b 12.0 12.0 VOCATIONAL ENROLLMENT (% OF SECONDARY) 14.0 11.0/e .. 23.0 1o.0 17.0 ADULT LITERACY RATE (%) .. 40.0 .. 12.0 HOUSING PERSONS PER ROOM (URBAN) .. .. .. .. OCCUPIED DWELLINGS WITHOUT PIPED WATER (%) 89.0 /d .. .. ACCESS TO ELECTRICITY (% OF ALL DWELLINGS) 22.0 /d .. .. .. RURAL DWELLINGS CONNECTED TO ELECTRICITY (%) 8.0 /d .. .. .. CONSUMPTION RADIO RECEIVERS (PER THOU POP) 73.0 .. 78.0 36.0 57.0 134.0 PASSENGER CARS (PER THOU POP) 3.0 4.0 .. 6.0 5.0 17.0 ELECTRICITY (KWH/YR PER CAP) 118.0 160.0 177.0 201.0 127.0 415.0 NEWSPRINT (KG/YR PER CAP) 1.0 1.0 0.9 .. 1.1 3.7 SEE NOTES AND DEFINITIONS ON REVERSE ANNEX I Page 2 NOTES Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961, for 1970 between 1969 and 1971 and for Most Recent Estimates between 1973 and 1976. * Provisional results of Bolivia's 1976 population census give 4.647 millions. 5* Peru has been selected as an objective country because of similar natural conditions and comparable human and resource endowments. BOLIVIA 1960 Ia Ratio of population under 15 and 65 and over to total labor force; /b 1965; /c As percentage of labor force in employment; /d 1963; /a 1961-65 average. 1970 /a Ratio of population under 15 and 65 and over to total labor force; /b As percentage of labor force in employment; /c Population; /d 1964-66; /a Beginning 1969 the duration of general secondary education was reduced from 6 to 4 years. MOST RECENT ESTIMATE: /a Ratio of population under 15 and 65 and over to total labor force; /b As percentage of labor force in employment; /c 1972, including midwives. CAMEROON 1970 Ia 1964-66; /b 13 years for East Cameroon. HONDURAS 1970 /a Largely due to emigration since 1969 of El Salvadoreaneresident in Honduras, population growth rate is lower than the rate of natural increase; /b Ratio of population under 15 and 65 and over to total labor force; /c 1967-68 population; /d Registered, not all practicing in the country. PERU 1970 /a Excludes Indian jungle population; /b 1961-70; /c Ratio of population under 15 and 65 and over to total labor force. R8, April 21, 1978 IMINITIONS OF SOCIAL INDICATORS Land Ares (thou kl) Population per nursing person - Population divided by number of practicing Total - Total surface area comprising land area and inland waters, male and female graduate nurses, "trained" or "certified" nurses, and Agric.- Most recent estimate of agricultural area used temporarily or perna- auxiliary personnel with training or experience. reotly for crops, pastures, market & kitchen gardens or to lie fallow. Population per hospital bed - Population divided by number of hospital beds available in public and private general and specialized hospital and CNP per capita (US$) - GNP per capita estimates at current market prices, rehabilitation centers; excludes nursing homes and establishments for calculated by same conversion sethod as World Bank Atlas (1974-76 basis); custodial and preventive care. 1960; 1970 and 1976 data. Per capita supply of calories (% of requirements) - Computed from energy equivalent of net food supplies available in country per capita per day; Population and vital statistics available supplies comprise donestic production, imports less exports, and Poclaution (mid-year million) - As of July first: if not available, average changes in stock; net supplies exclude animal feed, seeds, quantities used of two end-year estimates; 1960, 1970 and 1976 data. in food processing and losses in distribution; requirement were estimated by PAO based on physiological needs for normal activity and health consid- Popol,tion density - per square kmn - Mid-year population per square kiloineter acing environmental temperature, body weights, age and ns distributions of (100 hectares) of total area. population, and allowing 10% for waste at household level. Population density - per square kms of agric. land - Computed as above for Per capita supply of protein (grams per day) - Protein content of per capita agricultural land only. net supply of food per day; net supply of food is defined as above; require- ments for all countries established by IISDA Economic Research Services Vital ocatistics provide for a minimum allowance of 60 gras of total protein per day, and Crude birth rate per thousand, average - Annual live births per thousand of 20 grans of animal and pulse protein, of which 10 grams should be animal mid-year population; ten-year arithmetic averages ending in 1960 and 1970, protein; these standards are lower than those of 75 grams of total protein and five-year average ending in 1975 for most recent estimate, and 23 grams of animal protein as an average for the world, proposed by PAO Crule death rate per thousand, average - Annual deaths per thousand of mid-year in the Third World Food Survey. population; ten-year arithmetic averages ending in 1960 and 1970 and five- Per capita protein supply from animal and pulse - Protein supply of food year average ending in 1975 for most recent estimate. derived from animals and pulses in grams per day. Infant mortality rate (/thou) - Annual deaths of infants under one year of age Death rate (Ithou) ages 1-4 - Annual deaths per thousand in age group 1-4 per thousand live births. years, to children in this age group; suggested as an indicator of Life expectancy at birth (yre) - Average number of years of life remaining at malnutrition. birth; usually five-year averages ending in 1960, 1970 and 1975 for develop- Ing countries. Education Gross reproduction rate - Average number of live daughters a woman will bear Adjusted enrollment ratio - primary school - Enrollment of all ages as per- in her normal reproductive period if she experiences present age-specific centage of primary school-age population; includes children aged 6-11 years fertility rates; usually five-year averages ending in 1960, 1970 and 1975 but adjusted for different lengths of primary education; for countries with for developing countries. universal education, enrollment may exceed 1007. since eone pupi1s are below Populaion growth rate (%) - total - Compound annual growth rates of mid-year or above the official school age. population for 1450-60, 1960-70 and 1970-75. Adjusted enrollment ratio - secondary school - Computed as above; secondary Population growth rate (%) - urban - Computed like growth rate of total educati n requires at least four years of approved primary instruction; population; different definitions of urban areas may affect comparability of provides general, vocational or teacher training instructions for pupils data among countries. of 12 to 17 years of age; correspondence courses are generally excluded. Urban population (% of total) - Ratio of urban to total population; different Years of schooling provided (first and second levels) - Total years of definitions of urban areas may affect comparability of data among countries. schooling; at secondary level, vocational instruction may be partially or completely excladed. Age a rueture (percent) - Childroma (0-14 yeers), werking-aga (15-64 yean), acaiaal merollmaat (% of aecodary) - Vocational iostitutona include and retirod (65 years and over) s Percetgee ef mid-year popelacioe. tectmical, indsstrial r ocher Progra which erate ependently or as Ag!L _dodcy rai - Ratio of Population under 15 and 63 and aver to those departmsents of secondary inscitutions. o- aim 15 thr-.gho 64. Adult literacy rate (%) - Literate adults (able to read and write) as per- Eco,,i[t dependency ratio - Ratfo of population under 15 and 65 and over to cecOge Of total adult Population aged 15 years and Over. the Taboo force is age group of 15-64 years.. Faom lnning - accepeors (cumulative, thou) - Cu"aulative number of acceptors Housing of b;rth-ontrol devices under auspices of national family planning program Persons per room (urban) - Average number of persons per room in Occupied wince inceprctu. conventionas dwellings in urban areas; dwellings exclude non-permanent Cooll aning - uacrs (% of married women) - Percentages of married women of structures and unoccupied parts. child-hearing age (15-44 years) who use birth-control devices to all marriad Occupied dwellings without piped water (28 - Occupied conventional dwellings men in same age group. in urban and rural areas without inside or outside piped water facilities as percentage of all occupied dwellings. md~t 0010 ccaisectricity (% of all dwellings) - Conventional dwellings with Totdl labor porce (thousand) - Economically active persons, including armed electricity in living quarters as percent of total dwellings in urban and forces and unemployed hoc excluding housewives, students, etc.; definitions rural areas. in various countries arc not comparable. Rural dwellings connected to electricity ( - Computed as above for rural Labr frcein griolcre 7.1 Agricultural labor force (in farming, forestry, dwellings only. hunting and fishing) as percentage of total labor force. UnemPlod-(7- of labor force - Unemployed are usually defined as persons who Consumption ore able and willi ng to take a lob, out of aob on a given day, remained out Radio receivers (Dat thou pap) - All types of receivers for radio broadcas ofa oh, and seeking work for apcifIed mInimum perio not exceeding one to general public per thousand of population ; excludes unlicensed receivers wnok, may not he comparable between countries due to different definitions in councries end in years when r egistration of radio sets was in ertect; of unmployed nnd s ource of data, e.g., employment office statistics, sample data far recent years may nor be comparable stne moat coontries abolished surv.ys, compulsory un.mploymbt insurance, licensing. Passenger cars (per thou pop) Passenger cars comprise motor cars seating Inme distributirn - Percentage of private income (both in cash and kind) aea tan eight persons; excludes ambulances, hearses and military reomived by richest 5%, richest 20%, poorest 20%, sod poorest 40? of house- vehicles. holds. Electricity (kwh/yr per cap) - Annual consumption of industrial, coumercial, public and private electricity In kilowatt hours per capita, generally Disribution of land ownership - Percentages of land owned by wealthiest 10% based n producti data, without allowance for losses in grids bt allow- and poorest 10%. of land owners. ing for imports and exports of electricity. Newsprint (kg/yr per cap) - Per capita annual consumption in kilograms health and Hutricin estimated from domestic production plus net imports of newsprint. Population per physician - Population divided by number of practicing physicians qualified from a medical school at university level. ANNEX i Page 3 of 5 BOLIVIA: ECONOMIC DEVELOPMERr DATA (Amouts in US$ million) Actual Provi.ional Proeted 1970- 1974- 1977- 1980- National Account, 1974 1925 1976 1977 1980 1985 1974 1977 1980 1985 1974 1977 1980 1985 Conustant 1977 Prices in Million US$0 Grmth Ratt A, Percent of GDY Gross doestic product 3,051 3,202 3,412 3,564 4,129 5,347 6.3 5.3 5.0 5.3 99.7 100,0 101.2 100.1 Gains from tem,s of trade (+) + 9 -139 - 73 0 - 48 - 4 - - - - 0.3 0.0 - 1.2 - 0.1 Gross domestic income 3,060 3,063 3,339 3,564 4,081 5,343 7.2 5.2 4.6 5.5 100.0 100.0 100.0 100.0 Impors (lnc1. nfs) 576 702 740 828 937 1,213 7,6 12.9 4.2 5.3 18.8 23.2 23.0 22.7 Exports (inc. nfIs (import capacity) -743 -556 -663 -721 -821 -1.127 14.9 - 1.0 44 6.5 -24.3 -20.2 -20.1 -21,1 Resource gap -167 146 184 107 116 86 - - - - - 5.5 3.0 2.9 1.6 Consuptio expenditures 2,311 2,543 2,879 2,971 3,442 4.421 5.1 8.7 5.0 5.1 75.5 B3.4 84.3 82.7 lovestment ependitures (ino1. st,cks) 582 666 644 700 755 1,008 8.7 6.3 2.6 6.0 19.0 19.6 18.5 18.9 Doesticavings 749 520 460 593 639 922 16.0 - 7.5 2.5 7.6 24.5 16.6 15.7 17.3 National saving 719 499 430 516 538 779 18.9 -10.5 1.4 7.7 23.5 14.5 13.2 14.6 Merchandise Trade Anoual Data at Current Prices As Percent of Total Imports I.ports Consumer durable good, 52.7 67.5 62.7 64.9 90.6 159.2 23.7 7.2 11.8 11.9 12.2 8.9 8.7 B.6 Couer aon-d.rable goods 37.7 60.3 56.0 61.8 113.2 208.4 40.0 17.9 22.4 13.0 8.8 8.5 10.8 11.2 Puels 4.0 7.2 6.1 6.2 10.0 21.9 38.1 15.7 17.3 17.0 0.9 0.B 1.0 1.2 Raw aterials int. goods 115.6 192.0 189.7 213.1 288.8 479.4 18.4 22.6 10.7 10.7 26.9 29.2 27.7 25.0 Capital goods 177.2 223.7 235.7 267.5 377.8 699.2 27.9 14.7 12.2 13.1 41.2 36,6 36.2 37.7 0ther gooda 42.B 52.2 87.4 117.4 162,2 287.6 7.7 40.0 11.4 12.1 10,0 16.0 15.6 15.5 Total .p.candise 1mpors (cif) 430.0 602.9 637.6 730.9 1,042.5 1,855.7 22.6 19.3 12.6 12.2 100.0 100.0 100.0 100.0 Exporta As Fercent of Total Exports Primary products 361.8 274.3 389.9 513.6 675.2 1,301.5 18.7 12.4 9.5 14,0 61.6 79.2 73.8 75.2 Fuels 225.4 188.0 185,4 134.9 239.8 429.9 103.3 -15.7 21.1 12.4 38.4 20.8 26.2 24.8 o/w Crude petrrleum (63.0) (63.4) (64.0) (67.5) (119.6) (269.2) (47.8) (2.3) (21.0) (17.6) (10.7) (10.4 (13. 1) (15. 51 Manufactured g.ods Total merchandis exporta (f.b) 587.2 462.3 575.3 648.5 9M5.0 1,731.4 31.6 3.4 12.2 13¯6 100.0 100.0 100 0 100 0 Marhandiae Trade Indice Export prce index 86.3 74.2 86.0 100.0 117.7 169.8 I,p,ort pr, Inde 85.1 95.6 96.7 100.0 124.6 170.4 Te_rm of trade Index 101.4 77.6 88.9 100.0 94.5 99.6 Export volum»e index (incl. ofs) 90.2 71.3 88.9 100.0 120.0 157.0 Value Added by Sector Annual Data at 1977 Prices and Exchange Rate Avera e Aal Growth Ratas As Percent of Total 1974 1975 1976 1977 1980 1985 Agriculture 554 591 612 620 715 891 5.0 3.8 4.9 4.5 18.2 17.4 17.3 16.7 Industry and aining 900 673 960 1,010 1,162 1,504 7.7 3.9 4.8 5.3 29.5 28.3 28.2 28.1 e1.597 1.738 1.840 1.934 2.252 2.952 6.0 6.6 5 2 5.6 52.3 54.3 54.5 55.2 Total 3,051 3.202 3,412 3,564 4,129 5,347 6.3 5.3 5.0 5.3 100.0 100.0 100.0 100.0 Public Finance Percent of GDP Detail nA Percent of Total (Central G.or_ment) 1974 1975 1976 1977 Public Sect0r (Five-Year Plan) Carrent receipts ¯13.1 13.1 13.5 12.9 inve~tent Program 1976-80 Currnteoxpenditures 10.8 10.6 11.6 10.5 Agriculture 9 6 &odgtaryaviongs 2.3 2.5 1.9 2.4 Miniog 0nd hydrarbons 23.4 Publi secto svngs 9.3 5.5 7.2 6.2 nd,ustry and pover 25.8 Pubi, fixed caItal form.atio 6.9 11.3 13.4 11.5 Tra.port ad co unici ations 19.0 Public service and saoal service 22.0 Current Expendit-ue D00Il1 100.0 (a total current expenditure) 1974 1975 1976 1977 Goods and services 15.0 49.8 25.4 19.3 As Percen, of Total Wages and salar,es 52.7 51.3 52.0 52.0 Financing 1977- 80 Transfer payments 29.0 24.9 24.8 25.0 Private ~tor 30 0 Other 3.3 4.0 2.8 3.7 Foregn sources 31,I Total curtrent ependitu~.r 100.0 100.0 100.0 100.0 Publir sector 39.0 100.0 S1ected Indicators 1970- 1974- 1977- 1980- 1974 1977 1980 1985 ICO -2.84 3.68 3.63 ¯.50 Import lastiiy 1.2 2.3 0.9 1.0 Average national savings rat 19,9 18.0 13.0 14.4 marginal naonaal saving rate .42 - .34 .04 .20 L a b o r F o r c e a n d t p u t p e r W o r k e r I n T h o u a n d s 7 1 o f 1 0 0 a l 1 r o w t h a t e dn0 U S aD oP e C W o r A e r a e Agol 1970 1976 1970 1976 1970-71 1970 1976 1970 1976 1,307 1,459 6410 58.0 1.9 39 Ind"usr an miig97 349 419 297 3. Iad o aod l 279 378 14.0 15.0 5.4 2.420 2,540 205.8 187.3 Sevie 446 680 22.0 27.0 7,3 2,834 2,706 241.0 199.6 Total 2,029 2,517 100.0 10.0 3.7 1,176 1,356 100.0 100.0 /l Provisional ANNEM I Page 4 ef 5 BOLIVIA: BALANCE OF PAYMEKTS, EXT~EAL ASSISTANCE AND DEDT (Curreat US dollars lallien.) actal Provialonal Projected 1972 1973 1974 1975 1976 1977 1980 1985 earvof balance of eayments - (incl FS> -260.6 -309.2 -485.1 -667.3 -711.2 -827.9 -1,167.8 -2,066.3 taports (Incl. NFSì 224.7 297.2 627.6 527.8 637.1 721.1 1.023.3 1.919.9 Reaource balance - 35.9 - 12.0 142.5 -139.5 - 74.1 -106.8 - 144.5 - 146.9 cto in"come - 21.8 - 22.9 - 37.2 - 31.4 - 41.2 - 92.4 - 146.8 - 264.0 Net intetres paymens (- 13.4) (- 18.0) 4- 19.6) (- 25.9) (- 37.1) (- 54.1) (- 135.0) (- 247,8) Other fartor aervice incee (net) (- 8.4) (- 4.9) (- 17.6) (- 5.5) (- 4.1) (- 38.3) (- 11.8) (- 16.2) Curret trans fers (net) 13.4 15.4 13.7 13.1 14.0 15.0 24.8 33.3 Crrent account balance - 44.3 - 19.5 119.0 -157.8 -101.3 -184.2 - 266.3 - 377.6 Dicret forecgninetment - 13.4 4.6 16.7 53.4 12.1 11.0 13.3 17.8 OffIcial capital grant 8.0 10.0 9.0 10.5 . .. 20.4 20.0 Pubic MLD loansa Disaburaemnts 122.5 37.0 108.0 150.4 292.2 427.5 446.2 685.9 Repay.ents - 28.4 - 30.3 - 50.7 - 56.6 - 69.7 - 83.5 - 173.1 - 286.6 Net dcsbnrsents 94.1 6.7 37.3 93.8 222.5 344.0 273.1 399.3 Øther long-term teant D-bursements 17.7 24.0 14.2 16.4 25.0 25.0 29.0 33.0 Repayments - __26 - 7.6 - 5.1 - 18.2 - 23.0 - 24.0 - 27.0 - 31.0 Net diabursemnts 15.1 16.4 - 0.9 - 1.0 2.0 1.0 2.0 2.0 Capial t.ransactins n... - 40.9 - 32.1 - 89.6 - 42.5 - 74.0 -163.4 - 18.6 - 24.8 Change c iereserves - 18.6 13.9 -111.5 44.4 - 61.3 - 8.4 - 23.6 - 36.7 Grants and lo ..ncommitmnts Tntal MLT loans 179.9 78.9 172.4 397.5 461.0 587.9 509.1 747.5 10R0 - - - 32.0 68.0 92.0 80.0 89.9 DA .0 6.0 6.2 7.5 - - 10.0 - tier munltilteral 27.0 11.2 35.0 104.6 90.4 15.3 95.0 95.0 icvernmen 71.7 34.1 60.8 109.3 43.8 177.2 55.0 61.3 Sappiees 40.1 16.6 13.8 44.2 46.3 55.5 50.0 75.7 Finainil institutins 23.1 9.9 56.0 89.3 222.5 025.7 199.1 405.6 Iteer 10.0 t.i 0,6 10.6 - 22.2 20.0 20.0 C. Menorandnm items Grant lement f total commitments ()) 32.2 36.5 39.7 19.0 19.2 13.9 Average interest (t) 4.9 4.9 5.6 6.8 6.9 7.2 Averagematuriy (yeatr 19.2 22.0 25.6 17.6 15.0 12.4 Actual debt outstanding Publicexternal Previsional on Dec. 31, 1977 delt and debt s-rvie 1974 1975 1976 1977 D. eernalI debt Disbursed only Percent IBRD 42.1 3.1 A. Medium- and lang-term debt (disbursed enly) IDA 54.8 4.1 Othe multilateral 94.7 7.0 Total debt untetading (DØD end of period) 691.6 778.0 1,003.8 1,347.9 Governmen 504.7 37.4 Including andisbursed 889.4 1,206.8 1,585.9 2,089.8 Suppliers 89.9 6.7 Public debt svice 68.0 80.2 104.6 135.6 Fnanctal institution 438.8 32.6 Interest 17.3 23.5 34.8 51.8 Bods 69.8 5.2 Puli delt nat 3,0 3.9 B. Debt burden Totai public 46LT debt 1,347.8 100.0 Debt service ratio 10.8 15.2 16.4 18.8 E. Debt profile Debt service ratio /L 13.6 16.2 17.1 24.1 Debt service/GDP 3.1 3.2 3.5 3.8 Total debt nerie 1978-80/ ttalI D0D ed of 1977 60.6 C. Terms Interest on DØD/DOD 2.5 3.0 3.5 3.8 D. Dependency ratios for M&LT debt Grete disbursement/lnporta (incl. nfs) 22.3 22.3 41.1 51.6 Net traasfer/import (incl. nfs) 7,8 10.2 26.1 35.0 Net transfer/gross disbursmeent 34.9 45.1 63.4 67.8 E. Exposure IBRD DOD/tetal Do 3.0 2.7 3.1 3.1 Bank graup disb./total 01D 8.9 9.0 8.4 7.2 0000 debt serice/tetal delt servtce 5.0 2.0 3.6 2.9 Bank group debt service/total debt service 5.4 2.6 4.2 3.4 /1 Intluding net direct investment income. ANNEX 1 Page 5 of 5 CONTRACTED PUBLIC AND PUBLICLY GUARANTEED EXTERNAL DEBT, 1969-1977 (US$ millions) 1969 1970 1971 1972 1973 1974 1975 1976 1977/1 International Organizations 39.1 6.9 26.8 35.0 17.2 41.2 144.1 148.4 107.3 CAF - - 0.1 2.0 1.2 - 38.1 6.7 1.7 IBRD 23.3 - - - - - 32.0 68.0 92.0 IDA 7.4 1.4 6.8 8.0 6.0 6.2 7.5 - - TDB 8.5 5.5 19.9 25.0 10.0 35.0 66.5 73.7 13.6 Governments 30.0 17.2 35.2 71.7 34.1 60.8 109.3 43.8 177.2 Argentina 3,2 14.3 4.3 4.2 3.4 2.9 3.4 4.6 50.0 Czechoslovakia - - 3.9 1.4 - - - 0.3 - Germany F.R. 1.7 1.4 - - - 28.6 - 5.2 21.7 United Kingdom 1.4 - - 6.8 - - 1.0 - - USA 22.7 1.5 25.3 40.0 26.5 28.8 26.9 26.3 75.5 USSR - - - 15.9 - - 0.5 5.2 16.6 Others 1.0 - 1.7 3.4 4.2 0.5 77.5 2.2 13.4 Suppliers' credits 11.j5 1.6 3.9 40.1 16.6 13.8 44.2 46.3 55.5 Argentina - - 1.6 5.1 5.9 1.6 1.7 0.3 1.9 Belgium - - - - 5.8 0.1 - - - Canada - - - - 3.7 1.9 - - - Denmark 0.7 1.3 - 0.8 0.2 0.2 4.9 - - Germany F.R. 3.9 0.3 - - - - 13.6 2.8 1.3 Israel - - - - - - 5.5 - - Italy 2.1 - - 26.6 - - - - - Japan - - 2.0 6.4 - - 10.8 19.5 10.3 Spain 3.3 - - - - - - - - USA - - - 1.1 0.9 1.9 2.4 - 25.2 Others 1.5 - 0.3 0.1 0.1 8.1 5.3 23.7 16.8 Private Banks 1.3 - 23.3 23.1 9.9 56.0 89.3 222.5 225.7 Brazil - - 12.0 7.9 4.7 13.5 - 13.7 7.7 USA 1.3 - 10.0 12.8 1.5 34.3 63.9 146.2 159.8 Others - - 1.3 2.4 3.7 8.2 25.4 62.6 58.2 Other 14.1 4.1 0.1 10.0 0.4 0.6 10.6 - 22.2 Nationalization (US ) - 78.6 - - 0.7 - - - Total /2 96.2 108.4 89.3 179.9 78.9 172.4 397.5 461.0 587.9 /1 Provisional /2 Net of adjustments and cancellations. Source: Central Bank, IBRD Social and Economic Data Division. ANNEX II Page 1 of 4 THE STATUS OF BANK GROUP OPERATIONS IN BOLIVIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of March 31, 1978) -------- US$ million ------ Loan or (Amount less cancellations) Credit # Year Borrower Purpose Bank IDA Undisbursed Fully disbursed loans and credits 23.3 44.6 261 1971 Bolivia Livestock 6.8 1.1 455 1974 Bolivia Mining/Manufacturing 6.2 1.5 561 1975 Bolivia Agriculture 7.5 4.6 1121 1975 ENFE Railways 28.7 3.1 1211 1976 Bolivia Rural Development 9.5 8.6 1238 1976 ENDE IV Power 25.0 16.3 1290 1976 Bolivia Mining/Manufacturing 10.0 10.0 1324 1976 Bolivia Water Supply and Sewerage 11.5 11.4 1331 1976 Bolivia Small-Scale Mining 12.0 11.5 1404 1977 Bolivia Education and Voca- tional Training 15.0 14.3 1422 1977 ENFE Third Railway 35.0 34.3 1423 1977 AASANA Aviation 25.0 25.0 1489 1977 Bolivia Urban Development 17.0 /1 17.0 Total 212.0 65.1 of which has been repaid 6.3 0.6 Total now outstanding 205.7 64.5 Amount sold 0.1 - of which has been repaid - 0.1 - Total now held by Bank 205.6 /2 64.5 158.7 /1 Not yet effective. /2 In addition, a loan and a credit of US$9.0 million each for the Ulla Ulla Development Project were signed April 6, 1978. They are not yet effective. ANNEX II Page 2 of 4 B. STATEMENT OF IFC INVESTMENT (As of March 31, 1978) Fiscal Amount in US$ million Year Obligator Type of Business Loan Equity Total 1973 Plasmar, S.A. Cables and Plastic Product 0.3 0.1 0.4 1976 Banco Hipotecario Nacional Capital Market 0.3 0.3 1976 Banco Industrial S.A. Development Financing 0.6 0.6 1978 Molino Andino S.R.L. Plastic Products 2.3 - 2.3 Total 2.6 1.0 3.6 Repaid, cancelled or sold 1.2 - 1.2 Held by IFC 1.4 1.0 2.4 C. PROJECTS IN EXECUTION Credit 261-BO - Third Livestock Development Project, US$6.8 million, June 23, 1971; Effective Date: September 15, 1971; Closing Date: June 30, 1978. After implementation slowed down in 1974, the project is now pro- ceeding satisfactorily and the credit should be disbursed by the Closing Date. Credit 455-BO - Mining Credit Project, US$6.2 million, January 18, 1974; Effective Date: June 18, 1974; Closing Date: June 30, 1978. The project is proceeding satisfactorily and the credit should be disbursed by the Closing Date. Credit 561-BO - Agricultural Credit 1, US$7.5 million, June 20, 1975; Effective Date: December 15, 1975; Closing Date: June 30, 1979. Funds originally allocated for cattle are fully committed; credit demand for grape production has been as anticipated, whereas demand for sheep, annual crops and sugarcane has been less than anticipated. Demand for sheep and annual crops funds is expected to accelerate; demand for sugarcane is not expected to materialize. Loan 1121-BO - Second Railway Project, US$28.7 million, June 5, 1975; Effective Date: August 6, 1975; Closing Date: December 31, 1978. Project progress has been satisfactory with performance targets either having been attained or exceeded. The loan is now almost fully committed. ANNEX II Page 3 of 4 Loan 1211-BO - Ingavi Rural Development Project, US$9.5 million, March 8, 1976; Effective Date: October 7, 1976; Closing Date: June 30, 1982. There have been delays in the implementation of some components of the project. Measures are being taken to speed up implementation of delayed components. Loan 1238-BO - Fourth ENDE Power Project, US$25 million, June 2, 1976; Effective Date: August 23, 1976; Closing Date: June 30, 1980. The project is proceeding as scheduled. Loan 1290-BO - Banco Industrial Mining and Industrial Credit Project, US$10 million, October 15, 1976; Effective Date: April 14, 1977; Closing Date: December 31, 1980. Funds for the mining component are not expected to be disbursed until funds available under credit 455-BO are used up. Commitments have started. Loan 1324-BO - Urban and Rural Communities Water Supply and Sewerage Project; US$11.5 million, October 15, 1976; Effective Date: December 10, 1976; Closing Date: June 30, 1981. The Government has requested that the water supply and sewerage investments for the cities of Sucre and Potosi be cancelled inasmuch as these cities are not prepared to proceed without substantial Government subsidies. In spite of initial delays, the other components of the project are now proceeding satisfactorily. Loan 1331-BO - Small-Scale Mining Development Project, US$12 million, October 15, 1976; Effective Date: July 15, 1977; Closing Date: December 31, 1980. Project implementation has been delayed because of difficulties in establishing procedures for the preparation of feasibility studies. Three feasibility studies are expected to be completed by mid-1978. Loan 1404-BO - Education and Vocational Training Project, US$15 million, May 11, 1977; Effective Date: September 7, 1977; Closing Date: December 31, 1981. The project is proceeding as scheduled. ANNEX II Page 4 of 4 Loan 1422-BO - Third Railway Project, US$35 million, June 6, 1977; Effective Date: September 29, 1977; Closing Date: December 31, 1981. There was an initial delay in the preparation of tender documents for spare parts. The project is proceeding satisfactorily. Loan 1423-BO - Aviation Development Project; US$25 million, June 9, 1977; Effective Date: September 29, 1977; Closing Date: June 30, 1983. The project is proceeding as scheduled. ANNEX III Page 1 of 2 BOLIVIA HIGHWAY MAINTENANCE PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken to prepare project: 8 months (b) Agency which prepared project: National Highway Service (c) Project first presented to the Bank: November 1976 (d) First Bank mission to review project: March 1977 (e) Departure of Appraisal Mission: November 1977 (f) Completion of negotiations: May 1978 (g) Planned date of effectiveness: September 1978 Section II: Special Bank Implementation Actions None. Section III: Special Conditions 1. During negotiations assurances were obtained that: (a) the Government would consult the Bank on the measures required to carry out the recommendations of the National Transport Survey (para. 35); (b) at the time of issuance of the final report on the first phase of the National Transport Survey, the Government would adopt a plan satisfactory to the Bank for the enforcement of vehicle dimension and axle load regulations throughout Bolivia; enforcement of the plan would commence three months later (para. 38); (c) expenditures for minor improvement works would be 10% or less of SNC maintenance budget (para. 53); (d) SNC would consult with the Bank on the scope and content of its annual maintenance work programs before their inclusion in its budget; and obtain Bank approval for deferred mainte- nance programs (para. 53); ANNEX III Page 2 of 2 (e) SNC would prepare by September 30, 1978 a list of equipment units to be overhauled and start implementing a scrapping program of obsolete units by July 1979 (para. 54); (f) the maintenance equipment, overhauled or purchased under the project, would be used exclusively for limited improvements and maintenance of roads in the three districts and no further acquisitions would be made without prior information of the Bank (para. 54); (g) SNC would take all action necessary to ensure proper maintenance and repairs of equipment and vehicles; the Government would provide SNC with adequate funds for purchases of spare parts (para. 55); (h) SNC would furnish to the Bank a manpower development program before December 31, 1978, and carry out a review of its personnel management policies to identify necessary improvements to be furnished to the Bank not later than December 31, 1979 (para. 57); (i) SNC would make available adequate counterpart staff (para. 59); (j) SNC would prepare in agreement with the Bank a detailed list of studies for the rehabilitation and upgrading of roads, in the light of the recommendations of the National Transport Survey (para. 60); (k) SNC would keep road maintenance in other districts at least at present levels (para. 62); (1) the Government would provide promptly as needed the necessary funds to carry, out the project (para. 62); and (m) SNC would employ consultants whose qualifications, experience and terms of conditions of employment be satisfactory to the Bank (para. 64). 2. A condition of effectiveness would be that: SNC has made available the required counterpart personnel to the technical assistance consultants. 3. A condition of disbursement for the spare parts component would be that: SNC reorganizes its supply and distribution system for spare parts in the three project districts.  一一－…A:-- 一一 EU99ヤ110H日】