Jordan - Second Urban Development Project

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The World Bank Foa omCuL USE ONLY Uquit No P-4095* REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$28.0 MILLION TO THE HASHEMITE KINGDOM OF JORDAN FOR A SECOND URBAN DEVELOPMENT PROJECT May 22, 1985 Thb dj.me.t I a u d_gubdlkn .d my be no bY relpkmb uW i. th Pehc I I thr .ehI doIu. lb m omaynf iK eamhuw be dbdus wthm Wwii Bmmk hedwi.in.I  HASHEMITE KINGDOM OF JORDAN CURRENCY EQUIVALENTS Calendar 1984 December 1984 Currency Unit Jordanian Dinar (JD) JD US$1.00 J JD .384 JD .403 JD 1.00 = US$2.60 US$2.48 Exchange rate used in Appraisal Report: JD I = US$2.50 GOVERNDENT OF JORDAN FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS CVDB Cities and Villages Development Bank 3B H Housing Bank JEC = Jordan Housing Corporation LIHEF = Low Income Housing Revolving Fund MM~RAE = Ministry of Municipal and Rural Affairs and the Environment MOP M Ministry of PlannIng SSC = Social Security Corporation UDD = Urban Development Department UDP = Urban Development Project USAID = United States Agency for International Development  FOR OFFICUIL USE ONLY RASHEMITE KINGDOM OF JORDAN SECOND URBAN DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: The Hashemite Kingdom of Jordan. Beneficiaries: The Urban Development Department (UDD) of the Amman Municipality and the Housing Bank (HE). Amount: US$28.0 million equivalent. Terms: 15 years, including 3 years of grace at the standard variable interest rate. Oulending Terms: The Borrower would onlend $12.5 million of the proposed loan to the HB for items whose costs are recoverable from property sales. The maturity and grace period for the onlent funds would be the same as under the Bank loan (15 and 3 years, respectively); the interest rate would be fixed at the rate in effect at the time of loan signing. The remainder of the Bank funds would be made available as a grant to the UDD for social facilities whose costs are non-recoverable from project beneficiaries. The Government would bear the foreign exchange and interest rate fluctuation risks. Project Description: The project is part of the Government's long-term program to provide shelter for poorer urban dwellers. It aims at improving the living conditions of low-income people in the Amman region by providing shelter at affordable prices without subsidy to ensure the project's replicability; encouraging sound growth patterns through stimulating urban development in appropriate locations and at lower infrastructure cost than under traditional practice; and strengthening institutional capacities in Jordan to undertake low-income shelter and urbanization projects. The project includes the following major components: (a) upgrading two low-income squatter settlements that house about 4,200 people; (b) servicing land in four sites for about 3,400 plots with initial occupancy by about 24,000 people; and (c) providing technical assistance to the UDD for project design, project planning and supervision, studies and advice on management and financial issues. The project would benefit a substantial portion of the population of Greater Amman, a quarter of whom fall below the poverty threshhold, and provide for shelter at lower economic costs than existing alternatives. The principal project risk concerns the uncertain marketability of plots in times of economic slowdown. The project, however, includes features to minimize the risk. This document bs a resticted distribution and may be used by recipients only in the performance of I lheir offic dus. ts contents may not oterwie be didosed witbout World Dank authoziation.  - is - Estimated CostsLL: Local Forei Total US$ million Upgrading 3.7 2.0 5.7 Sites and Services 39.2 20.6 59.8 Project Management 2.7 1.2 3.9 Studies 0.3 0.8 1.1 Base Costs 45.9 24.6 70.5 Physical Contingencies 2.7 2.5 5.2 Price Contingencies 7.0 5.8 12.8 TOTAL 55.6 32.9 88.5 Financing Plan: Housing Rank ) ) 22.3 Low Income Housing Revolving Fund ) 37.4 ) 3.1 1.2 Beneficiaries ) ) 17.0 Government 18.2 1.8 20.0 World Bank 0.0 28.0 28.0 TOTAL 55.6 32.9 88.5 Estimated Disbursements: Bank FY 1986 1987 1988 1989 1990 1991 US$ mmllion Annual 0.5 4.8 11.3 9.5 1.6 0-3 Cumulative 0.5 5.3 16.6 26.1 27.7 28.0 Rate of Return: 14 percent. Appraisal Report: Report No. 5569-JO, dated May 16, 1985. Maps: Numbers IBRD 16512R, 18802. 1/ Includes custom duties and taxes (2.3 percent of total project costs).  INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE HASHEMITE KINGDOM OF JORDAN FOR A SECOND URBAN DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed Bank loan to the Hashemite Kingdom of Jordan of US$28.0 million equivalent to help finance a Second Urban Development Project. The loan would be for 15 years, including three years of grace, at the standard variable interest rate. The Government would onlend US$12.5 million to the Housing Bank for items whose * costs are recoverable from property sales. The maturity and grace period would be the same as under the Bank loan (15 and 3 years, respectively); the interest rate would be fixed at the rate in effect at the time of loan signing. The Government would bear the foreign exchange and interest rate fluctuation risks. The remainder of the Bank loan would be made available to the Urban Development Department of Amman Municipality as a grant for social facilities. PART I - THE ECONOMY"' 2. A report entitled "Jordan Review of the Five-Year Plan" (No. 4129-JO, dated May 1983) was distributed to the Executive Diiectors in June 1983. An economic mission visited the country in May/June 1983; its findings have been included in the present text. Z Country data sheets are attached as Annex 1. Recent Economic Developments 3. Conscious of the country's limited natural resources, its relatively narrow productive base and the sensitiveness of the economy to changes in its oil-rich regional environment, the Government has pursued liberal, outward-looking policies in trade, labor migration and foreign exchange. This has enabled Jordan to alleviate the effects of a very high natural population growth rate (3.4 percent) through massive emigration stimulated by high salaries in the neighboring countries and through rapid expansion of domestic production fueled by an exceptionally high investment rate and rapidly growing export demand. At present, a large part of Jordan's total workforce is employed abroad. In addition to sizable workers' remittance inflows, Jordan has benefited from large inflows of grant aid from neighboring countries as well as from a rapid increase in regional demand for its exports. During the period 1976-82, the yearly inflow of workers' remittances and grants reached on average close to two-thirds of Jordan's GDP. The abundant supply of these resources and a favorable entrepreneurial climate enabled Jordan to maintain both very high consumption and investment rates. 4. As a result, the Jordanian economy expanded rapidly with an annual average GDP growth rate of over 10 percent in real terms during the 1976-82 period; almost full employment was reached. The overall balance of payments remained strong despite a large chronic deficit in merchandise trade. 1/ This section is substantially the same as Part I of the President's Report for the Primary Health Care Project (P-4024-JO), which was approved by the Executive Directors on May 7, 1985. 2/ All references are to the East Bank of Jordan.  - 2 - Although exports of goods and non-factor services (primarily agricultural products, manufactured goods, tourism and exports of the new commodities, fertilizers and potash) grew at a rapid rate of about 16 percent in real terms during 1976-82, its small base in relation to imports led to a continuous deterioration of the resource gap. These trade deficits, however, were almost fully covered by factor income and transfers from abroad. Government- guaranteed external borrowing remained therefore within reasonable limits and borrowing on commercial terms was reduced to a modest level (para. 14). 5. Beginning in 1982, however, the economic slowdown in the neighboring countries has affected the Jordanian economy in many ways; it led to a slowdown of domestic economic activity and a reduction in the inflow of external transfers. The overall economic growth rate slowed to about 5.5 percent (in real terms) in 1983, still a satisfactory performance considering the present unfavorable economic environment; foreign grant aid was about 25 percent lower, and workers' remittances stagnated while exports of manufactured goods and services to neighboring countries declined. The effect of these factors was exacerbated by a marked decline in exports of raw and processed minerals. Imports also declined, in line with the sizable reduction in public and private investments. As a result, the current account deficit for 1983 showed only a slight increase to $390 million. It was mainly covered by the proceeds of a $225 million Eurodollar loan contracted in early 1983. Jordan also drew on its reserves, which remained, however, equal to three months of imports. Preliminary estimates for 1984 show the decline in merchandise imports continuing which, combined with an increase in exports of goods, contributed to an improvement in the balance of trade, from a deficit of nearly $2.4 billion in 1983 to about $2.0 billion in 1984. A slight reduction in official transfers was more than offset by the decline in imports, and the current account deficit improved to $229.3 million. 6. With the decline in Government revenues from grants, public investment has been reduced, and the Government has further intensified its domestic resource mobilization efforts through cuts in subsidies and improved collection of direct and indirect taxes (about 99 percent of recurrent expenditures is covered by domestic revenues). 7. The main concerns of monetary policy have been mobilizing savings and controlling domestic liquidity. Private savings have improved, but public savings have continued to be negative because of the high level of defense expenditures. To promote domestic savings, greater discretion is being allowed the Central Bank in adjusting interest rates and banking commissions. As a result of increases in deposit rates in 1983, savings deposits rose faster than the money supply. A parallel situation materialized in 1984 though both savings deposits and the money supply grew at slower rates in that year. Together with a marked decline in inflation to 4.5 percent in 1984, these increases have resulted in interest rates becoming substantially positive again in real terms. Medium-Term Prospects 8. Given the changed situation and outlook in the neighboring oil producing countries, continuing GDP growth in the 9-11 percent range as projected by the 1981-85 Plan would no longer appear feasible in the medium term; a rate in the neighborhood of 5 percent per annum in real terms appears  more likely during the next Plan (1986-90). This projection assumes a reduction in the exceptionally high level of investments achieved during the early 1980s, which was mainly due to implementation of a number of major new projects such as potash, fertilizer and a refinery, now at initial stages of production. While the new, major natural resource-based industries have provided some new employment opportunities in the short term, the economic slowdown is likely to change the manpower situation in Jordan from one of selective shortages to one of general excess supply requiring finding employment for a rapidly increasing domestic workforce (para. 12). 9. The industrial sector (including mining, manufacturing and construction) is expected to continue to lead the growth of GDP and exports. The new industries are expected to contribute more than one third towards incremental GDP during 1984-85. Together with an expansion of phosphate mining and cement production, total industrial output would grow at a brisk annual rate of about 10.8 percent for 1984-85 but slow down to an underlying rate of 7.5 percent per annum for the period 1987-90. Since the rapid expansion of infrastructure and private housing during the boom years of the 1970s and early 1980s has slowed down substantially, the construction industry is likely to grow at a substantially lower rate (3 percent) during 1986-90. Thus, industrial growth during the next plan period will have to rely increasingly on development of more small and medium-scale higher technology manufacturing, largely for exports. The projected 7.5 percent for industrial growth assumes that adjustment of the industrial sector in this direction will be achieved, inter alia through changes in protection policies and improvements in export incentives. 10. Curtailment in growth of public expenditures and the slowdown in domestic and foreign demand for banking and transportation services are expected to slow down growth of services to an average annual rate of a little over 3 percent per annum for 1984-87. In particular, it is expected that the transportation sector and the hotel industry, which at present are facing large surplus capacity, will undergo a period of consolidation. In the trade sector, efficiency gains from modernization would likely be offset by increased pressure from higher unemployment to expand the less efficient informal sector of trade. In contrast to the expected slow growth performance of traditional private services, the prospects are favorable to exploit Jordan's potential in skilled labor and meet the demand for special services in areas such as consulting, contracting, and maintenance. Agriculture is projected to continue to grow by about 5 percent per annum. Overall, the sectoral growth rates would enable Jordan to maintain a comfortable GDP growth rate of about 5 percent per annum for 1984-85, which would seem sustainable throughout the 1980s. 11. On the external balance side, the projections assume that exports of goods and non-factor services would grow by an average rate of about 8 percent per annum in real terms for 1985-90. Exports from the output of previous and new industrial, natural resource-based projects to the world market would make the largest contribution to this growth performance. The export projections for the later 1980s assume that adequate measures are taken to develop Jordan's manufacturing exports. The external balance projections assume that imports would increase less rapidly because of the slow overall economic growth rate and the expected sizable reduction in the level of investments after completion of the major industrial projects. Even though merchandise exports are projected to approach a high rate of increase while imports would  - 4 - grow at a significantly lower rate, the trade deficit could remain large and exceed the $2.1 billion mark in 1985. In relation to GDP, however, the resource gap is expected to show a further decline from about 51 percent in 1984 to about 42 percent in 1987. Unlike the past, net workers' remittances and foreign grants, which are likely to decline, may not be sufficient to meet the growing trade deficit. Jordan therefore would have to rely more on external borrowing (para. 15). In order to maintain its prudent build-up of external debt, Jordan will need to combine externAl borrowing with increased efforts to mobilize domestic resources, particularly in the public sector. Social Issues 12. Due to the substantial migration of Jordanian workers to neighboring countries and the rapid economic growth, the labor market situation has been characterized until recently by selective manpower shortages. However, according to recent manpower projections, supply of labor in Jordan in the medium term is likely to show selective surpluses, particularly throughout certain categories of skilled professionals. In 1983, it is estimated that 312,000 Jordanians were working abroad compared to a total domestic employment of about 570,000. Domestic employment includes at present a relatively large number of foreign workers currently estimated at about 130,000, half of whom are unskilled. A comprehensive manpower and training plan is needed to help ensure that the education and training system is geared to meet both domestic and external demands for manpower. 13. The Government has emphasized social issues in the current Five-Year Plan (1981-85). Although the social indicators are relatively favorable in most sectors, social services are unevenly distributed across income groups and between urban and rural areas. Housing remains a problem despite the boom in 1978-80, mainly because housing costs have far exceeded the means of the lower income groups. External Assistance 14. With the large, chronic trade deficit offset by inflows of remittances and foreign transfers, the current account of the balance of payments was on average in equilibrium through 1975-81. Net workers' remittances increased from about $160 million in 1975 to about $900 million in 1983 and 1984. Following the Baghdad Arab Sucmmit Conference in November 1978, which pledged assistance of about $1.2 billion per year over a 10-year period, net foreign grant aid rose from $400-500 million in 1977-78 to about $1.3 billion in 1980 and 1981; it declined to some $0.8 billion in 1983 and to $0.7 billion in 1984. This decline was the main reason for the current account deficits of $390 million in 1983, and $230 million in 1984, both of which were financed largely by external borrowing and partly by drawing on reserves. The external public debt outstanding and disbursed reached $2.2 billion at the end of 1984 (about 49 percent of GNP). External debt service payments amounted to $319 million in 1984 or 9.8 percent of total exports of goods and services. 15. Jordan's impressive growth, pragmatic economic and social policies and efficient economic management have helped to attract large amounts of foreign assistance. The grant component of this foreign assistance is projected to decline gradually in real terms over the next few years. The projections on that basis indicate a need for average gross external borrowing  - 5 - of about $0.9 billion over the 1985-1990 period, mostly in later years. While bilateral and multilateral sources can be expected to provide the bulk of external resources, Jordan is likely to resort increasingly to the financial markets, and this would result in a hardening of loan terms. On these assumptions, the debt service ratio as a percentage of exports of goods and services is projected to reach 11.3 percent by 1990. Given this outlook and the country's record of prudent management, Jordan remains creditworthy for Bank lending. PART II - BANK GROUP OPERATIONS'' 16. Jordan has received 17 Bank loans totalling $424.3 million and 15 IDA credits totalling $86.1 million (net of cancellations), of which all the credits and two loans have been fully disbursed. Project implementation and disbursement performance have been generally satisfactory. In recent years, disbursements have amounted to about 50-60 percent of appraisal estimates. IFC has made investments in Jordan with total commitments of $94.2 million. Annex II contains a sumaary statement of Bank loans, IDA credits and IFC investments as of March 31, 1985. 17. Under its last two development plans, Jordan has aimed at restructuring its economy to achieve a wider manufacturing base, to reduce its dependence on external grants, and to spread the benefits of development among different regions. The Bank's strategy has been tailored to support those objectives and in particular is designed to help the Government: (a) to diversify the country's economic base and promote exports; (b) to alleviate manpower and infrastructure constraints in the productive sectors; and (c) to encourage more balanced growth and distribution of social services among regions and income groups, with particular emphasis on low-income groups. 18. Within this broad framework, past lending has emphasized support for capital infrastructure and manpower development. Since 1962, Bank Group lending has focussed on water supply and sewerage, power and energy development, education and urban and municipal development. The Bank Group has also 'ent for irrigation, agricultural and industrial credit, transportation, and tour'sm- In addition, the Bank Group has financed technical assistance for developing and implementing a plan for expanding phosphate rock mining. An engineering credit was made in. FY75 to help prepare a large project for potash production from the Dead Sea via solar evaporation, for which a loan was approved in September 1978. These projects have been designed with an emphasis on institution building to assist the agencies involved to develop their capabilities to plan, prepare, and implement projects on their own. In addition to the proposed urban development project, future lending would include projects for mining, transportation, water supply and sewerage, power and energy development, and industry. IFC has provided loans and equity contributions for a major fertilizer project and for projects in the construction materials subsector. It has also assisted the capital market and leasing ventures. 1/ This section is substantially the same as the corresponding part of the President's Report for the Primary Health Care Project (P-4024-JO), which was approved by the Board on May 7, 1985.  - 6 - 19. The Bank has recently helped the Government to review the energy, water supply, health, and urban sectors, and the Bank's economic and sector work will continue to focus on strengthening the macroeconomic and sector base for our lending program. The Bank's economic work program aims to deepen and broadeiq the well-established policy dialogue with the Government in three priority areas: (i) development planning, with a focus on resource mobilization and allocation; (ii) industrial and trade policies, including technology transfer and export strategy/promotion and industrial subsector studies; and (iii) regional development and equity and efficiency of government revenues and social expenditures. These subjects are crucial because the substantially tighter balance of payments situation expecced for the rest of the decade calls for increased efforts to step up domestic resource mobilization, to stimulate manufactured exports and to optimize resource allocation, while making particular efforts to reduce rural and urban poverty. 20. At the end of 1983, the actual Bank Group share in Jordan's total external public debt was estimated at 12 percent, and its share in debt service was 5 percent. In 1985, the Bank Group's shares in debt outstanding and in debt service are expected to be about 13 and 8.5 percent respectively. PART III - THE URBAN SECTOR The Settins 21. Jordan-'is a highly urbanized country. Fr,l1owing three decades of rapid population growth and massive immigration, about 70 percent of its 2.6 million population lives in urban areas of 5,000 people or more. By the year 2000, Jordan's urban population is expected to increase by some 2 million. Unemployment is expected to become an increasing problem, since the labor force is rising at about 6 percent per annum while domestic and external demand for Jordanian labor is weakening. Given its scarcity of natural resources, limited arable land and water and small domestic market, Jordan's future economic growth and employment must depend upon export-based manufactures and services. In an era of expected slower economic growth, the development and management of efficient and cost-effective services and infrastructure in urban areas to support these activities, as well as to improve the welfare of a rapidly increasing urban population, are crucial challenges facing Jordan. 22. Jordan's population is highly concentrated. Most of its urban population lives within 30 kilometers of the capital, Amman, which itself accounts for over 750,000 people. This area produces most of the country's services and manufacturing industrial output. While the Government is taking active measures to stimulate growth in other areas, the Amman region is expected to accommodate most of the growth in population for the remainder of this century and to continue its role as the main engine for Jordan's economic development. With the very rapid increase in the Amman region's population, lack of low-cost housing and proliferation of slums have emerged as pressing problems. Up to 26 percent of households in the Ammian urban region have incomes below the Bank-defined urban poverty threshold of JD 140/month. 1/ Data in the text which follows refer to the East Bank of Jordan.  The most rapid population growth in the Anman region is occurring outside the Municipality, typically in new areas with low land costs, but with high costs of infrastructure services. Given limited budgets, many areas, especially those inhabitec by the poor, are inadequately served. The prospect of low and uncertain economic growth implies a continuing need for the Government to be concerned with providing services for less fortunate citizens. Institutional Framework 23. Several government corporations or authorities provide services or coordinate local functions, including, most notably, the Cities and Villages Development Bank, which lends to local governments; the Jordan Housing Corporation, which develops housing for moderate-income and public sector employees; the Housing Bank, which finances housing, usually for moderate and upper income groups; the Water Authority of Jordan, which is responsible for water production and distribution and sewerage works; and the Jordan Electric Power Company, responsible for electricity distribution. Local governments have an essential role to play, especially in transport, roads, solid waste management, land use planning, health controls, provision of markets, a variety of licensing functions and, in some areas, investments in schools and health centers. For purposes of local administration, about 135 municipalities ar.-; bier 300 villages report to the Ministry of Municipalities and Rural Affairs and the Environment (MMRAE). The MMRAE is responsible for regional physical planning and assists municipal and village councils in most of the smaller urban centers with technical tasks (e.g., planning, design) and budgetary procedures. The Municipality of Amman is by far the most important local government in Jordan and has a unique political status: the Lord Mayor has ministerial rank, its budget is approved by the Prime Minister rather than the MMRAE, and it is responsible for its own planning standards. 24. There are several weaknesses in the provision of local services, including the multiplicity of institutions, overcentralization of authority within specific organizations, and personnel policies and levels of remuneration that make it difficult to attract and retain qualified staff. Local government management, planning, and finance need to be further reinforced to enable municipalities to prepare and implement investment programs to meet the needs of a rapidly growing urban population. Better planning and coordination of public investments in different sectors at the regional as well as city level will become increasingly important in avoiding waste and encouraging efficient patterns of urban development. A general problem in providing services has been urban sprawl, and in Greater Amman, population density has actually been decreasing for this reason. The result has been over-investment in infrastructure networks, due to weak planning controls, low taxes on land and subsidized provision of services which reduce pressures to develop land in serviced areas. Given the vital economic role of the Amman region, and the increasing scale and complexity of services, special attention is required to strengthening planning there. The Government has begun to deal with all these issues (paras. 29-31). Shelter 25. Mbst housing in Jordan is provided by the private sector and consists of one to three-storey detached buildings, usually with provisions for vertical  and horizontal expansions. Around 11 percent of the urban population lives in official refugee camps administered by the United Nations Relief and Works Administration. Some 7 percent of the urban population lives in low-income squatter settlements, many comprising overflows from nearby refugee camps, which are characterized by illegal tenures and serious deficiencies in infrastructural and social services. Squatting on government lands on the urban fringe of Amman, while a relatively new phenomenon not yet involving many people, has been increasing in recent years. A low degree of direct cost recovery from beneficiaries for infrastructure, together with limited resources available for infrastructure investments, means that poorer neighborhoods tend to suffer more service deficiencies than richer ones. 26. Substantial resources have been mobilized for housing investment which, fuelled by workers' remittances, has exceeded plan targets considerably and in 1976-1980 came to about 6 percent of GNP. The crux of the shelter problem is not a shortage of housing overall, but its high cost, which forces poorer families to live in overcrowded conditions. Occupancy in the squatter areas is estimated at over four persons per room, compared with a national average of about 2.6. One reason is that land and building costs, triggered by large inflows of workers' remittances, have risen faster than incomes in the last decade. Second, although the Jordan 'Landlord/tenant legislation allows landlords freedom in setting rents on new buildings, it contains no provision for rent increases; tenants have complete security of tenure, with the result that some landlords prefer to keep apartments vacant for long periods rather than lease them. However, rental ceilings were raised in 1983, and rents on new properties appear to have stabilized in the last few years. The question of rent controls is being reviewed as part of the housing sector strategy study under the First Urban Development Project (para. 31). The main cause of the problem for low-income people, however, is excessively costly building and planning standards including, most notably, minimnm plot sizes of 300 m2, which are unaffordable to poorer persons. The cheapest private sector accommodations for sale with financing require monthly mortgage payments of more than JD 100 per month, which is unaffordable to families in the lower two thirds of the Amman region income distribution. 27. The Government's basic response in the past to the high housing cost problem has been to establish subsidized housing funds (those for the military, police and teachers provide zero interest rate loan;) and to encourage construction and sale of housing by the Jordan HousLng Corporation (JHC) with rates of interest to beneficiaries of about 8 percent. The 1981-1985 Development Plan stressed the expansion of housing for lower and middle income groups and proposed that the JHC produce approximately one quarter of new housing, an increase in its output from 1,500 to 4,000 units per year. This strategy has not met the need for low-income housing since JHC housing, even with subsidy, is unaffordable to families in the lower half of the Amman income distribution. The Government, with the Bank-supported First Urban Development Project (UDPl), is now developing an alternative approach that involves provision of less initial accommodation on individual plots of land with room for progressive construction by households, cross subsidization between sales at market prices and sales to target group beneficiaries, and provision of the full range of social and infrastructural facilities required for sound urban development (para. 34).  -9- Government Actions in the Sector 28. The Bank's Urban Sectcr Review (No. 3965-JO, dated June 22, 1983) identified a number of key policy issues requiring priority attention. These included: (i) reviewing the organization and staffing of institutions concerned with urban management; (ii) strengthening Amman Municipality's organization, staffing and finances; (iii) establishing effective planning machinery for the Amman region; (iv) incorporating regional planning considerations into Ministry of Planning (MOP) procedures; (v) encouraging more cost-effective and economic development patterns by inter alia increasing land taxes and improving control over the public domain; (vi) developing a country-wide housing policy and allocating institutional responsibility for its monitoring and implementation; and (vii) improving shelter (infrastructure and housing) to lower income groups who are under-served by existing practice. 29. The Government is cognizant of these issues and has been moving effectively to address them. The current Five-Year Plan (1981-85) allocates $825 million or 8.8 percent of public sector investment for public housing, as well as significant amounts for other urban services such as water, sewerage, and electricity. The incorporation of spatial planning considerations on a regional basis is being addressed through the establishment in MOP of a regional planning section. A comprehensive survey throughout Jordan of basic needs and potential for income-generating projects is now being undertaken by the MOP with technical assistance from USAID as an input for the aext Five-Year Plan (1986-90); as a consequence the Plan is expected to incorporate a much stronger regional development emphasis. 30. The Municipality of A-man is in the process of improving management of its engineering services, investment programing, and fi-ancial planning. The Municipality has recently appointed a financial officer and has established a Capital Improvement Program Group, which is introducing systematic investment programing into municipal government for the first time. Furthermore, a working party, under the chairmanship of the Lord Mayor of Anman, and with the assistance of consultants, is studying the institutional changes required to establish effective regional planning machinery for Greater Amman and is also preparing master plans and investment plans for the region. 31. With regard to developing a housing policy, including institutional arrangements for the sector, funds for carrying out a housing strategy study v were included under UDP1. The Government subsequently decided to use grant funds for this study, and experts financed by USAID and UN Habitat will supplement an in-house MOP team, which is expected to complete the study by December 31, 1986 after which the Government would discuss its findings with the Bank (Loan Agreement, Section 3.05(a)). The Government has also taken some steps to encourage more economic development patterns by revaluing land for taxation purposes. Through UDP1 and the proposed project, the Government is experimenting with more cost-effective, low-income shelter. Bank Group Role in the Sector 32. Bank Group assistance has been responsive to the problems created by rapid urbanization. Extensive economic and sector work has been carried out, as well as project financing related to urban development in Jordan. Recent  - 10 - studies include the previously cited Urban Sector Review, the Water Sector Report and a regional development study. The Bank also plans to carry out a study on mnincipal management, with special emphasis on resource mobilization and taxation at the local level. Based on discussions of these reports, the Bank's strategy in the sector includes assistance for: (i) improving main urban service levels (water, sewerage, solid waste management, urban transportation); (ii) increasing the supply of serviced land, with cost recovery, in locations and at costs that reinforce sound spatial development patterns and are affordable to relevant commercial and household groups; (iii) improving physical and development planning in Amman and other urban centers where most future development will occur; and (iv) strengthening the capacity of local governments to plan, implement, and manage the functions for which they are responsible. 33. In support of the above strategy, a "three track" lending approach is currently being followed, i.e. (i) water and sewerage projects, (ii) shelter projects and (iii) municipal projects. Seven water and sewerage projects have been undertaken in urban areas. The Cities and Villages Development Bank (CVDB) loan ($10 million, Loan No. 1826-JO, 1980) has the objective of strengthening CVDB so it can help local governments provide urban services for their populations. A second loan to CVDB is scheduled to be presented to the Bank's Board of Executive Directors in early fiscal year 1986. The Amman Transport and Municipal Development Project ($30 million, Loan No. 2334-JO, 1983) aims to help Anman Municipality ameliorate traffic problems, upgrade the capacity of the relevant municipal departments to plan and execute works (including maintenance and operation functions), to upgrade solid waste m gement, and to initiate systematic investment programming. With the exception of some of the earlier water supply and sewerage projects, no Project Completion Reports have been undertaken in the urban sector, since the projects are still under execution. 34. UDPI (Loan 1983-JO, $21 million, 1980) is addressing the need for cost-effective, low-cost housing in the A-an region. The project is being executed by the Urban Development Department (UDD) of Ammnan Municipality (para. 40), which was set up expressly for this purpose. UDP1 extends beyond narrowly defined shelter to provide both sites and services and upgrading areas with appropriate educational, health, and community facilities. The upgrading of sites has been completed. Occupation of the new sites started in December 1984 and is expected to be completed during the first half of 1986. Over 12,000 families in the low-income target group have applied for about 2,130 beneficiary housing plots, and early sales of housing at market prices are also brisk. The project also includes vocational and commercial training for the urban poor by the Vocational Training Corporation, with special emphasis on increasing female participation in the labor force. A scheme to promote employment opportunities through loans by the Industrial Development Bank to small-scale and handicraft enterprises in the project areas will start when sites are occupied. 35. A decision to redesign the sites and services component to higher design standards than appraised caused an implementation delay of over one year, but project execution and disbursements are now proceeding efficiently. The project is expected to achieve its main goals of upgrading low-income settlements and providing affordable shelter to many lower income groups without subsidy. The proposed project would build upon the experience gained  - 11 - under the first project and the skills developed by the UDD in designing, implementing and marketing a new type of shelter project. It would also incorporate several modifications in design standards to reflect lessons learned in the first project (para. 37(b)). Future operations might address shelter problems outside the Amman region. PART IV - THE PROJECT Project Historv 36. The project was identified in March 1982, prepared in June 1984 and appraised in December 1984. Negotiations were held in Washington, D.C. during May 6 - 10, 1985. The Jordanian delegation was headed by Dr. Hisham Zagha of the Urban Development Department of Amman Municipality. A Staff Appraisal Report (No. 5569-JO), dated May 16, 1985, is being distributed separately. The main features of the proposed loan and project are outlined in the Loan and Project Summary and in Annex III. Maps of the project area are attached. Project Objectives and Description 37. The project aims at: (i) providing shelter for low-income people in the Anman region at affordable prices without subsidy to ensure the ptoject's replicability; (ii) encouraging sound spatial development patterns in the Am-an region through stimulating urban growth in appropriate locations at lower infrastructure cost than under traditional practice; and (iii) strengthening institutional capacities in Jordan to undertake low-income shelter and urbanization projects. The project is part of the Government's long-term program to provide shelter for poorer urban dwellers and would: (a) Upgrade conditions in two low-income squatter settlements on government land at Emir Hassan and Jebel Emir Ali, covering about 21 hectares with about 4,200 people. The areas selected suffer major deficiencies in public services and require significant investments in the type of coordinated and cost-effective solutions that the Urban Development Department (UDD) can provide. Security of tenure would be provided, with transfer of freehold to existing residents. Road access, internal roads and footpaths would be improved; sewer systems installed; water supply distribution rationalized including house connections, electricity distribution connections; and street and footpath security lighting provided. Community and vocational training centers would be built at each site, and a primary health clinic at Jebel Emir Ali. About 141 infill plots would be developed at Jebel Emir Ali for commercial use and sale for residential use to members of the target group (10th to 40th income percentiles). Loans would be provided to existing residents to expand housing and to purchasers of infill plots for new house construction. (b) Service land in four sites (two at Ruseifa and one each at Naqab and Um Nowarah) for about 3,420 plots covering 110 hectares with initial occupancy by about 24,000 people, of which about three-quarters would be in the target group. All plots would have individual water supply, sewerage and electricity connections. The new sites would include plots for commercial development and workshops for small enterprises and be furnished with a full complement of  - 12 - social services, including: ten new schools and, at Ruseifa, two extensions to existing schools at the primary, preparatory and secondary levels; four women's training centers; two primary health care clinics; four community centers (to be used for day-care programs, literacy courses, etc.); and three emergency service centers (for fire fighting and ambulances). Of the land developed for private ownership, about 60 percent would be sold to persons in the target group below cost and subsidized by sales at market prices of other residential land (34 percent) and commercial property (6 percent). The sites were selected following a major effort to identify areas that would be suitably located with respect to present and future employment opportunities and existing or planned trunk infrastructures. Based on lessons learned during the First Urban Development Project (UDP1), major features of the property sales would include: development of a wider range of plot sizes (113 m2 to 200 M2) versus UDPls standard 150 m2 and the 300 ml allowed under existing regulations in other parts of the Amman region; sale of the largest plots to two or more families; greater reliance on informal sector construction (housing would be built on only 45 percent of the plots versus 77 percent in UDPI) with expected cost savings of about 30 percent compared to construction by large contractors; inclusion of kitchens and bathrooms in all units; and greater involvement of the private sector by providing areas to developers for further subdivision, construction and sale and for residential and comuercial use in Um Nowarah and Ruseifa. (c) Provide technical assistance to the UDD: (i) 90 staffmonths for advice on in-house design, project planning, management, economic and financial issues; (ii) 60 staffmonths for design of community facilities; (iii) 225 staffmonths for project supervision; and (iv) 135 staffmonths for studies. In addition to on-the-job training to be provided by the UDD's advisors, the project would include training in Jordan and abroad in such fields as financial and economic analysis, social surveys, project monitoring, and the use of microcomputers. The studies included under the project are: *i) feasibility studies and designs for a third urban development project to be carried out by consultants with in-house support; (ii) surveys and feasibility studies to be carried out by consultants for redevelopment of the 100-150 hectares of worked-out quarries which currently constitute a barrier to development on the southern and eastern edges of Aaman Municipality; (iii) a feasibility study for a program of regularizing land tenure and upgrading the remaining squatter areas in Amman to be prepared by the UDD, with the assistance of its in-house advisors; and (iv) a study to be carried out by the UDD of means to increase employment opportunities for women living on project sites. Terms of reference and the timetable for the studies have been agreed, and the results would be discussed with the Bank before recommendations are implemented (Loan Agreement, Section 3.05(b)). Consultants would be recruited with terms of reference and qualifications satisfactory to the Bank. Consultants for design and supervision, who would be financed under the loan, wouLd be recruited according to Bank guidelines (Project Agreement, Schedule 1(I1)). Project Implementation 38. The UDD would have responsibility for project execution, including design and execution of all on-site project facilities and connections to trunk infrastructure, marketing and beneficiary selection, and coordination of the various agencies responsible for operating services on the sites when  - 13 - investment is complete. The Water Authority of Jordan would be responsible for operating water and sewerage services, and the Jordan Electric Power Company for supplying electricity. The Municipality of Amman would provide municipal services and maintenance to all project sites except Ruseifa, which would be serviced by the Municipality of Ruseifa. The Housing Bank would extend construction finance to the UDD and mortgage and building loans to the beneficiaries. The Vocational Training Corporation would operate the training centers; and the Ministries of Education, Health, Labor and Social Development and Interior, the schools, health, community and emergency centers, respectively. 39. Feasibility studies and preliminary engineering designs for over 80 percent of infrastructure works for the sites and services and for the upgrading schemes have been completed, and sketch designs have been done for the remainder. Final designs and bidding documents for all contracts for the first year are expected to be available for Bank review by mid-1985. Designs for social facilities (schools, emergency, coamunity and training centers) would be prepared by consultants, and all other designs would be carried out in-house by UDD staff and the technical assistance advisors to be engaged under the project. Land acquisition for all project sites has conmenced and is not considered to be a problem; the UDD has developed considerable experience in this area and the land on which initial construction would take place is government-owned. Project execution is expected to take about five years. The expected completion date would be December 31, 1990. Completion of property sales would occur during 1990. Implementing Agencies 40. The Urban Development Department (UDD) was established in 1980 as a quasi-autonomous department of Amnan Municipality. The UDD's staff of 109 is expected to increase to 135 during the execution of the proposed project. It has been agreed that the UDD would continue to be satisfactorily staffed (Project Agreement, Section 2.01(a)(i)(B)). With the exception of the Director-General, the staff is on contract terms, which provides a useful element of flexibility for an operation that is commercial in many important respects. Nevertheless, although the staff is on a contract basis, the UDD is a public sector organization with pay scales that are lower than the private sector offers. This makes it difficult to attract and retain experienced staff, especially capable financial and marketing staff. As under UDPI, the UDD is expected to make effective use of the technical assistance included * under the proposed project, which would provide advice on design, project planning and supervision, marketing, economic and financial issues and special studies. Employment of the management advisors (para. 37(c)(i)) would be a condition for loan effectiveness (Loan Agreement, Section 5.01(c)). The UDD has also shown considerable enterprise in taking advantage of training opportunities for required skills, and a training program covering the period of project execution has been agreed. To ensure continuity in its work, and to support staff training, the UDD is preparing manuals covering all aspects of its operations. The success of the UDD has been due to its financial independence (its operational and administrative costs are recovered outside regular municipal channels from sales receipts, the Government's development budget, and Housing Bank loans), the competence of UDD staff and the support by successive Lord Mayors of Amman. The UDD's status, however, may need to  - 14 - change if it is to be given responsibility for carrying out urban development projects outside the Amman region, as is now beginning to be discussed. This will be reviewed in the context of the Rousing Strategy Study (para. 31), and the Government will keep the Bank informed of proposed changes in the UDD's status. 41. The Housing Bank (HB) is a mixed public-private sector institution that operates on a commercial basis. It was established in 1974 to help mobilize private savings to finance housing construction, with an emphasis on low-to-middle income groups. The EB, with a paid-in capital of $30 million, has grown into the main savings institution in Jordan. The HB has been quite adept at mobilizing resources and has quite an aggressive program, including widespread branches, mobile units in remote rural areas, late opening hours and active advertising. Between 1979 and 1983, its total assets grew at an annual rate of 27 percent and deposits and loan commitments at 25 percent. In 1983, its return on total assets was 7.8 percent. Interest rates paid on deposits range from 4.5 percent (to the Central Bank for special housing loans) and 5 percent (individual saving deposits) to 8.75 percent (deposits held by institutions), for an average of 5.3 percent in 1983. The HEB charges an interest rate of 4.5 percent for loans to the Jordan Housing Corporation (JHC), 8.5 percent for individual loans and 9-13 percent (including commissions) to other borrowers, resulting in a weighted average of about 8.4 percent. Presently, the HB provides loans for a maxinum of 18 years. Default on loan repayments is negligible and was less than 0.1 percent of loans outstanding in 1983. In 1983, the HB had a net profit of 9 percent on net worth and paid one half of this in dividends. The value of HB's portfolio of equity investments increased 52 percent annually between 1979 and 1983 to 10 percent of its total assets, which were about $830 million in that year. Earnings have not kept pace, not least because of poorly performing equity investments and the need to lend to the JHC at low rates. The decline in regional economic growth and the lower growth of Jordan's GNP can be expected to moderate the increase in HB's earnings, deposits (especially from expatriate Jordanians) and the demand for its loans. Nevertheless, the HB has shown itself to be resourceful in meeting challenges in the past, and this is expected to continue. 42. The Vocational Training Corporation (VTC) provides short courses for skill upgrading and initial training in semi-skilled occupations for new employees, as well as longer term apprenticeship training, which combines three days of on-the-job training per week with three days of instruction. Apprenticeship training has been provided for more than six years, and the VTC now has about 6,000 trainees, of which about 1,500 are enrolled in short courses, and 4,500 are in apprenticeships. The design of training programs for UDP1 has been flexible and responsive to the needs of industry and of UDD beneficiaries, and successful performance is expected under the proposed project. Project Costs 43. The total project cost, including contingencies, is estimated at $88.5 million (in April 1985 prices) with a foreign exchange component of $32.9 million (37 percent of the total). Cost estimates include import duties and taxes (2.3 percent of total project costs). Construction costs are based on advanced preliminary engineering designs, checked against unit prices from recent tenders of similar projects. Costs of technical assistance, training,  -15 - .-advisory and consultant services for design and supervision to be provided under the project are based on current staffmonth rates in Jordan. Physical jcontingencies average 7 percent of total baseline costs. Price contingencies -oqthe foreign component are estimated at 5 percent for 1985, 7.5 percent for 1386 and 8 percent for 1987-90; and on domestic costs at 5 percent in 1985, 6 percent in 1986, and 7 percent per annum in later years. Price contingencies represent about 17 percent of baseline costs plus physical contingencies, and total contingencies amount to about 20 percent of total ..project costs. Proiect Financing 44. Of the $88.5 million financing required, the Government would provide $20.0 million to cover costs of social facilities, technical assistance to the UDD (the items listed in para. 37(c), (i) and (iv)) and training for UDD ataff. The Government would secure financing for some of the technical assistance and training from bilateral sources. The HB would provide $22.3 million to finance those items whose costs would be recovered from property sales (para. 48) and mortgage and construction loans to project beneficiaries. Cash payments by beneficiaries would contribute $17.0 million, and surpluses from UDP1 property sales would contribute an estimated $1.2 million. The proposed Bank loan of $28.0 million would finance 31.6 percent of total project cost and 85 percent of the foreign exchange cost. It would be provided to the Government at the standard variable interest rate for 15 years, including three years of grace. The Government would onlend $12.5 million of the Bank loan proceeds to the EB for the project item whose costs are recoverable from project beneficiaries in the sale price of property developed under the project. The maturity and grace period for the onlent funds would be the same as the Bank loan (15 and three years, respectively); the interest rate for onlent funds would be fixed at the rate in effect at the time of loan signing. The Government would bear the foreign exchange and interest rate fluctuation risks. The remainder of the Bank loan, $15.5 million, would be made available to the UDD as a grant for financing social facilities. The proposed onlending arrangements would be incorporated in a subsidiary loan agreement between the Government, the Municipality of Annan and the EB, satisfactory to the Bank, the execution of which would be a condition of effectiveness (Loan Agreement, Sections 3.02(a) and 5.01(a)). 45. The UDD would be funded, for items whose costs are recovered from property sales, by cash receipts and downpayments, loans from the HB at 8.5 percent on a line-of-credit basis, and transfers from the Low Inmme Housing Revolving Fund (LIHRF) (see para. 47) of surpluses from UDP1 property sales. The HB would sake use of its own resources, LIHRF deposits, and refinancing from the Central Bank. For purposes of replicability, it is important that HB should expect to make a positive return on its participation in the project; and to this end, the Government would review annually with the HB the appropriateness of project interest rates to enable the HB to earn a reasonable spread, satisfactory to the Government, the Bank and the HB, on funds employed in the project (Loan Agreement, Section 3.02 (a)(vii)). 46. The Central Bank refinancing is intended to avoid losses which the HB would incur from borrowing Bank funds at a higher rate than the 8.5 percent  - 16 - that the HB receives from its borrowers; the refinancing has been assumed at 25 percent of the funds the HB invests in the project, at an interest rate of 4.5 percent, or the same rate as the Central Bank advances funds to the HB for JIC programs. These financial arrangements imply that the maximum amount of its own funds that the HB would invest in the project would be $14.2 million in 1986-87, or about 1.2 percent of its assets at that time. Based upon the above arrangements, the HB would recover all costs of its participation in the project, including the costs of administering mortgage and building loans, and earn a small surplus. 47. The LIHRF was developed under UDP1 to ensure surpluses generated from land sales under UDPl would be reinvested in low-income shelter projects. LIHRF's objectives and operational guidelines have been drafted, and a committee has been established (comprising inter alia, the Director General of the UDD and representatives of the HB, the Ministries of Planning and Finance) to approve LIHPRF policies and budgets. Formal adoption of objectives and operational guidelines for the LIERF, satisfactory to the Bank, would be a condition of effectiveness of the proposed loan (Loan Agreement, Sections 3.06 and 5.01(b)). 48. Cost Recovery. Costs recovered from beneficiaries through property sales include the cost of land, site preparation, on-site infrastructure, small roads and on-plot development. Land, site preparation and infrastructure costs relating to schools, training facilities, community and emergency centers, larger roads as well as the studies included in the project would be charged to the government budget. Costs for design, supervision, project management and interest during construction would be allocated in proportion to costs of different investment items. Costs of off-site infrastructure (water supply, sewerage and electricity) would be recovered through normal user fees. These cost-recovery arrangements have been agreed, and the UDD and buyers of plots would not be subject to any fees or charges intended to recover costs of items which have already been included in plot prices (Loan Agreement. Section 3.08; Project Agreement, Section 2.01(b)(i), and Schedule 2). 49. Construction, mortgage and building loans to target group beneficiaries and owners of plots in the upgrading areas would be made by the HB pursuant to its regular terms (Project Agreement, Section 2.01 (b) (ii)) which are currently up to 18 years, at an interest rate of 8.5 percent. A default premium of 5 percent of repayments would be charged to beneficiaries, making the effective rate 9.24 percent. This is above the rates charged to beneficiaries of the government housing programs (8 percent) and of Social Security Corporation individual mortgage loans (6 percent). With Jordanian inflation in 1984 at 4.5 percent and forecast at 5 percent per annum in 1985, 6 percent in 1986 and 7 percent in following years, this interest rate is expected to remain positive in real terms. 50. Project success hinges heavily upon realizing adequate surpluses from sales of residential and commercial properties at market prices to cross-subsidize shelter for the low-income target group. Hence, the state of the Amman property market and the UDD's skill in marketing its property rill  - 17 - strongly influence project success. While the Amman property market has been dampened recently by stagnating workers' remittances, the project has been designed to offer a unique product that is affordable to largt market segments unserved by existing private or public programs. Furthermore, there has been strong buyer interest in UDP1 sites (para. 34). UDD performance under UDP1 has focussed thus far on design and implementation activities, since the marketing effort has only recently begun. This would be a major goal of the technical assistance component of the project. Finally, it has been agreed that the UDD would prepare, simultaneously with the preparation of detailed engineering, analyses of the affordability of plots based on the latest information on market demand and income and submit these to the Bank before issuing tender documents. It would also sell the developed plots promptly, using flexible marketing techniques (Project Agreement, Section 2.02). 51. Affordability. The target group for new sites comprises families of Jordanian nationals in the 10th to 40th percentiles of the income distribution. Based on experience under UDPl, beneficiaries would be willing and able to pay up to a third of their monthly incomes on shelter costs (including utilities and mortgage payments) plus a cash downpayment of 10 percent of the cost of their plots. The Government and the Bank have agreed that these criteria would be observed when final plans and plot allocations are made and that all plots, other than those sold at market prices, would be affordable to the target group; however, if beneficiaries in the target group request the UDD to build housing that would not meet the affordability criteria, the UDD could fulfill such requests if the concerned beneficiaries first advance cash payments equal to the regular downpayment plus the cost of the additional provision (Project Agreement, Schedule 2). These criteria are more demanding than those used under UDP1 (25 and 5 percent, respectively) and nave been adopted in light of the fact that about half of applicants for UDP1 plots have monthly rental payments and utilities charges of over 30 percent of their incomes, and many applicants have offered larger than minimum downpayments. Plot sizes and houses on cross-subsidized plots have been designed so as to ensure tLat plot supply ranked by cost is more or less proportional to the numbers of families in each percentile of the target group. Specifically, all plots would be affordable to families at the 40th percentile, at least five-sixths of them would be affordable to families at the 35th percentile, two-tbirds to families at the 30th, one-half to families at the 25th, one-third to families at the 20th, one-sixth to families at the 15th and some plots would be affordable to families at the 10th percentile. In the case of upgrading sites, the monthly mortgage payment to recover average cost of land and services per plot would come to 15-20 percent of median monthly family income, although multiple family occupancy in the project area would make it less than this per family in most cases. Detailed cost recovery arrangements, satisfactory to the Bank, would be worked out on the basis of final designs, taking account of the sizes of individual plots, the numbers of families residing on them, and opportunities for cross-subsidy.  - 18 - Procurement and Disbursements 52. Procurement arrangements are summarized below: Number Project Element Contracts ICB LCB Other Total US$ millions Land NA - - 18.6 18.6 (-) (}) Civil Works 14 42.2 3.8 0.5 46.5 (21.1) (1.9) (0.2) (23.2) Building Loans NA - - 9.8 9.8 (-) (-) Furniture and Equipment 21 4.1 0.5 0.5 5.1 (3.1) (0.4) (0.3) (3.8) UDD Operating Expense NA 3.5 3.5 (-) (-) Consultant Services 10 - - 5.0 5.0 and Training _-) ( (1) (1.0) TOTAL 45 46.3 4.3 37.9 88.5 (24.2) (2.3) (1.5) (28.0) Notes: Figures in parentheses are the respective figures financed by the Bank. NA = Not applicable. 53. Civil works packages of $2.5 million or more would be procured through international competitive bidding (ICB), and those estimated to cost $2.0 million or more would be subject to the Bank's prior review. The four civil works contracts for the development of sites and services schemes (about $28.7 million) and contracts for community buildings would be grouped into contracts of at least $2.5 million whenever possible and procured under ICB. The contract for extension of schools at Ruseifa ($0.5 million) would be negotiated with the contractor who is executing the Ruseifa schools under UDPl. Due to their size and nature, the upgrading schemes contracts are unlikely to interest foreign bidders, and the four contracts for these ($3.2 million) would be procured by local competitive bidding procedures (LCB), which the Bank has reviewed and are satisfactory. The above arrangements would result in prior Bank review of about 10 contracts accounting for about 90 percent of the total estimated value of civil work contracts for the project. Equipment, vehicles, tools, machinery, furniture and fixtures for community buildings would be grouped into seven bidding packages valued at $150,000 or more and would be procured through ICB and subject to prior Bank review. A margin of preference equal to 15 percent of the c.i.f. bid price of imported goods or actual custom duties and import taxes, whichever is less, will be allowed for domestic manufacturers. Contracts for miscellaneous items valued at less than $150,000 (and aggregating to no more than $650,000) would be procured through LCB or, for items costing less than $50,000, by obtaining price quotations from at least three suppliers (Project Agreement, Schedule 1).  - 19 - 54. The proposed loan would be disbursed over a period of approximately six years as follows: for civil works, 50 percent; for furniture, tools and equipment for municipal services and community facilities, 100 percent of foreign expenditures, 100 percent of ex-factory cost of locally manufactured goods, and 70 percent of locally purchased miscellaneous items; and for consultant services, 100 percent of foreign expenditures. In order not to delay urgently required ongoing work, retroactive financing of $100,000 was agreed for expenditures related to the Ruseifa school extensions made between April 30. 1985 and the date of loan signature. The loan closing date would be June 31, 1991. The estimated disbursement schedule in the Loan and Project Sinmary is similar to the disbursement profile for a sample of social service projects in Jordan. In order to expedite disbursements, a revolving fund of $0.6 million (equivalent to an average of about three months disbursements in the early project years) would be established by the Government and replenished on the basis of standard documentation for eligible reimbursable expenditures. Con:racts below $10,000 equivalent would be claimed under statements of expenditures (Loan Agreement, Section 2.02(b), Schedule 4; Project Agreement, Section 3.01(d)). Reports, Accounts, Audit and Monitoring and Evaluation 55. The UDD maintains adequate project accounts of UDPl expenditures. U-ider the proposed project, the UDD would prepare quarterly progress reports and project accounts, including those for LIHRF, for submission to the Bank not later than one month after the end of each quarter. The HB would prepare quarterly reports showing the status of all its operations relating to UDP1 and the proposed project. Annual reports including financial statements for the project, audited by auditors acceptable to the Bank, would be submitted by UDD and the HB to the Bank not later than six months after the end of the financial year (Project Agreement, Section 3.01). Besides the basic monitoring and evaluation, which would be undertaken through the quarterly reports, special surveys would be carried out following project completion of numbers of families and businesses resident in each site in UDP1 and this project to monitor the extent to which the development anticipated under these projects has occurred. Proiect Justification and Risks 56. The project would assist the Government of Jordan in providing affordable shelter, without subsidy, to low-income groups who have been poorly, if at all, served by other programs. As such, the project would help increase the welfare of a substantial proportion of the population, 26 percent of whom fall below the poverty threshold. Over the 1985-1990 period, when all ncw accommodation from UDPI and this project will come on stream, UDP new sites are forecast to accommodate over one half of the increase in target group families in the Amman region and about 17 percent of the total regional population increase (i.e. 66,000 people). The project would also provide for shelter at lower economic costs than existing alternatives and better access to social services than is typically the case. The technical assistance component would strengthen local, organizational, and institutional capability in the sector. 57. The base case economic rate of return (ERR) for the project is 14 percent, with ERRs for the upgrading and the sites and services components estimated at 29 and 14 percent, respectively, based on increases in property  - 20 - values and imputed rental values attributable to the project. A delay in benefits by one year would reduce the ERR to 12 percent. A 10 percent increase in benefits would increase the rate of return to 16 percent. A 10 percent increase in costs would reduce the rate of return to 13 percent. Costs would need to rise by 29 percent to reduce the ERR to 10 percent. 58. The principal risk facing this project concerns uncertain maricetability of plots in a time of economic slowdown. Heavy emphasis has been placed on ensuring affordable standards, on monitoring the performance of the UDD in undertaking a major real estate sales effort, on technical assistance in estate management and on establishing a financing scheme with sufficient elasticity to accommodate possible delays in sales of commercial properties. In addition, construction prices in Jordan currently appear to be stable, while prices continue to rise overall. Hence, the assumption that construction prices rise with general inflation imparts a conservative element to project marketability and cost recovery targets. There is also a risk concerning the ability of the UDD, as a public sector organization, to continue to manage mnulti-faceted UDP operations and innovate as the UDD's rapid growth phase ends. The greater emphasis placed on training in the proposed project than in UDPl, and continued substantial use of technical assistance, are designed to reduce this risk. PART V - LEGAL INSTRUMENTS AND AUTHORITY 59. The draft Loan Agreement between the Hashemite Kingdom of Jordan and the Bank, the draft Project Agreement between the Bank and Municipality of A-an and the Housing 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 separately. 60. Special conditions of the project are listed in Section III of Annex III. The conditions of effectiveness are: (i) the execution of the subsidiary loan agreement between the Government, the Municipality of Amman and the Housing Bank; (ii) adoption of objectives and operational guidelines for the Low Income Housing Revolving Fund (LIHRF); and (iii) employment of consultants to provide management advisory services to the UDD (Loan Agreement, Sections 5.01(a), (b) and (c)). 61. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 62. 1 recommend that the Executive Directors approve the proposed loan. A. W. Clausen President Attachments Washington, D.C. May 22, 1985  - 21 - T A L : 34 FA1!! JORDAN SOCIAL IOUICAY BTA SINK? csetun puimas ours (s t ASuMI) I MOS T (WT INSUlTISATC) ft macaw NIDDLX INC1S miOLS XINCI 196iat 1970tk SiiILkTELb N. AIICA a HID ES LAT. ANICA A cA ARU Cm*DWUM SQ- i) TOTAL 97.7 97.7 97.7 ACRICULTURAL 12.0 14.0 14.* Qf PEI CArEA (U) . 390.0/c 1690.0 Ic 1149.0 2106.0 mRFY mmrnsIZI a CITS (KILOGRAMS 0F OIL EQUIVALENT) 127.0 211.0 706.0 622.1 995.5 IOPULSYIIS - VITAL STATISTICS POPULATION.NID-YEAII (THOUSANDS) 1695.0 2299.0 3177.0 URBAN POPULATION CZ OF TOTAL) 42.7 50.5 59.9 U.2 66.5 POPUIATION PUJCTIONS POPULATION IN YAR 2000 (KiLL) 6.2 STATIONART POPULATION (HILL) 16.2 POPULATION NThNI 2.0 POPULATION DENSITY PER SQ. DI. 17.3 23.5 30.9 36.3 35.7 PER SQ. KM. ACRI. tAND 101.4 164.2 203.9 461.7 92.4 POPULATION ACE STRUCTURE (S) 0-14 URS L4.4 45.6 46.1 43.6 39.9 15-64 Rs 51.5 51.0 51.5 53.1 56.0 65 AND ABOVE 4.1 3.1 2.6 3.3 4.1 POPUILATION CRUFIN RATE (2) TOTAL 3.1 3.0 2.1 2.5 2.4 URBAN 5.2 4.7 4.0 4.5 3.6 CRUDE BIRTH RATE (PER IHOUS) 47.4 47.6 44.6 40.4 31.3 CRUDE DEATH RATE (PER TIROS) 19.9 15.5 R.1 11.5 6.1 CROSS REPRODUCTION RAE 3.5 3.5 3.2 2.8 2.0 FAMILY PLAtNNIG ACCEPTORS. ANNUAL (TNOUS) -. .. USERS (t OF KARIED ) .. 22.0 Id 25.0 I- 22.2 _ 40.3 FoOD - UnUIION INDEX OF FOOD PROD. PMILCAPITA (1969-71-100) 220.0 79.0 70.0 97.3 114.3 PER CAPITA SUPPLY OF CALORIES (Z OF REQUIRESMES) 93.0 93.0 102.0 110.8 110.6 PROTEINS (GRAMS PER DAY) 61.0 55.0 64.0 70.1 67.3 OF WHlCH ANIAL AND PULSE 15.0 15.0 16.0 If 17.8 34.1 CHILD (AGES 1-4) DEATE RATE Z6.3 1Z.5 6.0 14.6 5.7 E8ALTJ LIFE EXPECT. AT uRTm (TERAS) 46.9 50.1 64.0 57.5 64.7 INFNT ST. RATE (PER TNOUS) 135.5 97.5 64.6 101.5 60.6 ACCESS TO SAFE WATER (SPOP) TOTAL 21.3 .. 80.0 IC 59.7 65.4 URBAN 48.6 .. .. 84.5 78.1 RURAL 2.1 .. . 38.4 40.2 ACCESS TO ENCREZA DISPOSAL CZ OF POPUIATIONT) TOTAL .. .. 78.0 /c .. 52.9 URBAN .. .. .. 0.. 6.0 RURAL .. .. .. .. z4.5 POPULATION PR PHYSICIa 5800.0 3780.0 1700.0 4345.1 1917.7 POP. PU NUSNG PERSON 1930.0 I 1480.0 1180.0 1831.1 615.8 POP. PER HOSPITAL BED TOTAL 560.0 1350.0 sOB.O /b 632.9 367_.t URBAN _ 1120.0 680.0 7 545.5 411.5 RURAL 5440.0 .. 2513.5 2636.3 ADMISSIONS PER HOSPITAL RED .. 36.5 45.7 If 26.2 27.3 HSIC AVERACE SIZE OF HDUSEHOLD TOTAL 5.3 6.1 6.7 le.1 URBAN 5.5 RURAL 5.1 .. AVERACE NO. OF PERSONSIROOH TOTAL .. .. 6.3 IL. URBAN - - RURAL .. .. ACCESS TO ELECT. tZ OF DWELLIICS) TOTAL 17.0 .. 66.0 IC 46.2 URBAN 39.2 .. 90.0 7 77.7 RURAL 1.4 .. 30.0 16.1  - 22 - . A I L * 16A 2 JOISAN - NfCZAL ZIICATOU DATA I N"DS CmITI 3c31 UTATZ) / rzc KMXDO xINCON KSOu LNCM m 19?l iT. AfR7A A ABs LaH. WcA & cuA AuJUSD tIOLLU M XATIO ltIDMRTS TOTAL 71.0 72.0 103.0 8 6.3 105.4 ai 9. 79.0 105.0 7 102.5 106.3 t3LWX 5.0 63.0 100. :o 73.6 104.3 SCM1AAYs TOTAL 25.0 33.0 77.0L. 43.0 43.2 IMUL 36.0 41.0 79.:70 52.3 42.3 PALX 13.0 24.0 76.o 7 33.0 44.5 VOCATIONAL (Z or stcomu) 2.7 3.0 6.1 /c 10.3 33.6 ruIrZL-SZACZ RATIO PRDmRT 34.0 39.0 31.0 /c 30.3 30.1 SECO aU 20.0 23.0 21.0 7- 23.1 16.8 ADULT LITtRAC RAT2 CZ) 32.4 .. 70.0 43.5 79.5 AIU ( CABS/TOUSAND POP 3.7 6.7 30.7 17.8 46.0 Mazo azCVu/TrOUSMI PoP 37.8 160.9 L83.4 138.8 2U2.6 TV UIGRVEUI/TROU3SAD POP .. 20.0 58.5 46.1 107.2 NUISPAPM C-DAILT UURAL INTKREST) CXRCi1ATION PER IODSUAD POPULATION 18.3 24.4 31.3 ff 3L.2 63.5 CDM ANUAL ATTEUDANIECAPT 3.2 0.9 5.3 T7 1.7 2.8 TOTAL LANK Po=E (mus) 4- 2.0 569.0 756.0 FMUA (PACBUQY) 5.0 5.6 6.6 10.8 23.2 dLSIIUI (1E1P ) 4.0 34.0 20.0 42.4 31.5 3DIIS? (PERCENT) 26.0 9.0 20.0 27.9 23.9 PA.TIClPATIOH RATE PCFEN) TOTAL 15.5 24.7 24.1 26.2 32.2 RAZZ 46.7 45.5 43.5 46.4 49.3 re3ALr 2.7 2.8 3.3 5.8 15.2 zcouzc DEMENECT RATO 1.9 2.0 2.0 1.8 1.4 P-Et Or PRVATE: rlCU uzczrvu sr ITOREST 20S or NuIISEUOLDS .. LOVES 201 or OsEOW LOVES? os Or BOUSENOS ABSOLUT roZrr DCM EL (US3 PER CAPITA) URBIN .. .. 230.0 If 27L.8 2B8.2 RURAL .. .. 100.0 7 177.2 1I4.0 ES m OVERI LEVEL CUS5 PER CAPIrA) URAN 206.0 If 402.6 522.8 RUL 1350_ ZB4.9 372.4 ESTD(ATED POP. BRUM ASOLUT POVMRTr rKCM LEE (C) UERBA N 14.0 1I RURAL 1. 17.07? NOTr AVAUILAE.E ~ ~ or APM ICABI NO TE S A The grooyp avra for each lnd2cator are popala-valghted arlti neaum. Covera of countcrii amog the Indieators de_pnd on availability of data ad Is nc munfor. th Uenles otherulm r oted. o1tc for 1960- refr co any yar betv_em 1959 and 1961; Vata for 1970- betc_n 1969 &ad 1971; and oat& for Mec Rectc ZstI.tee beteen 1980 and 1982. Ie Eaat Dank. /d 197i2; Ie 1976; If 2977; .L 1962; /h 1978; /I 1979. JUNE. 1984  - 23 - flast tlmhmst mhm dal . R nt IC.. uammrm u.sm-siie jdgudml am; I= =uiaue aS est"let. It b..td m..- b. eSlotfAI it., ~ -p ,oge b. lmumm mt_kV ehath bsamR .1 to. l. 64 tl mamtiuW daflSiam- use mnap. esd he dlrvstsu s"temS ..m _diemis ml. dua.. lb An. UP Ste.4m.sShLRem mmmml ku dasite rdu I.em umstm. II Slam V mv.ssm . attsuai- a.-9 -utae 1ju dmtnsm hut,sm mui-d% Aa. 111f nPt M g.OPOTom. :.101", Xsame lmmupt 1mm'mob mines., Ditmper gaSp am. addmu I-mum t t Ulic. -1d MuSt. ussr mm mbNmOP bces .1 .9mim egut msmirlelmm Sol= Rem . I m. eusema aeon dais ml. stungs. anPO1R`lIms-" nsh .d aeeuss am lam a.st media.. ae ua PPIV samR .m,memm uc a.~ mea . i. mmep ha Wi. Cm. S IS.11ied Rse. 5am Eta msesveu mlm Ieml ames thu 9medl1M.it depuSm - ml. -ni.1,mltat . dam dad Em1. nilan,d" nIle mt ha etmln Am wisle -"eea. 51 me SPIamse Cs me-ter. thus messgu m. Me-IV seusIi is nemmisim. m Rh " 1 -n dis t. AtI amis Samet tl. -seey aSo - teatsatIn areammqtiimm a 51551a amRmestitmmml emehat, e'-k md ktiluh daldme mm mm II. laliste mis. an..m ".1 ittelem. till me dmios.. "umat.55uil~-ms.sle e em uaant-ee (maui maeelam .md-sadinalm INs hmLi=shiiilmmsu. buplisim l emAtolubmut pumueslI, ululld tie0. 1910. ad list dm1.. byatmSSm pbytmss. gsalmem pe Amide petmepuly sPLdiat mS.e at m i-Jlad. teal mimplsl., h--.am ime "hasta - * ammp oamswyen ma teem - ~A_Isa epasesM -aem,Petmm mm relml -Adi-s assues mum aem.uy Calmed hp 5 utemlise (hi1 be 5 da -0 A. WTA ea.~~~~~~ThEililfli~Ml.ml.m OP Am P "I isle C,ram. 19mm, a 140 '.d 1t1AA. d- ila,. ArrOlfAtWtAAton Ladatid iis. m..adme mueemu 55,155,mm festdas she uszml s nmaluemmeini tauru-as..VM ~~jgjinjtsjmjrn Smumasamad1etr d. .1 mel -I.. ma vs- - met.ymesa myi-i saum I-" m e Pem 'eCluasta use-u. Cat emmusli,m tam contu sm Wtmt aeMsptd "sram ime1. PsaniLm Ltr. suIMmamme as t1int Immuusmu miii steeRs' pWeSca u mem (use-Rm ml dalitme)- mat ehm.a ms - .mpi. R=s I.t.. a muSs lors aameum sm lsq,1 am .1.1 _umum alimsut tmsliem flmium maru.-p.n PARuIeS deamlu is I-e11imme astdIes im Smem tat ad pRPm Cattp .saa he mamlsisdant les emim.9 aimRt- P"-" ifelumltyaOI ag.u l rme mmiA - "90 pmsu mm a tepels maind hamalaust meulue a mplmu- lent lmm rim . mRulse muaISCsml suWmai =mam sttdm use u-S .srdumut- e C. rth. isb ..sIm s eeslslm . u hiA-.em ii. emete -yeses has f -`ij -Isud -me dsm -s tamt. e P ..1m paiue u emss1t adIawl e L. hat vts.m. meI S emmmut lual mas,a mPtt I.t -aums simh. adeeus udnes meuisu m uemd 13pa gmmtRasi ss,- eaiemypplai imanmin - ml. u-Ime enpuil sns 1.e - tAl.m iulteisi. usu-itiegs. ..ftuluismmem R te ml msmdmsme t papu 'a . Ptuuul is mumlue plss e-~main. ua= stl em semi immuiS lammimt. si h=sdmI.Ctshm- tsme-eetlrSlmih hmSemauashmuelea-fl .I m ?Ime Is mespaum asesa md,left dam. NusmmeseumlROSSut d amum ma smdss asildI P-nI.I f7 R-7-,a pmtatiu put4 .ma 4hllmu -1115 hastes) ImIemsemia u S"l-)i.u -10 is dls dm dl -lesrC.,- -mstmam)- Lmse_e .tm (att us ma-mdummm Suy mc. iit adlitEae Fmnla - mueMuUestRu usm-ll Oidme(i-i sst).mumOe-senn-ett t msa.am estd- t fS.*rat ad.e)aemmua-udes teeeau ttel. . *mu iusseu -Pmesu aeanisnm peust-ulm-; -mm.. m W, ad miss deem, m n -s (W, in- m ijMiipea uTVmu bimuus hemms tensele Cmsmt Lmam =nasm -- inea amalgemm etme eii-,- tmum Tteli era. pepuimesa. le "5-50. sasa-Ps. ad clu-am,.mRi musmsm a -1 sadeulamut Wl tyu Itmm iRut at. mumamuC1 i mnsImem -etus me,- m a5m' tee I .e Roe.m h-m1ms eP-,a",tl e msmsd lmmmam seuu pumiila in :ns-e.is-i, dsU-a..-temm d mnemsm animmd Im-l ,R Rum hersamea R lvu. FiteeustSas(r ism)-ams lam tint met) esamdt S-.- ma an. mu .mtmes de atun wee--a hmsgmtsues ysme mueeisui.m; SimS. midi. ad imma das. semmetias aheiumhed ml-mueummg.0. O (meAls muas. mama Ems.chummed) - et tmamh p. thesusad m Cd-n.m eIRA---us See shadmemamee 11. mutaes lee hesmdl-e. us p~ias5sits, 15Mmadls dams asne Z.,tpteeau umaesemtdumtene mmam - eva;shmm dstue eeuaimta i mmnee dmeS---,epmems.a t m.a i lem ham eensummtdueeee mrsudem m. su.vleea mma..me-emmmme esa.s (meelu I- use iemu umeiuml) - he sset tui Jlame E. t bsmut .1 P_eesed mu-s - 1-tf-maee ma ateltate Is alms estt.imme Ce -1 msemsssme l murledens ha R. ja . m-mmcm_ . - t1 _;Io. ease...teaumemml. msa.5. nts eat1 P ia - st-mm - W. m ROMes ad ...uusgd hm-I- %.ldeulsmms-a evudus`. m5t., ssut .-%. ~~ _pptI. -1-1 f-d' -e . seslast.m amspm Rmuimuuu LeAtlu. enmes mat em . vies me _emetI,%tem t . 1 - e -gb. .emamj;f(5.ii dls- Vdata. ,S Cuda . - emeuu "T.ns, hu ts. (smden'se mu semEm tea. mi IRAes - peuie M 1ma ak ae; P ll mlt dataO`O ueaes ame m estIt ltmmmmli a sa- eemteeP-...A JatJ -tl. su e ils.ammmtim anmuele e OfIdeem.1-1 24 O 1 .1 esesmnl hem- leuresa -Isu. al.w mm an.- slmpm ua mite -i.setm mwl aslmeeumeess am' melm4W s -U..sdCt tamemu eas.se u d-umu.u.,a amalb mn- muss. ~sm5sm ad- md seman eumR. i 5.musypmcptaermeeeaee meal ale a Ounl uspummhms.1 ai metu easen am., Aulibl mam-S)iu fmeieeari..m-sm lu mi V-A~ t T.. mee ad sim faa ihM ae ~ m tms pmt.pte teas mWuem ad6 mlsmge mu nant, mum anim susia em lea, ed. I ttulelms0-m utautem l puies. dluses ued isunmmemned m ma pumsusss. aissee I dm ROaeSS hss R--Iemmue. am R.ys usmst tel-s. 1t f. muss a asmuumd y Cs uad s ememleaealmmm. mm emau f~1&h~if 5s- taints ml peuas SW e W i Amdt m ri aememp ed esuteseidais umemmamtmussmma. ud muats,iiVnImjsCppseum (hu Rud ibSI isit-mem ya als -hat. ummeet e f et-- ela.la wlees -1 muaIsI siuse .m -Zasaa mea mu-e.- -- dm s em ta ad- asmm psis. p.sem em asse med f mes absid he mml peem. it. Pe mam 13 dasm. seORC.md ublOrm.= OmtsCse -S -em se(u.m-b d- -Csedet ieeha I mlaedtsse tny.imet ut msPa oi.)-atsuSves  - 24 - _ *A= I Pqp 4 of 6 JOM- SM4IC DICAZB qoualtiow. 2.b uillino (1983) If CM per ci= US$ 1,710 (19ig li,2/ ANOL30t Anmel G1 Csh Rtes TInicator (uifligs US at Aci (at 196D wi-s) PoiecOd (at 1L3 pricn) cutwt prime) 1983 1978 1979 1960 1981 1902 IW 3/ 1964 1985 1986 1987 1988 NA!DIAL Aca1S Gros daintic prod&ct 4,096 2L5 9.1 10.8 7.4 7.1 5.5 5.0 5.5 5.0 5.0 5.0 Aalcultuze 273 25.0 -29.0 39.0 11.6 9.7 12.6 5.0 5.0 5.0 5.0 5.0 i;iscry 1,13. 27.C 19.2 1L5 13.2 0.3 3.8 10.8 10.7 8o 7.0 7.5 xer2es 2,223 189 10.2 7.9 4.3 8.9 4.8 2.4 3.0 3.5 3.7 3.2 Loowmt,w. 4,hC 18.9 ; .73 -7.D 6.4 3.8 4.9 -4.3 4.9 5.6 5.4 4.3 GCes Investmerc 1.621 5.6 10.5 17.2 24.2 2.4 -5.7 0.0 -5.6 -7.0 -1.3 2.6 EwOrts ONFS _.760 10.4 2U... 24.1 2%.. 1.5 -9.1 10.2 10. 9.8 7.0 7.0 Z:DOt s of tIJiF .&.03 9.7 26.1. -L7 _7.- -..8 6.2 -5.8 3.0 3.1 4.4 4.5 r tt cnal Praouct -4.09: i1. *.7 6.8 d.: .. 2.2 4.0 5.0 4.2 4.3 4.2 ;GF Drf amor ;2b 8.5 1C0.C 1b.5 IB.7 12.F beiuse pAre 3.2a 3.33 3.35 3.07 .8'. 2.7e S&m of Za at HuSre r--=es :.:A: hF=V Amual Increase .sC curvenC pruice. (at CeuAMat price) 974 1.980 1985 197843 198f.-8 1986-0 , ms q . s - :.,, X,t - .. sy,8 10.3 5.1 5.0 M.e c.: 10.2 5.0 5.0 str.- .:. 3f..' 14.1 L8 7.5 qr 5 : -8.9 3.2 3.2 *afluwrlor. :2-5.t i09.e :1&- 7.4 3.3 4.3 ..rms , cEe 2b.5 .iO.o 3S.o L8 -2.3 2.6 a3orcs of OFQ 35._ -.9 20 13.6 a7 7.0 inpams of X2*9-. 97.. IOZ.- 9.7 1.9 4.5 .dss Nua;l Pn,aduct i., IDO.t, 1O0.Z 8.0 L.3 4.2 bet Factor 1a -.1 -0.8 2.Z - - - Grcss NinAEOal svlxu 2- -9Ji -'.' _ - _ As of GX tat current prxces, 1975 198 196 DCsruic Rem.-us 24.8 22.D 23.- CrrAeit BPaiuiuMeS 37.b 33.9 23.- Bulgerr Savp -12.B -10.0 0.0 4>V=l Expeuszr.es 23.o 22.9 12.7 Foreign Fi-ig ''.8 27.7 11.8 ot whbxc fareiga ats 30.t 20.5 7.0 1978-B3 1984-68 OD3 nDIAD6 I=Da 6.3 6.3 G ci Nf Svim Rate 0.1 -0.2 IMpor Eleririty (goods) 0.9 0.4 11 E_c Bank oaLy. 2/ Prelinunsry escLie ebsedi an de rv2sed seri of nstional accois to be dimmused with the G_cero , biwi c lhes ittmoces fr la%1 tem resides abrmI dot awe coaderd capital trsa. 3Preliinay esti,we. Mgy 1985 ol05  - 25- Pqe 5 ot 6 Nm - EL ME _MK, 1MM Gm Rat Indiczator Cillim us$ at ACb:l (Ui 1980 Wieu) Peoimted (i 1980 pnie) 1983 1978 1979 1990 1981 1982 1983 1984 2/ 1985 1986 1987 L988 mE ~ He ise oWnts 1/ 441 6.7 22.5 22.9 31.1 2.1 -0 9.5 10.1 9.1 8.5 8.5 ki_r9 255 5.5 16.1 26.2 18.5 -3.2 -60 1L0 9.7 9.2 8.7 8.7 MWAAc 155 9.1 35.6 17.0 59.0 8.5 -1 4.0 11.7 9.0 8.3 8.3 hrdim1e im qacts 3,044 -1.3 10.5 7.8 27.4 -1.0 -6.2 -.1 1.5 4.4 4.7 4.5 Food 497 25.8 8.9 7.1 31.6 6.4 -6.0 -2.0 2.0 3.2 4.8 4.5 PeNo1smu 585 -13.2 30.3 42.3 19.3 22.0 1I 4.0 2.0 3.2 4.3 4.0 HuVhnery md eipt 723 -3.5 -11.7 13.6 56.6 -13.0 -1LO -65 0.5 0.8 1.1 L0 Ods 1.239 -9.8 27.5 -3.4 19.3 0.5 9.1 -61 L5 2.8 4.7 4.5 PRIM (1975 - 100) (90 - MD0) lpt pnce izi d - 85.8 90.2 106.9 107.5 113.2 90.3 97.5 106.1 112.4 124.3 128.5 bmat pnce id - 114.8 133.5 150.4 L13.6 119.4 94.2 9L6 96.9 105.3 10.9 U7.0 Teuu of Cae iidc - 74.7 67.6 711 94,.6 94.8 95.9 106.4 107.3 106.7 112.1 109.8 q~o.ii.i of Hrdu Trade (Z) A=W Annal4 % GcA Rate (at umut prices) (at comt Prices) 1975 1982 1987 1979-3 19W817 EZort. / . 100.0 100.0 11.9 9.1 primay 79.8 46.8 57.8 8.2 9.5 ::uf6tuvas 20.2 53.2 42.2 19.2 8.1 IMP-to 100.0 100.0 1O.O 6.6 1.8 Food 22.2 16.7 18.3 9.7 2.5 Pecolu 10.6 21.0 24.3 16.8 3.8 MHchzry mxA eq.ait 316 28.0 23.7 3.9 -L0 Odher 35.5 34.3 33.8 9.0 1.1 sic of Totl hports CO) Shar of Total Ipoct (Z) DMERJ30 E DPIE 1975 1983 1975 L963 Deveimpa _sbnt _ ecomid 17.6 4.9 6L6 46.3 Deq unri economies 70.2 82.0 29.2 46.5 of Eih Arab caxtries 42.4 63.3 19.8 48.6 Cencaly plimd ec_aie 12.2 13.1 8.2 7.3 EMin ci'-c 1J u1dix -Cs Ky 1985 2/elimnary e'tmte 01856  - 26 - AMU I %*soof 6 N - W F PASO. EC1NL CNhr=L ASD r biam IIS at ctzmnt wie.) Indicator 1 P-oia:ted 1977 1978 1979 1980 1981 1962 1983 19 3/ 19B5 1966 1987 1990 MVAICE (F PAYIOS Eqcu of goods & services 1203 1437 1819 2491 32l5 3174 3G47 3A5 3685 409g 4537 6179 Of which: Mecdiadise f.o.b. 249 297 402 574 742 749 581 756 906 1047 1256 1760 Wacer. xmittcu:e 470 5 600 79 102 106 1112 1235 1367 1455 157. 19WC Tlapom& of g6ad & aerices 1714 265 2872 3452 4550 456 4 4251 4186 45BB 5102 552' 750, Of which: Mewhidim f.o.b. 1376 1497 1957 2393 3237 3229 3011 2779 3057 333 36 4923 worer remittanes 46 65 80 154 159 175 201 228 216 2- 195 18 . Net trgfers 2/ 504 317 1046 1335 1321 1055 814 712 600 60D 60D 5LY: Orent tac t bsle -7 -280 - 374 -2t -335 -39t -22m -3D3 -40, -_I;? Privae dixect inveamm 11 56 zc 31 67 91 2 S, 1a - o z loans (net) 190 189 193 232 274' NZ 30b we :7. 39o _ .: - Official 86 :_ 143 24. 28' D 27 . e : ^. 27 56: Private 10' 77 50 -6 -' -29 bii. x ye 1-. 19; i9- Ocher capital -21 278 2C -2bo -39e -29t. -7c Quges in esmerws -173 -24 -232 -37T 63 2 1 36 _- Interrial re 74C 983 1215 .5ke :5.3 ;li 1075 6,:. -: : ::7: Of uhich Gold 6! S1 82 3)! i9E i M9L- 3L .21.