Transcript of meeting of the Executive Directors of the IBRD and IDA, held on Thursday, September 4, 1969 : Cameroon - Education Project

 STRICTLY CONFIDENTIAL 78519 ELK INTERN:ATIONAL BANK FOR RECONST,lWCTION AND DEVELOPMENT 9/4/6.9 JB;RD/IDA INTERNATIONAL DEVELOPMENT ASSOCIATION Washington, D. C. Thursday, September 4, 1969 A joint meeti~g of the Executive Directors of the International Bank for Reconstruction and Development and the International Development Association was convened at 10:00 o'clock, a.m., in the Board Room, 1818 H Street, N. W., Washington, D. C., Mr. Roberts. McNamara, President, presiding. STRICTLY CONFIDENTIAL STRICTLY CONFIDENTIAL STRICTLY CONFIDENTIAL 12 project, to which both the government and ourselves attach the highest priority: These benefits will be widespread and substantial. The project would help meet shortages of manpower, in both public and private sectors of the economy; and make a si.gnifican.t contribution to improving the quality of the output of the school system. Agricultural and technical sources would be introduced into the secondary school curricular; an.d agricultural training facilities would be expanded and imJ?roved. The education system would, thus, become increasingly more relevan.t to the ne.e ds of the local and national economy. The size of the project is related to the foreseeable demand for manpower in the modern sector of the economy -- both to provide for economic growth; and for the progressive re- placement of foreigners, both in public and private sectors, and in the education system itself. The proportion of trained Cameroonians, in both primary and secondary education, would rise sharply during the next few years as a result of the project. The re.placement of expatriates in the priva te sector is evidently a slower process, particularly in a growing economy; and the proport i on of foreigners is not e xpe cted to decline appre ciably during the next f ive or six years. But, in STRICTLY CONFIDENTIAL 13 the longer run, the continuing flow of trained secondary graduates from the education system, will facilitate more : meroonian participation extensive Ca· in the private sector of the economy as well. The map at the end of the appraisal report illus- trates anot!er important characteristic of this project: the schools are planned to be developed in every major region of the country. It will i:mp;rove the regional balance of the educational system, and, thus, give greater opportunities for the education and advancement of large numbers of able pupils throughout the country. This is all complemented by the government's balance regional development program: :cotton and rice in the north; forestry and timber products in the southeast; plantation projects and smallholder tea production in the west; and by the planned improvements in the transportation system. To sum up: The proposed project is expected to :make an important contribution to the development of Cameroon, and is closely linked to development efforts in other sectors; and, therefore, fully justifies your support. Thank you very much. MR. McNAMARA: Thank you, Mr. Wilkinson. Mr. Carriere. STRICTLY CONFIDENTIAL 14 MR. CARRIERE: Mr. Chairman, I have no particular comment on the project itself -- which seems to me to be very well conceived, and which will help Cameroon to finance a ....eCJ. very need/improvement of its educational system. In the course of the two previous years, Cameroon has benefited of low crecd'i ts from IDA, except a credit of $600,000 in 1968. But this country preferred not to postpone its major development projects, and agreed to have them financed by Bank loans, in spite of the cost incurred. Thii.s is the ;reason why I particularly welcome the resumption of IDA's activity in Cameroon; and I fully support your recomunendation. Thank you, Mr. Chairman. MR. McNAMARA: Thank you, Mr. Carriere. Gentlemen, are there other -- Mr .. Rice. MR. RICE: Thank you, Mr. Chairman. We welcome the credit to the Cameroon for an educati.o n project. We believe this particular project is a good one, and we are . glad to give it our full support. However, one aspect of the loan agreement gives us concern; and this is the extension of the 15 percent margin of preferenc to the other Member Countries of UDEAC. I refer in the documen STRICTLY CONFIDENTIAL 15 to page 4, paragraph 15, of your report. Some weeks ago, when the Board considered and approved a power loan to Costa Rica, I expressed reservations as to the appropriateness of the similar procedure in the case of the members of the Central American Common Market. I said then that I thought the implications of this practice had not been f~lly thought through, and that our support for that project should not be taken as s~pport for extension of the preference margin. I, also, expressed the hope that approval of that loan would not serve to establish a policy precedent in this area. I continue to hold to this view, Mr. Chairman, perhaps mQre strongly, because with this credit and the inclusion of this provisison, it appears tnat we are moving one step closer to establishing a policy precedent; and that continuing to move in this direction would, of course, strengthen it as a policy. We do have reservations about this. But, with these reservations recorded, we are glad to give our support to the 'credit and the project. MR. McNAMARA: Thank you, Mr. Rice. I must confess, I don't fully understand the problems STRICTLY CONFIDENTIAL 16 you foresee by extension of the 15 percent preference to a customs union, which, in effect, exists as I understand it in this situation. But, since you have indicated you would approve the project, I won't pursue the matter, today. But I would, at your convenience, like time to talk to you and understand more fully the problems you see in this kind of a policy. The amount involved in this case is very, very small; and I think we can certainly accept the project, as proposed. But I will make an effort to more fully understand th problems that you see if we continue to do this in other respects. Gentlemen, are there other comments? MR. RICE: ~hank you. MR. McNAMARA: Dr. Machado. DR. MACHADO: I fully support this project, and I saw no need of speaking in connection with it -- but the statement just made by my distinguished colleague, the Director from the United States, forces me to remind this Board that this 15 percent prefexence for local suppliers is something that we accept generally in this Bank, when we are dealing with furnishing machinery, equipment, and industrial go c for countries; and I see no reason why we should not apply the same thing to education. STRICTLY CONFIDENTIAL 17 It is very hard, even with this 15 percent margin, for sma:lL' industries and manufacturers in developing countries to compete with the usual suppliers: and this is the only chance, in my opinion, that local industries have of using their own products in their own development. The extension of the principle to members of a common economic area, and a common market, is, in my opinion, one of the best things this Bank has done. I have been receiving, and passing on to our President and members of the staff, many letters of praise for the adoption of this policy by the Directors~ and I hope that in weighing the statement of my colleague's from the United States you will also weigh that there are also opinions on the other side of the fence on the same problem. MR. McNAMARA: Yes. I am very sensitive to the advantage of this to the customs union members, or the common market countries. And it has seemed to me an entirely natural progression, or step, or evolution of the policy that we have followed for years. But it may be that I am failing to under- stand some aspect of it that Mr. Rice and his country has in mind, and I will inform myself of it; and if at some later point, either he or you, or others, wish to enter into a fuller discussion of this matter, unrelated to a particular STRICTLY CONFIDENTIAL 18 project, I will be quite happy to schedule such a discussion for the Board. Mr. Young. MR. YOUNG: Thank you, Mr. Chairman. This appears an excellent project, and I support fully. I was interested in the analysis of the project on page 10 of the appraisal report, which sho1~ the enrollments for the different fields in the education project. And I would have hoped that in the future some greater emphasis coul be given to the higher agricultural section, in view of the great dependence of the country on agriculture. It was only an increase from 70 to 120, and, presumably, it is the higher agricultural section which provides the extension officers, if I am correct there; rather than the technical and vocational. If that is true, then, presumably, there is a lot of work still to be done in disseminating the information around to the farmers. One other aspect or question I have is on page 15 of the appraisal report. And I do welcome the way in which you have arranged for the cost per place to be set out under the various headings. This does now highlight, in my mind, some of the differences that occur. And I am not quite sure of the STRICTLY CONFIDENTIAL 19 reasons for the differences. This does apply in all the sections; but, just take the case of "Boarding." I didn't follow why the 1tCost per Boarder" or the area should be different, say, between "General secondary" and "Technical secondaryr" and the costs move inversely. 1\nd why the "Furniture" requirements for "Technical secondary" should be so much greater than for "Teacher training" would in places. These sort of differences are highlighted in this analysis, and I wondered whether the staff might make some comment on. this. MR. McNAMARA: Yes. Sure. Let me start with your first point, however -- the question of the proposed enrollment versus the existing enrollment in higher agricultural education versus the other types of education. Mr. Wilkinson, would you-- or,if you prefer, one of your associates -- care to comment on that? MR. WILKINSON: Perhaps Mr. Germanacos. MR. NcNAMARA: Yes. Go right ahead, sir. MR. GERMANACOS: The proposed enrollment of 120 at the agricultural school does not show the part-time courses that will be held for extension workers, for students who have completed the lower agricultural schools in the system, and will be taken in from time to time into~art-time courses STRICTLY CONFIDENTIAL 20 or lo~t;:r sum.mer ..vacation cou.rses. The present enrollment o~ 120 is to turn out some- thi~g like 20 . graduates per year for Cameroon itself. And our investigations show that this will be adequ.ate ~or the next few years .. MR. McNAMARA: Thank you. One of the major problems in education financing, I am su.re all of you realize, is to avoid diverting an excessive quantity of the country's resources, scarce resources, into educational fields earlier than is absolutely essential to match with other parts of the economy and its development. Education has such a high appeal, a high political ap~eal, that there is a da~ger of excessive financi~g, excessiv expansion. And our Educational Projects Department and a,rea departments are being very careful to try to avoid that. I feel fairly confident we haven't excessively financed educa- tion, so far. But it is a consta,nt danger that we need to be a,ware of .. And we make eveJJy effort, therefore, in establishi~g proposed enrollments, to be sure that they match w~t~ an opt:i:m'lirl division of scarce resources in the count.r y, and the probable :t:"ate of advance in other sectors of the economy. Now your second qu.es·tion: "'Why the apparent contradictions and iJ?.equalities in the per PllPil cost, shown in STRICTLY CONFIDENTIAL 21 the table on page 15?" Mr. Wilkinson, you, or one of your associates may wish to comment on that. Take, for example, the point Mr. Young raised: the "Furniture Cost per Boarder" for "Technical secondary" -er schools at $65 versus $44 per Board/in "Teacher training." MR. WILKINSON: Mr. Vera, would you like to comment on that? .M,R. VERA: The reason for the difference is the amount of pupils who are in the Boarder school are higher than the number of pupils with lower cost per student place. MR. NcNAMARA: There being some fixed costs, in effe t; and some variable costs. And with a smaller number of pupils in the "Teacher training" than the "Technical secondary" the fixed costs per pupil are higher; and, hence, the total cost -- or, exactly the reverse: the smaller number of pupils in the "Technical secondary" schools the fixed costs per pupil are higher; and, hence, the total costs are higher. What are the number of pupils -- number of boarder pupils in the "Teacher training" versus the "~echnical secondary" in the project? It's roughly twice the -- MR. GERMANACOS: One hundred eighty in each. In STRICTLY CONFIDENTIAL 22 "Te~cher trainitig" it's 500. MR. McNAMARA; So that the three times or four times greater n:unber in "Teacher training" leads to the lower per unit cost, Mr. Young. MR. GERMANACOS: Yes. MR. McNAMARA: Gentlemen, are there other comments or questions on this proposal? {Silence] If not, we will consider it approved. Mr. Kochman, would you care to comment? MR. KOCHMAN: Mr. Chairman, this project gives me the occasion to underline the very good relationship that has cteveloped between the World Bank Group and the Federal Republic of the Cameroon. Judging by . the number of credits and loans that have been given to that country in the last three years to be more precise since 1967 -- I think I must say that Camero n is ~mea~ the countries in my group that are in .a good place. This situation is widely recognized by the federal authorities of Cameroon, and that is why the President of the Federal Republic has asked me personally to express his deep apprecia- tion of the Federal Government for the great assistance that has been given by the World Bank Group. MR. McNAMARA: Thank you very much, sir.