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General information

World Bank: Annual Report 1991

The World Bank anticipates new lending commitments to developing countries in fiscal year 1992, which began on July 1 1991, to range between $23 billion and $25 billion, according to the Bank’s Annual Report 1991, which has recently been published. New loans from the IBRD (International Bank for Reconstruction and Development) are expected to amount to between $17 billion and $19 billion while new credits from the IDA (International Development Association) are expected to reach SDR4.8 billion (currently equivalent to $6.4 billion).

In fiscal year 1991, IBRD lending totalled $16.4 billion, up from $15.2 billion the previous fiscal year. IDA credits in FY91 amounted to SDR4.6 billion ($6.3 billion equivalent), compared with $5.5 billion in FY90. Net disbursements from IBRD and IDA in FY91 totalled $6.4 billion, down from $9.3 billion a year earlier. Net income for the last fiscal year was $1.2 billion, up from $1.05 billion in FY90.

Lending for human resource development rose dramatically during FY91. New commitments for education combined with loans and credits for population, health and nutrition amounted to $3.8 billion, up from $2.4 billion the previous year. Lending to nations in Eastern and Central Europe also rose sharply in FY91, totalling $2.9 billion, compared with $1.8 billion a year earlier.

Lending for structural and sector adjustment operations, accounting for 25% of total FY91 commitments by IBRD and IDA, totalled $5.67 billion, up from $3.97 billion in FY90 - 20% of total combined commitments that year.

Other activities described in the Report include:

- adoption of a long-term strategy to ensure that all assistance undertaken by the World Bank is geared to the reduction of poverty;

- provision of additional financial assistance by the Bank (nearly $1.5 billion) and the international community to countries adversely affected by the Gulf crisis;

- launch of the second phase of the Special Programme of Assistance to countries in sub-Saharan Africa with the support of 18 donor nations which have pledged $7.4 billion to help finance adjustment programmes;

- continuation of support for debt and debt-service reduction, along with the first operations of the Debt Reduction Facility for IDA-only countries;

- initiation of improved procedures within the World Bank Group for cooperation in supporting private-sector development;

- continued increase of the proportion of projects approved which include specific actions aimed at integrating women into the development process;

- publication of an Environmental Assessment Sourcebook, along with development of a new forest policy;

- revision of the Bank’s loan-loss provisioning policy;

- selection by the Board of Executive Directors of Lewis Preston to be the next President of the World Bank.

During the course of fiscal 1991, membership in the IBRD rose to 155 nations and in the IDA, to 139. At the end of FY91, action was pending on membership in the IBRD and IDA for Albania and Switzerland and in IDA for Portugal.


Official development financing and contributions from the private sector improve in 1990

Official development financing and private sector contributions grew in 1990 according to a recent OECD study on financing the developing countries’ external debt. Official bilateral payments from the DAC countries are firm, there are large increases in payments from the Arab countries and direct investments are continuing, the Organisation says. The improvements recorded in 1988-89 were confirmed in 1990, with the net contribution of resources to the developing world rising by 16% for $142 billion, broken down as follows:

- public financing 55%
- contributions from the private sector 43%
- export credits 2%

Debts mounted more slowly. External debts, totalling $1.450 billion by the end of 1990, were 6% up on 1987. Payments by the main categories of the countries most heavily in debt declined in 1989 and 1990. The situation remains serious in the low-income countries of sub-Saharan Africa and the medium-income countries, particularly those in Latin America.


The Philippines

The Commission has decided to provide ECU 300 000 in emergency aid to the victims of the torrential rains which have hit the Philippines adding to the damage already done by the eruption of the Pinatubo volcano.

This aid will be used to finance the conveyance and distribution of basic necessities to the sections of the population worse hit. A first instalment of an equivalent amount had already been authorised on 24 June.


The Commission has decided to provide ECU 200 000 of aid for victims of the earthquake which struck Guatemala on 18 September, leaving 20 dead and 20 000 homeless.

The aid will be chanelled through the League of Red Cross Societies (LICROSS) and the French organisation, Mcins sans Frontis, and provides for the supply of urgent essentials such as tents, blankets, medicines, etc.


In response to a personal request from the Romanian Prime Minister, Mr Roman, to Mr Andriessen and to the appeal for international aid launched by the United Nations Disaster Relief Organisation, the Commission has decided to grant ECU 500 000 in emergency aid to help the victims of the floods in Romania.

According to latest reports torrential rain has caused considerable damage and made 13 000 people homeless in the departments of Suceava, Neamt and Bacau. In Bacau 71 people died and 43 are missing after a dam burst.

The aid is made up of ECU 200 000 for shelters and medicines plus ECU 300 000 from the Phare programme to supply essential goods and diesel fuel. It will be implemented by the Commission’s customary partners, including the Belgian NGO Villages Roumains’.

Yugoslavia and Cambodia

The Commission has granted ECU 1 million in emergency aid for victims of the conflict in Yugoslavia.

The aid covers the distribution of essential supplies (medicines, basic medical supplies, provision of essential services, etc.) and will be implemented by the International Committee of the Red Cross and Mcins sans Frontis (Belgium).

The Commission has also granted ECU I million for people in Cambodia affected by the renewed fighting and recent flooding.

The Commission’s usual partners (NGOs, agencies of the United Nations, Red Cross societies) will handle the aid.


The Commission has made an agreement with the Hungarian Government to purchase 45000 tonnes of Hungarian bread wheat for Albania, at a cost of ECU 5 million. The expenditure is being met out of funds set aside for the Phare programme, under which the Community gives economic support to a number of countries in Central and Eastern Europe, including Hungary.

This essentially humanitarian aid is an expression of the Community’s political will to ensure that the Albanian people have sufficient food. It is an additional bonus that this end can be served by buying a Hungarian product which is immediately available. The wheat is to be transported by rail. This will avoid putting a strain on Albania’s very limited port facilities, which are to be used to import the food which the Community was already planning to send.

The Commission had promised to supply Albania with 50000 tonnes of bread wheat from its own stocks and now plans to increase that quantity significantly.


The Commission has just decided to finance the following projects as part of the financial and technical assistance programme for developing countries in Asia and Latin America.

India: ECU 11800 000 for an irrigation scheme in Kerala.

The idea is to reduce poverty in rural Kerala by raising farm incomes thanks to better productivity on 20 200 hectares of irrigated land by 1997 (which should mean an extra 74 000 t of paddy rice and 3800 t of copra).

The work is as follows.

1. Irrigation water to be supplied for the second crop (11 500 ha under irrigation from storage reservoirs by the end of 1994). During this time, 459 reservoirs will be distributed throughout the State of Kerala.

2. Irrigation water to be supplied for the second crop (8700 ha irrigated by pumping from independent networks by the end of 1988) During this phase, 31 networks will be built in the districts if Thrissur and Malapurram.

3. Project management unit installations to be built by September 1992 and to stay operational throughout the period of implementation. Detailed studies of the economic, technical, social and ecological aspects of the basin and land rationalisation plans are to be run.

Bolivia: ECU 5 000 000 for water supplies to the town of Potosi.

The purpose of this project is to make up for the chronic shortcomings of the Potosi water supplies, which get worse every year as the population expands, and have been particularly bad over the past two years because of drought.

In 1990, in particular, the water supply system virtually dried up for more than a month, when serious gastro-intestinal cases trebled, with an alarming increase in deaths, particularly of children.

The project should guarantee the town a supply of water throughout the year, with a useful volume of 40 litres per person per day in the dry season and as much as 701 in the other seasons.

International agricultural research centres: ECU 9 000 000 for agricultural research.

This, a continuation of the Community assistance begun in 1977, is divided as follows:

- CIAT (Centro Internacional de Agricultural Tropical), Cali, Colombia: ECU 1 900 000. Research activity here focuses on four products - beans, maniac, rice and tropical forage.

- CIP (Centro International de la Papa), Lima, Peru: ECU I 100 000.

The aim here is to improve the quality of potatoes from the highlands of Peru and develop a strain which is suitable for the tropical plains.

- ICRISAT (Institute of Crops Research for the Semi-Arid Tropics), Hyderabad, India: ECU 1 900 000.

Research here is into products from the semi-arid tropics in 50 countries of Africa, Asia, Latin America and Australasia - for example, sorghum, millet and chick peas.

- IRRI (International Rice Research Institute), Manila, Philippines: ECU 1 900 000.

IRRI researches varieties of rice, the preparation of the soil and the socioeconomic aspects of new technology.

- ISNAR (International Service for National Agricultural Research), The Hague, Netherlands: ECU 500 000.

This establishment helps developing countries to improve the efficiency of their research through better organisation and management.

- CIMMYT (Centro International de Mejoramento de Maiz y Trigo), Mexico: ECU 1 700 000.

As its name suggests, CIMMYT specialises in research into improving varieties of maize and wheat.


Two financial agreements signed

Mr Abel Matutes, Member of the Commission with special responsibility for Mediterranean Policy, and Mr Safa Giray, Turkish Minister of Foreign Affairs, have signed the agreements for financing two Community/Turkey cooperation projects.

Community funding will amount to ECU 5 400 000, on a grant basis. The projects will deal with vocational training in tourism and coal-mining. Under the first project a centre will be set up at Istanbul capable of training 360 professional people annually, for technical and financial management in tourism to a standard similar to that in other tourist countries. Under the other project, a training programme will be set up to prepare young mechanics, electricians and metal workers to enter the Turkish coal industry.

The signature of these two financial agreements is the last stage in the implementation of the ECU 75 million Special Assistance Programme adapted in 1980.


1990 Report and mid-term aid renew with Central and Eastern European partners

The Commission has sent to the Council and Parliament, the annual report on the implementation of economic aid to the countries of Central and Eastern Europe. The report covers the period ending 31 December 1990.

The report gives a detailed breakdown of the use made of the ECU 500 million granted to finance projects in Poland, Hungary, Czechoslovakia, the former GDR, Bulgaria and Yugoslavia, the six countries eligible for such aid last year.

This year, the Community has budgeted ECU 785 million for PHARE, which now covers Romania in addition to last year’s six recipients.

The Commission has convened a ministerial meeting with the Central and Eastern European partners for 30 September and I October with the aim of conducting a mid-term review of the use made of this aid instrument.

It will be an opportunity to study aid already granted, to assess future needs and to discuss both the economic and political situation and the implementation of reforms in the countries concerned.


Setting-up of an ECU 10 000 000 Fund for a technical assistance programme

The Commission has decided to grant an initial sum of ECU 10 000 000 to set up a multidisciplinary technical assistance fund as part of the technical assistance programme for the USSR adopted at the Rome Summit in December last year, which provides for overall support of ECU 400 million in 1991.

This decision should enable the drawing up of sectoral projects which, in accordance with the indicative programme signed by the Community and the USSR in August, will cover:

- public and private-sector management training,
- foodstuffs distribution,
- financial services,
- transport,
- energy.

This initial funding is intended:

- to ensure prompt and effective use of aid by making it possible to carry out immediately essential tasks connected with the preparation and implementation of the technical assistance programme as a whole and individual projects;

- to response flexibly and swiftly to the urgent need which has emerged in the USSR for small-scale training schemes as a result of the country’s efforts to improve the requisite professional know-how and skills in specific areas which link up with the priorities of the indicative programme;

- to increase the Commission’s capacity to deal adequately and promptly with the urgent problems affecting the USSR.

In addition, this measure will make a direct contribution to the process of economic restructuring under way in the Soviet Union and help increase its ability to manage Community-backed operations.

Mr Andriessen, Vice-President of the Commission, will be visiting the Soviet Union from 8 to 12 September when he will meet the relevant authorities, primarily to work out the coordination for technical assistance in the light of recent events.

Implementation of Community aid to the USSR

Technical assistance

Implementation of the indicative programme of Community technical assistance for 1991, which was signed on 2 August, has not yet started. The programme provides for a ECU 400 million package that forms part of the aid for the Soviet Union decided at the Rome European Council in December.

Food aid (ECU 250 million)

Implementation started in June.

Contracts for most (approximately 80%) of the proposed quantities of food aid have been awarded and transport contracts have been signed. But of these quantities, only a small proportion, mostly infant foods and milk powder, have been delivered.

Credit guarantee (ECU 500 million)

The contract between the Community and financial institutions to guarantee credit for the export of Community agricultural and food products to the Soviet Union has not yet been signed.


UNCTAD VIII - an opportunity for new political approaches

Kenneth Dadzie, UNCTAD Secretary-General, has just produced his report for UNCTAD VIII, the eighth UN Conference on Trade and Development, scheduled for Cartagena de lndias (Colombia), on 8-25 February 1992. It deals with speeding up development and the aims of national and international policies in the 1990s and it calls on developed and developing countries alike to grasp the opportunity of UNCTAD VIII to devise innovative political approaches.

The scope, structure and subject matter of the Dadzie report reflect the agenda which the governments have adopted for the Conference, the guiding principle of which is better national and international action and multilateral cooperation for a healthy, reliable and fair world economy. It discusses the national and international dimension of development and the question of making development last - a theme running through the report and studied in its many ramifications. It emphasises the democratisation of political structures, the importance of proper respect for human rights, be they economic, civil or political, in the development process and the fact that harmonious development of the world economy is an important factor of peace and stability.

Part one, on trends in the world economy in the early 1990s (change and stagnation), looks at what is at stake, what changed, and what has been inherited from the 1980s. Elements of analysis and assessment are provided and an attempt is made to reveal both the consequences of the problems and the potential of long-term structural changes when it comes to lasting development and expanding international trade in an interdependent world economy.

Part two, containing the main guidelines, covers market forces, government action, proper management and trends in the economic policy framework. It looks at policies likely to speed up development - the background for an investigation of the new and so far controversial notion in UNCTAD of ‘sound management’ and particularly the role of market forces and government action in promoting development.

Part three tackles political questions in the interdependent fields of development resources, international trade, technology, services and commodities from the point of view of desirable national and international policies and in the light of the aims of lasting development and sound management.

Separate regional meetings have been run at intergovernmental level over the past few months - the group of Latin American countries went to Caracas (Venezuela), the Asians to Pyongyang (Korea) and the Africans to Lusaka (Zambia).

These events were preceded by informal meetings where various development operators were invited to think about items on the UNCTAD VIII agenda. Meetings such as the round table on international commodity policies in Moscow in May and the second session on trade and the environment in Oslo (Norway) in February brought out new ideas and fresh prospects to help both governments and the UNCTAD Secretariat to come up with an analytical report containing a detailed examination of the main problems for the eighth Conference.