UNITED A NATIONS

Distr- GENERAL

A/41/522 22 September 1986

ORIGINAL: ENGLISH

Forty-first session Agenda item 82 (b)

SPECIAL ECONOMIC AND DISASTER RELIEF ASSISTANCE: SPECIAL PROGRAMMES OF ECONOMIC ASSISTANCE '

Summary reports on , Madagascar, Mozambique and Vanuatu

Report of the Secretarv-General

CONTENTS

Paae

I. INTRODUCTION ...... 2

11. DJIBOUTI ...... 2

III. MADAGASCAR ...... 8

IV. MOZAMBIQUE ...... 12

V. VANUATU ...... 19

86-23698 205Oi (E) /1.. I:: ‘\' . A/4 l/522 Enqlish Pa9e 2

I. INTRODUCTION

1. The General Assembly, at its Portieth session, adopted a number of resolutions in which the Secretary-General was requested to report to the Assemblv at its forty-first session on the economic situation in a number of developina countries and on the progress made in orqanizina and implementinq special proqrammes of economic assistance for those countries.

2. In order to enhance the efficiency and effectiveness of the special prosrammes of economic assistance, it has been decided that, as of this year, the United Nations Development Programme (UNDP) will assume responsibility for implementinq resolutions calling for such programmes in countries for which there is an active round-table process and where special economic assistance programmes have been integrated into the national presentation at round-table meetings. For 1986, they included the following countries: Benin, Cape Verde, Central African Republic, Chad, Comoros, Eauatorial Guinea, Gambia, Guinea Bissau and Sierra Leone. A summary report prepared by UNDP covering these countries was issued in document A/41/592.

3. The Office for Special Political Questions retains responsibility for implementing special economic assistance resolutions dealing with Djibouti, Guinea, Madaqascar, Mauritania, Mozambique, , Uganda and Vanuatu. The Government of each of these countries was asked whether it wished the report to the General Assembly to be based on the findings of a review mission that would visit the country or whether it would prefer to provide information which would constitute the basis of a brief summary report to the Assembly. The Governments of Djibouti, Guinea, Madagascar, Mozambique and Vanuatu expressed the wish for the second form of report. The summary reports would address major economic developments in each country in the period under review as well as the status of special programmes Of economic assistance.

4. With the exception of Guinea, each country has provided the necessary information for incorporation in this report. Should information on Guinea be received in time, it will be reproduced as an addendum to the present report.

II. DJIBOUTI

A. Background

5. The special programme of economic assistance for Djibouti was initiated in 1978, in response to General Assembly resolution 32/93 of 17 December 1977 to help the country cope with its serious economic and social problems that were compounded by severe drought. The basic features of the economy of Djibouti were described in some detail in previous reports of the Secretary-General on assistance to Djibouti (A/33/106, A/34/362, A/35/415, A/36/281, A/37/136, A/38/216, sect. VIII, A/39/392, sect. V, and A/40/441, sect. VI).

/ l . . A/41/522 Enql ish Page 3

D. Economic situation

6. l’hc basic constrainto to economic development in Djibouti include a harsh arid environment that provides little scope for agricultural production and a consequent dependence on imports1 a poor natural resource endowment and thus 110 basis for siqnificant induntriol activity! an unueually high doqree of economic reliance on the tertiary sector associated with the high degree of population concentration in the -orientad port city of Djiboutit limited skilled and manaqerial human resources) continued dependence on external assistance for budqetary and capital sxpenditureuj and ii relatively hiqh rate, especially when measured aqainut resources. To the above must be added a continuing problem of refugees, which further strains both the resources and the capacity of the Government to deal with the problem. In 1985, there were 30,000 refugees in Djibouti, out of a total population estimated at 450,000.

7. Dj i bout i I B economy, boinq overwhelll~ing?.y dependent on the service sector fservicee provided to international port and airport traffic), has borne the brunt of the world-wide crisie in maritime transport in recent years.

8. In 1985, the decline in the value of the dollar - to which the Djibouti franc in linked - and in the price of oil has made Djibouti competitive aqain in tho sale of uoods and services without creating inflationary pressure, which had been kept very low until 1985. The Government continues to qive hiqh priority to encouraqinq private investment in Djibouti, particularly in the auf tcultural, small industry and services sectors. The employment situation should improve durinq the next few vears with the implementation of sizeable investment prnlocts and renewed activity in the private sector. This has been trigqered by increased consumption amonq expatriates whose purchasing power has risen as a result of the decline in thb value of the dollar.

1. Gross national product

9. The lack of consistent and reliable statistical data has made it difficult to establish overall trends in economic performance in Djibouti. Generally, the c?conomy has ramalned ~taqnent throuyhout 1985. Given the 1arrrQ nuh,ber of foreiqnere earning a hiqh income in Djibouti (French army, technical assistants, foreign firms and employees), the national income of the Djiboutiens can only be rtruqhly calculated on the bagis of the gross national product. The Government has thun estimated that the per capita yrose national product (GNP) for 1983 (the last year for which full stetigtics are available) is in the order of $415. It should also be pointed out that Djibouti’s economy is character ized by a high deqree of monetization (it does not produce food for its own consumption) and by hiqh prices, as near!y all Consumer qoods are imported.

2. Pub1 ic finance

10. The cyclical financicll difficulties of the economy stem primarily from the fact that fiscal revenue haa leveled off as a result of the rise in the value of the dollar and its impact on the income of a segment of the foreign population and A/41/522 English Page 4 on domestic prices, expressed in Djibouti francs, of imports from European countries that are Djibouti’s main suppliers. There has also been a decline in external grants to subsidize the budget as donors have also been experiencing financial difficulties. In 1985, the Government continued to implement the austerity programme adopted in 1984. It is likely that this proqramme will be needed beyond 1986. The decline of the dollar and the implementation of projects that are part of the investment programme submitted to the donors' conference in 1983 should eventually lead to an upturn in the economy.

3. Balance of payments

11. Until 1982 Djibouti had an overall balance-of-payments surplus because of the external financing it received (in the form of loans and subsidies). Starting in 1983, the Government was compelled, because of its economic difficulties, to draw on the reserves it had built up since independence. The current account deficit is expected to remain high in 1986-1987 as high imports will be needed to meet the envisaged level of investment. The outlook for the medium and long term remains problematic.

12. totals some $205 million (of which 46 per cent is held by public enterprises) . Servicing of foreign debt will require $8 million in 1986, rising to $11.5 million in 1987.

C. Development activities

1. Special programme of economic assistance

13. The last’review of progress made in implementing the special programme of economic assistance for Djibouti is contained in the report of the Secretary- General (A/37/136). At that time, it was indicated that only 4 of the 51 projects of the initial programme had not received any support. These as well as the projects being implemented were incorporated in the investment programme presented to the 1983 donors conference.

2. Donors’ conference and public investment programme

14. The donors’ conference led to the preparation of an investment programme in the public sector; it consisted of 93 investment projects. Pollow-up activities and implementation of the programme have been conducted by a national supervisory committee chaired by the Ministry of Finance and assisted by a 'UNDP/World Bank technical assistance project. As at the end of December 1985, a total of 57 out of 93 projects were fully or partially funded. The total cost of these 57 projects was estimated at some $320 million, of which 63 per cent will be financed by external loans, 11 per cent by grants and 9 per cent by internal resources. Funding for the remaining 17 per cent has yet to be found.

15. In addition, the Government is drawing the attention of the donor community to the other priority projects that are Still without funding (see para. 17). A/4 l/522 Enqlish Paqe 5

16. With rraspect. to rcq,onal efforte, it should be pointed out that the TnterqoVf?rnmPntal Authority for Drouqht srld Development (IGADD) was established officially in January 1986 and a Plan of Action for the countries concerned has been adopted .

17. ‘I’here are plans to hold a second donors’ conference in November 1986. Preparations for the conference will be carried out with technical assistance from the United Nations system and the Commieaion of the European Communities,

projectePub1 ic investment (In million8 of United Ststss dollars1

Coet Remarks (Eat imatsd in AGRTCUL’l’URE March 1985)

Water

Tad jourah aqr icultural 0.50 Project submitted to the donors’ enqinear inq base conference with the same cost estimate.

Installation of solar 0.56 Project submitted to the donors’ pumps conference with the same cost astimate.

Stockraisinq and f ishinq

3. ‘rannery z/ 0.12 Project submitted to the donors’ conference in t.-e amount of 54 million. The coet estimate relates to the fcaaibility study (SO.12 million).

4. Poultry farminq 0.04 Project submitted to the donors’ conference in the amount of S1.3 million. Cost estimate of SO.04 mlll?on relates to the feasibility study.

Tota 1 1.22

Tl. RESEARCH

5. Evaluation of 0.56 Project eubmitted to the donors’ materials conference il. the same amount.

Tot a 1 0.56 A/41./522 English Page 6

Cost Remarks

III. INDUSTRY-MURISM

6. Woodworking 0.03 Project submitted to the donors’ conference in thr amount of $3.1 million, Fundincj is beina sought to cxer the cost of the feasibility studv.

7. Paper recycling 0.14 Project submitted to the donors’ conference in the amount of $1.6 million. Funding Is being souaht to cover the cost of the feasibility study.

8. Soap factory 3.52 Project submitted to the donors’ conference in the 8ame amount.

9. Brickworks 2.00 Project submitted to the donors’ conference in the same amount. The Islamic Development Bank is considering financing the fsasibil ity studv.

10. Rest houses at Eyla Ambelo 1.01 Project submitted to the donors’ and Khor Angar conference in the same amount.

11. Rest houses at the seaside 1.46 Project submitted to the donors’ conference in the same amount.

12. Mousha tourist centre 0.60 Project submitted to the donors’ conference in the same &mount.

Total 8.76

IV. TRANSPORT AND TELECOMMUNICATTONS

13. Urban transport centre 0.68 Project submitted to the donors’ conference in the same amount.

14. Development of a free zone 4.80 Project submitted to the donors’ in the port conference in the same amount. The Islamic Development Rank is considering finanning the feasibility studv.

15. Pier No. 14 14.97 Project submitted to the donors’ conference in the same amount. A/41/522 Ena 1 i sh Page 7

cost Remarks 16. Telecommunications 2.80 This project. was not auhmi.tted to euu ipmen t the donors’ canference inasmuch as fundina had already been arranged.

17. PANAF’TEL 3.60 New project.

18. Television station 2.50 This project was nat submitted to the donors’ conference because fundina had already been arranged.

19. Television eUUipment 4.1@ Project submitted to the donors’ conference in the same amount.

Tata 1 33.45 v. TOWN PLANNING

20. Drainage disposal 17.40 The project was not submitted to the donors’ conference as funding had already been arranged.

21. Utilization of local 2.80 Project submitted to the donors’ materials conference in the same amount.

22. Development of the Arta 2.30 Project submitted to the donors’ road conference in the same amount.

23. Collection of aarbaqe 2.00 Project submitted to the donors’ conference in the eame amount.

X4. Saline reservoir in rhe 1.46 Project submitted to the donors’ west conference in the same amount.

25. Extension of the drlnkinq 0.82 Project submitted to tht donors’ water supply conference in the same amount.

Tuta 1 26.78

VI. TRAINING - YOUTH - SPORTS

26. Vocational lycbe 12.38 Project submitted to the donors’ conference in the same amount.

27. Collhge d’enseignement 7.54 Project submitted to the donors’ secondaire at Balbala conference in the same amount.

28. General education lyc&e 3.00 Project submitted to the donors’ conference in the same amount, A/41/522 English Page 8

cost Remarks

29. Colliiqe de formation 5.74 Project submitted to the donors’ professionnelle conference in the same amount. administrative at Balbala

Tota 1 28.66

21 Fundinq under discussion.

III. MADAG.iSCAR

A. Background

18. The special programme of economic assistance for Madagascar was initiated in 1984 in response to Economic and Social Council resolution 1984/3 of 11 May 1984, to help the country cope with both the priority needs and the medium- and lonq-term impact of the cyclones and floods that had struck the country. The basic features of the as well as specific priority projects requirinq international assistance were described in detail in the previous report of the Secretary-General (A/39/404).

B. General economic developments

19. Madagascar cantinues to face serious economic constraints arisinq from an overriding foreign exchange shortage, which reflects its external debt and balance- of-payments position. Beginnina in 1982, the Government, in co-operation with the lnternat ional Monetary Fund, has implemented financial stabilization measures that are beginnina to show positive results: the central qovernment deficit was reduced from 18 per cent of GDP in 1980 to about 5 per cant in 1985; the balance-of- payments current account deficit fell from approximately 20 per cent of GDP in 1980 to 10 per cent in 19851 and the rate of declined from an average of 25 per cent for the period 1981-1983 to 10 per cent in 1984-1985. ft is estimated that in 1985, real GDP increased by 2.4 per cent, higher than the average of the two preceding years but still below population qrowth (approximately 2.75 per annum).

20. To achieve the above, government policy focused on demand manaqement, namely curtailing government expenditures and imports and the adoption of a flexible exchange rate policy in order to improve the competitiveness of the economy. At the same time, policies were initiated to restructure the economy, diversify the export base, rehabilitate public enterprises, liberalize domestic prices and reform financial institutions.

21. In spite of the above, economic performance in 1985 was disappointing. Exports declined by 16 per cent as compared to 1984, mainly a result of decl ininp and vanilla exports. The overall balance-of-payments situation remained critical. With the possible exception of cotton, agricultural production has been ~/41/522 Enql ioh Page 9 slow in responding to pricing and other po,icy initiatives. Output in the industrial sector showed a modest gain in 1985 but not enouah to make up for the losses in previous years. Major constraints in this sector include shortaaes of domestically supplied agricultural raw materials and of imported inputs and spare parts.

22. Despite several debt rescheduling arranaements, foreign debt service payments remain a serious constraint . In 1985, the debt service ratio was estimated at 89 per cent before rescheduling and 47 per cent with rescheduling.

23. The stabilization policy pursued by the Government has had severe social costs, and the living standards have continued to fall. The reduction in investments ha3 resulted in a deterioration of infrastructure, while stagnation due t0 lack of imports increased ,

24. Madagascar is at a critical staoe in its economic development as it attempts to make the transition fro3 retrenchment and stabilization to adjustment and growth. The 1986-1990 public investment programme has three major objectives: food self-sufficiency, increased exports and improved living standards, GDP is targeted to grow at 3 per cent per annum. is the priority sector, to be reinforced by the rehabilitation of infrastructure and transport, and by renewed industrial growth. Rehabilitation and intensification of existinq investment will have priority over new projects. The total cost of the five-year investment programme is estimated at $1.7 billion, of which 55 per cent would be in foreian currency.

Table 1

Estimated qross domestic product by industrial origin at 1976 prices, 1980-1984 (In billions of Malaqasy francs) g/

Or iq ins 1980 1981 1982 1983 1984

Agriculture, forestry and f ishinq 78.3 74.8 77.8 77.9 04.3 Industry 55.0 42.4 36.4 36.9 36.7 Services 90.7 84.5 03.6 83.0 84.2 Pub1 ic administration 41.7 43.8 44.2 44.7 45.4 Import dllt.ies 9.6 6.0 4.9 4.7 4.6 275.3 251.5 246.9 249.0 254.2 --.- - --

Percentage change 0.8 -0.6 -1.9 0.9 2.1

Source: Planninq Directorate, Government of Madagascar,

d/ Rate of exchange ( 1984) I 550 FMG - $US 1. A/41/522 Enql iAh Page 10

Table 2

Summary balance of payments (Millions of United States dollars in current prices)

1980 1981 1982 1983 1984 1985 fi/

Merchandise exports, f.o.b, 436 332 327 310 333 278 Merchandise imparts, f .o. b. 764 5!1 452 3.1 8 352 336 Services (net), of which8 -275 -250 -246 -239 ,3-..9 -213

Scheduled interest payments (42) (89) (97) (112) (137) (126) Private cllrrent transfers (net) 4 4 -1 -1 4 15 Cur rent account balance -599 -425 -372 -308 m-244 -256 Pub1 ic transfer8 43 63 72 61 68 63 Medium- and lcnq-term loans (net) 374 280 122 197 160 148 Disbursement (417) (327) (210) (194) (121) (146) Scheduled amc.it ization (43) (110) (181) (196) (130) (149) Debt relief (net) (0) (63) (93) (199) (169) (151) Net credit from IMF 49 37 57 7 18 -4 A,*rears (- = deer ease) iL7 70 70 74 -9 -8 C-her capi ta1 11 -15 60 -45 32 32 Charge in reserves (- = decrease) -105 -10 -9 14 -25 20

Source: Central Bank of Madagascar.

/ . . . A/41/522 Enql ish Paqe 11

Table 3

Debt service, exports and debt service ratios

1980 1981 1982 1983 1984 (Millio~f ZrnG StaF dollars in current prices)

Scheduled debt service 90 208 279 312 300 316 Interest (42) (89) (97) (112) (137) (126) Amortization (43) (110) (181) (196) (130) (149) Payment of arrears (0) (0) (0) (0) (9) (8) IMF repurchases (5) (9) (1) (4) (24) (33) Debt rescheduled (net) 0 63 93 199 169 151 Debt service after rescheduling 90 145 185 113 131 165 Exports of goods and services 518 398 382 358 394 354 Debt service ratios; (Percentages) Before rescheduling 17 52 73 87 76 89 After reschedulinq 17 36 49 32 33 47

Source: Central Bank of Madagascar.

sl/ Estimate.

c. Special proqralllme of economic assistance

25. The special programme of economic assistance formulated in 1984 to assist Madagascar in recovering from recent cyclones and hurricanes, in particular cyclone “Kamisy”, trtalled approximately $43 million. The programme included 8 projects to restore vital agricultural infrastructure ($4.5 million) 17 projects to reconstruct rvads, ports and ai;jmrts ($14 million), 6 projects to rehabilitate industrial plants ($10 millionr , 3 projecte for the reconstruction of essential public buildinas and electricity networks ($10 million), and one project aimed at strenqtheninq the meteorolooical and disaster early warning system ($1.3 million),

26. Accordinq to information provided by the Gcvernment, the r’orld Bank provided an immediate advance to cover the costs of studies that had to be undertaken urqently and of techrrical consultants to prepare specific project proposals. In February 1985, a loan of $15 million was neqotiated to cover reconstruction and rehabilitation projects for ports, airports, roads, public buildinqs, agriculture infrastructure, electrical networks, houeinq and technical consultants.

27. No additional information was provided by * e Government on other responses to the special proqramme of economic assistance, A/41/522 English Page 12

IV. MOZAMBIQUE

28. The special programme of economic assistance for Mozambique was first initiated in 1976 in response to Security Council resolution 386 (1976) of 17 March 1976 concerninq economic difficultfee ariaing from the country’6 application of economic sanctions against the regime in Southern Rhodeeia. Pursuant to subsequent resolutions of the various intergovernmental bodies, the programme expanded its focus to encompass the reh?bilitation and developmsnt efforts of the Government. The most recent report of the Secretary-General (A/40/441) reviewed economic developments through 1983 and called to the attention of the international community urgent needs for immediate assistance as well as some priority programmes designed to establish a basis for future development.

A. Economic ei tuat ion

1. General

29. Previous reports have presented detailed information on the critical economic situation of Mozambique. Although relatively richly endowed, the country confronts severe obstacles in its efforts to promote economic and social development: a colonial heritage of an economic structure geared to service other countries and a consequent neglect of domestic production for domestic consumption; a qeo-political situation that has required sacrifices as well as the major expenditure of scarce resources in a continuing effort to achieve peace and security for its inhabitenter and several years of natural disasters, including droughts, floods and cyclones, which also set back what little progress had been achieved.

30. There has’been little overall improvement in these fundamental constraints during the period under review. The effects of the recent drought, which disrupted the lives and livelihood of more than two million people, continue to be felt. Durinq 1985, heavy downpours brought floods in some parts of the central and southern zones of the country while areas inland, particuiarly in western Inhambane and eastern Gaza, once again suffered from drought.

31. Moreover, the internal security situation has continued to thwart many of the development efforts of the Government. Since the attacks of armed insurqe:rts are often tarqeted against the internal logistics system, the distribution ok inputs necessary for agriculture, such as seeds and tools, as well as food and other relief items, was severely hampered. However , dur inq 1985, the action taken by the Government to expand and lmprove co-ordination of an integrated air, sea and road transport network has successfully overcome some of these constraints.

32. On 23 March 1985, the Council of Ministers issued a press communique announcinq measures aimed at improving the overall situation, which inclt.de specific measurea to reinforce national defence and the introduction of a policy of maximum austerity, specifically with respect to fuel consumption, and policies to improve economic and financial management.

33. Tr, spite oE the difficulties confronting it, the Government is cont:‘.nuinq to A/4 l/522 Enqlimh Paya 13 apply a praqmatic approach to deal not only with the immediate crisis, but alao to establish a basis for lonq-term development, However, the ability of the Government to implemant ite policies of etructural transformation ia severely curtailed by the overwhelminq need to devote time and regourcea to the pressiny problem3 of nr-ltianal security 8nd emerqencien.

2. -.I3concimic performance 34. Althouqh there is limited reliable statistical data, all indications are that, durina 1985, economic performance continued to decline. In December 1985, the Minister of Finance told the Peoples Aeeembly that the objective of the state plan for 1985 had been to halt the trend towardsl neqative growth. But the plan was only 77 per cent fulfilled, reeultinq in the GDP declininq by 20 per cent in 1985, 88 compared to 1984. The National Planninq Commieeion has published figures that ahow a serious decline for all the main crop8 since 1981, and the production of Mozambique’s main export crops fell fer short of levels reached in 1975. The cause8 are partly rooted in actions of armed inaurqents, which severely disrupted merketfnq, adminietrat ion and tranaport. Shortages of aqriculturel inputs and consumer aoodn also affected production. The induetrial eector is workinq at approximately 20 per cent of capacity, and the index of production has decreased approximately 50 per cent since 1980 - primarily because of a lack of spare parts, manaqement capacity, constraints in the import of raw material8 end foreiqn exchanqe ehortoqeo, a8 well a$ the eerious eecurity situation and sabotaqe againet industry.

35. Expenditures on defence and security will account for more than 42 per cent of total qovernment expenditures in 1986, compared with 37.4 per cent in 19U5. Investment expenditure declined by more than 35 per cent between 1983 and 1984. rsflectina amonq other things the inability to obtain credit s.>d 8 qovernment policy of reetraint, The 1986 plan and budqet envisages a 13 per cent GDP growth rate with family eqriculture growinq by 29 per cent and induetry by 7 per cent. Overall, private consumption is planned to reach its 1984 level, implyinq an increase of 40 per cent over 1985. However, even if all these L;qete for 1986 were met, the overall economy would not reach itc pre-1984 levele.

36. The critical balance-of-payments situation reflect8 the continuing economic deterioration in the country. As part of the colonial leqacy, merchandise exports covered only 8 small portion of imports, with the balance financed by Bervices. The production of export crop8 fell far short of levels reached in 197s. This in due mainly to the ineurqency activities, which severely disrupted marketinq, reeultinq in ehortaqee of aqricultural inputs and consumer qoods for sale in rural areas and to administrative and transport problems, It has been estimated that external trade decreased by 12 per cent in 1985 BB compered to 1984, as a result of the decline of export crops and the economic policy of austerity carried out by the Government.

37. By the end of 1984, the country’s outstanding ext rl!zl debt totalled $2.4 billion (includinq arrears). Of this, 92 per cent represents bilateral public debt owed tr, members of the Orqanieation for Economic Co-operation and Development (36 per cent), centrally planned economies (30 per cent) arld countries of the A/4 l/522 Bnq 1 ish Page 14

CKqaniz8tion of Petroleum Exporting COUntKieR (OPEC) (16 per cent), At the Paris Club meeting in October 1984, agreement was reached to provide debt relief on accumulated arrears 80 at 30 June 1984 ati well as de, t service paymentn duo between 1 July 1984 and 30 June 1985. This still leavea an eatimated $550 million in Payments due in 1984-1986. In apite of the debt relief obtained, the debt 8aKViCe ratio at the end of 1984 was equivalent to about 174 per cent of the value of exwKtEl of qOOd8, not including accumulated arrears,

8. Fore ian assistance

38. Under plesent circumatancea, the Government of Mozambique has been forced to devote much of itR attention a.-d effort to coping with the emergency situation. It is grateful for t’ aseistance received. It would emphaeiae the need to respond not only to urqenL emergency needs but also to the requirement8 for rehabilitation and development. Apart from the previous six affected provinces, the Government of Mozembiaue has aleo asked for emetqency assistance to two provinces (Zambszia and Nampula) affected by the war.

1. Emeryency assistance

39. The emerqency needs of Mozambique, 88 presented at the country specific meeting organized by the Office for Emergency Operation6 in Africa convened at Geneva on 15 March 1985, totalled $88.5 million. By the end of 1985, the eme rqency need6 were assessed a8 followsl total emergency needs $51.9 million, of which $25.7 million for food aid, $7.4 million for logistics, $1.7 million for health, $6.55 million for water supply and sanitation, $3.439 million for relief eurvival items, $6.1 milliOn fOt agricultural inpUtB. These fiqures are under constant review and are revised in accordance with chanqinq circumetances.

2. Rehabilitation projecte

40. In addition to the above emergency and food aid requirementa, the Government haa called to the attention of the international community a number of priority rehabilitation projecte, designed to link emergency assistance with the development efforts of the country. Full details on these projects can be obtained from the eppropr iate author ities of the Government of Mozambique.

Estimated cost (Millions of US dollars)

AqKiCUltUKe

1. Reinforcement of agricultural unit8 in Maputo province 4.0

2. Equipment for irr iqat ion for production recovery 1.2 ~/41/522 English Paqe 15

Estimated coat (Millions of US dollare)

3, Programme of irrigation for the family Rector 5.1

4. Expeneion of irriqetion in Inhembene 2.3

5. Training an8 axtenaion in the techniques Of irritation and drainage 0.11

6. Brfiqadee for the construction, repair and maintenance of ems11 dame and emell irrigation scheme8 5.0

7. Irrigation in Manjangue 3.0

8. Irrigation in Chalacuane 5.0

9. Irrigation of the Cur80 Media of the Meputo River 7.5

1c. Irrigation of Alto Incomati 12.5

11. Rehabilitation programme for aqr icultural 0.5 (external) hydraul ice equipment and Meticais 16.0 (internal)

Internal trade

1. Rehabilitation of the network for Agricultural Marketing 4.7 Water

1. Chemical Water Treatment 0.99

2. Technical Assistance to rural water projects co-ordination 0.08

Meteoroloqy

1. Recovery of meteoroloqical network 0.23

2. Rehabilitation of the meteorological training centre 0.13

Education

1. Rehabilitation of tichoole, equipment and materials 3.1 A/41,‘522 Enql ieh Page 16

C, Activities of United Nstiona system

41, During 1985, the United Nations organizetions and aqencies represented in Mozambique implemented emerqency projects in food, loqietics, water, health, aqriculture and relief sectors, a8 well as two multisectorel projects. A brief summary follows,

1. Logistics

42, In 1985, the Department for the Prevention and Control of NaturGl Calamities (DPCCN) of the Government of Mozambique stationed an internal loqietice support unit in all affected provincee and assumed increasinq operbtional reeponeibilitiee in the co-ordination and management, reception, transport and diepatch of emrrqency relief aoods. The United Nationa orqanizations and aqenciee have made a major effort to complement and assist the Department.

43. UNDP ($450,000) and UNICEF ($40,000) supported the orqsnization of an emergency airlift, operated by the Mozambican airline LAM. UNICEF is continuinq its support of this emergency airlift in 1986 with an additional $500,000g

44. UNICEF provided six Toyota Land-Cruisers ($60,000) and 5 Renault trucks ($150,000)) UNDP purchased 4 Land-Rovers and ;O tractors with trailers ($253,300) for DPCCN) FA0 supplied 25 Fiat trucks ($900,000) for the transportation of horticultural products and assisted in the loqietical planning! and the World Food Programme (WFP) provided vehicles, trucks, and other non-food items for the emerqency logistical system ($500,000).

45. In co-ordination with DPCCN, WFP manaqed the emerqency coastal vessel, the Cinq-Juin, and’supported its operations ($720,000), a8 did UNICEF ($226,400). During 1986, WFP will aleo co-ordinate the uee of the four recently-arrived coastal barqes donated by the Govesnment of the .

46, UNICEF also supplied fuel that was critically needed in Tete Province ($516,300) and provided radios, materials, equipment and technical support to both the Ministry of Internal Trade ($138,300) and DPCCN ($93,000) and it qeve essential logistical support to both the Ministry of Internal Trade ($76,000) and DPCCN ($87,000).

47. UNDRO used a grant of $2,905,397 fror,r the Government of for the rehabilitation of the Incomati Bridge and the Moamba-Sebie Road.

2. Water

48. During lYS5, the Government of Mozambique began the implementation of an emergency water supply project for Maputo Province designed to tlafequard the water supply system which was seriously affected by the prolonged drought. The project is a joint effort by the Mozambican Government and UNDP ($200,000), in co-operation with the Governments of , Italy and the Netherlands ($101,000). A second project for the rehabilitation of drilling equipment for emergency water supply wde A/41/522 Enql ish Paqe 17 also funded by UNDP ($30,000). UNDRO, with the assintance of UNIDO, Channell@d a donation of approximately $1 million for the purchase of 11,080 tons of cement for the continued construction of two major dams in Mozambiq:... UNICEF provided $13,000 from its regular fund8 for emergency support to Later at Gaza and Inhombane.

49. In all, the Government of Mozambique reports that $3,416,200 were pledged or approved for rural water project8 durinq 1985. Several additional water projectR are being implemented during 1986.

3. Health

50. Supplementing its large reqular programme for assistance to the health sector in Mozemhique, UNICEF in 1985 began implementation of a nutrit:‘,on capacity development ($312,700) and a food and nutritional informatic,; system ($104,000) throuqhout the country. The World Health Grqanization will finance $850,000 in 1986/87 for the Primary Health Care Procrsmme of Mozambique to be used for purchase Of equipment for rehabilitation of Health Post8 and Centres.

51. The Government of Mozambique ha8 indicated in its emerqency programme of October 1985 that donations received in the health sector for the emercency amounted to $1,332,400. Theee donation8 are a Vital Bource Of assistance to meet the emergency needs, in the strained economic situation of Mozambique. However, their impact is low because medicinea were received after t.heir expiration date or with the validity period ehorter than required for their distrtbution and use.

4. Rel ief

52. Durin$i 1985, UNICEF provided 100,050 blankets ($1 million) for relief distribution, and UNDP implemented a project to supply $30,000 worth of candles for the area8 affected by the cyclone, supplemented by another $20,000 for canl‘les from UNDRO. The Government also reported that more than 5,200 tons of supplementary food such a8 skimmed milk, beans, sugar, cookin oil and canned food items were receive2 for the affected population, a8 well a8 an additional shipment of food and non-food item8 such as blanketa, clothes, shoes, soap and agricultural tools.

5. Agriculture

53. In 1985, Mozambique received 1,000 tons of fertilizers donated by the Government of Italy throuqh FA0 and valued at $256,000. In total, the Government of Mozambique indicated that donations received in the aqricultural sector for seeds, aprayers, medicines, transport and agricultural equipment amounted to $22,376,000. h/41/522 En91 ish Page 18

6. Multisectoral assistance

54. UNICEF is implementing a multisectoral project for the rehabilitation of food systems and nutritional support in Chanqara District, Tete Province ($300,500 in 1985, with an additional $300,000 in 1986). A second multisectoral project is being implemented in Espungabera, Manica Province, for the rehabilitation of displaced persons returning from Zimbabwe. UNICEF contributed $134,100 for this project in 1985 and will add $139,000 in 1986. UNDP also participated in this project with a contribution of $25,000.

7. Food assistance

55. Operating as a pilot activity in Tete Province, UNICEF has initiated a project that provides agricultural and consumer commodities to stimulate the production and sale of food to be used for distribution in food-deficit areas ($194,000 in 1985)) and it contributed tuna fish valued at $961,538 for supplementary feeding. UNDP purchased supplementary for $196,700 for relief distribution, and WFP carried out emergency food projects for a total value of $3,400,000. FA0 supplied 364 tons of maize, 245 tons of butter beans and 25 tons of peas ($500,000).

8. Food security

56. Even before the current emergency, Mozambique relied on food aid to supplement domestic production and on commercial imports to meet domestic food requirements. For the marketing year May 1985/April 1986, Mozambique’s food aid requirements for both market and emergency-affected populations were estimated at 635,556 metric tons. Of this, 77,359 tons were supplied by internal marketing, 86,000 by commercial imports, and 299,169 tons by food aid from 22 donor countries, leaving a deficit of 173,028 metric tons of maize, wheat and rice.

57. The Ministry of Trade completed a preliminary food security estimate, as at April 1986, which indicates total cereal food requirements at 674,782 metric tons, offset by 93,000 tons from internal marketing, 50,000 tons of commercial imports, 22,050 tons of food aid, and an additional 121,400 tons of food aid pledges, leaving an uncovered gap of 388,332 metric tons of maize, wheat and rice.

58. The number of people affected in Mozambique as at May 1986 is 1,848,OOO. The affected population can be found in seven provinces: Tete, Zambezia, Sofala , Manica, Gaza, Inhambane and Maputo. In addition, there are 3 million people in urban areas who de-pend on food supplies.

/ . . . A/41/522 English Paae 19

v. VANUATU

A. Backqround

59. The special proaramme of economic assistance for Vanuatu was launched in response to General Assembly resolution 38/218 of 20 December 1983, in which the Assembly expressed concern at the severe constraints on the economic development of the country, particularly those ensuing from its geographical isolation, and also at the continued structural imbalances in the economy, particularly its overwhelminq dependence on imports. The basic features of the Vanuatu economy were described in previous reports of the Secretary-General (A/39/388 and A/40/441, sect. XV) ,

B. Economic situation

1. General

60. Vanuatu is an archipelago of some 80 widely dispersed islands with a land area of approximately 12,200 square kilometres located in the Pacific Ocean between Fiji and the Solomon Islands. The population is estimated at 136,000 persons. The country faces formidable physical constraints as a result of its geographical fragmentation and isolation and the highly uneven distribution of its small population. It inherited an inadequate infrastructure base. Other development constraints include a costly administrative infrastructure, lack of basic facilities and services, a limited supply of skilled and experienced manpower, a hiqh degree of dependence on external budget support, a declining copra production base, and a tourism industry subject to the vaqaries of external developments.

61. The First National Development Plan for 1982-1986 has been outlined in previous reports. The Government is currently workina on its second plan to cover the period 1987-1991, Details of this plan are not as yet available.

2. Income

62. Althouqh a detailed analysis has not as yet been completed, it is estimated that real income for 1984 qrew by approximately 8 per cent. This reflects for the most part hiqh receipts from copra production, the major export, as a result of simultaneous increases in the quantity, quality and, especially world prices for copr a. However, in 1985, cyclone damaqe and reduced world prices caused a 52 per cent reduction in copra export receipts. At the same time, there was a substantial drop in tourism, the second most important foreiqn exchange earner. Visitor arrivals declined by 27.9 per cent compared with 1984. It is estimated that real income fell by at least 2 per cent. In 1986, a further decline in copra price and tourist arrivals, combined with marketing problems in the export beef and fish industries is expected to result in a further decrease in real GNP.

63. With the assistance of the Asian Development Bank, the Go-rernment is attempting to prepare a comprehensive set of national accounts by the end of 1986. Much of the preliminary work however is being used in the preparation of the Second National Development Plan. A/41/522 En91 ish Page 20

3. International trade and balance of payments

64. For 1985, exports of copra fell to 36,830 tonnes , or below the 1983 level, largely due to the effect of the cyclones early in the year. Production for 1986 is expected to increase but because of the very low world price and decreased incentive for copra qrowers, the degree of improvement is uncertain. Current estimates are for about 40,000 tonnes in 1986.

Table 4

Vanuatu: Exports and re-exports by commodity 1981-1985 (Value in millions of vatu; volume in metric tons)

1981 1982 1983 1984 1985

1. Total exports(f .o.b. \f 2 832 2 201 2 940 4 395 3 205

2. Domestic exports: value 1 402 1 027 1 781 3 220 1 922

Copr a : value 1 071 710 1 308 2 734 1 313 volume 47 070 34 798 38 538 46 682 36 830 Cocoa : value 117 57 183 135 154 volume 944 548 1 232 791 817 Beef: value 160 183 193 142 198 volume 804 776 1 054 682 1 134 Timber: value 21 23 32 147 136 volume 718 652 3 900 19 161 17 383 Others: value 33 54 65 62 121

3. Re-exports: value 1 430 1 174 1 159 1 174 1 282

Source: National Planning and Statistics Office.

65. Vanuatu’s persistent trade deficit is normally offset by earnings from tourism and aid flows. A substantial drop in external budgetary support and in tourism receipts in 1985 and 1986 has resulted in a severe deterioration in the balance of payments. The only saving factor is that Vanuatu is not yet burdened by heavy foreign debt-servicing payments. A/41/522 I?nq 1 i ,r, h Page 21

Table 5

Vanua tll r- Balance of payments 1982-1985 (Millions of vatu)

1982 1983 1984 1985

1. Exports (f.o.b.) 2 201 .-2 940 4 395 3 205 Domestic exports 1 027 1 781 3 121 1 923 Re-expor ts 1 17.1 ; 1 &j’) I 1'14 I 282 2. Imports (f.0.b.) -4 163 -4 553 -5 111 -5 53s for home consumption -3 814 -4 295 -4 814 -5 284 for re-expor t - 349 - 258 - 297 - 2Sl 3. Trade balance -3 136 -2 772 -1 990 -3 612 4. Services and investment income (net) 972 0071 1 022 803 Credits 5 080 5 220 5 996 6 115 Debits -4 108 -4 213 -4 974 -5 312 of whichr TO, *ism (net) 1 854 1 996 2 154 1 795 5. Net transfers 3 350 6022 2 979 2 477 6. Current balance 1 186 837 2 011 -332 7. Capital account (net) 633 619 835 567 knq-term (includ ina re-invested earnings) 443 1 095 819 567 fdent i fied short-term 190 - 476 16 8. Basic balance 1 629 1 456 2 846 235 9. Errors and omissions 147 294 832 306 10. Overall balance 1 776 1 750 3 678 541

Source I Central Bank of Vanuatu. A/4 l/52 2 Enq 1 i sh Page 22

66. It is highly unlikely that budgetary assistance will be forthcominq in 1986 or thereafter. Project aid is expected to continue and possibly increase, however. Because of an extremely tight government financial situation brought on by deterioration in the overall economic situation snd the withdrawal of budqetory aid, the inability of the Government co pay even for the recurrent costs of projects is now ceusinq a bottleneck. Unless donors now demnnatrate a willingness to finance the total costs of projects, inclludinq local and recurrent costs, it is clear that the overall development programme will suffer. This would have severe implications for the short-term balance of payments and also compromise the future ability of the country to develop a viable econ jmic base, capable of lorq-term sustained growth.

67. Speci. :yc’one relief and reconstruction assistance from many aid donors durinq thr. tlrst half of 1985 contributed favourably to the balance of payments.

4. Finance

68. Import duties remain tlro larr,eat revenue source. Their relative share in total revenue was 52.6 for 1985 and this share is expected to be maintained in 1986. As export and tourism receipts have fallen, incomes and consumption expenditure, and therefore revenue receipts from taxes on imported consumption aooda have erl~o fallen. Because of the very small economic and administrative base in Vanuatu, the scope for increased revenuer through the imposition of direct taxes is very limited and unlikely to occur in the short-term future. The sacis and political demand for expendrture on education and health facilities for the whole of the newly independent population is very hiqh, however. This, plus the recurrent costs of projects including future debt servicing, combined with a very small taxable economic base is causing great concern at this time as the nation does its forward planning. A/41/522 Finqlish Paqe 23

Taole 6 Vanuatu: Sources ot public receipts, sY8~-ly)Y6 (Millions of vatu)

IYY5 Preil- mlnary anu lytlb 19Ml lY8Z lYb3 1984 Buage t actual mayet

Total revenue -1 36Y.b -1 607.4 -1 b92.4 -2 503.4 -2 570.7 2 821.8 3 130.7

Tax revenue -1 019.5 P1 264.9 -I 467.9 -2 037.4 2- 045.3 -2 290.3 2 571.0 Taxes on goods and services 150.1 247.0 318.3 460.0 475.0 489.4 637.3 Taxes on tourist services 62.7 93.3 105.1 110.0 94.3 105.0 Licences Y4.5 115.4 136.4 170.0 190.0 213.4 297.3 Kork permit fees 2.5 2.7 6.3 22.8 23.0 25.3 35.0 Registration tees 53.1 66.2 82.3 162.1 152.0 156.4 2oo.u Companies (52.3) (64.0) (67-b) (121.a) (94.0) (108.7) (135.0) shipping (-) (0.9) (5.2) (11.5) (Y.0) (11.5) (20.0) Land (0.8) (1.3) (Y.3) (2M.8) (45.0) (29.2) (45.0) Taxes on international transactions 839-a YY2.0 1 100.7 1 521.7 1 475.7 1 716.Y 1 140.0 Import auties 710.0 900.7 974.1 1 245.0 1 329.7 1 484.0 1 646.0 Exprt autieb 12Y.B Y1.3 126.6 276.7 146.0 232.9 194.0

Other taxes 29-b 2b.Y 46-Y 55.7 94.6 ss.u Y3.7

Airport tax 1J.A 15.2 23.4 24.6 43.Y 41.8 54.7

K’harEage tax 16.5 10.7 25.5 26.1 30.7 2B.b 26.0 Other 5.0 20.0 12.6 13.0 Non-tax revenue 350.1 342.5 424.5 4bb.0 525.2 !a31.2 559.2 Public enterprises MO.2 84.4 135.6 128.8 173.5 151.0 115.3 Interest ana rent 156.8 138.8 154.0 15Y.l 128.1 164.0 145.0 Fines and fees 26.3 27.7 3b.7 50.3 99.0 91.0 91.9 Other 86.8 91.6 98.2 127.8 124.8 125.5 137.5

Source: Office of tne Accountant General, Vanuatu.

/ . . . A/41/522 English Page 24

Table 7

Vanuatu: Components of public expenditure, 1981-1986 (Millions of vatu)

1985 Prell- mlnary ana 1YMb 1981 1982 1983 1984 Budget actual Budyet

Total recurrent expandlture 2 042.6 2 327.0 2 419.1 2 657.9 3 071.3 3 i17.1 3 580.0 1. General public (services) 01: which: 717.9 992.5 1 049.0 1 136.1 I 3b3.7 1 356.3 1 b3U.U 1. Parliament 29.3 36.8 41.3 37.2 61.5 55.2 61.5 11. Prime tiinlstec, Jusclce ano Yubllce SeKVlce 74.0 98.3 102.1 136.6 313.3 319.3 434.3 iii. Home Affairs 185.3 266.6 249.1 274.9 318.7 iO\b.S 357.6 iv. FlnanCe 63.4 83.3 81.8 104.6 140.3 150.8 160.9 v. Common services 202.3 233.2 254.0 293.2 248.5 266-Y 290.6 Vl. Public Norks (net) 186.0 253.0 255.3 251.0 222.0 192.2 235.0 2. t'uucation 599.1 608.3 649.8 652.2 770.4 784.7 882.7 3. Health 275.1 353.1 365.2 406.4 388.7 434.0 443.7 4. Other social and community services 2i.4 27.7 25.0 35.1 45.5 42.5 114.9 5. Agriculture, forestry and flsheries 70.5 95.3 97.8 111.5 127.8 134.4 141.3 6. Transport and communications 145.1 164.4 155.5 17Y.4 231.7 241.3 234.0 7. other economic services 115.7 61.6 57.4 74.2 99.5 96.1 114.4 8. Interest payments 28.1 24.0 19.4 23.0 44.2 27.8 37.0 Y. Less not specitiea savings 18.0

source: Office of the Accountant General, Vanuatu.

/... ~/41/522 Enql ish Paqe 25

c. Special development projects

69. With regard to the special programme of economic assistance, originally consisting of 35 special development projects costino $74.6 million, which were proposed by the Government for financing by the international donor community and listed in the report of the Secretary-General (A/39/388), the Government has reported the following progress with respect to each of these projects:

(a) Agriculture

-0A-l Tanna coffee development (estimated cost: $746,000). Funds for Government’s equity have been obtained through a soft loan from the Caisse Centrale de Co-operation Economique (CCCE).

A-2. South Santo cattle development on Espiritu Santo (estimated cost $2.0 million). Government’s equity participation has been approved by the Australia.. Joint-Venture Scheme subject to the company’s loan finance being provided by another source. Both the Asian Development Bank and the Commonwealth Development Corporation have expressed a willingness to assist with loan funds and negotiations are continuing with a view to obtaininq these with a minimum Of further delays.

A-3. Espiritu Santo Industrial Forest Plantation (revised estimated cost initialphase $3.75 million). Following conaultancies by the ADB and the European Development Fund, the Department has prepared a detailed project proposal for the Espiritu Santo Plantation. A number of donor aqencies have already expressed interest in the project and it is anticipated that work will begin in lQ86/87. The Vanua Lava Plantation has been deferred pending initial results from Espiritu Santo.

A-4. Establishment of a copra crushing mill (estimated cost $4.94 million). Reservations concerninq the original feasibility study have led to the project being deferred for further consideration.

A-5. Development of oceanic fisheries in Vanuatu (revised estimated cost: $25O,ooo) * A reduction in landings by the existing, foreign-owned, deep sea fishing company based in Vanuatu has underlined the necessity for Vanuatu to develop its own national fleet. Assistance for the purchase of a long-lining vessel and technical assistance are being sought, but a donor has yet to be firmly ident if ied.

A-6. Tanna Island honey (revised estimated cost $145,000). The FAO-sponsored studywas completed in January 1986. The Government is currently studying proposals for a pilot project funded by FRO, under its Technical Co-operation Programme (TCP) .

_--A-7 National livestock water supply (revised estimated cost $575,000). The multidisciplinary review of the livestock sector has been noted by Governmen*. The Department of Aqriculture is currently considering priority areas for intervention in the sector. It is likely that the project will be partially integrated L!?TO a wider rural water supply proposal to be formulated in the near future. A/41/522 Enqlirh Page 26

(b) Tranegort

T-l. Bauerfield International Airport upgradina. The Qovernment, in January 1985, formally accepted the ADAB offer to provide 3 million Australian dollars for the urgent repair of failed and weak areaa of Bauerfield and to provide 35 to 40mm reeeal ing to bring the pavement to a maintenance free condition for the operation of Boeing 737 aircraft.

In order to develop touriem further, the Government is seeking funding to ntrengthen &nd extend the current runway to allow unrestricted Boeing 767 operat tone. The estimated costs of theas works together with necessary improved acoeso rorda and an enlarged terminal building, are in the order of BUS 6.5 million.

T-2. Santo Port - copr a storage shed, A new bulk copra shed at Santo has been funded by Auetralia and is expected to be in use by July 1986.

TIJ. Santo Port upgrading . This project has been included in Vanuatu’s first and second ADB/IDA multi-project Ian requests. A wharf engineering and deeiqn etudy should be completed in 1986 with the works being implemented under the 1987 multi-project loan (with CCCE co-financing) at a cost of approximately $US 7 million.

a. Replacement craft for Roens barge, The Brit$sh Government has agreed to fund a project to strengthen and refurbish the present veseel. The f-ltting works will be carried out in Fiji following prefabrication of parte in the United Kingdom.

E. Agricultural feeder roads. There has been no recent progress on this project. z. Port-Vila - integration of international and inter-ieland wharves and Port-Vila - provieion of additfonul coastal shipp g The Government ’ !%*delayed a decision on these two projects until the :zsu:h:if;he relocation of the etoraqe facilities for petroleum and liquified petroleum qaees (LPO) at the port and a land compensation dispute are settled, Work on the relocation issue ie well advanced and if relocation proceeds, OS is likely, significant 8Refstance will be required (7 million Australian dollars in 1984 prices) for project implementation. Meanwhile Government iu continuing to seek a tiolution to the land dispute.

T-8. Inter-island wharves and jettien. Japanese engineers carried out cost investigations and design work for the construction of wharvee at Malakula and Tanne during 1985 and the Japanese Government had indicated possible funding for the works during their 1986 .

In addition, the ADB and IDA have granted the Government a loom e,f $US l.A million for outer ielend wharf/roads construction (6 wharves and 64 killw(.t res of road on 5 islands) within the 1985 multi-project loan. Initial appr,, I .I#al and desiqn studies will be completed by mid-1987 and the works by mid-19t19.

/ . . . A/41/322 English Paoe 27

T-9. Pekoa air-port upgradina. The CCCE has carried out a study examining the terminal buildin? requirements (including equipment) at Pekoa and will provide loan fundina for the works as part of a national outer islands terminal upgrading project.

The Government is still seeking funds to upgrade the airport to Boeing 767 standard.

T-10. West Coast Santo road and m. South Malakula road. There has been no recent progress on these projects.

T-12. Ambae road. This project will be partially completed under the ADB/IDA wharves/roads project (see T-8 above).

(c) Telecommunications

C-l. Expansion of the rural telecommunications system. Australia has tentatively agreed to partial funding of the rural telephones component of this project (up to 50 per cent over 5 years), The Government is seeking funding for the remainder of the telephones programme as well as for the replacement of the Port Vila and Luganville exchanges,

(d) Enerav

-'E-l In-depth review of feasibility study for wood-fueled power station. The wood-fueled power station feasibility study was presented to the Government in September 1984 but proved to be deficient in a number of areas. A reviewinq consultant funded by United Nations Pacific Energy Development Proqramme (UNPEDP) identified areas where additional work was required and part of this was carried out under further UNDP funding in 1985. Additional work on the location of the fuel wocxl source as well as varietal wood trials is yet to be carried out.

E-2. Hvdroelectric power studies. CFTC has agreed to fund economic and technT:l feasibility studies on the suitability for hydroelectric developnent of the Teouma and Sarakata rivers. Consultants are expected to be in the country by July/August 1986.

E-3. Urban power development studv. This study will follow a decision on the implementation of the wood-fueled power station and completion of the studies on hydroelectric and geothermal power options.

E-4. Geothermal resource assessment. At the Government's request, New Zealarhas agreed to fund the final phase in the assessment of the resource. This work will be completed before the end of 1986,

E-5. Rural enerav plannina. The Government is seekinq fundinq for these plann% studies.

.I... A/41/522 Engl iah Pacie 20

(f-3) Social servicer3

j3-J Strengthening vocational education in Vanuatu. A review and evaluation of the whole rural vocational training sector ie to be undertaken by consultants funded by the Asian Development Bank. The projects included under S-l will he evaluated in the light of the recommondationn presented by the review.

s-2, Secondary schools for Tanna and Malakula. The Wor Id Dank, in conjunction with the Vanuatu Government, UNESCO and bilateral aid donors has recently formulated a medium-term 1987-1991 investment proq;amme for the education set tor . It has advised against the eetahlishment of single-stream schools and the Government has accepted this advice, A project for the construction of three double Rtream junior secondary schools is included in the programme. The financing of this programme will be finalized by the Vanuatu Government, the World Bank and other aid donors in 1986.

s-3, Upgrading of health EacilitieR. Projecte to upgrade hospitals in Port Vila and Luganville are currently und=ay. The Government also proposee to construct 60 new dispensaries (53 a8 replacements and 7 as new) over the next five- year period. The total cost of the programme is estimated at 290.52 million vatu. Funding is expected from the united Kingdom , Australia and New Zealand for a total of 40 buildinqs. The Government still require6 80 million vatu for the remaining 20 buildings.

s-4, Rural water supplies. The Government is aeeking sianificant esaiatance (40 m‘ii-iion vatu per annum) to supplement existing funding 80 that it may reach its national goal of supplying the total population with adequate water supljlies by the year 1990.

S-5. Port Vila sewerage system. The World Health Organization has agreed to carry out a master plan of the sewerage system needs of the Port Vila urban area. A consultant wa6 expected to be in the country by early June 1986 and to nubmft hifi report to the Government by the end of 1986.

S-6, Not ional Provident Fund. The Provident Fund Act has been drafted and is awaitinu ratification by Parliament. Much of the basic preparatory work has been done by an IL0 consultant under 9 UNDP project VAN/85/004 but computer proqrammen and accountancy systems have still to be developed. The Government plans to start oper;lting the fund in October 19R6.