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WORLDBANK S INTERNATIONALDEVELOPMENT ASSOCIATION AiinuaaReport 1971 Public Disclosure Authorized .. LE V", Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized 0 C-, ~ ri Q Table of Contents PaE President'sLetter of Transmittal ...................................................... g<CH>1- The Recordfor Ten Years-1962-1971.............................. 3 CH> Part l: The Year'sActivities ............................. 5 The Year's Lending: Introduction. 5 Agriculture . Education .15 Public Services.18 Industry .25 Population .27 Tourism .27 Non-Project Lending .28 Technical Assistanceand Other Activities: Technical Assistance.29 Economic Development Institute .31 Aid Coordination .32 The "Commodity Problem"-Implementation of Decisions .34 Economic Studies .34 International Investment Insurance Agency .35 International Centre for Settlement of Investment Disputes .35 Borrowings and Finance: World Capital Markets-Calendar 1970 .36 The Bank's Borrowings-Fiscal 1971.37 Increase in Capital: Bank .39 Other Financial Operations: Bank .39 Income and Expenditure: Bank .40 Disbursements: Bank .40 Finances: IDA .41 Organization and Administration: Staff and Department Changes.41 Recruitment .42 Membership and Executive Directors: Membership .43 Executive Directors .43 PartII: Trendsand Outlook in DevelopmentFinance The Flow of External Financial Resourcesto Developing Countries .47 The External Debt of Developing Countries .50 Statistical Annex .57 BankAppendices .79 IDA Appendices.93 Bank/IDAAppendices ............... ....................................... 107 1 International Bank for Reconstruction and Development International Development Association Office of the President September 27, 1971 Dear Mr. Chairman: In accordance with Section 10 of the By-Laws of the International Bank for Reconstruction and Development and Section 2 of the By-Laws of the International Develop- ment Association, I have been authorized by the Executive Directors of the Bank and the Association to submit to the Boards of Governors this Annual Report for the fiscal year July 1, 1970to June 30, 1971. I have also been authorized by the Executive Directors of the Bank and the Association to submit to the Boards of Governors, in accordance with Section 19 of the By-Laws of the Bank and Section 8 of the By-Laws of the Association, the audited financial statements as of June 30, 1971, and the Administrative Budgets for the fiscal year ending June 30, 1972. They are contained in the Appendices of the Report. Sincerely, Robert S. McNamara Chairman Boards of Governors International Bank for Reconstruction and Development and International Development Association 2 The Recordfor Ten Years-1962-1971 Expressedin millions of UnitedStates dollars FiscalYear 1962 1963 1964 1965 1966 1967 1968 1969 1970 19717 World Bank Loans:Number 29 28 37 38 37 46 44 84 70 78 Loans:Amount $ 882 $ 449 $ 810 $1,023 $ 839 $ 877 $ 847 $ 1,399 $ 1,680 $ 1,896 Countries 19 19 28 26 27 33 31 44 39 41 Disbursements $ 485 $ 620 $ 559 $ 606 $ 668 $ 790 $ 772 $ 762 $ 772 $ 955 Repaymentsto Bank 104 113 117 137 166 188 237 298 329 319 GrossIncome 188 204 219 267 292 331 356 410 504 578 Net Income 70 83 97 137 144 170 169 171 213 212 Total Reserves 699 813 846 895 954 1,023 1,160 1,254 1,329 1,444 Borrowings:Gross 271 121 100 598 288 729 735 1,224 735 1,368 Borrowings:Net 104 -5 -32 250 64 503 215 698 299 819 SubscribedCapital 20,485 20,730 21,186 21,669 22,426 22,850 22,942 23,036 23,159 23,871 MemberCountries 75 85 102 102 103 106 107 110 113 116 IDA Credits:Number 18 17 18 20 12 20 18 38 56 53 Credits:Amount $ 134 $ 260 $ 283 $ 309 $ 284 $ 354 $ 107 $ 385 $ 606 $ 584 Countries 8 9 8 11 8 13 14 28 33 34 Disbursements $ 12 $ 56 $ 124 $ 222 $ 267 $ 342 $ 319 $ 256 $ 143 $ 235 UsableResources, cumulative 758 767 1,451 1,593 1,682 1,767 1,807 2,176 3,182 3,343 MemberCountries 62 76 93 94 96 97 98 102 105 107 ProfessionalStaff 364 429 463 532 662 724 752 961 1,170 1,348 3 *4 V~~~~~~~1 PART1: THE YEAR'SACTIVITIES The World Bank Group made good progress which had notified IDA that they would partici- during fiscal year 1971 toward doubling lend- pate, fell short of the required amount by $828 ing in the five-year period 1969-73 compared with million. The effective date was postponed to the period 1964-68. At the same time, the Bank September 30, 1971. and its affiliates gave increasing attention to en- To permit the continuance of IDA operations suring that their assistance contributed to the pending the completion of action on the third re- optimum development of the recipient commu- plenishment, several member governments came nity as a whole. It was to this end that the Bank forward with advance contributions just before intensified its appraisals and broadened the scope and after the close of the fiscal year. In June, Den- of its country studies and reports. mark and Finland notified the Association that The Executive Directors during the year de- they would pay the first annual installments on voted much of their attention to the basic policy their contributions, amounting to $8.8 and $4.1 issues raised by these reports, and also considered million respectively. Other advance contributions more than 30 recommendations on Bank policy received in time for mention in this Report were made by the Pearson Commission. from Canada and the United Kingdom, each The Group's ability to maintain its projected amounting to $50 million. Others had similar level of operations in the coming fiscal year will action under consideration. depend in part upon the timing of the third re- Also after the end of the fiscal year, the Execu- plenishment of IDA's resources, since by the end tive Directors of the Bank recommended to the of June 1971 all of its available funds had been Governors that, without waiting until their Annual committed for specific projects. Meeting in September, they approve a grant to Negotiations for the replenishment were con- IDA of $110 milliot out of the Bank's net income cluded early in the fiscal year. The resulting agree- for fiscal 1971. Voting by mail, the Governors ment, however, which proposed making available a for commitment about $813 million a year for approved the proposal early in August. three years beginning July 1971, could not be- The need for IDA funds, and for more IDA-type come effective until donors pledging not less than assistanceas a proportion of total aid, is reflected $1,900 million, and including at least 12 of the 18 in the analyses of the flow of assistance and the Part I (richer) members, had notified IDA that they external debt of developing countries which ap- would take up subscriptions and make contribu- pear in Part II of this Report. Projections based tions as specified in the agreement. By June 30 on the debt of 80 developing countries as of 10-Part I countries had completed the necessary December 31, 1969, suggest that their debt serv- legislative or other action and had notified IDA ice obligations increased more than twice as fast that they would make their contributions. Their as their export earnings in 1970-by about 20% pledges, combined with those of Part II countries as compared with 9%. The growth rate of GNP in 1970 fell off for the world as a whole. The fact that the drop was especially severe in the devel- AFGHANISTAN-An Afghan farmeropening an oped countries raised a cloud over the export irrigation ditch. An IDA credit of $4.7 million will help prospects of the less developed. to modernize the irrigation system in Afghanistan's Public and private financial flows from the 16 fertile Khanabadvalley, in the northeast.FAO, the UNDP and the World Bank provided technical principal aid donors to developing countries and assistance to prepare the project for financing by IDA. multilateral development agenciesincreased by 5 more than 8% in 1970 over the previous year, pollution measures to be carried out. reaching nearly $15 billion for the first time. Vir- In line with policies agreed to during the year tually all of the $1 billion increase was in rela- by the Executive Directors, the Bank Group con- tively hard-term official export credits and private siderably broadened its approach to problems of funds, however, channeled for the most part to educational development, and its cooperative countries well above the lowest level of economic agreement with Unesco was expanded to include development. The flow to some of the poorer assistance in educational planning. The Group countries of Africa and South Asia continued to gave its first major assistance to agricultural re- decline, both absolutely and as a proportion of search, both through a loan to help one of its the total. The aggregate volume of official grants, members build a new national program, and by loans and other long-term development assist- joining forces with others in organizing a con- ance remained about the same as in 1969 and sultative group to support existing internatioLial there was little change in average terms. institutes working in the field and to help in the Development financing commitments by the establishment of new ones. In the field of water three Bank Group institutions combined totaled supply and sewerage, a cooperative agreement $2,581 million in fiscal 1971. If operations are was worked out with the World Health Organiza- maintained at the same level through fiscal 1973, tion (WHO), comparable to those under which the five-year average since June 30, 1968, will Unesco and FAO assist the Bank in the identifica- have more than doubled the average for the pre- tion and preparation of education and agriculture vious five.
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