Document of FILE COPYThe World Bank

FOR OFMICIAL USE ONLY

Report No. P-2573-BO

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

TO THE

REPUBLIC OF BOLIVIA

FOR A

SANTA CRUZ WATER SUPPLY AND SEWERAGE PROJECT

June 28, 1979

This docnmet ba a rostited iddbuon an may be med by recipients oy in the perfornwe oftheir fdicil dutks. Its conent may not onhrwie be dbcloed witut World Dak authoiatIon.

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CURRENCY EQUIVALENTS

Currency Unit = Bolivian Peso ($b)

US$1 = $b20.0O

$b1 = US$0.05

WEIGHTS AND MEASURES

Metric System

GLOSSARY OF ABBREVIATIONS

COMIBOL - Corporacion Minera de BoliviaCORPAGUAS - Corporacion de Agua y SaneamientoDIU - Direccion de Infraestructura UrbanaDSA - Division de Saneamiento AmbientalIDB - Inter-American Development BankMUV - Ministerio de Urbanismo y ViviendaPAHO - Pan American Health OrganizationSAGUAPAC - Servicios de Agua Potable y Alcantarillado de Santa CruzUSAID - United States Agency for International DevelopmentWHO - World Health Organization

FISCAL YEAR

January 1 to December 31

FOR OFFICIAL USE ONLYBOLIVIA

SANTA CRUZ WATER SUPPLY AND SEWERAGE PROJECT

CREDIT AND PROJECT SUMN.IRY

Borrower: The Republic of Bolivia

Beneficiary: Servicios de Agua Potable y Alcantarillado de Santa Cruz(SAGUAPAC)

Amount: US$9.0 million

Terms: Standard

Relending Terms: 20 years including 5 years of grace at 0.75% per annumduring the grace period and 7.9% per annum thereafter.After the grace period, SAGIJAPAC will effectively paythe Borrower 5% per annum and retain the remaining 2.9%per annum as a grant to capitalize a revolving fund forin-house plumbing and lot lines.

ProjectDescription: The project would (i) help :improve the health and sanitary

conditions of the city of Santa Cruz de la Sierra by pro-viding water supply services to about 108,000 inhabitantsand sewerage facilities to about 66,000 inhabitants, aboutone-third of whom are expected to be the urban poor; and(ii) strengthen SAGUAPAC's management, organization andplanning capacity. The project consists of: (a) expan-sion of the water supply system comprising the cornstructionof a pumping station of about 300 liters per secondcapacity in the northeast wellfield of the city and instal-lation of about 200 kilometers of distribution lines andabout 20,000 metered connections; (b) the expansion of thesanitary sewer system including the construction of a sewertreatment plant with about 25 hectares of oxidation pondsand associated pumping station and emissary, constructionof about 4,450 meters of trunk sewer and installation of60 kilometers of sewer lines and lateral sewers andabout 10,000 new house connections; (c) installation ofin-house plumbing and lot lines; (d) data processingand laboratory and communications equipment and vehiclesneeded for (a) and (b) above; and (e) technical assistancefor determining the future major sources of water supplyfor Santa Cruz, improving SAGUAPAC's organization, manage-ment and planning and the training of SAGUAPAC's staff.The works to be built are technically simple and offerlimited risks. Financial risks are minimized by the commit-ment by the Santa Cruz Development Corporation to provideits share of the project cost, and the Government's approvalof SAGUAPAC's new tariff and revenue package.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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1969/71, when political instability led to declining private investment anddeteriorating public finances. The deterioration of public finances reflecteda structural problem in the economy. Bolivia's public sector is proportionatelyone of the largest in South America and a source of livelihood for a sizeablesegment of the population. With scarce employment opportunities in theprivate sector, pressures to expand public employment proved difficult toresist. Large expenditures on wages and salaries, combined with a weak taxsystem, have limited the resources available for public investment. Moreover,the inability of the public sector to generate adequate savings limited itscapacity to utilize available external capital assistance effectively.

5. From mid-1971 to mid-1978, political stability and the Government'sencouragement of private sector investment raised hopes for a more rapid paceof economic development. In addition, during the early 1970s Bolivia'sexports of petroleum increased considerably, and it was generally expectedthat this upward trend would continue in the future. Public investment andexternal lending decisions were largely based on this expectation which seemedreasonable at the time. The Government launched an ambitious public investmentprogram financed largely through external borrowing, expecting to have nodifficulty servicing the loans out of future petroleum revenues. Petroleumexports began to decline, however, in 1975, because of insufficient output inthe face of rapidly rising internal demand. Through 1976 this decline waslargely offset by increased exports of natural gas to Argentina, but in 1977petroleum exports dropped to a point where current earnings from all hydro-carbon exports declined. At the end of 1978 petroleum exports came to avirtual halt. As a result, Bolivia has become even more dependent on exportsof minerals, mainly of tin.

6. Since most of the ongoing public investment projects were initiatedwhen petroleum prospects seemed favorable, they cannot now be stopped withouteconomic loss. The Government has therefore tried to make up the exportshortfall through additional external borrowing. As a consequence, Bolivia'spublic debt outstanding and disbursed increased rapidly; the end-1978 estimateis US$1.8 billion. As a result of increased borrowing from commercial banksand suppliers, the structure of the external debt has worsened; the grantelement of new loans fell from 40% in 1974 to 16% in 1978.

Recent Economic Performance and Prospects

7. The Bolivian economy is going through a very difficult phase. Theoverall public deficit has increased from about 1% of GDP in 1974 to 11-12% in1978. The current account deficit of the balance of payments has widened from5.3% of GDP in 1974 to 8.4% in 1978. 1/ During the last two years, the rateof GDP growth has been declining and the rate of inflation has been acceler-ating. According to the La Paz consumer price index (the only official priceindex in Bolivia), prices increased by 10% in 1978; estimates made by theCentral Bank indicate an inflation rate of about 19%. Indications are thatthe rate of inflation has been increasing further in 1979. The new Government

1/ These figures are but orders of magnitude because the statistics onwhich they are based suffer from considerable error, but they areindicative of a serious deterioration.

is expected to take measures in order to bring the rate of inflation down toan average of about 15% over the next years, the same as the average during1970-1977.

8. The service on external debt now absorbs about 30% of exports ofgoods and services. This ratio cannot be expected to improv, during the nextfew years and will probably fluctuate around 35%, an undesirable figure for acountry so dependent on a single export, tin, which is characterized by widefluctuations in demand and price. The country's balance-of-payments prospectsare not encouraging for the immediate future. The volume of mineral exportshas been stagnating and even with production-stimulating changes in miningtaxes no sharp increase in volume is to be expected during 1979 and 1980.However, a more favorable environment for private mining enterprises, modern-ization investment in the Bolivian Mining Corporation, and greater explorationefforts could bring about substantial increases in output and exports in themedium term. Non-traditional exports account for a small share of all exportsand while encouragement is also required in this area, favorable effects willonly affect exports significantly in the longer term.

9. Bolivia's most promising export potential lies in natural gas.Exports to Argentina are expected to increase as additional pumps begin tooperate on the pipeline during 1979. The construction of a natural gas pipe-line to Brazil could improve Bolivia's balance-of-payments position substan-tially. A letter of intent has been signed by the Bolivian and BrazilianGovernments, laying down the principles regarding the pipeline. While furtherstudies are required to prove the existence of sufficient gas reserves, oncethis is done the way would be open for an increase in total exports in theorder of 25-30% in the mid-1980s. The petroleum situation is less clear;exports cannot be expected to resume on a substantial scale before additionalreserves are confirmed.

10. In sum, while Bolivia's medium-term export prospects are moderatelyfavorable if efforts are made to promote them, it is difficult to see muchscope for improvement during the next two to three years. The vagaries ofinternational mineral prices will continue to have a decisive effect on thecountry's export earnings during that time.

11. The main internal cause of financial strain is the weak positionof the principal state enterprises. Foremost among them is the State Petro-leum Corporation (YPFB), whose finances have been damaged by the Governmentpolicy to maintain domestic prices of petroleum products at a fraction ofthe world market level. Since YPFB is also one of the largest taxpayersin Bolivia, its financial weakness is reflected in Central Government revenueshortfalls. Other state corporations such as COMIBOL, which owns and operatesthe country's major mines, and ENAF, the State Smelting Corporation, which hasembarked on a large-scale investment effort, have large overall deficitscaused by considerable investment expenditures, low productivity and/orinappropriate wage policies, rather than depressed prices. The financialsituation of the railroads has deteriorated because of the severe damageresulting from the recent floods. As noted above, because many of theseinvestments are already well advanced, it is unrealistic to expect a drasticdecline in expenditure in less than two to three years; nor would such adecline be rational when many projects are expected to show satisfactory rates

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of return once they are completed. As on-going investment projects aregradually completed it should become possible to reduce the amounts spent andto bring public investment into line with the country's public savings andexport capacity.

12. A new Government is scheduled to take office in August 1979. Thepresent administration considers itself a caretaker; this is the main reasonwhy some of the remedial actions that the present financial situation requireshave not been taken yet. The administration is fully aware of the seriousnessof the situation and has outlined elements of a stabilization program aimed atreducing the public deficit, narrowing down the balance-of-payments deficiton current account, and restricting external borrowing. The major measurescontemplated are a much needed increase in the domestic price of petroleumproducts and a series of tax and tariff adjustments. For the reasons outlinedabove, and because of the temporary character of the present Government,significant improvement cannot be expected before late summer at the earliest.

13. Bolivia's creditworthiness for lending on conventional terms islimited at present. Emphasis should be given to projects in the hydrocarbonsector with a clearly identifiable effect on production for export. Becauseof the need to improve Bolivia's debt management--and the reluctance of commer-cial lenders to increase their exposure in the country--Bolivia will have tolimit its foreign borrowing to priority projects and make maximum use of soft-term lending from international and bilateral institutions to get throughthe difficult next two or three years. We are following economic developmentsvery closely and are engaged in a detailed and frank dialogue with the Bolivianauthorities with a view to assisting them during the difficult situation.

PART II - BANK GROUP OPERATIONS IN BOLIVIA

14. Although Bolivia is an original member of the Bank, it did not obtainany Bank Group financing until 1964. Because of Bolivia's restricted capacityto service external debt, Bank Group financing was, except for a US$23.25million Gas Pipeline loan, exclusively on IDA terms until Bolivia started toexport small quantities of natural gas and petroleum. In view of promisingprospects for rapid expansion, Bolivia was graduated from IDA in 1975. In1978, however, it became apparent that the expectations of large petroleumexports, and with it dynamic economic development, would not materialize.Starting with the Ulla Ulla rural development project, financed in equalshares on Bank and IDA terms, Bolivia was made a blend country. Bolivia'seconomic situation has deteriorated significantly since then; petroleumproduction has declined and the country is expected to become a net importerin the near future. Development is still seriously constrained by the dualstructure of the economy; a large part of the population continues to livein extreme poverty. Limited creditworthiness and low per capita incomequalify Bolivia for IDA eligibility. To date, the Bank and IDA have approved23 operations (10 credits and 12 loans and one blend operation) for Boliviaamounting to US$313.8 million, of which 8 have been fully disbursed.

15. Bank Group lending to Bolivia has assisted in the development ofinfrastructure and social sectors. In the agricultural sector (7 operationsamounting to US$45.2 million), the Bank Group has helped the Government to

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develop a viable livestock industry, to increase agricultural production, toimprove living conditions on the Altiplano and to promote the development ofthe alpaca/llama industry; efforts to strengthen the Agricultural Bank ofBolivia have met with limited success. In the power sector, through5 operations amounting to US$53.4 million, the Bank Group has been instrumentalin modernizing the sector, expanding electricity supply, improving the qualityof service and setting up a regulatory agency and a public power company,which has been operated in an efficient and financially sound manner. In thetransportation sector, Bank Group assistance to the railways (3 operationsamounting to US$75.0 million of which US$3.3 million were cancelled) hashelped to improve the railways' quality of management, efficiency of operationsand financial condition; a US$23.3 million loan was made for the constructionof a gas pipeline from the Santa Cruz area to the border with Argentina;a US$25.0 million loan for an aviation development project is assistingBolivia's efforts to develop hitherto isolated areas by providing safe andefficient freight and passenger transportation; a US$25.0 million loan for ahighway maintenance project is helping Bolivia protect its investments inhighways. In the mining sector, 3 operations amounting to US$28.2 millionhave aimed at increased exploration and production and improved sectoralcoordination. A US$11.5 million loan for a water supply and sewerage project,of which US$6.3 million was cancelled as two cities withdrew from the project,is improving services in 70 rural communities. A US$15 million loan for aneducation and vocational training project is assisting Bolivia to develop itshuman resources in a more effective way. A US$17 million loan is helpingBolivia to improve the living conditions of the urban poor in the city of La Paz.

16. Because of the narrow scope for private investment, IFC became activein Bolivia only in 1973 through an investment of US$400,000 in a firm producingcables and plastic products. Two IFC investments since then have contributedto the establishment of a local market for long-term securities: an equityparticipation of up to US$550,000 in Banco Industrial S.A. (BISA) in conjunc-tion with a Bank loan of US$10.0 million for the same institution to assist infinancing medium-sized industrial and mining enterprises, and US$337,500 inBanco Hipotecario Nacional to assist in the development of mortgage banking.Annex II contains a summary statement of the status of Bank loans, IDA creditsand IFC investments in Bolivia as of April 30, 1979, and notes on theexecution of ongoing projects.

17. Bank Group lending to Bolivia during the recent past has been sup-portive of a broadly based Government effort to expand and upgrade Bolivia'seconomic and social infrastructure. Until recently, the Government hadestablished an excellent record in providing the required local funds; ingeneral, projects have been adequately carried out. However, the recentdeterioration in the public finances and the balance of payments have made itnecessary to reexamine Bank Group lending objectives. Special efforts will bemade in supporting projects that would help Bolivia to increase exports. Inthe longer run, Bank Group volume and composition of lending will depend onthe measures taken by the Government to raise additional revenues, stabilizethe economy and improve the balance of payments.

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18. For the period 1974-77, total official development assistance toBolivia has been as follows: Bank, US$192.0 million; IDA, US$13.7 million;Inter-American Development Bank (IDB), US$188.8 million; US Agency for Inter-national Development US$157.5 million; other, US$203.3 million. Net ofundisbursed balances, Bolivia's debt to the Bank and IDA in 1978 represented7.2% of its public debt. Bank and IDA's share of the Bolivian debt servicewas 3% in 1977.

PART III - THE WATER SUPPLY AND SEWERAGE SECTOR

General

19. Bolivia's population in 1976 was estimated at 4.8 million, growingat a rate of 2.6% per year. About 42% of the population lives in urban areas,defined as communities of 2,000 people and over; the urban population isgrowing at a rate of 3.9% per year. Water supply is available to 38% of theurban population through house connections and to 10% through public stand-pipes; only 6% of the rural population has access to public water supply ofproven quality. Public sewerage is available to 20% of the urban population;it is virtually unavailable in rural areas. The quality of the water supplyis often low even in urban areas as water chlorination is not widely used.The unavailability of adequate water supply and sewerage for the majorityof the population is reflected in the high mortality rate due to diarrhea andenteric diseases of 87/100,000, one of the highest rates in Latin America.

Sector Organization and Finances

20. Responsibility for policy formulation and implementation in thewater supply and sewerage sector rests with the Ministry of Public Healthand the Ministry of Housing and Urban Affairs (MWUV). The Ministry of PublicHealth, through its Division of Environmental Sanitation (DSA), is respon-sible for providing water and sewerage services to communities with lessthan 2,000 inhabitants; and the MUV through its Water Corporation (CORPAGUAS),to communities between 200 and 10,000 inhabitants. The large level of unsatis-fied demand has permitted both institutions to carry out programs withoutduplication of efforts. The Departmental Development Corporations are alsoimportant in the financing and construction of water supply facilities, espe-cially for small communities. In each department, except Pando, municipalentities are responsible for the provision of water supply and sewerage servicesin the departmental capital. In the departments of Beni and Tarija, eachurban community has a water supply entity. The Bolivian Mining Corporation,the Bolivian Armed Forces and the National Community Development Service alsoconstruct minor works for village water supply and sanitation.

21. Sector institutions, particularly those serving the rural areas, areweak in terms of management, finances and long-term planning. Operationsand maintenance are inadequate. Staffing is generally sufficient althoughefficiency is affected by high staff turnover caused by low salaries, andlack of experience in project preparation and evaluation.

22. Investments in the sector have not kept pace with the growth of the

population. Coverage of water supply and sewerage services, expressed as

a percentage of population served to total population, has fallen since 1950.

Loss of potential revenues because of lack of adequate water metering, high

levels of unaccounted-for water and low tariffs have made the sector dependent

on Government contributions to cover operational deficits. Investments for

expansion of services have been financed mainly by multinational agencies and

bilateral donors which provided about US$100 million equivalent in grants and

loans during the last twelve years mostly at concessionary terms. Government

has not coordinated this financing very well. Its own contributions for

sector expansions have been modest and on an ad hoc basis, mostly in response

to foreign loan proposals or local political pressures.

23. In an effort to strengthen the sector financially, the Government

established in 1974 a system of national standards for tariff classifica-

tion and a new rate structure, which would enable the smaller communities

to recover at least operating and maintenance costs and larger communities

operating, maintenance and financial costs. The system was revised in 1976

and a National Tariff Council was established under the MUV. Local political

considerations, however, have affected adversely its implementation.

24. The Government intends to improve progressively the coverage and

quality of the water supply and sewerage services throughout the country.

The Government is aware that these improvements are not likely to be realized

unless the institutional deficiencies and financial constraints in the sector

are overcome, as is evident from the failure of the ongoing 1976-80 plan to

expand water supply and sewerage services. The MUV has been assigned

responsibility to prepare a national development plan for the expansion of

water supply and sewerage services during the 1980s. A strong Government

commitment to promote and complete the plan will be required to bring about

improvements in the sector.

Bank Group Role in the Sector

25. The proposed project would be the second Bank Group operation

in the water supply and sewerage sector in Bolivia. The first one was the

Urban and Rural Water Supply and Sewerage Project for which a Bank loan

of US$11.5 million was signed on October 15, 1978 (Loan 1324-BO). The loan

financed (a) the design and construction of water supply systems in 70 rural

communities; (b) improvement and expansion of water supply systems in Potosi;

(c) improvement and expansion of the water supply and sewerage system of

Sucre; and (d) technical assistance to the Government and the three executing

agencies charged with the carrying out of the project. By mid-1977 it became

apparent that the loan funds allocated to Sucre and Potosi would not be used

because of the cities' reluctance to raise tariffs as covenanted in the loan

documents, and the prospect of obtaining funds on concessionary terms from

other sources. Consequently, and as requested by Government, US$6.29 million

of the loan was cancelled in December 1978. In spite of initial delays, the

rural component of the project is being carried out satisfactorily by CORPAGUAS.

A WHO/IBRD mission visited Bolivia in December 1978 and updated the water supply

and sewerage sector report prepared by the two institutions in 1975. A further

updating of the sector study is being carried out with funds provided in the

ongoing Bank financed water supply and sewerage project (Loan 1324-BO).

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PART IV - THE PROJECT

Background

26. The Government originally requested that the Bank assist in thefinancing of the urgently needed expansion of the water supply and seweragesystem of the city of Santa Cruz de la Sierra (Santa Cruz) by transferring thefunds allocated to the cities of Potosi and Sucre in Loan 1324-BO. However,following a preliminary evaluation of SAGUAPAC, the entity responsible forwater supply and sewerage in the city of Santa Cruz, and discussions with theGovernment, it was determined that a separate project would suit better theobjectives of strengthening SAGUAPAC's finances and operation. The watersupply component of the project was prepared by SAGUAPAC's staff; the seweragecomponent is the first stage of the Santa Cruz sewerage master plan preparedby the consulting firm of F.A. Kocks A.G. (Germany). The project was appraisedby a Bank mission which visited Bolivia in November 1978. A report entitledSanta Cruz Water Supply and Sewerage Project, Staff Appraisal Report No.2409c-BO, dated May 29, 1979 is being distributed separately to the ExecutiveDirectors. A credit and project summary is presented in Annex III.Negotiations took place in Washington from May 7 - 11, 1979. The Boliviandelegation was headed by Mr. Alfonso Criales and SAGUAPAC was represented byMr. Constantino Weise, General Manager.

27. Santa Cruz is the capital of the Department of Santa Cruz andthe second largest city in Bolivia, with an estimated population of 280,800in 1978. The city had been growing at nearly 11% until recently as a resultof rapid in-migration of people seeking increased employment opportunities.The growth seems to have declined to about 7% in the last two years. SantaCruz is the administrative, financial and educational center for a vast regionof great agricultural potential and of oil and gas production, and by 1990,its population is expected to reach 650,000 inhabitants. Demand for publicservices, including water supply and sewerage, is growing rapidly.

28. Santa Cruz uses groundwater resources which, at the present rateof consumption and population growth, will be developed to their capacity by1986. New and ample sources of both surface and groundwater are available atvarying distances from the city. The extent and yield of these sources,however, need to be evaluated before a decision can be made on which sourcesto develop next. SAGUAPAC would hire before July 31, 1980 qualified consul-tants on terms and conditions satisfactory to IDA, to carry out such evaluation(Section 2.02(ii) of the draft Project Agreement). Although present waterquality is adequate, about 8% is not chlorinated, posing a potential healthhazard. In a few parts of the city, water pressure is insufficient duringhours of peak consumption. Unaccounted-for water is 50% of all water produced.Public water supply is available to 82% of the population; and the remainderof the population relies on shallow wells and street vendors.

29. Sewage from the present system, serving about 33% of the population,is treated in oxidation ponds before it is discharged into the Pirai River.The ponds are overloaded and need to be expanded. However, the treatmentis still of adequate quality and the effluent discharge has not damaged theecology of the Pirai River. The majority of the population uses septic

tanks, soakage pits or sanitary latrines. In general, these alternatives have

given satisfactory results and have not yet affected the groundwater discharge.

To ensure that raw sewage does not become a health hazard in areas without

d public sewer sys(-La and that adequate dispu-i means are used, SAGUAPAC

would prepare by December 31, 1980 a preventive program for IDA review and

approval, and woul,d carry oujt the program t'erearcer So,tion 3.07 of the

draft Project Agreement).

Project Objectives and Description

30. The overall objective of the project is (i) to improve the health

and environmental conditions of the inhabitants of Santa Cruz by expanding the

city's water supply and sanitary sewerage facilities, and (ii) to strengthen

SAGUAPAC's management and organization by the provision of technical assistance

and the training of SAGUAPAC's staff. In addition, it is expected that the

actions to be taken for the institutional and financial strengthening of

SAGUAPAC would have a demonstration effect on other water and sewerage com-panies, thus furthering the Government's objectives in strengthening the sector

as a whole.

31. The project consists of:

(a) water supply works (LAP IBRD 14126) comprising (i) the constructionof a pumping station of about 300 liters per second capacity in a

well field located northeast of the city including two concretestorage tanks with a capacity of about 4,000 cubic meters each; and(ii) the installation of about 200 km of distribution lines andabout 20,000 metered connections;

(b) sewerage system works (MAP IBRD 14127) comprising (i) the con-

struction of a sewerage treatment plant with about 25 hectares of

oxidation ponds and related pumping station and emissary; and(ii) the installation of about 4.5 km of trunk sewer and about60 km of sewer lines;

(c) installation of lot lines (connections) and in-house plumbingfacilities;

(d) procurement of data processing, laboratory and communicationsequipment and vehicles; and

(e) technical assistance comprising (i) cdetermination of new sources ofwater supply, (ii) improvement of SAGUAPAC's organization and

management, (iii) development of SAGUJAPAC's engineering and planningunits, and (iv) training of personnel.

32. The project would provide public water supply to about 108,000 people

and improve existing service to about 22,0O0 people. About one third of the

beneficiaries are estimated to be the urban poor. By the end of the project in1983, public water supply coverage in Santa Cruz is expected to reach 85%.

Water pressures would be stabilized during peak consumption hours. Metering ofhouse connections would reduce unaccounted-for water from 50% to 27% in 1983.

Sewerage services would be provided to about 66,000 people; the service levelis expected to reach 40% in 1983. The proposed ground water sources are the

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closest available; the water requires no treatment other than chlorination.The cost of installing minimum household plumbing (kitchen and sanitaryfixtures) combined with connection fees are currently estimated at aboutUS$450, which is expensive for most low-income households. Since there is nofinancing available, many low income families are unable to benefit even fromthe existing water supply and sewerage system. Hence, a revolving fund tofinance in-house plumbing and lot lines (paragraph 41) would benefit about1,500-2,000 households per year most of which belong to the lowest incomegroups.

The Santa Cruz Water Supply and Sewerage Company (SAGUAPAC)

33. SAGUAPAC is an autonomous public enterprise under the jurisdictionof the Ministry of Housing and Urban Affairs. It was established by theGovernment in 1973 and began its operations in September 1975. It took overthe water supply and sewerage system built by the Santa Cruz DevelopmentCorporation (Corporation) with the help of IDB. Transformation of SAGUAPACinto a cooperative, based on a recent organization study carried out bythe Corporation, and in accordance with the Government policy for decentrali-zation, is expected shortly. The change would give SAGUAPAC more autonomyand is not expected to affect adversely the project execution.

34. SAGUAPAC is managed by a six member Board of Directors, chairedby the President of the Corporation; other members are representatives ofMUV, the municipality of Santa Cruz, the Ministry of Public Health, privatebusinesses and consumers, with the General Manager serving as secretary. TheGeneral Manager, assisted by the Technical Manager and the AdministrativeManager, is responsible for day-to-day operations. He is designated by theMinister of Housing and Urban Affairs from a list of three candidates presentedby the Board. SAGUAPAC would consult with IDA before changing its GeneralManager (Section 3.04 of the Draft Project Agreement).

35. SAGUAPAC's management is competent and its professional staff isadequate. SAGUAPAC has about 160 employees, or 4.9 employees for 1,000 con-nections, which compares well with other Latin American utilities. Since1977, 30% of SAGUAPAC's personnel received training at various levels. Astudy for improving organization and management has been recently carried outand is being reviewed by a committee which would propose company policies onrecruitment, salary scales and promotion, and prepare a manual of functions.SAGUAPAC would present a statement on its personnel policies to IDA for reviewby December 31, 1979 (Section 3.05 (a)(i) of the draft Project Agreement). Untilrecently, planning and engineering was carried out for SAGUAPAC by the Corpora-tion. As a condition of credit effectiveness, SAGUAPAC would establish plan-ning and engineering units with functions satisfactory to IDA (Section 3.06of the draft Project Agreement and Section 5.01(b) of the draft DevelopmentCredit Agreement).

36. SAGUAPAC's accounting system is satisfactory, although itsfixed assets have not yet been properly valued, distorting the balancesheets; a competent consultant has been retained to study this matter.SAGUAPAC would value its fixed assets by November 30, 1979 and, at theend of each fiscal year thereafter, revalue them in accordance withprinciples and procedures satisfactory to IDA (Section 4.03 of thedraft Project Agreement). Billing and collection is satisfactory with

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only 10% of the bills outstanding more than 60 days. SAGUAPAC would ensurethat accounts receivable for its water and sewerage services would not exceedan average of two months' billings (Section 4.07 of the draft Project Agreement).

37. SAGUAPAC's accounts are audited adequately by qualified independentauditors. Internal auditing is adequate with the auditing group reporting tothe General Manager. SAGUAPAC would send to IDA, for review by March 31,1980, a statement on its internal auditing procedures and correspondingmanuals (Section 3.05(a)(ii) of the draft Project Agreement).

Project Execution

38. The project would be carried out by SAGUAPAC with the assistanceof qualified consultants. The installation of in-house plumbing and lot lineswould be contracted by the consumers and supervised by SAGUAPAC. Finalengineering designs for the project works are practically completed. As acondition of credit effectiveness, SAGUAPAC would contract (a) about 36man-months of engineering consultants on terms and conditions satisfactory toIDA to prepare the bidding documents, to help in bid evaluation and to super-vise construction; and (b) about 14 man-months of management consultants tohelp improve its organization and management (Section 2.02 of the draftProject Agreement and Section 5.01(c) of the draft Development Credit Agree-ment). The works under the project are expected to be completed by the end of1982. During project execution, SAGUAPAC would provide IDA quarterly progressreports on its operating and financial performance.

39. To assist in its program of institutional strengthening and toprepare the water resource studies, SAGUAPAC would contract, on terms andconditions satisfactory to IDA, (a) by January 1, 1980, engineering consultants(6 man-months) to assist in developing the engineering and planning units; and(b) by July 31, 1980, consultants (30 man-months) to carry out the study fordetermining the next major sources of water supply for Santa Cruz (Section2.02(ii) of the draft Project Agreement). In total, about 80 man-months ofconsultant services are foreseen at an average cost of US$5,000 per man-month.By December 31, 1979, SAGUAPAC would furnish for IDA approval, a three yeartraining program to be initiated by March 31, 1980 (Section 2.03 of the draftProject Agreement).

Project Cost and Financing Plan

40. The estimated cost of the project is US$16.0 million includingcontingencies, with a foreign exchange component of US$6.2 million. Thecosts are based on June 1978 contract prices updated by SAGUAPAC to December1978. Physical contingencies have been estimated at 15% of base cost (US$1.7million) and price contingencies at 15% per year for local costs and 7% peryear for foreign costs (US$3.5 million).

41. The project would be financed by the proposed IDA credit (52%), bySAGUAPAC's internal cash generation (30%) and by the grant from the Santa CruzDevelopment Corporation (18%). Formal agreement between the Corporation andSAGUAPAC whereby the Corporation would contribute US$2.5 million, in accordancewith a schedule agreeable to IDA, would be a condition of loan effectiveness(Section 5.01(e) of the draft Development Credit Agreement). The proposed IDAcredit is expected to finance the foreign exchange costs and US$2.8 million of

- 12 -

local costs. Financing of local costs is justified in light of Bolivia'spoverty and the need to help meet the country's external capital requirements.Proceeds from the IDA credit would be relent to SAGUAPAC through a subsidiaryloan agreement between the Borrower and SAGUAPAC to be executed as a conditioniof credit effectiveness (Section 5.01(a) of the draft Development CreditAgreement). The Borrower would relend to SAGUAPAC in peso equivalent of USdollar for 20 years including 5 years of grace with interest at 0.75% perannum during the grace period and 7.9% per annum thereafter (Section 3.01(b)of the draft Development Credit Agreement). SAGUAPAC would assume the foreignexchange risk. After the grace period, SAGUAPAC would effectively pay theBorrower 5% per annum and retain the remaining 2.9% per annum as a grant from

the Government to capitalize a revolving fund to help new low-income cosumersto finance the installation of in-house plumbing and lot lines (Section 3.01(b) of the draft Credit Agreement and Section 2.05 (c) (iii) of the draftProject Agreement). SAGUAPAC would service the entire US$9 million includingUS$2.0 million that would be used to set up the revolving fund. SAGUAPAC wouldestablish the aforementioned revolving fund on terms and conditions satisfactoryto IDA by January 1, 1980 and deposit an initial amount of US$50,000 equivalent(Section 2.05(a) of the draft Project Agreement). The beneficiaries wouldrepay SAGUAPAC in less than ten years and at a minimum of 12% per annuminterest rate on the unpaid balance (Section 2.05(b) of the draft ProjectAgreement). The interest rate would be slightly negative in real terms com-pared to the expected average rate of inflation during 1979-83; it would bejustified in view of the objective of the revolving fund to benefit low-incomefamilies. SAGUAPAC would review the interest rate from time to time, and ifnecessary, would adjust the rate in order to maintain, along with otherresources which would become available for the fund, the dollar value of theproceeds of the IDA Credit used to set up the fund (Section 2.05 (d) of thedraft Project Agreement).

Financial Position

42. SAGUAPAC's original assets (US$14.5 million) were financed bycontributions of US$8.7 million from the Corporation and a loan of US$5.8million in 1968 from IDB to the Corporation. The Corporation has agreed tocontinue servicing the IDB loan. From the start of its operations, SAGUAPAC'srevenues have been insufficient to cover its operating costs, mostly becauseof delays in implementing approved tariff levels. As a condition of crediteffectiveness, SAGUAPAC would implement water and sewerage charges in pesos ofUS$0.175 equivalent ($b3.50) per cubic meter and take all steps necessary toenable it to collect fixed charges for water supply and sewerage services inthe case of new service connections (Section 5.01(d) of the draft DevelopmentCredit Agreement and Section 4.05 of the draft Project Agreement).

43. In September 1978, SAGUAPAC hired a consultant to carry out atariff study based on socio-economic grounds and consumption patterns. Onthe basis of the study, differential tariffs with five principal categories:residential, commercial, residential/commercial, industrial and officialhave been designed. Five subcategories for residential and residential/commercial categories have been established in accordance with their co sump-

tion level. The minimum monThly water consumption would vary from 15 m forresidential category to 30 m for industrial. The average revenue from waterand sewerage charges under the new tariff system, approved by the National

- 13 -

Tariff Council, would be increased by 67% over the present level to $b5.00/m3

by June 30, 1980 (Section 4.04(a) of the draft Project Agreement). Revenuesper cubic meter sold are expected to increase by 22% per year in nominal termsor about 6% per year in real terms during 1979-1983. Operating costs areexpected to increase by about 10% per year.

44. The financial projections have been based on the assumption thatthe proposed revenue package would be implemented as stated above. SAGUAPACwould adjust its tariffs so as to attain annual rates of return on revaluedfixed assets of 1.5% in 1980, 5.0% in 1981, 5.5% in 1982, and 6% thereafter(Section 4.04(b) of the draft Project Agreement). During the constructionperiod the debt equity ratio would remain below 26% and the current ratio atabout 4:1. Until the Closing Date of the Project (June 30, 1983), SAGUAPACwould not undertake any investment, other than those included in the project,of over US$0.5 million without prior consultation with IDA (Section 4.06 ofthe draft Project Agreement).

Procurement and Disbursement

45. Contracts for equipment and materials would be awarded throughinternational competitive bidding according to IDA guidelines. Local manufac-turers would be accorded a margin of preference of 15% of the c.i.f. priceor the actual import tariff, whichever is lower. Contracts for civilworks estimated to cost less than US$100,000 and contracts for equipmentand materials estimated to cost less than US$50,000, up to an aggregate amountof US$1,000,000, would be awarded on the basis of local bidding proceduresacceptable to IDA. Minor civil works contracts of less than US$10,000 up toan aggregate amount of US$200,000 for the installation of sewerage and watersupply distribution lines would be awarded after obtaining price quotationsfrom registered local contractors. Installation of in-house plumbing and lotlines would be carried out by local contractors contracted by individualhouseholds and approved by SAGUAPAC. It is expected that most of the civilworks contracts would be won by local firms and most of the equipment andmaterials supply contracts by foreign firms. After considering a number ofalternatives, it was determined that the purchase for US$320,000 of thecomputer now being leased by SAGUAPAC would be the most economical.

46. Disbursements of the IDA credit would be for 35% of civil worksexpenditures; 100% of foreign expenditures for directly imported equipment,materials and vehicles; and 40% of local expenditures for locally procuredgoods; 100% of expenditures for in-house plumbing and lot lines; and 100% ofexpenditures for technical assistance and consultants. Retroactive financingof up to US$300,000 is considered for expenditures after January 1, 1979, forthe hiring of consultants (US$50,000) and the purchase of data processingequipment (US$250,000). The credit is expected to be fully disbursed byJune 30, 1983.

Benefits and Risks

47. The rate of return, calculated on the basis of increased revenuesfrom the water supply and sewerage components, which account for 72% of thetotal project cost, is 12%. The cost of the technical assistance component,which is designed to improve SAGUAPAC's performance, has been included in thecalculation. The use of a shadow exchange rate of 1.25 and a shadow price

- 14 -

factor for unskilled labor of 0.80 would decrease the rate of return to about10%. Both the water supply and sewerage components are least-cost solutions.The proposed ground water sources are the closest ones to Santa Cruz andrequire no treatment other than chlorination. In view of the rapid growthand increasing density of the population of Santa Cruz, the water bornesewerage with oxidation ponds is the safest least-cost method compared toseptic tanks or soakage pits. The project is expected to yieid a number ofbenefits whose value cannot be quantified such as better overall livingstandards for the people of Santa Cruz, prevention of water borne diseases,general public health improvements, water pollution control and the improvementin the management, operation and planning capacity of SAGUAPAC.

48. Under the project, by 1983, about 108,300 inhabitants of Santa Cruzwould receive access to safe, reliable water supply and about 22,000 peoplewould benefit from increased reliability of existing water supply. Theproposed project also constitutes the first phase of the Master SewerageExpansion Plan and would provide access to the sewerage system to about 66,000people. About one-third of the population to benefit from the project areestimated to be the urban poor. Also, since Santa Cruz relies heavily onground water resources for its water supply, the project is urgently needed toreduce the risk of contamination by untreated sewage.

49. An innovative feature of the project, which would help low-incomepeople to overcome the high costs of initial connection and in-house plumbing,is the establishment of the revolving fund for in-house plumbing and lotconnections. About 8,000 households are expected to utilize this fund duringthe project period; it would assist low income households which would other-wise not be able to afford connections to SAGUAPAC's expanded system. SAGUAPAC'spast performance in obtaining payments on time (and the punctuality of itsresidential customers in making service payments) indicate that with carefulmonitoring of installation costs and terms of financing, SAGUAPAC would beable to ensure the continuity of the fund.

50. By promoting the orderly expansion of the vital physical infrastruc-ture for Santa Cruz, the project would help increase the absorptive capacityof the city for additional in-migration. The city is the most importantgrowth pole of Bolivia and would be the staging area for the planned export ofnatural gas to Brazil and the stepped-up program for oil and gas exploration.It is also the marketing center for the vast agricultural hinterland of theBolivian lowlands. The provision of safe water supply and basic sanitation inthe medium- and long-term would be necessary if Santa Cruz is to continueserving as the development hub of Bolivia.

51. The works to be built are technically simple and offer limited risks.Financial risks are minimized by the commitment by the Development Corporationto provide its share of the construction cost and the approval by the NationalTariff Council of a new tariff and revenue package. Management and organiza-tion of SAGUAPAC would be strengthened by a carefully planned technicalassistance program provided under the project, consisting of consultantservices and the training of SAGUAPAC's staff.

- 15 -

PART V - LEGAL INSTRUMENTS AND AUTHORITY

52. The draft Development Credit Agreement between the Republic ofBolivia and the Association, the draft Project Agreement between the Associa-tion and Servicios de Agua Potable y AlcantariLllado de Santa uruz (SAGUAPAC),and the Report of the Recommendation of the Committee provided for in ArticleV, Section 1(d) of the Association's Articles of Agreement are being distrib-uted to the Executive Directors separately. Special conditions of the projectare listed in Section III of Annex III. Additional conditions of effectivenesswould be that: (a) SAGUAPAC has established planning and engineering unitswith functions satisfactory to IDA (para. 35); (b) SAGUAPAC has contracted (i)engineering consultants to prepare the bidding documents, to help in bidevaluation and to supervise construction; and (ii) management consultants tohelp improve its management and organization (para. 38); (c) the Santa CruzDevelopment Corporation and SAGUAPAC have executed an agreement whereby theCorporation would provide US$2.5 million to help finance the project inaccordance with a schedule acceptable to IDA (para. 41); (d) the Borrower andSAGUAPAC have executed the Subsidiary Loan Agreement (para. 41); and (e)SAGUAPAC has implemented water supply and sewerage charges in pesos of US$0.175equivalent ($b3.50) per cubic meter and has taken all steps necessary tocollect fixed charges for new service connections (para. 42).

53. I am satisfied that the proposed credit would comply with the Articles

of Agreement of the Association.

PART VI - RECOMMENDATION

54. I recommend that the Executive Directors approve the proposed credit.

Robert S. HlcNamaraPresident

Attachments

June 28, 1979Washington, D.C.

- 16 - ANNEX IPage 1 of 6

BOLIVIA - SOCIAL INDICATORS DATA SHEET

RIERENCE GrOUPS (ADJUSTED AERAGESLAND AREA (THOUSAND SQ. KM.) BOLIVIA - MOST RECEMT ESTIATE)

TOTAL 1098.6 SAME SAME NUT HIGHERAGRICULTURAL 304.4 MOST RECENT GROGRAPHIC INCOME INCOME

1960 lb 1970 /b ESTIMATE lb REGION /c GROUP /d GROUP /e

GNP PER CAPITA (US$) 210.0 330.0 610.0 1074.6 430.3 926.1

ENERGY CONSUMPTION PER CAPITA(KILOGRAMS OF COAL EQUIVALENT) 147.0 229.0 318.0 943.1 262.1 730.7

POPULATION AND VITAL STATISTICSPOPULATION, MID-YEAR (MILLIONS) 3.3 4.3 5.2/fURBAN POPULATION (PERCENT OF TOTAL) 24.0 28.1 30.3 59.3 24.6 49.0X

POPULATION PROJECTIONSPOPULATION IN YEAR 2000 (MILLIONS) 9.0STATIONARY POPULATION (MILLIONS) 19.0YEAR STATIONARY POPULATION IS REACHED 2100

POPULATION DENSITYPER SQ- KM. 3.0 4.0 5.0 23.5 45.3 44.6PER SQ. EM. AGRICULTURAL LAND 11.0 14.0 17.0 80.5 149.0 140.7

POPULATION AGE STRUCTURE (PERCENT)0-14 YRS. 43.0 43.1 43.0 40.9 45.2 41.3

15-64 YRS. 54.0 54.0 54.0 54.4 51.9 55.365 YRS. AND ABOVE 3.0 2.9 3.0 3.9 2.8 3.5

POPULATION GROWTH RATE (PERCENT)TOTAL 2.1 2.6 2.6 2.4 2.7 2.4URBAN 3.6 4.1 4.2 3.7 4.3 4.5

CRUDE BIRTH RATE (PER THOUSAND) 48.0 47.0 44.0 32.8 39.4 31.1CRUDE DEATH RATE (PER THOUSAND) 23.0 19.0 15.0 8.5 11.7 9.2GROSS REPRODUCTION RATE .. 2.8 3.2 2.4 2.7 2.2FAMILY PLANNING

ACCEPTORS, ANNUAL (THOUSANDS) .. .. 7.6USERS (PERCENT OF MARRIED WOMEN) .. .. .. 17.7 13.2 ' 34.7

FOOD AND NUTRITIONINDEX OF FOOD PRODUCTION

PER CAPITA (1969-71-100) 81.7 101.0 108.0 99.4 99.6 104.4

PER CAPITA SUPPLY OFCALORIES (PERCENT OF

REQUIREMENTS) 69.0 76.0 77.0 107.0 94.7 105.0PROTEINS (GRAMS PER DAY) 43.0 46.0 48.5 60.4 54.3 64.4

OF WHICH ANIMAL AND PULSE 13.3/& 14.0 14.4 28.3 17.4 23.5

CHILD (AGES 1-4) MORTALITY RATE 36.0 27.0 22.0 6.7 11.4 8.6

HEALTHLIFE EXPECTANCY AT BIRTH (YEARS) 43.0 48.0 52.0 63.6 54.7 60.2INFANT MORTALITY RATE (PERTHOUSAND) .. .. 158.0 76.1 68.1 46.7

ACCESS TO SAFE WATER (PERCENT OFPOPULATION)TOTAL .. 33.0 34.0 63.4 34.4 60.8URBAN .. 92.0 81.0 79.5 57.9 75.7RURAL .. 2.0 6.0 38.6 21.2 40.0

ACCESS TO EXCRETA DISPOSAL (PERCENTOF POPULATION)

TOTAL .. 12.0 .. 58.8 40.8 46.0URBAN .. 25.0 .. 77.8 71.3 46.0RURAL .. 4.0 9.0 24.5 27.7 22.5

POPULATION PER PHYSICIAN 3900.0 2300.0 2120.0 1841.9 6799.4 2262.4POPULATION PER NURSING PERSON .. 2730.0 3520.0 933.7 1522.1 1195.4POPULATION PER HOSPITAL BED

TOTAL 580.0 510.0 .. 563.4 726.5 453.4URBAN .. 200.0 .. 279.4 272.7 253.1RURAL .. 2400.0 .. 1140.9 1404.4 2732.4

ADMISSIONS PER HOSPITAL BED .. .. .. 25.7 27.5 22.1

HOUSINGAVERAGE SIZE OF HOUSEHOLD

TOTAL .. .. .. 5.0 5.4 5.3

URBAN .. .. . 4.8 5.1 5.2RURAL .. .. .. 5.3 5.5 5.4

AVERAGE NUMBER OF PERSONS PER ROOMTOTAL .. .. .. 1.3 .. 1.9URBAN .. .. .. 1.3 .. 1.6RURAL .. .. .. 1.5 .. 2.5

ACCESS TO ELECTRICITY (PERCENTOF DWELLINGS)

TOTAL 22.0/h .. . 54.3 28.1 50.0URBAN 76.0/h .. .. 80.1 45.1 71.7RURAL 8.0/h .. .. 14.2 9.9 17.3

- 17 - ANNEX I

BOLIVIA - SOCIAL INDICATORS DATA SHEET Page 2 of 6REFERENCE GROUPS (ADJUSTED AlERA.ES

BOLIVIA - MOST RECENT ESTIMATE) -

SAME SAME NEXT HIGHERMOST RECENT GEOGRAPHIC INCOME INCOME

1960 lb 1970 /b ESTIMIATE /b REGION /c GROUP /d GIOUP /e

EDUCATIONADJUSTED ENROLLMENT RATIOS

PRIMARY: TOTAL 64.0 68.0 80.0 107.3 82.7 102.5MALE 78.0 80.0 88.0 109.1 87.3 108.6FEMALE 50.0 56.0 72.0 107.4 75.8 97.1

SECONDARY: TOTAL 12.0 21.0 32.0 40.5 21.4 33.5MALE 13.0 24.0 36.0 40.4 33.0 38.4FEMALE 9.0 18.0 27.0 39.0 15.5 30.7

VOCATIONAL ENROL. (Z OF SECONDARY) 14.0 .. ,. 18.5 9.8 11.5

PUPIL-TEACHER RATIOPRIMARY 27.0 27.0 23.0 37.1 34.1 35.8SECONDARY 13.0 17.0 .. 17.9 23.4 22.9

ADULT LITERACY RATE (PERCENT) 38.8 40.0 63.0 77.4 54.0 64.0

CONSUMPTIONPASSENGER CARS PER THOUSAND

POPULATION 3.0 4.0 1,6 29.1 9.3 13.5RADIO RECEIVERS PER THOUSAND

POPULATION 73.0 82.0 74.0 172.1 76.9 122.7TV RECEIVERS PER THOUSAND

POPULATION .. .. .. 67.9 13.5 38.3NEWSPAPER ("DAILY GENERALINTEREST") CIRCULATION PERTHOUSAND POPULATION 27.0 42.0 35.0 76.1 i8.3 40.0CINEMA ANNUAL ATTENDANCE PER CAPITA .. .. .. 4.2 2.5 3.7

LABOR FORCETOTAL LABOR FORCE (THOUSANDS) 2000.0/i 2300.0 2500.0

FEMALE (PERCENT) 18.9/i 19.5 20.4 21.5 29.2 25.0AGRICULTURE (PERCENT) 61.0 65.0 51.0 30.2 62.7 43.5INDUSTRY (PERCENT) 18.1 21.1 23.0 23.8 11.9 21.5

PARTICIPATION RATE (PERCENT)TOTAL 34.1 33.2 33.0 30.9 37.1 33.5MALE 56.0 53.7 52.7 47.3 48.8 48.0FEMALE 12.7 12.9 13.4 13.3 20.4 16.8

ECONOMIC DEPENDENCY RATIO 0.9/i 0.9 1.0 1.5 1.4 1.4

INCOME DISTRIBUTIONPERCENT OF PRIVATE INCOMERECEIVED BY

HIGHEST 5 PERCENT OF HOUSEHOLDS .. 36.O/1 *- 23.7 15.2 20.8HIGHEST 20 PERCENT OF HOUSEHOLDS .. 59.0 *- 58.7 48.2 52.1LOWEST 20 PERCENT OF hOUSEHOLDS .. 4.OJI *- 2.9 6.3 3.9LOWEST 40 PERCENT OF HOUSEHOLDS .. 13.07: .. 9.9 16.3 12.6

POVERTY TARGET GROUPSESTIMATED ABSOLUTE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. .. 265.6 241.3 270.0RURAL .. .. 134.0 185.1 136.6 183.3

ESTIMATED RELATIVE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. ,. 105.0 396.3 179.7 282.5RURAL .. .. 75.0 308.1 103.7 248.9

ESTIMATED POPULATION BELOW ABSOLUTEPOVERTY INCOME LEVEL (PERCENT)

URBAN .. . .. 35 .2 24 .8 20 .5RURAL .. .. 85.0 46.6 37.5 35.3

Not availableNot applicable.

NOTES

/a The adjusted group averages for each indicator are populatio.n-weighted geometric means, excluding the ettremevalues of the indicator and the most populated country in each group. Coverage of countries among theindicators depends on availability of data and is not uniform.

/b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969and 1971; and for Most Recent Estimate, between 1974 and 1977.

/c Latin America & Caribbean; /d Lower Middle Income ($281-550 per capita, 1976); /e IntermediateMiddle Income (5551-1135 per capita, 1976); /f Provisional 1976 population census gives estimateof 4.647 million; /g Av. 1961-65; /h 1963; /i 1965; /] Population.

May, 1979

- 18 - ANNEX I

IXFOXMS aSOCrA nMZATMSPage 3 of 6Motes, AlthOt4h th. dota are dreo fen. so-,oo g.noroly Jodgo the -t .ntbooetton mam e!i.ble, It ohouU .10. ho noted that thY my7 not be wert..-tilnly o."rable bet.*.. o the latk of tema.41eid definitiomum cod amewmets md by difforat tmmett0im Lo ool1"ieotr the dot.. Th. dot. Ow., soeethoom.,uoof.l to 4.0.01k. owdoo of Lonod tdlot.tm to.., ad M-cm.utOimm,o ou.rti Ols dif 00000.00, boon --otImm.

Th. o4.llgi.uALTJogLU fo oath faindltOr an0 4Pv.IAtf..wI9htmd eOWTI* shw eotlediss tb. extrm nele. of the ImAlestaw ad the wsnt popolat.dooa'I. logroeq.ToDM to 1.0k of dots, . B mWQr*W of 011 loI&tO"tr for toPitol 2"71" Oil I tootot aNd of todIooiooe of Amoe. to otor 0.4 0000000

diopol 0000100,& lomom dioorIhotio ond P-nory fo other oitov Xrooq. ore Pepo16tio.-neightd I.amatio -- m CitbOt 0010100 of the ewto no.. rAd

Lo t RA 10004q.h)0O00o0t tOeIfoitteoqotq-o1.wn.d

It-r-I I"Z.1t_I ad t-W -11 -Wt"' P-Pprieto ad 05.1sf -ootdbatpono

((OPPt CAtPTA ,,(S) - CNtP por -spit. 001.. t OoOrrmt -ort poioeo, p-.atj,mL.01O1eR divided by obo of pr-oticiog phy.l-os_olatd3 -

7a 000010nthod 00 WOrld Iank 00tl0 (1975-77 boof.). . -Li "'irifR -?0 nd.l .! hoboo ot osiveroity 1-,1.

1960. 1970, 004 1977 d.ts. leooineo oeO t00-Ppllo divid*d by .- "r of praoticio 1%enotead m lgoot oeo Promttic-1 nro. d .,.etoton ooeE th C IOtPTIOIO PEt CAPITA ;.- -Iou Mao piPto of oomfoi.1 -nrgy (.-I boootn 00 oOio hod - toto. ra.ndf.l-oulto (ot,

.0 Lgote,pooot.ntra o d hydo- olsndootO. eo.adro)diid by their. Iop iooo of bopitto1 bodolotoi iyl 0 klOramm of to.oovlntpowptt1L0 90ooloblo to poblio d0 privato 1-n1o .0d opeoLiai d hoepit.1 end o-and 976 t01. hbhilit.tim oont.r.. H_opit.l. 00 .. t.blielinot. poonantly otoffod by

007.10 ltV'IAL STATISTICS st boo:t o.phymiia.- E.t.oIh-Io t. p-oodieo pri-cip.11y X -di0010Tots! PIP, io. d'yO ottoo -A fJoly 1; 1960, 1970, . d 000 . -id01.d.. to.!l honpft.l, bhw.or, 100104. h.olth .. d -di-

7977 doto. cel ostor. not ~~~~~~~~psenontly ot.ff.d by o phy.iota (but by o nodio o-Orbr oo!oiorlorOntoftot.!! - tio ofort to totOl popolotion; ltn 000 idwtf., eto.. hich offor i.-patI..t so- -od.tlno

diforotdoiwtioOoforaorooo ny -fot op-rbility of dot. rvd iia 00 fndo oiito-nt1t0 .O .r 1960, 1970 end 1975 dot.I.. o.d 1..igg gr honoitobahd - 10t01 oob.r of odojolo- to or d !-h-orin

Poou!Oi!Ow PwoiootiaO ~~~~~~~fr-n bhPitelo divided by 060 .-ot. of bod..porlotow n Yor 000- Curroow p:p.otiot proJootion oro bo...d a197 toe!poplotooby Ego .nd .e .0.4~ th.ir nooItylo ond fortiliry LIDI

-o,oiog life ootaoo brth oro o oith oo-trye pe cpio A'hotehoLd nootr o. f o ru 0bdvdoeet br iioqurt.roI=000 1-on, od fenl lieoPotry -tbili.ig or 77.5 70000. .0d their 0.10 -. 01.. A b0r400 or 1041Cr n.y or ny not bo teoodod it rh.

Orpor-nter for fertlItyr t. h. ay. 3 10001. oeae h.01 600 ld1 for et.ttotol.. Prp-00..lofro Iitoy,rtodio tojLno101.8p faity pln... 1~p- A-or..o -b., of tarm-n nor roon -toa.ob.. end 005.1 .- nrOge os

100000.Vo,,coo,oy t tto g.optd -t of then. 9 -bhi..IOt of por.-o par rot. i .11, urb.n, od rtor.1 -oopL.d ooetnado!lg..ooli .od frut trn.fo m~cti0 pUtpO 0. r.Pertivoly. "Pllg 0140noposot t u. 0 uwouid pro

toe ow flt _tOtOt his In ochlved only oft fertility roto tots1, orbo.. .. d .rul dwol log rP. ti-ly.801 oo t to oL__ttO Iw of _ni,t wof p-od-utlo 00t0, 060 00th

oorr, lw f 00oo epacs tsef oatl. b.Stoti-nry Popolti- EDUCATI0ONdoe as ot osto onrho0.01 ofrhoproScto hbr-otriotlc. ofto 441-.d00 -.. oIm rti..

pop!elooitoho100 200 008 ho ot of40110 o fetlt rto primaryob~ . -1 to..osoed f-1ol - Cr0.0. .oe. 0.10 so. d foeoetilrrpl-a-rioothbo. no0of0,1 goood ho.rimry oo!a.pdr.n1iotof Ofpof-eilitoro

to ,.OOotioo foooo ogahod - Th. y.orov h- totr oPoolo- o-hoo-1-o popoo!r-ot wotol'fl!d11iloneo -!yorhtdoor oitv boo hoov. rest hod. a~~~~~~~~~~~~~~d j.-td for dlfforont lewtho of primary odO...tiflfocotrto !h

foro!OttOtO densityutloorool edocotiononroilnent n.y excod 100 pe ..ort sito000 opb .reforsq An -918-vOr op plolo Po q..000 ktilonOtor (100 h-ctaro.) 60100 1or d06 ,0 ho fii!ecoloo

of total 0000. 500004000~~~~11-1. -ch-o - -1.t ol .. d1fI.o! - C-p.ootd 00 abov. -ocvdor od,ts-Potto.Inoaorcoi.ori Lnd- sp-td -osboto for sorl-to-tr iseod t!.t teoi. 00I t foor yr- of opprovod priosry otrt t;Pr-id-,

-L0 i. gonra vooiowol or :ehorp Oritg,to in for pop1Io. o!o of

rooltonalourotre(rron)- hlde (0.14 y ... ) oobit00 12 t- 17 yoc foo ooro. 1 todoo g00oo 0 ... or -11, -1td.d.(15-6 yea,'. od rtiro 76!yeorosod ver)so prcooooeo00 ad- .o.tioulerOio (0t.00 t0 of -oodlryl V- V ti-1. i-otitoft-o iw-bod.

voo pooiSlot. 160,1970 .nd 1977 d.0.. toitl.iotd_orio!j orohrLoon.hn pwooidptdtt' r

ioOo!.too gowt oat (nrconl -tota! - A-w..l growth Iat.. of ttl depootnen oft00c040d7 l tttione,.Id-y ooltoOfr19550-., 1960-70, owd 1970-77. ui-eoo o L rnr. tand eeooodorE - fore trd-wt. -rrolld 10

Ovololo gowh 00 (Frerc t)--orbo-A-wwu.. Igothb rOe f 000-rioyso - 040 1pri..dry, yoothr 00. otirhroepo,uiotfor 1950-60. 1960O-70,..od 1970-75. eproioy 100010. .I d".db - -- fI-h-i

- 00o, rotorhouol - o a 711- birth. per ..... oootd of AdoIt litt....acros topatO-.t) - LI Oeroteodu1to (oh!l to rood 008 onto, a..7or .... o!oolor 1960. 190 s-d I977 d_t.opar ... togo of tots! odo1t popoolotiw ogod 15 y..rt 0..dorr

crode de0th r.to por Ahood 00.1. I4d00h p00 thosowd of eid-,vo pooltio ~19600, 1970 -od1977 dat.ZC.ItTO

Inhr ool ord-ol pe io If 0:he eporioo-o pr ...o-oge- oting Ie. hwo..prelo7otoe ooueoe oroosdnltrtyvlti fotlltv 000. oooly fi-r-yoe- ovrooe digo Lw 1960, vohiole.. th _ d.-b -- ,.dil.r

19(7. sod 9757. 0.d.41 oeor foot th-ooed Alloeio)- typos of 000010000. too r.d10Foo _l 01 nntnOacc.tort -001 tosod) to.! botr f!hodsne00 ,-r.1 pob1it par ohonoord of ptpo!etiow; -ocldso un1icowoed

pl-oRon Pror, tf-ot: do te foo re--t yeo- 00y 00 ho cp.r.rblo etow .- --oOtrie'sool otoow ....eu o pr--n 0 f.0r1i4d P.--gOOtO.O Of h.ltehd to eino

wsrrod ooo ofthtd-hoori.E 000 (15-46 o-re who ooe hirtb-tOot-1 TV roce.i-or. oor oowosd top iet!Iot - T r-ci-or tor br-dreot to got-1od-t- 11 tarIe 000 oea -rop. public per thono... pouM lw ewld.. 001 i--d TV 000 ieO o o,

000 A00 NL7RfilotIU 2il 10- 00000000 1%-Trtooto 1000 t poooOd o Tull - how th.ff r.gocro slOd- of food trod-ci.. .0 -ft.00 99-1e0)-Iwo 00 Per cOeito 0iw of "doily 0000051 i.t.r..tw....popr". 4d0f0400d perIodi.al publi-

oool rdooo of a food -seroitfo -P-oo-ino euclod.. .. d ond -otio devotd pri.srily --rcodlog geocro1 .no. It Le cownidered (t d -odtoow -sed-r ynsr V.01 Co-moditocrr pOli,ry io-do ho "doily' if i0nptor u brut Loot titn.ow -uwl

-.0 go.or.n in--ed of suar) 'hich =0 edIbto owd.ttLooutriew- Clo.- .-.. oL .Ottendao- 00r -pit. 000 yor -B ... d o oh' no r of 01tk00,-f rfte 08ttoretio ) A&gr:X-sw prduotto- of ... h-..Itdt01 dorli.g Oh. yeor, ilotdiog oonnloet dieiwcfot. 04-bl

(Or 010 uplrof alrlo eonto of -- ni= -sft) - Coput-d fr-

potdon -olshtoppllet -opPintdOertit pris00~ lo1ut bo ""KIr"'hjTrifo- (thoooaod.) - Ec--i.ttuly -rti- p-roow, i-I.dtli -rsd-oPor... drane 0 to. N(00 toppli.. -ot Iod onloto feed. 0.0 furOoeood o-piyod but. 00m oooioe, 000d000e. 000i Dflol-

qoOtltrt'tod n (odprocosto d I..... J0 d lboiuto. R 10 noroocuote r o prbloooroaruoro rotto td by FA0 b6.0.4d0- phy.iOlOiO-l 00040 for nor- Fonut (,0000..1 t F- roat Iobor fornee -P-oeta 00 001 Isorfoteoos ooioo' 0.8 tolI o-id-itbno i "'lortwol tnowoooo body g iolur .. tot) - Lambor force Lw f. wiwg, tor-try. h-t001w owd fthieln

.000.oeod oodorfoto of I-osO , ond 11boiog IS per- o protog 1: tota 1., 0 000.

000 foruoOsrVoot-oh loe.tda,(000) - Labo force inL ow. rtrooot owfr"lo n

010nttp.ply of food pr doy. N., -opply' of fodIs dot10 0 PnIi.tO"iwn01-111 0. a mt-PotIOlOn0000. eqoronotttooallrouort -otsbIohs.d by USDA provide 0 rtvt atooo "0doetr!,nb ndrn labr 000000.-

L btonoioao of6 000 ftoa protolo pre doy .04 20 iram. peonoo o 0f,nb 0 oso ouoiw00olaooopciOy0) oto. endpolo prtoi, 0!ohih 10100 etnoldho 0100! prtoi. 160, 970ood 975dotO 1960 00 1970prOi-dOt1w75oedfltttn

,h .... ottdordo 00 IOwer Oh., (ho- f( 00 f I 000.7 proteIn sod7_ oran of _n oo p F.or, go..... frro ol, pne y00-e 30000000 of who p.pIwoltio, end long tIm tr.wd. ofO stitoete

PettoIlaplti 000010 uotr s s.wlol sod ouluo - Protin oupply of fond Otnf .edoo ai ato0 Ouaiw ne Vsdti.o ord_rt_d (o nlI~ -04 poltOti coo roowper do.r. ebr forc to ogo grfp of 15_64 000..

00118d (sue 1.4, 000.! ito t .. 0 ...... do A ... ol d-htb P'r th..o- - 10C000 DISTRIBUTIONO

00l01 p tog dooro t80. d-ri-d 000 ittO tobirO. . f cOt, ri-hto 20 c pe-o obohoi,ost .t drcen. od) ro-redObopohrrr

100200 oof Voot-ho1do.bir000cat a l,o (ooO- u-OorOo. f roar of lItfe rn-it-

1oo5 btt

960. (57 od(r s (00107Y T11GET 40000rote ...0 oouad, - -coogi d-,h, of Oofo.- -d.r0 Etlootod aboolot -- 000 -0boon leve (1,) Peos Itta,-o-b-o sod -00

ocero of o per- ,oto o tj,iro Abooloto povewy Into- l-1 l 10 tOo 10000- leoI o!o h!rh .101-,1Oo to o af cate (_00000 f roolaiov - to-el -rban .. sd ror1-I ooor ltton,il d.q.-t die, pl-o --otolo -o-food rqieeoo( 0

ote fp-ople rrl orso.ad ro..I) art rostoleocc....tn tndtooPPL to'totld-s orod oroc00000 owtdht tOl,ted robt! P:oo rooro iwnn 00 10000007-.Oe 0 00

,r8.uoi 00.11.00peroso,of choir reup-o 10 Oolt- o. pero-e1 1r00 0( 000007. rb-t 10007 it dorlod toeh' 00"I- 0,n oot00000,oi, o.ooatoor--odp-oo toroted onoont 0fo 00neo 1 11s7000r( ng r000 lig In b Orhse-.

7100r, 7, . -ooop,oieeda oolooioreool 'Itton-o r o.ato belo hcoo,h- t HCt oosoloi niet..r 0

0o000.:idrroi -roo r...sheroootldol Iur1Pe,ood ppoaiorf0*7o0I .t,pO,'(0 0'.. e __hooldooor.rtobod :ornt too,17o Lt0'

<ro (al, etrlo dtO (siyo- red oooo.o,loo ro)rifc0.O0

P, .. .... h, J- h, f-J1, -d, L-7~~~~~~~~~~~~~~~i, -d00 00,i 0

-19- ANNEX IPage 4 of 6

BOLIVIA: BALANCE OF PAYMENTS, EXTERNAL ASSISTANCE AND DEB7

(Current US dollars millions)

Actual Pruvisional Proiected1972 1973 1974 1975 1976 1977 1980 1985

A. Sum-nary Of balance of payments

tnpnrtn (inc1

. NFS) -260.6 -309.2 -485.1 -667.3 -711.2 -827.9 -1,167.8 -2,066.3

Enports (incl. NFS) 224.7 297.2 627.6 527.8 637.1 721.1 1,023,3

1.9I1.9

Resource bala-ce - 35.9 - 12.0 142.5 -139.5 - 74.1 -106.B _ 144.5 - 146.9

PactFor income - 21.8 - 22.9 - 37.2 - 31.4 - 41.2 92.4 - 146.8 - 264.0

Net interest paymentn 13.4) (_ 18.70) - 19.6) (- 25.9) (_ 37.1) C 54.1i l- 135.0) (- 247.8)Other fact crartor r i oae (oer) l- 8.4) C- 4.9) 9 - 17.6) (- 5.5) (. 4.1 (- 38.3) C- 11.8) (- 16.2)

Current trac . fer (net) 13.4 15.4 13.7 13.1 14.0 15.0 24.8 33.3

Current account balaoce - 44.3 - 19.5 119.0 -157.8 -101.3 - 164.2 - 266.5 - 377.6

DiBeet foreign investent - 13.4 4.6 16.7 53.4 12.1 11.0 15.3 17.8

Official capital grunts 8.0 10.0 9.0 10.5 .. .. 20.4 20.0

Pnblic 6LT I.annsDisbursem.ents 122.5 37.0 108.0 150.4 292.2 427.5 446.2 685.9

Bepayssants - 28.4 - 30.3 - 30.7 - 56.6 269.7 83.5 - 173.l - 286-6Net disb-raonst 94.1 6.7 37.3 93.0 222.5 344.0 273.1 399.3

Other long-tnrm loanstjbulrn_etn 17.7 24.0 14.2 16.4 25.0 25.0 29.0 33.0

Repaymensts - 2.- - 7,6 - 15.1 - 18.2 . 23.0 - 24.0 - 27.0 - 31.0

Non dishbrsenents 15.1 16.4 - 0.9 - 1.8 2.0 1.0 2.0 2.0

Capital transuctionso.r.s. - 40.9 - 32.1 - 89.6 - 42.5 - 74.0 -163.4 - 18.6 - 24.8

Change in set ro-eserv - 18.6 13.9 -111.5 44.4 - 61.3 - 8.4 - 23.6 - 36.7

Grants and louancuarit-ettTotal M9LT Ionn 179.9 78.9 172.4 397.5 461.0 587.9 509.1 747.5

IBRD - - - 32.0 68.0 92.0 80.0 89.91DA 8.0 6.0 6.2 7.5 . - 10.0

Othbr snltiloteral 27.0 11.2 35.0 104.6 80.4 15.3 95.0 95.0

Governments 71.7 34.1 60.8 109.3 43.8 177.2 55.0 61.3loppli-r 43.0 16.6 13.8 44.2 46.3 55.5 50.0 75.7

?ioanolul institutiovs 423.1 9.9 56.0 09.3 222.5 225.7 199.1 405.6

Oth-r 10.0 1.1 0.6 10,6 - 22.2 20.0 20.0

C. Memoruodun ites

Grant elemnt of total co-sit-snts (.) 32.2 36.5 39.7 19,0 19.2 13.9Average i--ernt (7) 4.9 4.9 5.6 6.6 6.9 7.2Ovorage muculity (yeacs) 19.2 22.0 25.6 17.6 15.0 12.4

Actual debt ou'tsotding Yublic enternal Proviional

on leo. 31, 1977 debt cod debt service 1974 1975 1976 1977

D. External debt Disbur-ed only Percent

IBRD 42.1 3.1 A. Medium- and tour-ben debt (disbaraed oslv)

7DA 54.8 4.1Other -iltilatenal 94.7 7.0 Total debt outstanding (DOI end of prriod) 691.6 778.0 1,003.8 1,347.8

Go-ennm04cs 554.7 37.4 Includiog ndisbursed 889.4 1,206.8 1,585,9 2,089.8

Suppliers 89.9 6.7 Public debt -erice 68.0 80.2 104.6 135.6

Financial is onn 438.8 32.6 In oes t 17.3 23.5 34.8 51.8

Bonds 69.8 5.2Public debt ntt 53.e3 2.9 B. Debt burden

Total public M&LT debt 1,347.8 IDD,O Debt serv-ce ratio 10.8 15.2 16.4 18.8

E. Debt profile Debt service ratio /1 13.6 16.2 17.1 24.1Debt service/GDP 3.1 3.2 3.5 3.8

Total debt servce 1978-80/tutal DO0 ond of 1977 65.6 C. Terms

Internat on DOD/DOD 2.5 3.0 3.5 3.8

D. Derendenco ratios for M6LT debt

.roas disburement/imports (inl. ofs) 22.3 22.5 41.1 51.6

Net trans fer/imports (incl. cfs) 7.8 10,2 26.1 35.0Net tracs fer/gros disbuceenrat 34.9 45.1 63.4 67.8

E. Exposure

TERD DOD5/total DOD 3.0 2.7 3.1 3Bank fro-p diob/tanal BOO 8.9 9.0 8.4 7.21B3D debt service/total debt service 5.0 2.0 3.6 2.9Bank group debt service/total debt uerviao 5.4 2.6 4.2 3.4

71 -oclodiog net ditett i-nvestent income.

-DO0- _ANNOX IPage 9 of 6

BOLIVIA: ECONOMIC DEVOOLOPOIENT DATA(A, ,utst US$ million)

Actual Proisional P-o7-tcd 1970- 197u- 197'- 1980-Na soul Aco,7Ott ~~~~~~~~~~~~~~L1974 1975 1976 1977 1-980 1995 1 974 1977 1980 1985 1974 1977 1990 1995

Covta-- 1977 PrAi- uifMilli.n US$ Growh fat As_Parcoo of GOY3,7051 3-,021 3,412 3,560 4,105 5,347 t.3 5.3 5.0 35 .3 99.7 100.0 1l21.2 100.1

fr-r:-rnucr-d,, ( - 3 -139 '73 C -5 48 4 - - - - t.3 0.0 - 1.2 - 0.1ret ons -- n 3,061 3,063 3,339 3 , 564 4,091 5,343 7 .2 5.1 4.6 5.7 100.1 100.0 130.0 100.0

5- 71 740 326 337 1,213 70 12.9 1 5 .3 16.9 23.02 03.0 22.76.crr,0'710i177un0447 capt(ir4, -443 -~~~ ~ ~~~~~~536 -463 -721 LI27 -1,2 14.9 - 1.0 4.0 6.5 -24.3 -20.2 -20.1 -21.1

Otsrn 76~~~~~~~~~~~~~~~~~~~17 146 134 107 116 86 - - - - '. 5 -3.C 2.9 -16

7,1 .75 207 ,7 3,442 4,7 3.1 7 5 . 0 9.1 75.5 93.0 64.3 92.7,70(7. 0777777 167 966 ~~~~ ~~~ ~~~~~644 70 76 1009 6.7 6.1 2.6 6,0 16. 13.6 19s 1~9.

740 520 460 519 69 972 16.0 - 7.7 7.1l 7.6 24.1l 16.6 15. 17.37-7-7 --<70 79 434 311 53 76 09 -17. . 77 23. 149 13. 10.

A--ul Ijcu u1 Curr- PIoo,..r.nrc Ot1Incz

P,-dl 52.7 6?.5~~~t> 67.?. 64 .9 37.0 1 59 .2 2 3.17 '.2 11.9 11.5 12.2 6.9 8.7 6.6-&- 7 377 7.0.7 5 6 .0 61.8 113.7 276.1 40.0 17.9 21.4 13.0 0.6 . 10.6 11.2

F-I, 4,D ~~~ ~ ~~~~~~~772 6.1 0.2 77 .0 21.9 30.1 i5.- 17.3 1-l.0 0.6 7.9 1.0 1.2I'll - I li j t . 1~1, - 92.( 1389. ~ 273.7, 29.6~ 419.4 19.4 22.5 7Q~7 10.7, 26.91 29.,2 077- 29.6-

'Pi , I-, 2 2 ~~~~~~~~~3.,7 235.7 207. 377. 6992 27.9 14.7 12. 13.1 41. 366 36.2 3.7___________________ 52.7 60.~~~~~~~~~~~~~~~~~~17,4 117.4 162.2 207. 0. 4. 11.4 12.7 10.0 16.7 156 15.5

ci ,oor('7stJ'.c(pOtt( 7.70. ~~~~~0.0 02.9 637.6 733.9 1,042.5 7,855.7 22.6 76.3 12.6 12.2 100.2 0. 0. 0.

00--7 361.6 177"3 3869 6 513.6 675.2 1,311.5 16.7 11.4 9.5 74.0616 7. 39 92005.4 1685 1875.4 7234.9 239.6 4629.9 10. 1. 3. 2436.4~ 00.6) 26.0 24.676~1 (31 (640 07 77.7' '794: 7692 64.9 7.7 6217 17.6' IT7.7 731

'78972.2 46. 906.7 915.0 7,731.4 31.6 3.4 12.2 13.6 109.2 159.0 70 100.0

undo 6~~~~~~~~~~ ~~~6.37 1 8 170.0~ 117~7 799.669.7770.0 174.9 164

701.4 70. 3.5 9.7.771. 71(7 ~~~~~~92.2 700 ~ q ."0:6 140 157.0

007l(Add '(747 Any al On- - '1977 P,ui 0 0 cod E-h.ono R-tt _rA-u- A-Osl Orooc, Rutn Ao P-rrnn f Tota1970 16-5 9 1927 1960 1995

15' 59 622 T2 7275 891 5.0 3.0 4.9 4.5 10.2 17.4 1773 1.77777 77777 .~~~~~~~~~~ 9~00 913 960 1,010 i1.162 1,304 7.2 3.9 49 631. 28.3 292 20.

7 29 1 736 7.645 1.934 Zi_2 5 2_9 52 6t 6.6 52 5.6 52.3 So 3 54.5 65.2-- l 3~~~~~~~~~~,257 3 ,201 2,4~12 3,564 4,129 5 ,3407 6.3 5.3 9.0 3 .3 100.0 Io0 T20Th 100.0

0.744 07007(o ~~~~~~~~~~~~~~~~~~~P--nn f0 GDP Detil on As Percent of 0071((r7--t I n.,0 172 1 1271 1976 13~77 Public irto 0s(--a PIanO

13.71 13.7I 73.5 7269 loatsrPrna 976-80

7444045 ncpnodir77roo ~~~~~ ~~~~17.6 10.' 11.6 10.3 Agrit-lfur 9.67.dg-r40, -(Oi.g 2.3 2.5 1.6 2.4 MhInig a-d hydro-abon 23.4

.. ..04447i7o9.3 5.5 7.3 . Iod-str,c_droPe 5.Pith7 (lor (017I.147014 6.9 179 3. 11.3 Trn or.n tonoiolo 19.0O

Pohli r evc n ool577c22.2

70 (trnoonOsOci(..ro ~~ ~ ~~ ~~~107 197 1926 1977-72700,--it-S 1 . 9. . 9.3 A. Pnr-On of T-Ia

-t707 -t i- 025 1. 2C 572 Oioa2ELu LI -19T 802407-r -0m, - 29C 24 20 8 25.0 Privat secto 30.0

119 7~~~~~~~~~~~~~~~~~~~. 302~ 3.? raaotrs 31.2Or-c (47047 oooonccrcrru 100~~~Loo0 122 2 172 0 122.0 ?,,bli usco 39.0

S--ctd T,,di2t7rt190 17- 9 1985-

22176 09 ~~~~~~~~~~~~~~~~~~~23.63 3.90

HA 13.0 4~~~.0

-067u -t(00 c7(27 407 .20

.b For --r a0

-p. co. W-rkor 1,, Thocos-ida 1 ~ Tccal Iror -oat.II.. ~1 Added err orker

0(r (0577 r ~~~~~~~~~~~~~~~T ~ R76 7179 1 97 1976 6 172 196 97 1976

37~~~~~~6. . 39 49 97 30.9702> r7 00(1777cc us~~ ~ ~~~ ~ ~~~~~~ ~~~~~~ ~~~~~~~ ~~~~~.0 3.4 2,422 2.540 203.0 102.3

One 92~~~~~~~~~~~~~~~~~~~~~~~~~~8 22 2.034 2,_06 241.O 199..o.o1 7~~~~~~~~~~~~~~~~~,0q 257 c. 00.2 3.7 7,1- 1,3356 TO02.0 T 700.

ANNEX I

- 21 - Page 6 of 6

CONTRACTED PUBLIC AND PUBLICLY GUARANTEED EXTERNAL DEBT, 1969-1977

(US$ millions)

1969 1970 1971 1972 1973 1974 1975 1976 1977'

International Organizations 39.1 6.9 26.8 35.0 17.2 41.2 144.1 148.4 107.3

CAF - - 0.1 2.0 1.2 - 38.1 6.7 1.7TBRD 23.3 - - - - - 32.0 68.0 92.0IDA 7.4 1.4 6.8 8.0 6.0 6.2 7.5 - _TDB 8.5 5.5 19.9 25.0 10.0 35.0 66.5 73.7 13.6

Governments 30.0 17.2 35.2 71.7 34.1 60.8 109.3 43.8 177.2

Argentina 3.2 14.3 4.3 4.2 3.4 2.9 3.4 4.6 50.0Czechoslovakia - - 3.9 1.4 - - - 0.3 -Germany F.R. 1.7 1.4 - - - 28.6 - 5.2 21.7United Kingdom 1.4 - - 6.8 - - 1.0 k- -USA 22.7 1.5 25.3 40.0 26.5 28.8 26.9 26.3 75.5USSR - - - 15.9 - - 0.5 5.2 16.6Others 1.0 - 1.7 3.4 4.2 0.5 77.5 2.2 13.4

Suppliers' credits 11.5 1,6 3.9 40.1 16.6 13.8 44.2 46.3 55.5

Argentina - - 1.6 5.1 5.9 1.6 1.7 0,3 1.9Belgium - - - - 5.8 0.1 - - -Canada - - - - 3 1.9Denmark 0.7 1.3 - 0.8 0.2 0.2 4.9i - -Germany F.R. 3.9 0.3 - - - - 13.6 2.8 1.3Israel - - - - - - 5.5 - -Italy 2.1 - - 26.6 - - - - -Japan - - 2.0 6.4 - - 10.8 19.5 10,3Spain 3.3 - - - - - - - -USA - - - 1.1 0.9 1.9 2.4 25.2Others 1.5 - 0.3 0.1 0.1 8.1 5.3 23.7 16.8

Private Banks 1.3 - 23.3 23.1 9.9 56.0 89.3 222.5 225,7

Brazil - - 12.0 7.9 4.7 13.5 - 13.7 7.7USA 1.3 - 10,0 12.8 1.5 34.3 63.9 146.2 159.8Others - - 1.3 2.4 3.7 8.2 25.4 62,6 58.2

Other 14.1 4.1 0,1 10.0 0.4 0.6 10.6 - 22.2

Nationalization (US ) - 78,6 - - 0.7 - - - -

Total 2 96.2 108.4 89,3 179.9 78.9 172.4 397,5 461,0 587.9

/1 Provisional/2 Net of adjustments and cancellations.

Source: Central Bank, TBRD Social and Economic Data Division.

- 22 -

ANNEX IIPage 1 of 4

THE STATUS OF BANK GROUP OPERATIONS IN BOLIVIA

A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of April 30, 1979)

-------- US$ millionLoan or (Amount less cancellations)Credit # Year Borrower Purpose Bank IDA Undisbursed

Fully disbursed loans and credits 23.3 44.6

261 1971 Bolivia Livestock 6.8 0.8455 1974 Bolivia Mining/Manufacturing 6.2 0.8561 1975 Bolivia Agriculture 7.5 3.2762 1978 Bolivia Ulla Ulla Development 9.0 8.41121 1975 ENFE Railways 28.7 0.11211 1976 Bolivia Rural Development 9.5 7.61238 1976 ENDE IV Power 25.0 7.41290 1976 Bolivia Mining/Manufacturing 10.0 8.11324 1976 Bolivia Water Supply and

Sewerage 5.2 3.51331 1976 Bolivia Small-Scale Mining 12.0 11.01404 1977 Bolivia Education and Voca-

tional Training 15.0 12.91422 1977 ENFE Third Railway 35.0 21.01423 1977 AASANA Aviation 25.0 23.01489 1977 Bolivia Urban Development 17.0 16.81510 1978 Bolivia Ulla Ulla Development 9.0 9.01587 1978 Bolivia Highway Maintenance 25.0 _ 25.0

Total 239.7 74.1of which has been repaid 7.5 0.9

Total now outstanding 232.2 73.2Amount sold 0.1 -of which has been repaid - 0.1 -

Total now held by Bank 232.1 73.2

158.6

- 23 - ANNEX II

Page 2 of 4

B. STATEMENT OF IFC INVESTMENTS (As of April 30, 1979)

Fiscal Amount in US$ millionYear Obligator Type of Business Loan Equity Total

1973 Plasmar, S.A. Cables and Plastic Product 0.3 0.1 0.41976 Banco Hipotecario

Nacional Capital Market 0.3 0.31976 Banco Industrial

S.A. Development Financing 0.6 0.61978 Molino Andino S.R.L. Plastic Products 2.3 - 2.3

Total 2.6 1.0 3.6Repaid, cancelled or sold 1.2 0.4 1.6

Held by IFC 1.4 0.6 2.0

C. PROJECTS IN EXECUTION

Credit 261-BO - Third Livestock Development Project, US$6.8 million, June 23, 1971;Effective Date: September 15, 1971; Closing Date: December 31, 1979.

The credit portion of the project has been almost fully disbursed;only about US$800,000 including about US$400,000 for technical assistanceremains to be disbursed and the credit should be fully disbursed by theClosing Date.

Credit 455-BO - Mining Credit Project, US$6.2 million, January 18, 1974;Effective Date: June 18, 1974; Closing Date: June 30, 1979.

The project is proceeding satisfactorily and the credit should befully disbursed by the Closing Date or shortly thereafter.

Credit 561-BO - Agricultural Credit I, US$7.5 million, June 20, 1975;Effective Date: December 15, 1975; Closing Date: March 31, 1981.

Funds originally allocated for cattle are fully committed; creditdemand for grape production has been as anticipated, whereas demand for sheep,annual crops and sugarcane has been less than anticipated. Demand for sheepand annual crops funds is expected to accelerate but the demand for sugarcaneis not expected to materialize in the near future.

Loan 1121-BO - Second Railway Project, US$28.7 million, June 5, 1975;Effective Date: August 6, 1975; Closing Date: December 31, 1979.

Project progress has been satisfactory with performance targetseither having been attained or exceeded. The loan is now almost fullycommitted.

- 24 -

ANNEX IIPage 3 of 4

Loan 1211-BO - Ingavi Rural Development Project, US$9.5 million, March 8, 1976;Effective Date: October 7, 1976; Closing Date: June 30, 1982.

There have been delays in the implementation of some components ofthe project. Corrective measures have been taken and the project is nowproceeding satisfactorily.

Loan 1238-BO - Fourth ENDE Power Project, US$25 million, June 2, 1976;Effective Date: August 23, 1976; Closing Date: June 30, 1980.

The project has recently been delayed somewhat by poor performanceof local contractors and difficulties experienced in the transportation ofa major equipment component. Overall progress of the project has beensatisfactorily.

Loan 1290-BO - Banco Industrial Mining and Industrial Credit Project,US$10 million, October 15, 1976; Effective Date: April 14, 1977;Closing Date: December 31, 1980.

After initial delays, the project is now proceeding satisfactorily.

Loan 1324-BO - Urban and Rural Communities Water Supply and Sewerage Project;US$11.5 million, October 15, 1976; Effective Date: December 10, 1976;Closing Date: June 30, 1981.

The Government has requested that the water supply and sewerageinvestments for the cities of Sucre and Potosi be cancelled inasmuch as thesecities are not prepared to proceed- without substantial Government subsidies.In spite of initial delays, the rural component of the project is nowproceeding satisfactorily.

Loan 1331-BO - Small-Scale Mining Development Project, US$12 million,October 15, 1976; Effective Date: July 15, 1977; Closing Date: December 31,1980.

Due to institutional and managerial problems, the preparation ofsubprojects was delayed about 15 months. To facilitate loan utilizationa number of measures were taken in mid 1978; the first disbursement underthe credit component was authorized November 1978.

Loan 1404-BO - Education and Vocational Training Project, US$15 million,May 11, 1977; Effective Date: September 7, 1977; Closing Date: December 31,1981.

The project has experienced some initial delays but is now proceedingsatisfactorily.

- 25 -

ANNEX IIPage 4 of 4

Loan 1422-BO - Third Railway Project, US$35 million, June 6, 1977;

Effective Date: September 29, 1977; Closing Date: December 31, 1981.

The progress of the project has been seriously impaired by

recent heavy rains and extensive floodings. A reduction in the project

scope is expected as the railways have to divert funds to repair damages.

The Bank is discussing with Government on how best to proceed.

Loan 1423-BO - Aviation Development Project; US$25 million, June 9, 1977;

Effective Date: September 29, 1977; Closing Date: June 30, 1983.

The project has been delayed by about nine months because of poor

weather conditions and management changes. Most components are now proceeding

satisfactorily.

Loan 1489-BO - Urban Development Project, US$9 million, November 30, 1977;

Effective Date: June 22, 1978; Closing Date: June 30, 1983.

The project has been delayed nine months because of slow processing

of subsidiary loan agreements. Most components are now proceeding satis-

factorily.

Loan 1510-BO and Credit 762-BO - Ulla Ulla Development Project, US$9 million

each, April 6, 1978; Effective Date: July 31, 1978; Closing Date: June 30, 1983.

The project is proceeding as scheduled.

Loan 1587-BO - Highway Maintenance Project, US$25 million, July 10, 1978;

Effective Date: October 4, 1978; Closing Date: December 31, 1983.

Initiation of the maintenance works delayed six months because

beneficiary has to concentrate on emergency measures to repair damages to

road system, caused by heavy rains and extensive flooding. No further delays

are expected.

- 26 -ANNEX IIIPage 1 of 2

BOLIVIA

SANTA CRUZ WATER SUPPLY AND SEWERAGE PROJECT

SUPPLEMENTARY DATA PROJECT SHEET

Section I - Timetable of Key Events

(a) Time taken to prepare project: 2 years(b) Agency which prepared the project: SAGUAPAC(c) First presentation to IDA: August 1977(d) First IDA mission to review project: December 1977(e) Departure of appraisal mission: December 1978(f) Completion of negotiations: May 11, 1979(g) Planned Date of Effectiveness: October 1979

Section II - Special IDA Implementation Actions

None

Section III - Special Conditions

SAGUAPAC agreed: to consult with IDA before changing its GeneralManager (para. 34); to prepare a statement on its personnel policiesby December 31, 1979 for review by IDA (para. 35); to value itsfixed assets by November 30, 1979 and, at the end of each fiscalyear thereafter, revalue its fixed assets in accordance withprinciples and procedures satisfactory to IDA (para. 36); toestablish, by January 1, 1980, a revolving fund to finance thecost of in-house plumbing and lot lines (para. 41); to review theinterest rate from time to time, and to adjust it if necessary, inorder to maintain, along with other resources which would becomeavailable to the fund, the dollar value of the proceeds of the IDAcredit used to set up the fund (para. 41); and to adjust its tariffsso as to attain annual rates of return on revalued fixed assets of1.5% in 1980, 5.0% in 1981, 5.5% in 1982, 6% thereafter (para.44).

The Following are Conditions of Credit Effectiveness

(a) SAGUAPAC has established planning and engineering units withfunctions satisfactory to IDA (para. 35).

(b) SAGUAPAC has contracted: (i) engineering consultants to IDA toprepare the bidding documents, to help in bid evaluation and tosupervise construction; and (ii) management consultants to helpimprove its management and organization (para. 38).

- 27 -ANNEX IIIPage 2 of 2

(c) SAGUAPAC and the Corporation have entered into a contractualagreement whereby the Corporation would contribute US$2.5 millionequivalent to finance the project in accordance with a scheduleacceptable to IDA (para. 41).

(d) The Borrower and SAGUAPAC have executed a subsidiary Loan Agreementsatisfactory to IDA (para. 41).

(e) SAGUAPAC has obtained revenues in pesos of US$0.175 equivalent($b3.50) per cubic meter from water supply and sewerage charges andtaken all steps necessary to collect fix charges for new serviceconnections (para. 42).

IBRD 14126MARCH 1979

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- ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IBRD 14127-t: MAR5H 1979

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