FiLE COPYDOCUMENT OF INTERNATIONAL DEVELOPMENT ASSOCIATION

Not For Public Use

Report No. P-1571-WSO

REPORT AND RECOMMENDATION

OF THE PRESIDENT

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

TO

WESTERN SAMOA

FOR A

HIGHWAY PROJECT

February 20, 1975

This report was prepared for official use only by the Bank Group. It may not be published,quoted or cited without Bank Group authorization. The Bank Group does not acceptresponsibility for the accuracy or completeness of the report.

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CURRENCY EQUIVALENTS

Currency Unit = Western Samoa Tala (WS$)

US$1.00 m WS$0.60WS$1.00 - US$1.67WS$1,000,000 = US$1,666,667

FISCAL YEAR

January 1 to December 31

REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORS ON A PROPOSED

CREDIT TO THE GOVERNMENT OF WESTERN SAMOAFOR A HIGHWAY PROJECT

I submit the following report and recommendation on a proposeddevelopment credit to Western Samoa for the equivalent of US$4.4 million onstandard IDA terms to help finance a highway project. Consultants' servicesfor project preparation and for the supervision of construction are being fi-nanced by a grant of US$1.07 million equivalent from the Government of i'NewZealand.

PART I

THE ECONOMY

2. The first Economic Report - "Memorandum on the Economy of WesternSamoa" (No. 54a-WAO of April 26, 1973), based on a reconnaissance economicmission in June 1972, was circulated to the Executive Directors on May 4,1973 (R73-97). The section on the economy which follows is primarily basedon this report and discussions with the International Monetary Fundmission which was in the field in July 1974. Annex I contains country data.

3. Western Samoa consists of a group of nine islands in CentralPolynesia; two of these (Upolu and Sawaii), account for most of the landand population of about 152,000. The natural rate of population growthis about 3% per annum, although the growth of the resident population isonly about 2.2% a year because of emigration. Western Samoa becamean independent state in 1962 after half a century of New Zealand trusteeshipadministration. Ties with New Zealand remain close. New Zealand providesconsiderable financial and technical aid as well as access to its labor market.Western Samoa is a parliamentary democracy built on the traditional Samoansocial structure. The present Government was formed following an electionin March 1973, the fourth since independence.

4. The economy has a large subsistence sector based on traditionalagriculture and a monetized sector covering plantation agriculture, publicsector operations and services, mainly tourism. National accounts statisticsare not yet available; 1972 per capita income is estimated roughly at aboutUS$150. Partly as a result of two severe hurricanes, real GNP growthsince the mid-sixties has probably been negligible, so that real per capitaincome has probably declined.

5. Agriculture employs about 70% of the labor force and accounts forabout 90% of the value of total annual exports. Exports consist mainlyof copra, cocoa, and bananas. The economy is highly vulnerable to fluctuationsin the production and world market prices of these three commodities. Althoughprices for both cocoa and copra rose sharply in 1973, the export volume of

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these three crops decreased considerably and Western Samoa was unable to takefull advantage of the improved market situation. The decline in the exportvolume is attributed to a combination of factors: rising production costs,difficulties in implementing the replanting scheme for cocoa, rising domesticdemand for bananas, unfavorable weather conditions and inadequate shippingservices. In an attempt to diversify traditional agricultural exports, theGovernment is encouraging the production of vegetable and fruit crops suchas taro and pineapple through subsidized sales of fertilizers and insecti-cides.

6. Manufacturing industry in Western Samoa is at a very early stageof development and is largely confined to the processing of agriculturalproducts and small scale production of consumer goods. The Government isproviding incentives under the Enterprises Incentives Act of 1965 toencourage manufacturing; these include income tax exemption and dutyexemptions on imported raw materials, machinery, and other equipment. Bythe end of 1973, 32 enterprises with a total capital investment of US$11million were using these incentives. The Government has given priorityto labor intensive and local raw material oriented industries and isencouraging local participation in foreign owned enterprises. Tourism whichhas been growing rapidly in recent years, has become a major foreign exchangeearner and has stimulated rapid expansion in the construction and servicessectors. Tourism receipts have grown at an annual rate of over 25% during1969-73 and surpassed copra which was the main export as a source of foreignexchange in 1972 and 1973.

7. Western Samoa is totally dependent on imported oil products, whichrepresent a small proportion of total imports. The oil import bill in

1974 is expected to double compared to 1973 and reach about 7% of estimatedtotal imports. The long term Government program envisages increasingdependence on hydro-electricity, which currently supplies about 40% of total

electric energy generated.

8. Western Samoa enjoyed comparative price stability until 1972, butinflation emerged as a major problem in 1973 when consumer prices rose by24%. This was caused by domestic food shortages, increased import prices,depreciation of the tala vis-a-vis the New Zealand and Australian dollars,booming tourist expenditures, rapid domestic credit expansion and risinggovernment expenditures. Among the measures taken to curb inflationarypressures are: price controls on imported essential commodities, quantitativeguidelines for domestic credit expansion since mid-1973 and an increase indeposit and lending rates between one and two percentage points in April1974.

9. The Government's fiscal performance is satisfactory. The ratioof Central Government tax revenues to GNP is estimated at about 22% whichis higher than in most of the developing countries. Prior to 1971, capitaland development expenditures were mainly financed by the budgetary currentaccount surplus. In 1972 and 1973, capital expenditures sharply increased.The increased overall deficit in 1972 was financed mainly by foreign loans.However, foreign loans declined in 1973 compared to the previous year, and

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increasing recourse to domestic sources, mainly the banking sector, wasnecessary. The emphasis of the public investment program has been primarilyon infrastructure development. Public investment in 1973 is estimated tohave been about US$6 million or 15% of GNP including subsistence. In viewof the changing balance of payments situation and revised priorities, theGovernment, with technical assistance financed by the Asian Development Bank,intends to introduce a Third Plan in 1975 with an emphasis on increasingthe productive capacity in the economy. About two-thirds of the totalfinancing of public capital expenditures in the Third Plan is expected fromforeign sources with the balance coming from budgetary savings and domesticborrowings from non-bank sources such as the Post Office and Provident Fund.

10. Western Samoa has had a continuous trade deficit which has beenmore or less offset by a surplus on services and transfer accounts and by anincreasing inflow of capital up to 1971. Export earnings have fluctuatedwidely from year to year due to variations in the output and world marketprices of the three major agricultural exports, but there has been hardlyany increase since 1960. The balance of payments showed an overall deficitof US$3 million in 1972 mainly due to a record annual increase of imports of63%. There was an improvement in 1973 with a reduction in the overalldeficit to US$1.4 million mainly due to an 18% increase in export earningsdue to higher export prices and a 17% decline in imports payments. Exportearnings in the first half of 1974 have almost doubled compared to the firsthalf of 1973, whereas import payments during the same period in 1974 declinedby 10 percent compared to those during the corresponding period in 1973.Nevertheless, net foreign exchange reserves declined steadily from US$12.4million in 1971 to US$8 million or the equivalent of about four months ofimports by the end of August 1974.

11. The prospects in the next few years are for higher exports andincreased foreign exchange earnings, if the forecast for export commodityprices materializes and the volume of production recovers to 1972 levels.Balance of payments problems would be manageable during the next few yearswith capital inflows continuing to supplement exports of goods, tourismearnings and transfers. This assumes no adverse weather or market conditionsfor Western Samoa's vulnerable exports.

12. Western Samoa's external public debt, disbursed and outstandinghas increased steadily from US$5 million in 1971 to US$8.8 million in 1973and is expected to reach US$9.6 million in 1974. In 1973, ADB's shareof the total foreign public debt was about 30%, most of which was on con-cessionary terms. The remaining external public debt consisting of loans fromthe New Zealand Government and raised in the New Zealand money market, is onfavorable terms. The IDA's share in public debt outstanding after full dis-bursement of the proposed highway project credit, is not likely to exceed 25%.

13. The ratio of public debt service payments to exports of goods andservices was less than 5% in 1973. In 1974 it is expected to reach about13% because of the lump sum repayment of a major New Zealand Government loan.

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Projections for the next five years suggest that the public debt serviceratio is likely to decline to levels more in line with previous years.However, with the need to maintain adequate reserves to offset futurefluctuations in foreign exchange earnings, prudent debt management requiresthat a high proportion of foreign financing is obtained on liberal terms.The Government policy is to seek as much soft loan financing as possible fromoverseas, mostly from New Zealand, Australia and the United Kingdom; suchfinancing is required because of the relatively low per capita income andlimited capacity to service debt on conventional terms.

PART II

BANK GROUP OPERATIONS IN WESTERN SAMOA

14. Western Samoa became a member of the Bank and Association onJune 28, 1974 and this road improvement project will be the first Bank Groupoperation in the country. On the basis of the Government's developmentprogram, the following areas of investment seem to deserve priority -transport, power, telecommunications, agriculture and manpower training.ADB is already involved in agriculture, transport, power and telecommunica-tions. The UNDP and bilateral donors are providing technical assistance formanpower training.

15. There are no plans for additional IDA lending in Western Samoaduring the next few years. In response to a Government request, we havejust sent a mission to Western Samoa to help prepare agricultural programsand to identify projects which would be suitable for other sources ofexternal financing.

PART III

TRANSPORTATION IN WESTERN SAMOA

Transportation - overview

16. Because of Western Samoa's isolated location and its reliance onforeign trade, access to neighboring countries and to overseas markets isthe country's most vital transport requirement. Good external communicationis also an essential prerequisite for the development of manufacturing andtourism in the islands. Therefore, the Government, has given highest priorityto improvements in ports and aviation, and with external assistance since1968 has been able to improve the two main ports and build a new airport

(Faleolo) with a connecting road to Apia, the capital of Western Samoa onthe main island of Upolu. In addition, works to widen and deepen theentrance channel to the port of Asau, on the island of Savaii, are currentlyunder way.

17. With the requirements of external traffic largely met, the Govern-ment is giving increased attention to domestic transport needs in order topromote agricultural development and exports, support tourism expansion andreduce the costs of moving workers and consumer goods. The main demand fordomestic transport services is to bring goods and passengers to and fromApia. This demand is presently being met by road transport which, despitethe poor state of most roads, is the most important mode of transport, bycoastal and inter-island shipping with shallow draft sailing boats, smalltrading vessels, and a passenger-ferry between the two main islands andby air services provided by a scheduled carrier and an air taxi company.The Government's efforts to improve domestic transport are now concentratedon having a more reliable and all-weather road network.

18. Annual amounts spent on transport projects seem to have averagedabout WS$ 1.5 million (US$2.5 million) between 1971 and 1973. The Govern-ment anticipates that future transport investments will remain at thelevel of the last few years but this will depend to a large extent onwhether external financing for these projects can be arranged. In additionto this proposed road project, other major transport projects which arebeing discussed in the Government for the longer term are an additionalwharf in the port of Apia to accommodate container and passenger ships anda runway extension to Faleolo airport to handle larger aircraft.

19. Coordination between different modes of transport has been givendue attention. Road transport is by far the most important mode; the dis-tribution of traffic between roads, coastal shipping and aviation is deter-mined by relative service advantages and prices. Because of poor roadconditions and the inaccessibility of outlying areas, coastal shipping andaviation presently carry some traffic which will be diverted to the roadsonce they have been improved.

20. The Economic Development Department (EDD) under the Minister ofFinance is the Government's planning agency. Together with the TreasuryDepartment and the operating departments and agencies concerned, it is res-ponsible for preparation and implementation of development plans and annualdevelopment budgets. Transport projects are prepared and executed throughthe Public Works Department (PWD). The EDD is inadequately staffed tocarry out its assignment and this situation is likely to continue untilmore Samoan staff with planning skills are available. In the last twoyears, it relied mainly on a team of three UNDP economists who had localcounterparts assigned for training; one of the UNDP advisors tookresponsibility for transport projects. The last of these advisors is aboutto leave the country and the Government has requested the UNDP that oneof the replacements, expected to arrive by mid-1975, have some background

in transportation. This would help the Government improve transporc ;:

planning in the PWD by enabling the EDD to guide effectively the pi(l:

work of the PWD, to coordinate transport projects with projects in oter

sectors and to cover transport policy issues which may require atte:Ln-L.

Highways

21. The public highway network totals 584 km of which 156 kri ar--

classified as paved. In addition, there are 226 km of plantation arnd plntsi-

tion access roads, most of which are open for public use. The pny$~s.cal

condition of the network is generally poor, and many sections are ina,ie; u_e

for current traffic levels. The requirements for modest rehabilCtation r,o

bring roads into reasonable operating condition were identified in October,

1974 in an Australian--financed Road Maintenance Study. On the bas1i 'i this

study the Australian Government agreed in December 1974 to grant A'4.Q4-million

in aid to Western Samoa for workshop facilities, road maintenance eq:l.pmenc

and advisor-trainers to help implement a five-year program to impLcV>e a4ighway

maintenance. No major extension of the current main road network is foreseen

for the near future but the Government intends to emphasize constru.;ZiOn and

improvement of village access and agricultural feeder roads in the proposed

Third Development Plan.

22. Road planning has mainly consisted of the technical preparat4.:n of

projects which were selected on an apparent need basis, without an' economic

evaluation. The first effort in planning was the Australian financt`

Preinvestment Study for Road Development completed in 1972. This szu`y

established the relative priorities for main road improvements for the next

five to ten years and provides a sound basis for future planning rf roas1

improvements; the East Coast and Central Cross Island Roads receivee the

highest priority .or improvement and are included in the proposed proj_ict.

However, regular updating is required to coordinate road investmentF with

the Government's agricultural and tourism development schemes. Also, at

present there is no basis for the selection and design of village access and

feeder roads which the Government intends to build during the next:p'an

The Government agreed that it will institute a regular system to collect and

analyze key data including traffic statistics to accomplish this. (Saction

4.03 of the Development Credit Agreement). The Government has also recently

added a transport planner-engineer to the PWD to improve planning.

23. There is no local contracting industry capable of undertaking

road work in Western Samoa and all road improvements in the past hav"e ;Jeen

done by force account. In a small country like Western Samoa, this is a

practical and viable method of carrying out road works at acceprtble cost.

This view was borne out by recent experience under the airport ard road

project financed by ADB.

24. The ADB and the Government agreed in 1969 to the establishmenr of

the Special ProJects Division (SPD) under the PWD to construct the airport

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and the .Apia-Faleolc road. The results after construction showed that costswere reasonable, lower than those obtained under less organized force accountmethods and substantially lower than those experienced on similar Bank Groupfinanced works in the Pacific region and which are being carried out underan international contract. It also showed that the efficiency of the SPDimproved continuously through monitoring and training and that the qualityof works performed was satisfactory. Impressed with these results, theGovernment, in 1973, transformed SPD into the semi-autonomous Special ProjectDevelopment Corporation (SPDC). The Government intends that the SPDC willcarry out suitable public construction work and that the PWD will continueto carry out routine maintenance of public facilities and minor improvementsworks that cannot be readily defined for contract purposes.

PART IV

THE PROJECT

25. The proposed project was identified on the basis of the Preinvest-ment Study for Road Development in 1972. Further detailed studies todetermine the improvements in the sections under consideration and to preparethem for construction were financed by New Zealand and carried out by theEngineering Export Association of New Zealand (ENEX). Bank missions appraisedthe project in February/March and July/August, 1974. The credit was negotiatedin January, 1975 and The Hon. Laumea Matolu II, Minister of Works, Transportand Marine led the Government's negotiating team. The Appraisal Report(No. 589a-WSO) on the proposed project is being circulated separately tothe Executive Directors. Annex II provides a credit and project summary.

Description of the Project

26. The project comprises the reconstruction of about 42 km of the twomain roads on Upolu, the East Coast Road and the Central Cross Island Road.The East Coast Road is the main coastal route connecting the north-easternvillages and plantations of Upolu with the Capital. It hugs the coast for

23.6 km from Apia east to Falefa Falls and has a bituminous pavement widthof 4 - 5 m. This 23.6 km section would be reconstructed under the project

to two-lane paved standards on the existing alignment, with some improve-ments in curvature and shifts inland, and some stone foreshore protectionto prevent the road and village lands from being damaged by sea waves and

erosion. In addition, three bridges would be replaced, two of these toreplace bridges washed away by severe floods in November 1974 and repairseffected to eight others damaged by the same floods. The Central Cross

Island Road, 21.3 km long, is the principal cross island link between thenorth and south coasts of Upolu. Under the project, 17.7 km of this road

would be reconstructed to two-lane paved standards. Improvement of the

Central Cross Island Road would also protect adjacent lands from flood damage

and erosion.

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Project Execution

27. The Public Works Department (PWD), assisted by qualified consultants,would be responsible for project execution. The reconstruction of the pro-ject roads would be carried out by the Government's semi-autonomous SpecialProjects Development Corporation (SPDC) (paras. 23-24 above). In order toprovide a continuous stream of work to the SPDC and to permit efficientutilization of equipment and staff resources no longer needed for anADB-financed road project, the Government engaged the SPDC to start workon the East Coast Road in September 1973. Part of this work, which is beingcarried out according to satisfactory designs, is proposed for retroactivefinancing under the credit (see paragraph 30, 33).

28. SPDC is adequately staffed, but as the required skills are notavailable in Western Samoa, most supervisory positions have been filled byexpatriates. However, it is expected that several local staff will betrained bv these expatriates and can replace some of them near the conclusionof the project. SPDC has recently arranged for equipment operators tobe trained in phase with additions to the plant required for the project.At the conclusion of the project, SPDC would have a better trained workforce and equipment capable of constructing civil works valued at aboutUS$1.5 million annually. The Government can appropriately make use ofI:these resources in undertaking various public works in its developmentprogram.

29. The East Coast Road is being reconstructed by the SPDC. This work issupervised by ENEX under a contract reviewed by the Association; the qualityof supervision is satisfactory. A revised contract, to cover supervisionof both project roads is now being reviewed by the Government of New Zealand.Conclusion of this contract would be a condition of effectiveness of thecredit (Section 5.01 of the Development Credit Agreement).

Cost Estimates and Financing

30. The total estimated cost of the project is $8.0 million. Theforeign exchange cost of the project is estimated at $5.4 million. Allproject costs have been updated to January 1, 1975. Physical contingencieshave been estimated at 10% and price contingencies at 34%. The price con-tingency allowed on foreign and local costs of civil works takes into accountrecent Bank Group experience as well as recent and expected price trendsin Western Samoa. The proposed development credit equivalent to $4.4 millionwotld finanicc 55% of the total cost or 81%, of the foreign exchange component.This would cover the foreign exchange costs of reconstructing the EastCoast Road, including tip to $350,000 of retroactive financing for work donefrom March 1, 1974, and the Central Cross Island Road. The Government ofNew Zealand has financed the full cost of project preparation and willfinance the full cost of construction supervision, totalling $1.07 million.

The Government would finance the balance of $2.48 million, which wouldcover all expenditures on the East Coast Road for work performed beforeMarch 1, 1974 as mentioned above and all local costs thereafter on the twoproject roads, including land acquisition costs.

Procurement

31. As mentioned earlier, the SPDC would undertake the reconstructionof the roads financed by the credit. Because of the relatively small sizeof the contract and Western Samoa's isolated location, the project would bemost unlikely to interest international contractors. Also, because thereis no private contracting industry (only artisans) in Western Samoa, useof SPDC is the best means of executing the works and developing local skills.Moreover, the SPDC, under a project financed by the ADB, has carried outearlier road works successfully and at reasonable cost (paras. 23-24).

32. The reconstruction works would be carried out under separate unitprice contracts negotiated with the SPDC. A satisfactory construction con-tract now exists for the East Coast Road and a further one will be negotiated,subject to the approval of the Association, for the Central Cross Island worksshortly before the works are scheduled to commence (October, 1975). Theadditional contract will be based on the agreed unit prices of the East CoastRoad, adjusted for documented price increases up to October 1975, and willtake into account actual experience with construction of the East Coast Road.

Disbursement

33. Credit funds will be disbursed on the basis of 70% of the totalcost of construction (the estimated foreign exchange component), includingcosts incurred from March 1, 1974 up to a limit of $350,000 (paras 27 and 30).

Project Justification

34. The proposed reconstruction of the two roads is expected to promotethe development of the relatively less advanced eastern and southern partsof Upolu and to contribute to the objectives of the Government's new five-year development plan. Additionally, the construction of the project bySPDC will create new jobs for the economy's growing labour force includingon-site training. The quantifiable benefits of the proposed improvementwhich have been considered in the economic evaluation are savings in vehicleoperating cost, reductions in maintenance costs and avoided costs for repairsand property damage from storm damage and erosion. On this basis, the econo-mic rates of return over the economic life of the project are 24% and 16%for the East Coast and Central Cross Island Roads, respectively, and theproject is therefore economically justified.

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PART V

LEGAL INSTRUMENTS AND AUTHORITY

35. The draft Development Credit Agreement between the Government of

Western Samoa and the Association, the Recommendation of the Committee

provided for in Article V, Section 1(d) of the Articles of Agreement of the

Association and the text of a draft resolution approving the proposed creditare being distributed separately to the Executive Directors. Features ofthe Development Credit Agreement of special interest are referred to in

paragraphs 22 and 29 of this Report.

36. 1 am satisfied that the proposed credit would comply with the

Articles of Agreement of the Association.

PART VI

RECOMMENDATION

I recommend that the Executive Directors approve the proposed Credit.

Robert S. McNamaraPresident

AttachmentsFebruary 20, 1975

Annex IPage 1 of 3 peges

SUxuR DATA - WthTERR SAMOA

ARPA CPOULATON IlISITY

2.g42 km

20.15 million (mid-1972) .. Per kn2of arable lend

SOCAL INDICATORS

Roef-roe CountriesageS ern aD3 3mba *r,gir

ON? PER CAPITA U58 (nts 3s5sI ..- 150 fc,3e l1, I3 300 /a 5UO Ia

DEMCR.APnilcCrude birth rat. (per thousand) . 27 / b3 /1b 25 /S 30 /d

Cruds doatk rats (per thOu3mnd) . 7- 23 7E 8/ac i7TInfant mortality rate (per thousand live births) 21 7S ..- 64 F 21 71

Life expectancy at birth (yeare) , 2 72 41 /b 63 68 7;

Oross ePp1togction ret. 2 1 7 2.6 2W 22U Jb

Population growth rat. f_ 3.2 2.6 /f 2.0 If 2.2 /I 2. 77FPopulation grVwth rate - urban 6 / 31 7 8 7I 2 Il M

Age structure (p-ccert)

11 50 5-65 L o6 ; 58 LO 5d 42 id

65 mcd Over 37; 37; 6Z L7;a J7Deme0ndeccy ratio S 2.1 7;, 2.0 7 ; : r 2.1 1 5 7 i. e;

Urban poppatinc a. pero-z of total 19 /g,n 20j 15 /a i L,i 33 /l.rFamily pIonming: No of acceptors umulitive (thoa. . .1 . .

Nt. of users (% or tarried wosen)

Total labor force (thousands) 28 /I - 35 Sn 58 /u 250 1 0Per.en..geo esploy.d in agriculture 69 7ii I1 7; 85 7V 30 5?

Porceonage un1employed 1.E .. .. 1; 6

INCOEC D.STrIBif7ONPercnt of national income recoived by highest 5% . . .. 20 /awPrerrnt of natiocal in-oos reoeived by highest 20% .. -Percont of national income received by lowest 20% . 6 /aPercent of national lIocvo racol-d by loosen 50% .. ...... 1

DISTtItJTION OF LAND OINR5HWI% ownad by top lO% of owners .. ..

% oweed by saelleet 10% of camera .. .,

ffEALTE ADW Ni8tITIONiPopulation p hyiian 2,800 18,950 It 4,09c 2,120

Population per nuraing person 752 1,950 It 800 870Population per hospital bad 190 - 220 690 250 30

per capita calorie supply as S of requirementa 97 /o 57Per capita protein supply, totel (prane per day) 6297 z 90

Of which, aoimal end poise. . 62077 19Death rate 1-4 years /I ,, b- ..I 3. /d

EmCATIn3AdJusted a Primary school enrollment ratio 121 91 /t 32 /t 105Adjusted secondary school enrollment ratio 10 39 7T 10 7! 30 ItTears of achooling provided, first and aseond level 9 9 12 lI i4Voa.ttonal enrollmont a3 % of sac school enrallmbnt 1 3 /t 1 o 6Adult literacy rete %

HOUSINGAverage No. of persons per room (crb.n) 3.5 /ao ohPercent of occupied units without piped water 83 YS a-bA.o.e to electricity (as % Of total population) 62Percent of tural popoatio, conancttd to slactricity

CONSUMPTIONRedic _ro-ivors per 1000 population 23 350 137 122 9J /tlPassenger ears per lODO population 5 lad 6 8 15 30 7iElectric poser cans.uption (kwh p.o.) a47; 76 36 27i 30Neosprint conroptian p.c. kg per year 4. 1.L .6 0.7 1.5

Note-, Figures refer either to the ltest periods or to ccoont of oneiroonmOtal tsmperature, body weight., ndthe latest years. Letat priods refer in principle to distribution by age an sea of eational populations.the years 1956-60 or 1966-70; the latest years in pritn- Protein atandarde (requironeots) for all aountries as estab-

ciple to 1960 ond 1970. lished by USDA Economic FResearch Service provide for a minimam/ The Per Copitc OFP rstinmat Ia ut carbot pricon fcr allowance of 60 gram. of total protein per day, and 20 grms of

ytora Otter than 1910,calculated by the oae. conversion animal and pulse protein, of whioh 10 grams should ha animaltechnique as the 1972 World Bank Atles. protein. Theme standard are someawhat lvers than those Of 75

12 Aeragg number of daughters per woman of reproductive grams of total protein and 23 gross of animal protein as anage. average for the World, propoaed by FAO In toe Third Wurld Food

/3 FPula1tioc g-oth rmten ore for the droodno ending in Su,rvey.1960 -od 1970. /7 Some studies have souggeated that ade death rates of children

A hatic of under 15 and 65 and over age brackets to ages I through 4 nay be used as a firat approximation index ofthosen I labor terre bro-en of ages 15 throagh 6. malnutritio.

LF0O reference atandardr represent physiological re. /8 Paroertege enrolled af corresponding popuiatioa of school agequirements for noreal ectivity and health, ta3ing a: defined for sanh o0untry.

a l9'2; Ph l1-70; lt Regiotte,ed only; /d 19l; /e 196-c6, If 1°h60-2; 1

rbar anoa of Apt, copresingtne Faip.Te disticto orvaimauga West arn Folla7 Losti 7t 1963-?2; '7 Btburst oiiy / Peociotee, wneipa

acco rdIng t enlarged limlts as of August 1963, pluo t

ae totn of Makeburg; A .1956-66; /1 teflsnitiu noCt railableI/ 1561; /n lS66; /0 1966; p 15-L4 years; j 45 and over; /r Rat-? of populatio under 15 and 65 wnd over to

total labor fcrnc; 7

s Ratio o. population under a 5 anm over to total labor force; /t 1969, I February1969; /0 Istinat; Lw Households (urban only); I. Incioding eiduicee; 7 Oooernmeftlhoapita1 orabiiireontn;

n 1965-66; aa 1967; 75b City of Apia only, /-c Trhide; lad 1963; las Eacluden subsistence sector income.

Fiji has been selected as an objective country fcr Western inmoo becausm both arm small island economirs heavily ieordennon -riculttral -oportD and noorie In addition, Fiji has a per capita income tan to three times nigher than Wrotsrn

qk o- December 3, 1975

A IN .IN L' XI

Page 2 uf 3 pagcs

ECONOMIC INDICATORS

Government Finance

Cenitral Government (Million WS$) 1970 1971 1972 1973

Cturrent Receipts 5.0 5.9 6.7 6.8

Current Expenditure 4.0 4.5 5.5 5.8

Current Surplus 1.0 1.4 1.2 1.o

Capital Expenditure 1.4 1.6 3.0 3.4

Money Credit and Prices (Million WS$ end of year)

Money and Quasi Money 3.7 4.8 5.5 6.7

Bank Credit to Public Sector 0.3 0.5 0.6 1.0

Bank Credit to Private Sector 1.6 2.0 2.6 2.9

General Price Index (1951 = 100) 173 180 184 228

Annual Percentage changes in:

General Price Index 3.6 4.0 2.2 23.9

Bank Credit to Public Sector 20.4 62.7 34.8 58.7

Bank Credit to Private Sector 24.0 25.0 30.0 15.4

Atr.ex IPage 3 of 3 pages

Balanice of Payments Merchandise Fxports (Avcrage 1971 - 73)(Million US$)

1971 1972 1973 us$ Million

Merchandise Expocts 7.9 5.8 6.9 Copra 2.8 40.6

Merchandise Imports 16.2 26.3 21.9 Cocoa 1.8 26.1

Trade Balance - 8.3 - 20.5 - 15.0 Bananas 0.5 7.2

Services (Net) 1.1 2.3 1.0 Timber o.6 8.7

Net Transfers 3.7 4.8 8.4 Other AgriculturalCommodities 0.5 7.2

Balance on Current Account - 3.5 - 13.4 - 5.6 Non-agriculturalCommodities 0.2 2.93/

Direct Foreign Investment 2.5 7.1 2.7 Others 0.5 7.31/

Other Capital (net) 1.5 3.7 1.4 Total 6.9 loo.o2/

Other items n.e.i. 0.3 - 0.3 0.1

Increase in Reserves 0.8 - 2.9 - 1.4 External Public Debt, December 31 1973

Net International Reserves 12.4 9.5 8.1 US$ Million

8.8Fuel and Related Materials (Million US$) 5/

Public Debt Service Ratio for 1973-Merchandise Imports 16.2 26.3 21.9

US$ Millionof which: Petroleum 0.7 0.9 0.9

2.9

IBRD/IDA Lending (October 30. 1974)Rate of Exchange (since July 26, 1973)

WS$l = us$ 1.67736

I/Includes SDR's, Short-term private loans, Central Bank Liabilities and use of IMF credit.

2/Errors and omissions

3/Including Re-exports

4/On a disbursement basis. Data on Private Debt are not available.

5/Ratio of Debt Service to Exports of Goods and Services.

ANNEX IIPage 1

WESTERN SAMOA

HIGHWAY PROJECT

Borrower: The Government of Western Samoa.

Amount: US$4.4 million equivalent

Terms: Standard

Project Description: A credit of $4.4 million is proposed to financea part of the foreign exchange component of ahighway project. The project would reconstructabout 42 km of the two main roads on Upolu totwo-lane paved standards. Consultanriservicesfor supervision of construction are being fi-nanced by a grant from New Zealand.

Estimated Cost: US$8.0 million equivalent of which US$2.6 isexpected to be in local currency and US$5.4million in foreign exchange.

Project Cost By Purpose of Expenditure(US$ millions)

Local Foreign Total

Item financed with IDA participation

Construction 1.9 4.4 6.3Sub-total: 1.9 4.4 6.3

Items financed entirely by New Zealand

Project Preparation 0.1 0.3 0.4Supervision 0.1 0.5 0.7

Sub-total: 0.2 0.9 1.1

Items financed entirely by Government

Construction 0.1 0.1 0.2Land aquisition 0.4 - 0.4

Sub-total: 0.5 0.1 0.6

Total Project Cost: 2.6 5.4 8.0

ANNEX IIPage 2

Financing Plan: Local Foreign Total

IDA - 4.4 4.4New Zealand 0.2 0.9 1.1Government 2.4 0.1 2.5

Total 2.6 5.4 8.0

Estimated Disbursements: Fiscal Year US$ millionl

1975 0.91976 2.11977 3.51978 4.31979 4.4

Procurement: The Government's semi-autonomous SpecialProject Development Corporation will carryout all construction work under negotiatedunit price contracts. Costs incurred fromMarch 1, 1974 up to a limit of $350,000 willbe financed by the Credit.

Consultants: Consultants will be appointed for constructionsupervision.

Rate of Return: The economic rates of return are 24% and 16%for the East and Central Cross Island Roads,respectively.

Appraisal Report: Report No. 589a-WSO datedEast Asia and Pacific Region.

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