84458 THE WORLD BANK SOCIAL AND ECONOMIC DEVELOPMENT GROUP THE WORLD BANK OFFICE IN SANAA MIDDLE EAST NORTH AFRICA REGION YEMEN ECONOMIC MONITORING REPORT APRIL Table Of Contents I SUMMARY II MACROECONOMIC DEVELOPMENTS AND OUTLOOK III STRUCTURAL DEVELOPMENTS AND POLICIES Successes And Challenges Of Basic Education Strategy ANNEX I S E L E C T E D E C O N O M I C I N D I C AT O R S ANNEX II AT A G L A N C E TA B L E S 2 I SUMMARY Yemen s Macroeconomic Outcomes Show Increasing Fragility Decelerating GDP growth widening primary non oil fiscal deficit persisting double digit inflation and rapidly dwindling current account surpluses characterize the weaknesses in the Yemeni economy Decline in oil production is proving to be an important turning point in Yemen s economic development With the annual growth of GDP projected around percent for the second year in a row Yemen s per capita GDP is set to decline again in Underlying primary non oil fiscal deficit continued to widen to percent of GDP in reflecting the poor resource mobilization efforts Inflation has persisted near percent annual rate in the last two years and the inevitable revisions to petroleum prices and introduction of general sales tax would call for tighter monetary management to contain inflation in The buffer of foreign exchange reserves that the government has built to US billion from high oil prices by end some months of imports equivalent could only provide a temporary cushion against erosion of current account balance Policy and Institutional Environment Deteriorated Somewhat In In the context of increasing fragility of macroeconomic outcomes Yemen s overall institutional and policy environment has slightly deteriorated in Policy and institutional environment in all the four clusters economic management structural policies social inclusion and equity and public sector management witnessed some deterioration The weakness in economic management is seen mainly in limited use of monetary policy to contain inflation and insufficient efforts to rein in fiscal deficit In the structural area though Yemen s trade policy is not restrictive underdeveloped financial system and stifling business regulatory environment are the problem areas In the social inclusion and equity cluster Yemen s weak record in promoting gender equality and unaddressed agenda of reforms in the health sector weigh down on ratings Finally in the public sector management and institutions cluster stalled and slow reforms of budgetary and financial management and the need to improve transparency accountability and integrity call for lowered rating Continued Delay in Implementing Reform Proposals In Budget Raises Concern The fiscal reforms proposed in the budget for are long overdue Originally proposed in they have been repeatedly postponed It is creditable that the government finally managed to include the proposals in the budget for and get the budget approved by the parliament However three months into the fiscal year the implementation of reform proposals in the budget remains paralyzed by the conditions imposed by the parliament before the reform proposals can be implemented Even If Reforms in Budget Are Implemented The Challenge Of Long Term Growth Will Remain Though the fiscal reforms in budget proposal for are badly needed these will not be enough to face up to the medium term challenge of growth The looming crisis of decline in oil production is a very big challenge facing the Yemeni economy By most counts removing petroleum subsidies and introducing General Sales Tax would yet leave a large fiscal and BOP gap un bridged This would call for more determined efforts to identify and sequence reforms in the areas of governance and investment climate to reap the potential for growth in sectors such as fisheries tourism and possibly gas exports 3 II MACROECONOMIC DEVELOPMENTS AND OUTLOOK Yemen s Macroeconomic Outcomes Show Increasing Fragility Decelerating GDP growth widening primary non oil fiscal deficit persisting double digit inflation and rapidly dwindling current account surpluses characterize the weaknesses in the Yemeni economy Growth Continues to Decelerate Yemen s economic growth has been decelerating from Table a year after oil production started leveling off The outlook for the current year continues to be gloomy implying a stagnant or declining per capita GDP growth for the third year in a row In general the deceleration in growth is mainly because of rapidly falling oil sector growth accompanied by the failure to stimulate a broad based growth in non oil sectors Continued low growth in is because of the expected steep decline in oil production of about percent and little sign of revival elsewhere except for a possible rebound in agriculture Table GDP Growth est proj proj GDP Growth Oil Non Oil Memo Items Per capita GDP growth Crude oil production barrels day Source Staff Estimates based on World Bank and IMF sources The Widening Primary Non Oil Fiscal Deficit Is Worrisome Analysis of budget1 indicates that overall budget deficit in could stay at around percent of GDP the same as in This however masks considerable expenditure restraint percent of GDP envisaged by cutting on subsidies and development expenditure as shown in Table On the revenue side the government has to cope with a moderation in oil price US bbl assumed for 2 and about percent decline in oil production However the implementation details of the budget are unknown at this stage Recently there has been widespread protest in Yemen about the introduction of GST arising from ill founded fears about the impact on the poor Box for more details The removal of petroleum subsidies in the budget has been conditioned on several other measures Box which also could prove to be contentious The continued delay in implementing the reform proposals in budget clouds the validity of the analysis On the one hand cuts proposed in diesel subsidy are not implemented and additional expenditures implied by the parliament s conditions are not accounted for On the other oil prices have ruled higher than budget s conservative assumption of a barrel The assumption on oil prices is usually conservative compared to the projected price for the year 4 Table Central Government Finance In percent of GDP Proj Proj Overall Fiscal Balance commitment basis Primary non oil fiscal balance Total Revenues and Grants Oil and gas revenues Tax Revenues Direct Taxes Indirect Taxes Grants Total Expenditure and net lending Current Expenditure Transfers and Subsidies Wages and Salaries civilian Goods and Services Interest Obligations Development Capital Expenditure Source IMF estimates based on Article IV report March Note Budget and projected estimates for differ because the government usually comes with a supplementary budget during the course of the year Primary non oil is derived by subtracting interest obligations and oil and gas revenue from overall balance commitment including grants Box Introduction of GST in Yemen Facts and Myths Yemen s central government budget proposes the introduction of VAT at percent labeled as General Sales Tax GST from July However this is not the first time VAT is proposed in Yemen Introduction of VAT in Yemen by was part of the reforms under Enhanced Structural Adjustment Facility The budget of proposed the law but it was not implemented because IMF advised a delay to broaden the base and improve tax administration Since then vested interests have frustrated the introduction of a simple broad based GST Though more preparation has gone into building the infrastructure for tax administration opposition to GST also has grown On the one hand this has polarized opinion between the ruling and opposition parties On the other private business sector regardless of their political affiliation have rallied against GST This note provides a brief overview of the rationale for key features of and an evaluation of GST Introduction of GST is a part of fiscal reforms to improve transparency reliability and efficiency of revenue mobilization in Yemen GST is set to replace the existing tax on production consumption and services TPCS TPCS has a narrow base and multiple tax structure to percent fetching a meager revenue of percent of GDP GST in contrast has a simple uniform rate of percent with a potential to generate to percent of GDP in about three years The draft GST law awaiting approval in the parliament proposes a uniform percent rate imported and 5 domestic goods and services with exemptions for food products medicines books inputs into agriculture and fishing and sale of land and buildings Exempt services are financial and banking health education land transport water sewage and electricity Exported goods and services and international transportation services are zero rated exemption with refund of GST at the preceding stage With a compulsory registration threshold of YR million US GST aims to net to large tax payers If GST is implemented this year Yemen will join the ranks of the majority of MENA countries that have VAT with Libya and Syria as the exceptions Though several design issues remain a there will be little adverse impact on the poor with most of the goods consumed by the poor exempt from GST The concern of traders appears to be mainly from the fear of losing more of their business to smugglers Since GST is applied to imported goods at the same time as custom duties are collected as opposed to TCPS collected at the point of final sales without compensating reduction in import duties the existing incentive to smuggling will increase Therefore a complementary proposal imposed by the parliamentarians is to cut import duties to percent across the board from the current percent average rate Better communication to explain the working of GST and speeding the refund mechanisms could allay the unfounded fears of opponents of GST in the business community Reaching out to the gainers from the introduction of GST mainly the exporters is also important to balance public opinion a Mr Bennon s Adviser with IMF s Middle East Technical Assistance Center report of December lists six issues in this regard exemptions remain wide multiple rate structure remains timeframe for refunds is too long insufficient enforcement powers streamlining of contest and appeal procedures and inappropriate incentives for tax officials Box Uncertainties in Yemen s Central Government Budget Budget conditionally approved with a small majority The Yemeni Parliament has approved the state budget on the th of January with a small margin of votes over the required majority after an extended discussion about removing subsidies on petroleum products Parliament s approval of the energy price reform was subject to the submission to parliament of several new draft laws and amendments new customs law with uniform tariff of a general sales tax GST at act a new borrowing strategy act an amendment to the fiscal law an amendment to the procurement law and an amendment to the local administration law In addition the government was required to submit to parliament a national strategy on wages and salaries unifying civilians and military employees in one database and improving scales of wages and salaries subsidize inputs to fishermen and allocate more resources to the social safety net With full details of the content of all the provisions of these laws and additional spending plans not known at this stage there is potential for delay in moving to the implementation stage and gauging the final impact on the budget Inflation Persists In Double Digits In the last two years inflation as measured by consumer price index has averaged at percent annual rate Figure Sharp rises in food and qat prices account for about percent of inflation in CPI About two thirds of the total inflation in the last months can be attributed to the strong rise in food prices weight in CPI of about Though the world food grain prices have hardened by during the year domestic factors must have played a significant part of the explanation These include poor agricultural crop speculative behavior by traders and insufficiently flexible monetary policy Qat weight in CPI have also risen by about helped by declining production and ban on imports The habit of chewing Qat has emerged as a major development 6 challenge for Yemen in the last three decades Box With inflation persisting at annual rate and stable exchange rate against the US dollar at about YR Yemen s competitiveness in the export markets is beginning to suffer The impact of high food prices on the poor could also be severe given that the social welfare fund transfers are too small in relation to the food poverty line Figure Inflation in Consumer Prices 25.0 20.0 Inflation (YOY) 15.0 10.0 5.0 0.0 2002-Q1 2002-Q2 2002-Q3 2002-Q4 2003-Q1 2003-Q2 2003-Q3 2003-Q4 2004-Q1 2004-Q2 2004-Q3 2004-Q4 All Items Food Source: Central Statistical Organization, Yemen Note: Food refers to food and non-alcoholic beverages excluding qat. Box Qat Chewing A Development Challenge for Yemen The leaf of the Qat plant provides natural stimulants When chewed the chemicals cathinone and cathine schedule I and IV drugs respectively from the leaves pass through the membrane in the mouth to the blood stream producing the effects of exaltation Though prevalent since the th century Qat chewing has dramatically spread in the last three decades helped by the remittance inflows introduction of drilling rigs and government policy to promote irrigated agriculture Qat chewing has become so pervasive in Yemen the rich and the poor the Northern and the Southern Yemenis men and women all chew Qat Despite the significant economic opportunities for the suppliers of Qat the net effect of this chewing obsession is negative for Yemen s economic development Qat plays a major economic role in the Yemeni economy Qat s contribution to GDP at percent including direct and indirect effects equals two thirds that of oil One third of agricultural GDP the main source of income in the rural Yemen is from Qat With nearly half a million persons employed Qat is the second largest employer in Yemen employing one in every seven working Yemeni surpassing even public sector The negative effects of Qat are grave It depletes scarce water resources deprives agricultural exports lowers domestic savings wastes human resources and damages health Since Qat is an irrigated crop with unmatched profitability one third of all ground water abstraction for all other uses agricultural industrial and residential is utilized for Qat cultivation The area under Qat has expanded fold in the last three decades displacing potentially the area that could have been planted with exportable coffee fruits and vegetables If the expenditures on Qat were to be saved savings would have been higher by percent points of GDP If the poor According to Department of Drug Enforcement Administration USA Though illegal in USA Qat chewing is legal in Europe and the middle east 7 families put the money spent on Qat for good uses the percentage of poor would be lower by percent points The culture of spending extended afternoon hours chewing Qat is inimical to the development of a disciplined work ethics with nearly a quarter of usable working hours wasted Adverse health effects of Qat are many high blood pressure under weight children when pregnant women chew Qat and cancer from pesticide residues Overcoming the obsession of chewing Qat is a critical and complex task for Yemenis It is far too well integrated into the Yemeni economy and society to be abruptly ended without serious short term adverse effects Beyond prohibiting chewing Qat in government offices the government and all other stake holders in development must step up a campaign and rehabilitation policy that helps Yemenis realize their full development potential External Current Account Switches To Deficit Yemen s current account balance has been in surplus since because of buoyant oil revenues Figure 2: Current Account Balance as a ratio of GDP After narrowing sharply in to (percent) percent of GDP the indications are that the C ur r ent acco unt bal ance t o GD P (%) current account would turn into a small deficit 16 of GDP in because of falling oil 14 production Income account deficit is likely to be 12 enlarged by and cross the one billion US 10 8 dollar mark in as oil companies remitted 6 higher profits abroad Inter national reserves of 4 Yemen continue to increase albeit at a slower 2 pace than in the past In international 0 99 00 01 02 03 04 05 reserves of the central bank are projected to be -2 close to the US billion equivalent to about months of imports III STRUCTURAL DEVELOPMENTS AND POLICIES Policy and Institutional Environment Deteriorates In the context of increasing macroeconomic fragility Yemen s institutional and policy environment has slightly deteriorated in compared to the previous year in all the four clusters of macroeconomic management structural policies social inclusion and equity and public sector management Figure Figure Yemen Policy and Institutional Assessment 5 4 3 2003 2 2004 1 0 Macr oeconom ic S tr uctur al policies S ocial inclus ion and Public s ector mana ge ment equity m anage m ent 8 Source Country Policy and Institutional Assessment Policy and Institutional Environment Deteriorates witnessed in the limited use of monetary and fiscal policy tools to contain inflation Fiscal policy as noted earlier has allowed fiscal deficit to enlarge over time On a positive note Yemen is a less indebted country with the present value of debt to exports at percent of GDP in and ranked highest in timeliness and quality of statistics in reporting debt to World Bank s Debt Reporting System In structural policies cluster Yemen s failings are in business regulatory environment and efficiency and depth of financial sector Though there are few bans on investment regulations to start a new business or continue in business are burdensome Regulations limit the availability of land for industrial development Financial payment and clearance systems are underdeveloped with inefficient microfinance However limited depth of financial markets lends stability to the financial sector In social inclusion and equity cluster the deterioration reflects the needs to promote equal gender access to health services opportunities to work and social protection Equity of public resource use is fairly progressive in education and health sectors where the poor are favored Yemen has a participatory comprehensive education strategy that is showing results on the ground with the enrolment of girls outpacing boys Yemen s labor market interventions are improving in balancing job creation and social protection adequately In the area of social protection the Social Fund for Development is considered a best practice in community based programs Yemen s cash transfer program however continues to suffer from poor targeting and insufficient amount of transfer more In public sector management and institutions cluster lower ratings capture weaknesses in securing property rights governance and transparency Continued dependence on informal mechanisms manipulation by the powerful costly and prolonged legal procedures limit new business activity Inadequate sanctioning of public officials for failures in service delivery and corruption renders accountability of public officials weak Revenue mobilization efforts are weak with little non oil revenue sources There has been some improvement in adequacy of pay in public sector with wage increases announced featured in the last quarterly report and identification of surplus manpower SUCCESSES AND CHALLENGES OF BASIC E D U C AT I O N S T R AT E G Y Education is one of the pillars of the five year plan and PRSP The PRSP identifies human capital as particularly important in addressing poverty and inequity It emphasizes the need to expand basic education close the gender gap in education support literacy programs and inclusive education Since the Government has initiated the development of a basic education development strategy BEDS in a participatory manner The BEDS was approved by the Cabinet in The BEDS is a twelve year Countries with a present value of debt of more than percent of exports or percent of GNI are severely indebted countries that are not severely indebted but whose present value of debt exceeds either percent of exports or percent of GNI are moderately indebted and countries that do not fall into the above two groups are less indebted http intresources worldbank org DATA Resources Status pdf 9 program that serves as a schemata toward achieving the MDGs related to education i e universal completion of primary education and gender parity by The BEDS has become an important basis for donors to move towards jointly supporting programs rather than isolated Projects In order to formalize planning monitoring and evaluation arrangements eight in country donors formally agreed together with the Government of Yemen Public Works Project and Social Fund for Development to the Partnership Declaration signed in January The international community has recognized these tremendous efforts Yemen has made in achieving Education for All EFA goals A good example is that the international community chose Yemen along with nine other countries to be in the first group of a global initiative called Education for All Fast Track Initiative FTI The country was granted US million towards its program for during the official launch of the FTI Catalytic Fund This was the second largest allocation among the FTI countries that received financial support from the Fund In addition US million is allocated for provided the implementation of programs is satisfactory Furthermore three signatories of the Partnership Declaration the World Bank and the Governments of the Netherlands and the United Kingdom have also agreed to combine resources through a pooled financing arrangement as a single contribution to the comprehensive pre SWAP Project prepared by the GoY the Basic Education Development Project BEDP The BEDP is expected to be effective in March with a total of planned donor contribution of US million Other donors may choose to contribute to this pooled funding arrangement in the future Since its preparation progress has been made towards BEDS objectives but more so in the area of expansion than on reform objectives Performance has been especially strong in expanding of access and improving the equity The gross enrollment rate has increased from in baseline data to in PRSP monitoring report The number of enrollments increased by nearly half million reaching million in The ratio of girls to the total enrollments has also improved from in to in On quality progress has been made in expanding delivery of in service teacher training program management and supervision training programs However there is a tendency that technical work of research and development in preparation for reform interventions is behind schedule such as in the quality of teacher training programs and teacher deployment strategy These issues will be systematically addressed at the sector s and country s first joint annual review scheduled for April 10 ANNEX I SELECTED ECONOMIC INDICATORS Selected Macroeconomic Indicators 2000 2001 2002 2003 2004 Proj 2005 Proj Real Sector (annual % change) Real GDP 4.4 4.6 3.9 3.1 2.7 2.9 Real oil GDP 9.4 1.3 0.4 -1.8 -5.9 -4.7 Real non-oil GDP 3.5 5.2 4.6 4.0 4.1 4.0 Money and prices (annual % change) CPI inflation 1 10.0 10.7 6.8 11.9 12.0 16.4 Broad money 25.1 18.7 18.0 20.0 15.0 13.5 Investment & saving (% of GDP) Total investment 18.6 20.9 21.5 24.4 22.1 21.9 Private Investment 13.2 13.4 13.4 13.4 13.3 13.8 Gross national savings 31.8 26.2 25.8 24.2 23.1 21.6 Public sector 13.4 10.1 7.5 5.3 5.0 3.5 Private sector 18.4 16.1 18.3 18.9 18.0 18.1 Government finance (% of GDP) Revenue (including grants) 39.2 35.3 33.9 33.3 35.0 30.6 Oil & Gas 27.9 25.3 22.3 23.6 25.2 20.1 Non-oil 10.0 9.8 9.7 9.1 9.6 9.7 Grants 1.3 0.3 1.6 0.4 0.2 0.8 Total expenditure and net lending 31.2 32.8 34.8 38.2 39.4 35.3 Current 25.8 25.2 27.7 28.6 29.6 26.5 Capital 5.4 7.5 7.1 9.7 8.8 8.1 Overall balance (deficit(-)) (commitment basis) 8.0 2.6 -0.7 -4.9 -4.4 -4.7 External sector (US $ million) Current account Exports of goods 3805 3302 3584 3923 4510 4864 Imports of goods 2635 2771 3083 3422 3884 4556 Service (net) -630 -718 -633 -748 -757 -762 Gross reserves 3 2822 3569 4056 4445 5108 5091 Gross reserves (months of imports) 12.3 14.9 17.0 16.0 16.4 14.6 Current account balance (% of GDP) 13.2 5.3 5.2 1.2 1.0 -0.3 Total External Debt (US $ million) Total Debt Stock 4 5615 5538 5352 5377 5343 5326 Medium & Long Term 4 5615 5538 5352 5377 5343 5326 Short term Debt to GDP Ratio (%) 58.7 58.1 53.6 48.0 41.4 36.6 Debt Service Ratio (%)(obligation basis) 3.9 5.1 3.0 4.6 3.6 4.0 Memorandum items: Nominal GDP market price (bn Rials) 1539.4 1608.1 1753.5 2035.5 2390.8 2788.7 Exchange rate, average, Rial/US$) 164.0 173.3 178.9 184.3 185.8 .. GDP (in million US$, Average rate) 9561 9533 9900 11000 12904 14566 Average oil export price (US$/barrel)2 28.2 23.0 24.6 27.9 34.7 37.5 Source: Based on IMF Staff Report SM/05/71, March 2005 and World Bank Staff Estimates. 1/ Core CPI is defined as CPI excluding qat. 2/ Oil price is different from the WEO price because Yemeni oil is traded at a discount. 3/ Includes central bank SDR holdings, foreign exchange held abroad, foreign securities, gold, silver and foreign currencies; bank required foreign exchange reserves with the central bank against their foreign currency deposits and pension fund reserves. 4/ Public and publicly guaranteed debt including central bank foreign liabilities. 11 ANNEX II AT A G L A N C E TA B L E S Yemen, Rep. at a glance 3/25/05 M. East POVERTY and SOCIAL & North Low- Yemen Africa income Development diamond* 2003 Population, mid-year (millions) 19.2 306 2,495 Life expectancy GNI per capita (Atlas method, US$) 510 2,240 430 GNI (Atlas method, US$ billions) 9.8 685 1,070 Average annual growth, 1997-03 Population (%) 2.9 1.9 1.9 Labor force (%) 3.0 2.8 2.3 GNI Gross per primary Most recent estimate (latest year available, 1997-03) capita enrollment Poverty (% of population below national poverty line) 42 .. .. Urban population (% of total population) 25 58 31 Life expectancy at birth (years) 63 69 59 Infant mortality (per 1,000 live births) 75 44 79 Child malnutrition (% of children under 5) 46 .. 42 Access to improved water source Access to an improved water source (% of population) 69 88 76 Illiteracy (% of population age 15+) 50 35 37 Gross primary enrollment (% of school-age population) 81 96 94 Yemen, Rep. Male 97 100 100 Low-income group Female 64 92 88 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) .. 4.9 9.9 11.0 Gross domestic investment/GDP .. 20.2 21.5 24.4 Trade Exports of goods and services/GDP .. 27.4 38.7 37.7 Gross domestic savings/GDP .. -17.2 19.1 20.9 Gross national savings/GDP .. -5.2 25.8 24.2 Current account balance/GDP .. -25.5 5.2 1.2 Domestic Interest payments/GDP .. 0.4 0.5 0.5 Investment savings Total debt/GDP .. 120.9 54.1 48.9 Total debt service/exports .. 5.2 3.0 4.7 Present value of debt/GDP .. .. 35.8 34.4 Present value of debt/exports .. .. 68.2 70.2 Indebtedness 1983-93 1993-03 2002 2003 2003-07 (average annual growth) GDP .. 5.5 3.9 3.1 3.6 Yemen, Rep. GDP per capita .. 2.5 0.8 0.1 0.5 Low-income group Exports of goods and services .. 5.4 8.6 2.1 -1.2 STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) (% of GDP) 60 Agriculture .. 21.4 11.1 10.7 40 Industry .. 21.8 40.2 41.3 20 Manufacturing .. 12.0 5.2 4.8 0 Services .. 56.8 48.8 48.0 98 99 00 01 02 03 -20 Private consumption .. 98.2 64.1 62.4 -40 General government consumption .. 19.1 16.7 16.7 GDI GDP Imports of goods and services .. 64.9 40.2 39.9 1983-93 1993-03 2002 2003 Growth of exports and imports (%) (average annual growth) 60 Agriculture .. 5.3 -0.1 3.8 Industry .. 7.8 3.5 0.4 40 Manufacturing .. 8.1 7.0 4.5 20 Services .. 4.3 6.3 4.7 0 -20 98 99 00 01 02 03 Private consumption .. 2.4 2.2 0.0 General government consumption .. 4.7 10.9 2.8 -40 Gross domestic investment .. 6.0 1.7 16.4 Exports Imports Imports of goods and services .. 0.4 7.0 4.0 Note: 2003 data are preliminary estimates. Group data are for 2002. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 12 PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Domestic prices 40 (% change) 30 Consumer prices .. 35.8 6.8 11.9 20 Implicit GDP deflator .. 19.2 4.9 12.5 10 Government finance 0 (% of GDP, includes current grants) -10 98 99 00 01 02 03 Current revenue .. 15.2 33.9 33.3 -20 Current budget balance .. -9.5 6.0 4.5 GDP deflator CPI Overall surplus/deficit .. -12.8 -0.7 -4.9 TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. 1,167 3,684 3,934 4,500 Crude oil (government share) .. 277 1,600 1,828 4,000 3,500 Crude oil (company share) .. 556 1,546 1,631 3,000 Manufactures .. 20 138 139 2,500 Total imports (cif) .. 2,138 2,932 2,932 2,000 Food .. 548 997 1,153 1,500 1,000 Fuel and energy .. 148 416 480 500 Capital goods .. 502 747 852 0 97 98 99 00 01 02 03 Export price index (1995=100) .. 100 134 154 Import price index (1995=100) .. 89 83 91 Exports Imports Terms of trade (1995=100) .. 112 162 170 BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) (US$ millions) Exports of goods and services .. 1,344 3,864 4,227 16 Imports of goods and services .. 3,182 4,014 4,473 14 12 Resource balance .. -1,838 -150 -247 10 Net income .. -408 -718 -827 8 Net current transfers .. 998 1,384 1,201 6 4 Current account balance .. -1,248 516 127 2 0 Financing items (net) .. 1,391 236 455 -2 97 98 99 00 01 02 03 Changes in net reserves .. -144 -752 -583 -4 Memo: Reserves including gold (US$ millions) .. 148 4,056 4,445 Conversion rate (DEC, local/US$) 4.6 48.6 175.6 183.4 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Composition of 2003 debt (US$ mill.) Total debt outstanding and disbursed 2,796 5,923 5,352 5,377 IBRD 0 0 0 0 G: 438 IDA 253 726 1,350 1,417 F: 59 B: 1,417 Total debt service 85 119 158 252 IBRD 0 0 0 0 IDA 2 10 29 34 Composition of net resource flows Official grants 231 109 3 55 C: 368 Official creditors 454 49 60 60 Private creditors 14 10 0 0 E: 2,678 Foreign direct investment 8 897 39 -131 D: 417 Portfolio equity 0 0 -6 2 World Bank program Commitments 0 27 163 47 A - IBRD E - Bilateral Disbursements 55 46 83 89 B - IDA D - Other multilateral F - Private Principal repayments 0 5 19 23 C - IMF G - Short-term Net flows 55 41 64 66 Interest payments 2 5 10 11 Net transfers 53 36 54 55 13